As filed with the Securities and Exchange Commission on July 1, 2005
File No. 333-_______
United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. _______
Post-Effective Amendment No. ______
(Check appropriate box or boxes)
PIONEER AMERICA INCOME TRUST
(Exact Name of Registrant as Specified in Charter)
(617) 742-7825 (Area Code and
Telephone Number)
60 State Street, Boston, Massachusetts 02109
(Address of Principal Executive Offices: Number, Street, City, State, Zip Code)
Dorothy E. Bourassa, Esq.
Pioneer Investment Management, Inc.
60 State Street
Boston, Massachusetts 02109
(Name and Address of Agent for Service)
Copies to: David C. Phelan, Esq.
Wilmer Cutler Pickering Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this Registration Statement.
Calculation of Registration Fee under the Securities Act of 1933: No filing fee
is due because of reliance on Section 24(f) of the Investment Company Act of
1940, which permits registration of an indefinite number of securities.
Title of Securities Being Registered: Shares of beneficial interest of the
Registrant.
It is proposed that this registration statement will become effective on August
1, 2005, pursuant to Rule 488 under the Securities Act of 1933, as amended.
COMBINED PROXY STATEMENT OF
AMSOUTH FUNDS
on behalf of its Series:
AMSOUTH CAPITAL GROWTH FUND
AMSOUTH LARGE CAP FUND
AMSOUTH ENHANCED MARKET FUND
AMSOUTH VALUE FUND
AMSOUTH MID CAP FUND
AMSOUTH SMALL CAP FUND
AMSOUTH INTERNATIONAL EQUITY FUND
AMSOUTH SELECT EQUITY FUND
AMSOUTH BALANCED FUND
AMSOUTH STRATEGIC PORTFOLIOS: AGGRESSIVE GROWTH PORTFOLIO
AMSOUTH STRATEGIC PORTFOLIOS: GROWTH PORTFOLIO
AMSOUTH STRATEGIC PORTFOLIOS: GROWTH AND INCOME PORTFOLIO
AMSOUTH STRATEGIC PORTFOLIOS: MODERATE GROWTH AND INCOME PORTFOLIO
AMSOUTH HIGH QUALITY BOND FUND
AMSOUTH FLORIDA TAX-EXEMPT FUND
AMSOUTH HIGH QUALITY MUNICIPAL BOND FUND
AMSOUTH TENNESSEE TAX-EXEMPT FUND
AMSOUTH GOVERNMENT INCOME FUND
AMSOUTH LIMITED TERM BOND FUND
AMSOUTH TREASURY RESERVE MONEY MARKET FUND
AMSOUTH PRIME MONEY MARKET FUND
AMSOUTH TAX-EXEMPT MONEY MARKET FUND
AMSOUTH INSTITUTIONAL PRIME OBLIGATIONS MONEY MARKET FUND
(each, an "AmSouth Fund" and collectively, the "AmSouth Funds")
The address and telephone number of each AmSouth Fund is:
3435 Stelzer Road, Columbus, OH 43219
1-800-451-8382
PROSPECTUS FOR CLASS A, CLASS B AND CLASS Y SHARES OF
PIONEER OAK RIDGE LARGE CAP GROWTH FUND
PIONEER FUND
PIONEER VALUE FUND
PIONEER MID CAP VALUE FUND
PIONEER GROWTH OPPORTUNITIES FUND
PIONEER INTERNATIONAL CORE EQUITY FUND
PIONEER FOCUSED EQUITY FUND
PIONEER CLASSIC BALANCED FUND
PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND
PIONEER IBBOTSON GROWTH ALLOCATION FUND
PIONEER IBBOTSON MODERATE ALLOCATION FUND
PIONEER BOND FUND
PIONEER FLORIDA TAX FREE INCOME FUND
PIONEER TAX FREE INCOME FUND
PIONEER AMERICA INCOME TRUST
PIONEER SHORT TERM INCOME FUND
PIONEER CASH RESERVES FUND
PIONEER TAX FREE MONEY MARKET FUND
PROSPECTUS FOR CLASS 1, CLASS 2 AND CLASS 3 SHARES OF
PIONEER INSTITUTIONAL MONEY MARKET FUND
(each, a "Pioneer Fund" and collectively, the "Pioneer Funds")
The address and telephone number of each Pioneer Fund is:
60 State Street, Boston, Massachusetts 02109
1-800-225-6292
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
SCHEDULED FOR [ ], 2005
To the Shareholders of the AmSouth Funds:
A joint special meeting of shareholders (the "Meeting") for each of the
AmSouth Funds will be held at the offices of [ ], [ ], on [ ]at [ ] [a/p].m.,
local time, to consider the following:
1. With respect to each AmSouth Fund, a proposal to approve an Agreement
and Plan of Reorganization. Under the Agreement and Plan of
Reorganization applicable to your AmSouth Fund, it will transfer all
of its assets to an investment company or a series thereof (each a
"Pioneer Fund") managed by Pioneer Investment Management, Inc.
("Pioneer") in exchange for Class A, B and Y shares of the Pioneer
Fund (or, in the case of Pioneer Institutional Money Market Fund,
Class 1, 2 and 3 shares). Class A, B and Y shares of the Pioneer Fund
will be distributed to each AmSouth Fund's shareholders in proportion
to their Class A, B and I share holdings on the reorganization date.
In the case of Pioneer Institutional Money Market Fund, Class 1, 2 and
3 shares will be distributed in exchange for Institutional Class 1
shares, Institutional Class 2 shares and Institutional Class 3 shares
of AmSouth Institutional Money Market Fund. The Pioneer Fund also will
assume your AmSouth Fund's liabilities that are included in the
calculation of your AmSouth Fund's net asset value on the closing date
at the reorganization. In the case of certain AmSouth Funds, the
Pioneer Fund is an existing mutual fund with a substantially similar
investment objective and similar investment policies as your AmSouth
Fund. In the case of other AmSouth Funds, the Pioneer Fund is a newly
organized mutual fund with a substantially similar investment
objective and similar investment policies as your AmSouth Fund.
Following the reorganization, your AmSouth Fund will then be
dissolved. As a result of the reorganization, you will become
shareholders of the Pioneer Fund. Your board of trustees recommends
that you vote FOR this proposal.
2. Any other business that may properly come before the Meeting.
Shareholders of record as of the close of business on [ ], 2005, are
entitled to vote at the Meeting and any related follow-up meetings.
Whether or not you expect to attend the Meeting, please complete and return
the enclosed proxy card. If shareholders do not return their proxies in
sufficient numbers, your AmSouth Fund may be required to make additional
solicitations.
By order of the Board of Trustees,
[ ]
[Chairman]
[ ], 2005
COMBINED PROXY STATEMENT OF
AMSOUTH FUNDS
on behalf of its Series:
AMSOUTH CAPITAL GROWTH FUND
AMSOUTH LARGE CAP FUND
AMSOUTH ENHANCED MARKET FUND
AMSOUTH VALUE FUND
AMSOUTH MID CAP FUND
AMSOUTH SMALL CAP FUND
AMSOUTH INTERNATIONAL EQUITY FUND
AMSOUTH SELECT EQUITY FUND
AMSOUTH BALANCED FUND
AMSOUTH STRATEGIC PORTFOLIOS: AGGRESSIVE GROWTH PORTFOLIO
AMSOUTH STRATEGIC PORTFOLIOS: GROWTH PORTFOLIO
AMSOUTH STRATEGIC PORTFOLIOS: GROWTH AND INCOME PORTFOLIO
AMSOUTH STRATEGIC PORTFOLIOS: MODERATE GROWTH AND INCOME PORTFOLIO
AMSOUTH HIGH QUALITY BOND FUND
AMSOUTH FLORIDA TAX-EXEMPT FUND
AMSOUTH HIGH QUALITY MUNICIPAL BOND FUND
AMSOUTH TENNESSEE TAX-EXEMPT FUND
AMSOUTH GOVERNMENT INCOME FUND
AMSOUTH LIMITED TERM BOND FUND
AMSOUTH TREASURY RESERVE MONEY MARKET FUND
AMSOUTH PRIME MONEY MARKET FUND
AMSOUTH TAX-EXEMPT MONEY MARKET FUND
AMSOUTH INSTITUTIONAL PRIME OBLIGATIONS MONEY MARKET FUND
(each, an "AmSouth Fund" and collectively, the "AmSouth Funds")
The address and telephone number of each AmSouth Fund is:
3435 Stelzer Road, Columbus, OH 43219
1-800-451-8382
PROSPECTUS
FOR CLASS A, CLASS B AND CLASS Y SHARES OF
PIONEER OAK RIDGE LARGE CAP GROWTH FUND
PIONEER FUND
PIONEER VALUE FUND
PIONEER MID CAP VALUE FUND
PIONEER GROWTH OPPORTUNITIES FUND
PIONEER INTERNATIONAL CORE EQUITY FUND
PIONEER FOCUSED EQUITY FUND
PIONEER CLASSIC BALANCED FUND
PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND
PIONEER IBBOTSON GROWTH ALLOCATION FUND
PIONEER IBBOTSON MODERATE ALLOCATION FUND
PIONEER BOND FUND
PIONEER FLORIDA TAX FREE INCOME FUND
PIONEER TAX FREE INCOME FUND
PIONEER AMERICA INCOME TRUST
PIONEER SHORT TERM INCOME FUND
PIONEER CASH RESERVES FUND
1
PIONEER TAX FREE MONEY MARKET FUND
PROSPECTUS
FOR CLASS 1, CLASS 2 AND CLASS 3 SHARES OF
PIONEER INSTITUTIONAL MONEY MARKET FUND
(each, a "Pioneer Fund" and collectively, the "Pioneer Funds")
The address and telephone number of each Pioneer Fund is:
60 State Street, Boston, Massachusetts 02109
and 1-800-225-6292
Shares of the Pioneer Funds have not been approved or disapproved by the
Securities and Exchange Commission (the "SEC"). The SEC has not passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
An investment in any AmSouth Fund or Pioneer Fund (each sometimes referred
to herein as a "Fund") is not a bank deposit and is not insured or guaranteed by
the Federal Deposit Insurance Corporation or any other government agency.
This combined proxy statement and prospectus (the "Proxy
Statement/Prospectus"), dated [ ], 2005, is being furnished to shareholders of
the AmSouth Funds in connection with the solicitation by the board of trustees
(the "Board", or the "Trustees") of the AmSouth Funds of proxies to be used at a
joint meeting of shareholders of the AmSouth Funds (the "Meeting") to be held at
the offices of [ ], [ ], on [ ], 2005 at [ ] [a/p].m., local time. Each AmSouth
Fund is a series of AmSouth Funds, an open-end management investment company
organized as a Massachusetts business trust. Each Pioneer Fund is an open-end
management investment company, or a series thereof, organized as either a
Delaware statutory trust or a Massachusetts business trust.
The Proxy Statement/Prospectus contains information you should know before
voting on the approval of a proposed Agreement and Plan of Reorganization (each
a "Plan") that provides for the reorganization of each AmSouth Fund into a
corresponding Pioneer Fund (each a "Reorganization"). The following table
indicates (a) the corresponding Pioneer Fund shares that each AmSouth Fund
shareholder would receive if each Plan is approved, (b) which AmSouth Fund
shareholders may vote on which proposals and on what page of this Proxy
Statement/Prospectus the discussion regarding each proposal begins. On each
proposal, all shareholders of an AmSouth Fund, regardless of the class of shares
held, will vote together as a single class. Although each Reorganization is
similar in structure, you should read carefully the specific discussion
regarding your AmSouth Fund's Reorganization.
The Proxy Statement/Prospectus sets forth the information about the Pioneer
Fund that a prospective investor ought to know before investing and should be
retained for future reference. Additional information about each Pioneer Fund
has been filed with the SEC and is available upon oral or written request and
without charge. See "Where to Get More Information."
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AmSouth Fund Pioneer Fund Shareholders Entitled to Vote Page
- ------------------------------------------------------------------------------------------------------------------------------
PROPOSAL 1(a) AmSouth Capital Growth Pioneer Oak Ridge AmSouth Capital Growth Fund
Fund Large Cap Growth Fund shareholders
- ------------------------------------------------------------------------------------------------------------------------------
PROPOSAL 1(b) AmSouth Large Cap Fund Pioneer Oak Ridge AmSouth Large Cap Fund shareholders
Large Cap Growth Fund
- ------------------------------------------------------------------------------------------------------------------------------
2
- ------------------------------------------------------------------------------------------------------------------------------
AmSouth Fund Pioneer Fund Shareholders Entitled to Vote Page
- ------------------------------------------------------------------------------------------------------------------------------
PROPOSAL 1(c) AmSouth Enhanced Market Pioneer Fund AmSouth Enhanced Market Fund
Fund shareholders
- ------------------------------------------------------------------------------------------------------------------------------
PROPOSAL 1(d) AmSouth Value Fund Pioneer Value Fund AmSouth Value Fund shareholders
- ------------------------------------------------------------------------------------------------------------------------------
PROPOSAL 1(e) AmSouth Mid Cap Fund Pioneer Mid Cap Value AmSouth Mid Cap Fund shareholders
Fund
- ------------------------------------------------------------------------------------------------------------------------------
PROPOSAL 1(f) AmSouth Small Cap Fund Pioneer Growth AmSouth Small Cap Fund shareholders
Opportunities Fund
- ------------------------------------------------------------------------------------------------------------------------------
PROPOSAL 1(g) AmSouth International Pioneer International AmSouth International Equity Fund
Equity Fund Core Equity Fund shareholders
- ------------------------------------------------------------------------------------------------------------------------------
PROPOSAL 1(h) AmSouth Select Equity Pioneer Focused AmSouth Select Equity Fund
Fund Equity Fund shareholders
- ------------------------------------------------------------------------------------------------------------------------------
PROPOSAL 1(i) AmSouth Balanced Fund Pioneer Classic AmSouth Balanced Fund shareholders
Balanced Fund
- ------------------------------------------------------------------------------------------------------------------------------
PROPOSAL 1(j) AmSouth Strategic Pioneer Ibbotson AmSouth Strategic Aggressive Growth
Portfolios: Aggressive Aggressive Allocation Portfolio shareholders
Growth Portfolio Fund
- ------------------------------------------------------------------------------------------------------------------------------
PROPOSAL 1(k) AmSouth Strategic Pioneer Ibbotson AmSouth Strategic Growth Portfolio
Portfolios: Growth Growth Allocation Fund shareholders
Portfolio
- ------------------------------------------------------------------------------------------------------------------------------
PROPOSAL 1(l) AmSouth Strategic Pioneer Ibbotson AmSouth Strategic Growth and Income
Portfolios: Growth and Moderate Allocation Portfolio shareholders
Income Portfolio Fund
- ------------------------------------------------------------------------------------------------------------------------------
PROPOSAL 1(m) AmSouth Strategic Pioneer Ibbotson AmSouth Strategic Moderate Growth &
Portfolios: Moderate Moderate Allocation Income Portfolio shareholders
Growth & Income Fund
Portfolio
- ------------------------------------------------------------------------------------------------------------------------------
PROPOSAL 1(n) AmSouth High Quality Pioneer Bond Fund AmSouth High Quality Bond Fund
Bond Fund shareholders
- ------------------------------------------------------------------------------------------------------------------------------
PROPOSAL 1(o) AmSouth Florida Pioneer Florida Tax AmSouth Florida Tax-Exempt Fund
Tax-Exempt Fund Free Income Fund shareholders
- ------------------------------------------------------------------------------------------------------------------------------
PROPOSAL 1(p) AmSouth High Quality Pioneer Tax Free AmSouth High Quality Municipal Bond
Municipal Bond Fund Income Fund Fund shareholders
- ------------------------------------------------------------------------------------------------------------------------------
PROPOSAL 1(q) AmSouth Tennessee Pioneer Tax Free AmSouth Tennessee Tax-Exempt Fund
Tax-Exempt Fund Income Fund shareholders
- ------------------------------------------------------------------------------------------------------------------------------
PROPOSAL 1(r) AmSouth Government Pioneer America AmSouth Government Income Fund
Income Fund Income Trust shareholders
- ------------------------------------------------------------------------------------------------------------------------------
3
- ------------------------------------------------------------------------------------------------------------------------------
AmSouth Fund Pioneer Fund Shareholders Entitled to Vote Page
- ------------------------------------------------------------------------------------------------------------------------------
PROPOSAL 1(s) AmSouth Limited Term Pioneer Short Term AmSouth Limited Term Bond Fund
Bond Fund Income Fund shareholders
- ------------------------------------------------------------------------------------------------------------------------------
PROPOSAL 1(t) AmSouth Treasury Pioneer Cash Reserves AmSouth Treasury Reserve Money Market
Reserve Money Market Fund Fund shareholders
Fund
- ------------------------------------------------------------------------------------------------------------------------------
PROPOSAL 1(u) AmSouth Prime Money Pioneer Cash Reserves AmSouth Prime Money Market Fund
Market Fund Fund shareholders
- ------------------------------------------------------------------------------------------------------------------------------
PROPOSAL 1(v) AmSouth Tax-Exempt Pioneer Tax Free AmSouth Tax-Exempt Money Market Fund
Money Market Fund Money Market Fund shareholders
- ------------------------------------------------------------------------------------------------------------------------------
PROPOSAL 1(w) AmSouth Institutional Pioneer Institutional AmSouth Institutional Prime
Prime Obligations Money Money Market Fund Obligations Money Market Fund
Market Fund shareholders
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Where to Get More Information
- ------------------------------------------------------------------------------------------------------------------------------
The AmSouth Funds' prospectus dated December 1, 2004, as Available to you free of charge by calling 1-800-451-8382.
supplemented January 12, 2005, April 26, 2005, June 1, 2005 Each prospectus is also on file with the SEC.
and June 27, 2005.
The AmSouth Funds' statement of additional information dated Available to you free of charge by calling 1-800-451-8382.
December 1, 2004, as supplemented March 22, 2005. Each statement of additional information is also on file
with the SEC.
The AmSouth Funds' annual report dated July 31, 2004 and Available to you free of charge by calling 1-800-451-8382.
semiannual report dated January 31, 2005. Also on file with the SEC. See "Available Information."
- ------------------------------------------------------------------------------------------------------------------------------
Each Pioneer Funds' current prospectus and each Pioneer Fund's Available to you free of charge by calling 1-800-225-6292.
most recent annual and semiannual reports and supplements (as These prospectuses and reports are also on file with the
they apply) to shareholders. SEC.
- ------------------------------------------------------------------------------------------------------------------------------
A statement of additional information for this joint Proxy Available to you free of charge by calling 1-800-225-6292.
Statement/Prospectus (the "SAI"), dated [ ], 2005. It Also on file with the SEC. This SAI is incorporated by
contains additional information about your AmSouth Funds and reference into this Proxy Statement/Prospectus.
the Pioneer Funds.
- ------------------------------------------------------------------------------------------------------------------------------
To ask questions about this Proxy Statement/Prospectus. Call your AmSouth Fund's toll-free telephone number:
1-800-451-8382.
- ------------------------------------------------------------------------------------------------------------------------------
Background to the Reorganizations
AmSouth Asset Management Inc. ("AAMI") is investment adviser to the AmSouth
Funds and a wholly-owned subsidiary of AmSouth Bank, which in turn is wholly
owned by AmSouth Bancorporation. AmSouth Bank and AAMI have determined that
engaging in the business of investment adviser to the AmSouth Funds is not a
core business that AAMI intends to continue. After investigating and discussing
several alternatives for ongoing investment management of the AmSouth Funds with
the Trustees, AmSouth Bank and AAMI conducted a search for a buyer for AAMI's
fund management business.
4
Ultimately, AmSouth Bank and AAMI decided to recommend to the Board that the
AmSouth Funds be reorganized into similar mutual funds managed by Pioneer
Investment Management, Inc. ("Pioneer").
The Board met twice in May 2005 and again in June 2005. At these meetings,
your Trustees received and evaluated materials regarding Pioneer and the Pioneer
Funds, including the performance record and expense structure of each of the
Pioneer Funds, the impact of the proposed Reorganizations on the AmSouth Funds'
shareholders, and the quality of the services offered by Pioneer. The Trustees
also considered other alternatives for the ongoing management of AmSouth Funds.
At a meeting on May 18, 2005, the Trustees met with representatives of Pioneer.
In addition to these general factors, the Trustees also considered the factors
discussed below in the context of each Reorganization. At the May 18, 2005
meeting, all of the Trustees who are not interested persons of AAMI (the
"Independent Trustees") met separately in executive session with counsel to the
Independent Trustees and requested and received such information from AAMI and
Pioneer as they determined to be necessary and appropriate to evaluate the
proposed Reorganizations. On June 23, 2005, the Board, including all of the
Independent Trustees, unanimously voted to approve each of the Reorganizations.
In approving the Reorganizations, the Board determined that the Reorganizations
were in the best interests of the AmSouth Funds' shareholders and the interests
of existing AmSouth Funds' shareholders will not be diluted as a result of the
Reorganizations.
Pioneer believes that it can offer capable management and favorable
long-term investment performance to the AmSouth Funds' shareholders. The
Reorganizations will, by combining the assets of two mutual funds and by
increasing distribution capabilities, offer the potential for increased
economies of scale. Increased economies of scale have the potential of
benefiting the shareholders of your AmSouth Funds and the Pioneer Funds by
spreading fixed costs over a larger asset base and reducing expenses on a per
share basis. There can be no assurance that such economies of scale will be
realized.
Why the Trustees Are Recommending the Reorganizations
The Trustees believe that reorganizing your AmSouth Fund into a portfolio
with a substantially similar investment objective and similar investment
policies that is part of the Pioneer family of funds offers you potential
benefits. These potential benefits and considerations include:
o AmSouth Bank and AAMI have determined that engaging in the business of
investment adviser to the AmSouth Funds is not a core business that
AAMI intends to continue. Therefore, a change in your AmSouth Fund's
investment adviser is necessary. In the absence of the Reorganization,
such change would be more likely to motivate shareholders invested in
reliance on AAMI's role to withdraw from the Fund, thereby reducing
the fund size and increasing fund expense ratios;
o The track record of Pioneer in managing the Pioneer Funds;
o The transaction will qualify as a tax free reorganization under
Section 368(a) of the Internal Revenue Code of 1986, as amended (the
"Code") and there fore will not be treated as a taxable sale of your
AmSouth shares;
o In the case of certain AmSouth Funds, the potential for lower
management fees and total expenses;
o The resources of Pioneer, including its infrastructure in shareholder
services; and
o The opportunity to be part of a significantly larger family of funds,
with additional product offerings and enhanced shareholder servicing
options, and a stronger compliance structure.
For further information, please see the individual descriptions of the
proposals contained in this Proxy Statement/Prospectus.
How Each Reorganization Will Work
o AmSouth Fund shareholder-directed exchanges and purchases made by
check, [ACH], or wire will be accepted up until [ ] [a/p].m. ([ ]
Time) on [ ]day, [ ], 2005. Exchange and purchase requests received
after this deadline will be rejected and returned. Purchase and
exchange requests made by AmSouth Fund shareholders through financial
institutions or advisers must be made earlier to ensure the trade can
be processed within this deadline. Financial institutions and advisers
that trade electronically (NSCC) with the AmSouth Funds can place
exchange and purchase requests up until [ ] [a/p].m. ([ ] Time) on [
]day, [ ], 2005. Exchanges and purchases received after this deadline
will be rejected and returned. The AmSouth Funds will not process
purchases made via automatic investment method (AIM) after [ ], 2005.
Dividend/capital gain reinvestment and established systematic
exchanges will continue through [ ], 2005.
5
o Each AmSouth Fund will transfer all of its assets to a corresponding
Pioneer Fund. Each Pioneer Fund will assume the corresponding AmSouth
Fund's liabilities that are included in the calculation of such
AmSouth Fund's net asset value on the day on which each Reorganization
closes (the "Closing Date"). Liabilities of each Fund to its
shareholders not assumed by a corresponding Pioneer Fund will be
assumed by AmSouth Bancorporation.
o Each Pioneer Fund will issue Class A, B and Y shares to the
corresponding AmSouth Fund in amounts equal to the aggregate net asset
value of that AmSouth Fund's Class A, B and I shares. Shareholders of
your AmSouth Fund will receive Class A, B and Y shares of the
corresponding Pioneer Fund. These shares will be distributed to
shareholders in proportion to the relative net asset value of their
share holdings on the Closing Date. On the Closing Date, each
shareholder will hold shares of the Pioneer Fund with the same
aggregate net asset value as the shares of the AmSouth Fund that the
shareholder held immediately prior to the Reorganization.
o Each AmSouth Fund will be dissolved after the Closing Date.
o Pioneer acts as investment adviser to each Pioneer Fund.
o The Reorganizations are intended to result in no income, gain or loss
being recognized for federal income tax purposes to any of the Pioneer
Funds, the AmSouth Funds or the shareholders of the AmSouth Funds.
o In recommending each of the Reorganizations, the Trustees of your
AmSouth Fund have determined that the Reorganization is in the best
interest of your AmSouth Fund and will not dilute the interests of
shareholders of your AmSouth Fund. The Trustees have made that
determination on the basis of the factors listed above and discussed
in more detail under each proposal. A reorganization might not be in
the best interest of the shareholders of a mutual fund if the
surviving fund had higher expenses, less experienced management or the
adviser did not have adequate resources to manage the affairs of the
mutual fund.
o If the Reorganizations are approved, the AmSouth Funds will file with
the SEC an application for deregistration on Form N-8F under the
Investment Company Act of 1940, as amended (the "Investment Company
Act"), and will cease to exist as an investment company when such
application is approved.
Who Is Pioneer
Pioneer is registered as an investment adviser under the Investment
Advisers Act of 1940, as amended, and acts as investment adviser to mutual funds
and institutional accounts. Pioneer or its predecessors have been managing
mutual funds since 1928 and at December 31, 2004 had, together with its
affiliates, over $42 billion in assets under management. Pioneer is an indirect,
wholly owned subsidiary of UniCredito Italiano S.p.A., an Italian Bank.
In addition to the Class A, B and Y shares to be issued in the
Reorganization, each Pioneer Fund also offers Class C shares (subject to a
contingent deferred sales charge and a Rule 12b-1 Plan). In addition, most of
the Pioneer Funds also offer Class R shares (which are offered only to certain
retirement plans).
Who Bears the Expenses Associated with the Reorganizations
Pioneer and AmSouth Bancorporation will pay all costs of preparing and
printing the AmSouth Funds' proxy statements and solicitation costs incurred by
the AmSouth Funds in connection with the Reorganization. AAMI will otherwise be
responsible for all costs and expenses of the AmSouth Funds in connection with
the Reorganizations.
Will Pioneer and AmSouth Bancorporation Benefit from the Reorganizations
Pioneer will benefit from managing a larger pool of assets. Pioneer is also
acquiring certain assets associated with AAMI's fund management business and the
benefits of certain restrictive covenants on AAMI's and AmSouth Bancorporation's
activities. In consideration for the acquisition of these assets, the
opportunity to manage additional assets and covenants from AmSouth
Bancorporation and AAMI, including their assistance in facilitating the
Reorganizations, noncompetition covenants and their obligation to indemnify
Pioneer against certain liabilities, Pioneer has agreed to pay AAMI $65 million.
This amount is subject to partial repayment in the event that the assets
attributable to the AmSouth Funds are
6
redeemed (subject to certain conditions, including threshold amounts) from the
Pioneer Funds within four years after the closing of the Reorganization.
Pioneer will also agree to provide an affiliate of AAMI with ongoing
servicing payments with respect to the Class Y shares issued in the
Reorganizations. This additional compensation will be equal on an annual basis
to 0.10% of the average daily net assets attributable to the Class Y shares held
by former AmSouth Funds' shareholders. This payment would be made by Pioneer and
not the Pioneer Funds. No additional compensation would be paid with respect to
Class A or Class B shares; however, if an affiliate of AAMI is the broker of
record, that affiliate would receive the trail commissions under the Class A and
Class B Rule 12 b-1 Plans.
What Happens if a Reorganization Is Not Approved
If the required approval of shareholders is not obtained, the Meeting may
be adjourned as more fully described in this Proxy Statement/Prospectus, your
AmSouth Fund will continue to engage in business as a separate mutual fund and
the Board will consider what further action may be appropriate.
Who Is Eligible to Vote
Shareholders of record on [ ], 2005 are entitled to attend and vote at the
Meeting or any adjournment of the Meeting. On each proposal, all shareholders of
an AmSouth Fund, regardless of the class of shares held, will vote together as a
singe class. 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.
7
TABLE OF CONTENTS
Page
----
INTRODUCTION..............................................................................
PROPOSAL 1(a) -- AMSOUTH CAPITAL GROWTH FUND..............................................
PROPOSAL 1(b) -- AMSOUTH LARGE CAP FUND...................................................
PROPOSAL 1(c) -- AMSOUTH ENHANCED MARKET FUND.............................................
PROPOSAL 1(d) -- AMSOUTH VALUE FUND.......................................................
PROPOSAL 1(e) -- AMSOUTH MID CAP FUND.....................................................
PROPOSAL 1(f) -- AMSOUTH SMALL CAP FUND...................................................
PROPOSAL 1(g) -- AMSOUTH INTERNATIONAL EQUITY FUND........................................
PROPOSAL 1(h) -- AMSOUTH SELECT EQUITY FUND...............................................
PROPOSAL 1(i) -- AMSOUTH BALANCED FUND....................................................
PROPOSAL 1(j) -- AMSOUTH STRATEGIC PORTFOLIOS: AGGRESSIVE GROWTH PORTFOLIO................
PROPOSAL 1(k) -- AMSOUTH STRATEGIC PORTFOLIOS: GROWTH PORTFOLIO...........................
PROPOSAL 1(l) -- AMSOUTH STRATEGIC PORTFOLIOS: GROWTH AND INCOME PORTFOLIO................
PROPOSAL 1(m) -- AMSOUTH STRATEGIC PORTFOLIOS: MODERATE GROWTH AND INCOME PORTFOLIO.......
PROPOSAL 1(n) -- AMSOUTH HIGH QUALITY BOND FUND...........................................
PROPOSAL 1(o) -- AMSOUTH FLORIDA TAX-EXEMPT FUND..........................................
PROPOSAL 1(p) -- AMSOUTH HIGH QUALITY MUNICIPAL BOND FUND.................................
PROPOSAL 1(q) -- AMSOUTH TENNESSEE TAX-EXEMPT FUND........................................
PROPOSAL 1(r) -- AMSOUTH GOVERNMENT INCOME FUND...........................................
PROPOSAL 1(s) -- AMSOUTH LIMITED TERM BOND FUND...........................................
PROPOSAL 1(t) -- AMSOUTH TREASURY RESERVE MONEY MARKET FUND...............................
PROPOSAL 1(u) -- AMSOUTH PRIME MONEY MARKET FUND..........................................
PROPOSAL 1(v) -- AMSOUTH TAX-EXEMPT MONEY MARKET FUND.....................................
PROPOSAL 1(w) -- AMSOUTH INSTITUTIONAL PRIME OBLIGATIONS MONEY MARKET FUND................
TERMS OF EACH AGREEMENT AND PLAN OF REORGANIZATION........................................
TAX STATUS OF EACH REORGANIZATION.........................................................
AGREEMENT WITH PIONEER....................................................................
VOTING RIGHTS AND REQUIRED VOTE...........................................................
COMPARISON OF DELAWARE STATUTORY TRUST AND MASSACHUSETTS BUSINESS TRUST...................
ADDITIONAL INFORMATION ABOUT THE PIONEER FUNDS............................................
FINANCIAL HIGHLIGHTS......................................................................
INFORMATION CONCERNING THE MEETING........................................................
OWNERSHIP OF SHARES OF THE FUNDS..........................................................
EXPERTS...................................................................................
AVAILABLE INFORMATION.....................................................................
EXHIBIT A-1 -- FORM OF AGREEMENT AND PLAN OF REORGANIZATION
(C/D REORGANIZATIONS).....................................................................A-1
EXHIBIT A-2 -- FORM OF AGREEMENT AND PLAN OF REORGANIZATION
(F REORGANIZATIONS).......................................................................A-24
EXHIBIT B -- ADDITIONAL INFORMATION ABOUT PIONEER.........................................B-1
EXHIBIT C -- PORTFOLIO MANAGER'S DISCUSSION OF PERFORMANCE................................C-1
8
AmSouth Capital Growth Fund and
Pioneer Oak Ridge Large Cap Growth Fund
PROPOSAL 1(a)
Approval of Agreement and Plan of Reorganization
SUMMARY
The following is a summary of more complete information appearing later in
this Proxy Statement/Prospectus or incorporated herein. You should read
carefully the entire Proxy Statement/Prospectus, including the form of Agreement
and Plan of Reorganization attached as EXHIBIT A-1, because it contains details
that are not in the summary.
Each Fund invests primarily in equity securities of large capitalization
issuers and, consequently, the Funds have similar investment policies and risks.
In the table below, if a row extends across the entire table, the policy
disclosed applies to both your AmSouth Fund and the Pioneer Fund.
Comparison of AmSouth Capital Growth Fund to Pioneer Oak Ridge Large Cap Growth
Fund
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AmSouth Capital Growth Fund Pioneer Oak Ridge Large Cap Growth Fund
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Business A non-diversified series of AmSouth Funds, an A diversified series of Pioneer Series Trust
open-end management investment company I, an open-end management investment company
organized as a Massachusetts business trust. organized as a Delaware statutory trust.
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Net assets as of March 31, $251.35 million $157.9 million
2005
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Investment advisers and Investment Adviser: Investment Adviser:
portfolio managers AAMI Pioneer
Portfolio Manager: Investment Subadviser:
Day-to-day management of AmSouth Capital Oak Ridge Investments, LLC ("Oak Ridge")
Growth Fund's portfolio is the responsibility
of John Mark McKenzie (since 2004), who has Portfolio Managers:
been involved in investment management since Day-to-day management of the Fund's portfolio
1981, with portfolio management expertise in is the responsibility of David M. Klaskin
both equity and fixed income securities. Mr. (lead manager), Chairman (since 1998),
McKenzie co-managed the AmSouth Government Treasurer and Chief Investment Officer (since
Income Fund from 1999 to 2002 and managed it 1989) of Oak Ridge, and Robert G. McVicker,
from 2003 to 2004. Mr. McKenzie has been Portfolio Manager and Director of Research at
associated with the Trust Investment Oak Ridge (since 1989).
Department of AmSouth Bank, and banks acquired
by AmSouth Bank, since 1984 and joined AAMI in
2003.
Mr. McKenzie is Senior Vice President of
AmSouth Bank and AAMI.
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Investment objective AmSouth Capital Growth Fund seeks to provide Pioneer Oak Ridge Large Cap Growth Fund seeks
investors with capital growth. capital appreciation.
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1
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AmSouth Capital Growth Fund Pioneer Oak Ridge Large Cap Growth Fund
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Primary investments AmSouth Capital Growth Fund invests at least Normally, Pioneer Oak Ridge Large Cap Growth
65% of its total assets in equity securities. Fund invests at least 80% of its net assets
The Fund invests primarily in equity (plus the amount of borrowings, if any, for
securities of U.S. companies with market investment purposes) in equity securities of
capitalizations of at least $1 billion that large capitalization U.S. companies. Large
AAMI believes offer opportunities for capital capitalization companies have market
appreciation and growth of earnings. The Fund capitalizations at the time of acquisition of
also may invest in medium-sized companies. $3 billion or more. The Fund anticipates that
the average weighted market capitalization of
the companies in the Fund's portfolio will be
significantly higher than $3 billion.
The equity securities in which Pioneer Oak
Ridge Large Cap Growth Fund principally
invests are common stocks, preferred stocks,
depositary receipts and convertible debt, but
the Fund may invest in other types of equity
securities to a lesser extent, such as
warrants and rights.
- ------------------------------------------------------------------------------------------------------------------------------
Investment strategies In choosing stocks for AmSouth Capital Growth Pioneer Oak Ridge Large Cap Growth Fund uses a
Fund, AAMI first identifies industries that it "growth" style of management and seeks to
believes will expand over the next few years invest in issuers with above average potential
or longer. AAMI then uses fundamental analysis for earnings growth. Pioneer has engaged Oak
of company financial statements to find large Ridge to act as the Fund's subadviser under
U.S. companies within these industries that Pioneer's supervision. When making purchase
offer the prospect of solid earnings growth. decisions for the Fund, the subadviser uses a
AAMI also may consider other factors in disciplined approach that involves three
selecting investments for the Fund, including primary components:
the development of new or improved products or o Research: The subadviser analyzes
services, opportunities for greater market research on potential investments from a wide
share, more effective management or other variety of sources, including internally
signs that the company will have greater than generated analysis and research provided by
average earnings growth and capital institutions and the brokerage community. The
appreciation. subadviser seeks to supplement this analysis
with information derived from business and
trade publications, filings with the SEC,
corporate contacts, industry conferences and
discussions with company management.
o Fundamentals: Once a potential
investment is identified, the subadviser
considers whether the issuer possesses certain
attributes that the subadviser believes a
"buy" candidate should possess relating to,
among other things, (i) growth of sales and
earnings, (ii) earnings power, trends and
predictability, (iii) quality of management,
(iv) competitive position of products and/or
services, (v) fundamentals of the industry in
which the company operates and (vi) the
ability to benefit from economic and political
trends affecting the company.
o Valuation: Finally, the subadviser
values companies by considering price-to-sales
ratios and price-to-earnings ratios within a
peer group.
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2
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AmSouth Capital Growth Fund Pioneer Oak Ridge Large Cap Growth Fund
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Other investments AmSouth Capital Growth Fund may invest in debt The Fund may invest up to 20% of its total
securities of domestic and foreign issuers assets in equity and debt securities of
when AAMI believes that such securities offer non-U.S. corporate issuers and debt securities
opportunities for capital growth. The Fund may of non-U.S. government issuers.
invest up to 10% of its total assets in
foreign securities which are not publicly The Fund will not invest more than 5% of its
traded in the United States. total assets in the securities of emerging
markets issuers.
At least 65% of the Fund's total assets
invested in debt securities must consist of
debt securities which are rated no lower than
investment grade (Baa/BBB) by a credit rating
agency, or, if unrated, deemed to be of
comparable quality by AAMI. The remainder of
such assets may be invested in debt
securities which are rated no lower than Ba
by Moody's Investors Service, Inc. and BB by
Standard & Poor's Ratings Group ("S&P") or
Fitch, Inc. or, if unrated, deemed to be of
comparable quality by AAMI.
- ------------------------------------------------------------------------------------------------------------------------------
Temporary defensive When AAMI determines adverse market conditions Pioneer Oak Ridge Large Cap Growth Fund
strategies exist, AmSouth Capital Growth Fund may invest may invest all or part of its assets in
entirely in cash positions, directly in U.S. securities with remaining maturities of less
Government securities and short-term paper, than one year, cash equivalents or may hold
such as bankers' acceptances. cash.
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Diversification AmSouth Capital Growth Fund is non-diversified Pioneer Oak Ridge Large Cap Growth Fund is
for the purpose of the Investment Company Act diversified for the purpose of the Investment
and, therefore, may concentrate its Company Act and is subject to diversification
investments in a limited number of issuers. requirements under the Internal Revenue Code
of 1986, as amended (the "Code").
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Industry concentration AmSouth Capital Growth Fund may not purchase Pioneer Oak Ridge Large Cap Growth Fund may
any securities which would cause more than 25% not invest more than 25% of its assets in any
of the value of the Fund's total assets at the one industry.
time of purchase to be invested in securities
of one or more issuers conducting their
principal business activities in the same
industry, provided that (a) there is no
limitation with respect to obligations issued
or guaranteed by the U.S. government or its
agencies or instrumentalities, and repurchase
agreements secured by obligations of the U.S.
government or its agencies or instrumentalities;
(b) wholly owned finance companies will be
considered to be in the industries of their
parents if their activities are primarily
related to financing the activities of their
parents; and (c) utilities will be divided
according to their services. For example, gas,
gas transmission, electric and gas, electric,
and telephone will each be considered a
separate industry.
There is no limitation with respect to
municipal securities, which, for purposes of
this limitation only, do not include private
activity bonds that are backed only by the
assets and revenues of a non-governmental user.
- ------------------------------------------------------------------------------------------------------------------------------
3
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AmSouth Capital Growth Fund Pioneer Oak Ridge Large Cap Growth Fund
- ------------------------------------------------------------------------------------------------------------------------------
Restricted and illiquid AmSouth Capital Growth Fund may not invest Pioneer Oak Ridge Large Cap Growth Fund may
securities more than 15% of its net assets in securities not invest more than 15% of its net assets in
that are restricted as to resale, or for which securities that are illiquid and other
no readily available market exists, including securities that are not readily marketable.
repurchase agreements providing for settlement Repurchase agreements maturing in more than
more than seven days after notice. seven days will be included for purposes of
the foregoing limit.
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Borrowing AmSouth Capital Growth Fund may not borrow Pioneer Oak Ridge Large Cap Growth Fund may
money or issue senior securities, except that not borrow money, except the Fund may: (a)
the Fund may borrow from banks or enter into borrow from banks or through reverse
reverse repurchase agreements for temporary repurchase agreements in an amount up to 33
emergency purposes in amounts up to 33 1/3% of 1/3% of the Fund's total assets (including the
the value of its total assets at the time of amount borrowed); (b) to the extent permitted
such borrowing. The Fund will not purchase by applicable law, borrow up to an additional
securities while borrowings (including reverse 5% of the Fund's assets for temporary
repurchase agreements) in excess of 5% of its purposes; (c) obtain such short-term credits
total assets are outstanding. In addition, as are necessary for the clearance of
the Fund is permitted to participate in a portfolio transactions; (d) purchase
credit facility whereby the Fund may directly securities on margin to the extent permitted
lend to and borrow money from other AmSouth by applicable law; and (e) engage in
funds for temporary purposes, provided that transactions in mortgage dollar rolls that are
the loans are made in accordance with an order accounted for as financings.
of exemption from the SEC and any conditions
thereto.
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Lending AmSouth Capital Growth Fund may not make Pioneer Oak Ridge Large Cap Growth Fund may
loans, except that the Fund may purchase or not make loans, except that the Fund may (i)
hold debt instruments in accordance with its lend portfolio securities in accordance with
investment objective and policies, lend Fund the Fund's investment policies, (ii) enter
securities in accordance with its investment into repurchase agreements, (iii) purchase all
objective and policies and enter into or a portion of an issue of publicly
repurchase agreements. In addition, the Fund distributed debt securities, bank loan
is permitted to participate in a credit participation interests, bank certificates of
facility whereby the Fund may directly lend to deposit, bankers' acceptances, debentures or
and borrow money from other AmSouth Funds for other securities, whether or not the purchase
temporary purposes, provided that the loans is made upon the original issuance of the
are made in accordance with an order of securities, (iv) participate in a credit
exemption from the SEC and any conditions facility whereby the Fund may directly lend to
thereto. and borrow money from other affiliated funds
to the extent permitted under the Investment
Company Act or an exemption therefrom, and (v)
make loans in any other manner consistent with
applicable law, as amended and interpreted or
modified from time to time by any regulatory
authority having jurisdiction.
- ------------------------------------------------------------------------------------------------------------------------------
4
- ------------------------------------------------------------------------------------------------------------------------------
AmSouth Capital Growth Fund Pioneer Oak Ridge Large Cap Growth Fund
- ------------------------------------------------------------------------------------------------------------------------------
Derivative instruments AmSouth Capital Growth Fund may invest in Pioneer Oak Ridge Large Cap Growth Fund may
futures contracts and options thereon use futures and options on securities, indices
(interest rate futures contracts or index and currencies, forward currency exchange
futures contracts, as applicable) to commit contracts and other derivatives. The Fund
funds awaiting investment, to maintain cash does not use derivatives as a primary
liquidity or for other hedging purposes. The investment technique and generally limits
value of the Fund's contracts may equal or their use to hedging. However, the Fund may
exceed 100% of the Fund's total assets, use derivatives for a variety of non-principal
although the Fund will not purchase or sell a purposes, including:
futures contract unless immediately afterwards
the aggregate amount of margin deposits on its o As a hedge against adverse changes in
existing futures positions plus the amount of stock market prices, interest rates
premiums paid for related futures options or currency exchange rates
entered into for other than bona fide hedging o As a substitute for purchasing or
purposes is 5% or less of its net assets. selling securities
o To increase the Fund's return as a
The Fund also may write covered put options in non-hedging strategy that may be
respect of specific securities in which the considered speculative
Fund may invest and write covered call and put
option contracts. The size of the premiums
that the Fund may receive may be adversely
affected as new or existing institutions,
including other investment companies, engage
in or increase their option-writing activities.
- ------------------------------------------------------------------------------------------------------------------------------
Short-term trading AmSouth Capital Growth Fund may engage in the Pioneer Oak Ridge Large Cap Growth Fund does
technique of short-term trading. Such trading not usually trade for short-term profits. The
involves the selling of securities held for a Fund will sell an investment, however, even if
short-time, ranging from several months to it has only been held for a short time, if it
less than a day. The object of such short-term no longer meets the Fund's investment criteria.
trading is to increase the potential for
capital appreciation and/or income of the Fund
in order to take advantage of what AAMI
believes are changes in market, industry or
individual company outlook.
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Other investment policies As described above, the Funds have substantially similar principal investment strategies and
and restrictions policies. Certain of the non-principal investment policies and restrictions are different.
For a more complete discussion of each Fund's other investment policies and fundamental and
non-fundamental investment restrictions, see the SAI.
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Buying, Selling and Exchanging Shares
- ------------------------------------------------------------------------------------------------------------------------------
Class A sales charges and Class A shares are offered with an initial Class A shares are offered with an initial
Rule 12b-1 fees sales charge of up to 5.50% of the offering sales charge of up to 5.75% of the offering
price, which is reduced depending upon the price, which is reduced or waived for large
amount invested or, in certain circumstances, purchases and certain types of investors. At
waived. Class A shares bought as part of an the time of your purchase, your investment
investment of $1 million or more are not firm may receive a commission from Pioneer
subject to an initial sales charge, but may be Funds Distributor, Inc. ("PFD"), the Fund's
charged a contingent deferred sales charge distributor, of up to 5% declining as the size
("CDSC") of 1.00% if sold within one year of of your investment increases.
purchase.
There is no CDSC, except in certain Class A
Class A shares pay a shareholder servicing fee circumstances when the initial sales charge is
(non 12b-1) of up to 0.25% of average daily waived.
net assets.
Class A shares are subject to distribution and
service (12b-1) fees of up to 0.25% of average
daily net assets.
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5
- ------------------------------------------------------------------------------------------------------------------------------
AmSouth Capital Growth Fund Pioneer Oak Ridge Large Cap Growth Fund
- ------------------------------------------------------------------------------------------------------------------------------
Class B sales charges and Class B shares are offered without an initial Class B shares are offered without an initial
Rule 12b-1 fees sales charge, but are subject to a CDSC of up sales charge, but are subject to a CDSC of up
to 5%. For Class B shares purchased prior to to 4% if you sell your shares. The charge is
the combination of AmSouth Funds with ISG reduced over time and is not charged after
Funds, the CDSC on such Class B shares held five years. Your investment firm may receive a
continuously declines over six years, starting commission from PFD, the Fund's distributor,
with year one and ending in year seven from: at the time of your purchase of up to 4%.
4%, 3%, 3%, 2%, 2%, 1%. For all other Class B
shares held continuously, the CDSC declines Class B shares are subject to distribution and
over six years, starting with year one and service (12b-1) fees of up to 1% of average
ending in year seven from: 5%, 4%, 3%, 3%, 2%, daily net assets.
1%. Eight years after purchase (seven years in
the case of shares acquired in the ISG Maximum purchase of Class B shares in a single
combination), Class B shares automatically transaction is $49,999.
convert to Class A shares.
Class B shares acquired through the
Class B shares pay a shareholder servicing fee Reorganization will be subject to the CDSC and
(non 12b-1) of up to 0.25% of average daily commission schedules applicable to the
net assets and a distribution (12b-1) fee of original purchase.
0.75% of average daily net assets.
Maximum investment for all Class B purchases
by a shareholder for the Fund's shares is
$99,999.
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Class I and Class Y sales AmSouth Capital Growth Fund does not impose The Fund does not impose any initial,
charges and Rule 12b-1 fees any initial or CDSC on Class I shares. contingent deferred or asset based sales
charge on Class Y shares.
The Fund may impose a shareholder servicing
fee (non 12b-1) of up to 0.15% of average The distributor incurs the expenses of
daily net assets. distributing the Fund's Class Y shares, none
of which are reimbursed by the Fund or the
Class Y shareowners.
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Management AmSouth Capital Growth Fund pays an advisory Pioneer Oak Ridge Large Cap Growth Fund pays
and other fees fee on a monthly basis at an annual rate of Pioneer an annual fee equal to 0.75% of the
0.80% of the Fund's average daily net assets. Fund's average daily net assets up to $1
billion and 0.70% on assets over $1 billion.
ASO Services Company, Inc. ("ASO") serves as
administrator and fund accounting agent for The fee is computed daily and paid monthly.
the Fund. The Fund pays ASO an administrative During its most recent fiscal year, the Fund
services fee of 0.15% of the Fund's average paid an advisory fee at an average rate of
daily net assets. 0.75% of average daily net assets.
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6
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AmSouth Capital Growth Fund Pioneer Oak Ridge Large Cap Growth Fund
- ------------------------------------------------------------------------------------------------------------------------------
Other expenses of the Fund are being limited In addition, the Fund reimburses Pioneer for
to 0.49% for Class A shares, 0.49% for Class B certain fund accounting and legal expenses
shares and 0.34% for Class I shares. Any fee incurred on behalf of the Fund and pays a
waiver or expense reimbursement arrangement is separate shareholder servicing/transfer agency
voluntary and may be discontinued at any time. fee to PIMSS, an affiliate of Pioneer.
For the fiscal year ended July 31, 2004, the Pioneer has contractually agreed to limit
Fund's annual operating expenses for Class A ordinary operating expenses to the extent
shares, after giving effect to the expense required to reduce fund expenses to 1.30% and
limitation were 1.29%, and without giving 2.10% of the average daily net assets
effect to the expense limitation, were 1.31% attributable to Class A and Class B shares,
of average daily net assets. respectively. These expense limitations are in
effect through April 1, 2008 for Class A
For the fiscal year ended July 31, 2004, the shares and through April 1, 2007 for Class B
Fund's annual operating expenses for Class B shares.
shares, after giving effect to the expense
limitation were 2.04%, and without giving For the fiscal year ended November 30, 2004,
effect to the expense limitation, were 2.06% the Fund's total annual operating expenses for
of average daily net assets. Class A shares, after giving effect to the
expense limitation, were 1.30%, and without
For the fiscal year ended July 31, 2004, the giving effect to the expense limitation were
Fund's annual operating expenses for Class I 2.42% of average daily net assets.
shares, after giving effect to the expense
limitation were 1.14%, and without giving For the fiscal year ended November 30, 2004,
effect to the expense limitation, were 1.21% the Fund's total annual operating expenses for
of average daily net assets. Class B shares, after giving effect to the
expense limitation, were 2.20%, and without
giving effect to the expense limitation were
2.94% of average daily net assets.
For the fiscal year ended November 30, 2004,
the Fund's total annual operating expenses for
Class Y shares were 1.19% of average daily net
assets.
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Buying shares You may buy shares of the Fund directly You may buy shares from any investment firm
through BISYS Fund Services, the Fund's that has a sales agreement with PFD, the
distributor, or through brokers, registered Pioneer Fund's distributor.
investment advisers, banks and other financial
institutions that have entered into selling If the account is established in the
agreements with the Fund's distributor, as shareholder's own name, shareholders may also
described in the Fund's prospectus. purchase additional shares of the Fund by
telephone or online.
Certain account transactions may be done by
telephone.
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Exchanging shares You can exchange your shares in the Fund for You may exchange your shares for shares of the
shares of the same class of another AmSouth same class of another Pioneer mutual fund.
Fund, usually without paying additional sales Your exchange request must be for at least
charges. You must meet the minimum investment $1,000. The Fund allows you to exchange your
requirements for the Fund into which you are shares at net asset value without charging you
exchanging. Exchanges from one Fund to another either an initial or contingent deferred
are taxable. Class A shares may be exchanged shares charge at the time of the exchange.
for Class I shares of the same Fund or another Shares you acquire as part of an exchange will
AmSouth Fund if you become eligible to continue to be subject to any contingent
purchase Class I shares. Class I shares may deferred sales charge that applies to the
be exchanged for Class A shares of the same shares you originally purchased. When you
Fund. No transaction fees are currently ultimately sell your shares, the date of your
charged for exchanges. original purchase will determine your
contingent deferred sales charge. An exchange
If you sell your shares or exchange them for generally is treated as a sale and a new
shares of another AmSouth Fund within 7 days purchase of shares for federal income tax
of the date of purchase, you will be charged a purposes.
2.00% fee on the current net asset value of
the shares sold or exchanged. The fee is paid After you establish an eligible fund account,
to the Fund to offset the costs associated you can exchange Fund shares by telephone or
with short-term trading, such as portfolio online.
transaction and administrative costs.
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7
- ------------------------------------------------------------------------------------------------------------------------------
AmSouth Capital Growth Fund Pioneer Oak Ridge Large Cap Growth Fund
- ------------------------------------------------------------------------------------------------------------------------------
The Fund uses a "first-in, first-out" method
to determine how long you have held your
shares. This means that if you purchased shares
on different days, the shares purchased first
will be considered redeemed first for purposes
of determining whether the redemption fee will
be charged.
The fee will be charged on all covered
redemptions and exchanges, including those made
through retirement plan, brokerage and other
types of omnibus accounts (except where it is
not practical for the plan administrator or
brokerage firm to implement the fee). The Fund
will not impose the redemption fee on a
redemption or exchange of shares purchased upon
the reinvestment of dividend and capital gain
distributions.
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Selling shares Shares of each Fund are sold at the net asset value per share next calculated after the
Fund receives your request in good order.
-------------------------------------------------------------------------------------------------
You may sell your shares by contacting the Normally, your investment firm will send your
Fund directly in writing or by telephone or by request to sell shares to PIMSS. You can also
contacting a financial intermediary as sell your shares by contacting the Fund
described in the Fund's prospectus. directly if your account is registered in your
name.
If the account is established in the
shareholder's own name, shareholders may also
redeem shares of the Pioneer Fund by telephone
or online.
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Comparison of Principal Risks of Investing in the Funds
Because each Fund has a similar investment objective, primary investment
policies and strategies, the Funds are subject to the same principal risks. You
could lose money on your investment in either Fund or not make as much as if you
invested elsewhere if:
8
o The stock market goes down (this risk may be greater in the short
term)
o Large company or growth stocks fall out of favor with investors
o The adviser's/subadviser's judgment about the attractiveness, growth
potential or potential appreciation of a particular stock proves to be
incorrect
Pioneer Oak Ridge Large Cap Growth Fund may be subject to the following
additional risks associated with investing in non-U.S. issuers, which may
involve unique risks compared to investing in securities of U.S. issuers. These
risks are more pronounced to the extent the Fund invests in issuers in countries
with emerging markets or if the Fund invests significantly in one country. These
risks may include:
o Less information about non-U.S. issuers or markets may be available
due to less rigorous disclosure or accounting standards or regulatory
practices
o Many non-U.S. markets are smaller, less liquid and more volatile. In a
changing market, the adviser/subadviser might 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 non-U.S. countries may grow at slower rates than
expected or may experience a downturn or recession
o Economic, political and social developments may adversely affect the
securities markets
o Withholding and other non-U.S. taxes may decrease the Fund's return
In addition, at times, more than 25% of Pioneer Oak Ridge Large Cap Growth
Fund's assets may be invested in the same market segment, such as financial or
technology. To the extent the Fund emphasizes investments in a market segment,
the Fund will be subject to a greater degree to the risks particular to the
industries in that segment, and may experience greater market fluctuation, than
a fund without the same focus.
AmSouth Capital Growth Fund is subject to risks relating to the fact that
it is non-diversified. The Fund may invest in a small number of companies which
may increase the volatility of the Fund. Accordingly, the Fund's portfolio may
be more sensitive to changes in the market value of a single company or
industry.
Although Pioneer Oak Ridge Large Cap Growth Fund is classified as a
diversified investment company, the Fund's portfolio may be comprised of fewer
issuers than many large cap growth funds. Typically, the subadviser expects the
portfolio to include a limited number of different issuers, which may increase
the volatility of the Fund's net asset value per share.
Past Performance
Set forth below is performance information for each Fund. The bar charts
show how each Fund's total return (not including any deduction for sales
charges) has varied from year to year for each full calendar year. The tables
show average annual total return (before and after taxes) for each Fund over
time for each class of shares (including deductions for sales charges) compared
with a broad-based securities market index. The bar charts give an indication of
the risks of investing in each Fund, including the fact that you could incur a
loss and experience volatility of returns year to year. Past performance before
and after taxes does not indicate future results.
9
AmSouth Capital Growth Fund -- Class A Shares
Calendar Year Total Returns*
[THE FOLLOWING DATA WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL]
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
30.42 22.25 30.79 32.05 21.85 -0.69 -21.75 -25.17 26.36 3.80
* During the period shown in the bar chart, your AmSouth Fund's highest
quarterly return was 22.63% for the quarter ended December 31, 1998,
and the lowest quarterly return was -21.26% for the quarter ended
September 30, 2001.
Pioneer Oak Ridge Large Cap Growth Fund -- Class A Shares
Calendar Year Total Returns*
[THE FOLLOWING DATA WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL]
2000 2001 2002 2003 2004
6.64 -11.95 -17.4 19.53 11.4
* During the period shown in the bar chart since the Fund's inception
March 1, 1999, Pioneer Oak Ridge Large Cap Growth Fund's highest
quarterly return was 13.43% for the quarter ended December 31, 1999,
and the lowest quarterly return was -13.05% for the quarter ended
September 30, 2002.
10
AmSouth Capital Growth Fund
Average Annual Total Returns as of December 31, 2004
- ---------------------------------------------------------------------------------------------------------------------------------
1 Year 5 Years 10 Years
- ---------------------------------------------------------------------------------------------------------------------------------
AmSouth Capital Growth Fund, Class A Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes(1) -1.94% -6.34% 9.24%
- ---------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions -2.08% -6.80 7.69%
- ---------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares -1.27% -5.44 7.62%
- ---------------------------------------------------------------------------------------------------------------------------------
AmSouth Capital Growth Fund, Class B Shares(2)
- ---------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes -2.01% -6.30% 8.87%
- ---------------------------------------------------------------------------------------------------------------------------------
AmSouth Capital Growth Fund, Class I Shares (3)
- ---------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 3.92% -5.11% 9.90%
- ---------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions 3.77% -5.58% 8.34%
- ---------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares 2.54% -4.44% 8.22%
- ---------------------------------------------------------------------------------------------------------------------------------
S&P 500/Barra Growth Index(4) 6.13% -7.07% 11.44%
(reflects no deduction for fees, expenses or taxes)
- ---------------------------------------------------------------------------------------------------------------------------------
(1) The quoted returns reflect the performance from 4/1/96 to 3/12/00 of the
ISG Capital Growth Fund, an open-end investment company that was the
predecessor fund to the AmSouth Capital Growth Fund. The ISG Capital Growth
Fund commenced operations on 4/1/96 through a transfer of assets from
certain collective trust fund ("commingled") accounts managed by First
American National Bank, using substantially the same investment objective,
policies and methodologies as the Fund. The quoted before-tax returns of
the Fund includes the performance of the predecessor fund and commingled
accounts for periods dating back to 7/31/93, and prior to the Fund's
commencement of operations, restated to reflect the expenses associated
with the Fund. The commingled accounts were not registered with the SEC
and, therefore, were not subject to the investment restrictions imposed by
law on registered mutual funds. If the commingled accounts had been
registered, the commingled accounts' performance may have been adversely
affected. After-tax returns reflect performance since 4/1/96, and do not
include the performance of the commingled accounts prior to that date.
Class A shares were first offered on 4/1/96.
(2) Performance for the Class B shares, which were first offered on 2/5/98, is
based on the historical performance of the Fund's Class A shares, including
the performance of the predecessor fund and commingled accounts (without
sales charge), prior to that date. The predecessor fund and commingled
accounts were managed using substantially the same investment objective,
policies and methodologies as the Fund. The historical performance of the
Class B shares has been restated to reflect the Fund's Class B shares
distribution (12b-1) fees and the contingent deferred sales charge.
(3) Performance for the Class I shares, which were first offered on 10/3/97, is
based on the historical performance of the Fund's Class A shares, including
the performance of the predecessor fund and commingled accounts (without
sales charge), prior to that date. The predecessor fund and commingled
accounts were managed using substantially the same investment objective,
policies and methodologies as the Fund.
(4) The S&P 500/Barra Growth Index, an unmanaged index of 500 stocks, is for
reference only, does not mirror the Fund's investments, and reflects no
deduction for fees, expenses or taxes.
The table above shows the impact of taxes on AmSouth Capital Growth Fund's
returns. After-tax returns are only shown for Class A shares and Class I shares
and may vary for Class B shares. The Fund's after-tax returns are calculated
using the highest individual federal marginal income tax rates and do not
reflect the impact of state and local taxes. In certain cases, the figure
representing "Return After Taxes on Distributions and Sale of Fund Shares" may
be higher than the other return figures for the same period. A higher after-tax
return results when a capital loss occurs upon redemption and translates into an
assumed tax deduction that benefits the shareholder. Please note that actual
after-tax returns depend on an investor's tax situation and may differ from
those shown. Also note that after-tax returns shown are not relevant to
shareholders who hold Fund shares through tax-deferred arrangements, such as
401(k) plans or individual retirement accounts.
The Pioneer Fund's past performance does not necessarily indicate how it will
perform in the future. Pursuant to an agreement and plan of reorganization, the
Pioneer Fund acquired all of the assets and those liabilities reflected in the
net assets of Oak Ridge Large Cap Equity Fund (the predecessor fund) on February
13, 2004. In the reorganization, the predecessor fund exchanged all of its
assets for Class A shares of the Pioneer Fund. The predecessor fund offered only
one class of shares which
11
was most similar to Class A shares of the Pioneer Fund. As a result of the
reorganization, the Pioneer Fund is the accounting successor of the predecessor
fund, which commenced operations on March 1, 1999. The Pioneer Fund's subadviser
served as the predecessor fund's investment adviser. The performance of each
class of the Pioneer Fund includes the performance of the predecessor fund's
shares prior to the reorganization, which has been restated to reflect
differences in any applicable sales charges and Rule 12b-1 fees (but not other
differences in expenses). This adjustment had the effect of reducing the
previously reported performance of the predecessor fund.
Pioneer Oak Ridge Large Cap Growth Fund
Average Annual Total Returns as of December 31, 2004
- ---------------------------------------------------------------------------------------------------------------------------------
1 Year 5 Years Since Inception
(March 1, 1999)
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer Oak Ridge Large Cap Growth Fund, Class A shares
- ---------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 4.96% -0.54% 1.26%
- ---------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions(1) 4.88% -0.79% 1.04%
- ---------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares(1) 3.29% -0.55% 0.99%
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer Oak Ridge Large Cap Growth Fund, Class B shares(2)
- ---------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 6.59% -0.10% 1.53%
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer Oak Ridge Large Cap Growth Fund, Class Y shares(2)
- ---------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 11.56% 0.67% 2.31%
- ---------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions(1) 11.51% 0.43% 2.10%
- ---------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares(1) 7.58% 0.48% 1.90%
- ---------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(3) 10.87% -2.30% 1.13%
(reflects no deduction for fees, expenses or taxes)
- ---------------------------------------------------------------------------------------------------------------------------------
Russell 1000 Growth Index(4) 6.30% -9.29% -3.56%
(reflects no deduction for fees, expenses or taxes)
- ---------------------------------------------------------------------------------------------------------------------------------
(1) After-tax returns are calculated using the historical highest individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your situation and may
differ from those shown, and the after-tax returns shown are not relevant
to shareholders who hold Fund shares through tax-deferred arrangements such
as 401(k) plans or IRA accounts, or to investors that are tax-exempt.
(2) Reflects the inception date of predecessor fund. The inception date of
Class B shares was February 17, 2004 and of Class Y shares was August 11,
2004.
(3) The S&P 500 Index, an unmanaged index of 500 stocks, is for reference only,
does not mirror the Fund's investments, and reflects no deduction for fees,
expenses or taxes.
(4) The Russell 1000 Growth Index, and unmanaged index made up of those stocks
contained within the Russell 1000 Index having higher price-to-book ratios,
is for reference only, does not mirror the Fund's investments, and reflects
no deduction for fees, expenses or taxes.
The most recent portfolio manager's discussion of each Fund's performance
is attached as Exhibit C.
12
The Funds' Fees and Expenses
Shareholders of both Funds pay various fees and expenses, either directly
or indirectly. The tables below show the fees and expenses that you would pay if
you were to buy and hold shares of each Fund. The expenses in the tables
appearing below are based on (i) for the AmSouth Capital Growth Fund, the
expenses of AmSouth Capital Growth Fund for the period ended January 31, 2005
and (ii) for Pioneer Oak Ridge Large Cap Growth Fund, the expenses of Pioneer
Oak Ridge Large Cap Growth Fund for the period ended May 31, 2005. Future
expenses for all share classes may be greater or less. Shareholders of AmSouth
Large Cap Fund are also being asked to approve the reorganization of their fund
into Pioneer Oak Ridge Large Cap Growth Fund. The tables also show (1) the pro
forma expenses of the combined Fund assuming the Reorganization occurred on May
31, 2005, and (2) the pro forma expenses of the combined Fund assuming the
reorganization of AmSouth Large Cap Fund into Pioneer Oak Ridge Large Cap Growth
Fund also occurred on May 31, 2005.
- ------------------------------------------------------------------------------------------------------------------------------------
Shareholder AmSouth Pioneer Combined Combined AmSouth Pioneer Combined Combined AmSouth Pioneer
transaction fees Capital Oak Fund (Pro Fund Capital Oak Ridge Fund Fund Capital Oak
(paid directly Growth Ridge Forma) (including Growth Fund (Pro (including Growth Ridge
from your Fund(1) Fund AmSouth Fund(1) Forma) AmSouth Fund(1) Fund
investment) Large Cap Large Cap
Fund) (Pro Fund) (Pro
Forma) Forma)
Class A Class A Class A Class A Class B Class B Class B Class B Class I Class Y
- ------------------------------------------------------------------------------------------------------------------------------------
Maximum sales 5.50%(2) 5.75%(2) 5.75%(2) 5.75%(2) None None None None None None
charge (load)
when you buy
shares as a
percentage of
offering price
- ------------------------------------------------------------------------------------------------------------------------------------
Maximum deferred None None None None 5.00%(3) 4.00% 4.00% 4.00% None None
sales charge
(load) as a
percentage of
purchase price
or the amount
you receive when
you sell shares,
whichever is less
- ------------------------------------------------------------------------------------------------------------------------------------
Redemption fees 2.00%(4) None None None 2.00%(4) None None None 2.00%(4) None
- ------------------------------------------------------------------------------------------------------------------------------------
Annual fund
operating
expenses
(deducted from
fund assets) (as
a % of average
net assets)
- ------------------------------------------------------------------------------------------------------------------------------------
Management fee 0.80% 0.75% 0.75% 0.75% 0.80% 0.75% 0.75% 0.75% 0.80% 0.75%
- ------------------------------------------------------------------------------------------------------------------------------------
Distribution and None 0.25% 0.25% 0.25% 0.75% 1.00% 1.00% 1.00% None None
service (12b-1)
fee
- ------------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------
Shareholder Combined Combined
transaction fees Fund (Pro Fund
(paid directly Forma) (including
from your AmSouth
investment) Large Cap
Fund) (Pro
Forma)
Class Y Class Y
- ---------------------------------------------
Maximum sales None None
charge (load)
when you buy
shares as a
percentage of
offering price
- ---------------------------------------------
Maximum deferred None None
sales charge
(load) as a
percentage of
purchase price
or the amount
you receive when
you sell shares,
whichever is less
- ---------------------------------------------
Redemption fees None None
- ---------------------------------------------
Annual fund
operating
expenses
(deducted from
fund assets) (as
a % of average
net assets)
- ---------------------------------------------
Management fee 0.75% 0.75%
- ---------------------------------------------
Distribution and None None
service (12b-1)
fee
- ---------------------------------------------
13
- ------------------------------------------------------------------------------------------------------------------------------------
Shareholder AmSouth Pioneer Combined Combined AmSouth Pioneer Combined Combined AmSouth Pioneer
transaction fees Capital Oak Fund (Pro Fund Capital Oak Ridge Fund Fund Capital Oak
(paid directly Growth Ridge Forma) (including Growth Fund (Pro (including Growth Ridge
from your Fund(1) Fund AmSouth Fund(1) Forma) AmSouth Fund(1) Fund
investment) Large Cap Large Cap
Fund) (Pro Fund) (Pro
Forma) Forma)
Class A Class A Class A Class A Class B Class B Class B Class B Class I Class Y
- ------------------------------------------------------------------------------------------------------------------------------------
Other expenses 0.57%(5) 1.42% 0.25% 0.19% 0.67%(5) 1.19% 0.53% 0.45% 0.45%(5) 0.44%
- ------------------------------------------------------------------------------------------------------------------------------------
Total fund 1.37% 2.42%(6) 1.25% 1.19% 2.22% 2.94%(6) 2.28% 2.20% 1.25% 1.19%(6)
operating
expenses
- ------------------------------------------------------------------------------------------------------------------------------------
Expense 0.08% 1.12%(7) NA N/A 0.18% 0.74%(7) 0.18%(8) 0.10%(8) 0.11% N/A
reimbursement/
reduction
- ------------------------------------------------------------------------------------------------------------------------------------
Net fund 1.29% 1.30% 1.25% 1.19% 2.04% 2.20% 2.10% 2.10% 1.14% 1.19%
operating
expenses
- ------------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------
Shareholder Combined Combined
transaction fees Fund (Pro Fund
(paid directly Forma) (including
from your AmSouth
investment) Large Cap
Fund) (Pro
Forma)
Class Y Class Y
- ---------------------------------------------
Other expenses 0.15% 0.11%
- ---------------------------------------------
Total fund 0.90% 0.86%
operating
expenses
- ---------------------------------------------
Expense N/A N/A
reimbursement/
reduction
- ---------------------------------------------
Net fund 0.90% 0.86%
operating
expenses
- ---------------------------------------------
(1) AmSouth Bank or other financial institutions may charge their customer
account fees for automatic investment and other cash management services
provided in connection with investment in the Fund.
(2) Sales charges may be reduced depending upon the amount invested or, in
certain circumstances, waived. Class A shares of the Pioneer Fund bought as
part of an investment of $1 million or more are not subject to an initial
sales charge, but may be charged a CDSC of 1.00% if sold within one year of
purchase.
(3) For Class B shares purchased prior to the combination of AmSouth Funds with
ISG Funds, the CDSC on such Class B shares held continuously declines over
six years, starting with year one and ending in year seven from: 4%, 3%,
3%, 2%, 2%, 1%. For all other Class B shares held continuously, the CDSC
declines over six years, starting with year one and ending in year seven
from: 5%, 4%, 3%, 3%, 2%, 1%. Eight years after purchase (seven years in
the case of shares acquired in the ISG combination), Class B shares
automatically convert to Class A shares.
(4) To discourage short-term trading, a redemption fee of 2.00% will be charged
on sales or exchanges of Class A, Class B and Class I shares of your
AmSouth Fund made within 7 days of the date of purchase. A wire transfer
fee of $7.00 will be deducted from the amount of your redemption if you
request a wire transfer.
(5) Other expenses for your AmSouth Fund are being limited to 0.49% for Class A
shares, 0.49% for Class B shares and 0.34% for Class I shares. Any fee
waiver or expense reimbursement arrangement is voluntary and may be
discontinued at any time.
(6) The Pioneer Fund's total annual operating expenses in the table have not
been reduced by any expense offset arrangements.
(7) The expenses in the table above reflect the expense limitations currently
in effect for the Pioneer Fund, under which Pioneer has contractually
agreed to limit ordinary operating expenses to the extent required to
reduce fund expenses to 1.30%, and 2.20% of the average daily net assets
attributable to Class A and Class B shares, respectively. These expense
limitations are in effect through April 1, 2008 for Class A shares and
through April 1, 2006 for Class B shares. There can be no assurance that
Pioneer will extend the expense limitations beyond such time.
(8) The expenses in the table above reflect the expense limitation in effect
for Class B shares of the Pioneer Fund, under which Pioneer has
contractually agreed to limit ordinary operating expenses to the extent
required to reduce fund expenses 2.10% of the average daily net assets
attributable Class B shares. This expense limitation is in effect through
April 1, 2007. There can be no assurance that Pioneer will extend the
expense limitations beyond such time.
14
The hypothetical example below helps you compare the cost of investing in
each Fund. It assumes that: (a) you invest $10,000 in each Fund for the time
periods shown, (b) you reinvest all dividends and distributions, (c) your
investment has a 5% return each year, and (d) each Fund's gross operating
expenses remain the same. The examples are for comparison purposes only and are
not a representation of either Fund's actual expenses or returns, either past or
future.
- ------------------------------------------------------------------------------------------------------------
Combined Fund
(including AmSouth
Number of years you AmSouth Capital Pioneer Oak Ridge Large Combined Fund Large Cap Fund)
own your shares Growth Fund Cap Growth Fund (Pro Forma) (Pro Forma)
- ------------------------------------------------------------------------------------------------------------
Class A
- ------------------------------------------------------------------------------------------------------------
Year 1 $682 $700 $695 $689
- ------------------------------------------------------------------------------------------------------------
Year 3 $960 $963 $949 $931
- ------------------------------------------------------------------------------------------------------------
Year 5 $1,259 $1,485 $1,222 $1,192
- ------------------------------------------------------------------------------------------------------------
Year 10 $2,106 $2,913 $1,999 $1,935
- ------------------------------------------------------------------------------------------------------------
Class B -- assuming redemption at end of period
- ------------------------------------------------------------------------------------------------------------
Year 1 $725 $623 $613 $613
- ------------------------------------------------------------------------------------------------------------
Year 3 $994 $1,140 $995 $979
- ------------------------------------------------------------------------------------------------------------
Year 5 $1,390 $1,583 $1,304 $1,271
- ------------------------------------------------------------------------------------------------------------
Year 10 $2,340 $3,086 $2,342 $2,270
- ------------------------------------------------------------------------------------------------------------
Class B -- assuming no redemption
- ------------------------------------------------------------------------------------------------------------
Year 1 $225 $223 $213 $213
- ------------------------------------------------------------------------------------------------------------
Year 3 $694 $840 $695 $679
- ------------------------------------------------------------------------------------------------------------
Year 5 $1,190 $1,483 $1,204 $1,171
- ------------------------------------------------------------------------------------------------------------
Year 10 $2,340 $3,086 $2,342 $2,270
- ------------------------------------------------------------------------------------------------------------
Class I Class Y
- ------------------------------------------------------------------------------------------------------------
Year 1 $127 $121 $92 $88
- ------------------------------------------------------------------------------------------------------------
Year 3 $397 $378 $287 $274
- ------------------------------------------------------------------------------------------------------------
Year 5 $686 $654 $498 $477
- ------------------------------------------------------------------------------------------------------------
Year 10 $1,511 $1,443 $1,108 $1,061
- ------------------------------------------------------------------------------------------------------------
Reasons for the Proposed Reorganization
The Trustees believe that the proposed Reorganization is in the best
interests of AmSouth Capital Growth Fund and its shareholders. The Trustees
considered the following matters, among others, in approving the proposal.
First, AAMI, the investment adviser to your AmSouth Fund, informed the
Trustees that it does not intend to continue to provide investment advisory
services to the AmSouth Funds. Consequently, a change in your AmSouth Fund's
investment adviser was necessary. In the absence of the Reorganization, such a
change would be more likely to motivate shareholders invested in reliance on
AAMI's role to withdraw from the Fund, thereby reducing fund size and increasing
fund expense ratios.
Second, the historical investment performance of Pioneer Oak Ridge Large
Cap Growth Fund is significantly better than your AmSouth Fund's investment
performance. For the one and five year periods ended December 31, 2004, Class A
shares of Pioneer Oak Ridge Large Cap Growth Fund had an average annual return
of 4.96% (one year); and -0.54% (five year), compared to an average annual
return of the Class A shares of your AmSouth Fund of -1.94% (one year); and
- -6.34% (five year), respectively, during the same period. In addition, the
Trustees considered the track record of Pioneer in managing equity and fixed
income mutual funds.
15
Third, the resources of Pioneer. At December 31, 2004, Pioneer managed over
80 investment companies and accounts with approximately $42 billion in assets,
including $26.7 billion in equity securities. Pioneer is part of the global
asset management group of UniCredito Italiano S.p.A., one of the largest banking
groups in Italy, providing investment management and financial services to
mutual funds, institutional and other clients. As of December 31, 2004, assets
under management of UniCredito Italiano S.p.A. were approximately $175 billion
worldwide. Shareholders of your AmSouth Fund would become part of a
significantly larger family of funds that offers a more diverse array of
investment options and enhanced shareholder account options. The Pioneer family
of mutual funds offers over 80 funds, including domestic and international
equity and fixed income funds and a money market fund that will be available to
your AmSouth Fund's shareholders through exchanges
Fourth, Pioneer Oak Ridge Large Cap Growth Fund's management fee (0.75% of
average daily net assets) is lower than the advisory fee of your AmSouth Fund
(0.80% of average daily net assets). The historical gross and net expenses of
Pioneer Oak Ridge Large Cap Growth Fund attributable to Class A are slightly
higher than your AmSouth Fund's historical gross and net expenses. However, the
estimated pro forma expenses of the Pioneer Fund attributable to Class A and Y
shares after giving effect to the Reorganizations on both a gross and net basis
are lower than your AmSouth Fund's gross and net operating expenses for the
Class A and I shares. The estimated pro forma expenses for Class B shares will
be lower on a gross basis, but higher on a net basis. The Board considered the
positive factors associated with the Reorganization, such as the superior
performance of the Pioneer Fund, to outweigh the negative factors, such as the
increase in net operating expenses for the Class B shares. The aggregate Rule
12b-1 distribution and shareholder servicing fees and non-Rule 12b-1 shareholder
servicing fees paid by the Class A and Class B shares of both Funds are the
same. Moreover, your AmSouth Fund's Class I shares pay a non 12b-1 shareholder
servicing fee that is not paid by the Pioneer Fund's Class Y shares. In
addition, the broader distribution arrangements of the Pioneer Fund offer
greater potential for further asset growth and reduced per share expenses.
Fifth, the substantially larger size of the combined Pioneer Oak Ridge
Large Cap Growth Fund will offer greater opportunity for diversification of the
investment portfolio, which should help to reduce risks.
Sixth, the Class A, B and Y shares of Pioneer Oak Ridge Large Cap Growth
Fund received in the Reorganization will provide AmSouth Capital Growth Fund
shareholders with exposure to substantially the same investment product as they
currently have.
Seventh, The transaction is structured to qualify as a tax-free
reorganization under Section 368(a) of the Internal Revenue Code of 1986 and
therefore will not be treated as a taxable sale of your AmSouth shares. Although
the Reorganization will result in a per share increase in net unrealized capital
gains and decrease in capital loss carryforwards, the potential negative tax
consequences of these aspects of the Reorganization are outweighed by the
advantages of the Reorganization.
Pioneer and AmSouth Bank will pay all costs of preparing and printing the
AmSouth Funds' proxy statements and solicitation costs incurred by the AmSouth
Funds in connection with the Reorganization. AAMI will otherwise be responsible
for all costs and expenses of the AmSouth Funds in connection with the
Reorganizations.
The Trustees also considered that Pioneer and AmSouth Bank will benefit
from the Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the
Reorganizations."
The Board of Trustees of the Pioneer Fund also considered that the
Reorganization presents an excellent opportunity for the Pioneer Fund to acquire
investment assets without the obligation to pay commissions or other transaction
costs that a fund normally incurs when purchasing securities. This opportunity
provides an economic benefit to the Pioneer Fund and its shareholders.
CAPITALIZATION
The following table sets forth the capitalization of each Fund as of May
31, 2005, and the pro forma combined Fund as of May 31, 2005. The table also
sets forth the pro forma capitalization of the combined Fund as of May 31, 2005,
assuming the shareholders of AmSouth Large Cap Fund approve the reorganization
of their fund into Pioneer Oak Ridge Large Cap Growth Fund.
16
- ------------------------------------------------------------------------------------------------------------------------------
Pro Forma Pioneer
Oak Ridge Large
Cap Growth Fund
Pioneer Oak Ridge Pro Forma Pioneer Oak (including
AmSouth Capital Large Cap Growth Ridge Large Cap AmSouth Large Cap
Growth Fund Fund Growth Fund Fund)
May 31, 2005 May 31, 2005 May 31, 2005 May 31, 2005
- ------------------------------------------------------------------------------------------------------------------------------
Total Net Assets (in thousands) $248,563 $220,176 $468,739 $799,086
- ------------------------------------------------------------------------------------------------------------------------------
Class A shares ................. $27,454 $87,287 $114,740 $228,425
- ------------------------------------------------------------------------------------------------------------------------------
Class B shares ................. $6,781 $10,999 $17,780 $40,130
- ------------------------------------------------------------------------------------------------------------------------------
Class I/Y shares ............... $214,328 $79,164 $293,493 $487,805
- ------------------------------------------------------------------------------------------------------------------------------
Net Asset Value Per Share
- ------------------------------------------------------------------------------------------------------------------------------
Class A shares ................. $9.99 $12.66 $12.66 $12.66
- ------------------------------------------------------------------------------------------------------------------------------
Class B shares ................. $9.30 $12.54 $12.54 $12.54
- ------------------------------------------------------------------------------------------------------------------------------
Class I/Y shares ............... $10.01 $12.70 $12.70 $12.70
- ------------------------------------------------------------------------------------------------------------------------------
Shares Outstanding
- ------------------------------------------------------------------------------------------------------------------------------
Class A shares ................. $2,747,560 $6,895,166 $9,063,867 $18,044,318
- ------------------------------------------------------------------------------------------------------------------------------
Class B shares ................. $729,523 $877,131 $1,417,918 $3,200,220
- ------------------------------------------------------------------------------------------------------------------------------
Class I/Y shares ............... $21,403,248 $6,234,510 $23,113,721 $38,416,647
- ------------------------------------------------------------------------------------------------------------------------------
It is impossible to predict how many shares of the Pioneer Fund will actually be
received and distributed by your AmSouth Fund on the Reorganization date. The
table should not be relied upon to determine the amount of the Pioneer Fund's
shares that will actually be received and distributed.
BOARD'S EVALUATION AND RECOMMENDATION
For the reasons described above, the Trustees, including the Independent
Trustees, approved the Reorganization. In particular, the Trustees determined
that the Reorganization is in the best interests of your AmSouth Fund.
Similarly, the Board of Trustees of the Pioneer Fund, including its Independent
Trustees, approved the Reorganization. They also determined that the
Reorganization is in the best interests of the Pioneer Fund.
The Trustees recommend that the shareholders of your AmSouth Fund vote FOR
the proposal to approve the Agreement and Plan of Reorganization.
17
AmSouth Large Cap Fund and
Pioneer Oak Ridge Large Cap Growth Fund
PROPOSAL 1(b)
Approval of Agreement and Plan of Reorganization
SUMMARY
The following is a summary of more complete information appearing later in
this Proxy Statement/Prospectus or incorporated herein. You should read
carefully the entire Proxy Statement/Prospectus, including the form of Agreement
and Plan of Reorganization attached as EXHIBIT A-1, because it contains details
that are not in the summary.
Each Fund invests primarily in equity securities of large capitalization
issuers and, consequently the Funds have similar investment policies and risks.
In the table below, if a row extends across the entire table, the policy
disclosed applies to both your AmSouth Fund and the Pioneer Fund.
Comparison of AmSouth Large Cap Fund to Pioneer Oak Ridge Large Cap Growth Fund
- ------------------------------------------------------------------------------------------------------------------------------
AmSouth Large Cap Fund Pioneer Oak Ridge Large Cap Growth Fund
- ------------------------------------------------------------------------------------------------------------------------------
Business A diversified series of AmSouth Funds, an A diversified series of Pioneer Series Trust
open-end management investment company I, and open-end management investment company
organized as a Massachusetts business trust. organized as a Delaware statutory trust.
- ------------------------------------------------------------------------------------------------------------------------------
Net assets as of March 31, $337.4 million $157.9 million
2005
- ------------------------------------------------------------------------------------------------------------------------------
Investment advisers and Investment Adviser: Investment Adviser:
portfolio managers AAMI Pioneer
Portfolio Manager: Investment Subadviser:
Day-to-day management of AmSouth Large Cap Oak Ridge Investments, LLC ("Oak Ridge")
Fund's portfolio is the responsibility of
Ronald E. Lindquist, who has been the Fund's Portfolio Managers:
primary portfolio manager since its inception, Day-to-day management of the Fund's portfolio
and has been employed by AAMI since December is the responsibility of David M. Klaskin
1999. Prior to December 1999, Mr. Lindquist (lead manager), Chairman (since 1998),
was employed by First American National Bank Treasurer and Chief Investment Officer (since
(since May 1998), and by Deposit Guaranty 1989) of Oak Ridge, and Robert G. McVicker,
National Bank, and Commercial National Bank Portfolio Manager and Director of Research at
(since 1978). First American National Bank, Oak Ridge (since 1989).
Deposit Guaranty National Bank and Commercial
National Bank are predecessors of AmSouth Bank
and affiliates of AAMI.
Mr. Lindquist is Senior Vice President of
AmSouth Bank and AmSouth Asset Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------
Investment objective AmSouth Large Cap Fund seeks to provide Pioneer Oak Ridge Large Cap Growth Fund seeks
investors with long-term capital appreciation. capital appreciation.
- ------------------------------------------------------------------------------------------------------------------------------
1
- ------------------------------------------------------------------------------------------------------------------------------
AmSouth Large Cap Fund Pioneer Oak Ridge Large Cap Growth Fund
- ------------------------------------------------------------------------------------------------------------------------------
Primary investments Under normal circumstances, AmSouth Large Cap Normally, Pioneer Oak Ridge Large Cap Growth
Fund invests at least 80% of its net assets in Fund invests at least 80% of its net assets
equity securities of U.S. companies with large (plus the amount of borrowings, if any, for
market capitalizations. For the purpose of investment purposes) in equity securities of
this policy, net assets include net assets large capitalization U.S. companies. Large
plus borrowings for investment purposes. Large capitalization companies have market
capitalization companies are generally those capitalizations at the time of acquisition of
companies with market capitalization over $1 $3 billion or more. The Fund anticipates that
billion. the average weighted market capitalization of
the companies in the Fund's portfolio will be
significantly higher than $3 billion.
The equity securities in which Pioneer Oak
Ridge Large Cap Growth Fund principally
invests are common stocks, preferred stocks,
depositary receipts and convertible debt, but
the Fund may invest in other types of equity
securities to a lesser extent, such as
warrants and rights.
- ------------------------------------------------------------------------------------------------------------------------------
Investment strategies In choosing stocks for the Fund, AAMI's Pioneer Oak Ridge Large Cap Growth Fund uses a
strategy is to select what are in its opinion, "growth" style of management and seeks to
well-managed U.S. companies that have invest in issuers with above average potential
demonstrated sustained patterns of for earnings growth. Pioneer has engaged Oak
profitability, strong balance sheets, and the Ridge to act as the Fund's subadviser under
potential to achieve predictable, Pioneer's supervision. When making purchase
above-average earnings growth. AAMI seeks to decisions for the Fund, the subadviser uses a
diversify the Fund's portfolio within various disciplined approach that involves three
industries typically comprising those AAMI primary components:
believes to be the classic growth sectors of o Research: The subadviser analyzes
the U.S. economy: Technology, Consumer research on potential investments from a wide
Non-Durables, Health Care, Business Equipment variety of sources, including internally
and Services, Retail, Capital Goods and generated analysis and research provided by
Financials. institutions and the brokerage community. The
subadviser seeks to supplement this analysis
The Fund invests for long-term growth rather with information derived from business and
than short-term profits. trade publications, filings with the SEC,
corporate contacts, industry conferences and
discussions with company management.
o Fundamentals: Once a potential
investment is identified, the subadviser
considers whether the issuer possesses certain
attributes that the subadviser believes a
"buy" candidate should possess relating to,
among other things, (i) growth of sales and
earnings, (ii) earnings power, trends and
predictability, (iii) quality of management,
(iv) competitive position of products and/or
services, (v) fundamentals of the industry in
which the company operates and (vi) the
ability to benefit from economic and political
trends affecting the company.
o Valuation: Finally, the subadviser
values companies by considering price-to-sales
ratios and price-to-earnings ratios within a
peer group.
- ------------------------------------------------------------------------------------------------------------------------------
2
- ------------------------------------------------------------------------------------------------------------------------------
AmSouth Large Cap Fund Pioneer Oak Ridge Large Cap Growth Fund
- ------------------------------------------------------------------------------------------------------------------------------
Other investments AmSouth Large Cap Fund may invest in debt The Fund may invest up to 20% of its total
securities of domestic issuers rated no lower assets in equity and debt securities of
than investment grade (Baa/BBB) by a credit non-U.S. corporate issuers and debt securities
rating agency, or, if unrated, deemed to be of of non-U.S. government issuers.
comparable quality by AAMI.
The Fund will not invest more than 5% of its
total assets in the securities of emerging
markets issuers.
- ------------------------------------------------------------------------------------------------------------------------------
Temporary defensive When AAMI determines adverse market conditions Pioneer Oak Ridge Large Cap Growth Fund may
strategies exist, AmSouth Large Cap Fund may invest invest all or part of its assets in securities
entirely in cash positions, directly in U.S. with remaining maturities of less than one
Government securities and short-term paper, year, cash equivalents or may hold cash.
such as bankers' acceptances.
- ------------------------------------------------------------------------------------------------------------------------------
Diversification Each Fund is diversified for the purpose of the Investment Company Act and is subject to
diversification requirements under the Internal Revenue Code of 1986, as amended (the "Code").
- ------------------------------------------------------------------------------------------------------------------------------
Industry concentration AmSouth Large Cap Fund may not purchase any Pioneer Oak Ridge Large Cap Growth Fund may
securities which would cause more than 25% of not invest more than 25% of its assets in any
the value of the Fund's total assets at the one industry.
time of purchase to be invested in securities
of one or more issuers conducting their
principal business activities in the same
industry, provided that (a) there is no
limitation with respect to obligations issued
or guaranteed by the U.S. government or its
agencies or instrumentalities, and repurchase
agreements secured by obligations of the U.S.
government or its agencies or
instrumentalities; (b) wholly owned finance
companies will be considered to be in the
industries of their parents if their
activities are primarily related to financing
the activities of their parents; and (c)
utilities will be divided according to their
services. For example, gas, gas transmission,
electric and gas, electric, and telephone will
each be considered a separate industry.
There is no limitation with respect to
municipal securities, which, for purposes of
this limitation only, do not include private
activity bonds that are backed only by the
assets and revenues of a non-governmental user.
- ------------------------------------------------------------------------------------------------------------------------------
Restricted and illiquid AmSouth Large Cap Fund may not invest more Pioneer Oak Ridge Large Cap Growth Fund may
securities than 15% of its net assets in securities that not invest more than 15% of its net assets in
are restricted as to resale, or for which no securities that are illiquid and other
readily available market exists, including securities that are not readily marketable.
repurchase agreements providing for settlement Repurchase agreements maturing in more than
more than seven days after notice. seven days will be included for purposes of
the foregoing limit.
- ------------------------------------------------------------------------------------------------------------------------------
3
- ------------------------------------------------------------------------------------------------------------------------------
AmSouth Large Cap Fund Pioneer Oak Ridge Large Cap Growth Fund
- ------------------------------------------------------------------------------------------------------------------------------
Borrowing AmSouth Large Cap Fund may not borrow money or Pioneer Oak Ridge Large Cap Growth Fund may
issue senior securities, except the Fund may not borrow money, except the Fund may: (a)
borrow from banks or enter into reverse borrow from banks or through reverse
repurchase agreements for temporary emergency repurchase agreements in an amount up to 33
purposes in amounts up to 33 1/3% of the value 1/3% of the Fund's total assets (including the
of its total assets at the time of such amount borrowed); (b) to the extent permitted
borrowing. The Fund will not purchase by applicable law, borrow up to an additional
securities while borrowings (including reverse 5% of the Fund's assets for temporary
repurchase agreements) in excess of 5% of its purposes; (c) obtain such short-term credits
total assets are outstanding. In addition, as are necessary for the clearance of
the Fund is permitted to participate in a portfolio transactions; (d) purchase
credit facility whereby the Fund may directly securities on margin to the extent permitted
lend to and borrow money from other AmSouth by applicable law; and (e) engage in
funds for temporary purposes, provided that transactions in mortgage dollar rolls that are
the loans are made in accordance with an order accounted for as financings.
of exemption from the SEC and any conditions
thereto.
- ------------------------------------------------------------------------------------------------------------------------------
Lending AmSouth Large Cap Fund may not make loans, Pioneer Oak Ridge Large Cap Growth Fund may
except that the Fund may purchase or hold debt not make loans, except that the Fund may (i)
instruments in accordance with its investment lend portfolio securities in accordance with
objective and policies, lend Fund securities the Fund's investment policies, (ii) enter
in accordance with its investment objective into repurchase agreements, (iii) purchase all
and policies and enter into repurchase or a portion of an issue of publicly
agreements. In addition, the Fund is permitted distributed debt securities, bank loan
to participate in a credit facility whereby participation interests, bank certificates of
the Fund may directly lend to and borrow money deposit, bankers' acceptances, debentures or
from other AmSouth Funds for temporary other securities, whether or not the purchase
purposes, provided that the loans are made in is made upon the original issuance of the
accordance with an order of exemption from the securities, (iv) participate in a credit
SEC and any conditions thereto. facility whereby the Fund may directly lend to
and borrow money from other affiliated funds
to the extent permitted under the Investment
Company Act or an exemption therefrom, and (v)
make loans in any other manner consistent with
applicable law, as amended and interpreted or
modified from time to time by any regulatory
authority having jurisdiction.
- ------------------------------------------------------------------------------------------------------------------------------
Derivative instruments AmSouth Large Cap Fund may invest in futures Pioneer Oak Ridge Large Cap Growth Fund may
contracts and options thereon (interest rate use futures and options on securities, indices
futures contracts or index futures contracts, and currencies, forward currency exchange
as applicable) to commit funds awaiting contracts and other derivatives. The Fund
investment, to maintain cash liquidity or for does not use derivatives as a primary
other hedging purposes. The value of the investment technique and generally limits
Fund's contracts may equal or exceed 100% of their use to hedging. However, the Fund may
the Fund's total assets, although the Fund use derivatives for a variety of non-principal
will not purchase or sell a futures contract purposes, including:
unless immediately afterwards the aggregate
amount of margin deposits on its existing o As a hedge against adverse changes in
futures positions plus the amount of premiums stock market prices, interest rates or
paid for related futures options entered into currency exchange rates
for other than bona fide hedging purposes is o As a substitute for purchasing or
5% or less of its net assets. selling securities
o To increase the Fund's return as a
The AmSouth Fund also may write covered put non-hedging strategy that may be
options in respect of specific securities in considered speculative
which the Fund may invest and write covered
call and put option contracts. The size of
the premiums that the Fund may receive may be
adversely affected as new or existing
institutions, including other investment
companies, engage in or increase their
option-writing activities.
- ------------------------------------------------------------------------------------------------------------------------------
4
- ------------------------------------------------------------------------------------------------------------------------------
AmSouth Large Cap Fund Pioneer Oak Ridge Large Cap Growth Fund
- ------------------------------------------------------------------------------------------------------------------------------
Short-term trading AmSouth Large Cap Fund may engage in the Pioneer Oak Ridge Large Cap Growth Fund does
technique of short-term trading. Such trading not usually trade for short-term profits. The
involves the selling of securities held for a Fund will sell an investment, however, even if
short-time, ranging from several months to it has only been held for a short time, if it
less than a day. The object of such short-term no longer meets the Fund's investment criteria.
trading is to increase the potential for
capital appreciation and/or income of the Fund
in order to take advantage of what AAMI
believes are changes in market, industry or
individual company outlook.
- ------------------------------------------------------------------------------------------------------------------------------
Other investment policies As described above, the Funds have substantially similar principal investment strategies and
and restrictions policies. Certain of the non-principal investment policies and restrictions are different.
For a more complete discussion of each Fund's other investment policies and fundamental and
non-fundamental investment restrictions, see the SAI.
- ------------------------------------------------------------------------------------------------------------------------------
Buying, Selling and Exchanging Shares
- ------------------------------------------------------------------------------------------------------------------------------
Class A sales charges and Class A shares are offered with an initial Class A shares are offered with an initial
Rule 12b-1 fees sales charge of up to 5.50% of the offering sales charge of up to 5.75% of the offering
price, which is reduced depending upon the price, which is reduced or waived for large
amount invested or, in certain circumstances, purchases and certain types of investors. At
waived. Class A shares bought as part of an the time of your purchase, your investment
investment of $1 million or more are not firm may receive a commission from Pioneer
subject to an initial sales charge, but may be Funds Distributor, Inc. ("PFD"), the Fund's
charged a contingent deferred sales charge distributor, of up to 5% declining as the size
("CDSC") of 1.00% if sold within one year of of your investment increases.
purchase.
There is no CDSC, except in certain
Class A shares pay a shareholder servicing fee circumstances when the initial sales charge is
(non 12b-1) of up to 0.25% of average daily waived.
net assets.
Class A shares are subject to distribution and
service (12b-1) fees of up to 0.25% of average
daily net assets.
- ------------------------------------------------------------------------------------------------------------------------------
5
- ------------------------------------------------------------------------------------------------------------------------------
AmSouth Large Cap Fund Pioneer Oak Ridge Large Cap Growth Fund
- ------------------------------------------------------------------------------------------------------------------------------
Class B sales charges and Class B shares are offered without an initial Class B shares are offered without an initial
Rule 12b-1 fees sales charge, but are subject to a CDSC of up sales charge, but are subject to a CDSC of up
to 5%. For Class B shares purchased prior to to 4% if you sell your shares. The charge is
the combination of AmSouth Funds with ISG reduced over time and is not charged after
Funds, the CDSC on such Class B shares held five years. Your investment firm may receive a
continuously declines over six years, starting commission from PFD, the Fund's distributor,
with year one and ending in year seven from: at the time of your purchase of up to 4%.
4%, 3%, 3%, 2%, 2%, 1%. For all other Class B
shares held continuously, the CDSC declines Class B shares are subject to distribution and
over six years, starting with year one and service (12b-1) fees of up to 1% of average
ending in year seven from: 5%, 4%, 3%, 3%, 2%, daily net assets.
1%. Eight years after purchase (seven years in
the case of shares acquired in the ISG Maximum purchase of Class B in a single
combination), Class B shares automatically transaction is $49,999.
convert to Class A shares.
Class B shares acquired through the
Class B shares pay a shareholder servicing fee Reorganization will be subject to the CDSC and
(non 12b-1) of up to 0.25% of average daily commission schedules applicable to the
net assets and a distribution (12b-1) fee of original purchase.
0.75% of average daily net assets.
Maximum investment for all Class B purchases
by a shareholder for the Fund's shares is
$99,999.
- ------------------------------------------------------------------------------------------------------------------------------
Class I and Class Y sales AmSouth Large Cap Fund does not impose any The Fund does not impose any initial,
charges and Rule 12b-1 fees initial or CDSC on Class I shares. contingent deferred or asset based sales
charge on Class Y shares.
The Fund may impose a shareholder servicing
fee (non 12b-1) of up to 0.15% of average The distributor incurs the expenses of
daily net assets. distributing the Fund's Class Y shares, none
of which are reimbursed by the Fund or the
Class Y shareowners.
- ------------------------------------------------------------------------------------------------------------------------------
Management and other fees AmSouth Large Cap Fund pays an advisory fee on Pioneer Oak Ridge Large Cap Growth Fund pays
a monthly basis at an annual rate of 0.80% of Pioneer an annual fee equal to 0.75% of the
the Fund's average daily net assets. Fund's average daily net assets up to $1
billion and 0.70% on assets over $1 billion.
ASO Services Company, Inc. ("ASO") serves as The fee is computed daily and paid monthly.
administrator and fund accounting agent for
the Fund. The Fund pays ASO an administrative During its most recent fiscal year, the Fund
services fee of 0.15% of the Fund's average paid an advisory fee at an average rate of
daily net assets. 0.75% of average daily net assets.
Other expenses of the Fund are being limited In addition, the Fund reimburses Pioneer for
to 0.45% for Class A shares, 0.45% for Class B certain fund accounting and legal expenses
shares and 0.30% for Class I shares. Any fee incurred on behalf of the Fund and pays a
waiver or expense reimbursement arrangement is separate shareholder servicing/transfer agency
voluntary and may be discontinued at any time. fee to PIMSS, an affiliate of Pioneer.
For the fiscal year ended July 31, 2004, the Pioneer has contractually agreed to limit
Fund's annual operating expenses for Class A ordinary operating expenses to the extent
shares, after giving effect to the expense required to reduce fund expenses to 1.30% and
limitation were 1.25%, and without giving 2.10% of the average daily net assets
effect to the expense limitation, were 1.32% attributable to Class A and Class B shares,
of average daily net assets. respectively. These expense limitations are in
effect through April 1, 2008 for Class A
For the fiscal year ended July 31, 2004, the shares and through April 1, 2007 for Class B
Fund's annual operating expenses for Class B shares.
shares, after giving effect to the expense
limitation were 2.00%, and without giving For the fiscal year ended November 30, 2004,
effect to the expense limitation, were 2.07% the Fund's total annual operating expenses for
of average daily net assets. Class A shares, after giving effect to the
expense limitation, were 1.30%, and without
For the fiscal year ended July 31, 2004, the giving effect to the expense limitation were
Fund's annual operating expenses for Class I 2.42% of average daily net assets.
shares, after giving effect to the expense
limitation were 1.10%, and without giving For the fiscal year ended November 30, 2004,
effect to the expense limitation, were 1.22% the Fund's total annual operating expenses for
of average daily net assets. Class B shares, after giving effect to the
expense limitation, were 2.20%, and without
giving effect to the expense limitation were
2.94% of average daily net assets.
For the fiscal year ended November 30, 2004,
the Fund's total annual operating expenses for
Class Y shares were 1.19% of average daily net
assets.
- ------------------------------------------------------------------------------------------------------------------------------
6
- ------------------------------------------------------------------------------------------------------------------------------
AmSouth Large Cap Fund Pioneer Oak Ridge Large Cap Growth Fund
- ------------------------------------------------------------------------------------------------------------------------------
Buying shares You may buy shares of the Fund directly You may buy shares from any investment firm
through BISYS Fund Services, the Fund's that has a sales agreement with PFD, the
distributor, or through brokers, registered Pioneer Fund's distributor.
investment advisers, banks and other financial
institutions that have entered into selling If the account is established in the
agreements with the Fund's distributor, as shareholder's own name, shareholders may also
described in the Fund's prospectus. purchase additional shares of the Pioneer Fund
by telephone or online.
Certain account transactions may be done by
telephone.
- ------------------------------------------------------------------------------------------------------------------------------
Exchanging shares You can exchange your shares in the Fund for You may exchange your shares for shares of the
shares of the same class of another AmSouth same class of another Pioneer mutual fund.
Fund, usually without paying additional sales Your exchange request must be for at least
charges. You must meet the minimum investment $1,000. The Fund allows you to exchange your
requirements for the Fund into which you are shares at net asset value without charging you
exchanging. Exchanges from one Fund to another either an initial or contingent deferred
are taxable. Class A shares may be exchanged shares charge at the time of the exchange.
for Class I shares of the same Fund or another Shares you acquire as part of an exchange will
AmSouth Fund if you become eligible to continue to be subject to any contingent
purchase Class I shares. Class I shares may deferred sales charge that applies to the
be exchanged for Class A shares of the same shares you originally purchased. When you
Fund. No transaction fees are currently ultimately sell your shares, the date of your
charged for exchanges. original purchase will determine your
contingent deferred sales charge. An exchange
If you sell your shares or exchange them for generally is treated as a sale and a new
shares of another AmSouth Fund within 7 purchase of shares for federal income tax
days of the date of purchase, you will be purposes.
charged a 2.00% fee on the current net asset
value of the shares sold or exchanged. The After you establish an eligible fund account,
fee is paid to the Fund to offset the costs you can exchange Fund shares by telephone or
associated with short-term trading, such as online.
portfolio transaction and administrative costs.
The Fund uses a "first-in, first-out" method
to determine how long you have held your
shares. This means that if you purchased
shares on different days, the shares purchased
first will be considered redeemed first for
purposes of determining whether the redemption
fee will be charged.
The fee will be charged on all covered
redemptions and exchanges, including those
made through retirement plan, brokerage and
other types of omnibus accounts (except where
it is not practical for the plan administrator
or brokerage firm to implement the fee). The
Fund will not impose the redemption fee on a
redemption or exchange of shares purchased
upon the reinvestment of dividend and capital
gain distributions.
- ------------------------------------------------------------------------------------------------------------------------------
7
- ------------------------------------------------------------------------------------------------------------------------------
AmSouth Large Cap Fund Pioneer Oak Ridge Large Cap Growth Fund
- ------------------------------------------------------------------------------------------------------------------------------
Selling shares Shares of each Fund are sold at the net asset value per share next calculated after the Fund
receives your request in good order.
- ------------------------------------------------------------------------------------------------------------------------------
You may sell your shares by contacting the Normally, your investment firm will send your
Fund directly in writing or by telephone or by request to sell shares to PIMSS. You can also
contacting a financial intermediary as sell your shares by contacting the Fund
described in the Fund's prospectus. directly if your account is registered in your
name.
If the account is established in the
shareholder's own name, shareholders may also
redeem shares of the Pioneer Fund by telephone
or online.
- ------------------------------------------------------------------------------------------------------------------------------
Comparison of Principal Risks of Investing in the Funds
Because each Fund has a similar investment objective, primary investment
policies and strategies, the Funds are subject to the same principal risks. You
could lose money on your investment in either Fund or not make as much as if you
invested elsewhere if:
o The stock market goes down (this risk may be greater in the short
term)
o Large company or growth stocks fall out of favor with investors
o The adviser's/subadviser's judgment about the attractiveness, growth
potential or potential appreciation of a particular stock proves to be
incorrect
8
Pioneer Oak Ridge Large Cap Growth Fund may be subject to the following
additional risks associated with investing in non-U.S. issuers, which may
involve unique risks compared to investing in securities of U.S. issuers. These
risks are more pronounced to the extent the Fund invests in issuers in countries
with emerging markets or if the Fund invests significantly in one country. These
risks may include:
o Less information about non-U.S. issuers or markets may be available
due to less rigorous disclosure or accounting standards or regulatory
practices
o Many non-U.S. markets are smaller, less liquid and more volatile. In a
changing market, the adviser/subadviser might 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 non-U.S. countries may grow at slower rates than
expected or may experience a downturn or recession
o Economic, political and social developments may adversely affect the
securities markets
o Withholding and other non-U.S. taxes may decrease the Fund's return
In addition, at times, more than 25% of Pioneer Oak Ridge Large Cap Growth
Fund's assets may be invested in the same market segment, such as financials or
technology. To the extent the Fund emphasizes investments in a market segment,
the fund will be subject to a greater degree to the risks particular to the
industries in that segment, and may experience greater market fluctuation, than
a fund without the same focus.
Although the Pioneer Oak Ridge Large Cap Growth Fund is classified as a
diversified investment company, the Fund's portfolio may be comprised of fewer
issuers than many large cap growth funds. Typically, the subadviser expects the
portfolio to include a limited number of different issuers, which may increase
the volatility of the Fund's net asset value per share.
Past Performance
Set forth below is performance information for each Fund. The bar charts
show how each Fund's total return (not including any deduction for sales
charges) has varied from year to year for each full calendar year. The tables
show average annual total return (before and after taxes) for each Fund over
time for each class of shares (including deductions for sales charges) compared
with a broad-based securities market index. The bar charts give an indication of
the risks of investing in each Fund, including the fact that you could incur a
loss and experience volatility of returns year to year. Past performance before
and after taxes does not indicate future results.
AmSouth Large Cap Fund -- Class A Shares
Calendar Year Total Returns*
[THE FOLLOWING DATA WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL]
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
34.99 17.63 35.93 37.87 18.85 -2.22 -11.29 -23.27 25.59 5.25
* During the period shown in the bar chart, your AmSouth Fund's highest
quarterly return was 24.83% for the quarter ended December 31, 1998, and
the lowest quarterly return was -17.87% for the quarter ended September 30,
2002.
9
The Pioneer Fund's past performance does not necessarily indicate how it
will perform in the future. Pursuant to an agreement and plan of reorganization,
the Pioneer Fund acquired all of the assets and those liabilities reflected in
the net assets of Oak Ridge Large Cap Equity Fund (the predecessor fund) on
February 13, 2004. In the reorganization, the predecessor fund exchanged all of
its assets for Class A shares of the Fund. The predecessor fund offered only one
class of shares which was most similar to Class A shares of the Pioneer Fund. As
a result of that reorganization, the Pioneer Fund is the accounting successor of
the predecessor fund, which commenced operations on March 1, 1999. The Pioneer
Fund's subadviser served as the predecessor fund's investment adviser. The
performance of each class of the Pioneer Fund includes the performance of the
predecessor fund's shares prior to the 2004 reorganization, which has been
restated to reflect differences in any applicable sales charges and Rule 12b-1
fees (but not other differences in expenses). This adjustment had the effect of
reducing the previously reported performance of the predecessor fund.
Pioneer Oak Ridge Large Cap Growth Fund -- Class A Shares
Calendar Year Total Returns*
[THE FOLLOWING DATA WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL]
2000 2001 2002 2003 2004
6.64 -11.95 -17.4 19.53 11.4
* During the period shown in the bar chart since the Fund's inception March
1, 1999, Pioneer Oak Ridge Large Cap Growth Fund's highest quarterly return
was 13.43% for the quarter ended December 31, 1999, and the lowest
quarterly return was -13.05% for the quarter ended September 30, 2002.
AmSouth Large Cap Fund
Average Annual Total Returns as of December 31, 2004
- ---------------------------------------------------------------------------------------------------------------------------------
1 Year 5 Years 10 Years
- ---------------------------------------------------------------------------------------------------------------------------------
AmSouth Large Cap Fund, Class A Shares(1)
- ---------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes -0.53% -3.62% 11.39%
- ---------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions -1.54% -4.79% 9.95%
- ---------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares -0.35% -3.36% 9.68%
- ---------------------------------------------------------------------------------------------------------------------------------
AmSouth Large Cap Fund, Class B Shares(2)
- ---------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes -0.56% -3.56% 11.05%
- ---------------------------------------------------------------------------------------------------------------------------------
AmSouth Large Cap Fund, Class I Shares(3)
- ---------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 5.35% -2.39% 12.10%
- ---------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions 4.29% -3.58% 10.64%
- ---------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares 3.47% -2.35% 10.32%
- ---------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(4) 10.87% -2.30% 12.07%
(reflects no deduction for fees, expenses or taxes)
- ---------------------------------------------------------------------------------------------------------------------------------
(1) The quoted returns reflect the performance from 8/3/92 to 12/13/98 of the
DG Equity Fund and from 12/14/98 to 3/12/00 of the ISG Large Cap Equity
Fund, which were open-end investment companies that were predecessor funds
to the Large Cap Fund. The predecessor funds were managed using
substantially the same investment objective, policies and methodologies as
the Fund. Class A shares were first offered on 8/3/92.
10
(2) Performance for the Class B shares, which were first offered on 12/15/98,
is based on the historical performance of the Fund's Class A shares,
including the performance of the predecessor funds (without sales charge)
prior to that date. The historical performance of the Class B shares has
been restated to reflect the Fund's Class B distribution (12b-1) fees and
the contingent deferred sales charge.
(3) The quoted returns reflect the performance from 8/3/92 to 12/13/98 of the
DG Equity Fund and from 12/14/98 to 3/12/00 of the ISG Large Cap Equity
Fund, which were open-end investment companies that were predecessor funds
to the Large Cap Fund. The predecessor funds were managed using
substantially the same investment objective, policies and methodologies as
the Fund. Performance for the Class I shares, which were first offered on
12/14/98, is based on the historical performance of the Fund's Class A
shares, including the performance of the predecessor funds (without sales
charge) prior to that date.
(3) The S&P 500 Index, an unmanaged index of 500 stocks, is for reference only,
does not mirror the Fund's investments, and reflects no deduction for fees,
expenses or taxes.
The table above shows the impact of taxes on AmSouth Large Cap Fund's returns.
After-tax returns are only shown for Class A shares and Class I shares and may
vary for Class B shares. The Fund's after-tax returns are calculated using the
highest individual federal marginal income tax rates and do not reflect the
impact of state and local taxes. In certain cases, the figure representing
"Return After Taxes on Distributions and Sale of Fund Shares" may be higher than
the other return figures for the same period. A higher after-tax return results
when a capital loss occurs upon redemption and translates into an assumed tax
deduction that benefits the shareholder. Please note that actual after-tax
returns depend on an investor's tax situation and may differ from those shown.
Also note that after-tax returns shown are not relevant to investors who hold
their Fund shares through tax-deferred arrangements, such as 401(k) plans or
individual retirement accounts.
Pioneer Oak Ridge Large Cap Growth Fund
Average Annual Total Returns as of December 31, 2004
- ---------------------------------------------------------------------------------------------------------------------------------
1 Year 5 Years Since Inception
(March 1, 1999)
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer Oak Ridge Large Cap Growth Fund, Class A shares
- ---------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 4.96% -0.54% 1.26%
- ---------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions(1) 4.88% -0.79% 1.04%
- ---------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares(1) 3.29% -0.55% 0.99%
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer Oak Ridge Large Cap Growth Fund, Class B shares(2)
- ---------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 6.59% -0.10% 1.53%
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer Oak Ridge Large Cap Growth Fund, Class Y shares(2)
- ---------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 11.56% 0.67% 2.31%
- ---------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions(1) 11.51% 0.43% 2.10%
- ---------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares(1) 7.58% 0.48% 1.90%
- ---------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(3) 10.87% -2.30% 1.13%
(reflects no deduction for fees, expenses or taxes)
- ---------------------------------------------------------------------------------------------------------------------------------
Russell 1000 Growth Index(4) 6.30% -9.29% -3.56%
(reflects no deduction for fees, expenses or taxes)
- ---------------------------------------------------------------------------------------------------------------------------------
(1) After-tax returns are calculated using the historical highest individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your situation and may
differ from those shown. Furthermore, the after-tax returns shown are not
relevant to shareholders who hold Fund shares through tax-deferred
arrangements such as 401(k) plans or IRA accounts, or to investors that are
tax-exempt.
(2) Reflects the inception date of predecessor fund. The inception date of
Class B shares was February 17, 2004 and of Class Y shares was August 11,
2004.
(3) The S&P 500 Index, an unmanaged index of 500 stocks, is for reference only,
does not mirror the Fund's investments, and reflects no deduction for fees,
expenses or taxes.
11
(4) The Russell 1000 Growth Index, and unmanaged index made up of those stocks
contained within the Russell 1000 Index having higher price-to-book ratios,
is for reference only, does not mirror the Fund's investments, and reflects
no deduction for fees, expenses or taxes.
The most recent portfolio manager's discussion of each Fund's performance
is attached as Exhibit C.
12
The Funds' Fees and Expenses
Shareholders of both Funds pay various fees and expenses, either directly
or indirectly. The tables below show the fees and expenses that you would pay if
you were to buy and hold shares of each Fund. The expenses in the tables
appearing below are based on (i) for the AmSouth Large Cap Fund, the expenses of
AmSouth Large Cap Fund for the period ended January 31, 2005 and (ii) for
Pioneer Oak Ridge Large Cap Fund, the expenses of Pioneer Oak Ridge Large Cap
Growth Fund for the period ended May 31, 2005. Future expenses for all share
classes may be greater or less. Shareholders of AmSouth Capital Growth Fund are
also being asked to approve the reorganization of their fund into Pioneer Oak
Ridge Large Cap Growth Fund. The tables also show (1) the pro forma expenses of
the combined Fund assuming the Reorganization occurred on May 31, 2005, and (2)
the pro forma expenses of the combined Fund assuming the reorganization of
AmSouth Capital Growth Fund into Pioneer Oak Ridge Large Cap Growth Fund also
occurred May 31, 2005.
- ------------------------------------------------------------------------------------------------------------------------------------
Shareholder AmSouth Pioneer Combined Combined AmSouth Pioneer Combined Combined AmSouth Pioneer
transaction Large Cap Oak Ridge Fund (Pro Fund Large Cap Oak Ridge Fund (Pro Fund Large Oak Ridge
fees (paid Fund(1) Fund Forma) (including Fund(1) Fund Forma) (including Cap Fund
directly AmSouth AmSouth Fund(1)
from your Capital Capital
investment) Growth Growth
Fund) (Pro Fund) (Pro
Forma) Forma)
Class A Class A Class A Class A Class B Class B Class B Class B Class I Class Y
- ------------------------------------------------------------------------------------------------------------------------------------
Maximum 5.50%(2) 5.75%(2) 5.75%(2) 5.75%(2) None None None None None None
sales charge
(load) when
you buy
shares as a
percentage
of offering
price
- ------------------------------------------------------------------------------------------------------------------------------------
Maximum None None None None 5.00%(3) 4.00% 4.00% 4.00% None None
deferred
sales charge
(load) as
a percentage
of purchase
price or the
amount you
receive when
you sell
shares,
whichever is
less
- ------------------------------------------------------------------------------------------------------------------------------------
Redemption 2.00%(4) None None None 2.00%(4) None None None 2.00%(4) None
fees
- ------------------------------------------------------------------------------------------------------------------------------------
Annual fund
operating
expenses
(deducted
from fund
assets) (as
a % of
average net
assets)
- ------------------------------------------------------------------------------------------------------------------------------------
Management 0.80% 0.75% 0.75% 0.75% 0.80% 0.75% 0.75% 0.75% 0.80% 0.75%
fee
- ------------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------
Shareholder Combined Combined
transaction Fund (Pro Fund
fees (paid Forma) (including
directly AmSouth
from your Capital
investment) Growth Fund)
(Pro
Forma)
Class Y Class Y
- ----------------------------------------
Maximum None None
sales charge
(load) when
you buy
shares as a
percentage
of offering
price
- ----------------------------------------
Maximum None None
deferred
sales charge
(load) as
a percentage
of purchase
price or the
amount you
receive when
you sell
shares,
whichever is
less
- ----------------------------------------
Redemption None None
fees
- ----------------------------------------
Annual fund
operating
expenses
(deducted
from fund
assets) (as
a % of
average net
assets)
- ----------------------------------------
Management 0.75% 0.75%
fee
- ----------------------------------------
13
- ------------------------------------------------------------------------------------------------------------------------------------
Shareholder AmSouth Pioneer Combined Combined AmSouth Pioneer Combined Combined AmSouth Pioneer
transaction Large Cap Oak Ridge Fund (Pro Fund Large Cap Oak Ridge Fund (Pro Fund Large Oak Ridge
fees (paid Fund(1) Fund Forma) (including Fund(1) Fund Forma) (including Cap Fund
directly AmSouth AmSouth Fund(1)
from your Capital Capital
investment) Growth Growth
Fund) (Pro Fund) (Pro
Forma) Forma)
Class A Class A Class A Class A Class B Class B Class B Class B Class I Class Y
- ------------------------------------------------------------------------------------------------------------------------------------
Distribution None 0.25% 0.25% 0.25% 0.75% 1.00% 1.00% 1.00% None None
and service
(12b-1) fee
- ------------------------------------------------------------------------------------------------------------------------------------
Other 0.58%(5) 1.42% 0.21% 0.19% 0.61%(5) 1.19% 0.51% 0.45% 0.48%(5) 0.44%
expenses
- ------------------------------------------------------------------------------------------------------------------------------------
Total fund 1.38% 2.42%(6) 1.21% 1.19% 2.16% 2.94%(6) 2.26% 2.20% 1.28% 1.19%(6)
operating
expenses
- ------------------------------------------------------------------------------------------------------------------------------------
Expense 0.11% 1.12%(7) N/A N/A 0.14% 0.74%(7) 0.16%(8) 0.10%(8) 0.16% N/A
reimbursement/
reduction
- ------------------------------------------------------------------------------------------------------------------------------------
Net fund 1.27% 1.30% 1.21% 1.19% 2.02% 2.20% 2.10% 2.10% 1.12% 1.19%
operating
expenses
- ------------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------
Shareholder Combined Combined
transaction Fund (Pro Fund
fees (paid Forma) (including
directly AmSouth
from your Capital
investment) Growth Fund)
(Pro
Forma)
Class Y Class Y
- ----------------------------------------
Distribution None None
and service
(12b-1) fee
- ----------------------------------------
Other 0.13% 0.11%
expenses
- ----------------------------------------
Total fund 0.88% 0.86%
operating
expenses
- ----------------------------------------
Expense N/A N/A
reimbursement/
reduction
- ----------------------------------------
Net fund 0.88% 0.86%
operating
expenses
- ----------------------------------------
(1) AmSouth Bank or other financial institutions may charge their customer
account fees for automatic investment and other cash management services
provided in connection with investment in the Fund.
(2) Sales charges may be reduced depending upon the amount invested or, in
certain circumstances, waived. Class A shares bought as part of an
investment of $1 million or more are not subject to an initial sales
charge, but may be charged a CDSC of 1.00% if sold within one year of
purchase.
(3) For Class B shares purchased prior to the combination of AmSouth Funds with
ISG Funds, the CDSC on such Class B shares held continuously declines over
six years, starting with year one and ending in year seven from: 4%, 3%,
3%, 2%, 2%, 1%. For all other Class B shares held continuously, the CDSC
declines over six years, starting with year one and ending in year seven
from: 5%, 4%, 3%, 3%, 2%, 1%. Eight years after purchase (seven years in
the case of shares acquired in the ISG combination), Class B shares
automatically convert to Class A shares.
(4) To discourage short-term trading, a redemption fee of 2.00% will be charged
on sales or exchanges of Class A, Class B and Class I shares of your
AmSouth Fund made within 7 days of the date of purchase. A wire transfer
fee of $7.00 will be deducted from the amount of your redemption if you
request a wire transfer.
(5) Other expenses for your AmSouth Fund are being limited to 0.47% for Class A
shares, 0.47% for Class B shares and 0.32% for Class I shares. Any fee
waiver or expense reimbursement arrangement is voluntary and may be
discontinued at any time.
(6) The Pioneer Fund's total annual operating expenses in the table have not
been reduced by any expense offset arrangements.
(7) The expenses in the table above reflect the expense limitations currently
in effect for the Pioneer Fund, under which Pioneer has contractually
agreed to limit ordinary operating expenses to the extent required to
reduce fund expenses to 1.30%, and 2.20% of the average daily net assets
attributable to Class A and Class B shares, respectively. These expense
limitations are in effect through April 1, 2008 for Class A shares and
through April 1, 2006 for Class B shares. There can be no assurance that
Pioneer will extend the expense limitations beyond such time.
(8) The expenses in the table above reflect the expense limitation in effect
for Class B shares of the Pioneer Fund, under which Pioneer has
contractually agreed to limit ordinary operating expenses to the extent
required to reduce fund expenses 2.10% of the average daily net assets
attributable Class B shares. This expense limitation is in effect through
April 1, 2007. There can be no assurance that Pioneer will extend the
expense limitations beyond such time.
14
The hypothetical example below helps you compare the cost of investing in
each Fund. It assumes that: (a) you invest $10,000 in each Fund for the time
periods shown, (b) you reinvest all dividends and distributions, (c) your
investment has a 5% return each year, and (d) each Fund's gross operating
expenses remain the same,. The examples are for comparison purposes only and are
not a representation of either Fund's actual expenses or returns, either past or
future.
- ------------------------------------------------------------------------------------------------------------
Combined Fund
(including AmSouth
Number of years you AmSouth Large Cap Pioneer Oak Ridge Large Combined Fund Capital Growth Fund)
own your shares Fund Cap Growth Fund (Pro Forma) (Pro Forma)
- ------------------------------------------------------------------------------------------------------------
Class A
- ------------------------------------------------------------------------------------------------------------
Year 1 $683 $700 $691 $689
- ------------------------------------------------------------------------------------------------------------
Year 3 $963 $963 $937 $931
- ------------------------------------------------------------------------------------------------------------
Year 5 $1,264 $1,485 $1,202 $1,192
- ------------------------------------------------------------------------------------------------------------
Year 10 $2,116 $2,913 $1,957 $1,935
- ------------------------------------------------------------------------------------------------------------
Class B -- assuming redemption at end of period
- ------------------------------------------------------------------------------------------------------------
Year 1 $719 $623 $613 $613
- ------------------------------------------------------------------------------------------------------------
Year 3 $976 $1,140 $975 $979
- ------------------------------------------------------------------------------------------------------------
Year 5 $1,359 $1,583 $1,280 $1,271
- ------------------------------------------------------------------------------------------------------------
Year 10 $2,295 $3,086 $2,304 $2,270
- ------------------------------------------------------------------------------------------------------------
Class B -- assuming no redemption
- ------------------------------------------------------------------------------------------------------------
Year 1 $219 $223 $213 $213
- ------------------------------------------------------------------------------------------------------------
Year 3 $676 $840 $675 $679
- ------------------------------------------------------------------------------------------------------------
Year 5 $1,159 $1,483 $1,180 $1,171
- ------------------------------------------------------------------------------------------------------------
Year 10 $2,295 $3,086 $2,304 $2,270
- ------------------------------------------------------------------------------------------------------------
Class I Class Y
- ------------------------------------------------------------------------------------------------------------
Year 1 $130 $121 $90 $88
- ------------------------------------------------------------------------------------------------------------
Year 3 $406 $378 $281 $274
- ------------------------------------------------------------------------------------------------------------
Year 5 $702 $654 $488 $477
- ------------------------------------------------------------------------------------------------------------
Year 10 $1,545 $1,443 $1,084 $1,061
- ------------------------------------------------------------------------------------------------------------
Reasons for the Proposed Reorganization
The Trustees believe that the proposed Reorganization is in the best
interests of AmSouth Large Cap Fund and its shareholders. The Trustees
considered the following matters, among others, in approving the proposal.
First, AAMI, the investment adviser to your AmSouth Fund, informed the
Trustees that it does not intend to continue to provide investment advisory
services to the AmSouth Funds. Consequently, a change in your AmSouth Fund's
investment adviser was necessary. In the absence of the Reorganization, such a
change would be more likely to motivate shareholders invested in reliance on
AAMI's role to withdraw from the Fund, thereby reducing fund size and increasing
fund expense ratios.
Second, the historical investment performance of Pioneer Oak Ridge Large
Cap Growth Fund is significantly better than your AmSouth Fund's investment
performance. For the one and five year periods ended December 31, 2004, Class A
shares of Pioneer Oak Ridge Large Cap Growth Fund had an average annual return
of 4.96% (one year) and -0.54% (five year); compared to an average annual return
of the Class A shares of your AmSouth Fund of -0.53% (one year); and -3.62%
(five year); respectively, during the same period. In addition, the Trustees
considered the track record of Pioneer in managing equity and fixed income
mutual funds.
Third, the resources of Pioneer. At December 31, 2004, Pioneer managed over
80 investment companies and accounts with approximately $42 billion in assets,
including $26.7 billion in equity securities. Pioneer is part of the global
asset management group of UniCredito Italiano S.p.A., one of the largest banking
groups in Italy, providing investment management
15
and financial services to mutual funds, institutional and other clients. As of
December 31, 2004, assets under management of UniCredito Italiano S.p.A. were
approximately $175 billion worldwide. Shareholders of your AmSouth Fund would
become part of a significantly larger family of funds that offers a more diverse
array of investment options and enhanced shareholder account options. The
Pioneer family of mutual funds offers over 80 funds, including domestic and
international equity and fixed income funds and a money market fund that will be
available to your AmSouth Fund's shareholders through exchanges.
Fourth, Pioneer Oak Ridge Large Cap Growth Fund's management fee (0.75% of
average daily net assets) is lower than the advisory fee of your Fund (0.80% of
average daily net assets). Although the historical gross and net expenses of
Pioneer Oak Ridge Large Cap Growth Fund are higher than your Fund's historical
gross and net expenses (except for Class Y shares), the estimated pro forma
expenses of Class A and Class Y Shares of the Pioneer Fund after giving effect
to the Reorganizations on both a gross and net basis are lower than your Fund's
gross and net operating expenses for the Class A and I shares. Although the pro
forma operating expenses for the Class B shares are estimated to increase
slightly, this increase is partly the result of expense limitations on your
AmSouth Fund that are voluntary and may be discontinued at any time. AmSouth
Bank and its affiliates have informed the trustees that they will discontinue
their expense limitations in the future. The trustees considered the positive
factors associated with the Reorganization, such as the superior performance of
the Pioneer Fund, to outweigh the negative factors, such as the increase in
expenses. The aggregate Rule 12b-1 distribution and shareholder servicing fees
and non-Rule 12b-1 shareholder servicing fees paid by the Class A and Class B
shares of both Funds are the same. Moreover, your AmSouth Fund's Class I shares
pay a non 12b-1 shareholder servicing fee that is not paid by the Pioneer Fund's
Class Y shares. In addition, the broader distribution arrangements of the
Pioneer Fund offer greater potential for further asset growth and reduced per
share expenses.
Fifth, the substantially larger size of the combined Pioneer Oak Ridge
Large Cap Growth Fund will offer greater opportunity for diversification of the
investment portfolio, which should help to reduce risks.
Sixth, the Class A, B and Y shares of Pioneer Oak Ridge Large Cap Growth
Fund received in the Reorganization will provide AmSouth Large Cap Fund
shareholders with exposure to substantially the same investment product as they
currently have.
Seventh, the transaction is structured to qualify as a tax-free
reorganization under Section 368(a) of the Internal Revenue Code of 1986 and
therefore will not be treated as a taxable sale of your AmSouth shares.
Pioneer and AAMI will pay all costs of preparing and printing the Funds'
proxy statements and solicitation costs incurred by the Funds in connection with
the Reorganization. AAMI will otherwise be responsible for all costs and
expenses of the AmSouth Fund in connection with the Reorganizations.
The Trustees also considered that Pioneer and AmSouth Bank will benefit
from the Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the
Reorganizations."
The Board of Trustees of the Pioneer Fund also considered that the
Reorganization presents an excellent opportunity for the Pioneer Fund to acquire
investment assets without the obligation to pay commissions or other transaction
costs that a fund normally incurs when purchasing securities. This opportunity
provides an economic benefit to the Pioneer Fund and its shareholders.
CAPITALIZATION
The following table sets forth the capitalization of each Fund as of May
31, 2005, and the pro forma combined Fund as of May 31, 2005. The table also
sets forth the pro forma capitalization of the combined Fund as of May 31, 2005,
assuming the shareholders of AmSouth Capital Growth Fund approve the
reorganization of their fund into Pioneer Oak Ridge Large Cap Growth Fund.
16
- --------------------------------------------------------------------------------------------------------------------------------
Pro Forma
Pioneer Oak
Pro Forma Ridge Large Cap
Pioneer Oak Pioneer Oak Growth Fund
Ridge Large Cap Ridge Large (including
AmSouth Large Growth Cap Growth AmSouth Capital
Cap Fund Fund Fund Growth Fund)
May 31, 2005 May 31, 2005 May 31, 2005 May 31, 2005
- --------------------------------------------------------------------------------------------------------------------------------
Total Net Assets (in thousands) $330,347 $220,176 $550,522 $799,086
- --------------------------------------------------------------------------------------------------------------------------------
Class A shares ................................... $113,684 $87,287 $200,971 $228,425
- --------------------------------------------------------------------------------------------------------------------------------
Class B shares ................................... $22,350 $10,999 $33,348 $40,130
- --------------------------------------------------------------------------------------------------------------------------------
Class I/Y shares ................................. $194,313 $79,164 $273,477 $487,805
- --------------------------------------------------------------------------------------------------------------------------------
Net Asset Value Per Share
- --------------------------------------------------------------------------------------------------------------------------------
Class A shares ................................... $18.35 $12.66 $12.66 $12.66
- --------------------------------------------------------------------------------------------------------------------------------
Class B shares ................................... $17.35 $12.54 $12.54 $12.54
- --------------------------------------------------------------------------------------------------------------------------------
Class I/Y shares ................................. $18.46 $12.70 $12.70 $12.70
- --------------------------------------------------------------------------------------------------------------------------------
Shares Outstanding
- --------------------------------------------------------------------------------------------------------------------------------
Class A shares ................................... $6,194,719 $6,895,166 $15,875,617 $18,044,318
- --------------------------------------------------------------------------------------------------------------------------------
Class B shares ................................... $1,288,165 $877,131 $2,659,432 $3,200,220
- --------------------------------------------------------------------------------------------------------------------------------
Class I/Y shares ................................. $10,525,146 $6,234,510 $21,537,436 $38,416,647
- --------------------------------------------------------------------------------------------------------------------------------
It is impossible to predict how many shares of the Pioneer Fund will
actually be received and distributed by your AmSouth Fund on the Reorganization
date. The table should not be relied upon to determine the amount of the Pioneer
Fund's shares that will actually be received and distributed.
BOARD'S EVALUATION AND RECOMMENDATION
For the reasons described above, the Trustees, including the Independent
Trustees, approved the Reorganization. In particular, the Trustees determined
that the Reorganization is in the best interests of your AmSouth Fund.
Similarly, the Board of Trustees of the Pioneer Fund, including its Independent
Trustees, approved the Reorganization. They also determined that the
Reorganization is in the best interests of the Pioneer Fund.
The Trustees recommend that the shareholders of your AmSouth Fund vote FOR
the proposal to approve the Agreement and Plan of Reorganization.
17
AmSouth Enhanced Market Fund and
Pioneer Fund
PROPOSAL 1(c)
Approval of Agreement and Plan of Reorganization
SUMMARY
The following is a summary of more complete information appearing later in
this Proxy Statement/Prospectus or incorporated herein. You should read
carefully the entire Proxy Statement/Prospectus, including the form of Agreement
and Plan of Reorganization attached as EXHIBIT A-1, because it contains details
that are not in the summary.
Each Fund invests primarily in the equity securities of large cap U.S.
issuers and, consequently, has similar investment policies and risks. Your Fund,
while not a pure index fund, seeks to track closely the S&P 500 Stock Index,
while the Pioneer Fund is actively managed and does not have a goal of tracking
an index. In the table below, if a row extends across the entire table, the
policy disclosed applies to both your AmSouth Fund and the Pioneer Fund.
Comparison of AmSouth Enhanced Market Fund to Pioneer Fund
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth Enhanced Market Fund Pioneer Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Business A diversified series of AmSouth Funds, an A diversified open-end management investment
open-end management investment company company organized as a Delaware statutory
organized as a Massachusetts business trust. trust.
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets as of March 31, $190.38 million $6,463.4 million
2005
- ------------------------------------------------------------------------------------------------------------------------------------
Investment advisers and Investment Adviser: Investment Adviser:
portfolio managers AAMI Pioneer
Investment Subadviser: Portfolio Managers:
OakBrook Investments, LLC ("OakBrook") Day-to-day management of the Pioneer Fund's
portfolio is the responsibility of John
Portfolio Managers: A. Carey, portfolio manager, and Walter
Day-to-day management of AmSouth Enhanced Hunnewell, Jr., assistant portfolio manager.
Market Fund's portfolio is the responsibility Mr. Carey is director of portfolio management
of a team of investment professionals, all of and an executive vice president of Pioneer.
whom take part in the decision making Mr. Carey joined Pioneer in 1979. Mr.
process. Dr. Neil Wright, Ms. Janna Sampson Hunnewell is a vice president of Pioneer. Mr.
and Dr. Peter Jankovskis are the team members Hunnewell joined Pioneer in 2001 and has been
and have been the portfolio managers of the an investment professional for more than 16
Fund since its inception in 1998. Each of the years.
portfolio managers has been with OakBrook
since 1998.
Dr. Wright is OakBrook's President and Chief
Investment Officer. From 1993 to 1997, Dr.
Wright was the Chief Investment Officer of
ANB Investment Management & Trust Co.
("ANB").
Ms. Sampson is OakBrook's Director of
Portfolio Management. From 1993 to 1997, she
was Senior Portfolio Manager for ANB.
- ------------------------------------------------------------------------------------------------------------------------------------
1
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth Enhanced Market Fund Pioneer Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Dr. Jankovskis is OakBrook's Director of
Research. From 1992 to 1996, he was an
Investment Strategist for ANB and from 1996
to 1997 he was the Manager of Research for
ANB.
- ------------------------------------------------------------------------------------------------------------------------------------
Investment objective AmSouth Enhanced Market Fund seeks to produce Pioneer Fund seeks reasonable income and
long-term growth of capital by investing in a capital growth through investment primarily
diversified portfolio of common stocks and in equity securities of U.S. issuers.
securities convertible into common stock such
as convertible bonds and convertible
preferred stock. Oakbrook does not currently
intend to purchase convertible securities.
- ------------------------------------------------------------------------------------------------------------------------------------
Primary investments AmSouth Enhanced Marked Fund normally invests Pioneer Fund invests a major portion of its
at least 80% of its total assets in equity assets in equity securities, primarily of
securities drawn from the S&P 500 Stock Index U.S. issuers. For purposes of the Fund's
(the "S&P 500"). investment policies, equity securities
include common stocks, convertible debt and
other equity instruments such as depositary
receipts, warrants, rights and preferred
stock.
- ------------------------------------------------------------------------------------------------------------------------------------
Investment strategies AmSouth Enhanced Market Fund invests in a Pioneer Fund uses a "value" style of
broadly diversified portfolio of stocks of management and seeks securities selling at
the companies comprising the S&P 500, reasonable prices or substantial discounts to
overweighting relative to their S&P weights their underlying values and then holds these
those that the subadviser believes to be securities until the market values reflect
undervalued compared to others in the S&P their intrinsic values. Pioneer looks at the
500. following factors in selecting investments:
favorable expected returns relative to
The Fund seeks to maintain risk perceived risk; about average potential for
characteristics similar to those of the S&P earnings and revenue growth; low market
500 and, normally, invests at least 80% of valuations relative to earnings forecast,
its assets in common stocks drawn from the book value, cash flow and sales; a
S&P 500. The Fund's investment subadviser sustainable competitive advantage such as a
does not currently intend to purchase brand name, customer base, proprietary
convertible securities. technology or economies of scale.
The subadviser's stock selection process
utilizes computer-aided quantitative
analysis. The subadviser's computer models
use many types of data, but emphasize
technical data such as price and volume
information. Applying these models to stocks
within the S&P 500, the subadviser hopes to
generate more capital growth than that of the
S&P 500. The subadviser's emphasis on
technical analyses can result in significant
shifts in portfolio holdings at different
times. However, stringent risk controls at
the style, industry and individual stock
levels help ensure the Fund maintains risk
characteristics similar to those of the S&P
500.
- ------------------------------------------------------------------------------------------------------------------------------------
Other investments AmSouth Enhanced Market Fund may invest Pioneer Fund may invest up to 10% of its total
- ------------------------------------------------------------------------------------------------------------------------------------
2
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth Enhanced Market Fund Pioneer Fund
- ------------------------------------------------------------------------------------------------------------------------------------
up to 20% of its total assets in equity assets in equity and debt securities of
securities not held in the S&P 500, corporate non-U.S. corporate issuers and debt
bonds, notes, and warrants, and short-term securities of non-U.S. government issuers.
money market instruments. Stock futures and
option contracts, stock index futures and The Fund will not invest more than 5% of its
index option contracts may be used to hedge total assets in securities of emerging market
cash and maintain exposure to the U.S. equity issuers.
market.
The Fund may invest up to 5% of its net
assets in below investment grade debt
securities issued by both U.S. and non-U.S.
corporate and government issuers.
- ------------------------------------------------------------------------------------------------------------------------------------
Temporary defensive strategies When AAMI determines adverse market Pioneer Fund may invest all or part of its
conditions exist, AmSouth Enhanced Market assets in securities with remaining
Fund may invest entirely in cash positions, maturities of less than one year, cash
directly in U.S. Government securities and equivalents or may hold cash.
short-term paper, such as bankers'
acceptances.
- ------------------------------------------------------------------------------------------------------------------------------------
Diversification Each Fund is diversified for the purpose of the Investment Company Act and is subject to
diversification requirements under the Internal Revenue Code of 1986, as amended (the "Code").
- ------------------------------------------------------------------------------------------------------------------------------------
Industry concentration AmSouth Enhanced Market Fund may not purchase Pioneer Fund may not invest more than 25% of
any securities which would cause more than its assets in any one industry.
25% of the value of the Fund's total assets
at the time of purchase to be invested in
securities of one or more issuers conducting
their principal business activities in the
same industry, provided that (a) there is no
limitation with respect to obligations issued
or guaranteed by the U.S. government or its
agencies or instrumentalities, and repurchase
agreements secured by obligations of the U.S.
government or its agencies or
instrumentalities; (b) wholly owned finance
companies will be considered to be in the
industries of their parents if their
activities are primarily related to financing
the activities of their parents; and (c)
utilities will be divided according to their
services. For example, gas, gas transmission,
electric and gas, electric, and telephone
will each be considered a separate industry.
- ------------------------------------------------------------------------------------------------------------------------------------
Restricted and illiquid AmSouth Enhanced Market Fund may not invest Pioneer Fund may not invest more than 15% of
securities more than 15% of its net assets in securities its net assets in securities that are
that are restricted as to resale, or for illiquid and other securities that are not
which no readily available market exists, readily marketable. Repurchase agreements
including repurchase agreements providing for maturing in more than seven days will be
settlement more than seven days after notice. included for purposes of the foregoing limit.
- ------------------------------------------------------------------------------------------------------------------------------------
Borrowing AmSouth Enhanced Market Fund may not borrow Pioneer Fund may not borrow money, except the
money or issue senior securities, except the Fund may: (a) borrow from banks or through
Fund may borrow from banks or enter into reverse repurchase agreements in an amount up
reverse repurchase agreements for temporary to 33 1/3% of the Fund's total
- ------------------------------------------------------------------------------------------------------------------------------------
3
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth Enhanced Market Fund Pioneer Fund
- ------------------------------------------------------------------------------------------------------------------------------------
emergency purposes in amounts up to 33 1/3% assets (including the amount borrowed); (b)
of the value of its total assets at the time borrow up to an additional 5% of the Fund's
of such borrowing. The Fund will not purchase assets for temporary purposes; (c) obtain
securities while borrowings (including such short-term credits as are necessary for
reverse repurchase agreements) in excess of the clearance of portfolio transactions; (d)
5% of its total assets are outstanding. In purchase securities on margin to the extent
addition, the Fund is permitted to permitted by applicable law; and (e) engage
participate in a credit facility whereby the in transactions in mortgage dollar rolls that
Fund may directly lend to and borrow money are accounted for as financings.
from other AmSouth funds for temporary
purposes, provided that the loans are made in
accordance with an order of exemption from
the SEC and any conditions thereto.
- ------------------------------------------------------------------------------------------------------------------------------------
Lending AmSouth Enhanced Market Fund may not make Pioneer Fund may not make loans, except that
loans, except that the Fund may purchase or the Fund may (i) lend portfolio securities in
hold debt instruments in accordance with its accordance with the Fund's investment
investment objective and policies, lend Fund policies, (ii) enter into repurchase
securities in accordance with its investment agreements, (iii) purchase all or a portion
objective and policies and enter into of an issue of publicly distributed debt
repurchase agreements. In addition, the Fund securities, bank loan participation
is permitted to participate in a credit interests, bank certificates of deposit,
facility whereby the Fund may directly lend bankers' acceptances, debentures or other
to and borrow money from other AmSouth funds securities, whether or not the purchase is
for temporary purposes, provided that the made upon the original issuance of the
loans are made in accordance with an order of securities, (iv) participate in a credit
exemption from the SEC and any conditions facility whereby the Fund may directly lend
thereto. to and borrow money from other affiliated
funds to the extent permitted under the
Investment Company Act or an exemption
therefrom, and (v) make loans in any other
manner consistent with applicable law, as
amended and interpreted or modified from time
to time by any regulatory authority having
jurisdiction.
- ------------------------------------------------------------------------------------------------------------------------------------
Derivative instruments AmSouth Enhanced Market Fund may invest in Pioneer Fund may use futures and options on
futures contracts and options thereon securities, indices and currencies, forward
(interest rate futures contracts or index currency exchange contracts and other
futures contracts, as applicable) to commit derivatives. The Fund does not use
funds awaiting investment, to maintain cash derivatives as a primary investment technique
liquidity or for other hedging purposes. and generally limits their use to hedging.
Stock futures and option contracts, stock However, the Fund may use derivatives for a
index futures and index option contracts may variety of non-principal purposes, including:
be used to hedge cash and maintain exposure
to the U.S. equity market. The value of the o As a hedge against adverse changes in
Fund's contracts may equal or exceed 100% of stock market prices, interest rates or
the Fund's total assets, although the Fund currency exchange rates
will not purchase or sell a futures contract
unless immediately afterwards the aggregate o As a substitute for purchasing or selling
amount of margin deposits on its existing securities
futures positions plus the amount of premiums
paid for related futures options entered into o To increase the Fund's return as a
for other than bona fide hedging purposes is non-hedging strategy that may be
5% or less of its net assets. considered speculative
- ------------------------------------------------------------------------------------------------------------------------------------
Short-term trading AmSouth Enhanced Market Fund may engage Pioneer Fund does not usually trade for short-
- ------------------------------------------------------------------------------------------------------------------------------------
4
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth Enhanced Market Fund Pioneer Fund
- ------------------------------------------------------------------------------------------------------------------------------------
in the technique of short-term trading. Such term profits. The Fund will sell an
trading involves the selling of securities investment, however, even if it has only been
held for a short-time, ranging from several held for a short time, if it no longer meets
months to less than a day. The object of such the Fund's investment criteria.
short-term trading is to increase the
potential for capital appreciation and/or
income of the Fund in order to take advantage
of what OakBrook believes are changes in
market, industry or individual company
conditions or outlook.
- ------------------------------------------------------------------------------------------------------------------------------------
Other investment policies As described above, the Funds have substantially similar principal investment strategies and
and restrictions policies. Certain of the non-principal investment policies and restrictions are different. For
a more complete discussion of each Fund's other investment policies and fundamental and
non-fundamental investment restrictions, see the SAI.
- ------------------------------------------------------------------------------------------------------------------------------------
Buying, Selling and Exchanging Shares
- ------------------------------------------------------------------------------------------------------------------------------------
Class A sales charges Class A shares are offered with an initial Class A shares are offered with an initial
and Rule 12b-1 Fees sales charge of up to 5.50% of the offering sales charge of up to 5.75% of the offering
price, which is reduced depending upon the price, which is reduced or waived for large
amount invested or, in certain circumstances, purchases and certain types of investors. At
waived. Class A shares bought as part of an the time of your purchase, your investment
investment of $1 million or more are not firm may receive a commission from Pioneer
subject to an initial sales charge, but may Funds Distributor, Inc. ("PFD"), the Fund's
be charged a contingent deferred sales charge distributor, of up to 5% declining as the
("CDSC") of 1.00% if sold within one year of size of your investment increases.
purchase.
There is no CDSC, except in certain
Class A shares pay a shareholder servicing circumstances when the initial sales charge
fee (12b-1) of up to 0.25% of average daily is waived.
net assets.
Class A shares are subject to distribution
and service (12b-1) fees of up to 0.25% of
average daily net assets.
- ------------------------------------------------------------------------------------------------------------------------------------
Class B sales charges Class B shares are offered without an initial Class B shares are offered without an initial
and Rule 12b-1 fees sales charge, but are subject to a CDSC of up sales charge, but are subject to a CDSC of up
to 5%. For Class B shares purchased prior to to 4% if you sell your shares. The charge is
the combination of AmSouth Funds with ISG reduced over time and is not charged after
Funds, the CDSC on such Class B shares held five years. Your investment firm may receive
continuously declines over six years, a commission from PFD, the Fund's
starting with year one and ending in year distributor, at the time of your purchase of
seven from: 4%, 3%, 3%, 2%, 2%, 1%. For all up to 4%.
other Class B shares held continuously, the
CDSC declines over six years, starting with Class B shares are subject to distribution
year one and ending in year seven from: 5%, and service (12b-1) fees of up to 1% of
4%, 3%, 3%, 2%, 1%. Eight years after average daily net assets.
purchase (seven years in the case of shares
acquired in the ISG combination), Class B Maximum purchase of Class B shares in a
shares automatically convert to Class A single transaction is $49,999.
shares.
Class B shares acquired through the
Class B shares pay a shareholder servicing Reorganization will be subject to the CDSC
fee (non 12b-1) of up to 0.25% of average and commission schedules applicable to the
daily net assets and a distribution (12b-1)
fee of 0.75%
- ------------------------------------------------------------------------------------------------------------------------------------
5
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth Enhanced Market Fund Pioneer Fund
- ------------------------------------------------------------------------------------------------------------------------------------
of average daily net assets. original purchase.
Maximum investment for all Class B purchases
by a shareholder for the Fund's shares is
$99,999.
- ------------------------------------------------------------------------------------------------------------------------------------
Class I and Class Y sales AmSouth Enhanced Market Fund does not impose The Fund does not impose any initial,
charges and Rule 12b-1 fees any initial or CDSC on Class I shares. contingent deferred or asset based sales
charge on Class Y shares.
The Fund may impose a shareholder servicing
fee (non 12b-1) of up to 0.15% of average The distributor incurs the expenses of
daily net assets. distributing the Fund's Class Y shares, none
of which are reimbursed by the Fund or the
Class Y shareowners.
- ------------------------------------------------------------------------------------------------------------------------------------
Management and other fees AmSouth Enhanced Market Fund pays an advisory Pioneer Fund pays Pioneer an annual basic fee
fee on a monthly basis at an annual rate of of 0.60% of the Fund's average daily net
0.35% of the Fund's average daily net assets. assets. The fee is computed daily and paid
monthly.
ASO Services Company, Inc. ("ASO") serves as
administrator and fund accounting agent for Pioneer's fee increases or decreases
the Fund. The Fund pays ASO an administrative depending upon whether the Fund's performance
services fee of 0.15% of the Fund's average exceeds, or is exceeded by, that of the S&P
daily net assets. 500 Index over a rolling three year
performance period. Each percentage point of
Other expenses of the Fund are being limited difference between the performance of the
to 0.50% for Class A shares, 0.50% for Class Class A shares and the index (limited to a
B shares and 0.35% for Class I shares. Any maximum of +/-10) is multiplied by a
fee waiver or expense reimbursement performance rate adjustment of 0.01%. As a
arrangement is voluntary and may be result, the fee is subject to a maximum
discontinued at any time. annualized rate adjustment of +/-0.10%. This
performance comparison is made at the end of
For the fiscal year ended July 31, 2004, the each month. An appropriate monthly percentage
Fund's annual operating expenses for Class A of this annual rate (based on the number of
shares, after giving effect to the expense days in the current month) is then applied to
limitation were 0.85%, and without giving the Fund's average net assets for the entire
effect to the expense limitation, were 0.87% 36-month performance period, giving a dollar
of average daily net assets. amount that is added to (or subtracted from)
the basic fee. In addition, the fee is also
For the fiscal year ended July 31, 2004, the further limited to a maximum annualized rate
Fund's annual operating expenses for Class B adjustment of +/-0.10% (i.e., the management
shares, after giving effect to the expense fee will not exceed 0.70% or be less than
limitation were 1.60%, and without giving 0.50%) on average daily net assets for the
effect to the expense limitation, were 1.62% current year. However, Pioneer currently is
of average daily net assets. waiving the lower limitation on its fee, but
may reimpose it in the future. Because any
For the fiscal year ended July 31, 2004, the adjustments to the basic fee begin with the
Fund's annual operating expenses for Class I comparative performance of the Fund and the
shares, after giving effect to the expense performance record of the index, the
limitation were 0.70%, and without giving controlling factor is not whether fund
effect to the expense limitation, were 0.77% performance is up or down, but whether it is
of average daily net assets. up or down more or less than the performance
record of the index, regardless of general
market performance. During its most
- ------------------------------------------------------------------------------------------------------------------------------------
6
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth Enhanced Market Fund Pioneer Fund
- ------------------------------------------------------------------------------------------------------------------------------------
recent fiscal year, the Pioneer Fund paid an
advisory fee at an average rate of 0.53% of
average daily net assets.
In addition, the Fund reimburses Pioneer for
certain fund accounting and legal expenses
incurred on behalf of the Fund and pays a
separate shareholder servicing/transfer
agency fee to PIMSS, an affiliate of Pioneer.
For the fiscal year ended December 31, 2004,
the Fund's total annual operating expenses
for Class A shares were 1.06% of average
daily net assets.
For the fiscal year ended December 31, 2004,
the Fund's total annual operating expenses
for Class B shares were 1.92% of average
daily net assets.
For the fiscal year ended December 31, 2004,
the Fund's total annual operating expenses
for Class Y shares were 0.61% of average
daily net assets.
- ------------------------------------------------------------------------------------------------------------------------------------
Buying shares You may buy shares of the Fund directly You may buy shares from any investment firm
through BISYS Fund Services, the Fund's that has a sales agreement with PFD, the
distributor, or through brokers, registered Pioneer Fund's distributor.
investment advisers, banks and other
financial institutions that have entered into If the account is established in the
selling agreements with the Fund's shareholder's own name, shareholders may also
distributor, as described in the Fund's purchase additional shares of the Pioneer
prospectus. Fund by telephone or online.
Certain account transactions may be done by
telephone.
- ------------------------------------------------------------------------------------------------------------------------------------
Exchanging shares You can exchange your shares in the Fund for You may exchange your shares for shares of
shares of the same class of another AmSouth the same class of another Pioneer mutual
Fund, usually without paying additional sales fund. Your exchange request must be for at
charges. You must meet the minimum investment least $1,000. The Fund allows you to exchange
requirements for the Fund into which you are your shares at net asset value without
exchanging. Exchanges from one Fund to charging you either an initial or contingent
another are taxable. Class A shares may be deferred shares charge at the time of the
exchanged for Class I shares of the same Fund exchange. Shares you acquire as part of an
or another AmSouth Fund if you become exchange will continue to be subject to any
eligible to purchase Class I shares. Class I contingent deferred sales charge that applies
shares may be exchanged for Class A shares of to the shares you originally purchased. When
the same Fund. No transaction fees are you ultimately sell your shares, the date of
currently charged for exchanges. your original purchase will determine your
contingent deferred sales charge. An exchange
If you sell your shares or exchange them for generally is treated as a sale and a new
shares of another AmSouth Fund within 7 days purchase of shares for federal income tax
of the date of purchase, you will be charged purposes.
a 2.00% fee on the current net asset value of
the
- ------------------------------------------------------------------------------------------------------------------------------------
7
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth Enhanced Market Fund Pioneer Fund
- ------------------------------------------------------------------------------------------------------------------------------------
shares sold or exchanged. The fee is paid to After you establish an eligible fund account,
the Fund to offset the costs associated with you can exchange Fund shares by telephone or
short-term trading, such as portfolio online.
transaction and administrative costs.
The Fund uses a "first-in, first-out" method
to determine how long you have held your
shares. This means that if you purchased
shares on different days, the shares
purchased first will be considered redeemed
first for purposes of determining whether the
redemption fee will be charged.
The fee will be charged on all covered
redemptions and exchanges, including those
made through retirement plan, brokerage and
other types of omnibus accounts (except where
it is not practical for the plan
administrator or brokerage firm to implement
the fee). The Fund will not impose the
redemption fee on a redemption or exchange of
shares purchased upon the reinvestment of
dividend and capital gain distributions.
- ------------------------------------------------------------------------------------------------------------------------------------
Selling shares Shares of each Fund are sold at the net asset value per share next calculated after the Fund
receives your request in good order.
--------------------------------------------------------------------------------------------------
You may sell your shares by contacting the Normally, your investment firm will send your
Fund directly in writing or by telephone or request to sell shares to PIMSS. You can also
by contacting a financial intermediary as sell your shares by contacting the Fund
described in the Fund's prospectus. directly if your account is registered in
your name.
If the account is established in the
shareholder's own name, shareholders may also
redeem shares of the Pioneer Fund by
telephone or online.
- ------------------------------------------------------------------------------------------------------------------------------------
Comparison of Principal Risks of Investing in the Funds
Because each Fund has a similar investment objective, primary investment
policies and strategies, the Funds are subject to the same principal risks. You
could lose money on your investment in either Fund or not make as much as if you
invested elsewhere if:
o The stock market goes down (this risk may be greater in the short
term)
o In the case of the Pioneer Fund, value stocks fall out of favor with
investors
o The Fund's assets remain undervalued or do not have the potential
value originally expected
o Stocks selected for income do not achieve the same return as
securities selected for capital growth
8
Past Performance
Set forth below is performance information for each Fund. The bar charts
show how each Fund's total return (not including any deduction for sales
charges) has varied from year to year for each full calendar year. The tables
show average annual total return (before and after taxes) for each Fund over
time for each class of shares (including deductions for sales charges) compared
with a broad-based securities market index. The bar charts give an indication of
the risks of investing in each Fund, including the fact that you could incur a
loss and experience volatility of returns year to year. Past performance before
and after taxes does not indicate future results.
AmSouth Enhanced Market Fund --Class A Shares
Calendar Year Total Returns*
[DATA BELOW IS REPRESENTED BY A BAR CHART IN THE ORIGINAL REPORT]
1999 2000 2001 2002 2003 2004
21.05 -8.24 -12.58 -23.47 27.81 10.05
* During the period shown in the bar chart since the Fund's inception
September 1, 1998, your AmSouth Fund's highest quarterly return was 15.38%
for the quarter ended June 30, 2003, and the lowest quarterly return was
-18.14% for the quarter ended September 30, 2002.
Pioneer Fund -- Class A Shares
Calendar Year Total Returns*
[DATA BELOW IS REPRESENTED BY A BAR CHART IN THE ORIGINAL REPORT]
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
26.76 19.7 38.47 29.09 15.54 0.12 -11.13 -20.26 24.58 11.64
* During the period shown in the bar chart Pioneer Fund's highest quarterly
return was 22.33% for the quarter ended December 31, 1998, and the lowest
quarterly return was -18.18% for the quarter ended September 30, 2002.
9
AmSouth Enhanced Market Fund
Average Annual Total Returns as of December 31, 2004
- ---------------------------------------------------------------------------------------------------------------------------------
1 Year 5 Years Since Inception
(9/1/98)
- ---------------------------------------------------------------------------------------------------------------------------------
AmSouth Enhanced Marked Fund, Class A Shares(1)
- ---------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 3.98% -3.99% 3.82%
- ---------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions 3.01% -4.39% 3.21%
- ---------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares 3.24% -3.48% 3.01%
- ---------------------------------------------------------------------------------------------------------------------------------
AmSouth Enhanced Marked Fund, Class B Shares(1)
- ---------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 4.18% -4.00% 3.95%
- ---------------------------------------------------------------------------------------------------------------------------------
AmSouth Enhanced Market Fund, Class I Shares(2)
- ---------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 10.14% -2.75% 4.91%
- ---------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions 9.09% -3.19% 4.25%
- ---------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares 7.28% -2.47% 3.93%
- ---------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(3) 10.87% -2.30% 4.71%
(reflects no deduction for fees, expenses or taxes)
- ---------------------------------------------------------------------------------------------------------------------------------
(1) Class A shares were first offered on 9/1/98. Performance for the Class B
shares, which were first offered on 9/2/98, is based on the historical
performance of the Fund's Class A shares (without sales charge) prior to
that date. The historical performance of the Class B shares has been
restated to reflect the Fund's Class B shares distribution (12b-1) fees and
the contingent deferred sales charge.
(2) Performance for the Class I shares, which were first offered on 12/11/98,
is based on the historical performance of the Fund's Class A shares
(without sales charge) prior to that date.
(3) The S&P 500, an unmanaged index of 500 stocks, is for reference only, does
not mirror the Fund's investments, and reflects no deduction for fees,
expenses or taxes.
The above table shows the impact of taxes on AmSouth Enhanced Market Fund's
returns. After-tax returns are only shown for Class A shares and may vary for
Class B shares. The Fund's after-tax returns are calculated using the highest
individual federal marginal income tax rates and do not reflect the impact of
state and local taxes. In certain cases, the figure representing "Return After
Taxes on Distributions and Sale of Fund Shares" may be higher than the other
return figures for the same period. A higher after-tax return results when a
capital loss occurs upon redemption and translates into an assumed tax deduction
that benefits the shareholder. Please note that actual after-tax returns depend
on an investor's tax situation and may differ from those shown. Also note that
after-tax returns shown are not relevant to shareholders who hold Fund shares
through tax-deferred arrangements, such as 401(k) plans or individual retirement
accounts.
Pioneer Fund
Average Annual Total Returns as of December 31, 2004
- ------------------------------------------------------------------------------------------------------------------------------------
1 Year 5 Years 10 Years Since Inception
- ------------------------------------------------------------------------------------------------------------------------------------
Pioneer Fund, Class A shares
- ------------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 5.21% -1.44% 11.29% 12.50% (2/13/28)
- ------------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions(1) 4.90% -1.95% 10.00% 8.84%
- ------------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund 3.37% -1.42% 9.36% 8.73%
Shares(1)
- ------------------------------------------------------------------------------------------------------------------------------------
Pioneer Fund, Class B shares
- ------------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 6.68% -1.14% N/A 9.01% (7/1/96)
- ------------------------------------------------------------------------------------------------------------------------------------
Pioneer Fund, Class Y shares
- ------------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 12.15% 0.16% 0.16% 12.61% (2/13/28)(3)
- ------------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions(1) 11.64% -0.49% -0.49% 8.94%
- ------------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund 7.78% -0.15% -0.15% 8.83%
Shares(1)
- ------------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(2) 10.87% -2.30% -2.30% 10.11%(4)
(reflects no deduction for fees, expenses or taxes)
- ------------------------------------------------------------------------------------------------------------------------------------
10
(1) After-tax returns are calculated using the historical highest individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your situation and may
differ from those shown, and the after-tax returns shown are not relevant
to shareholders who hold Fund shares through tax-deferred arrangements such
as 401(k) plans or IRA accounts, or to investors that are tax-exempt.
(2) The S&P 500 Index, an unmanaged index of 500 stocks, is for reference only,
does not mirror the Fund's investments, and reflects no deduction for fees,
expenses or taxes.
(3) Reflects the inception date of the Fund's Class A shares. The inception
date of the Fund's Class Y shares was May 6, 1999.
(4) Reflects the return of the index since the inception of Class A shares. The
return of the index is 8.90% since the inception of Class B shares.
The most recent portfolio manager's discussion of each Fund's performance
is attached as Exhibit C.
The Funds' Fees and Expenses
Shareholders of both Funds pay various fees and expenses, either directly
or indirectly. The tables below show the fees and expenses that you would pay if
you were to buy and hold shares of each Fund. The expenses in the tables
appearing below are based on (i) for the AmSouth Enhanced Market Fund, the
expenses of AmSouth Enhanced Marked Fund for the period ended January 31, 2005,
and (ii) for Pioneer Fund, the expenses of Pioneer Fund for the period ended
October 31, 2004. Future expenses for all share classes may be greater or less.
The tables also show the pro forma expenses of the combined Fund assuming the
Reorganization occurred on October 31, 2004.
- ------------------------------------------------------------------------------------------------------------------------------------
Shareholder AmSouth Pioneer Combined AmSouth Pioneer Combined AmSouth Pioneer Combined
transaction Enhanced Fund Fund (Pro Enhanced Fund Fund (Pro Enhanced Fund Fund (Pro
fees (paid Marked Forma) Marked Forma) Marked Forma)
directly from Fund(1) Fund(1) Fund(1)
your
investment) Class A Class A Class A Class B Class B Class B Class I Class Y Class Y
- ------------------------------------------------------------------------------------------------------------------------------------
Maximum sales 5.50%(2) 5.75%(2) 5.75%(2) None None None None None None
charge (load)
when you buy
shares as a
percentage of
offering price
- ------------------------------------------------------------------------------------------------------------------------------------
Maximum None None None 5.00%(3) 4.00% 4.00% None None None
deferred sales
charge (load)
as a
percentage of
purchase price
or the amount
you receive
when you sell
shares,
whichever is
less
- ------------------------------------------------------------------------------------------------------------------------------------
Redemption 2.00%(4) None None 2.00%(4) None None 2.00%(4) None None
fees
- ------------------------------------------------------------------------------------------------------------------------------------
Annual fund
operating
expenses
(deducted from
fund assets)
(as a % of
average net
assets)
- ------------------------------------------------------------------------------------------------------------------------------------
11
- ------------------------------------------------------------------------------------------------------------------------------------
Shareholder AmSouth Pioneer Combined AmSouth Pioneer Combined AmSouth Pioneer Combined
transaction Enhanced Fund Fund (Pro Enhanced Fund Fund (Pro Enhanced Fund Fund (Pro
fees (paid Marked Forma) Marked Forma) Marked Forma)
directly from Fund(1) Fund(1) Fund(1)
your
investment) Class A Class A Class A Class B Class B Class B Class I Class Y Class Y
- ------------------------------------------------------------------------------------------------------------------------------------
Management fee 0.35% 0.53%(6) 0.53%(6) 0.35% 0.53%(6) 0.53%(6) 0.35% 0.53%(6) 0.53%(6)
- ------------------------------------------------------------------------------------------------------------------------------------
Distribution None 0.25% 0.25% 0.75% 1.00% 1.00% None None None
and service
(12b-1) fee
- ------------------------------------------------------------------------------------------------------------------------------------
Other expenses 0.65%(5) 0.28% 0.27% 0.71%(5) 0.40% 0.39% 0.53%(5) 0.01% 0.07%
- ------------------------------------------------------------------------------------------------------------------------------------
Total fund 1.00% 1.06%(7) 1.05% 1.81% 1.93%(7) 1.92% 0.88% 0.61%(7) 0.60%
operating
expenses
- ------------------------------------------------------------------------------------------------------------------------------------
Expense 0.09% N/A N/A 0.15% N/A N/A 0.12% N/A N/A
reimbursement/
reduction
- ------------------------------------------------------------------------------------------------------------------------------------
Net fund 0.91% 1.06% 1.05% 1.66% 1.93% 1.92% 0.76% 0.61% 0.60%
operating
expenses
- ------------------------------------------------------------------------------------------------------------------------------------
(1) AmSouth Bank or other financial institutions may charge their customer
account fees for automatic investment and other cash management services
provided in connection with investment in the Fund.
(2) Sales charges may be reduced depending upon the amount invested or, in
certain circumstances, waived. Class A shares bought as part of an
investment of $1 million or more are not subject to an initial sales
charge, but may be charged a CDSC of 1.00% if sold within one year of
purchase.
(3) For Class B shares purchased prior to the combination of AmSouth Funds with
ISG Funds, the CDSC on such Class B shares held continuously declines over
six years, starting with year one and ending in year seven from: 4%, 3%,
3%, 2%, 2%, 1%. For all other Class B shares held continuously, the CDSC
declines over six years, starting with year one and ending in year seven
from: 5%, 4%, 3%, 3%, 2%, 1%. Eight years after purchase (seven years in
the case of shares acquired in the ISG combination), Class B shares
automatically convert to Class A shares.
(4) To discourage short-term trading, a redemption fee of 2.00% will be charged
on sales or exchanges of Class A, Class B and Class I shares of your
AmSouth Fund made within 7 days of the date of purchase. A wire transfer
fee of $7.00 will be deducted from the amount of your redemption if you
request a wire transfer.
(5) Other expenses for your AmSouth Fund are being limited to 0.56% for Class A
shares, 0.56% for Class B shares and 0.41% for Class I shares. Any fee
waiver or expense reimbursement arrangement is voluntary and may be
discontinued at any time.
(6) Pioneer Fund pays a management fee that ranges from 0.50% to 0.70% of
average daily net assets based on its performance.
(7) The Pioneer Fund's total annual operating expenses in the table have not
been reduced by any expense offset arrangements.
The hypothetical example below helps you compare the cost of investing in
each Fund. It assumes that: (a) you invest $10,000 in each Fund for the time
periods shown, (b) you reinvest all dividends and distributions, (c) your
investment has a 5% return each year, and (d) each Fund's gross operating
expenses remain the same. The examples are for comparison purposes only and are
not a representation of either Fund's actual expenses or returns, either past or
future.
- ------------------------------------------------------------------------------------------------------------
Number of years you AmSouth Enhanced Marked Fund Pioneer Fund Combined Fund
own your shares (Pro Forma)
- ------------------------------------------------------------------------------------------------------------
Class A
- ------------------------------------------------------------------------------------------------------------
Year 1 $646 $667 $676
- ------------------------------------------------------------------------------------------------------------
Year 3 $851 $893 $890
- ------------------------------------------------------------------------------------------------------------
Year 5 $1,072 $1,126 $1,121
- ------------------------------------------------------------------------------------------------------------
12
- ------------------------------------------------------------------------------------------------------------
Year 10 $1,707 $1,795 $1,784
- ------------------------------------------------------------------------------------------------------------
Class B -- assuming redemption at end of period
- ------------------------------------------------------------------------------------------------------------
Year 1 $684 $596 $595
- ------------------------------------------------------------------------------------------------------------
Year 3 $869 $906 $903
- ------------------------------------------------------------------------------------------------------------
Year 5 $1,180 $1,142 $1,137
- ------------------------------------------------------------------------------------------------------------
Year 10 $1,914 $2,028 $2,017
- ------------------------------------------------------------------------------------------------------------
Class B -- assuming no redemption
- ------------------------------------------------------------------------------------------------------------
Year 1 $184 $196 $195
- ------------------------------------------------------------------------------------------------------------
Year 3 $569 $606 $603
- ------------------------------------------------------------------------------------------------------------
Year 5 $980 $1,042 $1,037
- ------------------------------------------------------------------------------------------------------------
Year 10 $1,914 $2,028 $2,017
- ------------------------------------------------------------------------------------------------------------
Class I Class Y
- ------------------------------------------------------------------------------------------------------------
Year 1 $90 $62 $61
- ------------------------------------------------------------------------------------------------------------
Year 3 $281 $195 $192
- ------------------------------------------------------------------------------------------------------------
Year 5 $488 $340 $335
- ------------------------------------------------------------------------------------------------------------
Year 10 $1084 $762 $750
- ------------------------------------------------------------------------------------------------------------
Reasons for the Proposed Reorganization
The Trustees believe that the proposed Reorganization is in the best
interests of AmSouth Enhanced Market Fund. The Trustees considered the following
matters, among others, in approving the proposal.
First, AAMI, the investment adviser to your AmSouth Fund, informed the
Trustees that it does not intend to continue to provide investment advisory
services to the AmSouth Funds. Consequently, a change in your AmSouth Fund's
investment adviser was necessary. In the absence of the Reorganization, such a
change would be more likely to motivate shareholders invested in reliance on
AAMI's role to withdraw from the Fund, thereby reducing fund size and increasing
fund expense ratios.
Second, after the Reorganization, the combined Fund will have an asset size
substantially larger than that of your AmSouth Fund, which may allow the
combined Fund to achieve significant economies of scale in investments or
expenses.
Third, the historical investment performance of Pioneer Fund is superior to
your AmSouth Fund's investment performance. For the one and five year periods
ended December 31, 2004, Class A shares of Pioneer Fund had an average annual
return of 5.21% (one year); and -1.44% (five year); compared to an average
annual return of the Class A shares of your AmSouth Fund of 3.98% (one year);
and -3.99% (five year), respectively, during the same period. In addition, the
Trustees considered the track record of Pioneer in managing equity and fixed
income mutual funds.
Fourth, the resources of Pioneer. At December 31, 2004, Pioneer managed
over 80 investment companies and accounts with approximately $42 billion in
assets, including $26.7 billion in equity securities. Pioneer is part of the
global asset management group of UniCredito Italiano S.p.A., one of the largest
banking groups in Italy, providing investment management and financial services
to mutual funds, institutional and other clients. As of December 31, 2004,
assets under management of UniCredito Italiano S.p.A. were approximately $175
billion worldwide. Shareholders of your AmSouth Fund would become part of a
significantly larger family of funds that offers a more diverse array of
investment options and enhanced shareholder account options. The Pioneer family
of mutual funds offers over 80 funds, including domestic and international
equity and fixed income funds and a money market fund that will be available to
your AmSouth Fund's shareholders through exchanges.
Fifth, the Trustees recognized that Pioneer Fund's operating expenses for
Class A and Class B shares, both gross and net of expense limitations, and its
management fee, are higher than your Fund's expenses for Class A and Class B
shares and your Fund's management fee. They also noted that on a pro forma
basis, after giving effect to the Reorganization, the expenses of the Pioneer
Fund's Class A and Class B shares were estimated to be higher that your Fund's
expenses for Class A and Class B shares both on a gross and a net basis, though
the gross and net expenses of your Fund's Class I shares would decline. The
Trustees noted that the differential in fees can be explained by the fact that
the Pioneer Fund is more actively managed, while the AmSouth Fund is an enhanced
index fund, and index funds traditionally have substantially lower fees than
actively
13
managed funds. The Trustees considered that the other advantages of the
Reorganization were sufficient to make up for the higher expenses of the Pioneer
Fund. The Trustees also considered that the aggregate Rule 12b-1 distribution
and shareholder servicing fees and non-Rule 12b-1 shareholder servicing fees
paid by the Class A and Class B shares of both Funds are the same. Moreover,
your AmSouth Fund's Class I shares pay a non 12b-1 shareholder servicing fee
that is not paid by the Pioneer Fund's Class Y shares. In addition, the broader
distribution arrangements of the Pioneer Fund offer greater potential for
further asset growth and reduced per share expenses.
Sixth, the substantially larger size of Pioneer Fund will offer greater
opportunity for diversification of the investment portfolio, which should help
to reduce risks.
Seventh, the Class A, B and Y shares of Pioneer Fund received in the
Reorganization will provide AmSouth Enhanced Market Fund shareholders with
exposure to substantially the same investment product as they currently have.
Eighth, the transaction is structured to qualify as a tax-free
reorganization under Section 368(a) of the Internal Revenue Code of 1986 and
therefore will not be treated as a taxable sale of your AmSouth shares. Although
the Reorganization will result in a per share increase in net unrealized capital
gains and decrease in capital loss carryforwards, the potential negative tax
consequences of these aspects of the Reorganization are outweighed by the
advantages of the Reorganization.
Pioneer and AmSouth Bank will pay all costs of preparing and printing the
Funds' proxy statements and solicitation costs incurred by the Funds in
connection with the Reorganization. AAMI will otherwise be responsible for all
costs and expenses of the AmSouth Fund in connection with the Reorganizations.
The Trustees also considered that Pioneer and AmSouth Bank will benefit
from the Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the
Reorganizations."
The Board of Trustees of the Pioneer Fund also considered that the
Reorganization presents an excellent opportunity for the Pioneer Fund to acquire
investment assets without the obligation to pay commissions or other transaction
costs that a fund normally incurs when purchasing securities. This opportunity
provides an economic benefit to the Pioneer Fund and its shareholders.
CAPITALIZATION
The following table sets forth the capitalization of each Fund as of May
31, 2005, and the pro forma combined Fund as of May 31, 2005.
- --------------------------------------------------------------------------------------------------------------------
AmSouth Enhanced Pro Forma Pioneer
Market Fund Pioneer Fund Fund
May 31, 2005 May 31, 2005 May 31, 2005
- --------------------------------------------------------------------------------------------------------------------
Total Net Assets (in thousands) $190,688 $6,958,502 $7,149,190
- --------------------------------------------------------------------------------------------------------------------
Class A shares ................................... $27,264 $5,448,914 $5,476,179
- --------------------------------------------------------------------------------------------------------------------
Class B shares ................................... $10,392 $492,629 $503,021
- --------------------------------------------------------------------------------------------------------------------
Class I/Y shares ................................. $153,032 $164,592 $317,624
- --------------------------------------------------------------------------------------------------------------------
Net Asset Value Per Share
- --------------------------------------------------------------------------------------------------------------------
Class A shares ................................... $11.66 $41.71 $41.71
- --------------------------------------------------------------------------------------------------------------------
Class B shares ................................... $11.39 $40.73 $40.73
- --------------------------------------------------------------------------------------------------------------------
Class I/Y shares ................................. $11.69 $41.84 $41.84
- --------------------------------------------------------------------------------------------------------------------
Shares Outstanding
- --------------------------------------------------------------------------------------------------------------------
Class A shares ................................... $2,337,280 $130,631,789 $131,285,421
- --------------------------------------------------------------------------------------------------------------------
Class B shares ................................... $912,719 $12,094,860 $12,350,007
- --------------------------------------------------------------------------------------------------------------------
Class I/Y shares ................................. $13,094,306 $3,933,930 $7,591,555
- --------------------------------------------------------------------------------------------------------------------
It is impossible to predict how many shares of the Pioneer Fund will
actually be received and distributed by your AmSouth Fund on the Reorganization
date. The table should not be relied upon to determine the amount of the Pioneer
Fund's shares that will actually be received and distributed.
14
BOARD'S EVALUATION AND RECOMMENDATION
For the reasons described above, the Trustees, including the
Independent Trustees, approved the Reorganization. In particular, the Trustees
determined that the Reorganization is in the best interests of your AmSouth
Fund. Similarly, the Board of Trustees of the Pioneer Fund, including its
Independent Trustees, approved the Reorganization. They also determined that the
Reorganization is in the best interests of the Pioneer Fund.
The Trustees recommend that the shareholders of your AmSouth Fund vote
FOR the proposal to approve the Agreement and Plan of Reorganization.
15
AmSouth Value Fund and
Pioneer Value Fund
PROPOSAL 1(d)
Approval of Agreement and Plan of Reorganization
SUMMARY
The following is a summary of more complete information appearing later in
this Proxy Statement/Prospectus or incorporated herein. You should read
carefully the entire Proxy Statement/Prospectus, including the form of Agreement
and Plan of Reorganization attached as EXHIBIT A-1, because it contains details
that are not in the summary.
Each Fund invests primarily in equity securities of U.S. issuers using a
value oriented investment approach and, consequently, the Funds have similar
investment policies and risks. In the table below, if a row extends across the
entire table, the policy disclosed applies to both your AmSouth Fund and the
Pioneer Fund.
Comparison of AmSouth Value Fund to Pioneer Value Fund
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AmSouth Value Fund Pioneer Value Fund
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Business A diversified series of AmSouth Funds, an A diversified open-end management investment
open-end management investment company company organized as a Delaware statutory
organized as a Massachusetts business trust. trust.
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Net assets as of March 31, $498.2 million $4,066.0 million
2005
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Investment advisers and Investment Adviser: Investment Adviser:
portfolio managers AAMI Pioneer
Portfolio Manager: Portfolio Managers:
AmSouth Value Fund is managed by Brian B. Day-to-day management of Pioneer Value Fund's
Sullivan, CFA (since June 2004). Mr. Sullivan portfolio is the responsibility of J. Rodman
has been an officer of AAMI since 1996 and Wright, lead portfolio manager. Mr. Wright is
joined AmSouth Bank in 1982. Prior to serving supported by Aaron C. Clark, portfolio
as Director of Fixed Income for AmSouth manager, and the domestic equity team.
Bank's Trust Department, Mr. Sullivan managed Members of this team manage other Pioneer
equity portfolios and held the position of funds investing primarily in U.S. equity
equity research coordinator for AmSouth securities.
Bank's Trust Department.
Mr. Wright is a senior vice president of
Pioneer and strategy director of the value
team. He joined Pioneer in 1994 as an analyst
and has been an investment professional since
1988. Mr. Clark is a vice president and
joined Pioneer in 2004 as a portfolio
manager. Prior to joining Pioneer, Mr. Clark
was employed as a portfolio manager at Morgan
Stanley Investment Management from 1997 to
2004 and has been an investment professional
since 1992.
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Investment objective AmSouth Value Fund seeks long-term capital Pioneer Value Fund seeks reasonable income
growth by investing primarily in a and capital growth primarily through equity
diversified portfolio of common stock and securities.
securities
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1
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AmSouth Value Fund Pioneer Value Fund
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convertible into common stock, such as
convertible bonds and convertible preferred
stock. The production of current income is an
incidental objective.
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Primary investments AmSouth Value Fund normally invests at least Pioneer Value Fund seeks to invest in a broad
80% of its total assets in common stocks and list of carefully selected, reasonably priced
securities convertible into common stocks, securities rather than in securities whose
such as convertible bonds and convertible prices reflect a premium resulting from their
preferred stocks. The Fund invests primarily current market popularity. Pioneer Value Fund
in common stocks that AAMI believes to be invests the major portion of its assets in
undervalued. equity securities, primarily of U.S. issuers.
For purposes of the Fund's investment
policies, equity securities include common
stocks, convertible debt and other equity
instruments, such as depositary receipts,
warrants, rights and preferred stocks.
Pioneer Value Fund may invest up to 25% of
its assets in the equity securities of
non-U.S. companies.
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Investment strategies In managing the AmSouth Value Fund's Pioneer uses a "value" approach to select
portfolio, AAMI combines fundamental and Pioneer Value Fund's investments. Pioneer
quantitative analysis with risk management to evaluates a security's potential value,
identify value opportunities, construct the including the attractiveness of its market
portfolio and make purchase and sale valuation, based on the company's assets and
decisions. AAMI selects investments it prospects for earnings and revenue growth.
believes have basic investment value that Factors Pioneer looks for in selecting
will eventually be recognized by other investments include:
investors, thus increasing their value to the
Fund. o Above average potential for earnings and
revenue growth
o Favorable expected returns relative to
perceived risks
o Management with demonstrated ability and
commitment to the company
o Low market valuations relative to earnings
forecast, book value, cash flow and sales
o Turnaround potential for companies that
have been through difficult periods
o Good prospects for dividend growth
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Other investments AmSouth Value Fund may invest up to 20% of Pioneer Value Fund may invest up to 25% of
the value of its total assets in preferred its assets in the equity securities of
stocks, corporate bonds, notes, and warrants, non-U.S. companies. The Fund will not invest
and short-term money market instruments. more than 5% of its total assets in the
securities of emerging market issuers.
AmSouth Value Fund may purchase securities on
a when-issued basis (i.e., for delivery Pioneer Value Fund may invest the balance of
beyond the normal settlement date at a stated its assets in debt securities of corporate
price and yield). The Fund expects that and government issuers. The Fund may invest
up
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2
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AmSouth Value Fund Pioneer Value Fund
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commitments to purchase "when-issued" to 5% of its net assets in below investment
securities will not exceed 25% of the value grade debt securities issued by both U.S. and
of its total assets under normal market non-U.S. corporate and government issuers,
conditions, and that a commitment to purchase including convertible debt securities.
"when-issued" securities will not exceed 60
days.
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Temporary defensive strategies When AAMI determines adverse market Pioneer Value Fund may invest all or part of
conditions exist, AmSouth Value Fund may its assets in securities with remaining
invest entirely in cash positions, directly maturities of less than one year, cash
in U.S. Government securities and short-term equivalents or may hold cash.
paper, such as bankers' acceptances.
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Diversification Each Fund is diversified for the purpose of the Investment Company Act and is subject to
diversification requirements under the Internal Revenue Code of 1986, as amended (the "Code").
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Industry concentration AmSouth Value Fund may not purchase any Pioneer Value Fund may not invest more than
securities which would cause more than 25% of 25% of its assets in any one industry.
the value of the Fund's total assets at the
time of purchase to be invested in securities
of one or more issuers conducting their
principal business activities in the same
industry, provided that (a) there is no
limitation with respect to obligations issued
or guaranteed by the U.S. government or its
agencies or instrumentalities, and repurchase
agreements secured by obligations of the U.S.
government or its agencies or
instrumentalities; (b) wholly owned finance
companies will be considered to be in the
industries of their parents if their
activities are primarily related to financing
the activities of their parents; and (c)
utilities will be divided according to their
services. For example, gas, gas transmission,
electric and gas, electric, and telephone
will each be considered a separate industry.
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Restricted and illiquid AmSouth Value Fund may not invest more than Pioneer Value Fund may not invest more than
securities 15% of its net assets in securities that are 15% of its net assets in securities that are
restricted as to resale, or for which no illiquid and other securities that are not
readily available market exists, including readily marketable. Repurchase agreements
repurchase agreements providing for maturing in more than seven days will be
settlement more than seven days after notice. included for purposes of the foregoing limit.
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Borrowing AmSouth Value Fund may not borrow money or Pioneer Value Fund may not borrow money,
issue senior securities, except that the Fund except the Fund may: (a) borrow from banks or
may borrow from banks or enter into reverse through reverse repurchase agreements in an
repurchase agreements for temporary emergency amount up to 33 1/3% of the Fund's total
purposes in amounts up to 33 1/3% of the assets (including the amount borrowed); (b)
value of its total assets at the time of such to the extent permitted by applicable law,
borrowing. The Fund will not purchase borrow up to an additional 5% of the Fund's
securities while borrowings (including assets for temporary purposes; (c) obtain
reverse repurchase agreements) in excess of such short-term credits as are necessary for
5% of its total assets are outstanding. In the clearance of portfolio transactions; (d)
addition, the Fund is permitted to purchase securities on margin to the extent
participate in a credit permitted by
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3
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AmSouth Value Fund Pioneer Value Fund
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facility whereby the Fund may directly lend applicable law; and (e) engage in
to and borrow money from other AmSouth funds transactions in mortgage dollar rolls that
for temporary purposes, provided that the are accounted for as financings.
loans are made in accordance with an order of
exemption from the SEC and any conditions
thereto.
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Lending AmSouth Value Fund may not make loans, except Pioneer Value Fund may not make loans, except
that the Fund may purchase or hold debt that the Fund may (i) lend portfolio
instruments in accordance with its investment securities in accordance with the Fund's
objective and policies, lend Fund securities investment policies, (ii) enter into
in accordance with its investment objective repurchase agreements, (iii) purchase all or
and policies and enter into repurchase a portion of an issue of publicly distributed
agreements. In addition, the Fund is debt securities, bank loan participation
permitted to participate in a credit facility interests, bank certificates of deposit,
whereby the Fund may directly lend to and bankers' acceptances, debentures or other
borrow money from other AmSouth Funds for securities, whether or not the purchase is
temporary purposes, provided that the loans made upon the original issuance of the
are made in accordance with an order of securities, (iv) participate in a credit
exemption from the SEC and any conditions facility whereby the Fund may directly lend
thereto. to and borrow money from other affiliated
funds to the extent permitted under the
Investment Company Act or an exemption
therefrom, and (v) make loans in any other
manner consistent with applicable law, as
amended and interpreted or modified from time
to time by any regulatory authority having
jurisdiction.
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Derivative instruments AmSouth Value Fund may invest in futures Pioneer Value Fund may use futures and
contracts and options thereon (interest rate options on securities, indices and
futures contracts or index futures contracts, currencies, forward currency exchange
as applicable) to commit funds awaiting contracts and other derivatives. The Fund
investment, to maintain cash liquidity or for does not use derivatives as a primary
other hedging purposes. The value of the investment technique and generally limits
Fund's contracts may equal or exceed 100% of their use to hedging. However, the Fund may
the Fund's total assets, although the Fund use derivatives for a variety of
will not purchase or sell a futures contract non-principal purposes, including:
unless immediately afterwards the aggregate
amount of margin deposits on its existing o As a hedge against adverse changes in
futures positions plus the amount of premiums stock market prices, interest rates or
paid for related futures options entered into currency exchange rates
for other than bona fide hedging purposes is
5% or less of its net assets. 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
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Short-term trading AmSouth Value Fund may engage in the Pioneer Value Fund does not usually trade for
technique of short-term trading. Such trading short-term profits. The Fund will sell an
involves the selling of securities held for a investment, however, even if it has only been
short-time, ranging from several months to held for a short time, if it no longer meets
less than a day. The object of such the Fund's investment criteria.
short-term trading is to increase the
potential for capital appreciation and/or
income of the Fund in order to take advantage
of what AAMI believes
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4
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AmSouth Value Fund Pioneer Value Fund
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are changes in market, industry or individual
company outlook.
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Other investment policies As described above, the Funds have substantially similar principal investment strategies and
and restrictions policies. Certain of the non-principal investment policies and restrictions are different. For
a more complete discussion of each Fund's other investment policies and fundamental and
non-fundamental investment restrictions, see the SAI.
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Buying, Selling and Exchanging Shares
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Class A sales charges and Class A shares are offered with an initial Class A shares are offered with an initial
Rule 12b-1 Fees sales charge of up to 5.50% of the offering sales charge of up to 5.75% of the offering
price, which is reduced depending upon the price, which is reduced or waived for large
amount invested or, in certain circumstances, purchases and certain types of investors. At
waived. Class A shares bought as part of an the time of your purchase, your investment
investment of $1 million or more are not firm may receive a commission from Pioneer
subject to an initial sales charge, but may Funds Distributor, Inc. ("PFD'), the Fund's
be charged a contingent deferred sales charge distributor, of up to 5% declining as the
("CDSC") of 1.00% if sold within one year of size of your investment increases.
purchase.
There is no CDSC, except in certain
Class A shares pay a shareholder servicing circumstances when the initial sales charge
fee (non 12b-1) of up to 0.25% of average is waived.
daily net assets.
Class A shares are subject to distribution
and service (12b-1) fees of up to 0.25% of
average daily net assets.
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Class B sales charges and Class B shares are offered without an initial Class B shares are offered without an initial
Rule 12b-1 fees sales charge, but are subject to a CDSC of up sales charge, but are subject to a CDSC of up
to 5%. For Class B shares purchased prior to to 4% if you sell your shares. The charge is
the combination of AmSouth Funds with ISG reduced over time and is not charged after
Funds, the CDSC on such Class B shares held five years. Your investment firm may receive
continuously declines over six years, a commission from PFD, the Fund's
starting with year one and ending in year distributor, at the time of your purchase of
seven from: 4%, 3%, 3%, 2%, 2%, 1%. For all up to 4%.
other Class B shares held continuously, the
CDSC declines over six years, starting with Class B shares are subject to distribution
year one and ending in year seven from: 5%, and service (12b-1) fees of up to 1% of
4%, 3%, 3%, 2%, 1%. Eight years after average daily net assets.
purchase (seven years in the case of shares
acquired in the ISG combination), Class B Maximum purchase of Class B shares in a
shares automatically convert to Class A single transaction is $49,999.
shares.
Class B shares acquired through the
Class B shares pay a shareholder servicing Reorganization will be subject to the CDSC
fee (non 12b-1) of up to 0.25% of average and commission schedules applicable to the
daily net assets and a distribution (12b-1) original purchase.
fee of 0.75% of average daily net assets.
Maximum investment for all Class B purchases
by a shareholder for the Fund's shares is
$99,999.
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Class I and Class Y AmSouth Value Fund does not impose any The Fund does not impose any initial,
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5
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AmSouth Value Fund Pioneer Value Fund
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sales charges and initial or CDSC on Class I shares. contingent deferred or asset based sales
Rule 12b-1 fees charge on Class Y shares.
The Fund may impose a shareholder servicing
fee (non 12b-1) of up to 0.15% of average The distributor incurs the expenses of
daily net assets. distributing the Fund's Class Y shares, none
of which are reimbursed by the Fund or the
Class Y shareowners.
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Management and other fees AmSouth Value Fund pays an advisory fee on a Pioneer Value Fund pays Pioneer an annual
monthly basis at an annual rate of 0.80% of basic fee of 0.60% of the Fund's average
the Fund's average daily net assets. daily net assets, which fee is reduced at
asset levels above $5 billion. The fee is
ASO Services Company, Inc. ("ASO") serves as computed daily and paid monthly.
administrator and fund accounting agent for
the Fund. The Fund pays ASO an administrative Pioneer's fee increases or decreases
services fee of 0.15% of the Fund's average depending upon whether the Fund's performance
daily net assets. exceeds, or is exceeded by, that of the S&P
500 Index over a rolling three-year
Other expenses of the Fund are being limited performance period. Each percentage point of
to 0.49% for Class A shares, 0.49% for Class difference between the performance of the
B shares and 0.34% for Class I shares. Any Class A shares and the index (limited to a
fee waiver or expense reimbursement maximum of +/-10) is multiplied by a
arrangement is voluntary and may be performance rate adjustment of 0.01%. As a
discontinued at any time. result, the fee is subject to a maximum
annualized rate adjustment of +/-0.10%. This
For the fiscal year ended July 31, 2004, the adjustment factor is applied to the average
Fund's annual operating expenses for Class A net assets during the 36-month period. This
shares, after giving effect to the expense performance comparison is made at the end of
limitation were 1.29%, and without giving each month. An appropriate monthly percentage
effect to the expense limitation, were 1.31% of this annual rate (based on the number of
of average daily net assets. days in the current month) is then applied to
the Fund's average net assets for the entire
For the fiscal year ended July 31, 2004, the performance period, giving a dollar amount
Fund's annual operating expenses for Class B that is added to (or subtracted from) the
shares, after giving effect to the expense basic fee. In addition, the fee is also
limitation were 2.04%, and without giving further limited to a maximum annualized rate
effect to the expense limitation, were 2.06% adjustment of +/-0.10% (i.e., the management
of average daily net assets. fee will not exceed 0.70% or be less than
0.50%) on average daily net assets for the
For the fiscal year ended July 31, 2004, the current year. However, Pioneer currently is
Fund's annual operating expenses for Class I waving the lower limitation on its fee, but
shares, after giving effect to the expense may reimpose it in the future. Because any
limitation were 1.14%, and without giving adjustments to the basic fee begin with the
effect to the expense limitation, were 1.21% comparative performance of the Fund and the
of average daily net assets. performance record of the index, the
controlling factor is not whether Fund
performance is up or down, but whether it is
up or down more or less than the performance
record of the index, regardless of general
market performance. During its most recent
fiscal year, Pioneer Value Fund paid an
advisory fee at an average rate of 0.60% of
average daily net assets.
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6
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AmSouth Value Fund Pioneer Value Fund
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In addition, the Fund reimburses Pioneer for
certain fund accounting and legal expenses
incurred on behalf of the Fund and pays a
separate shareholder servicing/transfer
agency fee to PIMSS, an affiliate of Pioneer.
For the fiscal year ended December 31, 2004,
the Fund's total annual operating expenses
for Class A shares were 1.02% of average
daily net assets.
For the fiscal year ended December 31, 2004,
the Fund's total annual operating expenses
for Class B shares were 1.89% of average
daily net assets.
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Buying shares You may buy shares of the Fund directly You may buy shares from any investment firm
through BISYS Fund Services, the Fund's that has a sales agreement with PFD, the
distributor, or through brokers, registered Pioneer Fund's distributor.
investment advisers, banks and other
financial institutions that have entered into If the account is established in the
selling agreements with the Fund's shareholder's own name, shareholders may also
distributor, as described in the Fund's purchase additional shares of the Fund by
prospectus. telephone or online.
Certain account transactions may be done by
telephone.
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Exchanging shares You can exchange your shares in the Fund for You may exchange your shares for shares of
shares of the same class of another AmSouth the same class of another Pioneer fund. Your
Fund, usually without paying additional sales exchange request must be for at least $1,000.
charges. You must meet the minimum investment The Fund allows you to exchange your shares
requirements for the Fund into which you are at net asset value without charging you
exchanging. Exchanges from one Fund to either an initial or contingent deferred
another are taxable. Class A shares may be shares charge at the time of the exchange.
exchanged for Class I shares of the same Fund Shares you acquire as part of an exchange
or another AmSouth Fund if you become will continue to be subject to any contingent
eligible to purchase Class I shares. Class I deferred sales charge that applies to the
shares may be exchanged for Class A shares of shares you originally purchased. When you
the same Fund. No transaction fees are ultimately sell your shares, the date of your
currently charged for exchanges. original purchase will determine your
contingent deferred sales charge. An exchange
If you sell your shares or exchange them for generally is treated as a sale and a new
shares of another AmSouth Fund within 7 days purchase of shares for federal income tax
of the date of purchase, you will be charged purposes.
a 2.00% fee on the current net asset value of
the shares sold or exchanged. The fee is paid After you establish an eligible fund account,
to the Fund to offset the costs associated you can exchange Fund shares by telephone or
with short-term trading, such as portfolio online.
transaction and administrative costs.
The Fund uses a "first-in, first-out" method
to determine how long you have held your
shares. This means that if you purchased
shares on different days, the shares
purchased first will be
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7
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AmSouth Value Fund Pioneer Value Fund
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considered redeemed first for purposes of
determining whether the redemption fee will
be charged.
The fee will be charged on all covered
redemptions and exchanges, including those
made through retirement plan, brokerage and
other types of omnibus accounts (except where
it is not practical for the plan
administrator or brokerage firm to implement
the fee). The Fund will not impose the
redemption fee on a redemption or exchange of
shares purchased upon the reinvestment of
dividend and capital gain distributions.
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Selling shares Shares of each Fund are sold at the net asset value per share next calculated after the Fund
receives your request in good order.
--------------------------------------------------------------------------------------------------
You may sell your shares by contacting the Normally, your investment firm will send your
Fund directly in writing or by telephone or request to sell shares to PIMSS. You can also
by contacting a financial intermediary as sell your shares by contacting the Fund
described in the Fund's prospectus. directly if your account is registered in
your name.
If the account is established in the
shareholder's own name, shareholders may also
redeem shares of the Fund by telephone or
online.
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Comparison of Principal Risks of Investing in the Funds
Because each Fund has a similar investment objective, primary investment
policies and strategies, the Funds are subject to the same principal risks. You
could lose money on your investment in either Fund or not make as much as if you
invested elsewhere if:
o The stock market goes down (this risk may be greater in the short term)
o Value stocks fall out of favor with investors
o The Fund's assets remain undervalued or do not have the potential value
originally expected
Pioneer Value Fund may be subject to the following additional risks
associated with investing in non-U.S. issuers, which may involve unique risks
compared to investing in securities of U.S. issuers. These risks are more
pronounced to the extent the Fund invests in issuers in countries with emerging
markets or if the Fund invests significantly in one country. These risks may
include:
o Less information about non-U.S. issuers or markets may be available due to
less rigorous disclosure or accounting standards or regulatory practices
o Many non-U.S. markets are smaller, less liquid and more volatile. In a
changing market, the adviser/subadviser might not be able to sell the
Fund's portfolio securities at times, in amounts and at prices it
considers reasonable
8
o Adverse effect of currency exchange rates or controls on the value of the
Fund's investments
o The economies of non-U.S. countries may grow at slower rates than expected
or may experience a downturn or recession
o Economic, political and social developments may adversely affect the
securities markets
o Withholding and other non-U.S. taxes may decrease the Fund's return
In addition, at times, more than 25% of Pioneer Value Fund's assets may be
invested in the same market segment, such as financials or technology. To the
extent the Fund emphasizes investments in a market segment, the Fund will be
subject to a greater degree to the risks particular to the industries in that
segment, and may experience greater market fluctuation, than a fund without the
same focus.
Past Performance
Set forth below is performance information for each Fund. The bar charts show
how each Fund's total return (not including any deduction for sales charges) has
varied from year to year for each full calendar year. The tables show average
annual total return (before and after taxes) for each Fund over time for each
class of shares (including deductions for sales charges) compared with a
broad-based securities market index. The bar charts give an indication of the
risks of investing in each Fund, including the fact that you could incur a loss
and experience volatility of returns year to year. Past performance before and
after taxes does not indicate future results.
AmSouth Value Fund -- Class A Shares
Calendar Year Total Returns*
[DATA BELOW IS REPRESENTED BY A BAR CHART IN THE ORIGINAL REPORT]
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
27.39 15.74 32.3 17.61 3.86 5.08 4.08 -29.31 25.08 15.14
* During the period shown in the bar chart, your AmSouth Fund's highest
quarterly return was 18.35% for the quarter ended June 30, 2003, and the
lowest quarterly return was -26.41% for the quarter ended September 30, 2002.
9
Pioneer Value Fund -- Class A Shares
Calendar Year Total Returns*
[DATA BELOW IS REPRESENTED BY A BAR CHART IN THE ORIGINAL REPORT]
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
27.15 21.99 23.7 -7.99 1.61 15.95 -3.08 -18.79 28.54 12.26
* During the period shown in the bar chart the Pioneer Fund's highest quarterly
return was 15.93% for the quarter ended June 30, 2003, and the lowest
quarterly return was -22.31% for the quarter ended September 30, 1998.
AmSouth Value Fund
Average Annual Total Returns as of December 31, 2004
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1 Year 5 Years 10 Years
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AmSouth Value Fund, Class A Shares(1)
- ---------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 8.78% 1.02% 9.62%
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Return After Taxes on Distributions 8.52% -0.30% 7.60%
- ---------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares 5.70% 0.39% 7.57%
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AmSouth Value Fund, Class B Shares(1)
- ---------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 9.27% 1.09% 9.65%
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AmSouth Value Fund, Class I Shares(2)
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Return Before Taxes 15.31% 2.29% 10.37%
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Return After Taxes on Distributions 14.97% 0.91% 8.28%
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Return After Taxes on Distributions and Sale of Fund Shares 9.93% 1.44% 8.22%
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S&P 500/Barra Value Index(3) 15.71% 2.48% 12.24%
(reflects no deduction for fees, expenses or taxes)
- ---------------------------------------------------------------------------------------------------------------------------------
(1) Class A shares were first offered on 12/1/88. Performance for the Class B
shares, which were first offered on 9/3/97, is based on the historical
performance of the Fund's Class A shares (without sales charge) prior to
that date. The historical performance of the Class B shares has been
restated to reflect the Fund's Class B shares distribution (12b-1) fees and
the contingent deferred sales charge.
(2) Performance for the Class I shares, which were first offered on 9/2/97, is
based on the historical performance of the Fund's Class A shares (without
sales charge) prior to that date.
(3) The S&P 500/Barra Value Index, an unmanaged market capitalization weighted
index comprised of a subset of the S&P 500 with low price to book ratios
relative to the S&P 500 as a whole, is for reference only, does not mirror
the Fund's investments, and reflects no deduction for fees, expenses or
taxes.
The table above shows the impact of taxes on AmSouth Value Fund's returns.
After-tax returns are only shown for Class A and Class I shares and may vary for
Class B shares. The Fund's after-tax returns are calculated using the highest
individual federal marginal income tax rates and do not reflect the impact of
state and local taxes. In certain cases, the figure representing "Return After
Taxes on Distributions and Sale of Fund Shares" may be higher than the other
return figures for the same period. A higher after-tax return results when a
capital loss occurs upon redemption and translates into an assumed tax deduction
that benefits the shareholder. Please note that actual after-tax returns depend
on an investor's tax situation and may differ from
10
those shown. Also note that after-tax returns shown are not relevant to
investors who hold their Fund shares through tax-deferred arrangements, such as
401(k) plans or individual retirement accounts.
Pioneer Value Fund
Average Annual Total Returns as of December 31, 2004
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1 Year 5 Years 10 Years Since Inception
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Pioneer Value Fund, Class A shares
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Return Before Taxes 5.78% 4.42% 8.34% 12.49% (9/30/69)
- ---------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions(1) 3.19% 2.68% 6.33% 9.52%
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Return After Taxes on Distributions and Sale of Fund 6.13% 3.16% 6.39% 9.46%
Shares(1)
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Pioneer Value Fund, Class B shares
- ---------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 7.45% 4.44% N/A 5.59% (7/1/96)
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Pioneer Value Fund, Class Y shares
- ---------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 12.47% 5.70% 9.00% 12.69% (9/30/69)(3)
- ---------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions(1) 9.64% 3.92% 6.97% 9.71%
- ---------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund 10.62% 4.26% 6.98% 9.65%
Shares(1)
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Russell 1000 Value Index(2) 16.49% 5.27% 13.83% 14.60%(4)
(reflects no deduction for fees, expenses or taxes)
- ---------------------------------------------------------------------------------------------------------------------------------
(1) After-tax returns are calculated using the historical highest individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your situation and may
differ from those shown, and the after-tax returns shown are not relevant
to shareholders who hold Fund shares through tax-deferred arrangements such
as 401(k) plans or IRA accounts, or to investors that are tax-exempt.
(2) The Russell 1000 Value Index, an unmanaged index of those Russell 1000
companies with lower price-to-book ratios and lower forecasted growth
ratios, is for reference only, does not mirror the Fund's investments, and
reflects no deduction for fees, expenses or taxes.
(3) Reflects the inception date of the Fund's Class A shares. The inception
date of the Fund's Class Y shares was August 10, 2004.
(4) Reflects the return of the index since the inception of the Russell 1000
Value Index (December 31, 1978). The return of the index since the
inception of Class B shares is 11.15%.
The most recent portfolio manager's discussion of each Fund's performance
is attached as Exhibit C.
The Funds' Fees and Expenses
Shareholders of both Funds pay various fees and expenses, either directly
or indirectly. The tables below show the fees and expenses that you would pay if
you were to buy and hold shares of each Fund. The expenses in the tables
appearing below are based on (i) for the AmSouth Value Fund, the expenses of
AmSouth Value Fund for the period ended January 31, 2005 and (ii) for Pioneer
Value Fund, the expenses of Pioneer Value Fund for the period ended March 31,
2005. Future expenses for all share classes may be greater or less. The tables
also show the pro forma expenses of the combined Fund assuming the
Reorganization occurred on March 31, 2005.
11
- ---------------------------------------------------------------------------------------------------------------------------------
Shareholder AmSouth Pioneer Combined AmSouth Pioneer Combined AmSouth Pioneer Combined
transaction Value Fund(1) Value Fund Fund (Pro Value Value Fund Fund (Pro Value Value Fund Fund (Pro
fees (paid Forma) Fund(1) Forma) Fund(1) Forma)
directly from
your
investment) Class A Class A Class A Class B Class B Class B Class I Class Y Class Y
- ---------------------------------------------------------------------------------------------------------------------------------
Maximum sales 5.50%(2) 5.75%(2) 5.75%(2) None None None None None None
charge (load)
when you buy
shares as a
percentage of
offering price
- ---------------------------------------------------------------------------------------------------------------------------------
Maximum None None None 5.00%(3) 4.00% 4.00% None None None
deferred sales
charge (load)
as a
percentage of
purchase price
or the amount
you receive
when you sell
shares,
whichever is
less
- ---------------------------------------------------------------------------------------------------------------------------------
Redemption 2.00%(4) None None 2.00%(4) None None 2.00%(4) None None
fees
- ---------------------------------------------------------------------------------------------------------------------------------
Annual fund
operating
expenses
(deducted from
fund assets)
(as a % of
average net
assets)
- ---------------------------------------------------------------------------------------------------------------------------------
Management fee 0.80% 0.60%(6) 0.60%(6) 0.80% 0.60%(6) 0.60%(6) 0.80% 0.60%(6) 0.60%(6)
- ---------------------------------------------------------------------------------------------------------------------------------
Distribution None 0.25% 0.25% 0.75% 1.00% 1.00% None None None
and service
(12b-1) fee
- ---------------------------------------------------------------------------------------------------------------------------------
Other expenses 0.56%(5) 0.15% 0.15% 0.58%(5) 0.28% 0.28% 0.46%(5) 0.01% 0.02%
- ---------------------------------------------------------------------------------------------------------------------------------
Total fund 1.36% 1.00%(7) 1.00% 2.13% 1.88%(7) 1.88% 1.26% 0.61%(7) 0.62%
operating
expenses
- ---------------------------------------------------------------------------------------------------------------------------------
Expense 0.04% N/A N/A 0.06% N/A N/A 0.09% N/A N/A
reimbursement/
reduction
- ---------------------------------------------------------------------------------------------------------------------------------
Net fund 1.32% 1.00% 1.00% 2.07% 1.88% 1.88% 1.17% 0.61% 0.62%
operating
expenses
- ---------------------------------------------------------------------------------------------------------------------------------
(1) AmSouth Bank or other financial institutions may charge their customer
account fees for automatic investment and other cash management services
provided in connection with investment in the Fund.
(2) Sales charges may be reduced depending upon the amount invested or, in
certain circumstances, waived. Class A shares bought as part of an
investment of $1 million or more are not subject to an initial sales
charge, but may be charged a CDSC of 1.00% if sold within one year of
purchase.
(3) For Class B shares purchased prior to the combination of AmSouth Funds with
ISG Funds, the CDSC on such Class B shares held continuously declines over
six years, starting with year one and ending in year seven from: 4%, 3%,
3%, 2%, 2%, 1%. For all other Class B shares held continuously, the CDSC
declines over six years, starting with year one and ending in year seven
from: 5%, 4%,
12
3%, 3%, 2%, 1%. Eight years after purchase (seven years in the case of
shares acquired in the ISG combination), Class B shares automatically
convert to Class A shares.
(4) To discourage short-term trading, a redemption fee of 2.00% will be charged
on sales or exchanges of Class A, Class B and Class I shares of your
AmSouth Fund made within 7 days of the date of purchase. A wire transfer
fee of $7.00 will be deducted from the amount of your redemption if you
request a wire transfer.
(5) Other expenses for your AmSouth Fund are being limited to 0.52% for Class A
shares, 0.52% for Class B shares and 0.37% for Class I shares. Any fee
waiver or expense reimbursement arrangement is voluntary and may be
discontinued at any time.
(6) Pioneer Value Fund pays a management fee that ranges from 0.50% to 0.70% of
average daily net assets based on its performance. The Fund's basic fee
before any performance adjustment is 0.60% of average daily net assets,
which fee is reduced at asset levels above $5 billion.
(7) Pioneer Value Fund's total annual operating expenses have not been reduced
by any expense offset arrangements.
The hypothetical example below helps you compare the cost of investing in
each Fund. It assumes that: (a) you invest $10,000 in each Fund for the time
periods shown, (b) you reinvest all dividends and distributions, (c) your
investment has a 5% return each year, and (d) each Fund's gross operating
expenses remain the same. The examples are for comparison purposes only and are
not a representation of either Fund's actual expenses or returns, either past or
future.
- ------------------------------------------------------------------------------------------------------------
Number of years you AmSouth Value Fund Pioneer Value Fund Combined Fund
own your shares (Pro Forma)
- ------------------------------------------------------------------------------------------------------------
Class A
- ------------------------------------------------------------------------------------------------------------
Year 1 $681 $671 $671
- ------------------------------------------------------------------------------------------------------------
Year 3 $957 $875 $875
- ------------------------------------------------------------------------------------------------------------
Year 5 $1,254 $1,096 $1,096
- ------------------------------------------------------------------------------------------------------------
Year 10 $2.095 $1,729 $1,729
- ------------------------------------------------------------------------------------------------------------
Class B -- assuming redemption at end of period
- ------------------------------------------------------------------------------------------------------------
Year 1 $716 $591 $591
- ------------------------------------------------------------------------------------------------------------
Year 3 $967 $891 $891
- ------------------------------------------------------------------------------------------------------------
Year 5 $1,344 $1,116 $1,116
- ------------------------------------------------------------------------------------------------------------
Year 10 $2,266 $1,971 $1,971
- ------------------------------------------------------------------------------------------------------------
Class B -- assuming no redemption
- ------------------------------------------------------------------------------------------------------------
Year 1 $216 $191 $191
- ------------------------------------------------------------------------------------------------------------
Year 3 $667 $591 $591
- ------------------------------------------------------------------------------------------------------------
Year 5 $1,144 $1,016 $1,016
- ------------------------------------------------------------------------------------------------------------
Year 10 $2,266 $1,971 $1,971
- ------------------------------------------------------------------------------------------------------------
Class I Class Y
- ------------------------------------------------------------------------------------------------------------
Year 1 $128 $63 $63
- ------------------------------------------------------------------------------------------------------------
Year 3 $400 $199 $199
- ------------------------------------------------------------------------------------------------------------
Year 5 $692 $346 $346
- ------------------------------------------------------------------------------------------------------------
Year 10 $1,523 $774 $774
- ------------------------------------------------------------------------------------------------------------
Reasons for the Proposed Reorganization
The Trustees believe that the proposed Reorganization is in the best
interests of AmSouth Value Fund. The Trustees considered the following matters,
among others, in approving the proposal.
First, AAMI, the investment adviser to your AmSouth Fund, informed the
Trustees that it does not intend to continue to provide investment advisory
services to the AmSouth Funds. Consequently, a change in your AmSouth Fund's
investment
13
adviser was necessary. In the absence of the Reorganization, such a change would
be more likely to motivate shareholders invested in reliance on AAMI's role to
withdraw from the Fund, thereby reducing fund size and increasing fund expense
ratios.
Second, after the Reorganization, the combined Fund will have an asset size
substantially larger than that of your AmSouth Fund, which may allow the
combined Fund to achieve significant economies of scale in investments or
expenses.
Third, the historical investment performance of Pioneer Value Fund is
comparable to your AmSouth Fund's investment performance. For the one, five and
ten year periods ended December 31, 2004, Class A shares of Pioneer Value Fund
had an average annual return of 5.78% (one year); 4.42% (five year); and 8.34%
(ten year), compared to an average annual return of the Class A shares of your
AmSouth Fund of 8.78% (one year); 1.02% (five year); and 9.62% (ten year),
respectively, during the same period. In addition, the Trustees considered the
track record of Pioneer in managing equity and fixed income mutual funds.
Fourth, the resources of Pioneer. At December 31, 2004, Pioneer managed
over 80 investment companies and accounts with approximately $42 billion in
assets. Pioneer is part of the global asset management group of UniCredito
Italiano S.p.A., one of the largest banking groups in Italy, providing
investment management and financial services to mutual funds, institutional and
other clients. As of December 31, 2004, assets under management of UniCredito
Italiano S.p.A. were approximately $175 billion worldwide. Shareholders of your
AmSouth Fund would become part of a significantly larger family of funds that
offers a more diverse array of investment options and enhanced shareholder
account options. The Pioneer family of mutual funds offers over 80 funds,
including domestic and international equity and fixed income funds and a money
market fund that will be available to your AmSouth Fund's shareholders through
exchanges.
Fifth, Pioneer Value Fund's management fee (0.60% of average daily net
assets as of as of March 31, 2005) is substantially lower than the advisory fees
of your Fund (0.80% of average daily net assets). The aggregate Rule 12b-1
distribution and shareholder servicing fees and non-Rule 12b-1 shareholder
servicing fees paid by the Class A and Class B shares of both Funds are the
same. Moreover, your AmSouth Fund's Class I shares pay a non 12b-1 shareholder
servicing fee that is not paid by the Pioneer Fund's Class Y shares. Pioneer
Value Fund's expenses are lower than your Fund's expenses on both a gross and
net basis. On a pro forma basis, after giving effect to the Reorganization, it
is estimated that the Pioneer Value Fund's expenses will also be lower than you
Fund's expenses on a gross and net basis. In addition, the broader distribution
arrangements of the Pioneer Fund offer greater potential for further asset
growth and reduced per share expenses.
Sixth, the substantially larger size of the combined Pioneer Value Fund
will offer greater opportunity for diversification of the investment portfolio,
which should help to reduce risks.
Seventh, the Class A, B and Y shares of Pioneer Value Fund received in the
Reorganization will provide AmSouth Value Fund shareholders with exposure to
substantially the same investment product as they currently have.
Eighth, the transaction is structured to qualify as a tax-free
reorganization under Section 368(a) of the Internal Revenue Code of 1986 and
therefore will not be treated as a taxable sale of your AmSouth shares. Although
the Reorganization will result in a per share decrease in capital loss
carryforwards, the potential negative tax consequences of this aspect of the
Reorganization are outweighed by the advantages of the Reorganization.
Pioneer and AmSouth Bank will pay all costs of preparing and printing the
Funds' proxy statements and solicitation costs incurred by the Funds in
connection with the Reorganization. AAMI will otherwise be responsible for all
costs and expenses of the AmSouth Fund in connection with the Reorganizations.
The Trustees also considered that Pioneer and AmSouth Bank will benefit
from the Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the
Reorganizations."
The Board of Trustees of the Pioneer Fund also considered that the
Reorganization presents an excellent opportunity for the Pioneer Fund to acquire
investment assets without the obligation to pay commissions or other transaction
costs that a fund normally incurs when purchasing securities. This opportunity
provides an economic benefit to the Pioneer Fund and its shareholders.
14
CAPITALIZATION
The following table sets forth the capitalization of each Fund as of May
31, 2005, and the pro forma combined Fund as of May 31, 2005.
- -----------------------------------------------------------------------------------------------------------------------
Pioneer Value Pro Forma Pioneer
AmSouth Value Fund Fund Value Fund
May 31, 2005 May 31, 2005 May 31, 2005
- -----------------------------------------------------------------------------------------------------------------------
Total Net Assets (in thousands) $481,874 $3,992,881 $4,474,755
- -----------------------------------------------------------------------------------------------------------------------
Class A shares ................................... $132,299 $3,817,843 $3,950,143
- -----------------------------------------------------------------------------------------------------------------------
Class B shares ................................... $27,013 $27,494 $54,507
- -----------------------------------------------------------------------------------------------------------------------
Class I /Y shares ................................ $322,562 $12,907 $335,469
- -----------------------------------------------------------------------------------------------------------------------
Net Asset Value Per Share
- -----------------------------------------------------------------------------------------------------------------------
Class A shares ................................... $16.75 $17.63 $17.63
- -----------------------------------------------------------------------------------------------------------------------
Class B shares ................................... $16.40 $16.55 $16.55
- -----------------------------------------------------------------------------------------------------------------------
Class I/Y shares ................................. $16.72 $17.68 $17.68
- -----------------------------------------------------------------------------------------------------------------------
Shares Outstanding
- -----------------------------------------------------------------------------------------------------------------------
Class A shares ................................... 7,896,883 216,506,470 244,009,051
- -----------------------------------------------------------------------------------------------------------------------
Class B shares ................................... 1,647,053 1,661,225 3,293,388
- -----------------------------------------------------------------------------------------------------------------------
Class I/Y shares ................................. 19,287,248 730,157 18,977,538
- -----------------------------------------------------------------------------------------------------------------------
It is impossible to predict how many shares of the Pioneer Fund will actually be
received and distributed by your AmSouth Fund on the Reorganization date. The
table should not be relied upon to determine the amount of the Pioneer Fund's
shares that will actually be received and distributed.
BOARD'S EVALUATION AND RECOMMENDATION
For the reasons described above, the Trustees, including the Independent
Trustees, approved the Reorganization. In particular, the Trustees determined
that the Reorganization is in the best interests of your AmSouth Fund.
Similarly, the Board of Trustees of the Pioneer Fund, including its Independent
Trustees, approved the Reorganization. They also determined that the
Reorganization is in the best interests of the Pioneer Fund.
The Trustees recommend that the shareholders of your AmSouth Fund vote FOR
the proposal to approve the Agreement and Plan of Reorganization.
15
AmSouth Mid Cap Fund and
Pioneer Mid Cap Value Fund
PROPOSAL 1(e)
Approval of Agreement and Plan of Reorganization
SUMMARY
The following is a summary of more complete information appearing later in
this Proxy Statement/Prospectus or incorporated herein. You should read
carefully the entire Proxy Statement/Prospectus, including the form of Agreement
and Plan of Reorganization attached as EXHIBIT A-1, because it contains details
that are not in the summary.
Each Fund invests primarily in equity securities of mid capitalization
issuers and, consequently, has similar investment policies and risks. Your Fund,
while not a pure index fund, seeks to track closely the S&P MidCap 400 Index,
while the Pioneer Fund is actively managed and does not have a goal of tracking
an index. In the table below, if a row extends across the entire table, the
policy disclosed applies to both your AmSouth Fund and the Pioneer Fund.
Comparison of AmSouth Mid Cap Fund to Pioneer Mid Cap Value Fund
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth Mid Cap Fund Pioneer Mid Cap Value Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Business A diversified series of AmSouth Funds, an A diversified open-end management investment
open-end management investment company company organized as a Delaware statutory
organized as a Massachusetts business trust. trust.
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets as of March 31, $228.9 million $2,362.1 million
2005
- ------------------------------------------------------------------------------------------------------------------------------------
Investment advisers and Investment Adviser: Investment Adviser:
portfolio managers AAMI Pioneer
Investment Subadviser: Portfolio Managers:
OakBrook Investments, LLC ("OakBrook") Day-to-day management of the Fund's portfolio
is the responsibility of J. Rodman Wright,
Portfolio Managers: portfolio manager, and Sean Gavin, assistant
Day-to-day management of AmSouth Mid Cap portfolio manager. Mr. Wright is a senior
Fund's portfolio is the responsibility of a vice president of Pioneer. He joined Pioneer
team of investment professionals, all of whom in 1994 as an analyst and has been an
take part in the decision making process. Dr. investment professional since 1988. Mr. Gavin
Neil Wright, Ms. Janna Sampson and Dr. Peter is a vice president and joined Pioneer in
Jankovskis are the team members and have been 2002 as an assistant portfolio manager. Prior
the portfolio managers of the Fund since June to joining Pioneer, Mr. Gavin was employed as
2002. Each of the portfolio managers has been an analyst at Boston Partners from 2000 to
with OakBrook since 1998. 2002 and at Delphi Management from 1998 to
2000.
Dr. Wright is OakBrook's President and Chief
Investment Officer. From 1993 to 1997, Dr.
Wright was the Chief Investment Officer of
ANB Investment Management & Trust Co.
("ANB").
Ms. Sampson is OakBrook's Director of
Portfolio Management. From 1993 to 1997, she
was Senior Portfolio Manager for ANB.
- ------------------------------------------------------------------------------------------------------------------------------------
1
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth Mid Cap Fund Pioneer Mid Cap Value Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Dr. Jankovskis is OakBrook's Director of
Research. From 1992 to 1996, he was an
Investment Strategist for ANB and from 1996
to 1997 he was the Manager of Research for
ANB.
- ------------------------------------------------------------------------------------------------------------------------------------
Investment objective AmSouth Mid Cap Fund seeks to provide Pioneer Mid Cap Value Fund seeks capital
investors with capital appreciation. appreciation by investing in a diversified
portfolio of securities consisting primarily
of common stocks.
- ------------------------------------------------------------------------------------------------------------------------------------
Primary investments AmSouth Mid Cap Fund seeks to maintain risk Normally, Pioneer Mid Cap Value Fund invests
characteristics similar to those of the S&P at least 80% of its total assets in equity
MidCap 400 Index ("S&P 400") and, normally, securities of mid-size companies, that is
invests at least 80% of its net assets in companies with market values within the range
common stocks of companies comprising the S&P of market values of companies included in the
400. For the purpose of this policy, assets Russell Midcap Value Index. Pioneer Mid Cap
include net assets plus borrowings for Value Fund focuses on issuers with
investment purposes. capitalizations within the $1 billion to $10
billion range, and that range will change
The Fund overweights relative to their S&P depending on market conditions.
weights those issuers that OakBrook believes
to be undervalued compared to those in the The equity securities in which Pioneer Mid
S&P 400. As of December 31, 2004, the Cap Value Fund principally invests are common
capitalization range of issuers included in stocks, preferred stocks, depositary receipts
the S&P 400 was $309 million to $8.75 and convertible debt, but the Fund may invest
billion. in other types of equity securities to a
lesser extent, such as warrants and rights.
- ------------------------------------------------------------------------------------------------------------------------------------
Investment strategies OakBrook's stock selection process utilizes Pioneer uses a value approach to select
computer-aided quantitative analysis. Pioneer Mid Cap Value Fund's investments.
OakBrook's computer models use many types of Using this investment style, Pioneer seeks
data, but emphasize technical data such as securities selling at substantial discounts
price and volume information. Applying these to their underlying values and then holds
models to stocks within the S&P 400, OakBrook these securities until the market values
hopes to generate more capital growth than reflect their intrinsic values. Pioneer
that of the S&P 400. OakBrook's emphasis on evaluates a security's potential value,
technical analyses can result in significant including the attractiveness of its market
shifts in portfolio holdings at different valuation, based on the company's assets and
times. However, stringent risk controls at prospects for earnings growth. In making that
the style, industry and individual stock assessment, Pioneer employs due diligence and
levels are intended to help the Fund maintain fundamental research, an evaluation of the
risk characteristics similar to those of the issuer based on its financial statements and
S&P 400. operations, employing a bottom-up analytic
style. Pioneer relies on the knowledge,
experience and judgment of its staff who have
access to a wide variety of research. Pioneer
focuses on the quality and price of
individual issuers, not on economic sector or
market-timing strategies.
Factors Pioneer looks for in selecting
investments include:
o Favorable expected returns relative to
perceived risk
- ------------------------------------------------------------------------------------------------------------------------------------
2
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth Mid Cap Fund Pioneer Mid Cap Value Fund
- ------------------------------------------------------------------------------------------------------------------------------------
o Management with demonstrated ability and
commitment to the company
o Low market valuations relative to earnings
forecast, book value, cash flow and sales
o Turnaround potential for companies that
have been through difficult periods
o Estimated private market value in excess
of current stock price
o Issuer's industry has strong fundamentals,
such as increasing or sustainable demand
and barriers to entry
- ------------------------------------------------------------------------------------------------------------------------------------
Other investments Subject to the Fund's 80% policy described Pioneer Mid Cap Value Fund may invest up to
above, OakBrook may invest the Fund's assets 25% of its total assets in equity and debt
in companies with smaller or larger market securities of non-U.S. issuers. The Fund will
capitalizations. AmSouth Mid Cap Fund may not invest more than 5% of its total assets
invest up to 20% of its assets in securities in the securities of emerging markets
of foreign issuers traded on the New York or issuers.
American Stock Exchange or in the
over-the-counter market in the form of Pioneer Mid Cap Value Fund may invest up to
depositary receipts, such as ADRs. The Fund 20% of its total assets in debt securities of
may also invest in debt securities of corporate and government issuers. Generally
domestic issuers rated no lower than the Fund acquires debt securities that are
investment grade (Baa/BBB) by a credit rating investment grade, but the Fund may invest up
agency, or, if unrated, deemed to be of to 5% of its net assets in below investment
comparable quality by AAMI. grade convertible debt securities issued by
both U.S. and non-U.S. issuers. The Fund
invests in debt securities when Pioneer
believes they are consistent with the Fund's
investment objective by offering the
potential for capital appreciation, to
diversify the Fund's portfolio or for greater
liquidity.
- ------------------------------------------------------------------------------------------------------------------------------------
Temporary defensive strategies If deemed appropriate under the Pioneer Mid Cap Value Fund may invest all or
circumstances, AmSouth Mid Cap Fund may part of its assets in securities with
increase its holdings in short-term money remaining maturities of less than one year,
market instruments to over 20% of total cash equivalents or may hold cash.
assets. AmSouth Mid Cap Fund may hold
uninvested cash pending investment.
- ------------------------------------------------------------------------------------------------------------------------------------
Diversification Each Fund is diversified for the purpose of the Investment Company Act and is subject to
diversification requirements under the Internal Revenue Code of 1986, as amended (the "Code").
- ------------------------------------------------------------------------------------------------------------------------------------
Industry concentration AmSouth Mid Cap Fund may not purchase any Pioneer Mid Cap Value Fund may not invest
securities which would cause more than 25% of more than 25% of its assets in any one
the value of the Fund's total assets at the industry.
time of purchase to be invested in securities
of one or more issuers conducting their
principal business activities in the same
industry, provided that (a) there is no
limitation with respect to obligations issued
or guaranteed by the U.S. government or its
agencies or instrumentalities, and repurchase
agreements
- ------------------------------------------------------------------------------------------------------------------------------------
3
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth Mid Cap Fund Pioneer Mid Cap Value Fund
- ------------------------------------------------------------------------------------------------------------------------------------
secured by obligations of the U.S. government
or its instrumentalities; (b) wholly owned
finance companies will be considered to be in
the industries of their parents if their
activities are primarily related to financing
the activities of their parents; and (c)
utilities will be divided according to their
services. For example, gas, gas transmission,
electric and gas, electric, and telephone
will each be considered a separate industry.
There is no limitation with respect to
municipal securities, which, for purposes of
this limitation only, do not include private
activity bonds that are backed only by the
assets and revenues of a non-governmental
user.
- ------------------------------------------------------------------------------------------------------------------------------------
Restricted and illiquid AmSouth Mid Cap Fund may not invest more than Pioneer Mid Cap Value Fund may not invest
securities 15% of its net assets in securities that are more than 15% of its net assets in securities
restricted as to resale, or for which no that are illiquid and other securities that
readily available market exists, including are not readily marketable. Repurchase
repurchase agreements providing for agreements maturing in more than seven days
settlement more than seven days after notice. will be included for purposes of the
foregoing limit.
- ------------------------------------------------------------------------------------------------------------------------------------
Borrowing AmSouth Mid Cap Fund may not borrow money or Pioneer Mid Cap Value Fund may not borrow
issue senior securities, except that the Fund money, except the Fund may: (a) borrow from
may borrow from banks or enter into reverse banks or through reverse repurchase
repurchase agreements for temporary emergency agreements in an amount up to 33 1/3% of the
purposes in amounts up to 33 1/3% of the Fund's total assets (including the amount
value of its total assets at the time of such borrowed); (b) borrow up to an additional 5%
borrowing. The Fund will not purchase of the Fund's assets for temporary purposes;
securities while borrowings (including (c) obtain such short-term credits as are
reverse repurchase agreements) in excess of necessary for the clearance of portfolio
5% of its total assets are outstanding. In transactions; (d) purchase securities on
addition, the Fund is permitted to margin to the extent permitted by applicable
participate in a credit facility whereby the law; and (e) engage in transactions in
Fund may directly lend to and borrow money mortgage dollar rolls that are accounted for
from other AmSouth funds for temporary as financings.
purposes, provided that the loans are made in
accordance with an order of exemption from
the SEC and any conditions thereto.
- ------------------------------------------------------------------------------------------------------------------------------------
Lending AmSouth Mid Cap Fund may not make loans, Pioneer Mid Cap Value Fund may not make
except that the Fund may purchase or hold loans, except that the Fund may (i) lend
debt instruments in accordance with its portfolio securities in accordance with the
investment objective and policies, lend Fund Fund's investment policies, (ii) enter into
securities in accordance with its investment repurchase agreements, (iii) purchase all or
objective and policies and enter into a portion of an issue of publicly distributed
repurchase agreements. In addition, the Fund debt securities, bank loan participation
is permitted to participate in a credit interests, bank certificates of deposit,
facility whereby the Fund may directly lend bankers' acceptances, debentures or other
to and borrow money from other AmSouth funds securities, whether or not the purchase is
for temporary purposes, provided that the made upon the original issuance of the
loans are made in accordance with an order of securities, (iv) participate in a credit
exemption from the SEC and facility whereby the
- ------------------------------------------------------------------------------------------------------------------------------------
4
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth Mid Cap Fund Pioneer Mid Cap Value Fund
- ------------------------------------------------------------------------------------------------------------------------------------
any conditions thereto. Fund may directly lend to and borrow money
from other affiliated funds to the extent
permitted under the Investment Company Act or
an exemption therefrom, and (v) make loans in
any other manner consistent with applicable
law, as amended and interpreted or modified
from time to time by any regulatory authority
having jurisdiction.
- ------------------------------------------------------------------------------------------------------------------------------------
Derivative instruments AmSouth Mid Cap Fund may invest in futures Pioneer Mid Cap Value Fund may use futures
contracts and options thereon (interest rate and options on securities, indices and
futures contracts or index futures contracts, currencies, forward currency exchange
as applicable) to commit funds awaiting contracts and other derivatives. The Fund
investment, to maintain cash liquidity or for does not use derivatives as a primary
other hedging purposes. The value of the investment technique and generally limits
Fund's contracts may equal or exceed 100% of their use to hedging. However, the Fund may
the Fund's total assets, although the Fund use derivatives for a variety of
will not purchase or sell a futures contract non-principal purposes, including:
unless immediately afterwards the aggregate
amount of margin deposits on its existing o As a hedge against adverse changes in
futures positions plus the amount of premiums stock market prices, interest rates or
paid for related futures options entered into currency exchange rates
for other than bona fide hedging purposes is o As a substitute for purchasing or selling
5% or less of its net assets. securities
o To increase the Fund's return as a
non-hedging strategy that may be
considered speculative
- ------------------------------------------------------------------------------------------------------------------------------------
Short-term trading AmSouth Mid Cap Fund may engage in the Pioneer Mid Cap Value Fund does not usually
technique of short-term trading. Such trading trade for short-term profits. The Fund will
involves the selling of securities held for a sell an investment, however, even if it has
short-time, ranging from several months to only been held for a short time, if it no
less than a day. The object of such longer meets the Fund's investment criteria.
short-term trading is to increase the
potential for capital appreciation and/or
income of the Fund in order to take advantage
of what OakBrook believes are changes in
market, industry or individual company
outlook.
- ------------------------------------------------------------------------------------------------------------------------------------
Other investment policies As described above, the Funds have substantially similar principal investment strategies and
and restrictions policies. Certain of the non-principal investment policies and restrictions are different. For
a more complete discussion of each Fund's other investment policies and fundamental and
non-fundamental investment restrictions, see the SAI.
- ------------------------------------------------------------------------------------------------------------------------------------
Buying, Selling and Exchanging Shares
- ------------------------------------------------------------------------------------------------------------------------------------
Class A sales charges and Class A shares are offered with an initial Class A shares are offered with an initial
Rule 12b-1 Fees sales charge of up to 5.50% of the offering sales charge of up to 5.75% of the offering
price, which is reduced depending upon the price, which is reduced or waived for large
amount invested or, in certain circumstances, purchases and certain types of investors. At
waived. Class A shares bought as part of an the time of your purchase, your investment
investment of $1 million or more are not firm may receive a commission from Pioneer
subject to an initial sales charge, but may Funds Distributor, Inc. ("PFD"), the Fund's
be charged a contingent deferred sales charge distributor, of up to 5% declining as the
("CDSC") of size
- ------------------------------------------------------------------------------------------------------------------------------------
5
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth Mid Cap Fund Pioneer Mid Cap Value Fund
- ------------------------------------------------------------------------------------------------------------------------------------
1.00% if sold within one year of purchase. of your investment increases.
Class A shares pay a shareholder servicing There is no CDSC, except in certain
fee (non 12b-1) of up to 0.25% of average circumstances when the initial sales charge
daily net assets. is waived.
Class A shares are subject to distribution
and service (12b-1) fees of up to 0.25% of
average daily net assets.
- ------------------------------------------------------------------------------------------------------------------------------------
Class B sales charges and Class B shares are offered without an initial Class B shares are offered without an initial
Rule 12b-1 fees sales charge, but are subject to a contingent sales charge, but are subject to a CDSC of up
deferred sales charge of up to 5%. For Class to 4% if you sell your shares. The charge is
B shares purchased prior to the combination reduced over time and is not charged after
of AmSouth Funds with ISG Funds, the CDSC on five years. Your investment firm may receive
such Class B shares held continuously a commission from PFD, the Fund's
declines over six years, starting with year distributor, at the time of your purchase of
one and ending in year seven from: 4%, 3%, up to 4%.
3%, 2%, 2%, 1%. For all other Class B shares
held continuously, the CDSC declines over six Class B shares are subject to distribution
years, starting with year one and ending in and service (12b-1) fees of up to 1% of
year seven from: 5%, 4%, 3%, 3%, 2%, 1%. average daily net assets.
Eight years after purchase (seven years in
the case of shares acquired in the ISG Maximum purchase of Class B shares in a
combination), Class B shares automatically single transaction is $49,999.
convert to Class A shares.
Class B shares acquired through the
Class B shares pay a shareholder servicing Reorganization will be subject to the CDSC
fee (non 12b-1) of up to 0.25% of average and commission schedules applicable to the
daily net assets and a distribution (12b-1) original purchase.
fee of 0.75% of average daily net assets.
Maximum investment for all Class B purchases
by a shareholder for the Fund's shares is
$99,999.
- ------------------------------------------------------------------------------------------------------------------------------------
Class I and Class Y sales AmSouth Mid Cap Fund does not CDSC deferred The Fund does not impose any initial,
charges and Rule 12b-1 fees sales charge on Class I shares. contingent deferred or asset based sales
charge on Class Y shares.
The Fund may impose a shareholder servicing
fee (non 12b-1) of up to 0.15% of average The distributor incurs the expenses of
daily net assets. distributing the Fund's Class Y shares, none
of which are reimbursed by the Fund or the
Class Y shareowners.
- ------------------------------------------------------------------------------------------------------------------------------------
Management and other fees AmSouth Mid Cap Fund pays an advisory fee on Pioneer Mid Cap Value Fund pays Pioneer an
a monthly basis at an annual rate of 0.90% of annual basic fee, subject to a performance
the Fund's average daily net assets. adjustment, equal to 0.70% of the Fund's
average daily net assets up to $500 million,
ASO Services Company, Inc. ("ASO") serves as 0.65% on the next $500 million, 0.625% on the
administrator and fund accounting agent for next $3 billion, and 0.60% on the excess over
the Fund. The Fund pays ASO an administrative $4 billion.
services fee of 0.15% of the
- ------------------------------------------------------------------------------------------------------------------------------------
6
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth Mid Cap Fund Pioneer Mid Cap Value Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Fund's average daily net assets. Pioneer's fee can increase or decrease by a
maximum of 0.10%, depending on the
Other expenses of the Fund are being limited performance of the Fund's Class A shares
to 0.20% for Class A shares, 0.20% for Class relative to the Russell Midcap Value Index.
B shares, and 0.05% for Class I shares. Any The performance comparison is made for a
fee waiver or expense reimbursement rolling 36-month period. Pioneer's fee
arrangement is voluntary and may be increases or decreases depending upon whether
discontinued at any time. the Fund's performance is up and down more or
less than that of the index during the
For the fiscal year ended July 31, 2004, the rolling 36-month performance period. Each
Fund's annual operating expenses for Class A percentage point of difference between the
shares, after giving effect to the expense performance of the Class A shares and the
limitation were 1.10%, and without giving index (to a maximum of +/- 10) is multiplied
effect to the expense limitation, were 1.43% by a performance rate adjustment of 0.01%. As
of average daily net assets. a result, the maximum annualized rate
adjustment is +/- 10% for the rolling
For the fiscal year ended July 31, 2004, the 36-month performance period. This adjustment
Fund's annual operating expenses for Class B factor is applied to the average net assets
shares, after giving effect to the expense during the 36-month period. In addition, the
limitation were 1.85%, and without giving fee is further limited on an annual basis to
effect to the expense limitation, were 2.18% a maximum rate adjustment of +/-10% on
of average daily net assets. average daily net assets for the current year
(i.e., the fee is further subject to a cap of
For the fiscal year ended July 31, 2004, the average daily net assets of 0.80% and a floor
Fund's annual operating expenses for Class I of 0.50% of average daily net assets assuming
shares, after giving effect to the expense that the Fund is not large enough for any
limitation were 0.95%, and without giving breakpoints to apply). Pioneer currently is
effect to the expense limitation, were 1.33% waiving the floor on its fee. Pioneer may
of average daily net assets. reimpose the same floor in the future, but
will not be entitled to recover any
previously waived fees. Because the
adjustment to the basic fee is based on the
comparative performance of the Fund and the
performance record of the index, the
controlling factor is not whether Fund
performance is up or down, but whether it is
up or down more or less than the performance
record of the index, regardless of general
market performance. As a result, Pioneer
could earn the maximum possible fee even if
the Fund's net asset declines. Moreover, the
comparative investment performance of the
Fund is based solely on the relevant
performance period without regard to the
cumulative performance over a longer or
shorter period of time.
During its most recent fiscal year, Pioneer
Mid Cap Value Fund paid an advisory fee
equivalent to 0.74% of the average daily net
assets.
In addition, the Fund reimburses Pioneer for
certain fund accounting and legal expenses
incurred on behalf of the Fund and pays a
- ------------------------------------------------------------------------------------------------------------------------------------
7
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth Mid Cap Fund Pioneer Mid Cap Value Fund
- ------------------------------------------------------------------------------------------------------------------------------------
separate shareholder servicing/transfer
agency fee to PIMSS, an affiliate of Pioneer.
For the fiscal year ended October 31, 2004,
the Fund's total annual operating expenses
for Class A shares were 1.21%, Class B shares
were 2.13%, and Class Y shares were 0.78%.
The Fund does not currently have an expense
limitation for its Class A, Class B or Class
Y shares.
- ------------------------------------------------------------------------------------------------------------------------------------
Buying shares You may buy shares of the Fund directly You may buy shares from any investment firm
through BISYS Fund Services, the Fund's that has a sales agreement with PFD, the
distributor, or through brokers, registered Pioneer Fund's distributor.
investment advisers, banks and other
financial institutions that have entered into If the account is established in the
selling agreements with the Fund's shareholder's own name, shareholders may also
distributor, as described in the Fund's purchase additional shares of the Fund by
prospectus. telephone or online.
Certain account transactions may be done by
telephone.
- ------------------------------------------------------------------------------------------------------------------------------------
Exchanging shares You can exchange your shares in the Fund for You may exchange your shares for shares of
shares of the same class of another AmSouth the same class of another Pioneer mutual
Fund, usually without paying additional sales fund. Your exchange request must be for at
charges. You must meet the minimum investment least $1,000. The Fund allows you to exchange
requirements for the Fund into which you are your shares at net asset value without
exchanging. Exchanges from one Fund to charging you either an initial or contingent
another are taxable. Class A shares may be deferred shares charge at the time of the
exchanged for Class I shares of the same Fund exchange. Shares you acquire as part of an
or another AmSouth Fund if you become exchange will continue to be subject to any
eligible to purchase Class I shares. Class I contingent deferred sales charge that applies
shares may be exchanged for Class A shares of to the shares you originally purchased. When
the same Fund. No transaction fees are you ultimately sell your shares, the date of
currently charged for exchanges. your original purchase will determine your
contingent deferred sales charge. An exchange
If you sell your shares or exchange them for generally is treated as a sale and a new
shares of another AmSouth Fund within 7 days purchase of shares for federal income tax
of the date of purchase, you will be charged purposes.
a 2.00% fee on the current net asset value of
the shares sold or exchanged. The fee is paid After you establish an eligible Fund account,
to the Fund to offset the costs associated you can exchange Fund shares by telephone or
with short-term trading, such as portfolio online.
transaction and administrative costs.
The Fund uses a "first-in, first-out" method
to determine how long you have held your
shares. This means that if you purchased
shares on different days, the shares
purchased first will be considered redeemed
first for purposes of determining whether the
redemption fee will be charged.
The fee will be charged on all covered
- ------------------------------------------------------------------------------------------------------------------------------------
8
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth Mid Cap Fund Pioneer Mid Cap Value Fund
- ------------------------------------------------------------------------------------------------------------------------------------
redemptions and exchanges, including those
made through retirement plan, brokerage and
other types of omnibus accounts (except where
it is not practical for the plan
administrator or brokerage firm to implement
the fee). The Fund will not impose the
redemption fee on a redemption or exchange of
shares purchased upon the reinvestment of
dividend and capital gain distributions.
- ------------------------------------------------------------------------------------------------------------------------------------
Selling shares Shares of each Fund are sold at the net asset value per share next calculated after the Fund
receives your request in good order.
--------------------------------------------------------------------------------------------------
You may sell your shares by contacting the Normally, your investment firm will send your
Fund directly in writing or by telephone or request to sell shares to PIMSS. You can also
by contacting a financial intermediary as sell your shares by contacting the Fund
described in the Fund's prospectus. directly if your account is registered in
your name.
If the account is established in the
shareholder's own name, shareholders may also
redeem shares of the Pioneer Fund by
telephone or online.
- ------------------------------------------------------------------------------------------------------------------------------------
Comparison of Principal Risks of Investing in the Funds
Because each Fund has a similar investment objective, primary investment
policies and strategies, the Funds are subject to the same principal risks. You
could lose money on your investment in either Fund or not make as much as if you
invested elsewhere if:
o The stock market goes down (this risk may be greater in the short
term)
o Value or Mid-Cap stocks fall out of favor with investors
o The Fund's assets remain undervalued or do not have the potential
value originally expected
Each Fund also has risks associated with investing in mid-size companies.
Compared to large companies, mid-size companies, and the market for their equity
securities, are likely to:
o Be more sensitive to changes in earnings results and investor
expectations
o Have more limited product lines and capital resources
o Experience sharper swings in market values
o Be harder to sell at the times and prices the adviser/subadviser
thinks appropriate
o Offer greater potential for gain or loss
Investing in non-U.S. issuers may involve unique risks compared to
investing in securities of U.S. issuers. These risks may include:
9
o Less information about non-U.S. issuers or markets may be available
due to less rigorous disclosure or accounting standards or regulatory
practices
o Many non-U.S. markets are smaller, less liquid and more volatile. In a
changing market, the adviser/subadviser might 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 non-U.S. countries may grow at slower rates than
expected or may experience a downturn or recession
o Economic, political and social developments may adversely affect the
securities markets
o Withholding and other non-U.S. taxes may decrease the Fund's return
In addition, at times, more than 25% of Pioneer Mid Cap Value Fund's assets
may be invested in the same market segment, such as financial or technology. To
the extent the Fund emphasizes investments in a market segment, the Fund will be
subject to a greater degree to the risks particular to the industries in that
segment, and may experience greater market fluctuation, than a fund without the
same focus.
Past Performance
Set forth below is performance information for each Fund. The bar charts
show how each Fund's total return (not including any deduction for sales
charges) has varied from year to year for each full calendar year. The tables
show average annual total return (before and after taxes) for each Fund over
time for each class of shares (including deductions for sales charges) compared
with a broad-based securities market index. The bar charts give an indication of
the risks of investing in each Fund, including the fact that you could incur a
loss and experience volatility of returns year to year. Past performance before
and after taxes does not indicate future results.
AmSouth Mid Cap Fund -- Class A
Calendar Year Total Returns*
[DATA BELOW IS REPRESENTED BY A BAR CHART IN THE ORIGINAL REPORT]
2000 2001 2002 2003 2004
- -14.95 -23.07 -19.73 34.27 15.83
* During the period shown in the bar chart, your AmSouth Fund's highest
quarterly return was 17.06% for the quarter ended June 30, 2003, and the
lowest quarterly return was -21.79% for the quarter ended September 30,
2001. The quoted returns reflect the performance from 5/4/99 to 3/12/00 of
the ISG Mid-Cap Fund, an open-end investment company that was the
predecessor fund to AmSouth Mid Cap Fund. The predecessor fund was managed
using substantially the same investment objective, policies and
methodologies as the AmSouth Mid Cap Fund. Class A, Class B and Class I
shares were first offered on 5/4/99.
10
Pioneer Mid Cap Value Fund -- Class A Shares
Calendar Year Total Returns*
[DATA BELOW IS REPRESENTED BY A BAR CHART IN THE ORIGINAL REPORT]
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
30.73 11.66 17.45 -4.71 12.6 17.64 5.56 -11.99 36.87 21.67
* During the period shown in the bar chart, Pioneer Mid Cap Value Fund's
highest quarterly return was 17.27% for the quarter ended June 30, 2003,
and the lowest quarterly return was -21.42% for the quarter ended September
30, 1998.
AmSouth Mid Cap Fund
Average Annual Total Returns as of December 31, 2004
- ---------------------------------------------------------------------------------------------------------------------------
1 Year 5 Years Since Inception
(5/4/99)
- ---------------------------------------------------------------------------------------------------------------------------
AmSouth Mid Cap Fund, Class A Shares(1)
- ---------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 9.46% -5.05% 5.28%
- ---------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions 9.40% -5.06% 5.26%
- ---------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares 6.14% -4.23% 4.55%
- ---------------------------------------------------------------------------------------------------------------------------
AmSouth Mid Cap Fund, Class B Shares(1)
- ---------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 10.06% -5.15% 5.35%
- ---------------------------------------------------------------------------------------------------------------------------
AmSouth Mid Cap Fund, Class I Shares(1)
- ---------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 16.07% -3.90% 6.44%
- ---------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions 16.00% -3.93% 6.41%
- ---------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares 10.44% -3.29% 5.57%
- ---------------------------------------------------------------------------------------------------------------------------
S&P MidCap 400 Index(2) 16.48% 9.54% 10.63%
(reflects no deduction for fees, expenses or taxes)
- ---------------------------------------------------------------------------------------------------------------------------
(1) The quoted returns reflect the performance from 5/4/99 to 3/12/00 of the
ISG Mid-Cap Fund, an open-end investment company that was the predecessor
fund to the AmSouth Mid Cap Fund. The predecessor fund was managed using
substantially the same investment objective, policies and methodologies as
the Fund. Class A, Class B, and Class I shares were first offered on
5/4/99.
(2) The S&P MidCap 400 Index, an unmanaged index of 400 domestic stocks, is not
available for investment and does not reflect fees, brokerage commissions
or other expenses of investing.
The table above shows the impact of taxes on AmSouth Mid Cap Fund's returns.
After-tax returns are only shown for Class A and Class I shares and may vary for
Class B shares. The Fund's after-tax returns are calculated using the highest
individual
11
federal marginal income tax rates and do not reflect the impact of state and
local taxes. In certain cases, the figure representing "Return After Taxes on
Distributions and Sale of Fund Shares" may be higher than the other return
figures for the same period. A higher after-tax return results when a capital
loss occurs upon redemption and translates into an assumed tax deduction that
benefits the shareholder. Please note that actual after-tax returns depend on an
investor's tax situation and may differ from those shown. Also note that
after-tax returns shown are not relevant to investors who hold their Fund shares
through tax-deferred arrangements, such as 401(k) plans or individual retirement
accounts.
Pioneer Mid Cap Value Fund
Average Annual Total Returns as of December 31, 2004
- ------------------------------------------------------------------------------------------------------------------------------------
1 Year 5 Years 10 Years Since Inception
- ------------------------------------------------------------------------------------------------------------------------------------
Pioneer Mid Cap Value Fund, Class A shares
- ------------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 14.68% 11.40% 12.20% 13.35% (07/25/90)
- ------------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions(1) 12.51% 10.11% 10.20% 11.28%
- ------------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund 11.90% 9.46% 9.74% 10.82%
Shares(1)
- ------------------------------------------------------------------------------------------------------------------------------------
Pioneer Mid Cap Value Fund, Class B shares
- ------------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 16.55% 11.79% 11.94% 12.23% (04/04/94)
- ------------------------------------------------------------------------------------------------------------------------------------
Pioneer Mid Cap Value Fund, Class Y shares
- ------------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 22.44% 13.30% 13.22% 14.08% (07/25/90)(1)
- ------------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions(1) 20.18% 12.00% 11.18% 11.98%
- ------------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund 17.04% 11.15% 10.65% 11.49%
Shares(1)
- ------------------------------------------------------------------------------------------------------------------------------------
Russell Midcap Value Index(2) 23.71% 13.48% 15.72% 14.86%(3)
(reflects no deduction for fees, expenses or taxes)
- ------------------------------------------------------------------------------------------------------------------------------------
(1) Reflects the inception date of the Fund's Class A shares. Inception of
Class Y shares was July 2, 1998.
(2) The Russell Midcap Value Index, an unmanaged index that measures the
performance of those companies in the Russell Midcap Value Index with lower
price-to-book ratios and lower forecasted growth values, is for reference
only and does not mirror the Fund's investments.
(3) Reflects the return of the index since the inception of Class A shares.
After-tax returns are calculated using the historical highest individual federal
marginal income tax rates and do not reflect the impact of state and local
taxes. Actual after-tax returns depend on your situation and may differ from
those shown, and the after-tax returns shown are not relevant to shareholders
who hold Fund shares through tax-deferred arrangements such as 401(k) plans or
IRA accounts, or to investors that are tax-exempt.
The most recent portfolio manager's discussion of each Fund's performance is
attached as Exhibit C.
The Funds' Fees and Expenses
Shareholders of both Funds pay various fees and expenses, either directly
or indirectly. The tables below show the fees and expenses that you would pay if
you were to buy and hold shares of each Fund. The expenses in the tables
appearing below are based on (i) for the AmSouth Mid Cap Fund, the expenses of
AmSouth Mid Cap Fund for the period ended January 31, 2005, and (ii) for Pioneer
Mid Cap Value Fund, the expenses of Pioneer Mid Cap Value Fund for the period
ended May 31, 2005. Future expenses for all share classes may be greater or
less. The tables also show the pro forma expenses of the combined Fund assuming
the Reorganization occurred on May 31, 2005.
12
- ------------------------------------------------------------------------------------------------------------------------------------
Shareholder AmSouth Pioneer Combined AmSouth Pioneer Combined AmSouth Pioneer Combined
transaction Mid Cap Mid Cap Fund (Pro Mid Cap Mid Cap Fund (Pro Mid Cap Mid Cap Fund (Pro
fees (paid Fund(1) Value Fund Forma) Fund(1) Value Fund Forma) Fund(1) Value Fund Forma)
directly from
your
investment) Class A Class A Class A Class B Class B Class B Class I Class Y Class Y
- ------------------------------------------------------------------------------------------------------------------------------------
Maximum sales 5.50%(2) 5.75%(2) 5.75%(2) None None None None None None
charge (load)
when you buy
shares as a
percentage of
offering price
- ------------------------------------------------------------------------------------------------------------------------------------
Maximum None None(6) None 5.00%(3) 4.00% 4.00% None None None
deferred sales
charge (load)
as a
percentage of
purchase price
or the amount
you receive
when you sell
shares,
whichever is
less
- ------------------------------------------------------------------------------------------------------------------------------------
Redemption 2.00%(4) None None 2.00%(4) None None 2.00%(4) None None
fees
- ------------------------------------------------------------------------------------------------------------------------------------
Annual fund
operating
expenses
(deducted from
fund assets)
(as a % of
average net
assets)
- ------------------------------------------------------------------------------------------------------------------------------------
Management fee 0.90% 0.74%(7) 0.74% 0.90% 0.74%(7) 0.74% 0.90% 0.74%(7) 0.74%
- ------------------------------------------------------------------------------------------------------------------------------------
Distribution None 0.25% 0.25% 0.75% 1.00% 1.00% None 0.00% 1.00%
and service
(12b-1) fee
- ------------------------------------------------------------------------------------------------------------------------------------
Other expenses 0.67%(5) 0.20% 0.20% 0.75%(5) 0.39% 0.39% 0.53%(5) 0.04% 0.03%
- ------------------------------------------------------------------------------------------------------------------------------------
Total fund 1.57% 1.19%(8) 1.19% 2.40% 2.13%(8) 2.13% 1.43% 0.77%(8) 0.77%
operating
expenses
- ------------------------------------------------------------------------------------------------------------------------------------
Expense 0.47% N/A N/A 0.55% N/A N/A 0.48% N/A N/A
reimbursement/
reduction
- ------------------------------------------------------------------------------------------------------------------------------------
Net fund
operating 1.10% 1.19% 1.19% 1.85% 2.13% 2.13% 0.95% 0.77% 0.77%
expenses
- ------------------------------------------------------------------------------------------------------------------------------------
(1) AmSouth Bank or other financial institutions may charge their customer
account fees for automatic investment and other cash management services
provided in connection with investment in the Fund.
(2) Sales charges may be reduced depending upon the amount invested or, in
certain circumstances, waived. Class A shares bought as part of an
investment of $1 million or more are not subject to an initial sales
charge, but may be charged a CDSC of 1.00% if sold within one year of
purchase.
(3) For Class B shares purchased prior to the combination of AmSouth Funds with
ISG Funds, the CDSC on such Class B shares held continuously declines over
six years, starting with year one and ending in year seven from: 4%, 3%,
3%, 2%, 2%, 1%. For all other Class B shares held continuously, the CDSC
declines over six years, starting with year one and ending in year seven
from: 5%, 4%, 3%, 3%, 2%, 1%. Eight years after purchase (seven years in
the case of shares acquired in the ISG combination), Class B shares
automatically convert to Class A shares.
13
(4) To discourage short-term trading, a redemption fee of 2.00% will be charged
on sales or exchanges of Class A, Class B and Class I shares of your
AmSouth Fund made within 7 days of the date of purchase. A wire transfer
fee of $7.00 will be deducted from the amount of your redemption if you
request a wire transfer.
(5) Other expenses for your AmSouth Fund are being limited to 0.20% for Class A
shares, 0.20% for Class B shares and 0.05% for Class I shares. Any fee
waiver or expense reimbursement arrangement is voluntary and may be
discontinued at any time.
(6) Purchases of $1 million or more and purchases by participants in certain
group plans are not subject to an initial sales charge but may be subject
to a contingent deferred sales charge of 1%.
(7) At current asset levels, Pioneer Mid Cap Value Fund pays a management fee
that ranges from 0.60% to 0.80% of average daily net assets based on its
performance and the size of the Fund. The Fund's basic fee, before any
performance adjustment, is 0.70% of average daily net assets, which is
reduced at asset levels above $500 million.
(8) Pioneer Mid Cap Value Fund's total annual operating expenses in the table
have not been reduced by any expense offset arrangements.
The hypothetical example below helps you compare the cost of investing in
each Fund. It assumes that: (a) you invest $10,000 in each Fund for the time
periods shown, (b) you reinvest all dividends and distributions, (c) your
investment has a 5% return each year, and (d) each Fund's gross operating
expenses remain the same. The examples are for comparison purposes only and are
not a representation of either Fund's actual expenses or returns, either past or
future.
- ------------------------------------------------------------------------------------------------------------
Number of years you AmSouth Mid Cap Fund Pioneer Mid Cap Value Fund Combined Fund
own your shares (Pro Forma)
- ------------------------------------------------------------------------------------------------------------
Class A
- ------------------------------------------------------------------------------------------------------------
Year 1 $701 $689 $689
- ------------------------------------------------------------------------------------------------------------
Year 3 $1,018 $931 $931
- ------------------------------------------------------------------------------------------------------------
Year 5 $1,358 $1,202 $1,192
- ------------------------------------------------------------------------------------------------------------
Year 10 $2,135 $1,957 $1,935
- ------------------------------------------------------------------------------------------------------------
Class B -- assuming redemption at end of period
- ------------------------------------------------------------------------------------------------------------
Year 1 $743 $616 $616
- ------------------------------------------------------------------------------------------------------------
Year 3 $1,048 $967 $967
- ------------------------------------------------------------------------------------------------------------
Year 5 $1,480 $1,244 $1,244
- ------------------------------------------------------------------------------------------------------------
Year 10 $2,530 $2,222 $2,222
- ------------------------------------------------------------------------------------------------------------
Class B -- assuming no redemption
- ------------------------------------------------------------------------------------------------------------
Year 1 $243 $216 $79
- ------------------------------------------------------------------------------------------------------------
Year 3 $748 $667 $246
- ------------------------------------------------------------------------------------------------------------
Year 5 $1,280 $1,144 $1,144
- ------------------------------------------------------------------------------------------------------------
Year 10 $2,530 $2,222 $2,222
- ------------------------------------------------------------------------------------------------------------
Class I Class Y
- ------------------------------------------------------------------------------------------------------------
Year 1 $146 $216 $79
- ------------------------------------------------------------------------------------------------------------
Year 3 $452 $667 $246
- ------------------------------------------------------------------------------------------------------------
Year 5 $782 $1,144 $428
- ------------------------------------------------------------------------------------------------------------
Year 10 $1,713 $2,222 $954
- ------------------------------------------------------------------------------------------------------------
Reasons for the Proposed Reorganization
The Trustees believe that the proposed Reorganization is in the best
interests of AmSouth Mid Cap Fund. The Trustees considered the following
matters, among others, in approving the proposal.
14
First, AAMI, the investment adviser to your Amsouth Fund, informed the
Trustees that it does not intend to continue to provide investment advisory
services to the AmSouth Funds. Consequently, a change in your AmSouth Fund's
investment adviser was necessary. In the absence of the Reorganization, such a
change would be more likely to motivate shareholders invested in reliance on
AAMI's role to withdraw from the Fund, thereby reducing fund size and increasing
fund expense ratios.
Second, after the Reorganization, the combined Fund will have an asset size
substantially larger than that of your AmSouth Fund, which may allow the
combined Fund to achieve significant economies of scale in investments or
expenses.
Third, the historical investment performance of Pioneer Mid Cap Value Fund
is superior to your AmSouth Fund's investment performance. For the one and five
year periods ended December 31, 2004, Class A shares of Pioneer Mid Cap Value
Fund had an average annual return of 14.68% (one year) and 11.40% (five year),
compared to an average annual return of the Class A shares of your AmSouth Fund
of 9.46% (one year) and -5.05% (five year) during the same period. The Trustees
also considered that, for the one and five year periods ended March 31, 2005,
Class A shares of the Pioneer Fund had an average annual return of 17.73% (one
year) and 12.59% (five year), compared to an average annual return of the Class
A shares of your AmSouth Fund of 10.15% (one year) and -6.37% (five year),
respectively, during the same period. In addition, the Trustees considered the
track record of Pioneer in managing equity and fixed income mutual funds.
Fourth, the resources of Pioneer. At December 31, 2004, Pioneer managed
over 80 investment companies and accounts with approximately $42 billion in
assets, including $26.7 billion in equity funds. Pioneer is part of the global
asset management group of UniCredito Italiano S.p.A., one of the largest banking
groups in Italy, providing investment management and financial services to
mutual funds, institutional and other clients. As of December 31, 2004, assets
under management of UniCredito Italiano S.p.A. were approximately $175 billion
worldwide. Shareholders of your AmSouth Fund would become part of a
significantly larger family of funds that offers a more diverse array of
investment options and enhanced shareholder account options. The Pioneer family
of mutual funds offers over 80 funds, including domestic and international
equity and fixed income funds and a money market fund that will be available to
your AmSouth Fund's shareholders through exchanges
Fifth, Pioneer Mid Cap Value Fund's management fee (0.74% of average daily
net assets) is substantially lower than the advisory fee of your Fund (0.90% of
average daily net assets). The aggregate Rule 12b-1 distribution and shareholder
servicing fees and non-Rule 12b-1 shareholder servicing fees paid by the Class A
and Class B shares of both Funds are the same. Moreover, your AmSouth Fund's
Class I shares pay a non 12b-1 shareholder servicing fee that is not paid by the
Pioneer Fund's Class Y shares. Currently, the Pioneer Mid Cap Value Fund's gross
expense ratio is below the gross expense ratio of the corresponding class of
your AmSouth Fund. However, your current expense ratio net of expense
limitations is lower than the gross expense ratio of the Pioneer Fund (except
for the Class Y shares of the Pioneer Fund, both the gross and net expenses of
which are lower than the expenses of the Class I shares of the AmSouth Fund). On
a pro forma basis, after giving effect to the Reorganization, it is estimated
that the gross expenses of each class of the Pioneer Fund will be lower than the
gross expenses of the corresponding class of your Fund. Although the net
expenses of the Pioneer Fund's Class A and Class B shares will be higher than
the net expenses of your Fund's Class A and Class B shares, your Fund's expense
limitation is voluntary and may be discontinued at any time. AAMI has informed
the trustees that the expense limitations will be discontinued in the future.
The Trustees also noted that the Pioneer Fund is more actively managed, while
the AmSouth Fund is an enhanced index fund, and index funds traditionally have
substantially lower fees than actively managed funds. In addition, the broader
distribution arrangements of the Pioneer Fund offer greater potential for
further asset growth and reduced per share expenses.
Sixth, the substantially larger size of the combined Pioneer Mid Cap Value
Fund will offer greater opportunity for diversification of the investment
portfolio, which should help to reduced risks.
Seventh, the Class A, B and Y shares of Pioneer Mid Cap Value Fund received
in the Reorganization will provide AmSouth Mid Cap Fund shareholders with
exposure to substantially the same investment product as they currently have.
Eighth, the transaction is structured to qualify as a tax-free
reorganization under Section 368(a) of the Internal Revenue Code of 1986 and
therefore will not be treated as a taxable sale of your AmSouth shares. Although
the Reorganization will result in a per share increase in net unrealized capital
gains and a decrease in capital loss carryforwards, the potential negative tax
consequences of these aspects of the Reorganization are outweighed by the
advantages of the Reorganization.
15
Pioneer and AmSouth Bank will pay all costs of preparing and printing the
Funds' proxy statements and solicitation costs incurred by the Funds in
connection with the Reorganization. AAMI will otherwise be responsible for all
costs and expenses of the AmSouth Fund in connection with the Reorganizations.
The Trustees also considered that Pioneer and AmSouth Bank will benefit
from the Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the
Reorganizations."
The Board of Trustees of the Pioneer Fund also considered that the
Reorganization presents an excellent opportunity for the Pioneer Fund to acquire
investment assets without the obligation to pay commissions or other transaction
costs that a fund normally incurs when purchasing securities. This opportunity
provides an economic benefit to the Pioneer Fund and its shareholders.
CAPITALIZATION
The following table sets forth the capitalization of each Fund as of May
31, 2005, and the pro forma combined Fund as of May 31, 2005.
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AmSouth Mid Cap Pioneer Mid Cap Value Pro Forma Pioneer Mid
Fund Fund Cap Value Fund
May 31, 2005 May 31, 2005 May 31, 2005
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Total Net Assets (in thousands) $234,876 $2,460,056 $2,694,932
- ------------------------------------------------------------------------------------------------------------------------------
Class A shares ................................... $23,363 $1,911,174 $1,934,538
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Class B shares ................................... $7,918 $208,901 $216,819
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Class I/Y shares ................................. $203,595 $114,061 $317,656
- ------------------------------------------------------------------------------------------------------------------------------
Net Asset Value Per Share
- ------------------------------------------------------------------------------------------------------------------------------
Class A shares ................................... $14.24 $25.22 $25.22
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Class B shares ................................... $13.61 $22.57 $22.57
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Class I/Y shares ................................. $14.30 $26.01 $26.01
- ------------------------------------------------------------------------------------------------------------------------------
Shares Outstanding
- ------------------------------------------------------------------------------------------------------------------------------
Class A shares ................................... 1,641,062 75,781,678 76,708,079
- ------------------------------------------------------------------------------------------------------------------------------
Class B shares ................................... 581,591 9,254,911 9,605,706
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Class I/Y shares ................................. 14,234,921 4,385,193 12,212,598
- ------------------------------------------------------------------------------------------------------------------------------
It is impossible to predict how many shares of the Pioneer Fund will
actually be received and distributed by your AmSouth Fund on the Reorganization
date. The table should not be relied upon to determine the amount of the Pioneer
Fund's shares that will actually be received and distributed.
16
BOARD'S EVALUATION AND RECOMMENDATION
For the reasons described above, the Trustees, including the Independent
Trustees, approved the Reorganization. In particular, the Trustees determined
that the Reorganization is in the best interests of your AmSouth Fund.
Similarly, the Board of Trustees of the Pioneer Fund, including its Independent
Trustees, approved the Reorganization. They also determined that the
Reorganization is in the best interests of the Pioneer Fund.
The Trustees recommend that the shareholders of your AmSouth Fund vote FOR
the proposal to approve the Agreement and Plan of Reorganization.
17
AmSouth Small Cap Fund and
Pioneer Growth Opportunities Fund
PROPOSAL 1(f)
Approval of Agreement and Plan of Reorganization
SUMMARY
The following is a summary of more complete information appearing later in
this Proxy Statement/Prospectus or incorporated herein. You should read
carefully the entire Proxy Statement/Prospectus, including the form of Agreement
and Plan of Reorganization attached as EXHIBIT A-1, because it contains details
that are not in the summary.
Each Fund invests primarily in equity securities of smaller capitalization
issuers with above-average growth potential, and, consequently, has similar
investment policies and risks. In the table below, if a row extends across the
entire table, the policy disclosed applies to both your AmSouth Fund and the
Pioneer Fund.
Comparison of AmSouth Small Cap Fund to Pioneer Growth Opportunities Fund
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AmSouth Small Cap Fund Pioneer Growth Opportunities Fund
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Business A diversified series of AmSouth Funds, an A diversified series of Pioneer Series Trust
open-end management investment company II, an open-end management investment company
organized as a Massachusetts business trust. organized as a Delaware statutory trust.
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Net assets as of March 31, 2005 $258.48 million $464.48 million
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Investment advisers and Investment Adviser: Investment Adviser:
portfolio managers AAMI Pioneer
Investment Subadviser: Portfolio Managers:
Sawgrass Asset Management, LLC ("Sawgrass") Day-to-day management of the Fund's portfolio
is the responsibility of co-managers Diego
Portfolio Manager: Franzin and Michael Rega. Mr. Franzin, vice
Day-to-day management of AmSouth Small Cap president and head of U.S. Quantitative
Fund is the responsibility of Dean McQuiddy, Research & Management and leader of Global
CFA, who has been the portfolio manager for Active Quantitative Equity Research, joined
the Fund since its inception. Mr. McQuiddy, Pioneer in 1998 as an active quantitative
who has been employed by Sawgrass since 1998, equity research analyst. Mr. Rega, vice
is a Principal and the Director of Equity president and senior portfolio manager,
Investing of Sawgrass. From 1983 to 1997, Mr. joined Pioneer in 2004. Prior to joining
McQuiddy was portfolio manager at Barnett Pioneer, Mr. Rega was a vice president and
Capital Advisors, Inc. Mr. McQuiddy holds portfolio manager at 646 Advisors from 2000
membership in the Association for Investment to 2004.
Management and Research. He has 20 years of
investment experience.
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Investment objective AmSouth Small Cap Fund seeks capital Pioneer Growth Opportunities Fund seeks
appreciation by investing primarily in a growth of capital.
diversified portfolio of securities
consisting of common stocks and securities
convertible into common stocks such as
convertible bonds and convertible preferred
stocks. Any current
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1
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AmSouth Small Cap Fund Pioneer Growth Opportunities Fund
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income generated from these securities is
incidental.
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Primary investments Under normal circumstances, AmSouth Small Cap Pioneer Growth Opportunities Fund invests
Fund will invest at least 80% of its net primarily in equity securities of companies
assets in equity securities of companies with that Pioneer considers to be reasonably
small market capitalizations at the time of priced or undervalued, with above average
purchase, including common stocks and growth potential. The Fund may invest a
securities convertible into common stocks significant portion of its assets in equity
such as convertible bonds and convertible securities of small companies.
preferred stock. For the purpose of this
policy, net assets include net assets plus
borrowings for investment purposes. Small
capitalization companies are generally those
whose market capitalizations are similar to
the capitalizations at the time of purchase
of the companies in the Russell 2000 Growth
Index. As of December 31, 2004, companies in
the Russell 2000 Growth Index had market
capitalizations between $49 million and $2.9
billion.
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Investment strategies In managing the Fund's portfolio, Sawgrass Pioneer Growth Opportunities Fund uses a
seeks smaller companies with above-average "growth at a reasonable price" style of
growth potential. Factors Sawgrass typically management and seeks to invest in securities
considers in selecting individual securities of issuers with above average potential for
include positive changes in earnings earnings and revenue growth that are also
estimates for future growth, higher than trading at attractive market valuations. To
market average profitability, a strategic select stock, Pioneer may also use
position in a specialized market, earnings quantitative analysis. Pioneer relies on the
growth consistently above market, and knowledge, experience and judgment of its
fundamental value. staff who have access to a wide variety of
research. Pioneer focuses on the quality and
price of individual issuers, not on economic
sector or market-timing strategies. Factors
Pioneer looks for in selecting investments
include:
o Strength of the company's balance sheet
o Quality of the management team
o Rate at which the company's earnings are
projected to grow
o Whether the company's stock may be trading
at a discount relative to its industry
peers or the overall market
Pioneer generally sells a portfolio security
when it believes that the issuer no longer
offers the potential for growth at a
reasonable price or if any of the above
factors have deteriorated. Pioneer makes that
determination based upon the same criteria it
uses to select portfolio securities.
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Other investments AmSouth Small Cap Fund may invest up to 20% Pioneer may invest up to 20% of its total
of its assets in common stocks and securities assets in securities of non-U.S. issuers. Up
convertible into common stocks of companies to 5% of the Fund's total assets may be
with a market capitalization of invested in securities of emerging markets
issuers.
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2
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AmSouth Small Cap Fund Pioneer Growth Opportunities Fund
- ------------------------------------------------------------------------------------------------------------------------------------
greater than $2 billion determined at the Non-U.S. securities may be issued by non-U.S.
time of the purchase, preferred stocks, governments, banks or corporations and
corporate bonds, notes, and warrants, and certain supranational organizations, such as
short-term money market instruments. the World Bank and the European Union. The
Fund may invest in securities of Canadian
issuers to the same extent as securities of
U.S. issuers. Investing in Canadian and other
non-U.S. issuers, particularly issuers in
emerging markets, may involve unique risks
compared to investing in the securities of
U.S. issuers.
Pioneer Growth Opportunities Fund may invest
up to 20% of its total assets in debt
securities of U.S. corporate and government
issuers. Generally, the Fund acquires debt
securities that are investment grade, but the
Fund may invest up to 5% of its net assets in
below investment grade debt securities
including below investment grade convertible
debt securities. The Fund invests in debt
securities when Pioneer believes they are
consistent with the Fund's investment
objective of capital growth, to diversify the
Fund's portfolio or for greater liquidity.
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Temporary defensive strategies If deemed appropriate under the Pioneer Growth Opportunities Fund may invest
circumstances, AmSouth Small Cap Fund may all or part of its assets in securities with
increase its holdings in short-term money remaining maturities of less than one year,
market instruments to over 20% of total cash equivalents or may hold cash.
assets. AmSouth Small Cap Fund may hold
uninvested cash pending investment.
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Diversification Each Fund is diversified for the purpose of the Investment Company Act and is subject to
diversification requirements under the Internal Revenue Code of 1986, as amended (the "Code").
- ------------------------------------------------------------------------------------------------------------------------------------
Industry concentration AmSouth Small Cap Fund may not purchase any Pioneer Growth Opportunities Fund may not
securities which would cause more than 25% of invest more than 25% of its assets in any one
the value of the Fund's total assets at the industry.
time of purchase to be invested in securities
of one or more issuers conducting their
principal business activities in the same
industry, provided that (a) there is no
limitation with respect to obligations issued
or guaranteed by the U.S. government or its
agencies or instrumentalities, and repurchase
agreements secured by obligations of the U.S.
government or its instrumentalities; (b)
wholly owned finance companies will be
considered to be in the industries of their
parents if their activities are primarily
related to financing the activities of their
parents; and (c) utilities will be divided
according to their services. For example,
gas, gas transmission, electric and gas,
electric, and telephone will each be
considered a separate
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3
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AmSouth Small Cap Fund Pioneer Growth Opportunities Fund
- ------------------------------------------------------------------------------------------------------------------------------------
industry.
- ------------------------------------------------------------------------------------------------------------------------------------
Restricted and illiquid AmSouth Small Cap Fund may not invest more Pioneer Growth Opportunities Fund may not
securities than 15% of its net assets in securities that invest more than 15% of its net assets in
are restricted as to resale, or for which no securities that are illiquid and other
readily available market exists, including securities that are not readily marketable.
repurchase agreements providing for Repurchase agreements maturing in more than
settlement more than seven days after notice. seven days will be included for purposes of
the foregoing limit.
- ------------------------------------------------------------------------------------------------------------------------------------
Borrowing AmSouth Small Cap Fund may not borrow money Pioneer Growth Opportunities Fund may not
or issue senior securities, except that the borrow money, except the Fund may: (a) borrow
Fund may borrow from banks or enter into from banks or through reverse repurchase
reverse repurchase agreements for temporary agreements in an amount up to 33 1/3% of the
emergency purposes in amounts up to 33 1/3% Fund's total assets (including the amount
of the value of its total assets at the time borrowed); (b) borrow up to an additional 5%
of such borrowing. The Fund will not purchase of the Fund's assets for temporary purposes;
securities while borrowings (including (c) obtain such short-term credits as are
reverse repurchase agreements) in excess of necessary for the clearance of portfolio
5% of its total assets are outstanding. In transactions; (d) purchase securities on
addition, the Fund is permitted to margin to the extent permitted by applicable
participate in a credit facility whereby the law; and (e) engage in transactions in
Fund may directly lend to and borrow money mortgage dollar rolls that are accounted for
from other AmSouth funds for temporary as financings.
purposes, provided that the loans are made in
accordance with an order of exemption from
the SEC and any conditions thereto.
- ------------------------------------------------------------------------------------------------------------------------------------
Lending AmSouth Small Cap Fund may not make loans, Pioneer Growth Opportunities Fund may not
except that the Fund may purchase or hold make loans, except that the Fund may (i) lend
debt instruments in accordance with its portfolio securities in accordance with the
investment objective and policies, lend Fund Fund's investment policies, (ii) enter into
securities in accordance with its investment repurchase agreements, (iii) purchase all or
objective and policies and enter into a portion of an issue of publicly distributed
repurchase agreements. In addition, the Fund debt securities, bank loan participation
is permitted to participate in a credit interests, bank certificates of deposit,
facility whereby the Fund may directly lend bankers' acceptances, debentures or other
to and borrow money from other AmSouth funds securities, whether or not the purchase is
for temporary purposes, provided that the made upon the original issuance of the
loans are made in accordance with an order of securities, (iv) participate in a credit
exemption from the SEC and any conditions facility whereby the Fund may directly lend
thereto. to and borrow money from other affiliated
funds to the extent permitted under the
Investment Company Act or an exemption
therefrom, and (v) make loans in any other
manner consistent with applicable law, as
amended and interpreted or modified from time
to time by any regulatory authority having
jurisdiction.
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Derivative instruments AmSouth Small Cap Fund may invest in futures Pioneer Growth Opportunities Fund may use
contracts and options thereon (interest rate futures and options on securities, indices
futures contracts or index futures contracts, and currencies, forward currency exchange
as applicable) to commit funds awaiting contracts and other derivatives. The Fund
investment, to maintain cash liquidity or for does not use derivatives as a primary
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4
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AmSouth Small Cap Fund Pioneer Growth Opportunities Fund
- ------------------------------------------------------------------------------------------------------------------------------------
other hedging purposes. The value of the investment technique and generally limits
Fund's contracts may equal or exceed 100% of their use to hedging. However, the Fund may
the Fund's total assets, although the Fund use derivatives for a variety of
will not purchase or sell a futures contract non-principal purposes, including:
unless immediately afterwards the aggregate
amount of margin deposits on its existing o As a hedge against adverse changes in
futures positions plus the amount of premiums stock market prices, interest rates or
paid for related futures options entered into currency exchange rates
for other than bona fide hedging purposes is
5% or less of its net assets. 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
- ------------------------------------------------------------------------------------------------------------------------------------
Short-term trading AmSouth Small Cap Fund may engage in the Pioneer Growth Opportunities Fund does not
technique of short-term trading. Such trading usually trade for short-term profits. The
involves the selling of securities held for a Fund will sell an investment, however, even
short-time, ranging from several months to if it has only been held for a short time, if
less than a day. The object of such it no longer meets the Fund's investment
short-term trading is to increase the criteria.
potential for capital appreciation and/or
income of the Fund in order to take advantage
of what Sawgrass believes are changes in
market, industry or individual company
outlook.
- ------------------------------------------------------------------------------------------------------------------------------------
Other investment policies As described above, the Funds have substantially similar principal investment strategies and
and restrictions policies. Certain of the non-principal investment policies and restrictions are different. For
a more complete discussion of each Fund's other investment policies and fundamental and
non-fundamental investment restrictions, see the SAI.
- ------------------------------------------------------------------------------------------------------------------------------------
Buying, Selling and Exchanging Shares
- ------------------------------------------------------------------------------------------------------------------------------------
Class A sales charges and Class A shares are offered with an initial Class A shares are offered with an initial
Rule 12b-1 Fees sales charge of up to 5.50% of the offering sales charge of up to 5.75% of the offering
price, which is reduced depending upon the price, which is reduced or waived for large
amount invested or, in certain circumstances, purchases and certain types of investors. At
waived. Class A shares bought as part of an the time of your purchase, your investment
investment of $1 million or more are not firm may receive a commission from Pioneer
subject to an initial sales charge, but may Funds Distributor, Inc. ("PFD"), the Fund's
be charged a contingent deferred sales charge distributor, of up to 5% declining as the
("CDSC") of 1.00% if sold within one year of size of your investment increases.
purchase.
There is no CDSC, except in certain
Class A shares pay a shareholder servicing circumstances when the initial sales charge
fee (non 12b-1) of up to 0.25% of average is waived.
daily net assets.
Class A shares are subject to distribution
and service (12b-1) fees of up to 0.25% of
average daily net assets.
- ------------------------------------------------------------------------------------------------------------------------------------
Class B sales charges Class B shares are offered without an initial Class B shares are offered without an initial
and Rule 12b-1 fees sales charge, but are subject to a CDSC of up sales charge, but are subject to a CDSC of up
to 5%. For Class B shares purchased prior to to 4% if you sell your shares. The charge is
the combination of AmSouth Funds with ISG reduced over time and is not charged after
five
- ------------------------------------------------------------------------------------------------------------------------------------
5
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth Small Cap Fund Pioneer Growth Opportunities Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Funds, the CDSC on such Class B shares held years. Your investment firm may receive a
continuously declines over six years, commission from PFD, the Fund's distributor,
starting with year one and ending in year at the time of your purchase of up to 4%.
seven from: 4%, 3%, 3%, 2%, 2%, 1%. For all
other Class B shares held continuously, the Class B shares are subject to distribution
CDSC declines over six years, starting with and service (12b-1) fees of up to 1% of
year one and ending in year seven from: 5%, average daily net assets.
4%, 3%, 3%, 2%, 1%. Eight years after
purchase (seven years in the case of shares Maximum purchase of Class B shares in a
acquired in the ISG combination), Class B single transaction is $49,999.
shares automatically convert to Class A
shares. Class B shares acquired through the
Reorganization will be subject to the CDSC
Class B shares pay a shareholder servicing and commission schedules applicable to the
fee (non 12-b-1) of up to 0.25% of average original purchase.
daily net assets and a distribution (12b-1)
fee of 0.75% of average daily net assets.
Maximum investment for all Class B purchases
by a shareholder for the Fund's shares is
$99,999.
- ------------------------------------------------------------------------------------------------------------------------------------
Class I and Class Y sales AmSouth Small Cap Fund does not impose any The Fund does not impose any initial,
charges and Rule 12b-1 fees initial or CDSC on Class I shares. contingent deferred or asset based sales
charge on Class Y shares.
The Fund may impose a shareholder servicing
fee (non 12b-1) of up to 0.15% of average The distributor incurs the expenses of
daily net assets. distributing the Fund's Class Y shares, none
of which are reimbursed by the Fund or the
Class Y shareowners.
- ------------------------------------------------------------------------------------------------------------------------------------
Management and other fees AmSouth Small Cap Fund pays an advisory fee Pioneer Growth Opportunities Fund pays
on a monthly basis at an annual rate of 0.90% Pioneer an annual fee equal to 0.65% of the
of the Fund's average daily net assets. Fund's average daily net assets. The fee is
computed daily and paid monthly.
ASO Services Company, Inc. ("ASO") serves as
administrator and fund accounting agent for In addition, the Fund reimburses Pioneer for
the Fund. The Fund pays ASO an administrative certain fund accounting and legal expenses
services fee of 0.15% of the Fund's average incurred on behalf of the Fund and pays a
daily net assets. separate shareholder servicing/transfer
agency fee to PIMSS, an affiliate of Pioneer.
Other expenses of the Fund are being limited
to 0.39% for Class A shares, 0.38% for Class Through May 1, 2006, Pioneer has
B shares, and 0.24% for Class I shares. Any contractually agreed to not to impose all or
fee waiver or expense reimbursement a portion of its management fee and, if
arrangement is voluntary and may be necessary, to limit other ordinary operating
discontinued at any time. expenses to 1.30% of the average daily net
assets attributable to Class A shares. The
For the fiscal year ended July 31, 2004, the portion of Fund expenses (including the
Fund's annual operating expenses for Class A amount of the management fee waived)
shares, after giving effect to the expense attributable to Class B and Class Y shares
limitation were 1.29%, and without giving will be reduced only to the extent such
effect to the expense limitation, were 1.41% expenses are reduced for Class A shares.
of average daily net assets.
For the fiscal year ended December 31, 2004,
- ------------------------------------------------------------------------------------------------------------------------------------
6
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth Small Cap Fund Pioneer Growth Opportunities Fund
- ------------------------------------------------------------------------------------------------------------------------------------
For the fiscal year ended July 31, 2004, the the Fund's total annual operating expenses
Fund's annual operating expenses for Class B for Class A shares, after giving effect to
shares, after giving effect to the expense the expense limitation, were 1.31%, and
limitation were 2.03%, and without giving without giving effect to the expense
effect to the expense limitation, were 2.15% limitation were 2.29% of average daily net
of average daily net assets. assets. The expense limitation applicable to
Class A shares was not in effect for the
For the fiscal year ended July 31, 2004, the entire fiscal year ended December 31, 2004.
Fund's annual operating expenses for Class I
shares, after giving effect to the expense For the fiscal year ended December 31, 2004,
limitation were 1.14%, and without giving the Fund's total annual operating expenses
effect to the expense limitation, were 1.31% for Class B shares, after giving effect to
of average daily net assets. the expense limitation, were 2.08%, and
without giving effect to the expense
limitation were 2.33% of average daily net
assets. The expense limitation applicable to
Class B shares was not in effect for the
entire fiscal year ended December 31, 2004.
Class Y shares of Pioneer Growth
Opportunities Fund are being offered for the
first time in connection with the
Reorganization.
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Buying shares You may buy shares of the Fund directly You may buy shares from any investment firm
through BISYS Fund Services, the Fund's that has a sales agreement with PFD, the
distributor, or through brokers, registered Pioneer Fund's distributor.
investment advisers, banks and other
financial institutions that have entered into If the account is established in the
selling agreements with the Fund's shareholder's own name, shareholders may also
distributor, as described in the Fund's purchase additional shares of the Fund by
prospectus. telephone or online.
Certain account transactions may be done by
telephone.
- ------------------------------------------------------------------------------------------------------------------------------------
Exchanging shares You can exchange your shares in the Fund for You may exchange your shares for shares of
shares of the same class of another AmSouth the same class of another Pioneer mutual
Fund, usually without paying additional sales fund. Your exchange request must be for at
charges. You must meet the minimum investment least $1,000. The Fund allows you to exchange
requirements for the Fund into which you are your shares at net asset value without
exchanging. Exchanges from one Fund to charging you either an initial or contingent
another are taxable. Class A shares may be deferred shares charge at the time of the
exchanged for Class I shares of the same Fund exchange. Shares you acquire as part of an
or another AmSouth Fund if you become exchange will continue to be subject to any
eligible to purchase Class I shares. Class I contingent deferred sales charge that applies
shares may be exchanged for Class A shares of to the shares you originally purchased. When
the same Fund. No transaction fees are you ultimately sell your shares, the date of
currently charged for exchanges. your original purchase will determine your
contingent deferred sales charge. An exchange
If you sell your shares or exchange them for generally is treated as a sale and a new
shares of another AmSouth Fund within 30 days purchase of shares for federal income tax
of the date of purchase, you will be charged purposes.
a 2.00% fee on the current net asset value of
the shares sold or exchanged. The fee After you establish an eligible Fund account,
- ------------------------------------------------------------------------------------------------------------------------------------
7
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth Small Cap Fund Pioneer Growth Opportunities Fund
- ------------------------------------------------------------------------------------------------------------------------------------
is paid to the Fund to offset the costs you can exchange Fund shares by telephone or
associated with short-term trading, such as online.
portfolio transaction and administrative
costs.
The Fund uses a "first-in, first-out" method
to determine how long you have held your
shares. This means that if you purchased
shares on different days, the shares
purchased first will be considered redeemed
first for purposes of determining whether the
redemption fee will be charged.
The fee will be charged on all covered
redemptions and exchanges, including those
made through retirement plan, brokerage and
other types of omnibus accounts (except where
it is not practical for the plan
administrator or brokerage firm to implement
the fee). The Fund will not impose the
redemption fee on a redemption or exchange of
shares purchased upon the reinvestment of
dividend and capital gain distributions.
- ------------------------------------------------------------------------------------------------------------------------------------
Selling shares Shares of each Fund are sold at the net asset value per share next calculated after the Fund
receives your request in good order.
--------------------------------------------------------------------------------------------------
You may sell your shares by contacting the Normally, your investment firm will send your
Fund directly in writing or by telephone or request to sell shares to PIMSS. You can also
by contacting a financial intermediary as sell your shares by contacting the Fund
described in the Fund's prospectus. directly if your account is registered in
your name.
If the account is established in the
shareholder's own name, shareholders may also
redeem shares of the Pioneer Fund by
telephone or online.
- ------------------------------------------------------------------------------------------------------------------------------------
Comparison of Principal Risks of Investing in the Funds
Because each Fund has a similar investment objective, primary investment
policies and strategies, the Funds are subject to the same principal risks. You
could lose money on your investment in either Fund or not make as much as if you
invested elsewhere if:
o The stock market goes down
o Small company or growth stocks fall out of favor with investors
o The adviser's/subadviser's judgment about the attractiveness, growth
potential or potential appreciation of a particular stock proves
incorrect
Each Fund also has risks associated with investing in small companies.
Compared to large companies, small companies, and the market for their equity
securities, are likely to:
8
o Be more sensitive to changes in the economy, earnings results and
investor expectations
o Have more limited product lines and capital resources
o Experience sharper swings in market values
o Be harder to sell at the times and prices the adviser or subadviser
thinks appropriate
o Offer greater potential for gain or loss
Investing in non-U.S. issuers may involve unique risks compared to
investing in securities of U.S. issuers. These risks are more pronounced to the
extent the Fund invests in issuers in countries with emerging markets or if the
Fund invests significantly in one country. These risks may include:
o Less information about non-U.S. issuers or markets may be available
due to less rigorous disclosure or accounting standards or regulatory
practices
o Many non-U.S. markets are smaller, less liquid and more volatile. In a
changing market, the adviser/subadviser might 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 non-U.S. countries may grow at slower rates than
expected or may experience a downturn or recession
o Economic, political and social developments may adversely affect the
securities markets
o Withholding and other non-U.S. taxes may decrease the Fund's return
In addition, at times, more than 25% of Pioneer Growth Opportunities Fund's
assets may be invested in the same market segment, such as financial or
technology. To the extent the Fund emphasizes investments in a market segment,
the Fund will be subject to a greater degree to the risks particular to the
industries in that segment, and may experience greater market fluctuation, than
a fund without the same focus.
Past Performance
Set forth below is performance information for each Fund. The bar charts
show how each Fund's total return (not including any deduction for sales
charges) has varied from year to year for each full calendar year. The tables
show average annual total return (before and after taxes) for each Fund over
time for each class of shares (including deductions for sales charges) compared
with a broad-based securities market index. The bar charts give an indication of
the risks of investing in each Fund, including the fact that you could incur a
loss and experience volatility of returns year to year. Past performance before
and after taxes does not indicate future results.
9
AmSouth Small Cap Fund -- Class A Shares
Calendar Year Total Returns*
[DATA BELOW IS REPRESENTED BY A BAR CHART IN THE ORIGINAL REPORT]]
1999 2000 2001 2002 2003 2004
15.97 18.68 -27.81 -26.75 34.42 13.89
* During the period shown in the bar chart, your AmSouth Fund's highest
quarterly return was 27.37% for the quarter ended December 31, 1999, and
the lowest quarterly return was -20.17% for the quarter ended September 30,
2001.
Pioneer Growth Opportunities Fund -- Class A Shares
Calendar Year Total Returns*
[DATA BELOW IS REPRESENTED BY A BAR CHART IN THE ORIGINAL REPORT]]
1997 1998 1999 2000 2001 2002 2003 2004
49.61 4.47 2.43 -4.52 21.66 -37.05 43.67 22.23
* During the period shown in the bar chart, Pioneer Growth Opportunities
Fund's highest quarterly return was 34.38% for the quarter ended June 30,
2001, and the lowest quarterly return was -26.86% for the quarter ended
September 30, 2002.
Pursuant to an agreement and plan of reorganization, Pioneer Growth
Opportunities Fund's Investor Class acquired all of the assets and those
liabilities reflected in the net assets of Safeco Growth Opportunities Fund (the
predecessor fund) on December 10, 2004. In the reorganization, the predecessor
fund exchanged all of its assets for Investor Class shares of the Fund. The
predecessor fund offered an Investor Class and other classes of shares similar
to the Fund's Class A, B and C shares. As a result of the reorganization,
Pioneer Growth Opportunities Fund is the accounting successor of the predecessor
fund. The predecessor fund operated as a registered investment company like the
Fund. The performance of each class of the Fund includes the performance of the
predecessor fund's Class A and Class B shares prior to the reorganization, which
has been restated to reflect differences in any applicable sales charges (but
not differences in expenses). If all the expenses of Pioneer Growth
Opportunities Fund were reflected, the performance would be lower. Since August
2, 2004 and prior to the reorganization, Pioneer served as the predecessor
fund's investment adviser. Previously, Safeco Asset Management Company served as
the predecessor fund's investment adviser. The Fund's Investor Class shares are
not offered in the Reorganization.
10
AmSouth Small Cap Fund
Average Annual Total Returns as of December 31, 2004
- ---------------------------------------------------------------------------------------------------------------------------
1 Year 5 Years Since Inception (3/2/98)
- ---------------------------------------------------------------------------------------------------------------------------
AmSouth Small Cap Fund, Class A Shares(1)
- ---------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 7.65% -1.91% -0.12%
- ---------------------------------------------------------------------------------------------------------------------------
Return After Taxes on 7.65% -2.59% -0.63%
Distributions
- ---------------------------------------------------------------------------------------------------------------------------
Return After Taxes on 4.97% -1.96% -0.37%
Distributions and Sale of
Fund Shares
- ---------------------------------------------------------------------------------------------------------------------------
AmSouth Small Cap Fund, Class B Shares(1)
- ---------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 8.02% -1.89% -0.09%
- ---------------------------------------------------------------------------------------------------------------------------
AmSouth Small Cap Fund, Class I Shares(1)
- ---------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 13.95% -0.65% 0.85%
- ---------------------------------------------------------------------------------------------------------------------------
Return After Taxes on 13.95% -1.34% 0.34%
Distributions
- ---------------------------------------------------------------------------------------------------------------------------
Return After Taxes on 9.06% -0.91% 0.46%
Distributions and Sale of
Fund Shares
- ---------------------------------------------------------------------------------------------------------------------------
Russell 2000 Growth Index(2) 14.31% -3.57% 1.77%
(reflects no deduction for
fees, expenses or taxes)
- ---------------------------------------------------------------------------------------------------------------------------
(1) Class A, B and I shares were first offered on 3/2/98.
(2) Russell 2000 Growth Index, an unmanaged index of common stocks of small- to
mid-sized companies, is not available for investment and does not reflect
fees, brokerage commissions or other expenses of investing.
The table above shows the impact of taxes on AmSouth Small Cap Fund's returns.
After-tax returns are only shown for Class A and Class I shares and may vary for
Class B shares. The Fund's after-tax returns are calculated using the highest
individual federal marginal income tax rates and do not reflect the impact of
state and local taxes. In certain cases, the figure representing "Return After
Taxes on Distributions and Sale of Fund Shares" may be higher than the other
return figures for the same period. A higher after-tax return results when a
capital loss occurs upon redemption and translates into an assumed tax deduction
that benefits the shareholder. Please note that actual after-tax returns depend
on an investor's tax situation and may differ from those shown. Also note that
after-tax returns shown are not relevant to investors who hold their Fund shares
through tax-deferred arrangements, such as 401(k) plans or individual retirement
accounts.
Pioneer Growth Opportunities Fund
Average Annual Total Returns as of December 31, 2004
- ------------------------------------------------------------------------------------------------------------------------------
1 Year 5 Years Since Inception
- ------------------------------------------------------------------------------------------------------------------------------
Pioneer Growth Opportunities Fund, Class A shares(1)
- ------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 15.19% 3.88% 11.76% (9/30/96)
- ------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions 15.19% 3.88% 10.56%
- ------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund 9.87% 3.34% 9.67%
Shares(1)
- ------------------------------------------------------------------------------------------------------------------------------
Pioneer Growth Opportunities Fund, Class B shares(1)
- ------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 17.21% 4.36% 11.67% (9/30/96)
- ------------------------------------------------------------------------------------------------------------------------------
Pioneer Growth Opportunities Fund, Class Y shares(2)
- ------------------------------------------------------------------------------------------------------------------------------
Russell 2000 Stock Index(3) 18.33% 6.61% 9.38%(4)
(reflects no deduction for fees, expenses or taxes)
- ------------------------------------------------------------------------------------------------------------------------------
(1) Reflects the inception date of the predecessor fund. Inception of Class A
and Class B shares was December 13, 2004.
11
(2) Class Y shares were not outstanding prior to the closing of the
Reorganization and consequently have no performance history. However, the
performance record of the Class Y shares would be modestly higher than the
performance of the Class A and Class B shares due to the lower expenses
applicable to Class Y shares.
(3) The Russell 2000 Stock Index measures, an unmanaged index of U.S. small cap
stocks, is for reference only, does not mirror the Fund's investments, and
reflects no deduction for fees, expenses or taxes.
(4) Reflects the return of the index since the inception of Class A and Class B
shares.
After-tax returns are calculated using the historical highest individual federal
marginal income tax rates and do not reflect the impact of state and local
taxes. Actual after-tax returns depend on your situation and may differ from
those shown, and the after-tax returns shown are not relevant to shareholders
who hold Fund shares through tax-deferred arrangements such as 401(k) plans or
IRA accounts, or to investors that are tax-exempt.
The most recent portfolio manager's discussion of each Fund's performance is
attached as Exhibit C.
The Funds' Fees and Expenses
Shareholders of both Funds pay various fees and expenses, either directly
or indirectly. The tables below show the fees and expenses that you would pay if
you were to buy and hold shares of each Fund. The expenses in the tables
appearing below are based on (i) for the AmSouth Small Cap Fund, the expenses of
AmSouth Small Cap Fund for the period ended January 31, 2005, and (ii) for
Pioneer Growth Opportunities Fund, the expenses of Pioneer Growth Opportunities
Fund for the period ended December 31, 2004. Future expenses for all share
classes may be greater or less. The tables also show the pro forma expenses of
the combined Fund assuming the Reorganization occurred on December 31, 2004.
- ---------------------------------------------------------------------------------------------------------------------
Shareholder AmSouth Pioneer Combined AmSouth Pioneer Combined AmSouth Combined
transaction Small Cap Growth Fund (Pro Small Cap Growth Fund (Pro Small Cap Fund (Pro
fees (paid Fund(1) Opportunities Forma) Fund(1) Opportunities Forma) Fund(1) Forma)
directly from Fund Fund
your
investment) Class A Class A Class A Class B Class B Class B Class I Class Y(10)
- ---------------------------------------------------------------------------------------------------------------------
Maximum sales 5.50%(2) 5.75% 5.75% None None None None None
charge (load)
when you buy
shares as a
percentage of
offering price
- ---------------------------------------------------------------------------------------------------------------------
Maximum None None(6) None 5.00%(3) 4.00% 4.00% None None
deferred sales
charge (load)
as a
percentage of
purchase price
or the amount
you receive
when you sell
shares,
whichever is
less
- ---------------------------------------------------------------------------------------------------------------------
Redemption 2.00%(4) None None 2.00%(4) None None 2.00%(4) None
fees
- ---------------------------------------------------------------------------------------------------------------------
Annual fund
operating
expenses
(deducted from
fund assets)
(as a % of
average net
assets)
- ---------------------------------------------------------------------------------------------------------------------
Management fee 0.90% 0.65% 0.65% 0.90% 0.65% 0.65% 0.90% 0.65%
- ---------------------------------------------------------------------------------------------------------------------
12
- ---------------------------------------------------------------------------------------------------------------------
Distribution None 0.25% 0.25% 0.75% 1.00% 1.00% None None
and service
(12b-1) fee
- ---------------------------------------------------------------------------------------------------------------------
Other expenses 0.85%(5) 1.39%(7) 0.52% 1.11%(5) 0.68%(7) 0.48% 0.64%(5) 0.25%
- ---------------------------------------------------------------------------------------------------------------------
Total fund 1.75% 2.29%(8) 1.27% 2.76% 2.33%(8) 2.08% 1.54% 0.75%
operating
expenses
- ---------------------------------------------------------------------------------------------------------------------
Expense 0.28% 0.99%(9) N/A 0.54% 0.99%(9) N/A 0.22% N/A
reimbursement/
reduction
- ---------------------------------------------------------------------------------------------------------------------
Net fund 1.47% 1.30% 1.27% 2.22% 1.34% 2.08% 1.32% 0.75%
operating
expenses
- ---------------------------------------------------------------------------------------------------------------------
(1) AmSouth Bank or other financial institutions may charge their customer
account fees for automatic investment and other cash management services
provided in connection with investment in the Fund.
(2) Sales charges may be reduced depending upon the amount invested or, in
certain circumstances, waived. Class A shares bought as part of an
investment of $1 million or more are not subject to an initial sales
charge, but may be charged a CDSC of 1.00% if sold within one year of
purchase.
(3) For Class B shares purchased prior to the combination of AmSouth Funds with
ISG Funds, the CDSC on such Class B shares held continuously declines over
six years, starting with year one and ending in year seven from: 4%, 3%,
3%, 2%, 2%, 1%. For all other Class B shares held continuously, the CDSC
declines over six years, starting with year one and ending in year seven
from: 5%, 4%, 3%, 3%, 2%, 1%. Eight years after purchase (seven years in
the case of shares acquired in the ISG combination), Class B shares
automatically convert to Class A shares.
(4) To discourage short-term trading, a redemption fee of 2.00% will be charged
on sales or exchanges of Class A, Class B and Class I shares of your
AmSouth Fund made within 30 days of the date of purchase. A wire transfer
fee of $7.00 will be deducted from the amount of your redemption if you
request a wire transfer.
(5) Other expenses for your AmSouth Fund are being limited to 0.57% for Class A
shares, 0.57% for Class B shares and 0.42% for Class I shares. Any fee
waiver or expense reimbursement arrangement is voluntary and may be
discontinued at any time.
(6) Purchases of $1 million or more and purchases by participants in certain
group plans are not subject to an initial sales charge but may be subject
to a contingent deferred sales charge of 1%.
(7) Other expenses are based on estimated amounts for the current fiscal year.
(8) Pioneer Growth Opportunities Fund's total annual operating expenses in the
table have not been reduced by any expense offset arrangements.
(9) The expenses in the table above reflect the expense limitation in effect
through May 1, 2006 under which Pioneer has contractually 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 1.30% of the average daily net assets attributable to Class A
shares; the portion of Fund expenses (including the amount of the
management fee waived) attributable to Class B and Class Y shares will be
reduced only to the extent such expenses are reduced for Class A shares.
There can be no assurance that Pioneer will extend the expense limitation
beyond May 1, 2006.
(10) Class Y shares of Pioneer Growth Opportunities Fund are being offered for
the first time in connection with the Reorganization.
The hypothetical example below helps you compare the cost of investing in
each Fund. It assumes that: (a) you invest $10,000 in each Fund for the time
periods shown, (b) you reinvest all dividends and distributions, (c) your
investment has a 5% return each year, and (d) each Fund's gross operating
expenses remain the same. The examples are for comparison purposes only and are
not a representation of either Fund's actual expenses or returns, either past or
future.
13
- ------------------------------------------------------------------------------------------------------------
Number of years you AmSouth Small Cap Fund Pioneer Growth Opportunities Combined Fund
own your shares Fund (Pro Forma)
- ------------------------------------------------------------------------------------------------------------
Class A
- ------------------------------------------------------------------------------------------------------------
Year 1 $718 $700 $696
- ------------------------------------------------------------------------------------------------------------
Year 3 $1,071 $1,160 $953
- ------------------------------------------------------------------------------------------------------------
Year 5 $1,447 $1,645 $1,229
- ------------------------------------------------------------------------------------------------------------
Year 10 $2,499 $2,977 $2,015
- ------------------------------------------------------------------------------------------------------------
Class B -- assuming redemption at end of period
- ------------------------------------------------------------------------------------------------------------
Year 1 $779 $536 $611
- ------------------------------------------------------------------------------------------------------------
Year 3 $1,156 $932 $952
- ------------------------------------------------------------------------------------------------------------
Year 5 $1,659 $1,255 $1,219
- ------------------------------------------------------------------------------------------------------------
Year 10 $2,847 $2,580 $2,203
- ------------------------------------------------------------------------------------------------------------
Class B -- assuming no redemption
- ------------------------------------------------------------------------------------------------------------
Year 1 $279 $136 $211
- ------------------------------------------------------------------------------------------------------------
Year 3 $856 $632 $652
- ------------------------------------------------------------------------------------------------------------
Year 5 $1,459 $1,155 $1,119
- ------------------------------------------------------------------------------------------------------------
Year 10 $2,847 $2,580 $2,203
- ------------------------------------------------------------------------------------------------------------
Class I Class Y
- ------------------------------------------------------------------------------------------------------------
Year 1 $157 N/A $77
- ------------------------------------------------------------------------------------------------------------
Year 3 $486 N/A $240
- ------------------------------------------------------------------------------------------------------------
Year 5 $839 N/A $417
- ------------------------------------------------------------------------------------------------------------
Year 10 $1,834 N/A $931
- ------------------------------------------------------------------------------------------------------------
Reasons for the Proposed Reorganization
The Trustees believe that the proposed Reorganization is in the best
interests of AmSouth Small Cap Fund. The Trustees considered the following
matters, among others, in approving the proposal.
First, AAMI, the investment adviser to your AmSouth Fund, informed the
Trustees that it does not intend to continue to provide investment advisory
services to the AmSouth Funds. Consequently, a change in your AmSouth Fund's
investment adviser was necessary. In the absence of the Reorganization, such a
change would be more likely to motivate shareholders invested in reliance on
AAMI's role to withdraw from the Fund, thereby reducing fund size and increasing
fund expense ratios.
Second, after the Reorganization, the combined Fund will have an asset size
substantially larger than that of your AmSouth Fund, which may allow the
combined Fund to achieve significant economies of scale in investments or
expenses.
Third, the historical investment performance of Pioneer Growth
Opportunities Fund exceeds your AmSouth Fund's investment performance. For the
one and five year periods ended December 31, 2004, Class A shares of Pioneer
Growth Opportunities Fund had an average annual return of 15.19% (one year); and
3.88% (five year); compared to an average annual return of the Class A shares of
your AmSouth Fund of 7.65% (one year); and -1.91% (five year), respectively,
during the same period. In addition, the Trustees considered the track record of
Pioneer in managing equity and fixed income mutual funds.
Fourth, the resources of Pioneer. At December 31, 2004, Pioneer managed
over 80 investment companies and accounts with approximately $42 billion in
assets. Pioneer is part of the global asset management group of UniCredito
Italiano S.p.A., one of the largest banking groups in Italy, providing
investment management and financial services to mutual funds, institutional and
other clients. As of December 31, 2004, assets under management of UniCredito
Italiano S.p.A. were approximately $175 billion worldwide. Shareholders of your
AmSouth Fund would become part of a significantly larger family of funds that
offers a more diverse array of investment options and enhanced shareholder
account options. The Pioneer family of mutual funds offers over 80 funds,
including domestic and international equity and fixed income funds and a money
market fund that will be available to your AmSouth Fund's shareholders through
exchanges.
Fifth, Pioneer Fund's management fee (0.65% of average daily net assets) is
substantially lower than the advisory fee of your Fund (0.90% of average daily
net assets). Although the historical gross expenses of Class A shares of Pioneer
Growth
14
Opportunities Fund are higher than your Fund's historical gross expenses for
Class A shares, the historical gross and net expenses for Class B shares of the
Pioneer Fund, and estimated pro forma expenses of the Pioneer Fund attributable
to Class A, B and Y shares after giving effect to the Reorganization on both a
gross and net basis are lower than your Fund's gross and net operating expenses.
The aggregate Rule 12b-1 distribution and shareholder servicing fees and
non-Rule 12b-1 shareholder servicing fees paid by the Class A and Class B shares
of both Funds are the same. Moreover, your AmSouth Fund's Class I shares pay a
non 12b-1 shareholder servicing fee that is not paid by the Pioneer Fund's Class
Y shares. In addition, the broader distribution arrangements of the Pioneer Fund
offer greater potential for further asset growth and reduced per share expenses.
Sixth, the substantially larger size of the combined Pioneer Growth
Opportunities Fund will offer greater opportunity for diversification of the
investment portfolio, which should help to reduce risks.
Seventh, the Class A, B and Y shares of Pioneer Growth Opportunities Fund
received in the Reorganization will provide AmSouth Small Cap Fund shareholders
with exposure to substantially the same investment product as they currently
have.
Eighth, the transaction is structured to qualify as a tax-free
reorganization under Section 368(a) of the Internal Revenue Code of 1986 and
therefore will not be treated as a taxable sale of your AmSouth shares.
Pioneer and AmSouth Bank will pay all costs of preparing and printing the
Funds' proxy statements and solicitation costs incurred by the Funds in
connection with the Reorganization. AAMI will otherwise be responsible for all
costs and expenses of the AmSouth Fund in connection with the Reorganizations.
The Trustees also considered that Pioneer and AmSouth Bank will benefit
from the Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the
Reorganizations."
The Board of Trustees of the Pioneer Fund also considered that the
Reorganization presents an excellent opportunity for the Pioneer Fund to acquire
investment assets without the obligation to pay commissions or other transaction
costs that a fund normally incurs when purchasing securities. This opportunity
provides an economic benefit to the Pioneer Fund and its shareholders.
CAPITALIZATION
The following table sets forth the capitalization of each Fund as of May
31, 2005, and the pro forma combined Fund as of May 31, 2005.
- ------------------------------------------------------------------------------------------------------------------------------------
Pioneer Growth Pro Forma Pioneer
AmSouth Small Cap Opportunities Growth Opportunities
Fund Fund Fund
May 31, 2005 May 31, 2005 May 31, 2005
- ------------------------------------------------------------------------------------------------------------------------------------
Total Net Assets (in thousands) $257,277 $450,076 $707,352
- ------------------------------------------------------------------------------------------------------------------------------------
Class A shares ................................... $10,487 $31,515 $42,002
- ------------------------------------------------------------------------------------------------------------------------------------
Class B shares ................................... $2,523 $338 $2,861
- ------------------------------------------------------------------------------------------------------------------------------------
Class I/Y shares ................................. $244,267 N/A $244,267
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value Per Share
- ------------------------------------------------------------------------------------------------------------------------------------
Class A shares ................................... $9.18 $28.16 $28.16
- ------------------------------------------------------------------------------------------------------------------------------------
Class B shares ................................... $8.67 $26.32 $26.32
- ------------------------------------------------------------------------------------------------------------------------------------
Class I/Y shares ................................. $9.32 N/A $28.16
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Outstanding
- ------------------------------------------------------------------------------------------------------------------------------------
Class A shares ................................... 1,142,354 1,119,263 1,491,720
- ------------------------------------------------------------------------------------------------------------------------------------
Class B shares ................................... 290,839 12,846 108,684
- ------------------------------------------------------------------------------------------------------------------------------------
Class I/Y shares ................................. 26,215,302 N/A 8,675,149
- ------------------------------------------------------------------------------------------------------------------------------------
It is impossible to predict how many shares of the Pioneer Fund will
actually be received and distributed by your AmSouth Fund on the Reorganization
date. The table should not be relied upon to determine the amount of the Pioneer
Fund's shares that will actually be received and distributed.
15
BOARD'S EVALUATION AND RECOMMENDATION
For the reasons described above, the Trustees, including the Independent
Trustees, approved the Reorganization. In particular, the Trustees determined
that the Reorganization is in the best interests of your AmSouth Fund.
Similarly, the Board of Trustees of the Pioneer Fund, including its Independent
Trustees, approved the Reorganization. They also determined that the
Reorganization is in the best interests of the Pioneer Fund.
The Trustees recommend that the shareholders of your AmSouth Fund vote FOR
the proposal to approve the Agreement and Plan of Reorganization.
16
AmSouth International Equity Fund and
Pioneer International Core Equity Fund
PROPOSAL 1(g)
Approval of Agreement and Plan of Reorganization
SUMMARY
The following is a summary of more complete information appearing later in
this Proxy Statement/Prospectus or incorporated herein. You should read
carefully the entire Proxy Statement/Prospectus, including the form of Agreement
and Plan of Reorganization attached as EXHIBIT A-2, because it contains details
that are not in the summary.
Each Fund invests in securities of international issuers and, consequently,
each Fund has similar investment policies and risks. In the table below, if a
row extends across the entire table, the policy disclosed applies to both your
AmSouth Fund and the Pioneer Fund.
Comparison of AmSouth International Equity Fund to
Pioneer International Core Equity Fund
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth International Equity Fund Pioneer International Core Equity Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Business A non-diversified series of AmSouth Funds, an A newly created diversified series of Pioneer
open-end management investment company series Trust IV, an open-end management
organized as a Massachusetts business trust. investment company organized as a Delaware
statutory trust.
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets as of March 31, 2005 $479.2 million None. Pioneer International Core Equity Fund
is newly created and does not expect to
commence investment operations until the
Reorganization occurs.
- ------------------------------------------------------------------------------------------------------------------------------------
Investment advisers and Investment Adviser: Investment Adviser:
portfolio managers AAMI Pioneer
Investment Subadviser: Portfolio Manager:
Dimensional Fund Advisors Inc. Day-to-day management of the Fund's portfolio
("Dimensional") will be the responsibility of Christopher
Smart. Mr. Smart is supported by a team of
Portfolio Manager: portfolio managers and analysts. The members
Day-to-day management of AmSouth of this team manage other Pioneer funds
International Equity Fund's portfolio is the investing primarily in international
responsibility of Karen E. Umland. Ms. Umland securities. The portfolio manager and team
joined Dimensional in 1993 and has been also may draw upon the research and
responsible for the international equity investment management expertise of the global
portfolios advised by Dimensional since 1998. research team, which provides fundamental
She coordinates the portfolio managers and research on companies and buy and sell
trading personnel that comprise the recommendations on equity securities, and
Investment Committee of Dimensional that have includes members from Pioneer's affiliate,
served as investment sub-adviser to the Pioneer Investment Management Limited. Mr.
AmSouth Fund since July 2002. The Investment Smart, senior vice president and director of
Committee meets on a regular basis and also international investments, joined Pioneer in
as needed to consider investment issues. The 1995 as director of research of Pioneer First
Investment Committee is composed of certain Investments, Moscow, Russia.
officers and directors of Dimensional who are
elected annually.
- ------------------------------------------------------------------------------------------------------------------------------------
1
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth International Equity Fund Pioneer International Core Equity Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Investment objective AmSouth International Equity Fund seeks to Pioneer International Core Equity Fund seeks
provide investors with capital appreciation. long-term capital growth.
- ------------------------------------------------------------------------------------------------------------------------------------
Primary investments Under normal circumstances, the Fund will Normally, the Fund invests at least 80% of
invest at least 80% of its net assets in its total assets in equity securities of
equity securities. For the purpose of this non-U.S. issuers.
policy, net assets include net assets plus
borrowings for investment purposes. The Fund The Fund focuses on securities of issuers
invests its assets primarily in equity located in countries with developed markets
securities of non-U.S. companies (i.e., (other than the United States) but may
incorporated or organized outside the United allocate up to 10% of its assets in countries
States). with emerging economies or securities
markets. Developed markets outside the United
The Fund seeks to achieve its objective by States generally include, but are not limited
investing in the stocks of large non-U.S. to, the countries included in the Morgan
companies that Dimensional determines to be Stanley Capital International Europe,
value stocks at the time of purchase. Australasia, Far East Index. The Fund's
Securities are considered value stocks assets must be allocated to securities of
primarily because a company's shares have a issuers located in at least three non-U.S.
high book value in relation to their market countries. For purposes of the Fund's
value (a "book to market ratio"). In investment policies, equity securities
assessing value, Dimensional may consider include common stocks, convertible debt and
additional factors such as price to cash flow other equity instruments, such as depositary
or price to earnings ratios as well as receipts, warrants, rights and preferred
economic conditions and developments in the stocks. The Fund may also purchase and sell
issuer's industry. The criteria Dimensional forward foreign currency exchange contracts
uses for assessing value are subject to in non-U.S. currencies in connection with its
change from time to time. investments.
The Fund intends to invest in the stocks of
large companies in countries with developed
markets. Under normal market conditions, the
Fund intends to invest in companies organized
or having a majority of their assets in or
deriving a majority of their operating income
in at least three non-U.S. countries, and no
more than 40% of the Fund's assets are
invested in such companies in any one
country. Dimensional determines company size
on a country or region specific basis and
based primarily on market capitalization. In
the countries or regions authorized for
investment, the subadviser first ranks
eligible companies listed on selected
exchanges based on the companies' market
capitalizations. Dimensional then determines
the universe of eligible stocks by defining
the minimum market capitalization of a large
company that may be purchased by the Fund
with respect to each country or region. As of
the date of this Proxy Statement/Prospectus,
on an aggregate basis for the Fund,
Dimensional considers large companies to be
those companies with a market capitalization
of at least $716 million. This threshold will
vary by country or region and will change
with market conditions.
- ------------------------------------------------------------------------------------------------------------------------------------
2
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth International Equity Fund Pioneer International Core Equity Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Investment strategies Dimensional believes that equity investing Pioneer International Core Equity Fund uses a
should involve a long-term view and a focus "growth at a reasonable price" style of
on asset class selection, not stock picking. management. The Fund seeks to invest in
It places priority on limiting expenses, issuers with above average potential for
portfolio turnover and trading costs. earnings and revenue growth that are also
Generally, the subadviser structures a trading at attractive market valuations. To
portfolio by: 1) starting with a universe of select stocks, Pioneer employs due diligence
securities, 2) creating a sub-set of and fundamental research, an evaluation of
companies meeting the subadviser's investment the issuer based on its financial statements
guidelines, 3) excluding certain companies and operations. Pioneer relies on the
after analyzing various factors and 4) knowledge, experience and judgment of its
purchasing stocks so the portfolio is staff who have access to a wide variety of
generally market capitalization weighted research. Pioneer focuses on the quality and
within countries. price of individual issuers, not on economic
sector or market-timing strategies. Factors
The value criteria used by Dimensional, as Pioneer looks for in selecting investments
described above, generally apply at the time include:
of purchase by the Fund. The Fund is not
required to dispose of a security if the o Favorable expected returns relative to
security's issuer does not meet current value perceived risk
criteria. Similarly, Dimensional is not
required to sell a security even if the o Above average potential for earnings and
decline in the market capitalization reflects revenue growth
a serious financial difficulty or potential
or actual insolvency of the company. o Issuer's industry has strong fundamentals,
Securities which do meet the market such as increasing or sustainable demand
capitalization and/or value criteria and barriers to entry
nevertheless may be sold at any time when, in
Dimensional's judgment, circumstances warrant o Low market valuations relative to earnings
their sale. forecast, book value, cash flow and sales.
The Fund is non-diversified and, therefore, Pioneer generally sells a portfolio security
may concentrate its investments in a limited when it believes that the issuer no longer
number of issuers. offers the potential for above average
earnings and revenue growth. Pioneer makes
The Fund intends to purchase securities that determination based upon the same
within each applicable country or region criteria it uses to select portfolio
using a market capitalization weighted securities.
approach. Dimensional, using this approach
and its best judgment, will seek to set
country or region weights based on the
relative market capitalization of eligible
large companies within each country or
region. When investing on a market
capitalization weighted basis, Dimensional
will use a market capitalization weighted
approach which may include adjusting that
weighting to consider such factors as free
float, trading strategies, liquidity
management and other factors that Dimensional
determines appropriate, given market
conditions. As a result, the weighting of
certain countries in the Fund's portfolio may
vary from their weighting in international
indices such as those published by FTSE
International, Morgan Stanley Capital
- ------------------------------------------------------------------------------------------------------------------------------------
3
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth International Equity Fund Pioneer International Core Equity Fund
- ------------------------------------------------------------------------------------------------------------------------------------
International or Salomon/Smith Barney.
- ------------------------------------------------------------------------------------------------------------------------------------
Other investments The Fund is not required to invest The Fund may invest up to 20% of its total
exclusively in common stocks or other equity assets in debt securities, cash and cash
securities, and, if deemed advisable, the equivalents. The debt securities may be
Fund may invest, to a limited extent, in issued by U.S. or non-U.S. corporate and
fixed income securities and money market government issuers. Generally the Fund
instruments. The Fund will not invest in acquires debt securities that are investment
fixed income securities rated lower than A by grade, but the Fund may invest up to 5% of
a credit rating agency, such as Moody's, its net assets in below investment grade
Standard & Poor's Ratings Group or Fitch convertible debt securities.
Ratings, or, if unrated, deemed to be of
comparable quality by AAMI. 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 statistical rating
organization or determined to be of
equivalent credit quality by Pioneer. Debt
securities rated below investment grade are
commonly referred to as "junk bonds" and are
considered speculative. Below investment
grade debt securities involve greater risk of
loss, are subject to greater price volatility
and are less liquid, especially during
periods of economic uncertainty or change,
than higher quality debt securities.
- ------------------------------------------------------------------------------------------------------------------------------------
Temporary defensive strategies When AAMI determines adverse market Pioneer International Core Equity Fund may
conditions exist, AmSouth International invest all or part of its assets in
Equity Fund may invest entirely in cash securities with remaining maturities of less
positions, directly in U.S. Government than one year, cash equivalents or may hold
securities and short-term paper, such as cash.
bankers' acceptances.
- ------------------------------------------------------------------------------------------------------------------------------------
Diversification AmSouth International Equity Fund is Pioneer International Core Equity Fund is
non-diversified for the purpose of the diversified for the purpose of the Investment
Investment Company Act and, therefore, may Company Act and is subject to diversification
concentrate its investments in a limited requirements under the Internal Revenue Code
number of issuers. of 1986, as amended (the "Code").
AmSouth International Equity Fund may not
purchase securities of any one issuer, other
than obligations issued or guaranteed by the
U.S. government or its agencies or
instrumentalities if, immediately after such
purchase, more than 5% of the value of its
total assets would be invested in such issuer
(except that up to 50% of the value of the
Fund's total assets may be invested without
regard to such 5% limitation). For purposes
of this limitation, a security is
- ------------------------------------------------------------------------------------------------------------------------------------
4
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AmSouth International Equity Fund Pioneer International Core Equity Fund
- ------------------------------------------------------------------------------------------------------------------------------------
considered to be issued by the government
entity (or entities) whose assets and
revenues back the security; with respect to a
private activity bond that is backed only by
the assets and revenues of a non-government
user, a security is considered to be issued
by such non-governmental user.
- ------------------------------------------------------------------------------------------------------------------------------------
Industry concentration AmSouth International Equity Fund may Pioneer International Core Equity Fund may
purchase any securities which would cause not invest more than 25% of its assets in any
more than 25% of the value of the Fund's one industry.
total assets at the time of purchase to be
invested in securities of one or more issuers
conducting their principal business
activities in the same industry, provided
that (a) there is no limitation with respect
to obligations issued or guaranteed by the
U.S. government or its agencies or
instrumentalities, and repurchase agreements
secured by obligations of the U.S. government
or its agencies or instrumentalities; (b)
wholly owned finance companies will be
considered to be in the industries of their
parents if their activities are primarily
related to financing the activities of their
parents; and (c) utilities will be divided
according to their services. For example,
gas, gas transmission, electric and gas,
electric, and telephone will each be
considered a separate industry.
There is no limitation with respect to
municipal securities, which, for purposes of
this limitation only, do not include private
activity bonds that are backed only by the
assets and revenues of a non-governmental
user.
- ------------------------------------------------------------------------------------------------------------------------------------
Restricted and illiquid AmSouth International Equity Fund may not Pioneer International Core Equity Fund may
securities invest more than 15% of its net assets in not invest more than 15% of its net assets in
securities that are restricted as to resale, securities that are illiquid and other
or for which no readily available market securities that are not readily marketable.
exists, including repurchase agreements Repurchase agreements maturing in more than
providing for settlement more than seven days seven days will be included for purposes of
after notice. the foregoing limit.
- ------------------------------------------------------------------------------------------------------------------------------------
Borrowing AmSouth International Equity Fund may not Pioneer International Core Equity Fund may
borrow money or issue senior securities, lend portfolio securities with a value that
except that the Fund may borrow from banks or may not exceed 33 1/3% of the value of the
enter into reverse repurchase agreements for Fund's total assets.
temporary emergency purposes in amounts up to
33 1/3% of the value of its total assets at
the time of such borrowing. The Fund will not
purchase securities while borrowings
(including reverse repurchase agreements) in
excess of 5% of its total assets are
outstanding. In addition, the Fund is
permitted to participate
- ------------------------------------------------------------------------------------------------------------------------------------
5
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AmSouth International Equity Fund Pioneer International Core Equity Fund
- ------------------------------------------------------------------------------------------------------------------------------------
in a credit facility whereby the Fund may
directly lend to and borrow money from other
AmSouth Funds for temporary purposes,
provided that the loans are made in
accordance with an order of exemption from
the SEC and any conditions thereto.
- ------------------------------------------------------------------------------------------------------------------------------------
Lending AmSouth International Equity Fund may not Pioneer International Core Equity Fund may
make loans, except that the Fund may purchase make loans, except by the purchase of debt
or hold debt instruments in accordance with obligations in which the Fund may invest
its investment objective and policies, lend consistent with its investment policies, by
Fund securities in accordance with its entering into repurchase agreements or
investment objective and policies and enter through the lending of portfolio securities,
into repurchase agreements. In addition, the in each case only to the extent permitted by
Fund is permitted to participate in a credit the prospectus and this statement of
facility whereby the Fund may directly lend additional information.
to and borrow money from other AmSouth Funds
for temporary purposes, provided that the
loans are made in accordance with an order of
exemption from the SEC and any conditions
thereto.
- ------------------------------------------------------------------------------------------------------------------------------------
Derivative instruments AmSouth International Equity Fund may invest Pioneer International Core Equity Fund may
in futures contracts and options thereon use futures and options on securities,
(interest rate futures contracts or index indices and currencies, forward currency
futures contracts, as applicable) to commit exchange contracts and other derivatives. The
funds awaiting investment, to maintain cash Fund does not use derivatives as a primary
liquidity or for other hedging purposes. The investment technique and generally limits
value of the Fund's contracts may equal or their use to hedging. However, the Fund may
exceed 100% of the Fund's total assets, use derivatives for a variety of
although the Fund will not purchase or sell a non-principal purposes, including:
futures contract unless immediately
afterwards the aggregate amount of margin o As a hedge against adverse changes in
deposits on its existing futures positions stock market prices, interest rates or
plus the amount of premiums paid for related currency exchange rates
futures options entered into for other than
bona fide hedging purposes is 5% or less of o As a substitute for purchasing or selling
its net assets. securities
The AmSouth Fund also may write covered put o To increase the Fund's return as a
options in respect of specific securities in non-hedging strategy that may be
which the Fund may invest and write covered considered speculative
call and put option contracts. The size of
the premiums that the Fund may receive may be
adversely affected as new or existing
institutions, including other investment
companies, engage in or increase their
option-writing activities.
- ------------------------------------------------------------------------------------------------------------------------------------
Short-term trading The AmSouth International Equity Fund may Pioneer International Core Equity Fund does
engage in the technique of short-term not usually trade for short-term profits. The
trading. Such trading involves the selling of Fund will sell an investment, however, even
securities held for a short time, ranging if it has only been held for a short time, if
from several months to less than a day. The it no longer meets the Fund's investment
object of such short-term trading is to criteria.
increase the potential for capital
appreciation and/or income of the
- ------------------------------------------------------------------------------------------------------------------------------------
6
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth International Equity Fund Pioneer International Core Equity Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Fund in order to take advantage of what AAMI
believes are changes in market, industry or
individual company conditions or outlook.
- ------------------------------------------------------------------------------------------------------------------------------------
Other investment policies As described above, the Funds have substantially similar principal investment strategies and
and restrictions policies. Certain of the non-principal investment policies and restrictions are different. For
a more complete discussion of each Fund's other investment policies and fundamental and
non-fundamental investment restrictions, see the SAI.
- ------------------------------------------------------------------------------------------------------------------------------------
Buying, Selling and Exchanging Shares
- ------------------------------------------------------------------------------------------------------------------------------------
Class A sales charges Class A shares are offered with an initial Class A shares are offered with an initial
and Rule 12b-1 fees sales charge of up to 5.50% of the offering sales charge of up to 5.75% of the offering
price, which is reduced depending upon the price, which is reduced or waived for large
amount invested or, in certain circumstances, purchases and certain types of investors. At
waived. Class A shares bought as part of an the time of your purchase, your investment
investment of $1 million or more are not firm may receive a commission from Pioneer
subject to an initial sales charge, but may Funds Distributor, Inc. ("PFD"), the Fund's
be charged a contingent deferred sales charge distributor, of up to 5% declining as the
("CDSC") of 1.00% if sold within one year of size of your investment increases.
purchase.
There is no CDSC except in certain
Class A shares pay a shareholder servicing circumstances when the initial sales charge
fee (non 12b-1) of up to 0.25% of average is waived.
daily net assets.
Class A shares are subject to distribution
and service (12b-1) fees of up to 0.25% of
average daily net assets.
- ------------------------------------------------------------------------------------------------------------------------------------
Class B sales charges Class B shares are offered without an initial Class B shares are offered without an initial
and Rule 12b-1 fees sales charge, but are subject to a CDSC of up sales charge, but are subject to a CDSC of up
to 5%. For Class B shares purchased prior to to 4% if you sell your shares. The charge is
the combination of AmSouth Funds with ISG reduced over time and is not charged after
Funds, the CDSC on such Class B shares held five years. Your investment firm may receive
continuously declines over six years, a commission from PFD, the Fund's
starting with year one and ending in year distributor, at the time of your purchase of
seven from: 4%, 3%, 3%, 2%, 2%, 1%. For all up to 4%.
other Class B shares held continuously, the
CDSC declines over six years, starting with Class B shares are subject to distribution
year one and ending in year seven from: 5%, and service (12b-1) fees of up to 1% of
4%, 3%, 3%, 2%, 1%. Eight years after average daily net assets.
purchase (seven years in the case of shares
acquired in the ISG combination), Class B Maximum purchase of Class B shares in a
shares automatically convert to Class A single transaction is $49,999.
shares.
Class B shares acquired through the
Class B shares pay a shareholder servicing Reorganization will be subject to the CDSC
fee (non 12b-1) of up to 0.25% of average and commission schedules applicable to the
daily net assets and a distribution (12b-1) original purchase.
fee of 0.75% of average daily net assets.
Maximum investment for all Class B purchases
by a shareholder for the Fund's shares is
$99,999.
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7
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AmSouth International Equity Fund Pioneer International Core Equity Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Class I and Class Y sales AmSouth International Equity Fund does not The Fund does not impose any initial,
charges and Rule 12b-1 fees impose any initial or contingent deferred contingent deferred or asset based sales
sales charge on Class I shares. charge on Class Y shares.
The Fund may impose a shareholder servicing The distributor incurs the expenses of
fee (non 12b-1) of up to 0.15% of average distributing the Fund's Class Y shares, none
daily net assets. of which are reimbursed by the Fund or the
Class Y shareowners.
- ------------------------------------------------------------------------------------------------------------------------------------
Management and other fees AmSouth International Equity Fund pays an Pioneer International Core Equity Fund pays
advisory fee on a monthly basis at an annual Pioneer an annual fee equal to 0.95% of the
rate of 0.90% of the Fund's average daily net Fund's average daily net assets. The fee is
assets. computed daily and paid monthly.
ASO Services Company, Inc. ("ASO") serves as In addition, the Fund reimburses Pioneer for
administrator and fund accounting agent for certain fund accounting and legal expenses
the Fund. The Fund pays ASO an administrative incurred on behalf of the Fund and pays a
services fee of 0.15% of the Fund's average separate shareholder servicing/transfer
daily net assets. agency fee to PIMSS, an affiliate of Pioneer.
Other expenses of the Fund are being limited The Fund's total annual fund operating
to 0.42% for Class A shares, 0.41% for Class expenses are estimated to be 1.41% of average
B shares and 0.26% for Class I shares. Any daily net assets for Class A shares, 2.43%
fee waiver or expense reimbursement for Class B shares, and 1.10% for Class Y
arrangement is voluntary and may be shares for the current fiscal year.
discontinued at any time.
For the fiscal year ended July 31, 2004, the
Fund's annual operating expenses for Class A
shares, after giving effect to the expense
limitation were 1.32%, and without giving
effect to the expense limitation, were 1.43%
of average daily net assets.
For the fiscal year ended July 31, 2004, the
Fund's annual operating expenses for Class B
shares, after giving effect to the expense
limitation were 2.06%, and without giving
effect to the expense limitation, were 2.17%
of average daily net assets.
For the fiscal year ended July 31, 2004, the
Fund's annual operating expenses for Class I
shares, after giving effect to the expense
limitation were 1.16%, and without giving
effect to the expense limitation, were 1.32%
of average daily net assets.
- ------------------------------------------------------------------------------------------------------------------------------------
Buying shares You may buy shares of the Fund directly You may buy shares from any investment firm
through BISYS Fund Services, the Fund's that has a sales agreement with PFD, the
distributor, or through brokers, registered Pioneer Fund's distributor
investment advisers, banks and other
financial institutions that have entered into If the account is established in the
selling agreements with the Fund's shareholder's own name, shareholders may also
distributor, as purchase additional shares of the Pioneer
- ------------------------------------------------------------------------------------------------------------------------------------
8
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AmSouth International Equity Fund Pioneer International Core Equity Fund
- ------------------------------------------------------------------------------------------------------------------------------------
described in the Fund's prospectus. Fund by telephone or online.
Certain account transactions may be done by
telephone.
- ------------------------------------------------------------------------------------------------------------------------------------
Exchanging shares You can exchange your shares in the Fund for You may exchange your shares for shares of
shares of the same class of another AmSouth the same class of another Pioneer mutual
Fund, usually without paying additional sales fund. Your exchange request must be for at
charges. You must meet the minimum investment least $1,000. The Fund allows you to exchange
requirements for the Fund into which you are your shares at net asset value without
exchanging. Exchanges from one Fund to charging you either an initial or contingent
another are taxable. Class A shares may be deferred shares charge at the time of the
exchanged for Class I shares of the same Fund exchange. Shares you acquire as part of an
or another AmSouth Fund if you become exchange will continue to be subject to any
eligible to purchase Class I shares. Class I contingent deferred sales charge that applies
shares may be exchanged for Class A shares of to the shares you originally purchased. When
the same Fund. No transaction fees are you ultimately sell your shares, the date of
currently charged for exchanges. your original purchase will determine your
contingent deferred sales charge. An exchange
If you sell your shares or exchange them for generally is treated as a sale and a new
shares of another AmSouth Fund within 30 days purchase of shares for federal income tax
of the date of purchase, you will be charged purposes.
a 2.00% fee on the current net asset value of
the shares sold or exchanged. The fee is paid After you establish an eligible fund account,
to the Fund to offset the costs associated you can exchange Fund shares by telephone or
with short-term trading, such as portfolio online.
transaction and administrative costs.
The Fund uses a "first-in, first-out" method
to determine how long you have held your
shares. This means that if you purchased
shares on different days, the shares
purchased first will be considered redeemed
first for purposes of determining whether the
redemption fee will be charged.
The fee will be charged on all covered
redemptions and exchanges, including those
made through retirement plan, brokerage and
other types of omnibus accounts (except where
it is not practical for the plan
administrator or brokerage firm to implement
the fee). The Fund will not impose the
redemption fee on a redemption or exchange of
shares purchased upon the reinvestment of
dividend and capital gain distributions.
- ------------------------------------------------------------------------------------------------------------------------------------
Selling shares Shares of each Fund are sold at the net asset value per share next calculated after the Fund
receives your request in good order.
- ------------------------------------------------------------------------------------------------------------------------------------
9
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AmSouth International Equity Fund Pioneer International Core Equity Fund
- ------------------------------------------------------------------------------------------------------------------------------------
You may sell your shares by contacting the Normally, your investment firm will send your
Fund directly in writing or by telephone or request to sell shares to PIMSS. You can also
by contacting a financial intermediary as sell your shares by contacting the Fund
described in the Fund's prospectus. directly if your account is registered in
your name.
If the account is established in the
shareholder's own name, shareholders may also
redeem shares of the Fund by telephone or
online.
- ------------------------------------------------------------------------------------------------------------------------------------
Comparison of Principal Risks of Investing in the Funds
Because each Fund has a similar investment objective, primary investment
policies and strategies, the Funds are subject to the same principal risks. You
could lose money on your investment in either Fund or not make as much as if you
invested elsewhere if:
o The non-U.S. stock markets go down or perform poorly relative to other
investments (this risk may be greater in the short term)
o Equity securities of non-U.S. issuers or growth stocks fall out of
favor with investors
o The Fund's investments do not have the growth potential originally
expected
Each Fund may be subject to the following additional risks associated with
investing in non-U.S. issuers, which may involve unique risks compared to
investing in securities of U.S. issuers. These risks are more pronounced to the
extent the Funds invests in issuers in countries with emerging markets or if the
Funds invest significantly in one country. These risks may include:
o Less information about non-U.S. issuers or markets may be available
due to less rigorous disclosure or accounting standards or regulatory
practices
o Many non-U.S. markets are smaller, less liquid and more volatile. In a
changing market, the adviser/subadviser might 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 non-U.S. countries may grow at slower rates than
expected or may experience a downturn or recession
o Economic, political and social developments may adversely affect the
securities markets
o Withholding and other non-U.S. taxes may decrease the Fund's return
In addition, at times, more than 25% of Pioneer International Core Equity
Fund's assets may be invested in the same market segment, such as financial or
technology. To the extent the Fund emphasizes investments in a market segment,
the Fund will be subject to a greater degree to the risks particular to the
industries in that segment, and may experience greater market fluctuation, than
a Fund without the same focus.
10
AmSouth International Equity Fund is subject to risks relating to the fact
that it is non-diversified. The Fund may invest in a small number of companies
which may increase the volatility of the Fund. Accordingly, the Fund's portfolio
may be more sensitive to changes in the market value of a single company or
industry.
AmSouth International Equity Fund may trade securities actively to achieve
its principal investment strategies. Active trading of portfolio securities
could increase the Fund's transaction costs (thereby lowering its performance)
and may increase the amount of taxes that you pay (on distributions of net gains
realized on those trades).
Past Performance
Set forth below is performance information for AmSouth International Equity
Fund. The bar charts show how your AmSouth Fund's total return (not including
any deduction for sales charges) has varied from year to year for each full
calendar year. The tables show average annual total return (before and after
taxes) for your AmSouth Fund over time for each class of shares (including
deductions for sales charges) compared with a broad-based securities market
index. The bar charts give an indication of the risks of investing in your
AmSouth Fund, including the fact that you could incur a loss and experience
volatility of returns year to year. Past performance before and after taxes does
not indicate future results. Pioneer International Core Equity Fund has not
commenced investment operations.
AmSouth International Equity Fund -- Class A Shares
Calendar Year Total Returns*
[DATA BELOW IS REPRESENTED BY A BAR CHART IN THE ORIGINAL REPORT]]
1998 1999 2000 2001 2002 2003 2004
9.48 26.77 -11.50 -24.31 -14.95 52.67 25.84
* During the period shown in the bar chart, your AmSouth Fund's highest
quarterly return was 23.15% for the quarter ended June 30, 2003, and the
lowest quarterly return was -20.23% for the quarter ended September 30,
2002.
AmSouth International Equity Fund
Average Annual Total Returns for the periods ending December 31, 2004
- ---------------------------------------------------------------------------------------------------------------------------------
1 Year 5 Years Since Inception
(8/15/97)
- ---------------------------------------------------------------------------------------------------------------------------------
AmSouth International Equity Fund, Class A Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes(1) 18.95% 0.68% 4.60%
- ---------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions 18.60% 0.41% 4.33%
- ---------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares 12.31% 0.45% 3.83%
- ---------------------------------------------------------------------------------------------------------------------------------
AmSouth International Equity Fund, Class B Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 19.81% 0.76% 4.60%
- ---------------------------------------------------------------------------------------------------------------------------------
AmSouth International Equity Fund, Class I Shares(2)
- ---------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 26.05% 2.03% 5.54%
- ---------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions 25.64% 1.75% 5.24%
- ---------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares 16.93% 1.57% 4.65%
- ---------------------------------------------------------------------------------------------------------------------------------
MSCI EAFE Index (3) 20.00% -0.08% 5.45%
(reflects no deduction for fees, expenses or taxes)
- ---------------------------------------------------------------------------------------------------------------------------------
11
(1) The quoted returns reflect the performance from 8/15/97 to 12/13/98 of the
DG International Equity Fund and from 12/14/98 to 3/12/00 of the ISG
International Equity Fund, which were open-end investment companies that
were the predecessor funds to the International Equity Fund. The
predecessor funds were managed using substantially the same investment
objective, policies and methodologies as the Fund. Class A shares were
first offered on 8/15/97. Performance for the Class B shares, which were
first offered on 2/2/99, is based on the historical performance of the
Fund's Class A shares, including the performance of the predecessor funds,
(without sales charge) prior to that date. The historical performance of
the Class B shares has been restated to reflect the Fund's Class B
distribution (12b-1) fees and the contingent deferred sales charge.
(2) The quoted returns reflect the performance from 8/15/97 to 12/13/98 of the
DG International Equity Fund and from 12/14/98 to 3/12/00 of the ISG
International Equity Fund, which were open-end investment companies that
were the predecessor funds to the International Equity Fund. The
predecessor funds were managed using substantially the same investment
objective, policies and methodologies as the Fund Performance for the Class
I shares, which were first offered on 12/14/98, is based on the historical
performance of the Fund's Class A shares, including the performance of the
predecessor funds (without sales charge) prior to that date.
(3) The Morgan Stanley Capital International Europe, Australasia, Far East
Index ("MSCI EAFE Index"), an unmanaged, capitalization weighted index of
21 international markets, is for reference only, does not mirror the Fund's
investments, and reflects no deduction for fees, expenses or taxes and was
calculated from 7/31/97.
The above table shows the impact of taxes on the AmSouth International Equity
Fund's returns. After-tax returns are only shown for Class A shares and may vary
for Class B shares. The Fund's after-tax returns are calculated using the
highest individual federal marginal income tax rates and do not reflect the
impact of state and local taxes. In certain cases, the figure representing
"Return After Taxes on Distributions and Sale of Fund Shares" may be higher than
the other return figures for the same period. A higher after-tax return results
when a capital loss occurs upon redemption and translates into an assumed tax
deduction that benefits the shareholder. Please note that actual after-tax
returns depend on an investor's tax situation and may differ from those shown.
Also note that after-tax returns shown are not relevant to investors who hold
their Fund shares through tax-deferred arrangements, such as 401(k) plans or
individual retirement accounts.
The most recent portfolio manager's discussion of your AmSouth Fund's
performance is attached as Exhibit C.
The Funds' Fees and Expenses
Shareholders of both Funds pay various fees and expenses, either directly
or indirectly. The tables below show the fees and expenses that you would pay if
you were to buy and hold shares of each Fund. The expenses in the tables
appearing below are based on (i) for AmSouth International Equity Fund, the
expenses of AmSouth International Equity Fund for the period ended January 31,
2005 and (ii) for Pioneer International Core Equity Fund, and (ii) for the
Pioneer International Core Equity Fund, the estimated pro forma annual expenses
assuming the Reorganization occurred on May 31, 2005.
- -------------------------------------------------------------------------------------------------------------------------------
Shareholder AmSouth Pioneer AmSouth Pioneer AmSouth Pioneer
transaction fees International International International International International International
(paid directly from Equity Fund(1) Core Equity Equity Fund(1) Core Equity Equity Fund(1) Core Equity
your investment) Fund (Pro Fund (Pro Fund (Pro
Forma) Forma) Forma)
Class A Class A Class B Class B Class I Class Y
- -------------------------------------------------------------------------------------------------------------------------------
Maximum sales charge 5.50%(2) 5.75%(2) None None None None
(load) when you buy
shares as a
percentage of
offering price
- -------------------------------------------------------------------------------------------------------------------------------
Maximum deferred None None 5.00%(3) 4.00% None None
sales charge (load)
as a percentage of
purchase price or
the amount you
receive when you
sell shares,
whichever is less
- -------------------------------------------------------------------------------------------------------------------------------
12
- -------------------------------------------------------------------------------------------------------------------------------
Shareholder AmSouth Pioneer AmSouth Pioneer AmSouth Pioneer
transaction fees International International International International International International
(paid directly from Equity Fund(1) Core Equity Equity Fund(1) Core Equity Equity Fund(1) Core Equity
your investment) Fund (Pro Fund (Pro Fund (Pro
Forma) Forma) Forma)
Class A Class A Class B Class B Class I Class Y
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
Redemption fees 2.00%(4) 2.00% 2.00%(4) 2.00% 2.00%(4) 2.00%
- -------------------------------------------------------------------------------------------------------------------------------
Annual fund
operating expenses
(deducted from fund
assets) (as a % of
average net assets)
- -------------------------------------------------------------------------------------------------------------------------------
Management fee 0.90% 0.95% 0.90% 0.95% 0.90% 0.95%
- -------------------------------------------------------------------------------------------------------------------------------
Distribution and None 0.25% 0.75% 1.00% None None
service (12b-1) fee
- -------------------------------------------------------------------------------------------------------------------------------
Other expenses 0.80%(5) 0.21% 1.15%(5) 0.48% 0.67%(5) 0.15%
- -------------------------------------------------------------------------------------------------------------------------------
Total fund operating 1.70% 1.41%(6) 2.80% 2.43%(6) 1.57% 1.10%(6)
expenses
- -------------------------------------------------------------------------------------------------------------------------------
Expense 0.39% N/A 0.74% N/A 0.41% N/A
reimbursement/reduction
- -------------------------------------------------------------------------------------------------------------------------------
Net fund operating 1.31% 1.41% 2.06% 2.43% 1.16% 1.10%
expenses
- -------------------------------------------------------------------------------------------------------------------------------
(1) AmSouth Bank or other financial institutions may charge their customer
account fees for automatic investment and other cash management services
provided in connection with investment in the Fund.
(2) Sales charges may be reduced depending upon the amount invested or, in
certain circumstances, waived. Class A shares bought as part of an
investment of $1 million or more are not subject to an initial sales
charge, but may be charged a CDSC of 1.00% if sold within one year of
purchase.
(3) For Class B shares purchased prior to the combination of AmSouth Funds with
ISG Funds, the CDSC on such Class B shares held continuously declines over
six years, starting with year one and ending in year seven from: 4%, 3%,
3%, 2%, 2%, 1%. For all other Class B shares held continuously, the CDSC
declines over six years, starting with year one and ending in year seven
from: 5%, 4%, 3%, 3%, 2%, 1%. Eight years after purchase (seven years in
the case of shares acquired in the ISG combination), Class B shares
automatically convert to Class A shares.
(4) To discourage short-term trading, a redemption fee of 2.00% will be charged
on sales or exchanges of Class A, Class B and Class I shares of your
AmSouth Fund made within 30 days of the date of purchase. A wire transfer
fee of $7.00 will be deducted from the amount of your redemption if you
request a wire transfer.
(5) Other expenses for your AmSouth Fund are being limited to 0.41% for Class A
shares, 0.41% for Class B shares and 0.26% for Class I shares. Any fee
waiver or expense reimbursement arrangement is voluntary and may be
discontinued at any time.
(6) The Pioneer Fund's total annual operating expenses in the table have not
been reduced by any expense offset arrangements.
The hypothetical example below helps you compare the cost of investing in
each Fund. It assumes that: (a) you invest $10,000 in each Fund for the time
periods shown, (b) you reinvest all dividends and distributions, (c) your
investment has a 5% return each year, and (d) each Fund's gross operating
expenses remain the same. The examples are for comparison purposes only and are
not a representation of either Fund's actual expenses or returns, either past or
future.
13
- ------------------------------------------------------------------------------------------------------------
Number of years you AmSouth International Equity Fund Pro Forma
own your shares Pioneer International Core Equity Fund
- ------------------------------------------------------------------------------------------------------------
Class A
- ------------------------------------------------------------------------------------------------------------
Year 1 $713 $790
- ------------------------------------------------------------------------------------------------------------
Year 3 $1,056 $996
- ------------------------------------------------------------------------------------------------------------
Year 5 $1,422 $1,302
- ------------------------------------------------------------------------------------------------------------
Year 10 $2,448 $2,169
- ------------------------------------------------------------------------------------------------------------
Class B -- assuming redemption at end of period
- ------------------------------------------------------------------------------------------------------------
Year 1 $783 $646
- ------------------------------------------------------------------------------------------------------------
Year 3 $1,168 $1,058
- ------------------------------------------------------------------------------------------------------------
Year 5 $1,679 $1,396
- ------------------------------------------------------------------------------------------------------------
Year 10 $2,865 $2,513
- ------------------------------------------------------------------------------------------------------------
Class B -- assuming no redemption
- ------------------------------------------------------------------------------------------------------------
Year 1 $283 $246
- ------------------------------------------------------------------------------------------------------------
Year 3 $868 $758
- ------------------------------------------------------------------------------------------------------------
Year 5 $1,479 $1,296
- ------------------------------------------------------------------------------------------------------------
Year 10 $2,865 $2,513
- ------------------------------------------------------------------------------------------------------------
Class I Class Y
- ------------------------------------------------------------------------------------------------------------
Year 1 $160 $112
- ------------------------------------------------------------------------------------------------------------
Year 3 $496 $350
- ------------------------------------------------------------------------------------------------------------
Year 5 $855 $606
- ------------------------------------------------------------------------------------------------------------
Year 10 $1,867 $1,340
- ------------------------------------------------------------------------------------------------------------
Reasons for the Proposed Reorganization
The Trustees believe that the proposed Reorganization is in the best
interests of Amsouth International Equity Fund. The Trustees considered the
following matters, among others, in approving the proposal.
First, AAMI, the investment adviser to your AmSouth Fund, informed the
Trustees that it does not intend to continue to provide investment advisory
services to the AmSouth Funds. Consequently, a change in your AmSouth Fund's
investment adviser was necessary. In the absence of the Reorganization, such a
change would be more likely to motivate shareholders invested in reliance on
AAMI's role to withdraw from the Fund, thereby reducing fund size and increasing
fund expense ratios.
Second, the resources of Pioneer. At December 31, 2004, Pioneer managed
over 80 investment companies and accounts with approximately $42 billion in
assets. Pioneer is part of the global asset management group of UniCredito
Italiano S.p.A., one of the largest banking groups in Italy, providing
investment management and financial services to mutual funds, institutional and
other clients. As of December 31, 2004, assets under management of UniCredito
Italiano S.p.A. were approximately $175 billion worldwide. Shareholders of your
AmSouth Fund would become part of a significantly larger family of funds that
offers a more diverse array of investment options and enhanced shareholder
account options. The Pioneer family of mutual funds offers over 80 funds,
including domestic and international equity and fixed income funds and a money
market fund that will be available to your AmSouth Fund's shareholders through
exchanges.
Third, the estimated pro forma expenses of the Pioneer Fund, after giving
effect to the Reorganization, on a gross basis are lower than your AmSouth
Fund's gross operating expenses. The Trustees recognized that the Pioneer Fund's
operating expenses net of expense limitations, and its management fee, are
higher than your Fund's expenses net of expense limitations and management fee
(except for Class I shares, for which pro forma expenses of the Pioneer Fund's
Class Y shares are estimated to be lower on both a gross and a net basis).
However, the expense limitations on your AmSouth Fund are voluntary and may be
discontinued at any time. In addition, the Trustees considered the positive
factors associated with the Reorganization to outweigh the negative factors,
such as the increase in expenses of the Pioneer Fund. The Trustees also
considered that the aggregate Rule 12b-1 distribution and shareholder servicing
fees and non-Rule 12b-1 shareholder servicing fees paid by the Class A and Class
B shares of each Fund are the same. Moreover, your AmSouth Fund's Class I shares
pay a non 12b-1 shareholder servicing fee that is not paid by the Pioneer Fund's
Class Y shares. In addition, the broader distribution arrangements of the
Pioneer Fund offer greater potential for further asset growth and reduced per
share expenses.
14
Fourth, the Class A, B and Y shares of Pioneer International Core Equity
Fund received in the Reorganization will provide AmSouth International Equity
Fund shareholders with exposure to substantially the same investment product as
they currently have.
Fifth, the transaction is structured to qualify as a tax-free
reorganization under Section 368(a) of the Internal Revenue Code of 1986 and
therefore will not be treated as a taxable sale of your AmSouth shares.
Pioneer and AmSouth Bank will pay all costs of preparing and printing the
Funds' proxy statements and solicitation costs incurred by the Funds in
connection with the Reorganization. AAMI will otherwise be responsible for all
costs and expenses of the AmSouth Fund in connection with the Reorganizations.
The Trustees also considered that Pioneer and AmSouth Bank will benefit
from the Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the
Reorganizations."
The Board of Trustees of the Pioneer Fund also considered that the
Reorganization presents an excellent opportunity for the Pioneer Fund to acquire
investment assets without the obligation to pay commissions or other transaction
costs that a fund normally incurs when purchasing securities. This opportunity
provides an economic benefit to the Pioneer Fund and its shareholders.
CAPITALIZATION
The following table sets forth the capitalization of each Fund as of May
31, 2005, and the pro forma combined Fund as of May 31, 2005.
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Pro Forma
Pioneer Pioneer
AmSouth International International
International Core Equity Core Equity
Equity Fund Fund Fund
May 31, 2005 May 31, 2005 May 31, 2005
- --------------------------------------------------------------------------------------------------------------
Total Net Assets (in thousands) $466,466 N/A $466,466
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Class A shares ................................... $25,582 N/A $25,582
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Class B shares ................................... $3,070 N/A $3,070
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Class I/Y shares ................................. $437,814 N/A $437,814
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Net Asset Value Per Share
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Class A shares ................................... $13.35 N/A $13.35
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Class B shares ................................... $13.03 N/A $13.03
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Class I /Y shares ................................ $13.41 N/A $13.41
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Shares Outstanding
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Class A shares ................................... 1,916,864 N/A 1,916,864
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Class B shares ................................... 235,732 N/A 235,732
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Class I/Y shares ................................. 32,649,798 N/A 32,649,798
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It is impossible to predict how many shares of the Pioneer Fund will
actually be received and distributed by your AmSouth Fund on the Reorganization
date. The table should not be relied upon to determine the amount of the Pioneer
Fund's shares that will actually be received and distributed.
BOARD'S EVALUATION AND RECOMMENDATION
For the reasons described above, the Trustees, including the Independent
Trustees, approved the Reorganization. In particular, the Trustees determined
that the Reorganization is in the best interests of your AmSouth Fund.
Similarly, the Board of Trustees of the Pioneer Fund, including its Independent
Trustees, approved the Reorganization. They also determined that the
Reorganization is in the best interests of the Pioneer Fund.
15
The Trustees recommend that the shareholders of your AmSouth Fund vote FOR
the proposal to approve the Agreement and Plan of Reorganization.
16
AmSouth Select Equity Fund and
Pioneer Focused Equity Fund
PROPOSAL 1 (h)
Approval of Agreement and Plan of Reorganization
SUMMARY
The following is a summary of more complete information appearing later in
this Proxy Statement/Prospectus or incorporated herein. You should read
carefully the entire Proxy Statement/Prospectus, including the form of Agreement
and Plan of Reorganization attached as EXHIBIT A-2, because it contains details
that are not in the summary.
Each Fund has an investment objective of long-term capital growth and,
consequently, the Funds have similar investment polices and risks. In the table
below, if a row extends across the entire table, the policy disclosed applies to
both your AmSouth Fund and the Pioneer Fund.
Comparison of AmSouth Select Equity Fund to Pioneer Focused Equity Fund
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AmSouth Select Equity Fund Pioneer Focused Equity Fund
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Business A non-diversified series of AmSouth Funds, an A newly created, non-diversified series of
open-end management investment company Pioneer series Trust IV, an open-end
organized as a Massachusetts business trust. management investment company organized as a
Delaware statutory trust.
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Net assets as of March 31, 2005 $132.4 million None. Pioneer Focused Equity Fund is newly
created and does not expect to commence
investment operations until the
Reorganization occurs.
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Investment advisers and Investment Adviser: Investment Adviser:
portfolio managers AAMI Pioneer
Investment Subadviser: Investment Subadviser:
OakBrook Investments, LLC ("OakBrook") OakBrook
Portfolio Managers: Portfolio Managers:
Day-to-day management of AmSouth Select Day-to-day management of Pioneer Focused
Equity Fund's portfolio is the responsibility Equity Fund's portfolio is the responsibility
of a team of investment professionals, all of of a team of investment professionals, all of
whom take part in the decision making whom take part in the decision making
process. Dr. Neil Wright, Ms. Janna Sampson process. Dr. Neil Wright, Ms. Janna Sampson
and Dr. Peter Jankovskis are the team members and Dr. Peter Jankovskis are the team members
and have been the portfolio managers of the and have been the portfolio managers of the
Fund since its inception. Each of the Fund since its inception. Each of the
portfolio managers has been with OakBrook portfolio managers has been with OakBrook
since 1998. since 1998.
Dr. Wright is OakBrook's President and Chief Dr. Wright is OakBrook's President and Chief
Investment Officer. From 1993 to 1997, Dr. Investment Officer. From 1993 to 1997, Dr.
Wright was the Chief Investment Officer of Wright was the Chief Investment Officer of
ANB Investment Management & Trust Co. ANB.
("ANB").
Ms. Sampson is OakBrook's Director of
Ms. Sampson is OakBrook's Director of Portfolio Management. From 1993 to 1997,
Portfolio Management. From 1993 to 1997, she
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1
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AmSouth Select Equity Fund Pioneer Focused Equity Fund
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was Senior Portfolio Manager for ANB. she was Senior Portfolio Manager for ANB.
Dr. Jankovskis is OakBrook's Director of Dr. Jankovskis is OakBrook's Director of
Research. From 1992 to 1996, he was an Research. From 1992 to 1996, he was an
Investment Strategist for ANB and from 1996 Investment Strategist for ANB and from 1996
to 1997 he was the Manager of Research for to 1997 he was the Manager of Research for
ANB. ANB.
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Investment objective AmSouth Select Equity Fund seeks long-term Pioneer Focused Equity Fund seeks long-term
growth of capital by investing primarily in capital growth.
common stocks and securities convertible into
common stocks such as convertible bonds and
convertible preferred stocks.
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Primary investments Under normal circumstances, AmSouth Select Normally, the Fund invests at least 80% of
Equity Fund invests at least 80% of its net its net assets (plus the amount of
assets in equity securities. For purposes of borrowings, if any, for investment purposes)
this policy, net assets include net assets in equity securities. The Fund may invest a
plus borrowings for investment purposes. The significant portion of its assets in equity
Fund invests primarily in common stocks with securities of medium- and
market capitalizations greater than $2 large-capitalization companies. Consequently,
billion at the time of purchase and that the Fund will be subject to the risks of
possess a dominant market share and have investing in companies with market
barriers, such as a patent or well -known capitalizations of $1.5 billion or more.
brand name, that shield their market share
and profits from competitors. OakBrook does For purposes of the Fund's investment
not currently intend to purchase convertible policies, equity securities include common
securities for the Fund. stocks, convertible debt and other equity
instruments, such as depositary receipts,
warrants, rights, exchange-traded funds
(ETFs), interests in real estate investment
trusts (REITs) and preferred stocks.
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Investment strategies In managing the Fund's portfolio, OakBrook Pioneer Focused Equity Fund seeks securities
continuously monitors a universe of companies that its believes possess a dominant market
possessing "market power" to look for share and have barriers, such as a patent or
opportunities to purchase these stocks at well-known brand name, that may shield their
reasonable prices. "Market power" is a market share and profits from competitors.
combination of dominant market share and The subadviser continuously monitors a
a barrier that protects that market share. In universe of companies possessing "market
selecting individual securities, OakBrook power" to look for opportunities to purchase
looks for companies that appear undervalued. these stocks at reasonable prices. "Market
OakBrook then conducts a fundamental analysis power" is a combination of dominant market
of the stock, the industry and the industry share and a barrier that protects that market
structure. OakBrook will then purchase those share. In selecting individual securities,
companies whose market power, in the the subadviser looks for companies that
managers' opinion, is intact. As a result, appear undervalued. The subadviser then
OakBrook may focus on a relatively conducts a fundamental analysis of the stock,
limited number of stocks (i.e., generally 25 the industry and the industry structure. The
or less). subadviser then purchases those companies
whose market power, in the subadviser's
opinion, is intact. As a result, the
subadviser may focus on a relatively limited
number of securities (i.e., generally 25 or
fewer).
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2
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AmSouth Select Equity Fund Pioneer Focused Equity Fund
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Other investments AmSouth Select Equity Fund may invest in Pioneer Focused Equity Fund may invest up to
common stocks and securities convertible into 20% of its total assets in debt securities of
common stocks of companies with market corporate and government issuers. Generally
capitalizations less than $2 billion and the Fund acquires debt securities that are
preferred stocks. investment grade, but the Fund may invest up
to 5% of its total assets in below investment
The Fund may also invest up to 20% of its grade debt securities issued by both U.S. and
assets in corporate bonds, notes, and non-U.S. corporate and government issuers,
warrants, and short-term money market including below investment grade convertible
instruments. Stock futures and option debt securities. The Fund invests in debt
contracts and stock index futures and index securities when the subadviser believes they
option contracts may be used to hedge cash are consistent with the Fund's investment
and maintain exposure to the U.S. equity objective, long-term capital growth, or for
market. greater liquidity.
The Fund may invest in common stocks and
securities convertible into common stocks of
companies with market capitalizations less
than $2 billion and preferred stocks.
The Fund may also invest up to 20% of its
assets in corporate bonds, notes, and
warrants, and short-term money market
instruments. Stock futures and option
contracts and stock index futures and index
option contracts may be used to hedge cash
and maintain exposure to the U.S. equity
market.
The Fund may invest up to 25% of its total
assets in equity and debt securities of
non-U.S. corporate issuers and debt
securities of non-U.S. government issuers,
including securities of emerging markets
issuers. The Fund invests in non-U.S.
securities to diversify its portfolio when
they offer similar or greater potential for
capital appreciation compared to U.S.
securities.
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Temporary defensive strategies When AAMI determines adverse market Normally, the Fund invests substantially all
conditions exist, AmSouth Select Equity Fund of its assets to meet its investment
may invest entirely in cash positions, objective. The Fund may invest the remainder
directly in U.S. Government securities and of its assets in securities with remaining
short-term paper, such as bankers' maturities of less than one year, cash
acceptances. equivalents or may hold cash. For temporary
defensive purposes, including during periods
of unusual cash flows, the 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, the Fund may not be able to achieve
its investment objective. The Fund intends to
adopt a defensive strategy when the
subadviser believes securities in which the
Fund normally invests have extraordinary
risks due to political or
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3
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AmSouth Select Equity Fund Pioneer Focused Equity Fund
- ------------------------------------------------------------------------------------------------------------------------------------
economic factors and in other extraordinary
circumstances.
- ------------------------------------------------------------------------------------------------------------------------------------
Diversification Each Fund is non-diversified for the purpose of the Investment Company Act and, therefore, may
concentrate its investments in a limited number of issuers.
- ------------------------------------------------------------------------------------------------------------------------------------
Industry concentration AmSouth Select Equity Fund may not purchase Pioneer Focused Equity Fund may not invest
any securities which would cause more than more than 25% of its assets in any one
25% of the value of the Fund's total assets industry.
at the time of purchase to be invested in
securities of one or more issuers conducting
their principal business activities in the
same industry, provided that (a) there is no
limitation with respect to obligations issued
or guaranteed by the U.S. government or its
agencies or instrumentalities, and repurchase
agreements secured by obligations of the
U.S. government or its agencies or
instrumentalities; (b) wholly owned finance
companies will be considered to be in the
industries of their parents if their
activities are primarily related to financing
the activities of their parents; and
(c) utilities will be divided according to
their services. For example, gas, gas
transmission, electric and gas, electric, and
telephone will each be considered a separate
industry.
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Restricted and illiquid AmSouth Select Equity Fund may not invest Pioneer Focused Equity Fund may not invest
securities more than 15% of its net assets in securities more than 15% of its net assets in securities
that are restricted as to resale, or for that are illiquid and other securities that
which no readily available market exists, are not readily marketable. Repurchase
including repurchase agreements providing for agreements maturing in more than seven days
settlement more than seven days after notice. will be included for purposes of the
foregoing limit.
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Borrowing AmSouth Select Equity Fund may not borrow Pioneer Focused Equity Fund may not borrow
money or issue senior securities, except the money, except the Fund may: (a) borrow from
Fund may borrow from banks or enter into banks or through reverse repurchase
reverse repurchase agreements for temporary agreements in an amount up to 33 1/3% of the
emergency purposes in amounts up to 33 1/3% Fund's total assets (including the amount
of the value of its total assets at the time borrowed); (b) to the extent permitted by
of such borrowing. The Fund will not purchase applicable law, borrow up to an additional 5%
securities while borrowings (including of the Fund's assets for temporary purposes;
reverse repurchase agreements) in excess of (c) obtain such short-term credits as are
5% of its total assets are outstanding. necessary for the clearance of portfolio
transactions; (d) purchase securities on
margin to the extent permitted by applicable
law; and (e) engage in transactions in
mortgage dollar rolls that are accounted for
as financings.
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Lending AmSouth Select Equity Fund may not make Pioneer Focused Equity Fund may not make
loans, except that the Fund may purchase or loans, except that the Fund may (i) lend
hold debt instruments in accordance with its portfolio securities in accordance with the
investment objective and policies, lend Fund Fund's investment policies, (ii) enter into
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4
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AmSouth Select Equity Fund Pioneer Focused Equity Fund
- ------------------------------------------------------------------------------------------------------------------------------------
securities in accordance with its investment repurchase agreements, (iii) purchase all or
objective and policies and enter into a portion of an issue of publicly distributed
repurchase agreements. debt securities, bank loan participation
interests, bank certificates of deposit,
bankers' acceptances, debentures or other
securities, whether or not the purchase is
made upon the original issuance of the
securities, (iv) participate in a credit
facility whereby the Fund may directly lend
to and borrow money from other affiliated
funds to the extent permitted under the
Investment Company Act or an exemption
therefrom, and (v) make loans in any other
manner consistent with applicable law, as
amended and interpreted or modified from time
to time by any regulatory authority having
jurisdiction.
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Derivative instruments AmSouth Select Equity Fund may invest in Pioneer Focused Equity Fund may use futures
futures contracts and options thereon and options on securities, indices and
(interest rate futures contracts or index currencies, forward currency exchange
futures contracts, as applicable) to commit contracts and other derivatives. A derivative
funds awaiting investment, to maintain cash is a security or instrument whose value is
liquidity or for other hedging purposes. The determined by reference to the value or the
value of the Fund's contracts may equal or change in value of one or more securities,
exceed 100% of the Fund's total assets, currencies, indices or other financial
although the Fund will not purchase or sell a instruments. Although there is no specific
futures contract unless immediately limitation on investing in derivatives, the
afterwards the aggregate amount of margin Fund does not use derivatives as a primary
deposits on its existing futures positions investment technique and generally limits
plus the amount of premiums paid for related their use to hedging. However, the Fund may
futures options entered into for other than use derivatives for a variety of
bona fide hedging purposes is 5% or less of non-principal purposes, including:
its net assets.
o As a hedge against adverse changes in
The Fund also may write covered put options stock market prices, interest rates or
in respect of specific securities in which currency exchange rates
the Fund may invest and write covered call
and put option contracts. The size of the o As a substitute for purchasing or selling
premiums that the Fund may receive may be securities
adversely affected as new or existing
institutions, including other investment o To increase the Fund's return as a
companies, engage in or increase their non-hedging strategy that may be
option-writing activities. considered speculative
Even a small investment in derivatives can
have a significant impact on the 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
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5
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AmSouth Select Equity Fund Pioneer Focused Equity Fund
- ------------------------------------------------------------------------------------------------------------------------------------
difficult to value. The Fund will only invest
in derivatives to the extent the subadviser
believes these investments do not prevent the
Fund from seeking its investment objective.
- ------------------------------------------------------------------------------------------------------------------------------------
Short-term trading AmSouth Select Equity Fund may engage in the Pioneer Focused Equity Fund usually does not
technique of short-term trading. Such trading trade for short-term profits. A Fund will
involves the selling of securities held for a sell an investment, however, even if it has
short time, ranging from several months to only been held for a short time, if it no
less than a day. The object of such longer meets the Fund's investment criteria.
short-term trading is to increase the
potential for capital appreciation and/or
income of the Fund in order to take advantage
of what AAMI believes are changes in market,
industry or individual company conditions or
outlook.
- ------------------------------------------------------------------------------------------------------------------------------------
Other investment policies As described above, the Funds have substantially similar principal investment strategies and
and restrictions policies. Certain of the non-principal investment policies and restrictions are different. For
a more complete discussion of each Fund's other investment policies and fundamental and
non-fundamental investment restrictions, see the SAI.
- ------------------------------------------------------------------------------------------------------------------------------------
Buying, Selling and Exchanging Shares
- ------------------------------------------------------------------------------------------------------------------------------------
Class A sales charges and Class A shares are offered with an initial Class A shares are offered with an initial
Rule 12b-1 fees sales charge of up to 5.50% of the offering sales charge of up to 5.75% of the offering
price, which is reduced depending upon the price, which is reduced or waived for large
amount invested or, in certain circumstances, purchases and certain types of investors. At
waived. Class A shares bought as part of an the time of your purchase, your investment
investment of $1 million or more are not firm may receive a commission from Pioneer
subject to an initial sales charge, but may Funds Distributor, Inc. ("PFD"), the Fund's
be charged a contingent deferred sales charge distributor, of up to 4% declining as the
("CDSC") of 1.00% if sold within one year of size of your investment increases.
purchase.
There is no CDSC, except in certain
Class A shares pay a shareholder servicing circumstances when the initial sales charge
fee (non 12b-1) of up to 0.25% of average is waived.
daily net assets.
Class A shares are subject to distribution
and service (12b-1) fees of up to 0.25% of
average daily net assets.
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Class B sales charges and Class B shares are offered without an initial Class B shares are offered without an initial
Rule 12b-1 fees sales charge, but are subject to a CDSC of up sales charge, but are subject to a CDSC of up
to 5%. For Class B shares held continuously, to 4% if you sell your shares. The charge is
the CDSC declines over six years, starting reduced over time and is not charged after
with year one and ending in year seven from: five years. Your investment firm may receive
5%, 4%, 3%, 2%, 1%. Eight years after a commission from PFD, the Fund's
purchase Class B shares automatically convert distributor, at the time of your purchase of
to Class A shares. up to 4%.
Class B shares pay a shareholder servicing Class B shares are subject to distribution
fee (non 12b-1) of up to 0.25% of average and service (12b-1) fees of up to 1% of
daily net assets. This fee is in the form of average daily net assets.
a separate non-Rule 12b-1 fee. All Funds bear
a distribution Class B shares acquired through the
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6
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AmSouth Select Equity Fund Pioneer Focused Equity Fund
- ------------------------------------------------------------------------------------------------------------------------------------
(12b-1) fee of up to 0.75%. Reorganization will be subject to the CDSC
and commission schedules applicable to the
Maximum investment for all Class B purchases original purchase.
by a shareholder for the Fund's shares is
$99,999. Maximum purchase of Class B shares in a
single transaction is $49,999.
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Class I and Class Y sales AmSouth Select Equity Fund does not impose The Fund does not impose any initial,
charges and Rule 12b-1 fees any initial or a CDSC on Class I shares. contingent deferred or asset based sales
charge on Class Y shares.
The Fund may impose a shareholder servicing
fee (non 12b-1) of up to 0.15% of average The distributor incurs the expenses of
daily net assets. distributing the Fund's Class Y shares, none
of which are reimbursed by the Fund or the
Class Y shareowners.
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Management and other fees AmSouth Select Equity Fund pays an advisory Pioneer Focused Equity Fund will pay Pioneer
fee on a monthly basis at an annual rate of an advisory fee as follows: 0.65% of the
0.80% of the Fund's average daily net assets. Fund's average daily net assets up to
$1 billion, and 0.60% on assets greater than
ASO Services Company, Inc. ("ASO") serves as $1 billion. The fee is computed daily and
administrator and fund accounting agent for paid monthly.
the Fund. The Fund pays ASO an administrative
services fee of 0.15% of the Fund's average In addition, the Fund will reimburse Pioneer
daily net assets. for certain fund accounting and legal
expenses incurred on behalf of the Fund and
Other expenses of the Fund are being limited pay a separate shareholder servicing/transfer
to 0.49% for Class A shares, 0.49% for Class agency fee to PIMSS, an affiliate of Pioneer.
B shares and 0.34% for Class I shares. Any
fee waiver or expense reimbursement The Fund's total annual fund operating
arrangement is voluntary and may be expenses are estimated to be 1.17% of average
discontinued at any time. daily net assets for Class A shares, 2.03%
for Class B shares, and 0.79% for Class Y
For the fiscal year ended July 31, 2004, the shares for the current fiscal year.
Fund's annual operating expenses for Class A
shares, after giving effect to the expense
limitation were 1.29%, and without giving
effect to the expense limitation, were 1.32%
of average daily net assets.
For the fiscal year ended July 31, 2004, the
Fund's annual operating expenses for Class B
shares, after giving effect to the expense
limitation were 2.04%, and without giving
effect to the expense limitation, were 2.07%
of average daily net assets.
For the fiscal year ended July 31, 2004, the
Fund's annual operating expenses for Class I
shares, after giving effect to the expense
limitation were 1.14%, and without giving
effect to the expense limitation, were 1.22%
of average daily net assets.
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7
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AmSouth Select Equity Fund Pioneer Focused Equity Fund
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Buying shares You may buy shares of the Fund directly You may buy shares from any investment firm
through BISYS Fund Services, the Fund's that has a sales agreement with PFD, the
distributor, or through brokers, registered Pioneer Fund's distributor.
investment advisers, banks and other
financial institutions that have entered into If the account is established in the
selling agreements with the Fund's shareholder's own name, shareholders may also
distributor, as described in the Fund's purchase additional shares of the Fund by
prospectus. telephone or online.
Certain account transactions may be done by
telephone.
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Exchanging shares You can exchange your shares in the Fund for You may exchange your shares for shares of
shares of the same class of another AmSouth the same class of another Pioneer mutual
Fund, usually without paying additional sales fund. Your exchange request must be for at
charges. You must meet the minimum investment least $1,000. The Fund allows you to exchange
requirements for the Fund into which you are your shares at net asset value without
exchanging. Exchanges from one Fund to charging you either an initial or contingent
another are taxable. Class A shares may be deferred shares charge at the time of the
exchanged for Class I shares of the same Fund exchange. Shares you acquire as part of an
or another AmSouth fund if you become exchange will continue to be subject to any
eligible to purchase Class I shares. Class I contingent deferred sales charge that applies
shares may be exchanged for Class A shares of to the shares you originally purchased. When
the same Fund. No transaction fees are you ultimately sell your shares, the date of
currently charged for exchanges. your original purchase will determine your
contingent deferred sales charge. An exchange
If you sell your shares or exchange them for generally is treated as a sale and a new
shares of another AmSouth Fund within 7 days purchase of shares for federal income tax
of the date of purchase, you will be charged purposes.
a 2.00% fee on the current net asset value of
the shares sold or exchanged. The fee is paid After you establish an eligible fund account,
to the Fund to offset the costs associated you can exchange Fund shares by telephone or
with short-term trading, such as portfolio online.
transaction and administrative costs.
The Fund uses a "first-in, first-out" method
to determine how long you have held your
shares. This means that if you purchased
shares on different days, the shares
purchased first will be considered redeemed
first for purposes of determining whether the
redemption fee will be charged.
The fee will be charged on all covered
redemptions and exchanges, including those
made through retirement plan, brokerage and
other types of omnibus accounts (except where
it is not practical for the plan
administrator or brokerage firm to implement
the fee). The Fund will not impose the
redemption fee on a redemption or exchange of
shares purchased upon the reinvestment of
dividend and capital gain distributions.
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8
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AmSouth Select Equity Fund Pioneer Focused Equity Fund
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Selling shares Shares of each Fund are sold at the net asset value per share next calculated after the Fund
receives your request in good order.
--------------------------------------------------------------------------------------------------
You may sell your shares by contacting the Normally, your investment firm will send your
Fund directly in writing or by telephone or request to sell shares to PIMSS. You can also
by contacting a financial intermediary as sell your shares by contacting the Fund
described in the Fund's prospectus. directly if your account is registered in
your name.
If the account is established in the
shareholder's own name, shareholders may also
redeem shares of the Fund by telephone or
online.
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Comparison of Principal Risks of Investing in the Funds
Because each Fund has a similar investment objective, primary investment
policies and strategies, the Funds are subject to the same principal risks. You
could lose money on your investment in either Fund or not make as much as if you
invested elsewhere if:
o The stock market goes down (this risk may be greater in the short
term)
o The market segment on which the Fund focuses - undervalued growth
stocks - underperforms other kinds of investments or market averages
o Value stocks fall out of favor with investors
o The adviser's/subadviser's judgment about the attractiveness, growth
potential or potential appreciation of a particular stock proves to be
incorrect
Each Fund is subject to risks relating to the fact that it is
non-diversified. Each Fund may invest in a small number of companies which may
increase the volatility of the Fund. Accordingly, each Fund's portfolio may be
more sensitive to changes in the market value of a single company or industry.
Each Fund may trade securities actively to achieve its principal investment
strategies. Active trading of portfolio securities could increase the Fund's
transaction costs (thereby lowering its performance) and may increase the amount
of taxes that you pay (on distributions of net gains realized on those trades).
However, the adviser/subadviser expects that the Fund's annual portfolio
turnover rate will average less than 50% each year.
If either Fund invests in securities with additional risk, that Fund's
share price volatility accordingly could be greater and its performance lower.
At times, more than 25% of the Pioneer Focused Equity Fund's assets may be
invested in the same market segment, such as financials or technology. To the
extent the Fund emphasizes investments in a market segment, the Fund will be
subject to a greater degree to the risks particular to the industries in that
segment, and may experience greater market fluctuation, than a fund without the
same focus. For example, industries in the financial segment, such as banks,
insurance companies, broker-dealers and REITs, may be sensitive to changes in
interest rates and general economic activity and are subject to extensive
government regulation. Industries in the technology segment, such as information
technology, communications equipment, computer hardware and software, and office
and scientific equipment, are subject to risks of rapidly evolving technology,
short product lives, rates of corporate expenditures, falling prices and
profits, competition from new market entrants, and general economic conditions.
9
Pioneer Focused Equity Fund may be subject to the following additional
risks associated with investing in non-U.S. issuers, which may involve unique
risks compared to investing in securities of U.S. issuers. Some of these risks
do not apply to larger, more developed non-U.S. countries. However, these risks
are more pronounced for issuers of securities in emerging markets. These risks
may include:
o Less information about non-U.S. issuers or markets may be available
due to less rigorous disclosure or accounting standards or regulatory
practices
o Many non-U.S. 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 non-U.S. countries may grow at slower rates than
expected or may experience a downturn or recession
o Economic, political and social developments may adversely affect the
securities markets
o Withholding and other non-U.S. taxes may decrease the Fund's return
Past Performance
Set forth below is performance information for AmSouth Select Equity Fund.
The bar charts show how AmSouth Select Equity Fund's total return (not including
any deduction for sales charges) has varied from year to year for each full
calendar year. The tables show average annual total return for AmSouth Select
Equity Fund over time for each class of shares compared with a broad-based
securities market index. The bar charts give an indication of the risks of
investing in AmSouth Select Equity Fund, including the fact that you could incur
a loss and experience volatility of returns year to year. Past performance does
not indicate future results. Pioneer Focused Equity Fund has not commenced
investment operations.
AmSouth Select Equity Fund -- Class A Shares
Calendar Year Total Returns*
[DATA BELOW IS REPRESENTED BY A BAR CHART IN THE ORIGINAL REPORT]
1999 2000 2001 2002 2003 2004
- -10.12% 12.66% 7.45% -9.12% 26.03% 9.93%
* During the period shown in the bar chart, your AmSouth Fund's highest
quarterly return was 17.30% for the quarter ended December 31, 2000, and
the lowest quarterly return was -13.07% for the quarter ended September 30,
1999.
10
AmSouth Select Equity Fund
Average Annual Total Returns (as of December 31, 2004)
- ---------------------------------------------------------------------------------------------------------------------------------
1 Year 5 Years Since Inception
(September 1, 1998)
- ---------------------------------------------------------------------------------------------------------------------------------
AmSouth Select Equity Fund, Class A Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes(1) 3.90% 7.56% 7.29%
- ---------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions 3.66% 7.39% 6.62%
- ---------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares 2.53% 6.46% 5.90%
- ---------------------------------------------------------------------------------------------------------------------------------
AmSouth Select Equity Fund, Class B Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes(1) 4.10% 7.72% 7.47%
- ---------------------------------------------------------------------------------------------------------------------------------
AmSouth Select Equity Fund, Class I Shares(2)
- ---------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 10.10% 8.97% 8.43%
- ---------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions 9.83% 8.76% 7.72%
- ---------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares 6.56% 7.68% 6.88%
- ---------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(3) 10.87% -2.30% 4.71%
(reflects no deduction for fees, expenses or taxes)
- ---------------------------------------------------------------------------------------------------------------------------------
(1) Class A shares were first offered on 9/1/98. Performance for the Class B
shares, which were first offered on 9/2/98, is based on the historical
performance of the Fund's Class A shares (without sales charge) prior to
that date. The historical performance of the Class B shares has been
restated to reflect the Fund's Class B shares distribution (12b-1) fees and
the contingent deferred sales charge.
2 Performance for the Class I shares, which were first offered on 9/1/98, is
based on the historical performance of the Fund's Class A shares (without
sales charge) prior to that date.
(3) The S&P 500 Index, a widely recognized, unmanaged index of 500 common
stocks, is for reference only, does not mirror the Fund's investments, and
reflects no deduction for fees, expenses or taxes.
The table above shows the impact of taxes on the Fund's returns. After-tax
returns are only shown for Class A shares and may vary for Class B shares. The
Fund's after-tax returns are calculated using the highest individual federal
marginal income tax rates and do not reflect the impact of state and local
taxes. In certain cases, the figure representing "Return After Taxes on
Distributions and Sale of Fund Shares" may be higher than the other return
figures for the same period. A higher after-tax return results when a capital
loss occurs upon redemption and translates into an assumed tax deduction that
beneflts the shareholder. Please note that actual after-tax returns depend on an
investor's tax situation and may differ from those shown. Also note that
after-tax returns shown are not relevant to investors who hold their Fund shares
through tax-deferred arrangements, such as 401(k) plans or individual retirement
accounts.
The most recent portfolio manager's discussion of AmSouth Select Equity
Fund's performance is attached as Exhibit C.
The Funds' Fees and Expenses
Shareholders of both Funds pay various fees and expenses, either directly
or indirectly. The table below shows the fees and expenses that you would pay if
you were to buy and hold shares of each Fund. The expenses in the table
appearing below are based on (i) for the AmSouth Select Equity Fund, the
expenses of AmSouth Select Equity Fund for the period ended January 31, 2005 and
(ii) for the Pioneer Focused Equity Fund, the estimated pro forma annual
expenses for the period ended May 31, 2005.
11
- ----------------------------------------------------------------------------------------------------------------------------
Shareholder AmSouth Select Pioneer Focused AmSouth Select Pioneer Focused AmSouth Select Pioneer Focused
transaction Equity Fund(1) Equity Fund Equity Fund(1) Equity Fund Equity Fund(1) Equity Fund
fees (paid (Pro Forma) (Pro Forma) (Pro forma)
directly from
your
investment) Class A Class A Class B Class B Class I Class Y
- ----------------------------------------------------------------------------------------------------------------------------
Maximum sales 5.50%(2) 5.75%(2) None None None None
charge (load)
when you buy
shares as a
percentage of
offering price
- ----------------------------------------------------------------------------------------------------------------------------
Maximum None None 5.00%(3) 4.00% None None
deferred sales
charge (load)
as a
percentage of
purchase price
or the amount
you receive
when you sell
shares,
whichever is
less
- ----------------------------------------------------------------------------------------------------------------------------
Redemption fees 2.00%(4) None 2.00%(4) None 2.00%(4) None
- ----------------------------------------------------------------------------------------------------------------------------
Annual fund
operating
expenses
(deducted from
fund assets)
(as a % of
average net
assets)
- ----------------------------------------------------------------------------------------------------------------------------
Management fee 0.80% 0.65% 0.80% 0.65% 0.80% 0.65%
- ----------------------------------------------------------------------------------------------------------------------------
Distribution None 0.25% 0.75% 1.00% None None
and service
(12b-1) fee
- ----------------------------------------------------------------------------------------------------------------------------
Other expenses 0.60%(5) 0.27% 0.61%(5) 0.38% 0.46%(5) 0.14%
- ----------------------------------------------------------------------------------------------------------------------------
Total fund 1.40% 1.17% (6) 2.16% 2.03% (6) 1.26% 0.79% (6)
operating
expenses
- ----------------------------------------------------------------------------------------------------------------------------
Expense 0.11% N/A 0.12% N/A 0.12% N/A
reimbursement/
reduction
- ----------------------------------------------------------------------------------------------------------------------------
Net fund 1.29% 1.17% 2.04% 2.03% 1.14% 0.79%
operating
expenses
- ----------------------------------------------------------------------------------------------------------------------------
(1) AmSouth Bank or other financial institutions may charge their customer
account fees for automatic investment and other cash management services
provided in connection with investment in the Fund.
(2) Sales charges may be reduced depending upon the amount invested or, in
certain circumstances, waived. Class A shares of the Pioneer Fund bought as
part of an investment of $1 million or more are not subject to an initial
sales charge, but may be charged a CDSC of 1.00% if sold within one year of
purchase.
(3) A CDSC on Class B shares held continuously declines over six years starting
with year one and ending in year seven from: 5%, 4%, 3%, 3%, 2%, 1%. Eight
years after purchase Class B shares automatically convert to Class A
shares.
(4) To discourage short-term trading, a redemption fee of 2.00% will be charged
on sales or exchanges of Class A, Class B and Class I shares of your
AmSouth Fund made within 7 days of the date of purchase. A wire transfer
fee of $7.00 will be deducted from the amount of your redemption if you
request a wire transfer.
12
(5) Other expenses for your AmSouth Fund are being limited to 0.49% for Class A
shares, 0.49% for Class B shares and 0.34% for Class I shares. Any fee
waiver or expense reimbursement arrangement is voluntary and may be
discontinued at any time.
(6) The Pioneer Fund's total annual operating expenses in the table have not
been reduced by any expense offset arrangements.
The hypothetical example below helps you compare the cost of investing in
each Fund. It assumes that: (a) you invest $10,000 in each Fund for the time
periods shown, (b) you reinvest all dividends and distributions, (c) your
investment has a 5% return each year, (d) each Fund's gross operating expenses
remain the same, and (e) the expense limitation for your Fund is in effect for
year one. The examples are for comparison purposes only and are not a
representation of either Fund's actual expenses or returns, either past or
future.
- -----------------------------------------------------------------------------------
Number of years you AmSouth Equity Select Fund Pro Forma
own your shares Pioneer Focused Equity Fund
- -----------------------------------------------------------------------------------
Class A
- -----------------------------------------------------------------------------------
Year 1 $685 $687
- -----------------------------------------------------------------------------------
Year 3 $969 $925
- -----------------------------------------------------------------------------------
Year 5 $1,274 $1,182
- -----------------------------------------------------------------------------------
Year 10 $2,095 $1,194
- -----------------------------------------------------------------------------------
Class B --- assuming redemption at end of period
- -----------------------------------------------------------------------------------
Year 1 $719 $606
- -----------------------------------------------------------------------------------
Year 3 $976 $937
- -----------------------------------------------------------------------------------
Year 5 $1,359 $1,193
- -----------------------------------------------------------------------------------
Year 10 $2,300 $2,137
- -----------------------------------------------------------------------------------
Class B --- assuming no redemption
- -----------------------------------------------------------------------------------
Year 1 $219 $206
- -----------------------------------------------------------------------------------
Year 3 $676 $637
- -----------------------------------------------------------------------------------
Year 5 $1,159 $1,093
- -----------------------------------------------------------------------------------
Year 10 $2,300 $2,137
- -----------------------------------------------------------------------------------
Class I Class Y
- -----------------------------------------------------------------------------------
Year 1 $128 $81
- -----------------------------------------------------------------------------------
Year 3 $400 $252
- -----------------------------------------------------------------------------------
Year 5 $692 $439
- -----------------------------------------------------------------------------------
Year 10 $1,523 $978
- -----------------------------------------------------------------------------------
Reasons for the Proposed Reorganization
The Trustees believe that the proposed Reorganization is in the best
interests of Amsouth Select Equity Fund. The Trustees considered the following
matters, among others, in approving the proposal.
First, AAMI, the investment adviser to your AmSouth Fund, and AmSouth Bank
informed the Trustees that they did not intend to continue to provide investment
advisory services to the AmSouth Funds. Consequently, a change in your Fund's
investment adviser was necessary. In the absence of the Reorganization, such a
change would be more likely to motivate shareholders invested in reliance on
AAMI's role to withdraw from the Fund, thereby reducing fund size and increasing
fund expense ratios.
Second, the resources of Pioneer. At December 31, 2004, Pioneer managed
over 80 investment companies and accounts with approximately $42 billion in
assets. Pioneer is part of the global asset management group of UniCredito
Italiano S.p.A., one of the largest banking groups in Italy, providing
investment management and financial services to mutual funds, institutional and
other clients. As of December 31, 2004, assets under management of UniCredito
Italiano S.p.A. were approximately $175 billion worldwide. Shareholders of your
AmSouth Fund would become part of a significantly larger family of funds that
offers a more diverse array of investment options and enhanced shareholder
account options. The Pioneer
13
family of mutual funds offers over 80 funds, including domestic and
international equity and fixed income funds and a money market fund that will be
available to your AmSouth Fund's shareholders through exchanges. In addition,
Pioneer offers shareholders additional options for their accounts, including the
ability to transact and exchange shares over the telephone or online and the
ability to access account values and transaction history in all of the
shareholder's direct accounts in the Pioneer Funds over the telephone or online.
Third, Pioneer Focused Equity Fund's management fee (0.65% of average daily
net assets up to $1 billion, and 0.60% on assets greater than $1 billion) will
be substantially lower than the advisory fee of your AmSouth Fund (0.80% of
average daily net assets). The aggregate Rule 12b-1 distribution and shareholder
servicing fees and non-Rule 12b-1 shareholder servicing fees paid by the Class A
and Class B shares of both Funds will be the same. Moreover, your AmSouth Fund's
Class I shares pay a non 12b-1 shareholder servicing fee that will not be paid
by the Pioneer Fund's Class Y shares. On a pro forma basis, the estimated
expense ratio of each class of shares of the Pioneer Fund is estimated to be
lower than the expense ratio of the corresponding class of your AmSouth Fund. In
addition, the broader distribution arrangements of the Pioneer Fund offer
greater potential for further asset growth and reduced per share expenses.
Fourth, the Class A, B and Y shares of Pioneer Focused Equity Fund received
in the Reorganization will provide AmSouth Select Equity Fund shareholders with
exposure to substantially the same investment product as they currently have.
Fifth, the transaction is structured to qualify as a tax-free
reorganization under Section 368(a) of the Internal Revenue Code of 1986 and
therefore will not be treated as a taxable sale of your AmSouth shares.
Pioneer and AmSouth Bank will pay all costs of preparing and printing the
Funds' proxy statements and solicitation costs incurred by the Funds in
connection with the Reorganization. AAMI will otherwise be responsible for all
costs and expenses of the AmSouth Fund in connection with the Reorganizations.
The Trustees also considered that Pioneer and AmSouth Bank will benefit
from the Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the
Reorganizations."
The Board of Trustees of the Pioneer Fund also considered that the
Reorganization presents an excellent opportunity for the Pioneer Fund to acquire
investment assets without the obligation to pay commissions or other transaction
costs that a fund normally incurs when purchasing securities. This opportunity
provides an economic benefit to the Pioneer Fund and its shareholders.
CAPITALIZATION
The following table sets forth the capitalization of each Fund as of May
31, 2005, and the pro forma combined Fund as of May 31, 2005.
- --------------------------------------------------------------------------------------------------------------
Pioneer
Focused Equity
AmSouth Select Fund
Equity Fund Pioneer Focused (Pro Forma)
May 31, 2005 Equity Fund May 31, 2005
- --------------------------------------------------------------------------------------------------------------
Total Net Assets (in thousands) $128,657 N/A $128,657
- --------------------------------------------------------------------------------------------------------------
Class A shares ................................... $20,736 N/A $20,736
- --------------------------------------------------------------------------------------------------------------
Class B shares ................................... $17,590 N/A $17,590
- --------------------------------------------------------------------------------------------------------------
Class I/Y shares ................................. $90,331 N/A $90,331
- --------------------------------------------------------------------------------------------------------------
Net Asset Value Per Share N/A
- --------------------------------------------------------------------------------------------------------------
Class A shares ................................... $14.14 N/A $14.14
- --------------------------------------------------------------------------------------------------------------
Class B shares ................................... $13.68 N/A $13.68
- --------------------------------------------------------------------------------------------------------------
Class I/Y shares ................................. $14.21 N/A $14.21
- --------------------------------------------------------------------------------------------------------------
Shares Outstanding
- --------------------------------------------------------------------------------------------------------------
Class A shares ................................... 1,466,769 N/A 1,466,769
- --------------------------------------------------------------------------------------------------------------
Class B shares ................................... 1,285,404 N/A 1,285,404
- --------------------------------------------------------------------------------------------------------------
Class I/Y shares ................................. 6,358,281 N/A 6,358,281
- --------------------------------------------------------------------------------------------------------------
14
It is impossible to predict how many shares of the Pioneer Fund will
actually be received and distributed by your AmSouth Fund on the Reorganization
date. The table should not be relied upon to determine the amount of the Pioneer
Fund's shares that will actually be received and distributed.
BOARD'S EVALUATION AND RECOMMENDATION
For the reasons described above, the Trustees, including the Independent
Trustees, approved the Reorganization. In particular, the Trustees determined
that the Reorganization is in the best interests of your AmSouth Fund.
Similarly, the Board of Trustees of the Pioneer Fund, including its Independent
Trustees, approved the Reorganization. They also determined that the
Reorganization is in the best interests of the Pioneer Fund.
The Trustees recommend that the shareholders of your AmSouth Fund vote FOR
the proposal to approve the Agreement and Plan of Reorganization.
15
AmSouth Balanced Fund and
Pioneer Classic Balanced Fund
PROPOSAL 1(i)
Approval of Agreement and Plan of Reorganization
SUMMARY
The following is a summary of more complete information appearing later in
this Proxy Statement/Prospectus or incorporated herein. You should read
carefully the entire Proxy Statement/Prospectus, including the form of Agreement
and Plan of Reorganization attached as EXHIBIT A-2, because it contains details
that are not in the summary.
Each Fund has an investment objective of obtaining capital growth and
current income and, consequently, the Funds have similar investment policies and
risks. In the table below, if a row extends across the entire table, the policy
disclosed applies to both your AmSouth Fund and the Pioneer Fund.
Comparison of AmSouth Balanced Fund to Pioneer Classic Balanced Fund
AmSouth Balanced Fund Pioneer Classic Balanced Fund
- -----------------------------------------------------------------------------------------------------------------------------
Business A diversified series of AmSouth Funds, an A newly created diversified series of Pioneer
open-end management investment company series Trust IV, an open-end management
organized as a Massachusetts business trust. investment company organized as a Delaware
statutory trust.
Net assets as of March 31, $182.74 million None. Pioneer Classic Balanced Fund is newly
2005 created and does not expect to commence
investment operations until the Reorganization
occurs.
Investment advisers and Investment Adviser: Investment Adviser:
portfolio managers AAMI Pioneer
Portfolio Managers: Portfolio Managers:
Day-to-day management of AmSouth Balanced Day-to-day management of the Fund's portfolio
Fund's portfolio is the responsibility of John is the responsibility of John A. Carey,
P. Boston, CFA, and Brian B. Sullivan, CFA Mr. portfolio manager, and Walter Hunnewell, Jr.,
Boston has co-managed the Balanced Fund since assistant portfolio manager. Mr. Carey and Mr.
1994. Mr. Sullivan has co-managed the Balanced Hunnewell are supported by the domestic equity
Fund since June 2004. Mr. Sullivan has been an team. Members of this team manage other
officer of AAMI since 1996 and joined AmSouth Pioneer mutual funds investing primarily in
Bank in 1982. Prior to serving as Director of U.S. equity securities. The portfolio managers
Fixed Income for AmSouth Bank's Trust and the team also draw upon the research and
Department, Mr. Sullivan managed equity investment management expertise of the global
portfolios and held the position of equity research team, which provides fundamental
research coordinator for AmSouth Bank's Trust research on companies and includes members
Department. Mr. Boston is Chief Fixed Income from Pioneer's affiliate, Pioneer Investment
Officer for AmSouth Asset Management, Inc. Mr. Management Limited.
Boston began his career in investment
management with AmSouth Bank in 1988 and has Mr. Carey is director of portfolio management
been associated with AAMI since 1996. and an executive vice president of Pioneer.
Mr. Carey joined Pioneer as an analyst in
1979. Mr. Hunnewell is a vice president of
Pioneer. He joined Pioneer in August 2001 and
has been an investment professional since
1
AmSouth Balanced Fund Pioneer Classic Balanced Fund
- -----------------------------------------------------------------------------------------------------------------------------
1985. Prior to joining Pioneer, Mr. Hunnewell
was an independent investment manager and a
fiduciary of private asset portfolios from
2000 to 2001.
Investment objective AmSouth Balanced Fund seeks to obtain Pioneer Classic Balanced Fund seeks to obtain
long-term capital growth and produce a capital growth and current income.
reasonable amount of current income through a
moderately aggressive investment strategy.
Primary investments AmSouth Balanced Fund invests in a broadly Pioneer allocates the Fund's assets between
diversified portfolio of equity and debt equity and debt securities based on its
securities consisting primarily of common assessment of current business, economic and
stocks and bonds. market conditions. Normally, equity and debt
securities each represent 35% to 65% of the
The Fund normally invests between 45-75% of Fund's assets.
its assets in equity securities and at least
25% of its assets in fixed income securities. For purposes of the Fund's investment
The portion of the Fund's assets invested in policies, equity investments include common
equity and debt securities will vary depending stocks, convertible debt, equity interests in
upon economic conditions, the general level of real estate investment trusts (REITs), and
stock prices, interest rates and other securities with common stock characteristics,
factors, including the risks associated with such as preferred stocks. The Fund's
each investment. The Fund's equity investments investments in debt securities include U.S.
consist primarily of common stocks of government securities, corporate debt
companies that AAMI believes are undervalued securities, mortgage- and asset-backed
and have a favorable outlook or are reasonably securities, short-term debt securities, cash
priced with the potential to produce and cash equivalents. Cash and cash
above-average earnings growth. The Fund's equivalents include cash balances, accrued
fixed-income investments consist primarily of interest and receivables for items such as the
"high-grade" bonds, notes and debentures. The proceeds, not yet received, from the sale of
Fund invests in securities issued by: (i) the the Fund's portfolio investments. Debt
Government National Mortgage Association securities in which the Fund invests may have
("GNMA"), which are supported by the full fixed or variable principal payments and all
faith and credit of the U.S. government; and types of interest rate payment and reset
(ii) the Federal National Mortgage Association terms, including fixed rate, adjustable rate,
("FNMA") and the Federal Home Loan Mortgage zero coupon, contingent, deferred,
Corporation ("FHLMC") which are supported by payment-in-kind and auction rate features.
the right of the issuer to borrow from the
U.S. Treasury. The Fund also invests in U.S. The Fund may invest in U.S. government
Treasury obligations. securities. U.S. government securities include
obligations: directly issued by or supported
by the full faith and credit of the U.S.
government, like Treasury bills, notes and
bonds and Government National Mortgage
Association certificates; supported by the
right of the issuer to borrow from the U.S.
Treasury, like those of the Federal Home Loan
Banks; supported by the discretionary
authority of the U.S. government to purchase
the agency's securities like those of the
Federal National Mortgage Association; or
supported only by the credit of the issuer
itself, like the Tennessee Valley Authority.
2
AmSouth Balanced Fund Pioneer Classic Balanced Fund
- -----------------------------------------------------------------------------------------------------------------------------
The Fund may invest in mortgage-backed and
asset-backed securities. Mortgage-related
securities may be issued by private companies
or by agencies of the U.S. government and
represent direct or indirect participation in,
or are collateralized by and payable from,
mortgage loans secured by real property.
Asset-backed securities represent
participations in, or are secured by and
payable from, assets such as installment sales
or loan contracts, leases, credit card
receivables and other categories of
receivables.
Investment strategies In managing the equity portion of the Fund, In selecting equity securities, Pioneer uses a
the AAMI combines fundamental and quantitative value approach to select the Fund's
analysis with risk management to identify investments. Pioneer seeks securities selling
value opportunities, construct the portfolio at reasonable prices or substantial discounts
and make sell decisions. AAMI selects to their underlying values and then holds
investments believed to have basic investment these securities until the market values
value that will eventually be recognized by reflect their intrinsic values. Pioneer
other investors. In addition, the AAMI may evaluates a security's potential value,
identify companies with a history of including the attractiveness of its market
above-average growth or companies that are valuation, based on the company's assets and
expected to enter periods of above-average prospects for earnings growth. In making that
growth or are positioned in emerging growth assessment, Pioneer employs due diligence and
industries. fundamental research, an evaluation of the
issuer based on its financial statements and
AAMI's fixed income portfolio management operations. Pioneer also considers a
process focuses on the four key areas of security's potential to provide a reasonable
duration management, sector weights, position amount of income. Pioneer relies on the
on the yield curve, and security selection; knowledge, experience and judgment of its
AAMI's goal is to add value in each of staff who have access to a wide variety of
these four areas through the active management research. Pioneer focuses on the quality and
of the Fund's portfolio. Beginning with price of individual issuers, not on economic
rigorous fundamental analysis of the economy sector or market-timing strategies. Factors
and taking into account characteristics of the Pioneer looks for in selecting investments
current business and interest rate cycles, include:
AAMI arrives at a projection of the likely
trend in interest rates and adjusts duration o Favorable expected returns relative
accordingly. Analysis of the shape of the to perceived risk
yield curve and yield spreads among bond o Above average potential for earnings
market sectors leads to further refinements in and revenue growth
strategy for companies that appear o Low market valuations relative to
undervalued. earnings forecast, book value, cash flow
and sales
o A sustainable competitive advantage,
such as a brand name, customer base,
proprietary technology or economies of
scale
In selecting debt securities, Pioneer
considers both broad economic and issuer
specific factors in selecting a portfolio
designed to achieve the Fund's investment
objectives. In assessing the appropriate
maturity, rating and
3
AmSouth Balanced Fund Pioneer Classic Balanced Fund
- -----------------------------------------------------------------------------------------------------------------------------
sector weighting of the Fund's portfolio,
Pioneer considers a variety of factors that are
expected to influence economic activity and
interest rates. These factors include
fundamental economic indicators, such as the
rates of economic growth and inflation, Federal
Reserve monetary policy and the relative value
of the U.S. dollar compared to other
currencies. Once Pioneer determines the
preferable portfolio characteristics, Pioneer
selects individual securities based upon the
terms of the securities (such as yields
compared to U.S. Treasuries or comparable
issuers), liquidity and rating, sector and
issuer diversification.
Other investments The Fund may also invest in debt securities, Up to 10% of the Fund's total assets may be
preferred stock and that portion of the value invested in debt securities rated below
of securities convertible in to common stock, investment grade, including convertible debt.
including convertible preferred stock and A debt security is investment grade if it is
convertible debt, which is attributable to the rated in one of the top four categories by a
fixed income characteristics of those nationally recognized statistical rating
securities. organization or determined to be of equivalent
credit quality by Pioneer. Debt securities
rated below investment grade are commonly
referred to as "junk bonds" and are considered
speculative. Below investment grade debt
securities involve greater risk of loss, are
subject to greater price volatility and are
less liquid, especially during periods of
economic uncertainty or change, than higher
quality debt securities.
The Fund may invest up to 25% of its total
assets in real estate investment trusts
(REITs). REITs are companies that invest
primarily in real estate or real estate
related loans.
The Fund may invest up to 25% of its total
assets in equity and debt securities of
non-U.S. issuers. The Fund will not invest
more than 5% of its total assets in the
securities of emerging markets issuers. The
Fund invests in non-U.S. securities to
diversify its portfolio when they offer
similar or greater potential for capital
appreciation.
Temporary defensive When AAMI determines adverse market conditions Normally, Pioneer Classic Balanced Fund
strategies exist, AmSouth Balanced Fund may invest invests substantially all of its assets to
entirely in cash positions, directly in U.S. meet its investment objective. The Fund may
Government securities and short-term paper, invest the remainder of its assets in
such as bankers' acceptances. securities with remaining maturities of less
than one year, cash equivalents or may hold
cash. For temporary defensive purposes,
including
4
AmSouth Balanced Fund Pioneer Classic Balanced Fund
- -----------------------------------------------------------------------------------------------------------------------------
during periods of unusual cash flows, the 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, the Fund may not be able to
achieve its investment objective. The Fund
intends to adopt a defensive strategy when
Pioneer believes securities in which the Fund
normally invests have extraordinary risks due
to political or economic factors and in other
extraordinary circumstances.
Diversification Each Fund is diversified for the purpose of the Investment Company Act and is subject to
diversification requirements under the Internal Revenue Code of 1986, as amended (the "Code").
Industry concentration AmSouth Balanced Fund may not purchase any Pioneer Classic Balanced Fund may not invest
securities which would cause more than 25% of more than 25% of its assets in any one
the value of the Fund's total assets at the industry.
time of purchase to be invested in securities
of one or more issuers conducting their
principal business activities in the same
industry, provided that (a) there is no
limitation with respect to obligations issued
or guaranteed by the U.S. government or its
agencies or instrumentalities, and repurchase
agreements secured by obligations of the
U.S. government or its agencies or
instrumentalities; (b) wholly owned finance
companies will be considered to be in the
industries of their parents if their
activities are primarily related to financing
the activities of their parents; and
(c) utilities will be divided according to
their services. For example, gas, gas
transmission, electric and gas, electric, and
telephone will each be considered a separate
industry.
Restricted and illiquid AmSouth Balanced Fund may not invest more than Pioneer Classic Balanced Fund may not invest
securities 15% of its net assets in securities that are more than 15% of its net assets in securities
restricted as to resale, or for which no that are illiquid and other securities that
readily available market exists, including are not readily marketable. Repurchase
repurchase agreements providing for settlement agreements maturing in more than seven days
more than seven days after notice. will be included for purposes of the foregoing
limit.
Borrowing AmSouth Balanced Fund may not borrow money or Pioneer Classic Balanced Fund may not borrow
issue senior securities, except that the Fund money, except the Fund may: (a) borrow from
may borrow from banks or enter into reverse banks or through reverse repurchase agreements
repurchase agreements for temporary emergency in an amount up to 33 1/3% of the Fund's total
purposes in amounts up to 33 1/3% of the value assets (including the amount borrowed); (b) to
of its total assets at the time of such the extent permitted by applicable law, borrow
borrowing. The Fund will not purchase up to an additional 5% of the Fund's assets
securities while borrowings (including reverse for temporary purposes; (c) obtain such
repurchase agreements) in excess of 5% of its short-term credits as are necessary for the
total assets are outstanding. clearance of portfolio
5
AmSouth Balanced Fund Pioneer Classic Balanced Fund
- -----------------------------------------------------------------------------------------------------------------------------
transactions; (d) purchase securities on margin
to the extent permitted by applicable law; and
(e) engage in transactions in mortgage dollar
rolls that are accounted for as financings.
Lending AmSouth Balanced Fund may not make loans, Pioneer Classic Balanced Fund may not make
except that the Fund may purchase or hold debt loans, except that the Fund may (i) lend
instruments in accordance with its investment portfolio securities in accordance with the
objective and policies, lend Fund securities Fund's investment policies, (ii) enter into
in accordance with its investment objective repurchase agreements, (iii) purchase all or a
and policies and enter into repurchase portion of an issue of publicly distributed
agreements. debt securities, bank loan participation
interests, bank certificates of deposit,
In addition, the Fund is permitted to bankers' acceptances, debentures or other
participate in a credit facility whereby the securities, whether or not the purchase is
Fund may directly lend to and borrow money made upon the original issuance of the
from other AmSouth funds for temporary securities, (iv) participate in a credit
purposes, provided that the loans are made in facility whereby the Fund may directly lend to
accordance with an order of exemption from the and borrow money from other affiliated funds
SEC and any conditions thereto. to the extent permitted under the Investment
Company Act or an exemption therefrom, and (v)
make loans in any other manner consistent with
applicable law, as amended and interpreted or
modified from time to time by any regulatory
authority having jurisdiction.
Derivative instruments AmSouth Balanced Fund may invest in futures The Fund may use futures and options on
contracts and options thereon (interest rate securities, indices and currencies, forward
futures contracts or index futures contracts, foreign currency exchange contracts and other
as applicable) to commit funds awaiting derivatives. A derivative is a security or
investment, to maintain cash liquidity or for instrument whose value is determined by
other hedging purposes. The value of the reference to the value or the change in value
Fund's contracts may equal or exceed 100% of of one or more securities, currencies, indices
the Fund's total assets, although the Fund or other financial instruments. Although there
will not purchase or sell a futures contract is no specific limitation on investing in
unless immediately afterwards the aggregate derivatives, the Fund does not use derivatives
amount of margin deposits on its existing as a primary investment technique and
futures positions plus the amount of premiums generally limits their use to hedging.
paid for related futures options entered into However, the Fund may use derivatives for a
for other than bona fide hedging purposes is variety of non-principal purposes, including:
5% or less of its net assets.
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 the Fund's
exposure to stock market values, interest
rates or currency exchange rates. If changes
in a derivative's value do not correspond to
6
AmSouth Balanced Fund Pioneer Classic Balanced Fund
- -----------------------------------------------------------------------------------------------------------------------------
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. The Fund will only
invest in derivatives to the extent Pioneer
believes these investments do not prevent the
Fund from seeking its investment objective.
Short-term trading The AmSouth Fund may engage in the technique The Fund usually does not trade for short-term
of short-term trading. Such trading involves profits. The Fund will sell an investment,
the selling of securities held for a short however, even if it has only been held for a
time, ranging from several months to less than short time, if it no longer meets the Fund's
a day. The object of such short-term trading investment criteria.
is to increase the potential for capital
appreciation and/or income of the Fund in
order to take advantage of what AAMI believes
are changes in market, industry or individual
company conditions or outlook.
Other investment policies As described above, the Funds have substantially similar principal investment strategies and
and restrictions policies. Certain of the non-principal investment policies and restrictions are different. For
a more complete discussion of each Fund's other investment policies and fundamental and
non-fundamental investment restrictions, see the SAI.
Buying, Selling and Exchanging Shares
Class A sales charges and Class A shares are offered with an initial Class A shares are offered with an initial
Rule 12b-1 fees sales charge of up to 5.50% of the offering sales charge of up to 5.75% of the offering
price, which is reduced depending upon the price, which is reduced or waived for large
amount invested or, in certain circumstances, purchases and certain types of investors. At
waived. Class A shares bought as part of an the time of your purchase, your investment
investment of $1 million or more are not firm may receive a commission from Pioneer
subject to an initial sales charge, but may be Funds Distributor, Inc. ("PFD"), the Fund's
charged a contingent deferred sales charge distributor, of up to 4% declining as the size
("CDSC") of 1.00% if sold within one year of of your investment increases.
purchase.
There is no CDSC, except in certain
Class A shares pay a shareholder servicing fee circumstances when the initial sales charge is
(non 12b-1) of up to 0.25% waived.
Class A shares are subject to distribution and
service (12b-1) fees of up to 0.25% of average
daily net assets.
Class B sales charges and Class B shares are offered without an initial Class B shares are offered without an initial
Rule 12b-1 fees sales charge, but are subject to a CDSC of up sales charge, but are subject to a CDSC of up
to 5%. For Class B shares held continuously, to 4% if you sell your shares. The charge is
the CDSC declines over six years, starting reduced over time and is not charged after
with year one and ending in year seven from: five years. Your investment firm may receive a
5%, 4%, 3%, 2%, 1%. Eight years after purchase commission from PFD, the Fund's distributor,
7
AmSouth Balanced Fund Pioneer Classic Balanced Fund
- -----------------------------------------------------------------------------------------------------------------------------
Class B shares automatically convert to Class at the time of your purchase of up to 4%.
A shares.
Class B shares are subject to distribution and
Class B shares pay a shareholder servicing fee service (12b-1) fees of up to 1% of average
(non 12b-1) of up to 0.25% of average daily daily net assets.
net assets. This fee is in the form of a
separate non-Rule 12b-1 fee. All Funds bear a Class B shares acquired through the
distribution (12b-1) fee of up to 0.75%. Reorganization will be subject to the CDSC and
commission schedules applicable to the
Maximum investment for all Class B purchases original purchase.
by a shareholder for the Fund's shares is
$99,999. Maximum purchase of Class B shares in a single
transaction is $49,999.
Class I and Class Y sales AmSouth Balanced Fund does not impose any The Fund does not impose any initial,
charges and Rule 12b-1 fees initial or CDSC on Class I shares. contingent deferred or asset based sales
charge on Class Y shares.
The Fund may impose a shareholder servicing
fee (non 12b-1) of up to 0.15% of average The distributor incurs the expenses of
daily net assets. The fee is computed daily distributing the Fund's Class Y shares, none
and paid monthly. of which are reimbursed by the Fund or the
Class Y shareowners.
Management and other fees AmSouth Balanced Fund pays an advisory fee on Pioneer Classic Balanced Fund will pay Pioneer
a monthly basis at an annual rate of 0.80% of an advisory fee as follows: 0.65% of the
the Fund's average daily net assets. Fund's average daily net assets on the first
$1 billion, 0.60% on the next $4 billion, and
ASO Services Company, Inc. ("ASO") serves as 0.55% on assets over $5 billion. The fee is
administrator and fund accounting agent for computed daily and paid monthly.
the Fund. The Fund pays ASO an administrative
services fee of 0.15% of the Fund's average In addition, the Fund will reimburse Pioneer
daily net assets. for certain fund accounting and legal expenses
incurred on behalf of the Fund and pay a
Other expenses of the Fund are being limited separate shareholder servicing/transfer agency
to 0.54% for Class A shares, 0.54% for Class B fee to PIMSS, an affiliate of Pioneer.
shares and 0.44% for Class I shares. Any fee
waiver or expense reimbursement arrangement is The Fund's total annual fund operating
voluntary and may be discontinued at any time. expenses are estimated to be 1.13% of average
daily net assets for Class A shares, 1.99% for
For the fiscal year ended July 31, 2004, the Class B shares, and 0.78% for Class Y shares
Fund's annual operating expenses for Class A for the current fiscal year.
shares, after giving effect to the expense
limitation were 1.32%, and without giving
effect to the expense limitation, were 1.34%
of average daily net assets.
For the fiscal year ended July 31, 2004, the
Fund's annual operating expenses for Class B
shares, after giving effect to the expense
limitation were 2.07%, and without giving
effect to the expense limitation, were 2.09%
of
8
AmSouth Balanced Fund Pioneer Classic Balanced Fund
- -----------------------------------------------------------------------------------------------------------------------------
average daily net assets.
For the fiscal year ended July 31, 2004, the
Fund's annual operating expenses for Class I
shares, after giving effect to the expense
limitation were 1.17%, and without giving
effect to the expense limitation, were 1.21%
of average daily net assets.
Buying shares You may buy shares of the Fund directly You may buy shares from any investment firm
through BISYS Fund Services, the Fund's that has a sales agreement with PFD, the
distributor, or through brokers, registered Pioneer Fund's distributor.
investment advisers, banks and other financial
institutions that have entered into selling If the account is established in the
agreements with the Fund's distributor, as shareholder's own name, shareholders may also
described in the Fund's prospectus. purchase additional shares of Pioneer Fund by
telephone or online.
Certain account transactions may be done by
telephone.
Exchanging shares You can exchange your shares in the Fund for You may exchange your shares for shares of the
shares of the same class of another AmSouth same class of another Pioneer mutual fund.
Fund, usually without paying additional sales Your exchange request must be for at least
charges. You must meet the minimum investment $1,000. The Fund allows you to exchange your
requirements for the Fund into which you are shares at net asset value without charging you
exchanging. Exchanges from one Fund to another either an initial or contingent deferred
are taxable. Class A shares may be exchanged shares charge at the time of the exchange.
for Class I shares of the same Fund or another Shares you acquire as part of an exchange will
AmSouth fund if you become eligible to continue to be subject to any contingent
purchase Class I shares. Class I shares may be deferred sales charge that applies to the
exchanged for Class A shares of the same Fund. shares you originally purchased. When you
No transaction fees are currently charged for ultimately sell your shares, the date of your
exchanges. original purchase will determine your
contingent deferred sales charge. An exchange
If you sell your shares or exchange them for generally is treated as a sale and a new
shares of another AmSouth Fund within 7 purchase of shares for federal income tax
days of the date of purchase, you will be purposes.
charged a 2.00% fee on the current net asset
value of the shares sold or exchanged. The fee After you establish an eligible fund account,
is paid to the Fund to offset the costs you can exchange Fund shares by telephone or
associated with short-term trading, such as online.
portfolio transaction and administrative costs.
The Fund uses a "first-in, first-out" method
to determine how long you have held your
shares. This means that if you purchased
shares on different days, the shares purchased
first will be considered redeemed first for
purposes of determining whether the redemption
fee will be charged.
The fee will be charged on all covered
redemptions and exchanges, including those
made through retirement plan, brokerage and
9
AmSouth Balanced Fund Pioneer Classic Balanced Fund
- -----------------------------------------------------------------------------------------------------------------------------
other types of omnibus accounts (except where
it is not practical for the plan administrator
or brokerage firm to implement the fee). The
Fund will not impose the redemption fee on a
redemption or exchange of shares purchased
upon the reinvestment of dividend and capital
gain distributions.
Selling shares Shares of each Fund are sold at the net asset value per share next calculated after the Fund
receives your request in good order.
You may sell your shares by contacting the Normally, your investment firm will send your
Fund directly in writing or by telephone or by request to sell shares to PIMSS. You can also
contacting a financial intermediary as sell your shares by contacting the Fund
described in the Fund's prospectus. directly if your account is registered in your
name.
If the account is established in the
shareholder's own name, shareholders may also
redeem shares of the Fund by telephone or
online.
Comparison of Principal Risks of Investing in the Funds
Because each Fund has a similar investment objective, primary investment
policies and strategies, the Funds are subject to the same principal risks. You
could lose money on your investment in either Fund or not make as much as if you
invested elsewhere if:
o The stock market goes down (this risk may be greater in the short
term)
o The adviser's judgment about the attractiveness, growth potential or
potential appreciation of a particular stock proves to be incorrect
o The market segment on which the Fund equity investment are focused -
value and growth stocks - under performs other kinds of investments
or market averages
o The value of the Fund's fixed-income investments declines due to an
increase in interest rates (generally, an increase in the average
maturity of the fixed income portfolio of the Fund will make it more
sensitive to interest rate risk)
o During periods of declining interest rates, the issuer of a security
may exercise its option to prepay principal earlier than scheduled,
forcing the Fund to reinvest in lower yielding securities. This is
known as call or prepayment risk
o During periods of rising interest rates, the average life of certain
types of securities may be extended because of slower than expected
principal payments. This may lock in a below market interest rate,
increase the security's duration (the estimated period until the
security is paid in full) and reduce the value of the security. This
is known as extension risk
o An issuer cannot make timely interest and principal payments on its
debt securities, such as bonds (the lower a security's rating, the
greater its credit risk)
10
Each Fund may trade securities actively to achieve its principal
investment strategies. Active trading of portfolio securities could increase
each Fund's transaction costs (thereby lowering its performance) and may
increase the amount of taxes that you pay (on distributions of net gains
realized on those trades).
If either Fund invests in securities with additional risk, that Fund's
share price volatility accordingly could be greater and its performance lower.
At times, more than 25% of the Fund's assets may be invested in the same
market segment, such as financials or technology. To the extent the Fund
emphasizes investments in a market segment, the Fund will be subject to a
greater degree to the risks particular to the industries in that segment, and
may experience greater market fluctuation, than a Fund without the same focus.
For example, industries in the financial segment, such as banks, insurance
companies, broker-dealers and REITs, may be sensitive to changes in interest
rates and general economic activity and are subject to extensive government
regulation. Industries in the technology segment, such as information
technology, communications equipment, computer hardware and software, and office
and scientific equipment, are subject to risks of rapidly evolving technology,
short product lives, rates of corporate expenditures, falling prices and
profits, competition from new market entrants, and general economic conditions.
If the Fund does a lot of trading, it may incur additional operating
expenses, which would reduce performance, and could cause shareowners to incur a
higher level of taxable income or capital gains.
Pioneer Classic Balanced Fund may be subject to the following additional
risks associated with investing in non-U.S. issuers, which may involve unique
risks compared to investing in securities of U.S. issuers. Some of these risks
do not apply to larger, more developed non-U.S. countries. However, these risks
are more pronounced for issuers of securities in emerging markets. These risks
may include:
o Less information about non-U.S. issuers or markets may be available
due to less rigorous disclosure or accounting standards or
regulatory practices
o Many non-U.S. 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 non-U.S. countries may grow at slower rates than
expected or may experience a downturn or recession
o Economic, political and social developments may adversely affect the
securities markets
o Withholding and other non-U.S. taxes may decrease the Fund's return
Past Performance
Set forth below is performance information for AmSouth Balanced Fund. The
bar charts show how AmSouth Balanced Fund's total return (not including any
deduction for sales charges) has varied from year to year for each full calendar
year. The tables show average annual total return for AmSouth Balanced Fund over
time for each class of shares compared with a broad-based securities market
index. The bar charts give an indication of the risks of investing in AmSouth
Balanced Fund, including the fact that you could incur a loss and experience
volatility of returns year to year. Past performance does not indicate future
results. Pioneer Classic Balanced Fund has not commenced investment operations.
11
AmSouth Balanced Fund -- Class A Shares
Calendar Year Total Returns*
[BAR CHART]
1995 23.51%
1996 9.72
1997 20.84
1998 13.12
1999 1.33
2000 10.18
2001 4.04
2002 -6.86
2003 15.69
2004 7.60
* During the period shown in the bar chart, your AmSouth Fund's highest
quarterly return was 10.62% for the quarter ended June 30, 2003, and the
lowest quarterly return was -6.78% for the quarter ended September 30,
2002.
AmSouth Balanced Fund
Average Annual Total Returns (as of December 31, 2004)
1 Year 5 Years 10 Years
- --------------------------------------------------------------------------------------------------------------------------
AmSouth Balanced Fund, Class A Shares
- --------------------------------------------------------------------------------------------------------------------------
Return Before Taxes(1) 1.68% 4.79% 9.02%
- --------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions 0.89% 3.23% 6.71%
- --------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares 1.07% 3.29% 6.64%
- --------------------------------------------------------------------------------------------------------------------------
AmSouth Balanced Fund, Class B Shares
- --------------------------------------------------------------------------------------------------------------------------
Return Before Taxes(1) 1.86% 4.87% 8.75%
- --------------------------------------------------------------------------------------------------------------------------
AmSouth Balanced Fund, Class I Shares(2)
- --------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 7.76% 6.15% 9.78%
- --------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions 6.88% 4.46% 7.38%
- --------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares 5.02% 4.38% 7.27%
- --------------------------------------------------------------------------------------------------------------------------
S&P 500 Index 10.87% -2.30% 12.07%
- --------------------------------------------------------------------------------------------------------------------------
Lehman Government/Credit Bond Index 4.19% 8.00% 7.80%
- --------------------------------------------------------------------------------------------------------------------------
(1) Class A shares were first offered on 12/19/91. Performance for the Class B
shares, which were first offered on 9/2/97, is based on the historical
performance of the Fund's Class A shares (without sales charge) prior to
that date. The historical performance of the Class B shares has been
restated to reflect the Fund's Class B shares distribution (12b-1) fees
and the contingent deferred sales charge.
(2) Performance for the Class I shares, which were first offered on 9/1/97, is
based on the historical performance of the Fund's Class A shares (without
sales charge) prior to that date.
The table shows the impact of taxes on the Fund's returns. After-tax
returns are only shown for Class A shares and may vary for Class B shares.
The Fund's after-tax returns are calculated using the highest individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. In certain cases, the figure representing "Return After
Taxes on Distributions and Sale of Fund Shares" may be higher than the
other return figures for the same period. A higher after-tax return
results when a capital loss occurs upon redemption and translates into an
assumed tax deduction that benefits the shareholder. Please note that
actual after-tax returns depend on an investor's tax situation and may
differ from those shown. Also note that after-tax returns shown are not
relevant to investors who hold their Fund shares through tax-deferred
arrangements, such as 401(k) plans or individual retirement accounts.
The most recent portfolio manager's discussion of AmSouth Balanced Fund's
performance is attached as Exhibit C.
12
The Funds' Fees and Expenses
Shareholders of both Funds pay various fees and expenses, either directly
or indirectly. The table below shows the fees and expenses that you would pay if
you were to buy and hold shares of each Fund. The expenses in the table
appearing below are based on (i) for the AmSouth Balanced Fund, the expenses of
AmSouth Balanced Fund for the period ended January 31, 2005 and (ii) for the
Pioneer Classic Balanced Fund, the estimated pro forma annual expenses assuming
the Reorganization occurred on May 31, 2005.
Shareholder AmSouth Balanced Pioneer Classic AmSouth Balanced Pioneer Classic AmSouth Balanced Pioneer Classic
transaction Fund(1) Balanced Fund Fund(1) Balanced Fund Fund(1) Balanced Fund
fees (paid (Pro Forma) (Pro Forma) (Pro Forma)
directly from
your
investment) Class A Class A Class B Class B Class I Class Y
- ---------------------------------------------------------------------------------------------------------------------------------
Maximum sales 5.50%(2) 5.75%(2) None None None None
charge (load)
when you buy
shares as a
percentage of
offering price
- ---------------------------------------------------------------------------------------------------------------------------------
Maximum None None 5.00%(3) 4.00% None None
deferred sales
charge (load)
as a percentage
of purchase
price or the
amount you
receive when
you sell
shares,
whichever is
less
- ---------------------------------------------------------------------------------------------------------------------------------
Redemption fees 2.00%(4) None 2.00%(4) None 2.00%(4) None
- ---------------------------------------------------------------------------------------------------------------------------------
Annual fund
operating
expenses
(deducted from
fund assets)
(as a % of
average net
assets)
- ---------------------------------------------------------------------------------------------------------------------------------
Management fee 0.80% 0.65% 0.80% 0.65% 0.80% 0.65%
- ---------------------------------------------------------------------------------------------------------------------------------
Distribution None 0.25% 0.75% 1.00% None None
and service
(12b-1) fee
- ---------------------------------------------------------------------------------------------------------------------------------
Other expenses 0.60%(5) 0.23% 0.63%(5) 0.34% 0.50%(5) 0.13%
- ---------------------------------------------------------------------------------------------------------------------------------
Total fund 1.40% 1.13%(6) 2.18% 1.99%(6) 1.30% 0.78%(6)
operating
expenses
- ---------------------------------------------------------------------------------------------------------------------------------
Expense 0.07% 0.09% 0.10% N/A 0.12% N/A
reimbursement/
reduction
- ---------------------------------------------------------------------------------------------------------------------------------
Net fund 1.33% 1.13% 2.08% 1.99% 1.18% 0.78%
operating
expenses
- ---------------------------------------------------------------------------------------------------------------------------------
(1) AmSouth Bank or other financial institutions may charge their customer
account fees for automatic investment and other cash management services
provided in connection with investment in the Fund.
(2) Sales charges may be reduced depending upon the amount invested or, in
certain circumstances, waived. Class A shares of the Pioneer Fund bought
as part of an investment of $1 million or more are not subject to an
initial sales charge, but may be charged a CDSC of 1.00% if sold within
one year of purchase.
13
(3) A CDCS on Class B shares held continuously declines over six years
starting with year one and ending in year seven from: 5%, 4%, 3%, 3%, 2%,
1%. Eight years after purchase Class B shares automatically convert to
Class A shares.
(4) To discourage short-term trading, a redemption fee of 2.00% will be
charged on sales or exchanges of Class A, Class B and Class I shares of
your AmSouth Fund made within 7 days of the date of purchase. A wire
transfer fee of $7.00 will be deducted from the amount of your redemption
if you request a wire transfer.
(5) Other expenses for your AmSouth Fund are being limited to 0.53% for Class
A shares, 0.53% for Class B shares and 0.38% for Class I shares. Any fee
waiver or expense reimbursement arrangement is voluntary and may be
discontinued at any time.
(6) The Pioneer Fund's total annual operating expenses in the table have not
been reduced by any expense offset arrangements.
The hypothetical example below helps you compare the cost of investing in
each Fund. It assumes that: (a) you invest $10,000 in each Fund for the time
periods shown, (b) you reinvest all dividends and distributions, (c) your
investment has a 5% return each year, (d) each Fund's gross operating expenses
remain the same, and (e) the expense limitation for your Fund is in effect for
year one. The examples are for comparison purposes only and are not a
representation of either Fund's actual expenses or returns, either past or
future.
Pro Forma
Number of years you Pioneer Classic Balanced
own your shares AmSouth Balanced Fund Fund
- ---------------------------------------------------------------------------------
Class A
- ---------------------------------------------------------------------------------
Year 1 $ 685 $ 684
- ---------------------------------------------------------------------------------
Year 3 $ 969 $ 913
- ---------------------------------------------------------------------------------
Year 5 $ 1,274 $ 1,161
- ---------------------------------------------------------------------------------
Year 10 $ 2,137 $ 1,871
- ---------------------------------------------------------------------------------
Class B --- assuming redemption at end of period
- ---------------------------------------------------------------------------------
Year 1 $ 721 $ 602
- ---------------------------------------------------------------------------------
Year 3 $ 982 $ 924
- ---------------------------------------------------------------------------------
Year 5 $ 1,369 $ 1,173
- ---------------------------------------------------------------------------------
Year 10 $ 2,316 $ 2,095
- ---------------------------------------------------------------------------------
Class B --- assuming no redemption
- ---------------------------------------------------------------------------------
Year 1 $ 221 $ 202
- ---------------------------------------------------------------------------------
Year 3 $ 682 $ 624
- ---------------------------------------------------------------------------------
Year 5 $ 1,169 $ 1,073
- ---------------------------------------------------------------------------------
Year 10 $ 2,316 $ 2,095
- ---------------------------------------------------------------------------------
Class I Class Y
- ---------------------------------------------------------------------------------
Year 1 $ 132 $ 80
- ---------------------------------------------------------------------------------
Year 3 $ 412 $ 249
- ---------------------------------------------------------------------------------
Year 5 $ 713 $ 433
- ---------------------------------------------------------------------------------
Year 10 $ 1,568 $ 966
- ---------------------------------------------------------------------------------
Reasons for the Proposed Reorganization
The Trustees believe that the proposed Reorganization is in the best
interests of Amsouth Balanced Fund. The Trustees considered the following
matters, among others, in approving the proposal.
First, AAMI, the investment adviser to your AmSouth Fund, and AmSouth Bank
informed the Trustees that they did not intend to continue to provide investment
advisory services to the AmSouth Funds. Consequently, a change in your Fund's
investment adviser was necessary. In the absence of the Reorganization, such a
change would be more likely to motivate
14
shareholders invested in reliance on AAMI's role to withdraw from the Fund,
thereby reducing fund size and increasing fund expense ratios.
Second, the resources of Pioneer. At December 31, 2004, Pioneer managed
over 80 investment companies and accounts with approximately $42 billion in
assets. Pioneer is part of the global asset management group of UniCredito
Italiano S.p.A., one of the largest banking groups in Italy, providing
investment management and financial services to mutual funds, institutional and
other clients. As December 31, 2004, assets under management of UniCredito
Italiano S.p.A. were approximately $175 billion worldwide. Shareholders of your
AmSouth Fund would become part of a significantly larger family of funds that
offers a more diverse array of investment options and enhanced shareholder
account options. The Pioneer family of mutual funds offers over 80 funds,
including domestic and international equity and fixed income funds and a money
market fund that will be available to your AmSouth Fund's shareholders through
exchanges. In addition, Pioneer offers shareholders additional options for their
accounts, including the ability to transact and exchange shares over the
telephone or online and the ability to access account values and transaction
history in all of the shareholder's direct accounts in the Pioneer Funds over
the telephone or online.
Third, Pioneer Classic Balanced Fund's management fee (0.65% of average
daily net assets on the first $1 billion, 0.60% on the next $4 billion, and
0.55% on assets over $5 billion) will be substantially lower than the advisory
fee of your Fund (0.80% of average daily net assets). The aggregate Rule 12b-1
distribution and shareholder servicing fees and non-Rule 12b-1 shareholder
servicing fees paid by the Class A and Class B shares of both Funds will be the
same. Moreover, your AmSouth Fund's Class I shares pay a non 12b-1 shareholder
servicing fee that will not be paid by the Pioneer Fund's Class Y shares. On a
pro forma basis, both the gross and net expenses of each class of the Pioneer
Fund are estimated to be lower than the expenses of the corresponding class of
your AmSouth Fund. In addition, the broader distribution arrangements of the
Pioneer Fund offer greater potential for further asset growth and reduce per
share expenses.
Fourth, the Class A, B and Y shares of Pioneer Classic Balanced Fund
received in the Reorganization will provide AmSouth Balanced Fund shareholders
with exposure to substantially the same investment product as they currently
have.
Fifth, the transaction is structured to qualify as a tax-free
reorganization under Section 368(a) of the Internal Revenue Code of 1986 and
therefore will not be treated as a taxable sale of your AmSouth shares.
Pioneer and AmSouth Bank will pay all costs of preparing and printing the
Funds' proxy statements and solicitation costs incurred by the Funds in
connection with the Reorganization. AAMI will otherwise be responsible for all
costs and expenses of the AmSouth Fund in connection with the Reorganizations.
The Trustees also considered that Pioneer and AmSouth Bank will benefit
from the Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the
Reorganizations."
The Board of Trustees of the Pioneer Fund also considered that the
Reorganization presents an excellent opportunity for the Pioneer Fund to acquire
investment assets without the obligation to pay commissions or other transaction
costs that a fund normally incurs when purchasing securities. This opportunity
provides an economic benefit to the Pioneer Fund and its shareholders.
CAPITALIZATION
The following table sets forth the capitalization of each Fund as of May
31, 2005, and the pro forma combined Fund as of May 31, 2005.
(Pro Forma)
AmSouth Balanced Pioneer Classic Pioneer Classic
Fund Balanced Fund Balanced Fund
May 31, 2005 May 31, 2005 May 31, 2005
---------------- --------------- --------------
Total Net Assets (in thousands) $ 181,569 N/A $ 181,569
Class A shares........................................... $ 105,281 N/A $ 105,281
Class B shares .......................................... $ 25,044 N/A $ 25,044
Class I/Y shares ........................................ $ 51,244 N/A $ 51,244
15
Net Asset Value Per Share
Class A shares .......................................... $ 12.74 N/A $ 12.74
Class B shares .......................................... $ 12.69 N/A $ 12.69
Class I/Y shares ........................................ $ 12.74 N/A $ 12.74
Shares Outstanding
Class A shares .......................................... 8,265,238 N/A 8,265,238
Class B shares .......................................... 1,973,093 N/A 1,973,093
Class I/Y shares ........................................ 4,022,510 N/A 4,022,510
It is impossible to predict how many shares of the Pioneer Fund will
actually be received and distributed by your AmSouth Fund on the Reorganization
date. The table should not be relied upon to determine the amount of the Pioneer
Fund's shares that will actually be received and distributed.
BOARD'S EVALUATION AND RECOMMENDATION
For the reasons described above, the Trustees, including the Independent
Trustees, approved the Reorganization. In particular, the Trustees determined
that the Reorganization is in the best interests of your AmSouth Fund.
Similarly, the Board of Trustees of the Pioneer Fund, including its Independent
Trustees, approved the Reorganization. They also determined that the
Reorganization is in the best interests of the Pioneer Fund.
The Trustees recommend that the shareholders of your AmSouth Fund vote FOR
the proposal to approve the Agreement and Plan of Reorganization.
16
AmSouth Strategic Portfolios: Aggressive Growth Portfolio and
Pioneer Ibbotson Aggressive Allocation Fund
PROPOSAL 1(j)
Approval of Agreement and Plan of Reorganization
SUMMARY
The following is a summary of more complete information appearing later in
this Proxy Statement/Prospectus or incorporated herein. You should read
carefully the entire Proxy Statement/Prospectus, including the form of Agreement
and Plan of Reorganization attached as EXHIBIT A-1, because it contains details
that are not in the summary.
Each Fund is structured as a "fund of funds," which means all of its
assets are invested in other mutual funds ("underlying funds"). Your Fund
invests only in other AmSouth funds. Currently, the Pioneer Fund only invests in
other Pioneer Funds but is seeking an exemptive order from the Securities and
Exchange Commission that would permit the Pioneer Fund to invest, in addition,
in mutual funds that are not managed by Pioneer. To the extent Pioneer receives
an order from the Securities and Exchange Commission that permits Pioneer to
invest in such other non-Pioneer underlying funds, Pioneer and the Pioneer Fund
intend to rely on such order, subject to any applicable conditions of the order.
In the table below, if a row extends across the entire table, the policy
disclosed applies to both your AmSouth Fund and the Pioneer Fund.
Comparison of AmSouth Strategic Portfolios: Aggressive Growth Portfolio to
Pioneer Ibbotson Aggressive Allocation Fund
AmSouth Strategic Portfolios: Aggressive Pioneer Ibbotson Aggressive Allocation
Growth Portfolio Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Business A diversified series of AmSouth Funds, an A series of Pioneer Ibbotson Asset Allocation
open-end management investment company Series, a diversified open-end management
organized as a Massachusetts business trust. investment company organized as a Delaware
statutory trust.
Net assets as of March $51.9 million $19.1 million
31, 2005
Investment advisers Investment Adviser: Investment Adviser:
and portfolio AAMI Pioneer
managers
Portfolio Manager: Investment Subadviser:
Day-to-day management of AmSouth Strategic Ibbotson Associates Advisors, LLC
Portfolios: Aggressive Growth Portfolio is the ("Ibbotson")
responsibility of the AmSouth Strategy
Committee, and no person is primarily Portfolio Managers:
responsible for making recommendations to the Day-to-day management of Pioneer Ibbotson
Committee. The Committee members consist Aggressive Allocation Fund is the
of John Boston, CFA, Fred Crown, CFA, Paige responsibility of portfolio managers and
B. Daniel, David M. Dasari, CFA, Joseph T. members of Ibbotson's Investment Committee
Keating, Ronald E. Lindquist, John Mark headed by Roger Ibbotson. Roger Ibbotson
McKenzie, Matt Smith, CFA, Brian B. founded Ibbotson in 1977 and is the firm's
Sullivan, CFA, Doug S. Williams and Jason Chairman. Peng Chen, Ph.D., managing
Waters. director and chief investment officer at
Ibbotson, conducts research projects on asset
Mr. Boston is Chief Fixed Income Officer for allocation, portfolio risk measurement,
AAMI. He began his career in investment nontraditional assets, and global financial
management with AmSouth Bank in 1987 and markets. Dr. Chen joined Ibbotson in 1997.
has been associated with AAMI since 1996. Michael E. Annin, managing director,
Mr. Boston received his CFA charter in 1993 manages the investment management services
and is an active member and past president of and data products group for Ibbotson. Scott
1
AmSouth Strategic Portfolios: Aggressive Pioneer Ibbotson Aggressive Allocation
Growth Portfolio Fund
- ------------------------------------------------------------------------------------------------------------------------------------
the Alabama Society of Financial Analysts. He Wentsel, senior portfolio manager, is
also serves as the portfolio manager for the responsible for management of the firm's
AmSouth High Quality Bond Fund. Mr. Boston fund-of-funds business which includes
is a Senior Vice President of AmSouth Bank oversight of its investment management staff
and Vice President of AAMI. and process. Alexander E. Kaye, portfolio
manager, is responsible for managing the
Mr. Crown has been employed with AmSouth delivery of fund-of-funds programs for
Bank since 1982 and AAMI since 2001. He institutional and retail clients, which includes
was an Institutional Fund Manager with AAMI asset allocation modeling, portfolio
(2001-2003) and has been a Regional Manager construction, fund classification and manager
since 2003. Mr. Crown is a Senior Vice due diligence. Brian Huckstep, portfolio
President of AmSouth Bank. manager, is responsible for managing the
delivery of fund-of-funds programs for
Ms. Daniel has been employed with AmSouth institutional and retail clients, which includes
Bank since 1999. She has been employed by asset allocation modeling, portfolio
AAMI as the Director of Alternative Strategies construction, fund classification, and manager
since 2003. She is an Assistant Vice President due diligence.
with AmSouth Bank.
Mr. Dasari has been employed with AmSouth
Bank since 2002 and AAMI since 2003. He is
Director of Individual Security Management
for AAMI. Prior to joining AmSouth Bank, he
was Assistant Vice President at Fifth Third
Bank. Mr. Dasari is a Vice President of
AmSouth Bank.
Mr. Keating has been employed with AmSouth
Bank since 2001 and AAMI since 2002. He is
the Chairman and Chief Investment Officer of
AAMI. Prior to 2001, he was employed as the
Chief Market Strategist and Chief Fixed
Income Officer of Fifth Third Bank. Mr.
Keating is an Executive Vice-President of
AmSouth Bank.
Mr. Lindquist has been employed with AAMI
since December 1999. Prior to December 1999,
Mr. Lindquist was employed by First American
National Bank (since May 1998), and by
Deposit Guaranty National Bank, and
Commercial National Bank (since 1978). First
American National Bank, Deposit Guaranty
National Bank and Commercial National Bank
are predecessors of AmSouth Bank and
affiliates of AAMI. He also serves as the
portfolio manager for the AmSouth Large Cap
Fund. Mr. Lindquist is a Senior Vice President
of AmSouth Bank and Vice President of
AAMI.
Mr. McKenzie has been involved in investment
management since 1981, with portfolio
management expertise in both equity and fixed
2
AmSouth Strategic Portfolios: Aggressive Pioneer Ibbotson Aggressive Allocation
Growth Portfolio Fund
- ------------------------------------------------------------------------------------------------------------------------------------
income securities. Mr. McKenzie co-managed
the AmSouth Government Income Fund from
1999 to 2002 and managed it from 2003 to
2004. Mr. McKenzie has been associated with
the Trust Investment Department of AmSouth
Bank, and banks acquired by AmSouth Bank,
since 1984 and joined AAMI in 2003. Mr.
McKenzie is a Senior Vice President of
AmSouth Bank and Vice President of AAMI.
Mr. Smith has been employed with AmSouth
Bank since 1988. He has been employed by
AAMI as a Regional Manager since 2004. He
is a Senior Vice President with AmSouth Bank.
Mr. Sullivan has been an officer of AAMI
since 1996 and joined AmSouth Bank in 1984.
Prior to serving as Director of Fixed Income for
AmSouth Bank's Trust Department, Mr.
Sullivan managed equity portfolios and held
the position of equity research coordinator for
AmSouth Bank's Trust Department. Mr.
Sullivan is a Senior Vice President of AmSouth
Bank and Vice President of AAMI.
Mr. Waters has been employed with AmSouth
Bank since 1999. He has been employed as an
Institutional Portfolio Manager with AAMI
since 2001. Mr. Williams is a Senior Vice
President of AmSouth Bank.
Mr. Williams has been employed with
AmSouth Bank since 2002. He has been
employed as a Regional Manager with AAMI
since 2004. Prior to 2002, Mr. Williams was a
Director of Portfolio Management with Fifth
Third Bank (1988-2002). Mr. Williams is a
Senior Vice President of AmSouth Bank.
Investment objective AmSouth Strategic Portfolios: Aggressive Pioneer Ibbotson Aggressive Allocation Fund
Growth Portfolio seeks to provide investors seeks long-term capital growth.
with capital growth.
Primary investments Each Fund allocates its investments among underlying funds within pre-determined strategy
ranges.
3
AmSouth Strategic Portfolios: Aggressive Pioneer Ibbotson Aggressive Allocation
Growth Portfolio Fund
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Aggressive Growth Portfolio:
AmSouth Strategic Portfolios: Aggressive Growth Portfolio allocates its assets among the
following underlying funds within the ranges set forth below based upon AAMI's outlook for the
economy, financial markets and relative market valuations of the underlying AmSouth Funds.
Underlying Fund Allocation Range
AmSouth Value Fund 0-20%
AmSouth Select Equity Fund 0-15%
AmSouth Enhanced Market Fund 0-25%
AmSouth Large Cap Fund 0-15%
AmSouth Capital Growth Fund 0-20%
AmSouth Mid Cap Fund 0-15%
AmSouth Small Cap Fund 0-25%
AmSouth International Equity Fund 0-15%
AmSouth High Quality Bond Fund 0-35%
AmSouth Limited Term Bond Fund 0-10%
AmSouth Prime Money Market Fund 0-5%
The selection of the underlying funds and their ranges are not fundamental and may be changed
without the prior approval of AmSouth Strategic Portfolios: Aggressive Growth Portfolio's
shareholders.
4
AmSouth Strategic Portfolios: Aggressive Pioneer Ibbotson Aggressive Allocation
Growth Portfolio Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Pioneer Ibbotson Aggressive Allocation Fund:
Because this is an aggressive allocation fund, the majority of Pioneer Ibbotson Aggressive
Allocation Fund's assets will be invested in equity funds, although a portion of its assets will be
invested in bond funds, cash, cash equivalents, or in money market funds. Under normal
circumstances, Pioneer Ibbotson Aggressive Allocation Fund initially expects to invest its assets
among asset classes in the following ranges:
Short-Term
Investments Equity Fund Fixed Income Fund
Allocation Allocation Allocation
-------------------------------------------------------------------
0-5% 75-95% 5-15%
Based upon the analysis described under "Asset allocation process," the Fund initially expects to
invest its assets in underlying mutual funds within the following ranges:
Percentage of
Fund
Fund Name Holdings
------------------------------------------------------------------------------------------------
Pioneer Fund 0-25%
------------------------------------------------------------------------------------------------
Pioneer Research Fund 0-25%
------------------------------------------------------------------------------------------------
Pioneer Growth Leaders Fund (formerly Pioneer Papp Stock Fund) 0-25%
------------------------------------------------------------------------------------------------
Pioneer Strategic Growth Fund (formerly Pioneer Papp Strategic 0-25%
Growth Fund)
------------------------------------------------------------------------------------------------
Pioneer Oak Ridge Large Cap Growth Fund 0-25%
------------------------------------------------------------------------------------------------
Pioneer AmPac Growth Fund (formerly Pioneer Papp America- 0-25%
Pacific Rim Fund)
------------------------------------------------------------------------------------------------
Pioneer Value Fund 0-25%
------------------------------------------------------------------------------------------------
Pioneer Mid Cap Growth Fund 0-25%
------------------------------------------------------------------------------------------------
Pioneer Mid Cap Value Fund 0-25%
------------------------------------------------------------------------------------------------
Pioneer Small and Mid Cap Growth Fund (formerly Pioneer Papp 0-25%
Small and Mid Cap Growth Fund)
------------------------------------------------------------------------------------------------
Pioneer Oak Ridge Small Cap Growth Fund 0-25%
------------------------------------------------------------------------------------------------
Pioneer Small Cap Value Fund 0-25%
------------------------------------------------------------------------------------------------
Pioneer International Equity Fund 0-25%
------------------------------------------------------------------------------------------------
Pioneer International Value Fund 0-25%
------------------------------------------------------------------------------------------------
Pioneer Europe Select Fund 0-25%
------------------------------------------------------------------------------------------------
Pioneer Emerging Markets Fund 0-20%
------------------------------------------------------------------------------------------------
Pioneer Real Estate Shares 0-20%
------------------------------------------------------------------------------------------------
Pioneer High Yield Fund 0-20%
------------------------------------------------------------------------------------------------
Pioneer Bond Fund 0-20%
------------------------------------------------------------------------------------------------
Pioneer Strategic Income Fund 0-20%
------------------------------------------------------------------------------------------------
Pioneer Short Term Income Fund 0-20%
------------------------------------------------------------------------------------------------
Pioneer Cash Reserves Fund 0-15%
The Pioneer Fund may change its target allocation to each asset class, the underlying fund in
each asset class (including adding or deleting funds) or target allocations to each underlying fund
without prior approval from or notice to shareholders. Certain of the Pioneer Funds into which
the AmSouth Funds are being reorganized are not currently included in the above list of funds
underlying the Pioneer Fund. Pioneer and Ibbotson may determine to include such additional
Pioneer Funds in the list of permitted investments for the Pioneer Fund into which your Fund is
being reorganized. Alternatively, Pioneer and Ibbotson may determine to hold those additional
Pioneer Funds temporarily until the Pioneer Fund's portfolio is rebalanced.
Appendix A contains a summary description of each of the underlying Pioneer funds.
5
AmSouth Strategic Portfolios: Aggressive Pioneer Ibbotson Aggressive Allocation
Growth Portfolio Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Normally, the Fund invests substantially all of its assets in underlying funds to meet its
investment objective. However, the Fund may invest a portion of its assets in cash, cash
equivalents or in money market funds. The underlying funds may also invest a portion of their
assets in money market funds, securities with remaining maturities of less than one year, cash
equivalents or may hold cash. For temporary defensive purposes, including during periods of
unusual cash flows, the Fund and each of the underlying funds 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, the Fund may not be able to achieve its investment objective. The Fund
intends to adopt a defensive strategy when Pioneer or Ibbotson believes securities in which the
Fund normally invests have extraordinary risks due to political or economic factors and in other
extraordinary circumstances.
Borrowing AmSouth Strategic Portfolios: Aggressive Pioneer Ibbotson Aggressive Allocation Fund
Growth Portfolio may not borrow money or may not borrow money, except on a temporary
issue senior securities, except that the Fund basis and to the extent permitted by
may borrow from banks or enter into reverse applicable law, the Fund may: (a) borrow from
repurchase agreements for temporary emergency banks or through reverse repurchase agreements
purposes in amounts up to 33 1/3% of the value in an amount up to 33 1/3% of the Fund's total
of its total assets at the time of such assets (including the amount borrowed); (b)
borrowing. AmSouth Strategic Portfolios: borrow up to an additional 5% of the Fund's
Aggressive Growth Portfolio will not purchase assets for temporary purposes; (c) obtain such
securities while borrowings (including reverse short-term credits as are necessary for the
repurchase agreements) in excess of 5% of its clearance of portfolio transactions; (d)
total assets are outstanding. In addition, purchase securities on margin; and (e) engage
AmSouth Strategic Portfolios: Aggressive in transactions in mortgage dollar rolls that
Growth Portfolio is permitted to participate are accounted for as financings.
in a credit facility whereby the Fund may
directly lend to and borrow money from other
AmSouth Funds for temporary purposes, provided
that the loans are made in accordance with an
order of exemption from the SEC and any
conditions thereto.
Other investment As described above, the Funds have substantially similar principal investment strategies and
policies and policies. Certain of the non-principal investment policies and restrictions are different. For a
restrictions more complete discussion of each Fund's other investment policies and fundamental and non-
fundamental investment restrictions, see the SAI.
Buying, Selling and Exchanging Shares
Class A sales charges Class A shares are offered with an initial sales Class A shares are offered with an initial sales
and Rule 12b-1 fees charge of up to 5.50% of the offering price, charge of up to 5.75% of the offering price,
which is reduced depending upon the amount which is reduced or waived for large
invested or, in certain circumstances, waived. purchases and certain types of investors. At
Class A shares bought as part of an investment the time of your purchase, your investment
of $1 million or more are not subject to an firm may receive a commission from Pioneer
initial sales charge, but may be charged a Funds Distributor, Inc. ("PFD"), the Fund's
contingent deferred sales charge ("CDSC") of distributor, of up to 2% declining as the size
1.00% if sold within one year of purchase. of your investment increases.
Class A shares pay a shareholder servicing fee There is no CDSC, except in certain
(non 12b-1) of up to 0.25% of average daily net circumstances when the initial sales charge is
assets. waived.
6
AmSouth Strategic Portfolios: Aggressive Pioneer Ibbotson Aggressive Allocation
Growth Portfolio Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Class A shares are subject to distribution and
service (12b-1) fees of up to 0.25% of average
daily net assets.
Class B sales charges Class B shares are offered without an initial Class B shares are offered without an initial
and Rule 12b-1 fees sales charge, but are subject to a CDSC of up to sales charge, but are subject to a CDSC of up
5%. For Class B shares purchased prior to the to 2% if you sell your shares. The charge is
combination of AmSouth Funds with ISG reduced over time and is not charged after five
Funds, the CDSC on such Class B shares held years. Your investment firm may receive a
continuously declines over six years, starting commission from PFD, the Fund's distributor,
with year one and ending in year seven from: at the time of your purchase of up to 2%.
4%, 3%, 3%, 2%, 2%, 1%. For all other Class
B shares held continuously, the CDSC declines Class B shares are subject to distribution and
over six years, starting with year one and service (12b-1) fees of up to 1% of average
ending in year seven from: 5%, 4%, 3%, 3%, daily net assets.
2%, 1%. Eight years after purchase (seven
years in the case of shares acquired in the ISG Class B shares acquired through the
combination), Class B shares automatically Reorganization will be subject to the CDSC
convert to Class A shares. and commission schedules applicable to the
original purchase.
Class B shares pay a shareholder servicing fee
(non 12b-1) of up to 0.25% of average daily net Maximum purchase of Class B shares in a
assets and a distribution (12b-1) fee of up to single transaction is $49,999.
0.75% of average daily net assets.
Maximum investment for all Class B purchases
by a shareholder for the Fund's shares is
$99,999.
Class I and Class Y AmSouth Strategic Portfolios: Aggressive The Fund does not impose any initial,
sales charges and Rule Growth Portfolio does not impose any initial or contingent deferred or asset based sales charge
12b-1 fees CDSC on Class I shares. on Class Y shares.
The Fund may impose a shareholder servicing The distributor incurs the expenses of
fee (non 12b-1) of up to 0.15% of average daily distributing the Fund's Class Y shares, none
net assets. of which are reimbursed by the Fund or the
Class Y shareowners.
Management and AmSouth Strategic Portfolios: Aggressive The management fee payable by Pioneer
other fees Growth Portfolio pays an advisory fee on a Ibbotson Aggressive Allocation Fund is equal
monthly basis at an annual rate of 0.20% of the to 0.13% of average daily net assets
Fund's average daily net assets. attributable to the Fund's investments in
underlying funds managed by Pioneer and
ASO Services Company, Inc. ("ASO") serves cash and 0.17% of average daily net assets
as administrator and fund accounting agent for attributable to other investments, including
the Fund. The Fund pays ASO an underlying funds that are not managed by
administrative services fee of 0.15% of the Pioneer, with breakpoints at incremental asset
Fund's average daily net assets. levels. Since Pioneer currently manages all of
the underlying funds, the management fee will
Other expenses of the Fund are being limited to initially be 0.13% of average daily net assets.
0.36% for Class A shares, 0.35% for Class B
shares and 0.31% for Class I shares. Any fee In addition, the Fund reimburses Pioneer for
waiver or expense reimbursement arrangement certain fund accounting and legal expenses
is voluntary and may be discontinued at any incurred on behalf of the Fund and pays a
7
AmSouth Strategic Portfolios: Aggressive Pioneer Ibbotson Aggressive Allocation
Growth Portfolio Fund
- ------------------------------------------------------------------------------------------------------------------------------------
time. You also indirectly bear a pro rata share separate shareholder servicing/transfer agency
of the fees and expenses of the underlying fee to PIMSS, an affiliate of Pioneer.
funds.
Pioneer has contractually agreed not to impose
For the fiscal year ended July 31, 2004, the all or a portion of its fees or to limit other
Fund's annual operating expenses for Class A direct ordinary operating expenses to the
shares, after giving effect to the expense extent required to reduce expenses, other than
limitation were 0.56%, and without giving "Estimated average expense ratio of
effect to the expense limitation, were 0.79% of underlying funds," to 0.85% of the average
average daily net assets. As of January 12, daily net assets attributable to Class A shares
2005, estimated total direct and indirect and 1.64% of average daily net assets
expenses were 2.04% of average daily net attributable to Class B shares. There is no
assets. expense limitation with respect to the Class Y
shares. This expense limitation is in effect for
For the fiscal year ended July 31, 2004, the Class A shares until December 1, 2008 and in
Fund's annual operating expenses for Class B effect for Class B shares until December 1,
shares, after giving effect to the expense 2006. There can be no assurance that Pioneer
limitation were 1.30%, and without giving will extend these expense limitations past such
effect to the expense limitation, were 1.53% of dates. The expense limitation does not limit
average daily net assets. As of January 12, the expenses of the underlying funds
2005, estimated total direct and indirect indirectly incurred by a shareholder.
expenses were 2.78% of average daily net
assets. Class Y shares of the Pioneer Fund are being
offered for the first time in connection with
For the fiscal year ended July 31, 2004, the the Reorganization.
Fund's annual operating expenses for Class I
shares, after giving effect to the expense
limitation were 0.51%, and without giving
effect to the expense limitation, were 0.74% of
average daily net assets. As of January 12,
2005, estimated total direct and indirect
expenses were 1.94% of average daily net
assets.
Buying shares You may buy shares of the Fund directly You may buy shares from any investment firm
through BISYS Fund Services, the Fund's that has a sales agreement with PFD, the
distributor, or through brokers, registered Pioneer Fund's distributor.
investment advisers, banks and other financial
institutions that have entered into selling If the account is established in the
agreements with the Fund's distributor, as shareholder's own name, shareholders may
described in the Fund's prospectus. also purchase additional shares of the Fund by
telephone or online.
Certain account transactions may be done by
telephone.
Exchanging shares You can exchange your shares in the Fund for You may exchange your shares for shares of
shares of the same class of another AmSouth the same class of another Pioneer mutual fund.
fund, usually without paying additional sales Your exchange request must be for at least
charges. You must meet the minimum $1,000.
investment requirements for the Fund into
which you are exchanging. Exchanges from After you establish an eligible fund account,
one fund to another are taxable. Class A shares you can exchange Fund shares by telephone or
may be exchanged for Class I shares of the online.
same Fund or another AmSouth fund if you
8
AmSouth Strategic Portfolios: Aggressive Pioneer Ibbotson Aggressive Allocation
Growth Portfolio Fund
- ------------------------------------------------------------------------------------------------------------------------------------
become eligible to purchase Class I shares.
Class I shares may be exchanged for Class A
shares of the same fund. No transaction fees are
currently charged for exchanges.
If you sell your shares or exchange them for
shares of another AmSouth fund within 7 days
of the date of purchase, you will be charged a
2.00% fee on the current net asset value of the
shares sold or exchanged. The fee is paid to the
Fund to offset the costs associated with short-
term trading, such as portfolio transaction and
administrative costs.
The Fund uses a "first-in, first-out" method to
determine how long you have held your shares.
This means that if you purchased shares on
different days, the shares purchased first will
be considered redeemed first for purposes of
determining whether the redemption fee will be
charged.
The fee will be charged on all covered
redemptions and exchanges, including those
made through retirement plan, brokerage and
other types of omnibus accounts (except where
it is not practical for the plan administrator or
brokerage firm to implement the fee). The Fund
will not impose the redemption fee on a
redemption or exchange of shares purchased
upon the reinvestment of dividend and capital
gain distributions.
Selling shares Shares of each Fund are sold at the net asset value per share next calculated after the Fund
receives your request in good order.
You may sell your shares by contacting the Normally, your investment firm will send
Fund directly in writing or by telephone or by your request to sell shares to PIMSS. You can
contacting a financial intermediary as described also sell your shares by contacting the Fund
in the Fund's prospectus. directly if your account is registered in your
name.
If the account is established in the
shareholder's own name, shareholders may
also redeem shares of the Fund by telephone
or online.
Comparison of Principal Risks of Investing in the Funds
Because each Fund has a similar investment objective, primary
investment policies and strategies, the Funds are subject to the same principal
risks. You could lose money on an investment in a Fund or a Fund may not perform
as well as other investment options.
Fund of funds structure and layering of fees
9
Each Fund is structured as a fund of funds. Each Fund's investments are
focused in the underlying funds, so the Fund's investment performance is
directly related to the performance of the underlying funds. Each Fund's net
asset value will be affected by the performance of the equity and bond markets
and the value of the mutual funds in which the Fund invests. Since the Funds
mainly invest in the underlying funds, as opposed to other types of securities,
the Funds do not have the same flexibility in their portfolio holdings as many
mutual funds. In addition, each Fund indirectly pays a portion of the expenses
incurred by the underlying funds. Consequently, an investment in a Fund entails
more direct and indirect expenses than a direct investment in the underlying
funds. For instance, you will pay management fees and operating expenses of both
the Fund and the underlying funds.
The underlying funds will not necessarily make consistent investment
decisions, which may also increase your costs. One underlying fund may buy the
same security that another underlying fund is selling. You would indirectly bear
the costs of both trades without achieving any investment purpose. These
transactions may also generate taxable gains. You may receive taxable gains from
portfolio transactions by the underlying funds as well as taxable gains from the
Fund's transactions in shares of the underlying funds.
Currently, Pioneer manages all of the funds underlying the Pioneer Fund.
Because the portfolio management teams of each of the underlying Pioneer funds
may draw upon the resources of the same equity and fixed income analyst team or
may share common investment management styles or approaches, the underlying
funds may hold many common portfolio positions, reducing the diversification
benefits of an asset allocation style.
Equity investments
Equity funds invest primarily in equity securities (such as stocks), which
are more volatile and carry more risks than some other forms of investment. When
the value of the stocks held by an underlying equity fund goes down, the value
of your investment in the Fund will be affected.
The underlying equity funds have risks associated with investing in equity
securities. An equity fund could underperform other investments if:
o The stock market goes down (this risk may be greater in the short
term)
o The fund's equity investments do not have the growth potential or
value characteristics originally expected
o Stocks selected for income do not achieve the same return as
securities selected for capital growth
o The types of stocks in which the fund invests or the fund's
investment approach fall out of favor with investors
Fixed income investments
Fixed income funds primarily invest in debt securities, such as government
securities, investment grade corporate securities, junk bonds, mortgaged backed
securities, asset-backed securities, and money market securities. The value of
your investment in the fund will change as the value of investments of the
underlying funds increases and decreases.
The underlying fixed income funds have risks associated with investing in
debt securities. A fund could underperform other investments if:
o Interest rates go up causing the value of the fund's portfolio to
decline
o The issuer of a debt security owned by the fund defaults on its
obligation to pay principal or interest or has its credit rating
downgraded
o During periods of declining interest rates, the issuer of a security
may exercise its option to prepay earlier than scheduled, forcing
the fund to reinvest in lower yielding securities. This is known as
call or prepayment risk
o During periods of rising interest rates, the average life of certain
types of securities may be extended because of slower than expected
principal payments. This may lock in a below market interest rate,
increase the security's duration (the estimated period until the
security is paid in full) and reduce the value of the security. This
is known as extension risk
o The investment manager's judgment about the attractiveness, relative
value or potential appreciation of a particular sector, security or
investment strategy proves to be incorrect
Equity securities of smaller companies
10
Compared to large companies, small and mid-sized companies, and the market
for their equity securities, are likely to:
o Be more sensitive to changes in the economy, earnings results and
investor expectations
o Have more limited product lines and capital resources
o Experience sharper swings in market values
o Be harder to sell at the times and prices Pioneer thinks appropriate
o Offer greater potential for loss than other U.S. equity securities
Equity securities of real estate industry issuers
Specific risks associated with the real estate industry include:
o The U.S. or a local real estate market declines due to adverse
economic conditions, overbuilding and high vacancy rates, reduced or
regulated rents or other causes
o Interest rates go up. Rising interest rates can adversely affect the
availability and cost of financing for property acquisitions and
other purposes and reduce the value of a REIT's fixed income
investments
o The values of properties owned by a REIT or the prospects of other
real estate industry issuers may be hurt by property tax increases,
zoning changes, other governmental actions, environmental
liabilities, natural disasters or increased operating expenses
o A REIT in an underlying fund's portfolio is, or is perceived by the
market to be, poorly managed
Non-U.S. securities
Investing in non-U.S. issuers, including emerging market issuers, may
involve unique risks compared to investing in securities of issuers in the U.S.
These risks are more pronounced to the extent the fund invests in issuers in the
lesser-developed emerging markets or in one region, such as Europe or the
Pacific Rim. These risks may include:
o Less information about the non-U.S. issuers or markets may be
available due to less rigorous disclosure or accounting standards or
regulatory practices
o Adverse effect of currency exchange rates or controls on the value
of the fund's investments
o The economies of non-U.S. 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 Withholding and other non-U.S. taxes may decrease the fund's return
High yield/below investment grade debt securities
Investment in high yield securities involves substantial risk of loss.
These securities are considered speculative with respect to the issuer's ability
to pay interest and principal and are susceptible to default or decline in
market value due to adverse economic and business developments. The market
values for high yield securities tend to be very volatile, and these securities
are less liquid than investment grade debt securities. For these reasons, your
investment in the fund is subject to the following specific risks:
o Increased price sensitivity to changing interest rates and
deteriorating economic environment
o Greater risk of loss due to default or declining credit quality
o Adverse company specific events are more likely to render the issuer
unable to make interest and/or principal payments
o A negative perception of the high yield market develops, depressing
the price and liquidity of high yield securities. This negative
perception could last for a significant period of time
Derivatives
Certain underlying funds may use futures and options on securities,
indices and currencies, 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. The underlying funds may use
derivatives for a variety of 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
11
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.
Past Performance
Set forth below is performance information for AmSouth Strategic
Portfolios: Aggressive Growth Portfolio. The bar charts show how AmSouth
Strategic Portfolios: Aggressive Growth Portfolio's total return (not including
any deduction for sales charges) has varied from year to year for each full
calendar year. The table shows average annual total return (before and after
taxes) for each Fund over time for each class of shares (including deductions
for sales charges) compared with a broad-based securities market index. The bar
chart gives an indication of the risks of investing in each fund, including the
fact that you could incur a loss and experience volatility of returns year to
year. Past performance before and after taxes does not indicate future results.
AmSouth Strategic Portfolios: Aggressive Growth Portfolio -- Class A Shares
Calendar Year Total Returns*
[BAR CHART]
2000 1.50%
2001 -9.40%
2002 -22.32%
2003 28.31%
2004 11.13%
* During the period shown in the bar chart, your AmSouth Fund's highest
quarterly return was 15.61% for the quarter ended June 30, 2003, and the
lowest quarterly return was -19.18% for the quarter ended September 30,
2002.
Pioneer Ibbotson Aggressive Allocation Fund -- Class A Shares
Calendar Year Total Returns
Pioneer Ibbotson Growth Allocation Portfolio began investment operations
in August 2004. Since the Pioneer Fund has conducted investment operations for
less than one calendar year, it may not disclose any performance information in
this prospectus. The Fund's performance will vary from year to year. Past
performance does not necessarily indicate how a fund will perform in the future.
As a shareowner, you may lose or make money on your investment.
AmSouth Strategic Portfolios: Aggressive Growth Portfolio
Average Annual Total Returns (for the periods ending December 31, 2004)
Since Inception
1 Year 5 Years (2/1/99)
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Aggressive Growth Portfolio, Class A Shares
- ------------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 5.01% -0.77% 1.99%
- ------------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions 4.96% -1.62% 1.77%
- ------------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares 3.25% -0.97% 1.38%
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Aggressive Growth Portfolio, Class B Shares
- ------------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 5.37% -0.74% 2.00%
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Aggressive Growth Portfolio, Class I Shares
- ------------------------------------------------------------------------------------------------------------------------------------
12
Since Inception
1 Year 5 Years (2/1/99)
- ------------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 11.14% 0.40% 2.93%
- ------------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions 11.08% -0.47% 2.08%
- ------------------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares 7.24% 0.01% 2.17%
- ------------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(1) 10.87% -2.30% 0.66%
(reflects no deduction for fees, expenses or taxes)
- ------------------------------------------------------------------------------------------------------------------------------------
(1) The S&P 500, an unmanaged index of 500 stocks, is for reference only, does
not mirror the Fund's investments, and reflects no deduction for fees,
expenses or taxes.
The table above shows the impact of taxes on AmSouth Strategic Portfolios:
Aggressive Growth Portfolio's returns. After-tax returns are only shown for
Class A shares and Class I shares and may vary for Class B shares. The Fund's
after-tax returns are calculated using the highest individual federal marginal
income tax rates and do not reflect the impact of state and local taxes. In
certain cases, the figure representing "Return After Taxes on Distributions and
Sale of Fund Shares" may be higher than the other return figures for the same
period. A higher after-tax return results when a capital loss occurs upon
redemption and translates into an assumed tax deduction that benefits the
shareholder. Please note that actual after-tax returns depend on an investor's
tax situation and may differ from those shown. Also note that after-tax returns
shown are not relevant to shareholders who hold Fund shares through tax-deferred
arrangements, such as 401(k) plans or individual retirement accounts.
The Funds' Fees and Expenses
Shareholders of both Funds pay various fees and expenses, either directly
or indirectly. The tables below show the fees and expenses that you would pay if
you were to buy and hold shares of each Fund. The expenses in the tables
appearing below are based on (i) for the AmSouth Strategic Portfolios:
Aggressive Growth Portfolio, the expenses of AmSouth Strategic Portfolios:
Aggressive Growth Portfolio for the period ended January 31, 2005 and (ii) for
Pioneer Ibbotson Aggressive Allocation Fund, the estimated expenses for the
period ended January 31, 2005. Future expenses for all share classes may be
greater or less. The tables also show the pro forma expenses of the combined
Fund assuming the Reorganization occurred on January 31, 2005.
AmSouth AmSouth AmSouth
Shareholder Strategic Pioneer Strategic Pioneer Strategic
transaction fees Portfolios: Ibbotson Portfolios: Ibbotson Portfolios:
(paid directly Aggressive Aggressive Aggressive Aggressive Combined Aggressive
from your Growth Allocation Combined Fund Growth Allocation Fund (Pro Growth Combined Fund
investment) Portfolio(1) Fund (Pro Forma) Portfolio Fund Forma) Portfolio (Pro Forma)
- ------------------------------------------------------------------------------------------------------------------------------------
Class A Class A Class A Class B Class B Class B Class I Class Y(7)
- ------------------------------------------------------------------------------------------------------------------------------------
Maximum sales 5.50%(2) 5.75% 5.75% None None None None None
charge (load)
when you buy
shares as a
percentage of
offering price
- ------------------------------------------------------------------------------------------------------------------------------------
Maximum None None None 5.00%(3) 4.00% 4.00% None None
deferred sales
charge (load) as
a percentage of
purchase price
or the amount
you receive
when you sell
shares,
whichever is
less
- ------------------------------------------------------------------------------------------------------------------------------------
Redemption 2.00%(4) None None 2.00%(4) None None 2.00%(4) None
fees
13
AmSouth AmSouth AmSouth
Shareholder Strategic Pioneer Strategic Pioneer Strategic
transaction fees Portfolios: Ibbotson Portfolios: Ibbotson Portfolios:
(paid directly Aggressive Aggressive Aggressive Aggressive Combined Aggressive
from your Growth Allocation Combined Fund Growth Allocation Fund (Pro Growth Combined Fund
investment) Portfolio(1) Fund (Pro Forma) Portfolio Fund Forma) Portfolio (Pro Forma)
- ------------------------------------------------------------------------------------------------------------------------------------
Class A Class A Class A Class B Class B Class B Class I Class Y(7)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Annual fund
operating
expenses
(deducted
from fund
assets) (as a %
of average net
assets)
- ------------------------------------------------------------------------------------------------------------------------------------
Management 0.20% 0.17% 0.17% 0.20% 0.17% 0.17% 0.20% 0.17%
fee
- ------------------------------------------------------------------------------------------------------------------------------------
Distribution None 0.25% 0.25% 0.75% 1.00% 1.00% None None
and service
(12b-1) fee
- ------------------------------------------------------------------------------------------------------------------------------------
Other expenses(5) 0.71% 0.78% 0.75% 0.68% 0.92% 1.08% 0.59% 0.59%
- ------------------------------------------------------------------------------------------------------------------------------------
Estimated 1.62% 0.81% 0.81% 2.37% 0.81% 0.81% 1.57% 0.81%
indirect
expenses
- ------------------------------------------------------------------------------------------------------------------------------------
Total fund
operating 2.53% 2.01%(6) 1.98% 4.00% 2.90%(6) 3.06% 2.36% 1.57%
expenses
- ------------------------------------------------------------------------------------------------------------------------------------
Expense 0.35% 0.27% 0.24% 0.38% 0.27% 0.42% 0.31% N/A
reimbursement/
reduction
- ------------------------------------------------------------------------------------------------------------------------------------
Net fund 2.18% 1.74% 1.74% 3.62% 2.63% 2.64% 2.05% 1.57%
operating
expenses
- ------------------------------------------------------------------------------------------------------------------------------------
(1) AmSouth Bank or other financial institutions may charge their customer
account fees for automatic investment and other cash management services
provided in connection with investment in the Fund.
(2) Sales charges may be reduced depending upon the amount invested or, in
certain circumstances, waived. Class A shares of the Pioneer Fund bought
as part of an investment of $1 million or more are not subject to an
initial sales charge, but may be charged a CDSC of 1.00% if sold within
one year of purchase.
(3) For Class B shares purchased prior to the combination of AmSouth Funds
with ISG Funds, the CDSC on such Class B shares held continuously declines
over six years, starting with year one and ending in year seven from: 4%,
3%, 3%, 2%, 2%, 1%. For all other Class B shares held continuously, the
CDSC declines over six years, starting with year one and ending in year
seven from: 5%, 4%, 3%, 3%, 2%, 1%. Approximately eight years after
purchase (seven years in the case of shares acquired in the ISG
combination), Class B shares automatically convert to Class A shares.
(4) To discourage short-term trading, a redemption fee of 2.00% will be
charged on sales or exchanges of Class A, Class B and Class I shares of
your AmSouth Fund made within 7 days of the date of purchase. A wire
transfer fee of $7.00 will be deducted from the amount of your redemption
if you request a wire transfer.
(5) Other expenses for your AmSouth Fund are being limited to 0.36% for Class
A shares, 0.36% for Class B shares and 0.31% for Class I shares. Any fee
waiver or expense reimbursement arrangement is voluntary and may be
discontinued at any time. Pioneer has contractually agreed not to impose
all or a portion of its fees or to limit other direct ordinary operating
expenses to the extent required to reduce expenses, other than "Estimated
average expense ratio of underlying funds," to 0.85% of the average daily
net assets attributable to Class A shares and 1.64% of average daily net
assets attributable to Class B shares. This expense limitation is in
effect for Class A shares until December 1, 2008 and in effect for Class B
until December 1, 2006. There can be no assurance that Pioneer will extend
these expense limitations past such dates. The expense limitation does not
limit the expenses of the underlying funds indirectly incurred by a
shareholder.
(6) The Pioneer Fund's total annual operating expenses in the table have not
been reduced by any expense offset arrangements.
(7) Class Y shares of the Pioneer Fund are being offered for the first time in
connection with the Reorganization.
14
The hypothetical example below helps you compare the cost of investing in each
Fund. It assumes that: (a) you invest $10,000 in each Fund for the time periods
shown, (b) you reinvest all dividends and distributions, (c) your investment has
a 5% return each year, and (d) each Fund's gross operating expenses remain the
same. The examples are for comparison purposes only and are not a representation
of either Fund's actual expenses or returns, either past or future.
- -----------------------------------------------------------------------------------------------------
Number of years you AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive Combined Fund
own your shares Aggressive Growth Portfolio Allocation Fund (Pro Forma)
- -----------------------------------------------------------------------------------------------------
Class A
- -----------------------------------------------------------------------------------------------------
Year 1 $ 758 $ 742 $ 742
- -----------------------------------------------------------------------------------------------------
Year 3 $1,192 $1,145 $1,091
- -----------------------------------------------------------------------------------------------------
Year 5 $1,650 N/A $1,515
- -----------------------------------------------------------------------------------------------------
Year 10 $2,916 N/A $2,691
- -----------------------------------------------------------------------------------------------------
Class B --- assuming redemption at end of period
- -----------------------------------------------------------------------------------------------------
Year 1 $ 798 $ 666 $ 667
- -----------------------------------------------------------------------------------------------------
Year 3 $1,213 $1,172 $1,206
- -----------------------------------------------------------------------------------------------------
Year 5 $1,752 N/A $1,669
- -----------------------------------------------------------------------------------------------------
Year 10 $3,087 N/A $3,092
- -----------------------------------------------------------------------------------------------------
Class B --- assuming no redemption
- -----------------------------------------------------------------------------------------------------
Year 1 $ 298 $ 266 $ 267
- -----------------------------------------------------------------------------------------------------
Year 3 $ 913 $ 872 $ 906
- -----------------------------------------------------------------------------------------------------
Year 5 $1,552 N/A $1,569
- -----------------------------------------------------------------------------------------------------
Year 10 $3,087 N/A $3,092
- -----------------------------------------------------------------------------------------------------
Class I Class Y
- -----------------------------------------------------------------------------------------------------
Year 1 $ 211 N/A $ 160
- -----------------------------------------------------------------------------------------------------
Year 3 $ 652 N/A $ 496
- -----------------------------------------------------------------------------------------------------
Year 5 $1,119 N/A $ 855
- -----------------------------------------------------------------------------------------------------
Year 10 $2,410 N/A $1,867
- -----------------------------------------------------------------------------------------------------
Reasons for the Proposed Reorganization
The Trustees believe that the proposed Reorganization is in the best
interests of AmSouth Strategic Portfolios: Aggressive Growth Portfolio. The
Trustees considered the following matters, among others, in approving the
proposal.
First, AAMI, the investment adviser to your AmSouth Fund, informed the
Trustees that it does not intend to continue to provide investment advisory
services to the AmSouth Funds. Consequently, a change in your Fund's investment
adviser was necessary. In the absence of the Reorganization, such a change would
be more likely to motivate shareholders invested in reliance on AAMI's role to
withdraw from the Fund, thereby reducing fund size and increasing fund expense
ratios.
Second, the resources of Pioneer. At December 31, 2004, Pioneer managed
over 80 investment companies and accounts with approximately $42 billion in
assets, including $15.7 billion in fixed income securities. Pioneer is part of
the global asset management group of UniCredito Italiano S.p.A., one of the
largest banking groups in Italy, providing investment management and financial
services to mutual funds, institutional and other clients. As of December 31,
2004, assets under management of UniCredito Italiano S.p.A. were approximately
$175 billion worldwide. Shareholders of your AmSouth Fund would become part of a
significantly larger family of funds that offers a more diverse array of
investment options and enhanced shareholder account options. The Pioneer family
of mutual funds offers over 80 funds, including domestic and international
equity and fixed income funds and a money market fund that will be available to
your AmSouth Fund's shareholders through exchanges.
Third, Pioneer Ibbotson Aggressive Allocation Fund's management fee (0.17%
of average daily net assets) is lower than the advisory fee of your Fund (0.20%
of average daily net assets). Both the historical and estimated pro forma
expenses of the Pioneer Fund, after giving effect to the Reorganization, on a
gross and net basis are lower than your Fund's gross and net operating expenses.
The aggregate Rule 12b-1 distribution and shareholder servicing fees and
non-Rule 12b-1 shareholder
15
servicing fees paid by both the Class A and Class B shares of Funds are the
same. Moreover, your AmSouth Fund's Class I shares pay a non 12b-1 shareholder
servicing fee that is not paid by the Pioneer Fund's Class Y shares. In
addition, the broader distribution arrangements of the Pioneer Fund offer
greater potential for further asset growth and reduce per share expenses.
Fourth, because of Pioneer distribution arrangements, Pioneer Fund has
greater potential to further increase the assets compared to your Fund. Further
assets growth is anticipated to further reduce the combined Fund's gross
operating expenses per share.
Fifth, the Class A, B and Y shares of the Pioneer Fund received in the
Reorganization will provide AmSouth Fund shareholders with exposure to a similar
investment product as they currently have. The Trustees also noted that the
allocation decisions are made by Ibbotson, a leading asset allocation adviser,
and that the Pioneer Fund intends, as soon as permitted by the SEC, to include
unaffiliated mutual funds as underlying funds.
Sixth, The transaction is structured to qualify as a tax-free
reorganization under Section 368(a) of the Internal Revenue Code of 1986 and
therefore will not be treated as a taxable sale of your AmSouth shares.
Pioneer and AmSouth Bank will pay all costs of preparing and printing the
Funds' proxy statements and solicitation costs incurred by the Funds in
connection with the Reorganization. AAMI will otherwise be responsible for all
costs and expenses of AmSouth Fund in connection with the Reorganization.
The Trustees also considered that Pioneer and AmSouth Bank will benefit
from the Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the
Reorganizations."
The Board of Trustees of the Pioneer Fund also considered that the
Reorganization presents an excellent opportunity for the Pioneer Fund to acquire
investment assets without the obligation to pay commissions or other transaction
costs that a fund normally incurs when purchasing securities. This opportunity
provides an economic benefit to the Pioneer Fund and its shareholders.
CAPITALIZATION
The following table sets forth the capitalization of each Fund as of May
31, 2005, and the pro forma combined Fund as of May 31, 2005.
AmSouth Strategic Pioneer Ibbotson
Portfolios: Pioneer Ibbotson Aggressive
Aggressive Growth Aggressive Allocation Fund
Portfolio Fund Allocation Fund (Pro Forma)
May 31, 2005 May 31, 2005 May 31, 2005
- -------------------------------------------------------- ------------------ ----------------- ----------------
Total Net Assets (in thousands) $ 53,136 $ 24,987 $ 78,123
Class A shares ................................... $ 22,953 $ 14,975 $ 37,928
Class B shares ................................... $ 15,156 $ 4,269 $ 19,425
Class I/Y shares ................................. $ 15,028 N/A $ 15,028
Net Asset Value Per Share
Class A shares ................................... $ 9.60 $ 11.21 $ 11.21
Class B shares ................................... $ 9.19 $ 10.82 $ 10.82
Class I shares ................................... $ 9.60 N/A $ 11.21
Shares Outstanding
Class A shares ................................... 2,391,779 1,335,779 3,383,164
Class B shares ................................... 1,649,291 394,722 1,795,948
Class I/Y shares ................................. 1,565,894 N/A 1,340,485
It is impossible to predict how many shares of the Pioneer Fund will
actually be received and distributed by your AmSouth Fund on the Reorganization
date. The table should not be relied upon to determine the amount of the Pioneer
Fund's shares that will actually be received and distributed.
16
BOARD'S EVALUATION AND RECOMMENDATION
For the reasons described above, the Trustees, including the Independent
Trustees, approved the Reorganization. In particular, the Trustees determined
that the Reorganization is in the best interests of your AmSouth Fund.
Similarly, the Board of Trustees of the Pioneer Fund, including its Independent
Trustees, approved the Reorganization. They also determined that the
Reorganization is in the best interests of the Pioneer Fund.
The Trustees recommend that the shareholders of your AmSouth Fund vote FOR
the proposal to approve the Agreement and Plan of Reorganization.
17
Appendix A
Information about the underlying funds
The following is intended to summarize the investment objectives and primary
strategies of, and to provide you with certain other information about, the
underlying funds. These summaries do not reflect all of the investment policies
and strategies that are disclosed in each underlying fund's prospectus, and are
not an offer of the underlying funds' shares. The underlying funds in which the
funds intend to invest may change from time to time and the funds may invest in
underlying funds in addition to those described below at the discretion of
Pioneer without prior notice to or approval of shareholders. The prospectus and
SAI for each underlying fund is available on the SEC's website as well as on our
website at www.pioneerfunds.com.
Each underlying fund normally will be invested according to its investment
strategy. However, an underlying fund also may have the ability to invest
without limitation in money market instruments or other investments for
temporary, defensive purposes.
The underlying funds that invest primarily in equity securities are:
Pioneer Fund
Investment objective
Reasonable income and capital growth.
Principal investment strategies
The fund invests in a broad list of carefully selected, reasonably priced
securities rather than in securities whose prices reflect a premium resulting
from their current market popularity. The fund invests the major portion of its
assets in equity securities, primarily of U.S. issuers. For purposes of the
fund's investment policies, equity securities include common stocks, convertible
debt and other equity instruments, such as depositary receipts, warrants, rights
and preferred stocks.
Investment Adviser
Pioneer
Pioneer Research Fund
Investment objective
Long-term capital growth.
Principal investment strategies
Normally, the fund invests at least 80% of its assets in equity securities,
primarily of U.S. issuers. For purposes of the fund's investment policies,
equity securities include common stocks, convertible debt and other equity
instruments, such as preferred stocks, depositary receipts, rights and warrants.
Investment Adviser
Pioneer
18
Pioneer Growth Leaders Fund
Investment objective
Long term capital growth.
Principal investment strategies
Normally, the fund invests at least 80% of its net assets (plus the amount of
borrowings, if any, for investment purposes) in common and preferred stocks and
securities convertible into stocks. Securities convertible into stocks include
depositary receipts on stocks, convertible debt securities, warrants and rights.
The fund offers a broad investment program for the equity portion of an
investor's portfolio, with an emphasis on mid and large capitalization issuers
traded in the U.S. However, the fund may invest in issuers of any
capitalization.
Investment Adviser
Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser)
Pioneer Strategic Growth Fund
Investment objective
Long term capital growth.
Principal investment strategies
Normally, the fund invests at least 80% of its net assets (plus the amount of
borrowings, if any, for investment purposes) in equity securities of U.S.
issuers. The fund invests primarily in securities, traded in the U.S., of
issuers that the subadviser believes have substantial international activities.
In evaluating whether an issuer has substantial international activities, the
subadviser considers the degree to which the issuer has non-U.S. reported sales
and revenues, operating earnings or tangible assets. The fund may invest up to
20% of the value of its investments in equity securities of non-U.S. issuers
that are traded in U.S. markets.
Investment Adviser
Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser)
Pioneer Oak Ridge Large Cap Growth Fund
Investment objective
Capital appreciation.
Principal investment strategies
Normally, the fund invests at least 80% of its net assets (plus the amount of
borrowings, if any, for investment purposes) in equity securities of large
capitalization U.S. companies. Large capitalization companies have market
capitalizations at the time of acquisition of $3 billion or more. The fund
anticipates that the average weighted market capitalization of the companies in
the fund's portfolio will be significantly higher that $3 billion. The equity
securities in which the fund principally invests are common stocks, preferred
stocks, depositary receipts and convertible debt, but the fund may invest in
other types of equity securities to a lesser extent, such as warrants and
rights.
Investment Adviser
Pioneer (adviser); Oak Ridge Investments, LLC (subadviser)
19
Pioneer AmPac Growth Fund
Investment objective
Long-term capital growth.
Principal investment strategies
Normally, the fund invests at least 80% of its net assets (plus the amount of
borrowings, if any, for investment purposes) in equity securities of issuers
that have substantial sales to, or receive significant income from, countries
within the Pacific Rim. These issuers meet one of the following criteria:
o 50% or more of the issuer's earnings or sales are attributed to, or
assets are situated in, Pacific Rim countries (including the U.S.
and other countries bordering the Pacific Ocean, such as China and
Indonesia)
o 50% or more of the issuer's earnings or sales are attributed to, or
assets are situated in, Pacific Rim countries other than the U.S.
The fund also may invest up to 30% of the value of its investments in equity
securities of non-U.S. issuers that are traded in U.S. markets.
Investment Adviser
Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser)
Pioneer Value Fund
Investment objective
Reasonable income and capital growth.
Principal investment strategies
The fund seeks to invest in a broad list of carefully selected, reasonably
priced securities rather than in securities whose prices reflect a premium
resulting from their current market popularity. The fund invests the major
portion of its assets in equity securities, primarily of U.S. issuers. For
purposes of the fund's investment policies, equity securities include common
stocks, convertible debt and other equity instruments, such as depositary
receipts, warrants, rights and preferred stocks.
Investment Adviser
Pioneer
Pioneer Mid Cap Growth Fund
Investment objective
Capital growth by investing in a diversified portfolio of securities consisting
primarily of common stocks.
Principal investment strategies
Normally, the fund invests at least 80% of its total assets in equity securities
of mid-size companies, that is, companies with market values within the range of
market values of issuers included in the Russell Midcap Growth Index. For
purposes of the fund's investment policies, equity securities include common
stocks, convertible debt and other equity instruments, such as depositary
receipts, warrants, rights, interests in real estate investment trusts (REITs)
and preferred stocks.
20
Investment Adviser
Pioneer
Pioneer Cullen Value Fund
Investment objective
Capital appreciation. Current income is a secondary objective.
Principal investment strategies
The fund invests primarily in equity securities. The fund may invest a
significant portion of its assets in equity securities of medium- and
large-capitalization companies. Consequently, the fund will be subject to the
risks of investing in companies with market capitalizations of $1.5 billion or
more. For purposes of the fund's investment policies, equity securities include
common stocks, convertible debt and other equity instruments, such as depositary
receipts, warrants, rights, equity interests in real estate investment trusts
(REITs) and preferred stocks.
The fund may invest up to 30% of its total assets in securities of non-U.S.
issuers. Up to 5% of the fund's total assets may be invested in securities of
emerging market issuers. The fund may invest in securities of Canadian issuers
to the same extent as securities of U.S. issuers.
Investment Adviser
Pioneer
Pioneer Mid Cap Value Fund
Investment objective
Capital appreciation by investing in a diversified portfolio of securities
consisting primarily of common stocks.
Principal investment strategies
Normally, the fund invests at least 80% of its total assets in equity securities
of mid-size companies, that is companies with market values within the range of
market values of companies included in the Russell Midcap Value Index. The fund
focuses on issuers with capitalizations within the $1 billion to $10 billion
range, and that range will change depending on market conditions. The equity
securities in which the fund principally invests are common stocks, preferred
stocks, depositary receipts and convertible debt, but the fund may invest in
other types of equity securities to a lesser extent, such as warrants and
rights.
Investment Adviser
Pioneer
Pioneer Small and Mid Cap Growth Fund
Investment objective
Long-term capital growth.
Principal investment strategies
Normally, the fund invests at least 80% of its net assets (plus the amount of
borrowings, if any, for investment purposes) in equity securities of small and
mid-capitalization issuers, that is those with market values, at the time of
investment, that do not exceed the market capitalization of the largest company
within the S&P Mid Cap 400 Index. The size of the companies in the index may
change dramatically as a result of market conditions and the composition of the
index. The fund's investments will
21
not be confined to securities issued by companies included in an index. For
purposes of the fund's investment policies, equity securities include common
stocks, convertible debt and other equity instruments, such as depositary
receipts, warrants, rights and preferred stocks.
Investment Adviser
Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser)
Pioneer Oak Ridge Small Cap Growth Fund
Investment objective
Capital appreciation.
Principal investment strategies
Normally, the fund invests at least 80% of its net assets (plus the amount of
borrowings, if any, for investment purposes) in equity securities of small
capitalization U.S. companies with market capitalizations of $2 billion or less.
For purposes of the fund's investment policies, equity securities include common
stocks, convertible debt and other equity instruments, such as depositary
receipts, warrants, rights and preferred stocks. Small capitalization companies
have market capitalizations at the time of acquisition of $2 billion or less.
The equity securities in which the fund principally invests are common stocks,
preferred stocks, depositary receipts and convertible debt, but the fund may
invest in other types of equity securities to a lesser extent, such as warrants
and rights.
Investment Adviser
Pioneer (adviser); Oak Ridge Investments, LLC (subadviser)
Pioneer Small Cap Value Fund
Investment objective
Capital growth by investing in a diversified portfolio of securities consisting
primarily of common stocks.
Principal investment strategies
Normally, the fund invests at least 80% of its net assets (plus the amount of
borrowings, if any, for investment purposes) in equity securities of small
companies. Small companies are those with market values, at the time of
investment, that do not exceed the greater of the market capitalization of the
largest company within the Russell 2000 Index or the 3-year rolling average of
the market capitalization of the largest company within the Russell 2000 Index
as measured at the end of the preceding month. The Russell 2000 Index measures
the performance of the 2,000 smallest companies in the Russell 3000 Index. The
size of the companies in the index changes with market conditions and the
composition of the index. Pioneer monitors the fund's portfolio so that, under
normal circumstances, the capitalization range of the fund's portfolio is
consistent with the inclusion of the fund in the Lipper Small-Cap category. For
purposes of the fund's investment policies, equity securities include common
stocks, convertible debt and other equity instruments, such as depositary
receipts, warrants, rights, equity interests in real estate investment trusts
(REITs) and preferred stocks.
Investment Adviser
Pioneer
Pioneer International Equity Fund
Investment objective
Long-term capital growth.
22
Principal investment strategies
Normally, the fund invests at least 80% of its total assets in equity securities
of non-U.S. issuers. The fund focuses on securities of issuers located in
countries with developed markets (other than the United States) but may allocate
up to 10% of its assets in countries with emerging economies or securities
markets. Developed markets outside the United States generally include, but are
not limited to, the countries included in the Morgan Stanley Capital
International Europe, Australasia, Far East Index. The fund's assets must be
allocated to securities of issuers located in at least three non-U.S. countries.
For purposes of the fund's investment policies, equity securities include common
stocks, convertible debt and other equity instruments, such as depositary
receipts, warrants, rights and preferred stocks. The fund may also purchase and
sell forward foreign currency exchange contracts in non-U.S. currencies in
connection with its investments.
Investment Adviser
Pioneer
Pioneer International Value Fund
Investment objective
Long-term capital growth.
Principal investment strategies
Normally, the fund invests at least 80% of its total assets in equity securities
of non-U.S. issuers. These issuers may be located in both developed and emerging
markets. Under normal circumstances, the fund's assets will be invested in
securities of companies domiciled in at least three different foreign countries.
Generally, the fund's investments in any country are limited to 25% or less of
its total assets. However, the fund may invest more than 25% of its assets in
issuers organized in Japan or the United Kingdom or in securities quoted or
denominated in the Japanese yen, the British pound and the euro. Investment of a
substantial portion of the fund's assets in such countries or currencies will
subject the fund to the risks of adverse securities markets, exchange rates and
social, political or economic events which may occur in those countries.
The fund may invest without limitation in securities of issuers located in
countries with emerging economies or securities markets, but will not invest
more than 25% of its total assets in securities of issuers located in any one
such country.
For purposes of the fund's investment policies, equity securities include common
stocks, convertible debt and other equity instruments, such as depositary
receipts, warrants, rights and preferred shares. The fund may also purchase and
sell forward foreign currency exchange contracts in non-U.S. currencies in
connection with its investments.
Investment Adviser
Pioneer
Pioneer Europe Select Fund
Investment objective
Capital growth.
Principal investment strategies
Normally, the fund invests at least 80% of its total assets in equity securities
of European issuers. The fund's principal focus is on European companies that
exhibit strong growth characteristics and are considered to be leaders in their
sector or industry. The fund generally focuses on mid- and large-capitalization
European issuers. Equity securities include common stocks, convertible debt and
other equity instruments, such as depositary receipts, warrants, rights and
preferred stocks. The fund may also purchase and sell forward foreign currency
exchange contracts in connection with its investments.
23
Investment Adviser
Pioneer
Pioneer Emerging Markets Fund
Investment objective
Long-term growth of capital.
Principal investment strategies
The fund invests primarily in securities of emerging market issuers. Although
the fund invests in both equity and debt securities, it normally emphasizes
equity securities in its portfolio. Normally, the fund invests at least 80% of
its total assets in the securities of emerging market corporate and government
issuers (i.e., securities of companies that are domiciled or primarily doing
business in emerging countries and securities of these countries' governmental
issuers).
Investment Adviser
Pioneer
Pioneer Real Estate Shares
Investment objective
Long-term growth of capital. Current income is a secondary objective.
Principal investment strategies
Normally, the fund invests at least 80% of its total assets in equity securities
of real estate investment trusts (REITs) and other real estate industry issuers.
For purposes of the fund's investment policies, equity securities include common
stocks, convertible debt and other equity instruments, such as warrants, rights,
interests in REITs and preferred stocks.
Investment Adviser
Pioneer (adviser); AEW Management and Advisors, L.P. (subadviser)
The underlying funds that invest primarily in debt securities are:
Pioneer Bond Fund
Investment objective
To provide current income from an investment grade 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.
Principal investment strategies
The fund invests primarily in:
o Debt securities issued or guaranteed by the U.S. government or its
agencies and instrumentalities,
o Debt securities, including convertible debt, of corporate and other
issuers rated at least investment grade at the time of investment,
and comparably rated commercial paper,
24
o Cash and cash equivalents, certificates of deposit, repurchase
agreements maturing in one week or less and bankers' acceptances.
Normally, the fund invests at least 80% of its total assets in these securities.
In addition, the fund may invest up to 20% of its total assets in debt
securities rated below investment grade or, if unrated, of equivalent quality as
determined by Pioneer. Cash and cash equivalents include cash balances, accrued
interest and receivables for items such as the proceeds, not yet received, from
the sale of the fund's portfolio investments.
Investment Adviser
Pioneer
Pioneer High Yield Fund
Investment objective
Maximize total return through a combination of income and capital appreciation.
Principal investment strategies
Normally, the fund invests at least 80% of its total assets in below investment
grade (high yield) debt securities and preferred stocks. These high yield
securities may be convertible into the equity securities of the issuer. Debt
securities rated below investment grade are commonly referred to as "junk bonds"
and are considered speculative. Below investment grade debt securities involve
greater risk of loss, are subject to greater price volatility and are less
liquid, especially during periods of economic uncertainty or change, than higher
rated debt securities.
Investment Adviser
Pioneer
Pioneer Short Term Income Fund
Investment objective
A high level of current income to the extent consistent with a relatively high
level of stability of principal.
Principal investment strategies
The fund invests primarily in:
o Debt securities issued or guaranteed by the U.S. government, its
agencies or instrumentalities
o Debt securities, including convertible debt, of corporate and other
issuers and commercial paper
o Mortgage-backed and asset-backed securities
o Short-term money market instruments
Normally, at least 80% of the fund's net assets are invested in debt securities
that are rated investment grade at the time of purchase or cash and cash
equivalents. Cash and cash equivalents may include cash balances, accrued
interest and receivables for items such as the proceeds, not yet received, from
the sale of the fund's portfolio investments.
Investment Adviser
Pioneer
25
Pioneer Cash Reserves Fund
Investment objective
High current income, preservation of capital and liquidity through investments
in high-quality short-term securities.
Principal investment strategies
The fund seeks to maintain a constant net asset value of $1.00 per share by
investing in high-quality, U.S. dollar denominated money market securities,
including those issued by:
o U.S. and foreign banks
o U.S. and foreign corporate issuers
o The U.S. government and its agencies and instrumentalities
o Foreign governments
o Multinational organizations such as the World Bank
The fund may invest more than 25% of its total assets in U.S. government
securities and obligations of U.S. banks. The fund may invest in any money
market instrument that is a permissible investment for a money market fund under
the rules of the Securities and Exchange Commission, including commercial paper,
certificates of deposit, time deposits, bankers' acceptances, mortgage-backed
and asset-backed securities, repurchase agreements, municipal obligations and
other short-term debt securities.
Investment Adviser
Pioneer
Pioneer Strategic Income Fund
Investment objective
A high level of current income.
Principal investment strategies
Normally, the fund invests at least 80% of its net assets (plus the amount of
borrowings, if any, for investment purposes) in debt securities. The fund has
the flexibility to invest in a broad range of issuers and segments of the debt
securities markets. Pioneer Investment Management, Inc., the fund's investment
adviser, allocates the fund's investments among the following three segments of
the debt markets:
o Below investment grade (high yield) securities of U.S. and non-U.S.
issuers
o Investment grade securities of U.S. issuers
o Investment grade securities of non-U.S. issuers
Pioneer's allocations among these segments of the debt markets depend upon its
outlook for economic, interest rate and political trends. The fund invests
primarily in:
o Debt securities issued or guaranteed by the U.S. government, its
agencies or instrumentalities or non-U.S. governmental entities
26
o Debt securities of U.S. and non-U.S. corporate issuers, including
convertible debt
o Mortgage-backed and asset-backed securities
The fund's investments may have fixed or variable principal payments and all
types of interest rate payment and reset terms, including fixed rate, adjustable
rate, zero coupon, contingent, deferred, payment in kind and auction rate
features. The fund invests in securities with a broad range of maturities.
Depending upon Pioneer's allocation among market segments, up to 70% of the
fund's total assets may be in debt securities rated below investment grade at
the time of purchase or determined to be of equivalent quality by Pioneer. Up to
20% of the fund's total assets may be invested in debt securities rated below
CCC by Standard & Poor's Ratings Group or the equivalent by another nationally
recognized statistical rating organization or determined to be of equivalent
credit quality by Pioneer. Debt securities rated below investment grade are
commonly referred to as "junk bonds" and are considered speculative. Below
investment grade debt securities involve greater risk of loss, are subject to
greater price volatility and are less liquid, especially during periods of
economic uncertainty or change, than higher rated debt securities.
As with all fixed income securities, the market values of convertible debt
securities tend to decline as interest rates increase and, conversely, to
increase as interest rates decline. However, when the market price of the common
stock underlying a convertible security exceeds the conversion price, the
convertible security tends to reflect the market price of the underlying common
stock.
Depending upon Pioneer's allocation among market segments, up to 85% of the
fund's total assets may be in debt securities of non-U.S. corporate and
governmental issuers, including debt securities of corporate and governmental
issuers in emerging markets.
Investment Adviser
Pioneer
27
AmSouth Strategic Portfolios: Growth Portfolio and
Pioneer Ibbotson Growth Allocation Fund
PROPOSAL 1(k)
Approval of Agreement and Plan of Reorganization
SUMMARY
The following is a summary of more complete information appearing later in
this Proxy Statement/Prospectus or incorporated herein. You should read
carefully the entire Proxy Statement/Prospectus, including the form of Agreement
and Plan of Reorganization attached as EXHIBIT A-1, because it contains details
that are not in the summary.
Each Fund is structured as a "fund of funds," which means all of its
assets are invested in other mutual funds ("underlying funds"). Your Fund
invests only in other AmSouth funds. Currently, the Pioneer Fund only invests in
other Pioneer Funds but is seeking an exemptive order from the Securities and
Exchange Commission that would permit the Pioneer Fund to invest, in addition,
in mutual funds that are not managed by Pioneer. To the extent Pioneer receives
an order from the Securities and Exchange Commission that permits Pioneer to
invest in such other non-Pioneer underlying funds, Pioneer and the Pioneer Fund
intend to rely on such order, subject to any applicable conditions of the order.
In the table below, if a row extends across the entire table, the policy
disclosed applies to both your AmSouth Fund and the Pioneer Fund.
Comparison of AmSouth Strategic Portfolios: Growth Portfolio to Pioneer
Ibbotson Growth Allocation Fund
AmSouth Strategic Portfolios: Growth Portfolio Pioneer Ibbotson Growth Allocation Fund
- -------------------------------------------------------------------------------------------------------------------------------
Business A diversified series of AmSouth Funds, an A series of Pioneer Ibbotson Asset Allocation
open-end management investment company Series, a diversified open-end management
organized as a Massachusetts business trust. investment company organized as a Delaware
statutory trust.
Net assets as of March 31, $64.9 million $32.8 million
2005
Investment advisers Investment Adviser: Investment Adviser:
and portfolio AAMI Pioneer
managers
Portfolio Manager: Investment Subadviser:
Day-to-day management of the AmSouth Strategic Ibbotson Associates Advisors, LLC ("Ibbotson")
Portfolios: Growth Portfolio is the
responsibility of the AmSouth Strategy Portfolio Managers:
Committee, and no person is primarily Day-to-day management of Pioneer Ibbotson
responsible for making recommendations to the Growth Allocation Fund is the responsibility
Committee. The Committee members consist of of portfolio managers and members of
John Boston, CFA, Fred Crown, CFA, Paige B. Ibbotson's Investment Committee headed by
Daniel, David M. Dasari, CFA, Joseph T. Roger Ibbotson. Roger Ibbotson founded
Keating, Ronald E. Lindquist, John Mark Ibbotson in 1977 and is the firm's Chairman.
McKenzie, Matt Smith, CFA, Brian B. Sullivan, Peng Chen, Ph.D., managing director and chief
CFA, Doug S. Williams and Jason Waters. investment officer at Ibbotson, conducts
research projects on asset allocation,
Mr. Boston is Chief Fixed Income Officer for portfolio risk measurement, nontraditional
AAMI. He began his career in investment assets, and global financial markets. Dr. Chen
management with AmSouth Bank in 1987 and has joined Ibbotson in 1997. Michael E. Annin,
been associated with AAMI since 1996. Mr. managing director, manages the investment
Boston received his CFA charter in 1993 and is management services and data products group
an active member and past president of the for Ibbotson. Scott Wentsel, senior portfolio
Alabama Society of Financial Analysts. He manager, is responsible for management of
AmSouth Strategic Portfolios: Growth Portfolio Pioneer Ibbotson Growth Allocation Fund
- -------------------------------------------------------------------------------------------------------------------------------
also serves as the portfolio manager for the the firm's fund-of-funds business which includes
AmSouth High Quality Bond Fund. Mr. Boston is oversight of its investment management staff
a Senior Vice President of AmSouth Bank and and process. Alexander E. Kaye, portfolio
Vice President of AAMI. manager, is responsible for managing the
delivery of fund-of-funds programs for
Mr. Crown has been employed with AmSouth Bank institutional and retail clients, which
since 1982 and AAMI since 2001. He was an includes asset allocation modeling, portfolio
Institutional Fund Manager with AAMI construction, fund classification and manager
(2001-2003) and has been a Regional Manager due diligence. Brian Huckstep, portfolio
since 2003. Mr. Crown is a Senior Vice manager, is responsible for managing the
President of AmSouth Bank. delivery of fund-of-funds programs for
institutional and retail clients, which
Ms. Daniel has been employed with AmSouth Bank includes asset allocation modeling, portfolio
since 1999. She has been employed by AAMI as construction, fund classification, and manager
the Director of Alternative Strategies since due diligence.
2003. She is an Assistant Vice President with
AmSouth Bank.
Mr. Dasari has been employed with AmSouth Bank
since 2002 and AAMI since 2003. He is Director
of Individual Security Management for AAMI.
Prior to joining AmSouth Bank, he was
Assistant Vice President at Fifth Third Bank.
Mr. Dasari is a Vice President of AmSouth Bank.
Mr. Keating has been employed with AmSouth
Bank since 2001 and AAMI since 2002. He is the
Chairman and Chief Investment Officer of AAMI.
Prior to 2001, he was employed as the Chief
Market Strategist and Chief Fixed Income
Officer of Fifth Third Bank. Mr. Keating is an
Executive Vice-President of AmSouth Bank.
Mr. Lindquist has been employed with AAMI
since December 1999. Prior to December 1999,
Mr. Lindquist was employed by First American
National Bank (since May 1998), and by Deposit
Guaranty National Bank, and Commercial
National Bank (since 1978). First American
National Bank, Deposit Guaranty National Bank
and Commercial National Bank are predecessors
of AmSouth Bank and affiliates of AAMI. He
also serves as the portfolio manager for the
AmSouth Large Cap Fund. Mr. Lindquist is a
Senior Vice President of AmSouth Bank and Vice
President of AAMI.
Mr. McKenzie has been involved in investment
management since 1981, with portfolio
management expertise in both equity and fixed
income securities. Mr. McKenzie co-managed
2
AmSouth Strategic Portfolios: Growth Portfolio Pioneer Ibbotson Growth Allocation Fund
- -------------------------------------------------------------------------------------------------------------------------------
the AmSouth Government Income Fund from 1999 to
2002 and managed it from 2003 to 2004. Mr.
McKenzie has been associated with the Trust
Investment Department of AmSouth Bank, and
banks acquired by AmSouth Bank, since 1984 and
joined AAMI in 2003. Mr. McKenzie is a Senior
Vice President of AmSouth Bank and Vice
President of AAMI.
Mr. Smith has been employed with AmSouth Bank
since 1988. He has been employed by AAMI as a
Regional Manager since 2004. He is a Senior
Vice President with AmSouth Bank.
Mr. Sullivan has been an officer of AAMI since
1996 and joined AmSouth Bank in 1984. Prior
to serving as Director of Fixed Income for
AmSouth Bank's Trust Department, Mr. Sullivan
managed equity portfolios and held the
position of equity research coordinator for
AmSouth Bank's Trust Department. Mr. Sullivan
is a Senior Vice President of AmSouth Bank and
Vice President of AAMI.
Mr. Waters has been employed with AmSouth Bank
since 1999. He has been employed as an
Institutional Portfolio Manager with AAMI
since 2001. Mr. Williams is a Senior Vice
President of AmSouth Bank.
Mr. Williams has been employed with AmSouth
Bank since 2002. He has been employed as a
Regional Manager with AAMI since 2004. Prior
to 2002, Mr. Williams was a Director of
Portfolio Management with Fifth Third Bank
(1988-2002). Mr. Williams is a Senior Vice
President of AmSouth Bank.
Investment objective AmSouth Strategic Portfolios: Growth Portfolio Pioneer Ibbotson Growth Allocation Fund seeks
seeks to provide investors with long term long-term capital growth and income.
capital growth.
Primary investments Each Fund allocates its investments among underlying funds within pre-determined strategy
ranges.
3
AmSouth Strategic Portfolios: Growth Portfolio Pioneer Ibbotson Growth Allocation Fund
- -------------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Growth Portfolio:
AmSouth Strategic Portfolios: Growth Portfolio allocates its assets among the following underlying
funds within the ranges set forth below based upon AAMI's outlook for the economy, financial markets
and relative market valuations of the underlying AmSouth Funds.
Underlying Fund Allocation Range
AmSouth Value Fund 0-15%
AmSouth Select Equity Fund 0-15%
AmSouth Enhanced Market Fund 0-20%
AmSouth Large Cap Fund 0-15%
AmSouth Capital Growth Fund 0-15%
AmSouth Mid Cap Fund 0-15%
AmSouth Small Cap Fund 0-15%
AmSouth International Equity Fund 0-15%
AmSouth Government Income Fund 0-15%
AmSouth High Quality Bond Fund 0-45%
AmSouth Limited Term Bond Fund 0-15%
AmSouth Prime Money Market Fund 0-5%
The selection of the underlying funds and their ranges are not fundamental and may be changed
without the prior approval of AmSouth Strategic Portfolios: Growth Portfolio's shareholders.
4
AmSouth Strategic Portfolios: Growth Portfolio Pioneer Ibbotson Growth Allocation Fund
- -------------------------------------------------------------------------------------------------------------------------------
Pioneer Ibbotson Growth Allocation Fund:
Because this is a moderate growth allocation fund, Pioneer Ibbotson Growth Allocation Fund's assets
will be invested in equity and bond funds, although a small portion of its assets will be invested in
cash, cash equivalents, or in money market funds. Under normal circumstances, Pioneer Ibbotson Growth
Allocation Fund initially expects to invest its assets among asset classes in the following ranges:
Short-Term
Investments Equity Fund Fixed Income Fund
Allocation Allocation Allocation
----------- ----------- -----------------
0-5% 70-80% 20-30%
--------------------------------------------
Based upon the analysis described under "Asset allocation process," the Fund initially expects to
invest its assets in underlying mutual funds within the following ranges:
Percentage of
Fund
Fund Name Holdings
---------------------------------------------------------------
Pioneer Fund 0-25%
---------------------------------------------------------------
Pioneer Research Fund 0-25%
---------------------------------------------------------------
Pioneer Growth Leaders Fund (formerly Pioneer
Papp Stock Fund) 0-25%
---------------------------------------------------------------
Pioneer Strategic Growth Fund (formerly Pioneer
Papp Strategic Growth Fund) 0-25%
---------------------------------------------------------------
Pioneer Oak Ridge Large Cap Growth Fund 0-25%
---------------------------------------------------------------
Pioneer AmPac Growth Fund (formerly Pioneer Papp
America-Pacific Rim Fund) 0-25%
---------------------------------------------------------------
Pioneer Value Fund 0-25%
---------------------------------------------------------------
Pioneer Mid Cap Growth Fund 0-25%
---------------------------------------------------------------
Pioneer Mid Cap Value Fund 0-25%
---------------------------------------------------------------
Pioneer Small and Mid Cap Growth Fund
(formerly Pioneer Papp Small and Mid Cap
Growth Fund) 0-25%
---------------------------------------------------------------
Pioneer Oak Ridge Small Cap Growth Fund 0-25%
---------------------------------------------------------------
Pioneer Small Cap Value Fund 0-25%
---------------------------------------------------------------
Pioneer International Equity Fund 0-25%
---------------------------------------------------------------
Pioneer International Value Fund 0-25%
---------------------------------------------------------------
Pioneer Europe Select Fund 0-25%
---------------------------------------------------------------
Pioneer Emerging Markets Fund 0-20%
---------------------------------------------------------------
Pioneer Real Estate Shares 0-20%
---------------------------------------------------------------
Pioneer High Yield Fund 0-20%
---------------------------------------------------------------
Pioneer Bond Fund 0-25%
---------------------------------------------------------------
Pioneer Strategic Income Fund 0-25%
---------------------------------------------------------------
Pioneer Short Term Income Fund 0-20%
---------------------------------------------------------------
Pioneer Cash Reserves Fund 0-20%
---------------------------------------------------------------
The Pioneer Fund may change its target allocation to each asset class, the underlying fund in
each asset class (including adding or deleting funds) or target allocations to each underlying
fund without prior approval from or notice to shareholders. Certain of the Pioneer Funds into
which the AmSouth Funds are being reorganized are not currently included in the above list of
funds underlying the Pioneer Fund. Pioneer and Ibbotson may determine to include such
additional Pioneer Funds in the list of permitted investments for the Pioneer Fund into which
your Fund is being reorganized. Alternatively, Pioneer and Ibbotson may determine to hold those
additional Pioneer Funds temporarily until the Pioneer Fund's portfolio is rebalanced.
Appendix A contains a summary description of each of the underlying Pioneer funds.
5
AmSouth Strategic Portfolios: Growth Portfolio Pioneer Ibbotson Growth Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------------
Normally, the Fund invests substantially all of its assets in underlying funds to meet its
investment objective. However, the Fund may invest a portion of its assets in cash, cash
equivalents or in money market funds. The underlying funds may also invest a portion of their
assets in money market funds, securities with remaining maturities of less than one year, cash
equivalents or may hold cash. For temporary defensive purposes, including during periods of
unusual cash flows, the Fund and each of the underlying funds 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, the Fund may not be able to achieve its investment objective. The
Fund intends to adopt a defensive strategy when Pioneer or Ibbotson believes securities in
which the Fund normally invests have extraordinary risks due to political or economic factors
and in other extraordinary circumstances.
Borrowing AmSouth Strategic Portfolios: Growth Portfolio Pioneer Ibbotson Growth Allocation Fund may
may not borrow money or issue senior not borrow money, except on a temporary basis
securities, except that the Fund may borrow and to the extent permitted by applicable law,
from banks or enter into reverse repurchase the Fund may: (a) borrow from banks or through
agreements for temporary emergency purposes in reverse repurchase agreements in an amount up
amounts up to 33 1/3% of the value of its to 33 1/3% of the Fund's total assets
total assets at the time of such borrowing. (including the amount borrowed); (b) borrow up
AmSouth Strategic Portfolios: Growth Portfolio to an additional 5% of the Fund's assets for
will not purchase securities while borrowings temporary purposes; (c) obtain such short-term
(including reverse repurchase agreements) in credits as are necessary for the clearance of
excess of 5% of its total assets are portfolio transactions; (d) purchase
outstanding. In addition, AmSouth Strategic securities on margin; and (e) engage in
Portfolios: Growth Portfolio is permitted to transactions in mortgage dollar rolls that are
participate in a credit facility whereby the accounted for as financings.
Fund may directly lend to and borrow money
from another AmSouth Fund for temporary
purposes, provided that the loans are made in
accordance with an order of exemption from the
SEC and any conditions thereto.
Other investment policies As described above, the Funds have substantially similar principal investment strategies and
policies and policies. Certain of the non-principal investment policies and restrictions are different. For
restrictions a more complete discussion of each Fund's other investment policies and fundamental and
non-fundamental investment restrictions, see the SAI.
Buying, Selling and Exchanging Shares
Class A sales charges and Class A shares are offered with an initial Class A shares are offered with an initial
Rule 12b-1 fees sales charge of up to 5.50% of the offering sales charge of up to 5.75% of the offering
price, which is reduced depending upon the price, which is reduced or waived for large
amount invested or, in certain circumstances, purchases and certain types of investors. At
waived. Class A shares bought as part of an the time of your purchase, your investment
investment of $1 million or more are not firm may receive a commission from Pioneer
subject to an initial sales charge, but may be Funds Distributor, Inc. ("PFD"), the Fund's
charged a contingent deferred sales charge distributor, of up to 2% declining as the size
("CDSC") of 1.00% if sold within one year of of your investment increases.
purchase.
There is no CDSC, except in certain
Class A shares pay a shareholder servicing fee circumstances when the initial sales charge is
(non 12b-1) of up to 0.25% of average daily waived.
net assets.
Class A shares are subject to distribution and
6
AmSouth Strategic Portfolios: Growth Portfolio Pioneer Ibbotson Growth Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------------
service (12b-1) fees of up to 0.25% of average
daily net assets.
Class B sales charges Class B shares are offered without an initial Class B shares are offered without an initial
and Rule 12b-1 fees sales charge, but are subject to a CDSC of up sales charge, but are subject to CDSC of up to
to 5%. For Class B shares purchased prior to 2% if you sell your shares. The charge is
the combination of AmSouth Funds with ISG reduced over time and is not charged after
Funds, the CDSC on such Class B shares held five years. Your investment firm may receive a
continuously declines over six years, starting commission from PFD, the Fund's distributor,
with year one and ending in year seven from: at the time of your purchase of up to 2%.
4%, 3%, 3%, 2%, 2%, 1%. For all other Class B
shares held continuously, the CDSC declines Class B shares are subject to distribution and
over six years, starting with year one and service (12b-1) fees of up to 1% of average
ending in year seven from: 5%, 4%, 3%, 3%, 2%, daily net assets.
1%. Eight years after purchase (seven years in
the case of shares acquired in the ISG Class B shares acquired through the
combination), Class B shares automatically Reorganization will be subject to the CDSC and
convert to Class A shares. commission schedules applicable to the
original purchase.
Class B shares pay a shareholder servicing fee
(non 12b-1) of up to 0.25% of average daily Maximum purchase of Class B shares in a single
net assets and a distribution (12b-1) fee of transaction is $49,999.
up to 0.75% of average daily net assets.
Maximum investment for all Class B purchases
by a shareholder for the Fund's shares is
$99,999.
Class I and Class Y sales AmSouth Strategic Portfolios: Growth Portfolio The Fund does not impose any initial,
sales charges and Rule does not impose any initial or CDSC on Class I contingent deferred or asset based sales
12b-1 fees shares. charge on Class Y shares.
The Fund may impose a shareholder servicing The distributor incurs the expenses of
fee (non 12b-1) of up to 0.15% of average distributing the Fund's Class Y shares, none
daily net assets. of which are reimbursed by the Fund or the
Class Y shareowners.
Management and AmSouth Strategic Portfolios: Growth Portfolio The management fee payable by Pioneer Ibbotson
other fees pays an advisory fee on a monthly basis at an Growth Allocation Fund is equal to 0.13% of
annual rate of 0.20% of the Fund's average average daily net assets attributable to the
daily net assets. Fund's investments in underlying funds managed
by Pioneer and cash and 0.17% of average daily
ASO Services Company, Inc. ("ASO") serves as net assets attributable to other investments,
administrator and fund accounting agent for including underlying funds that are not
the Fund. The Fund pays ASO an administrative managed by Pioneer, with breakpoints at
services fee of 0.15% of the Fund's average incremental asset levels. Since currently all
daily net assets. of the underlying funds are managed by
Pioneer, the management fee will initially be
Other expenses of the Fund are being limited 0.13% of average daily net assets.
to 0.30% for Class A shares, 0.29% for Class B
shares and 0.25 % for Class I shares. Any fee In addition, the Fund reimburses Pioneer for
waiver or expense reimbursement arrangement is certain fund accounting and legal expenses
voluntary and may be discontinued at any time. incurred on behalf of the Fund and pays a
You also indirectly bear a pro rata share separate shareholder servicing/transfer agency
7
AmSouth Strategic Portfolios: Growth Portfolio Pioneer Ibbotson Growth Allocation Fund
- ------------------------------------------------------------------------------------------------------------------------------
of the fees and expenses of the underlying fee to PIMSS, an affiliate of Pioneer.
funds.
Pioneer has contractually agreed not to impose
For the fiscal year ended July 31, 2004, the all or a portion of its fees or to limit other
Fund's annual operating expenses for Class A direct ordinary operating expenses to the
shares, after giving effect to the expense extent required to reduce expenses, other than
limitation were 0.50%, and without giving "Estimated average expense ratio of underlying
effect to the expense limitation, were 0.73% funds," to 0.79% of the average daily net
of average daily net assets. As of January 12, assets attributable to Class A shares and
2005, estimated total direct and indirect 1.57% of average daily net assets attributable
expenses were 1.92% of average daily net to Class B shares. There is no expense
assets. limitation with respect to the Class Y shares.
This expense limitation is in effect for Class
For the fiscal year ended July 31, 2004, the A shares until December 1, 2008 and in effect
Fund's annual operating expenses for Class B for Class B shares until December 1, 2006.
shares, after giving effect to the expense There can be no assurance that Pioneer will
limitation were 1.24%, and without giving extend these expense limitations past such
effect to the expense limitation, were 1.47% dates. The expense limitation does not limit
of average daily net assets. As of January 12, the expenses of the underlying funds
2005, estimated total direct and indirect indirectly incurred by a shareholder.
expenses were 2.66% of average daily net
assets. Class Y shares of the Pioneer Fund are being
offered for the first time in connection with
For the fiscal year ended July 31, 2004, the the Reorganization.
Fund's annual operating expenses for Class I
shares, after giving effect to the expense
limitation were 0.45%, and without giving
effect to the expense limitation, were 0.68%
of average daily net assets. As of January 12,
2005, estimated total direct and indirect
expenses were 1.82% of average daily net
assets.
Buying shares You may buy shares of the Fund directly You may buy shares from any investment firm
through BISYS Fund Services, the Fund's that has a sales agreement with PFD, the
distributor, or through brokers, registered Pioneer Fund's distributor.
investment advisers, banks and other financial
institutions that have entered into selling If the account is established in the
agreements with the Fund's distributor, as shareholder's own name, shareholders may also
described in the Fund's prospectus. purchase additional shares of the Fund by
telephone or online.
Certain account transactions may be done by
telephone.
Exchanging shares You can exchange your shares in the Fund for You may exchange your shares for shares of the
shares of the same class of another AmSouth same class of another Pioneer mutual fund.
fund, usually without paying additional sales Your exchange request must be for at least
charges. You must meet the minimum investment $1,000.
requirements for the Fund into which you are
exchanging. Exchanges from one fund to another After you establish an eligible fund account,
are taxable. Class A shares may be exchanged you can exchange fund shares by telephone or
for Class I shares of the same Fund or another online.
AmSouth fund if you become eligible to
purchase Class I shares.
8
AmSouth Strategic Portfolios: Growth Portfolio Pioneer Ibbotson Growth Allocation Fund
- ----------------------------------------------------------------------------------------------------------------------------
Class I shares may be exchanged for Class
A shares of the same fund. No transaction fees
are currently charged for exchanges.
If you sell your shares or exchange them for
shares of another AmSouth fund within 7 days
of the date of purchase, you will be charged a
2.00% fee on the current net asset value of
the shares sold or exchanged. The fee is paid
to the Fund to offset the costs associated
with short-term trading, such as portfolio
transaction and administrative costs.
The Fund uses a "first-in, first-out" method
to determine how long you have held your
shares. This means that if you purchased
shares on different days, the shares purchased
first will be considered redeemed first for
purposes of determining whether the redemption
fee will be charged.
The fee will be charged on all covered
redemptions and exchanges, including those
made through retirement plan, brokerage and
other types of omnibus accounts (except where
it is not practical for the plan administrator
or brokerage firm to implement the fee). The
Fund will not impose the redemption fee on a
redemption or exchange of shares purchased
upon the reinvestment of dividend and capital
gain distributions.
Selling shares Shares of each Fund are sold at the net asset value per share next calculated after the Fund
receives your request in good order.
You may sell your shares by contacting the Normally, your investment firm will send your
Fund directly in writing or by telephone or by request to sell shares to PIMSS. You can also
contacting a financial intermediary as sell your shares by contacting the Fund
described in the Fund's prospectus. directly if your account is registered in your
name.
If the account is established in the
shareholder's own name, shareholders may also
redeem shares of the Fund by telephone or
online.
Comparison of Principal Risks of Investing in the Funds
Because each Fund has a similar investment objective, primary investment
policies and strategies, the Funds are subject to the same principal risks. You
could lose money on an investment in a fund or a fund may not perform as well as
other investment options.
Fund of funds structure and layering of fees
9
Each Fund is structured as a fund of funds. Each Fund's investments are
focused in the underlying funds, so the Fund's investment performance is
directly related to the performance of the underlying funds. Each Fund's net
asset value will be affected by the performance of the equity and bond markets
and the value of the mutual funds in which the Fund invests. Since the Funds
mainly invest in the underlying funds, as opposed to other types of securities,
the Funds do not have the same flexibility in their portfolio holdings as many
mutual funds. In addition, each Fund indirectly pays a portion of the expenses
incurred by the underlying funds. Consequently, an investment in a Fund entails
more direct and indirect expenses than a direct investment in the underlying
funds. For instance, you will pay management fees and operating expenses of both
the Fund and the underlying funds.
The underlying funds will not necessarily make consistent investment
decisions, which may also increase your costs. One underlying fund may buy the
same security that another underlying fund is selling. You would indirectly bear
the costs of both trades without achieving any investment purpose. These
transactions may also generate taxable gains. You may receive taxable gains from
portfolio transactions by the underlying funds as well as taxable gains from the
fund's transactions in shares of the underlying funds.
Currently, Pioneer manages all of the funds underlying the Pioneer Fund.
Because the portfolio management teams of each of the underlying Pioneer funds
may draw upon the resources of the same equity and fixed income analyst team or
may share common investment management styles or approaches, the underlying
funds may hold many common portfolio positions, reducing the diversification
benefits of an asset allocation style.
Equity investments
Equity funds invest primarily in equity securities (such as stocks), which
are more volatile and carry more risks than some other forms of investment. When
the value of the stocks held by an underlying equity fund goes down, the value
of your investment in the fund will be affected.
The underlying equity funds have risks associated with investing in equity
securities. An equity fund could underperform other investments if:
o The stock market goes down (this risk may be greater in the short
term)
o The fund's equity investments do not have the growth potential or
value characteristics originally expected
o Stocks selected for income do not achieve the same return as
securities selected for capital growth
o The types of stocks in which the fund invests or the fund's
investment approach fall out of favor with investors
Fixed income investments
Fixed income funds primarily invest in debt securities, such as government
securities, investment grade corporate securities, junk bonds, mortgaged backed
securities, asset-backed securities, and money market securities. The value of
your investment in the fund will change as the value of investments of the
underlying funds increases and decreases.
The underlying fixed income funds have risks associated with investing in
debt securities. A fund could underperform other investments if:
o Interest rates go up causing the value of the fund's portfolio to
decline
o The issuer of a debt security owned by the fund defaults on its
obligation to pay principal or interest or has its credit rating
downgraded
o During periods of declining interest rates, the issuer of a security
may exercise its option to prepay earlier than scheduled, forcing
the fund to reinvest in lower yielding securities. This is known as
call or prepayment risk
o During periods of rising interest rates, the average life of certain
types of securities may be extended because of slower than expected
principal payments. This may lock in a below market interest rate,
increase the security's duration (the estimated period until the
security is paid in full) and reduce the value of the security. This
is known as extension risk
o The investment manager's judgment about the attractiveness, relative
value or potential appreciation of a particular sector, security or
investment strategy proves to be incorrect
Equity securities of smaller companies
Compared to large companies, small and mid-sized companies, and the market
for their equity securities, are likely to:
10
o Be more sensitive to changes in the economy, earnings results and
investor expectations
o Have more limited product lines and capital resources
o Experience sharper swings in market values
o Be harder to sell at the times and prices Pioneer thinks appropriate
o Offer greater potential for loss than other U.S. equity securities
Equity securities of real estate industry issuers
Specific risks associated with the real estate industry include:
o The U.S. or a local real estate market declines due to adverse
economic conditions, overbuilding and high vacancy rates, reduced or
regulated rents or other causes
o Interest rates go up. Rising interest rates can adversely affect the
availability and cost of financing for property acquisitions and
other purposes and reduce the value of a REIT's fixed income
investments
o The values of properties owned by a REIT or the prospects of other
real estate industry issuers may be hurt by property tax increases,
zoning changes, other governmental actions, environmental
liabilities, natural disasters or increased operating expenses
o A REIT in an underlying fund's portfolio is, or is perceived by the
market to be, poorly managed
Non-U.S. securities
Investing in non-U.S. issuers, including emerging market issuers, may
involve unique risks compared to investing in securities of issuers in the U.S.
These risks are more pronounced to the extent the fund invests in issuers in the
lesser-developed emerging markets or in one region, such as Europe or the
Pacific Rim. These risks may include:
o Less information about the non-U.S. issuers or markets may be
available due to less rigorous disclosure or accounting standards or
regulatory practices
o Adverse effect of currency exchange rates or controls on the value
of the Fund's investments
o The economies of non-U.S. 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 Withholding and other non-U.S. taxes may decrease the Fund's return
High yield/below investment grade debt securities
Investment in high yield securities involves substantial risk of loss.
These securities are considered speculative with respect to the issuer's ability
to pay interest and principal and are susceptible to default or decline in
market value due to adverse economic and business developments. The market
values for high yield securities tend to be very volatile, and these securities
are less liquid than investment grade debt securities. For these reasons, your
investment in the fund is subject to the following specific risks:
o Increased price sensitivity to changing interest rates and
deteriorating economic environment
o Greater risk of loss due to default or declining credit quality
o Adverse company specific events are more likely to render the issuer
unable to make interest and/or principal payments
o A negative perception of the high yield market develops, depressing
the price and liquidity of high yield securities. This negative
perception could last for a significant period of time
Derivatives
Certain underlying funds may use futures and options on securities,
indices and currencies, 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. The underlying funds may use
derivatives for a variety of 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
11
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.
Past Performance
Set forth below is performance information for AmSouth Strategic
Portfolios: Growth Portfolio. The bar charts show how AmSouth Strategic
Portfolios: Growth Portfolio's total return (not including any deduction for
sales charges) has varied from year to year for each full calendar year. The
table shows average annual total return (before and after taxes) for each Fund
over time for each class of shares (including deductions for sales charges)
compared with a broad-based securities market index. The bar chart gives an
indication of the risks of investing in each Fund, including the fact that you
could incur a loss and experience volatility of returns year to year. Past
performance before and after taxes does not indicate future results.
AmSouth Strategic Portfolios: Growth Portfolio -- Class A Shares
Calendar Year Total Returns*
[BAR CHART]
2000 0.59%
2001 -5.77%
2002 -13.63%
2003 21.84%
2004 8.92%
* During the period shown in the bar chart, your AmSouth Fund's highest
quarterly return was 11.62% for the quarter ended June 30, 2003, and the
lowest quarterly return was -12.73% for the quarter ended September 30,
2002.
Pioneer Ibbotson Growth Allocation Fund -- Class A Shares
Calendar Year Total Returns
Pioneer Ibbotson Growth Allocation Portfolio began investment operations
in August 2004. Since the Pioneer Fund has conducted investment operations for
less than one calendar year, it may not disclose any performance information in
this prospectus. The fund's performance will vary from year to year. Past
performance does not necessarily indicate how a fund will perform in the future.
As a shareowner, you may lose or make money on your investment.
AmSouth Strategic Portfolios: Growth Portfolio
Average Annual Total Returns (for the periods ending December 31, 2004)
Since Inception
1 Year 5 Years (2/1/99)
- --------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Growth Portfolio, Class A Shares
- --------------------------------------------------------------------------------------------------
Return Before Taxes 2.89% 0.52% 1.90%
- --------------------------------------------------------------------------------------------------
Return After Taxes on Distributions 2.61% -0.44% 0.94%
- --------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares 1.88% -0.07% 1.10%
- --------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Growth Portfolio, Class B Shares
- --------------------------------------------------------------------------------------------------
Return Before Taxes 3.11% 0.55% 2.19%
- --------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Growth Portfolio, Class I Shares
- --------------------------------------------------------------------------------------------------
Return Before Taxes 9.13% 1.74% 2.90%
- --------------------------------------------------------------------------------------------------
Return After Taxes on Distributions 8.83% 0.76% 1.91%
- --------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares 5.93% 0.96% 1.94%
- --------------------------------------------------------------------------------------------------
12
Since Inception
1 Year 5 Years (2/1/99)
------ ------- ---------------
S&P 500 Index(1) 10.87% -2.30% 0.66%
(reflects no deduction for fees, expenses or taxes)
(1) The S&P 500, an unmanaged index of 500 stocks, is for reference only; it
does not mirror the Fund's investments, and reflects no deduction for
fees, expenses or taxes.
The table above shows the impact of taxes on AmSouth Strategic Portfolios:
Growth Portfolio's returns. After-tax returns are only shown for Class A shares
and Class I shares and may vary for Class B shares. The Fund's after-tax returns
are calculated using the highest individual federal marginal income tax rates
and do not reflect the impact of state and local taxes. In certain cases, the
figure representing "Return After Taxes on Distributions and Sale of Fund
Shares" may be higher than the other return figures for the same period. A
higher after-tax return results when a capital loss occurs upon redemption and
translates into an assumed tax deduction that benefits the shareholder. Please
note that actual after-tax returns depend on an investor's tax situation and may
differ from those shown. Also note that after-tax returns shown are not relevant
to shareholders who hold Fund shares through tax-deferred arrangements, such as
401(k) plans or individual retirement accounts.
The Funds' Fees and Expenses
Shareholders of both Funds pay various fees and expenses, either directly
or indirectly. The tables below show the fees and expenses that you would pay if
you were to buy and hold shares of each Fund. The expenses in the tables
appearing below are based on (i) for the AmSouth Strategic Portfolios: Growth
Portfolio, the expenses of AmSouth Strategic Portfolios: Growth Portfolio for
the period ended January 31, 2005 and (ii) for Pioneer Ibbotson Growth
Allocation Fund, the estimated expenses for the period ended January 31, 2005.
Future expenses for all share classes may be greater or less. The tables also
show the pro forma expenses of the combined Fund assuming the Reorganization
occurred on January 31, 2005.
Shareholder AmSouth Pioneer Combined AmSouth Pioneer Ibbotson Combined AmSouth Combined
transaction Strategic Ibbotson Fund (Pro Strategic Growth Fund (Pro Strategic Fund (Pro
fees (paid Portfolios Growth Forma) Portfolios Allocation Forma) Portfolios Forma)
directly from Growth Allocation Growth Fund Growth
your Portfolio Fund Portfolio Portfolio
investment) (1)
Class A Class A Class A Class B Class B Class B Class I Class Y(7)
- -----------------------------------------------------------------------------------------------------------------
Maximum 5.50%(2) 5.75% 5.75% None None None None None
sales charge
(load) when
you buy
shares as a
percentage of
offering price
- -----------------------------------------------------------------------------------------------------------------
Maximum None None None 5.00%(3) 4.00% 4.00% None None
deferred sales
charge (load)
as a
percentage of
purchase
price or the
amount
you receive
when you sell
shares,
whichever is
less
- -----------------------------------------------------------------------------------------------------------------
Redemption 2.00%(4) None None 2.00%(4) None None 2.00%(4) None
fees
- -----------------------------------------------------------------------------------------------------------------
13
Shareholder AmSouth Pioneer Combined AmSouth Pioneer Ibbotson Combined AmSouth Combined
transaction Strategic Ibbotson Fund (Pro Strategic Growth Allocation Fund (Pro Strategic Fund (Pro
fees (paid Portfolios Growth Forma) Portfolios Fund Forma) Portfolios Forma)
directly from Growth Allocation Growth Growth
your Portfolio(1) Fund Portfolio Portfolio
investment)
Class A Class A Class A Class B Class B Class B Class I Class Y(7)
- ---------------------------------------------------------------------------------------------------------------------
Annual fund
operating
expenses
(deducted
from fund
assets) (as a
% of average
net assets)
- --------------------------------------------------------------------------------------------------------------------
Management 0.20% 0.17% 0.17% 0.20% 0.17% 0.17% 0.20% 0.17%
fee
- --------------------------------------------------------------------------------------------------------------------
Distribution None 0.25% 0.25% 0.75% 1.00% 1.00% None None
and service
(12b-1) fee
- --------------------------------------------------------------------------------------------------------------------
Other 0.64% 0.70% 0.62% 0.65% 0.86% 0.93% 0.60% 0.50%
expenses(5)
- --------------------------------------------------------------------------------------------------------------------
Estimated 1.52% 0.78% 0.78% 2.26% 0.78% 0.78% 1.47% 0.78%
indirect
expenses
- --------------------------------------------------------------------------------------------------------------------
Total fund 2.36% 1.90%(6) 1.82% 3.86% 2.81%(6) 2.88% 2.27% 1.45%
operating
expenses(6)
- --------------------------------------------------------------------------------------------------------------------
Expense 0.33% 0.19% 0.14% 0.35% 0.19% 0.30% 0.34% N/A
reimbursement
/reduction
- --------------------------------------------------------------------------------------------------------------------
Net fund 2.03% 1.71% 1.68% 3.51% 2.62% 2.58% 1.93% 1.45%
operating
expenses
- --------------------------------------------------------------------------------------------------------------------
(1) AmSouth Bank or other financial institutions may charge their customer
account fees for automatic investment and other cash management services
provided in connection with investment in the Fund.
(2) Sales charges may be reduced depending upon the amount invested or, in
certain circumstances, waived. Class A shares of the Pioneer Fund bought
as part of an investment of $1 million or more are not subject to an
initial sales charge, but may be charged a CDSC of 1.00% if sold within
one year of purchase.
(3) For Class B shares purchased prior to the combination of AmSouth Funds
with ISG Funds, the CDSC on such Class B shares held continuously declines
over six years, starting with year one and ending in year seven from: 4%,
3%, 3%, 2%, 2%, 1%. For all other Class B shares held continuously, the
CDSC declines over six years, starting with year one and ending in year
seven from: 5%, 4%, 3%, 3%, 2%, 1%. Eight years after purchase (seven
years in the case of shares acquired in the ISG combination), Class B
shares automatically convert to Class A shares.
(4) To discourage short-term trading, a redemption fee of 2.00% will be
charged on sales or exchanges of Class A, Class B and Class I shares of
your AmSouth Fund made within 7 days of the date of purchase. A wire
transfer fee of $7.00 will be deducted from the amount of your redemption
if you request a wire transfer.
(5) Other expenses for your AmSouth Fund are being limited to 0.31% for Class
A shares, 0.30% for Class B shares and 0.26% for Class I shares. Any fee
waiver or expense reimbursement arrangement is voluntary and may be
discontinued at any time. Pioneer has contractually agreed not to impose
all or a portion of its fees or to limit other direct ordinary operating
expenses to the extent required to reduce expenses, other than "Estimated
average expense ratio of underlying funds," to 0.79% of the average daily
net assets attributable to Class A shares and 1.57% of average daily net
assets attributable to Class B shares. This expense limitation is in
effect for Class A shares until December 1, 2008 and in effect for Class B
until December 1, 2006. There can be no assurance that Pioneer will
14
extend these expense limitations past such dates. The expense limitation
does not limit the expenses of the underlying funds indirectly incurred by
a shareholder.
(6) The Pioneer Fund's total annual operating expenses in the table have not
been reduced by any expense offset arrangements.
(7) Class Y shares of the Pioneer Fund are being offered for the first time in
connection with the Reorganization.
The hypothetical example below helps you compare the cost of investing in each
Fund. It assumes that: (a) you invest $10,000 in each Fund for the time periods
shown, (b) you reinvest all dividends and distributions, (c) your investment has
a 5% return each year, and (d) each Fund's gross operating expenses remain the
same. The examples are for comparison purposes only and are not a representation
of either Fund's actual expenses or returns, either past or future.
AmSouth Pioneer
Number of Strategic Ibbotson
years you Portfolios: Growth Combined
own your Growth Allocation Fund
shares Portfolio Fund (Pro Forma)
- --------------------------------------------------------------------
Class A
- --------------------------------------------------------------------
Year 1 $ 747 $ 739 $ 736
- --------------------------------------------------------------------
Year 3 $1,157 $1,120 $1,074
- --------------------------------------------------------------------
Year 5 $1,593 N/A $1,465
- --------------------------------------------------------------------
Year 10 $2,798 N/A $2,555
- --------------------------------------------------------------------
Class B --- assuming redemption at end of period
- --------------------------------------------------------------------
Year 1 $ 784 $ 665 $ 661
- --------------------------------------------------------------------
Year 3 $1,171 $1,153 $1,164
- --------------------------------------------------------------------
Year 5 $1,684 N/A $1,592
- --------------------------------------------------------------------
Year 10 $2,957 N/A $2,931
- --------------------------------------------------------------------
Class B --- assuming no redemption
- --------------------------------------------------------------------
Year 1 $ 284 $ 265 $ 261
- --------------------------------------------------------------------
Year 3 $ 871 $ 853 $ 864
- --------------------------------------------------------------------
Year 5 $1,484 N/A $1,492
- --------------------------------------------------------------------
Year 10 $2,957 N/A $2,931
- --------------------------------------------------------------------
Class I Class Y
- --------------------------------------------------------------------
Year 1 $ 204 N/A $ 148
- --------------------------------------------------------------------
Year 3 $ 630 N/A $ 459
- --------------------------------------------------------------------
Year 5 $ 1083 N/A $ 792
- --------------------------------------------------------------------
Year 10 $2,338 N/A $1,735
- --------------------------------------------------------------------
Reasons for the Proposed Reorganization
The Trustees believe that the proposed Reorganization is in the best
interests of AmSouth Strategic Portfolios: Growth Portfolio. The Trustees
considered the following matters, among others, in approving the proposal.
First, AAMI, the investment adviser to your AmSouth Fund, informed the
Trustees that it does not intend to continue to provide investment advisory
services to the AmSouth Funds. Consequently, a change in your Fund's investment
adviser was necessary. In the absence of the Reorganization, such a change would
be more likely to motivate shareholders invested in reliance on AAMI's role to
withdraw from the Fund, thereby reducing fund size and increasing fund expense
ratios.
Second, the resources of Pioneer. At December 31, 2004, Pioneer managed
over 80 investment companies and accounts with approximately $42 billion in
assets, including $15.7 billion in fixed income securities. Pioneer is part of
the global asset management group of UniCredito Italiano S.p.A., one of the
largest banking groups in Italy, providing investment management and financial
services to mutual funds, institutional and other clients. As of December 31,
2004, assets under management of UniCredito Italiano S.p.A. were approximately
$175 billion worldwide. Shareholders of your AmSouth Fund would become part of a
significantly larger family of funds that offers a more diverse array of
investment options and enhanced shareholder account options. The Pioneer family
of mutual funds offers over 80 funds, including domestic and international
15
equity and fixed income funds and a money market fund that will be available to
your AmSouth Fund's shareholders through exchanges.
Third, Pioneer Ibbotson Growth Allocation Fund's management fee (0.17% of
average daily net assets) is lower than the advisory fee of your Fund (0.20% of
average daily net assets). Both the historical and estimated pro forma expenses
of the Pioneer Fund, after giving effect to the Reorganization, on a gross and
net basis are lower than your Fund's gross and net operating expenses. The
aggregate Rule 12b-1 distribution and shareholder servicing fees and non-Rule
12b-1 shareholder servicing fees paid by the Class A and Class B shares of both
Funds are the same. Moreover, your AmSouth Fund's Class I shares pay a non 12b-1
shareholder servicing fee that is not paid by the Pioneer Fund's Class Y shares.
Fourth, because of Pioneer distribution arrangements, Pioneer Fund has
greater potential to further increase the assets compared to your fund. Further
assets growth is anticipated to further reduce the combined Fund's gross
operating expenses per share.
Fifth, the Class A, B and Y shares of the Pioneer Fund received in the
Reorganization will provide AmSouth Fund shareholders with exposure to a similar
investment product as they currently have. The Trustees also noted that the
allocation decisions are made by Ibbotson, a leading asset allocation adviser,
and that the Pioneer Fund intends, as soon as permitted by the SEC, to include
unaffiliated mutual funds as underlying funds.
Sixth, the transaction is structured to qualify as a tax-free
reorganization under Section 368(a) of the Internal Revenue Code of 1986 and
therefore will not be treated as a taxable sale of your AmSouth shares.
Pioneer and AmSouth Bank will pay all costs of preparing and printing the
Funds' proxy statements and solicitation costs incurred by the Funds in
connection with the Reorganization. AAMI will otherwise be responsible for all
costs and expenses of AmSouth Fund in connection with the Reorganization.
The Trustees also considered that Pioneer and AmSouth Bank will benefit
from the Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the
Reorganizations."
The Board of Trustees of the Pioneer Fund also considered that the
Reorganization presents an excellent opportunity for the Pioneer Fund to acquire
investment assets without the obligation to pay commissions or other transaction
costs that a fund normally incurs when purchasing securities. This opportunity
provides an economic benefit to the Pioneer Fund and its shareholders.
CAPITALIZATION
The following table sets forth the capitalization of each Fund as of May
31, 2005, and the pro forma combined Fund as of May 31, 2005.
Pioneer
AmSouth Ibbotson
Strategic Growth
Portfolios: Pioneer Allocation
Growth Portfolio Ibbotson Growth Fund (Pro
Fund Allocation Fund Forma)
May 31, 2005 May 31, 2005 May 31, 2005
---------------- --------------- ------------
Total Net Assets (in thousands) $ 68,258 $ 44,509 $ 112,765
Class A shares..................... $ 30,461 $ 24,395 $ 54,855
Class B shares..................... $ 29,483 $ 7,898 $ 37,380
Class I/Y shares................... $ 8,314 N/A $ 8,314
Net Asset Value Per Share
Class A shares..................... $ 9.72 $ 10.99 $ 10.99
Class B shares..................... $ 9.59 $ 10.06 $ 10.06
Class I/Y shares................... $ 9.76 N/A $ 10.99
Shares Outstanding
Class A shares..................... 3,134,755 2,220,131 4,992,340
Class B shares..................... 3,075,573 785,240 3,716,617
16
Class I/Y shares................... 851,792 N/A 756,607
It is impossible to predict how many shares of the Pioneer Fund will
actually be received and distributed by your AmSouth Fund on the Reorganization
date. The table should not be relied upon to determine the amount of the Pioneer
Fund's shares that will actually be received and distributed.
BOARD'S EVALUATION AND RECOMMENDATION
For the reasons described above, the Trustees, including the Independent
Trustees, approved the Reorganization. In particular, the Trustees determined
that the Reorganization is in the best interests of your AmSouth Fund.
Similarly, the Board of Trustees of the Pioneer Fund, including its Independent
Trustees, approved the Reorganization. They also determined that the
Reorganization is in the best interests of the Pioneer Fund.
The Trustees recommend that the shareholders of your AmSouth Fund vote FOR
the proposal to approve the Agreement and Plan of Reorganization.
17
Appendix A
Information about the underlying funds
The following is intended to summarize the investment objectives and primary
strategies of, and to provide you with certain other information about, the
underlying funds. These summaries do not reflect all of the investment policies
and strategies that are disclosed in each underlying fund's prospectus, and are
not an offer of the underlying funds' shares. The underlying funds in which the
funds intend to invest may change from time to time and the funds may invest in
underlying funds in addition to those described below at the discretion of
Pioneer without prior notice to or approval of shareholders. The prospectus and
SAI for each underlying fund is available on the SEC's website as well as on our
website at www.pioneerfunds.com.
Each underlying fund normally will be invested according to its investment
strategy. However, an underlying fund also may have the ability to invest
without limitation in money market instruments or other investments for
temporary, defensive purposes.
The underlying funds that invest primarily in equity securities are:
Pioneer Fund
Investment objective
Reasonable income and capital growth.
Principal investment strategies
The fund invests in a broad list of carefully selected, reasonably priced
securities rather than in securities whose prices reflect a premium resulting
from their current market popularity. The fund invests the major portion of its
assets in equity securities, primarily of U.S. issuers. For purposes of the
fund's investment policies, equity securities include common stocks, convertible
debt and other equity instruments, such as depositary receipts, warrants, rights
and preferred stocks.
Investment Adviser
Pioneer
Pioneer Research Fund
Investment objective
Long-term capital growth.
Principal investment strategies
Normally, the fund invests at least 80% of its assets in equity securities,
primarily of U.S. issuers. For purposes of the fund's investment policies,
equity securities include common stocks, convertible debt and other equity
instruments, such as preferred stocks, depositary receipts, rights and warrants.
Investment Adviser
Pioneer
18
Pioneer Growth Leaders Fund
Investment objective
Long term capital growth.
Principal investment strategies
Normally, the fund invests at least 80% of its net assets (plus the amount of
borrowings, if any, for investment purposes) in common and preferred stocks and
securities convertible into stocks. Securities convertible into stocks include
depositary receipts on stocks, convertible debt securities, warrants and rights.
The fund offers a broad investment program for the equity portion of an
investor's portfolio, with an emphasis on mid and large capitalization issuers
traded in the U.S. However, the fund may invest in issuers of any
capitalization.
Investment Adviser
Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser)
Pioneer Strategic Growth Fund
Investment objective
Long term capital growth.
Principal investment strategies
Normally, the fund invests at least 80% of its net assets (plus the amount of
borrowings, if any, for investment purposes) in equity securities of U.S.
issuers. The fund invests primarily in securities, traded in the U.S., of
issuers that the subadviser believes have substantial international activities.
In evaluating whether an issuer has substantial international activities, the
subadviser considers the degree to which the issuer has non-U.S. reported sales
and revenues, operating earnings or tangible assets. The fund may invest up to
20% of the value of its investments in equity securities of non-U.S. issuers
that are traded in U.S. markets.
Investment Adviser
Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser)
Pioneer Oak Ridge Large Cap Growth Fund
Investment objective
Capital appreciation.
Principal investment strategies
Normally, the fund invests at least 80% of its net assets (plus the amount of
borrowings, if any, for investment purposes) in equity securities of large
capitalization U.S. companies. Large capitalization companies have market
capitalizations at the time of acquisition of $3 billion or more. The fund
anticipates that the average weighted market capitalization of the companies in
the fund's portfolio will be significantly higher that $3 billion. The equity
securities in which the fund principally invests are common stocks, preferred
stocks, depositary receipts and convertible debt, but the fund may invest in
other types of equity securities to a lesser extent, such as warrants and
rights.
Investment Adviser
Pioneer (adviser); Oak Ridge Investments, LLC (subadviser)
19
Pioneer AmPac Growth Fund
Investment objective
Long-term capital growth.
Principal investment strategies
Normally, the fund invests at least 80% of its net assets (plus the amount of
borrowings, if any, for investment purposes) in equity securities of issuers
that have substantial sales to, or receive significant income from, countries
within the Pacific Rim. These issuers meet one of the following criteria:
o 50% or more of the issuer's earnings or sales are attributed to, or
assets are situated in, Pacific Rim countries (including the U.S.
and other countries bordering the Pacific Ocean, such as China and
Indonesia)
o 50% or more of the issuer's earnings or sales are attributed to, or
assets are situated in, Pacific Rim countries other than the U.S.
The fund also may invest up to 30% of the value of its investments in equity
securities of non-U.S. issuers that are traded in U.S. markets.
Investment Adviser
Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser)
Pioneer Value Fund
Investment objective
Reasonable income and capital growth.
Principal investment strategies
The fund seeks to invest in a broad list of carefully selected, reasonably
priced securities rather than in securities whose prices reflect a premium
resulting from their current market popularity. The fund invests the major
portion of its assets in equity securities, primarily of U.S. issuers. For
purposes of the fund's investment policies, equity securities include common
stocks, convertible debt and other equity instruments, such as depositary
receipts, warrants, rights and preferred stocks.
Investment Adviser
Pioneer
Pioneer Mid Cap Growth Fund
Investment objective
Capital growth by investing in a diversified portfolio of securities consisting
primarily of common stocks.
Principal investment strategies
Normally, the fund invests at least 80% of its total assets in equity securities
of mid-size companies, that is, companies with market values within the range of
market values of issuers included in the Russell Midcap Growth Index. For
purposes of the fund's investment policies, equity securities include common
stocks, convertible debt and other equity instruments, such as depositary
receipts, warrants, rights, interests in real estate investment trusts (REITs)
and preferred stocks.
20
Investment Adviser
Pioneer
Pioneer Cullen Value Fund
Investment objective
Capital appreciation. Current income is a secondary objective.
Principal investment strategies
The fund invests primarily in equity securities. The fund may invest a
significant portion of its assets in equity securities of medium- and
large-capitalization companies. Consequently, the fund will be subject to the
risks of investing in companies with market capitalizations of $1.5 billion or
more. For purposes of the fund's investment policies, equity securities include
common stocks, convertible debt and other equity instruments, such as depositary
receipts, warrants, rights, equity interests in real estate investment trusts
(REITs) and preferred stocks.
The fund may invest up to 30% of its total assets in securities of non-U.S.
issuers. Up to 5% of the fund's total assets may be invested in securities of
emerging market issuers. The fund may invest in securities of Canadian issuers
to the same extent as securities of U.S. issuers.
Investment Adviser
Pioneer
Pioneer Mid Cap Value Fund
Investment objective
Capital appreciation by investing in a diversified portfolio of securities
consisting primarily of common stocks.
Principal investment strategies
Normally, the fund invests at least 80% of its total assets in equity securities
of mid-size companies, that is companies with market values within the range of
market values of companies included in the Russell Midcap Value Index. The fund
focuses on issuers with capitalizations within the $1 billion to $10 billion
range, and that range will change depending on market conditions. The equity
securities in which the fund principally invests are common stocks, preferred
stocks, depositary receipts and convertible debt, but the fund may invest in
other types of equity securities to a lesser extent, such as warrants and
rights.
Investment Adviser
Pioneer
Pioneer Small and Mid Cap Growth Fund
Investment objective
Long-term capital growth.
Principal investment strategies
Normally, the fund invests at least 80% of its net assets (plus the amount of
borrowings, if any, for investment purposes) in equity securities of small and
mid-capitalization issuers, that is those with market values, at the time of
investment, that do not exceed the market capitalization of the largest company
within the S&P Mid Cap 400 Index. The size of the companies in the index may
change dramatically as a result of market conditions and the composition of the
index. The fund's investments will
21
not be confined to securities issued by companies included in an index. For
purposes of the fund's investment policies, equity securities include common
stocks, convertible debt and other equity instruments, such as depositary
receipts, warrants, rights and preferred stocks.
Investment Adviser
Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser)
Pioneer Oak Ridge Small Cap Growth Fund
Investment objective
Capital appreciation.
Principal investment strategies
Normally, the fund invests at least 80% of its net assets (plus the amount of
borrowings, if any, for investment purposes) in equity securities of small
capitalization U.S. companies with market capitalizations of $2 billion or less.
For purposes of the fund's investment policies, equity securities include common
stocks, convertible debt and other equity instruments, such as depositary
receipts, warrants, rights and preferred stocks. Small capitalization companies
have market capitalizations at the time of acquisition of $2 billion or less.
The equity securities in which the fund principally invests are common stocks,
preferred stocks, depositary receipts and convertible debt, but the fund may
invest in other types of equity securities to a lesser extent, such as warrants
and rights.
Investment Adviser
Pioneer (adviser); Oak Ridge Investments, LLC (subadviser)
Pioneer Small Cap Value Fund
Investment objective
Capital growth by investing in a diversified portfolio of securities consisting
primarily of common stocks.
Principal investment strategies
Normally, the fund invests at least 80% of its net assets (plus the amount of
borrowings, if any, for investment purposes) in equity securities of small
companies. Small companies are those with market values, at the time of
investment, that do not exceed the greater of the market capitalization of the
largest company within the Russell 2000 Index or the 3-year rolling average of
the market capitalization of the largest company within the Russell 2000 Index
as measured at the end of the preceding month. The Russell 2000 Index measures
the performance of the 2,000 smallest companies in the Russell 3000 Index. The
size of the companies in the index changes with market conditions and the
composition of the index. Pioneer monitors the fund's portfolio so that, under
normal circumstances, the capitalization range of the fund's portfolio is
consistent with the inclusion of the fund in the Lipper Small-Cap category. For
purposes of the fund's investment policies, equity securities include common
stocks, convertible debt and other equity instruments, such as depositary
receipts, warrants, rights, equity interests in real estate investment trusts
(REITs) and preferred stocks.
Investment Adviser
Pioneer
Pioneer International Equity Fund
Investment objective
Long-term capital growth.
22
Principal investment strategies
Normally, the fund invests at least 80% of its total assets in equity securities
of non-U.S. issuers. The fund focuses on securities of issuers located in
countries with developed markets (other than the United States) but may allocate
up to 10% of its assets in countries with emerging economies or securities
markets. Developed markets outside the United States generally include, but are
not limited to, the countries included in the Morgan Stanley Capital
International Europe, Australasia, Far East Index. The fund's assets must be
allocated to securities of issuers located in at least three non-U.S. countries.
For purposes of the fund's investment policies, equity securities include common
stocks, convertible debt and other equity instruments, such as depositary
receipts, warrants, rights and preferred stocks. The fund may also purchase and
sell forward foreign currency exchange contracts in non-U.S. currencies in
connection with its investments.
Investment Adviser
Pioneer
Pioneer International Value Fund
Investment objective
Long-term capital growth.
Principal investment strategies
Normally, the fund invests at least 80% of its total assets in equity securities
of non-U.S. issuers. These issuers may be located in both developed and emerging
markets. Under normal circumstances, the fund's assets will be invested in
securities of companies domiciled in at least three different foreign countries.
Generally, the fund's investments in any country are limited to 25% or less of
its total assets. However, the fund may invest more than 25% of its assets in
issuers organized in Japan or the United Kingdom or in securities quoted or
denominated in the Japanese yen, the British pound and the euro. Investment of a
substantial portion of the fund's assets in such countries or currencies will
subject the fund to the risks of adverse securities markets, exchange rates and
social, political or economic events which may occur in those countries.
The fund may invest without limitation in securities of issuers located in
countries with emerging economies or securities markets, but will not invest
more than 25% of its total assets in securities of issuers located in any one
such country.
For purposes of the fund's investment policies, equity securities include common
stocks, convertible debt and other equity instruments, such as depositary
receipts, warrants, rights and preferred shares. The fund may also purchase and
sell forward foreign currency exchange contracts in non-U.S. currencies in
connection with its investments.
Investment Adviser
Pioneer
Pioneer Europe Select Fund
Investment objective
Capital growth.
Principal investment strategies
Normally, the fund invests at least 80% of its total assets in equity securities
of European issuers. The fund's principal focus is on European companies that
exhibit strong growth characteristics and are considered to be leaders in their
sector or industry. The fund generally focuses on mid- and large-capitalization
European issuers. Equity securities include common stocks, convertible debt and
other equity instruments, such as depositary receipts, warrants, rights and
preferred stocks. The fund may also purchase and sell forward foreign currency
exchange contracts in connection with its investments.
23
Investment Adviser
Pioneer
Pioneer Emerging Markets Fund
Investment objective
Long-term growth of capital.
Principal investment strategies
The fund invests primarily in securities of emerging market issuers. Although
the fund invests in both equity and debt securities, it normally emphasizes
equity securities in its portfolio. Normally, the fund invests at least 80% of
its total assets in the securities of emerging market corporate and government
issuers (i.e., securities of companies that are domiciled or primarily doing
business in emerging countries and securities of these countries' governmental
issuers).
Investment Adviser
Pioneer
Pioneer Real Estate Shares
Investment objective
Long-term growth of capital. Current income is a secondary objective.
Principal investment strategies
Normally, the fund invests at least 80% of its total assets in equity securities
of real estate investment trusts (REITs) and other real estate industry issuers.
For purposes of the fund's investment policies, equity securities include common
stocks, convertible debt and other equity instruments, such as warrants, rights,
interests in REITs and preferred stocks.
Investment Adviser
Pioneer (adviser); AEW Management and Advisors, L.P. (subadviser)
The underlying funds that invest primarily in debt securities are:
Pioneer Bond Fund
Investment objective
To provide current income from an investment grade 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.
Principal investment strategies
The fund invests primarily in:
o Debt securities issued or guaranteed by the U.S. government or its
agencies and instrumentalities,
o Debt securities, including convertible debt, of corporate and other
issuers rated at least investment grade at the time of investment,
and comparably rated commercial paper,
24
o Cash and cash equivalents, certificates of deposit, repurchase
agreements maturing in one week or less and bankers' acceptances.
Normally, the fund invests at least 80% of its total assets in these securities.
In addition, the fund may invest up to 20% of its total assets in debt
securities rated below investment grade or, if unrated, of equivalent quality as
determined by Pioneer. Cash and cash equivalents include cash balances, accrued
interest and receivables for items such as the proceeds, not yet received, from
the sale of the fund's portfolio investments.
Investment Adviser
Pioneer
Pioneer High Yield Fund
Investment objective
Maximize total return through a combination of income and capital appreciation.
Principal investment strategies
Normally, the fund invests at least 80% of its total assets in below investment
grade (high yield) debt securities and preferred stocks. These high yield
securities may be convertible into the equity securities of the issuer. Debt
securities rated below investment grade are commonly referred to as "junk bonds"
and are considered speculative. Below investment grade debt securities involve
greater risk of loss, are subject to greater price volatility and are less
liquid, especially during periods of economic uncertainty or change, than higher
rated debt securities.
Investment Adviser
Pioneer
Pioneer Short Term Income Fund
Investment objective
A high level of current income to the extent consistent with a relatively high
level of stability of principal.
Principal investment strategies
The fund invests primarily in:
o Debt securities issued or guaranteed by the U.S. government, its
agencies or instrumentalities
o Debt securities, including convertible debt, of corporate and other
issuers and commercial paper
o Mortgage-backed and asset-backed securities
o Short-term money market instruments
Normally, at least 80% of the fund's net assets are invested in debt securities
that are rated investment grade at the time of purchase or cash and cash
equivalents. Cash and cash equivalents may include cash balances, accrued
interest and receivables for items such as the proceeds, not yet received, from
the sale of the fund's portfolio investments.
Investment Adviser
Pioneer
25
Pioneer Cash Reserves Fund
Investment objective
High current income, preservation of capital and liquidity through investments
in high-quality short-term securities.
Principal investment strategies
The fund seeks to maintain a constant net asset value of $1.00 per share by
investing in high-quality, U.S. dollar denominated money market securities,
including those issued by:
o U.S. and foreign banks
o U.S. and foreign corporate issuers
o The U.S. government and its agencies and instrumentalities
o Foreign governments
o Multinational organizations such as the World Bank
The fund may invest more than 25% of its total assets in U.S. government
securities and obligations of U.S. banks. The fund may invest in any money
market instrument that is a permissible investment for a money market fund under
the rules of the Securities and Exchange Commission, including commercial paper,
certificates of deposit, time deposits, bankers' acceptances, mortgage-backed
and asset-backed securities, repurchase agreements, municipal obligations and
other short-term debt securities.
Investment Adviser
Pioneer
Pioneer Strategic Income Fund
Investment objective
A high level of current income.
Principal investment strategies
Normally, the fund invests at least 80% of its net assets (plus the amount of
borrowings, if any, for investment purposes) in debt securities. The fund has
the flexibility to invest in a broad range of issuers and segments of the debt
securities markets. Pioneer Investment Management, Inc., the fund's investment
adviser, allocates the fund's investments among the following three segments of
the debt markets:
o Below investment grade (high yield) securities of U.S. and non-U.S.
issuers
o Investment grade securities of U.S. issuers
o Investment grade securities of non-U.S. issuers
Pioneer's allocations among these segments of the debt markets depend upon its
outlook for economic, interest rate and political trends. The fund invests
primarily in:
o Debt securities issued or guaranteed by the U.S. government, its
agencies or instrumentalities or non-U.S. governmental entities
26
o Debt securities of U.S. and non-U.S. corporate issuers, including
convertible debt
o Mortgage-backed and asset-backed securities
The fund's investments may have fixed or variable principal payments and all
types of interest rate payment and reset terms, including fixed rate, adjustable
rate, zero coupon, contingent, deferred, payment in kind and auction rate
features. The fund invests in securities with a broad range of maturities.
Depending upon Pioneer's allocation among market segments, up to 70% of the
fund's total assets may be in debt securities rated below investment grade at
the time of purchase or determined to be of equivalent quality by Pioneer. Up to
20% of the fund's total assets may be invested in debt securities rated below
CCC by Standard & Poor's Ratings Group or the equivalent by another nationally
recognized statistical rating organization or determined to be of equivalent
credit quality by Pioneer. Debt securities rated below investment grade are
commonly referred to as "junk bonds" and are considered speculative. Below
investment grade debt securities involve greater risk of loss, are subject to
greater price volatility and are less liquid, especially during periods of
economic uncertainty or change, than higher rated debt securities.
As with all fixed income securities, the market values of convertible debt
securities tend to decline as interest rates increase and, conversely, to
increase as interest rates decline. However, when the market price of the common
stock underlying a convertible security exceeds the conversion price, the
convertible security tends to reflect the market price of the underlying common
stock.
Depending upon Pioneer's allocation among market segments, up to 85% of the
fund's total assets may be in debt securities of non-U.S. corporate and
governmental issuers, including debt securities of corporate and governmental
issuers in emerging markets.
Investment Adviser
Pioneer
27
AmSouth Strategic Portfolios: Growth & Income Portfolio and
Pioneer Ibbotson Moderate Allocation Fund
PROPOSAL 1(l)
Approval of Agreement and Plan of Reorganization
SUMMARY
The following is a summary of more complete information appearing later in
this Proxy Statement/Prospectus or incorporated herein. You should read
carefully the entire Proxy Statement/Prospectus, including the form of Agreement
and Plan of Reorganization attached as EXHIBIT A-1, because it contains details
that are not in the summary.
Each Fund is structured as a "fund of funds," which means all of its
assets are invested in other mutual funds ("underlying funds"). Your Fund
invests only in other AmSouth funds. Currently, the Pioneer Fund only invests in
other Pioneer Funds but is seeking an exemptive order from the Securities and
Exchange Commission that would permit the Pioneer Fund to invest, in addition,
in mutual funds that are not managed by Pioneer. To the extent Pioneer receives
an order from the Securities and Exchange Commission that permits Pioneer to
invest in such other non-Pioneer underlying funds, Pioneer and the Pioneer Fund
intend to rely on such order, subject to any applicable conditions of the order.
In the table below, if a row extends across the entire table, the policy
disclosed applies to both your AmSouth Fund and the Pioneer Fund.
Comparison of AmSouth Strategic Portfolios: Growth & Income Portfolio to Pioneer
Ibbotson Moderate Allocation Fund
AmSouth Strategic Portfolios: Growth &
Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------------
Business A diversified series of AmSouth Funds, an A series of Pioneer Ibbotson Asset Allocation
open-end management investment company Series, a diversified open-end management
organized as a Massachusetts business trust. investment company organized as a Delaware
statutory trust.
Net assets as of March 31, $112.5 million $34.3 million
2005
Investment advisers and Investment Adviser: Investment Adviser:
portfolio managers AAMI Pioneer
Portfolio Manager: Investment Subadviser:
Day-to-day management of AmSouth Strategic Ibbotson Associates Advisors, LLC ("Ibbotson")
Portfolios: Growth & Income Portfolio is the
responsibility of the AmSouth Strategy Portfolio Managers:
Committee, and no person is primarily Day-to-day management of Pioneer Ibbotson
responsible for making recommendations to Moderate Allocation Fund is the responsibility
the Committee. The Committee members consist of portfolio managers and members of Ibbotson's
of John Boston, CFA, Fred Crown, CFA, Paige Investment Committee headed by Roger Ibbotson.
B. Daniel, David M. Dasari, CFA, Joseph T. Roger Ibbotson founded Ibbotson in 1977 and is
Keating, Ronald E. Lindquist, John Mark the firm's Chairman. Peng Chen, Ph.D., managing
McKenzie, Matt Smith, CFA, Brian director and chief investment officer at
B. Sullivan, CFA, Doug S. Williams and Jason Ibbotson, conducts research projects on asset
Waters. allocation, portfolio risk measurement,
nontraditional assets, and global financial
Mr. Boston is Chief Fixed Income Officer for markets. Dr. Chen joined Ibbotson in 1997.
AAMI. He began his career in investment Michael E. Annin, managing director, manages the
management with AmSouth Bank in 1987 and has investment management services and data products
been associated with AAMI since 1996. group for Ibbotson. Scott Wentsel, senior
Mr. Boston received his CFA charter in 1993 portfolio manager, is responsible for management
and is an active member and past of the firm's fund-
1
AmSouth Strategic Portfolios: Growth &
Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------------
president of the Alabama Society of Financial of-funds business which includes oversight of
Analysts. He also serves as the portfolio its investment management staff and process.
manager for the AmSouth High Quality Bond Alexander E. Kaye, portfolio manager, is
Fund. Mr. Boston is a Senior Vice President of responsible for managing the delivery of
AmSouth Bank and Vice President of AAMI. fund-of-funds programs for institutional and
retail clients, which includes asset allocation
Mr. Crown has been employed with AmSouth modeling, portfolio construction, fund
Bank since 1982 and AAMI since 2001. He was classification and manager due diligence. Brian
an Institutional Fund Manager with AAMI Huckstep, portfolio manager, is responsible for
(2001-2003) and has been a Regional Manager managing the delivery of fund-of-funds programs
since 2003. Mr. Crown is a Senior Vice for institutional and retail clients, which
President of AmSouth Bank. includes asset allocation modeling, portfolio
construction, fund classification, and manager
Ms. Daniel has been employed with AmSouth due diligence.
Bank since 1999. She has been employed by
AAMI as the Director of Alternative
Strategies since 2003. She is an Assistant
Vice President with AmSouth Bank.
Mr. Dasari has been employed with AmSouth
Bank since 2002 and AAMI since 2003. He is
Director of Individual Security Management
for AAMI. Prior to joining AmSouth Bank, he
was Assistant Vice President at Fifth Third
Bank. Mr. Dasari is a Vice President of
AmSouth Bank.
Mr. Keating has been employed with AmSouth
Bank since 2001 and AAMI since 2002. He is
the Chairman and Chief Investment Officer of
AAMI. Prior to 2001, he was employed as the
Chief Market Strategist and Chief Fixed
Income Officer of Fifth Third Bank. Mr.
Keating is an Executive Vice-President of
AmSouth Bank.
Mr. Lindquist has been employed with AAMI
since December 1999. Prior to December 1999,
Mr. Lindquist was employed by First American
National Bank (since May 1998), and by
Deposit Guaranty National Bank, and
Commercial National Bank (since 1978). First
American National Bank, Deposit Guaranty
National Bank and Commercial National Bank
are predecessors of AmSouth Bank and
affiliates of AAMI. He also serves as the
portfolio manager for the AmSouth Large Cap
Fund. Mr. Lindquist is a Senior Vice
President of AmSouth Bank and Vice President
of AAMI.
Mr. McKenzie has been involved in
2
AmSouth Strategic Portfolios: Growth &
Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------------
investment management since 1981, with
portfolio management expertise in both equity
and fixed income securities. Mr. McKenzie
co-managed the AmSouth Government Income
Fund from 1999 to 2002 and managed it from
2003 to 2004. Mr. McKenzie has been
associated with the Trust Investment
Department of AmSouth Bank, and banks
acquired by AmSouth Bank, since 1984 and
joined AAMI in 2003. Mr. McKenzie is a
Senior Vice President of AmSouth Bank and
Vice President of AAMI.
Mr. Smith has been employed with AmSouth
Bank since 1988. He has been employed by
AAMI as a Regional Manager since 2004. He is
a Senior Vice President with AmSouth Bank.
Mr. Sullivan has been an officer of AAMI
since 1996 and joined AmSouth Bank in 1984.
Prior to serving as Director of Fixed Income
for AmSouth Bank's Trust Department, Mr.
Sullivan managed equity portfolios and held
the position of equity research coordinator
for AmSouth Bank's Trust Department. Mr.
Sullivan is a Senior Vice President of
AmSouth Bank and Vice President of AAMI.
Mr. Waters has been employed with AmSouth
Bank since 1999. He has been employed as an
Institutional Portfolio Manager with AAMI
since 2001. Mr. Williams is a Senior Vice
President of AmSouth Bank.
Mr. Williams has been employed with AmSouth
Bank since 2002. He has been employed as a
Regional Manager with AAMI since 2004. Prior
to 2002, Mr. Williams was a Director of
Portfolio Management with Fifth Third Bank
(1988-2002). Mr. Williams is a Senior Vice
President of AmSouth Bank.
Investment objective AmSouth Strategic Portfolios: Growth & Pioneer Ibbotson Moderate Allocation Fund seeks
Income Portfolio seeks to provide investors long-term capital growth and current income.
with long-term capital growth and a moderate
level of current income.
Primary investments Each Fund allocates its investments among underlying funds within pre-determined strategy
ranges.
3
AmSouth Strategic Portfolios: Growth &
Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Growth & Income Portfolio:
AmSouth Strategic Portfolios: Growth & Income Portfolio allocates its assets among the
following underlying funds within the ranges set forth below based upon AAMI's outlook for the
economy, financial markets and relative market valuations of the underlying AmSouth Funds.
Underlying Fund Allocation Range
AmSouth Value Fund 0-15%
AmSouth Select Equity Fund 0-10%
AmSouth Enhanced Market Fund 0-15%
AmSouth Large Cap Fund 0-10%
AmSouth Capital Growth Fund 0-15%
AmSouth Mid Cap Fund 0-10%
AmSouth Small Cap Fund 0-10%
AmSouth International Equity Fund 0-10%
AmSouth Government Income Fund 0-20%
AmSouth High Quality Bond Fund 0-60%
AmSouth Limited Term Bond Fund 0-20%
AmSouth Prime Money Market Fund 0-5%
The selection of the underlying funds and their ranges are not fundamental and may be changed
without the prior approval of AmSouth Strategic Portfolios: Growth & Income Portfolio's
shareholders.
4
AmSouth Strategic Portfolios: Growth &
Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------------
Pioneer Ibbotson Moderate Allocation Fund:
Because this is a moderate allocation fund, Pioneer Ibbotson Moderate Allocation Fund's assets
will be invested in equity and bond funds, although a portion of its assets will be invested in
cash, cash equivalents, or in money market funds. Under normal circumstances, Pioneer Ibbotson
Moderate Allocation Fund initially expects to invest its assets among asset classes in the
following ranges:
Short-Term
Investments Equity Fund Fixed Income Fund
Allocation Allocation Allocation
----------------------------------------------
0-5% 55-65% 35-45%
Based upon the analysis described under "Asset allocation process," the Fund initially expects
to invest its assets in underlying mutual funds within the following ranges:
Percentage of
Fund
Fund Name Holdings
--------------------------------------------------------------------------------------------
Pioneer Fund 0-20%
--------------------------------------------------------------------------------------------
Pioneer Research Fund 0-20%
--------------------------------------------------------------------------------------------
Pioneer Growth Leaders Fund (formerly Pioneer Papp Stock Fund) 0-20%
--------------------------------------------------------------------------------------------
Pioneer Strategic Growth Fund (formerly Pioneer Papp Strategic Growth Fund) 0-20%
--------------------------------------------------------------------------------------------
Pioneer Oak Ridge Large Cap Growth Fund 0-20%
--------------------------------------------------------------------------------------------
Pioneer AmPac Growth Fund (formerly Pioneer Papp America-Pacific Rim Fund) 0-20%
--------------------------------------------------------------------------------------------
Pioneer Value Fund 0-20%
--------------------------------------------------------------------------------------------
Pioneer Mid Cap Growth Fund 0-20%
--------------------------------------------------------------------------------------------
Pioneer Mid Cap Value Fund 0-20%
--------------------------------------------------------------------------------------------
Pioneer Small and Mid Cap Growth Fund (formerly Pioneer Papp Small and Mid
Cap Growth Fund) 0-20%
--------------------------------------------------------------------------------------------
Pioneer Oak Ridge Small Cap Growth Fund 0-20%
--------------------------------------------------------------------------------------------
Pioneer Small Cap Value Fund 0-20%
--------------------------------------------------------------------------------------------
Pioneer International Equity Fund 0-20%
--------------------------------------------------------------------------------------------
Pioneer International Value Fund 0-20%
--------------------------------------------------------------------------------------------
Pioneer Europe Select Fund 0-20%
--------------------------------------------------------------------------------------------
Pioneer Emerging Markets Fund 0-20%
--------------------------------------------------------------------------------------------
Pioneer Real Estate Shares 0-20%
--------------------------------------------------------------------------------------------
Pioneer High Yield Fund 0-20%
--------------------------------------------------------------------------------------------
Pioneer Bond Fund 0-25%
--------------------------------------------------------------------------------------------
Pioneer Strategic Income Fund 0-25%
--------------------------------------------------------------------------------------------
Pioneer Short Term Income Fund 0-25%
--------------------------------------------------------------------------------------------
Pioneer Cash Reserves Fund 0-20%
--------------------------------------------------------------------------------------------
The Pioneer Fund may change its target allocation to each asset class, the underlying fund in
each asset class (including adding or deleting funds) or target allocations to each underlying
fund without prior approval from or notice to shareholders. Certain of the Pioneer Funds into
which the AmSouth Funds are being reorganized are not currently included in the above list of
funds underlying the Pioneer Fund. Pioneer and Ibbotson may determine to include such
additional Pioneer Funds in the list of permitted investments for the Pioneer Fund into which
your Fund is being reorganized. Alternatively, Pioneer and Ibbotson may determine to hold those
additional Pioneer Funds temporarily until the Pioneer Fund's portfolio is rebalanced.
Appendix A contains a summary description of each of the underlying Pioneer funds.
5
AmSouth Strategic Portfolios: Growth &
Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------------
Normally, the Fund invests substantially all of its assets in underlying funds to meet its
investment objective. However, the Fund may invest a portion of its assets in cash, cash
equivalents or in money market funds. The underlying funds may also invest a portion of their
assets in money market funds, securities with remaining maturities of less than one year, cash
equivalents or may hold cash. For temporary defensive purposes, including during periods of
unusual cash flows, the Fund and each of the underlying funds 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, the fund may not be able to achieve its investment objective. The
Fund intends to adopt a defensive strategy when Pioneer or Ibbotson believes securities in
which the fund normally invests have extraordinary risks due to political or economic factors
and in other extraordinary circumstances.
Borrowing AmSouth Strategic Portfolios: Growth & Pioneer Ibbotson Moderate Allocation Fund may
Income Portfolio may not borrow money or not borrow money, except on a temporary basis
issue senior securities, except that the and to the extent permitted by applicable law,
Fund may borrow from banks or enter into the Fund may: (a) borrow from banks or through
reverse repurchase agreements for temporary reverse repurchase agreements in an amount up to
emergency purposes in amounts up to 33 1/3% 33 1/3% of the Fund's total assets (including
of the value of its total assets at the time the amount borrowed); (b) borrow up to an
of such borrowing. AmSouth Strategic additional 5% of the Fund's assets for temporary
Portfolios: Growth & Income Portfolio will purposes; (c) obtain such short-term credits as
not purchase securities while borrowings are necessary for the clearance of portfolio
(including reverse repurchase agreements) in transactions; (d) purchase securities on margin;
excess of 5% of its total assets are and (e) engage in transactions in mortgage
outstanding. In addition, AmSouth Strategic dollar rolls that are accounted for as
Portfolios: Growth & Income Portfolio is financings.
permitted to participate in a credit
facility whereby the Fund may directly lend
to and borrow money from other AmSouth funds
for temporary purposes, provided that the
loans are made in accordance with an order
of exemption from the SEC and any conditions
thereto.
Other investment policies As described above, the Funds have substantially similar principal investment strategies and
and restrictions policies. Certain of the non-principal investment policies and restrictions are different. For
a more complete discussion of each Fund's other investment policies and fundamental and
non-fundamental investment restrictions, see the SAI.
Buying, Selling and Exchanging Shares
Class A sales charges and Class A shares are offered with an initial Class A shares are offered with an initial sales
Rule 12b-1 fees sales charge of up to 5.50% of the offering charge of up to 5.75% of the offering price,
price, which is reduced depending upon the which is reduced or waived for large purchases
amount invested or, in certain and certain types of investors. At the time of
circumstances, waived. Class A shares bought your purchase, your investment firm may receive
as part of an investment of $1 million or a commission from Pioneer Funds Distributor,
more are not subject to an initial sales Inc. ("PFD"), the Fund's distributor, of up to
charge, but may be charged a contingent 2% declining as the size of your investment
deferred sales charge ("CDSC") of 1.00% if increases.
sold within one year of purchase.
There is no CDSC, except in certain
Class A shares pay a shareholder servicing circumstances when the initial sales charge is
fee (non 12b-1) of up to 0.25% of average
6
AmSouth Strategic Portfolios: Growth &
Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------------
daily net assets. waived.
Class A shares are subject to distribution and
service (12b-1) fees of up to 0.25% of average
daily net assets.
Class B sales charges and Class B shares are offered without an Class B shares are offered without an initial
Rule 12b-1 fees initial sales charge, but are subject to a sales charge, but are subject to a CDSC of up to
CDSC of up to 5%. For Class B shares 2% if you sell your shares. The charge is
purchased prior to the combination of reduced over time and is not charged after three
AmSouth Funds with ISG Funds, the CDSC on years. Your investment firm may receive a
such Class B shares held continuously commission from PFD, the Fund's distributor, at
declines over six years, starting with year the time of your purchase of up to 2%.
one and ending in year seven from: 4%, 3%,
3%, 2%, 2%, 1%. For all other Class B shares Class B shares are subject to distribution and
held continuously, the CDSC declines over service (12b-1) fees of up to 1% of average
six years, starting with year one and ending daily net assets.
in year seven from: 5%, 4%, 3%, 3%, 2%, 1%.
Eight years after purchase (seven years in Class B shares acquired through the
the case of shares acquired in the ISG Reorganization will be subject to the CDSC and
combination), Class B shares automatically commission schedules applicable to the original
convert to Class A shares. purchase.
Class B shares pay a shareholder servicing Maximum purchase of Class B shares in a single
fee (non 12b-1) of up to 0.25% of average transaction is $49,999.
daily net assets and a distribution (12b-1)
fee of 0.75% of up to average daily net
assets.
Maximum investment for all Class B purchases
by a shareholder for the Fund's shares is
$99,999.
Class I and Class Y sales AmSouth Strategic Portfolios: Growth & The Fund does not impose any initial, contingent
charges and Rule 12b-1 Income Portfolio does not impose any initial deferred or asset based sales charge on Class Y
fees or CDSC on Class I shares. shares.
The Fund may impose a shareholder servicing The distributor incurs the expenses of
fee (non 12b-1) of up to 0.15% of average distributing the Fund's Class Y shares, none of
daily net assets. which are reimbursed by the Fund or the Class Y
shareowners.
Management and other fees AmSouth Strategic Portfolios: Growth & The management fee payable by Pioneer Ibbotson
Income Portfolio pays an advisory fee on a Moderate Allocation Fund is equal to 0.13% of
monthly basis at an annual rate of 0.20% of average daily net assets attributable to the
the Fund's average daily net assets. Fund's investments in underlying funds managed
by Pioneer and cash and 0.17% of average daily
ASO Services Company, Inc. ("ASO") serves as net assets attributable to other investments,
administrator and fund accounting agent for including underlying funds that are not managed
the Fund. The Fund pays ASO an by Pioneer, with breakpoints at incremental
administrative services fee of 0.15% of the asset levels. Since currently all of the
Fund's average daily net assets. underlying funds are managed by Pioneer, the
management fee will initially be 0.13% of
Other expenses of the Fund are being limited average daily net assets.
to 0.33% for Class A shares, 0.33% for Class
7
AmSouth Strategic Portfolios: Growth &
Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------------
B shares and 0.28% for Class I shares. Any In addition, the Fund reimburses Pioneer for
fee waiver or expense reimbursement certain fund accounting and legal expenses
arrangement is voluntary and may be incurred on behalf of the Fund and pays a
discontinued at any time. You also separate shareholder servicing/transfer agency
indirectly bear a pro rata share of the fees fee to PIMSS, an affiliate of Pioneer.
and expenses of the underlying funds.
Pioneer has contractually agreed not to impose
For the fiscal year ended July 31, 2004, the all or a portion of its fees or to limit other
Fund's annual operating expenses for Class A direct ordinary operating expenses to the extent
shares, after giving effect to the expense required to reduce expenses, other than
limitation were 0.53%, and without giving "Estimated average expense ratio of underlying
effect to the expense limitation, were 0.66% funds," to 0.74% of the average daily net assets
of average daily net assets. As of January attributable to Class A shares and 1.64% of
12, 2005, estimated total direct and average daily net assets attributable to Class B
indirect expenses were 1.81% of average shares. There is no expense limitation with
daily net assets. respect to the Class Y shares. This expense
limitation is in effect for Class A shares until
For the fiscal year ended July 31, 2004, the December 1, 2008 and in effect for Class B
Fund's annual operating expenses for Class B shares until December 1, 2006. There can be no
shares, after giving effect to the expense assurance that Pioneer will extend these expense
limitation were 1.28%, and without giving limitations past such dates. The expense
effect to the expense limitation, were 1.41% limitation does not limit the expenses of the
of average daily net assets. As of January underlying funds indirectly incurred by a
12, 2005, estimated total direct and shareholder.
indirect expenses were 2.56% of average
daily net assets. Class Y shares of the Pioneer Fund are being
offered for the first time in connection with
For the fiscal year ended July 31, 2004, the the Reorganization.
Fund's annual operating expenses for Class I
shares, after giving effect to the expense
limitation were 0.48%, and without giving
effect to the expense limitation, were 0.61%
of average daily net assets. As of January
12, 2005, estimated total direct and
indirect expenses were 1.74% of average
daily net assets.
Buying shares You may buy shares of the Fund directly You may buy shares from any investment firm that
through BISYS Fund Services, the Fund's has a sales agreement with PFD, the Pioneer
distributor, or through brokers, registered Fund's distributor.
investment advisers, banks and other
financial institutions that have entered If the account is established in the
into selling agreements with the Fund's shareholder's own name, shareholders may also
distributor, as described in the Fund's purchase additional shares of the Fund by
prospectus. telephone or online.
Certain account transactions may be done by
telephone.
Exchanging shares You can exchange your shares in the Fund for You may exchange your shares for shares of the
shares of the same class of another AmSouth same class of another Pioneer mutual fund. Your
fund, usually without paying additional exchange request must be for at least $1,000.
sales charges. You must meet the minimum
investment requirements for the
8
AmSouth Strategic Portfolios: Growth &
Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------------
Fund into which you are exchanging. Exchanges After you establish an eligible fund account,
from one fund to another are taxable. Class A you can exchange Fund shares by telephone or
shares may be exchanged for Class I shares of online.
the same Fund or another AmSouth Fund if you
become eligible to purchase Class I shares.
Class I shares may be exchanged for Class A
shares of the same fund. No transaction fees
are currently charged for exchanges.
If you sell your shares or exchange them for
shares of another AmSouth fund within 7 days
of the date of purchase, you will be charged
a 2.00% fee on the current net asset value
of the shares sold or exchanged. The fee is
paid to the Fund to offset the costs
associated with short-term trading, such as
portfolio transaction and administrative
costs.
The Fund uses a "first-in, first-out" method
to determine how long you have held your
shares. This means that if you purchased
shares on different days, the shares
purchased first will be considered redeemed
first for purposes of determining whether
the redemption fee will be charged.
The fee will be charged on all covered
redemptions and exchanges, including those
made through retirement plan, brokerage and
other types of omnibus accounts (except
where it is not practical for the plan
administrator or brokerage firm to implement
the fee). The Fund will not impose the
redemption fee on a redemption or exchange
of shares purchased upon the reinvestment of
dividend and capital gain distributions.
Selling shares Shares of each Fund are sold at the net asset value per share next calculated after the Fund
receives your request in good order.
You may sell your shares by contacting the Normally, your investment firm will send your
Fund directly in writing or by telephone or by request to sell shares to PIMSS. You can also
contacting a financial intermediary as sell your shares by contacting the Fund
described in the Fund's prospectus. directly if your account is registered in your
name.
If the account is established in the
shareholder's own name, shareholders may also
redeem shares of the Fund by telephone or
online.
9
Comparison of Principal Risks of Investing in the Funds
Because each Fund has a similar investment objective, primary investment
policies and strategies, the Funds are subject to the same principal risks. You
could lose money on an investment in a fund or a fund may not perform as well as
other investment options.
Fund of funds structure and layering of fees
Each Fund is structured as a fund of funds. Each Fund's investments are
focused in the underlying funds, so the Fund's investment performance is
directly related to the performance of the underlying funds. Each Fund's net
asset value will be affected by the performance of the equity and bond markets
and the value of the mutual funds in which the fund invests. Since the Funds
mainly invest in the underlying funds, as opposed to other types of securities,
the Funds do not have the same flexibility in their portfolio holdings as many
mutual funds. In addition, each Fund indirectly pays a portion of the expenses
incurred by the underlying funds. Consequently, an investment in a Fund entails
more direct and indirect expenses than a direct investment in the underlying
funds. For instance, you will pay management fees and operating expenses of both
the Fund and the underlying funds.
The underlying funds will not necessarily make consistent investment
decisions, which may also increase your costs. One underlying fund may buy the
same security that another underlying fund is selling. You would indirectly bear
the costs of both trades without achieving any investment purpose. These
transactions may also generate taxable gains. You may receive taxable gains from
portfolio transactions by the underlying funds as well as taxable gains from the
fund's transactions in shares of the underlying funds.
Currently, Pioneer manages all of the funds underlying the Pioneer Fund.
Because the portfolio management teams of each of the underlying Pioneer funds
may draw upon the resources of the same equity and fixed income analyst team or
may share common investment management styles or approaches, the underlying
funds may hold many common portfolio positions, reducing the diversification
benefits of an asset allocation style.
Equity investments
Equity funds invest primarily in equity securities (such as stocks), which
are more volatile and carry more risks than some other forms of investment. When
the value of the stocks held by an underlying equity fund goes down, the value
of your investment in the fund will be affected.
The underlying equity funds have risks associated with investing in equity
securities. An equity fund could underperform other investments if:
o The stock market goes down (this risk may be greater in the short
term)
o The fund's equity investments do not have the growth potential or
value characteristics originally expected
o Stocks selected for income do not achieve the same return as
securities selected for capital growth
o The types of stocks in which the fund invests or the fund's
investment approach fall out of favor with investors
Fixed income investments
Fixed income funds primarily invest in debt securities, such as government
securities, investment grade corporate securities, junk bonds, mortgaged backed
securities, asset-backed securities, and money market securities. The value of
your investment in the fund will change as the value of investments of the
underlying funds increases and decreases.
The underlying fixed income funds have risks associated with investing in
debt securities. A fund could underperform other investments if:
o Interest rates go up causing the value of the fund's portfolio to
decline
o The issuer of a debt security owned by the fund defaults on its
obligation to pay principal or interest or has its credit rating
downgraded
o During periods of declining interest rates, the issuer of a security
may exercise its option to prepay earlier than scheduled, forcing
the fund to reinvest in lower yielding securities. This is known as
call or prepayment risk
10
o During periods of rising interest rates, the average life of certain
types of securities may be extended because of slower than expected
principal payments. This may lock in a below market interest rate,
increase the security's duration (the estimated period until the
security is paid in full) and reduce the value of the security. This
is known as extension risk
o The investment manager's judgment about the attractiveness, relative
value or potential appreciation of a particular sector, security or
investment strategy proves to be incorrect
Equity securities of smaller companies
Compared to large companies, small and mid-sized companies, and the market
for their equity securities, are likely to:
o Be more sensitive to changes in the economy, earnings results and
investor expectations
o Have more limited product lines and capital resources
o Experience sharper swings in market values
o Be harder to sell at the times and prices Pioneer thinks appropriate
o Offer greater potential for loss than other U.S. equity securities
Equity securities of real estate industry issuers
Specific risks associated with the real estate industry include:
o The U.S. or a local real estate market declines due to adverse
economic conditions, overbuilding and high vacancy rates, reduced or
regulated rents or other causes
o Interest rates go up. Rising interest rates can adversely affect the
availability and cost of financing for property acquisitions and
other purposes and reduce the value of a REIT's fixed income
investments
o The values of properties owned by a REIT or the prospects of other
real estate industry issuers may be hurt by property tax increases,
zoning changes, other governmental actions, environmental
liabilities, natural disasters or increased operating expenses
o A REIT in an underlying fund's portfolio is, or is perceived by the
market to be, poorly managed
Non-U.S. securities
Investing in non-U.S. issuers, including emerging market issuers, may
involve unique risks compared to investing in securities of issuers in the U.S.
These risks are more pronounced to the extent the fund invests in issuers in the
lesser-developed emerging markets or in one region, such as Europe or the
Pacific Rim. These risks may include:
o Less information about the non-U.S. issuers or markets may be
available due to less rigorous disclosure or accounting standards or
regulatory practices
o Adverse effect of currency exchange rates or controls on the value
of the fund's investments
o The economies of non-U.S. 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 Withholding and other non-U.S. taxes may decrease the fund's return
High yield/below investment grade debt securities
Investment in high yield securities involves substantial risk of loss.
These securities are considered speculative with respect to the issuer's ability
to pay interest and principal and are susceptible to default or decline in
market value due to adverse economic and business developments. The market
values for high yield securities tend to be very volatile, and these securities
are less liquid than investment grade debt securities. For these reasons, your
investment in the fund is subject to the following specific risks:
o Increased price sensitivity to changing interest rates and
deteriorating economic environment
o Greater risk of loss due to default or declining credit quality
o Adverse company specific events are more likely to render the issuer
unable to make interest and/or principal payments
o A negative perception of the high yield market develops, depressing
the price and liquidity of high yield securities. This negative
perception could last for a significant period of time
11
Derivatives
Certain underlying funds may use futures and options on securities,
indices and currencies, 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. The underlying funds may use
derivatives for a variety of 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.
Past Performance
Set forth below is performance information for AmSouth Strategic
Portfolios: Growth & Income Portfolio. The bar charts show how AmSouth Strategic
Portfolios: Growth & Income Portfolio's total return (not including any
deduction for sales charges) has varied from year to year for each full calendar
year. The table shows average annual total return (before and after taxes) for
each Fund over time for each class of shares (including deductions for sales
charges) compared with a broad-based securities market index. The bar charts
give an indication of the risks of investing in each Fund, including the fact
that you could incur a loss and experience volatility of returns year to year.
Past performance before and after taxes does not indicate future results.
AmSouth Strategic Portfolios: Growth & Income Portfolio -- Class A Shares
Calendar Year Total Returns*
[BAR CHART]
2000 4.21%
2001 -2.29%
2002 -8.54%
2003 17.38%
2004 7.39%
* During the period shown in the bar chart, your AmSouth Fund's highest
quarterly return was 9.52% for the quarter ended June 30, 2003, and the
lowest quarterly return was -8.83% for the quarter ended September 30,
2002.
Pioneer Ibbotson Moderate Allocation Fund -- Class A Shares
Calendar Year Total Returns
Pioneer Ibbotson Moderate Allocation Fund began investment operations in
August 2004. Since the Pioneer Fund has conducted investment operations for less
than one calendar year, it may not disclose any performance information in this
prospectus. The fund's performance will vary from year to year. Past performance
does not necessarily indicate how a fund will perform in the future. As a
shareowner, you may lose or make money on your investment.
AmSouth Strategic Portfolios: Growth & Income Portfolio
Average Annual Total Returns (for the periods ending December 31, 2004)
12
1 Year 5 Years Since Inception
(1/27/99)
- ------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Growth & Income Portfolio, Class A Shares
Return Before Taxes 1.46% 2.10% 2.69%
Return After Taxes on Distributions 0.98% 0.95% 1.61%
Return After Taxes on Distributions and Sale of Fund Shares 0.94% 1.18% 1.71%
AmSouth Strategic Portfolios: Growth & Income Portfolio, Class B Shares
Return Before Taxes 1.77% 2.16% 3.00%
AmSouth Strategic Portfolios: Growth & Income Portfolio, Class I Shares
Return Before Taxes 7.51% 3.32% 4.22%
Return After Taxes on Distributions 7.00% 2.14% 3.11%
Return After Taxes on Distributions and Sale of Fund Shares 4.87% 2.21% 3.02%
S&P 500 Index(1) 10.87% -2.30% 0.66%
(reflects no deduction for fees, expenses or taxes)
(1) The S&P 500 Index, an unmanaged index of 500 stocks, is for reference
only, does not mirror the Fund's investments, and reflects no deduction
for fees, expenses or taxes.
The table above shows the impact of taxes on AmSouth Strategic Portfolios:
Growth & Income Portfolio's returns. After-tax returns are only shown for Class
A shares and Class I shares and may vary for Class B shares. The Fund's
after-tax returns are calculated using the highest individual federal marginal
income tax rates and do not reflect the impact of state and local taxes. In
certain cases, the figure representing "Return After Taxes on Distributions and
Sale of Fund Shares" may be higher than the other return figures for the same
period. A higher after-tax return results when a capital loss occurs upon
redemption and translates into an assumed tax deduction that benefits the
shareholder. Please note that actual after-tax returns depend on an investor's
tax situation and may differ from those shown. Also note that after-tax returns
shown are not relevant to shareholders who hold Fund shares through tax-deferred
arrangements, such as 401(k) plans or individual retirement accounts.
13
The Funds' Fees and Expenses
Shareholders of both Funds pay various fees and expenses, either directly
or indirectly. The tables below show the fees and expenses that you would pay if
you were to buy and hold shares of each Fund. The expenses in the tables
appearing below are based on (i) for the AmSouth Strategic Portfolios: Growth &
Income Portfolio, the expenses of AmSouth Strategic Portfolios: Growth & Income
Portfolio for the period ended January 31, 2005 and (ii) for Pioneer Ibbotson
Moderate Allocation Fund, the estimated expenses for the period ended January
31, 2005. Future expenses for all share classes may be greater or less.
Shareholders of AmSouth Strategic Portfolios: Moderate Growth & Income Portfolio
are also being asked to approve the reorganization of their fund into Pioneer
Ibbotson Moderate Allocation Fund. The tables also show (1) the pro forma
expenses of the combined Fund assuming the Reorganization occurred on January
31, 2005 and (2) the pro forma expenses of the combined Fund assuming the
reorganization of AmSouth Strategic Portfolios: Moderate Growth & Income
Portfolio into Pioneer Ibbotson Moderate Allocation Fund also occurred on
January 31, 2005.
Shareholder AmSouth Pioneer Combined Combined AmSouth
transaction Strategic Ibbotson Fund Fund Strategic
fees (paid Portfolios Moderate (Pro (including Portfolios
directly from Growth & Allocation Forma) AmSouth Growth &
your Income Fund Moderate Income
investment) Portfolio(1) Growth & Portfolio
Income
Portfolio)(Pro
Forma)
Class A Class A Class A Class A Class B
- -------------------------------------------------------------------------------------------------
Maximum 5.50%(2) 5.75% 5.75% 5.75% None
sales charge
(load) when
you buy
shares as a
percentage of
offering price
- -------------------------------------------------------------------------------------------------
Maximum None None None None 5.00%(3)
deferred sales
charge (load)
as a
percentage of
purchase price
or the amount
you receive
when you sell
shares,
whichever is
less
- -------------------------------------------------------------------------------------------------
Redemption 2.00%(4) None None None 2.00%(4)
fees
- -------------------------------------------------------------------------------------------------
Shareholder Pioneer Combined Combined AmSouth Combined Combined Fund
transaction Ibbotson Fund (Pro Fund Strategic Fund (Pro (including
fees (paid Moderate Forma) (including Portfolios Forma) AmSouth
directly from Allocation AmSouth Growth & Moderate
your Fund Moderate Income Growth &
investment) Growth & Portfolio Income
Income Portfolio) (Pro
Portfolio) Forma)
(Pro Forma)
Class B Class B Class B Class I Class Y(8) Class Y(8)
- ------------------------------------------------------------------------------------------------------------------------
Maximum None None None None None None
sales charge
(load) when
you buy
shares as a
percentage of
offering price
- ------------------------------------------------------------------------------------------------------------------------
Maximum 4.00% 4.00% 4.00% None None None
deferred sales
charge (load)
as a
percentage of
purchase price
or the amount
you receive
when you sell
shares,
whichever is
less
- ------------------------------------------------------------------------------------------------------------------------
Redemption None None None 2.00%(4) None None
fees
- ------------------------------------------------------------------------------------------------------------------------
14
Shareholder AmSouth Pioneer Combined Combined AmSouth
transaction Strategic Ibbotson Fund Fund Strategic
fees (paid Portfolios Moderate (Pro (including Portfolios
directly from Growth & Allocation Forma) AmSouth Growth &
your Income Fund Moderate Income
investment) Portfolio(1) Growth & Portfolio
Income
Portfolio)(Pro
Forma)
Class A Class A Class A Class A Class B
- -------------------------------------------------------------------------------------------------
Annual fund
operating
expenses
(deducted
from fund
assets) (as a
% of average
net assets)
- -------------------------------------------------------------------------------------------------
Management 0.20% 0.17%(6) 0.17%(6) 0.17%(6) 0.20%
fee
- -------------------------------------------------------------------------------------------------
Distribution None 0.25% 0.25% 0.25% 0.75%
and service
(12b-1) fee
- -------------------------------------------------------------------------------------------------
Other 0.57% 0.68% 0.35% 0.32% 0.61%
expenses(5)
- -------------------------------------------------------------------------------------------------
Estimated 1.50% 0.68% 0.68% 0.32% 2.24%
indirect
expenses
- -------------------------------------------------------------------------------------------------
Total fund 2.27% 1.78%(7) 1.45% 1.42% 3.05%
operating
expenses
- -------------------------------------------------------------------------------------------------
Expense 0.25% 0.20% N/A N/A 0.30%
reimbursement
/reduction
- -------------------------------------------------------------------------------------------------
Net fund 2.02% 1.58% 1.45% 1.42% 2.75%
operating
expenses
- -------------------------------------------------------------------------------------------------
Shareholder Pioneer Combined Combined AmSouth Combined Combined Fund
transaction Ibbotson Fund (Pro Fund Strategic Fund (Pro (including
fees (paid Moderate Forma) (including Portfolios Forma) AmSouth
directly from Allocation AmSouth Growth & Moderate
your Fund Moderate Income Growth &
investment) Growth & Portfolio Income
Income Portfolio) (Pro
Portfolio) Forma)
(Pro Forma)
Class B Class B Class B Class I Class Y(8) Class Y(8)
- ------------------------------------------------------------------------------------------------------------------------
Annual fund
operating
expenses
(deducted
from fund
assets) (as a
% of average
net assets)
- ------------------------------------------------------------------------------------------------------------------------
Management 0.17%(6) 0.17%(6) 0.17%(6) 0.20% 0.17%(6) 0.17%(6)
fee
- ------------------------------------------------------------------------------------------------------------------------
Distribution 1.00% 1.00% 1.00% None None None
and service
(12b-1) fee
- ------------------------------------------------------------------------------------------------------------------------
Other 0.80% 0.80% 0.80% 0.47% 0.31% 0.27%
expenses(5)
- ------------------------------------------------------------------------------------------------------------------------
Estimated 0.68% 0.64% 0.56% 1.45% 0.31% 0.27%
indirect
expenses
- ------------------------------------------------------------------------------------------------------------------------
Total fund 2.65%(7) 2.49% 2.41% 2.12% 1.16% 1.12%
operating
expenses
- ------------------------------------------------------------------------------------------------------------------------
Expense 0.20% 0.01% N/A 0.20% N/A N/A
reimbursement
/reduction
- ------------------------------------------------------------------------------------------------------------------------
Net fund 2.45% 2.48% 2.41% 1.92% 1.16% 1.12%
operating
expenses
- ------------------------------------------------------------------------------------------------------------------------
(1) AmSouth Bank or other financial institutions may charge their customer
account fees for automatic investment and other cash management services
provided in connection with investment in the Fund.
(2) Sales charges may be reduced depending upon the amount invested or, in
certain circumstances, waived. Class A Shares bought as part of an
investment of $1 million or more are not subject to an initial sales
charge, but may be charged a CDSC of 1.00% if sold within one year of
purchase.
(3) For Class B shares purchased prior to the combination of AmSouth Funds
with ISG Funds, the CDSC on such Class B Shares held continuously declines
over six years, starting with year one and ending in year seven from: 4%,
3%, 3%, 2%, 2%, 1%. For all other Class B shares held continuously, the
CDSC declines over six years, starting with year one and ending in year
seven from: 5%, 4%, 3%, 3%, 2%, 1%. Eight years after purchase (seven
years in the case of shares acquired in the ISG combination), Class B
shares automatically convert to Class A shares.
15
(4) To discourage short-term trading, a redemption fee of 2.00% will be
charged on sales or exchanges of Class A, Class B and Class I shares of
your AmSouth Fund made within 7 days of the date of purchase. A wire
transfer fee of $7.00 will be deducted from the amount of your redemption
if you request a wire transfer.
(5) Other expenses for your AmSouth Fund are being limited to 0.32% for Class
A shares, 0.31% for Class B shares and 0.27% for Class I shares. Any fee
waiver or expense reimbursement arrangement is voluntary and may be
discontinued at any time. Pioneer has contractually agreed not to impose
all or a portion of its fees or to limit other direct ordinary operating
expenses to the extent required to reduce expenses, other than "Estimated
average expense ratio of underlying funds," to 0.74% of the average daily
net assets attributable to Class A shares and 1.64% of average daily net
assets attributable to Class B shares. This expense limitation is in
effect for Class A shares until December 1, 2008 and in effect for Class B
until December 1, 2006. There can be no assurance that Pioneer will extend
these expense limitations past such dates. The expense limitation does not
limit the expenses of the underlying funds indirectly incurred by a
shareholder.
(6) The management fee payable by the Pioneer Fund is equal to 0.13% of
average daily net assets attributable to the Pioneer Fund's investments in
underlying funds managed by Pioneer and cash and 0.17% of average daily
net assets attributable to other investments, including underlying funds
that are not managed by Pioneer, with breakpoints at incremental asset
levels. Since initially all of the underlying funds are managed by
Pioneer, the management fee will initially be 0.13% of average daily net
assets.
(7) The Pioneer Fund's total annual operating expenses in the table have not
been reduced by any expense offset arrangements.
(8) Class Y shares of the Pioneer Fund are being offered for the first time in
connection with the Reorganization.
16
The hypothetical example below helps you compare the cost of investing in each
Fund. It assumes that: (a) you invest $10,000 in each Fund for the time periods
shown, (b) you reinvest all dividends and distributions, (c) your investment has
a 5% return each year, and (d) each Fund's gross operating expenses remain the
same. The examples are for comparison purposes only and are not a representation
of either Fund's actual expenses or returns, either past or future.
Combined Fund
(including AmSouth
Strategic Portfolios:
AmSouth Strategic Moderate Growth &
Number of years you Portfolios: Growth & Pioneer Ibbotson Combined Fund Income Portfolio)
own your shares Income Portfolio Moderate Allocation Fund (Pro Forma) (Pro Forma)
- -------------------- -------------------- ------------------------ ------------- ---------------------
Class A
- --------------------------------------------------------------------------------------------------------------
Year 1 $ 737 $ 726 $ 714 $ 711
- --------------------------------------------------------------------------------------------------------------
Year 3 $1,129 $1,085 $1,007 $ 998
- --------------------------------------------------------------------------------------------------------------
Year 5 $1,544 N/A $1,322 $1,307
- --------------------------------------------------------------------------------------------------------------
Year 10 $2,700 N/A $2,210 $2,179
- --------------------------------------------------------------------------------------------------------------
Class B --- assuming redemption at end of period
- --------------------------------------------------------------------------------------------------------------
Year 1 $ 777 $ 648 $ 651 $ 644
- --------------------------------------------------------------------------------------------------------------
Year 3 $1,150 $1,104 $1,075 $1,051
- --------------------------------------------------------------------------------------------------------------
Year 5 $1,650 N/A $1,425 $1,385
- --------------------------------------------------------------------------------------------------------------
Year 10 $2,881 N/A $2,569 $2,501
- --------------------------------------------------------------------------------------------------------------
Class B --- assuming no redemption
- --------------------------------------------------------------------------------------------------------------
Year 1 $ 277 $ 248 $ 251 $ 244
- --------------------------------------------------------------------------------------------------------------
Year 3 $ 850 $ 804 $ 775 $ 751
- --------------------------------------------------------------------------------------------------------------
Year 5 $1,450 N/A $1,325 $1,285
- --------------------------------------------------------------------------------------------------------------
Year 10 $2,881 N/A $2,569 $2,501
- --------------------------------------------------------------------------------------------------------------
Class I Class Y
- --------------------------------------------------------------------------------------------------------------
Year 1 $ 188 N/A $ 118 $ 114
- --------------------------------------------------------------------------------------------------------------
Year 3 $ 582 N/A $ 368 $ 356
- --------------------------------------------------------------------------------------------------------------
Year 5 $ 1001 N/A $ 638 $ 617
- --------------------------------------------------------------------------------------------------------------
Year 10 $2,169 N/A $1,409 $1,363
- --------------------------------------------------------------------------------------------------------------
Reasons for the Proposed Reorganization
The Trustees believe that the proposed Reorganization is in the best
interests of AmSouth Strategic Portfolios: Growth & Income Portfolio. The
Trustees considered the following matters, among others, in approving the
proposal.
First, AAMI, the investment adviser to your Amsouth Fund, informed the
Trustees that it does not intend to continue to provide investment advisory
services to the AmSouth Funds. Consequently, a change in your Fund's investment
adviser was necessary. In the absence of the Reorganization, such a change would
be more likely to motivate shareholders invested in reliance on AAMI's role to
withdraw from the Fund, thereby reducing fund size and increasing fund expense
ratios.
Second, the resources of Pioneer. At December 31, 2004, Pioneer managed
over 80 investment companies and accounts with approximately $42 billion in
assets. Pioneer is part of the global asset management group of UniCredito
Italiano S.p.A., one of the largest banking groups in Italy, providing
investment management and financial services to mutual funds, institutional and
other clients. As of December 31, 2004, assets under management of UniCredito
Italiano S.p.A. were approximately $175 billion worldwide. Shareholders of your
AmSouth Fund would become part of a significantly larger family of funds that
offers a more diverse array of investment options and enhanced shareholder
account options. The Pioneer family of mutual funds offers over 80 funds,
including domestic and international equity and fixed income funds and a money
market fund that will be available to your AmSouth Fund's shareholders through
exchanges.
Third, Pioneer Ibbotson Moderate Allocation Fund's management fee (0.17%
of average daily net assets) is lower than the advisory fee of your Fund (0.20%
of average daily net assets). Both the historical and estimated pro forma
expenses of the Pioneer Fund, after giving effect to the Reorganization, on a
gross and net basis are lower than your Fund's gross and net
17
operating expenses. The aggregate Rule 12b-1 distribution and shareholder
servicing fees and non-Rule 12b-1 shareholder servicing fees paid by the Class A
and Class B shares of both Funds are the same. Moreover, your AmSouth Fund's
Class I shares pay a non 12b-1 shareholder servicing fee that is not paid by the
Pioneer Fund's Class Y shares.
Fourth, because of Pioneer distribution arrangements, Pioneer Fund has
greater potential to further increase the assets compared to your Fund. Further
assets growth is anticipated to further reduce the combined Fund's gross
operating expenses per share.
Fifth, the Class A, B and Y shares of the Pioneer Fund received in the
Reorganization will provide AmSouth Fund shareholders with exposure to a similar
investment product as they currently have. The Trustees also noted that the
allocation decisions are made by Ibbotson, a leading asset allocation adviser,
and that the Pioneer Fund intends, as soon as permitted by the Securities and
Exchange Commission, to include unaffiliated mutual funds as underlying funds.
Sixth, the transaction is structured to qualify as a tax-free
reorganization under Section 368(a) of the Internal Revenue Code of 1986 and
therefore will not be treated as a taxable sale of your AmSouth shares. Although
the Reorganization will result in a per share decrease in capital loss
carryforwards, the potential negative tax consequences of this aspect of the
Reorganization are outweighed by the advantages of the Reorganization. The
Reorganization will also result in a per share decrease in net unrealized
capital gains.
Pioneer and AmSouth Bank will pay all costs of preparing and printing the
Funds' proxy statements and solicitation costs incurred by the Funds in
connection with the Reorganization. AAMI will otherwise be responsible for all
costs and expenses of AmSouth Fund in connection with the Reorganization.
The Trustees also considered that Pioneer and AmSouth Bank will benefit
from the Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the
Reorganizations."
The Board of Trustees of the Pioneer Fund also considered that the
Reorganization presents an excellent opportunity for the Pioneer Fund to acquire
investment assets without the obligation to pay commissions or other transaction
costs that a fund normally incurs when purchasing securities. This opportunity
provides an economic benefit to the Pioneer Fund and its shareholders.
CAPITALIZATION
The following table sets forth the capitalization of each Fund as of May
31, 2005, and the pro forma combined Fund as of May 31, 2005. The table also
sets forth the pro forma capitalization of the combined Fund as of May 31, 2005,
assuming the shareholders of AmSouth Strategic Portfolios: Moderate Growth &
Income Portfolio approve the reorganization of their fund into Pioneer Ibbotson
Moderate Allocation Fund.
Pro Forma Pioneer
Ibbotson Moderate
Allocation Fund
(including
AmSouth Strategic
Portfolios:
AmSouth Strategic Pioneer Ibbotson Pro Forma Pioneer Moderate Growth
Portfolios: Growth & Moderate Allocation Ibbotson Moderate Income &
Income Portfolio Fund Fund Allocation Fund Portfolio)
May 31, 2005 May 31, 2005 May 31, 2005 May 31, 2005
--------------------- ------------------- ----------------- ------------------
Total Net Assets (in thousands) $ 113,640 $ 45,791 $ 159,430 $ 211,011
- ----------------------------------------------------------------------------------------------------------------------
Class A shares........... $ 55,716 $ 26,035 $ 81,751 $ 105,349
- ----------------------------------------------------------------------------------------------------------------------
Class B shares........... $ 19,098 $ 7,824 $ 26,923 $ 40,751
- ----------------------------------------------------------------------------------------------------------------------
Class I/Y shares......... $ 38,825 N/A $ 38,825 $ 52,979
Net Asset Value Per Share
- ----------------------------------------------------------------------------------------------------------------------
Class A shares........... $ 10.09 $ 10.77 $ 10.77 $ 10.77
- ----------------------------------------------------------------------------------------------------------------------
Class B shares........... $ 10.05 $ 10.42 $ 10.42 $ 10.42
- ----------------------------------------------------------------------------------------------------------------------
Class I/Y shares......... $ 10.13 N/A $ 10.77 $ 10.77
Shares Outstanding
- ----------------------------------------------------------------------------------------------------------------------
Class A shares........... 5,521,241 2,417,639 7,591,546 9,782,884
18
Class B shares........... 1,900,376 751,050 2,584,294 3,911,684
Class I/Y shares......... 3,832,756 N/A 3,605,325 4,919,719
It is impossible to predict how many shares of the Pioneer Fund will
actually be received and distributed by your AmSouth Fund on the Reorganization
date. The table should not be relied upon to determine the amount of the Pioneer
Fund's shares that will actually be received and distributed.
BOARD'S EVALUATION AND RECOMMENDATION
For the reasons described above, the Trustees, including the Independent
Trustees, approved the Reorganization. In particular, the Trustees determined
that the Reorganization is in the best interests of your AmSouth Fund.
Similarly, the Board of Trustees of the Pioneer Fund, including its Independent
Trustees, approved the Reorganization. They also determined that the
Reorganization is in the best interests of the Pioneer Fund.
The Trustees recommend that the shareholders of your AmSouth Fund vote FOR
the proposal to approve the Agreement and Plan of Reorganization.
19
Information about the underlying funds
The following is intended to summarize the investment objectives and primary
strategies of, and to provide you with certain other information about, the
underlying funds. These summaries do not reflect all of the investment policies
and strategies that are disclosed in each underlying fund's prospectus, and are
not an offer of the underlying funds' shares. The underlying funds in which the
funds intend to invest may change from time to time and the funds may invest in
underlying funds in addition to those described below at the discretion of
Pioneer without prior notice to or approval of shareholders. The prospectus and
SAI for each underlying fund is available on the SEC's website as well as on our
website at www.pioneerfunds.com.
Each underlying fund normally will be invested according to its investment
strategy. However, an underlying fund also may have the ability to invest
without limitation in money market instruments or other investments for
temporary, defensive purposes.
The underlying funds that invest primarily in equity securities are:
Pioneer Fund
Investment objective
Reasonable income and capital growth.
Principal investment strategies
The fund invests in a broad list of carefully selected, reasonably priced
securities rather than in securities whose prices reflect a premium resulting
from their current market popularity. The fund invests the major portion of its
assets in equity securities, primarily of U.S. issuers. For purposes of the
fund's investment policies, equity securities include common stocks, convertible
debt and other equity instruments, such as depositary receipts, warrants, rights
and preferred stocks.
Investment Adviser
Pioneer
Pioneer Research Fund
Investment objective
Long-term capital growth.
Principal investment strategies
Normally, the fund invests at least 80% of its assets in equity securities,
primarily of U.S. issuers. For purposes of the fund's investment policies,
equity securities include common stocks, convertible debt and other equity
instruments, such as preferred stocks, depositary receipts, rights and warrants.
Investment Adviser
Pioneer
20
Pioneer Growth Leaders Fund
Investment objective
Long term capital growth.
Principal investment strategies
Normally, the fund invests at least 80% of its net assets (plus the amount of
borrowings, if any, for investment purposes) in common and preferred stocks and
securities convertible into stocks. Securities convertible into stocks include
depositary receipts on stocks, convertible debt securities, warrants and rights.
The fund offers a broad investment program for the equity portion of an
investor's portfolio, with an emphasis on mid and large capitalization issuers
traded in the U.S. However, the fund may invest in issuers of any
capitalization.
Investment Adviser
Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser)
Pioneer Strategic Growth Fund
Investment objective
Long term capital growth.
Principal investment strategies
Normally, the fund invests at least 80% of its net assets (plus the amount of
borrowings, if any, for investment purposes) in equity securities of U.S.
issuers. The fund invests primarily in securities, traded in the U.S., of
issuers that the subadviser believes have substantial international activities.
In evaluating whether an issuer has substantial international activities, the
subadviser considers the degree to which the issuer has non-U.S. reported sales
and revenues, operating earnings or tangible assets. The fund may invest up to
20% of the value of its investments in equity securities of non-U.S. issuers
that are traded in U.S. markets.
Investment Adviser
Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser)
Pioneer Oak Ridge Large Cap Growth Fund
Investment objective
Capital appreciation.
Principal investment strategies
Normally, the fund invests at least 80% of its net assets (plus the amount of
borrowings, if any, for investment purposes) in equity securities of large
capitalization U.S. companies. Large capitalization companies have market
capitalizations at the time of acquisition of $3 billion or more. The fund
anticipates that the average weighted market capitalization of the companies in
the fund's portfolio will be significantly higher that $3 billion. The equity
securities in which the fund principally invests are common stocks, preferred
stocks, depositary receipts and convertible debt, but the fund may invest in
other types of equity securities to a lesser extent, such as warrants and
rights.
Investment Adviser
Pioneer (adviser); Oak Ridge Investments, LLC (subadviser)
21
Pioneer AmPac Growth Fund
Investment objective
Long-term capital growth.
Principal investment strategies
Normally, the fund invests at least 80% of its net assets (plus the amount of
borrowings, if any, for investment purposes) in equity securities of issuers
that have substantial sales to, or receive significant income from, countries
within the Pacific Rim. These issuers meet one of the following criteria:
o 50% or more of the issuer's earnings or sales are attributed to, or
assets are situated in, Pacific Rim countries (including the U.S.
and other countries bordering the Pacific Ocean, such as China and
Indonesia)
o 50% or more of the issuer's earnings or sales are attributed to, or
assets are situated in, Pacific Rim countries other than the U.S.
The fund also may invest up to 30% of the value of its investments in equity
securities of non-U.S. issuers that are traded in U.S. markets.
Investment Adviser
Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser)
Pioneer Value Fund
Investment objective
Reasonable income and capital growth.
Principal investment strategies
The fund seeks to invest in a broad list of carefully selected, reasonably
priced securities rather than in securities whose prices reflect a premium
resulting from their current market popularity. The fund invests the major
portion of its assets in equity securities, primarily of U.S. issuers. For
purposes of the fund's investment policies, equity securities include common
stocks, convertible debt and other equity instruments, such as depositary
receipts, warrants, rights and preferred stocks.
Investment Adviser
Pioneer
Pioneer Mid Cap Growth Fund
Investment objective
Capital growth by investing in a diversified portfolio of securities consisting
primarily of common stocks.
Principal investment strategies
Normally, the fund invests at least 80% of its total assets in equity securities
of mid-size companies, that is, companies with market values within the range of
market values of issuers included in the Russell Midcap Growth Index. For
purposes of the fund's investment policies, equity securities include common
stocks, convertible debt and other equity instruments, such as depositary
receipts, warrants, rights, interests in real estate investment trusts (REITs)
and preferred stocks.
22
Investment Adviser
Pioneer
Pioneer Cullen Value Fund
Investment objective
Capital appreciation. Current income is a secondary objective.
Principal investment strategies
The fund invests primarily in equity securities. The fund may invest a
significant portion of its assets in equity securities of medium- and
large-capitalization companies. Consequently, the fund will be subject to the
risks of investing in companies with market capitalizations of $1.5 billion or
more. For purposes of the fund's investment policies, equity securities include
common stocks, convertible debt and other equity instruments, such as depositary
receipts, warrants, rights, equity interests in real estate investment trusts
(REITs) and preferred stocks.
The fund may invest up to 30% of its total assets in securities of non-U.S.
issuers. Up to 5% of the fund's total assets may be invested in securities of
emerging market issuers. The fund may invest in securities of Canadian issuers
to the same extent as securities of U.S. issuers.
Investment Adviser
Pioneer
Pioneer Mid Cap Value Fund
Investment objective
Capital appreciation by investing in a diversified portfolio of securities
consisting primarily of common stocks.
Principal investment strategies
Normally, the fund invests at least 80% of its total assets in equity securities
of mid-size companies, that is companies with market values within the range of
market values of companies included in the Russell Midcap Value Index. The fund
focuses on issuers with capitalizations within the $1 billion to $10 billion
range, and that range will change depending on market conditions. The equity
securities in which the fund principally invests are common stocks, preferred
stocks, depositary receipts and convertible debt, but the fund may invest in
other types of equity securities to a lesser extent, such as warrants and
rights.
Investment Adviser
Pioneer
Pioneer Small and Mid Cap Growth Fund
Investment objective
Long-term capital growth.
Principal investment strategies
Normally, the fund invests at least 80% of its net assets (plus the amount of
borrowings, if any, for investment purposes) in equity securities of small and
mid-capitalization issuers, that is those with market values, at the time of
investment, that do not exceed the market capitalization of the largest company
within the S&P Mid Cap 400 Index. The size of the companies in the index may
change dramatically as a result of market conditions and the composition of the
index. The fund's investments will
23
not be confined to securities issued by companies included in an index. For
purposes of the fund's investment policies, equity securities include common
stocks, convertible debt and other equity instruments, such as depositary
receipts, warrants, rights and preferred stocks.
Investment Adviser
Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser)
Pioneer Oak Ridge Small Cap Growth Fund
Investment objective
Capital appreciation.
Principal investment strategies
Normally, the fund invests at least 80% of its net assets (plus the amount of
borrowings, if any, for investment purposes) in equity securities of small
capitalization U.S. companies with market capitalizations of $2 billion or less.
For purposes of the fund's investment policies, equity securities include common
stocks, convertible debt and other equity instruments, such as depositary
receipts, warrants, rights and preferred stocks. Small capitalization companies
have market capitalizations at the time of acquisition of $2 billion or less.
The equity securities in which the fund principally invests are common stocks,
preferred stocks, depositary receipts and convertible debt, but the fund may
invest in other types of equity securities to a lesser extent, such as warrants
and rights.
Investment Adviser
Pioneer (adviser); Oak Ridge Investments, LLC (subadviser)
Pioneer Small Cap Value Fund
Investment objective
Capital growth by investing in a diversified portfolio of securities consisting
primarily of common stocks.
Principal investment strategies
Normally, the fund invests at least 80% of its net assets (plus the amount of
borrowings, if any, for investment purposes) in equity securities of small
companies. Small companies are those with market values, at the time of
investment, that do not exceed the greater of the market capitalization of the
largest company within the Russell 2000 Index or the 3-year rolling average of
the market capitalization of the largest company within the Russell 2000 Index
as measured at the end of the preceding month. The Russell 2000 Index measures
the performance of the 2,000 smallest companies in the Russell 3000 Index. The
size of the companies in the index changes with market conditions and the
composition of the index. Pioneer monitors the fund's portfolio so that, under
normal circumstances, the capitalization range of the fund's portfolio is
consistent with the inclusion of the fund in the Lipper Small-Cap category. For
purposes of the fund's investment policies, equity securities include common
stocks, convertible debt and other equity instruments, such as depositary
receipts, warrants, rights, equity interests in real estate investment trusts
(REITs) and preferred stocks.
Investment Adviser
Pioneer
Pioneer International Equity Fund
Investment objective
Long-term capital growth.
24
Principal investment strategies
Normally, the fund invests at least 80% of its total assets in equity securities
of non-U.S. issuers. The fund focuses on securities of issuers located in
countries with developed markets (other than the United States) but may allocate
up to 10% of its assets in countries with emerging economies or securities
markets. Developed markets outside the United States generally include, but are
not limited to, the countries included in the Morgan Stanley Capital
International Europe, Australasia, Far East Index. The fund's assets must be
allocated to securities of issuers located in at least three non-U.S. countries.
For purposes of the fund's investment policies, equity securities include common
stocks, convertible debt and other equity instruments, such as depositary
receipts, warrants, rights and preferred stocks. The fund may also purchase and
sell forward foreign currency exchange contracts in non-U.S. currencies in
connection with its investments.
Investment Adviser
Pioneer
Pioneer International Value Fund
Investment objective
Long-term capital growth.
Principal investment strategies
Normally, the fund invests at least 80% of its total assets in equity securities
of non-U.S. issuers. These issuers may be located in both developed and emerging
markets. Under normal circumstances, the fund's assets will be invested in
securities of companies domiciled in at least three different foreign countries.
Generally, the fund's investments in any country are limited to 25% or less of
its total assets. However, the fund may invest more than 25% of its assets in
issuers organized in Japan or the United Kingdom or in securities quoted or
denominated in the Japanese yen, the British pound and the euro. Investment of a
substantial portion of the fund's assets in such countries or currencies will
subject the fund to the risks of adverse securities markets, exchange rates and
social, political or economic events which may occur in those countries.
The fund may invest without limitation in securities of issuers located in
countries with emerging economies or securities markets, but will not invest
more than 25% of its total assets in securities of issuers located in any one
such country.
For purposes of the fund's investment policies, equity securities include common
stocks, convertible debt and other equity instruments, such as depositary
receipts, warrants, rights and preferred shares. The fund may also purchase and
sell forward foreign currency exchange contracts in non-U.S. currencies in
connection with its investments.
Investment Adviser
Pioneer
Pioneer Europe Select Fund
Investment objective
Capital growth.
Principal investment strategies
Normally, the fund invests at least 80% of its total assets in equity securities
of European issuers. The fund's principal focus is on European companies that
exhibit strong growth characteristics and are considered to be leaders in their
sector or industry. The fund generally focuses on mid- and large-capitalization
European issuers. Equity securities include common stocks, convertible debt and
other equity instruments, such as depositary receipts, warrants, rights and
preferred stocks. The fund may also purchase and sell forward foreign currency
exchange contracts in connection with its investments.
25
Investment Adviser
Pioneer
Pioneer Emerging Markets Fund
Investment objective
Long-term growth of capital.
Principal investment strategies
The fund invests primarily in securities of emerging market issuers. Although
the fund invests in both equity and debt securities, it normally emphasizes
equity securities in its portfolio. Normally, the fund invests at least 80% of
its total assets in the securities of emerging market corporate and government
issuers (i.e., securities of companies that are domiciled or primarily doing
business in emerging countries and securities of these countries' governmental
issuers).
Investment Adviser
Pioneer
Pioneer Real Estate Shares
Investment objective
Long-term growth of capital. Current income is a secondary objective.
Principal investment strategies
Normally, the fund invests at least 80% of its total assets in equity securities
of real estate investment trusts (REITs) and other real estate industry issuers.
For purposes of the fund's investment policies, equity securities include common
stocks, convertible debt and other equity instruments, such as warrants, rights,
interests in REITs and preferred stocks.
Investment Adviser
Pioneer (adviser); AEW Management and Advisors, L.P. (subadviser)
The underlying funds that invest primarily in debt securities are:
Pioneer Bond Fund
Investment objective
To provide current income from an investment grade 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.
Principal investment strategies
The fund invests primarily in:
o Debt securities issued or guaranteed by the U.S. government or its
agencies and instrumentalities,
o Debt securities, including convertible debt, of corporate and other
issuers rated at least investment grade at the time of investment,
and comparably rated commercial paper,
26
o Cash and cash equivalents, certificates of deposit, repurchase
agreements maturing in one week or less and bankers' acceptances.
Normally, the fund invests at least 80% of its total assets in these securities.
In addition, the fund may invest up to 20% of its total assets in debt
securities rated below investment grade or, if unrated, of equivalent quality as
determined by Pioneer. Cash and cash equivalents include cash balances, accrued
interest and receivables for items such as the proceeds, not yet received, from
the sale of the fund's portfolio investments.
Investment Adviser
Pioneer
Pioneer High Yield Fund
Investment objective
Maximize total return through a combination of income and capital appreciation.
Principal investment strategies
Normally, the fund invests at least 80% of its total assets in below investment
grade (high yield) debt securities and preferred stocks. These high yield
securities may be convertible into the equity securities of the issuer. Debt
securities rated below investment grade are commonly referred to as "junk bonds"
and are considered speculative. Below investment grade debt securities involve
greater risk of loss, are subject to greater price volatility and are less
liquid, especially during periods of economic uncertainty or change, than higher
rated debt securities.
Investment Adviser
Pioneer
Pioneer Short Term Income Fund
Investment objective
A high level of current income to the extent consistent with a relatively high
level of stability of principal.
Principal investment strategies
The fund invests primarily in:
o Debt securities issued or guaranteed by the U.S. government, its
agencies or instrumentalities
o Debt securities, including convertible debt, of corporate and other
issuers and commercial paper
o Mortgage-backed and asset-backed securities
o Short-term money market instruments
Normally, at least 80% of the fund's net assets are invested in debt securities
that are rated investment grade at the time of purchase or cash and cash
equivalents. Cash and cash equivalents may include cash balances, accrued
interest and receivables for items such as the proceeds, not yet received, from
the sale of the fund's portfolio investments.
Investment Adviser
Pioneer
27
Pioneer Cash Reserves Fund
Investment objective
High current income, preservation of capital and liquidity through investments
in high-quality short-term securities.
Principal investment strategies
The fund seeks to maintain a constant net asset value of $1.00 per share by
investing in high-quality, U.S. dollar denominated money market securities,
including those issued by:
o U.S. and foreign banks
o U.S. and foreign corporate issuers
o The U.S. government and its agencies and instrumentalities
o Foreign governments
o Multinational organizations such as the World Bank
The fund may invest more than 25% of its total assets in U.S. government
securities and obligations of U.S. banks. The fund may invest in any money
market instrument that is a permissible investment for a money market fund under
the rules of the Securities and Exchange Commission, including commercial paper,
certificates of deposit, time deposits, bankers' acceptances, mortgage-backed
and asset-backed securities, repurchase agreements, municipal obligations and
other short-term debt securities.
Investment Adviser
Pioneer
Pioneer Strategic Income Fund
Investment objective
A high level of current income.
Principal investment strategies
Normally, the fund invests at least 80% of its net assets (plus the amount of
borrowings, if any, for investment purposes) in debt securities. The fund has
the flexibility to invest in a broad range of issuers and segments of the debt
securities markets. Pioneer Investment Management, Inc., the fund's investment
adviser, allocates the fund's investments among the following three segments of
the debt markets:
o Below investment grade (high yield) securities of U.S. and non-U.S.
issuers
o Investment grade securities of U.S. issuers
o Investment grade securities of non-U.S. issuers
Pioneer's allocations among these segments of the debt markets depend upon its
outlook for economic, interest rate and political trends. The fund invests
primarily in:
o Debt securities issued or guaranteed by the U.S. government, its
agencies or instrumentalities or non-U.S. governmental entities
28
o Debt securities of U.S. and non-U.S. corporate issuers, including
convertible debt
o Mortgage-backed and asset-backed securities
The fund's investments may have fixed or variable principal payments and all
types of interest rate payment and reset terms, including fixed rate, adjustable
rate, zero coupon, contingent, deferred, payment in kind and auction rate
features. The fund invests in securities with a broad range of maturities.
Depending upon Pioneer's allocation among market segments, up to 70% of the
fund's total assets may be in debt securities rated below investment grade at
the time of purchase or determined to be of equivalent quality by Pioneer. Up to
20% of the fund's total assets may be invested in debt securities rated below
CCC by Standard & Poor's Ratings Group or the equivalent by another nationally
recognized statistical rating organization or determined to be of equivalent
credit quality by Pioneer. Debt securities rated below investment grade are
commonly referred to as "junk bonds" and are considered speculative. Below
investment grade debt securities involve greater risk of loss, are subject to
greater price volatility and are less liquid, especially during periods of
economic uncertainty or change, than higher rated debt securities.
As with all fixed income securities, the market values of convertible debt
securities tend to decline as interest rates increase and, conversely, to
increase as interest rates decline. However, when the market price of the common
stock underlying a convertible security exceeds the conversion price, the
convertible security tends to reflect the market price of the underlying common
stock.
Depending upon Pioneer's allocation among market segments, up to 85% of the
fund's total assets may be in debt securities of non-U.S. corporate and
governmental issuers, including debt securities of corporate and governmental
issuers in emerging markets.
Investment Adviser
Pioneer
29
AmSouth Strategic Portfolios: Moderate Growth & Income Portfolio and
Pioneer Ibbotson Moderate Allocation Fund
PROPOSAL 1(m)
Approval of Agreement and Plan of Reorganization
SUMMARY
The following is a summary of more complete information appearing later in
this Proxy Statement/Prospectus or incorporated herein. You should read
carefully the entire Proxy Statement/Prospectus, including the form of Agreement
and Plan of Reorganization attached as EXHIBIT A-1, because it contains details
that are not in the summary.
Each Fund is structured as a "fund of funds," which means all of its
assets are invested in other mutual funds ("underlying funds"). Your Fund
invests only in other AmSouth funds. Currently, the Pioneer Fund only invests in
other Pioneer funds but is seeking an exemptive order from the Securities and
Exchange Commission that would permit the Pioneer Fund to invest, in addition,
in mutual funds that are not managed by Pioneer. To the extent that Pioneer
receives an order from the Securities and Exchange Commission that permits
Pioneer to invest in such other non-Pioneer underlying funds, Pioneer and the
Pioneer Fund intend to rely on such order, subject to any applicable conditions
of the order. In the table below, if a row extends across the entire table, the
policy disclosed applies to both your AmSouth Fund and the Pioneer Fund.
Comparison of AmSouth Strategic Portfolios: Moderate Growth & Income
Portfolio to Pioneer Ibbotson Moderate Allocation Fund
AmSouth Strategic Portfolios: Moderate Growth Pioneer Ibbotson Moderate Allocation Fund
& Income Portfolio
- ------------------------------------------------------------------------------------------------------------------------------
Business A diversified series of AmSouth Funds, an A series of Pioneer Ibbotson Asset Allocation
open-end management investment company Series, a diversified open-end management
organized as a Massachusetts business trust. investment company organized as a Delaware
statutory trust.
Net assets as of March 31, $50.6 million $34.3 million
2005
Investment advisers and Investment Adviser: Investment Adviser:
portfolio managers AAMI Pioneer
Portfolio Manager: Investment Subadviser:
Day-to-day management of AmSouth Strategic Ibbotson Associates Advisors, LLC ("Ibbotson")
Portfolios: Moderate Growth & Income Portfolio
is the responsibility of the AmSouth Strategy Portfolio Managers:
Committee, and no person is primarily Day-to-day management of Pioneer Ibbotson
responsible for making recommendations to the Moderate Allocation Fund is the responsibility
Committee. The Committee members consist of of portfolio managers and members of
John Boston, CFA, Fred Crown, CFA, Paige B. Ibbotson's Investment Committee headed by
Daniel, David M. Dasari, CFA, Joseph T. Roger Ibbotson. Roger Ibbotson founded
Keating, Ronald E. Lindquist, John Mark Ibbotson in 1977 and is the firm's Chairman.
McKenzie, Matt Smith, CFA, Brian B. Sullivan, Peng Chen, Ph.D., managing director and chief
CFA, Doug S. Williams and Jason Waters. investment officer at Ibbotson, conducts
research projects on asset allocation,
Mr. Boston is Chief Fixed Income Officer for portfolio risk measurement, nontraditional
AAMI. He began his career in investment assets, and global financial markets. Dr. Chen
management with AmSouth Bank in 1987 and has joined Ibbotson in 1997. Michael E. Annin,
been associated with AAMI since 1996. Mr. managing director, manages the investment
Boston received his CFA charter in 1993 and is management services and data products group
an active member and past president of for Ibbotson. Scott Wentsel, senior portfolio
1
AmSouth Strategic Portfolios: Moderate Growth Pioneer Ibbotson Moderate Allocation Fund
& Income Portfolio
- ------------------------------------------------------------------------------------------------------------------------------
the Alabama Society of Financial Analysts. He manager, is responsible for management of the
also serves as the portfolio manager for the firm's fund-of-funds business which includes
AmSouth High Quality Bond Fund. Mr. Boston is oversight of its investment management staff
a Senior Vice President of AmSouth Bank and and process. Alexander E. Kaye, portfolio
Vice President of AAMI. manager, is responsible for managing the
delivery of fund-of-funds programs for
Mr. Crown has been employed with AmSouth Bank institutional and retail clients, which
since 1982 and AAMI since 2001. He was an includes asset allocation modeling, portfolio
Institutional Fund Manager with AAMI construction, fund classification and manager
(2001-2003) and has been a Regional Manager due diligence. Brian Huckstep, portfolio
since 2003. Mr. Crown is a Senior Vice manager, is responsible for managing the
President of AmSouth Bank. delivery of fund-of-funds programs for
institutional and retail clients, which
Ms. Daniel has been employed with AmSouth Bank includes asset allocation modeling, portfolio
since 1999. She has been employed by AAMI as construction, fund classification, and manager
the Director of Alternative Strategies since due diligence.
2003. She is an Assistant Vice President with
AmSouth Bank.
Mr. Dasari has been employed with AmSouth Bank
since 2002 and AAMI since 2003. He is
Director of Individual Security Management for
AAMI. Prior to joining AmSouth Bank, he was
Assistant Vice President at Fifth Third Bank.
Mr. Dasari is a Vice President of AmSouth Bank.
Mr. Keating has been employed with AmSouth
Bank since 2001 and AAMI since 2002. He is
the Chairman and Chief Investment Officer of
AAMI. Prior to 2001, he was employed as the
Chief Market Strategist and Chief Fixed Income
Officer of Fifth Third Bank. Mr. Keating is
an Executive Vice-President of AmSouth Bank.
Mr. Lindquist has been employed with AAMI
since December 1999. Prior to December 1999,
Mr. Lindquist was employed by First American
National Bank (since May 1998), and by Deposit
Guaranty National Bank, and Commercial
National Bank (since 1978). First American
National Bank, Deposit Guaranty National Bank
and Commercial National Bank are predecessors
of AmSouth Bank and affiliates of AAMI. He
also serves as the portfolio manager for the
AmSouth Large Cap Fund. Mr. Lindquist is a
Senior Vice President of AmSouth Bank and Vice
President of AAMI.
Mr. McKenzie has been involved in investment
management since 1981, with portfolio
management expertise in both equity and fixed
2
AmSouth Strategic Portfolios: Moderate Growth Pioneer Ibbotson Moderate Allocation Fund
& Income Portfolio
- ------------------------------------------------------------------------------------------------------------------------------
income securities. Mr. McKenzie co-managed the
AmSouth Government Income Fund from 1999 to
2002 and managed it from 2003 to 2004. Mr.
McKenzie has been associated with the Trust
Investment Department of AmSouth Bank, and
banks acquired by AmSouth Bank, since 1984 and
joined AAMI in 2003. Mr. McKenzie is a Senior
Vice President of AmSouth Bank and Vice
President of AAMI.
Mr. Smith has been employed with AmSouth Bank
since 1988. He has been employed by AAMI as a
Regional Manager since 2004. He is a Senior
Vice President with AmSouth Bank.
Mr. Sullivan has been an officer of AAMI since
1996 and joined AmSouth Bank in 1984. Prior
to serving as Director of Fixed Income for
AmSouth Bank's Trust Department, Mr. Sullivan
managed equity portfolios and held the
position of equity research coordinator for
AmSouth Bank's Trust Department. Mr. Sullivan
is a Senior Vice President of AmSouth Bank and
Vice President of AAMI.
Mr. Waters has been employed with AmSouth Bank
since 1999. He has been employed as an
Institutional Portfolio Manager with AAMI
since 2001. Mr. Williams is a Senior Vice
President of AmSouth Bank.
Mr. Williams has been employed with AmSouth
Bank since 2002. He has been employed as a
Regional Manager with AAMI since 2004. Prior
to 2002, Mr. Williams was a Director of
Portfolio Management with Fifth Third Bank
(1988-2002). Mr. Williams is a Senior Vice
President of AmSouth Bank.
Investment objective AmSouth Strategic Portfolios: Moderate Growth Pioneer Ibbotson Moderate Allocation Fund
& Income Portfolio seeks to provide investors seeks long-term capital growth and current
with current income and a moderate level of income.
capital growth.
Primary investments Each Fund allocates its investments among underlying funds within pre-determined strategy
ranges.
3
AmSouth Strategic Portfolios: Moderate Growth Pioneer Ibbotson Moderate Allocation Fund
& Income Portfolio
- ------------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Moderate Growth & Income Portfolio:
AmSouth Strategic Portfolios: Moderate Growth & Income Portfolio allocates its assets among the
following underlying funds within the ranges set forth below based upon AAMI's outlook for the
economy, financial markets and relative market valuations of the underlying AmSouth Funds.
Underlying Fund Allocation Range
AmSouth Value Fund 0-15%
AmSouth Select Equity Fund 0-10%
AmSouth Enhanced Market Fund 0-15%
AmSouth Large Cap Fund 0-10%
AmSouth Capital Growth Fund 0-15%
AmSouth Mid Cap Fund 0-10%
AmSouth Small Cap Fund 0-10%
AmSouth International Equity Fund 0-10%
AmSouth Government Income Fund 0-25%
AmSouth High Quality Bond Fund 0-70%
AmSouth Limited Term Bond Fund 0-25%
AmSouth Prime Money Market Fund 0-5%
The selection of the underlying funds and their ranges are not fundamental and may be changed
without the prior approval of AmSouth Strategic Portfolios: Moderate Growth & Income Portfolio's
shareholders.
4
AmSouth Strategic Portfolios: Moderate Growth Pioneer Ibbotson Moderate Allocation Fund
& Income Portfolio
- ------------------------------------------------------------------------------------------------------------------------------
Pioneer Ibbotson Moderate Allocation Fund:
Because this is a moderate allocation fund, the majority of Pioneer Ibbotson Moderate
Allocation Fund's assets will be invested in equity and bond funds, although a portion of its
assets will be invested in cash, cash equivalents, or in money market funds. Under normal
circumstances, Pioneer Ibbotson Moderate Allocation Fund initially expects to invest its assets
among asset classes in the following ranges:
Short-Term
Investments Equity Fund Fixed Income Fund
Allocation Allocation Allocation
---------------------------------------------------------
0-5% 55-65% 35-45%
Based upon the analysis described under "Asset allocation process," the fund initially expects
to invest its assets in underlying mutual funds within the following ranges:
Fund Name Percentage of Fund Holdings
-----------------------------------------------------------------------------------
Pioneer Fund 0-20%
-----------------------------------------------------------------------------------
Pioneer Research Fund 0-20%
-----------------------------------------------------------------------------------
Pioneer Growth Leaders Fund (formerly Pioneer
Papp Stock Fund) 0-20%
-----------------------------------------------------------------------------------
Pioneer Strategic Growth Fund (formerly Pioneer
Papp Strategic Growth Fund) 0-20%
-----------------------------------------------------------------------------------
Pioneer Oak Ridge Large Cap Growth Fund 0-20%
-----------------------------------------------------------------------------------
Pioneer AmPac Growth Fund (formerly Pioneer Papp
America-Pacific Rim Fund) 0-20%
-----------------------------------------------------------------------------------
Pioneer Value Fund 0-20%
-----------------------------------------------------------------------------------
Pioneer Mid Cap Growth Fund 0-20%
-----------------------------------------------------------------------------------
Pioneer Mid Cap Value Fund 0-20%
-----------------------------------------------------------------------------------
Pioneer Small and Mid Cap Growth Fund (formerly
Pioneer Papp Small and Mid Cap Growth Fund) 0-20%
-----------------------------------------------------------------------------------
Pioneer Oak Ridge Small Cap Growth Fund 0-20%
-----------------------------------------------------------------------------------
Pioneer Small Cap Value Fund 0-20%
-----------------------------------------------------------------------------------
Pioneer International Equity Fund 0-20%
-----------------------------------------------------------------------------------
Pioneer International Value Fund 0-20%
-----------------------------------------------------------------------------------
Pioneer Europe Select Fund 0-20%
-----------------------------------------------------------------------------------
Pioneer Emerging Markets Fund 0-20%
-----------------------------------------------------------------------------------
Pioneer Real Estate Shares 0-20%
-----------------------------------------------------------------------------------
Pioneer High Yield Fund 0-20%
-----------------------------------------------------------------------------------
Pioneer Bond Fund 0-25%
-----------------------------------------------------------------------------------
Pioneer Strategic Income Fund 0-25%
-----------------------------------------------------------------------------------
Pioneer Short Term Income Fund 0-25%
-----------------------------------------------------------------------------------
Pioneer Cash Reserves Fund 0-20%
-----------------------------------------------------------------------------------
The Fund may change its target allocation to each asset class, the underlying fund in each
asset class (including adding or deleting funds) or target allocations to each underlying fund
without prior approval from or notice to shareholders. Certain of the Pioneer Funds into which
the AmSouth Funds are being reorganized are not currently included in the above list of funds
underlying the Pioneer Fund. Pioneer and Ibbotson may determine to include such additional
Pioneer Funds in the list of permitted investments for the Pioneer Fund into which your Fund is
being reorganized. Alternatively, Pioneer and Ibbotson may determine to hold those additional
Pioneer Funds temporarily until the Pioneer Fund's portfolio is rebalanced.
Appendix A contains a summary description of each of the underlying Pioneer funds.
5
AmSouth Strategic Portfolios: Moderate Growth Pioneer Ibbotson Moderate Allocation Fund
& Income Portfolio
- ------------------------------------------------------------------------------------------------------------------------------
Normally, the Fund invests substantially all of its assets in underlying funds to meet its
investment objective. However, the Fund may invest a portion of its assets in cash, cash
equivalents or in money market funds. The underlying funds may also invest a portion of their
assets in money market funds, securities with remaining maturities of less than one year, cash
equivalents or may hold cash. For temporary defensive purposes, including during periods of
unusual cash flows, the Fund and each of the underlying funds 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, the Fund may not be able to achieve its investment objective. The
Fund intends to adopt a defensive strategy when Pioneer or Ibbotson believes securities in
which the Fund normally invests have extraordinary risks due to political or economic factors
and in other extraordinary circumstances.
Borrowing AmSouth Strategic Portfolios: Moderate Growth Pioneer Ibbotson Moderate Allocation Fund may
& Income Portfolio may not borrow money or not borrow money, except on a temporary basis
issue senior securities, except that the Fund and to the extent permitted by applicable law,
may borrow from banks or enter into reverse the Fund may: (a) borrow from banks or through
repurchase agreements for temporary emergency reverse repurchase agreements in an amount up
purposes in amounts up to 33 1/3% of the value to 33 1/3% of the Fund's total assets
of its total assets at the time of such (including the amount borrowed); (b) borrow up
borrowing. AmSouth Strategic Portfolios: to an additional 5% of the Fund's assets for
Moderate Growth & Income Portfolio will not temporary purposes; (c) obtain such short-term
purchase securities while borrowings credits as are necessary for the clearance of
(including reverse repurchase agreements) in portfolio transactions; (d) purchase
excess of 5% of its total assets are securities on margin; and (e) engage in
outstanding. In addition, AmSouth Strategic transactions in mortgage dollar rolls that are
Portfolios: Moderate Growth & Income Portfolio accounted for as financings.
is permitted to participate in a credit
facility whereby the Fund may directly lend to
and borrow money from another AmSouth Fund for
temporary purposes, provided that the loans
are made in accordance with an order of
exemption from the SEC and any conditions
thereto.
Other investment policies As described above, the Funds have substantially similar principal investment strategies and
and restrictions policies. Certain of the non-principal investment policies and restrictions are different.
For a more complete discussion of each Fund's other investment policies and fundamental and
non-fundamental investment restrictions, see the SAI.
Buying, Selling and Exchanging Shares
Class A sales charges and Class A shares are offered with an initial Class A shares are offered with initial sales
Rule 12b-1 Fees sales charge of up to 5.50% of the offering charges up to 5.75% of the offering price,
price, which is reduced depending upon the which is reduced or waived for large purchases
amount invested or, in certain circumstances, and certain types of investors. At the time of
waived. Class A shares bought as part of an your purchase, your investment firm may
investment of $1 million or more are not receive a commission from Pioneer Funds
subject to an initial sales charge, but may be Distributor, Inc. ("PFD"), the Fund's
charged a contingent deferred sales charge distributor, of up to 2% declining as the size
("CDSC") of 1.00% if sold within one year of of your investment increases.
purchase.
Class A shares pay a shareholder servicing fee There is no CDSC, except in certain
(non 12b-1) of up to 0.25% of average daily circumstances when the initial sales charge is
net assets. waived.
6
AmSouth Strategic Portfolios: Moderate Growth Pioneer Ibbotson Moderate Allocation Fund
& Income Portfolio
- ------------------------------------------------------------------------------------------------------------------------------
Class A shares are subject to distribution and
service (12b-1) fees of up to 0.25% of average
daily net assets.
Class B sales charges and Class B shares are offered without an initial Class B shares are offered without an initial
Rule 12b-1 fees sales charge, but are subject to a CDSC of up sales charge, but are subject to a CDSC of up
to 5%. For Class B shares purchased prior to to 2% if you sell your shares. The charge is
the combination of AmSouth Funds with ISG reduced over time and is not charged after
Funds, the CDSC on such Class B shares held five years. Your investment firm may receive a
continuously declines over six years, starting commission from PFD, the Fund's distributor,
with year one and ending in year seven from: at the time of your purchase of up to 2%.
4%, 3%, 3%, 2%, 2%, 1%. For all other Class B
shares held continuously, the CDSC declines Class B shares are subject to distribution and
over six years, starting with year one and service (12b-1) fees of up to 1% of average
ending in year seven from: 5%, 4%, 3%, 3%, 2%, daily net assets.
1%. Eight years after purchase (seven years in
the case of shares acquired in the ISG Class B shares acquired through the
combination), Class B shares automatically Reorganization will be subject to the CDSC and
convert to Class A shares. commission schedules applicable to the
original purchase.
Class B shares pay a shareholder servicing fee
(non 12b-1) of up to 0.25% of average daily Maximum purchase of Class B shares in a single
net assets and a distribution (12b-1) fee of transaction is $49,999.
up to 0.75% of average daily net assets.
Maximum investment for all Class B purchases
by a shareholder for the Fund's shares is
$99,999.
Class I and Class Y sales AmSouth Strategic Portfolios: Moderate Growth The Fund does not impose any initial,
charges and Rule 12b-1 fees & Income Portfolio does not impose any initial contingent deferred or asset based sales
or CDSC on Class I shares. charge on Class Y shares.
The Fund may impose a shareholder servicing The distributor incurs the expenses of
fee (non 12b-1) of up to 0.15% of average distributing the Fund's Class Y shares, none
daily net assets. of which are reimbursed by the Fund or the
Class Y shareowners.
Management and other fees AmSouth Strategic Portfolios: Moderate Growth The management fee payable by Pioneer Ibbotson
& Income Portfolio pays an advisory fee on a Moderate Allocation Fund is equal to 0.13% of
monthly basis at an annual rate of 0.20% of average daily net assets attributable to the
the Fund's average daily net assets. Fund's investments in underlying funds managed
by Pioneer and cash and 0.17% of average daily
ASO Services Company, Inc. ("ASO") serves as net assets attributable to other investments,
administrator and fund accounting agent for including underlying funds that are not
the Fund. The Fund pays ASO an administrative managed by Pioneer, with breakpoints at
services fee of 0.15% of the Fund's average incremental asset levels. Since currently all
daily net assets. of the underlying funds are managed by
Pioneer, the management fee will initially be
Other expenses of the Fund are being limited 0.13% of average daily net assets.
to 0.38% for Class A shares, 0.37% for Class B
shares and 0.33% for Class I shares. Any fee In addition, the Fund reimburses Pioneer for
waiver or expense reimbursement arrangement is certain fund accounting and legal expenses
voluntary and may be discontinued at any incurred on behalf of the Fund and pays a
7
AmSouth Strategic Portfolios: Moderate Growth Pioneer Ibbotson Moderate Allocation Fund
& Income Portfolio
- ------------------------------------------------------------------------------------------------------------------------------
time. You also indirectly bear a pro rata separate shareholder servicing/transfer agency
share of the fees and expenses of the fee to PIMSS, an affiliate of Pioneer.
underlying funds.
Pioneer has contractually agreed not to impose
For the fiscal year ended July 31, 2004, the all or a portion of its fees or to limit other
Fund's annual operating expenses for Class A direct ordinary operating expenses to the
shares, after giving effect to the expense extent required to reduce expenses, other than
limitation were 0.58%, and without giving "Estimated average expense ratio of underlying
effect to the expense limitation, were 0.81% funds," to 0.74% of the average daily net
of average daily net assets. As of January assets attributable to Class A shares and
12, 2005, estimated total direct and indirect 1.52% of average daily net assets attributable
expenses were 1.94% of average daily net to Class B shares. There is no expense
assets. limitation with respect to the Class Y shares.
This expense limitation is in effect for Class
For the fiscal year ended July 31, 2004, the A shares until December 1, 2008 and in effect
Fund's annual operating expenses for Class B for Class B shares until December 1, 2006.
shares, after giving effect to the expense There can be no assurance that Pioneer will
limitation were 1.32%, and without giving extend these expense limitations past such
effect to the expense limitation, were 1.55% dates. The expense limitation does not limit
of average daily net assets. As of January 12, the expenses of the underlying funds
2005, estimated total direct and indirect indirectly incurred by a shareholder.
expenses were 2.68% of average daily net
assets. Class Y shares of the Pioneer Fund are being
offered for the first time in connection with
For the fiscal year ended July 31, 2004, the the Reorganization.
Fund's annual operating expenses for Class I
shares, after giving effect to the expense
limitation were 0.53%, and without giving
effect to the expense limitation, were 0.76%
of average daily net assets. As of January 12,
2005, estimated total direct and indirect
expenses were 1.84% of average daily net
assets.
Buying shares You may buy shares of the Fund directly You may buy shares from any investment firm
through BISYS Fund Services, the Fund's that has a sales agreement with PFD, the
distributor, or through brokers, registered Pioneer Fund's distributor.
investment advisers, banks and other financial
institutions that have entered into selling If the account is established in the
agreements with the Fund's distributor, as shareholder's own name, shareholders may also
described in the Fund's prospectus. purchase additional shares of the Fund by
telephone or online.
Certain account transactions may be done by
telephone.
Exchanging shares You can exchange your shares in the Fund for You may exchange your shares for shares of the
shares of the same class of another AmSouth same class of another Pioneer mutual fund.
fund, usually without paying additional sales Your exchange request must be for at least
charges. You must meet the minimum investment $1,000.
requirements for the Fund into which you are
exchanging. Exchanges from one fund to another After you establish an eligible fund account,
are taxable. Class A shares may be exchanged you can exchange fund shares by telephone or
for Class I shares of the same Fund or another online.
AmSouth Fund if you
8
AmSouth Strategic Portfolios: Moderate Growth Pioneer Ibbotson Moderate Allocation Fund
& Income Portfolio
- ------------------------------------------------------------------------------------------------------------------------------
become eligible to purchase Class I shares.
Class I shares may be exchanged for Class A
shares of the same fund. No transaction fees
are currently charged for exchanges.
If you sell your shares or exchange them for
shares of another AmSouth Fund within 7
days of the date of purchase, you will be
charged a 2.00% fee on the current net asset
value of the shares sold or exchanged. The
fee is paid to the Fund to offset the costs
associated with short-term trading, such as
portfolio transaction and administrative costs.
The Fund uses a "first-in, first-out" method
to determine how long you have held your
shares. This means that if you purchased
shares on different days, the shares purchased
first will be considered redeemed first for
purposes of determining whether the redemption
fee will be charged.
The fee will be charged on all covered
redemptions and exchanges, including those
made through retirement plan, brokerage and
other types of omnibus accounts (except where
it is not practical for the plan administrator
or brokerage firm to implement the fee). The
Fund will not impose the redemption fee on a
redemption or exchange of shares purchased
upon the reinvestment of dividend and capital
gain distributions.
Selling shares Shares of each Fund are sold at the net asset value per share next calculated after the Fund
receives your request in good order.
You may sell your shares by contacting the Normally, your investment firm will send your
Fund directly in writing or by telephone or by request to sell shares to PIMSS. You can also
contacting a financial intermediary as sell your shares by contacting the Fund
described in the Fund's prospectus. directly if your account is registered in your
name.
If the account is established in the
shareholder's own name, shareholders may also
redeem shares of the Pioneer Fund by telephone
or online.
Comparison of Principal Risks of Investing in the Funds
Because each Fund has a similar investment objective, primary investment
policies and strategies, the Funds are subject to the same principal risks. You
could lose money on an investment in a Fund or a Fund may not perform as well as
other investment options.
Fund of funds structure and layering of fees
9
Each Fund is structured as a fund of funds. Each Fund's investments are
focused in the underlying funds, so the Fund's investment performance is
directly related to the performance of the underlying funds. Each Fund's net
asset value will be affected by the performance of the equity and bond markets
and the value of the mutual funds in which the fund invests. Since the Funds
mainly invest in the underlying funds, as opposed to other types of securities,
the Funds do not have the same flexibility in their portfolio holdings as many
mutual funds. In addition, each Fund indirectly pays a portion of the expenses
incurred by the underlying funds. Consequently, an investment in a Fund entails
more direct and indirect expenses than a direct investment in the underlying
funds. For instance, you will pay management fees and operating expenses of both
the Fund and the underlying funds.
The underlying funds will not necessarily make consistent investment
decisions, which may also increase your costs. One underlying fund may buy the
same security that another underlying fund is selling. You would indirectly bear
the costs of both trades without achieving any investment purpose. These
transactions may also generate taxable gains. You may receive taxable gains from
portfolio transactions by the underlying funds as well as taxable gains from the
Fund's transactions in shares of the underlying funds.
Currently, Pioneer manages all of the funds underlying the Pioneer Fund.
Because the portfolio management teams of each of the underlying Pioneer funds
may draw upon the resources of the same equity and fixed income analyst team or
may share common investment management styles or approaches, the underlying
funds may hold many common portfolio positions, reducing the diversification
benefits of an asset allocation style.
Equity investments
Equity funds invest primarily in equity securities (such as stocks), which
are more volatile and carry more risks than some other forms of investment. When
the value of the stocks held by an underlying equity fund goes down, the value
of your investment in the fund will be affected.
The underlying equity funds have risks associated with investing in equity
securities. An equity fund could underperform other investments if:
o The stock market goes down (this risk may be greater in the short
term)
o The fund's equity investments do not have the growth potential or
value characteristics originally expected
o Stocks selected for income do not achieve the same return as
securities selected for capital growth
o The types of stocks in which the fund invests or the fund's
investment approach fall out of favor with investors
Fixed income investments
Fixed income funds primarily invest in debt securities, such as government
securities, investment grade corporate securities, junk bonds, mortgaged backed
securities, asset-backed securities, and money market securities. The value of
your investment in the fund will change as the value of investments of the
underlying funds increases and decreases.
The underlying fixed income funds have risks associated with investing in
debt securities. A fund could underperform other investments if:
o Interest rates go up causing the value of the fund's portfolio to
decline
o The issuer of a debt security owned by the fund defaults on its
obligation to pay principal or interest or has its credit rating
downgraded
o During periods of declining interest rates, the issuer of a security
may exercise its option to prepay earlier than scheduled, forcing
the fund to reinvest in lower yielding securities. This is known as
call or prepayment risk
o During periods of rising interest rates, the average life of certain
types of securities may be extended because of slower than expected
principal payments. This may lock in a below market interest rate,
increase the security's duration (the estimated period until the
security is paid in full) and reduce the value of the security. This
is known as extension risk
o The investment manager's judgment about the attractiveness, relative
value or potential appreciation of a particular sector, security or
investment strategy proves to be incorrect
Equity securities of smaller companies
10
Compared to large companies, small and mid-sized companies, and the market
for their equity securities, are likely to:
o Be more sensitive to changes in the economy, earnings results and
investor expectations
o Have more limited product lines and capital resources
o Experience sharper swings in market values
o Be harder to sell at the times and prices Pioneer thinks appropriate
o Offer greater potential for loss than other U.S. equity securities
Equity securities of real estate industry issuers
Specific risks associated with the real estate industry include:
o The U.S. or a local real estate market declines due to adverse
economic conditions, overbuilding and high vacancy rates, reduced or
regulated rents or other causes
o Interest rates go up. Rising interest rates can adversely affect the
availability and cost of financing for property acquisitions and
other purposes and reduce the value of a REIT's fixed income
investments
o The values of properties owned by a REIT or the prospects of other
real estate industry issuers may be hurt by property tax increases,
zoning changes, other governmental actions, environmental
liabilities, natural disasters or increased operating expenses
o A REIT in an underlying fund's portfolio is, or is perceived by the
market to be, poorly managed
Non-U.S. securities
Investing in non-U.S. issuers, including emerging market issuers, may
involve unique risks compared to investing in securities of issuers in the U.S.
These risks are more pronounced to the extent the fund invests in issuers in the
lesser-developed emerging markets or in one region, such as Europe or the
Pacific Rim. These risks may include:
o Less information about the non-U.S. issuers or markets may be
available due to less rigorous disclosure or accounting standards or
regulatory practices
o Adverse effect of currency exchange rates or controls on the value
of the fund's investments
o The economies of non-U.S. 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 Withholding and other non-U.S. taxes may decrease the fund's return
High yield/below investment grade debt securities
Investment in high yield securities involves substantial risk of loss.
These securities are considered speculative with respect to the issuer's ability
to pay interest and principal and are susceptible to default or decline in
market value due to adverse economic and business developments. The market
values for high yield securities tend to be very volatile, and these securities
are less liquid than investment grade debt securities. For these reasons, your
investment in the fund is subject to the following specific risks:
o Increased price sensitivity to changing interest rates and
deteriorating economic environment
o Greater risk of loss due to default or declining credit quality
o Adverse company specific events are more likely to render the issuer
unable to make interest and/or principal payments
o A negative perception of the high yield market develops, depressing
the price and liquidity of high yield securities. This negative
perception could last for a significant period of time
Derivatives
Certain underlying funds may use futures and options on securities,
indices and currencies, 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. The underlying funds may use
derivatives for a variety of 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
11
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.
Past Performance
Set forth below is performance information for AmSouth Strategic
Portfolios: Moderate Growth & Income Portfolio. The bar chart shows how AmSouth
Strategic Portfolios: Moderate Growth & Income Portfolio's total return (not
including any deduction for sales charges) has varied from year to year for each
full calendar year. The table shows average annual total return (before and
after taxes) for each Fund over time for each class of shares (including
deductions for sales charges) compared with a broad-based securities market
index. The bar chart gives an indication of the risks of investing in each Fund,
including the fact that you could incur a loss and experience volatility of
returns year to year. Past performance before and after taxes does not indicate
future results.
AmSouth Strategic Portfolios: Moderate Growth & Income Portfolio --
Class A Shares
Calendar Year Total Returns*
[BAR CHART]
2000 0.59%
2001 -5.77%
2002 -13.33%
2003 21.81%
2004 2.89%
* During the period shown in the bar chart, your AmSouth Fund's highest
quarterly return was 7.94% for the quarter ended June 30, 2003, and the
lowest quarterly return was -6.80% for the quarter ended September 30,
2002.
Pioneer Ibbotson Moderate Allocation Fund -- Class A Shares
Calendar Year Total Returns
Pioneer Ibbotson Moderate Allocation Fund began investment operations in
August 2004.
Since the Pioneer Fund has conducted investment operations for less than
one calendar year, it may not disclose any performance information in this
prospectus. The Fund's performance will vary from year to year. Past performance
does not necessarily indicate how a fund will perform in the future. As a
shareowner, you may lose or make money on your investment.
AmSouth Strategic Portfolios: Moderate Growth & Income Portfolio
Average Annual Total Returns (for the periods ending December 31, 2004)
Since Inception
1 Year 5 Years (1/28/99)
- ---------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Moderate Growth & Income Portfolio, Class A Shares
- ---------------------------------------------------------------------------------------------------------------------
Return Before Taxes 0.59% 2.90% 3.04%
- ---------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions 0.00% 1.70% 1.87%
- ---------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares 0.37% 1.80% 1.93%
- ---------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Moderate Growth & Income Portfolio, Class B Shares
- ---------------------------------------------------------------------------------------------------------------------
12
Since Inception
1 Year 5 Years (1/28/99)
- ---------------------------------------------------------------------------------------------------------------------
Return Before Taxes 0.75% 2.96% 2.90%
- ---------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Moderate Growth & Income Portfolio, Class I Shares
- ---------------------------------------------------------------------------------------------------------------------
Return Before Taxes 6.59% 4.14% 4.13%
- ---------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions 5.95% 2.90% 2.91%
- ---------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares 4.26% 2.85% 2.81%
- ---------------------------------------------------------------------------------------------------------------------
S&P 500 Index(1) 10.87% -2.30% 0.66%
(reflects no deduction for fees, expenses or taxes)
- ---------------------------------------------------------------------------------------------------------------------
(1) The S&P 500, an unmanaged index of 500 stocks, is for reference only, does
not mirror the Fund's investments, and reflects no deduction for fees,
expenses or taxes.
The table above shows the impact of taxes on AmSouth Strategic Portfolios:
Moderate Growth & Income Portfolio's returns. After-tax returns are only shown
for Class A shares and Class I shares and may vary for Class B shares. The
Fund's after-tax returns are calculated using the highest individual federal
marginal income tax rates and do not reflect the impact of state and local
taxes. In certain cases, the figure representing "Return After Taxes on
Distributions and Sale of Fund Shares" may be higher than the other return
figures for the same period. A higher after-tax return results when a capital
loss occurs upon redemption and translates into an assumed tax deduction that
benefits the shareholder. Please note that actual after-tax returns depend on an
investor's tax situation and may differ from those shown. Also note that
after-tax returns shown are not relevant to shareholders who hold Fund shares
through tax-deferred arrangements, such as 401(k) plans or individual retirement
accounts.
13
The Funds' Fees and Expenses
Shareholders of both Funds pay various fees and expenses, either directly
or indirectly. The tables below show the fees and expenses that you would pay if
you were to buy and hold shares of each Fund. The expenses in the tables
appearing below are based on (i) for the AmSouth Strategic Portfolios: Moderate
Growth & Income Portfolio, the expenses of AmSouth Strategic Portfolios:
Moderate Growth & Income Portfolio for the period ended January 31, 2005 and
(ii) for Pioneer Ibbotson Moderate Allocation Fund, the estimated expenses for
the period ended January 31, 2005. Future expenses for all share classes may be
greater or less. Shareholders of AmSouth Strategic Portfolios: Growth & Income
Portfolio are also being asked to approve the reorganization of their fund into
Pioneer Ibbotson Moderate Allocation Fund. The tables also show (1) the pro
forma expenses of the combined Fund assuming the Reorganization occurred on
January 31, 2005 and (2) the pro forma expenses of the combined Fund assuming
the reorganization of AmSouth Strategic Portfolios: Growth & Income Portfolio
into Pioneer Ibbotson Moderate Allocation Fund also occurred on January 31,
2005.
Shareholder AmSouth Pioneer Combined Combined Fund AmSouth Pioneer
transaction Strategic Ibbotson Fund (including Strategic Ibbotson
fees (paid Portfolios Moderate (Pro AmSouth Portfolios Moderate
directly from Moderate Allocation Forma) Growth & Moderate Allocation
your Growth & Fund Income Growth & Fund
investment) Income Portfolio) Income
Portfolio(1) (Pro Forma) Portfolio
- ------------------------------------------------------------------------------------------------
Class A Class A Class A Class A Class B Class B
- ------------------------------------------------------------------------------------------------
Maximum sales 5.50%(2) 5.75% 5.75% 5.75% None None
charge (load)
when you buy
shares as a
percentage of
offering price
- ------------------------------------------------------------------------------------------------
Maximum None None None None 5.00%(3) 4.00%
deferred
sales charge
(load) as a
percentage of
purchase
price or the
amount you
receive when
you sell
shares,
whichever is
less
- ------------------------------------------------------------------------------------------------
Redemption 2.00%(4) None None None 2.00%(4) None
fees
- ------------------------------------------------------------------------------------------------
Shareholder Combined Combined AmSouth Combined Combined Fund
transaction Fund (Pro Fund Strategic Fund (Pro (including
fees (paid Forma) (including Portfolios Forma) AmSouth
directly from AmSouth Moderate Growth &
your Growth & Growth & Income
investment) Income Income Portfolio)
Portfolio) Portfolio (Pro Forma)
(Pro Forma)
- -------------------------------------------------------------------------------------
Class B Class B Class I Class Y(8) Class Y(8)
- -------------------------------------------------------------------------------------
Maximum sales None None None None None
charge (load)
when you buy
shares as a
percentage of
offering price
- -------------------------------------------------------------------------------------
Maximum 4.00% 4.00% None None None
deferred
sales charge
(load) as a
percentage of
purchase
price or the
amount you
receive when
you sell
shares,
whichever is
less
- -------------------------------------------------------------------------------------
Redemption None None 2.00%(4)) None None
fees
- -------------------------------------------------------------------------------------
14
Shareholder AmSouth Pioneer Combined Combined Fund AmSouth Pioneer
transaction Strategic Ibbotson Fund (including Strategic Ibbotson
fees (paid Portfolios Moderate (Pro AmSouth Portfolios Moderate
directly from Moderate Allocation Forma) Growth & Moderate Allocation
your Growth & Fund Income Growth & Fund
investment) Income Portfolio) Income
Portfolio(1) (Pro Forma) Portfolio
- ------------------------------------------------------------------------------------------------
Class A Class A Class A Class A Class B Class B
- ------------------------------------------------------------------------------------------------
Annual fund
operating
expenses
(deducted
from fund
assets) (as a
% of average
net assets)
- ------------------------------------------------------------------------------------------------
Management fee 0.20% 0.17%(6) 0.17%(6) 0.17%(6) 0.20% 0.17%(6)
- ------------------------------------------------------------------------------------------------
Distribution None 0.25% 0.25% 0.25% 0.75% 1.00%
and service
(12b-1) fee
- ------------------------------------------------------------------------------------------------
Other 0.68% 0.68% 0.65% 0.32%(5) 0.71% 0.80%
expenses(5)
- ------------------------------------------------------------------------------------------------
Estimated 1.49% 0.68% 0.68% 0.68% 2.24% 0.68%
indirect
expenses
- ------------------------------------------------------------------------------------------------
Total fund
operating 2.37% 1.90%(7) 1.75% 1.42% 3.90% 2.65%(7)
expenses
- ------------------------------------------------------------------------------------------------
Expense 0.35% 0.19 0.17% N/A 0.38% 0.45%
reimbursement/
reduction
- ------------------------------------------------------------------------------------------------
Net fund 2.02% 1.71% 1.58% 1.42% 3.52% 2.20%
operating
expenses
- ------------------------------------------------------------------------------------------------
Shareholder Combined Combined AmSouth Combined Combined Fund
transaction Fund (Pro Fund Strategic Fund (Pro (including
fees (paid Forma) (including Portfolios Forma) AmSouth
directly from AmSouth Moderate Growth &
your Growth & Growth & Income
investment) Income Income Portfolio)
Portfolio) Portfolio (Pro Forma)
(Pro Forma)
- -------------------------------------------------------------------------------------
Class B Class B Class I Class Y(8) Class Y(8)
- -------------------------------------------------------------------------------------
Annual fund
operating
expenses
(deducted
from fund
assets) (as a
% of average
net assets)
- -------------------------------------------------------------------------------------
Management fee 0.17%(6) 0.17%(6) 0.20% 0.17%(6) 0.17%(6)
- -------------------------------------------------------------------------------------
Distribution 1.00% 1.00% None None None
and service
(12b-1) fee
- -------------------------------------------------------------------------------------
Other 0.87% 0.56% 0.59% 0.57% 0.27%
expenses(5)
- -------------------------------------------------------------------------------------
Estimated 0.68% 0.68% 1.44% 0.68% 0.68%
indirect
expenses
- -------------------------------------------------------------------------------------
Total fund
operating 2.72% 2.41% 2.23% 1.42% 1.12%
expenses
- -------------------------------------------------------------------------------------
Expense 0.52% 0.21 0.31% N/A N/A
reimbursement/
reduction
- -------------------------------------------------------------------------------------
Net fund 2.20% 2.20% 1.92% 1.42% 1.12%
operating
expenses
- -------------------------------------------------------------------------------------
(1) AmSouth Bank or other financial institutions may charge their customer
account fees for automatic investment and other cash management services
provided in connection with investment in the Fund.
(2) Sales charges may be reduced depending upon the amount invested or, in
certain circumstances, waived. Class A shares of the Pioneer Fund bought
as part of an investment of $1 million or more are not subject to an
initial sales charge, but may be charged a CDSC of 1.00% if sold within
one year of purchase.
(3) For Class B shares purchased prior to the combination of AmSouth Funds
with ISG Funds, the CDSC on such Class B shares held continuously declines
over six years, starting with year one and ending in year seven from: 4%,
3%, 3%, 2%, 2%, 1%. For all other Class B shares held continuously, the
CDSC declines
15
over six years, starting with year one and ending in year seven from: 5%,
4%, 3%, 3%, 2%, 1%. Eight years after purchase (seven years in the case of
shares acquired in the ISG combination), Class B shares automatically
convert to Class A shares.
(4) To discourage short-term trading, a redemption fee of 2.00% will be
charged on sales or exchanges of Class A, Class B and Class I shares of
your AmSouth Fund made within 7 days of the date of purchase. A wire
transfer fee of $7.00 will be deducted from the amount of your redemption
if you request a wire transfer.
(5) Other expenses for your AmSouth Fund are being limited to 0.33% for Class
A shares, 0.33% for Class B shares and 0.28% for Class I shares. Any fee
waiver or expense reimbursement arrangement is voluntary and may be
discontinued at any time. Pioneer has contractually agreed not to impose
all or a portion of its fees or to limit other direct ordinary operating
expenses to the extent required to reduce expenses, other than "Estimated
average expense ratio of underlying funds," to 0.74% of the average daily
net assets attributable to Class A shares and 1.52% of average daily net
assets attributable to Class B shares. This expense limitation is in
effect for Class A shares until December 1, 2008 and in effect for Class B
until December 1, 2006. There can be no assurance that Pioneer will extend
these expense limitations past such dates. The expense limitation does not
limit the expenses of the underlying funds indirectly incurred by a
shareholder.
(6) The management fee payable by the Pioneer Fund is equal to 0.13% of
average daily net assets attributable to the Pioneer Fund's investments in
underlying funds managed by Pioneer and cash and 0.17% of average daily
net assets attributable to other investments, including underlying funds
that are not managed by Pioneer, with breakpoints at incremental asset
levels. Since initially all of the underlying funds are managed by
Pioneer, the management fee will initially be 0.13% of average daily net
assets.
(7) The Pioneer Fund's total annual operating expenses in the table have not
been reduced by any expense offset arrangements.
(8) Class Y shares of the Pioneer Fund are being offered for the first time in
connection with the Reorganization.
16
The hypothetical example below helps you compare the cost of investing in each
Fund. It assumes that: (a) you invest $10,000 in each Fund for the time periods
shown, (b) you reinvest all dividends and distributions, (c) your investment has
a 5% return each year, and (d) each Fund's gross operating expenses remain the
same. The examples are for comparison purposes only and are not a representation
of either Fund's actual expenses or returns, either past or future.
Combined Fund
(including AmSouth
Strategic
AmSouth Strategic Portfolios:
Portfolios: Moderate Pioneer Ibbotson Growth & Income
Number of years you Growth & Income Moderate Allocation Combined Fund Portfolio)
own your shares Portfolio Fund (Pro Forma) (Pro Forma)
- ---------------------------------------------------------------------------------------------------------------
Class A
- ---------------------------------------------------------------------------------------------------------------
Year 1 $ 747 $ 726 $ 726 $ 711
- ---------------------------------------------------------------------------------------------------------------
Year 3 $ 1,157 $1,085 $ 1,045 $ 998
- ---------------------------------------------------------------------------------------------------------------
Year 5 $ 1,593 N/A $ 1,422 $1,307
- ---------------------------------------------------------------------------------------------------------------
Year 10 $ 2,798 N/A $ 2,477 $2,179
- ---------------------------------------------------------------------------------------------------------------
Class B --- assuming redemption at end of period
- ---------------------------------------------------------------------------------------------------------------
Year 1 $ 786 $ 648 $ 651 $ 644
- ---------------------------------------------------------------------------------------------------------------
Year 3 $ 1,177 $1,104 $ 1,122 $1,051
- ---------------------------------------------------------------------------------------------------------------
Year 5 $ 1,694 N/A $ 1,518 $1,385
- ---------------------------------------------------------------------------------------------------------------
Year 10 $ 2,971 N/A $ 2,800 $2,501
- ---------------------------------------------------------------------------------------------------------------
Class B --- assuming no redemption
- ---------------------------------------------------------------------------------------------------------------
Year 1 $ 286 $248 $ 251 $ 244
- ---------------------------------------------------------------------------------------------------------------
Year 3 $ 877 $804 $ 822 $ 751
- ---------------------------------------------------------------------------------------------------------------
Year 5 $ 1,494 N/A $ 1,418 $1,285
- ---------------------------------------------------------------------------------------------------------------
Year 10 $ 2,971 N/A $ 2,800 $2,501
- ---------------------------------------------------------------------------------------------------------------
Class I Class Y
- ---------------------------------------------------------------------------------------------------------------
Year 1 $ 199 N/A $ 145 $ 114
- ---------------------------------------------------------------------------------------------------------------
Year 3 $ 615 N/A $ 449 $ 356
- ---------------------------------------------------------------------------------------------------------------
Year 5 $ 1057 N/A $ 776 $ 617
- ---------------------------------------------------------------------------------------------------------------
Year 10 $ 2,285 NA $ 1,702 $1,363
- ---------------------------------------------------------------------------------------------------------------
Reasons for the Proposed Reorganization
The Trustees believe that the proposed Reorganization is in the best
interests of AmSouth Strategic Portfolios: Moderate Growth & Income Portfolio.
The Trustees considered the following matters, among others, in approving the
proposal.
First, AAMI, the investment adviser to your AmSouth Fund, informed the
Trustees that it does not intend to continue to provide investment advisory
services to the AmSouth Funds. Consequently, a change in your Fund's investment
adviser was necessary. In the absence of the Reorganization, such a change would
be more likely to motivate shareholders invested in reliance on AAMI's role to
withdraw from the Fund, thereby reducing fund size and increasing fund expense
ratios.
Second, the resources of Pioneer. At December 31, 2004, Pioneer managed
over 80 investment companies and accounts with approximately $42 billion in
assets, including $15.7 billion in fixed income securities. Pioneer is part of
the global asset management group of UniCredito Italiano S.p.A., one of the
largest banking groups in Italy, providing investment management and financial
services to mutual funds, institutional and other clients. As of December 31,
2004, assets under management of UniCredito Italiano S.p.A. were approximately
$175 billion worldwide. Shareholders of your AmSouth Fund would become part of a
significantly larger family of funds that offers a more diverse array of
investment options and enhanced shareholder account options. The Pioneer family
of mutual funds offers over 80 funds, including domestic and international
equity and fixed income funds and a money market fund that will be available to
your AmSouth Fund's shareholders through exchanges.
17
Third, Pioneer Ibbotson Moderate Allocation Fund's management fee (0.17% of
average daily net assets) is lower than the advisory fee of your Fund (0.20% of
average daily net assets). Both the historical and estimated pro forma expenses
of the Pioneer Fund, after giving effect to the Reorganization, on a gross and
net basis are lower than your Fund's gross and net operating expenses. The
aggregate Rule 12b-1 distribution and shareholder servicing fees and non-Rule
12b-1 shareholder servicing fees paid by the Class A and Class B shares of both
Funds are the same. Moreover, your AmSouth Fund's Class I shares pay a non 12b-1
shareholder servicing fee that is not paid by the Pioneer Fund's Class Y shares.
Fourth, because of Pioneer distribution arrangements, Pioneer Fund has
greater potential to further increase the assets compared to your Fund. Further
assets growth is anticipated to further reduce the combined Fund's gross
operating expenses per share.
Fifth, the Class A, B and Y shares of the Pioneer Fund received in the
Reorganization will provide AmSouth Fund shareholders with exposure to a similar
investment product as they currently have. The Trustees also noted that the
allocation decision was made by Ibbotson, a leading asset allocation adviser,
and that the Pioneer Fund intends, as soon as permitted by the SEC, to include
unaffiliated mutual funds as underlying funds.
Sixth, the transaction is structured to qualify as a tax-free
reorganization under Section 368(a) of the Internal Revenue Code of 1986 and
therefore will not be treated as a taxable sale of your AmSouth shares.
Pioneer and AmSouth Bank will pay all costs of preparing and printing the
Funds' proxy statements and solicitation costs incurred by the Funds in
connection with the Reorganization. AAMI will otherwise be responsible for all
costs and expenses of AmSouth Fund in connection with the Reorganization.
The Trustees also considered that Pioneer and AmSouth Bank will benefit
from the Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the
Reorganizations."
The Board of Trustees of the Pioneer Fund also considered that the
Reorganization presents an excellent opportunity for the Pioneer Fund to acquire
investment assets without the obligation to pay commissions or other transaction
costs that a fund normally incurs when purchasing securities. This opportunity
provides an economic benefit to the Pioneer Fund and its shareholders.
CAPITALIZATION
The following table sets forth the capitalization of each Fund as of May
31, 2005, and the pro forma combined Fund as of May 31, 2005. The table also
sets forth the pro forma capitalization of the combined Fund as of May 31, 2005,
assuming the shareholders of AmSouth Strategic Portfolios: Growth & Income
Portfolio approve the reorganization of their fund into Pioneer Ibbotson
Moderate Allocation Fund.
Pro Forma
Pioneer
Ibbotson
Moderate
Allocation Fund
(including
Pro Forma AmSouth
Pioneer Strategic
AmSouth Strategic Pioneer Ibbotson Portfolios:
Portfolios: Ibbotson Moderate Growth &
Moderate Growth Moderate Allocation Income
& Income Portfolio Allocation Fund Fund Portfolio)
May 31, 2005 May 31, 2005 May 31, 2005 May 31, 2005
------------------ --------------- ------------ ---------------
Total Net Assets (in thousands) $ 51,581 $ 45,791 $ 97,372 $ 211,011
Class A shares ........... $ 23,598 $ 26,035 $ 49,633 $ 105,349
Class B shares ........... $ 13,828 $ 7,824 $ 21,653 $ 40,751
Class I/Y shares ......... $ 14,154 N/A $ 14,154 $ 52,979
Net Asset Value Per Share
Class A shares ........... $ 10.01 $ 10.77 $ 10.77 $ 10.77
Class B shares ........... $ 9.96 $ 10.42 $ 10.42 $ 10.42
Class I/Y shares ......... $ 10.04 N/A $ 10.77 $ 10.77
Shares Outstanding
Class A shares ........... 2,356,370 2,417,639 4,608,977 9,782,884
18
Class B shares ........... 1,389,040 751,050 2,078,440 3,911,684
Class I/Y shares ......... 1,409,269 N/A 1,314,394 4,919,719
It is impossible to predict how many shares of the Pioneer Fund will
actually be received and distributed by your AmSouth Fund on the Reorganization
date. The table should not be relied upon to determine the amount of the Pioneer
Fund's shares that will actually be received and distributed.
BOARD'S EVALUATION AND RECOMMENDATION
For the reasons described above, the Trustees, including the Independent
Trustees, approved the Reorganization. In particular, the Trustees determined
that the Reorganization is in the best interests of your AmSouth Fund.
Similarly, the Board of Trustees of the Pioneer Fund, including its Independent
Trustees, approved the Reorganization. They also determined that the
Reorganization is in the best interests of the Pioneer Fund.
The Trustees recommend that the shareholders of your AmSouth Fund vote FOR
the proposal to approve the Agreement and Plan of Reorganization.
19
Appendix A
Information about the underlying funds
The following is intended to summarize the investment objectives and primary
strategies of, and to provide you with certain other information about, the
underlying funds. These summaries do not reflect all of the investment policies
and strategies that are disclosed in each underlying fund's prospectus, and are
not an offer of the underlying funds' shares. The underlying funds in which the
funds intend to invest may change from time to time and the funds may invest in
underlying funds in addition to those described below at the discretion of
Pioneer without prior notice to or approval of shareholders. The prospectus and
SAI for each underlying fund is available on the SEC's website as well as on our
website at www.pioneerfunds.com.
Each underlying fund normally will be invested according to its investment
strategy. However, an underlying fund also may have the ability to invest
without limitation in money market instruments or other investments for
temporary, defensive purposes.
The underlying funds that invest primarily in equity securities are:
Pioneer Fund
Investment objective
Reasonable income and capital growth.
Principal investment strategies
The fund invests in a broad list of carefully selected, reasonably priced
securities rather than in securities whose prices reflect a premium resulting
from their current market popularity. The fund invests the major portion of its
assets in equity securities, primarily of U.S. issuers. For purposes of the
fund's investment policies, equity securities include common stocks, convertible
debt and other equity instruments, such as depositary receipts, warrants, rights
and preferred stocks.
Investment Adviser
Pioneer
Pioneer Research Fund
Investment objective
Long-term capital growth.
Principal investment strategies
Normally, the fund invests at least 80% of its assets in equity securities,
primarily of U.S. issuers. For purposes of the fund's investment policies,
equity securities include common stocks, convertible debt and other equity
instruments, such as preferred stocks, depositary receipts, rights and warrants.
Investment Adviser
Pioneer
20
Pioneer Growth Leaders Fund
Investment objective
Long term capital growth.
Principal investment strategies
Normally, the fund invests at least 80% of its net assets (plus the amount of
borrowings, if any, for investment purposes) in common and preferred stocks and
securities convertible into stocks. Securities convertible into stocks include
depositary receipts on stocks, convertible debt securities, warrants and rights.
The fund offers a broad investment program for the equity portion of an
investor's portfolio, with an emphasis on mid and large capitalization issuers
traded in the U.S. However, the fund may invest in issuers of any
capitalization.
Investment Adviser
Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser)
Pioneer Strategic Growth Fund
Investment objective
Long term capital growth.
Principal investment strategies
Normally, the fund invests at least 80% of its net assets (plus the amount of
borrowings, if any, for investment purposes) in equity securities of U.S.
issuers. The fund invests primarily in securities, traded in the U.S., of
issuers that the subadviser believes have substantial international activities.
In evaluating whether an issuer has substantial international activities, the
subadviser considers the degree to which the issuer has non-U.S. reported sales
and revenues, operating earnings or tangible assets. The fund may invest up to
20% of the value of its investments in equity securities of non-U.S. issuers
that are traded in U.S. markets.
Investment Adviser
Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser)
Pioneer Oak Ridge Large Cap Growth Fund
Investment objective
Capital appreciation.
Principal investment strategies
Normally, the fund invests at least 80% of its net assets (plus the amount of
borrowings, if any, for investment purposes) in equity securities of large
capitalization U.S. companies. Large capitalization companies have market
capitalizations at the time of acquisition of $3 billion or more. The fund
anticipates that the average weighted market capitalization of the companies in
the fund's portfolio will be significantly higher that $3 billion. The equity
securities in which the fund principally invests are common stocks, preferred
stocks, depositary receipts and convertible debt, but the fund may invest in
other types of equity securities to a lesser extent, such as warrants and
rights.
Investment Adviser
Pioneer (adviser); Oak Ridge Investments, LLC (subadviser)
21
Pioneer AmPac Growth Fund
Investment objective
Long-term capital growth.
Principal investment strategies
Normally, the fund invests at least 80% of its net assets (plus the amount of
borrowings, if any, for investment purposes) in equity securities of issuers
that have substantial sales to, or receive significant income from, countries
within the Pacific Rim. These issuers meet one of the following criteria:
o 50% or more of the issuer's earnings or sales are attributed to, or
assets are situated in, Pacific Rim countries (including the U.S.
and other countries bordering the Pacific Ocean, such as China and
Indonesia)
o 50% or more of the issuer's earnings or sales are attributed to, or
assets are situated in, Pacific Rim countries other than the U.S.
The fund also may invest up to 30% of the value of its investments in equity
securities of non-U.S. issuers that are traded in U.S. markets.
Investment Adviser
Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser)
Pioneer Value Fund
Investment objective
Reasonable income and capital growth.
Principal investment strategies
The fund seeks to invest in a broad list of carefully selected, reasonably
priced securities rather than in securities whose prices reflect a premium
resulting from their current market popularity. The fund invests the major
portion of its assets in equity securities, primarily of U.S. issuers. For
purposes of the fund's investment policies, equity securities include common
stocks, convertible debt and other equity instruments, such as depositary
receipts, warrants, rights and preferred stocks.
Investment Adviser
Pioneer
Pioneer Mid Cap Growth Fund
Investment objective
Capital growth by investing in a diversified portfolio of securities consisting
primarily of common stocks.
Principal investment strategies
Normally, the fund invests at least 80% of its total assets in equity securities
of mid-size companies, that is, companies with market values within the range of
market values of issuers included in the Russell Midcap Growth Index. For
purposes of the fund's investment policies, equity securities include common
stocks, convertible debt and other equity instruments, such as depositary
receipts, warrants, rights, interests in real estate investment trusts (REITs)
and preferred stocks.
22
Investment Adviser
Pioneer
Pioneer Cullen Value Fund
Investment objective
Capital appreciation. Current income is a secondary objective.
Principal investment strategies
The fund invests primarily in equity securities. The fund may invest a
significant portion of its assets in equity securities of medium- and
large-capitalization companies. Consequently, the fund will be subject to the
risks of investing in companies with market capitalizations of $1.5 billion or
more. For purposes of the fund's investment policies, equity securities include
common stocks, convertible debt and other equity instruments, such as depositary
receipts, warrants, rights, equity interests in real estate investment trusts
(REITs) and preferred stocks.
The fund may invest up to 30% of its total assets in securities of non-U.S.
issuers. Up to 5% of the fund's total assets may be invested in securities of
emerging market issuers. The fund may invest in securities of Canadian issuers
to the same extent as securities of U.S. issuers.
Investment Adviser
Pioneer
Pioneer Mid Cap Value Fund
Investment objective
Capital appreciation by investing in a diversified portfolio of securities
consisting primarily of common stocks.
Principal investment strategies
Normally, the fund invests at least 80% of its total assets in equity securities
of mid-size companies, that is companies with market values within the range of
market values of companies included in the Russell Midcap Value Index. The fund
focuses on issuers with capitalizations within the $1 billion to $10 billion
range, and that range will change depending on market conditions. The equity
securities in which the fund principally invests are common stocks, preferred
stocks, depositary receipts and convertible debt, but the fund may invest in
other types of equity securities to a lesser extent, such as warrants and
rights.
Investment Adviser
Pioneer
Pioneer Small and Mid Cap Growth Fund
Investment objective
Long-term capital growth.
Principal investment strategies
Normally, the fund invests at least 80% of its net assets (plus the amount of
borrowings, if any, for investment purposes) in equity securities of small and
mid-capitalization issuers, that is those with market values, at the time of
investment, that do not exceed the market capitalization of the largest company
within the S&P Mid Cap 400 Index. The size of the companies in the index may
change dramatically as a result of market conditions and the composition of the
index. The fund's investments will
23
not be confined to securities issued by companies included in an index. For
purposes of the fund's investment policies, equity securities include common
stocks, convertible debt and other equity instruments, such as depositary
receipts, warrants, rights and preferred stocks.
Investment Adviser
Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser)
Pioneer Oak Ridge Small Cap Growth Fund
Investment objective
Capital appreciation.
Principal investment strategies
Normally, the fund invests at least 80% of its net assets (plus the amount of
borrowings, if any, for investment purposes) in equity securities of small
capitalization U.S. companies with market capitalizations of $2 billion or less.
For purposes of the fund's investment policies, equity securities include common
stocks, convertible debt and other equity instruments, such as depositary
receipts, warrants, rights and preferred stocks. Small capitalization companies
have market capitalizations at the time of acquisition of $2 billion or less.
The equity securities in which the fund principally invests are common stocks,
preferred stocks, depositary receipts and convertible debt, but the fund may
invest in other types of equity securities to a lesser extent, such as warrants
and rights.
Investment Adviser
Pioneer (adviser); Oak Ridge Investments, LLC (subadviser)
Pioneer Small Cap Value Fund
Investment objective
Capital growth by investing in a diversified portfolio of securities consisting
primarily of common stocks.
Principal investment strategies
Normally, the fund invests at least 80% of its net assets (plus the amount of
borrowings, if any, for investment purposes) in equity securities of small
companies. Small companies are those with market values, at the time of
investment, that do not exceed the greater of the market capitalization of the
largest company within the Russell 2000 Index or the 3-year rolling average of
the market capitalization of the largest company within the Russell 2000 Index
as measured at the end of the preceding month. The Russell 2000 Index measures
the performance of the 2,000 smallest companies in the Russell 3000 Index. The
size of the companies in the index changes with market conditions and the
composition of the index. Pioneer monitors the fund's portfolio so that, under
normal circumstances, the capitalization range of the fund's portfolio is
consistent with the inclusion of the fund in the Lipper Small-Cap category. For
purposes of the fund's investment policies, equity securities include common
stocks, convertible debt and other equity instruments, such as depositary
receipts, warrants, rights, equity interests in real estate investment trusts
(REITs) and preferred stocks.
Investment Adviser
Pioneer
Pioneer International Equity Fund
Investment objective
Long-term capital growth.
24
Principal investment strategies
Normally, the fund invests at least 80% of its total assets in equity securities
of non-U.S. issuers. The fund focuses on securities of issuers located in
countries with developed markets (other than the United States) but may allocate
up to 10% of its assets in countries with emerging economies or securities
markets. Developed markets outside the United States generally include, but are
not limited to, the countries included in the Morgan Stanley Capital
International Europe, Australasia, Far East Index. The fund's assets must be
allocated to securities of issuers located in at least three non-U.S. countries.
For purposes of the fund's investment policies, equity securities include common
stocks, convertible debt and other equity instruments, such as depositary
receipts, warrants, rights and preferred stocks. The fund may also purchase and
sell forward foreign currency exchange contracts in non-U.S. currencies in
connection with its investments.
Investment Adviser
Pioneer
Pioneer International Value Fund
Investment objective
Long-term capital growth.
Principal investment strategies
Normally, the fund invests at least 80% of its total assets in equity securities
of non-U.S. issuers. These issuers may be located in both developed and emerging
markets. Under normal circumstances, the fund's assets will be invested in
securities of companies domiciled in at least three different foreign countries.
Generally, the fund's investments in any country are limited to 25% or less of
its total assets. However, the fund may invest more than 25% of its assets in
issuers organized in Japan or the United Kingdom or in securities quoted or
denominated in the Japanese yen, the British pound and the euro. Investment of a
substantial portion of the fund's assets in such countries or currencies will
subject the fund to the risks of adverse securities markets, exchange rates and
social, political or economic events which may occur in those countries.
The fund may invest without limitation in securities of issuers located in
countries with emerging economies or securities markets, but will not invest
more than 25% of its total assets in securities of issuers located in any one
such country.
For purposes of the fund's investment policies, equity securities include common
stocks, convertible debt and other equity instruments, such as depositary
receipts, warrants, rights and preferred shares. The fund may also purchase and
sell forward foreign currency exchange contracts in non-U.S. currencies in
connection with its investments.
Investment Adviser
Pioneer
Pioneer Europe Select Fund
Investment objective
Capital growth.
Principal investment strategies
Normally, the fund invests at least 80% of its total assets in equity securities
of European issuers. The fund's principal focus is on European companies that
exhibit strong growth characteristics and are considered to be leaders in their
sector or industry. The fund generally focuses on mid- and large-capitalization
European issuers. Equity securities include common stocks, convertible debt and
other equity instruments, such as depositary receipts, warrants, rights and
preferred stocks. The fund may also purchase and sell forward foreign currency
exchange contracts in connection with its investments.
25
Investment Adviser
Pioneer
Pioneer Emerging Markets Fund
Investment objective
Long-term growth of capital.
Principal investment strategies
The fund invests primarily in securities of emerging market issuers. Although
the fund invests in both equity and debt securities, it normally emphasizes
equity securities in its portfolio. Normally, the fund invests at least 80% of
its total assets in the securities of emerging market corporate and government
issuers (i.e., securities of companies that are domiciled or primarily doing
business in emerging countries and securities of these countries' governmental
issuers).
Investment Adviser
Pioneer
Pioneer Real Estate Shares
Investment objective
Long-term growth of capital. Current income is a secondary objective.
Principal investment strategies
Normally, the fund invests at least 80% of its total assets in equity securities
of real estate investment trusts (REITs) and other real estate industry issuers.
For purposes of the fund's investment policies, equity securities include common
stocks, convertible debt and other equity instruments, such as warrants, rights,
interests in REITs and preferred stocks.
Investment Adviser
Pioneer (adviser); AEW Management and Advisors, L.P. (subadviser)
The underlying funds that invest primarily in debt securities are:
Pioneer Bond Fund
Investment objective
To provide current income from an investment grade 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.
Principal investment strategies
The fund invests primarily in:
o Debt securities issued or guaranteed by the U.S. government or its
agencies and instrumentalities,
o Debt securities, including convertible debt, of corporate and other
issuers rated at least investment grade at the time of investment,
and comparably rated commercial paper,
26
o Cash and cash equivalents, certificates of deposit, repurchase
agreements maturing in one week or less and bankers' acceptances.
Normally, the fund invests at least 80% of its total assets in these securities.
In addition, the fund may invest up to 20% of its total assets in debt
securities rated below investment grade or, if unrated, of equivalent quality as
determined by Pioneer. Cash and cash equivalents include cash balances, accrued
interest and receivables for items such as the proceeds, not yet received, from
the sale of the fund's portfolio investments.
Investment Adviser
Pioneer
Pioneer High Yield Fund
Investment objective
Maximize total return through a combination of income and capital appreciation.
Principal investment strategies
Normally, the fund invests at least 80% of its total assets in below investment
grade (high yield) debt securities and preferred stocks. These high yield
securities may be convertible into the equity securities of the issuer. Debt
securities rated below investment grade are commonly referred to as "junk bonds"
and are considered speculative. Below investment grade debt securities involve
greater risk of loss, are subject to greater price volatility and are less
liquid, especially during periods of economic uncertainty or change, than higher
rated debt securities.
Investment Adviser
Pioneer
Pioneer Short Term Income Fund
Investment objective
A high level of current income to the extent consistent with a relatively high
level of stability of principal.
Principal investment strategies
The fund invests primarily in:
o Debt securities issued or guaranteed by the U.S. government, its
agencies or instrumentalities
o Debt securities, including convertible debt, of corporate and other
issuers and commercial paper
o Mortgage-backed and asset-backed securities
o Short-term money market instruments
Normally, at least 80% of the fund's net assets are invested in debt securities
that are rated investment grade at the time of purchase or cash and cash
equivalents. Cash and cash equivalents may include cash balances, accrued
interest and receivables for items such as the proceeds, not yet received, from
the sale of the fund's portfolio investments.
Investment Adviser
Pioneer
27
Pioneer Cash Reserves Fund
Investment objective
High current income, preservation of capital and liquidity through investments
in high-quality short-term securities.
Principal investment strategies
The fund seeks to maintain a constant net asset value of $1.00 per share by
investing in high-quality, U.S. dollar denominated money market securities,
including those issued by:
o U.S. and foreign banks
o U.S. and foreign corporate issuers
o The U.S. government and its agencies and instrumentalities
o Foreign governments
o Multinational organizations such as the World Bank
The fund may invest more than 25% of its total assets in U.S. government
securities and obligations of U.S. banks. The fund may invest in any money
market instrument that is a permissible investment for a money market fund under
the rules of the Securities and Exchange Commission, including commercial paper,
certificates of deposit, time deposits, bankers' acceptances, mortgage-backed
and asset-backed securities, repurchase agreements, municipal obligations and
other short-term debt securities.
Investment Adviser
Pioneer
Pioneer Strategic Income Fund
Investment objective
A high level of current income.
Principal investment strategies
Normally, the fund invests at least 80% of its net assets (plus the amount of
borrowings, if any, for investment purposes) in debt securities. The fund has
the flexibility to invest in a broad range of issuers and segments of the debt
securities markets. Pioneer Investment Management, Inc., the fund's investment
adviser, allocates the fund's investments among the following three segments of
the debt markets:
o Below investment grade (high yield) securities of U.S. and non-U.S.
issuers
o Investment grade securities of U.S. issuers
o Investment grade securities of non-U.S. issuers
Pioneer's allocations among these segments of the debt markets depend upon its
outlook for economic, interest rate and political trends. The fund invests
primarily in:
o Debt securities issued or guaranteed by the U.S. government, its
agencies or instrumentalities or non-U.S. governmental entities
28
o Debt securities of U.S. and non-U.S. corporate issuers, including
convertible debt
o Mortgage-backed and asset-backed securities
The fund's investments may have fixed or variable principal payments and all
types of interest rate payment and reset terms, including fixed rate, adjustable
rate, zero coupon, contingent, deferred, payment in kind and auction rate
features. The fund invests in securities with a broad range of maturities.
Depending upon Pioneer's allocation among market segments, up to 70% of the
fund's total assets may be in debt securities rated below investment grade at
the time of purchase or determined to be of equivalent quality by Pioneer. Up to
20% of the fund's total assets may be invested in debt securities rated below
CCC by Standard & Poor's Ratings Group or the equivalent by another nationally
recognized statistical rating organization or determined to be of equivalent
credit quality by Pioneer. Debt securities rated below investment grade are
commonly referred to as "junk bonds" and are considered speculative. Below
investment grade debt securities involve greater risk of loss, are subject to
greater price volatility and are less liquid, especially during periods of
economic uncertainty or change, than higher rated debt securities.
As with all fixed income securities, the market values of convertible debt
securities tend to decline as interest rates increase and, conversely, to
increase as interest rates decline. However, when the market price of the common
stock underlying a convertible security exceeds the conversion price, the
convertible security tends to reflect the market price of the underlying common
stock.
Depending upon Pioneer's allocation among market segments, up to 85% of the
fund's total assets may be in debt securities of non-U.S. corporate and
governmental issuers, including debt securities of corporate and governmental
issuers in emerging markets.
Investment Adviser
Pioneer
29
AmSouth High Quality Bond Fund and
Pioneer Bond Fund
PROPOSAL 1(n)
Approval of Agreement and Plan of Reorganization
SUMMARY
The following is a summary of more complete information appearing later in
this Proxy Statement/Prospectus or incorporated herein. You should read
carefully the entire Proxy Statement/Prospectus, including the form of Agreement
and Plan of Reorganization attached as EXHIBIT A-1, because it contains details
that are not in the summary.
Each Fund invests in a portfolio of investment grade fixed income
securities and, consequently, the Funds have similar investment policies and
risks. Pioneer Bond Fund may invest up to 20% of its net assets in below
investment grade fixed income securities while your Fund only invests in
investment grade securities. In the table below, if a row extends across the
entire table, the policy disclosed applies to both your AmSouth Fund and the
Pioneer Fund.
Comparison of AmSouth High Quality Bond Fund to Pioneer Bond Fund
AmSouth High Quality Bond Fund Pioneer Bond Fund
- ----------------------------------------------------------------------------------------------------------------------------
Business A diversified series of AmSouth Funds, an A diversified open-end management investment
open-end management investment company company organized as a Delaware statutory
organized as a Massachusetts business trust. trust.
Net assets as of March 31, $628.6 million $270.3 million
2005
Investment advisers and Investment Adviser: Investment Adviser:
portfolio managers AAMI Pioneer
Portfolio Manager: Portfolio Manager:
Day to day management of the AmSouth High Day-to-day management of the Fund's portfolio
Quality Bond Fund's portfolio is the is the responsibility of Kenneth J. Taubes.
responsibility of John P. Boston, CFA. Mr. Mr. Taubes is responsible for overseeing the
Boston has served as the portfolio manager for U.S. and global fixed income teams. Mr. Taubes
the Fund since 1999. He also manages the joined Pioneer as a senior vice president in
AmSouth Government Income Fund and the AmSouth September 1998 and has been an investment
Limited Term Income Fund and co-manages the professional since 1982.
AmSouth Balanced Fund. He is Chief Fixed
Income Officer for AAMI. Mr. Boston began his
career in investment management with AmSouth
Bank in 1988 and has been associated with AAMI
since 1996.
Investment objective AmSouth High Quality Bond Fund seeks current Pioneer Bond Fund seeks current income from an
income consistent with the preservation of investment-grade portfolio with due regard to
capital. 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.
Primary investments Under normal circumstances, the Fund will Under normal market conditions, Pioneer
invest at least 80% of its net assets in Bond Fund invests at least 80% of total
bonds.
1
AmSouth High Quality Bond Fund Pioneer Bond Fund
- ----------------------------------------------------------------------------------------------------------------------------
For the purpose of this policy, net assets in:
assets include net assets plus borrowings for
investment purposes. AmSouth High Quality Bond o Debt securities issued or guaranteed by
Fund invests primarily in high quality bonds the U.S. government or its agencies and
and other fixed income securities. These instrumentalities
investments include primarily U.S. corporate o Debt securities, including convertible
bonds and debentures and notes or bonds issued debt, of corporate and other issuers
or guaranteed by the U.S. government, its rated at least investment grade at the
agencies or instrumentalities. The Fund time of investment, and comparably rated
invests in securities issued by GNMA, which commercial paper
are supported by the full faith and credit of o Cash and cash equivalents, certificates of
the U.S. government, and securities issued by deposit, repurchase agreements maturing in
FNMA, FHLMC and FHLBs, which are supported by one week or less and bankers' acceptances
the right of the issuer to borrow from the
U.S. Treasury. The Fund also invests in debt
securities only if they are high-grade (rated
at time of purchase in one of the four highest
rating categories by a national recognized
statistical rating organization, or are
determined by AAMI to be of comparable
quality). In addition, the Fund also invests
in zero-coupon obligations which are
securities which do not provide current income
but represent ownership of future interest and
principal payments on U.S. Treasury bonds.
AmSouth High Quality Bond Fund may purchase
fixed income securities of any maturity and
there is no limit on the Fund's average
maturity. AmSouth High Quality Bond Fund's
fixed income strategy focuses on managing the
Fund's portfolio to produce a total return
that will exceed the Lehman Brothers
Government/Credit Index while maintaining a
risk profile similar to that of the Index.
Investment strategies AAMI's fixed income portfolio management Pioneer considers both broad economic and
process focuses on the four key areas of issuer specific factors in selecting a
duration management, sector weights, position portfolio designed to achieve the Fund's
on the yield curve and security selection; investment objective. In assessing the
AAMI's goal is to add value in each of these appropriate maturity, rating and sector
four areas through the active management of weighting of the Fund's portfolio, Pioneer
AmSouth High Quality Bond Fund's portfolio. considers a variety of factors that are
Beginning with rigorous fundamental analysis expected to influence economic activity and
of the economy and taking into account interest rates. These factors include
characteristics of the current business and fundamental economic indicators, such as the
interest rate cycles, AAMI arrives at a rates of economic growth and inflation,
projection of the likely trend in interest Federal Reserve monetary policy and the
rates and adjusts duration accordingly. relative value of the U.S. dollar compared to
Analysis of the shape of the yield curve and other currencies. Once Pioneer determines the
yield spreads among bond market sectors leads preferable portfolio characteristics, it
to further refinements in strategy. Using selects individual securities based upon the
securities selected from the U.S. Treasury, terms of the securities (such as yields
Federal compared to U.S.
2
AmSouth High Quality Bond Fund Pioneer Bond Fund
- ----------------------------------------------------------------------------------------------------------------------------
Agency, mortgage backed and investment Treasuries or comparable issuers), liquidity
grade credit sectors, AmSouth High Quality and rating, sector and issuer diversification.
Bond Fund's portfolio is constructed and
managed to produce returns that exceed the
Fund's benchmark index over a full market
cycle.
Other investments The Fund may hold up to 20% of its assets in Pioneer Bond Fund may invest up to 20% of its
cash and cash equivalents. "Cash equivalents" total assets in debt securities rated below
are short-term, interest-bearing instruments investment grade or, if unrated, of equivalent
or deposits known as money market instruments. quality as determined by Pioneer.
Pioneer Bond Fund may invest up to 15% of its
total assets in equity and debt securities of
non-U.S. corporate issuers and in debt
securities of non-U.S. government issuers.
Pioneer Bond Fund will not invest more than 5%
of its total assets in the securities of
emerging markets issuers.
Pioneer Bond Fund may invest a substantial
portion of its assets in mortgage-related
securities, which represent interests in pools
of mortgage loans assembled for sale to
investors by various U.S. governmental
agencies, government-related organizations and
private issuers. These investments may include
mortgage-related derivative securities such as
collateralized mortgage obligations.
Pioneer Bond Fund may invest in securities of
Canadian issuers to the same extent as
securities of U.S. issuers.
Temporary defensive When AAMI determines adverse market conditions Pioneer Bond Fund may invest all or part of
strategies exist, AmSouth High Quality Bond Fund may its assets in securities with remaining
invest entirely in cash positions, directly in maturities of less than one year, cash
U.S. Government securities and short-term equivalents or may hold cash.
paper, such as bankers' acceptances.
Diversification Each Fund is diversified for the purpose of the Investment Company Act and is subject to
diversification requirements under the Internal Revenue Code of 1986, as amended (the "Code").
Industry concentration AmSouth High Quality Bond Fund may not Pioneer Bond Fund may not invest more than 25%
purchase any securities which would cause more of its assets in any one industry.
than 25% of the value of the Fund's total
assets at the time of purchase to be invested
in securities of one or more issuers
conducting their principal business activities
in the same industry, provided that (a) there
is no limitation with respect to obligations
issued or guaranteed by the U.S. government or
its agencies or instrumentalities, and
repurchase agreements
3
AmSouth High Quality Bond Fund Pioneer Bond Fund
- ----------------------------------------------------------------------------------------------------------------------------
secured by obligations of the U.S. government
or its agencies or instrumentalities; (b)
wholly owned finance companies will be
considered to be in the industries of their
parents if their activities are primarily
related to financing the activities of their
parents; and (c) utilities will be divided
according to their services. For example,
gas, gas transmission, electric and gas,
electric, and telephone will each be
considered a separate industry.
There is no limitation with respect to
municipal securities, which, for purposes of
this limitation only, do not include private
activity bonds that are backed only by the
assets and revenues of a non-governmental user.
Restricted and illiquid AmSouth High Quality Bond Fund may not invest Pioneer Bond Fund may not invest more than 15%
securities more than 15% of its net assets in securities of its net assets in securities that are
that are restricted as to resale, or for which illiquid and other securities that are not
no readily available market exists, including readily marketable. Repurchase agreements
repurchase agreements providing for settlement maturing in more than seven days will be
more than seven days after notice. included for purposes of the foregoing limit.
Borrowing AmSouth High Quality Bond Fund may not borrow Pioneer Bond Fund may not borrow money, except
money or issue senior securities, except that the Fund may: (a) borrow from banks or through
the Fund may borrow from banks or enter into reverse repurchase agreements in an amount up
reverse repurchase agreements for temporary to 33 1/3% of the Fund's total assets
emergency purposes in amounts up to 33 1/3% of (including the amount borrowed); (b) to the
the value of its total assets at the time of extent permitted by applicable law, borrow up
such borrowing. The Fund will not purchase to an additional 5% of the Fund's assets for
securities while borrowings (including reverse temporary purposes; (c) obtain such short-term
repurchase agreements) in excess of 5% of its credits as are necessary for the clearance of
total assets are outstanding. In addition, the portfolio transactions; (d) purchase
Fund is permitted to participate in a credit securities on margin to the extent permitted
facility whereby the Fund may directly lend to by applicable law; and (e) engage in
and borrow money from other AmSouth funds for transactions in mortgage dollar rolls that are
temporary purposes, provided that the loans accounted for as financings.
are made in accordance with an order of
exemption from the SEC and any conditions
thereto.
Lending AmSouth High Quality Bond Fund may not make Pioneer Bond Fund may not make loans, except
loans, except that the Fund may purchase or by the purchase of debt obligations, by
hold debt instruments in accordance with its entering into repurchase agreements
investment objective and policies, lend Fund or through the lending of portfolio securities.
securities in accordance with its investment
objective and policies and enter into
repurchase agreements. In addition, the Fund
is permitted to participate in a credit
facility whereby the Fund may directly lend
to and borrow money from other AmSouth funds
for temporary purposes, provided that the
loans are made in accordance with an order of
exemption from
4
AmSouth High Quality Bond Fund Pioneer Bond Fund
- ----------------------------------------------------------------------------------------------------------------------------
the SEC and any conditions thereto.
Derivative instruments AmSouth High Quality Bond Fund may invest in Pioneer Bond Fund may use futures and options
futures contracts and options thereon on securities, indices and currencies, forward
(interest rate futures contracts or index currency exchange contracts and other
futures contracts, as applicable) to commit derivatives. The Fund does not use derivatives
funds awaiting investment, to maintain cash as a primary investment technique and
liquidity or for other hedging purposes. The generally limits their use to hedging.
value of the Fund's contracts may equal or However, the Fund may use derivatives for a
exceed 100% of the Fund's total assets, variety of non-principal purposes, including:
although the Fund will not purchase or sell a o As a hedge against adverse changes in
futures contract unless immediately afterwards stock market prices, interest rates or
the aggregate amount of margin deposits on its currency exchange rates
existing futures positions plus the amount of o As a substitute for purchasing or
premiums paid for related futures options selling securities
entered into for other than bona fide hedging o To increase the Fund's return as a
purposes is 5% or less of its net assets. non-hedging strategy that may be
considered speculative
Short-term trading Neither Fund usually trades for short-term profits. A 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.
Other investment policies As described above, the Funds have substantially similar principal investment strategies and
and restrictions policies. Certain of the non-principal investment policies and restrictions are different. For
a more complete discussion of each Fund's other investment policies and fundamental and
non-fundamental investment restrictions, see the SAI.
Buying, Selling and Exchanging Shares
Class A sales charges and Class A shares are offered with an initial Class A shares are offered with an initial
Rule 12b-1 fees sales charge of up to 4.00% of the offering sales charge of up to 4.50% of the offering
price, which is reduced depending upon the price, which is reduced or waived for large
amount invested or, in certain circumstances, purchases and certain types of investors. At
waived. Class A shares bought as part of an the time of your purchase, your investment
investment of $1 million or more are not firm may receive a commission from Pioneer
subject to an initial sales charge, but may be Funds Distributor, Inc. ("PFD"), the Fund's
charged a contingent deferred sales charge distributor, of up to 4% declining as the size
("CDSC") of 1.00% if sold within one year of of your investment increases.
purchase.
There is no CDSC, except in certain
Class A shares pay a shareholder servicing fee circumstances when the initial sales charge is
(non 12b-1) of up to 0.25% of average daily waived.
net assets.
Class A shares are subject to distribution and
service (12b-1) fees of up to 0.25% of average
daily net assets.
Class B sales charges and Class B shares are offered without an initial Class B shares are offered without an initial
Rule 12b-1 fees sales charge, but are subject to a CDSC of up sales charge, but are subject to contingent
to 5%. For Class B shares purchased prior to deferred sales charges of up to 4% if you sell
the combination of AmSouth Funds with ISG your shares. The charge is reduced over time
Funds, the CDSC on such Class B shares held and is not charged after five years. Your
continuously declines over six years, starting investment firm may receive a commission
5
AmSouth High Quality Bond Fund Pioneer Bond Fund
- ----------------------------------------------------------------------------------------------------------------------------
with year one and ending in year seven from: from PFD, the Fund's distributor, at the time
4%, 3%, 3%, 2%, 2%, 1%. For all other Class B of your purchase of up to 4%.
shares held continuously, the CDSC declines
over six years, starting with year one and Class B shares are subject to distribution and
ending in year seven from: 5%, 4%, 3%, 3%, service (12b-1) fees of up to 1% of average
2%, 1%. Eight years after purchase (seven daily net assets.
years in the case of shares acquired in the
ISG combination), Class B shares Class B shares acquired through the
automatically convert to Class A shares. Reorganization will be subject to the CDSC and
commission schedules applicable to the
Class B shares pay a shareholder servicing fee original purchase.
(non 12b-1) of 0.25% of average daily net
assets and a distribution (12b-1) fee of 0.75% Maximum purchase of Class B shares in a single
of average daily net assets. transaction is $49,999.
Maximum investment for all Class B purchases
by a shareholder for the Fund's shares is
$99,999.
Class I and Class Y sales AmSouth High Quality Bond Fund does not impose The Fund does not impose any initial,
charges and Rule 12b-1 any initial or CDSC on Class I shares. contingent deferred or asset based sales
fees charge on Class Y shares.
The Fund may impose a shareholder servicing The distributor incurs the expenses of
fee (non 12b-1) of up to 0.15% of average distributing the Fund's Class Y shares, none
daily net assets. of which are reimbursed by the Fund or the
Class Y shareowners.
Management and other fees AmSouth High Quality Bond Fund pays an Pioneer Bond Fund pays Pioneer an annual fee
advisory fee on a monthly basis at an annual equal to 0.50% of the Fund's average daily net
rate of 0.50% of the Fund's average daily net assets.
assets.
In addition, the Fund reimburses Pioneer for
ASO Services Company, Inc. ("ASO") serves as certain fund accounting and legal expenses
administrator and fund accounting agent for incurred on behalf of the Fund and pays a
the Fund. The Fund pays ASO an administrative separate shareholder servicing/transfer agency
services fee of 0.15% of the Fund's average fee to PIMSS, an affiliate of Pioneer.
daily net assets.
Pioneer has contractually agreed to limit
Other expenses of the Fund are being limited ordinary operating expenses to the extent
to 0.48% for Class A shares, 0.49% for Class B required to reduce fund expenses to 1.00%
shares and 0.33% for Class I shares. Any fee attributable to Class A shares and 1.90%
waiver or expense reimbursement arrangement is attributable to Class B shares. This expense
voluntary and may be discontinued at any time. limitation is in effect through November 1,
2007 for Class A shares and November 1, 2006
For the fiscal year ended July 31, 2004, the for Class B shares.
Fund's annual operating expenses for Class A
shares, after giving effect to the expense For the fiscal year ended June 30, 2004, the
limitation were 0.98%, and without giving Fund's total annual operating expenses for
effect to the expense limitation, were 1.00% Class A shares, after giving effect to the
of average daily net assets. expense limitation, were 1.00%, and without
giving effect to the expense limitation were
For the fiscal year ended July 31, 2004, the 1.15% of average daily net assets.
6
AmSouth High Quality Bond Fund Pioneer Bond Fund
- ----------------------------------------------------------------------------------------------------------------------------
Fund's annual operating expenses for Class B For the fiscal year ended June 30, 2004, the
shares, after giving effect to the expense Fund's total annual operating expenses for
limitation were 1.74%, and without giving Class B shares were 1.98% of average daily net
effect to the expense limitation, were 1.76% assets.
of average daily net assets.
For the fiscal year ended June 30, 2004, the
For the fiscal year ended July 31, 2004, the Fund's total annual operating expenses for
Fund's annual operating expenses for Class I Class Y shares were 0.58% of average daily net
shares, after giving effect to the expense assets.
limitation were 0.83%, and without giving
effect to the expense limitation, were 0.90%
of average daily net assets.
Buying shares You may buy shares of the Fund directly You may buy shares from any investment firm
through BISYS Fund Services, the Fund's that has a sales agreement with PFD, the
distributor, or through brokers, registered Pioneer Fund's distributor.
investment advisers, banks and other financial
institutions that have entered into selling If the account is established in the
agreements with the Fund's distributor, as shareholder's own name, shareholders may also
described in the Fund's prospectus. purchase additional shares of the Pioneer Fund
by telephone or online.
Certain account transactions may be done by
telephone.
Exchanging shares You can exchange your shares in the Fund for You may exchange your shares for shares of the
shares of the same class of another AmSouth same class of another Pioneer mutual fund.
fund, usually without paying additional sales Your exchange request must be for at least
charges. You must meet the minimum investment $1,000. The Fund allows you to exchange your
requirements for the Fund into which you are shares at net asset value without charging you
exchanging. Exchanges from one fund to another either an initial or contingent deferred
are taxable. Class A shares may be exchanged shares charge at the time of the exchange.
for Class I shares of the same Fund or another Shares you acquire as part of an exchange will
AmSouth Fund if you become eligible to continue to be subject to any contingent
purchase Class I shares. Class I shares may be deferred sales charge that applies to the
exchanged for Class A shares of the same fund. shares you originally purchased. When you
No transaction fees are currently charged for ultimately sell your shares, the date of your
exchanges. original purchase will determine your
contingent deferred sales charge. An exchange
If you sell your shares or exchange them for generally is treated as a sale and a new
shares of another AmSouth fund within 7 days purchase of shares for federal income tax
of the date of purchase, you will be charged a purposes.
2.00% fee on the current net asset value of
the shares sold or exchanged. The fee is paid After you establish an eligible fund account,
to the Fund to offset the costs associated you can exchange Fund shares by telephone or
with short-term trading, such as portfolio online.
transaction and administrative costs.
The Fund uses a "first-in, first-out" method
to determine how long you have held your
shares. This means that if you purchased
shares on different days, the shares purchased
first will be considered redeemed first for
purposes of determining whether the redemption
fee will be charged.
7
AmSouth High Quality Bond Fund Pioneer Bond Fund
- ----------------------------------------------------------------------------------------------------------------------------
The fee will be charged on all covered
redemptions and exchanges, including those
made through retirement plan, brokerage and
other types of omnibus accounts (except where
it is not practical for the plan administrator
or brokerage firm to implement the fee). The
Fund will not impose the redemption fee on a
redemption or exchange of shares purchased
upon the reinvestment of dividend and capital
gain distributions.
Selling shares Shares of each Fund are sold at the net asset value per share next calculated after the Fund
receives your request in good order.
You may sell your shares by contacting the Normally, your investment firm will send your
Fund directly in writing or by telephone or by request to sell shares to PIMSS. You can also
contacting a financial intermediary as sell your shares by contacting the Fund
described in the Fund's prospectus. directly if your account is registered in your
name.
If the account is established in the
shareholder's own name, shareholders may also
redeem shares of the Fund by telephone or
online.
Comparison of Principal Risks of Investing in the Funds
Because each Fund has a similar investment objective, primary investment
policies and strategies, the Funds are subject to the same principal risks. You
could lose money on your investment in either Fund or not make as much as if you
invested elsewhere if:
o Interest rates go up, causing the value of the Fund's investments to
decline
o The issuer of a security owned by the Fund defaults on its
obligation to pay principal and/or interest or has its credit rating
downgraded
o During periods of declining interest rates, the issuer of a security
may exercise its option to prepay principal earlier than scheduled,
forcing the Fund to reinvest in lower yielding securities. This is
known as call or prepayment risk
o During periods of rising interest rates, the average life of certain
types of securities may be extended because of slower than expected
principal payments. This may lock in a below market interest rate,
increase the security's duration (the estimated period until the
security is paid in full) and reduce the value of the security. This
is known as extension risk
o The adviser's judgment about the attractiveness, relative value or
potential appreciation of a particular sector, security or
investment strategy proves to be incorrect
o To the extent that the Fund invests significantly in high yield
securities, its exposure to the credit risks associated with such
securities may be greater, its income and net asset value may be
more volatile and it may be more difficult to achieve preservation
of principal
8
Government sponsored entities such as the Federal Home Loan Mortgage
Corporation (Freddie Mac), the Federal National Mortgage Association (FNMA) and
the Federal Home Loan Banks (FHLBs), although chartered or sponsored by
Congress, are not funded by congressional appropriations and the debt and
mortgage-backed securities issued by them are neither guaranteed nor issued by
the U.S. government.
To the extent a Fund invest significantly in mortgage-backed securities,
its exposure to prepayment and extension risks may be greater than if it
invested in other fixed income securities.
At times, more than 25% of Pioneer Bond Fund's assets may be invested in
the same market segment, such as financials. To the extent the Fund emphasizes
investments in a market segment, the Fund will be subject to a greater degree to
the risks particular to the industries in that segment, and may experience
greater market fluctuation, than a fund without the same focus. For example,
industries in the financial segment, such as banks, insurance companies,
broker-dealers and REITs, may be sensitive to changes in interest rates and
general economic activity and are subject to extensive government regulation.
Past Performance
Set forth below is performance information for each Fund. The bar charts
show how each Fund's total return (not including any deduction for sales
charges) has varied from year to year for each full calendar year. The table
shows average annual total return (before and after taxes) for each Fund over
time for each class of shares (including deductions for sales charges) compared
with a broad-based securities market index. The bar charts give an indication of
the risks of investing in each Fund, including the fact that you could incur a
loss and experience volatility of returns year to year. Past performance before
and after taxes does not indicate future results.
AmSouth High Quality Bond Fund -- Class A Shares
Calendar Year Total Returns*
[BAR CHART]
1995 18.41
1996 2.56
1997 9.27
1998 9.19
1999 -2.56
2000 12.06
2001 7.40
2002 10.66
2003 2.63
2004 2.65
* During the period shown in the bar chart, your AmSouth Fund's
highest quarterly return was 6.53% for the quarter ended June
30, 1995, and the lowest quarterly return was -2.61% for the
quarter ended June 30, 2004.
9
Pioneer Bond Fund -- Class A Shares
Calendar Year Total Returns*
[BAR CHART]
1995 18.16
1996 1.96
1997 9.16
1998 7.69
1999 -3.20
2000 8.45
2001 7.54
2002 8.77
2003 8.85
2004 5.71
* During the period shown in the bar chart, Pioneer Bond Fund's
highest quarterly return was 6.11% for the quarter ended June
30, 1995, and the lowest quarterly return was -2.63% for the
quarter ended March 31, 1996.
AmSouth High Quality Bond Fund
Average Annual Total Returns as of December 31, 2004
1 Year 5 Years 10 Years
- -----------------------------------------------------------------------------------------
AmSouth High Quality Bond Fund, Class A Shares
- -----------------------------------------------------------------------------------------
Return Before Taxes(1) -1.45% 6.14% 6.64%
- -----------------------------------------------------------------------------------------
Return After Taxes on Distributions -2.95% 4.13% 4.32%
- -----------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares -0.95% 4.05% 4.26%
- -----------------------------------------------------------------------------------------
AmSouth High Quality Bond Fund, Class B Shares
- -----------------------------------------------------------------------------------------
Return Before Taxes -3.00% 5.90% 6.25%
- -----------------------------------------------------------------------------------------
AmSouth High Quality Bond Fund, Class I Shares(2)
- -----------------------------------------------------------------------------------------
Return Before Taxes 2.80% 7.16% 7.18%
- -----------------------------------------------------------------------------------------
Return After Taxes on Distributions 1.18% 5.08% 4.81%
- -----------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares 1.81% 4.90% 4.71%
- -----------------------------------------------------------------------------------------
Merrill Lynch Government Credit Index(3) 4.15% 7.95% 7.78%
Lehman Brothers Government/Credit Bond Index(4) 4.18% 8.00% 7.80%
Merrill Lynch Government Credit A-Rated Index(5) 3.72% 7.75% 7.65%
(reflects no deduction for fees, expenses or taxes)
- -----------------------------------------------------------------------------------------
(1) Class A shares were first offered on 12/1/88. Performance for the Class B
shares, which were first offered on 9/16/97, is based on the historical
performance of the Fund's Class A shares (without sales charge) prior to
that date. The historical performance of the Class B shares has been
restated to reflect the Fund's Class B shares distribution (12b-1) fees
and the contingent deferred sales charge.
(2) Performance for the Class I shares, which were first offered on 9/2/97, is
based on the historical performance of the Fund's Class A shares (without
sales charge) prior to that date.
(3) The Merrill Lynch Government Credit Index and the Merrill Lynch Government
Credit A-Rated Index, unmanaged indices representative of the total return
of government and corporate bonds, are for reference only, do not mirror
the Fund's investments, and reflect no deduction for fees, expenses or
taxes.
(4) The Fund has changed its benchmark from the Lehman Brothers
Government/Credit Bond Index to the Merrill Lynch Government Credit Index
to provide a more appropriate market comparison for the Fund's
performance.
(5) The Fund has added information regarding the Merrill Lynch Government
Credit A-Rated Index to provide an additional index for comparison of the
Fund's performance.
10
The table above shows the impact of taxes on AmSouth High Quality Bond Fund's
returns. After-tax returns are only shown for Class A shares and Class I shares
and may vary for Class B shares. The Fund's after-tax returns are calculated
using the highest individual federal marginal income tax rates and do not
reflect the impact of state and local taxes. In certain cases, the figure
representing "Return After Taxes on Distributions and Sale of Fund Shares" may
be higher than the other return figures for the same period. A higher after-tax
return results when a capital loss occurs upon redemption and translates into an
assumed tax deduction that benefits the shareholder. Please note that actual
after-tax returns depend on an investor's tax situation and may differ from
those shown. Also note that after-tax returns shown are not relevant to
shareholders who hold Fund shares through tax-deferred arrangements, such as
401(k) plans or individual retirement accounts.
Pioneer Bond Fund
Average Annual Total Returns as of December 31, 2004
1 Year 5 Years 10 Years
- --------------------------------------------------------------------------------------------
Pioneer Bond Fund, Class A shares
- --------------------------------------------------------------------------------------------
Return Before Taxes 0.95% 6.86% 6.69%
- --------------------------------------------------------------------------------------------
Return After Taxes on Distributions(1) -0.84% 4.54% 4.16%
- --------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares(1) 0.59% 4.42% 4.11%
- --------------------------------------------------------------------------------------------
Pioneer Bond Fund, Class B shares
- --------------------------------------------------------------------------------------------
Return Before Taxes 0.82% 6.93% 6.30%
- --------------------------------------------------------------------------------------------
Pioneer Bond Fund, Class Y shares
- --------------------------------------------------------------------------------------------
Return Before Taxes 6.35% 8.18% 7.34%
- --------------------------------------------------------------------------------------------
Return After Taxes on Distributions(1) 4.28% 5.68% 4.71%
- --------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares(1) 4.09% 5.45% 4.63%
- --------------------------------------------------------------------------------------------
Lehman Brothers Aggregate Bond Index(2) 4.34% 7.71% 7.72%
(reflects no deduction for fees, expenses or taxes)
- --------------------------------------------------------------------------------------------
(1) After-tax returns are calculated using the historical highest individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your situation and may
differ from those shown. Furthermore, the after-tax returns shown are not
relevant to those who hold their shares through tax-deferred arrangements
such as 401(k) plans or IRA accounts, or to investors that are tax-exempt.
(2) The Lehman Brothers Aggregate Bond Index, an unmanaged index of
government, mortgage and asset backed securities, is for reference only,
does not mirror the Fund's investments, and reflects no deduction for
fees, expenses or taxes.
The Funds' Fees and Expenses
Shareholders of both Funds pay various fees and expenses, either directly
or indirectly. The tables below show the fees and expenses that you would pay if
you were to buy and hold shares of each Fund. The expenses in the tables
appearing below are based on (i) for the AmSouth High Quality Bond Fund, the
expenses of AmSouth High Quality Bond Fund for the period ended January 31,
2005, and (ii) for Pioneer Bond Fund, the expenses of Pioneer Bond Fund for the
period ended December 31, 2004. Future expenses for all share classes may be
greater or less. The tables also show the pro forma expenses of the combined
Fund assuming the Reorganization occurred on December 31, 2004.
11
Shareholder AmSouth Pioneer Combined AmSouth Pioneer Combined AmSouth Pioneer Combined
transaction fees (paid High Bond Fund High Bond Fund (Pro High Bond Fund (Pro
directly from your Quality Fund (Pro Forma) Quality Fund Forma) Quality Fund Forma)
investment) Bond Bond Bond
Fund(1) Fund(1) Fund(1)
- -------------------------------------------------------------------------------------------------------------------------------
Class A Class A Class A Class B Class B Class B Class I Class Y Class Y
- -------------------------------------------------------------------------------------------------------------------------------
Maximum sales charge 4.00%(2) 4.50% 4.50% None None None None None None
(load) when you buy
shares as a percentage
of offering price
- -------------------------------------------------------------------------------------------------------------------------------
Maximum deferred sales None(2) None(2) None(2) 5.00%(3) 4.00% 4.00% None None None
charge (load) as a
percentage of purchase
price or the amount
you receive when you
sell shares, whichever
is less
- -------------------------------------------------------------------------------------------------------------------------------
Redemption fees 2.00%(4) None None 2.00%(4) None None 2.00%(4) None None
- -------------------------------------------------------------------------------------------------------------------------------
Annual fund operating
expenses (deducted
from fund assets) (as
a % of average net
assets)
- -------------------------------------------------------------------------------------------------------------------------------
Management fee 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50%
- -------------------------------------------------------------------------------------------------------------------------------
Distribution and None 0.25% 0.25% 0.75% 1.00% 1.00% None None None
service (12b-1) fee
- -------------------------------------------------------------------------------------------------------------------------------
Other expenses 0.66%(5) 0.30% 0.30% 0.79%(5) 0.45% 0.46% 0.56%(5) 0.06% 0.06%
- -------------------------------------------------------------------------------------------------------------------------------
Total fund operating 1.16% 1.05%(6) 1.05% 2.04% 1.95%(6) 1.95% 1.06% 0.56%(6) 0.56%
expenses
- -------------------------------------------------------------------------------------------------------------------------------
Expense 0.17% 0.05%(7) 0.05% 0.29% N/A 0.05%(8) 0.21% N/A N/A
reimbursement/reduction
- -------------------------------------------------------------------------------------------------------------------------------
Net fund operating 0.99% 1.00% 1.00% 1.75% 1.95% 1.90% 0.85% 0.56% 0.56%
expenses
- -------------------------------------------------------------------------------------------------------------------------------
(1) AmSouth Bank or other financial institutions may charge their customer
account fees for automatic investment and other cash management services
provided in connection with investment in the Fund.
(2) Sales charges may be reduced depending upon the amount invested or, in
certain circumstances, waived. Class A shares of the Pioneer Fund bought
as part of an investment of $1 million or more are not subject to an
initial sales charge, but may be charged a CDSC of 1.00% if sold within
one year of purchase.
(3) For Class B shares purchased prior to the combination of AmSouth Funds
with ISG Funds, the CDSC on such Class B shares held continuously declines
over six years, starting with year one and ending in year seven from: 4%,
3%, 3%, 2%, 2%, 1%. For all other Class B shares held continuously, the
CDSC declines over six years, starting with year one and ending in year
seven from: 5%, 4%, 3%, 3%, 2%, 1%. Eight years after purchase (seven
years in the case of shares acquired in the ISG combination), Class B
shares automatically convert to Class A shares.
(4) To discourage short-term trading, a redemption fee of 2.00% will be
charged on sales or exchanges of Class A, Class B and Class I shares of
your AmSouth Fund made within 7 days of the date of purchase. A wire
transfer fee of $7.00 will be deducted from the amount of your redemption
if you request a wire transfer.
(5) Other expenses for your AmSouth Fund are being limited to 0.49% for Class
A shares, 0.50% for Class B shares and 0.35% for Class I shares. Any fee
waiver or expense reimbursement arrangement is voluntary and may be
discontinued at any time.
(6) The Pioneer Fund's total annual operating expenses in the table have not
been reduced by any expense offset arrangements.
(7) The expenses in the table above reflect the expense limitation in effect
through November 1, 2007, under which Pioneer has contractually agreed to
limit ordinary operating expenses to the extent required to reduce Class A
expenses to 1.00% of the average daily net assets attributable to Class A
shares. There can be no assurance that Pioneer will extend the expense
limitation beyond November 1, 2007.
(8) The expenses in the table above reflect the expense limitation in effect
through November 1, 2006, under which Pioneer has contractually agreed to
limit ordinary operating expenses to the extent required to reduce Class B
expenses to 1.90% of the average daily net assets attributable to Class B
shares. There can be no assurance that Pioneer will extend the expense
limitation beyond November 1, 2006.
12
The hypothetical example below helps you compare the cost of investing in
each Fund. It assumes that: (a) you invest $10,000 in each Fund for the time
periods shown, (b) you reinvest all dividends and distributions, (c) your
investment has a 5% return each year, (d) each Fund's gross operating expenses
remain the same, and (e) the expense limitation for your Fund is in effect for
year one. The examples are for comparison purposes only and are not a
representation of either Fund's actual expenses or returns, either past or
future.
Number of years you AmSouth High Quality Bond Combined Fund
own your shares Fund Pioneer Bond Fund (Pro Forma)
- ---------------------------------------------------------------------------------------------------------------
Class A
- ---------------------------------------------------------------------------------------------------------------
Year 1 $ 513 $ 671 $ 671
- ---------------------------------------------------------------------------------------------------------------
Year 3 $ 754 $ 880 $ 880
- ---------------------------------------------------------------------------------------------------------------
Year 5 $1,013 $1,112 $1,112
- ---------------------------------------------------------------------------------------------------------------
Year 10 $1,753 $1,775 $1,775
- ---------------------------------------------------------------------------------------------------------------
Class B -- assuming redemption at end of period
- ---------------------------------------------------------------------------------------------------------------
Year 1 $ 707 $ 593 $ 593
- ---------------------------------------------------------------------------------------------------------------
Year 3 $ 940 $ 902 $ 907
- ---------------------------------------------------------------------------------------------------------------
Year 5 $1,298 $1,143 $1,148
- ---------------------------------------------------------------------------------------------------------------
Year 10 $2,143 $2,033 $2,037
- ---------------------------------------------------------------------------------------------------------------
Class B -- assuming no redemption
- ---------------------------------------------------------------------------------------------------------------
Year 1 $ 207 $ 193 $ 193
- ---------------------------------------------------------------------------------------------------------------
Year 3 $ 640 $ 602 $ 607
- ---------------------------------------------------------------------------------------------------------------
Year 5 $1,098 $1,043 $1,048
- ---------------------------------------------------------------------------------------------------------------
Year 10 $2,143 $2,033 $2,037
- ---------------------------------------------------------------------------------------------------------------
Class I Class Y
- ---------------------------------------------------------------------------------------------------------------
Year 1 $ 108 $ 57 $ 57
- ---------------------------------------------------------------------------------------------------------------
Year 3 $ 337 $ 179 $ 179
- ---------------------------------------------------------------------------------------------------------------
Year 5 $ 585 $ 313 $ 313
- ---------------------------------------------------------------------------------------------------------------
Year 10 $1,294 $ 701 $ 701
- ---------------------------------------------------------------------------------------------------------------
Reasons for the Proposed Reorganization
The Trustees believe that the proposed Reorganization is in the best
interests of Amsouth High Quality Bond Fund. The Trustees considered the
following matters, among others, in approving the proposal.
First, AAMI, the investment adviser to your AmSouth Fund, informed the
Trustees that it does not intend to continue to provide investment advisory
services to the AmSouth Funds. Consequently, a change in your Fund's investment
adviser was necessary. In the absence of the Reorganization, such a change would
be more likely to motivate shareholders invested in reliance on AAMI's role to
withdraw from the Fund, thereby reducing fund size and increasing fund expense
ratios.
Second, the historical investment performance of Pioneer Bond Fund is
comparable to your AmSouth Fund's investment performance. For the one, five and
ten year periods ended December 31, 2004, Class A shares of Pioneer Bond Fund
had an average annual return of 0.95% (one year); 6.86% (five year); and 6.69%
(ten year), compared to an average annual return of the Class A shares of your
AmSouth Fund of -1.45% (one year); 6.14% (five year); and 7.64% (ten year),
respectively, during the same period. The Trustees also noted that, for the one
and five year periods ended March 31, 2005, Class A shares of Pioneer Bond Fund
had an average annual return of 2.67% (one year); and 7.60% (five year),
compared to an average annual return of the Class A shares of your AmSouth Fund
of -0.25% (one year); and 6.25% (five year), during the same period. In
addition, the Trustees considered the track record of Pioneer in managing equity
and fixed income mutual funds.
Third, the resources of Pioneer. At December 31, 2004, Pioneer managed
over 80 investment companies and accounts with approximately $42 billion in
assets, including $15.7 billion in fixed income searches. Pioneer is part of the
global asset management group of UniCredito Italiano S.p.A., one of the largest
banking groups in Italy, providing investment management and financial services
to mutual funds, institutional and other clients. As of December 31, 2004,
assets under management of
13
UniCredito Italiano S.p.A. were approximately $175 billion worldwide.
Shareholders of your AmSouth Fund would become part of a significantly larger
family of funds that offers a more diverse array of investment options and
enhanced shareholder account options. The Pioneer family of mutual funds offers
over 80 funds, including domestic and international equity and fixed income
funds and a money market fund that will be available to your AmSouth Fund's
shareholders through exchanges.
Fourth, the aggregate management and administration fees incurred by your
AmSouth Fund are higher than the management fee paid by Pioneer Bond Fund. The
aggregate Rule 12b-1 distribution and shareholder servicing fees and non-Rule
12b-1 shareholder servicing fees paid by the Class A and Class B shares of both
Funds are the same. Moreover, your AmSouth Fund's Class I shares pay a non 12b-1
shareholder servicing fee that is not paid by the Pioneer Fund's Class Y shares.
With respect to Class I shares, both the gross and net expenses of the Pioneer
Fund are lower than your AmSouth Fund. While the pro forma expenses are
estimated to be lower for your Class A and B Shares on a gross basis, the
expenses will be higher on a net basis. The lower net expenses of your AmSouth
Fund are a result of voluntary expense limitations that may be discontinued at
any time. The trustees considered the positive factors associated with the
Reorganization, such as greater fund assets and potential for growth, to
outweigh the negative factors, such as the increase in expenses.
Fifth, the Class A, B and Y shares of Pioneer Bond Fund received in the
Reorganization will provide AmSouth High Quality Bond Fund shareholders with
exposure to substantially the same investment product as they currently have.
Sixth, the transaction is structured to qualify as a tax-free
reorganization under Section 368(a) of the Internal Revenue Code of 1986 and
therefore will not be treated as a taxable sale of your AmSouth shares.
Pioneer and AmSouth Bank will pay all costs of preparing and printing the
Funds' proxy statements and solicitation costs incurred by the Funds in
connection with the Reorganization. AAMI will otherwise be responsible for all
costs and expenses of your Fund in connection with the Reorganization.
The Trustees also considered that Pioneer and AmSouth Bank will benefit
from the Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the
Reorganizations."
The Board of Trustees of the Pioneer Fund also considered that the
Reorganization presents an excellent opportunity for the Pioneer Fund to acquire
investment assets without the obligation to pay commissions or other transaction
costs that a fund normally incurs when purchasing securities. This opportunity
provides an economic benefit to the Pioneer Fund and its shareholders.
CAPITALIZATION
The following table sets forth the capitalization of each Fund as of May
31, 2005, and the pro forma combined Fund as of May 31, 2005.
Pro Forma
AmSouth High Pioneer Bond Pioneer Bond
Quality Bond Fund Fund Fund
May 31, 2005 May 31, 2005 May 31, 2005
- -------------------------------------------------------------------------------------
Total Net Assets (in thousands) ... $ 622,574 $ 297,638 $ 920,212
Class A shares ................. $ 53,254 $ 173,605 $ 226,859
Class B shares ................. $ 6,222 $ 57,319 $ 63,542
Class I/Y shares ............... $ 563,098 $ 18,481 $ 581,579
Net Asset Value Per Share
Class A shares ................. $ 11.16 $ 9.37 $ 9.37
Class B shares ................. $ 11.13 $ 9.33 $ 9.33
Class I/Y shares ............... $ 11.16 $ 9.30 $ 9.30
Shares Outstanding
Class A shares ................. 4,771,272 18,533,637 24,218,924
Class B shares ................. 559,225 6,147,733 6,813,993
Class I/Y shares ............... 50,444,625 1,986,416 62,510,903
14
It is impossible to predict how many shares of the Pioneer Fund will
actually be received and distributed by your AmSouth Fund on the Reorganization
date. The table should not be relied upon to determine the amount of the Pioneer
Fund's shares that will actually be received and distributed.
BOARD'S EVALUATION AND RECOMMENDATION
For the reasons described above, the Trustees, including the Independent
Trustees, approved the Reorganization. In particular, the Trustees determined
that the Reorganization is in the best interests of your AmSouth Fund.
Similarly, the Board of Trustees of the Pioneer Fund, including its Independent
Trustees, approved the Reorganization. They also determined that the
Reorganization is in the best interests of the Pioneer Fund.
The Trustees recommend that the shareholders of your AmSouth Fund vote FOR
the proposal to approve the Agreement and Plan of Reorganization.
15
AmSouth Florida Tax-Exempt Fund and
Pioneer Florida Tax Free Income Fund
PROPOSAL 1(o)
Approval of Agreement and Plan of Reorganization
SUMMARY
The following is a summary of more complete information appearing later in
this Proxy Statement/Prospectus or incorporated herein. You should read
carefully the entire Proxy Statement/Prospectus, including the form of Agreement
and Plan of Reorganization attached as EXHIBIT A-2, because it contains details
that are not in the summary.
Each Fund seeks to produce as high a level of current interest income
exempt from federal income tax and Florida intangible personal property tax as
is consistent with the preservation of capital. In the table below, if a row
extends across the entire table, the policy disclosed applies to both your
AmSouth Fund and the Pioneer Fund.
Comparison of AmSouth Florida Tax-Exempt Fund to Pioneer Florida
Tax Free Income Fund
AmSouth Florida Tax-Exempt Fund Pioneer Florida Tax Free Income Fund
- --------------------------------------------------------------------------------------------------------------------------------
Business A non-diversified series of AmSouth Funds, an A newly created, non-diversified series of Pioneer
open-end management investment company Series Trust IV, an open-end management investment
organized as a Massachusetts business trust. company organized as a Delaware statutory trust.
Net assets as of March 31, $55.3 million None. Pioneer Florida Tax Free Income Fund is
2005 newly created and does not expect to commence
investment operations until the Reorganization
occurs.
Investment advisers and Investment Adviser: Investment Adviser:
portfolio managers AAMI Pioneer
Portfolio Manager: Portfolio Manager:
Day-to-day management of AmSouth Florida Day-to-day management of the fund's portfolio
Tax-Exempt Fund's portfolio is the is the responsibility of David Eurkus. Mr.
responsibility of Dorothy E. Thomas, CFA. Ms. Eurkus joined Pioneer as a senior vice
Thomas has more than 20 years of experience as president in January 2000 and has been an
an investment portfolio manager. She has been investment professional since 1969. From 1998
associated with AmSouth's Trust Investment to 2000, Mr. Eurkus was a senior vice
Group since 1982 and is currently Senior Vice president of fixed income investing for the
President and Trust Investment Officer in Private Client Group at Brown Brothers
charge of tax-free fixed income investments. Harriman. Prior to that he was a senior vice
president at Putnam Investments.
Investment objective AmSouth Florida Tax-Exempt Fund seeks to Pioneer Florida Tax Free Income Fund seeks to
produce as high a level of current interest produce as high a level of current interest
income exempt from federal income tax and income exempt from federal income tax and
Florida intangible personal property tax as Florida state intangible personal property
is consistent with the preservation of tax as is consistent with the relative
capital. stability of capital.
Primary investments Normally, AmSouth Florida Tax-Exempt Fund will Normally, the Fund invests at least 80% of its
invest at least 80% of its net assets in net assets (plus the amount of borrowings, if
1
AmSouth Florida Tax-Exempt Fund Pioneer Florida Tax Free Income Fund
- ----------------------------------------------------------------------------------------------------------------------------
municipal securities issued by or on behalf of any, for investment purposes) in securities
the State of Florida and its political the interest on which is exempt from regular
subdivisions, the interest on which, in the federal income tax and Florida intangible
opinion of the issuer's bond counsel at the personal property tax. Florida does not impose
time of issuance, is exempt from federal and an individual income tax. The Fund may invest
state income tax, if any, is not subject to in securities the interest on which is a tax
the federal alternative minimum tax, and is preference item for purposes of the federal
exempt from the Florida intangible personal alternative minimum tax.
property tax. For purposes of this policy, net
assets include net assets plus borrowings. The The Fund's investments may have fixed or
Fund invests in Florida municipal securities variable principal payments and all types of
only if they are high-grade (rated at the time interest rate payment and reset terms,
of purchase in one of the four highest rating including fixed and floating rates, inverse
categories by a national recognized floating rate, zero coupon, contingent,
statistical rating organization ("NRSRO") or deferred and payment in kind and auction rate
determined by AAMI to be of comparable features.
quality). The Fund will have a dollar-weighted
average maturity of five to ten years. The Fund may invest in municipal securities
of any maturity. Municipal securities with
longer maturities are generally more volatile
than other fixed income securities with
shorter maturities.
Investment strategies AAMI's fixed income portfolio management Pioneer considers both broad economic factors
process focuses on the four key areas of and issuer specific factors in selecting a
duration management, sector weights, position portfolio designed to achieve the Fund's
on the yield curve and security selection; investment objective. In assessing the
AAMI's goal is to add value in each of these appropriate maturity and rating weighting of
four areas through the active management of the Fund's portfolio, Pioneer considers a
the Fund's portfolio. Beginning with rigorous variety of factors that are expected to
fundamental analysis of the economy and taking influence economic activity and interest
into account characteristics of the current rates. These factors include fundamental
business and interest rate cycles, AAMI economic indicators, such as the rates of
arrives at a projection of the likely trend in economic growth and inflation, Federal Reserve
interest rates and adjusts duration monetary policy and the relative value of the
accordingly. Analysis of the shape of the U.S. dollar compared to other currencies. Once
yield curve and yield spreads among bond Pioneer determines the preferable portfolio
market sectors leads to further refinements in characteristics, Pioneer selects individual
strategy. securities based upon the terms of the
securities (such as yields compared to U.S.
Treasuries or comparable issues), liquidity
and rating and issuer diversification.
Pioneer also employs due diligence and
fundamental research, an evaluation of the
issuer based on its financial statements and
operations, to assess an issuer's credit
quality, taking into account financial
condition, future capital needs and potential
for change in rating. In making these
portfolio decisions, Pioneer relies on the
knowledge, experience and judgment of its
staff who have access to a wide variety of
research.
Other investments Under normal circumstances, the Fund may Pioneer Florida Tax Free Income Fund invests
2
AmSouth Florida Tax-Exempt Fund Pioneer Florida Tax Free Income Fund
- ----------------------------------------------------------------------------------------------------------------------------
invest up to 20% of its assets in taxable primarily in investment grade securities that
obligations. For purposes of the 20% basket, provide income that is exempt from federal
the Fund may also invest in municipal income tax and Florida intangible personal
securities of states other than Florida. property tax but may invest up to 10% of its
net assets in debt securities rated below
investment grade.
A debt security is considered investment
grade if it is:
o Rated BBB or higher at the time of
purchase by Standard & Poor's Ratings
Group;
o Rated the equivalent rating by a NRSRO;
or
o Determined to be of equivalent credit
quality by Pioneer
The Fund may invest in tax-exempt securities
of issuers located outside the state of
Florida.
The Fund may invest up to 20% of its net
assets in securities of other investment
companies, investment grade commercial paper,
U.S. government securities, U.S. or foreign
bank instruments and repurchase agreements.
The Fund may invest up to 10% of its net
assets in inverse floating rate obligations
(a type of derivative instrument). Inverse
floating rate obligations represent interests
in tax-exempt bonds. The interest rate on
inverse floating rate obligations will
generally decrease as short-term interest
rates increase, and increase as short-term
rates decrease. Due to their leveraged
structure, the sensitivity of the market
value of an inverse floating rate obligation
to changes in interest rates is generally
greater than a comparable long-term bond
issued by the same municipality and with
similar credit quality, redemption and
maturity provisions. Inverse floating rate
obligations may be volatile and involve
leverage risk.
Temporary defensive For temporary defensive purposes, the Fund may Normally, the Fund invests substantially all
strategies increase its holdings in taxable obligations of its assets to meet its investment
to over 20% of its assets and hold uninvested objective. The Fund may invest the remainder
cash reserves pending investment. The Fund may of its assets in securities with remaining
also increase its holdings in municipal maturities of less than one year, cash
securities of states other than Florida to equivalents or may hold cash. For temporary
over 20% of its assets in such situations. defensive purposes, including during periods
Taxable obligations may include obligations of unusual cash flows, the Fund may depart
issued or guaranteed by the U.S. government, from its principal investment strategies and
its agencies or instrumentalities (some of invest part or all of its assets in these
which securities or may hold cash.
3
AmSouth Florida Tax-Exempt Fund Pioneer Florida Tax Free Income Fund
- ----------------------------------------------------------------------------------------------------------------------------
may be subject to repurchase agreements), During such periods, the Fund may not be able
certificates of deposit, demand and time to achieve its investment objective. The Fund
deposits, bankers' acceptances of selected intends to adopt a defensive strategy when
banks, and commercial paper meeting the Fund's Pioneer believes securities in which the Fund
quality for tax-exempt commercial paper. normally invests have extraordinary risks due
to political or economic factors and in other
extraordinary circumstances.
Diversification Each Fund is non-diversified for the purpose of the Investment Company Act
and, therefore, may concentrate its investments in a limited number of
issuers.
Industry concentration AmSouth Florida Tax-Exempt Fund may not Pioneer Florida Tax Free Income Fund
purchase any securities which would may not invest more than 25% of its
cause more than 25% of the value of the assets in any one industry.
Fund's total assets at the time of
purchase to be invested in securities
of one or more issuers conducting their
principal business activities in the
same industry, provided that (a) there
is no limitation with respect to
obligations issued or guaranteed by the
U.S. government or its agencies or
instrumentalities, and repurchase
agreements secured by obligations of
the U.S. government or its agencies or
instrumentalities; (b) wholly owned
finance companies will be considered to
be in the industries of their parents
if their activities are primarily
related to financing the activities of
their parents; and (c) utilities will
be divided according to their services.
For example, gas, gas transmission,
electric and gas, electric, and
telephone will each be considered a
separate industry.
There is no limitation with respect to
municipal securities, which, for purposes of
this limitation only, do not include private
activity bonds that are backed only by the
assets and revenues of a non-governmental
user.
Restricted and illiquid AmSouth Florida Tax-Exempt Fund may not Pioneer Florida Tax Free Income Fund may not
securities invest more than 15% of its net assets in invest more than 15% of its net assets in
securities that are restricted as to resale, securities that are illiquid and other
or for which no readily available market securities that are not readily marketable.
exists, including repurchase agreements Repurchase agreements maturing in more than
providing for settlement more than seven seven days will be included for purposes of
days after notice. the foregoing limit.
Borrowing AmSouth Florida Tax-Exempt Fund may not borrow Pioneer Florida Tax Free Income Fund may not
money or issue senior securities, except that borrow money, except the Fund may: (a) borrow
the Fund may borrow from banks or enter into from banks or through reverse repurchase
reverse repurchase agreements for temporary agreements in an amount up to 33 1/3% of the
emergency purposes in amounts up to 10% of the Fund's total assets (including the amount
value of its total assets at the time of such borrowed); (b) to the extent permitted by
borrowing. The Fund will not purchase applicable law, borrow up to an additional 5%
securities while borrowings (including reverse of the Fund's assets for temporary purposes;
repurchase agreements) in excess of 5% of its (c) obtain such short-term credits as are
total assets are outstanding. necessary for the clearance of portfolio
4
AmSouth Florida Tax-Exempt Fund Pioneer Florida Tax Free Income Fund
- ----------------------------------------------------------------------------------------------------------------------------
excess of 5% of its total assets are transactions; (d) purchase securities on
outstanding. margin to the extent permitted by applicable
law; and (e) engage in transactions in
mortgage dollar rolls that are accounted for
as financings.
Lending AmSouth Florida Tax-Exempt Fund may not make Pioneer Florida Tax Free Income Fund may lend
loans, except that the Fund may purchase or portfolio securities with a value that may not
hold debt instruments in accordance with its exceed 33 1/3% of the value of its assets.
investment objective and policies, may lend
Fund securities in accordance with its
investment objective and policies, and may
enter into repurchase agreements.
Derivative instruments AmSouth Florida Tax-Exempt Fund may invest in Pioneer Florida Tax Free Income Fund may use
futures contracts and options thereon futures and options on securities, indices and
(interest rate futures contracts or index other derivatives. A derivative is a security
futures contracts, as applicable) to commit or instrument whose value is determined by
funds awaiting investment, to maintain cash reference to the value or the change in value
liquidity or for other hedging purposes. The of one or more securities, indices or other
value of the Fund's contracts may equal or financial instruments. Although there is no
exceed 100% of the Fund's total assets, specific limitation on investing in
although the Fund will not purchase or sell a derivatives, the Fund does not use derivatives
futures contract unless immediately afterwards as a primary investment technique and
the aggregate amount of margin deposits on its generally limits their use to hedging.
existing futures positions plus the amount of However, the Fund may use derivatives for a
premiums paid for related futures options variety of non-principal purposes, including:
entered into for other than bona fide hedging
purposes is 5% or less of its net assets. o As a hedge against adverse changes in
interest 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 the Fund's
exposure to interest 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. The Fund
will only invest in derivatives to the
extent Pioneer believes these investments do
not prevent the Fund from seeking its
investment objective.
5
AmSouth Florida Tax-Exempt Fund Pioneer Florida Tax Free Income Fund
- ----------------------------------------------------------------------------------------------------------------------------
Short-term trading The Fund may engage in the technique of The Fund usually does not trade for short-term
short-term trading. Such trading involves the profits. The Fund will sell an investment,
selling of securities held for a short time, however, even if it has only been held for a
ranging from several months to less than a short time, if it no longer meets the Fund's
day. The object of such short-term trading is investment criteria.
to increase the potential for capital
appreciation and/or income of the Fund in
order to take advantage of what AAMI believes
are changes in market, industry or individual
company conditions or outlook. Any such
trading would increase the turnover rate of a
Fund and its transaction costs.
Other investment policies As described above, the Funds have substantially similar principal investment strategies and
and restrictions policies. Certain of the non-principal investment policies and restrictions are different. For
a more complete discussion of each Fund's other investment policies and fundamental and
non-fundamental investment restrictions, see the SAI.
Buying, Selling and Exchanging Shares
Class A sales charges and Class A shares are offered with an initial Class A shares are offered with an initial
Rule 12b-1 fees sales charge of up to 4.00% of the sales charge up to 4.50% of the offering
offering price, which is reduced depending price, which is reduced or waived for
upon the amount invested or, in certain large purchases and certain types of
circumstances, waived. Class A shares investors. At the time of your purchase,
bought as part of an investment of $1 your investment firm may receive a
million or more are not subject to an commission from Pioneer Funds Distributor,
initial sales charge, but may be charged a Inc. ("PFD"), the Fund's distributor, of
contingent deferred sales charge ("CDSC") up to 5% declining as the size of your
of 1.00% if sold within one year of investment increases.
purchase.
There is no CDSC, except in certain
Class A shares pay a shareholder servicing circumstances when the initial sales
fee (non 12b-1) of up to 0.25% of average charge is waived.
daily net assets.
Class A shares are subject to distribution
and service (12b-1) fees of up to 0.25% of
average daily net assets.
Class B sales charges Class B shares are offered without an initial Class B shares are offered without an initial
and Rule 12b-1 fees sales charge, but are subject to a CDSC of up sales charge, but are subject to a CDSC of up
to 5%. For Class B shares purchased prior to to 4% if you sell your shares. The charge is
the combination of AmSouth Funds with ISG reduced over time and is not charged after
Funds, the CDSC on such Class B shares held five years. Your investment firm may receive
continuously declines over six years, a commission from PFD, the Fund's
starting with year one and ending in year distributor, at the time of your purchase of
seven from: 4%, 3%, 3%, 2%, 2%, 1%. For all up to 4%.
other Class B shares held continuously, the
CDSC declines over six years, starting with Class B shares are subject to distribution
year one and ending in year seven from: 5%, and service (12b-1) fees of up to 1% of
4%, 3%, 3%, 2%, 1%. Eight years after average daily net assets.
purchase (seven years in the case of Shares
acquired in the ISG combination), Class B Class B shares acquired through the
shares automatically convert to Class A Reorganization will be subject to the CDSC
shares. and commission schedules applicable to the
original purchase.
Class B shares pay a shareholder servicing
fee (non 12b-1) of 0.25% of average daily net Maximum purchase of Class B shares in a
single transaction is $49,999.
6
AmSouth Florida Tax-Exempt Fund Pioneer Florida Tax Free Income Fund
- ----------------------------------------------------------------------------------------------------------------------------
assets and a distribution (12b-1) fee of single transaction is $49,999.
0.75% of average daily net assets.
Maximum investment for all Class B purchases
by a shareholder for the Fund's shares is
$99,999.
Class I and Class Y sales AmSouth Florida Tax-Exempt Fund does not The Fund does not impose any initial,
charges and Rule 12b-1 fees impose any initial or CDSC on Class I shares. contingent deferred or asset based sales
charge on Class Y shares.
The Fund may impose a shareholder servicing
fee (non 12b-1) of up to 0.15% of average The distributor incurs the expenses of
daily net assets. distributing the Fund's Class Y shares, none
of which are reimbursed by the Fund or the
Class Y shareowners.
Management and other fees AmSouth Florida Tax-Exempt Fund pays an Pioneer Florida Tax Free Income Fund will pay
advisory fee on a monthly basis at an annual Pioneer an advisory fee as follows: 0.50% of
rate of 0.50% of the Fund's average daily net the Fund's average daily net assets on the
assets. first $250 million, 0.45% on assets greater
than $250 million to $750 million, and 0.40%
ASO Services Company, Inc. ("ASO") serves as on assets greater than $750 million. The fee
administrator and fund accounting agent for is computed daily and paid monthly.
the Fund. The Fund pays ASO an administrative
services fee of 0.15% of the Fund's average In addition, the Fund reimburses Pioneer for
daily net assets. certain fund accounting and legal expenses
incurred on behalf of the Fund and pays a
Other expenses are being limited to 0.33% for separate shareholder servicing/transfer
Class A shares, 0.33% for Class B shares and agency fee to PIMSS, an affiliate of Pioneer.
0.18% for Class I shares. Any fee waiver or
expense reimbursement arrangement is The Fund's annual fund operating expenses for
voluntary and may be discontinued at any Class A shares, after giving effect to the
time. expense limitation, are estimated to be
0.82%, and without giving effect to the
For the fiscal year ended July 31, 2004, the expense limitation, are estimated to be 0.98%
Fund's annual operating expenses for Class A of average daily net assets for the current
shares, after giving effect to the expense fiscal year.
limitation were 0.83% and without giving
effect to the expense limitation, were 1.03% The Fund's annual fund operating expenses for
of average daily net assets. Class B shares, after giving effect to the
expense limitation, are estimated to be
For the fiscal year ended July 31, 2004, the 1.72%, and without giving effect to the
Fund's annual operating expenses for Class B expense limitation, are estimated to be 1.76%
shares, after giving effect to the expense of average daily net assets for the current
limitation were 1.58%, and without giving fiscal year.
effect to the expense limitation, were 1.78%
of average daily net assets. The Fund's annual fund operating expenses for
Class Y shares are estimated to be 0.70% of
For the fiscal year ended July 31, 2004, the average daily net assets for the current
Fund's annual operating expenses for Class I fiscal year.
shares, after giving effect to the expense
limitation were 0.68%, and without giving
effect to the expense limitation, were 0.93%
of average daily net assets.
Buying shares You may buy shares of the Fund directly You may buy shares from any investment firm
through BISYS Fund Services, the Fund's that has a sales agreement with PFD, the
distributor, or through brokers, registered Pioneer Fund's distributor.
investment advisers, banks and other
financial institutions that have entered into If the account is established in the
selling
7
AmSouth Florida Tax-Exempt Fund Pioneer Florida Tax Free Income Fund
- ---------------------------------------------------------------------------------------------------------------------------------
agreements with the Fund's distributor, as shareholder's own name, shareholders may also
described in the Fund's prospectus. purchase additional shares of the Fund by
telephone or online
Certain account transactions may be done by
telephone.
Exchanging shares You can exchange your shares in the Fund for You may exchange your shares for shares of
shares of the same class of another AmSouth the same class of another Pioneer mutual fund.
Fund, usually without paying additional sales Your exchange request must be for at least
charges. You must meet the minimum $1,000. The Fund allows you to exchange
investment requirements for the Fund into your shares at net asset value without charging
which you are exchanging. Exchanges from you either an initial or contingent deferred
one Fund to another are taxable. Class A shares shares charge at the time of the exchange.
may be exchanged for Class I shares of the Shares you acquire as part of an exchange will
same Fund or another AmSouth Fund if you continue to be subject to any contingent
become eligible to purchase Class I shares. deferred sales charge that applies to the shares
Class I shares may be exchanged for Class A you originally purchased. When you
shares of the same Fund. No transaction fees ultimately sell your shares, the date of your
are currently charged for exchanges. original purchase will determine your
contingent deferred sales charge. An exchange
If you sell your shares or exchange them for generally is treated as a sale and a new
shares of another AmSouth Fund within 7 days purchase of shares for federal income tax
of the date of purchase, you will be charged a purposes.
2.00% fee on the current net asset value of the
shares sold or exchanged. The fee is paid to the After you establish an eligible Fund account,
Fund to offset the costs associated with short- you can exchange Fund shares by telephone or
term trading, such as portfolio transaction and online.
administrative costs.
The Fund uses a "first-in, first-out" method to
determine how long you have held your shares.
This means that if you purchased shares on
different days, the shares purchased first will
be considered redeemed first for purposes of
determining whether the redemption fee will be
charged.
The fee will be charged on all covered
redemptions and exchanges, including those
made through retirement plan, brokerage and
other types of omnibus accounts (except where
it is not practical for the plan administrator or
brokerage firm to implement the fee). The Fund
will not impose the redemption fee on a
redemption or exchange of shares purchased
upon the reinvestment of dividend and capital
gain distributions.
Selling shares Shares of each Fund are sold at the net asset value per share next calculated after the Fund
receives your request in good order.
You may sell your shares by contacting the Normally, your investment firm will send
Fund directly in writing or by telephone or by your request to sell shares to PIMSS. You
contacting a financial intermediary as described can also sell your shares by contacting the Fund
in the Fund's prospectus. directly if your account is registered in your
name.
If the account is established in the
8
AmSouth Florida Tax-Exempt Fund Pioneer Florida Tax Free Income Fund
- ------------------------------------------------------------------------------------------------------------------------------
shareholder's own name, shareholders may
also redeem shares of the Fund by telephone
or online.
Comparison of Principal Risks of Investing in the Funds
Because each Fund has a similar investment objective, primary investment
policies and strategies, the Funds are subject to the same principal risks. Even
though the Funds seek current income exempt from federal and Florida intangible
personal property tax, you could lose money on your investment or not make as
much as if you invested elsewhere if:
o Interest rates go up, causing the value of the Fund's investments to
decline
o The issuer of a security owned by the Fund defaults on its
obligation to pay principal and/or interest or has its credit rating
downgraded
o New federal or state legislation adversely affects the tax-exempt
status of securities held by the Fund or the financial ability of
municipalities to repay these obligations
o The issuer of a security owned by the Fund may not be able to make
timely payments because of a general economic downturn or increased
governmental costs
o Because the Fund concentrates its investments in a single state,
there may be more fluctuation in the value of its securities than is
the case for mutual funds whose portfolios are more geographically
diverse. Because the Fund invests primarily in securities issued by
Florida and its municipalities, it is more vulnerable to unfavorable
developments in Florida than are funds that invest in municipal
securities of many states. Unfavorable developments in any economic
sector may adversely affect the overall Florida municipal market
o The adviser is incorrect in its expectation of changes in interest
rates or the credit quality of an issuer
Although distributions of interest income from the Fund's tax-exempt securities
are generally exempt from regular federal income tax and Florida intangible
personal property tax, distributions from other sources, including capital gain
distributions and any gains on the sale of your shares, are not. You should
consult a tax adviser about state and local taxes on your Fund distributions.
At times, more than 25% of the Fund's assets may be invested in the same market
segment, such as financials. To the extent the Fund emphasizes investments in a
market segment, the Fund will be subject to a greater degree to the risks
particular to the industries in that segment, and may experience greater market
fluctuation, than a fund without the same focus. For example, industries in the
financial segment, such as banks, insurance companies, broker-dealers and REITs,
may be sensitive to changes in interest rates and general economic activity and
are subject to extensive government regulation.
The Fund generally invests in a limited number of securities and, as a result,
the Fund's performance may be more volatile than the performance of funds
holding more securities.
Past Performance
Set forth below is performance information for AmSouth Florida Tax-Exempt
Fund. The bar charts show how AmSouth Florida Tax-Exempt Fund's total return
(not including any deduction for sales charges) has varied from year to year for
each full calendar year. The tables show average annual total return for AmSouth
Florida Tax-Exempt Fund over time for each class of shares compared with a
broad-based securities market index. The bar charts give an indication of the
risks of investing in AmSouth Florida Tax-Exempt Fund, including the fact that
you could incur a loss and experience volatility of returns year to year. Past
performance does not indicate future results. Pioneer Florida Tax Free Income
Fund has not commenced investment operations.
9
AmSouth Florida Tax-Exempt Fund -- Class A Shares
Calendar Year Total Returns*
[BAR CHART]
1995 11.04
1996 3.6
1997 6.54
1998 5.44
1999 -1.33
2000 8.36
2001 4.47
2002 8.43
2003 3.04
2004 1.38
* During the period shown in the bar chart, your AmSouth Fund's highest
quarterly return was 4.40% for the quarter ended March 31, 1995, and the
lowest quarterly return was -2.12% for the quarter ended June 30, 2004.
AmSouth Florida Tax-Exempt Fund
Average Annual Total Returns (for the periods ending December 31, 2004)
1 Year 5 Years 10 Years
- -------------------------------------------------------------------------------------------
AmSouth Florida Tax-Exempt Fund, Class A Shares(1)
- -------------------------------------------------------------------------------------------
Return Before Taxes -2.64% 4.25% 4.61%
- -------------------------------------------------------------------------------------------
Return After Taxes on Distributions -2.80% 4.21% 4.55%
- -------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares -0.64% 4.14% 4.50%
- -------------------------------------------------------------------------------------------
AmSouth Florida Tax-Exempt Fund, Class B Shares(2)
- -------------------------------------------------------------------------------------------
Return Before Taxes -4.25% 3.98% 4.14%
- -------------------------------------------------------------------------------------------
AmSouth Florida Tax-Exempt Fund, Class I Shares'(3)
- -------------------------------------------------------------------------------------------
Return Before Taxes 1.52% 5.27% 5.15%
- -------------------------------------------------------------------------------------------
Return After Taxes on Distributions 1.35% 5.23% 5.09%
- -------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares 2.16% 5.05% 5.00%
- -------------------------------------------------------------------------------------------
Merrill Lynch 1-12 Year Municipal Bond Index(4) 3.43% 6.66% 6.48%
(reflects no deduction for fees, expenses or taxes)
- -------------------------------------------------------------------------------------------
(1) Class A shares were first offered on 9/30/94.
(2) Performance for the Class B shares, which were first offered on 3/16/99, is
based on the historical performance of the Fund's Class A shares (without
sales charge) prior to that date. The historical performance of the Class B
shares has been restated to reflect the Fund's Class B shares distribution
(12b-1) fees and the contingent deferred sales charge.
(3) Performance for the Class I shares, which were first offered on 9/2/97, is
based on the historical performance of the Fund's Class A shares (without
sales charge) prior to that date.
(4) Merrill Lynch 1-12 Year Municipal Bond Index, an unmanaged index generally
representative of municipal bonds with intermediate maturities of no less
than one year and no more than twelve years. The Index is for reference
only, does not mirror the Fund's investments, and reflects no deduction for
fees, expenses or taxes.
The table above shows the impact of taxes on the AmSouth Florida Tax-Exempt
Fund's returns. The Fund's after-tax returns are calculated using the
highest individual federal marginal income tax rates and do not reflect the
impact of state and local taxes. In certain cases, the figure representing
"Return After Taxes on Distributions and Sale of Fund Shares" may be higher
than the other return figures for the same period. A higher after-tax return
results when a capital loss occurs upon redemption and translates into an
assumed tax deduction that benefits the shareholder. Please note that actual
after-tax returns depend on an investor's tax situation and may differ from
those shown. Also note that after-tax returns shown
10
are not relevant to investors who hold their Fund shares through
tax-deferred arrangements, such as 401(k) plans or individual retirement
accounts.
The most recent portfolio manager's discussion of AmSouth Florida
Tax-Exempt Fund's performance is attached as Exhibit C.
The Funds' Fees and Expenses
Shareholders of both Funds pay various fees and expenses, either directly
or indirectly. The table below shows the fees and expenses that you would pay if
you were to buy and hold shares of each Fund. The expenses in the table
appearing below are based on (i) for the AmSouth Florida Tax-Exempt Fund, the
expenses of AmSouth Florida Tax-Exempt Fund for the period ended January 31,
2005 and (ii) for the Pioneer Florida Tax Free Income Fund, the estimated pro
forma annual expenses for the period ended May 31, 2005.
Shareholder AmSouth Florida Pro Forma AmSouth Florida Pro Forma AmSouth Florida Pro Forma
transaction fees Tax-Exempt Pioneer Florida Tax-Exempt Pioneer Florida Tax-Exempt Fund Pioneer Florida
(paid directly Fund(1) Tax Free Income Fund Tax Free Income Fund Tax Free Income
from your Fund Fund Fund
investment)
Class A Class A Class B Class B Class I Class Y
- --------------------------------------------------------------------------------------------------------------------------------
Maximum sales charge 4.00%(2) 5.75%(2) None(2) None None None
(load) when you buy
shares as a
percentage of
offering price
- --------------------------------------------------------------------------------------------------------------------------------
Maximum deferred None None 5.00%(3) 4.00% None None
sales charge (load)
as a percentage of
purchase price or
the amount you
receive when you
sell shares,
whichever is less
- --------------------------------------------------------------------------------------------------------------------------------
Redemption fees 2.00%(4) None 2.00%(4) None 2.00%(4) None
- --------------------------------------------------------------------------------------------------------------------------------
Annual fund
operating expenses
(deducted from fund
assets) (as a % of
average net assets)
- --------------------------------------------------------------------------------------------------------------------------------
Management fee 0.50% 0.50% 0.50% 0.50% 0.50% 0.50%
- --------------------------------------------------------------------------------------------------------------------------------
Distribution and None 0.25% 0.75% 1.00% None None
service (12b-1) fee
- --------------------------------------------------------------------------------------------------------------------------------
Other expenses 0.74%(5) 0.23% 0.97%(5) 0.26% 0.56%(5) 0.20%
- --------------------------------------------------------------------------------------------------------------------------------
Total fund operating 1.24% 0.98% 2.22% 1.76% 1.06% 0.70%
expenses
- --------------------------------------------------------------------------------------------------------------------------------
Expense 0.41% 0.16% 0.64% 0.04% 0.38% N/A
reimbursement/
reduction
- --------------------------------------------------------------------------------------------------------------------------------
11
Shareholder AmSouth Florida Pro Forma AmSouth Florida Pro Forma AmSouth Florida Pro Forma
transaction fees Tax-Exempt Pioneer Florida Tax-Exempt Pioneer Florida Tax-Exempt Fund Pioneer Florida
(paid directly Fund(1) Tax Free Income Fund Tax Free Income Fund Tax Free Income
from your Fund Fund Fund
investment)
Class A Class A Class B Class B Class I Class Y
- --------------------------------------------------------------------------------------------------------------------------------
Net fund operating 0.83% 0.82% 1.58% 1.72% 0.68% 0.70%
expenses
- --------------------------------------------------------------------------------------------------------------------------------
(1) AmSouth Bank or other financial institutions may charge their customer
account fees for automatic investment and other cash management services
provided in connection with investment in the Fund.
(2) Sales charges may be reduced depending upon the amount invested or, in
certain circumstances, waived. Class A shares of the Pioneer Fund bought as
part of an investment of $1 million or more are not subject to an initial
sales charge, but may be charged a CDSC of 1.00% if sold within one year of
purchase.
(3) For Class B shares purchased prior to the combination of AmSouth Funds with
ISG Funds, the CDSC on such Class B shares held continuously declines over
six years, starting with year one and ending in year seven from: 4%, 3%, 3%,
2%, 2%, 1%. For all other Class B shares held continuously, the CDSC
declines over six years, starting with year one and ending in year seven
from: 5%, 4%, 3%, 3%, 2%, 1%. Eight years after purchase (seven years in the
case of shares acquired in the ISG combination), Class B shares
automatically convert to Class A shares.
(4) To discourage short-term trading, a redemption fee of 2.00% will be charged
on sales or exchanges of Class A, Class B and Class I shares of your AmSouth
Fund made within 7 days of the date of purchase. A wire transfer fee of
$7.00 will be deducted from the amount of your redemption if you request a
wire transfer.
(5) Other expenses for the AmSouth Fund are being limited to 0.33% for Class A
shares, 0.33% for Class B shares and 0.18% for Class I shares. Any fee
waiver or expense reimbursement arrangement is voluntary and may be
discontinued at any time.
(6) The Pioneer Fund's total annual operating expenses have not been reduced by
any expense offset arrangements.
The hypothetical example below helps you compare the cost of investing in
each Fund. It assumes that: (a) you invest $10,000 in each Fund for the time
periods shown, (b) you reinvest all dividends and distributions, (c) your
investment has a 5% return each year, and (d) each Fund's gross operating
expenses remain the same. The examples are for comparison purposes only and are
not a representation of either Fund's actual expenses or returns, either past or
future.
Pro Forma
Number of years you own AmSouth Florida Tax-Exempt Pioneer Florida Tax Free
your shares Fund Income Fund
- ---------------------------------------------------------------------------------
Class A
- ---------------------------------------------------------------------------------
Year 1 $ 521 $ 654
- ---------------------------------------------------------------------------------
Year 3 $ 778 $ 822
- ---------------------------------------------------------------------------------
Year 5 $ 1054 $ 1,039
- ---------------------------------------------------------------------------------
Year 10 $ 1,840 $ 1,664
- ---------------------------------------------------------------------------------
Class B --- assuming redemption at end of period
- ---------------------------------------------------------------------------------
Year 1 $ 725 $ 575
- ---------------------------------------------------------------------------------
Year 3 $ 994 $ 850
- ---------------------------------------------------------------------------------
Year 5 $ 1,390 $ 1,050
- ---------------------------------------------------------------------------------
Year 10 $ 2,307 $ 1,864
- ---------------------------------------------------------------------------------
Class B --- assuming no redemption
- ---------------------------------------------------------------------------------
Year 1 $ 225 $ 175
- ---------------------------------------------------------------------------------
Year 3 $ 694 $ 550
- ---------------------------------------------------------------------------------
Year 5 $ 1,190 $ 950
- ---------------------------------------------------------------------------------
Year 10 $ 2,307 $ 1,864
- ---------------------------------------------------------------------------------
Class I Class Y
- ---------------------------------------------------------------------------------
Year 1 $ 108 $ 72
- ---------------------------------------------------------------------------------
Year 3 $ 337 $ 224
- ---------------------------------------------------------------------------------
Year 5 $ 585 $ 390
- ---------------------------------------------------------------------------------
12
Year 10 $ 1,294 $ 871
- ---------------------------------------------------------------------------------
Reasons for the Proposed Reorganization
The Trustees believe that the proposed Reorganization is in the best
interests of AmSouth Florida Tax-Exempt Fund. The Trustees considered the
following matters, among others, in approving the proposal.
First, AAMI, the investment adviser to your Amsouth Fund, informed the
Trustees that it does not intend to continue to provide investment advisory
services to the AmSouth Funds. Consequently, a change in your AmSouth Fund's
investment adviser was necessary. . In the absence of the Reorganization, such a
change would be more likely to motivate shareholders invested in reliance on
AAMI's role to withdraw from the Fund, thereby reducing fund size and increasing
fund expense ratios.
Second, the resources of Pioneer. At December 31, 2004, Pioneer managed
over 80 investment companies and accounts with approximately $42 billion in
assets, including $2 billion in municipal securities. Pioneer is part of the
global asset management group of UniCredito Italiano S.p.A., one of the largest
banking groups in Italy, providing investment management and financial services
to mutual funds, institutional and other clients. As of December 31, 2004,
assets under management of UniCredito Italiano S.p.A. were approximately $175
billion worldwide. Shareholders of your AmSouth Fund would become part of a
significantly larger family of funds that offers a more diverse array of
investment options and enhanced shareholder account options. The Pioneer family
of mutual funds offers over 80 funds, including domestic and international
equity and fixed income funds and a money market fund that will be available to
your AmSouth Fund's shareholders through exchanges.
Third, Pioneer Florida Tax Free Income Fund's management fee (0.50% of
average daily net assets on the first $250 million, 0.45% on assets greater than
$250 million to $750 million, and 0.40% on assets greater than $750 million)
will be the same as or lower than the advisory fee of your Fund (0.50% of
average daily net assets). The estimated pro forma expenses on a total basis of
the Pioneer Fund after giving effect to the Reorganizations are expected to
decline for all classes of shares. The estimated pro forma expenses on a net
basis are also expected to decline for Class A shares. Although the estimated
pro forma operating expenses for the AmSouth Fund's Class B and I shares are
lower on a gross basis, the expenses are higher on a net basis. AmSouth Bank and
its affiliates have informed the trustees that they will discontinue their
expense limitations in the future. The trustees considered the positive factors
associated with the reorganization to outweigh the negative factors, such as the
increase in expenses. The aggregate Rule 12b-1 distribution and shareholder
servicing fees and non-Rule 12b-1 shareholder servicing fees paid by the Class A
and Class B shares of both Funds will be the same. Moreover, your AmSouth Fund's
Class I shares pay a non 12b-1 shareholder servicing fee that will not be paid
by the Pioneer Fund's Class Y shares. In addition, the broader distribution
arrangements of the Pioneer Fund offer greater potential for further asset
growth and reduce per share expenses.
Fourth, the Class A, B and Y shares of Pioneer Florida Tax Free Income
Fund received in the Reorganization will provide AmSouth Florida Tax-Exempt Fund
shareholders with exposure to substantially the same investment product as they
currently have.
Fifth, the transaction is structured to qualify as a tax-free
reorganization under Section 368(a) of the Internal Revenue Code of 1986 and
therefore will not be treated as a taxable sale of your AmSouth shares.
Pioneer and AmSouth Bank will pay all costs of preparing and printing the
Funds' proxy statements and solicitation costs incurred by the Funds in
connection with the Reorganization. AAMI will otherwise be responsible for all
costs and expenses of AmSouth Florida Tax-Exempt Fund in connection with the
Reorganization.
The Trustees also considered that Pioneer and AmSouth Bank will benefit
from the Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the
Reorganizations."
The Board of Trustees of the Pioneer Fund also considered that the
Reorganization presents an excellent opportunity for the Pioneer Fund to acquire
investment assets without the obligation to pay commissions or other transaction
costs that a fund normally incurs when purchasing securities. This opportunity
provides an economic benefit to the Pioneer Fund and its shareholders.
13
CAPITALIZATION
The following table sets forth the capitalization of each Fund as of May
31, 2005, and the pro forma combined Fund as of May 31, 2005. The table also
sets forth the pro forma capitalization of the combined Fund as of May 31, 2005,
assuming the shareholders of AmSouth Florida Tax-Exempt Fund approve the
reorganization of their Fund into Pioneer Florida Tax Free Income Fund.
Pro Forma
AmSouth Florida Tax- Pioneer Florida Tax Free Pioneer Florida Tax Free
Exempt Fund Income Fund Income Fund
May 31, 2005 May 31, 2005 May 31, 2005
-------------------- ------------------------ ------------------------
Total Net Assets (in thousands) $ 52,512 N/A $ 52,512
Class A shares ............. $ 4,230 N/A $ 4,230
Class B shares ............. $ 2,473 N/A $ 2,473
Class I/Y shares ........... $ 45,809 N/A $ 45,809
Net Asset Value Per Share
Class A shares ............. $ 10.59 N/A $ 10.59
Class B shares ............. $ 10.56 N/A $ 10.56
Class I/Y shares ........... $ 10.60 N/A $ 10.60
Shares Outstanding
Class A shares ............. 399,350 N/A 399,350
Class B shares ............. 234,108 N/A 234,108
Class I/Y shares ........... 4,321,999 N/A 4,321,999
It is impossible to predict how many shares of the Pioneer Fund will
actually be received and distributed by your AmSouth Fund on the Reorganization
date. The table should not be relied upon to determine the amount of the Pioneer
Fund's shares that will actually be received and distributed.
BOARD'S EVALUATION AND RECOMMENDATION
For the reasons described above, the Trustees, including the Independent
Trustees, approved the Reorganization. In particular, the Trustees determined
that the Reorganization is in the best interests of your AmSouth Fund.
Similarly, the Board of Trustees of the Pioneer Fund, including its Independent
Trustees, approved the Reorganization. They also determined that the
Reorganization is in the best interests of the Pioneer Fund.
The Trustees recommend that the shareholders of your AmSouth Fund vote FOR
the proposal to approve the Agreement and Plan of Reorganization.
14
AmSouth High Quality Municipal Bond Fund and
Pioneer Tax Free Income Fund
PROPOSAL 1(p)
Approval of Agreement and Plan of Reorganization
SUMMARY
The following is a summary of more complete information appearing later in
this Proxy Statement/Prospectus or incorporated herein. You should read
carefully the entire Proxy Statement/Prospectus, including the form of Agreement
and Plan of Reorganization attached as EXHIBIT A-1, because it contains details
that are not in the summary.
Each Fund invests in securities that are exempt from regular federal
income tax and, consequently, the Funds have similar investment policies and
risks. In the table below, if a row extends across the entire table, the policy
disclosed applies to both your AmSouth Fund and the Pioneer Fund.
Comparison of AmSouth High Quality Municipal Bond Fund to Pioneer Tax Free
Income Fund
AmSouth High Quality Municipal Bond Fund Pioneer Tax Free Income Fund
- ----------------------------------------------------------------------------------------------------------------------------
Business A diversified series of AmSouth Funds, an A diversified open-end management investment
open-end management investment company company organized as a Delaware statutory
organized as a Massachusetts business trust. trust.
Net assets as of March $333.3 million $340.7 million
31, 2005
Investment advisers Investment Adviser: Investment Adviser:
and portfolio AAMI Pioneer
managers
Portfolio Manager: Portfolio Manager:
Day-to-day management of AmSouth High Quality Day-to-day management of the Fund's portfolio
Municipal Bond Fund's portfolio is the is the responsibility of David Eurkus. Mr.
responsibility of Dorothy E. Thomas, CFA. Ms. Eurkus joined Pioneer as a senior vice
Thomas has more than 20 years of experience as president in January 2000 and has been an
an investment portfolio manager. Ms. Thomas has investment professional since 1969. From 1998
been associated with AmSouth's Trust Investment to 2000, Mr. Eurkus was a senior vice
Group since 1982 and is currently Senior Vice president of fixed income investing for the
President and Trust Investment Officer in Private Client Group at Brown Brothers
charge of tax-free fixed income investments. Harriman. Prior to that he was a senior vice
president at Putnam Investments.
Investment objective AmSouth High Quality Municipal Bond Fund seeks Pioneer Tax Free Income Fund seeks as high a
to produce as high a level of current federal level of current income exempt from federal
tax-exempt income as is consistent with the income taxes as possible consistent with the
preservation of capital. preservation of capital.
Primary investments Normally, AmSouth High Quality Municipal Bond Normally, Pioneer Tax Free Income Fund
Fund will invest at least 80% of its net invests at least 80% of its total assets in
assets in high quality municipal securities investment grade securities that provide
that provide income that is exempt from federal income that is exempt from regular federal
income tax and is not a tax preference item for income tax and may not be subject to the AMT.
purposes of the federal alternative minimum tax These investments include bonds, notes and
("AMT"). For purposes of this policy, net other debt instruments issued by or
1
AmSouth High Quality Municipal Bond Fund Pioneer Tax Free Income Fund
- ----------------------------------------------------------------------------------------------------------------------------
assets include net assets plus borrowings for on behalf of states, counties,
investment purposes. Additionally, the Fund municipalities, territories and possessions
concentrates its investments in municipal of the United States and the District of
securities issued by the State of Alabama and Columbia and their authorities, political
its political subdivisions. The Fund invests in subdivisions, agencies or instrumentalities.
debt securities only if they are high-grade
(rated at the time of purchase in one of the
four highest rating categories by a nationally
recognized statistical rating organization or
determined by AAMI to be of comparable
quality). The Fund will have a dollar-weighted
average maturity of five to ten years.
Investment strategies AAMI's fixed income portfolio management Pioneer considers both broad economic factors
process focuses on the four key areas of and issuer-specific factors in selecting a
duration management, sector weights, position portfolio designed to achieve the Fund's
on the yield curve and security selection; investment objective. In assessing the
AAMI's goal is to add value in each of these appropriate maturity and rating weighting of
four areas through the active management of the the Fund's portfolio, Pioneer considers a
Fund's portfolio. Beginning with rigorous variety of factors that are expected to
fundamental analysis of the economy and taking influence economic activity and interest
into account characteristics of the current rates. These factors include fundamental
business and interest rate cycles, AAMI arrives economic indicators, such as the rates of
at a projection of the likely trend in interest economic growth and inflation, Federal
rates and adjusts duration accordingly. Reserve monetary policy and the relative
Analysis of the shape of the yield curve and value of the U.S. dollar compared to other
yield spreads among bond market sectors leads currencies. Once Pioneer determines the
to further refinements in strategy. preferable portfolio characteristics, Pioneer
selects individual securities based upon the
terms of the securities (such as yields
compared to U.S. Treasuries or comparable
issues), liquidity and rating and issuer
diversification. Pioneer also employs due
diligence and fundamental research, an
evaluation of the issuer based on its
financial statements and operations, to
assess an issuer's credit quality, taking
into account financial condition, future
capital needs and potential for change in
rating. In making these portfolio decisions,
Pioneer relies on the knowledge, experience
and judgment of its staff who have access to
a wide variety of research.
Other investments Under normal market conditions, the Fund may The Fund may invest in securities of any
invest up to 20% of its assets in obligations, maturity. The Fund may invest up to 25% or
the interest on which is either subject to more of its assets in issuers in any one or
federal income tax or treated as a preference more states or securities the payments on
item for purposes of the AMT. which are derived from gas, electric,
telephone, sewer and water segments of the
The Fund may invest 25% or more of its total municipal bond market. The Fund may invest up
assets in bonds, notes and warrants generally to 25% of its assets in industrial
issued by or on behalf of the State of Alabama development bonds.
and its political subdivisions, the interest on
The Fund may invest up to 20% of its net
2
AmSouth High Quality Municipal Bond Fund Pioneer Tax Free Income Fund
- ----------------------------------------------------------------------------------------------------------------------------
which, in the opinion of the issuer's bond assets in securities of other investment
counsel at the time of issuance, is exempt from companies, investment grade commercial paper,
both federal income tax and Alabama personal U.S. government securities, U.S. or foreign
income tax and is not treated as a preference bank instruments and repurchase agreements.
item for purposes of the AMT.
The Fund may invest up to 10% of its net
assets in debt securities rated below
investment grade or, if unrated, of
equivalent quality as determined by Pioneer.
Debt securities rated below investment grade
are commonly referred to as "junk bonds" and
are considered speculative.
The Fund may invest up to 10% of its net
assets in inverse floating rate obligations
(a type of derivative instrument). Inverse
floating rate obligations represent interests
in tax-exempt bonds.
Temporary defensive For temporary defensive purposes, the Fund may For temporary defensive purposes, including
strategies increase its holdings in taxable obligations to during periods of unusual cash flows, the
over 20% of its assets and hold uninvested cash Fund may depart from its principal investment
reserves pending investment. Taxable strategies and invest part or all of its
obligations may include obligations issued or assets in securities with remaining
guaranteed by the U.S. government, its agencies maturities of less than one year, cash
or instrumentalities (some of which may be equivalents, or may hold cash.
subject to repurchase agreements), certificates
of deposit, demand and time deposits, bankers'
acceptances of selected banks, and commercial
paper meeting the Tax-Free Fund's quality
standards for tax-exempt commercial paper.
Diversification Each Fund is diversified and is subject to diversification requirements under the Internal
Revenue Code of 1986, as amended (the "Code").
Industry concentration AmSouth High Quality Municipal Bond Fund may Pioneer Tax Free Income Fund will not
not purchase any securities which would cause concentrate its assets in the securities of
more than 25% of the value of the Fund's total issuers in any one industry except that the
assets at the time of purchase to be invested Fund may invest 25% or more of its assets in
in securities of one or more issuers conducting issuers in any one or more states or
their principal business activities in the same securities the payments on which are derived
industry, provided that (a) there is no from gas, electric, telephone, sewer and
limitation with respect to obligations issued water segments of the municipal bond market.
or guaranteed by the U.S. government or its
agencies or instrumentalities, and repurchase
agreements secured by obligations of the U.S.
government or its agencies or
instrumentalities; (b) wholly owned finance
companies will be considered to be in the
industries of their parents if their activities
are primarily related to financing the
activities of
3
AmSouth High Quality Municipal Bond Fund Pioneer Tax Free Income Fund
- ----------------------------------------------------------------------------------------------------------------------------
their parents; and (c) utilities will be
divided according to their services. For
example, gas, gas transmission, electric and
gas, electric, and telephone will each be
considered a separate industry.
There is no limitation with respect to
municipal securities, which, for purposes of
this limitation only, do not include private
activity bonds that are backed only by the
assets and revenues of a non-governmental user.
Restricted and illiquid AmSouth High Quality Municipal Bond Fund may Pioneer Tax Free Income Fund may not invest
securities not invest more than 15% of its net assets in more than 15% of its net assets in securities
securities that are restricted as to resale, or that are illiquid and other securities that
for which no readily available market exists, are not readily marketable. Repurchase
including repurchase agreements providing for agreements maturing in more than seven days
settlement more than seven days after notice. will be included for purposes of the
foregoing limit.
Borrowing AmSouth High Quality Municipal Bond Fund may Pioneer Tax Free Income Fund may not borrow
not borrow money or issue senior securities, money, except from a bank for temporary or
except that the Fund may borrow from banks or emergency purposes and not for investment
enter into reverse repurchase agreements for purposes, and then only in an amount not
temporary emergency purposes in amounts up to exceeding 5% of the value of the Fund's total
10% of the value of its total assets at the assets at the time of borrowing.
time of such borrowing. The Fund will not
purchase securities while borrowings (including
reverse repurchase agreements) in excess of 5%
of its total assets are outstanding.
Lending AmSouth High Quality Municipal Bond Fund may Pioneer Tax Free Income Fund may not make
not make loans, except that the Fund may loans, except through the purchase of
purchase or hold debt instruments in accordance securities, including repurchase agreements,
with its investment objective and policies, may in accordance with its investment objective,
lend Fund securities in accordance with its policies and limitations.
investment objective and policies, and may
enter into repurchase agreements.
Derivative instruments AmSouth High Quality Municipal Bond Fund may Pioneer Tax Free Income Fund may use futures
invest in futures contracts and options thereon and options on securities, indices and
(interest rate futures contracts or index currencies, forward currency exchange
futures contracts, as applicable) to commit contracts and other derivatives. The Fund
funds awaiting investment, to maintain cash does not use derivatives as a primary
liquidity or for other hedging purposes. The investment technique and generally limits
value of the Fund's contracts may equal or their use to hedging. However, the Fund may
exceed 100% of the Fund's total assets, use derivatives for a variety of
although the Fund will not purchase or sell a non-principal purposes, including:
futures contract unless immediately afterwards
the aggregate amount of margin deposits on its o As a hedge against adverse changes in stock
existing futures positions plus the amount of market prices, interest rates or currency
premiums paid for related futures options exchange rates
4
AmSouth High Quality Municipal Bond Fund Pioneer Tax Free Income Fund
- ----------------------------------------------------------------------------------------------------------------------------
entered into for other than bona fide hedging o As a substitute for purchasing or selling
purposes is 5% or less of its net assets. securities
o To increase the Fund's return as
a non-hedging strategy that may be
considered speculative
Short-term trading The Fund may engage in the technique of The Fund usually does not trade for
short-term trading. Such trading involves the short-term profits. The Fund will sell an
selling of securities held for a short time, investment, however, even if it has only been
ranging from several months to less than a day. held for a short time, if it no longer meets
The object of such short-term trading is to the Fund's investment criteria.
increase the potential for capital appreciation
and/or income of the Fund in order to take
advantage of what AAMI believes are changes in
market, industry or individual company
conditions or outlook. Any such trading would
increase the turnover rate of a Fund and its
transaction costs.
Other investment policies As described above, the Funds have substantially similar principal investment strategies and
and restrictions policies. Certain of the non-principal investment policies and restrictions are different. For
a more complete discussion of each Fund's other investment policies and fundamental and
non-fundamental investment restrictions, see the SAI.
Buying, Selling and Exchanging Shares
Class A sales charges and Class A shares are offered with an initial Class A shares are offered with an initial
Rule 12b-1 fees sales charge of up to 4.00% of the offering sales charge of up to 4.50% of the offering
price, which is reduced depending upon the price, which is reduced or waived for large
amount invested or, in certain circumstances, purchases and certain types of investors. At
waived. Class A shares bought as part of an the time of your purchase, your investment
investment of $1 million or more are not firm may receive a commission from Pioneer
subject to an initial sales charge, but may be Funds Distributor, Inc. ("PFD"), the Fund's
charged a contingent deferred sales charge distributor, of up to 4% declining as the
("CDSC") of 1.00% if sold within one year of size of your investment increases.
purchase.
There is no CDSC, except in certain
Class A shares pay a shareholder servicing fee circumstances when the initial sales charge
(non-12b-1) of up to 0.25% of average daily net is waived.
assets.
Class A shares are subject to distribution
and service (12b-1) fees of up to 0.25% of
average daily net assets.
Class B sales charges and Class B shares are offered without an initial Class B shares are offered without an initial
Rule 12b-1 fees sales charge, but are subject to a CDSC of up sales charge, but are subject to contingent
to 5%. For Class B shares purchased prior to deferred sales charges of up to 4% if you
the combination of AmSouth Funds with ISG sell your shares. The charge is reduced over
Funds, the CDSC on such Class B shares held time and is not charged after five years.
continuously declines over six years, starting Your investment firm may receive a commission
with year one and ending in year seven from: from PFD, the Fund's distributor, at the time
4%, 3%, 3%, 2%, 2%, 1%. For all other Class B of your purchase of up to 4%.
shares held continuously, the CDSC declines
5
AmSouth High Quality Municipal Bond Fund Pioneer Tax Free Income Fund
- ----------------------------------------------------------------------------------------------------------------------------
over six years, starting with year one and Class B shares are subject to distribution
ending in year seven from: 5%, 4%, 3%, 3%, 2%, and service (12b-1) fees of up to 1% of
1%. Eight years after purchase (seven years in average daily net assets.
the case of shares acquired in the ISG
combination), Class B shares automatically Class B shares acquired through the
convert to Class A shares. Reorganization will be subject to the CDSC
and commission schedules applicable to the
Class B shares pay a shareholder servicing fee original purchase.
(non 12b-1) of up to 0.25% of average daily net
assets and a distribution (12b-1) fee of up to Maximum purchase of Class B shares in a
0.75% of average daily net assets. single transaction is $49,999.
Maximum investment for all Class B purchases by
a shareholder for the Fund's shares is $99,999.
Class I and Class Y sales AmSouth High Quality Municipal Bond Fund does The Fund does not impose any initial,
charges and Rule 12b-1 not impose any initial or CDSC on Class I contingent deferred or asset based sales
fees shares. charge on Class Y shares.
The Fund may impose a shareholder servicing fee The distributor incurs the expenses of
(non 12b-1) of up to 0.15% of average daily distributing the Fund's Class Y shares, none
net assets. of which are reimbursed by the Fund or the
Class Y shareowners.
Management and other fees AmSouth High Quality Municipal Bond Fund pays Pioneer Tax Free Income Fund pays Pioneer an
an advisory fee on a monthly basis at an annual annual fee equal to 0.50% of the Fund's
rate of 0.50% of the Fund's average daily net average daily net assets up to $250 million,
assets. 0.48% of the next $50 million and 0.45% on
assets over $300 million.
ASO Services Company, Inc. ("ASO") serves as
administrator and fund accounting agent for the In addition, the Fund reimburses Pioneer for
Fund. The Fund pays ASO an administrative certain Fund accounting and legal expenses
services fee of 0.15% of the Fund's average incurred on behalf of the Fund and pays a
daily net assets. separate shareholder servicing/transfer
agency fee to PIMSS, an affiliate of Pioneer.
Other expenses are being limited to 0.37% for
Class A shares, 0.37% for Class B shares and For the fiscal year ended December 31, 2004,
0.22% for Class I shares. Any fee waiver or the Fund's total annual operating for Class A
expense reimbursement arrangement is voluntary shares were 0.91% of average daily net
and may be discontinued at any time. assets.
For the fiscal year ended July 31, 2004, the For the fiscal year ended December 31, 2004,
Fund's annual operating expenses for Class A the Fund's total annual operating expenses
shares, after giving effect to the expense for Class B shares were 1.67% of average
limitation were 0.87% and without giving effect daily net assets.
to the expense limitation, were 0.99% of
average daily net assets. For the fiscal year ended December 31, 2004,
the Fund's total annual operating expenses
For the fiscal year ended July 31, 2004, the for Class Y shares were 0.55% of average
Fund's annual operating expenses for Class B daily net assets.
shares, after giving effect to the expense
limitation were 1.62%, and without giving
6
AmSouth High Quality Municipal Bond Fund Pioneer Tax Free Income Fund
- ----------------------------------------------------------------------------------------------------------------------------
effect to the expense limitation, were 1.74% of
average daily net assets.
For the fiscal year ended July 31, 2004, the
Fund's annual operating expenses for Class I
shares, after giving effect to the expense
limitation were 0.72%, and without giving
effect to the expense limitation, were 0.89% of
average daily net assets.
Buying shares You may buy shares of the Fund directly through You may buy shares from any investment firm
BISYS Fund Services, the Fund's distributor, or that has a sales agreement with PFD, Pioneer
through brokers, registered investment advisers, Fund's distributor.
banks and other financial institutions that
institutions that have entered into selling If the account is established in the
agreements with the Fund's distributor, as shareholder's own name, shareholders may also
described in the Fund's prospectus. purchase additional shares of Pioneer Fund by
telephone or online.
Certain account transactions may be done by
telephone.
Exchanging shares You can exchange your shares in the Fund for You may exchange your shares for shares of
shares of the same class of another AmSouth the same class of another Pioneer mutual
Fund, usually without paying additional sales fund. Your exchange request must be for at
charges. You must meet the minimum investment least $1,000. The Fund allows you to exchange
requirements for the Fund into which you are your shares at net asset value without
exchanging. Exchanges from one Fund to another charging you either an initial or contingent
are taxable. Class A shares may be exchanged deferred shares charge at the time of the
for Class I shares of the same Fund or another exchange. Shares you acquire as part of an
AmSouth Fund if you become eligible to purchase exchange will continue to be subject to any
Class I shares. Class I shares may be exchanged contingent deferred sales charge that applies
for Class A shares of the same Fund. No to the shares you originally purchased. When
transaction fees are currently charged for you ultimately sell your shares, the date of
exchanges. your original purchase will determine your
contingent deferred sales charge. An exchange
If you sell your shares or exchange them for generally is treated as a sale and a new
shares of another AmSouth Fund within 7 days of purchase of shares for federal income tax
the date of purchase, you will be charged a purposes.
2.00% fee on the current net asset value of the
shares sold or exchanged. The fee is paid to After you establish an eligible fund account,
the Fund to offset the costs associated with you can exchange Fund shares by telephone or
short-term trading, such as portfolio online.
transaction and administrative costs.
The Fund uses a "first-in, first-out" method to
determine how long you have held your shares.
This means that if you purchased shares on
different days, the shares purchased first will
be considered redeemed first for purposes of
determining whether the redemption fee will be
charged.
The fee will be charged on all covered
7
AmSouth High Quality Municipal Bond Fund Pioneer Tax Free Income Fund
- ----------------------------------------------------------------------------------------------------------------------------
redemptions and exchanges, including those made
through retirement plan, brokerage and other
types of omnibus accounts (except where it is
not practical for the plan administrator or
brokerage firm to implement the fee). The Fund
will not impose the redemption fee on a
redemption or exchange of shares purchased upon
the reinvestment of dividend and capital gain
distributions.
Selling shares Shares of each Fund are sold at the net asset value per share next calculated after the Fund
receives your request in good order.
You may sell your shares by contacting the Fund Normally, your investment firm will send your
directly in writing or by telephone or by request to sell shares to PIMSS. You can also
contacting a financial intermediary as sell your shares by contacting the Fund
described in the Fund's prospectus. directly if your account is registered in
your name.
If the account is established in the
shareholder's own name, shareholders may also
redeem shares of the Pioneer Fund by
telephone or online.
Comparison of Principal Risks of Investing in the Funds
Because each Fund has a similar investment objective, primary investment
policies and strategies, the Funds are subject to the same principal risks. You
could lose money on your investment in either Fund or not make as much as if you
invested elsewhere if:
o Interest rates go up, causing the value of the Fund's investments to
decline
o The issuer of a security owned by the Fund defaults on its
obligation to pay principal and/or interest or has its credit rating
downgraded
o New federal or state legislation adversely affects the tax-exempt
status of securities held by the Fund or the financial ability of
municipalities to repay these obligations
o To the extent the Fund concentrates its investments in a single
state or securities the payments on which are dependent upon a
single industry, the Fund will be more susceptible to risks
associated with that state or industry
o The adviser is incorrect in its expectation of changes in interest
rates or the credit quality of an issuer
In addition, at times, more than 25% of Pioneer Tax Free Income Fund's
assets may be invested in the same market segment, such as financials or
technology. To the extent the Fund emphasizes investments in a market segment,
the Fund will be subject to a greater degree to the risks particular to the
industries in that segment, and may experience greater market fluctuation, than
a fund without the same focus.
Pioneer Tax Free Income Fund may also invest up to 10% of its net assets
in debt securities rated below investment grade or, if unrated, of equivalent
quality as determined by Pioneer. Debt securities rated below investment grade
are
8
commonly referred to as "junk bonds" and are considered speculative. Below
investment grade debt securities involve greater risk of loss, are subject to
greater price volatility and are less liquid, especially during periods of
economic uncertainty or change, than higher quality debt securities.
AmSouth High Quality Municipal Bond Fund may invest 25% or more of its
total assets in bonds, notes and warrants generally issued by or on behalf of
the State of Alabama and its political subdivisions, the interest on which, in
the opinion of the issuer's bond counsel at the time of issuance, is exempt from
both federal income tax and Alabama personal income tax and is not treated as a
preference item for purposes of the federal alternative minimum tax. By
concentrating its investments in securities issued by Alabama and its
municipalities, the Fund will be more vulnerable to unfavorable developments in
Alabama than funds that are more geographically diversified. Additionally,
because of the relatively small number of issuers of Alabama municipal
securities, the Fund is likely to invest in a limited number of issuers.
Past Performance
Set forth below is performance information for each Fund. The bar charts
show how each Fund's total return (not including any deduction for sales
charges) has varied from year to year for each full calendar year. The tables
show average annual total return (before and after taxes) for each Fund over
time for each class of shares (including deductions for sales charges) compared
with a broad-based securities market index. The bar charts give an indication of
the risks of investing in each Fund, including the fact that you could incur a
loss and experience volatility of returns year to year. Past performance before
and after taxes does not indicate future results.
AmSouth High Quality Municipal Bond Fund -- Class A Shares
Calendar Year Total Returns*
[BAR CHART]
1995 10.36
1996 3.48
1997 6.18
1998 5.42
1999 -1.67
2000 8.82
2001 4.5
2002 8.63
2003 3.11
2004 1.54
* During the period shown in the bar chart, your AmSouth Fund's highest
quarterly return was 3.79% for the quarter ended September 30, 2002, and
the lowest quarterly return was -2.21% for the quarter ended June 30,
1999.
9
Pioneer Tax Free Income Fund -- Class A Shares
Calendar Year Total Returns*
[BAR CHART]
1995 16.84
1996 3.58
1997 8.94
1998 6.2
1999 -4.20
2000 11.63
2001 4.13
2002 7.06
2003 5.8
2004 4.76
* During the period shown in the bar chart, Pioneer Tax Free Income Fund's
highest quarterly return was 7.11% for the quarter ended March 31, 1995,
and the lowest quarterly return was -3.38% for the quarter ended June 30,
2004.
AmSouth High Quality Municipal Bond Fund
Average Annual Total Returns (for the periods ending December 31, 2004)
1 Year 5 Years 10 Years
- ----------------------------------------------------------------------------------------------
AmSouth High Quality Municipal Bond Fund, Class A Shares
- ----------------------------------------------------------------------------------------------
Return Before Taxes(1) -2.55% 4.42% 4.55%
- ----------------------------------------------------------------------------------------------
Return After Taxes on Distributions -2.64% 4.38% 4.49%
- ----------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares -0.51% 4.30% 4.34%
- ----------------------------------------------------------------------------------------------
AmSouth High Quality Municipal Bond Fund, Class B Shares(2)
- ----------------------------------------------------------------------------------------------
Return Before Taxes -4.09% 4.16% 4.08%
- ----------------------------------------------------------------------------------------------
AmSouth High Quality Municipal Bond Fund, Class I Shares,(3)
- ----------------------------------------------------------------------------------------------
Return Before Taxes 1.78% 5.45% 5.09%
- ----------------------------------------------------------------------------------------------
Return After Taxes on Distributions 1.69% 5.41% 5.04%
- ----------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares 2.40% 5.23% 4.84%
- ----------------------------------------------------------------------------------------------
Merrill Lynch 1-12 Year Municipal Bond Index(4) 3.43% 6.66% 6.48%
(reflects no deduction for fees, expenses or taxes)
- ----------------------------------------------------------------------------------------------
(1) The Fund commenced operations on 7/1/97, through a transfer of assets from
certain collective trust fund ("commingled") accounts advised by AmSouth
Bank, using substantially the same investment objective, policies and
methodologies as the Fund. The quoted before-tax returns of the Fund
includes the performance of the commingled accounts for periods dating
back to 7/31/93, and prior to the Fund's commencement of operations,
restated to reflect the expenses associated with the Fund. The commingled
accounts were not registered with the SEC and, therefore, were not subject
to the investment restrictions imposed by law on registered mutual funds.
If the commingled accounts had been registered, their performance may have
been adversely affected. After-tax returns reflect performance since
7/1/97, and do not include the performance of the commingled accounts
prior to that date. Class A shares were first offered on 7/1/97.
(2) Performance for the Class B shares, which were first offered on 2/3/99, is
based on the historical performance of the Fund's Class A shares,
including the performance of the commingled accounts (without sales
charge) prior to that date. The commingled accounts were managed using
substantially the same investment objective, policies and methodologies as
the Fund. The historical performance of the Class B shares has been
restated to reflect the Fund's Class B shares distribution (12b-1) fees
and the contingent deferred sales charge.
(3) Performance for the Class I shares, which were first offered on 9/2/97, is
based on the historical performance of the Fund's Class A shares,
including the performance of the commingled accounts (without sales
charge) prior to that date. The commingled accounts were managed using
substantially the same investment objective, policies and methodologies as
the Fund.
10
(4) Merrill Lynch 1-12 Year Municipal Bond Index, an unmanaged index generally
representative of municipal bonds with intermediate maturities of no less
than one year and no more than twelve years, is for reference only, does
not mirror the Fund's investments, and reflects no deduction for fees,
expenses or taxes.
The table above shows the impact of taxes on the AmSouth High Quality
Municipal Bond Fund's returns. The Fund's after-tax returns are calculated
using the highest individual federal marginal income tax rates and do not
reflect the impact of state and local taxes. In certain cases, the figure
representing "Return After Taxes on Distributions and Sale of Fund Shares"
may be higher than the other return figures for the same period. A higher
after-tax return results when a capital loss occurs upon redemption and
translates into an assumed tax deduction that benefits the shareholder.
Please note that actual after-tax returns depend on an investor's tax
situation and may differ from those shown. Also note that after-tax
returns shown are not relevant to investors who hold their Fund shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts.
Pioneer Tax Free Income Fund
Average Annual Total Returns as of December 31, 2004
1 Year 5 Years 10 Years
- ----------------------------------------------------------------------------------------------
Pioneer Tax Free Income Fund, Class A Shares
- ----------------------------------------------------------------------------------------------
Return Before Taxes 0.05% 5.66% 5.88%
- ----------------------------------------------------------------------------------------------
Return After Taxes on Distributions 0.05% 5.56% 5.65%
- ----------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares 1.69% 5.52% 5.66%
- ----------------------------------------------------------------------------------------------
Pioneer Tax Free Income Fund, Class B Shares
- ----------------------------------------------------------------------------------------------
Return Before Taxes 0.07% 5.84% N/A
- ----------------------------------------------------------------------------------------------
Pioneer Tax Free Income Fund, Class Y Shares(1)
- ----------------------------------------------------------------------------------------------
Return Before Taxes 5.14% 6.26% 6.14%
- ----------------------------------------------------------------------------------------------
Return After Taxes on Distributions 5.14% 6.16% 5.91%
- ----------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares 5.21% 6.02% 5.88%
- ----------------------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index (2) 4.48% 7.20% 7.06%
(reflects no deduction for fees, expenses or taxes)
- ----------------------------------------------------------------------------------------------
(1) Reflects the inception of the Fund's Class A shares. The inception of
Class Y shares was February 28, 2002.
(2) Lehman Brothers Municipal Bond Index, an unmanaged measure of
approximately 15,000 municipal bonds, is for reference only, does not
mirror the Fund's investments, and reflects no deduction for fees,
expenses or taxes.
The most recent portfolio manager's discussion of each Fund's
performance is attached as Exhibit C.
11
The Funds' Fees and Expenses
Shareholders of both Funds pay various fees and expenses, either directly
or indirectly. The tables below show the fees and expenses that you would pay if
you were to buy and hold shares of each Fund. The expenses in the tables
appearing below are based on (i) for the AmSouth High Quality Municipal Bond
Fund, the expenses of AmSouth High Quality Municipal Bond Fund for the period
ended January 31, 2005 and (ii) for Pioneer Tax Free Income Fund, the expenses
of Pioneer Tax Free Income Fund for the period ended December 31, 2004. Future
expenses for all share classes may be greater or less. Shareholders of AmSouth
Tennessee Tax-Exempt Fund are also being asked to approve the reorganization of
their fund into Pioneer Tax Free Income Fund. The tables also show (1) the pro
forma expenses of the combined Fund assuming the Reorganization occurred on
December 31, 2004,(2) the pro forma expenses of the combined Fund assuming the
reorganization of AmSouth Tennessee Tax-Exempt Fund into Pioneer Tax Free Income
Fund also occurred on December 31, 2004.
Combined
Fund
(including
Shareholder AmSouth
transaction AmSouth Pioneer Combined Tennessee AmSouth High Pioneer
fees (paid High Quality Tax Free Fund Tax-Exempt Quality Tax Free
directly Municipal Income (Pro Fund) Municipal Income
from your Bond Fund(1) Fund Forma) (Pro Forma) Bond Fund(1) Fund
investment) Class A Class A Class A Class A Class B Class B
- --------------------------------------------------------------------------------------------------------
Maximum sales charge (load) when
you buy shares as a percentage
of offering price 4.00%(2) 4.50%(2) 4.50%(2) 4.50% None None
- --------------------------------------------------------------------------------------------------------
Maximum deferred sales charge
(load) as a percentage of
purchase price or the amount
you receive when you sell
shares, whichever is less None None(5) None None 5.00%(3) 4.00%
- --------------------------------------------------------------------------------------------------------
Redemption fees 2.00%(4) None None None 2.00%(4) None
- --------------------------------------------------------------------------------------------------------
Annual fund operating expenses
(deducted from fund assets)
(as a % of average net assets)
- --------------------------------------------------------------------------------------------------------
Management fee 0.50% 0.49% 0.49% 0.49% 0.50% 0.49%
- --------------------------------------------------------------------------------------------------------
Combined
Fund
(including Combined Fund
Shareholder AmSouth (including
transaction Tennessee AmSouth Combined AmSouth
fees (paid Combined Tax-Exempt High Quality Pioneer Fund Tennessee Tax-
directly Fund Fund) Municipal Tax Free (Pro Exempt Fund)
from your (Pro Forma) (Pro Forma) Bond Fund(1) Income Fund Forma) (Pro Forma)
investment) Class B Class B Class I Class Y Class Y Class Y
- ----------------------------------------------------------------------------------------------------------------
Maximum sales charge (load) when
you buy shares as a percentage
of offering price None None None None None None
- ----------------------------------------------------------------------------------------------------------------
Maximum deferred sales charge
(load) as a percentage of
purchase price or the amount
you receive when you sell
shares, whichever is less 4.00% 4.00% None None None None
- ----------------------------------------------------------------------------------------------------------------
Redemption fees None None 2.00%(4) None None None
- ----------------------------------------------------------------------------------------------------------------
Annual fund operating expenses
(deducted from fund assets)
(as a % of average net assets)
- ----------------------------------------------------------------------------------------------------------------
Management fee 0.49% 0.49% 0.50% 0.49% 0.49% 0.49%
- ----------------------------------------------------------------------------------------------------------------
12
Combined
Fund
(including
Shareholder AmSouth
transaction AmSouth Pioneer Combined Tennessee AmSouth High Pioneer
fees (paid High Quality Tax Free Fund Tax-Exempt Quality Tax Free
directly Municipal Income (Pro Fund) Municipal Income
from your Bond Fund(1) Fund Forma) (Pro Forma) Bond Fund(1) Fund
investment) Class A Class A Class A Class A Class B Class B
- ---------------------------------------------------------------------------------------------------------
Distribution and service (12b-1)
fee None 0.25% 0.25% 0.25% 0.75% 1.00%
- ---------------------------------------------------------------------------------------------------------
Other expenses 0.68%(5) 0.17% 0.17% 0.16% 0.88%(5) 0.18%
- ---------------------------------------------------------------------------------------------------------
Total fund operating expenses 1.18% 0.91%(6) 0.91% 0.90% 2.13% 1.67%(6)
- ---------------------------------------------------------------------------------------------------------
Expense reimbursement/reduction 0.30% N/A N/A N/A 0.50% N/A
- ---------------------------------------------------------------------------------------------------------
Net fund operating expenses 0.88% 0.91% 0.91% 0.90% 1.63% 1.67%
- ---------------------------------------------------------------------------------------------------------
Combined
Fund
(including Combined Fund
Shareholder AmSouth (including
transaction Tennessee AmSouth Combined AmSouth
fees (paid Combined Tax-Exempt High Quality Pioneer Fund Tennessee Tax-
directly Fund Fund) Municipal Tax Free (Pro Exempt Fund)
from your (Pro Forma) (Pro Forma) Bond Fund(1) Income Fund Forma) (Pro Forma)
investment) Class B Class B Class I Class Y Class Y Class Y
- ----------------------------------------------------------------------------------------------------------------
Distribution and service (12b-1)
fee 1.00% 1.00% None None None None
- ----------------------------------------------------------------------------------------------------------------
Other expenses 0.17% 0.16% 0.55%(5) 0.06% 0.06% 0.06%
- ----------------------------------------------------------------------------------------------------------------
Total fund operating expenses 1.66% 1.65% 1.05% 0.55%(6) 0.55% 0.55%
- ----------------------------------------------------------------------------------------------------------------
Expense reimbursement/reduction N/A N/A 0.32% N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------
Net fund operating expenses 1.66% 1.65% 0.73% 0.55% 0.55% 0.55%
- ----------------------------------------------------------------------------------------------------------------
(1) AmSouth Bank or other financial institutions may charge their customer
account fees for automatic investment and other cash management services
provided in connection with investment in the Fund.
(2) Sales charges may be reduced depending upon the amount invested or, in
certain circumstances, waived. Class A shares of the Pioneer Fund bought
as part of an investment of $1 million or more are not subject to an
initial sales charge, but may be charged a CDSC of 1.00% if sold within
one year of purchase.
(3) For Class B shares purchased prior to the combination of AmSouth Funds
with ISG Funds, the CDSC on such Class B shares held continuously declines
over six years, starting with year one and ending in year seven from: 4%,
3%, 3%, 2%, 2%, 1%. For all other Class B shares held continuously, the
CDSC declines over six years, starting with year one and ending in year
seven from: 5%, 4%, 3%, 3%, 2%, 1%. Eight years after purchase (seven
years in the case of shares acquired in the ISG combination), Class B
shares automatically convert to Class A shares
(4) To discourage short-term trading, a redemption fee of 2.00% will be
charged on sales or exchanges of Class A, Class B and Class I shares of
your AmSouth Fund made within 7 days of the date of purchase. A wire
transfer fee of $7.00 will be deducted from the amount of your redemption
if you request a wire transfer.
(5) Other expenses for your AmSouth Fund are being limited to 0.38% for Class
A shares, 0.38% for Class B shares and 0.23% for Class I shares. Any fee
waiver or expense reimbursement arrangement is voluntary and may be
discontinued at any time.
(6) The Pioneer Fund's total annual operating expenses in the table have not
been reduced by any expense offset arrangements.
13
The hypothetical example below helps you compare the cost of investing in
each Fund. It assumes that: (a) you invest $10,000 in each Fund for the time
periods shown, (b) you reinvest all dividends and distributions, (c) your
investment has a 5% return each year, (d) and each Fund's gross operating
expenses remain the same. The examples are for comparison purposes only and are
not a representation of either Fund's actual expenses or returns, either past or
future.
Combined Fund
(including AmSouth
AmSouth High Tennessee Tax-
Number of years you Quality Municipal Pioneer Tax Free Combined Fund Exempt Fund)
own your shares Bond Fund Income Fund (Pro Forma) (Pro Forma)
- --------------------------------------------------------------------------------------------
Class A
- --------------------------------------------------------------------------------------------
Year 1 $ 515 $ 539 $ 663 $ 662
- --------------------------------------------------------------------------------------------
Year 3 $ 760 $ 727 $ 848 $ 845
- --------------------------------------------------------------------------------------------
Year 5 $1,023 $ 931 $1,050 $1,045
- --------------------------------------------------------------------------------------------
Year 10 $1,775 $1,519 $1,630 $1,619
- --------------------------------------------------------------------------------------------
Class B -- assuming redemption at end of period
- --------------------------------------------------------------------------------------------
Year 1 $ 716 $ 570 $ 569 $ 559
- --------------------------------------------------------------------------------------------
Year 3 $ 967 $ 826 $ 823 $ 793
- --------------------------------------------------------------------------------------------
Year 5 $1,344 $1,007 $1,002 $ 950
- --------------------------------------------------------------------------------------------
Year 10 $2,220 $1,774 $1,766 $1,679
- --------------------------------------------------------------------------------------------
Class B -- assuming no redemption
- --------------------------------------------------------------------------------------------
Year 1 $ 216 $ 170 $ 169 $ 159
- --------------------------------------------------------------------------------------------
Year 3 $ 667 $ 526 $ 523 $ 493
- --------------------------------------------------------------------------------------------
Year 5 $1,144 $ 909 $ 902 $ 850
- --------------------------------------------------------------------------------------------
Year 10 $2,220 $1,774 $1,766 $1,679
- --------------------------------------------------------------------------------------------
Class I Class Y
- --------------------------------------------------------------------------------------------
Year 1 $ 107 $ 56 $ 56 $ 56
- --------------------------------------------------------------------------------------------
Year 3 $ 334 $ 176 $ 176 $ 176
- --------------------------------------------------------------------------------------------
Year 5 $ 579 $ 307 $ 307 $ 307
- --------------------------------------------------------------------------------------------
Year 10 $1,283 $ 689 $ 689 $ 689
- --------------------------------------------------------------------------------------------
Reasons for the Proposed Reorganization
The Trustees believe that the proposed Reorganization is in the best
interests of AmSouth High Quality Municipal Bond Fund. The Trustees considered
the following matters, among others, in approving the proposal.
First, AAMI, the investment adviser to your AmSouth Fund, informed the
Trustees that it does not intend to continue to provide investment advisory
services to the AmSouth Funds. Consequently, a change in your AmSouth Fund's
investment adviser was necessary. In the absence of the Reorganization, such a
change would be more likely to motivate shareholders invested in reliance on
AAMI's role to withdraw from the Fund, thereby reducing fund size and increasing
fund expense ratios.
Second, after the Reorganization, the combined Fund will have an asset
size substantially larger than that of your AmSouth Fund, which may allow the
combined Fund to achieve significant economies of scale in investments or
expenses.
Third, the historical investment performance of Pioneer Tax Free Income
Fund is better than your AmSouth Fund's investment performance. For the one,
five and ten year periods ended December 31, 2004, Class A shares of Pioneer Tax
Free Income Fund had an average annual return of 0.05% (one year); 5.66% (five
year); and 5.88% (ten year) compared to an average annual return of the Class A
shares of your AmSouth Fund of -2.55% (one year); 4.42% (five year); and 4.55%
(ten year), respectively, during the same period. The trustees also considered
performance information provided for the one, three, and five year periods ended
March 31, 2005 during which Class A shares of Pioneer Tax Free Income Fund had
an average annual return of 3.30% (one year); 5.82% (three year); and 6.10%
(five year), compared to an average annual return of the
14
Class A shares of your AmSouth Fund of -0.76% (one year); 3.73% (three year);
and 4.64% (five year), respectively, during the same period. In addition, the
Trustees considered the track record of Pioneer in managing equity and fixed
income mutual funds.
Fourth, the resources of Pioneer. At December 31, 2004, Pioneer managed
over 80 investment companies and accounts with approximately $42 billion in
assets. Pioneer is part of the global asset management group of UniCredito
Italiano S.p.A., one of the largest banking groups in Italy, providing
investment management and financial services to mutual funds, institutional and
other clients. As of December 31, 2004, assets under management of UniCredito
Italiano S.p.A. were approximately $175 billion worldwide. Shareholders of your
AmSouth Fund would become part of a significantly larger family of funds that
offers a more diverse array of investment options and enhanced shareholder
account options. The Pioneer family of mutual funds offers over 80 funds,
including domestic and international equity and fixed income funds and a money
market fund that will be available to your AmSouth Fund's shareholders through
exchanges.
Fifth, Pioneer Tax Free Income Fund's management fee will benefit from
breakpoints as assets increase as a result of the Reorganization. The aggregate
Rule 12b-1 distribution and shareholder servicing fees and non-Rule 12b-1
shareholder servicing fees paid by the Class A and Class B shares of both Funds
are the same. Moreover, your AmSouth Fund's Class I shares pay a non 12b-1
shareholder servicing fee that is not paid by the Pioneer Fund's Class Y shares.
Although your AmSouth Fund's expenses attributable to Class A and Class B shares
net of limitations are lower than the Pioneer Fund's net expenses currently and
on a pro forma basis, your AmSouth Fund may terminate such limitations at any
time. AAMI has informed the trustees that the expense waivers will be
discontinued in the future. The trustees considered the positive factors
associated with the Reorganization, such as superior performance of the Pioneer
Fund, greater fund assets and potential for growth, to outweigh the negative
factors. The gross expenses of Pioneer Fund's Class A, Class B and Class Y
shares are lower than the AmSouth Fund's gross expenses attributable to Class A,
Class B and Class I shares and are estimated to be lower on a pro forma basis
after giving effect to the Reorgnization. In addition, the net expenses of the
Class Y shares of the Pioneer Fund are lower than the net expenses of the
AmSouth Fund attributable to Class I shares and are estimated to be lower on a
pro forma basis. In addition, the broader distribution arrangement of the
Pioneer Fund offers greater potential for further increases in net assets of the
combined fund and lower per share expense ratios.
Sixth, the Class A, B and Y shares of Pioneer Tax Free Income Fund received
in the Reorganization will provide AmSouth High Quality Municipal Bond Fund
shareholders with exposure to substantially the same investment product as they
currently have.
Seventh, the transaction is structured to qualify as a tax-free
reorganization under Section 368(a) of the Internal Revenue Code of 1986 and
therefore will not be treated as a taxable sale of your AmSouth shares.
Pioneer and AmSouth Bank will pay all costs of preparing and printing the
Funds' proxy statements and solicitation costs incurred by the Funds in
connection with the Reorganization. AAMI will otherwise be responsible for all
costs and expenses of AmSouth High Quality Municipal Bond Fund in connection
with the Reorganization.
The Trustees also considered that Pioneer and AmSouth Bank will benefit
from the Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the
Reorganizations."
The Board of Trustees of the Pioneer Fund also considered that the
Reorganization presents an excellent opportunity for the Pioneer Fund to acquire
investment assets without the obligation to pay commissions or other transaction
costs that a fund normally incurs when purchasing securities. This opportunity
provides an economic benefit to the Pioneer Fund and its shareholders.
15
CAPITALIZATION
The following table sets forth the capitalization of each Fund as of May
31, 2005, and the pro forma combined Fund as of May 31, 2005. The table also
sets forth the pro forma capitalization of the combined Fund as of May 31, 2005,
assuming the shareholders of AmSouth Tennessee Tax-Exempt Bond Fund approve the
reorganization of their fund into Pioneer Tax Free Income Fund.
Pro Forma
Pioneer Tax Free
Income Fund
Pro Forma (including
AmSouth High Pioneer Tax AmSouth
Quality Municipal Pioneer Tax Free Free Income Tennessee Tax-
Bond Fund Income Fund Fund Exempt Fund)
May 31, 2005 May 31, 2005 May 31,2005 May 31, 2005
----------------- ---------------- ----------- ----------------
Total Net Assets (in thousands) $ 329,216 $ 345,063 $ 674,278 $ 710,145
Class A shares ............... $ 15,588 $ 304,731 $ 320,318 $ 325,503
Class B shares ............... $ 3,739 $ 18,036 $ 21,775 $ 23,867
Class I/Y shares ............. $ 309,889 $ 143 $ 310,031 $ 338,622
Net Asset Value Per Share
Class A shares ............... $ 10.19 $ 11.78 $ 11.78 $ 11.78
Class B shares ............... $ 10.16 $ 11.68 $ 11.68 $ 11.68
Class I/Y shares ............. $ 10.19 $ 11.72 $ 11.72 $ 11.72
Shares Outstanding
Class A shares ............... 1,530,430 25,863,912 27,186,900 27,626,928
Class B shares ............... 367,964 1,544,680 1,864,939 2,044,084
Class I/Y shares ............. 30,409,602 12,181 26,453,521 28,893,022
It is impossible to predict how many shares of the Pioneer Tax Free Income
Fund will actually be received and distributed by your AmSouth Fund on the
Reorganization date. The table should not be relied upon to determine the amount
of the Pioneer Fund's shares that will actually be received and distributed.
BOARD'S EVALUATION AND RECOMMENDATION
For the reasons described above, the Trustees, including the Independent
Trustees, approved the Reorganization. In particular, the Trustees determined
that the Reorganization is in the best interests of your AmSouth Fund.
Similarly, the Board of Trustees of the Pioneer Fund, including its Independent
Trustees, approved the Reorganization. They also determined that the
Reorganization is in the best interests of the Pioneer Fund.
The Trustees recommend that the shareholders of your AmSouth Fund vote FOR
the proposal to approve the Agreement and Plan of Reorganization.
16
AmSouth Tennessee Tax-Exempt Fund and
Pioneer Tax Free Income Fund
PROPOSAL 1(q)
Approval of Agreement and Plan of Reorganization
SUMMARY
The following is a summary of more complete information appearing later in
this Proxy Statement/Prospectus or incorporated herein. You should read
carefully the entire Proxy Statement/Prospectus, including the form of Agreement
and Plan of Reorganization attached as EXHIBIT A-1, because it contains details
that are not in the summary.
Pioneer Tax Free Income Fund invests in municipal securities of issuers
across the United States. AmSouth Tennessee Tax-Exempt Fund invests primarily in
securities of issuers in Tennessee. Both Funds are exempt from regular federal
income tax. In addition, AmSouth Tennessee Tax-Exempt Fund is exempt from
Tennessee state income tax. Income from the Pioneer Fund is not exempt from
Tennessee state income tax. In the table below, if a row extends across the
entire table, the policy disclosed applies to both your AmSouth Fund and the
Pioneer Fund.
Comparison of AmSouth Tennessee Tax-Exempt Fund to Pioneer Tax Free Income Fund
AmSouth Tennessee Tax-Exempt Fund Pioneer Tax Free Income Fund
- ---------------------------------------------------------------------------------------------------------------------------
Business A non-diversified series of AmSouth Funds, an A diversified open-end management investment
open-end management investment company company organized as a Delaware statutory
organized as a Massachusetts business trust. trust.
Net assets as of March $35.9 million $340.7 million
31, 2005
Investment advisers Investment Adviser: Investment Adviser:
and portfolio AAMI Pioneer
managers
Portfolio Manager: Day-to-day management of Portfolio Manager: Day-to-day management of
AmSouth Tennessee Tax-Exempt Fund's portfolio the Fund's portfolio is the responsibility of
is the responsibility of Dorothy E. Thomas, David Eurkus. Mr. Eurkus joined Pioneer as a
CFA. Ms. Thomas has more than 20 years of senior vice president in January 2000 and has
experience as an investment portfolio manager. been an investment professional since 1969.
Ms. Thomas has been associated with AmSouth's From 1998 to 2000, Mr. Eurkus was a senior
Trust Investment Group since 1982 and is vice president of fixed income investing for
currently Senior Vice President and Trust the Private Client Group at Brown Brothers
Investment Officer in charge of tax-free fixed Harriman. Prior to that he was a senior vice
income investments. president at Putnam Investments.
Investment objective AmSouth Tennessee Tax-Exempt Fund seeks to Pioneer Tax Free Income Fund seeks as high a
provide investors with current income exempt level of current income exempt from federal
from federal and Tennessee income taxes without income taxes as possible consistent with the
assuming undue risk. preservation of capital.
Primary investments Normally, AmSouth Tennessee Tax-Exempt Fund Normally, Pioneer Tax Free Income Fund
will invest at least 80% of its net assets in invests at least 80% of its total assets in
municipal securities of the State of Tennessee investment grade securities that provide
and its political subdivisions that provide income that is exempt from regular federal
income exempt from federal income tax and income tax and may not be subject to the AMT.
Tennessee personal income taxes. For purposes These investments include bonds, notes and
of this policy, net assets include net assets other debt instruments issued by or on behalf
plus borrowings for investment purposes. of states, counties, municipalities,
1
AmSouth Tennessee Tax-Exempt Fund Pioneer Tax Free Income Fund
- ---------------------------------------------------------------------------------------------------------------------------
The Fund invests in Tennessee municipal territories and possessions of the United
securities only if they are high-grade (rated States and the District of Columbia and their
at the time of purchase in one of the four authorities, political subdivisions, agencies
highest rating categories by a nationally or instrumentalities.
recognized statistical rating organization or
determined by AAMI to be of comparable
quality). The Fund will have a dollar-weighted
average maturity of five to ten years. As a
non-fundamental policy, the Fund will normally
invest at least 80% of its net assets in
municipal securities that are not subject to
the federal alternative minimum tax ("AMT") for
individuals.
Investment strategies AAMI's fixed income portfolio management Pioneer considers both broad economic factors
process focuses on the four key areas of and issuer specific factors in selecting a
duration management, sector weights, position portfolio designed to achieve the Fund's
on the yield curve and security selection; investment objective. In assessing the
AAMI's goal is to add value in each of these appropriate maturity and rating weighting of
four areas through the active management of the the Fund's portfolio, Pioneer considers a
Fund's portfolio. Beginning with rigorous variety of factors that are expected to
fundamental analysis of the economy and taking influence economic activity and interest
into account characteristics of the current rates. These factors include fundamental
business and interest rate cycles, AAMI arrives economic indicators, such as the rates of
at a projection of the likely trend in interest economic growth and inflation, Federal
rates and adjusts duration accordingly. Reserve monetary policy and the relative
Analysis of the shape of the yield curve and value of the U.S. dollar compared to other
yield spreads among bond market sectors leads currencies. Once Pioneer determines the
to further refinements in strategy. preferable portfolio characteristics, Pioneer
selects individual securities based upon the
terms of the securities (such as yields
compared to U.S. Treasuries or comparable
issues), liquidity and rating and issuer
diversification. Pioneer also employs due
diligence and fundamental research, an
evaluation of the issuer based on its
financial statements and operations, to
assess an issuer's credit quality, taking
into account financial condition, future
capital needs and potential for change in
rating. In making these portfolio decisions,
Pioneer relies on the knowledge, experience
and judgment of its staff who have access to
a wide variety of research.
Other investments Under normal market conditions, the Fund may The Fund may invest in securities of any
invest up to 20% of its assets in taxable maturity.
obligations. For purposes of the 20% basket,
the Fund may also invest in municipal The Fund may invest up to 25% or more of its
securities of states other than Tennessee. assets in issuers in any one or more states
or securities the payments on which are
derived from gas, electric, telephone, sewer
and water segments of the municipal bond
market. The Fund may invest up to 25% of its
assets in industrial development bonds.
2
AmSouth Tennessee Tax-Exempt Fund Pioneer Tax Free Income Fund
- ---------------------------------------------------------------------------------------------------------------------------
The Fund may invest up to 20% of its net
assets in securities of other investment
companies, investment grade commercial paper,
U.S. government securities, U.S. or foreign
bank instruments and repurchase agreements.
The Fund may invest up to 10% of its net
assets in debt securities rated below
investment grade or, if unrated, of
equivalent quality as determined by Pioneer.
Debt securities rated below investment grade
are commonly referred to as "junk bonds" and
are considered speculative.
The Fund may invest up to 10% of its net
assets in inverse floating rate obligations
(a type of derivative instrument). Inverse
floating rate obligations represent interests
in tax-exempt bonds.
Temporary defensive For temporary defensive purposes, the Fund may For temporary defensive purposes, including
strategies increase its holdings in taxable obligations to during periods of unusual cash flows, the
over 20% of its assets and hold uninvested cash Fund may depart from its principal investment
reserves pending investment. The Fund may also strategies and invest part or all of its
increase its holdings in municipal securities assets in securities with remaining
of states other than Tennessee to over 20% of maturities of less than one year, cash
its assets in such situations. Taxable equivalents or may hold cash.
obligations may include obligations issued or
guaranteed by the U.S. government, its agencies
or instrumentalities (some of which may be
subject to repurchase agreements), certificates
of deposit, demand and time deposits, bankers'
acceptances of selected banks, and commercial
paper meeting the Fund's quality for tax-exempt
commercial paper.
Diversification AmSouth Tennessee Tax-Exempt Fund is Pioneer Tax Free Income Fund is diversified
non-diversified for the purpose of the and is subject to diversification
Investment Company Act and, therefore, may requirements under the Internal Revenue Code
concentrate its investments in a limited number of 1986, as amended (the "Code").
of issuers.
Industry concentration AmSouth Tennessee Tax-Exempt Fund may not Pioneer Tax Free Income Fund will not
purchase any securities which would cause 25% concentrate its assets in the securities of
or more of the Fund's total assets at the time issuers in any one industry except that the
of purchase to be invested in the securities of Fund may invest 25% or more of its assets in
one or more issuers conducting their principal issuers in any one or more states or
business activities in the same industry; securities the payments on which are derived
provided that this limitation shall not apply from gas, electric, telephone, sewer and
to municipal securities; and provided, further, water segments of the municipal bond market.
that for the purpose of this limitation only,
private activity bonds that are backed only by
the assets and revenues of a non-governmental
user shall not be deemed to be municipal
securities.
3
AmSouth Tennessee Tax-Exempt Fund Pioneer Tax Free Income Fund
- ---------------------------------------------------------------------------------------------------------------------------
Restricted and illiquid AmSouth Tennessee Tax-Exempt Fund may not Pioneer Tax Free Income Fund may not invest
securities invest more than 15% of its net assets in more than 15% of its net assets in securities
securities that are restricted as to resale, or that are illiquid and other securities that
for which no readily available market exists, are not readily marketable. Repurchase
including repurchase agreements providing for agreements maturing in more than seven days
settlement more than seven days after notice. will be included for purposes of the
foregoing limit
Borrowing AmSouth Tennessee Tax-Exempt Fund may not Pioneer Tax Free Income Fund may not borrow
borrow money or issue senior securities, except money, except from a bank for temporary or
that the Fund may borrow from banks or enter emergency purposes and not for investment
into reverse repurchase agreements for purposes, and then only in an amount not
temporary emergency purposes in amounts up to exceeding 5% of the value of the Fund's total
33 1/3% of the value of its total assets at the assets at the time of borrowing.
time of such borrowing. The Fund will not
purchase securities while borrowings (including
reverse repurchase agreements) in excess of 5%
of its total assets are outstanding. In
addition, the Fund is permitted to participate
in a credit facility whereby the Fund may
directly lend to and borrow money from other
AmSouth Funds for temporary purposes, provided
that the loans are made in accordance with an
order of exemption from the SEC and any
conditions thereto.
Lending AmSouth Tennessee Tax-Exempt Fund may not make Pioneer Tax Free Income Fund may not make
loans, except that the Fund may purchase or loans, except through the purchase of
hold debt instruments in accordance with its securities, including repurchase agreements,
investment objective and policies, lend Fund in accordance with its investment objective,
securities in accordance with its investment policies and limitations.
objective and policies and enter into
repurchase agreements. In addition, the Fund is
permitted to participate in a credit facility
whereby the Fund may directly lend to and
borrow money from other AmSouth Funds for
temporary purposes, provided that the loans are
made in accordance with an order of exemption
from the SEC and any conditions thereto.
Derivative instruments AmSouth Tennessee Tax-Exempt Fund may invest in Pioneer Tax Free Income Fund may use futures
futures contracts and options thereon (interest and options on securities, indices and
rate futures contracts or index futures currencies, forward currency exchange
contracts, as applicable) to commit funds contracts and other derivatives. The Fund
awaiting investment, to maintain cash liquidity does not use derivatives as a primary
or for other hedging purposes. The value of the investment technique and generally limits
Fund's contracts may equal or exceed 100% of their use to hedging. However, the Fund may
the Fund's total assets, although the Fund will use derivatives for a variety of
not purchase or sell a futures contract unless non-principal purposes, including:
immediately afterwards the aggregate amount of
margin deposits on its existing futures o As a hedge against adverse changes in
positions plus the amount of premiums paid for stock market prices, interest rates or
related futures options entered into for other currency exchange rates
than bona fide hedging purposes is 5% or less
o As a substitute for purchasing or
4
AmSouth Tennessee Tax-Exempt Fund Pioneer Tax Free Income Fund
- ---------------------------------------------------------------------------------------------------------------------------
of its net assets. selling securities
o To increase the Fund's return as a
non-hedging strategy that may be
considered speculative
Short-term trading The Fund may engage in the technique of The Fund usually does not trade for
short-term trading. Such trading involves the short-term profits. The Fund will sell an
selling of securities held for a short time, investment, however, even if it has only been
ranging from several months to less than a day. held for a short time, if it no longer meets
The object of such short-term trading is to the Fund's investment criteria.
increase the potential for capital appreciation
and/or income of the Fund in order to take
advantage of what AAMI believes are changes in
market, industry or individual company
conditions or outlook. Any such trading would
increase the turnover rate of a Fund and its
transaction costs.
Other investment policies As described above, the Funds have substantially similar principal investment strategies and
and restrictions policies. Certain of the non-principal investment policies and restrictions are different. For
a more complete discussion of each Fund's other investment policies and fundamental and
non-fundamental investment restrictions, see the SAI.
Buying, Selling and Exchanging Shares
Class A sales charges and Class A shares are offered with an initial Class A shares are offered with an initial
Rule 12b-1 fees sales charge of up to 4.00% of the offering sales charge of up to 4.50% of the offering
price, which is reduced depending upon the price, which is reduced or waived for large
amount invested or, in certain circumstances, purchases and certain types of investors. At
waived. Class A Shares bought as part of an the time of your purchase, your investment
investment of $1 million or more are not firm may receive a commission from Pioneer
subject to an initial sales charge, but may be Funds Distributor, Inc. ("PFD"), the Fund's
charged a contingent deferred sales charge distributor, of up to 4% declining as the
("CDSC") of 1.00% if sold within one year of size of your investment increases.
purchase.
There is no CDSC, except in certain
Class A shares pay a shareholder servicing fee circumstances when the initial sales charge
(non 12b-1) of up to 0.25% of average daily net is waived.
assets.
Class A shares are subject to distribution
and service (12b-1) fees of up to 0.25% of
average daily net assets.
Class B sales charges and Class B shares are offered without an initial Class B shares are offered without an initial
Rule 12b-1 fees sales charge, but are subject to a CDSC of up sales charge, but are subject to a CDSC of up
to 5%. For Class B Shares purchased prior to to 4% if you sell your shares. The charge is
the combination of AmSouth Funds with ISG reduced over time and is not charged after
Funds, the CDSC on such Class B Shares held five years. Your investment firm may receive
continuously declines over six years, starting a commission from PFD, the Fund's
with year one and ending in year seven from: distributor, at the time of your purchase of
4%, 3%, 3%, 2%, 2%, 1%. For all other Class B up to 4%.
Shares held continuously, the CDSC declines
over six years, starting with year one and Class B shares are subject to distribution
ending in year seven from: 5%, 4%, 3%, 3%, 2%, and service (12b-1) fees of up to 1% of
1%. Eight years after purchase (seven years in average daily net assets.
the case of Shares acquired in the ISG
combination), Class B Shares automatically Class B shares acquired through the
Reorganization will be subject to the CDSC
and commission schedules applicable to the
5
AmSouth Tennessee Tax-Exempt Fund Pioneer Tax Free Income Fund
- ---------------------------------------------------------------------------------------------------------------------------
convert to Class A Shares. original purchase.
Class B Shares pay a shareholder servicing fee Maximum purchase of Class B shares in a
(non 12b-1) of up to 0.25% of average daily net single transaction is $49,999.
assets and a distribution (12b-1) fee of up to
0.75% of average daily net assets.
Maximum investment for all Class B purchases by
a shareholder for the Fund's shares is $99,999.
Class I and Class Y sales AmSouth Tennessee Tax-Exempt Fund does not The Fund does not impose any initial,
charges and Rule 12b-1 impose any initial or CDSC on Class I shares. contingent deferred or asset based sales
fees charge on Class Y shares.
The Fund may impose a shareholder servicing fee
(non 12b-1) of up to 0.15% of average daily The distributor incurs the expenses of
net assets. distributing the Fund's Class Y shares, none
of which are reimbursed by the Fund or the
Class Y shareowners.
Management and other fees AmSouth Tennessee Tax-Exempt Fund pays an Pioneer Tax Free Income Fund pays Pioneer an
advisory fee on a monthly basis at an annual annual fee equal to 0.49% of the Fund's
rate of 0.50% of the Fund's average daily net average daily net assets up to $250 million,
assets. 0.48% of the next $50 million and 0.45% on
assets over $300 million.
ASO Services Company, Inc. ("ASO") serves as
administrator and fund accounting agent for the In addition, the Fund reimburses Pioneer for
Fund. The Fund pays ASO an administrative certain fund accounting and legal expenses
services fee of 0.15% of the Fund's average incurred on behalf of the Fund and pays a
daily net assets. separate shareholder servicing/transfer
agency fee to PIMSS, an affiliate of Pioneer.
Other expenses are being limited to 0.50% for
Class A Shares, 0.50% for Class B Shares and For the fiscal year ended December 31, 2004,
0.35% for Class I Shares. Any fee waiver or the Fund's total annual operating for Class A
expense reimbursement arrangement is voluntary shares were 0.91% of average daily net
and may be discontinued at any time. assets.
For the fiscal year ended July 31, 2004, the For the fiscal year ended December 31, 2004,
Fund's annual operating expenses for Class A the Fund's total annual operating expenses
shares, after giving effect to the expense for Class B shares were 1.67% of average
limitation were 1.00% and without giving effect daily net assets.
to the expense limitation, were 1.07% of
average daily net assets. For the fiscal year ended December 31, 2004,
the Fund's total annual operating expenses
For the fiscal year ended July 31, 2004, the for Class Y shares were 0.55% of average
Fund's annual operating expenses for Class B daily net assets.
shares, after giving effect to the expense
limitation were 1.75%, and without giving
effect to the expense limitation, were 1.82% of
average daily net assets.
For the fiscal year ended July 31, 2004, the
Fund's annual operating expenses for Class I
shares, after giving effect to the expense
limitation were 0.85%, and without giving
effect to the expense limitation, were 0.97% of
average daily net assets.
6
AmSouth Tennessee Tax-Exempt Fund Pioneer Tax Free Income Fund
- ---------------------------------------------------------------------------------------------------------------------------
Buying shares You may buy shares of the Fund directly through You may buy shares from any investment firm
BISYS Fund Services, the Fund's distributor, or that has a sales agreement with PFD, the
through brokers, registered investment Pioneer Fund's distributor.
advisers, banks and other financial
institutions that have entered into selling If the account is established in the
agreements with the Fund's distributor, as shareholder's own name, shareholders may also
described in the Fund's prospectus. purchase additional shares of the Fund by
telephone or online.
Certain account transactions may be done by
telephone.
Exchanging shares You can exchange your shares in the Fund for You may exchange your shares for shares of
shares of the same class of another AmSouth the same class of another Pioneer mutual
Fund, usually without paying additional sales fund. Your exchange request must be for at
charges. You must meet the minimum investment least $1,000. The Fund allows you to exchange
requirements for the Fund into which you are your shares at net asset value without
exchanging. Exchanges from one Fund to another charging you either an initial or contingent
are taxable. Class A shares may be exchanged deferred shares charge at the time of the
for Class I shares of the same Fund or another exchange. Shares you acquire as part of an
AmSouth Fund if you become eligible to purchase exchange will continue to be subject to any
Class I shares. Class I Shares may be exchanged contingent deferred sales charge that applies
for Class A Shares of the same Fund. No to the shares you originally purchased. When
transaction fees are currently charged for you ultimately sell your shares, the date of
exchanges. your original purchase will determine your
contingent deferred sales charge. An exchange
If you sell your Shares or exchange them for generally is treated as a sale and a new
shares of another AmSouth Fund within 7 days of purchase of shares for federal income tax
the date of purchase, you will be charged a purposes.
2.00% fee on the current net asset value of the
Shares sold or exchanged. The fee is paid to After you establish an eligible fund account,
the Fund to offset the costs associated with you can exchange Fund shares by telephone or
short-term trading, such as portfolio online.
transaction and administrative costs.
The Fund uses a "first-in, first-out" method to
determine how long you have held your shares.
This means that if you purchased shares on
different days, the shares purchased first will
be considered redeemed first for purposes of
determining whether the redemption fee will be
charged.
The fee will be charged on all covered
redemptions and exchanges, including those made
through retirement plan, brokerage and other
types of omnibus accounts (except where it is
not practical for the plan administrator or
brokerage firm to implement the fee). The Fund
will not impose the redemption fee on a
redemption or exchange of shares purchased upon
the reinvestment of dividend and capital gain
distributions.
Selling shares Shares of each Fund are sold at the net asset value per share next calculated after the Fund
receives your request in good order.
You may sell your shares by contacting the Normally, your investment firm will send
7
AmSouth Tennessee Tax-Exempt Fund Pioneer Tax Free Income Fund
- ---------------------------------------------------------------------------------------------------------------------------
Fund directly in writing or by telephone or by your request to sell shares to PIMSS. You can
contacting a financial intermediary as also sell your shares by contacting the Fund
described in the Fund's prospectus. directly if your account is registered in
your name.
If the account is established in the
shareholder's own name, shareholders may also
redeem shares of the Fund by telephone or
online.
Comparison of Principal Risks of Investing in the Funds
Because each Fund primarily invests in municipal securities, the Funds are
subject to the same principal risks. You could lose money on your investment in
either Fund or not make as much as if you invested elsewhere if:
o Interest rates go up, causing the value of the Fund's investments to
decline
o The issuer of a security owned by the Fund defaults on its
obligation to pay principal and/or interest or has its credit rating
downgraded
o New federal or state legislation adversely affects the tax-exempt
status of securities held by the Fund or the financial ability of
municipalities to repay these obligations
o To the extent the Pioneer Fund concentrates its investments in a
single state or securities the payments on which are dependent upon
a single industry, the Fund will be more susceptible to risks
associated with that state or industry. By concentrating its
investments in securities issued by Tennessee and its
municipalities, AmSouth Tennessee Tax-Exempt Fund will be more
vulnerable to unfavorable developments in Tennessee than funds that
are more geographically diversified.
o The adviser is incorrect in its expectation of changes in interest
rates or the credit quality of an issuer
In addition, at times, more than 25% of Pioneer Tax Free Income Fund's
assets may be invested in the same market segment, such as financials or
technology. To the extent the Fund emphasizes investments in a market segment,
the Fund will be subject to a greater degree to the risks particular to the
industries in that segment, and may experience greater market fluctuation, than
a fund without the same focus.
Pioneer Tax Free Income Fund may also invest up to 10% of its net assets
in debt securities rated below investment grade or, if unrated, of equivalent
quality as determined by Pioneer. Debt securities rated below investment grade
are commonly referred to as "junk bonds" and are considered speculative. Below
investment grade debt securities involve greater risk of loss, are subject to
greater price volatility and are less liquid, especially during periods of
economic uncertainty or change, than higher quality debt securities.
AmSouth Tennessee Tax-Exempt Fund is subject to risks relating to the fact
that it is non-diversified. The Fund may invest in a small number of companies
which may increase the volatility of the Fund. Accordingly, the Fund's portfolio
may be more sensitive to changes in the market value of a single company or
industry.
8
Past Performance
Set forth below is performance information for each Fund. The bar charts
show how each Fund's total return (not including any deduction for sales
charges) has varied from year to year for each full calendar year. The tables
show average annual total return (before and after taxes) for each Fund over
time for each class of shares (including deductions for sales charges) compared
with a broad-based securities market index. The bar charts give an indication of
the risks of investing in each Fund, including the fact that you could incur a
loss and experience volatility of returns year to year. Past performance before
and after taxes does not indicate future results.
AmSouth Tennessee Tax-Exempt Fund -- Class A Shares
Calendar Year Total Returns*
[BAR CHART]
1995 13.4
1996 1.39
1997 7.13
1998 4.26
1999 -3.07
2000 8.65
2001 3.4
2002 8.43
2003 2.62
2004 1.22
* During the period shown in the bar chart, your AmSouth Fund's highest
quarterly return was 5.91% for the quarter ended March 31, 1995, and the
lowest quarterly return was -2.37% for the quarter ended June 30, 1999.
Pioneer Tax Free Income Fund -- Class A Shares
Calendar Year Total Returns*
[BAR CHART]
1995 16.84
1996 3.58
1997 8.94
1998 6.2
1999 -4.29
2000 11.63
2001 4.13
2002 7.06
2003 5.8
2004 4.76
* During the period shown in the bar chart, Pioneer Tax Free Income Fund's
highest quarterly return was 7.11% for the quarter ended March 31, 1995,
and the lowest quarterly return was -3.38% for the quarter ended June 30,
2004.
9
AmSouth Tennessee Tax-Exempt Fund
Average Annual Total Returns (for the periods ending December 31, 2004)
1 Year 5 Years 10 Years
- ----------------------------------------------------------------------------------------------------------------
AmSouth Tennessee Tax-Exempt Fund, Class A Shares(1)
- ----------------------------------------------------------------------------------------------------------------
Return Before Taxes -2.87% 3.96% 4.22%
- ----------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions -3.03% 3.91% 4.18%
- ----------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares -0.90% 3.83% 4.12%
- ----------------------------------------------------------------------------------------------------------------
AmSouth Tennessee Tax-Exempt Fund, Class B Shares(2)
- ----------------------------------------------------------------------------------------------------------------
Return Before Taxes -4.42% 3.69% 3.82%
- ----------------------------------------------------------------------------------------------------------------
AmSouth Tennessee Tax-Exempt Fund, Class I Shares,(3)
- ----------------------------------------------------------------------------------------------------------------
Return Before Taxes 1.36% 4.96% 4.77%
- ----------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions 1.19% 4.91% 4.73%
- ----------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares 1.94% 4.73% 4.63%
- ----------------------------------------------------------------------------------------------------------------
Merrill Lynch 1-12 Year Municipal Bond Index(4)
(reflects no deduction for fees, expenses or taxes) 3.43% 6.66% 6.48%
- ----------------------------------------------------------------------------------------------------------------
(1) The quoted returns reflect the performance from 3/28/94 to 3/12/00 of the
ISG Tennessee Tax Exempt Fund, an open-end investment company that was the
predecessor fund to the AmSouth Tennessee Tax-Exempt Fund. The ISG
Tennessee Tax-Exempt Fund, commenced operations on 3/28/94, through a
transfer of assets from certain collective trust fund ("commingled")
accounts managed by First American National Bank, using substantially the
same investment objective, policies and methodologies as the Fund. The
quoted before-tax returns of the Fund includes the performance of the
predecessor fund commingled accounts for periods dating back to 7/31/93,
and prior to the Fund's commencement of operations, restated to reflect
the expenses associated with the Fund. The commingled accounts were not
registered with the SEC and, therefore, were not subject to the investment
restrictions imposed by law on registered mutual funds. If the commingled
accounts had been registered, their performance may have been adversely
affected. After-tax returns reflect performance since 4/1/96, and do not
include the performance of the commingled accounts prior to that date.
Class A Shares were first offered on 3/28/94.
(2) Performance for the Class B Shares, which were first offered on 2/24/98,
is based on the historical performance of the Fund's Class A Shares,
including the performance of the predecessor fund and commingled accounts
(without sales charge) prior to that date. The predecessor fund and
commingled accounts were managed using substantially the same investment
objective, policies and methodologies as the Fund. The historical
performance of the Class B Shares has been restated to reflect the Fund's
Class B Shares distribution (12b-1) fees and the contingent deferred sales
charge.
(3) Performance for the Class I Shares, which were first offered on 10/3/97,
is based on the historical performance of the Fund's Class A Shares,
including the performance of the predecessor fund and commingled accounts
(without sales charge) prior to that date. The predecessor fund and
commingled accounts were managed using substantially the same investment
objective, policies and methodologies as the Fund.
(4) Merrill Lynch 1-12 Year Municipal Bond Index, an unmanaged index generally
representative of municipal bonds with intermediate maturities of no less
than one year and no more than twelve years. The Index is for reference
only, does not mirror the Fund's investments, and reflects no deduction
for fees, expenses or taxes.
The table shows the impact of taxes on the Fund's returns. The Fund's
after-tax returns are calculated using the highest individual federal
marginal income tax rates and do not reflect the impact of state and local
taxes. In certain cases, the figure representing "Return After Taxes on
Distributions and Sale of Fund Shares" may be higher than the other return
figures for the same period. A higher after-tax return results when a
capital loss occurs upon redemption and translates into an assumed tax
deduction that benefits the shareholder. Please note that actual after-tax
returns depend on an investor's tax situation and may differ from those
shown. Also note that after-tax returns shown are not relevant to
investors who hold their Fund shares through tax-deferred arrangements,
such as 401(k) plans or individual retirement accounts.
10
Pioneer Tax Free Income Fund
Average Annual Total Returns as of December 31, 2004
1 Year 5 Years 10 Years
- ---------------------------------------------------------------------------------------------------------------
Pioneer Tax Free Income Fund, Class A shares
- ---------------------------------------------------------------------------------------------------------------
Return Before Taxes 0.05% 5.66% 5.88%
- ---------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions 0.05% 5.56% 5.65%
- ---------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares 1.69% 5.52% 5.66%
- ---------------------------------------------------------------------------------------------------------------
Pioneer Tax Free Income Fund, Class B shares
- ---------------------------------------------------------------------------------------------------------------
Return Before Taxes 0.07% 5.84% N/A
- ---------------------------------------------------------------------------------------------------------------
Pioneer Tax Free Income Fund, Class Y shares(1)
- ---------------------------------------------------------------------------------------------------------------
Return Before Taxes 5.14% 6.26% 6.14%
- ---------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions 5.14% 6.16% 5.91%
- ---------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares 5.21% 6.02% 5.88%
- ---------------------------------------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index(2) 4.48% 7.20% 7.06%
(reflects no deduction for fees, expenses or taxes)
- ---------------------------------------------------------------------------------------------------------------
(1) Reflects the inception of the Fund's Class A shares. The inception of
Class Y shares was February 28, 2002.
(2) Lehman Brothers Municipal Bond Index is an unmanaged measure of
approximately 15,000 municipal bonds is for reference only, does not
mirror the Fund's investments, and reflects no deduction for fees,
expenses or taxes.
The most recent portfolio manager's discussion of each Fund's performance
is attached as Exhibit C.
11
The Funds' Fees and Expenses
Shareholders of both Funds pay various fees and expenses, either directly
or indirectly. The tables below show the fees and expenses that you would pay if
you were to buy and hold shares of each Fund. The expenses in the tables
appearing below are based on (i) for the AmSouth Tennessee Tax-Exempt Fund, the
expenses of AmSouth Tennessee Tax-Exempt Fund for the period ended January 31,
2005, and (ii) for Pioneer Tax Free Income Fund, the expenses of Pioneer Tax
Free Income Fund for the period ended December 31, 2004. Future expenses for all
share classes may be greater or less. Shareholders of AmSouth High Quality
Municipal Bond Fund are also being asked to approve the reorganization of their
fund into Pioneer Tax Free Income Fund. The tables also show (1) the pro forma
expenses of the combined Fund assuming the Reorganization occurred on December
31, 2004 and (2) the pro forma expenses of the combined Fund assuming the
reorganization of AmSouth High Quality Municipal Bond Fund into Pioneer Tax Free
Income Fund also occurred on December 31, 2004.
Shareholder AmSouth Pioneer Combined Combined AmSouth
transaction fees Tennessee Tax Free Fund Fund Tennessee Tax-
(paid directly Tax-Exempt Income (Pro Forma) (including Exempt Fund(1)
from your Fund(1) Fund AmSouth
investment) High Quality
Municipal
Bond Fund)
(Pro Forma)
Class A Class A Class A Class A Class B
- ---------------------------------------------------------------------------------------------
Maximum sales 4.00%(2) 4.50%(2) 4.50%(2) 4.50%(2) None
charge (load)
when you buy
shares as a
percentage of
offering price
- ---------------------------------------------------------------------------------------------
Maximum deferred None None None None 5.00%(3)
sales charge
(load) as a
percentage of
purchase price or
the amount you
receive when you
sell shares,
whichever is less
- ---------------------------------------------------------------------------------------------
Redemption fees 2.00%(4) None None None 2.00%(4)
- ---------------------------------------------------------------------------------------------
Annual fund
operating
expenses
(deducted from
fund assets)
(as a % of
average net
assets)
- ---------------------------------------------------------------------------------------------
Management fee 0.50% 0.49% 0.49 0.49% 0.50%
- ---------------------------------------------------------------------------------------------
Shareholder Pioneer Combined Fund Combined AmSouth Pioneer Combined Fund Combined
transaction fees Tax Free (Pro Forma) Fund Tennessee Tax Free (Pro Forma) Fund
(paid directly Income (including Tax-Exempt Income Fund (including
from your Fund AmSouth High Fund(1) AmSouth High
investment) Quality Quality
Municipal Municipal
Bond Fund) Bond Fund)
(Pro Forma (Pro Forma
Class B Class B Class B Class I Class Y Class Y Class Y
- -----------------------------------------------------------------------------------------------------------------------------
Maximum sales None None None None None None None
charge (load)
when you buy
shares as a
percentage of
offering price
- -----------------------------------------------------------------------------------------------------------------------------
Maximum deferred 4.00% 4.00% 4.00% None None None None
sales charge
(load) as a
percentage of
purchase price or
the amount you
receive when you
sell shares,
whichever is less
- -----------------------------------------------------------------------------------------------------------------------------
Redemption fees None None None 2.00%(4) None None None
- -----------------------------------------------------------------------------------------------------------------------------
Annual fund
operating
expenses
(deducted from
fund assets)
(as a % of
average net
assets)
- -----------------------------------------------------------------------------------------------------------------------------
Management fee 0.49% 0.49% 0.49% 0.50% 0.49% 0.49% 0.49%
- -----------------------------------------------------------------------------------------------------------------------------
12
Shareholder AmSouth Pioneer Combined Combined AmSouth
transaction fees Tennessee Tax Free Fund Fund Tennessee Tax-
(paid directly Tax-Exempt Income (Pro Forma) (including Exempt Fund(1)
from your Fund(1) Fund AmSouth
investment) High Quality
Municipal
Bond Fund)
(Pro Forma)
Class A Class A Class A Class A Class B
- ---------------------------------------------------------------------------------------------
Distribution and None 0.25% 0.25% 0.25% 0.75%
service (12b-1)
fee
- ---------------------------------------------------------------------------------------------
Other expenses 0.83%(5) 0.17% 0.17% 00.19% 1.07%(5)
- ---------------------------------------------------------------------------------------------
Total fund 1.33% 0.91%(6) 0.91% 0.90% 2.32%
operating expenses
- ---------------------------------------------------------------------------------------------
Expense 0.33% N/A N/A N/A 0.57%
reimbursement/
reduction
- ---------------------------------------------------------------------------------------------
Net fund 1.00% 0.91% 0.91% 0.90% 1.75%
operating expenses
- ---------------------------------------------------------------------------------------------
Shareholder Pioneer Combined Fund Combined AmSouth Pioneer Combined Fund Combined
transaction fees Tax Free (Pro Forma) Fund Tennessee Tax Free (Pro Forma) Fund
(paid directly Income (including Tax-Exempt Income Fund (including
from your Fund AmSouth High Fund(1) AmSouth High
investment) Quality Quality
Municipal Municipal
Bond Fund) Bond Fund)
(Pro Forma (Pro Forma
Class B Class B Class B Class I Class Y Class Y Class Y
- -----------------------------------------------------------------------------------------------------------------------------
Distribution and 1.00% 1.00% 1.00% None None None None
service (12b-1)
fee
- -----------------------------------------------------------------------------------------------------------------------------
Other expenses 0.18% 0.18% 0.16% 0.60%(5) 0.06% 0.06% 0.06%
- -----------------------------------------------------------------------------------------------------------------------------
Total fund 1.67%(6) 1.67% 1.65% 1.10% 0.55%(6) 0.55% 0.55%
operating expenses
- -----------------------------------------------------------------------------------------------------------------------------
Expense N/A N/A N/A 0.25% N/A N/A N/A
reimbursement/
reduction
- -----------------------------------------------------------------------------------------------------------------------------
Net fund 1.67% 1.67% 1.65% 0.85% 0.55% 0.55% 0.55%
operating expenses
- -----------------------------------------------------------------------------------------------------------------------------
(1) AmSouth Bank or other financial institutions may charge their customer
account fees for automatic investment and other cash management services
provided in connection with investment in the Fund.
(2) Sales charges may be reduced depending upon the amount invested or, in
certain circumstances, waived. Class A shares of the Pioneer Fund bought
as part of an investment of $1 million or more are not subject to an
initial sales charge, but may be charged a CDSC of 1.00% if sold within
one year of purchase. See "Distribution Arrangements."
(3) For Class B shares purchased prior to the combination of AmSouth Funds
with ISG Funds, the CDSC on such Class B Shares held continuously declines
over six years, starting with year one and ending in year seven from: 4%,
3%, 3%, 2%, 2%, 1%. For all other Class B shares held continuously, the
CDSC declines over six years, starting with year one and ending in year
seven from: 5%, 4%, 3%, 3%, 2%, 1%. Eight years after purchase (seven
years in the case of shares acquired in the ISG combination), Class B
shares automatically convert to Class A shares.
(4) To discourage short-term trading, a redemption fee of 2.00% will be
charged on sales or exchanges of Class A, Class B and Class I shares of
your AmSouth Fund made within 7 days of the date of purchase. A wire
transfer fee of $7.00 will be deducted from the amount of your redemption
if you request a wire transfer.
(5) Other expenses for the AmSouth Fund are being limited to 0.50% for Class A
shares, 050% for Class B shares and 0.35% for Class I shares. Any fee
waiver or expense reimbursement arrangement is voluntary and may be
discontinued at any time.
(6) The Pioneer Fund's total annual operating expenses in the table have not
been reduced by any expense offset arrangements.
13
The hypothetical example below helps you compare the cost of investing in
each Fund. It assumes that: (a) you invest $10,000 in each Fund for the time
periods shown, (b) you reinvest all dividends and distributions, (c) your
investment has a 5% return each year, and (d) each Fund's gross operating
expenses remain the same. The examples are for comparison purposes only and are
not a representation of either Fund's actual expenses or returns, either past or
future.
Number of years you own your AmSouth Tennessee Pioneer Tax Free Combined Fund Combined Fund
shares Tax-Exempt Fund Income Fund (Pro Forma) (including AmSouth
High Quality
Municipal Bond
Fund)
(Pro Forma)
- --------------------------------------------------------------------------------------------------------------------
Class A
- --------------------------------------------------------------------------------------------------------------------
Year 1 $ 530 $ 539 $ 663 $ 662
- --------------------------------------------------------------------------------------------------------------------
Year 3 $ 805 $ 727 $ 848 $ 845
- --------------------------------------------------------------------------------------------------------------------
Year 5 $ 1100 $ 931 $1,050 $1,045
- --------------------------------------------------------------------------------------------------------------------
Year 10 $1,937 $1,519 $1,630 $1,619
- --------------------------------------------------------------------------------------------------------------------
Class B -- assuming redemption at end of period
- --------------------------------------------------------------------------------------------------------------------
Year 1 $ 735 $ 570 $ 570 $ 559
- --------------------------------------------------------------------------------------------------------------------
Year 3 $1,024 $ 826 $ 826 $ 793
- --------------------------------------------------------------------------------------------------------------------
Year 5 $1,440 $1,007 $1,007 $ 950
- --------------------------------------------------------------------------------------------------------------------
Year 10 $2,408 $1,774 $1,774 $1,679
- --------------------------------------------------------------------------------------------------------------------
Class B -- assuming no redemption
- --------------------------------------------------------------------------------------------------------------------
Year 1 $ 235 $ 170 $ 170 $ 159
- --------------------------------------------------------------------------------------------------------------------
Year 3 $ 724 $ 526 $ 526 $ 493
- --------------------------------------------------------------------------------------------------------------------
Year 5 $1,240 $ 909 $ 907 $ 850
- --------------------------------------------------------------------------------------------------------------------
Year 10 $2,408 $1,774 $1,774 $1,679
- --------------------------------------------------------------------------------------------------------------------
Class I Class Y
- --------------------------------------------------------------------------------------------------------------------
Year 1 $ 112 $ 56 $ 56 $ 56
- --------------------------------------------------------------------------------------------------------------------
Year 3 $ 350 $ 176 $ 176 $ 176
- --------------------------------------------------------------------------------------------------------------------
Year 5 $ 606 $ 307 $ 307 $ 307
- --------------------------------------------------------------------------------------------------------------------
Year 10 $1,340 $ 689 $ 689 $ 689
- --------------------------------------------------------------------------------------------------------------------
Reasons for the Proposed Reorganization
The Trustees believe that the proposed Reorganization is in the best
interests of AmSouth Tennessee Tax-Exempt Fund. The Trustees considered the
following matters, among others, in approving the proposal.
First, AAMI, the investment adviser to your AmSouth Fund informed the
Trustees that it does not intend to continue to provide investment advisory
services to the AmSouth Funds. Consequently, a change in your AmSouth Fund's
investment adviser was necessary. In the absence of the Reorganization, such a
change would be more likely to motivate shareholders invested in reliance on
AAMI's role to withdraw from the Fund, thereby reducing fund size and increasing
fund expense ratios.
Second, after the Reorganization, the combined Fund will have an asset
size substantially larger than that of your AmSouth Fund, which may allow the
combined Fund to achieve significant economies of scale in investments or
expenses.
Third, the historical investment performance of Pioneer Tax Free Income
Fund is better than your AmSouth Fund's investment performance. For the one,
five and ten year periods ended December 31, 2004, Class A shares of Pioneer Tax
Free Income Fund had an average annual return of 0.05% (one year); 5.66% (five
years); and 5.88% (ten years) compared to an average annual return of the Class
A shares of your AmSouth Fund of -2.87% (one year); 3.96% (five years); and
4.22% (ten years), respectively, during the same period. The trustees also
considered performance information provided for the one, three, and five year
periods ended March 31, 2005 during which Class A shares of Pioneer Tax Free
Income Fund had an average annual return of 3.30% (one year); 5.82% (three
years); and 6.10% (five years), compared to an average annual return of the
Class A shares of your AmSouth Fund of -0.81% (one year); 3.52% (three years);
and 4.21% (five years), respectively, during
14
the same period. In addition, the Trustees considered the track record of
Pioneer in managing equity and fixed income mutual funds.
Fourth, the resources of Pioneer. At December 31, 2004, Pioneer managed
over 80 investment companies and accounts with approximately $42 billion in
assets, including $2 billion in municipal securities. Pioneer is part of the
global asset management group of UniCredito Italiano S.p.A., one of the largest
banking groups in Italy, providing investment management and financial services
to mutual funds, institutional and other clients. As of December 31, 2004,
assets under management of UniCredito Italiano S.p.A. were approximately $175
billion worldwide. Shareholders of your AmSouth Fund would become part of a
significantly larger family of funds that offers a more diverse array of
investment options and enhanced shareholder account options. The Pioneer family
of mutual funds offers over 80 funds, including domestic and international
equity and fixed income funds and a money market fund that will be available to
your AmSouth Fund's shareholders through exchanges.
Fifth, the Pioneer Fund's management fee is lower than your Fund's
management fee and will benefit from breakpoints as assets increase as a result
of the Reorganization. The aggregate Rule 12b-1 distribution and shareholder
servicing fees and non-Rule 12b-1 shareholder servicing fees paid by the Class A
and Class B shares of both Funds are the same. Moreover, your AmSouth Fund's
Class I shares pay a non 12b-1 shareholder servicing fee that is not paid by the
Pioneer Fund's Class Y shares. The net and gross expenses of Class A, Class B
and Class Y shares of Pioneer Tax Free Income Fund are currently lower than the
gross and net expenses of the corresponding classes of your Fund and are
estimated to be lower on a pro forma basis after giving effect to the
Reorganization.
Sixth, although the Pioneer Tax Free Income Fund does not concentrate its
investments in Tennessee and the dividends on the Pioneer Fund will not be
exempt from Tennessee state taxes, your Board believes that the broader
investment focus of the Pioneer Fund offered better long term prospects and
potential for after tax return.
Seventh, the transaction is structured to qualify as a tax-free
reorganization under Section 368(a) of the Internal Revenue Code of 1986 and
therefore will not be treated as a taxable sale of your AmSouth shares.
Pioneer and AmSouth Bank will pay all costs of preparing and printing the
Funds' proxy statements and solicitation costs incurred by the Funds in
connection with the Reorganization. AAMI will otherwise be responsible for all
costs and expenses of the AmSouth Fund in connection with the Reorganization.
The Trustees also considered that Pioneer and AmSouth Bank will benefit
from the Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the
Reorganizations."
The Board of Trustees of the Pioneer Fund also considered that the
Reorganization presents an excellent opportunity for the Pioneer Fund to acquire
investment assets without the obligation to pay commissions or other transaction
costs that a fund normally incurs when purchasing securities. This opportunity
provides an economic benefit to the Pioneer Fund and its shareholders.
CAPITALIZATION
The following table sets forth the capitalization of each Fund as of May
31, 2005, and the pro forma combined Fund as of May 31, 2005.The table also sets
forth the pro forma capitalization of the combined Fund as of May 31, 2005,
assuming the shareholders of AmSouth High Quality Municipal Bond Fund approve
the reorganization of their fund into Pioneer Tax Free Income Fund.
Pro Forma
Pro Forma Pioneer Tax Free Income
Pioneer Tax Fund (including AmSouth
AmSouth Tennessee Pioneer Tax Free Free Income High Quality Municipal
Tax-Exempt Fund Income Fund Fund Bond Fund)
May 31, 2005 May 31, 2005 May 31, 2005 May 31, 2005
------------------- ----------------- ------------ -----------------------
Total Net Assets (in thousands) $ 35,867 $ 345,063 $ 380,929 $ 710,145
Class A shares .......................... $ 5,184 $ 304,731 $ 309,915 $ 325,503
Class B shares .......................... $ 2,092 $ 18,036 $ 20,128 $ 23,867
Class I/Y shares ........................ $ 28,591 $ 143 $ 28,733 $ 338,622
15
Net Asset Value Per Share
Class A shares .......................... $ 10.15 $ 11.78 $ 11.78 $ 11.78
Class B shares .......................... $ 10.16 $ 11.68 $ 11.68 $ 11.68
Class I/Y shares ........................ $ 10.15 $ 11.72 $ 11.72 $ 11.72
Shares Outstanding
Class A shares .......................... 510,534 25,863,912 26,303,940 27,626,928
Class B shares .......................... 205,863 1,544,680 1,723,825 2,044,084
Class I/Y shares ........................ 2,818,033 12,181 2,451,682 28,893,022
It is impossible to predict how many shares of the Pioneer Fund will
actually be received and distributed by your AmSouth Fund on the Reorganization
date. The table should not be relied upon to determine the amount of the Pioneer
Fund's shares that will actually be received and distributed.
BOARD'S EVALUATION AND RECOMMENDATION
For the reasons described above, the Trustees, including the Independent
Trustees, approved the Reorganization. In particular, the Trustees determined
that the Reorganization is in the best interests of your AmSouth Fund.
Similarly, the Board of Trustees of the Pioneer Fund, including its Independent
Trustees, approved the Reorganization. They also determined that the
Reorganization is in the best interests of the Pioneer Fund.
The Trustees recommend that the shareholders of your AmSouth Fund vote FOR
the proposal to approve the Agreement and Plan of Reorganization.
16
AmSouth Government Income Fund and
Pioneer America Income Trust
PROPOSAL 1(r)
Approval of Agreement and Plan of Reorganization
SUMMARY
The following is a summary of more complete information appearing later in
this Proxy Statement/Prospectus or incorporated herein. You should read
carefully the entire Proxy Statement/Prospectus, including the form of Agreement
and Plan of Reorganization attached as EXHIBIT A-1, because it contains details
that are not in the summary.
Each Fund seeks current income as is consistent with preservation of
capital, and consequently, the Funds have similar investment policies and risks.
Both Funds invest in U.S. government securities but the Pioneer Fund only
invests in U.S. government securities backed by the full faith and credit of the
U.S. Treasury. In the table below, if a row extends across the entire table, the
policy disclosed applies to both your AmSouth Fund and the Pioneer Fund.
Comparison of AmSouth Government Income Fund to Pioneer America Income Trust
AmSouth Government Income Fund Pioneer America Income Trust
- --------------------------------------------------------------------------------------------------------------------------
Business A non-diversified series of AmSouth Funds, an A diversified open-end management investment
open-end management investment company company organized as a Massachusetts business
organized as a Massachusetts business trust. trust.
Net assets as of March $166.5 million $229.5 million
31, 2005
Investment advisers Investment Adviser: Investment Adviser:
and portfolio AAMI Pioneer
managers
Portfolio Managers: Portfolio Manager:
Day-to-day management of AmSouth Government Day-to-day management of the Fund's portfolio
Income Fund's portfolio is the responsibility is the responsibility of Richard Schlanger.
of John P. Boston, CFA and Michael T. Lytle, Mr. Schlanger is supported by the fixed income
CFA. Mr. Boston and Mr. Lytle were each named team. Members of this team manage other
co-manager of the Fund in 2004. Mr. Boston Pioneer funds investing primarily in fixed
managed the Fund from 1993 to 1998 and income securities. The portfolio manager and
co-managed the Fund from 1999 to 2002. He also the team also may draw upon the research and
manages AmSouth High Quality Bond Fund and investment management expertise of the global
AmSouth Limited Term Bond Fund and co-manages research team, which provides fundamental
AmSouth Balanced Fund. Mr. Boston is Chief research on companies and includes members
Fixed Income Officer for AAMI. Mr. Boston from Pioneer's affiliate, Pioneer Investment
began his career in investment management with Management Limited. Mr. Schlanger joined
AmSouth Bank in 1988 and has been associated Pioneer as a portfolio manager in 1988 after
with AAMI since 1996. spending 12 years with Irving Trust Company in
New York, where he had overall responsibility
Mr. Lytle joined AmSouth Bank's Asset for managing nearly $1.5 billion in fixed
Management Group in 1999 and AAMI in 2003. He income assets.
is a fixed-income portfolio manager for AAMI,
specializing in taxable fixed-income
securities.
Investment objective AmSouth Government Income Fund seeks current Pioneer America Income Fund seeks as high a
income consistent with the preservation level of current income as is consistent with
1
AmSouth Government Income Fund Pioneer America Income Trust
- ---------------------------------------------------------------------------------------------------------------------------
of capital. preservation of capital and prudent investment
risk.
Primary investments Under normal circumstances, the Fund will Pioneer America Income Trust invests
invest at least 80% of its net assets exclusively in securities that are backed by
primarily in obligations issued or guaranteed the full faith and credit of the U.S.
by the U.S. government or its agencies and government, and repurchase agreements and
instrumentalities. For the purpose of this "when-issued" commitments with respect to
policy, net assets include net assets plus these securities.
borrowings for investment purposes. The Fund
invests primarily in securities issued or Securities in which the Pioneer Trust may
guaranteed by the U.S. government, its invest include:
agencies or instrumentalities. These o U.S. Treasury obligations, which
investments are principally mortgage-related differ only in their interest rates,
securities, U.S. Treasury obligations and U.S. maturities and times of issuance,
government agency obligations. The Fund including U.S. Treasury bills (maturities
invests in securities issued by: (i) the of one year or less), U.S. Treasury notes
Government National Mortgage Association, (maturities of one to 10 years), and U.S.
which are supported by the full faith and Treasury bonds (generally maturities
credit of the U.S. government; (ii) the greater than 10 years)
Federal National Mortgage Association, the o Obligations issued by or guaranteed
Federal Home Loan Mortgage Corporation, the as to principal and interest by the U.S.
Student Loan Marketing Association ("SLMA") Treasury and certain agencies and
and the Federal Home Loan Banks ("FHLBs"), instrumentalities of the U.S. government,
which are supported by the right of the issuer such as Government National Mortgage
to borrow from the U.S. Treasury; (iii) the Association ("GNMA") certificates and
Federal Farm Credit Banks ("FFCBs") and the Federal Housing Administration ("FHA")
Tennessee Valley Authority ("TVA"), which are debentures, for which the U.S. Treasury
supported only by the credit of the issuer; unconditionally guarantees payment of
and (iv) the Private Export Funding principal and interest
Corporation ("PEFCO") which may be guaranteed
by the Export-Import Bank of the U.S. ("Exim The Fund's investments may have all types of
Bank"), an agency of the U.S. interest rate payment and reset terms,
including fixed rate, adjustable rate, zero
coupon, contingent, deferred, payment-in-kind
and auction rate features. The Fund may invest
in securities of any maturity. Although the
average dollar weighted maturity of the Fund's
portfolio may vary significantly, it generally
will not exceed 20 years.
Investment strategies AAMI's fixed income portfolio management Pioneer considers both broad economic factors
process focuses on the four key areas of and issuer specific factors in selecting a
duration management, sector weights, position portfolio designed to achieve the Fund's
on the yield curve and security selection; investment objective. In assessing the
AAMI's goal is to add value in each of these appropriate maturity and sector weighting of
four areas through the active management of the Fund's portfolio, Pioneer considers a
the Fund's portfolio. Beginning with rigorous variety of factors that are expected to
fundamental analysis of the economy and taking influence economic activity and interest rates.
into account characteristics of the current
business and interest rate cycles, AAMI These factors include fundamental economic
arrives at a projection of the likely trend in indicators, such as the rates of economic
interest rates and adjusts duration growth and inflation, Federal Reserve monetary
accordingly. Analysis of the shape of the policy and the relative value of the U.S.
yield curve and yield spreads among bond dollar compared to other currencies.
market sectors leads
2
AmSouth Government Income Fund Pioneer America Income Trust
- ---------------------------------------------------------------------------------------------------------------------------
to further refinements in strategy. Once Pioneer determines the preferable
portfolio characteristics, Pioneer selects
individual securities based upon the terms of
the securities (such as yields compared to U.S.
Treasuries or comparable issues and sector
diversification.
Other investments Up to 20% of the Fund's total assets may be The Fund may invest in mortgage-backed
invested in other types of debt securities, securities issued by certain agencies or
preferred stocks and options. The Fund may instrumentalities of the U.S. government.
invest up to 100% of its total assets in These securities represent direct or indirect
mortgage-related securities issued or participation in, or are collateralized by and
guaranteed by the U.S. government or its payable from, mortgage loans secured by real
agencies and instrumentalities such as GNMA, estate.
which are supported by the full faith and
credit of the U.S. government, and the Federal The Fund may purchase and sell securities,
National Mortgage Association ("FNMA") and including GNMA certificates, on a when-issued
Federal Home Loan Mortgage Corporation or delayed delivery basis. These transactions
("FHLMC"), which are supported by the right of arise when securities are purchased or sold by
the issuer to borrow from the U.S. Treasury, the Fund with payment and delivery taking
and in mortgage-related securities issued by place at a fixed future date. The Fund will not
nongovernmental entities which are rated, at earn income on these securities until
the time of purchase, in one of the four delivered. The Fund may engage in these
highest rating categories by a nationally transactions when it believes they would
recognized statistical rating organization result in a favorable price and yield for the
("NRSRO") or, if unrated, determined by AAMI security being purchased or sold.
to be of comparable quality.
The Fund's investments also include securities
issued by (i) SLMA and the FHLBs, which are
supported by the right of the issuer to borrow
from the U.S. Treasury; (ii) FFCBs and the
Tennessee Valley Authority, which are
supported only by the credit of the issuer;
and (iii) Private Export Funding Corporation,
which may be guaranteed by the Export Import
Bank of the U.S., an agency of the U.S.
The Fund may invest, to a limited extent, in
securities issued by other investment
companies that principally invest in
securities of the type in which the Fund
invests. Such investments will involve
duplication of advisory fees and certain other
expenses.
Temporary defensive When AAMI determines adverse market conditions Pioneer America Income Trust may invest all or
strategies exist, AmSouth Government Income Fund may part of its assets in securities with
invest entirely in cash positions, directly in remaining maturities of less than one year,
U.S. Government securities and short-term cash equivalents or may hold cash.
paper, such as bankers' acceptances.
3
AmSouth Government Income Fund Pioneer America Income Trust
- ---------------------------------------------------------------------------------------------------------------------------
Diversification AmSouth Government Income Fund is Pioneer America Income Trust is diversified
non-diversified for the purpose of the for the purpose of the Investment Company Act
Investment Company Act and, therefore, may and is subject to diversification requirements
concentrate its investments in a limited under the Internal Revenue Code of 1986, as
number of issuers. amended (the "Code").
Industry AmSouth Government Income Fund may not Pioneer America Income Trust does not have a
concentration purchase any securities which would cause more policy against industry concentration.
than 25% of the value of the Fund's total
assets at the time of purchase to be invested
in securities of one or more issuers
conducting their principal business activities
in the same industry, provided that (a) there
is no limitation with respect to obligations
issued or guaranteed by the U.S. government or
its agencies or instrumentalities, and
repurchase agreements secured by obligations
of the U.S. government or its agencies or
instrumentalities; (b) wholly owned finance
companies will be considered to be in the
industries of their parents if their
activities are primarily related to financing
the activities of their parents; and (c)
utilities will be divided according to their
services. For example, gas, gas transmission,
electric and gas, electric, and telephone will
each be considered a separate industry.
Restricted and illiquid AmSouth Government Income Fund may not invest Pioneer America Income Trust may not invest
securities more than 15% of its net assets in securities more than 15% of its net assets in securities
that are restricted as to resale, or for which which are illiquid and other securities which
no readily available market exists, including are not readily marketable. Repurchase
repurchase agreements providing for settlement agreements maturing in more than seven days
more than seven days after notice. will be included for purposes of the foregoing
limit.
Borrowing AmSouth Government Income Fund may not borrow Pioneer America Income Trust may not borrow
money or issue senior securities, except the money, except the Fund may: (a) borrow from
Fund may borrow from banks or enter into banks or through reverse repurchase agreements
reverse repurchase agreements for temporary in an amount up to 33 1/3% of the Fund's total
emergency purposes in amounts up to 33 1/3% of assets (including the amount borrowed); (b) to
the value of its total assets at the time of the extent permitted by applicable law, borrow
such borrowing. The Fund will not purchase up to an additional 5% of the Fund's assets
securities while borrowings (including reverse for temporary purposes; (c) obtain such
repurchase agreements) in excess of 5% of its short-term credits as are necessary for the
total assets are outstanding. clearance of portfolio transactions; (d)
purchase securities on margin to the extent
permitted by applicable law; and (e) engage in
transactions in mortgage dollar rolls that are
accounted for as financings.
Lending AmSouth Government Income Fund may not make Pioneer America Income Trust may not make
loans, except that the Fund may purchase or loans, except through the purchase of
hold debt instruments in accordance with its securities, including repurchase agreements in
investment objective and policies, lend Fund accordance with its investment objective,
4
AmSouth Government Income Fund Pioneer America Income Trust
- ---------------------------------------------------------------------------------------------------------------------------
securities in accordance with its investment policies and limitations.
objective and policies and enter into
repurchase agreements.
Derivative instruments AmSouth Government Income Fund may invest in Pioneer America Income Trust does not invest
futures contracts and options thereon in derivatives.
(interest rate futures contracts or index
futures contracts, as applicable) to commit
funds awaiting investment, to maintain cash
liquidity or for other hedging purposes. The
value of the Fund's contracts may equal or
exceed 100% of the Fund's total assets,
although the Fund will not purchase or sell a
futures contract unless immediately afterwards
the aggregate amount of margin deposits on its
existing futures positions plus the amount of
premiums paid for related futures options
entered into for other than bona fide hedging
purposes is 5% or less of its net assets.
Short-term trading The AmSouth Government Income Fund may engage Pioneer America Income Trust usually does not
in the technique of short-term trading. Such trade for short-term profits. The Fund will
trading involves the selling of securities sell an investment, however, even if it has
held for a short time, ranging from several only been held for a short time, if it no
months to less than a day. The object of such longer meets the Fund's investment criteria.
short-term trading is to increase the
potential for capital appreciation and/or
income of the Fund in order to take advantage
of what AAMI believes are changes in market,
industry or individual company conditions or
outlook.
Other investment As described above, the Funds have substantially similar principal investment strategies and
policies and policies. Certain of the non-principal investment policies and restrictions are different. For
restrictions a more complete discussion of each Fund's other investment policies and fundamental and
non-fundamental investment restrictions, see the SAI.
Buying, Selling and Exchanging Shares
Class A sales charges Class A shares are offered with an initial Class A shares are offered with an initial
and Rule 12b-1 fees sales charge of up to 4.00% of the offering sales charge of up to 4.50% of the offering
price, which is reduced depending upon the price, which is reduced or waived for large
amount invested or, in certain circumstances, purchases and certain types of investors. At
waived. Class A shares bought as part of an the time of your purchase, your investment
investment of $1 million or more are not firm may receive a commission from Pioneer
subject to an initial sales charge, but may be Funds Distributor, Inc. ("PFD"), the Fund's
charged a contingent deferred sales charge distributor, of up to 5% declining as the size
("CDSC") of 1.00% if sold within one year of of your investment increases.
purchase.
There is no CDSC, except in certain
Class A shares pay a shareholder servicing fee circumstances when the initial sales charge is
(non 12b-1) of up to 0.25% of average daily waived. Additionally, purchases of $1 million
net assets. or more or and purchases of participants in
certain group plans may be subject to a CDSC
5
AmSouth Government Income Fund Pioneer America Income Trust
- ---------------------------------------------------------------------------------------------------------------------------
of 1%.
Class A shares are subject to distribution and
service (12b-1) fees of up to 0.25% of average
daily net assets.
Class B sales charges Class B shares are offered without an initial Class B shares are offered without an initial
and Rule 12b-1 fees sales charge, but are subject to a CDSC of up sales charge, but are subject to a CDSC of up
to 5%. For Class B shares purchased prior to to 4% if you sell your shares. The charge is
the combination of AmSouth Funds with ISG reduced over time and is not charged after
Funds, the CDSC on such Class B shares held five years. Your investment firm may receive a
continuously declines over six years, starting commission from PFD, the Fund's distributor,
with year one and ending in year seven from: at the time of your purchase of up to 4%.
4%, 3%, 3%, 2%, 2%, 1%. For all other Class B
shares held continuously, the CDSC declines Class B shares are subject to distribution and
over six years, starting with year one and service (12b-1) fees of up to 1% of average
ending in year seven from: 5%, 4%, 3%, 3%, 2%, daily net assets.
1%. Eight years after purchase (seven years in
the case of shares acquired in the ISG Class B shares acquired through the
combination), Class B shares automatically Reorganization will be subject to the CDSC and
convert to Class A shares. commission schedules applicable to the
original purchase.
Class B shares pay a shareholder servicing fee
(non 12b-1) of 0.25% of average daily net
assets. This fee is in the form of a separate
non-Rule 12b-1 fee. All Funds bear a
distribution (12b-1) fee of 0.75%.
Maximum investment for all Class B purchases
by a shareholder for the Fund's shares is
$99,999.
Class I and Class Y AmSouth Government Income Fund does not impose The Fund does not impose any initial,
sales charges and Rule any initial or CDSC on Class I shares. contingent deferred or asset based sales
12b-1 fees charge on Class Y shares.
The Fund may impose a shareholder servicing
fee (non 12b-1) of up to 0.15% of average The distributor incurs the expenses of
daily net assets. distributing the Fund's Class Y shares, none
of which are reimbursed by the Fund or the
Class Y shareowners.
Management and AmSouth Government Income Fund pays an Pioneer America Income Trust pays Pioneer an
other fees advisory fee on a monthly basis at an annual annual fee equal to 0.50% of the Fund's
rate of 0.50% of the Fund's average daily net average daily net assets. The fee is computed
assets. daily and paid monthly.
ASO Services Company, Inc. ("ASO") serves as In addition, the Fund reimburses Pioneer for
administrator and fund accounting agent for certain Fund accounting and legal expenses
the Fund. The Fund pays ASO an administrative incurred on behalf of the Fund and pays a
services fee of 0.15% of the Fund's average separate shareholder servicing/transfer agency
daily net assets. fee to PIMSS, an affiliate of Pioneer.
Other expenses of the Fund are being limited Through August 31, 2005, Pioneer has
to 0.49% for Class A shares, 0.49% for Class B contractually agreed not to impose all or a
6
AmSouth Government Income Fund Pioneer America Income Trust
- ---------------------------------------------------------------------------------------------------------------------------
shares and 0.34% for Class I shares. Any fee portion of its management fee and, if
waiver or expense reimbursement arrangement is necessary, to limit other ordinary operating
voluntary and may be discontinued at any time. expenses to the extent required to reduce
Class A expenses to 1.50% of the average daily
For the fiscal year ended July 31, 2004, the net assets attributable to Class A shares. The
Fund's annual operating expenses for Class A portion of Fund expenses (including the amount
shares, after giving effect to the expense of the management fee waived) attributable to
limitation were 0.99%, and without giving Class Y shares will be reduced only to the
effect to the expense limitation, were 1.01% extent such expenses are reduced for Class A
of average daily net assets. shares.
For the fiscal year ended July 31, 2004, the For the fiscal year ended November 30, 2004,
Fund's annual operating expenses for Class B the Fund's total annual operating expenses for
shares, after giving effect to the expense Class A shares were 1.16% of average daily net
limitation were 1.74%, and without giving assets.
effect to the expense limitation, were 1.76%
of average daily net assets. For the fiscal year ended November 30, 2004,
the Fund's total annual operating expenses for
For the fiscal year ended July 31, 2004, the Class B shares were 1.98%.
Fund's annual operating expenses for Class I
shares, after giving effect to the expense For the fiscal year ended November 30, 2004,
limitation were 0.84%, and without giving the Fund's total annual operating expenses for
effect to the expense limitation, were 0.91% Class Y shares were 1.19% of average daily net
of average daily net assets. assets.
Buying shares You may buy shares of the Fund directly You may buy shares from any investment firm
through BISYS Fund Services, the Fund's that has a sales agreement with PFD, the
distributor, or through brokers, registered Fund's distributor.
investment advisers, banks and other financial
institutions that have entered into selling If the account is established in the
agreements with the Fund's distributor, as shareholder's own name, shareholders may also
described in the Fund's prospectus. purchase additional shares of the Fund by
telephone or online.
Certain account transactions may be done by
telephone.
Exchanging shares You can exchange your shares in the Fund for You may exchange your shares for shares of the
shares of the same class of another AmSouth same class of another Pioneer mutual fund.
Fund, usually without paying additional sales Your exchange request must be for at least
charges. You must meet the minimum investment $1,000. The Fund allows you to exchange your
requirements for the Fund into which you are shares at net asset value without charging you
exchanging. Exchanges from one Fund to another either an initial or contingent deferred
are taxable. Class A shares may be exchanged shares charge at the time of the exchange.
for Class I shares of the same Fund or another Shares you acquire as part of an exchange will
AmSouth Fund if you become eligible to continue to be subject to any CDSC that
purchase Class I shares. Class I shares may be applies to the shares you originally
exchanged for Class A shares of the same Fund. purchased. When you ultimately sell your
No transaction fees are currently charged for shares, the date of your original purchase will
exchanges. determine your CDSC. An exchange generally is
treated as a sale and a new purchase of shares
If you sell your shares or exchange them for for federal income tax purposes.
shares of another AmSouth Fund within 7
days of the date of purchase, you will be After you establish an eligible Fund account,
charged a 2.00% fee on the current net asset you can exchange Fund shares by telephone or
value of the shares sold or exchanged. The fee online.
7
AmSouth Government Income Fund Pioneer America Income Trust
- ---------------------------------------------------------------------------------------------------------------------------
is paid to the Fund to offset the costs
associated with short-term trading, such as
portfolio transaction and administrative costs.
The Fund uses a "first-in, first-out" method
to determine how long you have held your
shares. This means that if you purchased
shares on different days, the shares purchased
first will be considered redeemed first for
purposes of determining whether the redemption
fee will be charged.
The fee will be charged on all covered
redemptions and exchanges, including those
made through retirement plan, brokerage and
other types of omnibus accounts (except where
it is not practical for the plan administrator
or brokerage firm to implement the fee). The
Fund will not impose the redemption fee on a
redemption or exchange of shares purchased
upon the reinvestment of dividend and capital
gain distributions.
Selling shares Shares of each Fund are sold at the net asset value per share next calculated after the Fund
receives your request in good order.
You may sell your shares by contacting the Normally, your investment firm will send your
Fund directly in writing or by telephone or by request to sell shares to PIMSS. You can also
contacting a financial intermediary as sell your shares by contacting the Fund
described in the Fund's prospectus. directly if your account is registered in your
name.
If the account is established in the
shareholder's own name, shareholders may also
redeem shares of the Fund by telephone or
online.
Comparison of Principal Risks of Investing in the Funds
Because each Fund has a similar investment objective, primary investment
policies and strategies, the Funds are subject to the same principal risks. You
could lose money on your investment in either Fund or not make as much as if you
invested elsewhere if:
o Interest rates increase, causing the value of investments to
decline, a risk that is generally high for longer-term bonds and low
for shorter-term bonds
o During periods of declining interest rates, the issuer of a security
may exercise its option to prepay principal earlier than scheduled,
forcing the Fund to reinvest in lower yielding securities. This is
known as call or prepayment risk
o Interest rates decrease and the Fund's income declines. Income risk
is generally high for shorter-term bonds and low for longer-term
bonds
8
o The average life of certain types securities are extended because of
slower than expected principal during periods of rising interest
rates. This may lock in a below market interest rate, increase the
security's duration (the estimated period until the security is paid
in full) and reduce the value of the security. This is known as
extension risk
o The adviser's judgment about the attractiveness, relative value or
potential appreciation of a particular sector, security or
investment strategy proves to be incorrect
AmSouth Government Income Fund is subject to risks relating to the fact
that it is non-diversified. The Fund may invest in a small number of companies
which may increase the volatility of the Fund. Accordingly, the Fund's portfolio
may be more sensitive to changes in the market value of a single company or
industry.
Past Performance
Set forth below is performance information for each Fund. The bar charts
show how each Fund's total return (not including any deduction for sales
charges) has varied from year to year for each full calendar year. The tables
show average annual total return (before and after taxes) for each Fund over
time for each class of shares (including deductions for sales charges) compared
with a broad-based securities market index. The bar charts give an indication of
the risks of investing in each Fund, including the fact that you could incur a
loss and experience volatility of returns year to year. Past performance before
and after taxes does not indicate future results.
AmSouth Government Income Fund -- Class A
Calendar Year Total Returns*
[BAR CHART]
1995 14.38
1996 4.07
1997 9.35
1998 7.14
1999 0.63
2000 10.67
2001 7.01
2002 8.70
2002 1.46
2003 0.60
* During the period shown in the bar chart, your AmSouth Fund's
highest quarterly return was 4.54% for the quarter ended June 30,
1995, and the lowest quarterly return was -1.77% for the quarter
ended June 30, 2004.
9
Pioneer America Income Trust -- Class A Shares
Calendar Year Total Returns*
[BAR CHART]
1995 16.06
1996 2.20
1997 8.51
1998 7.78
1999 -2.53
2000 11.58
2001 5.92
2002 9.77
2003 1.47
2004 2.39
* During the period shown in the bar chart since the Fund's inception
June 1, 1998, Pioneer America Income Trust's highest quarterly
return was 4.72% for the quarter ended June 30, 1995, and the lowest
quarterly return was -2.07% for the quarter ended March 31, 1996.
AmSouth Government Income Fund
Average Annual Total Returns as of December 31, 2004
1 Year 5 Years 10 Years
- ---------------------------------------------------------------------------------------------------------------------------
AmSouth Government Income Fund, Class A Shares
- ---------------------------------------------------------------------------------------------------------------------------
Return Before Taxes -1.72% 5.12% 6.06%
- ---------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions -3.25% 3.16% 3.84%
- ---------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares -1.13% 3.19% 3.81%
- ---------------------------------------------------------------------------------------------------------------------------
AmSouth Government Income Fund, Class B Shares(1)
- ---------------------------------------------------------------------------------------------------------------------------
Return Before Taxes -3.25% 4.88% 5.58%
- ---------------------------------------------------------------------------------------------------------------------------
AmSouth Government Income Fund, Class I Shares(2)
- ---------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 2.54% 6.14% 6.60%
- ---------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions 0.89% 4.10% 4.43%
- ---------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares 1.64% 4.03% 4.25%
- ---------------------------------------------------------------------------------------------------------------------------
Lehman Mortgage Index(3)
(reflects no deduction for fees, expenses or taxes) 4.70% 7.17% 7.56%
- ---------------------------------------------------------------------------------------------------------------------------
(1) Class A shares were first offered on 10/1/93. Performance for the Class B
shares, which were first offered on 3/13/00, is based on the historical
performance of the Fund's Class A shares (without sales charge) prior to
that date. The historical performance of the Class B shares has been
restated to reflect the Fund's Class B shares distribution (12b-1) fees
and the CDSC.
(2) Performance for the Class I shares, which were first offered on 9/2/97, is
based on the historical performance of the Fund's Class A shares (without
sales charge) prior to that date.
(3) Lehman Mortgage Index, an unmanaged index generally representative of the
mortgage bond market as a whole, is for reference only, does not mirror
the Fund's investments, and reflects no deduction for fees, expenses or
taxes.
10
Pioneer America Income Trust
Average Annual Total Returns as of December 31, 2004
1 Year 5 Years 10 Years
- ----------------------------------------------------------------------------------------------------------
Pioneer America Income Trust, Class A shares
- ----------------------------------------------------------------------------------------------------------
Return Before Taxes -1.86% 5.26% 5.75%
- ----------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions(1) -3.34% 3.29% 3.46%
- ----------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and
Sale of Fund Shares(1) -1.22% 3.28% 3.47%
- ----------------------------------------------------------------------------------------------------------
Pioneer America Income Trust, Class B shares
- ----------------------------------------------------------------------------------------------------------
Return Before Taxes -1.92% 5.37% 5.41
- ----------------------------------------------------------------------------------------------------------
Pioneer America Income Trust, Class Y shares(3)
- ----------------------------------------------------------------------------------------------------------
Lehman Brothers Government Bond Index(2)
(reflects no deduction for fees, expenses
or taxes) 3.48% 7.48% 7.46
- ----------------------------------------------------------------------------------------------------------
Lehman Brothers Fixed Rate Mortgage-Backed
Securities Index(4) (reflects no deduction
for fees, expenses or taxes) 4.70% 7.14% 7.56%
- ----------------------------------------------------------------------------------------------------------
(1) After-tax returns are calculated using the historical highest individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your situation and may
differ from those shown. Furthermore, the after-tax returns shown are not
relevant to those who hold their shares through tax-deferred arrangements
such as 401(k) plans or IRA accounts, or to investors that are tax-exempt.
(2) The Lehman Brothers Government Bond Index is an unmanaged measure of the
performance of U.S. Treasury debt, all publicly issued debt of U.S.
government agencies and quasi-federal corporations, and corporate debt
guaranteed by the U.S. government. The Lehman Brother Government Bond
Index is for reference only, does not mirror the Fund's investments, and
reflects no deduction for fees, expenses or taxes.
(3) Class Y shares were not outstanding prior to the closing of the
Reorganization and consequently have no performance history. However, the
performance record of the Class Y shares would be modestly higher than the
performance of the Class A and Class B shares due to the lower expenses
applicable to Class Y shares.
(4) The Lehman Brothers Fixed Rate Mortgage-Backed Securities Index, an
unmanaged index including 15- and 30-year fixed rate securities backed by
mortgage pools of the Government National Mortgage Association ("GNMA"),
Federal Home Loan Mortgage Corporation ("FHLMC") and Federal National
Mortgage Association ("FNMA"). The Lehman Brother Fixed Rate
Mortgage-Backed Securities Index is for reference only, does not mirror
the Fund's investments, and reflects no deduction for fees, expenses or
taxes.
The most recent portfolio manager's discussion of each Fund's performance
is attached as Exhibit C.
The Funds' Fees and Expenses
Shareholders of both Funds pay various fees and expenses, either directly
or indirectly. The tables below show the fees and expenses that you would pay if
you were to buy and hold shares of each Fund. The expenses in the tables
appearing below are based on (i) for the AmSouth Government Income Fund, the
expenses of AmSouth Government Income Fund for the period ended January 31, 2005
and (ii) for Pioneer America Income Trust, the expenses of Pioneer America
Income Trust for the period ended December 31, 2004. Future expenses for all
share classes may be greater or less. The tables also show the pro forma
expenses of the combined Fund assuming the Reorganization occurred on December
31, 2004.
11
Shareholder
transaction Pioneer
fees (paid AmSouth America Combined AmSouth Pioneer Combined AmSouth Combined
directly from Government Income Fund (Pro Government America Fund (Pro Government Fund (Pro
your Income Fund(1) Trust Forma) Income Fund(1) Income Trust Forma) Income Fund(1) Forma)
investment) Class A Class A Class A Class B Class B Class B Class I Class Y(8)
- --------------------------------------------------------------------------------------------------------------------------------
Maximum sales
charge (load)
when you buy
shares as a
percentage of
offering price 4.00%(2) 4.50%(2) 4.50%(2) None None None None None
- --------------------------------------------------------------------------------------------------------------------------------
Maximum deferred
sales charge
(load) as a
percentage of
purchase price
or the amount
you receive when
you sell shares,
whichever is less None None None 5.00%(3) 4.00% 4.00% None None
- --------------------------------------------------------------------------------------------------------------------------------
Redemption fees 2.00%(4) None None 2.00%(4) None None 2.00%(4) None
- --------------------------------------------------------------------------------------------------------------------------------
Annual fund
operating
expenses
(deducted from
fund assets) (as
a % of average
net assets)
- --------------------------------------------------------------------------------------------------------------------------------
Management fee 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50%
- --------------------------------------------------------------------------------------------------------------------------------
Distribution and
service (12b-1)
fee None 0.25% 0.25% 0.75% 1.00% 1.00% None None
- --------------------------------------------------------------------------------------------------------------------------------
Other expenses 0.75%(5) 0.41% 0.37% 0.80%(5) 0.48% 0.42% 0.58%(5) 0.10%
- --------------------------------------------------------------------------------------------------------------------------------
Total fund
operating
expenses 1.25% 1.16%(6) 1.12% 2.05% 1.76%(6) 1.92% 1.08% 0.60%
- --------------------------------------------------------------------------------------------------------------------------------
Expense
reimbursement/
reduction 0.24% N/A(7) N/A 0.29% N/A(7) N/A 0.22% N/A
- --------------------------------------------------------------------------------------------------------------------------------
Net fund
operating
expenses 1.01% 1.16% 1.12% 1.76% 1.98% 1.92% 0.86% 0.60%
- --------------------------------------------------------------------------------------------------------------------------------
(1) AmSouth Bank or other financial institutions may charge their customer
account fees for automatic investment and other cash management services
provided in connection with investment in the Fund.
(2) Sales charges may be reduced depending upon the amount invested or, in
certain circumstances, waived. Class A shares of the Pioneer Fund bought as
part of an investment of $1 million or more are not subject to an initial
sales charge, but may be charged a CDSC of 1.00% if sold within one year of
purchase.
(3) For Class B shares purchased prior to the combination of AmSouth Funds with
ISG Funds, the CDSC on such Class B shares held continuously declines over
six years, starting with year one and ending in year seven from: 4%, 3%, 3%,
2%, 2%, 1%. For all other Class B shares held continuously, the CDSC
declines over six years, starting with year one and ending in year seven
from: 5%, 4%,
12
3%, 3%, 2%, 1%. Approximately eight years after purchase (seven years in the
case of shares acquired in the ISG combination), Class B shares
automatically convert to Class A shares.
(4) To discourage short-term trading, a redemption fee of 2.00% will be charged
on sales or exchanges of Class A, Class B and Class I shares of your AmSouth
Fund made within 7 days of the date of purchase. A wire transfer fee of
$7.00 will be deducted from the amount of your redemption if you request a
wire transfer.
(5) Other expenses for your AmSouth Fund are being limited to 0.51% for Class A
shares, 0.51% for Class B shares and 0.36% for Class I shares. Any fee
waiver or expense reimbursement arrangement is voluntary and may be
discontinued at any time.
(6) The Pioneer Fund's total annual operating expenses in the table have not
been reduced by any expense offset arrangements.
(7) The expenses in the table above reflect the expense limitations currently in
effect for the Pioneer Fund, under which Pioneer has contractually agreed to
limit ordinary operating expenses to the extent required to reduce Fund
expenses to 1.30%, and 2.20% of the average daily net assets attributable to
Class A and Class B shares, respectively. These expense limitations are in
effect through April 1, 2008 for Class A shares and through April 1, 2006
for Class B shares. There can be no assurance that Pioneer will extend the
expense limitations beyond such time.
(8) Class Y shares of Pioneer America Income Trust will be offered for the first
time in connection with the closing of the Reorganization.
The hypothetical example below helps you compare the cost of investing in
each Fund. It assumes that: (a) you invest $10,000 in each Fund for the time
periods shown, (b) you reinvest all dividends and distributions, (c) your
investment has a 5% return each year, (d) each Fund's gross operating expenses
remain the same, and (e) the expense limitation for your Fund is in effect for
year one. The examples are for comparison purposes only and are not a
representation of either Fund's actual expenses or returns, either past or
future.
Number of years you AmSouth Government Income Pioneer America Income Combined Fund
own your shares Fund Trust (Pro Forma)
- ----------------------------------------------------------------------------------------
Class A
- ----------------------------------------------------------------------------------------
Year 1 $ 522 $ 700 $ 682
- ----------------------------------------------------------------------------------------
Year 3 $ 781 $ 963 $ 909
- ----------------------------------------------------------------------------------------
Year 5 $ 1,059 $ 1,485 $ 1,155
- ----------------------------------------------------------------------------------------
Year 10 $ 1,851 $ 2,913 $ 1,856
- ----------------------------------------------------------------------------------------
Class B -- assuming redemption at end of period
- ----------------------------------------------------------------------------------------
Year 1 $ 708 $ 623 $ 595
- ----------------------------------------------------------------------------------------
Year 3 $ 943 $ 1,140 $ 902
- ----------------------------------------------------------------------------------------
Year 5 $ 1,303 $ 1,583 $ 1,036
- ----------------------------------------------------------------------------------------
Year 10 $ 2,174 $ 3,086 $ 2,033
- ----------------------------------------------------------------------------------------
Class B -- assuming no redemption
- ----------------------------------------------------------------------------------------
Year 1 $ 208 $ 223 $ 197
- ----------------------------------------------------------------------------------------
Year 3 $ 643 $ 840 $ 611
- ----------------------------------------------------------------------------------------
Year 5 $ 1,103 $ 1,483 $ 1,050
- ----------------------------------------------------------------------------------------
Year 10 $ 2,174 $ 3,086 $ 2,059
- ----------------------------------------------------------------------------------------
Class I Class Y
- ----------------------------------------------------------------------------------------
Year 1 $ 110 N/A $ 61
- -----------------------------------------------------------------------------------------
Year 3 $ 343 N/A $ 191
- ----------------------------------------------------------------------------------------
Year 5 $ 595 N/A $ 332
- ----------------------------------------------------------------------------------------
Year 10 $ 1,317 N/A $ 745
- ----------------------------------------------------------------------------------------
Reasons for the Proposed Reorganization
The Trustees believe that the proposed Reorganization is in the best
interests of AmSouth Government Income Fund. The Trustees considered the
following matters, among others, in approving the proposal.
13
First, AAMI, the investment adviser to you AmSouth Fund, and AmSouth Bank
informed the Trustees that they did not intend to continue to provide investment
advisory services to the AmSouth Funds. Consequently, a change in your AmSouth
Fund's investment adviser was necessary. In the absence of the Reorganization,
such a change would be more likely to motivate shareholders invested in reliance
on AAMI's role to withdraw from the Fund, thereby reducing fund size and
increasing fund expense ratios.
Second, the historical investment performance of Pioneer America Income
Trust is comparable to your AmSouth Fund's investment performance. For the one,
five and ten year periods ended December 31, 2004, Class A shares of Pioneer
America Income Trust had an average annual return of -1.86% (one year); 5.26%
(five year); and 5.75% (ten year), compared to an average annual return of the
Class A shares of your AmSouth Fund of -1.72% (one year); 5.12% (five year); and
6.06% (ten year), respectively, during the same period. The Trustees also
considered performance information provided for the one, three, and five year
periods ended March 31, 2005 during which Class A shares of Pioneer America
Income Trust had an average annual return of 0.79% (one year); 4.42% (three
year); and 5.57% (five year) compared to an average annual return of the Class A
shares of your AmSouth Fund of 0.02% (one year); 3.99% (three year); and 5.40%
(five year), respectively, during the same period. In addition, the Trustees
considered the track record of Pioneer in managing equity and fixed income
mutual funds.
Third, the resources of Pioneer. At December 31, 2004, Pioneer managed over
80 investment companies and accounts with approximately $42 billion in assets.
Pioneer is part of the global asset management group of UniCredito Italiano
S.p.A., one of the largest banking groups in Italy, providing investment
management and financial services to mutual funds, institutional and other
clients. As of December 31, 2004, assets under management of UniCredito Italiano
S.p.A. were approximately $175 billion worldwide. Shareholders of your AmSouth
Fund would become part of a significantly larger family of funds that offers a
more diverse array of investment options and enhanced shareholder account
options. The Pioneer family of mutual funds offers over 80 funds, including
domestic and international equity and fixed income funds and a money market fund
that will be available to your AmSouth Fund's shareholders through exchanges. In
addition, Pioneer offers shareholders additional options for their accounts,
including the ability to transact and exchange shares over the telephone or
online and the ability to access account values and transaction history in all
of the shareholder's direct accounts in the Pioneer Funds over the telephone or
online.
Fourth, Pioneer America Income Trust's management fee (0.50% of average
daily net assets) is the same as the advisory fee of your Fund (0.50% of average
daily net assets). In addition, the Trustees considered that the broader
distribution arrangements of the Pioneer Fund offer greater potential for
further asset growth and reduce per share expenses. The aggregate Rule 12b-1
distribution and shareholder servicing fees and non-Rule 12b-1 shareholder
servicing fees paid by the Class A and Class B shares of both Funds are the
same. Moreover, your AmSouth Fund's Class I shares pay a non 12b-1 shareholder
servicing fee that is not paid by the Pioneer Fund's Class Y shares. Currently,
for each class of shares, your Fund's gross expenses are higher than the
corresponding class of the Pioneer Fund. However, net of expense limitations,
the expenses attributable to Class Y shares of the Pioneer Fund are lower than
your Fund's net expenses attributable to Class I shares and the net expenses of
the Pioneer Fund attributable to Class A and Class B shares are higher than the
net expenses of the corresponding classes of the AmSouth Fund. On a pro forma
basis, after giving effect to the Reorganization, it is estimated that the gross
expenses of each class of the Pioneer America Income Trust will be lower than
the gross expenses of the corresponding class of your Fund. It is also estimated
that the expenses of the Pioneer America Income Trust's Class Y shares net of
expense limitations will be lower than the net expenses of your Fund's Class I
shares but that the net expenses of the Pioneer America Income Trust's Class A
shares and Class B shares will be higher. The lower net expenses are a result of
expense limitations on your AmSouth Fund that are voluntary and may be
discontinued at any time. AAMI has informed the trustees that the expense
limitations will be discontinued in the future. The trustees considered the
positive factors associated with the Reorganization, such as greater fund assets
and potential for growth, to outweigh the negative factors, such as the increase
in expenses.
Fifth, the Class A, B and Y shares of Pioneer America Income Trust received
in the Reorganization will provide AmSouth Government Income Fund shareholders
with exposure to substantially the same investment product as they currently
have.
Sixth, the transaction is structured to qualify as a tax-free
reorganization under Section 368(a) of the Internal Revenue Code of 1986 and
therefore will not be treated as a taxable sale of your AmSouth shares.
Pioneer and AmSouth Bank will pay all costs of preparing and printing the
Funds' proxy statements and solicitation costs incurred by the Funds in
connection with the Reorganization. AAMI will otherwise be responsible for all
costs and
14
expenses of your Fund in connection with the Reorganization. The Trustees also
considered that Pioneer and AmSouth Bank will benefit from the Reorganization.
See "Will Pioneer and AmSouth Bank Benefit from the Reorganizations."
The Trustees also considered that Pioneer and AmSouth Bank will benefit
from the Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the
Reorganizations."
The Board of Trustees of the Pioneer Fund also considered that the
Reorganization presents an excellent opportunity for the Pioneer Fund to acquire
investment assets without the obligation to pay commissions or other transaction
costs that a fund normally incurs when purchasing securities. This opportunity
provides an economic benefit to the Pioneer Fund and its shareholders.
CAPITALIZATION
The following table sets forth the capitalization of each Fund as of May
31, 2005, and the pro forma combined Fund as of May 31, 2005.
AmSouth Pro Forma
Government Pioneer America Pioneer America
Income Fund Income Trust Income Trust
May 31, 2005 May 31, 2005 May 31, 2005
------------ --------------- ---------------
Total Net Assets (in thousands) ...... $ 163,519 $ 233,045 $ 396,564
Class A shares .................... $ 20,039 $ 119,737 $ 139,776
Class B shares .................... $ 6,222 $ 38,742 $ 44,964
Class I/Y shares .................. $ 137,258 N/A $ 137,258
Net Asset Value Per Share
Class A shares .................... $ 9.74 $ 9.77 $ 9.77
Class B shares .................... $ 9.74 $ 9.71 $ 9.71
Class I/Y shares .................. $ 9.75 N/A $ 9.77
Shares Outstanding
Class A shares .................... 2,056,612 12,255,588 14,306,610
Class B shares .................... 638,777 3,988,717 4,629,298
Class I/Y shares .................. 14,080,389 N/A 14,080,389
It is impossible to predict how many shares of the Pioneer Fund will
actually be received and distributed by your AmSouth Fund on the Reorganization
date. The table should not be relied upon to determine the amount of the Pioneer
Fund's shares that will actually be received and distributed.
BOARD'S EVALUATION AND RECOMMENDATION
For the reasons described above, the Trustees, including the Independent
Trustees, approved the Reorganization. In particular, the Trustees determined
that the Reorganization is in the best interests of your AmSouth Fund.
Similarly, the Board of Trustees of the Pioneer Fund, including its Independent
Trustees, approved the Reorganization. They also determined that the
Reorganization is in the best interests of the Pioneer Fund.
The Trustees recommend that the shareholders of your AmSouth Fund vote FOR
the proposal to approve the Agreement and Plan of Reorganization.
15
AmSouth Limited Term Bond Fund and
Pioneer Short Term Income Fund
PROPOSAL 1(s)
Approval of Agreement and Plan of Reorganization
SUMMARY
The following is a summary of more complete information appearing later in
this Proxy Statement/Prospectus or incorporated herein. You should read
carefully the entire Proxy Statement/Prospectus, including the form of Agreement
and Plan of Reorganization attached as EXHIBIT A-1, because it contains details
that are not in the summary.
Each Fund has an investment objective of preservation of principal and
invests primarily in short-term debt instruments and, consequently, the Funds
have similar investment policies and risks. In the table below, if a row extends
across the entire table, the policy disclosed applies to both your AmSouth Fund
and the Pioneer Fund.
Comparison of AmSouth Limited Term Bond Fund to Pioneer Short Term Income Fund
AmSouth Limited Term Bond Fund Pioneer Short Term Income Fund
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Business A diversified series of AmSouth Funds, an A diversified open-end management investment
open-end management investment company company organized as a Delaware statutory
organized as a Massachusetts business trust. trust.
Net assets as of March 31, $ 186.4 million $25.5 million
2005
Investment advisers and Investment Adviser: Investment Adviser:
portfolio managers AAMI Pioneer
Portfolio Managers: Portfolio Manager:
Day-to-day management of AmSouth Limiter Term Day-to-day management of the Fund's portfolio
Bond Fund's portfolio is the responsibility of is the responsibility of a team of fixed
John P. Boston, CFA and Michael T. Lytle, CFA. income portfolio managers led by Kenneth J.
Mr. Boston and Mr. Lytle were each named Taubes. The team manages other Pioneer mutual
co-manager of the Fund in 2004. Mr. Boston funds investing primarily in fixed income
managed the Fund from 1993 to 1998 and securities. Mr. Taubes is responsible for
co-managed the Fund from 1999 to 2002. He overseeing the U.S. and global fixed income
also manages the AmSouth High Quality Bond team. He joined Pioneer as a senior vice
Fund and the AmSouth Government Income Fund president in September 1998 and has been an
and co-manages the AmSouth Balanced Fund. Mr. investment professional since 1982. The team
Boston is Chief Fixed Income Officer for may draw upon the research and investment
AAMI. Mr. Boston began his career in management expertise of the global research
investment management with AmSouth Bank in team, which provides fundamental research on
1988 and has been associated with AAMI since companies and includes members from Pioneer's
1996. Mr. Lytle joined AmSouth Bank's Asset affiliate, Pioneer Investment Management
Management Group in 1999 and AAMI in 2003. He Limited.
is a fixed-income portfolio manager for AAMI,
specializing in taxable fixed-income
securities.
Investment objective AmSouth Limited Term Bond Fund seeks to Pioneer Short Term Income Fund seeks a high
provide investors with current income level of current income to the extent
consistent with the preservation of capital. consistent with a relatively high level of
stability of principal.
1
AmSouth Limited Term Bond Fund Pioneer Short Term Income Fund
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Primary investments The Fund invests primarily in short-term fixed Pioneer Short Term Income Fund invests
income securities with maturities of five primarily in:
years or less, principally corporate bonds and
securities issued or guaranteed by the U.S. o Debt securities issued or guaranteed by
government, its agencies or instrumentalities. the U.S. government, its agencies or
Under normal circumstances, the Fund will instrumentalities
invest at least 80% of its net assets in bonds.
For the purpose of this policy, net assets o Debt securities, including convertible
include net assets plus borrowings for debt, of U.S. and non-U.S. issuers and
investment purposes. The Fund will invest commercial paper
at least 65% of its total assets in bonds
(including debentures), notes and other debt o Mortgage-backed and asset-backed
securities which have a stated or remaining securities of U.S. and non-U.S. issuers
maturity of five years or less or which have
an unconditional redemption feature that will o Short-term money market instruments of
permit the Fund to require the issuer of the U.S. and non-U.S. issuers
security to redeem the security within five
years from the date of purchase by the Fund or Normally, at least 80% of Pioneer Short Term
for which the Fund has acquired an Income Fund's net assets are invested in debt
unconditional "put" to sell the security securities that are rated investment grade at
within five years from the date of purchase by the time of purchase or cash and cash
the Fund. The Fund invests in securities equivalents. Cash and cash equivalents are
issued by the Government National Mortgage cash balances, accrued interest and receivables.
Association, which are supported by the full Pioneer Short Term Income Fund will normally
faith and credit of the U.S. government, and maintain a dollar-weighted average portfolio
securities issued by the Federal National maturity of no more than 3 years.
Mortgage Association, the Federal Home Loan
Mortgage Corporation and the Federal Home Loan A debt security is investment grade if it is
Banks, which are supported by the right of the rated in one of the top four categories by at
issuer to borrow from the U.S. Treasury. The least one NRSRO or Pioneer determines that the
Fund also invests in debt securities only if security is of equivalent credit quality.
they are high grade (rated at the time of Debt securities rated below investment grade
purchase in one of the four highest rating are commonly referred to as "junk bonds" and
categories by a nationally recognized are considered speculative. Lower quality
statistical rating organization ("NRSRO"), or debt securities involve greater risk of loss,
are determined by AAMI to be of comparable are subject to greater price volatility and
quality). are less liquid, especially during periods of
economic uncertainty or change, than high
quality debt securities. Pioneer Short Term
If the Fund acquires a debt security with a Income Fund's investments may have fixed or
stated or remaining maturity in excess of five variable principal payments and all types of
years, the Fund may acquire a "put" with interest rate payment and reset terms,
respect to the security. Under a "put," the including fixed rate, adjustable rate, zero
Fund would have the right to sell the debt coupon, contingent, deferred, payment in kind
security within a specified period of time at and auction rate features.
a specified minimum price. The Fund will only
acquire puts from dealers, banks and Pioneer Short Term Income Fund may invest in
broker-dealers which AAMI has determined are mortgage-backed and asset-backed securities.
creditworthy. A put will be sold, Mortgage related securities may be issued by
transferred, or assigned by the Fund only with private companies or by agencies of the U.S.
the underlying debt security. The Fund will government and represent direct or indirect
acquire puts solely to shorten the maturity of participation in, or are collateralized by and
the underlying debt security. payable from, mortgage loans secured by real
property. Asset-backed securities represent
participations in, or are secured by and
payable from, financial assets such as
2
AmSouth Limited Term Bond Fund Pioneer Short Term Income Fund
- --------------------------------------------------------------------------------------------------------------------------------
installment sales or loan contracts, leases,
credit card receivables and other categories
of receivables. Certain asset-backed
securities present a heightened level of risk
because, in the event of default, the
liquidation value of the underlying assets may
be inadequate or nonexistent to pay any unpaid
principal or interest. Certain debt
instruments may only pay principal at maturity
or may only represent the right to receive
payments of principal or payments of interest
on underlying pools of mortgage or government
securities, but not both. The value of these
types of instruments may change more
drastically than debt securities that pay both
principal and interest during periods of
changing interest rates. Principal only
mortgage-backed securities generally increase
in value if interest rates decline, but are
also subject to the risk of prepayment.
Interest only instruments generally increase
in value in a rising interest rate environment
when fewer of the underlying mortgages are
prepaid, but remain subject to prepayment
risk, which would be a loss of any expected
interest payments, even though there is no
default on the underlying financial asset.
For mortgage derivatives and structured
securities that have imbedded leverage
features, small changes in interest or
prepayment rates may cause large and sudden
price movements. Mortgage derivatives can
also become illiquid and hard to value in
declining markets.
Investment strategies AAMI's fixed income portfolio management Pioneer considers both broad economic and
process focuses on the four key areas of issuer specific factors in selecting a
duration management, sector weights, position portfolio designed to achieve the Fund's
on the yield curve and security selection; investment objective. In assessing the
AAMI's goal is to add value in each of these appropriate maturity, rating and sector
four areas through the active management of weighting of the Fund's portfolio, Pioneer
the Fund's portfolio. Beginning with rigorous considers a variety of broad economic factors
fundamental analysis of the economy and taking that are expected to influence economic
into account characteristics of the current activity and interest rates. These factors
business and interest rate cycles, AAMI include fundamental economic indicators,
arrives at a projection of the likely trend in Federal Reserve monetary policy and the
interest rates and adjusts duration relative value of the U.S. dollar compared to
accordingly. Analysis of the shape of the other currencies. Once Pioneer determines the
yield curve and yield spreads among bond preferable portfolio characteristic, Pioneer
market sectors leads to further refinements in selects individual securities based upon the
strategy. terms of the securities (such as yields
compared to U.S. Treasuries or comparable
issuers), liquidity and rating, sector and
issuer diversification. Pioneer also employs
due diligence and fundamental research, an
evaluation of the issuer based on its
financial statements and
3
AmSouth Limited Term Bond Fund Pioneer Short Term Income Fund
- --------------------------------------------------------------------------------------------------------------------------------
operations, to assess an issuer's credit
quality, taking into account financial condition
and profitability, future capital needs,
potential for change in rating, industry
outlook, the competitive environment and
management ability. In making these portfolio
decisions, Pioneer relies on the knowledge,
experience and judgment of its staff who have
access to a wide variety of research.
Other investments The remainder of the Fund's assets may be Up to 10% of Pioneer Short Term Income Fund's
invested in bonds (including debentures), net assets may be below investment grade.
notes and other debt securities which have a
stated or remaining maturity of greater than Pioneer Short Term Income Fund may invest up
five years, cash, cash equivalents, and money to 20% of its total assets in securities of
market instruments. The Fund may invest up to non-U.S. issuers. Up to 5% of Pioneer Short
20% of its total assets in cash, cash Term Income Fund's total assets may be
equivalents and corporate bonds with remaining invested in debt securities of emerging market
maturities of less than 1 year. issuers. Non-U.S. securities may be issued by
non-U.S. governments, banks or corporations
and certain supranational organizations, such
as the World Bank and the European Union.
Pioneer Short Term Income Fund may invest in
securities of Canadian issuers to the same
extent as securities of U.S. issuers.
Investing in Canadian and other non-U.S.
issuers, particularly issuers in emerging
markets, may involve unique risks compared to
investing in the securities of U.S. issuers.
If a rating organization downgrades the
quality rating assigned to one or more of the
Fund's portfolio securities, Pioneer will
consider what actions, if any, are appropriate
including selling the downgraded security or
purchasing additional investment grade
securities as soon as it is prudent to do so.
Temporary defensive When AAMI determines adverse market conditions Pioneer Short Term Income Fund may invest all
strategies exist, AmSouth Limited Term Bond Fund may or part of its assets in securities with
invest entirely in cash positions, directly in remaining maturities of less than one year,
U.S. Government securities and short-term cash equivalents or may hold cash.
paper, such as bankers' acceptances.
Diversification Each Fund is diversified and is subject to diversification requirements under the Internal
Revenue Code of 1986 for the purpose of the Investment Company Act, as amended (the "Code").
4
AmSouth Limited Term Bond Fund Pioneer Short Term Income Fund
- --------------------------------------------------------------------------------------------------------------------------------
Industry concentration AmSouth Limited Term Bond Fund may not Pioneer Short Term Income Fund may not invest
purchase any securities which would cause more more than 25% of its assets in any one
than 25% of the value of the Fund's total industry.
assets at the time of purchase to be invested
in securities of one or more issuers
conducting their principal business activities
in the same industry, provided that (a) there
is no limitation with respect to obligations
issued or guaranteed by the U.S. government or
its agencies or instrumentalities, and
repurchase agreements secured by obligations
of the U.S. government or its agencies or
instrumentalities; (b) wholly owned finance
companies will be considered to be in the
industries of their parents if their
activities are primarily related to financing
the activities of their parents; and (c)
utilities will be divided according to their
services. For example, gas, gas transmission,
electric and gas, electric, and telephone will
each be considered a separate industry.
There is no limitation with respect to
municipal securities, which, for purposes of
this limitation only, do not include private
activity bonds that are backed only by the
assets and revenues of a non-governmental user.
Restricted and illiquid AmSouth Limited Term Bond Fund may not invest Pioneer Short Term Income Fund may not invest
securities more than 15% of its net assets in securities more than 15% of its net assets in securities
that are restricted as to resale, or for which that are illiquid and other securities that
no readily available market exists, including are not readily marketable. Repurchase
repurchase agreements providing for settlement agreements maturing in more than seven days
more than seven days after notice. will be included for purposes of the foregoing
limit.
Borrowing AmSouth Limited Term Bond Fund may not borrow Pioneer Short Term Income Fund may not borrow
money or issue senior securities, except that money, except on a temporary basis and to the
the Fund may borrow from banks or enter into extent permitted by applicable law, the Fund
reverse repurchase agreements for temporary may: (a) borrow from banks or through reverse
emergency purposes in amounts up to 33 1/3% of repurchase agreements in an amount up to 33
the value of its total assets at the time of 1/3% of the Fund's total assets (including the
such borrowing. AmSouth Limited Term Bond amount borrowed); (b) borrow up to an
Fund will not purchase securities while additional 5% of the Fund's assets for
borrowings (including reverse repurchase temporary purposes; (c) obtain such short-term
agreements) in excess of 5% of its total credits as are necessary for the clearance of
assets are outstanding. In addition, AmSouth portfolio transactions; (d) purchase
Limited Term Bond Fund is permitted to securities on margin; and (e) engage in
participate in a credit facility whereby the transactions in mortgage dollar rolls that are
Fund may directly lend to and borrow money accounted for as financings.
from another AmSouth Fund for temporary
purposes, provided that the loans are made in
accordance with an order of exemption from the
SEC and any conditions thereto.
Lending AmSouth Limited Term Bond Fund may not Pioneer Short Term Income Fund may not
5
AmSouth Limited Term Bond Fund Pioneer Short Term Income Fund
- --------------------------------------------------------------------------------------------------------------------------------
make loans, except that it may purchase or hold make loans, except that the Fund may (i) lend
debt instruments in accordance with its portfolio securities in accordance with the
investment objective and policies, lend Fund Fund's investment policies, (ii) enter into
securities in accordance with its investment repurchase agreements, (iii) purchase all or a
objective and policies and enter into portion of an issue of publicly distributed
repurchase agreements. In addition, AmSouth debt securities, bank loan participation
Limited Term Bond Fund is permitted to interests, bank certificates of deposit,
participate in a credit facility whereby the bankers' acceptances, debentures or other
it may directly lend to and borrow money from securities, whether or not the purchase is
other AmSouth Funds for temporary purposes, made upon the original issuance of the
provided that the loans are made in accordance securities, (iv) participate in a credit
with an order of exemption from the SEC and facility whereby the Fund may directly lend to
any conditions thereto. and borrow money from other affiliated funds
to the extent permitted under the Investment
Company Act or an exemption therefrom, and (v)
make loans in any other manner consistent with
applicable law, as amended and interpreted or
modified from time to time by any regulatory
authority having jurisdiction.
Derivative instruments AmSouth Limited Term Bond Fund may invest in Pioneer Short Term Income Fund may use futures
futures contracts and options thereon and options on securities, indices and
(interest rate futures contracts or index currencies, forward currency exchange
futures contracts, as applicable) to commit contracts and other derivatives. The Fund
funds awaiting investment, to maintain cash does not use derivatives as a primary
liquidity or for other hedging purposes. The investment technique and generally limits
value of the Fund's contracts may equal or their use to hedging. However, the Fund may
exceed 100% of the Fund's total assets, use derivatives for a variety of non-principal
although the Fund will not purchase or sell a purposes, including:
futures contract unless immediately afterwards
the aggregate amount of margin deposits on its o As a hedge against adverse changes in
existing futures positions plus the amount of stock market prices, interest rates or
premiums paid for related futures options currency exchange rates
entered into for other than bona fide hedging
purposes is 5% or less of its net assets. 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
Short-term trading AmSouth Limited Term Bond Fund may engage in Pioneer Short Term Income Fund does not
the technique of short-term trading. Such usually trade for short-term profits. The
trading involves the selling of securities Fund will sell an investment, however, even if
held for a short-time, ranging from several it has only been held for a short time, if it
months to less than a day. The object of such no longer meets the Fund's investment criteria.
short-term trading is to increase the
potential for capital appreciation and/or
income of the Fund in order to take advantage
of what AAMI believes are changes in market,
industry or individual company outlook.
Other investment policies As described above, the Funds have substantially similar principal investment strategies and
and restrictions policies. Certain of the non-principal investment policies and restrictions are different.
For a more complete discussion of each Fund's other investment policies and fundamental and
non-fundamental investment restrictions, see the SAI.
- --------------------------------------------------------------------------------------------------------------------------------
6
AmSouth Limited Term Bond Fund Pioneer Short Term Income Fund
- --------------------------------------------------------------------------------------------------------------------------------
Buying, Selling and Exchanging Shares
Class A sales charges and Class A shares are offered with an initial Class A shares are offered with an initial
Rule 12b-1 fees sales charge of up to 4.00% of the offering sales charge of up to 2.50% of the offering
price, which is reduced depending upon the price, which is reduced or waived for large
amount invested or, in certain circumstances, purchases and certain types of investors. At
waived. Class A shares bought as part of an the time of your purchase, your investment
investment of $1 million or more are not firm may receive a commission from Pioneer
subject to an initial sales charge, but may be Funds Distributor, Inc. ("PFD"), the Fund's
charged a contingent deferred sales charge distributor, of up to 2% declining as the size
("CDSC") of 1.00% if sold within one year of of your investment increases.
purchase.
There is no CDSC, except in certain
Class A shares pay a shareholder servicing fee circumstances when the initial sales charge is
(non 12b-1) of up to 0.25% of average daily waived.
net assets.
Class A shares are subject to distribution and
service (12b-1) fees of up to 0.25% of average
daily net assets.
Class B sales charges and Class B shares are offered without an initial Class B shares are offered without an initial
Rule 12b-1 fees sales charge, but are subject to a CDSC of up sales charge, but are subject to a CDSC of up
to 5%. For Class B shares purchased prior to to 2% if you sell your shares. The charge is
the combination of AmSouth Funds with ISG reduced over time and is not charged after
Funds, the CDSC on such Class B shares held three years. Your investment firm may receive
continuously declines over six years, starting a commission from PFD, the Fund's distributor,
with year one and ending in year seven from: at the time of your purchase of up to 2%.
4%, 3%, 3%, 2%, 2%, 1%. For all other Class B
shares held continuously, the CDSC declines Class B shares are subject to distribution and
over six years, starting with year one and service (12b-1) fees of up to 1% of average
ending in year seven from: 5%, 4%, 3%, 3%, 2%, daily net assets.
1%. Eight years after purchase (seven years
in the case of shares acquired in the ISG Class B shares acquired through the
combination), Class B shares automatically Reorganization will be subject to the CDSC and
convert to Class A shares. commission schedules applicable to the
original purchase.
Class B shares pay a shareholder servicing fee
(non 12b-1) of up to 0.25% of average daily Maximum purchase of Class B shares in a single
net assets and a distribution (12b-1) fee of transaction is $49,999.
0.75% of up to average daily net assets.
Maximum investment for all Class B purchases
by a shareholder for the Fund's shares is
$99,999.
Class I and Class Y sales AmSouth Limited Term Bond Fund does not impose The Fund does not impose any initial,
charges and Rule 12b-1 fees any initial sales charge or a CDSC on Class I contingent deferred or asset based sales
shares. charge on Class Y shares.
The Fund may impose a shareholder servicing The distributor incurs the expenses of
fee (non 12b-1) of up to 0.15% of average distributing the Fund's Class Y shares, none
daily net assets. of which are reimbursed by the Fund or the
Class Y shareowners.
Management and other fees AmSouth Limited Term Bond Fund pays an Pioneer Short Term Income Fund pays Pioneer an
advisory fee on a monthly basis at an annual annual fee equal to 0.40% of the Fund's
rate of 0.50% of the Fund's average daily net average daily net assets.
7
AmSouth Limited Term Bond Fund Pioneer Short Term Income Fund
- --------------------------------------------------------------------------------------------------------------------------------
assets. Fund's average daily net assets.
ASO Services Company, Inc. ("ASO") serves as In addition, the Fund reimburses Pioneer for
administrator and fund accounting agent for certain fund accounting and legal expenses
the Fund. The Fund pays ASO an administrative incurred on behalf of the Fund and pays a
services fee of 0.15% of the Fund's average separate shareholder servicing/transfer agency
daily net assets. Other expenses of the Fund fee to PIMSS, an affiliate of Pioneer.
are being limited to 0.48% for Class A shares,
0.48% for Class B shares and 0.33% for Class I Through December 31, 2005, Pioneer has
shares. Any fee waiver or expense contractually agreed to limit ordinary
reimbursement arrangement is voluntary and may operating expenses to the extent required to
be discontinued at any time. reduce Fund expenses to 0.90% of the average
daily net assets attributable to Class A
For the fiscal year ended July 31, 2004, the shares. The portion of Fund expenses
Fund's annual operating expenses for Class A (including the amount of management fee
shares, after giving effect to the expense waived) attributable to Class B shares and
limitation were 0.98%, and without giving Class Y shares will be reduced only to the
effect to the expense limitation, were 1.00% extent such expenses are reduced for Class A
of average daily net assets. shares. Any differences in the fee waiver and
expense limitation among classes result from
For the fiscal year ended July 31, 2004, the rounding in the daily calculation of a class'
Fund's annual operating expenses for Class B net assets and expense limitation, which may
shares, after giving effect to the expense exceed 0.01% annually. There can be no
limitation were 1.73%, and without giving assurance that Pioneer will extend the expense
effect to the expense limitation, were 1.75% limitation beyond December 31, 2005.
of average daily net assets.
For the fiscal year ended August 31, 2004, the
For the fiscal year ended July 31, 2004, the Fund's total annual operating expenses for
Fund's annual operating expenses for Class I Class A shares, after giving effect to the
shares, after giving effect to the expense expense limitation, were 0.90%, and without
limitation were 0.83%, and without giving giving effect to the expense limitation were
effect to the expense limitation, were 0.90% 9.40% of average daily net assets.
of average daily net assets.
For the fiscal year ended August 31, 2004, the
Fund's total annual operating expenses for
Class B shares, after giving effect to the
expense limitation, were 1.89%, and without
giving effect to the expense limitation were
10.65% of average daily net assets.
For the fiscal year ended August 31, 2004, the
Fund's total annual operating expenses for
Class Y shares were 0.61%, and without giving
effect to the expense limitation were 10.54%
of average daily net assets.
Buying shares You may buy shares of the Fund directly You may buy shares from any investment firm
through BISYS Fund Services, the Fund's that has a sales agreement with PFD, the
distributor, or through brokers, registered Fund's distributor.
investment advisers, banks and other financial
institutions that have entered into selling If the account is established in the
agreements with the Fund's distributor, as shareholder's own name, shareholders may also
described in the Fund's prospectus. purchase additional shares of the Fund by
telephone or online.
Certain account transactions may be done by
telephone.
Exchanging shares You can exchange your shares in the Fund for You may exchange your shares for shares of
8
AmSouth Limited Term Bond Fund Pioneer Short Term Income Fund
- --------------------------------------------------------------------------------------------------------------------------------
shares of the same class of another AmSouth the same class of another Pioneer mutual fund.
Fund, usually without paying additional sales Your exchange request must be for at least
charges. You must meet the minimum investment $1,000. The Fund allows you to exchange your
requirements for the Fund into which you are shares at net asset value without charging you
exchanging. Exchanges from one Fund to either an initial or CDSC at the time of the
another are taxable. Class A shares may be exchange. Shares you acquire as part of an
exchanged for Class I shares of the same Fund exchange will continue to be subject to any
or another AmSouth Fund if you become eligible CDSC that applies to the shares you originally
to purchase Class I shares. Class I shares may purchased. When you ultimately sell your
be exchanged for Class A shares of the same shares, the date of your original purchase
Fund. No transaction fees are currently will determine your CDSC. An exchange
charged for exchanges. generally is treated as a sale and a new
purchase of shares for federal income tax
If you sell your shares or exchange them for purposes.
shares of another AmSouth Fund within 7 days
of the date of purchase, you will be charged a After you establish an eligible Fund account,
2.00% fee on the current net asset value of you can exchange Fund shares by telephone or
the shares sold or exchanged. The fee is paid online.
to the Fund to offset the costs associated
with short-term trading, such as portfolio
transaction and administrative costs.
The Fund uses a "first-in, first-out" method
to determine how long you have held your
shares. This means that if you purchased
shares on different days, the shares purchased
first will be considered redeemed first for
purposes of determining whether the redemption
fee will be charged.
The fee will be charged on all covered
redemptions and exchanges, including those
made through retirement plan, brokerage and
other types of omnibus accounts (except where
it is not practical for the plan administrator
or brokerage firm to implement the fee). The
Fund will not impose the redemption fee on a
redemption or exchange of shares purchased
upon the reinvestment of dividend and capital
gain distributions.
Selling shares Shares of each Fund are sold at the net asset value per share next calculated after the Fund
receives your request in good order.
You may sell your shares by contacting the Normally, your investment firm will send your
Fund directly in writing or by telephone or by request to sell shares to PIMSS. You can also
contacting a financial intermediary as sell your shares by contacting the Fund
described in the Fund's prospectus. directly if your account is registered in your
name.
If the account is established in the
shareholder's own name, shareholders may also
redeem shares of the Fund by telephone or
online.
9
Comparison of Principal Risks of Investing in the Funds
Because each Fund has a similar investment objective, primary investment
policies and strategies, the Funds are subject to the same principal risks. You
could lose money on your investment in either Fund or not make as much as if you
invested elsewhere if:
o The Fund's income declines due to a decrease in interest rates.
o The possibility that an issuer cannot make timely interest and
principal payments on its debt securities. The lower a security's
rating, generally the greater its credit risk.
o During periods of declining interest rates, the issuer of a security
may exercise its option to prepay principal earlier than scheduled,
forcing the Fund to reinvest in lower yielding securities. This is
known as call or prepayment risk.
o During periods of rising interest rates, the average life of certain
types of securities may be extended because of slower than expected
principal payments. This may lock in a below market interest rate,
increase the security's duration (the estimated period until the
security is paid in full) and reduce the value of the security. This
is known as extension risk. Risk is generally high for longer-term
bonds and lower or for shorter-term bonds.
o The adviser's judgment about the attractiveness, relative value or
potential appreciation of a particular sector, security or hedging
strategy proves to be incorrect.
Certain securities issued by agencies and instrumentalities of the U.S.
government in which each Fund may invest are backed by the full faith and credit
of the U.S. government, but others are not insured or guaranteed by the U.S.
government and may be supported only by the issuer's right to borrow from the
U.S. Treasury, by the credit of the issuing agency, instrumentality or
corporation, or by the U.S. in some other way. Likewise, government sponsored
entities such as the Federal Home Loan Mortgage Corporation (Freddie Mac), FNMA
and the FHLBs, although chartered or sponsored by Congress, are not funded by
congressional appropriations and the debt and mortgage backed securities issued
by them are neither guaranteed nor issued by the U.S. government.
To the extent that Pioneer Short Term Income Fund invests significantly in
asset-backed and mortgage-related securities, its exposure to prepayment and
extension risks may be greater than other investments in fixed income
securities.
Pioneer Short Term Income Fund may be subject to the following additional
risks associated with investing in non-U.S. issuers, which may involve unique
risks compared to investing in securities of U.S. issuers. These risks are more
pronounced to the extent the Fund invests in issuers in countries with emerging
markets or if the Fund invests significantly in one country. These risks may
include:
o Less information about non-U.S. issuers or markets may be available
due to less rigorous disclosure or accounting standards or
regulatory practices
o Many non-U.S. markets are smaller, less liquid and more volatile. In
a changing market, the adviser/subadviser might 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 non-U.S. countries may grow at slower rates than
expected or may experience a downturn or recession
o Economic, political and social developments may adversely affect the
securities markets
o Withholding and other non-U.S. taxes may decrease the Fund's return
10
In addition, at times, more than 25% of Pioneer Short Term Income Fund's
assets may be invested in the same market segment, such as financials or
technology. To the extent the Fund emphasizes investments in a market segment,
the Fund will be subject to a greater degree to the risks particular to the
industries in that segment, and may experience greater market fluctuation, than
a fund without the same focus.
Past Performance
Set forth below is performance information for your AmSouth Fund. The bar
charts show how your AmSouth Fund's total return (not including any deduction
for sales charges) has varied from year to year for each full calendar year. The
tables show average annual total return (before and after taxes) for your
AmSouth Fund over time for each class of shares (including deductions for sales
charges) compared with a broad-based securities market index. The bar charts
give an indication of the risks of investing in each Fund, including the fact
that you could incur a loss and experience volatility of returns year to year.
Past performance before and after taxes does not indicate future results.
AmSouth Limited Term Bond Fund -- Class A Shares
Calendar Year Total Returns*
[BAR CHART]
1995 12.72
1996 3.69
1997 6.80
1998 7.13
1999 1.36
2000 8.22
2001 7.93
2002 6.49
2003 2.19
2004 0.60
* During the period shown in the bar chart, your AmSouth Fund's highest
quarterly return was 4.02% for the quarter ended June 30, 1995, and the
lowest quarterly return was -1.36% for the quarter ended June 30, 2004.
Pioneer Short Term Income Fund -- Class A Shares
Calendar Year Total Returns
Since the Fund has conducted investment operations for less than one
calendar year, it may not disclose any performance information in this
prospectus. The Fund's performance will vary from year to year. Past performance
does not necessarily indicate how a fund will perform in the future. As a
shareowner, you may lose or make money on your investment.
AmSouth Limited Term Bond Fund
Average Annual Total Returns (for the periods ending December 31, 2004)
1 Year 5 Years 10 Years
- -----------------------------------------------------------------------------------------
AmSouth Limited Term Bond Fund, Class A Shares(1)
- -----------------------------------------------------------------------------------------
Return Before Taxes(1) -1.44% 4.61% 5.44%
- -----------------------------------------------------------------------------------------
Return After Taxes on Distributions -2.46% 2.90% 3.41%
- -----------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares -0.94% 2.88% 3.38%
- -----------------------------------------------------------------------------------------
AmSouth Limited Term Bond Fund, Class B Shares(2)
- -----------------------------------------------------------------------------------------
Return Before Taxes -5.01% 3.92% 4.75%
- -----------------------------------------------------------------------------------------
AmSouth Limited Term Bond Fund, Class I Shares(3)
- -----------------------------------------------------------------------------------------
Return Before Taxes 0.84% 5.20% 5.76%
- -----------------------------------------------------------------------------------------
Return After Taxes on Distributions -0.25% 3.43% 3.69%
- -----------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares 0.54% 3.36% 3.63%
- -----------------------------------------------------------------------------------------
11
1 Year 5 Years 10 Years
- -----------------------------------------------------------------------------------------
Merrill Lynch 1-5 Year Government/Corporate Bond Index(4) 1.77% 6.12% 6.49%
(reflects no deduction for fees, expenses or taxes)
- -----------------------------------------------------------------------------------------
(1) Class A shares were first offered on 2/1/89.
(2) Performance for the Class B shares, which were first offered on 1/21/99,
is based on the historical performance of the Fund's Class A shares
(without sales charge) prior to that date. The historical performance of
the Class B shares has been restated to reflect the Fund's Class B shares
distribution (12b-1) fees and the CDSC.
(3) Performance for the Class I shares, which were first offered on 9/2/97, is
based on the historical performance of the Fund's Class A shares,
including the performance of the predecessor fund and commingled accounts
(without sales charge) prior to that date. The predecessor fund and
commingled accounts were managed using substantially the same investment
objective, policies and methodologies as the Fund.
(4) Merrill Lynch 1-5 Year Government/Corporate Bond Index, an unmanaged index
representative of the total return of short-term government and corporate
bonds, is for reference only, does not mirror the Fund's investments, and
reflects no deduction for fees, expenses or taxes.
The table above shows the impact of taxes on AmSouth Limited Term Bond Fund's
returns. After-tax returns are only shown for Class A shares and Class I shares
and may vary for Class B shares. The Fund's after-tax returns are calculated
using the highest individual federal marginal income tax rates and do not
reflect the impact of state and local taxes. In certain cases, the figure
representing "Return After Taxes on Distributions and Sale of Fund Shares" may
be higher than the other return figures for the same period. A higher after-tax
return results when a capital loss occurs upon redemption and translates into an
assumed tax deduction that benefits the shareholder. Please note that actual
after-tax returns depend on an investor's tax situation and may differ from
those shown. Also note that after-tax returns shown are not relevant to
shareholders who hold Fund shares through tax-deferred arrangements, such as
401(k) plans or individual retirement accounts.
The Funds' Fees and Expenses
Shareholders of both Funds pay various fees and expenses, either directly
or indirectly. The tables below show the fees and expenses that you would pay if
you were to buy and hold shares of each Fund. The expenses in the tables
appearing below are based on (i) for the AmSouth Limited Term Bond Fund, the
expenses of AmSouth Limited Term Bond Fund for the period ended January 31, 2005
and (ii) for Pioneer Short Term Income Fund, the expenses of Pioneer Short Term
Income Fund for the period ended February 28, 2005. Future expenses for all
share classes may be greater or less. Shareholders of AmSouth Limited Term Bond
Fund are also being asked to approve the reorganization of their Fund into
Pioneer Short Term Income Fund. The tables also show the pro forma expenses of
the combined Fund assuming the Reorganization occurred on February 28, 2005.
Shareholder AmSouth Pioneer Combined AmSouth Pioneer Short Combined AmSouth Pioneer Short Combined
transaction Limited Short Fund Limited Term Term Income Fund (Pro Limited Term Term Income Fund (Pro
fees (paid Term Term (Pro Bond Fund(1) Fund Forma) Bond Fund(1) Fund Forma)
directly from Bond Income Forma)
your Fund(1) Fund
investment) Class A Class A Class A Class B Class B Class B Class I Class Y Class Y
- -----------------------------------------------------------------------------------------------------------------------------
Maximum sales 4.00%(2) 2.50%(2) 2.50%(2) None None None None None None
charge (load)
when you buy
shares as a
percentage of
offering price
12
Shareholder AmSouth Pioneer Combined AmSouth Pioneer Short Combined AmSouth Pioneer Short Combined
transaction Limited Short Fund Limited Term Term Income Fund (Pro Limited Term Term Income Fund (Pro
fees (paid Term Term (Pro Bond Fund(1) Fund Forma) Bond Fund(1) Fund Forma)
directly from Bond Income Forma)
your Fund(1) Fund
investment) Class A Class A Class A Class B Class B Class B Class I Class Y Class Y
- -------------------------------------------------------------------------------------------------------------------------------
Maximum None None None 5.00%(3) 4.00% 4.00% None None None
deferred
sales charge
(load) as a
percentage of
purchase
price or the
amount you
receive when
you sell
shares,
whichever is
less
Redemption 2.00%(4) None None 2.00%(4) None None 2.00%(4) None None
fees
Annual fund
operating
expenses
(deducted
from fund
assets)
(as a % of
average net
assets)
Management fee 0.50% 0.40% 0.40% 0.50% 0.40% 0.40% 0.50% 0.40% 0.40%
Distribution None 0.25% 0.25% 0.75% 1.00% 1.00% None None None
and service
(12b-1) fee
Other expenses 0.69%(5) 8.75% 0.19% 0.70%(5) 9.25% 0.29% 0.56%(5) 10.14% 0.14%
Total fund 1.19% 9.40% 0.84% 1.95% 10.65% 1.69% 1.06% 10.54% 0.54%
operating
expenses
Expense 0.20% 8.50%(6) N/A 0.21% 8.76%(6) N/A 0.22% 9.93%(6) N/A
reimbursement
/reduction
Net fund 0.99% 0.90% 0.84% 1.74% 1.89% 1.69% 0.84% 0.61% 0.54%
operating
expenses
(1.) AmSouth Bank or other financial institutions may charge their customer
account fees for automatic investment and other cash management services
provided in connection with investment in the Fund.
(2.) Sales charges may be reduced depending upon the amount invested or, in
certain circumstances, waived. Class A shares of the Pioneer Fund bought
as part of an investment of $1 million or more are not subject to an
initial sales charge, but may be charged a CDSC of 1.00% if sold within
one year of purchase.
(3.) For Class B shares purchased prior to the combination of AmSouth Funds
with ISG Funds, the CDSC on such Class B shares held continuously declines
over six years, starting with year one and ending in year seven from: 4%,
3%, 3%, 2%, 2%, 1%. For all other Class B shares held continuously, the
CDSC declines over six years, starting with year one and ending in year
seven from: 5%, 4%, 3%, 3%, 2%, 1%. Eight years after purchase (seven
years in the case of shares acquired in the ISG combination), Class B
shares automatically convert to Class A shares.
(4.) To discourage short-term trading, a redemption fee of 2.00% will be
charged on sales or exchanges of Class A, Class B and Class I shares of
your AmSouth Fund made within 7 days of the date of purchase. A wire
transfer fee of $7.00 will be deducted from the amount of your redemption
if you request a wire transfer.
13
(5.) Other expenses for your AmSouth Fund are being limited to 0.49% for Class
A shares, 0.49% for Class B shares and 0.34% for Class I shares. Any fee
waiver or expense reimbursement arrangement is voluntary and may be
discontinued at any time.
(6.) The expenses in the table above reflect the expense limitation in effect
through December 31, 2005 under which Pioneer has contractually 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 0.90% of the average daily net assets attributable to
Class A shares. The portion of Fund expenses (including the amount of
management fee waived) attributable to Class B and Class Y shares will be
reduced only to the extent such expenses are reduced for Class A shares.
Any differences in the fee waiver and expense limitation among classes
result from rounding in the daily calculation of a class' net assets and
expense limitation, which may exceed 0.01% annually. There can be no
assurance that Pioneer will extend the expense limitation beyond December
31, 2005.
The hypothetical example below helps you compare the cost of investing in each
Fund. It assumes that: (a) you invest $10,000 in each Fund for the time periods
shown, (b) you reinvest all dividends and distributions, (c) your investment has
a 5% return each year, and (d) each Fund's gross operating expenses remain the
same. The examples are for comparison purposes only and are not a representation
of either Fund's actual expenses or returns, either past or future.
Number of years you AmSouth Limited Term Bond Pioneer Short Term Income Combined Fund
own your shares Fund Fund (Pro Forma)
- ------------------------------------------------------------------------------------------------
Class A
- ------------------------------------------------------------------------------------------------
Year 1 $ 319 $ 340 $ 656
- ------------------------------------------------------------------------------------------------
Year 3 $ 570 $ 2,165 $ 828
- ------------------------------------------------------------------------------------------------
Year 5 $ 841 N/A $1,014
- ------------------------------------------------------------------------------------------------
Year 10 $ 1,614 N/A $1,553
- ------------------------------------------------------------------------------------------------
Class B --- assuming redemption at end of period
- ------------------------------------------------------------------------------------------------
Year 1 $ 698 $ 623 $ 572
- ------------------------------------------------------------------------------------------------
Year 3 $ 912 $ 1,140 $ 833
- ------------------------------------------------------------------------------------------------
Year 5 $ 1,252 N/A $1,018
- ------------------------------------------------------------------------------------------------
Year 10 $ 2,078 N/A $1,772
- ------------------------------------------------------------------------------------------------
Class B --- assuming no redemption
- ------------------------------------------------------------------------------------------------
Year 1 $ 198 $ 223 $ 172
- ------------------------------------------------------------------------------------------------
Year 3 $ 612 $ 840 $ 533
- ------------------------------------------------------------------------------------------------
Year 5 $ 1,052 N/A $ 918
- ------------------------------------------------------------------------------------------------
Year 10 $ 2,078 N/A $1,772
- ------------------------------------------------------------------------------------------------
Class I Class Y
- ------------------------------------------------------------------------------------------------
Year 1 $ 108 $ 62 $ 55
- ------------------------------------------------------------------------------------------------
Year 3 $ 337 $ 2,143 $ 173
- ------------------------------------------------------------------------------------------------
Year 5 $ 585 N/A $ 302
- ------------------------------------------------------------------------------------------------
Year 10 $ 1,294 N/A $ 677
- ------------------------------------------------------------------------------------------------
Reasons for the Proposed Reorganization
The Trustees believe that the proposed Reorganization is in the best
interests of AmSouth Limited Term Bond Fund and its shareholders. The Trustees
considered the following matters, among others, in approving the proposal.
First, AAMI, the investment adviser to your AmSouth Fund informed the
Trustees that it does not intend to continue to provide investment advisory
services to the AmSouth Funds. Consequently, a change in your AmSouth Fund's
investment adviser was necessary. In the absence of the Reorganization, such a
change would be more likely to motivate shareholders invested in reliance on
AAMI's role to withdraw from the Fund, thereby reducing fund size and increasing
fund expense ratios.
Second, the resources of Pioneer. At December 31, 2004, Pioneer managed
over 80 investment companies and accounts with approximately $42 billion in
assets, including $15.7 billion in fixed income securities. Pioneer is part of
the
14
global asset management group of UniCredito Italiano S.p.A., one of the largest
banking groups in Italy, providing investment management and financial services
to mutual funds, institutional and other clients. As of December 31, 2004,
assets under management of UniCredito Italiano S.p.A. were approximately $175
billion worldwide. Shareholders of your AmSouth Fund would become part of a
significantly larger family of funds that offers a more diverse array of
investment options and enhanced shareholder account options. The Pioneer family
of mutual funds offers over 80 funds, including domestic and international
equity and fixed income funds and a money market fund that will be available to
your AmSouth Fund's shareholders through exchanges.
Third, Pioneer Short Term Income Fund's management fee (0.40% of average
daily net assets) is lower than the advisory fee of your AmSouth Fund (0.50% of
average daily net assets). The distribution and shareholder servicing fees paid
by the Class A and Class B shares of both Funds are the same. Moreover, your
AmSouth Fund's Class I shares pay a non 12b-1 shareholder servicing fee that is
not paid by the Pioneer Fund's Class Y shares. While Pioneer Short Term Income
Fund's gross and net expenses are higher than the historical gross and net
expenses of your AmSouth Fund, (with the exception of the Pioneer Fund's Class Y
shares) on a pro forma basis, after giving effect to the Reorganization, the
gross and net expenses of each class of the Pioneer Fund are estimated to be
lower than gross and net expenses of the corresponding class of your Fund. In
addition, the broader distribution arrangements of the Pioneer Fund offer
greater potential for further asset growth and reduce per share expenses.
Fourth, the Class A, B and Y shares of Pioneer Short Term Income Fund
received in the Reorganization will provide AmSouth Limited Term Bond Fund
shareholders with exposure to substantially the same investment product as they
currently have.
Fifth, the transaction is structured to qualify as a tax-free
reorganization under Section 368(a) of the Internal Revenue Code of 1986 and
therefore will not be treated as a taxable sale of your AmSouth shares.
Pioneer and AmSouth Bank will pay all costs of preparing and printing the
AmSouth Funds' proxy statements and solicitation costs incurred by the AmSouth
Funds in connection with the Reorganization. AAMI will otherwise be responsible
for all costs and expenses of the AmSouth Funds in connection with the
Reorganization.
The Trustees also considered that Pioneer and AmSouth Bank will benefit
from the Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the
Reorganizations."
The Board of Trustees of the Pioneer Fund also considered that the
Reorganization presents an excellent opportunity for the Pioneer Fund to acquire
investment assets without the obligation to pay commissions or other transaction
costs that a fund normally incurs when purchasing securities. This opportunity
provides an economic benefit to the Pioneer Fund and its shareholders.
CAPITALIZATION
The following table sets forth the capitalization of each Fund as of May
31, 2005, and the pro forma combined Fund as of May 31, 2005.
Pro Forma
AmSouth Limited Pioneer Short Pioneer Short
Term Bond Fund Term Income Term Income
Fund Fund Fund
May 31, 2005 May 31, 2005 May 31, 2005
--------------- ------------- -------------
Total Net Assets (in thousands) $ 177,464 $ 31,013 $ 208,476
Class A shares ................................... $ 22,496 $ 10,781 $ 33,277
Class B shares ................................... $ 15,222 $ 3,262 $ 18,484
Class I/Y shares ................................. $ 139,746 $ 11,951 $ 151,696
Net Asset Value Per Share
Class A shares ................................... $ 10.29 $ 9.87 $ 9.87
Class B shares ................................... $ 10.28 $ 9.87 $ 9.87
Class I/Y shares ................................. $ 10.30 $ 9.88 $ 9.88
Shares Outstanding
Class A shares ................................... 2,185,785 $ 1,092,201 $ 3,371,288
15
Class B shares ................................... 1,481,111 $ 330,473 $ 1,872,521
Class I/Y shares ................................. 13,570,388 $ 1,210,036 $ 15,359,633
It is impossible to predict how many shares of the Pioneer Fund will
actually be received and distributed by your AmSouth Fund on the Reorganization
date. The table should not be relied upon to determine the amount of the Pioneer
Fund's shares that will actually be received and distributed.
BOARD'S EVALUATION AND RECOMMENDATION
For the reasons described above, the Trustees, including the Independent
Trustees, approved the Reorganization. In particular, the Trustees determined
that the Reorganization is in the best interests of your AmSouth Fund.
Similarly, the Board of Trustees of the Pioneer Fund, including its Independent
Trustees, approved the Reorganization. They also determined that the
Reorganization is in the best interests of the Pioneer Fund.
The Trustees recommend that the shareholders of your AmSouth Fund vote FOR
the proposal to approve the Agreement and Plan of Reorganization.
16
AmSouth Treasury Reserve Money Market Fund and
Pioneer Cash Reserves Fund
PROPOSAL 1(t)
Approval of Agreement and Plan of Reorganization
SUMMARY
The following is a summary of more complete information appearing later in
this Proxy Statement/Prospectus or incorporated herein. You should read
carefully the entire Proxy Statement/Prospectus, including the form of Agreement
and Plan of Reorganization attached as EXHIBIT A-1, because it contains details
that are not in the summary.
The principal difference in the investment policies and risks of the Funds
is that AmSouth Treasury Reserve Money Market Fund invests primarily in U.S.
Treasury securities and related repurchase agreements, while Pioneer Cash
Reserves Fund invests in a broader range of high quality short-term instruments.
In the table below, if a row extends across the entire table, the policy
disclosed applies to both your AmSouth Fund and the Pioneer Fund.
Comparison of AmSouth Treasury Reserve Money Market Fund to Pioneer Cash
Reserves Fund
AmSouth Treasury Reserve Money Market Fund Pioneer Cash Reserves Fund
- ------------------------------------------------------------------------------------------------------------------------------
Business A diversified series of AmSouth Funds, an A diversified series of Pioneer Money Market
open-end management investment company Trust, an open-end management investment
organized as a Massachusetts business trust. company organized as a Delaware statutory
trust.
Net assets as of March 31, $180.1 million $513.9 million
2005
Investment advisers and Investment Adviser: Investment Adviser:
portfolio managers AAMI Pioneer
Portfolio Manager: Portfolio Manager:
Day-to-day management of AmSouth Treasury Day-to-day management of the Fund's portfolio
Reserve Money Market Fund's portfolio is the is the responsibility of Andrew Feltus. Mr.
responsibility of a team of AAMI's portfolio Feltus, a vice president, joined Pioneer in
managers, and no person is primarily 1994.
responsible for making recommendations to the
team.
Investment objective AmSouth Treasury Reserve Money Market Fund Pioneer Cash Reserves Fund seeks high current
seeks to provide investors with as high a income, preservation of capital and liquidity.
level of current income as is consistent with
the preservation of capital and the
maintenance of liquidity.
Primary investments As a fundamental policy, AmSouth Treasury Pioneer Cash Reserves Fund invests in U.S.
Reserve Money Market Fund will invest at least government obligations and money market
65% of its total assets in securities issued securities rated in one of the two highest
by the U.S. Treasury and repurchase agreements rating categories for short-term debt by a
in respect thereof. nationally recognized statistical rating
organization or, if unrated, determined to be
Under normal circumstances, AmSouth Treasury of equivalent credit quality by Pioneer. If
Reserve Money Market Fund invests at least 80% rating organizations differ in the rating
of its assets in U.S. Treasury assigned to a security, the Fund will only treat
1
AmSouth Treasury Reserve Money Market Fund Pioneer Cash Reserves Fund
- ------------------------------------------------------------------------------------------------------------------------------
securities and related repurchase agreements. the security as having the higher rating
The remainder of its assets may be invested if at least two rating organizations assigned
in other securities guaranteed as to payment that rating. If a rating organization
of principal and interest by the U.S. downgrades the quality rating assigned to one
government and related repurchase agreements. or more of the Fund's portfolio securities,
Pioneer will promptly reassess whether the
downgraded security presents minimal credit
risk to the Fund.
Investment strategies AmSouth Treasury Reserve Money Market Fund Pioneer Cash Reserves Fund seeks to maintain a
invests based on considerations of safety of constant net asset value of $1.00 per share by
principal and liquidity, which means that the investing in high-quality, U.S. dollar
Fund may not necessarily invest in securities denominated money market securities, including
paying the highest available yield at a those issued by U.S. and foreign banks, U.S.
particular time. The Fund attempts to and foreign corporate issuers, the U.S.
increase its yield by trading to seek to take government and its agencies and
advantage of short-term market variations. instrumentalities, foreign governments, and
AAMI generally evaluates investments based on multinational organizations such as the World
interest rate sensitivity. The Fund will Bank.
maintain an average weighted portfolio
maturity of 90 days or less and will limit the The Fund invests exclusively in securities
maturity of each security in its portfolio to with a maximum remaining maturity of 397 days
397 days or less. and maintains a dollar-weighted average
portfolio maturity of 90 days or less. The
The interest income from the Fund's investment Fund's investments may have fixed, floating or
in direct obligations of the United States is variable interest rates.
exempt from state and local, but not federal,
income taxes. Dividends attributable to In selecting the Fund's portfolio, Pioneer
income from repurchase agreements are subject complies with the rating, maturity and
to federal, state and local income taxes. diversification requirements applicable to
money market funds. Within those limits,
The Fund will not invest in securities issued Pioneer's assessment of broad economic factors
or guaranteed by U.S. government agencies, that are expected to affect economic activity
instrumentalities or government-sponsored and interest rates influence its securities
enterprises that are not backed by the full selection. Pioneer also employs due diligence
faith and credit of the United States. and fundamental research, an evaluation of the
issuer based on its financial statements and
operations, to assess an issuer's credit
quality.
Other investments The Fund may enter into reverse repurchase Pioneer Cash Reserves Fund may invest more
agreements with banks, brokers or dealers. than 25% of its total assets in U.S.
The Fund will use the cash to make investments government securities and obligations of U.S.
which either mature or have a demand feature banks. The Fund may invest in any money
to resell to the issuer at a date simultaneous market instrument that is a permissible
with or prior to the time the Fund must investment for a money market fund under the
repurchase the security. rules of the SEC, including commercial paper,
certificates of deposit, time deposits,
bankers' acceptances, mortgage-backed and
asset-backed securities, repurchase
agreements, municipal obligations and other
short-term debt securities.
2
AmSouth Treasury Reserve Money Market Fund Pioneer Cash Reserves Fund
- ------------------------------------------------------------------------------------------------------------------------------
Diversification Each Fund is subject to the diversification requirements applicable to money market funds under
the Investment Company Act.
Industry concentration AmSouth Treasury Reserve Money Market Fund may Pioneer Cash Reserves Fund will not
not purchase any securities which would cause concentrate its assets in the securities of
25% or more of the Fund's total assets at the issuers in any one industry except with
time of purchase to be invested in securities respect to investments in obligations of (a)
of one or more issuers conducting their the U.S. government, its agencies, authorities
principal business activities in the same or instrumentalities and (b) domestic banks,
industry, provided that this Limitation shall purchase any security if, as a result (i) more
not apply to municipal securities; and than 5% of the assets of the Fund would be in
provided, further, that for the purpose of the securities of any one issuer, or (ii) more
this limitation only, private activity bonds than 25% of its assets would be in a
that are backed only by the assets and particular industry.
revenues of a non-governmental user shall not
be deemed to be municipal securities.
Restricted and illiquid AmSouth Treasury Reserve Money Market Fund may Pioneer Cash Reserves Fund will not invest
securities not invest more than 10% of its net assets in more than 10% of its net assets in illiquid
securities that are restricted as to resale, and other securities that are not readily
or for which no readily available market marketable. Repurchase agreements maturing in
exists, including repurchase agreements more than seven days will be included for
providing for settlement more than seven days purposes of the foregoing limit.
after notice.
Borrowing AmSouth Treasury Reserve Money Market Fund may Pioneer Cash Reserves Fund may not borrow
not borrow money or issue senior securities, money, except from banks for extraordinary
except the Fund may borrow from banks or enter purposes or to meet redemptions in amounts not
into reverse repurchase agreements for exceeding 33 1/3% of its total assets
temporary emergency purposes in amounts up to (including the amount borrowed).
33 1/3% of the value of its total assets at
the time of such borrowing. The Fund will not
purchase securities while borrowings
(including reverse repurchase agreements) in
excess of 5% of its total assets are
outstanding. In addition, the Fund is
permitted to participate in a credit facility
whereby the Fund may directly lend to and
borrow money from other AmSouth Funds for
temporary purposes, provided that the loans
are made in accordance with an order of
exemption from the SEC and any conditions
thereto.
Lending AmSouth Treasury Reserve Money Market Fund may Pioneer Cash Reserves Fund may not make loans
not make loans, except that the Fund may to any person, except by (a) the purchase of a
purchase or hold debt instruments in debt obligation in which the Fund is permitted
accordance with its investment objective and to invest and (b) engaging in repurchase
policies, lend Fund securities in accordance agreements.
with its investment objective and policies and
enter into repurchase agreements. In
addition, the Fund is permitted to participate
in a credit facility whereby the Fund may
directly lend to and borrow money from other
AmSouth Funds
3
AmSouth Treasury Reserve Money Market Fund Pioneer Cash Reserves Fund
- ------------------------------------------------------------------------------------------------------------------------------
for temporary purposes, provided that the loans
are made in accordance with an order of
exemption from the SEC and any conditions
thereto.
Derivative instruments AmSouth Treasury Reserve Money Market Fund may Pioneer Cash Reserves Fund may not write,
not write or purchase call options. purchase or otherwise invest in any put, call,
straddle or spread option.
Other investment policies As described above, the Funds have similar principal investment strategies and policies.
and restrictions Certain of the non-principal investment policies and restrictions are different. For a more
complete discussion of each Fund's other investment policies and fundamental and
non-fundamental investment restrictions, see the SAI.
Buying, Selling and Exchanging Shares
Class A sales charges and Class A shares are offered without sales Class A shares are offered without sales
Rule 12b-1 fees charges. charges.
Class A shares pay a shareholder servicing fee There is no contingent deferred sales charge
(non 12b-1) of up to 0.25% of average daily ("CDSC"), except in certain circumstances when
net assets. the initial sales charge is waived.
AmSouth Treasury Reserve Money Market Fund Class A shares are subject to distribution and
does not offer Class B shares. service (12b-1) fees of up to 0.15% of average
daily net assets.
Pioneer Cash Reserves Fund offers several
classes of shares, including Class A shares.
Class I and Class Y sales AmSouth Treasury Reserve Money Market Fund The Fund does not impose any initial,
charges and Rule 12b-1 fees does not impose any initial or CDSC on Class I contingent deferred or asset based sales
shares. charge on Class Y shares.
The Fund may impose a shareholder servicing The distributor incurs the expenses of
fee (non 12b-1) of up to 0.15% of average distributing the Fund's Class Y shares, none
daily net assets. of which are reimbursed by the Fund or the
Class Y shareowners.
Management and other fees AmSouth Treasury Reserve Money Market Fund Pioneer Cash Reserves Fund pays Pioneer an
pays an advisory fee on a monthly basis at an annual fee equal to 0.40% of the Fund's
annual rate of 0.40% of the Fund's average average daily net assets.
daily net assets.
Pioneer has agreed to limit the Fund's
ASO Services Company, Inc. ("ASO") serves as expenses or waive a portion of its management
administrator and fund accounting agent for fee to maintain a net asset value of $1.00.
the Fund. The Fund pays ASO an administrative Under certain circumstances, this limitation
services fee of 0.15% of the Fund's average may result in a 0.00% yield for one or more
daily net assets. classes for shares. From time to time,
Pioneer and its affiliates may limit the
Other expenses of the Fund are being limited expenses of one or more classes for the
to 0.36% for Class A shares. Any fee waiver purpose of increasing its yield during the
or expense reimbursement arrangement is period of the limitation. These expense
4
AmSouth Treasury Reserve Money Market Fund Pioneer Cash Reserves Fund
- ------------------------------------------------------------------------------------------------------------------------------
voluntary and may be discontinued at any time. limitation policies are voluntary and
temporary and may be revised or terminated by
Other expenses are being limited to 0.28% for Pioneer at any time without notice.
Class I shares. Any fee waiver or expense
reimbursement arrangement is voluntary and may For the fiscal year ended December 31, 2004,
be discontinued at any time. the Fund's total annual operating expenses for
Class A shares were 0.93% of average daily net
For the fiscal year ended July 31, 2004, the assets.
Fund's annual operating expenses for Class A
shares, after giving effect to the expense Class Y shares of Pioneer Cash Reserves Fund
limitation were 0.76%, and without giving are being offered for the first time in
effect to the expense limitation, were 0.95% connection with the Reorganization.
of average daily net assets.
For the fiscal year ended July 31, 2004, the
Fund's annual operating expenses for Class I
shares, after giving effect to the expense
limitation were 0.68%, and without giving
effect to the expense limitation, were 0.85%
of average daily net assets.
Buying shares You may buy shares of AmSouth Treasury Reserve You may buy shares from any investment firm
Money Market Fund directly through BISYS Fund that has a sales agreement with PFD, the
Services, the Fund's distributor, or through Fund's distributor.
brokers, registered investment advisers, banks
and other financial institutions that have If the account is established in the
entered into selling agreements with the shareholder's own name, shareholders may also
Fund's distributor, as described in the Fund's purchase additional shares of the Fund by
prospectus. telephone or online.
Certain account transactions may be done by
telephone.
Exchanging shares You can exchange your shares in the Fund for You may exchange your shares for shares of the
shares of the same class of another AmSouth same class of another Pioneer mutual fund.
Fund, usually without paying additional sales Your exchange request must be for at least
charges. You must meet the minimum investment $1,000. Shares you acquire as part of an
requirements for the Fund into which you are exchange will continue to be subject to any
exchanging. Exchanges from one Fund to another CDSC that applies to the shares you originally
are taxable. Class A shares may be exchanged purchased. When you ultimately sell your
for Class I shares of the same Fund or another shares, the date of your original purchase
AmSouth Fund if you become eligible to will determine your CDSC. An exchange
purchase Class I shares. Class I shares may generally is treated as a sale and a new
be exchanged for Class A shares of the same purchase of shares for federal income tax
Fund. No transaction fees are currently purposes.
charged for exchanges.
After you establish an eligible Fund account,
you can exchange Fund shares by telephone or
online.
Selling shares Shares of each Fund are sold at the net asset value per share next calculated after the Fund
receives your request in good order.
5
AmSouth Treasury Reserve Money Market Fund Pioneer Cash Reserves Fund
- ------------------------------------------------------------------------------------------------------------------------------
You may sell your shares by contacting the Normally, your investment firm will send your
Fund directly in writing or by telephone or by request to sell shares to PIMSS. You can also
contacting a financial intermediary as sell your shares by contacting the Fund
described in the Fund's prospectus. directly if your account is registered in your
name.
If the account is established in the
shareholder's own name, shareholders may also
redeem shares of the Fund by telephone or
online.
Comparison of Principal Risks of Investing in the Funds
Because each Fund has a similar investment objective, primary investment
policies and strategies, the Funds are subject to the same principal risks. The
Pioneer Fund may be subject to greater credit risk than the AmSouth Fund because
it may invest in securities other than U.S. Government securities. You could
lose money on your investment in either Fund or not make as much as if you
invested elsewhere if:
o Interest rates go up, causing the value of the Fund's investments to
decline
o In the case of Pioneer Cash Reserves Fund, the issuer of a security
owned by the Fund may not be able to make timely payments because of
a general economic downturn or increased governmental costs
o The adviser's judgment about the credit quality, attractiveness or
relative value of a particular security proves to be incorrect
Pioneer Cash Reserves Fund may be subject to the following additional
risks associated with investing in non-U.S. issuers, which may involve unique
risks compared to investing in securities of U.S. issuers. These risks are more
pronounced to the extent the Fund invests in issuers in countries with emerging
markets or if the Fund invests significantly in one country. These risks may
include:
o Inadequate financial information
o Smaller, less liquid and more volatile markets
o Political and economic upheavals
Pioneer Cash Reserves does not concentrate its investments in any
industry. At times, more than 25% of the Pioneer Cash Reserves Fund's assets may
be invested in the same market segment, such as financials. To the extent the
Fund emphasizes investments in a market segment, the Fund will be subject to a
greater degree to the risks particular to the industries in that segment, and
may experience greater market fluctuation, than a fund without the same focus.
For example, industries in the financial segment, such as banks, insurance
companies, broker-dealers and REITs, may be sensitive to changes in interest
rates and general economic activity and are subject to extensive government
regulation.
Past Performance
Set forth below is performance information for each Fund. The bar charts
show how each Fund's total return has varied from year to year for each full
calendar year. The tables show average annual total return for each Fund over
time for each class of shares compared with a broad-based securities market
index. The bar charts give an indication of the risks of
6
investing in each Fund, including the fact that you could incur a loss and
experience volatility of returns year to year. Past performance does not
indicate future results.
AmSouth Treasury Reserve Money Market Fund -- Class A Shares
Calendar Year Total Returns*
[BAR CHART]
1995 5.41
1996 4.78
1997 4.78
1998 4.68
1999 4.38
2000 5.54
2001 3.47
2002 0.96
2003 0.29
2004 0.61
* During the period shown in the bar chart, your AmSouth Fund's highest
quarterly return was 1.43% for the quarter ended December 31, 2000, and
the lowest quarterly return was 0.04% for the quarter ended December 31,
2003.
Pioneer Cash Reserves Fund -- Class A Shares
Calendar Year Total Returns*
[BAR CHART]
1995 5.17
1996 4.65
1997 4.78
1998 4.84
1999 4.23
2000 5.53
2001 3.32
2002 1.15
2003 0.26
2004 0.45
* During the period shown in the bar chart, Pioneer Cash Reserves Fund's
highest quarterly return was 1.45% for the quarter ended December 31,
2000, and the lowest quarterly return was 0.01% for the quarter ended
December 31, 2003.
AmSouth Treasury Reserve Money Market Fund
Average Annual Total Returns as of December 31, 2004
1 Year 5 Years 10 Years
- ---------------------------------------------------------------------------------------------------------------------------
AmSouth Treasury Reserve Money Market Fund, Class A Shares
Return Before Taxes(1) 0.61% 2.15% 3.47%
AmSouth Treasury Reserve Money Market Fund, Class I Shares
Return Before Taxes(1) 0.66% 2.25% 3.59%
(1) The return reported above assumes the reinvestment of dividends. The
AmSouth Treasury Reserve Money Market Fund commenced operations on 3/29/94
through a transfer of assets from certain collective trust fund
("commingled") accounts managed by AAMI, using substantially the same
investment objective, polices and methodologies as the Fund. The quoted
performance of the Fund includes the performance of the commingled
accounts for the periods prior to the Fund's
7
commencement of operations, restated to reflect the expenses associated
with the Fund. The commingled accounts were not registered with the SEC
and were not subject to the investment restrictions imposed by law on
registered mutual funds. If the commingled accounts had been registered,
their returns may have been adversely affected. Class A Shares were first
offered on 8/29/94.
Pioneer Cash Reserves Fund
Average Annual Total Returns as of December 31, 2004
1 Year 5 Years 10 Years
- ------------------------------------------------------------------------------------------------------------------------------
Pioneer Cash Reserves Fund, Class A shares
Return Before Taxes(1) 0.45% 2.12% 3.42%
Pioneer Cash Reserves Fund, Class Y shares(2)
90-day U.S. Treasury Bill 1.38% 2.67% 3.88%
(reflects no deduction for taxes)
(1) Return before taxes assumes that you sell your Class A shares at the end
of the period and that you reinvest all of your dividends and
distributions.
(2) Class Y shares were not outstanding prior to the closing of the
Reorganization and consequently have no performance history. However, the
performance record of the Class Y shares would be modestly higher than the
performance of the Class A and Class B shares due to the lower expenses
applicable to Class Y shares.
7-Day Yield
As of December 31, 2004
- -------------------------------------------------------------------------------------------------------------------
AmSouth Treasury Reserve Money Market Fund, Class A Shares 1.43%
Pioneer Cash Reserves Fund, Class A Shares 1.12%
AmSouth Treasury Reserve Money Market Fund, Class I Shares 1.48%
The most recent portfolio manager's discussion of each Fund's performance is
attached as Exhibit C.
The Funds' Fees and Expenses
Shareholders of both Funds pay various fees and expenses, either directly
or indirectly. The tables below show the fees and expenses that you would pay if
you were to buy and hold shares of each Fund. The expenses in the tables
appearing below are based on (i) for the AmSouth Treasury Reserve Money Market
Fund, the expenses of AmSouth Treasury Reserve Money Market Fund for the period
ended January 31, 2005, and (ii) for the Pioneer Cash Reserves Fund, the
expenses of Pioneer Cash Reserves Fund for the period ended December 31, 2004.
Future expenses for all share classes may be greater or less. Shareholders of
AmSouth Prime Money Market Fund are also being asked to approve the
reorganization of their fund into Pioneer Cash Reserves Fund. The tables also
show (1) the pro forma expenses of the combined Fund assuming the Reorganization
occurred on December 31, 2004, and (2) the pro forma expenses of the combined
Fund assuming the reorganization of AmSouth Prime Money Market Fund into Pioneer
Cash Reserves Fund also occurred December 31, 2004.
8
Combined Combined
Fund Fund
AmSouth (including AmSouth (including
Shareholder Treasury AmSouth Treasury AmSouth
transaction fees Reserve Prime Money Reserve Prime Money
(paid directly Money Pioneer Cash Combined Market Money Combined Market
from your Market Reserves Fund (Pro Fund) (Pro Market Fund (Pro Fund) (Pro
investment) Fund(1) Fund Forma) Forma) Fund(1) Forma) Forma)
- ---------------------------------------------------------------------------------------------------------------------------------
Class A Class A Class A Class A Class I Class Y(7) Class Y(7)
- ---------------------------------------------------------------------------------------------------------------------------------
Maximum sales charge
(load) when you buy
shares as a
percentage of
offering price None None None None None None None
- ---------------------------------------------------------------------------------------------------------------------------------
Maximum deferred
sales charge (load)
as a percentage of
purchase price or
the amount you
receive when you
sell shares,
whichever is less None None None None None None None
- ---------------------------------------------------------------------------------------------------------------------------------
Redemption fees None(2) None None None None None None
- ---------------------------------------------------------------------------------------------------------------------------------
Annual fund
operating expenses
(deducted from Fund
assets) (as a % of
average net assets)
- ---------------------------------------------------------------------------------------------------------------------------------
Management fee 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% 0.40%
- ---------------------------------------------------------------------------------------------------------------------------------
Distribution and
service (12b-1) fee None 0.15% 0.15% 0.15% None 0.15% None
- ---------------------------------------------------------------------------------------------------------------------------------
Other expenses 0.57%(3) 0.38% 0.31% 0.17% 0.47% 0.07%(6) 0.06%(6)
- ---------------------------------------------------------------------------------------------------------------------------------
Total fund operating
expenses 0.97% 0.93%(4) 0.86% 0.72% 0.87%(3) 0.47% 0.46%
- ---------------------------------------------------------------------------------------------------------------------------------
Expense
reimbursement/reduction 0.27% None(5) None(5) None(5) 0.22% None(5) None(5)
- ---------------------------------------------------------------------------------------------------------------------------------
Net fund operating
expenses 0.70% 0.93% 0.86% 0.72% 0.65% 0.47% 0.46%
- ---------------------------------------------------------------------------------------------------------------------------------
(1) AmSouth Bank or other financial institutions may charge their
customer account fees for automatic investment and other cash
management services provided in connection with investment in the
Fund.
(2) A wire transfer fee of $7.00 will be deducted from the amount of
your redemption if you request a wire transfer.
9
(3) Other expenses for your AmSouth Fund are being limited to 0.30% for
Class A shares and 0.25% for Class I shares. Any fee waiver or
expense reimbursement arrangement is voluntary and may be
discontinued at any time.
(4) The Pioneer Fund's total annual operating expenses in the table have
not been reduced by any expense offset arrangements.
(5) Pioneer has agreed to limit the Fund's expenses or waive a portion
of its management fee to maintain a net asset value of $1.00. Under
certain circumstances, this limitation may result in a 0.00% yield
for one or more classes for shares. From time to time, Pioneer and
its affiliates may limit the expenses of one or more classes for the
purpose of increasing its yield during the period of the limitation.
These expense limitation policies are voluntary and temporary and
may be revised or terminated by Pioneer at any time without notice.
(6) Other expenses for Class Y shares are estimated based on expenses
that would have been incurred for the fiscal year ended December 31,
2004 had such shares been outstanding for the entire fiscal year.
(7) Class Y shares of Pioneer Cash Reserves Fund are being offered for
the first time in connection with the Reorganization.
The hypothetical example below helps you compare the cost of investing in
each Fund. It assumes that: (a) you invest $10,000 in each Fund for the time
periods shown, (b) you reinvest all dividends and distributions, (c) your
investment has a 5% return each year, (d) each Fund's operating expenses remain
the same and (e) you sell your shares at the end of the time period shown. The
examples are for comparison purposes only and are not a representation of either
Fund's actual expenses or returns, either past or future.
Combined Fund
(including AmSouth
AmSouth Treasury Prime Money Market
Number of years you Reserve Money Pioneer Cash Reserves Combined Fund Fund)*
own your shares Market Fund Fund (Pro Forma) (Pro Forma)
- --------------------------------------------------------------------------------------------------------
Class A
- --------------------------------------------------------------------------------------------------------
Year 1 $ 99 $ 95 $ 658 $ 644
- --------------------------------------------------------------------------------------------------------
Year 3 $ 309 $ 296 $ 834 $ 792
- --------------------------------------------------------------------------------------------------------
Year 5 $ 536 $ 515 $ 1,024 $ 953
- --------------------------------------------------------------------------------------------------------
Year 10 $ 1,190 $1,143 $ 1,575 $1,418
- --------------------------------------------------------------------------------------------------------
Class I Class Y
- --------------------------------------------------------------------------------------------------------
Year 1 $ 89 N/A $ 48 $ 47
- --------------------------------------------------------------------------------------------------------
Year 3 $ 278 N/A $ 151 $ 148
- --------------------------------------------------------------------------------------------------------
Year 5 $ 482 N/A $ 263 $ 258
- --------------------------------------------------------------------------------------------------------
Year 10 $ 1,073 N/A $ 591 $ 579
- --------------------------------------------------------------------------------------------------------
* Pursuant to a separate proposal, AmSouth Prime Money Market Fund
proposes to transfer its assets to Pioneer Cash Reserves Fund.
Reasons for the Proposed Reorganization
The Trustees believe that the proposed Reorganization is in the best
interests of AmSouth Treasury Reserve Money Market Fund and its shareholders.
The Trustees considered the following matters, among others, in approving the
proposal.
First, AAMI, the investment adviser to your AmSouth Fund, informed the
Trustees that it does not intend to continue to provide investment advisory
services to the AmSouth Funds. Consequently, a change in your AmSouth Fund's
investment adviser was necessary. In the absence of the Reorganization, such a
change would be more likely to motivate shareholders invested in reliance on
AAMI's role to withdraw from the Fund, thereby reducing fund size and increasing
fund expense ratios.
10
Second, after the Reorganization, the combined Fund will have an asset size
substantially larger than that of your AmSouth Fund, which may allow the
combined Fund to achieve significant economies of scale in investments or
expenses.
Third, the historical investment performance of Pioneer Cash Reserves Fund
is comparable to your AmSouth Fund's investment performance. For the one, five
and ten year periods ended December 31, 2004, Class A shares of Pioneer Cash
Reserves Fund had an average annual return of 0.45% (one year); 2.12% (five
year); and 3.42% (ten year) compared to an average annual return of the Class A
shares of your AmSouth Fund of 0.61% (one year); 2.15% (five year); and 3.47%
(ten year), respectively, during the same period. In addition, the Trustees
considered the track record of Pioneer in managing fixed income mutual funds.
Fourth, the resources of Pioneer. At December 31, 2004, Pioneer managed
over 80 investment companies and accounts with approximately $42 billion in
assets. Pioneer is part of the global asset management group of UniCredito
Italiano S.p.A., one of the largest banking groups in Italy, providing
investment management and financial services to mutual funds, institutional and
other clients. As of December 31, 2004, assets under management of UniCredito
Italiano S.p.A. were approximately $175 billion worldwide. Shareholders of your
AmSouth Fund would become part of a significantly larger family of funds that
offers a more diverse array of investment options and enhanced shareholder
account options. The Pioneer family of mutual funds offers over 80 funds,
including domestic and international equity and fixed income funds and a money
market fund that will be available to your AmSouth Fund's shareholders through
exchanges.
Fifth, Pioneer Cash Reserves Fund's management fee (0.40% of average daily
net assets) is the same as the advisory fee of your AmSouth Fund (0.40% of
average daily net assets). Although the historical net expenses of Pioneer Cash
Reserves Fund are higher than your AmSouth Fund's historical net expenses, the
estimated pro forma gross expenses of the Pioneer Fund after giving effect to
the Reorganization are lower than your AmSouth Fund's gross expenses. In
addition, with respect to Class Y shares, the pro forma expense of the Pioneer
Fund, net of expense limitations, are lower than your Fund's net expenses
attributable to Class I shares. The net expenses attributable to the Class A
shares of the Pioneer Fund on a pro forma basis are estimated to be two basis
points higher than the net expenses attributable to the Class A shares of the
AmSouth Fund. However, AAMI has informed the trustees that its expense
limitations will be discontinued in the future. The distribution and shareholder
servicing fees paid by the Class A and Class B shares of both Funds are the
same. Moreover, your AmSouth Fund's Class I shares pay a non 12b-1 shareholder
servicing fee that is not paid by the Pioneer Fund's Class Y shares. In
addition, the broader distribution arrangements of the Pioneer Fund offer
greater potential for further asset growth and reduce per share expenses.
Sixth, the substantially larger size of Pioneer Cash Reserves Fund offers
greater opportunity for diversification of the investment portfolio, which
should help to reduce risks.
Seventh, the Class A and Y shares of Pioneer Cash Reserves Fund received in
the Reorganization will provide AmSouth Treasury Reserve Money Market Fund
shareholders with exposure to substantially the same investment product as they
currently have. The Board considered the differences in the investment policies
of the two Funds and concluded that the broader investment range of Pioneer Cash
Reserves Fund did not materially increase the risk exposure to AmSouth Treasury
Reserve Money Market Fund shareholders.
Eighth, the transaction is structured to qualify as a tax-free
reorganization under Section 368(a) of the Internal Revenue Code of 1986 and
therefore will not be treated as a taxable sale of your AmSouth shares.
Pioneer and AmSouth Bank will pay all costs of preparing and printing the
AmSouth Funds' proxy statements and solicitation costs incurred by the AmSouth
Funds in connection with the Reorganization. AAMI will otherwise be responsible
of all costs and expenses of the AmSouth Funds in connection with the
Reorganizations.
The Trustees also considered that Pioneer and AmSouth Bank will benefit
from the Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the
Reorganizations."
The Board of Trustees of the Pioneer Fund also considered that the
Reorganization presents an excellent opportunity for the Pioneer Fund to acquire
investment assets without the obligation to pay commissions or other transaction
costs that a fund normally incurs when purchasing securities. This opportunity
provides an economic benefit to the Pioneer Fund and its shareholders.
11
CAPITALIZATION
The following table sets forth the capitalization of each Fund as of May
31, 2005, and the pro forma combined Fund as of May 31, 2005. The table also
sets forth the pro forma capitalization of the combined Fund as of May 31, 2005,
assuming the shareholders of AmSouth Prime Money Market Fund approve the
reorganization of their fund into Pioneer Cash Reserves Fund.
Pro Forma
Pioneer Cash
Reserves Fund
AmSouth (including
Treasury Pioneer Cash Pro Forma AmSouth Prime
Reserve Money Reserves Pioneer Cash Money Market
Market Fund Fund Reserves Fund Fund)
May 31, 2005 May 31, 2005 May 31, 2005 May 31, 2005
------------- ------------ ------------- -------------
Total Net Assets (in thousands) $ 178,746 $ 419,881 $ 598,627 $ 1,226,225
Class A shares ............. $ 72,843 $ 212,426 $ 285,269 $ 698,111
Class B shares ............. N/A $ 50,365 $ 50,365 $ 53,515
Class I/Y shares ........... $ 105,903 N/A $ 105,903 $ 317,508
Net Asset Value Per Share
Class A shares ............. $ 1.00 $ 1.00 $ 1.00 $ 1.00
Class B shares ............. N/A $ 1.00 $ 1.00 $ 1.00
Class I/Y shares ........... $ 1.00 N/A $ 1.00 $ 1.00
Shares Outstanding
Class A shares ............. 72,852,140 212,571,273 285,464,278 698,590,414
Class B shares ............. N/A 50,321,650 50,321,650 53,468,483
Class I/Y shares ........... 105,913,462 N/A 105,913,462 317,725,662
It is impossible to predict how many shares of the Pioneer Fund will
actually be received and distributed by your AmSouth Fund on the Reorganization
date. The table should not be relied upon to determine the amount of the Pioneer
Fund's shares that will actually be received and distributed.
BOARD'S EVALUATION AND RECOMMENDATION
For the reasons described above, the Trustees, including the Independent
Trustees, approved the Reorganization. In particular, the Trustees determined
that the Reorganization is in the best interests of your AmSouth Fund.
Similarly, the Board of Trustees of the Pioneer Fund, including its Independent
Trustees, approved the Reorganization. They also determined that the
Reorganization is in the best interests of the Pioneer Fund.
The Trustees recommend that the shareholders of your AmSouth Fund vote FOR
the proposal to approve the Agreement and Plan of Reorganization.
12
AmSouth Prime Money Market Fund and
Pioneer Cash Reserves Fund
PROPOSAL 1(u)
Approval of Agreement and Plan of Reorganization
SUMMARY
The following is a summary of more complete information appearing later in
this Proxy Statement/Prospectus or incorporated herein. You should read
carefully the entire Proxy Statement/Prospectus, including the form of Agreement
and Plan of Reorganization attached as EXHIBIT A-1, because it contains details
that are not in the summary.
Each Fund invests primarily in high-quality short-term securities and,
consequently, the Funds have similar policies and risks. In the table below, if
a row extends across the entire table, the policy disclosed applies to both your
AmSouth Fund and the Pioneer Fund.
Comparison of AmSouth Prime Money Market Fund to Pioneer Cash Reserves Fund
- ------------------------------------------------------------------------------------------------------------------------------
AmSouth Prime Money Market Fund Pioneer Cash Reserves Fund
- ------------------------------------------------------------------------------------------------------------------------------
Business A diversified series of AmSouth Funds, an A diversified series of Pioneer Money Market
open-end management investment company Trust, an open-end management investment
organized as a Massachusetts business trust. company organized as a Delaware statutory
trust.
- ------------------------------------------------------------------------------------------------------------------------------
Net assets as of March 31, $583.9 million $513.9 million
2005
- ------------------------------------------------------------------------------------------------------------------------------
Investment advisers and Investment Adviser: Investment Adviser:
portfolio managers AAMI Pioneer
Portfolio Manager: Portfolio Manager:
Day-to-day management of AmSouth Prime Money Day-to-day management of the Fund's portfolio
Market Fund's portfolio is the responsibility is the responsibility of Andrew Feltus. Mr.
of a team of AAMI's portfolio managers, and no Feltus, a vice president, joined Pioneer in
person is primarily responsible for making 1994.
recommendations to the team.
- ------------------------------------------------------------------------------------------------------------------------------
Investment objective AmSouth Prime Money Market Fund seeks
to Pioneer Cash Reserves Fund seeks high current
provide investors with current income with income
and preservation of capital and liquidity and
stability of principal. liquidity.
- ------------------------------------------------------------------------------------------------------------------------------
Primary investments AmSouth Prime Money Market Fund invests only Pioneer Cash Reserves Fund invests in U.S.
in U.S. dollar-denominated, "high-quality" government obligations and money market
short-term debt securities, including securities rated in one of the two highest
obligations issued or guaranteed by the U.S. rating categories for short-term debt by a
government, its agencies or instrumentalities, nationally recognized statistical rating
certificates of deposit, time deposits, organization or, if unrated, determined to be
bankers' acceptances and other short-term of equivalent credit quality by Pioneer. If
securities issued by domestic or foreign banks rating organizations differ in the rating
or their subsidiaries or branches, domestic assigned to a security, the Fund will only
and foreign commercial paper and other treat the security as having the higher rating
short-term corporate debt obligations, if at least two rating organizations assigned
including those with floating or variable that rating. If a rating organization
rates of interest, obligations issued or downgrades the quality rating assigned to one
guaranteed by one or more foreign or more of
- ------------------------------------------------------------------------------------------------------------------------------
1
- ------------------------------------------------------------------------------------------------------------------------------
AmSouth Prime Money Market Fund Pioneer Cash Reserves Fund
- ------------------------------------------------------------------------------------------------------------------------------
governments or their agencies or the Fund's portfolio securities, Pioneer will
instrumentalities, including obligations promptly reassess whether the downgraded
of supranational entities, asset-backed security presents minimal credit risk to the
securities, repurchase agreements Fund.
collateralized by the types of
securities listed above.
- ------------------------------------------------------------------------------------------------------------------------------
Investment strategies The Fund invests in securities issued by: (i) Pioneer Cash Reserves Fund seeks to maintain a
FNMA, FHLMC, SLMA and the FHLBs, constant net asset value of $1.00 per share by
which are supported by the right of the issuer investing in high-quality, U.S. dollar
to borrow from the U.S. Treasury; and (ii) denominated money market securities, including
FFCBs and TVA, which are supported only by the those issued by U.S. and foreign banks, U.S.
credit of the issuer. and foreign corporate issuers, the U.S.
government and its agencies and
When selecting securities for the Fund's instrumentalities, foreign governments, and
portfolio, AAMI first considers safety of multinational organizations such as the World
principal and the quality of an investment. Bank.
AAMI then focuses on generating a high level
of income. AAMI generally evaluates The Fund invests exclusively in securities
investments based on interest rate sensitivity with a maximum remaining maturity of 397 days
selecting those securities whose maturities and maintains a dollar-weighted average
fit the Fund's interest rate sensitivity portfolio maturity of 90 days or less. The
target and which AAMI believes to be the best Fund's investments may have fixed, floating or
relative values. The Fund will maintain an variable interest rates.
average weighted portfolio maturity of 90 days
or less and will limit the maturity of each In selecting the Fund's portfolio, Pioneer
security in its portfolio to 397 days or less. complies with the rating, maturity and
diversification requirements applicable to
money market funds. Within those limits,
Pioneer's assessment of broad economic
factors that are expected to affect economic
activity and interest rates influence its
securities selection. Pioneer also employs
due diligence and fundamental research, an
evaluation of the issuer based on its
financial statements and operations, to
assess an issuer's credit quality.
- ------------------------------------------------------------------------------------------------------------------------------
Other investments AmSouth Prime Money Market Fund also invests Pioneer Cash Reserves Fund may invest more
in mortgage-related securities issued by than 25% of its total assets in U.S.
nongovernmental entities which are rated, at government securities and obligations of U.S.
the time of purchase, in one of the four banks. The Fund may invest in any money
highest rating categories by a nationally market instrument that is a permissible
recognized statistical rating organization investment for a money market fund under the
("NRSRO") or, if unrated, determined by its rules of the SEC, including commercial paper,
Advisor to be of comparable quality. certificates of deposit, time deposits,
"High-quality" debt securities are those bankers' acceptances, mortgage-backed and
obligations which, at the time of purchase, asset-backed securities, repurchase
(i) possess the highest short-term rating from agreements, municipal obligations and other
at least two NRSROs (for example, commercial short-term debt securities.
paper rated "A-1" by S&P, and "P-1" by Moody's
Investors Service, Inc.) or one NRSRO if only
rated by one NRSRO or (ii) if unrated, are
determined by AAMI to be of comparable Quality.
- ------------------------------------------------------------------------------------------------------------------------------
2
- ------------------------------------------------------------------------------------------------------------------------------
AmSouth Prime Money Market Fund Pioneer Cash Reserves Fund
- ------------------------------------------------------------------------------------------------------------------------------
Temporary defensive Pioneer Cash Reserves Fund may invest all or
strategies part of its assets in securities with
remaining maturities of less than one year,
cash equivalents or may hold cash.
- ------------------------------------------------------------------------------------------------------------------------------
Diversification Each Fund is subject to the diversification requirements applicable to money market funds
under the Investment Company Act of 1940.
- ------------------------------------------------------------------------------------------------------------------------------
Industry concentration AmSouth Prime Money Market Fund may not Pioneer Cash Reserves Fund will not
purchase any securities which would cause more concentrate its assets in the securities of
than 25% of the value of the Fund's total issuers in any one industry except with
assets at the time of purchase to be invested respect to investments in obligations of (a)
in securities of one or more issuers the U.S. government, its agencies, authorities
conducting their principal business activities or instrumentalities and (b) domestic banks,
in the same industry, provided that (a) there purchase any security if, as a result (i) more
is no limitation with respect to obligations than 5% of the assets of the Fund would be in
issued or guaranteed by the U.S. government or the securities of any one issuer, or (ii) more
its agencies or instrumentalities, bank than 25% of its assets would be in a
certificates of deposit or bankers' particular industry.
acceptances issued by a domestic bank or by a
U.S. branch of a foreign bank provided that
such U.S. branch is subject to the same
regulation as U.S. banks, and repurchase
agreements secured by bank instruments or
obligations of the U.S. government or its
agencies or instrumentalities; (b) wholly
owned finance companies will be considered to
be in the industries of their parents if their
activities are primarily related to financing
the activities of their parents; and (c)
utilities will be divided according to their
services. For example, gas, gas transmission,
electric and gas, electric, and telephone will
each be considered a separate industry.
- ------------------------------------------------------------------------------------------------------------------------------
Restricted and illiquid AmSouth Prime Money Market Fund may not Pioneer Cash Reserves Fund will not invest
securities invest more than 10% of its net assets in more than 10% of its net assets in illiquid
securities that are restricted as to resale, and other securities that are not readily
or for which no readily available market marketable. Repurchase agreements maturing in
exists, including repurchase agreements more than seven days will be included for
providing for settlement more than seven days purposes of the foregoing limit.
after notice.
- ------------------------------------------------------------------------------------------------------------------------------
Borrowing AmSouth Prime Money Market Fund may not borrow Pioneer Cash Reserves Fund may not borrow
money or issue senior securities, except the money, except from banks for extraordinary
Fund may borrow from banks or enter into purposes or to meet redemptions in amounts not
reverse repurchase agreements for temporary exceeding 33 1/3% of its total assets
emergency purposes in amounts up to 33 1/3% of (including the amount borrowed).
the value of its total assets at the time of
such borrowing. The Fund will not purchase
securities while borrowings (including reverse
repurchase agreements) in excess of 5% of its
total assets are outstanding. In addition,
the Fund is permitted to participate in a
credit facility whereby the Fund may directly
lend to and borrow money from other AmSouth
funds for temporary purposes, provided that
the loans are made in accordance with an order
of exemption from the SEC and any conditions
thereto.
- ------------------------------------------------------------------------------------------------------------------------------
3
- ------------------------------------------------------------------------------------------------------------------------------
AmSouth Prime Money Market Fund Pioneer Cash Reserves Fund
- ------------------------------------------------------------------------------------------------------------------------------
Lending AmSouth Prime Money Market Fund may not make Pioneer Cash Reserves Fund may make loans to
loans, except that the Fund may purchase or any person, except by (a) the purchase of a
hold debt instruments in accordance with its debt obligation in which the Fund is permitted
investment objective and policies, lend Fund to invest and (b) engaging in repurchase
securities in accordance with its investment agreements.
objective and policies and enter into
repurchase agreements. In addition, the Fund
is permitted to participate in a credit
facility whereby the Fund may directly lend to
and borrow money from other AmSouth funds for
temporary purposes, provided that the loans
are made in accordance with an order of
exemption from the SEC and any conditions
thereto.
- ------------------------------------------------------------------------------------------------------------------------------
Derivative instruments AmSouth Prime Money Market Fund may not write Pioneer Cash Reserves Fund may not write,
or purchase call options. purchase or otherwise invest in any put, call,
straddle or spread option.
- ------------------------------------------------------------------------------------------------------------------------------
Other investment policies As described above, the Funds have substantially similar principal investment
and restrictions strategies and policies. Certain of the non-principal investment policies and
restrictions are different. For a more complete discussion of each Fund's other
investment policies and fundamental and non-fundamental investment restrictions,
see the SAI.
- ------------------------------------------------------------------------------------------------------------------------------
Buying, Selling and Exchanging Shares
- ------------------------------------------------------------------------------------------------------------------------------
Class A sales charges and Class A shares are offered without sales Class A shares are offered without sales
Rule 12b-1 fees charges. charges.
Class A shares pay a shareholder servicing There is no contingent deferred sales charge
fee (non 12b-1) of up to 0.25% of average ("CDSC"), except in certain circumstances
daily net assets. when the initial sales charge is waived.
Class A shares are subject to distribution
and service (12b-1) fees of up to 0.15% of
average daily net assets.
- ------------------------------------------------------------------------------------------------------------------------------
Class B sales charges and Class B shares are offered without an initial Class B shares are offered without an initial
Rule 12b-1 fees sales charge, but are subject to a CDSC of up sales charge, but are subject to a CDSC of up
to 5%. For Class B shares purchased prior to to 4% if you sell your shares. The charge is
the combination of AmSouth Funds with ISG reduced over time and is not charged after
Funds, the CDSC on such Class B shares held five years. Your investment firm may receive
continuously declines over six years, a commission from PFD, the Fund's
starting with year one and ending in year distributor, at the time of your purchase of
seven from: 4%, 3%, 3%, 2%, 2%, 1%. For all up to 4%.
other Class B shares held continuously, the
CDSC declines over six years, starting with Class B shares are subject to distribution
year one and ending in year seven from: 5%, and service (12b-1) fees of up to 1% of
4%, 3%, 3%, 2%, 1%. Eight years after average daily net assets.
purchase (seven years in the case of shares
acquired in the ISG Class B shares acquired through the
- ------------------------------------------------------------------------------------------------------------------------------
4
- ------------------------------------------------------------------------------------------------------------------------------
AmSouth Prime Money Market Fund Pioneer Cash Reserves Fund
- ------------------------------------------------------------------------------------------------------------------------------
combination), Class B shares automatically Reorganization will be subject to the CDSC
convert to Class A shares. and commission schedules applicable to the
original purchase.
Class B shares pay a shareholder servicing
fee (non 12b-1) of up to 0.25% of average Maximum purchase of Class B shares in a
daily net assets, and a distribution (12b-1) single transaction is $49,999.
fee of 0.75% of average daily net assets.
Maximum investment for all Class B purchases
by a shareholder for the Fund's shares is
$99,999.
- ------------------------------------------------------------------------------------------------------------------------------
Class I and Class Y AmSouth Prime Money Market Fund does not The Fund does not impose any initial,
sales charges and Rule impose any initial or CDSC on Class I shares. contingent deferred or asset based sales charge
12b-1 fees on Class Y shares.
The Fund may impose a shareholder servicing
fee (non 12b-1) of up to 0.15% of average The distributor incurs the expenses of
daily net assets. distributing the Fund's Class Y shares, none
of which are reimbursed by the Fund or the
Class Y shareowners.
- ------------------------------------------------------------------------------------------------------------------------------
Management and other AmSouth Prime Money Market Fund pays an Pioneer Cash Reserves Fund pays Pioneer an
fees advisory fee on a monthly basis at an annual annual fee equal to 0.40% of the Fund's
rate of 0.40% of the Fund's average daily net average daily net assets. The fee is computed
assets. daily and paid monthly.
ASO Services Company, Inc. ("ASO") serves as Pioneer has agreed to limit the Fund's
administrator and fund accounting agent for expenses or waive a portion of its management
the Fund. The Fund pays ASO an administrative fee to maintain a net asset value of $1.000.
services fee of 0.15% of the Fund's average Under certain circumstances, this limitation
daily net assets. may result in a 0.00% yield for one or more
classes for shares. From time to time,
Other expenses of the Fund are being limited Pioneer and its affiliates may limit the
to 0.38% for Class A shares. Any fee waiver expenses of one or more classes for the
or expense reimbursement arrangement is purpose of increasing its yield during the
voluntary and may be discontinued at any period of the limitation. These expense
time. limitation policies are voluntary and
temporary and may be revised or terminated by
Other expenses of the Fund are being limited Pioneer at any time without notice.
to 0.22% for Class B shares. Any fee waiver
or expense reimbursement arrangement is For the fiscal year ended December 31, 2004,
voluntary and may be discontinued at any the Fund's total annual operating expenses
time. for Class A shares were 0.93% of average
daily net assets.
Other expenses of the Fund are being limited
to 0.23% for Class I shares. Any fee waiver For the fiscal year ended December 31, 2004,
or expense reimbursement arrangement is the Fund's total annual operating expenses
voluntary and may be discontinued at any for Class B shares were 1.81% of average
time. daily net assets.
For the fiscal year ended July 31, 2004, the Class Y shares of Pioneer Cash Reserves Fund
Fund's annual operating expenses for Class A are being offered for the first time in
shares, after giving effect to the expense connection with the Reorganization.
limitation were 0.78%, and without giving
effect to the expense limitation, were 0.90%
of
- ------------------------------------------------------------------------------------------------------------------------------
5
- ------------------------------------------------------------------------------------------------------------------------------
AmSouth Prime Money Market Fund Pioneer Cash Reserves Fund
- ------------------------------------------------------------------------------------------------------------------------------
average daily net assets.
For the fiscal year ended July 31, 2004, the
Fund's annual operating expenses for Class B
shares, after giving effect to the expense
limitation were 0.93%, and without giving
effect to the expense limitation, were 1.65%
of average daily net assets.
For the fiscal year ended July 31, 2004, the
Fund's annual operating expenses for Class I
shares, after giving effect to the expense
limitation were 0.63%, and without giving
effect to the expense limitation, were 0.80%
of average daily net assets.
- ------------------------------------------------------------------------------------------------------------------------------
Buying shares You may buy shares of AmSouth Prime Money You may buy shares from any investment firm
Market Fund directly through BISYS Fund that has a sales agreement with PFD, the
Services, the Fund's distributor, or through Fund's distributor.
brokers, registered investment advisers, banks
and other financial institutions that have If the account is established in the
entered into selling agreements with the shareholder's own name, shareholders may also
Fund's distributor, as described in the Fund's purchase additional shares of the Fund by
prospectus. telephone or online.
Certain account transactions may be done by
telephone.
- ------------------------------------------------------------------------------------------------------------------------------
Exchanging shares You can exchange your shares in the Fund for You may exchange your shares for shares of the
shares of the same class of another AmSouth same class of another Pioneer mutual fund.
Fund, usually without paying additional sales Your exchange request must be for at least
charges. You must meet the minimum investment $1,000. Shares you acquire as part of an
requirements for the Fund into which you are exchange will continue to be subject to any
exchanging. Exchanges from one Fund to CDSC that applies to the shares you originally
another are taxable. Class A shares may be purchased. When you ultimately sell your
exchanged for Class I shares of the same Fund shares, the date of your original purchase
or another AmSouth fund if you become eligible will determine your CDSC. An exchange
to purchase Class I shares. Class I shares generally is treated as a sale and a new
may be exchanged for Class A shares of the purchase of shares for federal income tax
same Fund. No transaction fees are currently purposes.
charged for exchanges.
After you establish an eligible Fund account,
you can exchange Fund shares by telephone or
online.
- ------------------------------------------------------------------------------------------------------------------------------
Selling shares Shares of each Fund are sold at the net asset value per share next calculated after
the Fund receives your request in good order.
-------------------------------------------------------------------------------------------------
You may sell your shares by contacting the Normally, your investment firm will send your
Fund directly in writing or by telephone or request to sell shares to PIMSS. You can also
by contacting a financial intermediary as sell your shares by contacting the Fund
described in the Fund's prospectus. directly if your account is registered in
your name.
- ------------------------------------------------------------------------------------------------------------------------------
6
- ------------------------------------------------------------------------------------------------------------------------------
AmSouth Prime Money Market Fund Pioneer Cash Reserves Fund
- ------------------------------------------------------------------------------------------------------------------------------
If the account is established in the
shareholder's own name, shareholders may also
redeem shares of the Fund by telephone or
online.
- ------------------------------------------------------------------------------------------------------------------------------
Comparison of Principal Risks of Investing in the Funds
Because each Fund has a similar investment objective, primary investment
policies and strategies, the Funds are subject to the same principal risks. Even
though each Fund seeks to maintain a constant net asset value of $1.00, you
could lose money on your investment in either Fund or not make as much as if you
invested elsewhere if:
o Interest rates go up, causing the value of the Fund's investments to decline
o The issuer of a security owned by the Fund may not be able to make timely
payments because of a general economic downturn or increased governmental
costs
o The adviser's judgment about the credit quality, attractiveness or relative
value of a particular security proves to be incorrect
Pioneer Cash Reserves Fund may be subject to the following additional risks
associated with investing in non-U.S. issuers, which may involve unique risks
compared to investing in securities of U.S. issuers. These risks are more
pronounced to the extent the Fund invests in issuers in countries with emerging
markets or if the Fund invests significantly in one country. These risks may
include:
o Inadequate financial information
o Smaller, less liquid and more volatile markets
o Political and economic upheavals
Pioneer Cash Reserves does not concentrate its investments in any industry.
At times, more than 25% of the Pioneer Cash Reserves Fund's assets may be
invested in the same market segment, such as financials. To the extent the Fund
emphasizes investments in a market segment, the Fund will be subject to a
greater degree to the risks particular to the industries in that segment, and
may experience greater market fluctuation, than a fund without the same focus.
For example, industries in the financial segment, such as banks, insurance
companies, broker-dealers and REITs, may be sensitive to changes in interest
rates and general economic activity and are subject to extensive government
regulation.
Past Performance
Set forth below is performance information for each Fund. The bar charts show
how each Fund's total return (not including any deduction for sales charges) has
varied from year to year for each full calendar year. The tables show average
annual total return (before and after taxes) for each Fund over time for each
class of shares (including deductions for sales charges) compared with a
broad-based securities market index. The bar charts give an indication of the
risks of investing in each Fund, including the fact that you could incur a loss
and experience volatility of returns year to year. Past performance before and
after taxes does not indicate future results. No Class Y shares of Pioneer Cash
Reserves Fund are currently outstanding.
7
AmSouth Prime Money Market Fund -- Class A Shares
Calendar Year Total Returns*
[The following table was depicted as a bar chart in the printed material.]
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
5.5 4.84 4.98 4.88 4.49 5.73 3.46 0.98 0.39 0.60
* During the period shown in the bar chart, your AmSouth Fund's highest
quarterly return was 1.48% for the quarter ended December 31, 2000, and the
lowest quarterly return was 0.08% for the quarter ended December 31, 2003.
Pioneer Cash Reserves Fund -- Class A Shares
Calendar Year Total Returns*
[The following table was depicted as a bar chart in the printed material.]
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
5.17 4.65 4.78 4.84 4.23 5.53 3.32 1.15 0.26 0.45
* During the period shown in the bar chart, Pioneer Cash Reserves Fund's
highest quarterly return was 1.48% for the quarter ended December 31, 2000,
and the lowest quarterly return was 0.07% for the quarter ended June 30,
2004.
AmSouth Prime Money Market Fund
Average Annual Total Returns as of December 31, 2004
- ---------------------------------------------------------------------------------------
1 Year 5 Years 10 Years
- ---------------------------------------------------------------------------------------
AmSouth Prime Money Market Fund, Class A Shares
- ---------------------------------------------------------------------------------------
Return Before Taxes(1) 0.60% 2.20% 3.56%
- ---------------------------------------------------------------------------------------
AmSouth Prime Money Market Fund, Class B Shares
- ---------------------------------------------------------------------------------------
Return Before Taxes(2) 0.45% 1.68% N/A
- ---------------------------------------------------------------------------------------
AmSouth Prime Money Market Fund, Class I Shares
- ---------------------------------------------------------------------------------------
Return Before Taxes(3) 0.75% 2.35% 3.68%
- ---------------------------------------------------------------------------------------
(1) The return reported above assumes the reinvestment of dividends.
Performance for the Class A shares, which were first offered on April 1,
1996, is based on the historical performance of the Class I shares prior to
that date.
8
(2) The return reported above assumes the reinvestment of dividends, includes
the applicable CDSC and assumes that Class B shareholders redeem all of
their Fund shares at the end of the period indicated. Class B shares were
first offered on June 15, 1998.
(3) The return reported above assumes the reinvestment of dividends.
Pioneer Cash Reserves Fund
Average Annual Total Returns as of December 31, 2004
- ---------------------------------------------------------------------------------------
1 Year 5 Years 10 Years
- ---------------------------------------------------------------------------------------
Pioneer Cash Reserves Fund, Class A shares
- ---------------------------------------------------------------------------------------
Return Before Taxes(1) 0.45% 2.12% 3.42%
- ---------------------------------------------------------------------------------------
Pioneer Cash Reserves Fund, Class B Shares
- ---------------------------------------------------------------------------------------
Return Before Taxes(2) 3.94% 1.49% N/A
- ---------------------------------------------------------------------------------------
Pioneer Cash Reserves Fund, Class Y Shares(3)
- ---------------------------------------------------------------------------------------
90-day U.S. Treasury Bill 1.38% 2.67% 3.88%
(reflects no deduction for taxes)
- ---------------------------------------------------------------------------------------
(1) Return before taxes assumes that you sell your Class A shares at the end of
the period and that you reinvest all of your dividends and distributions.
(2) Return before taxes assumes that you sell your Class B shares at the end of
the period and that you reinvest all of your dividends and distributions.
(3) Class Y shares were not outstanding prior to the closing of the
Reorganization and consequently have no performance history. However, the
performance record of the Class Y shares would be modestly higher than the
performance of the Class A and Class B shares due to the lower expenses
applicable to Class Y shares.
- -----------------------------------------------------------------------------------
7-Day Yield
As of December 31, 2004
- -----------------------------------------------------------------------------------
AmSouth Prime Money Market Fund, Class A Shares 1.47%
- -----------------------------------------------------------------------------------
Pioneer Cash Reserves Fund, Class A shares 1.12%
- -----------------------------------------------------------------------------------
AmSouth Prime Money Market Fund, Class B Shares 1.32%
- -----------------------------------------------------------------------------------
Pioneer Cash Reserves Fund, Class B shares 0.24%
- -----------------------------------------------------------------------------------
AmSouth Prime Money Market Fund, Class I Shares 1.62%
- -----------------------------------------------------------------------------------
The most recent portfolio manager's discussion of each Fund's performance is
attached as Exhibit C.
9
The Funds' Fees and Expenses
Shareholders of both Funds pay various fees and expenses, either directly
or indirectly. The tables below show the fees and expenses that you would pay if
you were to buy and hold shares of each Fund. The expenses in the tables
appearing below are based on (i) for the AmSouth Prime Money Market Fund, the
expenses of AmSouth Prime Money Market Fund for the period ended January 31,
2005 and (ii) for the Pioneer Cash Reserves Fund, the expenses of Pioneer Cash
Reserves Fund for the period ended December 31, 2004. Future expenses for all
share classes may be greater or less. Shareholders of AmSouth Treasury Reserve
Money Market Fund are also being asked to approve the reorganization of their
fund into Pioneer Cash Reserves Fund. The tables also show (1) the pro forma
expenses of the combined Fund assuming the Reorganization occurred on December
31, 2004, and (2) the pro forma expenses of the combined Fund assuming the
reorganization of AmSouth Treasury Reserve Money Market Fund into Pioneer Cash
Reserves Fund also occurred December 31, 2004.
- -------------------------------------------------------------------------------------------------------------------------
Combined Fund
AmSouth (including AmSouth
Shareholder Prime Pioneer AmSouth Prime Pioneer
transaction Money Cash Combined Treasury Money Cash Combined
fees (paid Market Reserves Fund Reserve Market Reserves Fund
directly Fund(1) Fund (Pro Forma) Fund) Fund(1) Fund (Pro Forma)
from your (Pro Forma)
investment) Class A Class A Class A Class A Class B Class B Class B
- -------------------------------------------------------------------------------------------------------------------------
Maximum sales None None None None None None None
charge (load)
when you buy
shares as a
percentage of
offering price
- -------------------------------------------------------------------------------------------------------------------------
Maximum deferred
sales charge
(load) as a
percentage of
purchase price or None None None None 5.00%(2) 4.00% 4.00%
the amount you
receive when you
sell shares,
whichever is less
- -------------------------------------------------------------------------------------------------------------------------
Redemption fees None(3) None None None None(3) None None
- -------------------------------------------------------------------------------------------------------------------------
Annual fund
operating
expenses
(deducted from
fund assets) (as
a % of average
net assets)
- -------------------------------------------------------------------------------------------------------------------------
Management fee 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% 0.40%
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------
Shareholder Combined AmSouth Combined Combined
transaction fees Fund Prime Fund (Pro Fund
(paid directly (including Money Forma) (including
from your AmSouth Market AmSouth
investment) Treasury Fund(1) Treasury
Reserve Reserve
Fund) Fund)
(Pro Forma) (Pro Forma)
Class B Class I Class Y(8) Class Y(8)
- -------------------------------------------------------------------------
Maximum sales None None None None
charge (load)
when you buy
shares as a
percentage of
offering price
- -------------------------------------------------------------------------
Maximum deferred
sales charge
(load) as a
percentage of
purchase price or 4.00% None None None
the amount you
receive when you
sell shares,
whichever is less
- -------------------------------------------------------------------------
Redemption fees None None(3) None None
- -------------------------------------------------------------------------
Annual fund
operating
expenses
(deducted from
fund assets) (as
a % of average
net assets)
- -------------------------------------------------------------------------
Management fee 0.40% 0.40% 0.40% 0.40%
- -------------------------------------------------------------------------
10
- -------------------------------------------------------------------------------------------------------------------------
Combined Fund
AmSouth (including AmSouth
Shareholder Prime Pioneer AmSouth Prime Pioneer
transaction Money Cash Combined Treasury Money Cash Combined
fees (paid Market Reserves Fund Reserve Market Reserves Fund
directly Fund(1) Fund (Pro Forma) Fund) Fund(1) Fund (Pro Forma)
from your (Pro Forma)
investment) Class A Class A Class A Class A Class B Class B Class B
- -------------------------------------------------------------------------------------------------------------------------
Distribution and None 0.25% 0.15% 0.15% 0.75% 1.00% 1.00%
service (12b-1)
fee
- -------------------------------------------------------------------------------------------------------------------------
Other expenses 0.56%(4) 0.38% 0.18% 0.17% 0.86%(4) 0.41% 0.38%
- -------------------------------------------------------------------------------------------------------------------------
Total fund 0.96% 0.93%(5) 0.73% 0.72% 2.01% 1.81%(5) 1.78%
operating expenses
- -------------------------------------------------------------------------------------------------------------------------
Expense 0.16% N/A(6) N/A N/A 1.06% N/A(6) N/A
reimbursement/
reduction
- -------------------------------------------------------------------------------------------------------------------------
Net fund 0.80% 0.93% 0.73% 0.72% 0.95% 1.81% 1.78%
operating expenses
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------
Shareholder Combined AmSouth Combined Combined
transaction fees Fund Prime Fund (Pro Fund
(paid directly (including Money Forma) (including
from your AmSouth Market AmSouth
investment) Treasury Fund(1) Treasury
Reserve Reserve
Fund) Fund)
(Pro Forma) (Pro Forma)
Class B Class I Class Y(8) Class Y(8)
- -------------------------------------------------------------------------
Distribution and 1.00% None None None
service (12b-1)
fee
- -------------------------------------------------------------------------
Other expenses 0.39% 0.46%(4) 0.06%(7) 0.06%(7)
- -------------------------------------------------------------------------
Total fund 1.79% 0.86% 0.46% 0.46%
operating expenses
- -------------------------------------------------------------------------
Expense N/A 0.21% N/A(6) N/A(6)
reimbursement/
reduction
- -------------------------------------------------------------------------
Net fund 1.79% 0.65% 0.46% 0.46%
operating expenses
- -------------------------------------------------------------------------
(1) AmSouth Bank or other financial institutions may charge their customer
account fees for automatic investment and other cash management services
provided in connection with investment in the Fund.
(2) For former Class B shares purchased prior to the combination of AmSouth
Funds with ISG Funds, the CDSC on such Class B shares held continuously
declines over six years, starting with year one and ending in year seven
from: 4%, 3%, 3%, 2%, 2%, 1%. For all other Class B shares held
continuously, the CDSC declines over six years, starting with year one and
ending in year seven from: 5%, 4%, 3%, 3%, 2%, 1%. Eight years after
purchase (seven years in the case of shares acquired in the ISG
combination), Class B shares automatically convert to Class A shares.
(3) A wire transfer fee of $7.00 will be deducted from the amount of your
redemption if you request a wire transfer.
(4) Other expenses for your AmSouth Fund are being limited to 0.40% for Class A
shares, 0.20% for Class B shares and 0.25% for Class I shares. Any fee
waiver or expense reimbursement arrangement is voluntary and may be
discontinued at any time.
(5) The Pioneer Fund's total annual operating expenses in the table have not
been reduced by any expense offset arrangements.
(6) Pioneer has agreed to limit the Fund's expenses or waive a portion of its
management fee to maintain a net asset value of $1.00. Under certain
circumstances, this limitation may result in a 0.00% yield for one or more
classes for shares. From time to time, Pioneer and its affiliates may limit
the expenses of one or more classes for the purpose of increasing its yield
during the period of the limitation. These expense limitation policies are
voluntary and temporary and may be revised or terminated by Pioneer at any
time without notice.
11
(7) Other expenses for Class Y shares are estimated based on expenses that
would have been incurred for the fiscal year ended December 31, 2004 had
such shares been outstanding for the entire fiscal year.
(8) Class Y shares of Pioneer Cash Reserves Fund are being offered for the
first time in connection with the Reorganization.
12
The hypothetical example below helps you compare the cost of investing in
each Fund. It assumes that: (a) you invest $10,000 in each Fund for the time
periods shown, (b) you reinvest all dividends and distributions, (c) your
investment has a 5% return each year, and (d) each Fund's operating expenses
remain the same. The examples are for comparison purposes only and are not a
representation of either Fund's actual expenses or returns, either past or
future.
- ---------------------------------------------------------------------------------------------------------
Combined Fund
(including AmSouth
Treasury Reserve
Number of years you AmSouth Prime Money Pioneer Cash Reserves Combined Fund Money Market Fund)
own your shares Market Fund Fund (Pro Forma) (Pro Forma)
- ---------------------------------------------------------------------------------------------------------
Class A
- ---------------------------------------------------------------------------------------------------------
Year 1 $98 $95 $645 $644
- ---------------------------------------------------------------------------------------------------------
Year 3 $306 $296 $795 $792
- ---------------------------------------------------------------------------------------------------------
Year 5 $531 $515 $958 $953
- ---------------------------------------------------------------------------------------------------------
Year 10 $1,178 $1,143 $1,429 $1,418
- ---------------------------------------------------------------------------------------------------------
Class B -- assuming redemption at end of period
- ---------------------------------------------------------------------------------------------------------
Year 1 $704 $584 $581 $582
- ---------------------------------------------------------------------------------------------------------
Year 3 $930 $869 $860 $863
- ---------------------------------------------------------------------------------------------------------
Year 5 $1,283 $1,080 $1,064 $1,070
- ---------------------------------------------------------------------------------------------------------
Year 10 $2,066 $1,895 $1,817 $1,823
- ---------------------------------------------------------------------------------------------------------
Class B -- assuming no redemption
- ---------------------------------------------------------------------------------------------------------
Year 1 $204 $184 $181 $182
- ---------------------------------------------------------------------------------------------------------
Year 3 $630 $569 $560 $563
- ---------------------------------------------------------------------------------------------------------
Year 5 $1,083 $980 $964 $970
- ---------------------------------------------------------------------------------------------------------
Year 10 $2,066 $1,895 $1,817 $1,823
- ---------------------------------------------------------------------------------------------------------
Class I Class Y
- ---------------------------------------------------------------------------------------------------------
Year 1 $88 N/A $47 $47
- ---------------------------------------------------------------------------------------------------------
Year 3 $274 N/A $148 $148
- ---------------------------------------------------------------------------------------------------------
Year 5 $477 N/A $258 $258
- ---------------------------------------------------------------------------------------------------------
Year 10 $1061 N/A $579 $579
- ---------------------------------------------------------------------------------------------------------
Reasons for the Proposed Reorganization
The Trustees believe that the proposed Reorganization is in the best
interests of AmSouth Prime Money Market Fund and its shareholders. The Trustees
considered the following matters, among others, in approving the proposal.
First, AAMI, the investment adviser to your AmSouth Fund, informed the
Trustees that it does not intend to continue to provide investment advisory
services to the AmSouth Funds. Consequently, a change in your AmSouth Fund's
investment adviser was necessary. In the absence of the Reorganization, such a
change would be more likely to motivate shareholders invested in reliance on
AAMI's role to withdraw from the Fund, thereby reducing fund size and increasing
fund expense ratios.
Second, the historical investment performance of Pioneer Cash Reserves Fund
is comparable to your AmSouth Fund's investment performance. For example, the
one, five and ten year periods ended December 31, 2004, Class A shares of
Pioneer Cash Reserves Fund had an average annual return of 0.45% (one year);
2.12% (five year); and 3.42% (ten year) compared to an average annual return of
the Class A shares of your AmSouth Fund of 0.60% (one year); 2.20% (five year);
and 3.56% (ten year), respectively, during the same period. In addition, the
Trustees considered the track record of Pioneer in managing equity and fixed
income mutual funds.
Third, the resources of Pioneer. At December 31, 2004, Pioneer manages over
80 investment companies and accounts with approximately $42 billion in assets.
Pioneer is part of the global asset management group of UniCredito Italiano
S.p.A., one of the largest banking groups in Italy, providing investment
management and financial services to mutual funds, institutional and other
clients. As of December 31, 2004, assets under management of UniCredito Italiano
S.p.A. were
13
approximately $175 billion worldwide. Shareholders of your AmSouth Fund would
become part of a significantly larger family of funds that offers a more diverse
array of investment options and enhanced shareholder account options. The
Pioneer family of mutual funds offers over 80 funds, including domestic and
international equity and fixed income funds and a money market fund that will be
available to your AmSouth Fund's shareholders through exchanges.
Fourth, Pioneer Cash Reserves Fund's management fee (0.40% of average daily
net assets) is the same as the advisory fee of your AmSouth Fund (0.40% of
average daily net assets). The gross expenses of each class of the Pioneer Fund,
on both a historical and pro-forma basis, are lower than the gross expenses
attributable to the corresponding class of your Fund. Expenses, net of
limitations, on a pro forma basis for the Class A and Class Y shares of the
Pioneer Fund are lower than the net expenses of the corresponding Class of your
Fund. With respect to Class B shares, your Fund's historical net expenses are
lower than the pro-forma expenses attributable to the Class B shares of the
Pioneer Fund. The pro forma expenses of Class B shares net of limitations will
increase 84 basis points. The lower net expenses on your AmSouth Fund are a
result of voluntary expense limitations that may be discontinued at any time.
AmSouth Bank and its affiliates have informed the trustees that they will
discontinue their expense limitations in the future. The trustees considered the
positive factors associated with the Reorganization, such as greater fund assets
and potential for growth, to outweigh the negative factors, such as the increase
in net expenses for the Class B shares. The aggregate Rule 12b-1 distribution
and shareholder servicing fees and non-Rule 12b-1 shareholder servicing fees
paid by the Class A and Class B shares of both Funds are the same. Moreover,
your AmSouth Fund's Class I shares pay a non 12b-1 shareholder servicing fee
that is not paid by the Pioneer Fund's Class Y shares. In addition, the broader
distribution arrangements of the Pioneer Fund offer greater potential for
further asset growth and reduce per share expenses.
Fifth, the substantially larger size of the combined Pioneer Cash Reserves
Fund will offer greater opportunity for diversification of the investment
portfolio, which should help to reduce risks.
Sixth, the Class A, B and Y shares of Pioneer Cash Reserves Fund received
in the Reorganization will provide AmSouth Prime Money Market Fund shareholders
with exposure to substantially the same investment product as they currently
have.
Seventh, the transaction is structured to qualify as a tax-free
reorganization under Section 368(a) of the Internal Revenue Code of 1986 and
therefore will not be treated as a taxable sale of your AmSouth shares.
Pioneer and AmSouth Bank will pay all costs of preparing and printing the
AmSouth Funds' proxy statements and solicitation costs incurred by the AmSouth
Funds in connection with the Reorganization. AAMI will otherwise be responsible
for all costs and expenses of the AmSouth Funds in connection with the
Reorganizations.
The Trustees also considered that Pioneer and AmSouth Bank will benefit
from the Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the
Reorganizations."
The Board of Trustees of the Pioneer Fund also considered that the
Reorganization presents an excellent opportunity for the Pioneer Fund to acquire
investment assets without the obligation to pay commissions or other transaction
costs that a fund normally incurs when purchasing securities. This opportunity
provides an economic benefit to the Pioneer Fund and its shareholders.
14
CAPITALIZATION
The following table sets forth the capitalization of each Fund as of May
31, 2005, and the pro forma combined Fund as of May 31, 2005. The table also
sets forth the pro forma capitalization of the combined Fund as of May 31, 2005,
assuming the shareholders of AmSouth Treasury Reserve Money Market Fund approve
the reorganization of their fund into Pioneer Cash Reserves Fund.
- --------------------------------------------------------------------------------------------------------------------------------
Pro Forma
Pioneer Cash
Reserves Fund
(including
AmSouth
AmSouth Prime Pioneer Cash Pro Forma Treasury
Money Market Reserves Pioneer Cash Reserve Money
Fund Fund Reserves Fund Market Fund)
May 31, 2005 May 31, 2005 May 31, 2005 May 31, 2005
- --------------------------------------------------------------------------------------------------------------------------------
Total Net Assets (in thousands) $627,598 $418,881 $1,047,479 $1,226,225
- --------------------------------------------------------------------------------------------------------------------------------
Class A shares .......................................... $412,843 $212,426 $625,268 $698,111
- --------------------------------------------------------------------------------------------------------------------------------
Class B shares .......................................... $3,150 $50,365 $53,515 $53,515
- --------------------------------------------------------------------------------------------------------------------------------
Class I/Y shares ........................................ $211,605 N/A $211,605 $317,508
- --------------------------------------------------------------------------------------------------------------------------------
Net Asset Value Per Share
- --------------------------------------------------------------------------------------------------------------------------------
Class A shares .......................................... $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------------------------
Class B shares .......................................... $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------------------------
Class I/Y shares ........................................ $1.00 N/A $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------------------------
Shares Outstanding
- --------------------------------------------------------------------------------------------------------------------------------
Class A shares .......................................... 412,880,561 212,571,273 625,697,409 698,590,414
- --------------------------------------------------------------------------------------------------------------------------------
Class B shares .......................................... 3,149,507 50,321,650 53,468,483 53,468,483
- --------------------------------------------------------------------------------------------------------------------------------
Class I/Y shares ........................................ 211,594,967 N/A 211,594,967 317,725,662
- --------------------------------------------------------------------------------------------------------------------------------
It is impossible to predict how many shares of the Pioneer Fund will
actually be received and distributed by your AmSouth Fund on the Reorganization
date. The table should not be relied upon to determine the amount of the Pioneer
Fund's shares that will actually be received and distributed.
BOARD'S EVALUATION AND RECOMMENDATION
For the reasons described above, the Trustees, including the Independent
Trustees, approved the Reorganization. In particular, the Trustees determined
that the Reorganization is in the best interests of your AmSouth Fund.
Similarly, the Board of Trustees of the Pioneer Fund, including its Independent
Trustees, approved the Reorganization. They also determined that the
Reorganization is in the best interests of the Pioneer Fund.
The Trustees recommend that the shareholders of your AmSouth Fund vote FOR
the proposal to approve the Agreement and Plan of Reorganization.
15
AmSouth Tax-Exempt Money Market Fund and
Pioneer Tax Free Money Market Fund
PROPOSAL 1(v)
Approval of Agreement and Plan of Reorganization
SUMMARY
The following is a summary of more complete information appearing later in
this Proxy Statement/Prospectus or incorporated herein. You should read
carefully the entire Proxy Statement/Prospectus, including the form of Agreement
and Plan of Reorganization attached as EXHIBIT A-1, because it contains details
that are not in the summary.
Each Fund is a money market fund that may invest in high quality short-term
instruments that are exempt from regular federal income tax. Consequently, the
policies and risks of each Fund are similar. A portion of the income from
Pioneer Tax Free Money Market Fund may be a preference item for purposes of the
federal alternative minimum tax. In the table below, if a row extends across the
entire table, the policy disclosed applies to both your AmSouth Fund and the
Pioneer Fund.
Comparison of AmSouth Tax-Exempt Money Market Fund
to Pioneer Tax Free Money Market Fund
- ---------------------------------------------------------------------------------------------------------------------------
AmSouth Tax-Exempt Money Market Fund Pioneer Tax Free Money Market Fund
- ---------------------------------------------------------------------------------------------------------------------------
Business A diversified series of AmSouth Funds, an A diversified series of Pioneer Series Trust
open-end management investment company II, an open-end management investment company
organized as a Massachusetts business trust. organized as a Delaware statutory trust.
- ---------------------------------------------------------------------------------------------------------------------------
Net assets as of March 31, $141.4 million $34.8 million
2005
- ---------------------------------------------------------------------------------------------------------------------------
Investment advisers and Investment Adviser: Investment Adviser:
portfolio managers AAMI Pioneer
Portfolio Manager: Portfolio Manager:
Day-to-day management of AmSouth Tax-Exempt Day-to-day management of the Fund's portfolio
Money Market Fund's portfolio is the is the responsibility of Kenneth J. Taubes.
responsibility of a team of AAMI's portfolio Mr. Taubes joined Pioneer as a senior vice
managers, and no person is primarily president in 1998 and has been an investment
responsible for making recommendations to the professional since 1982.
team.
- ---------------------------------------------------------------------------------------------------------------------------
Investment objective AmSouth Tax-Exempt Money Market Fund seeks to Pioneer Tax Free Money Market Fund seeks as
provide investors with as high a level of high a level of current income exempt from
current interest income exempt from federal federal income tax as is consistent with a
income tax as is consistent with the portfolio of high-quality, short-term
preservation of capital and relative municipal obligations selected on the basis
stability of principal. of liquidity and preservation of capital.
- ---------------------------------------------------------------------------------------------------------------------------
Primary investments AmSouth Tax-Exempt Money Market Fund under The Pioneer Tax Free Money Market Fund seeks
normal market conditions will invest at least to maintain a constant net asset value of
80% of the Fund's total assets in municipal $1.00 per share by investing, under normal
securities and in securities of money market circumstances, at least 80% of its assets in
mutual funds that invest primarily in high-quality, money market securities that
obligations the interest on which is exempt pay interest that is exempt from regular
from federal income tax. federal income tax. These investments include
bonds, notes and other debt instruments
The Fund will invest only in those municipal issued by or on behalf of states, counties,
municipalities,
- ---------------------------------------------------------------------------------------------------------------------------
1
- ---------------------------------------------------------------------------------------------------------------------------
AmSouth Tax-Exempt Money Market Fund Pioneer Tax Free Money Market Fund
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
securities and other obligations that are territories and possessions of the United
considered by AAMI to present minimal credit States and the District of Columbia and their
risks. In addition, investments will be authorities, political subdivisions, agencies
limited to those obligations that, at the or instrumentalities. The Fund will not
time of purchase, (i) possess one of the two invest in securities whose interest is
highest short-term ratings from an NRSRO in subject to the alternative minimum tax for
the case of single-rated securities or (ii) non-corporate taxpayers.
possess, in the case of multiple-rated
securities, one of the two highest short-term The Fund may only invest in money market
ratings by at least two NRSROs; or (iii) do instruments that are permissible investments
not possess a rating (i.e., are unrated) but for a money market fund under the rules of
are determined by AAMI to be of comparable the Securities and Exchange Commission. The
quality to the rated instruments eligible for Fund invests exclusively in U.S. dollar
purchase by the Fund under the guidelines denominated securities with a maximum
adopted by the Board. remaining maturity of 397 days and maintains
a dollar-weighted average portfolio maturity
The Fund may invest up to 10% of its total of 90 days or less. The Fund's investments
assets in the securities of money market may have fixed, floating or variable interest
mutual funds that invest primarily in rates.
obligations exempt from federal income tax.
- ---------------------------------------------------------------------------------------------------------------------------
Other investments The Fund invests primarily in short-term In selecting the Fund's portfolio, Pioneer
municipal securities that provide income that complies with the rating, maturity and
is exempt from federal income tax and is not diversification requirements applicable to
a tax preference item for purposes of the money market funds. Within those limits,
federal alternative minimum tax. Short-term Pioneer's assessment of broad economic
municipal securities are debt obligations, factors that are expected to affect economic
such as bonds and notes, issued by states, activity and interest rates influence its
territories, and possessions of the United securities selection. Pioneer also employs
States and their political subdivisions, due diligence and fundamental research, an
agencies, and instrumentalities, which evaluation of the issuer based on its
generally have remaining maturities of one financial statements and operations, to
year or less. Municipal securities purchased assess an issuer's credit quality.
by the Fund may include rated and unrated
variable and floating rate tax-exempt notes
which may have a stated maturity in excess of
one year but which will be subject to a
demand feature permitting the Fund to demand
payment within a year.
When selecting securities for the Fund's
portfolio, AAMI first considers safety of
principal and the quality of an investment.
AAMI then focuses on generating a high level
of income. AAMI generally evaluates
investments based on interest rate
sensitivity selecting those securities whose
maturities fit the Fund's interest rate
sensitivity target and which AAMI believes to
be the best relative values.
The Fund will maintain an average weighted
portfolio maturity of 90 days or less and
will limit the maturity of each security in
its portfolio to 397 days or less.
- ---------------------------------------------------------------------------------------------------------------------------
2
- ----------------------------------------------------------------------------------------------------------------------------
AmSouth Tax-Exempt Money Market Fund Pioneer Tax Free Money Market Fund
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Other investments The Fund may invest up to 20% of its total The Fund may invest up to 20% of its net
assets in taxable obligations. Taxable assets in U.S. dollar denominated securities
obligations may include obligations issued or issued by non-U.S. entities, such as non-U.S.
guaranteed by the U.S. government, its banks and corporate issuers.
agencies or instrumentalities (some of which
may be subject to repurchase agreements), The Fund's investment in municipal securities
certificates of deposit and bankers' whose issuers are located in the same state
acceptances of selected banks, and commercial will not exceed 25% of the Fund's total
paper. assets.
The Fund invests in money market securities
rated in one of the two highest rating
categories for short-term debt by a
nationally recognized statistical rating
organization or, if unrated, determined to be
of equivalent credit quality by Pioneer. If
rating organizations differ in the rating
assigned to a security, the Fund will only
treat the security as having the higher
rating if at least two rating organizations
assigned that rating. If a rating
organization downgrades the quality rating
assigned to one or more of the Fund's
portfolio securities, Pioneer will promptly
reassess whether the downgraded security
presents minimal credit risk to the Fund.
- ----------------------------------------------------------------------------------------------------------------------------
Diversification Each Fund is subject to the diversification requirements applicable to money market funds
under the Investment Company Act.
- ----------------------------------------------------------------------------------------------------------------------------
Industry concentration AmSouth Tax-Exempt Money Market Fund may not Pioneer Tax Free Money Market Fund may not
purchase any securities which would cause 25% invest 25% or more of the value of its total
or more of the Fund's total assets at the assets in any one industry, provided that
time of purchase to be invested in securities this limitation does not apply to municipal
of one or more issuers conducting their securities other than those municipal
principal business activities in the same securities backed only by assets and revenues
industry. This Limitation shall not apply to of non-governmental issuers. For purposes of
municipal securities; and for purposes of applying the limitation set forth in this
this limitation, private activity bonds that restriction, securities of the U.S.
are backed only by the assets and revenues of government, its agencies, or
a non-governmental user shall not be deemed instrumentalities, and securities backed by
to be municipal securities. the credit of a governmental entity are not
considered to represent industries. However,
obligations backed only by the assets and
revenues of non-governmental issuers may for
this purpose be deemed to be issued by such
non-governmental issuers. Thus, the 25%
limitation would apply to such obligations.
- ----------------------------------------------------------------------------------------------------------------------------
Restricted and illiquid AmSouth Tax-Exempt Money Market Fund may not Pioneer Tax Free Money Market Fund will not
securities invest more than 10% of its net assets in invest more than 10% of its net assets in
securities that are restricted as to resale, illiquid and other securities that are not
or for which no readily available market readily marketable. Repurchase agreements
exists, including repurchase agreements maturing in more than seven days will be
providing for settlement more than seven days included for purposes of the foregoing limit.
after notice.
- ----------------------------------------------------------------------------------------------------------------------------
3
- ----------------------------------------------------------------------------------------------------------------------------
AmSouth Tax-Exempt Money Market Fund Pioneer Tax Free Money Market Fund
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Borrowing AmSouth Tax-Exempt Money Market Fund may not Pioneer Tax Free Money Market Fund may not
borrow money or issue senior securities, borrow money, except on a temporary basis and
except the Fund may borrow from banks or to the extent permitted by applicable law, as
enter into reverse repurchase agreements for amended and interpreted or modified from time
temporary emergency purposes in amounts up to to time by any regulatory authority having
33 1/3% of the value of its total assets at jurisdiction. Under current regulatory
the time of such borrowing. The Fund will not requirements, a fund may: (a) borrow from
purchase securities while borrowings banks or through reverse repurchase
(including reverse repurchase agreements) in agreements in an amount up to 33 1/3% of the
excess of 5% of its total assets are fund's total assets (including the amount
outstanding. In addition, the Fund is borrowed); (b) borrow up to an additional 5%
permitted to participate in a credit facility of the fund's assets for temporary purposes;
whereby the Fund may directly lend to and (c) obtain such short-term credits as are
borrow money from other AmSouth funds for necessary for the clearance of portfolio
temporary purposes, provided that the loans transactions; (d) purchase securities on
are made in accordance with an order of margin to the extent permitted by applicable
exemption from the SEC and any conditions law; and (e) engage in transactions in
thereto. mortgage dollar rolls that are accounted for
as financings. In the opinion of the SEC, the
Fund's limitation on borrowing includes any
pledge, mortgage or hypothecation of its
assets.
- ----------------------------------------------------------------------------------------------------------------------------
Lending AmSouth Tax-Exempt Money Market Fund may not Pioneer Tax Free Money Market Fund may not
make loans, except that the Fund may purchase make loans, except that the fund may (i) lend
or hold debt instruments in accordance with portfolio securities in accordance with the
its investment objective and policies, lend fund's investment policies, (ii) enter into
Fund securities in accordance with its repurchase agreements, (iii) purchase all or
investment objective and policies and enter a portion of an issue of publicly distributed
into repurchase agreements. In addition, the debt securities, bank loan participation
Fund is permitted to participate in a credit interests, bank certificates of deposit,
facility whereby the Fund may directly lend to bankers' acceptances, debentures or other
and borrow money from other AmSouth Funds for securities, whether or not the purchase is
temporary purposes, provided that the loans made upon the original issuance of the
are made in accordance with an order of securities, (iv) participate in a credit
exemption from the SEC and any conditions facility whereby the fund may directly lend
thereto. to and borrow money from other affiliated
funds to the extent permitted under the 1940
Act or an exemption therefrom, and (v) make
loans in any other manner consistent with
applicable law, as amended and interpreted or
modified from time to time by any regulatory
authority having jurisdiction.
- ----------------------------------------------------------------------------------------------------------------------------
Derivative instruments AmSouth Tax-Exempt Money Market Fund may not Pioneer Tax Free Money Market Fund may use
write or purchase call options futures and options on securities, indices
and currencies, forward currency exchange
contracts and other derivatives. The Fund
does not use derivatives as a primary
investment technique and generally limits
their use to hedging. However, the Fund may
use derivatives for a variety of
non-principal purposes, including as a hedge
against adverse changes in stock market
prices, interest rates
- ----------------------------------------------------------------------------------------------------------------------------
4
- ----------------------------------------------------------------------------------------------------------------------------
AmSouth Tax-Exempt Money Market Fund Pioneer Tax Free Money Market Fund
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
or currency exchange rates, as a substitute
for purchasing or selling securities, and to
increase the Fund's return as a non-hedging
strategy that may be considered speculative.
- ----------------------------------------------------------------------------------------------------------------------------
Other investment policies As described above, the Funds have substantially similar principal investment strategies
and restrictions and policies. Certain of the non-principal investment policies and restrictions are
different. For a more complete discussion of each Fund's other investment policies and
fundamental and non-fundamental investment restrictions, see the SAI.
- ----------------------------------------------------------------------------------------------------------------------------
Buying, Selling and Exchanging Shares
- ----------------------------------------------------------------------------------------------------------------------------
Class A sales charges and Class A shares are offered without sales Class A shares are offered without sales
Rule 12b-1 fees charges. charges.
Class A shares pay a shareholder servicing fee There is no contingent deferred sales charge
(non 12b-1) up to 0.25% of average daily net ("CSDC"), except in certain circumstances when
assets. the initial sales charge is waived. Class A
shares are subject to distribution and service
AmSouth Tax-Exempt Money Market Fund does not (12b-1) fees of up to 0.15% of average daily
offer Class B shares. net assets.
- ----------------------------------------------------------------------------------------------------------------------------
Class I and Class Y AmSouth Tax-Exempt Money Market Fund does not The Fund does not impose any initial,
sales charges and impose any initial or contingent deferred contingent deferred or asset based sales
Rule 12b-1 fees sales charge on Class I shares are offered charge on Class Y shares.
without sales charges.
The distributor incurs the expenses of
The Fund may impose a shareholder servicing distributing the Fund's Class Y shares, none
fee (non 12b-1) of up to 0.15% of average of which are reimbursed by the Fund or the
daily net assets. Class Y shareowners.
- ----------------------------------------------------------------------------------------------------------------------------
Management and other fees AmSouth Tax-Exempt Money Market Fund pays an Pioneer Tax Free Money Market Fund pays
advisory fee on a monthly basis at an annual Pioneer an annual fee equal to 0.40% of the
rate of 0.40% of the Fund's average daily net Fund's average daily net assets. The fee is
assets. computed daily and paid monthly.
ASO Services Company, Inc. ("ASO") serves as Pioneer has agreed to limit the Fund's
administrator and fund accounting agent for expenses or waive a portion of its management
the Fund. The Fund pays ASO an administrative fee to maintain a net asset value of $1.000.
services fee of 0.15% of the Fund's average Under certain circumstances, this limitation
daily net assets. may result in a 0.00% yield for one or more
classes for shares. From time to time,
Other expenses of the Fund are being limited Pioneer and its affiliates may limit the
to 0.12% for Class A shares. Any fee waiver expenses of one or more classes for the
or expense reimbursement arrangement is purpose of increasing its yield during the
voluntary and may be discontinued at any period of the limitation. These expense
time. limitation policies are voluntary and
temporary and may be revised or terminated by
Other expenses of the Fund are being limited Pioneer at any time without notice.
to 0.12% for Class I shares. Any fee waiver
or expense reimbursement arrangement is For the fiscal year ended December 31, 2004,
voluntary and may be discontinued at any the Fund's annual operating expenses for
time. Class A shares were 0.94% of average daily
For the fiscal year ended July 31, 2004, the
- ----------------------------------------------------------------------------------------------------------------------------
5
- ----------------------------------------------------------------------------------------------------------------------------
AmSouth Tax-Exempt Money Market Fund Pioneer Tax Free Money Market Fund
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Fund's annual operating expenses for Class A net assets.
shares, after giving effect to the expense
limitation were 0.52%, and without giving Class Y shares of Pioneer Tax Free Money
effect to the expense limitation, were 0.89% Market Fund are being offered for the first
of average daily net assets. time in connection with the Reorganization.
For the fiscal year ended July 31, 2004, the
Fund's annual operating expenses for Class I
shares, after giving effect to the expense
limitation were 0.52%, and without giving
effect to the expense limitation, were 0.79%
of average daily net assets.
- ----------------------------------------------------------------------------------------------------------------------------
Buying shares You may buy shares of AmSouth Tax-Exempt Money You may buy shares from any investment firm
Market Fund directly through BISYS Fund that has a sales agreement with PFD, the
Services, the Fund's distributor, or through Fund's distributor.
brokers, registered investment advisers, banks
and other financial institutions that have If the account is established in the
entered into selling agreements with the shareholder's own name, shareholders may also
Fund's distributor, as described in the Fund's purchase additional shares of the Pioneer Fund
prospectus. by telephone or online.
Certain account transactions may be done by
telephone.
- ----------------------------------------------------------------------------------------------------------------------------
Exchanging shares You can exchange your shares in the Fund for You may exchange your shares for shares of
shares of the same class of another AmSouth the same class of another Pioneer mutual
fund, usually without paying additional sales fund. Your exchange request must be for at
charges. You must meet the minimum investment least $1,000. The Fund allows you to exchange
requirements for the Fund into which you are your shares at net asset value without
exchanging. Exchanges from one fund to charging you either an initial or contingent
another are taxable. Class A shares may be deferred shares charge at the time of the
exchanged for Class I shares of the same Fund exchange. Shares you acquire as part of an
or another AmSouth fund if you become exchange will continue to be subject to any
eligible to purchase Class I shares. Class I contingent deferred sales charge that applies
shares may be exchanged for Class A shares of to the shares you originally purchased. When
the same fund. No transaction fees are you ultimately sell your shares, the date of
currently charged for exchanges. your original purchase will determine your
contingent deferred sales charge. An exchange
generally is treated as a sale and a new
purchase of shares for federal income tax
purposes.
After you establish an eligible fund account,
you can exchange Fund shares by telephone or
online.
- ----------------------------------------------------------------------------------------------------------------------------
Selling shares Shares of each Fund are sold at the net asset value per share next calculated after the
Fund receives your request in good order.
- ----------------------------------------------------------------------------------------------------------------------------
6
- ----------------------------------------------------------------------------------------------------------------------------
AmSouth Tax-Exempt Money Market Fund Pioneer Tax Free Money Market Fund
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
You may sell your shares by contacting the Normally, your investment firm will send your
Fund directly in writing or by telephone or request to sell shares to PIMSS. You can also
by contacting a financial intermediary as sell your shares by contacting the Fund
described in the Fund's prospectus. directly if your account is registered in
your name.
If the account is established in the
shareholder's own name, shareholders may also
redeem shares of the Fund by telephone or
online.
- ----------------------------------------------------------------------------------------------------------------------------
Comparison of Principal Risks of Investing in the Funds
Because each Fund has a similar investment objective, primary investment
policies and strategies, the Funds are subject to the same principal risks. Even
though each Fund seeks to maintain a $1 share price, you could lose money on
your investment in either Fund or not make as much as if you invested elsewhere
if:
o Interest rates go up, causing the value of the Fund's investments to
decline
o New federal or state legislation adversely affects the tax-exempt status
of securities held by the Fund or the financial ability of an issuer to
repay financial obligations
o The issuer of a security owned by the Fund may not be able to make timely
payments because of a general economic downturn or increased governmental
costs
o The adviser's judgment about the credit quality, attractiveness or
relative value of a particular security proves to be incorrect
Past Performance
Set forth below is performance information for each Fund. The bar charts show
how each Fund's total return has varied from year to year for each full calendar
year. The table shows average annual total return for each Fund over time for
each class of shares compared with a broad-based securities market index. The
bar charts give an indication of the risks of investing in each Fund, including
the fact that you could incur a loss and experience volatility of returns year
to year. Past performance does not indicate future results. No Class Y shares of
Pioneer Tax Exempt Money Market Fund are currently outstanding.
AmSouth Tax-Exempt Money Market Fund -- Class A
Calendar Year Total Returns*
[The following table was depicted as a bar chart in the printed material.]
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
3.44 2.95 3.1 2.89 2.72 3.35 1.91 0.64 0.34 0.58
7
* During the period shown in the bar chart, your AmSouth Fund's highest
quarterly return was 0.91% for the quarter ended June 30, 1995, and the
lowest quarterly return was 0.06% for the quarter ended September 30, 2003.
Performance for Class A shares, which were first offered on April 1, 1996, is
based on the historical performance of the Class I shares prior to that date.
Pioneer Tax Free Money Market Fund -- Class A Shares
Calendar Year Total Returns*
[The following table was depicted as a bar chart in the printed material.]
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
3.54 3.07 3.12 3.07 2.77 3.52 2.34 0.97 0.51 0.58
* During the period shown in the bar chart, Pioneer Tax Free Money Market
Fund's highest quarterly return was 0.94% for the quarter ended June 30,
2000, and the lowest quarterly return was 0.09% for the quarter ended March
31, 2004.
Pursuant to an agreement and plan of reorganization, Pioneer Tax Exempt Money
Market Fund acquired all of the assets and those liabilities reflected in the
net assets of Safeco Tax-Free Money Free Money Market Fund (the predecessor
fund) on December 10, 2004. In the reorganization, the predecessor fund
exchanged all of its assets for Investor Class shares of the Pioneer Fund. The
predecessor fund offered an Investor Class and other classes of shares similar
to the Fund's Class A, B and C shares. As a result of the reorganization,
Pioneer Tax Exempt Money Market Fund is the accounting successor of the
predecessor fund. The predecessor fund operated as a registered investment
company like the Fund. The performance of each class of the Fund includes the
performance of the predecessor fund's Class A and Class B shares prior to the
reorganization, which has been restated to reflect differences in any applicable
sales charges. If all the expenses of Pioneer Tax Exempt Money Market Fund were
reflected, the performance would be lower. Since August 2, 2004, Pioneer has
served as the predecessor fund's investment adviser. Safeco Asset Management,
Inc. previously served as the predecessor fund's investment adviser. The Fund's
Investor Class shares are not offered in the reorganization.
AmSouth Tax-Exempt Money Market Fund
Average Annual Total Returns as of December 31, 2004
- -------------------------------------------------------------------------------------------
1 Year 5 Years 10 Years
- -------------------------------------------------------------------------------------------
AmSouth Tax-Exempt Money Market Fund, Class A Shares
- -------------------------------------------------------------------------------------------
Return Before Taxes(1) 0.56% 1.35% 2.18%
- -------------------------------------------------------------------------------------------
AmSouth Tax-Exempt Money Market Fund, Class I Shares
- -------------------------------------------------------------------------------------------
Return Before Taxes(2) 0.56% 1.45% 2.27%
- -------------------------------------------------------------------------------------------
(1) The return reported above assumes the reinvestment of dividends.
Performance for Class A shares, which were first offered on April 1, 1996,
is based on the historical performance of the Class I shares prior to that
date
(2) The return reported above assumes the reinvestment of dividends.
Pioneer Tax Free Money Market Fund
Average Annual Total Returns as of December 31, 2004(1)
8
- ---------------------------------------------------------------------------------------------------
1 Year 5 Years Since Inception
- ---------------------------------------------------------------------------------------------------
Pioneer Tax Free Money Market Fund, Class A shares
- ---------------------------------------------------------------------------------------------------
Return Before Taxes(2) 0.58% 1.58% 3.27% (9/18/84)
- ---------------------------------------------------------------------------------------------------
Return After Taxes on Distributions 0.38% 0.97% 2.04%
- ---------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of
Fund Shares 0.38% 0.97% 2.04%
- ---------------------------------------------------------------------------------------------------
Lipper Tax-Exempt Money Market Average(3) 0.67% 1.64% 3.30% (9/18/84)
(reflects no deduction for taxes)
- ---------------------------------------------------------------------------------------------------
(1) Rejects the inception dates of the predecessor fund. Inception of Class A
shares was December 13, 2004(.)
(2) Return before taxes assumes that you sell your Class A shares at the end of
the period and that you reinvest all of your dividends and distributions.
(3) The Lehman Brothers Municipal Bond Index, an unmanaged index that is a
broad measure of the municipal bond market, is for reference only, does not
mirror the Fund's investments, and reflects no deduction for fees, expenses
or taxes.
The following table shows the tax effective yield of each Fund:
- ---------------------------------------------------------------------------------
7-Day Tax Effective Yield
As of December 31, 2004
- ---------------------------------------------------------------------------------
AmSouth Tax-Exempt Money Market Fund, Class A Shares 1.30%
- ---------------------------------------------------------------------------------
Pioneer Tax Free Money Market Fund, Class A Shares 1.28%
- ---------------------------------------------------------------------------------
AmSouth Tax-Exempt Money Market Fund, Class I Shares 1.30%
- ---------------------------------------------------------------------------------
The most recent portfolio manager's discussion of each Fund's performance is
attached as Exhibit C.
The Funds' Fees and Expenses
Shareholders of both Funds pay various fees and expenses, either directly or
indirectly. The tables below show the fees and expenses that you would pay if
you were to buy and hold shares of each Fund. The expenses in the tables
appearing below are based on (i) for the AmSouth Tax-Exempt Money Market Fund,
the expenses of AmSouth Tax-Exempt Money Market Fund for the period ended
January 31, 2005 and (ii) for the Pioneer Tax Free Money Market Fund, the
expenses of Pioneer Tax Free Money Market Fund for the period ended December 31,
2004. Future expenses for all share classes may be greater or less. The tables
also show the pro forma expenses of the combined Fund assuming the
Reorganization occurred on December 31, 2004.
- --------------------------------------------------------------------------------------------------------------
Shareholder AmSouth Pioneer AmSouth
transaction fees Tax-Exempt Tax Free Combined Tax-Exempt Combined
(paid directly Money Market Money Market Fund Money Market Fund
from your Fund (1) Fund (Pro Forma) Fund (1) (Pro Forma)
investment) Class A Class A Class A Class I Class Y (7)
- --------------------------------------------------------------------------------------------------------------
Maximum sales charge None None None None None
(load) when you buy
shares as a percentage
of offering price
- --------------------------------------------------------------------------------------------------------------
Maximum deferred sales
charge (load) as a
percentage of purchase
price or the amount None None None None None
you receive when you
sell shares, whichever
is less
- --------------------------------------------------------------------------------------------------------------
9
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Shareholder AmSouth Pioneer AmSouth
transaction fees Tax-Exempt Tax Free Combined Tax-Exempt Combined
(paid directly Money Market Money Market Fund Money Market Fund
from your Fund (1) Fund (Pro Forma) Fund (1) (Pro Forma)
investment) Class A Class A Class A Class I Class Y (7)
- --------------------------------------------------------------------------------------------------------------
when you sell shares,
whichever is less
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Redemption fees None(2) None None None(2) None
- --------------------------------------------------------------------------------------------------------------
Annual fund operating
expenses (deducted
from fund assets) (as
a % of average net
assets)
- --------------------------------------------------------------------------------------------------------------
Management fee 0.40% 0.40% 0.40% 0.40% 0.40%
- --------------------------------------------------------------------------------------------------------------
Distribution and None 0.15% 0.15% None None
service (12b-1) fee
- --------------------------------------------------------------------------------------------------------------
Other expenses 0.57%(3) 0.62%(4) 0.11% 0.45%(5) 0.11%
- --------------------------------------------------------------------------------------------------------------
Total fund operating 0.97% 1.17%(6) 0.66% 0.85%(6) 0.51%(6)
expenses
- --------------------------------------------------------------------------------------------------------------
Expense 0.38% 0.23% 0.00% 0.25% 0.00%
reimbursement/reduction
- --------------------------------------------------------------------------------------------------------------
Net fund operating 0.59% 0.94% 0.66% 0.60% 0.51%
expenses
- --------------------------------------------------------------------------------------------------------------
(1) AmSouth Bank or other financial institutions may charge their customer
account fees for automatic investment and other cash management services
provided in connection with investment in the Fund.
(2) A wire transfer fee of $7.00 will be deducted from the amount of your
redemption if you request a wire transfer.
(3) Other expenses for your AmSouth Fund are being limited to 0.12% for Class A
shares. Any fee waiver or expense reimbursement arrangement is voluntary
and may be discontinued at any time.
(4) Other expenses for the Pioneer Fund are based on estimated amounts for the
current fiscal year.
(5) Other expenses for your AmSouth Fund are being limited to 0.19% for Class A
shares and 0.20% for Class I shares. Any fee waiver or expense
reimbursement arrangement is voluntary and may be discontinued at any time.
(6) The Pioneer Fund's total annual operating expenses in the table have not
been reduced by any expense offset arrangements.
(7) Class Y shares of Pioneer Tax Free Money Market Fund are being offered for
the first time in connection with the Reorganization.
The hypothetical example below helps you compare the cost of investing in
each Fund. It assumes that: (a) you invest $10,000 in each Fund for the time
periods shown, (b) you reinvest all dividends and distributions, (c) your
investment has a 5% return each year, and (d) each Fund's operating expenses
remain the same. The examples are for comparison purposes only and are not a
representation of either Fund's actual expenses or returns, either past or
future.
- -----------------------------------------------------------------------------------------------------
Number of years you AmSouth Tax-Exempt Money Pioneer Tax Free Money Market Combined Fund
own your shares Market Fund Fund (Pro Forma)
- -----------------------------------------------------------------------------------------------------
Class A
- -----------------------------------------------------------------------------------------------------
Year 1 $99 $89 $639
- -----------------------------------------------------------------------------------------------------
Year 3 $309 $278 $774
- -----------------------------------------------------------------------------------------------------
Year 5 $536 $482 $922
- -----------------------------------------------------------------------------------------------------
10
- -----------------------------------------------------------------------------------------------------
Year 10 $1,190 $1,073 $1,350
- -----------------------------------------------------------------------------------------------------
Class I Class Y
- -----------------------------------------------------------------------------------------------------
Year 1 $87 N/A $52
- -----------------------------------------------------------------------------------------------------
Year 3 $271 N/A $164
- -----------------------------------------------------------------------------------------------------
Year 5 $471 N/A $285
- -----------------------------------------------------------------------------------------------------
Year 10 $1049 N/A $640
- -----------------------------------------------------------------------------------------------------
Reasons for the Proposed Reorganization
The Trustees believe that the proposed Reorganization is in the best
interests of AmSouth Tax-Exempt Money Market Fund and its shareholders. The
Trustees considered the following matters, among others, in approving the
proposal.
First, AAMI, the investment adviser to your AmSouth Fund informed the
Trustees that it does not intend to continue to provide investment advisory
services to the AmSouth Funds. Consequently, a change in your AmSouth Fund's
investment adviser was necessary. In the absence of the Reorganization, such a
change would be more likely to motivate shareholders invested in reliance on
AAMI's role to withdraw from the Fund, thereby reducing fund size and increasing
fund expense ratios.
Second, the long-term historical investment performance of Pioneer Tax Free
Money Market Fund is superior to your AmSouth Fund's investment performance. For
the one and five year periods ended December 31, 2004, Class A shares of Pioneer
Tax Free Money Market Fund had an average annual return of 0.47% (one year) and
6.99% (five year), compared to an average annual return of the Class A shares of
your AmSouth Fund of 0.56% (one year) and 1.35% (five year), respectively,
during the same period. In addition, the Trustees considered the track record of
Pioneer in managing equity and fixed income mutual funds.
Third, the resources of Pioneer. At December 31, 2004, Pioneer managed over
80 investment companies and accounts with approximately $42 billion in assets.
Pioneer is part of the global asset management group of UniCredito Italiano
S.p.A., one of the largest banking groups in Italy, providing investment
management and financial services to mutual funds, institutional and other
clients. As of December 31, 2004, assets under management of UniCredito Italiano
S.p.A. were approximately $175 billion worldwide. Shareholders of your AmSouth
Fund would become part of a significantly larger family of funds that offers a
more diverse array of investment options and enhanced shareholder account
options. The Pioneer family of mutual funds offers over 80 funds, including
domestic and international equity and fixed income funds and a money market fund
that will be available to your AmSouth Fund's shareholders through exchanges.
Fourth, Pioneer Tax Free Money Market Fund's management fee (0.40% of
average daily net assets) is the same as the advisory fee of your AmSouth Fund
(0.40% of average daily net assets). The historical expenses attributable to the
Class A shares of the Pioneer Fund are higher than your Fund's Class A shares,
on both a gross and net basis. On a pro forma basis, the gross expenses of the
Pioneer Fund attributable to Class A expenses are estimated to be lower than
your Fund's gross expenses; however, your Fund's net expenses attributable to
Class A expenses are estimated to be lower than the pro forma net expenses
attributable to Class A shares. However, AAMI has advised your Trustees that it
will discontinue the expense limitation in the future. With respect to Class Y
shares, the pro forma gross and net expenses of the Pioneer Fund are lower than
the gross and net expenses of the Class I shares of your Fund. The aggregate
Rule 12b-1 distribution and shareholder servicing fees and non-Rule 12b-1
shareholder servicing fees paid by the Class A and Class B shares of both Funds
are the same. Moreover, your AmSouth Fund's Class I shares pay a non 12b-1
shareholder servicing fee that is not paid by the Pioneer Fund's Class Y shares.
In addition, the broader distribution arrangements of the Pioneer Fund offer
greater potential for further asset growth and reduced per share expenses.
Fifth the Class A shares of Pioneer Tax Free Money Market Fund received in
the Reorganization will provide AmSouth Tax-Exempt Money Market Fund
shareholders with exposure to substantially the same investment product as they
currently have.
Sixth, the transaction is structured to qualify as a tax-free
reorganization under Section 368(a) of the Internal Revenue Code of 1986 and
therefore will not be treated as a taxable sale of your AmSouth shares.
Pioneer and AmSouth Bank will pay all costs of preparing and printing the
AmSouth Funds' proxy statements and solicitation costs incurred by the AmSouth
Funds in connection with the Reorganization. AAMI will otherwise be responsible
of all costs and expenses of the AmSouth Funds in connection with the
Reorganization.
11
The Trustees also considered that Pioneer and AmSouth Bank will benefit
from the Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the
Reorganizations."
The Board of Trustees of the Pioneer Fund also considered that the
Reorganization presents an excellent opportunity for the Pioneer Fund to acquire
investment assets without the obligation to pay commissions or other transaction
costs that a fund normally incurs when purchasing securities. This opportunity
provides an economic benefit to the Pioneer Fund and its shareholders.
CAPITALIZATION
The following table sets forth the capitalization of each Fund as of May
31, 2005, and the pro forma combined Fund as of May 31, 2005.
- --------------------------------------------------------------------------------------------------------------
AmSouth Pioneer Tax Pro Forma
Tax-Exempt Free Money Pioneer Tax
Money Market Market Free Money
Fund Fund Market Fund
May 31, 2005 May 31, 2005 May 31, 2005
- --------------------------------------------------------------------------------------------------------------
Total Net Assets (in thousands) $142,574 $33,656 $176,230
- --------------------------------------------------------------------------------------------------------------
Class A shares .......................................... $31,543 $1,165 $32,707
- --------------------------------------------------------------------------------------------------------------
Class B shares .......................................... N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------
Class I/Y shares ........................................ $111,031 N/A $111,031
- --------------------------------------------------------------------------------------------------------------
Net Asset Value Per Share
- --------------------------------------------------------------------------------------------------------------
Class A shares .......................................... $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------
Class B shares .......................................... N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------
Class I/Y shares ........................................ $1.00 N/A $1.00
- --------------------------------------------------------------------------------------------------------------
Shares Outstanding
- --------------------------------------------------------------------------------------------------------------
Class A shares .......................................... 31,604,005 1,164,667 32,707,656
- --------------------------------------------------------------------------------------------------------------
Class B shares .......................................... N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------
Class I/Y shares ........................................ 111,276,485 N/A 111,276,485
- --------------------------------------------------------------------------------------------------------------
It is impossible to predict how many shares of the Pioneer Fund will
actually be received and distributed by your AmSouth Fund on the Reorganization
date. The table should not be relied upon to determine the amount of the Pioneer
Fund's shares that will actually be received and distributed.
BOARD'S EVALUATION AND RECOMMENDATION
For the reasons described above, the Trustees, including the Independent
Trustees, approved the Reorganization. In particular, the Trustees determined
that the Reorganization is in the best interests of your AmSouth Fund.
Similarly, the Board of Trustees of the Pioneer Fund, including its Independent
Trustees, approved the Reorganization. They also determined that the
Reorganization is in the best interests of the Pioneer Fund.
The Trustees recommend that the shareholders of your AmSouth Fund vote FOR
the proposal to approve the Agreement and Plan of Reorganization.
12
AmSouth Institutional Prime Obligations Money Market Fund and
Pioneer Institutional Money Market Fund
PROPOSAL 1(w)
Approval of Agreement and Plan of Reorganization
SUMMARY
The following is a summary of more complete information appearing later in
this Proxy Statement/Prospectus or incorporated herein. You should read
carefully the entire Proxy Statement/Prospectus, including the form of Agreement
and Plan of Reorganization attached as EXHIBIT A-2, because it contains details
that are not in the summary.
Each Fund is a money market fund that may invest in high quality short-term
instruments. Consequently, the policies and risks of each Fund are similar. In
the table below, if a row extends across the entire table, the policy disclosed
applies to both your AmSouth Fund and the Pioneer Fund.
Comparison of AmSouth Institutional Prime Obligations Money Market Fund
to Pioneer Institutional Money Market Fund
- ---------------------------------------------------------------------------------------------------------------------------------
AmSouth Institutional Prime Obligations
Money Market Fund Pioneer Institutional Money Market Fund
- ---------------------------------------------------------------------------------------------------------------------------------
Business A diversified series of AmSouth Funds, an open-end A
newly created diversified series of Pioneer management
investment company organized as a Series Trust IV, an
open-end management investment Massachusetts business
trust. company organized as a Delaware statutory trust.
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets as of $ 379.2 million None. Pioneer Institutional Money Market Fund is
March 31, 2005 newly created and does not expect to commence
investment operations until the Reorganization
occurs.
- ---------------------------------------------------------------------------------------------------------------------------------
Investment advisers Investment Adviser: Investment Adviser:
and portfolio AAMI Pioneer
managers
Portfolio Manager: Portfolio Manager:
Day-to-day management of AmSouth Institutional Prime Day-to-day management of the Fund's portfolio
Obligations Money Market Fund is the responsibility is the responsibility of Andrew Feltus. Mr.
of a team of AAMI's portfolio managers, and no Feltus is supported by the fixed income team.
person is primarily responsible for making Members of this team manage other Pioneer
recommendations to the team. funds investing primarily in fixed income
securities. The portfolio manager and the
team also may draw upon the research and
investment management expertise of the global
research team, which provides fundamental
research on companies and includes members
from Pioneer's affiliate, Pioneer Investment
Management Limited. Mr. Feltus, a vice
president, joined Pioneer in 1994 and has
been an investment professional for more than
10 years.
- ---------------------------------------------------------------------------------------------------------------------------------
Investment objective Each Fund seeks high current income with preservation of capital and liquidity.
- ---------------------------------------------------------------------------------------------------------------------------------
1
- ---------------------------------------------------------------------------------------------------------------------------------
AmSouth Institutional Prime Obligations
Money Market Fund Pioneer Institutional Money Market Fund
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Primary investments The AmSouth Fund invests only in U.S. The Fund seeks to maintain a constant net asset
dollar-denominated, "high-quality" short-term debt value of $1.00 per share by investing in
securities, including obligations issued or high-quality, U.S. dollar denominated money market
guaranteed by the U.S. government, its agencies or securities, including those issued by:
instrumentalities, certificates of deposit, time o U.S. and foreign banks
deposits, bankers' acceptances and other o U.S. and foreign corporate issuers
short-term securities issued by domestic or o The U.S. government and its agencies and
foreign banks or their subsidiaries or branches, instrumentalities
domestic and foreign commercial paper and other o Foreign governments
short-term corporate debt obligations, including o Multinational organizations such as the
those with floating or variable rates of interest, World Bank
obligations issued or guaranteed by one or more
foreign governments or their agencies or
instrumentalities, including obligations of
supranational entities, asset-backed securities,
and repurchase agreements collateralized by the
types of securities listed above.
- ---------------------------------------------------------------------------------------------------------------------------------
Investment strategies When selecting securities for the Fund's The Fund may invest more than 25% of its
portfolio, AAMI first considers safety of total assets in U.S. government securities
principal and the quality of an investment. AAMI and obligations of U.S. banks. The Fund may
then focuses on generating a high level of income. invest in any money market instrument that is
AAMI generally evaluates investments based on a permissible investment for a money market
interest rate sensitivity selecting those fund under the rules of the Securities and
securities whose maturities fit the Fund's Exchange Commission, including commercial
interest rate sensitivity target and which the paper, certificates of deposit, time
adviser believes to be the best relative values. deposits, bankers' acceptances,
The Fund will maintain an average weighted mortgage-backed and asset-backed securities,
portfolio maturity of 90 days or less and will repurchase agreements, municipal obligations
limit the maturity of each security in its and other short-term debt securities.
portfolio to 397 days or less.
The Fund invests in U.S. government
The Fund invests in securities issued by: (i) obligations and money market securities rated
FNMA, FHLMC, SLMA and the FHLBs, in one of the two highest rating categories
which are supported by the right of the issuer to for short-term debt by a nationally
borrow from the U.S. Treasury; and (ii) FFCBs recognized statistical rating organization
which is supported only by the credit of the or, if unrated, determined to be of
issuer. The Fund also invests in mortgage-related equivalent credit quality by Pioneer. If
securities issued by nongovernmental entities rating organizations differ in the rating
which are rated, at the time of purchase, in one assigned to a security, the Fund will only
of the four highest rating categories by an NRSRO treat the security as having the higher
or, if unrated, determined by its Advisor to be of rating if at least two rating organizations
comparable quality. "High-quality" debt assigned that rating. If a rating
securities are those obligations which, at the organization downgrades the quality rating
time of purchase, (i) possess the highest assigned to one or more of the Fund's
short-term rating from at least two NRSROs (for portfolio securities, Pioneer will promptly
example, reassess whether the downgraded security
commercial paper rated "A-1" by S&P, and "P-1" by presents minimal credit risk to the Fund.
Moody's Investors Service, Inc.
("Moody's")) or one NRSRO if only rated by one The Fund invests exclusively in securities
NRSRO or (ii) if unrated, are determined by AAMI with a maximum remaining maturity of 397 days
to be of comparable quality. and maintains a dollar-weighted average
portfolio maturity of 90 days or less. The
Fund's investments may have fixed, floating
or variable interest rates.
At times, more than 25% of the Fund's assets
may be invested in the same market segment,
such as
- ---------------------------------------------------------------------------------------------------------------------------------
2
- ---------------------------------------------------------------------------------------------------------------------------------
AmSouth Institutional Prime Obligations
Money Market Fund Pioneer Institutional Money Market Fund
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
financials. To the extent the Fund emphasizes
investments in a market segment, the Fund
will be subject to a greater degree to the
risks particular to the industries in that
segment, and may experience greater market
fluctuation, than a Fund without the same
focus. For example, industries in the
financial segment, such as banks, insurance
companies, broker-dealers and REITs, may be
sensitive to changes in interest rates and
general economic activity and are subject to
extensive government regulation.
In selecting the Fund's portfolio, Pioneer
complies with the rating, maturity and
diversification requirements applicable to
money market funds. Within those limits,
Pioneer's assessment of broad economic
factors that are expected to affect economic
activity and interest rates influence its
securities selection. Pioneer also employs
due diligence and fundamental research, an
evaluation of the issuer based on its
financial statements and operations, to
assess an issuer's credit quality.
- ---------------------------------------------------------------------------------------------------------------------------------
Temporary defensive Pioneer Cash Reserves Fund may invest all or part
strategies of its assets in securities with remaining
maturities of less than one year, cash
equivalents or may hold cash.
- ---------------------------------------------------------------------------------------------------------------------------------
Diversification Each Fund is subject to the diversification requirements applicable to money market funds
under the Investment Company Act.
- ---------------------------------------------------------------------------------------------------------------------------------
Industry AmSouth Institutional Prime Obligations Money Pioneer Institutional Money Market Fund may not
concentration Market Fund may not purchase any securities which concentrate its investments in a particular
would cause more than 25% of the value of the industry. The Fund would be concentrating if it
Fund's total assets at the time of purchase to be invested more than 25% of its assets in the
invested in securities of one or more issuers securities of issuers within the same industry.
conducting their principal business activities in
the same industry, provided that (a) there is no
limitation with respect to obligations issued or
guaranteed by the U.S. government or its agencies
or instrumentalities, bank certificates of deposit
or bankers' acceptances issued by a domestic bank
or by a U.S. branch of a foreign bank provided
that such U.S. branch is subject to the same
regulation as U.S. banks, and repurchase
agreements secured by bank instruments or
obligations of the U.S. government or its agencies
or instrumentalities; (b) wholly owned finance
companies will be considered to be in the
industries of their parents if their activities
are primarily related to financing the activities
of their parents; and (c) utilities will be
divided according to their services. For example,
gas, gas transmission, electric and gas, electric,
and telephone will each be considered a separate
industry.
- ---------------------------------------------------------------------------------------------------------------------------------
3
- ---------------------------------------------------------------------------------------------------------------------------------
AmSouth Institutional Prime Obligations
Money Market Fund Pioneer Institutional Money Market Fund
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
gas, gas transmission, electric and gas,
electric, and telephone will each be
considered a separate industry.
- ---------------------------------------------------------------------------------------------------------------------------------
Restricted and AmSouth Institutional Prime Obligations Money Pioneer Institutional Money Market Fund will
illiquid securities Market Fund may not invest more than 10% of not invest more than 10% of its net assets in
its net assets in securities that are illiquid and other securities that are not
restricted as to resale, or for which no readily marketable. Repurchase agreements
readily available market exists, including maturing in more than seven days will be
repurchase agreements providing for included for purposes of the foregoing limit.
settlement more than seven days after notice.
- ---------------------------------------------------------------------------------------------------------------------------------
Borrowing AmSouth Institutional Prime Obligations Money Pioneer Institutional Money Market Fund may not
Market Fund may not borrow money or issue senior borrow money, except from banks for extraordinary
securities, except the Fund may borrow from banks purposes or to meet redemptions in amounts not
or enter into reverse repurchase agreements for exceeding 33 1/3% of its total assets (including
temporary emergency purposes in amounts up to 33 the amount borrowed).
1/3% of the value of its total assets at the time
of such borrowing. The Fund will not purchase
securities while borrowings (including reverse
repurchase agreements) in excess of 5% of its
total assets are outstanding. In addition, the
Fund is permitted to participate in a credit
facility whereby the Fund may directly lend to and
borrow money from other AmSouth funds for
temporary purposes, provided that the loans are
made in accordance with an order of exemption from
the SEC and any conditions thereto.
- ---------------------------------------------------------------------------------------------------------------------------------
Lending AmSouth Institutional Prime Obligations Money Pioneer Institutional Money Market Fund may not
Market Fund may not make loans, except that the make loans to any person, except by (a) the
Fund may purchase or hold debt instruments in purchase of a debt obligation in which the Fund is
accordance with its investment objective and permitted to invest and (b) engaging in repurchase
policies, lend Fund securities in accordance with agreements.
its investment objective and policies and enter
into repurchase agreements. In addition, the Fund
is permitted to participate in a credit facility
whereby the Fund may directly lend to and borrow
money from other AmSouth funds for temporary
purposes, provided that the loans are made in
accordance with an order of exemption from the SEC
and any conditions thereto.
- ---------------------------------------------------------------------------------------------------------------------------------
Other investment As described above, the Funds have substantially similar principal investment strategies and policies.
policies and Certain of the non-principal investment policies and restrictions are different. For a more complete
restrictions discussion of each Fund's other investment policies and fundamental and non-fundamental investment
restrictions, see the SAI.
- ---------------------------------------------------------------------------------------------------------------------------------
Buying, Selling and Exchanging Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Institutional Class 1 Institutional Class 1 shares are offered Institutional Class 1 shares are offered
shares and Rule without sales charges or distribution or without sales charges or distribution or
12b-1 fees service (12b-1) fees. The minimum initial service (12b-1) fees. The minimum initial
investment for all Institutional Class 1 investment for all Institutional Class 1
share purchases by a share purchases by a shareholder is $3
- ---------------------------------------------------------------------------------------------------------------------------------
4
- ---------------------------------------------------------------------------------------------------------------------------------
AmSouth Institutional Prime Obligations
Money Market Fund Pioneer Institutional Money Market Fund
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
shareholder is $3 million. If the value of million.
Institutional Class 1 shares in your account
falls below $3 million, the Fund may ask you
to increase your balance. If it is still
below $3 million after 60 days, the Fund may
convert, at net asset value, your
Institutional Class 1 shares to Institutional
Class 2 shares.
Institutional Class 1 shares are offered only
to customers of AmSouth Bank for whom AmSouth
Bank acts as in a fiduciary, advisory,
custodial, agency, or similarly capacity, and
fiduciary customers of other financial
institutions approved by the Distributor
(Sweep Program Participant(s)).
- ---------------------------------------------------------------------------------------------------------------------------------
Institutional Class Institutional Class 2 shares are offered Institutional Class 2 shares are offered
2 shares and Rule without sales charges. without an initial sales charge.
12b-1 fees
Institutional Class 2 shares pay distribution Institutional Class 2 shares pay distribution
and service (12b-1) fees of 0.25% of average and service (12b-1) fees of 0.25% of average
daily net assets. daily net assets.
The minimum initial investment for all The minimum initial investment for all
Institutional Class 2 share purchases by a Institutional Class 2 share purchases by a
shareholder is $500,000. shareholder is $500,000.
- ---------------------------------------------------------------------------------------------------------------------------------
Institutional Class Institutional Class 3 shares are offered Institutional Class 3 shares are offered
3 shares and Rule without sales charges. without sales charges.
12b-1 fees
Institutional Class 3 shares pay distribution Institutional Class 3 shares pay distribution
and service (12b-1) fees of 0.50% of average and service (12b-1) fees of 0.50% of average
daily net assets. daily net assets.
The minimum initial investment for all The minimum initial investment for all
Institutional Class 3 share purchases by a Institutional Class 3 share purchases by a
shareholder is $50,000. shareholder is $50,000.
- ---------------------------------------------------------------------------------------------------------------------------------
Management and AmSouth Institutional Prime Obligations Money Pioneer Institutional Money Market Fund will
other fees Market Fund pays a management fee on a pay Pioneer an annual fee equal to 0.20% of
monthly basis at an annual rate of 0.20% of the Fund's average daily net assets. This fee
the Fund's average daily net assets. is computed daily and paid monthly.
ASO Services Company, Inc. ("ASO") serves as Institutional Class 1, Institutional Class 2
administrator and fund accounting agent for and Institutional Class 3 shares will be
the Fund. The Fund pays ASO an administrative issued for the first time in connection with
services fee of 0.15% of the Fund's average the Reorganization.
daily net assets.
In addition, the Fund will reimburse Pioneer
Other expenses of the Fund are being limited for certain fund accounting and legal
to 0.04% for each Institutional Class 1, expenses incurred on behalf of the Fund and
Institutional Class 2 and Institutional Class pay a separate shareholder servicing/transfer
3 share. Any fee waiver or expense agency fee to PIMSS, an affiliate of Pioneer.
reimbursement arrangement is
- ---------------------------------------------------------------------------------------------------------------------------------
5
- ---------------------------------------------------------------------------------------------------------------------------------
AmSouth Institutional Prime Obligations
Money Market Fund Pioneer Institutional Money Market Fund
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
voluntary and may be discontinued at any The Fund's annual fund operating expenses for
time. Class 1 shares, after giving effect to the
expense limitation, are estimated to be
For the fiscal year ended July 31, 2004, the 0.25%, and without giving effect to the
Fund's annual operating expenses for expense limitation are estimated to be 0.28%
Institutional Class 1 shares, after giving of average daily net assets.
effect to the expense limitation were 0.25%,
and without giving effect to the expense The Fund's annual fund operating expenses for
limitation, were 0.41% of average daily net Class 2 shares, after giving effect to the
assets. expense limitation, are estimated to be
0.50%, and without giving effect to the
For the fiscal year ended July 31, 2004, the expense limitation are estimated to be 0.53%
Fund's annual operating expenses for of average daily net assets.
Institutional Class 2 shares, after giving
effect to the expense limitation were 0.50%, The Fund's annual fund operating expenses for
and without giving effect to the expense Class 3 shares, after giving effect to the
limitation, were 0.66% of average daily net expense limitation, are estimated to be
assets. 0.75%, and without giving effect to the
expense limitation are estimated to be 0.78%
For the fiscal year ended July 31, 2004, the of average daily net assets.
Fund's annual operating expenses for
Institutional Class 3 shares, after giving
effect to the expense limitation were 0.75%,
and without giving effect to the expense
limitation, were 0.91% of average daily net
assets.
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Buying shares You may buy shares of AmSouth Institutional You may buy shares from any investment firm
Prime Obligations Money Market Fund directly that has a sales agreement with PFD, the
through BISYS Fund Services, the Fund's Fund's distributor.
distributor, or through brokers, registered
investment advisers, banks and other If the account is established in the
financial institutions that have entered into shareholder's own name, shareholders may also
selling agreements with the Fund's purchase additional shares of the Fund by
distributor, as described in the Fund's telephone or online.
prospectus.
Certain account transactions may be done by
telephone.
- ---------------------------------------------------------------------------------------------------------------------------------
Exchanging shares You may not exchange your shares in the You may not exchange your shares in the
AmSouth Fund for shares of another AmSouth Pioneer Fund for shares of another Pioneer
fund. Fund.
- ---------------------------------------------------------------------------------------------------------------------------------
Selling shares Shares of each Fund are sold at the net asset value per share next calculated after the Fund receives your
request in good order.
- ---------------------------------------------------------------------------------------------------------------------------------
You may sell your shares by contacting the Normally, your investment firm will send your
Fund directly in writing or by telephone or request to sell shares to PIMSS. You can also
by contacting a financial intermediary as sell your shares by contacting the Fund
described in the Fund's prospectus. directly if your account is registered in
your name.
If the account is established in the
shareholder's own name, shareholders may also
redeem shares of the Fund by telephone or
online.
- ---------------------------------------------------------------------------------------------------------------------------------
6
Comparison of Principal Risks of Investing in the Funds
Because each Fund has a similar investment objective, primary investment
policies and strategies, the Funds are subject to the same principal risks. Even
though each Fund seeks to maintain a $1 share price, you could lose money on
your investment in either Fund or not make as much as if you invested elsewhere
if:
o Interest rates go up, causing the value of the Fund's investments to
decline
o The issuer of a security owned by the Fund defaults on its obligation to
pay principal and/or interest or has its credit rating downgraded
o The adviser's judgment about the credit quality, attractiveness or
relative value of a particular security proves to be incorrect
Past Performance
Set forth below is performance information for AmSouth Institutional Prime
Obligations Money Market Fund. The bar charts show how AmSouth Institutional
Prime Obligations Money Market Fund's total return (not including any deduction
for sales charges) has varied from year to year for each full calendar year. The
tables show average annual total return for AmSouth Institutional Prime
Obligations Money Market Fund over time for each class of shares compared with a
broad-based securities market index. The bar charts give an indication of the
risks of investing in AmSouth Institutional Prime Obligations Money Market Fund,
including the fact that you could incur a loss and experience volatility of
returns year to year. Past performance does not indicate future results. Pioneer
Institutional Money Market Fund has not commenced investment operations.
Safeco Money Market Fund will not concentrate its assets in the securities of
issuers in any one industry except with respect to investments in obligations of
(a) the U.S. government, its agencies, authorities or instrumentalities and (b)
domestic banks, purchase any security if, as a result (i) more than 5% of the
assets of the Fund would be in the securities of any one issuer, or (ii) more
than 25% of its assets would be in a particular industry.
AmSouth Institutional Prime Obligations Money Market Fund -- Institutional
Class I Shares Calendar Year Total Returns*
1999 2000 2001 2002 2003 2004
5.07 6.33 3.99 1.53 0.95 1.16
* The returns reported above assume the reinvestment of dividends. During the
period shown in the bar chart, your AmSouth Fund's highest quarterly return
was 1.63% for the quarter ended September 30, 2000, and the lowest quarterly
return was 0.21% for the quarter ended December 31, 2003. The returns for
Institutional Class 2 shares and Institutional Class 3 shares will differ
from the Institutional Class 1 shares returns shown on the bar chart above
because of differences in the expenses of each class.
7
AmSouth Institutional Prime Obligations Money Market Fund(1)
Average Annual Total Returns as of December 31, 2004
- --------------------------------------------------------------------------------
1 Year 5 Years Since Inception
(9/15/98)
- --------------------------------------------------------------------------------
Institutional Class 1 Shares 1.16% 2.76% 2.23%
- --------------------------------------------------------------------------------
Institutional Class 2 Shares(2) 0.91% 2.51% 2.98%
- --------------------------------------------------------------------------------
Institutional Class 3 Shares(2) 0.67% 2.25% 2.72%
- --------------------------------------------------------------------------------
(1) The returns reported above assume the reinvestment of dividends.
(2) Performance for the Institutional Class 2 and Institutional Class 3 shares,
which were first offered on 2/19/99 and 2/22/99, respectively, is based on
the historical performance of the Institutional Class 1 shares prior to
that date.
- ------------------------------------------------------------------------------
7-Day Yield
As of December 31, 2004
- ------------------------------------------------------------------------------
AmSouth Institutional Prime Obligations Money Market Fund
- ------------------------------------------------------------------------------
Institutional Class 1 Shares 2.04%
- ------------------------------------------------------------------------------
Institutional Class 2 Shares 1.78%
- ------------------------------------------------------------------------------
Institutional Class 3 Shares 1.54%
- ------------------------------------------------------------------------------
The most recent portfolio manager's discussion of AmSouth Institutional Prime
Obligations Money Market Fund's performance is attached as Exhibit C.
The Funds' Fees and Expenses
Shareholders of both Funds pay various fees and expenses, either directly or
indirectly. The table below shows the fees and expenses that you would pay if
you were to buy and hold shares of each Fund. The expenses in the table
appearing below are based on (i) for the AmSouth Institutional Prime Obligations
Money Market Fund, the expenses of AmSouth Institutional Prime Obligations Money
Market Fund for the period ended January 31, 2005, and (ii) for the Pioneer
Institutional Money Market Fund, the estimated pro forma annual expenses for the
period ended May 31, 2005.
- -------------------------------------------------------------------------------------------------------------------------------
AmSouth Pro Forma AmSouth AmSouth
Institutional Pioneer Institutional Pro Forma Institutional Pro Forma
Shareholder Prime Institutional Prime Pioneer Prime Pioneer
transaction Obligations Money Market Obligations Institutional Obligations Institutional
fees (paid Money Market Fund Money Market Money Market Fund Money Market Money Market Fund
directly from Fund(1) Fund(1) Fund(1)
your Institutional Institutional Institutional Institutional Institutional Institutional
investment) Class 1 Class 1 Class 2 Class 2 Class 3 Class 3
- -------------------------------------------------------------------------------------------------------------------------------
Maximum sales c
charge (load)
when you buy None None None None None None
shares as a
percentage of
offering price
- -------------------------------------------------------------------------------------------------------------------------------
8
- -------------------------------------------------------------------------------------------------------------------------------
AmSouth Pro Forma AmSouth AmSouth
Institutional Pioneer Institutional Pro Forma Institutional Pro Forma
Shareholder Prime Institutional Prime Pioneer Prime Pioneer
transaction Obligations Money Market Obligations Institutional Obligations Institutional
fees (paid Money Market Fund Money Market Money Market Fund Money Market Money Market Fund
directly from Fund(1) Fund(1) Fund(1)
your Institutional Institutional Institutional Institutional Institutional Institutional
investment) Class 1 Class 1 Class 2 Class 2 Class 3 Class 3
- -------------------------------------------------------------------------------------------------------------------------------
Maximum
deferred
sales charge
(load) as a
percentage of None None None None None None
purchase
price or
the amount
you receive
when you
sell shares,
whichever is
less
- -------------------------------------------------------------------------------------------------------------------------------
Redemption None(2) None None(2) None None(2) None
fees
- -------------------------------------------------------------------------------------------------------------------------------
Annual fund
operating
expenses
(deducted from
fund assets)
(as a % of
average net
assets)
- -------------------------------------------------------------------------------------------------------------------------------
Management fee 0.20% 0.20% 0.20% 0.20% 0.20% 0.20%
- -------------------------------------------------------------------------------------------------------------------------------
Distribution None None 0.25% 0.25% 0.50% 0.50%
and service
(12b-1) fee
- -------------------------------------------------------------------------------------------------------------------------------
Other expenses 0.20%(3) 0.08% 0.20%(3) 0.08% 0.21%(3) 0.08%
- -------------------------------------------------------------------------------------------------------------------------------
Total fund 0.40% 0.28% 0.65% 0.53%(4) 0.91% 0.78%(4)
operating
expenses
- -------------------------------------------------------------------------------------------------------------------------------
Expense 0.15% 0.03% 0.16% 0.03% 0.16% 0.03%
reimbursement/
reduction
- -------------------------------------------------------------------------------------------------------------------------------
Net fund 0.25% 0.25% 0.49% 0.50% 0.75% 0.75%
operating
expenses(5)
- -------------------------------------------------------------------------------------------------------------------------------
(1) AmSouth Bank or other financial institutions may charge their customer
account fees for automatic investment and other cash management services
provided in connection with investment in the Fund.
(2) A wire transfer fee of $7.00 will be deducted from the amount of your
redemption if you request a wire transfer.
(3) Other expenses for your AmSouth Fund are being limited to 0.05% for each
Institutional Class 1 and Institutional Class 3 share and 0.04% for each
Institutional Class 2 share. Any fee waiver or expense reimbursement
arrangement is voluntary and may be discontinued at any time.
(4) The Pioneer Fund's total annual operating expenses in the table have not
been reduced by any expense offset arrangements.
(5) Pioneer as contractually agreed to limit the ordinary operating expenses of
Class 1 shares to 0.25% of average daily net assets attributable to Class 1
expenses, of class 3 shares to 0.50% of average daily net assets
attributable to Class 2
9
shares and of Class 3 shares to 0.75% of average daily net assets
attributable to Class 3 shares, in each case until December 1, 2008.
The hypothetical example below helps you compare the cost of investing in
each Fund. It assumes that: (a) you invest $10,000 in each Fund for the time
periods shown, (b) you reinvest all dividends and distributions, (c) your
investment has a 5% return each year, (d) each Fund's operating expenses remain
the same, and (e) you sell your shares at the end of the time period shown. The
examples are for comparison purposes only and are not a representation of either
Fund's actual expenses or returns, either past or future.
- ------------------------------------------------------------------------------------------
Number of years you AmSouth Institutional Prime Pro Forma
own your shares Obligations Money Market Fund Pioneer Institutional Money
Market Fund
- ------------------------------------------------------------------------------------------
Institutional Class 1 Shares
- ------------------------------------------------------------------------------------------
Year 1 $41 $26
- ------------------------------------------------------------------------------------------
Year 3 $128 $84
- ------------------------------------------------------------------------------------------
Year 5 $224 $151
- ------------------------------------------------------------------------------------------
Year 10 $505 $350
- ------------------------------------------------------------------------------------------
Institutional Class 2 Shares
- ------------------------------------------------------------------------------------------
Year 1 $66 $51
- ------------------------------------------------------------------------------------------
Year 3 $208 $164
- ------------------------------------------------------------------------------------------
Year 5 $362 $290
- ------------------------------------------------------------------------------------------
Year 10 $810 $585
- ------------------------------------------------------------------------------------------
Institutional Class 3 Shares
- ------------------------------------------------------------------------------------------
Year 1 $93 $77
- ------------------------------------------------------------------------------------------
Year 3 $290 $246
- ------------------------------------------------------------------------------------------
Year 5 $504 $430
- ------------------------------------------------------------------------------------------
Year 10 $1,120 $964
- ------------------------------------------------------------------------------------------
Reasons for the Proposed Reorganization
The Trustees believe that the proposed Reorganization is in the best
interests of AmSouth Institutional Prime Obligations Money Market Fund. The
Trustees considered the following matters, among others, in approving the
proposal.
First, AAMI, the investment adviser to the Fund, informed the Trustees that
it does not intend to continue to provide investment advisory services to the
AmSouth Funds. Consequently, a change in your AmSouth Fund's investment adviser
was necessary. In the absence of the Reorganization, such a change would be more
likely to motivate shareholders invested in reliance on AAMI's role to withdraw
from the Fund, thereby reducing fund size and increasing fund expense ratios.
Second, the resources of Pioneer. At December 31, 2004, Pioneer managed
over 80 investment companies and accounts with approximately $42 billion in
assets. Pioneer is part of the global asset management group of UniCredito
Italiano S.p.A., one of the largest banking groups in Italy, providing
investment management and financial services to mutual funds, institutional and
other clients. As of December 31, 2004, assets under management of UniCredito
Italiano S.p.A. were approximately $175 billion worldwide. Shareholders of your
AmSouth Fund would become part of a significantly larger family of funds that
offers a more diverse array of investment options and enhanced shareholder
account options. The Pioneer family of mutual funds offers over 80 funds,
including domestic and international equity and fixed income funds and a money
market fund that will be available to your AmSouth Fund's shareholders through
exchanges. In addition, Pioneer offers shareholders additional options for their
accounts, including the ability to transact and exchange shares over the
telephone or online and the ability to access account values and transaction
history in all of the shareholder's direct accounts in the Pioneer Funds over
the telephone or online.
Third, Pioneer Institutional Money Market Fund's management fee (0.20% of
average daily net assets) will be the same as the advisory fee of your Fund
(0.20% of average daily net assets). The aggregate Rule 12b-1 distribution and
shareholder servicing fees and non-Rule 12b-1 shareholder servicing fees paid by
both Funds will be the same. The gross
10
expenses of each class of the Pioneer Fund are estimated to be lower than the
gross expenses of the corresponding class of the AmSouth Fund. Net of expense
limitations, the expenses of the Class 1 and Class 3 shares of the Pioneer Fund
are estimated to be the same as net expenses of the corresponding class of the
AmSouth Fund. The estimated net expenses of the Class 2 shares of the Pioneer
Fund are estimated to be one basis point higher than the net expenses of the
Class 2 shares of the AmSouth Fund. AAMI has informed the trustees that the
expense limitations will be discontinued in the future.
Fourth, the Institutional Class 1, Institutional Class 2 and Institutional
Class 3 shares of Pioneer Fund received in the Reorganization will provide
AmSouth Institutional Prime Obligations Money Market Fund shareholders with
exposure to substantially the same investment product as they currently have.
Fifth, the transaction is structured to qualify as a tax-free
reorganization under Section 368(a) of the Internal Revenue Code of 1986 and
therefore will not be treated as a taxable sale of your AmSouth shares.
Pioneer and AmSouth Bank will pay all costs of preparing and printing the
Funds' proxy statements and solicitation costs incurred by the Funds in
connection with the Reorganization. AAMI will otherwise be responsible of all
costs and expenses of AmSouth Fund in connection with the Reorganizations. The
Trustees also considered that Pioneer and AmSouth Bank will benefit from the
Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the
Reorganizations."
The Board of Trustees of the Pioneer Fund also considered that the
Reorganization presents an excellent opportunity for the Pioneer Fund to acquire
investment assets without the obligation to pay commissions or other transaction
costs that a fund normally incurs when purchasing securities. This opportunity
provides an economic benefit to the Pioneer Fund and its shareholders.
CAPITALIZATION
The following table sets forth the capitalization of AmSouth Institutional
Prime Obligations Money Market Fund as of May 31, 2005.
- -------------------------------------------------------------------------------------------------------------
AmSouth Institutional Pioneer Pro Forma Pioneer
Prime Obligations Institutional Money Institutional Money
Money Market Fund Market Fund Market Fund
May 31, 2005 May 31, 2005 May 31, 2005
- -------------------------------------------------------------------------------------------------------------
Total Net Assets (in thousands) $374,130 N/A $374,130
- -------------------------------------------------------------------------------------------------------------
Institutional Class 1 shares ........ $185,856 N/A $185,856
- -------------------------------------------------------------------------------------------------------------
Institutional Class 2 shares ........ $139,943 N/A $139,943
- -------------------------------------------------------------------------------------------------------------
Institutional Class 3 shares ........ $48,331 N/A $48,331
- -------------------------------------------------------------------------------------------------------------
Net Asset Value Per Share
- -------------------------------------------------------------------------------------------------------------
Institutional Class 1 shares ........ $1.00 N/A $1.00
- -------------------------------------------------------------------------------------------------------------
Institutional Class 2 shares ........ $1.00 N/A $1.00
- -------------------------------------------------------------------------------------------------------------
Institutional Class 3 shares ........ $1.00 N/A $1.00
- -------------------------------------------------------------------------------------------------------------
Shares Outstanding
- -------------------------------------------------------------------------------------------------------------
Institutional Class 1shares ......... 185,860,023 N/A 185,860,023
- -------------------------------------------------------------------------------------------------------------
Institutional Class 2 shares ........ 139,943,961 N/A 139,943,961
- -------------------------------------------------------------------------------------------------------------
Institutional Class 3 shares ........ 48,331,683 N/A 48,331,683
- -------------------------------------------------------------------------------------------------------------
It is impossible to predict how many shares of the Pioneer Fund will
actually be received and distributed by your AmSouth Fund on the Reorganization
date. The table should not be relied upon to determine the amount of the Pioneer
Fund's shares that will actually be received and distributed.
BOARD'S EVALUATION AND RECOMMENDATION
For the reasons described above, the Trustees, including the Independent
Trustees, approved the Reorganization. In particular, the Trustees determined
that the Reorganization is in the best interests of your AmSouth Fund.
Similarly, the Board of Trustees of the Pioneer Fund, including its Independent
Trustees, approved the Reorganization. They also determined that the
Reorganization is in the best interests of the Pioneer Fund.
11
The Trustees recommend that the shareholders of your AmSouth Fund vote FOR
the proposal to approve the Agreement and Plan of Reorganization.
12
TERMS OF EACH AGREEMENT AND PLAN OF REORGANIZATION
The Reorganizations
o Each Reorganization is scheduled to occur at 4:00 p.m., Eastern time, on [
], 2005, unless your AmSouth Fund and the corresponding Pioneer Fund agree
in writing to a later date. Your AmSouth Fund will transfer all of its
assets to the corresponding Pioneer Fund. The corresponding Pioneer Fund
will assume your AmSouth Fund's liabilities that are included in the
calculation of your AmSouth Fund's net asset value on the Closing Date.
The net asset value [of both Funds] will be computed as of 4:00 p.m.,
Eastern time, on the Closing Date.
o Each Pioneer Fund (other than Pioneer Institutional Money Market Fund)
will issue to the corresponding AmSouth Fund Class A, B and Y shares with
an aggregate net asset value equal to the net assets attributable to the
corresponding AmSouth Fund's Class A, B and I shares. These shares will
immediately be distributed to your AmSouth Fund's shareholders in
proportion to the relative net asset value of their holdings of your
AmSouth Fund's shares on the Closing Date. As a result, each AmSouth
Fund's shareholders will end up as Class A, B, or Y class shareholders of
the corresponding Pioneer Fund.
o In the case of Pioneer Institutional Money Market Fund, Class 1, 2 and 3
shares will be distributed in exchange for Institutional Class 1, 2 and 3
shares of AmSouth Institutional Prime Obligations Money Market Fund. These
shares will immediately be distributed to AmSouth Institutional Prime
Obligations Money Market Fund's shareholders in proportion to the relative
net asset value of their holdings of AmSouth Institutional Prime
Obligations Money Market Fund's shares on the Closing Date. As a result,
AmSouth Institutional Prime Obligations Money Market Fund's shareholders
will end up as Class 1, 2 or 3 shareholders of Pioneer Institutional Money
Market Fund.
o After the distribution of shares, your AmSouth Fund will be liquidated and
dissolved.
o Each Reorganization is intended to result in no income, gain or loss being
recognized for federal income tax purposes and will not take place unless
both Funds involved in the Reorganization receive a satisfactory opinion
concerning the tax consequences of the Reorganization from Wilmer Cutler
Pickering Hale and Dorr LLP, counsel to the Pioneer Funds.
Agreement and Plan of Reorganization
The shareholders of each AmSouth Fund are being asked to approve an Agreement
and Plan of Reorganization substantially in the form attached as EXHIBIT A-1 or
A-2 (each, a "Plan"). The description of the Plan contained herein is qualified
in its entirety by the attached copies, as appropriate.
Conditions to Closing each Reorganization. The obligation of each Fund to
consummate each Reorganization is subject to the satisfaction of certain
conditions, including each Fund's performance of all of its obligations under
the Plan, the receipt of certain documents and financial statements from your
AmSouth Fund and the receipt of all consents, orders and permits necessary to
consummate the Reorganization (see Sections 7 and 8 of the Plan). The
consummation of each Reorganization is not contingent on consummation of any
other Reorganization.
The obligations of both Funds are subject to the approval of the Plan by the
necessary vote of the outstanding shares of your AmSouth Fund, in accordance
with the provisions of AmSouth Funds' trust instrument and by-laws. The Funds'
obligations are also subject to the receipt of a favorable opinion of Wilmer
Cutler Pickering Hale and Dorr LLP as to the United States federal income tax
consequences of each Reorganization (see Section 8.5 of the Plan).
Termination of the Plan. The board of either the AmSouth Funds or the
corresponding Pioneer Fund may terminate the Plan (even if the shareholders of
your AmSouth Fund have already approved it) at any time before the Closing Date,
if that board believes in good faith that proceeding with the Reorganization
would no longer be in the best interests of shareholders.
9
TAX STATUS OF EACH REORGANIZATION
Each Reorganization is intended to result in no income, gain or loss being
recognized for United States federal income tax purposes and will not take place
unless both Funds involved in the Reorganization receive a satisfactory opinion
from Wilmer Cutler Pickering Hale and Dorr LLP, counsel to the Pioneer Funds,
substantially to the effect that each Reorganization will be a "reorganization"
within the meaning of Section 368(a) of the Code.
As a result, for federal income tax purposes:
o No gain or loss will be recognized by your AmSouth Fund upon (1) the
transfer of all of its assets to the corresponding Pioneer Fund as
described in this Proxy Statement/Prospectus or (2) the distribution by
your AmSouth Fund of Pioneer Fund shares to your AmSouth Fund's
shareholders;
o No gain or loss will be recognized by the corresponding Pioneer Fund upon
the receipt of your AmSouth Fund's assets solely in exchange for the
issuance of Pioneer Fund shares to your AmSouth Fund and the assumption of
your AmSouth Fund's liabilities by the Pioneer Fund;
o The basis of the assets of your AmSouth Fund acquired by the corresponding
Pioneer Fund will be the same as the basis of those assets in the hands of
your AmSouth Fund immediately before the transfer;
o The tax holding period of the assets of your AmSouth Fund in the hands of
the corresponding Pioneer Fund will include your AmSouth Fund's tax
holding period for those assets;
o You will not recognize gain or loss upon the exchange of your shares of
your AmSouth Fund solely for the Pioneer Fund shares as part of the
Reorganization;
o The basis of the Pioneer Fund shares received by you in the Reorganization
will be the same as the basis of your shares of your AmSouth Fund
surrendered in the exchange; and
o The tax holding period of the Pioneer Fund shares you receive will include
the tax holding period of the shares of your AmSouth Fund surrendered in
the exchange, provided that you held the shares of your AmSouth Fund as
capital assets on the date of the exchange.
In rendering such opinions, counsel shall rely upon, among other things,
reasonable assumptions as well as representations of your AmSouth Fund and the
Pioneer Fund (see the annexes to the Plan).
No tax ruling has been or will be received from the Internal Revenue Service
("IRS") in connection with the Reorganizations. An opinion of counsel is not
binding on the IRS or a court, and no assurance can be given that the IRS would
not assert, or a court would not sustain, a contrary position.
You should consult your tax adviser for the particular tax consequences to
you of the Reorganizations, including the applicability of any state, local or
foreign tax laws.
10
VOTING RIGHTS AND REQUIRED VOTE
Each share of your AmSouth Fund is entitled to one vote and each fractional
share shall be entitled to a proportionate fractional vote. A quorum is required
to conduct business at the Meeting. With respect to each AmSouth Fund, the
presence in person or by proxy of a majority of the outstanding shares of an
AmSouth Fund entitled to cast votes at the Meeting will constitute a quorum with
respect to that AmSouth Fund. A favorable vote of a "majority of the outstanding
voting securities" of the applicable AmSouth Fund is required to approve each
Proposal. Under the Investment Company Act, the vote of a majority of the
outstanding voting securities means the affirmative vote of the lesser of (i)
67% or more of the shares of the applicable AmSouth Fund represented at the
meeting, if at least 50% of all outstanding shares of the AmSouth Fund are
represented at the meeting, or (ii) 50% or more of the outstanding shares of the
AmSouth Fund entitled to vote at the meeting.
- -------------------------------------------------------------------------------------------------------------------------------
Shares Quorum Voting
- -------------------------------------------------------------------------------------------------------------------------------
In General All shares "present" in person or by Shares "present" in person will be voted
proxy are counted towards a quorum. in person at the Meeting. Shares
present by proxy will be voted in
accordance with instructions.
- -------------------------------------------------------------------------------------------------------------------------------
Broker Non-Vote (where the underlying Considered "present" at Meeting for Broker non-votes do not count as a vote
holder has not voted and the broker does purposes of quorum. "for" and effectively result in a vote
not have discretionary authority to vote "against" Proposals 1(a)-(w).
the shares)
- -------------------------------------------------------------------------------------------------------------------------------
Proxy with No Voting Instruction (other Considered "present" at Meeting for Voted "for" the proposal.
than Broker Non-Vote) purposes of quorum.
- -------------------------------------------------------------------------------------------------------------------------------
Vote to Abstain Considered "present" at Meeting for Abstentions do not constitute a vote
purposes of quorum. "for" and effectively result in a vote
"against" Proposals 1(a)-(w).
- -------------------------------------------------------------------------------------------------------------------------------
COMPARISON OF DELAWARE STATUTORY TRUST AND MASSACHUSETTS BUSINESS TRUST
The AmSouth Funds are series of a Massachusetts Business Trust. Most of the
Pioneer Funds are series of Delaware Statutory Trusts. The following is a
summary of the principal differences between Delaware Statutory Trusts and
Massachusetts Business Trusts.
Limitation of Shareholders' and Series' Liability
Delaware law provides that the shareholders of a Delaware statutory trust
shall not be subject to liability for the debts or obligations of the trust.
Under Massachusetts law, shareholders of a Massachusetts business trust (such as
the shareholders of Europe Fund) may, under certain circumstances, be liability
for the debts and obligations of that trust. Although the risk of liability of
shareholders of a Massachusetts business trust who do not participate in the
management of the trust may be remote, Delaware law affords grater protection
against potential shareholder liability. Similarly, Delaware law provides that,
to the extent that a Delaware statutory trust issues multiple series of shares,
each series shall not be liable for the debts or obligations of any other
series, another potential, although remote, risk in the case of a Massachusetts
business trust. While the trustees believe that a series of a Massachusetts
business trust will only be liable for its own obligations, there is no direct
statutory or judicial support for that position.
Limitation of Trustee Liability
Delaware law provides that, except to the extent otherwise provided in a
trust's declaration of trust or by-laws, trustees will not be personally liable
to any person (other than the statutory trust or a shareholder thereof) for any
act, omission or obligation of the statutory trust or any trustee thereof.
Delaware law also provides that a trustee's actions under a Delaware statutory
trust's declaration of trust or by-laws will not subject the trustee to
liability to the statutory trust or its shareholders if the trustee takes such
action in good faith reliance on the provisions of the statutory trust's
declaration of trust or bylaws. The declaration of trust of a Massachusetts
business trust may limit the liability of a trustee, who is not also an officer
of the corporation, for breach of fiduciary duty except for, among other things,
any act or omission not in good faith which involves
11
intentional misconduct or a knowing violation of law or any transaction from
which such trustee derives an improper direct or indirect financial benefit. The
trustees believe that such limitations on liability under Delaware law and under
the Pioneer Funds' declarations of trust are consistent with those applicable to
directors of a corporation under Delaware law and will be beneficial in
attracting and retaining in the future qualified persons to act as trustees.
Shareholder Voting
Delaware law provides that a Delaware statutory trust's declaration of trust
or by-laws may set forth provisions related to voting in any manner. This
provision appears to permit trustee and shareholder voting through computer or
electronic media. For an investment company with a significant number of
institutional shareholders, all with access to computer or electronic networks,
the use of such voting methods could significantly reduce the costs of
shareholder voting. However, the advantage of such methods may not be realizable
unless the SEC modifies its proxy rules. Also, as required by the Investment
Company Act of 1940, as amended (the "1940 Act"), votes on certain matters by
trustees would still need to be taken at actual in-person meetings.
Board Composition
Delaware law explicitly provides that separate boards of trustees may be
authorized for each series of a Delaware statutory trust. Whether separate
boards of trustees can be authorized for series of a Massachusetts business
trust is unclear under Massachusetts law. As always, the establishment of any
board of trustees of a registered investment company must comply with applicable
securities laws, including the provision of the 1940 Act regarding the election
of trustees by shareholders. Establishing separate boards of trustees would,
among other things, enable the series of a Delaware statutory trust to be
governed by individuals who are more familiar with such series' particular
operations.
ADDITIONAL INFORMATION ABOUT THE PIONEER FUNDS
Investment Adviser
Pioneer serves as the investment adviser to each Pioneer Fund. Pioneer is an
indirect, wholly owned subsidiary of UniCredito Italiano S.p.A., one of the
largest banking groups in Italy. Pioneer is part of the global asset management
group providing investment management and financial services to mutual funds,
institutions and other clients. As of December 31, 2004, assets under management
were approximately $175 billion worldwide, including over $42 billion in assets
under management by Pioneer. Pioneer's main office is at 60 State Street,
Boston, Massachusetts 02109. Pioneer's U.S. mutual fund investment history
includes creating one of the first mutual funds in 1928.
The Board of Trustees of the Pioneer Funds is responsible for overseeing the
performance of each of Pioneer Fund's investment adviser and subadviser, if any,
and determining whether to approve and renew the fund's investment advisory
agreement and the subadvisory agreements.
Pioneer has received an order (the "Exemptive Order") from the SEC that
permits Pioneer, subject to the approval of the Pioneer Funds' Board of
Trustees, to hire and terminate a subadviser or to materially modify an existing
subadvisory agreement for a Pioneer Fund without shareholder approval. Pioneer
retains the ultimate responsibility to oversee and recommend the hiring,
termination and replacement of any subadviser. To the extent that the SEC adopts
a rule that would supersede the Exemptive Order, Pioneer and the Pioneer Funds
intend to rely on such rule to permit Pioneer, subject to the approval of the
Pioneer Funds' Board of Trustees and any other applicable conditions of the
rule, to hire and terminate a subadviser or to materially modify an existing
subadvisory agreement for a Pioneer Fund without shareholder approval.
Buying, Exchanging and Selling Shares of the Pioneer Funds
Net Asset Value. Each Pioneer 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 Pioneer 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 Pioneer Fund generally values its portfolio securities using closing
market prices or readily available market quotations. When closing market prices
or market quotations are not available or are considered by Pioneer to be
unreliable, a
12
Pioneer Fund will use a security's fair value. Fair value is the valuation of a
security determined on the basis of factors other than market value in
accordance with procedures approved by the Pioneer Funds' trustees. Each Pioneer
Fund also may use the fair value of a security, including a non-U.S. security,
when Pioneer determines that the closing market price on the primary exchange
where the security is traded no longer accurately reflects the value of the
security due to factors affecting one or more relevant securities markets or the
specific issuer. The use of fair value pricing by a Pioneer Fund may cause the
net asset value of its shares to differ from the net asset value that would be
calculated using closing market prices. International securities markets may be
open on days when the U.S. markets are closed. For this reason, the value of any
international securities owned by a Pioneer Fund could change on a day you
cannot buy or sell shares of the fund. Each Pioneer Fund may use a pricing
service or a pricing matrix to value some of its assets. Debt securities with
remaining maturities of 60 days or less are valued at amortized cost, which is a
method of determining a security's fair value.
Pioneer International Core Equity Fund primarily invests in securities of
non-U.S. issuers and the markets for these securities generally close prior to
the time the Fund determines its net asset value. However, the value of these
securities continues to be influenced by changes in the global markets.
Consequently, the trustees have determined to use the fair value of these
securities as of the time the fund determines its net asset value, based upon
data from a pricing service. On a daily basis, the pricing service recommends
changes, based upon a proprietary model, to the closing market prices of each
non-U.S. security held by the fund to reflect the security's fair value at the
time the fund determines its net asset value. The fund applies these
recommendations in accordance with procedures approved by the trustees. A
security's fair value determined in this manner may differ from the security's
closing market price on the date the fund determines its net asset value or the
opening price of the security on the next business day. The fund's use of this
method may significantly affect its net asset value compared to the net asset
value that would have been determined using closing market prices. The fund also
may take other factors influencing specific markets or issuers into
consideration in determining the fair value of a non-U.S. security.
You buy or sell shares at the share price. When you buy Class A shares, you
pay an initial sales charge unless you qualify for a waiver or reduced sales
charge. However, the Class A shares of the Pioneer Funds you receive in the
Reorganizations will not be subject to any sales charge. When you buy Class B
shares, you do not pay an initial sales charge but impose a contingent deferred
sales charge. However, if you sell within five years of purchase, you will pay a
contingent deferred sales charge. The Class B shares of the Pioneer Funds you
receive in the transaction will be subject to the same contingent deferred sales
charge as your Class B shares of the AmSouth Funds held at the time of sale.
These shares would then convert to Class A shares eight years after the original
date of purchase. Class Y shares do not impose a sales charge.
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 described
herein or in the Pioneer Fund's prospectus. Ask your investment professional for
more information.
If you invest in a Pioneer Fund through investment professionals or other
financial intermediaries, including wrap programs and fund supermarkets,
additional conditions may apply to your investment in a Pioneer 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 Pioneer 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 Pioneer Funds' transfer agent for account applications,
account options forms and other account information:
PIONEER INVESTMENT MANAGEMENT SHAREHOLDER SERVICES, INC.
P.O. Box 55014
Boston, Massachusetts 02205-5014
Telephone 1-800-225-6292
Telephone Transaction Privileges. If your account is registered in your name,
you can buy, exchange or sell shares of the Pioneer Funds 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.
13
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. Each Pioneer 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.
Online Transaction Privileges. If your account is registered in your name,
you may be able to buy, exchange or sell fund shares online. Your investment
firm may also be able to buy, exchange or sell your Pioneer Fund shares online.
To establish online transaction privileges complete an account options form,
write to the transfer agent or complete the online authorization screen on:
www.pioneerfunds.com.
To use online transactions, you must read and agree to the terms of an online
transaction agreement available on the Pioneer website. When you or your
investment firm requests an online transaction the transfer agent electronically
records the transaction, requires an authorizing password and sends a written
confirmation. The Pioneer Funds may implement other 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. You may not be able to use the online transaction privilege for
certain types of accounts, including most retirement accounts.
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 PFD
prior to PFD's close of business (usually 5:30 p.m. Eastern time), your share
price will be calculated that day. Otherwise, your price per share 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 Pioneer Fund Shares. You may buy shares of each Pioneer Fund from any
investment firm that has a sales agreement with PFD. 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 shares of the Pioneer Funds 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. 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. The minimum investment amount does not
apply for purposes of the Reorganization.
Exchanging Pioneer Fund Shares. You may exchange your shares in a Pioneer
Fund 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. Each Pioneer 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 policy as described in each fund's prospectus.
Selling Pioneer Fund Shares. Your shares will be sold at net asset value per
share next calculated after the Pioneer Fund, or authorized agent, and as a
broker-dealer, 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. Each Pioneer 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 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 federal income taxes on a sale or an exchange.
14
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 Pioneer 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:
o Are selling over $100,000 or exchanging over $500,000 worth of shares
o Changed your account registration or address within the last 30 days
o Instruct the transfer agent to mail the check to an address different from
the one on your account
o Want the check paid to someone other than the account owner(s)
o Are transferring the sale proceeds to a Pioneer mutual fund account with a
different registration
Buying, Exchanging and Selling Pioneer Fund Shares
------------------------------------------------------------------------------------------------------
Buying Shares Exchanging Shares
------------------------------------------------------------------------------------------------------
Through your Normally, your investment firm will send your Normally, your investment firm will send your
investment firm purchase request to the Pioneer Funds' transfer exchange request to the Pioneer Fund's transfer
agent. Consult your investment professional for agent. Consult your investment professional for
more information. Your investment firm may receive more information about exchanging your shares.
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
By phone or You can use the telephone or online privilege if After you establish your Pioneer Fund account, you
online you have an existing non-retirement account or can exchange Fund shares by phone or online if:
certain IRAs. You can purchase additional fund o You are exchanging into an existing account or
shares by phone if: using the exchange to establish a new account,
o You established your bank account of record at provided the new account has a registration
least 30 days ago identical to the original account
o Your bank information has not changed for at o The fund into which you are exchanging offers
least 30 days the same class of shares
o You are not purchasing more than $25,000 worth o You are not exchanging more than $500,000 worth
of shares per account per day of shares per account per day
o You can provide the proper account o You can provide the proper account identification
identification information information
When you request a telephone or online purchase,
the transfer agent will electronically debit the
amount of the purchase from your bank account of
record. The transfer agent will purchase Pioneer
Fund shares for the amount of the debit at the
offering price determined after the transfer agent
receives your telephone or online 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.
In writing, by You can purchase Pioneer Fund shares for an existing You can exchange fund shares by mailing or faxing a
mail or
----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
Buying Shares Exchanging Shares
-----------------------------------------------------------------------------------------------------------
by fax fund account by mailing a check to the transfer letter of instruction to the transfer agent. You
agent. Make your check payable to the Pioneer can exchange Pioneer Fund shares directly through
Fund. Neither initial nor subsequent investments the Pioneer Fund only if your account is
should be made by third party check. Your check registered in your name. However, you may not fax
must be in U.S. dollars and drawn on a U.S. bank. an exchange request for more than $500,000.
Include in your purchase request the fund's name, Include in your letter:
the account number and the name or names in the o The name, social security number and signature
account registration. 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
The dollar amount or number of shares you are
exchanging
------------------------------------------------------------------------------------------------------------
Selling Shares How to contact Pioneer
------------------------------------------------------------------------------------------------------------
Normally, your investment firm will send your By phone
request to sell shares to the Pioneer Fund's
transfer agent. Consult your investment For information or to request a telephone
professional for more information. Each Pioneer transaction between 8:00 a.m. and 7:00 p.m.
Fund has authorized PFD to act as its agent in the (Eastern time) by speaking with a shareholder
repurchase of Pioneer Fund shares from qualified services representative call 1-800-225-6292
investment firms. Each Pioneer Fund reserves the To request a transaction using FactFone(SM) call
right to terminate this procedure at any time. 1-800-225-4321
Telecommunications Device for the Deaf (TDD)
You may sell up to $100,000 per account per day by 1-800-225-1997
phone or online. You may sell Pioneer Fund shares
held in a retirement plan account by phone only if By mail
your account is an eligible IRA (tax penalties may Send your written instructions to:
apply). You may not sell your shares by phone or Pioneer Investment Management Shareholder
online if you have changed your address (for Services, Inc.
checks) or your bank information (for wires and P.O. Box 55014
transfers) in the last 30 days. Boston, Massachusetts 02205-5014
You may receive your sale proceeds: By fax
o By check, provided the check is made payable Fax your exchange and sale requests to:
exactly as your account is registered 1-800-225-4240
o By bank wire or by electronic funds transfer,
provided the sale proceeds are being sent to Exchange Privilege
your bank address of record You may make up to four exchange redemptions of
You can sell some or all of your Pioneer Fund $25,000 or more per account per calendar year.
shares by writing directly to the Pioneer fund
only if your account is registered in your name.
Include in your request your name, your social
security number, the fund's name 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. You may
not sell more than $100,000 per account per day by
fax.
Pioneer Fund Shareholder 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 Pioneer Fund shares
o Redeeming shares for which you hold a share certificate
16
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. All
Pioneer Funds will accept only medallion signature guarantees. A medallion
signature guarantee may be obtained from a domestic bank or trust company,
broker, dealer, clearing agency, savings association, or other financial
institution that is participating in a medallion program recognized by the
Securities Transfer Association. Signature guarantees from financial
institutions that are not participating in one of these programs are not
accepted. Fiduciaries and corporations are required to submit additional
documents to sell Pioneer Fund shares.
Exchange Limitation. You may only make up to four exchange redemptions of
$25,000 or more per account per calendar year out of a Pioneer Fund. Each Fund's
exchange limitation is 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. In determining whether the exchange
redemption limit has been reached, Pioneer may aggregate a series of exchanges
(each valued at less than $25,000) and/or fund accounts that 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.
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 Code. While financial intermediaries that
maintain omnibus accounts that invest in the fund are requested to apply the
exchange limitation policy to shareholders who hold shares through such
accounts, we do not impose the exchange limitation policy at the level of the
omnibus account and are not able to monitor compliance by the financial
intermediary with this policy.
Redemption Fee. Pioneer International Core Equity Fund has adopted a
redemption fee on short term holdings of the Fund's shares. If you sell or
exchange shares within 30 days of any purchase of Fund shares, the Fund will
apply a 2% fee to the entire amount of your sales proceeds. The Fund's
redemption fee is 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.
Excessive Trading. Frequent trading into and out of the fund can disrupt
portfolio management strategies, harm fund performance by forcing the fund to
hold excess cash or to liquidate certain portfolio securities prematurely and
increase expenses for all investors, including long-term investors who do not
generate these costs. An investor may use short-term trading as a strategy, for
example, if the investor believes that the valuation of the fund's portfolio
securities for purposes of calculating its net asset value does not fully
reflect the then current fair market value of those holdings. The fund
discourages, and does not take any intentional action to accommodate, excessive
and short-term trading practices, such as market timing. Although there is no
generally applied standard in the marketplace as to what level of trading
activity is excessive, we may consider trading in the fund's shares to be
excessive for a variety of reasons, such as if:
o You sell shares within a short period of time after the shares were
purchased;
o You make two or more purchases and redemptions within a short period of
time;
o You enter into a series of transactions that is indicative of a timing
pattern or strategy; or
o We reasonably believe that you have engaged in such practices in
connection with other mutual funds.
The fund's Board of Trustees has adopted policies and procedures with respect
to frequent purchases and redemptions of fund shares by fund investors. Pursuant
to these policies and procedures, we monitor selected trades on a daily basis in
an effort to detect excessive short-term trading. If we determine that an
investor or a client of a broker has engaged in excessive short-term trading
that we believe may be harmful to the fund, we will ask the investor or broker
to cease such activity and we will refuse to process purchase orders (including
purchases by exchange) of such investor, broker or accounts that we believe are
under their control. In determining whether to take such actions, we seek to act
in a manner that is consistent with the best interests of the fund's
shareholders.
While we use our reasonable efforts to detect excessive trading activity,
there can be no assurance that our efforts will be successful or that market
timers will not employ tactics designed to evade detection. If we are not
successful, your return from an investment in the fund may be adversely
affected. Frequently, fund shares are held through omnibus accounts maintained
by financial intermediaries such as brokers and retirement plan administrators,
where the holdings of multiple
17
shareholders, such as all the clients of a particular broker, are aggregated.
Our ability to monitor trading practices by investors purchasing shares through
omnibus accounts is limited and dependent upon the cooperation of the financial
intermediary in observing the fund's policies.
In addition to monitoring trades, the policies and procedures provide that:
o The fund imposes limitations on the number of exchanges out of an account
holding the fund's Class A, Class B or Class C shares that may occur in
any calendar year.
o Certain funds managed by Pioneer have adopted redemption fees that are
incurred if you redeem shares within a short period after purchase,
including exchanges. These redemption fees are described in the applicable
prospectuses under "Fees and expenses."
o The fund may reject a purchase or exchange order before its acceptance or
an order prior to issuance of shares. The fund may also restrict
additional purchases or exchanges in an account. Each of these steps may
be taken, for any reason, without prior notice, including transactions
that the fund believes are requested on behalf of market timers. The fund
reserves the right to reject any purchase request by any investor or
financial institution if the fund believes that any combination of trading
activity in the account or related accounts is potentially disruptive to
the fund. A prospective investor whose purchase or exchange order is
rejected will not achieve the investment results, whether gain or loss,
that would have been realized if the order were accepted and an investment
made in the fund. The fund and its shareholders do not incur any gain or
loss as a result of a rejected order. The fund may impose further
restrictions on trading activities by market timers in the future. The
fund's prospectus will be amended or supplemented to reflect any material
additional restrictions on trading activities intended to prevent
excessive trading.
Minimum Account Size. Each Pioneer 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 Pioneer 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.
Telephone Access. You may have difficulty contacting the Pioneer Fund by
telephone during times of market volatility or disruption in telephone service.
If you are unable to reach the Pioneer 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. Any share certificates of the AmSouth Funds
outstanding at the Closing of the Reorganization will be deemed to be cancelled
and will no longer represent shares of the Funds.
Other Policies. Each Pioneer 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, as determined by the SEC, for the
fund to sell or value its portfolio securities or with the permission of the
SEC.
Each Pioneer Fund or PFD may revise, suspend or terminate the account options
and services available to shareholders at any time.
Each Pioneer Fund reserves the right to redeem in kind by delivering
portfolio securities to a redeeming shareholder, provided that the Pioneer Fund
must pay redemptions in cash if a shareholder'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 Pioneer Fund generally pays any distributions of net short- and
long-term capital gains and dividends from any net investment income at least
annually.
18
Each Pioneer 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 Pioneer 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, distributions from each Pioneer Fund's
net long-term capital gains (if any) are considered long-term capital gains and
may be taxable to you at different maximum rates depending upon their source and
other factors. Short-term capital gain distributions for each Pioneer Fund are
taxable as ordinary income.
Dividends from net investment income are taxable either as ordinary income
or, if so designated by the fund and certain other conditions, including holding
period requirements, are met by the fund and the shareholder, as "qualified
dividend income" taxable to individual shareholders at the maximum 15% U.S.
federal tax rate. Dividends and distributions generally are taxable, whether you
take payment in cash or reinvest them to buy additional Pioneer Fund shares.
When you sell or exchange Pioneer 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 each Pioneer 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 Pioneer Fund will withhold 28% "backup
withholding" tax from your dividends and distributions, sale proceeds and any
other payments to you.
You should ask your tax adviser about any federal, state and foreign tax
considerations, including possible additional withholding taxes for non-U.S.
shareholders. You may also consult the "Tax Status" section of each Pioneer
Fund's statement of additional information for a more detailed discussion of
U.S. federal income tax considerations, including qualified dividend income
considerations that may affect the Pioneer Fund and its shareholders.
Pioneer Funds' Rule 12b-1 Plans. As described above, each Pioneer Fund has
adopted a Rule 12b-1 plan for its Class A shares, Class B shares, Class 2 shares
and Class 3 shares (the "Plans"). Because the Rule 12b-1 fees payable under each
Plan are an ongoing expense, over time they may increase the cost of your
investment and your shares may cost more than shares that are not subject to a
distribution or service fee or sales charge.
Compensation and Services. Each Class A Plan is a reimbursement plan, and
distribution expenses of PFD are expected to substantially exceed the
distribution fees paid by the fund in a given year. Pursuant to each 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 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.
The Class B Plan provides that the fund shall pay to PFD, as the fund's
distributor for its Class B shares a distribution fee equal on an annual basis
to 0.75% of the fund's average daily net assets attributable to Class B shares
and a service fee equal to 0.25% 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 also pays commissions
to broker-dealers and the cost of printing prospectuses and reports used for
sales purposes and the preparation and printing of sales literature and other
distribution-related expenses. The plan authorizes PFD to pay a 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 shareholders 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.
The Class 2 and Class 3 Plans (which pertain only to Pioneer Institutional
Money Market Fund) provide that the fund will pay PFD, as the distributor of the
shares, a distribution and service fee accrued daily and paid quarterly, equal
on an annual
19
basis to 0.25% of the fund's average daily net assets attributable to Class 2
shares and 0.50% of the fund's average daily net assets attributable to Class 3
shares. These plans authorize PFD to pay securities dealers or other service
organizations who agree to provide certain services to investors holding Class 1
and Class 2 shares a service fee of up to 0.25% of the fund's average daily net
assets attributable to shares held by such investors. The plans also may
compensate PFD for its distribution services with respect to these shares of the
fund.
The Class B, Class 2 and Class 3 Plans are compensation plans, which provide
for a fixed level of fees. Payments under these plans are not tied exclusively
to actual distribution and service expenses, and may exceed (or may be less
than) the expenses actually incurred.
Trustee Approval and Oversight. Each Plan was last approved by the board of
trustees of each Pioneer Fund, including a majority of the independent trustees,
by votes cast in person at meetings called for the purpose of voting on the Plan
on December 2, 2004 (July 12, 2005 with respect to the Class 1 and Class 2 Plans
for Pioneer Institutional Money Market Fund). Pursuant to the Plan, at least
quarterly, PFD will provide each fund with a written report of the amounts
expended under the Plan and the purpose for which these expenditures were made.
The trustees review these reports on a quarterly basis to determine their
continued appropriateness.
Term, Termination and Amendment. Each Plan's adoption, terms, continuance and
termination are governed by Rule 12b-1 under the Investment Company Act. The
board of trustees believes that there is a reasonable likelihood that the Plans
will benefit each 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.
20
FINANCIAL HIGHLIGHTS
The following tables show the financial performance of each Pioneer Fund for
the past five fiscal years and, if applicable, for any recent semiannual period
(or the period during which each Pioneer Fund has been in operation, if less
than five years). Certain information reflects financial results for a single
Pioneer Fund share. "Total return" shows how much an investment in a Pioneer
Fund would have increased or decreased during each period, assuming you had
reinvested all dividends and other distributions. In the case of each Pioneer
Fund, each fiscal year ended on or after the fiscal year ended June 30, 2002 has
been audited by Ernst & Young LLP, each Pioneer Fund's independent registered
public accounting firm, as stated in their reports incorporated by reference in
this registration statement. For fiscal years prior to the fiscal year ended
June 30, 2002, the financial statements of each Pioneer Fund were audited by
Arthur Andersen LLP, the Pioneer Funds' previous independent accountants. Arthur
Andersen ceased operations in 2002. The information for any semiannual period
has not been audited.
21
Pioneer Tax Free Money Market Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
12/11/04 (a)
to
12/31/04
CLASS A
Net asset value, beginning of period $ 1.0000
--------
Increase from investment operations:
Net investment income $ 0.0004
--------
Distributions to shareowners:
Net investment income $(0.0004)
--------
Net asset value, end of period $ 1.0000
========
Total return* 0.04%(b)
Ratio of net expenses to average net assets 0.94%**
Ratio of net investment income to average net assets 1.38%**
Net assets, end of period (in thousands) $ 317
Ratios with no waiver of management fees by PIM:
Net expenses 1.17%**
Net investment income 1.15%**
* 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
(a) Initial issue date of Class A Shares.
(b) Not annualized.
The accompanying notes are an integral part of these financial statements.
Pioneer Bond Fund
================================================================================
FINANCIAL HIGHLIGHTS
================================================================================
Six Months
Ended
12/31/04 Year Ended Year Ended Year Ended Year Ended Year Ended
(unaudited) 6/30/04 6/30/03 6/30/02 (a) 6/30/01 6/30/00
CLASS A
Net asset value, beginning of period $ 9.18 $ 9.41 $ 8.89 $ 8.78 $ 8.47 $ 8.94
------- -------- -------- -------- ------- --------
Increase (decrease) from investment operations:
Net investment income $ 0.23 $ 0.41 $ 0.45 $ 0.52 $ 0.57 $ 0.58
Net realized and unrealized gain (loss) on investments 0.22 (0.14) 0.53 0.13 0.31 (0.47)
------- -------- -------- -------- ------- --------
Net increase from investment operations $ 0.45 $ 0.27 $ 0.98 $ 0.65 $ 0.88 $ 0.11
Distributions to shareowners:
Net investment income (0.25) (0.50) (0.46) (0.54) (0.57) (0.58)
------- -------- -------- -------- ------- --------
Net increase (decrease) in net asset value $ 0.20 $ (0.23) $ 0.52 $ 0.11 $ 0.31 $ (0.47)
------- -------- -------- -------- ------- --------
Net asset value, end of period $ 9.38 $ 9.18 $ 9.41 $ 8.89 $ 8.78 $ 8.47
------- -------- -------- -------- ------- --------
Total return* 4.92% 2.98% 11.38% 7.58% 10.70% 1.30%
Ratio of net expenses to average net assets+ 1.10%** 1.14% 1.20% 1.16% 1.21% 1.18%
Ratio of net investment income to average net assets+ 4.76%** 4.42% 5.02% 5.79% 6.53% 6.68%
Portfolio turnover rate 61%** 63% 48% 59% 43% 60%
Net assets, end of period (in thousands) $164,621 $160,421 $183,338 $143,713 $98,004 $102,349
Ratios with no waiver of management fees by PIM and no
reductions for fees paid indirectly:
Net expenses 1.17%** 1.14% 1.20% 1.16% 1.18% 1.15%
Net investment income 4.70%** 4.42% 5.02% 5.79% 6.56% 6.71%
Ratios with waiver of management fees by PIM and reduction
for fees paid indirectly:
Net expenses 1.10% 1.14% 1.20% 1.16% 1.18% 1.15%
Net investment income 4.76% 4.42% 5.02% 5.79% 6.56% 6.71%
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized
+ Ratio with no reduction for fees paid indirectly.
(a) As a result of a change in accounting principle, the effect due to mandatory
accretion of discounts and amortization of premiums on debt securities
resulted in a reduction of net investment income of $0.02 per share, an
increase in net realized and unrealized gain (loss) on investments of $0.02
per share, and the ratio of net investment income to average net assets
decreased by 0.18%.
The accompanying notes are an integral part of these financial statements.
Pioneer Bond Fund
================================================================================
FINANCIAL HIGHLIGHTS
================================================================================
Six Months
Ended
12/31/04 Year Ended Year Ended Year Ended Year Ended Year Ended
(unaudited) 6/30/04 6/30/03 6/30/02 (a) 6/30/01 6/30/00
CLASS B
Net asset value, beginning of period $ 9.14 $ 9.37 $ 8.87 $ 8.77 $ 8.44 $ 8.91
------- ------- ------- ------- ------- -------
Increase (decrease) from investment operations:
Net investment gain $ 0.18 $ 0.33 $ 0.37 $ 0.44 $ 0.50 $ 0.50
Net realized and unrealized gain (loss) on investments 0.22 (0.14) 0.53 0.14 0.30 (0.46)
------- ------- ------- ------- ------- -------
Net increase from investment operations $ 0.41 $ 0.19 $ 0.90 $ 0.58 $ 0.80 $ 0.04
Distributions to shareowners:
Net investment income (0.21) (0.42) (0.40) (0.48) (0.47) (0.51)
------- ------- ------- ------- ------- -------
Net increase (decrease) in net asset value $ 0.20 $ (0.23) $ 0.50 $ 0.10 $ 0.33 $ (0.47)
------- ------- ------- ------- ------- -------
Net asset value, end of period $ 9.34 $ 9.14 $ 9.37 $ 8.87 $ 8.77 $ 8.44
------- ------- ------- ------- ------- -------
Total return* 4.50% 2.04% 10.44% 6.78% 9.71% 0.48%
Ratio of net expenses to average net assets+ 2.00%** 1.98% 2.02% 1.95% 2.05% 2.05%
Ratio of net investment income to average net assets+ 3.87%** 3.55% 4.22% 5.02% 5.72% 5.81%
Portfolio turnover rate 61%** 63% 48% 59% 43% 60%
Net assets, end of period (in thousands) $54,351 $57,774 $77,367 $59,729 $38,231 $37,269
Ratios with no waiver of management fees by PIM and no
reduction for fees paid indirectly:
Net expenses 2.02%** 1.98% 2.02% 1.95% 2.04% 2.03%
Net investment income 3.85%** 3.55% 4.22% 5.02% 5.73% 5.83%
Ratios with waiver of management fees by PIM and
reduction for fees paid indirectly:
Net expenses 2.00% 1.98% 2.02% 1.95% 2.04% 2.03%
Net investment income 3.87% 3.55% 4.22% 5.02% 5.73% 5.83%
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized
+ Ratio with no reduction for fees paid indirectly.
(a) As a result of a change in accounting principle, the effect due to mandatory
accretion of discounts and amortization of premiums on debt securities
resulted in a reduction of net investment income of $0.02 per share, an
increase in net realized and unrealized gain (loss) on investments of $0.02
per share, and the ratio of net investment income to average net assets
decreased by 0.18%.
The accompanying notes are an integral part of these financial statements.
Pioneer Bond Fund
================================================================================
FINANCIAL HIGHLIGHTS
================================================================================
Six Months
Ended
12/31/04 Year Ended Year Ended Year Ended Year Ended Year Ended
(unaudited) 6/30/04 6/30/03 6/30/02 (a) 6/30/01 6/30/00
CLASS C
Net asset value, beginning of period $ 9.11 $ 9.31 $ 8.83 $ 8.73 $ 8.46 $ 8.89
------- ------- ------- ------- ------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.18 $ 0.33 $ 0.37 $ 0.44 $ 0.48 $ 0.48
Net realized and unrealized gain (loss) on investments 0.22 (0.14) 0.51 0.12 0.30 (0.45)
------- ------- ------- ------- ------- -------
Net increase from investment operations $ 0.41 $ 0.19 $ 0.88 $ 0.56 $ 0.78 $ 0.03
Distributions to shareowners:
Net investment income (0.21) (0.39) (0.40) (0.46) (0.51) (0.46)
------- ------- ------- ------- ------- -------
Net increase (decrease) in net asset value $ 0.20 $ (0.20) $ 0.48 $ 0.10 $ 0.27 $ (0.43)
------- ------- ------- ------- ------- -------
Net asset value, end of period $ 9.31 $ 9.11 $ 9.31 $ 8.83 $ 8.73 $ 8.46
------- ------- ------- ------- ------- -------
Total return* 4.54% 2.11% 10.28% 6.55% 9.46% 0.36%
Ratio of net expenses to average net assets+ 1.94%** 1.97% 2.16% 2.14% 2.18% 2.32%
Ratio of net investment income to average net assets+ 3.92%** 3.59% 4.05% 4.78% 5.56% 5.53%
Portfolio turnover rate 61%** 63% 48% 59% 43% 60%
Net assets, end of period (in thousands) $28,110 $27,545 $29,777 $18,067 $ 7,377 $ 6,264
Ratios with no waiver of management fees by PIM and no
reduction for fees paid indirectly:
Net expenses 1.96%** 1.97% 2.16% 2.15% 2.15% 2.30%
Net investment income 3.91%** 3.59% 4.05% 4.77% 5.59% 5.55%
Ratios with waiver of management fees by PIM and
reduction for fees paid indirectly:
Net expenses 1.94% 1.97% 2.16% 2.15% 2.15% 2.30%
Net investment income 3.92% 3.59% 4.05% 4.77% 5.59% 5.55%
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized
+ Ratio with no reduction for fees paid indirectly.
(a) As a result of a change in accounting principle, the effect due to mandatory
accretion of discounts and amortization of premiums on debt securities
resulted in a reduction of net investment income of $0.02 per share, an
increase in net realized and unrealized gain (loss) on investments of $0.02
per share, and the ratio of net investment income to average net assets
decreased by 0.18%.
The accompanying notes are an integral part of these financial statements.
Pioneer Bond Fund
================================================================================
FINANCIAL HIGHLIGHTS
================================================================================
Six Months
Ended Year Year 9/20/01(a)
12/31/04 Ended Ended to
(unaudited) 6/30/04 6/30/03 6/30/02(b)
CLASS Y
Net asset value, beginning of period $ 9.12 $ 9.35 $ 8.87 $ 8.85
------- ------- ------- --------
Increase (decrease) from investment operations:
Net investment income $ 0.25 $ 0.46 $ 0.51 $ 0.43
Net realized and unrealized gain (loss) on investments 0.22 (0.14) 0.51 0.04
------- ------- ------- --------
Net increase from investment operations $ 0.47 $ 0.32 $ 1.02 $ 0.47
Distributions to shareowners:
Net investment income (0.27) (0.55) (0.54) (0.45)
Net increase (decrease) in net asset value $ 0.20 $ (0.23) $ 0.48 $ 0.02
------- ------- ------- --------
Net asset value, end of period $ 9.32 $ 9.12 $ 9.35 $ 8.87
------- ------- ------- --------
Total return* 5.22% 3.48% 11.86% 5.48%
Ratio of net expenses to average net assets+ 0.60%** 0.58% 0.67% 0.64%**
Ratio of net investment income to average net assets+ 5.21%** 5.05% 5.54% 6.28%**
Portfolio turnover rate 61%** 63% 48% 59%
Net assets, end of period (in thousands) $10,848 $13,617 $ 7,719 $ 4,051
Ratios with no waiver of management fees by PIM and no
reduction for fees paid indirectly:
Net expenses 0.60%** 0.58% 0.67% 0.64%**
Net investment income 5.21%** 5.05% 5.54% 6.28%**
Ratios with waiver of management fees by PIM and reduction
for fees paid indirectly:
Net expenses 0.60% 0.58% 0.67% 0.64%
Net investment income 5.21% 5.05% 5.54% 6.28%
(a) Class Y shares were first publicly offered on September 20, 2001.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, and the complete redemption of
the investment at net asset value at each end of each period.
** Annualized
+ Ratio with no reduction for fees paid indirectly.
(b) As a result of a change in accounting principle, the effect due to mandatory
accretion of discounts and amortization of premiums on debt securities
resulted in a reduction of net investment income of $0.02 per share, an
increase in net realized and unrealized gain (loss) on investments of $0.02
per share, and the ratio of net investment income to average net assets
decreased by 0.23%.
The accompanying notes are an integral part of these financial statements.
Pioneer Cash Reserves Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended
12/31/04 12/31/03 12/31/02 12/31/01 12/31/00
CLASS A
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Increase from investment operations:
Net investment income $ 0.005 $ 0.003 $ 0.01 $ 0.03 $ 0.05
-------- -------- -------- -------- --------
Distributions to shareowners:
Net investment income (0.005) (0.003) (0.01) (0.03) (0.05)
-------- -------- -------- -------- --------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Total return* 0.45% 0.26% 1.15% 3.29% 5.53%
Ratio of net expenses to average net assets+ 0.93% 1.00% 0.76% 0.93% 1.02%
Ratio of net investment income to average net assets+ 0.45% 0.26% 1.18% 2.89% 5.36%
Net assets, end of period (in thousands) $192,860 $227,052 $268,861 $493,871 $242,861
Ratios with no waiver of management fees and assumptions of
expenses by PIM and no reductions for fees paid indirectly:
Net expenses 0.93% 1.06% 0.93% 0.94% 1.02%
Net investment income 0.45% 0.20% 1.01% 2.88% 5.36%
Ratios with waiver of management fees and assumptions of
expenses by PIM and reductions for fees paid indirectly:
Net expenses 0.93% 0.99% 0.75% 0.89% 0.94%
Net investment income 0.45% 0.27% 1.19% 2.93% 5.44%
* 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.
+ Ratio with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
17
Pioneer Cash Reserves Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended
12/31/04 12/31/03 12/31/02 12/31/01 12/31/00
CLASS B
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- -------- ------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.001 $ 0.001 $ 0.003 $ 0.02 $ 0.05
------- ------- -------- ------- -------
Distributions to shareowners:
Net investment income (0.001) (0.001) (0.003) (0.02) (0.05)
------- ------- -------- ------- -------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- -------- ------- -------
Total return* 0.06% 0.05% 0.33% 2.42% 4.64%
Ratio of net expenses to average net assets+ 1.33% 1.21% 1.59% 1.79% 1.86%
Ratio of net investment income to average net assets+ 0.06% 0.05% 0.31% 2.08% 4.49%
Net assets, end of period (in thousands) $46,559 $59,059 $ 84,901 $55,837 $34,693
Ratios with no waiver of management fees and assumptions of
expenses by PIM and no reductions for fees paid indirectly:
Net expenses 1.81% 1.87% 1.81% 1.79% 1.86%
Net investment income (loss) (0.43)% (0.61)% 0.09% 2.08% 4.49%
Ratios with waiver of management fees and assumptions of
expenses by PIM and reductions for fees paid indirectly:
Net expenses 1.33% 1.21% 1.58% 1.77% 1.80%
Net investment income 0.06% 0.05% 0.32% 2.10% 4.55%
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges.
+ Ratio with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
18
Pioneer Cash Reserves Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended
12/31/04 12/31/03 12/31/02 12/31/01 12/31/00
CLASS C
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- -------- ------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.001 $ 0.001 $ 0.003 $ 0.02 $ 0.04
------- ------- -------- ------- -------
Distributions to shareowners:
Net investment income (0.001) (0.001) (0.003) (0.02) (0.04)
------- ------- -------- ------- -------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- -------- ------- -------
Total return* 0.06% 0.05% 0.28% 2.33% 4.54%
Ratio of net expenses to average net assets+ 1.33% 1.19% 1.64% 1.90% 2.00%
Ratio of net investment income to average net assets+ 0.06% 0.05% 0.27% 2.09% 4.27%
Net assets, end of period (in thousands) $34,413 $32,216 $ 33,633 $17,118 $11,195
Ratios with no waiver of management fees and assumptions of
expenses by PIM and no reductions for fees paid indirectly:
Net expenses 1.70% 1.86% 1.88% 1.91% 2.00%
Net investment income (loss) (0.31)% (0.62)% 0.02% 2.08% 4.27%
Ratios with waiver of management fees and assumptions of
expenses by PIM and reductions for fees paid indirectly:
Net expenses 1.33% 1.19% 1.62% 1.87% 1.87%
Net investment income 0.06% 0.05% 0.28% 2.12% 4.40%
* 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.
+ Ratio with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
19
PIONEER GROWTH OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
12/31/04(a) 12/31/03 12/31/02 12/31/01 12/31/00
CLASS A
Net asset value, beginning of period $ 24.38 $ 16.97 $ 26.96 $ 22.16 $ 23.21
-------- -------- -------- -------- --------
Net increase (decrease) from investment operations:
Net investment income (loss) $ (0.14)(b) $ (0.16) $ (0.24) $ (0.20) $ (0.25)
Net realized and unrealized gain (loss) on investments 5.56 7.56 (9.77)++ 5.00 (0.80)
-------- -------- -------- -------- --------
Net increase from investment operations $ 5.42 $ 7.40 $ (10.01) $ 4.80 $ (1.05)
-------- -------- -------- -------- --------
Redemption fees $ 0.00(c) $ 0.01 $ 0.02 $ -- $ --
Net increase in net asset value $ 5.42 $ 7.41 $ (9.99) $ 4.80 $ (1.05)
-------- -------- -------- -------- --------
Net asset value, end of period $ 29.80 $ 24.38 $ 16.97 $ 26.96 $ 22.16
======== ======== ======== ======== ========
Total return* 22.23% 43.67% (37.05)% 21.66% (4.52)%
Ratio of net expenses to average net assets 1.31% 1.33% 1.33% 1.31% 1.31%
Ratio of net investment income (loss) to average net assets (0.55)% (0.70)% (1.17)% (1.00)% (1.00)%
Portfolio turnover rate 17% 46% 37% 65% 63%
Net assets, end of period (in thousands) $ 23,225 $ 21,475 $ 19,024 $ 33,877 $ 26,020
Ratios with no waiver of fees:
Net expenses 2.29% 2.38% 1.67% 1.36% 1.49%
Net investment loss (1.53)% (1.75)% (1.51)% (1.05)% (1.18)%
(a) Effective August 2, 2004, PIM became the sub-advisor of the Fund and
subsequently became the advisor on December 10, 2004.
* 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.
++ Includes $0.10 related to investment reimbursement by affiliate.
(b) Net Investment income per share has been calculated using the average
shares method.
(c) Rounds to less than $0.01 cent per share.
The accompanying notes are an integral part of these financial statements.
PIONEER GROWTH OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
12/31/04(a) 12/31/03 12/31/02 12/31/01 12/31/00
CLASS B
Net asset value, beginning of period $ 23.05 $ 16.16 $ 25.87 $ 21.42 $ 22.57
-------- -------- -------- -------- --------
Net increase (decrease) from investment operations:
Net investment income (loss) $ (0.47)(b) $ (0.28) $ (0.39) $ (0.40) $ (0.41)
Net realized and unrealized gain (loss) on investments 5.36 7.16 (9.34)++ 4.85 (0.74)
-------- -------- -------- -------- --------
Net increase from investment operations $ 4.89 $ 6.88 $ (9.73) $ 4.45 $ (1.15)
-------- -------- -------- -------- --------
Redemption fees $ 0.00(c) $ 0.01 $ 0.02 $ -- $ --
Net increase in net asset value $ 4.89 $ 6.89 $ (9.71) $ 4.45 $ (1.15)
-------- -------- -------- -------- --------
Net asset value, end of period $ 27.94 $ 23.05 $ 16.16 $ 25.87 $ 21.42
======== ======== ======== ======== ========
Total return* 21.21% 42.64% (37.53)% 20.77% (5.10)%
Ratio of net expenses to average net assets 2.08% 2.08% 2.08% 2.06% 2.06%
Ratio of net investment (loss) to average net assets (1.37)% (1.43)% (1.92)% (1.75)% (1.71)%
Portfolio turnover rate 17% 46% 37% 65% 63%
Net assets, end of period (in thousands) $ 10 $ 11,126 $ 8,734 $ 14,346 $ 12,391
Ratios with no waiver of fees:
Net expenses 2.33% 2.45% 2.21% 2.09% 2.16%
Net investment loss (1.63)% (1.80)% (2.05)% (1.78)% (1.81)%
(a) Effective August 2, 2004, PIM became the sub-advisor of the Fund and
subsequently became the advisor on December 10, 2004.
* 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.
++ Includes $0.10 related to investment reimbursement by affiliate.
(b) Net Investment income per share has been calculated using the average
shares method.
(c) Rounds to less than $0.01 cent per share.
The accompanying notes are an integral part of these financial statements.
PIONEER GROWTH OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/04(a) 12/31/03 12/31/02 12/31/01 12/31/00(b)
CLASS C
Net asset value, beginning of period $ 23.05 $ 16.16 $ 25.85 $ 21.40 $ 23.34
------- ------- ------- -------- -------
Net increase (decrease) from investment operations:
Net investment income (loss) $ (0.33)(c) $ (0.29) $ (0.33) $ (0.35) $ (0.23)
Net realized and unrealized gain (loss) on
investments 5.22 7.17 (9.38)++ 4.80 (1.71)
------- ------- ------- -------- -------
Net increase from investment operations $ 4.89 $ 6.88 $ (9.71) $ 4.45 $ (1.94)
------- ------- ------- -------- -------
Redemption fees $ 0.00(d) $ 0.01 $ 0.02 $ -- $ --
Net increase in net asset value $ 4.89 $ 6.89 $ (9.69) $ 4.45 $ (1.94)
------- ------- ------- -------- -------
Net asset value, end of period $ 27.94 $ 23.05 $ 16.16 $ 25.85 $ 21.40
======= ======= ======= ======== =======
Total return* 21.21% 42.64% 37.49)% 20.74% (8.27)%***
Ratio of net expenses to average net assets 2.08% 2.08% 2.08% 2.06% 2.02%**
Ratio of net investment (loss) to average net assets (1.35)% (1.45)% (1.93)% (1.75)% (1.71)%**
Portfolio turnover rate 17% 46% 37% 65% 63%
Net assets, end of period (in thousands) $ 10 $ 198 $ 161 $ 194 $ 120
Ratios with no waiver of fees:
Net expenses 2.35% 2.48% 2.33% 2.06% 2.02%**
Net investment loss (1.62)% (1.85)% (2.18)% (1.75)% (1.71)%**
(a) Effective August 2, 2004, PIM became the sub-advisor of the Fund and
subsequently became the advisor on December 10, 2004.
* 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.
++ Includes $0.10 related to investment reimbursement by affiliate.
** Annualized
*** Not Annualized
(b) For the period from April 30, 2000 (initial issue date of Class C shares)
through December 31, 2000.
(c) Net Investment income per share has been calculated using the average
shares method.
(d) Amount rounds to less than $0.01 cent per share.
The accompanying notes are an integral part of these financial statements.
Pioneer Ibbotson Asset Allocation Series
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (unaudited)
- --------------------------------------------------------------------------------
Moderate Allocation Fund
For the period 8/9/04(a) to 1/31/05
-----------------------------------------
Class A Class B Class C
Net asset value, beginning of period $ 10.00 $ 10.00 $ 10.00
-------- ------- --------
Increase (decrease) from investment operations:
Net investment income (loss) (b) $ 0.06 $ 0.01 $ 0.07
Net realized and unrealized gain (loss) on investments 0.84 0.54 0.40
-------- ------- --------
Net increase (decrease) from investment operations $ 0.90 $ 0.55 $ 0.47
-------- ------- --------
Distributions to shareowners:
Net investment income $ (0.04) $ - $ (0.01)
Net realized gain (0.23) (0.23) (0.23)
-------- ------- --------
Net increase (decrease) in net asset value $ 0.63 $ 0.32 $ 0.23
-------- ------- --------
Net asset value, end of period $ 10.63 $ 10.32 $ 10.23
======== ======= ========
Total return* 9.04% 5.51% 4.72%
Ratio of net expenses to average net assets**++ 0.90% 1.80% 1.80%
Ratio of net investment income to average net assets** 1.15% 0.19% 1.37%
Portfolio turnover rate** 20% 20% 20%
Net assets, end of period (in thousands) $ 13,612 $ 3,274 $ 5,327
(a) Commencement of operations.
(b) Calculated using average shares outstanding for the period.
* 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.
++ In the absence of expense reimbursement, expenses on an annualized basis
would have been 2.84%, 4.35% and 3.92% of average net assets, respectively,
for Class A, Class B and Class C shares.
The accompanying notes are an integral part of these financial statements.
31
Pioneer Ibbotson Asset Allocation Series
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (unaudited)
- --------------------------------------------------------------------------------
Growth Allocation Fund
For the period 8/9/04(a) to 1/31/05
-----------------------------------------
Class A Class B Class C
Net asset value, beginning of period $ 10.00 $ 10.00 $ 10.00
-------- -------- --------
Increase (decrease) from investment operations:
Net investment income (loss) (b) $ 0.03 $ 0.04 $ 0.02
Net realized and unrealized gain (loss) on investments 1.09 0.16 0.75
-------- -------- --------
Net increase (decrease) from investment operations $ 1.12 $ 0.20 $ 0.77
-------- -------- --------
Distributions to shareowners:
Net investment income $ (0.03) $ - $ (0.01)
Net realized gain (0.25) (0.25) (0.25)
-------- -------- --------
Net increase (decrease) in net asset value $ 0.84 $ (0.05) $ 0.51
-------- -------- --------
Net asset value, end of period $ 10.84 $ 9.95 $ 10.51
======== ======== ========
Total return* 11.19% 1.95% 7.62%
Ratio of net expenses to average net assets**++ 0.93% 1.83% 1.83%
Ratio of net investment income to average net assets** 0.62% 0.72% 0.37%
Portfolio turnover rate** 13% 13% 13%
Net assets, end of period (in thousands) $ 11,580 $ 3,226 $ 6,106
(a) Commencement of operations.
(b) Calculated using average shares outstanding for the period.
* 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.
++ In the absence of expense reimbursement, expenses on an annualized basis
would have been 3.73%, 5.34% and 5.05% of average net assets, respectively,
for Class A, Class B and Class C shares.
The accompanying notes are an integral part of these financial statements.
32
Pioneer Ibbotson Asset Allocation Series
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (unaudited)
- --------------------------------------------------------------------------------
Aggressive Allocation Fund
For the period 8/9/04(a) to 1/31/05
-----------------------------------------
Class A Class B Class C
Net asset value, beginning of period $ 10.00 $ 10.00 $ 10.00
------- ------- -------
Increase (decrease) from investment operations:
Net investment income (loss) (b) $ - $ 0.01 $ (0.01)
Net realized and unrealized gain (loss) on investments 1.36 0.97 1.13
------- ------- -------
Net increase (decrease) from investment operations $ 1.36 $ 0.98 $ 1.12
------- ------- -------
Distributions to shareowners:
Net investment income $ (0.02) $ - $ -
Net realized gain (0.30) (0.30) (0.30)
------- ------- -------
Net increase (decrease) in net asset value $ 1.04 $ 0.68 $ 0.82
------- ------- -------
Net asset value, end of period $ 11.04 $ 10.68 $ 10.82
======= ======= =======
Total return* 13.54% 9.73% 11.12%
Ratio of net expenses to average net assets**++ 0.93% 1.83% 1.83%
Ratio of net investment income (loss) to average net assets** (0.02)% 0.18% (0.11)%
Portfolio turnover rate** 12% 12% 12%
Net assets, end of period (in thousands) $ 6,604 $ 1,962 $ 3,113
(a) Commencement of operations.
(b) Calculated using average shares outstanding for the period.
* 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.
++ In the absence of expense reimbursement, expenses on an annualized basis
would have been 6.66%, 9.32% and 8.70% of average net assets, respectively,
for Class A, Class B and Class C shares.
The accompanying notes are an integral part of these financial statements.
Pioneer Mid Cap Value Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS A 10/31/04 10/31/03 10/31/02 10/31/01 10/31/00
Net asset value, beginning of period $ 22.25 $ 16.93 $ 19.29 $ 20.83 $ 19.90
---------- ---------- ------- -------- --------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.01 $ 0.04 $ (0.02) $ (0.01) $ 0.11
Net realized and unrealized gain (loss) on investments,
options and foreign currency transactions 3.83 5.28 (0.97) 0.34 3.46
---------- ---------- ------- -------- --------
Net increase (decrease) from investment operations $ 3.84 $ 5.32 $ (0.99) $ 0.33 $ 3.57
Distributions to shareowners:
Net investment income - - - - -
Net realized gain (0.52) - (1.37) (1.87) (2.64)
---------- ---------- ------- -------- --------
Net increase (decrease) in net asset value $ 3.32 $ 5.32 $ (2.36) $ (1.54) $ 0.93
---------- ---------- ------- -------- --------
Net asset value, end of period $ 25.57 $ 22.25 $ 16.93 $ 19.29 $ 20.83
========== ========== ======= ======== ========
Total return* 17.65% 31.42% (5.99)% 1.85% 20.00%
Ratio of net expenses to average net assets+ 1.21% 1.37% 1.30% 1.24% 1.13%
Ratio of net investment income (loss) to average
net assets+ 0.05% 0.24% (0.09)% 0.01% 0.27%
Portfolio turnover rate 59% 58% 65% 95% 70%
Net assets, end of period (in thousands) $1,547,823 $1,208,400 $890,856 $921,310 $945,583
Ratios with reduction for fees paid indirectly:
Net expenses 1.21% 1.37% 1.30% 1.22% 1.11%
Net investment income (loss) 0.05% 0.24% (0.09)% 0.03% 0.29%
* 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 with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
24
Pioneer Mid Cap Value Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS B 10/31/04 10/31/03 10/31/02 10/31/01 10/31/00
Net asset value, beginning of period $ 20.48 $ 15.72 $ 18.14 $ 19.85 $ 19.22
------- ------- ------- ------- -------
Increase (decrease) from investment operations:
Net investment loss $ (0.22) $ (0.13) $ (0.18) $ (0.10) $ (0.20)
Net realized and unrealized gain (loss) on investments,
options and foreign currency transactions 3.55 4.89 (0.87) 0.26 3.47
------- ------- ------- ------- -------
Net increase (decrease) from investment operations $ 3.33 $ 4.76 $ (1.05) $ 0.16 $ 3.27
Distributions to shareowners:
Net investment income - - - - -
Net realized gain (0.49) - (1.37) (1.87) (2.64)
------- ------- ------- ------- -------
Net increase (decrease) in net asset value $ 2.84 $ 4.76 $ (2.42) $ (1.71) $ 0.63
------- ------- ------- ------- -------
Net asset value, end of period $ 23.32 $ 20.48 $ 15.72 $ 18.14 $ 19.85
======= ======= ======= ======= =======
Total return* 16.64% 30.28% (6.75)% 1.01% 19.04%
Ratio of net expenses to average net assets+ 2.13% 2.22% 2.10% 2.03% 1.91%
Ratio of net investment loss to average net assets+ (0.86)% (0.61)% (0.89)% (0.78)% (0.52)%
Portfolio turnover rate 59% 58% 65% 95% 70%
Net assets, end of period (in thousands) $208,844 $241,313 $264,881 $330,926 $336,301
Ratios with reduction for fees paid indirectly:
Net expenses 2.13% 2.22% 2.10% 2.01% 1.90%
Net investment loss (0.86)% (0.61)% (0.89)% (0.76)% (0.51)%
* 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 with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
25
Pioneer Mid Cap Value Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS C 10/31/04 10/31/03 10/31/02 10/31/01 10/31/00
Net asset value, beginning of period $ 20.34 $ 15.61 $ 18.04 $ 19.76 $ 19.16
------- ------- ------- ------- -------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.16) $ (0.10) $ (0.16) $ 0.03 $ (0.26)
Net realized and unrealized gain (loss) on investments,
options and foreign currency transactions 3.46 4.83 (0.90) 0.12 3.50
------- ------- ------- ------- -------
Net increase (decrease) from investment operations $ 3.30 $ 4.73 $ (1.06) $ 0.15 $ 3.24
Distributions to shareowners:
Net investment income - - - - -
Net realized gain (0.49) - (1.37) (1.87) (2.64)
------- ------- ------- ------- -------
Net increase (decrease) in net asset value $ 2.81 $ 4.73 $ (2.43) $ (1.72) $ 0.60
------- ------- ------- ------- -------
Net asset value, end of period $ 23.15 $ 20.34 $ 15.61 $ 18.04 $ 19.76
======= ======= ======= ======= =======
Total return* 16.60% 30.30% (6.85)% 0.96% 18.92%
Ratio of net expenses to average net assets+ 2.11% 2.28% 2.20% 2.11% 2.01%
Ratio of net investment loss to average net assets+ (0.88)% (0.68)% (0.99)% (0.86)% (0.61)%
Portfolio turnover rate 59% 58% 65% 95% 70%
Net assets, end of period (in thousands) $105,778 $53,982 $34,605 $29,547 $24,495
Ratios with reduction for fees paid indirectly:
Net expenses 2.11% 2.28% 2.20% 2.09% 1.98%
Net investment loss (0.88)% (0.68)% (0.99)% (0.84)% (0.58)%
* 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 with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
Pioneer Mid Cap Value Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS Y 10/31/04 10/31/03 10/31/02 10/31/01 10/31/00
Net asset value, beginning of period $ 22.73 $ 17.21 $ 19.50 $ 20.94 $ 19.91
------- -------- ------- ------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.08 $ 0.15 $ 0.06 $ 0.07 $ 0.20
Net realized and unrealized gain (loss) on investments,
options and foreign currency transactions 3.96 5.37 (0.98) 0.36 3.47
------- -------- ------- ------- -------
Net increase (decrease) from investment operations $ 4.04 $ 5.52 $ (0.92) $ 0.43 $ 3.67
Distributions to shareowners:
Net investment income - - - - -
Net realized gain (0.60) - (1.37) (1.87) (2.64)
------- -------- ------- ------- -------
Net increase (decrease) in net asset value $ 3.44 $ 5.52 $ (2.29) $ (1.44) $ 1.03
------- -------- ------- ------- -------
Net asset value, end of period $ 26.17 $ 22.73 $ 17.21 $ 19.50 $ 20.94
======= ======== ======= ======= =======
Total return* 18.23% 32.07% (5.54)% 2.36% 20.56%
Ratio of net expenses to average net assets+ 0.78% 0.84% 0.84% 0.76% 0.63%
Ratio of net investment income to average net assets+ 0.46% 0.76% 0.37% 0.49% 0.77%
Portfolio turnover rate 59% 58% 65% 95% 70%
Net assets, end of period (in thousands) $50,081 $ 8,261 $ 6,318 $ 3,642 $ 3,376
Ratios with reduction for fees paid indirectly:
Net expenses 0.78% 0.84% 0.83% 0.75% 0.61%
Net investment income 0.46% 0.76% 0.38% 0.50% 0.79%
* 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.
+ Ratios with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
Pioneer Oak Ridge Large Cap Growth Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS A 11/30/04 11/30/03 11/30/02 11/30/01 11/30/00
Net asset value, beginning of period $ 11.18 $ 10.74 $ 12.41 $ 13.89 $ 12.45
------- ------- -------- -------- -------
Increase (decrease) from investment operations:
Net investment loss $ (0.01) $ (0.11) $ (0.10) $ (0.07) $ (0.09)
Net realized and unrealized gain (loss) on investments 1.34 1.17 (1.57) (1.41) 1.53
------- ------- -------- -------- -------
Net increase (decrease) from investment operations $ 1.33 $ 1.06 $ (1.67) $ (1.48) $ 1.44
Distributions to shareowners:
Net realized gain - (0.62) - - -
------- ------- -------- -------- -------
Net increase (decrease) in net asset value $ 1.33 $ 0.44 $ (1.67) $ (1.48) $ 1.44
------- ------- -------- -------- -------
Net asset value, end of period $ 12.51 $ 11.18 $ 10.74 $ 12.41 $ 13.89
======= ======= ======== ======== =======
Total return* 11.90% 10.63% (13.46)% (10.66)% 11.57%
Ratio of net expenses to average net assets+ 1.57% 2.00% 2.00% 2.00% 2.00%
Ratio of net investment loss to average net assets+ (0.11)% (1.06)% (1.00)% (0.60)% (0.68)%
Portfolio turnover rate 29% 53% 26% 19% 25%
Net assets, end of period (in thousands) $37,193 $ 8,640 $ 8,069 $ 2,733 $ 2,530
Ratios with no waiver of management fees and assumption of
expenses by PIM and no reduction for fees paid indirectly:
Net expenses 2.42% 2.77% 3.21% 5.24% 4.72%
Net investment loss (0.97)% (1.83)% (2.21)% (3.84)% (3.40)%
Ratios with waiver of management fees and assumption of
expenses by PIM and reduction for fees paid indirectly:
Net expenses 1.57% 2.00% 2.00% 2.00% 2.00%
Net investment loss (0.11)% (1.06)% (1.00)% (0.60)% (0.68)%
* 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 with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
22
Pioneer Oak Ridge Large Cap Growth Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
2/17/04 (a)
to
CLASS B 11/30/04
Net asset value, beginning of period $ 11.86
--------
Increase from investment operations:
Net investment loss $ (0.02)
Net realized and unrealized gain on investments 0.60
--------
Net increase from investment operations $ 0.58
--------
Net increase in net asset value $ 0.58
--------
Net asset value, end of period $ 12.44
========
Total return* 4.89%
Ratio of net expenses to average net assets+ 2.53%**
Ratio of net investment loss to average net assets+ (0.72)%**
Portfolio turnover rate 29%
Net assets, end of period (in thousands) $ 4,161
Ratios with no waiver of management fees and assumption of
expenses by PIM and no reduction for fees paid indirectly:
Net expenses 2.94%**
Net investment loss (1.13)%**
Ratios with waiver of management fees and assumption of
expenses by PIM and reduction for fees paid indirectly:
Net expenses 2.52%**
Net investment loss (0.72)%**
(a) Class B shares were first publicly offered on February 17, 2004.
* 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 with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
23
Pioneer Oak Ridge Large Cap Growth Fund
FINANCIAL HIGHLIGHTS
2/17/04 (a)
to
CLASS C 11/30/04
Net asset value, beginning of period $ 11.86
--------
Increase (decrease) from investment operations:
Net investment loss $ (0.01)
Net realized and unrealized gain on investments 0.60
--------
Net increase from investment operations $ 0.59
--------
Net increase in net asset value $ 0.59
--------
Net asset value, end of period $ 12.45
========
Total return* 4.97%
Ratio of net expenses to average net assets+ 2.39%**
Ratio of net investment loss to average net assets+ (0.40)%**
Portfolio turnover rate 29%
Net assets, end of period (in thousands) $ 14,601
Ratios with no waiver of management fees and assumption of
expenses by PIM and no reduction for fees paid indirectly:
Net expenses 2.71%**
Net investment loss (0.72)%**
Ratios with waiver of management fees and assumption of
expenses by PIM and reduction for fees paid indirectly:
Net expenses 2.38%**
Net investment loss (0.40)%**
(a) Class C shares were first publicly offered on February 17, 2004.
* 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 with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
Pioneer Oak Ridge Large Cap Growth Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
8/11/04 (a)
to
11/30/04
CLASS Y
Net asset value, beginning of period $ 11.33
-------
Increase from investment operations:
Net investment income $ 0.03
Net realized and unrealized gain on investments 1.17
-------
Net increase from investment operations $ 1.20
-------
Net increase in net asset value $ 1.20
-------
Net asset value, end of period $ 12.53
=======
Total return* 10.59%
Ratio of net expenses to average net assets+ 1.09%**
Ratio of net investment income to average net assets+ 2.97%**
Portfolio turnover rate 29%
Net assets, end of period (in thousands) $31,385
Ratios with no waiver of management fees and assumption of
expenses by PIM and no reduction for fees paid indirectly:
Net expenses 1.19%**
Net investment income 2.87%**
Ratios with no waiver of management fees and assumption of
expenses by PIM and reduction for fees paid indirectly:
Net expenses 1.09%**
Net investment income 2.97%**
(a) Class Y shares were first publicly offered on August 11, 2004.
* 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.
** Annualized
+ Ratios with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
Pioneer Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS A 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00
Net asset value, beginning of period $ 38.00 $ 30.76 $ 38.87 $ 44.26 $ 47.60
---------- ---------- --------- --------- ----------
Increase (decrease) from investment operations:
Net investment income $ 0.35 $ 0.28 $ 0.27 $ 0.18 $ 0.16
Net realized and unrealized gain (loss) on investments 4.05 7.24 (8.12) (5.11) (0.14)
---------- ---------- --------- --------- ----------
Net increase (decrease) from investment operations $ 4.40 $ 7.52 $ (7.85) $ (4.93) $ 0.02
Distributions to shareowners:
Net investment income (0.34) (0.28) (0.26) (0.16) (0.12)
Net realized gain - - - (0.30) (3.24)
---------- ---------- --------- --------- ----------
Net increase (decrease) in net asset value $ 4.06 $ 7.24 $ (8.11) $ (5.39) $ (3.34)
---------- ---------- --------- --------- ----------
Net asset value, end of period $ 42.06 $ 38.00 $ 30.76 $ 38.87 $ 44.26
========== ========== ========= ========= ==========
Total return* 11.64% 24.58% (20.26)% (11.13)% 0.12%
Ratio of net expenses to average net assets+ 1.06% 1.09% 1.11% 1.14% 1.11%
Ratio of net investment gain to average net assets+ 0.90% 0.86% 0.75% 0.43% 0.31%
Portfolio turnover rate 14% 6% 7% 6% 20%
Net assets, end of period (in thousands) $5,626,270 $5,370,888 $4,584,649 $6,140,520 $6,645,954
Ratios with reductions for fees paid indirectly:
Net expenses 1.06% 1.09% 1.10% 1.13% 1.09%
Net investment income 0.90% 0.86% 0.76% 0.44% 0.33%
* 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.
+ Ratio with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
Pioneer Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS B 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00
Net asset value, beginning of period $ 37.18 $ 30.14 $ 38.13 $ 43.61 $ 47.24
-------- ------- -------- -------- -------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.01 $ (0.02) $ (0.09) $ (0.12) $ (0.18)
Net realized and unrealized gain (loss) on investments 3.96 7.08 (7.90) (5.06) (0.21)
-------- ------- -------- -------- -------
Net increase (decrease) from investment operations $ 3.97 $ 7.06 $ (7.99) $ (5.18) $ (0.39)
Distributions to shareowners:
Net investment income - (0.02) - - -
Net realized gain - - - (0.30) (3.24)
-------- ------- -------- -------- -------
Net increase (decrease) in net asset value $ 3.97 $ 7.04 $ (7.99) $ (5.48) $ (3.63)
-------- ------- -------- -------- -------
Net asset value, end of period $ 41.15 $ 37.18 $ 30.14 $ 38.13 $ 43.61
======== ======= ======== ======== =======
Total return* 10.68% 23.44% (20.96)% (11.87)% (0.75)%
Ratio of net expenses to average net assets+ 1.93% 2.00% 1.98% 1.99% 1.98%
Ratio of net investment income (loss) to average net assets+ 0.02% (0.05)% (0.12)% (0.41)% (0.56)%
Portfolio turnover rate 14% 6% 7% 6% 20%
Net assets, end of period (in thousands) $538,786 $555,669 $488,242 $680,820 $705,339
Ratios with reduction for fees paid indirectly:
Net expenses 1.93% 2.00% 1.97% 1.98% 1.96%
Net investment income (loss) 0.02% (0.05)% (0.11)% (0.40)% (0.54)%
* 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.
+ Ratio with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
31
Pioneer Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS C 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00
Net asset value, beginning of period $ 36.84 $ 29.84 $ 37.74 $ 43.15 $ 46.76
-------- -------- -------- -------- -------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.04 $ 0.02 $ (0.54) $ (0.06) $ (0.12)
Net realized and unrealized gain (loss) on investments 3.91 7.01 (7.34) (5.05) (0.25)
-------- -------- -------- -------- -------
Net increase (decrease) from investment operations $ 3.95 $ 7.03 $ (7.88) $ (5.11) $ (0.37)
Distributions to shareowners:
Net investment income (0.06) (0.03) (0.02) - -
Net realized gain - - - (0.30) (3.24)
-------- -------- -------- -------- -------
Net increase (decrease) in net asset value $ 3.89 $ 7.00 $ (7.90) $ (5.41) $ (3.61)
-------- -------- -------- -------- -------
Net asset value, end of period $ 40.73 $ 36.84 $ 29.84 $ 37.74 $ 43.15
======== ======== ======== ======== =======
Total return* 10.74% 23.58% (20.87)% (11.84)% (0.72)%
Ratio of net expenses to average net assets+ 1.84% 1.89% 1.90% 1.94% 1.95%
Ratio of net investment gain (loss) to average net assets+ 0.11% 0.05% (0.03)% (0.37)% (0.54)%
Portfolio turnover rate 14% 6% 7% 6% 20%
Net assets, end of period (in thousands) $313,420 $292,526 $226,183 $282,616 $240,792
Ratios with reduction for fees paid indirectly:
Net expenses 1.84% 1.89% 1.89% 1.93% 1.92%
Net investment income (loss) 0.11% 0.05% (0.02%) (0.36%) (0.51%)
* 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.
+ Ratio with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
Pioneer Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS Y 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00
Net asset value, beginning of period $ 38.09 $ 30.82 $ 38.93 $ 44.34 $ 47.62
-------- -------- -------- -------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.52 $ 0.41 $ 0.41 $ 0.24 $ 0.35
Net realized and unrealized gain (loss) on investments 4.06 7.28 (8.13) (5.02) (0.14)
-------- -------- -------- -------- -------
Net increase (decrease) from investment operations $ 4.58 $ 7.69 $ (7.72) $ (4.78) $ 0.21
Distributions to shareowners:
Net investment income (0.51) (0.42) (0.39) (0.33) (0.25)
Net realized gain - - - (0.30) (3.24)
-------- -------- -------- -------- -------
Net increase (decrease) in net asset value $ 4.07 $ 7.27 $ (8.11) $ (5.41) $ (3.28)
-------- -------- -------- -------- -------
Net asset value, end of period $ 42.16 $ 38.09 $ 30.82 $ 38.93 $ 44.34
======== ======== ======== ======== =======
Total return* 12.15% 25.14% (19.92)% (10.75)% 0.50%
Ratio of net expenses to average net assets+ 0.61% 0.61% 0.70% 0.72% 0.72%
Ratio of net investment income to average net assets+ 1.34% 1.31% 1.17% 0.84% 0.70%
Portfolio turnover rate 14% 6% 7% 6% 20%
Net assets, end of period (in thousands) $155,647 $139,210 $ 80,262 $101,603 $12,566
Ratios with reduction for fees paid indirectly:
Net expenses 0.61% 0.61% 0.69% 0.70% 0.70%
Net investment income 1.34% 1.31% 1.18% 0.86% 0.72%
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, and the complete redemption of the
investment at net asset value at each end of each period.
+ Ratio with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
Pioneer Value Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended
3/31/05 Year Ended
CLASS A (unaudited) 9/30/04
Net asset value, beginning of period $ 18.83 $ 16.25
--------- ----------
Increase (decrease) from investment operations:
Net investment income $ 0.06 $ 0.14
Net realized and unrealized gain (loss) on invest-
ments and foreign currency transactions 1.50 2.62
--------- ----------
Net increase (decrease) from investment
operations $ 1.56 $ 2.76
Distributions to shareowners:
Net investment income (0.07) (0.14)
Net realized gain (2.60) (0.04)
--------- ----------
Net increase (decrease) in net asset value $ (1.11) $ 2.58
--------- ----------
Net asset value, end of period $ 17.72 $ 18.83
========= ==========
Total return* 8.63% 17.04%
Ratio of net expenses to average net assets+ 0.98%** 1.02%
Ratio of net investment income to average net assets+ 0.80%** 0.72%
Portfolio turnover rate 59%** 40%
Net assets, end of period (in thousands) $3,894,102 $3,745,950
Ratios with reduction for fees paid indirectly:
Net expenses 0.98%** 1.02%
Net investment income 0.80%** 0.72%
Year Ended Year Ended Year Ended Year Ended
CLASS A 9/30/03 9/30/02 9/30/01 9/30/00
Net asset value, beginning of period $ 15.29 $ 19.12 $ 22.67 $ 20.16
---------- --------- --------- ----------
Increase (decrease) from investment operations:
Net investment income $ 0.11 $ 0.15 $ 0.17 $ 0.20
Net realized and unrealized gain (loss) on invest-
ments and foreign currency transactions 3.20 (3.17) (2.05) 3.02
---------- --------- --------- ----------
Net increase (decrease) from investment
operations $ 3.31 $ (3.02) $ (1.88) $ 3.22
Distributions to shareowners:
Net investment income (0.24) (0.09) (0.14) (0.20)
Net realized gain (2.11) (0.72) (1.53) (0.51)
---------- --------- --------- ----------
Net increase (decrease) in net asset value $ 0.96 $ (3.83) $ (3.55) $ 2.51
---------- --------- --------- ----------
Net asset value, end of period $ 16.25 $ 15.29 $ 19.12 $ 22.67
========== ========= ========= ==========
Total return* 22.94% (16.78)% (8.88)% 16.29%
Ratio of net expenses to average net assets+ 1.19% 1.16% 1.01% 0.96%
Ratio of net investment income to average net assets+ 0.85% 0.74% 0.76% 0.81%
Portfolio turnover rate 40% 61% 3% 3%
Net assets, end of period (in thousands) $3,424,962 $3,016,623 $3,885,560 $4,614,739
Ratios with reduction for fees paid indirectly:
Net expenses 1.19% 1.16% 0.99% 0.94%
Net investment income 0.85% 0.74% 0.78% 0.83%
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized
+ Ratios with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
28
Pioneer Value Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended
3/31/05 Year Ended
CLASS B (unaudited) 9/30/04
Net asset value, beginning of period $ 17.87 $ 15.45
--------- -------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.02) $ (0.04)
Net realized and unrealized gain (loss) on invest-
ments and foreign currency transactions 1.41 2.50
--------- -------
Net increase (decrease) from investment
operations $ 1.39 $ 2.46
Distributions to shareowners:
Net investment income - -
Net realized gain (2.60) (0.04)
--------- -------
Net increase (decrease) in net asset value $ (1.21) $ 2.42
--------- -------
Net asset value, end of period $ 16.66 $ 17.87
========= =======
Total return* 8.10% 15.95%
Ratio of net expenses to average net assets+ 2.02%** 1.89%
Ratio of net investment loss to average net assets+ (0.24)%** (0.15)%
Portfolio turnover rate 59%** 40%
Net assets, end of period (in thousands) $ 31,842 $32,440
Ratios with reduction for fees paid indirectly:
Net expenses 2.01%** 1.89%
Net investment loss (0.23)%** (0.15)%
Year Ended Year Ended Year Ended Year Ended
CLASS B 9/30/03 9/30/02 9/30/01 9/30/00
Net asset value, beginning of period $ 14.71 $ 18.53 $ 22.11 $ 19.74
------- --------- ------- -------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.13) $ (0.08) $ 0.01 $ (0.14)
Net realized and unrealized gain (loss) on invest-
ments and foreign currency transactions 3.08 (3.02) (2.06) 3.02
------- --------- ------- -------
Net increase (decrease) from investment
operations $ 2.95 $ (3.10) $ (2.05) $ 2.88
Distributions to shareowners:
Net investment income (0.10) - - -
Net realized gain (2.11) (0.72) (1.53) (0.51)
------- --------- ------- -------
Net increase (decrease) in net asset value $ 0.74 $ (3.82) $ (3.58) $ 2.37
------- --------- ------- -------
Net asset value, end of period $ 15.45 $ 14.71 $ 18.53 $ 22.11
======= ========= ======= =======
Total return* 21.11% (17.68)% (9.84)% 14.81%
Ratio of net expenses to average net assets+ 2.69% 2.28% 2.07% 2.23%
Ratio of net investment loss to average net assets+ (0.66)% (0.38)% (0.30)% (0.48)%
Portfolio turnover rate 40% 61% 3% 3%
Net assets, end of period (in thousands) $21,666 $ 17,976 $22,372 $20,632
Ratios with reduction for fees paid indirectly:
Net expenses 2.68% 2.29% 2.05% 2.21%
Net investment loss (0.65)% (0.39)% (0.28)% (0.46)%
* 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 with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
29
Pioneer Value Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended
3/31/05 Year Ended
CLASS C (unaudited) 9/30/04
Net asset value, beginning of period $ 17.87 $ 15.49
--------- -------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.03) $ (0.09)
Net realized and unrealized gain (loss) on invest-
ments and foreign currency transactions 1.41 2.51
--------- -------
Net increase (decrease) from investment
operations $ 1.38 $ 2.42
Distributions to shareowners:
Net investment income - -
Net realized gain (2.60) (0.04)
--------- -------
Net increase (decrease) in net asset value $ (1.22) $ 2.38
--------- -------
Net asset value, end of period $ 16.65 $ 17.87
========= ========
Total return* 8.05% 15.66%
Ratio of net expenses to average net assets+ 2.09%** 2.21%
Ratio of net investment loss to average net assets+ (0.31)%** (0.47)%
Portfolio turnover rate 59%** 40%
Net assets, end of period (in thousands) $ 9,433 $ 9,168
Ratios with reduction for fees paid indirectly:
Net expenses 2.09%** 2.20%
Net investment loss (0.31)%** (0.46)%
Year Ended Year Ended Year Ended Year Ended
CLASS C 9/30/03 9/30/02 9/31/01 9/30/00
Net asset value, beginning of period $ 14.69 $ 18.53 $ 22.16 $ 19.78
------- --------- ------- -------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.12) $ (0.10) $ 0.04 $ (0.15)
Net realized and unrealized gain (loss) on invest-
ments and foreign currency transactions 3.13 (3.02) (2.12) 3.04
------- --------- ------- -------
Net increase (decrease) from investment
operations $ 3.01 $ (3.12) $ (2.08) $ 2.89
Distributions to shareowners:
Net investment income (0.10) - (0.02) -
Net realized gain (2.11) (0.72) (1.53) (0.51)
------- --------- ------- -------
Net increase (decrease) in net asset value $ 0.80 $ (3.84) $ (3.63) $ 2.38
------- --------- ------- -------
Net asset value, end of period $ 15.49 $ 14.69 $ 18.53 $ 22.16
======= ========= ======= =======
Total return* 21.61% (17.79)% (9.98)% 14.83%
Ratio of net expenses to average net assets+ 2.48% 2.32% 2.15% 2.19%
Ratio of net investment loss to average net assets+ (0.44)% (0.42)% (0.39)% (0.43)%
Portfolio turnover rate 40% 61% 3% 3%
Net assets, end of period (in thousands) $ 6,349 $ 4,256 $ 4,431 $ 3,588
Ratios with reduction for fees paid indirectly:
Net expenses 2.47% 2.32% 2.11% 2.16%
Net investment loss (0.43)% (0.42)% (0.35)% (0.40)%
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratio with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
Pioneer Value Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended 8/11/04(a)
3/31/05 to
(unaudited) 9/30/04
CLASS Y
Net asset value, beginning of period $ 18.84 $ 18.16
------- -------
Increase from investment operations:
Net investment income $ 0.06 $ 0.02
Net realized and unrealized gain on investments and
foreign currency transactions 1.55 0.66
------- -------
Net increase from investment operations $ 1.61 $ 0.68
------- -------
Distributions to shareowners:
Net investment income (0.10) -
Net realized gain (2.60) -
------- -------
Net increase (decrease) in net asset value $ (1.09) $ 0.68
------- -------
Net asset value, end of period $ 17.75 $ 18.84
======= =======
Total return* 8.96% 3.74%
Ratio of net expenses to average net assets+ 0.59%** 0.61%**
Ratio of net investment income to average net assets+ 1.26%** 1.37%**
Portfolio turnover rate 59%** 40%
Net assets, end of period (in thousands) $10,187 $ 1,872
Ratios with reduction for fees paid indirectly:
Net expenses 0.59%** 0.61%**
Net investment income 1.26%** 1.37%**
(a) Class Y shares were first publicly offered on August 11, 2004.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period.
** Annualized.
+ Ratio with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements. 33
Pioneer Short Term Income Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended
2/28/05 7/8/04 to
(unaudited) 8/31/04 (a)
CLASS A
Net asset value, beginning of period $ 10.02 $10.00
------- ------
Increase from investment operations:
Net investment income $ 0.10 $ 0.03
Net realized and unrealized gain (loss)
on investments (0.09) 0.03
------- ------
Net increase from investment operations $ 0.01 $ 0.06
Distributions to shareowners:
Net investment income (0.15) (0.04)
------- ------
Net increase (decrease) in net asset value $ (0.14) $ 0.02
------- ------
Net asset value, end of period $ 9.88 $10.02
======= ======
Total return* 0.12%(b) 0.59%(b)
Ratio of net expenses to average net assets 0.90%** 0.90%**
Ratio of net investment income to average
net assets 1.74%** 1.64%**
Portfolio turnover rate 148%** 24%(b)
Net assets, end of period (in thousands) $10,546 $1,478
Ratios with no waiver of management fees and
assumption of expenses by PIM:
Net expenses 1.63%** 9.40%**
Net investment income (loss) 1.01%** (6.86)%**
(a) Class A shares were first publicly offered on July 8, 2004
* 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
(b) Not annualized
24 The accompanying notes are an integral part of these financial statements.
Pioneer Short Term Income Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended
2/28/05 7/8/04 to
(unaudited) 8/31/04 (a)
CLASS B
Net asset value, beginning of period $10.01 $10.00
------ ------
Increase from investment operations:
Net investment income $ 0.07 $ 0.01
Net realized and unrealized gain (loss)
on investments (0.09) 0.03
------ ------
Net increase from investment operations $(0.02) $ 0.04
Distributions to shareowners:
Net investment income (0.11) (0.03)
------ ------
Net increase (decrease) in net asset value $(0.13) $ 0.01
------ ------
Net asset value, end of period $ 9.88 $10.01
====== ======
Total return* (0.20)%(b) 0.40%(b)
Ratio of net expenses to average net assets 1.79%** 1.89%**
Ratio of net investment income to average
net assets 1.10%** 0.65%**
Portfolio turnover rate 148%** 24%(b)
Net assets, end of period (in thousands) $1,211 $ 718
Ratios with no waiver of management fees and
assumption of expenses by PIM:
Net expenses 3.02%** 10.65%**
Net investment income (loss) (0.13)%** (8.11)%**
(a) Class B shares were first publicly offered on July 8, 2004
* 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
(b) Not annualized
The accompanying notes are an integral part of these financial statements. 25
Pioneer Short Term Income Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended
2/28/05 7/8/04 to
(unaudited) 8/31/04 (a)
CLASS C
Net asset value, beginning of period $10.00 $10.00
------ ------
Increase from investment operations:
Net investment income $ 0.04 $ 0.03
Net realized and unrealized gain (loss)
on investments (0.05) 0.02
------ ------
Net increase from investment operations $(0.01) $ 0.05
Distributions to shareowners:
Net investment income (0.12) (0.05)
------ ------
Net decrease in net asset value $(0.13) $ -
------ ------
Net asset value, end of period $ 9.87 $10.00
====== ======
Total return* (0.11)%(b) 0.46%(b)
Ratio of net expenses to average net assets 1.69%** 1.39%**
Ratio of net investment income to average
net assets 0.64%** 1.16%**
Portfolio turnover rate 148%** 24%(b)
Net assets, end of period (in thousands) $3,997 $2,538
Ratios with no waiver of management fees and
assumption of expenses by PIM:
Net expenses 2.86%** 9.63%**
Net investment income (loss) (0.53)%** (7.08)%**
(a) Class C shares were first publicly offered on July 8, 2004
* 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
(b) Not annualized
26 The accompanying notes are an integral part of these financial statements.
Pioneer Short Term Income Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended
2/28/05 7/8/04 to
(unaudited) 8/31/04 (a)
CLASS Y
Net asset value, beginning of period $10.01 $10.00
------ ------
Increase from investment operations:
Net investment income $ 0.16 $ 0.04
Net realized and unrealized gain (loss)
on investments (0.11) 0.02
------ ------
Net increase from investment operations $ 0.05 $ 0.06
Distributions to shareowners:
Net investment income (0.17) (0.05)
------ ------
Net increase (decrease) in net asset value $(0.12) $ 0.01
------ ------
Net asset value, end of period $ 9.89 $10.01
====== ======
Total return* 0.50%(b) 0.57%(b)
Ratio of net expenses to average net assets 0.58%** 0.61%**
Ratio of net investment income to average
net assets 4.18%** 1.94%**
Portfolio turnover rate 148%** 24%(b)
Net assets, end of period (in thousands) $7,378 $ 530
Ratios with no waiver of management fees and
assumption of expenses by PIM:
Net expenses 1.24%** 10.54%**
Net investment income (loss) 3.52%** (7.99)%**
(a) Class Y shares were first publicly offered on July 8, 2004
* 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.
** Annualized
(b) Not annualized
The accompanying notes are an integral part of these financial statements. 27
Pioneer Tax Free Income Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended
12/31/04 12/31/03 12/31/02 12/31/01 12/31/00
CLASS A
Net asset value, beginning of period $ 11.70 $ 11.61 $ 11.47 $ 11.70 $ 10.98
-------- -------- -------- -------- --------
Increase (decrease) from investment operations:
Net investment income $ 0.56 $ 0.56 $ 0.56 $ 0.53 $ 0.52
Net realized and unrealized gain (loss) on investments (0.02) 0.09 0.23 (0.05) 0.72
-------- -------- -------- -------- --------
Net increase from investment operations $ 0.54 $ 0.65 $ 0.79 $ 0.48 $ 1.24
Distributions to shareowners:
Net investment income (0.57) (0.56) (0.57) (0.53) (0.52)
In excess of net investment income - - - - (0.00)(a)
Net realized gain - - (0.08) (0.18) -
-------- -------- -------- -------- --------
Net increase (decrease) in net asset value $ (0.03) $ 0.09 $ 0.14 $ (0.23) $ 0.72
-------- -------- -------- -------- --------
Net asset value, end of period $ 11.67 $ 11.70 $ 11.61 $ 11.47 $ 11.70
======== ======== ======== ======== ========
Total return* 4.75% 5.80% 7.07% 4.13% 11.63%
Ratio of net expenses to average net assets+ 0.91% 0.93% 0.93% 0.92% 0.95%
Ratio of net investment income to average net assets+ 4.88% 4.88% 4.83% 4.49% 4.62%
Portfolio turnover rate 39% 80% 161% 92% 14%
Net assets, end of period (in thousands) $307,463 $326,173 $343,872 $333,867 $341,179
Ratios with reductions for fees paid indirectly:
Net expenses 0.91% 0.93% 0.92% 0.91% 0.91%
Net investment income 4.88% 4.88% 4.84% 4.50% 4.66%
(a) Amount rounds to less than one 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.
+ Ratio with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
Pioneer Tax Free Income Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended
12/31/04 12/31/03 12/31/02 12/31/01 12/31/00
CLASS B
Net asset value, beginning of period $ 11.59 $ 11.51 $ 11.39 $ 11.62 $ 10.90
------- ------- ------- ------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.48 $ 0.46 $ 0.46 $ 0.44 $ 0.43
Net realized and unrealized gain (loss) on investments (0.02) 0.09 0.22 (0.05) 0.72
------- ------- ------- ------- -------
Net increase from investment operations $ 0.46 $ 0.55 $ 0.68 $ 0.39 $ 1.15
Distributions to shareowners:
Net investment income (0.48) (0.47) (0.48) (0.44) (0.43)
Net realized gain - - (0.08) (0.18) -
------- ------- ------- ------- -------
Net increase (decrease) in net asset value $ (0.02) $ 0.08 $ 0.12 $ (0.23) $ 0.72
------- ------- ------- ------- -------
Net asset value, end of period $ 11.57 $ 11.59 $ 11.51 $ 11.39 $ 11.62
======= ======= ======= ======= =======
Total return* 4.07% 4.98% 6.17% 3.38% 10.78%
Ratio of net expenses to average net assets+ 1.67% 1.70% 1.69% 1.67% 1.71%
Ratio of net investment income to average net assets+ 4.12% 4.10% 4.05% 3.73% 3.87%
Portfolio turnover rate 39% 80% 161% 92% 14%
Net assets, end of period (in thousands) $17,285 $20,363 $18,960 $13,735 $11,145
Ratios with reduction for fees paid indirectly:
Net expenses 1.67% 1.70% 1.69% 1.66% 1.70%
Net investment income 4.12% 4.10% 4.05% 3.74% 3.88%
* 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.
+ Ratio with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Pioneer Tax Free Income Fund
- --------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended
12/31/04 12/31/03 12/31/02 12/31/01 12/31/00
CLASS C
Net asset value, beginning of period $ 11.52 $ 11.44 $ 11.31 $ 11.54 $ 10.91
------- ------- ------- ------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.47 $ 0.48 $ 0.49 $ 0.49 $ 0.43
Net realized and unrealized gain (loss) on investments (0.02) 0.08 0.21 (0.05) 0.70
------- ------- ------- ------- -------
Net increase from investment operations $ 0.45 $ 0.56 $ 0.70 $ 0.44 $ 1.13
Distributions to shareowners:
Net investment income (0.48) (0.48) (0.49) (0.49) (0.43)
In excess of net investment income - - - - (0.07)
Net realized gain - - (0.08) (0.18) -
------- ------- ------- ------- -------
Net increase (decrease) in net asset value $ (0.03) $ 0.08 $ 0.13 $ (0.23) $ 0.63
------- ------- ------- ------- -------
Net asset value, end of period $ 11.49 $ 11.52 $ 11.44 $ 11.31 $ 11.54
======= ======= ======= ======= =======
Total return* 4.02% 5.04% 6.33% 3.39% 10.59%
Ratio of net expenses to average net assets+ 1.64% 1.66% 1.70% 1.62% 1.80%
Ratio of net investment income to average net assets+ 4.15% 4.11% 4.03% 3.75% 3.80%
Portfolio turnover rate 39% 80% 161% 92% 14%
Net assets, end of period (in thousands) $12,577 $11,266 $ 8,673 $ 3,505 $ 1,490
Ratios with reduction for fees paid indirectly:
Net expenses 1.64% 1.66% 1.70% 1.61% 1.77%
Net investment income 4.15% 4.11% 4.03% 3.76% 3.83%
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
+ Ratio with no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
Pioneer Tax Free Income Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Year 2/28/02(a)
Ended Ended to
12/31/04 12/31/03 12/31/02
CLASS Y
Net asset value, beginning of period $ 11.64 $ 11.56 $ 11.65
------- ------- -------
Increase from investment operations:
Net investment income $ 0.57 $ 0.62 $ 0.19
Net realized and unrealized gain on investments 0.01 0.07 0.02
------- ------- -------
Net increase from investment operations $ 0.58 $ 0.69 $ 0.21
Distributions to shareowners:
Net investment income (0.61) (0.61) (0.22)
Net realized gain - - (0.08)
------- ------- -------
Net increase (decrease) in net asset value $ (0.03) $ 0.08 $ (0.09)
------- ------- -------
Net asset value, end of period $ 11.61 $ 11.64 $ 11.56
======= ======= =======
Total return* 5.14% 6.21% 1.40%
Ratio of net expenses to average net assets+ 0.55% 0.57% 0.87%**
Ratio of net investment income to average
net assets+ 5.26% 5.21% 4.95%**
Portfolio turnover rate 39% 80% 161%
Net assets, end of period (in thousands) $ 393 $ 1,387 $ 392
Ratios with reduction for fees paid indirectly:
Net expenses 0.55% 0.57% 0.87%**
Net investment income 5.26% 5.21% 4.95%**
(a) Class Y shares were first publicly offered on February 28, 2002. The per
share amounts and ratios shown are based on the period from August 29, 2002
to December 31, 2002, during which the class had operations.
* 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.
** Annualized
+ Ratios with no reduction for fees paid indirectly
The accompanying notes are an integral part of these financial statements.
Pioneer America Income Trust
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended
12/31/04 12/31/03 12/31/02 12/31/01(a) 12/31/00
CLASS A
Net asset value, beginning of period $ 9.95 $ 10.27 $ 9.79 $ 9.76 $ 9.30
-------- -------- -------- -------- -------
Increase from investment operations:
Net investment income $ 0.28 $ 0.28 $ 0.40 $ 0.52 $ 0.58
Net realized and unrealized gain (loss) on investments (0.01) (0.13) 0.54 0.05 0.46
-------- -------- -------- -------- -------
Net increase from investment operations $ 0.27 $ 0.15 $ 0.94 $ 0.57 $ 1.04
Distributions to shareowners:
Net investment income (0.43) (0.47) (0.46) (0.51) (0.58)
Net realized gain - - - (0.03) -
-------- -------- -------- -------- -------
Net increase (decrease) in net asset value $ (0.16) $ (0.32) $ 0.48 $ 0.03 $ 0.46
-------- -------- -------- -------- -------
Net asset value, end of period $ 9.79 $ 9.95 $ 10.27 $ 9.79 $ 9.76
======== ======== ======== ======== =======
Total return* 2.77% 1.47% 9.78% 5.92% 11.58%
Ratio of net expenses to average net assets+ 1.16% 1.10% 1.00% 1.01% 1.04%
Ratio of net investment income to average net assets+ 3.04% 2.85% 4.17% 5.14% 6.09%
Portfolio turnover rate 27% 66% 76% 72% 56%
Net assets, end of period (in thousands) $123,524 $153,939 $164,393 $115,998 $96,068
Ratios with no waiver of management fees by
PIM and no reductions for fees paid indirectly:
Net expenses 1.16% 1.12% 1.08% 1.12% 1.16%
Net investment income 3.04% 2.83% 4.09% 5.03% 5.97%
Ratios with waiver of management fees by
PIM and reductions for fees paid indirectly:
Net expenses 1.16% 1.10% 1.00% 1.00% 1.00%
Net investment income 3.04% 2.85% 4.18% 5.15% 6.13%
* 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.
+ Ratio with no reduction for fees paid indirectly.
(a) On January 1, 2001, the Trust began accreting discounts and amortizing
premiums on debt securities. The effect of this charges for the year ended
December 31, 2001, was to decrease net investment income by $0.02 per share,
increase net realized and unrealized gain (loss) by $0.02 per share and
decrease the ratio of net investment income to average net assets assuming
waiver of management fees by PIM and reduction for fees paid indirectly from
5.35% to 5.15%. Per share ratios and supplemental data for periods prior to
January 1, 2001, have not been restated to reflect this change in
presentation.
The accompanying notes are an integral part of these financial statements.
Pioneer America Income Trust
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended
12/31/04 12/31/03 12/31/02 12/31/01(a) 12/31/00
CLASS B
Net asset value, beginning of period $ 9.89 $ 10.20 $ 9.76 $ 9.74 $ 9.28
------- ------- ------- ------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.18 $ 0.19 $ 0.34 $ 0.44 $ 0.50
Net realized and unrealized gain (loss) on investments 0.02 (0.12) 0.50 0.04 0.46
------- ------- ------- ------- -------
Net increase from investment operations $ 0.20 $ 0.07 $ 0.84 $ 0.48 $ 0.96
Distributions to shareowners:
Net investment income (0.35) (0.38) (0.40) (0.42) (0.50)
Net realized gain - - - (0.04) -
------- ------- ------- ------- -------
Net increase (decrease) in net asset value $ (0.15) $ (0.31) $ 0.44 $ 0.02 $ 0.46
------- ------- ------- ------- -------
Net asset value, end of period $ 9.74 $ 9.89 $ 10.20 $ 9.76 $ 9.74
======= ======= ======= ======= =======
Total return* 2.02% 0.69% 8.82% 4.99% 10.68%
Ratio of net expenses to average net assets+ 1.98% 1.94% 1.80% 1.95% 1.85%
Ratio of net investment income to average net assets+ 2.22% 2.02% 3.26% 4.18% 5.29%
Portfolio turnover rate 27% 66% 76% 72% 56%
Net assets, end of period (in thousands) $39,641 $55,302 $67,013 $25,008 $16,889
Ratios with no waiver of management fees by
PIM and no reduction for fees paid indirectly:
Net expenses 1.98% 1.96% 1.88% 2.06% 1.98%
Net investment income 2.22% 2.00% 3.19% 4.07% 5.16%
Ratios with waiver of management fees by
PIM and reductions for fees paid indirectly:
Net expenses 1.98% 1.94% 1.79% 1.93% 1.83%
Net investment income 2.22% 2.02% 3.27% 4.20% 5.31%
* 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.
+ Ratio with no reduction for fees paid indirectly.
(a) On January 1, 2001, the Trust began accreting discounts and amortizing
premiums on debt securities. The effect of this charges for the year ended
December 31, 2001, was to decrease net investment income by $0.02 per share,
increase net realized and unrealized gain (loss) by $0.02 per share and
decrease the ratio of net investment income to average net assets assuming
waiver of management fees by PIM and reduction for fees paid indirectly from
4.36% to 4.20%. Per share ratios and supplemental data for periods prior to
January 1, 2001, have not been restated to reflect this change in
presentation.
The accompanying notes are an integral part of these financial statements.
Pioneer America Income Trust
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended
12/31/04 12/31/03 12/31/02 12/31/01(a) 12/31/00
CLASS C
Net asset value, beginning of period $ 9.92 $ 10.24 $ 9.79 $ 9.74 $ 9.28
------- ------- ------- ------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.19 $ 0.21 $ 0.36 $ 0.46 $ 0.49
Net realized and unrealized gain (loss) on investments 0.01 (0.13) 0.50 0.03 0.46
------- ------- ------- ------- -------
Net increase from investment operations $ 0.20 $ 0.08 $ 0.86 $ 0.49 $ 0.95
Distributions to shareowners:
Net investment income (0.35) (0.40) (0.41) (0.43) (0.49)
Net realized gain - - - (0.01) -
------- ------- ------- ------- -------
Net increase (decrease) in net asset value $ (0.15) $ (0.32) $ 0.45 $ 0.05 $ 0.46
------- ------- ------- ------- -------
Net asset value, end of period $ 9.77 $ 9.92 $ 10.24 $ 9.79 $ 9.74
======= ======= ======= ======= =======
Total return* 2.09% 0.75% 8.93% 5.05% 10.52%
Ratio of net expenses to average net assets+ 1.89% 1.81% 1.77% 1.84% 2.02%
Ratio of net investment income to average net assets+ 2.31% 2.14% 3.16% 4.22% 5.14%
Portfolio turnover rate 27% 66% 76% 72% 56%
Net assets, end of period (in thousands) $27,832 $37,456 $38,258 $ 6,776 $ 3,221
Ratios with no waiver of management fees by
PIM and no reduction for fees paid indirectly:
Net expenses 1.89% 1.83% 1.84% 1.95% 2.15%
Net investment income 2.31% 2.12% 3.08% 4.11% 5.01%
Ratios with waiver of management fees by
PIM and reductions for fees paid indirectly:
Net expenses 1.89% 1.81% 1.76% 1.81% 1.97%
Net investment income 2.31% 2.14% 3.16% 4.25% 5.19%
* 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.
+ Ratio with no reduction for fees paid indirectly.
(a) On January 1, 2001, the Trust began accreting discounts and amortizing
premiums on debt securities. The effect of this changes for the year ended
December 31, 2001, was to decrease net investment income by $0.01 per share,
increase net realized and unrealized gain (loss) by $0.01 per share and
decrease the ratio of net investment income to average net assets assuming
waiver of management fees by PIM and reduction for fees paid indirectly from
4.42% to 4.25%. Per share ratios and supplemental data for periods prior to
January 1, 2001, have not been restated to reflect this change in
presentation.
The accompanying notes are an integral part of these financial statements.
INFORMATION CONCERNING THE MEETING
Solicitation of Proxies
In addition to the mailing of these proxy materials, proxies may be solicited
by telephone, by fax or in person by the trustees and officers of your AmSouth
Fund or its affiliates, including personnel of your AmSouth Fund's transfer
agent, Pioneer Funds' investment adviser, Pioneer, Pioneer Funds' transfer
agent, PIMSS, or by broker-dealer firms. [ ], has been retained to provide proxy
solicitation services to the Funds at a cost of approximately $[ ]. Pioneer and
AmSouth Bancorporation will bear the cost of such solicitation.
Revoking Proxies
An AmSouth Fund shareholder signing and returning a proxy has the power to
revoke it at any time before it is exercised:
o by filing a written notice of revocation with your AmSouth Fund's transfer
agent, BISYS Fund Services, at P.O. Box 182733, Columbus, Ohio 43218-2733,
or
o by returning a duly executed proxy with a later date before the time of
the Meeting, or
o if a shareholder has executed a proxy but is present at the Meeting and
wishes to vote in person, by notifying the secretary of your AmSouth Fund
(without complying with any formalities) at any time before it is voted.
Being present at the Meeting alone does NOT revoke a previously executed and
returned proxy.
Outstanding Shares
Only shareholders of record on [ ], 2005 (the "record date") are entitled to
notice of and to vote at the Meeting. As of the record date, the following
number of shares of each AmSouth Fund were outstanding.
Shares Outstanding
AmSouth Fund (as of [ ], 2005)
------------ -----------------
AmSouth Capital Growth Fund .......................
AmSouth Large Cap Fund.............................
AmSouth Enhanced Market Fund.......................
AmSouth Value Fund.................................
AmSouth Mid Cap Fund ..............................
AmSouth Small Cap Fund ............................
AmSouth International Equity Fund .................
AmSouth Select Equity Fund ........................
AmSouth Balanced Fund
22
AmSouth Strategic Portfolios: Aggressive Growth Portfolio
AmSouth Strategic Portfolios: Growth Portfolio
AmSouth Strategic Portfolios: Growth and Income Portfolio
AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio
AmSouth High Quality Bond Fund
AmSouth Florida Tax-Exempt Fund
AmSouth High Quality Municipal Bond Fund
AmSouth Tennessee Tax-Exempt Fund
AmSouth Government Income Fund
AmSouth Limited Term Bond Fund
AmSouth Treasury Reserve Money Market Fund
AmSouth Prime Money Market Fund
AmSouth Tax-Exempt Money Market Fund
AmSouth Institutional Prime Obligations Money Market Fund
Other Business
Your AmSouth Fund's Board of Trustees knows of no business to be presented
for consideration at the Meeting other than Proposals 1(a)-(w). If other
business is properly brought before the Meeting, proxies will be voted according
to the best judgment of the persons named as proxies.
Adjournments
If, by the time scheduled for the Meeting, a quorum of shareholders of a Fund
is not present or if a quorum is present but sufficient votes "for" the
proposals have not been received, the persons named as proxies may propose the
Meeting with respect to one or more of the Funds to another date and time, and
the Meeting may be held as adjourned within a reasonable time after the date set
for the original Meeting for that Fund without further notice. Any such
adjournment will require the affirmative vote of a majority of the votes cast on
the question in person or by proxy at the session of the Meeting to be
adjourned. The persons named as proxies will vote all proxies in favor of the
adjournment that voted in favor of the proposal or that abstained. They will
vote against such adjournment those proxies required to be voted against the
proposal. Broker non-votes will be disregarded in the vote for adjournment. If
the adjournment requires setting a new record date or the adjournment is for
more than 120 days of the original Meeting (in which case the Board of Trustees
of your AmSouth Fund will set a new record date), your AmSouth Fund will give
notice of the adjourned meeting to its shareholders.
Telephone Voting
In addition to soliciting proxies by mail, by fax or in person, your AmSouth
Fund may also arrange to have votes recorded by telephone by officers and
employees of your AmSouth Fund or by personnel of the adviser or transfer agent
or a third party solicitation firm. The telephone voting procedure is designed
to verify a shareholder's identity, to allow a shareholder to authorize the
voting of shares in accordance with the shareholder's instructions and to
confirm that the voting instructions have been properly recorded. If these
procedures were subject to a successful legal challenge, these telephone
23
votes would not be counted at the Meeting. Your AmSouth Fund has not obtained an
opinion of counsel about telephone voting, but is currently not aware of any
challenge.
o A shareholder will be called on a recorded line at the telephone number in
the Fund's account records and will be asked to provide the shareholder's
social security number or other identifying information.
o The shareholder will then be given an opportunity to authorize proxies to
vote his or her shares at the Meeting in accordance with the shareholder's
instructions.
o To ensure that the shareholder's instructions have been recorded
correctly, the shareholder will also receive a confirmation of the voting
instructions by mail.
o A toll-free number will be available in case the voting information
contained in the confirmation is incorrect.
o If the shareholder decides after voting by telephone to attend the
Meeting, the shareholder can revoke the proxy at that time and vote the
shares at the Meeting.
o [Insert touchtone telephone voting information]
Internet Voting
You will also have the opportunity to submit your voting instructions via the
Internet by utilizing a program provided through the tabulator. Voting via the
Internet will not affect your right to vote in person if you decide to attend
the Meeting. Do not mail the proxy card if you are voting via the Internet. To
vote via the Internet, you will need the "control number" that appears on your
proxy card. These Internet voting procedures are designed to authenticate
shareholder identities, to allow shareholders give their voting instructions,
and to confirm that shareholders instructions have been recorded properly. If
you are voting via the Internet you should understand that there may be costs
associated with electronic access, such as usage charges from Internet access
providers and telephone companies, that must be borne by you.
o Read the proxy statement and have your proxy card at hand.
o Go to the Web site listed on your proxy card.
o Enter control number found on your proxy card.
o Follow the simple instructions on the Web site. Please call AmSouth Funds
at 1-800-624-5711 if you have any problems.
o To insure that your instructions have been recorded correctly you will
receive a confirmation of your voting instructions immediately after your
submission and also by e-mail if chosen.
o [Insert touchtone telephone voting information]
Shareholders' Proposals
Your AmSouth Fund is not required, and does not intend, to hold meetings of
shareholders each year. Instead, meetings will be held only when and if
required. Any shareholders desiring to present a proposal for consideration at
the next meeting for shareholders must submit the proposal in writing, so that
it is received by the your AmSouth Fund to [ ] within a reasonable time before
any meeting. If the Reorganization is completed, your AmSouth Fund will not hold
another shareholder meeting.
24
Appraisal Rights
If the Reorganization of your AmSouth Fund is approved at the Meeting,
shareholders of your AmSouth Fund will not have the right to dissent and obtain
payment of the fair value of their shares because the exercise of appraisal
rights is subject to the forward pricing requirements of Rule 22c-1 under the
Investment Company Act, which supersede state law. Shareholders of your AmSouth
Funds, however, have the right to redeem their Fund shares until the closing
date of the Reorganizations.
OWNERSHIP OF SHARES OF THE AMSOUTH FUNDS
To the knowledge of your AmSouth Fund, as of May 31, 2005, the following
persons owned of record or beneficially 5% or more of the outstanding shares of
each of the AmSouth Funds.
Percent of the
Class Held by
Fund/Class No. of Shares Shareholder
AMSOUTH BALANCED FUND - CLASS A
AMVESCAP NATL TR CO AS AGENT FOR AM
BANK FBO AMSOUTH THRIFT PLAN
PO BOX 105779
ATLANTA GA 30348 1715208.626 20.75%
AMVESCAP NATIONAL TRUST CO AS AGENT
FOR AMSOUTH BANK FBO BCBS ALABAMA
PO BOX 105779
ATLANTA GA 30348 1471810.189 17.80%
AMVESCAP NATL TR CO AS AGENT FOR AM
BANK FBO BRASFIELD GORRIE EMPLOYEE
PO BOX 105779
ATLANTA GA 30348 516827.177 6.25%
AMSOUTH BALANCED FUND -- CLASS I
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 1699127.878 42.24%
AMVESCAP NATIONAL TRUST COMPANY
AS AGENT FOR AMSOUTH BANK
PO BOX 105779
ATLANTA GA 303485779 410690.141 10.21%
BISYS RETIREMENT SERVICES FBO
WARRIOR TRACTOR EQUIPMENT 401K
SUITE 300
DENVER CO 80202 398294.497 9.90%
25
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 388726.276 9.66%
AMVESCAP NATL TR CO AS AGENT FOR
AMSOUTH FBO TRACTOR EQUIPMENT
PO BOX 105779
ATLANTA GA 30348 275539.796 6.85%
AMSOUTH CAPITAL GROWTH FUND - CLASS A
AMVESCAP NATL TR CO AS AGENT FOR AM
BANK FBO AMSOUTH THRIFT PLAN
PO BOX 105779
ATLANTA GA 30348 1070750.463 38.96%
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 377488.597 13.73%
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 211229.688 7.69%
AMSOUTH CAPITAL GROWTH FUND - CLASS I
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 9494447.536 44.36%
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 6607120.324 30.87%
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 1961155.966 9.16%
AMSOUTH ENHANCED MARKET FUND - CLASS A
AMVESCAP NATL TR CO AS AGENT FOR AM
BANK FBO AMSOUTH THRIFT PLAN
PO BOX 105779
ATLANTA GA 30348 1210321.897 51.77%
AMSOUTH ENHANCED MARKET FUND - CLASS I
26
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 5170497.283 39.49%
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 3172919.272 24.23%
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 1300636.003 9.93%
AMSOUTH GROWTH & INCOME PORTFOLIO
3435 STELZER RD
ATTN FUND ACCOUNTING
COLUMBUS OH 43219 1207905.925 9.22%
AMSOUTH AGGRESSIVE GROWTH PORTFOLIO
3435 STELZER RD
ATTN FUND ACCOUNTING
COLUMBUS OH 43219 905753.760 6.92%
AMSOUTH GROWTH PORTFOLIO
3435 STELZER RD
ATTN FUND ACCOUNTING
COLUMBUS OH 43219 889061.074 6.79%
AMSOUTH FLORIDA TAX-EXEMPT FUND - CLASS A
PERSHING LLC
ONE PERSHING PLAZA
14TH FLOOR
JERSEY CITY NJ 07399 189171.452 47.37%
PERSHING LLC
ONE PERSHING PLAZA
14TH FLOOR
JERSEY CITY NJ 07399 23706.469 5.94%
AMSOUTH FLORIDA TAX-EXEMPT FUND - CLASS B
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 23882.318 10.20%
NATIONAL FINANCIAL SERVICES LLC
777 COMMERCE BLVD
CARLSTADT NJ 07072 23607.177 10.08%
27
PERSHING LLC
ONE PERSHING PLAZA
14TH FLOOR
JERSEY CITY NJ 07399 21373.706 9.13%
PERSHING LLC
ONE PERSHING PLAZA
14TH FLOOR
JERSEY CITY NJ 07399 12642.701 5.40%
AMSOUTH FLORIDA TAX-EXEMPT FUND - CLASS I
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 4109578.869 95.09%
AMSOUTH GOVERNMENT INCOME FUND - CLASS A
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 271795.024 13.22%
BISYS RETIREMENT SERVICES FBO
BUILDER S SUPPLY COMPANY INC PROF
SUITE 300
DENVER CO 80202 136915.126 6.66%
PERSHING LLC
ONE PERSHING PLAZA
14TH FLOOR
JERSEY CITY NJ 07399 107296.831 5.22%
BISYS RETIREMENT SERVICES FBO
AEROPRES CORPORATION RETIREMENT SAV
SUITE 300
DENVER CO 80202 103899.243 5.05%
AMSOUTH GOVERNMENT INCOME FUND - CLASS I
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 7095421.548 50.39%
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 3641649.788 25.86%
28
AMSOUTH GROWTH & INCOME PORTFOLIO
3435 STELZER RD
ATTN FUND ACCOUNTING
COLUMBUS OH 43219 977512.782 6.94%
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 875083.106 6.21%
AMSOUTH STRATEGIC PORTFOLIOS: GROWTH & INCOME PORTFOLIO - CLASS I
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 2021724.353 52.75%
BISYS RETIREMENT SERVICES FBO
C C CLARK INC 401K PLAN
SUITE 300
DENVER CO 80202 493107.625 12.87%
BISYS RETIREMENT SERVICES FBO
EAR NOSE THROAT CENTER RET SAVIN
SUITE 300
DENVER CO 80202 324655.761 8.47%
AMSOUTH STRATEGIC PORTFOLIOS: GROWTH & INCOME PORTFOLIO - CLASS A
BISYS RETIREMENT SERVICES FBO
THE WOMEN S CLINIC AMC P S PLAN
SUITE 300
DENVER CO 80202 551605.180 10.00%
BISYS RETIREMENT SERVICES FBO
ACE BOLT SCREW CO INC PROFIT SHA
SUITE 300
DENVER CO 80202 450593.183 8.17%
BISYS RETIREMENT SERVICES FBO
HEART CNTR CARDIOVASC SPECIALISTS 4
SUITE 300
DENVER CO 80202 431874.127 7.83%
BISYS RETIREMENT SERVICES FBO
EAR NOSE THROAT PHYS N MISS 4
SUITE 300
DENVER CO 80202 392323.861 7.11%
29
AMSOUTH STRATEGIC PORTFOLIOS: GROWTH PORTFOLIO - CLASS A
AMVESCAP NATIONAL TRUST COMPANY
AS AGENT FOR AMSOUTH BANK
PO BOX 105779
ATLANTA GA 30348 320083.181 10.22%
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 249833.742 7.98%
BISYS RETIREMENT SERVICES FBO
NORTH MISSISSIPPI ORAL 401 K PS PL
SUITE 300
DENVER CO 80202 177625.115 5.67%
AMSOUTH STRATEGIC PORTFOLIOS: GROWTH PORTFOLIO - CLASS I
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 338956.524 39.79%
AMSOUTH BANK
COOK YANCEY KING GALLOWAY
PO BOX 12365
BIRMINGHAM AL 35202 180856.121 21.23%
BISYS RETIREMENT SERVICES FBO
SEABROOK EES PROFIT SHARING RETIREM
SUITE 300
DENVER CO 80202 61057.862 7.17%
BISYS RETIREMENT SERVICES FBO
WALKER-J-WALKER INC PROFIT SHARIN
SUITE 300
DENVER CO 80202 54070.165 6.35%
AMSOUTH HIGH QUALITY BOND FUND - CLASS A
AMVESCAP NATL TR CO AS AGENT FOR AM
BANK FBO AMSOUTH THRIFT PLAN
PO BOX 105779
ATLANTA GA 30348 408992.228 8.57%
AMVESCAP NATL TR CO AS AGENT FOR AM
BANK FBO BRASFIELD GORRIE EMPLOYE
PO BOX 105779
ATLANTA GA 30348 352495.555 7.39%
30
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 247519.307 5.19%
AMSOUTH HIGH QUALITY BOND FUND - CLASS I
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 26799824.811 53.13%
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 10603041.188 21.02%
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 7283299.375 14.44%
AMSOUTH HIGH QUALITY MUNICIPAL BOND FUND - CLASS A
PERSHING LLC
ONE PERSHING PLAZA
14TH FLOOR
JERSEY CITY NJ 07399 104433.621 6.82%
PERSHING LLC
ONE PERSHING PLAZA
14TH FLOOR
JERSEY CITY NJ 07399 87715.686 5.73%
PERSHING LLC
ONE PERSHING PLAZA
14TH FLOOR
JERSEY CITY NJ 07399 86290.640 5.64%
AMSOUTH HIGH QUALITY MUNICIPAL BOND FUND - CLASS B
PERSHING LLC
ONE PERSHING PLAZA
14TH FLOOR
JERSEY CITY NJ 07399 30788.736 8.37%
PERSHING LLC
ONE PERSHING PLAZA
14TH FLOOR
JERSEY CITY NJ 07399 23100.812 6.28%
31
PERSHING LLC
ONE PERSHING PLAZA
14TH FLOOR
JERSEY CITY NJ 07399 21701.795 5.90%
AMSOUTH HIGH QUALITY MUNICIPAL BOND FUND - CLASS I
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 22801740.026 75.08%
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 5278700.919 17.38%
AMSOUTH INSTITUTIONAL PRIME OBLIGATIONS MONEY MARKET FUND - CLASS I
KENNEBURT & COMPANY
PO BOX 11426 CSTDY UNIT
ATTN PROPRIETARY FUNDS-RCS 5
BIRMINGHAM AL 352021426 158300602.970 85.16%
AMSOUTH STABLE PRINCIPAL
3435 STELZER RD
COLUMBUS OH 43219 27494605.160 14.79%
AMSOUTH INSTITUTIONAL PRIME OBLIGATIONS MONEY MARKET FUND - CLASS II
AMSOUTH BANK
PO BOX 11301
BIRMINGHAM AL 35202 70956579.050 50.70%
AMSOUTH BANK
PO BOX 11301
BIRMINGHAM AL 35202 67986840.140 48.58%
AMSOUTH INSTITUTIONAL PRIME OBLIGATIONS MONEY MARKET FUND - CLASS III
AMSOUTH BANK
PO BOX 11301
BIRMINGHAM AL 35202 25788178.200 53.36%
AMSOUTH BANK
PO BOX 11301
BIRMINGHAM AL 35202 22543387.510 46.64%
32
AMSOUTH INTERNATIONAL EQUITY FUND CLASS A
AMVESCAP NATL TR CO AS AGENT FOR AM
BANK FBO AMSOUTH THRIFT PLAN
PO BOX 105779
ATLANTA GA 30348 797254.163 41.59%
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 113859.081 5.94%
AMSOUTH INTERNATIONAL EQUITY FUND - CLASS B
PERSHING LLC
ONE PERSHING PLAZA
14TH FLOOR
JERSEY CITY NJ 07399 12844.984 5.44%
PERSHING LLC
ONE PERSHING PLAZA
14TH FLOOR
JERSEY CITY NJ 07399 12158.459 5.15%
AMSOUTH INTERNATIONAL EQUITY FUND - CLASS I
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 13164141.723 40.32%
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 12757231.053 39.07%
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 5128059.560 15.71%
AMSOUTH LARGE CAP FUND - CLASS A
AMVESCAP NATL TR CO AS AGENT FOR AM
BANK FBO AMSOUTH THRIFT PLAN
PO BOX 105779
ATLANTA GA 30348 915132.986 14.78%
AMVESCAP NATIONAL TRUST CO AS AGENT
FOR AMSOUTH BANK FBO BCBS ALABAMA
PO BOX 105779
ATLANTA GA 30348 353866.656 5.71%
33
AMSOUTH LARGE CAP FUND - CLASS I
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 4711697.773 44.77%
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 2591205.997 24.62%
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 877383.765 8.34%
AMSOUTH LIMITED TERM BOND FUND - CLASS I
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 6184887.811 45.58%
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 2906788.007 21.42%
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 1769958.318 13.04%
AMSOUTH GROWTH & INCOME PORTFOLIO
3435 STELZER RD
ATTN FUND ACCOUNTING
COLUMBUS OH 43219 1298415.623 9.57%
ASO MODERATE GROWTH & INCOME PORTFOLIO
3435 STELZER RD
ATTN FUND ACCOUNTING
COLUMBUS OH 43219 762989.072 5.62%
AMSOUTH LIMITED TERM BOND FUND - CLASS A
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 374104.316 17.12%
34
AMVESCAP NATL TR CO AS AGENT FOR AM
BANK FBO SWEETWATER HOSPITAL
PO BOX 105779
ATLANTA GA 30348 124584.336 5.70%
AMSOUTH BANCORPORATION DEFERRED
COMPENSATION STATE STREET BANK & TRST CO
200 NEWPORT AVE
N QUINCY MA 02171 116021.696 5.31%
AMSOUTH MID CAP FUND - CLASS A
AMVESCAP NATL TR CO AS AGENT FOR AM
BANK FBO AMSOUTH THRIFT PLAN
PO BOX 105779
ATLANTA GA 30348 802916.574 48.91%
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 91296.704 5.56%
AMSOUTH MID CAP FUND - CLASS I
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 7441208.353 52.27%
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 2930649.379 20.59%
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 2295303.215 16.12%
AMSOUTH STRATEGIC PORTFOLIOS: MODERATE GROWTH & INCOME PORTFOLIO - CLASS A
MCB TRUST SERVICES AS AGENT FOR
FRONTIER TRUST CO AS TRUSTEE
SUITE 300
700 17TH STREET
DENVER CO 80202 258695.800 10.98%
BISYS RETIREMENT SERVICES FBO
WEST QUALITY FOOD SERVICE INC 401
SUITE 300
DENVER CO 80202 159234.626 6.76%
HARTFORD LIFE INSURANCE COMPANY
200 HOPMEADOW STREET
SIMSBURY CT 06089 122492.770 5.20%
35
AMSOUTH STRATEGIC PORTFOLIOS: MODERATE GROWTH & INCOME PORTFOLIO - CLASS I
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 924772.196 65.62%
BISYS RETIREMENT SERVICES FBO
C C CLARK INC 401 K PLAN
SUITE 300
DENVER CO 80202 125779.661 8.93%
AMSOUTH PRIME MONEY MARKET - CLASS B
PERSHING LLC
ONE PERSHING PLAZA
14TH FLOOR
JERSEY CITY NJ 07399 161909.410 5.13%
AMSOUTH PRIME MONEY MARKET - CLASS A
PERSHING LLC FOR EXCLUSIVE BENEFIT OF
1 PERSHING PLAZA
ATTN CASH MANAGEMENT
JERSEY CITY NJ 073990002 379898167.130 91.84%
AMSOUTH PRIME MONEY MARKET - CLASS I
KENNEBURT & COMPANY
PO BOX 11426 CSTDY UNIT
ATTN PROPRIETARY FUNDS-RCS 5
BIRMINGHAM AL 352021426 187188291.480 88.44%
AMSOUTH SELECT EQUITY FUND - CLASS A
HARTFORD LIFE INSURANCE COMPANY
200 HOPMEADOW STREET
SIMSBURY CT 06089 79018.203 5.38%
AMSOUTH SELECT EQUITY FUND - CLASS I
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 2612223.528 41.08%
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 1484146.651 23.34%
36
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 879827.617 13.84%
AMSOUTH GROWTH & INCOME PORTFOLIO
3435 STELZER RD
ATTN FUND ACCOUNTING
COLUMBUS OH 43219 474197.822 7.46%
AMSOUTH AGGRESSIVE GROWTH PORTFOLIO
3435 STELZER RD
ATTN FUND ACCOUNTING
COLUMBUS OH 43219 349432.489 5.50%
AMSOUTH GROWTH PORTFOLIO
3435 STELZER RD
ATTN FUND ACCOUNTING
COLUMBUS OH 43219 349007.389 5.49%
AMSOUTH SMALL CAP FUND -- CLASS A
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 132743.418 11.61%
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 108121.506 9.46%
BISYS RETIREMENT SERVICES FBO
SAWGRASS ASSET MGMT LLC 401 K PL
SUITE 300
DENVER CO 80202 102357.551 8.96%
AMSOUTH SMALL CAP FUND - CLASS I
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 15266531.186 58.24%
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 5060997.797 19.31%
37
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 3553803.391 13.56%
AMSOUTH STRATEGIC PORTFOLIOS: AGGRESSIVE GROWTH FUND - CLASS A
HARTFORD LIFE INSURANCE COMPANY
200 HOPMEADOW STREET
SIMSBURY CT 06089 178046.693 7.44%
BISYS RETIREMENT SERVICES FBO
EAST CARROLL LUMBER YARD INC PROF
SUITE 300
DENVER CO 80202 170079.283 7.11%
AMVESCAP NATIONAL TRUST CO AS AGENT
FOR AMSOUTH BANK FBO
PO BOX 105779
ATLANTA GA 303485779 126965.217 5.31%
AMSOUTH STRATEGIC PORTFOLIOS: AGGRESSIVE GROWTH FUND - CLASS I
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 466778.020 29.81%
BISYS RETIREMENT SERVICES FBO
C C CLARK INC 401K PLAN
SUITE 300
DENVER CO 80202 229924.893 14.68%
BISYS RETIREMENT SERVICES FBO
WALKER-J-WALKER INC PROFIT SHARIN
SUITE 300
DENVER CO 80202 144952.998 9.26%
BISYS RETIREMENT SERVICES FBO
SEABROOK EES PROFIT SHARING RETIREM
SUITE 300
DENVER CO 80202 92304.222 5.89%
AMSOUTH TAX-EXEMPT MONEY MARKET FUND - CLASS A
PERSHING LLC FOR EXCLUSIVE BENEFIT OF
1 PERSHING PLAZA
ATTN CASH MANAGEMENT
JERSEY CITY NJ 073990002 23244618.300 73.44%
PERSHING LLC
ONE PERSHING PLAZA
14TH FLOOR
JERSEY CITY NJ 07399 4030386.870 12.73%
38
NATIONAL FINANCIAL SERVICES CORP
EXCLUSIVE BENEFIT OF OUR CUSTOMERS
200 LIBERTY ST
ONE WORLD FINAN CENTER ATTN C ROBINSON
NEW YORK NY 10281 3261858.500 10.30%
AMSOUTH TAX-EXEMPT MONEY MARKET FUND - CLASS I
KENNEBURT & COMPANY
PO BOX 11426 CSTDY UNIT
ATTN PROPRIETARY FUNDS-RCS 5
BIRMINGHAM AL 352021426 107917283.360 96.98%
AMSOUTH TENNESSEE TAX-EXEMPT FUND - CLASS A
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 179781.205 35.21%
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 95362.274 18.68%
PERSHING LLC
ONE PERSHING PLAZA
14TH FLOOR
JERSEY CITY NJ 07399 57233.178 11.21%
AMSOUTH TENNESSEE TAX-EXEMPT FUND - CLASS B
PERSHING LLC
ONE PERSHING PLAZA
14TH FLOOR
JERSEY CITY NJ 07399 23266.866 11.30%
PERSHING LLC
ONE PERSHING PLAZA
14TH FLOOR
JERSEY CITY NJ 07399 17255.803 8.38%
PERSHING LLC
ONE PERSHING PLAZA
14TH FLOOR
JERSEY CITY NJ 07399 10945.262 5.32%
39
PERSHING LLC
ONE PERSHING PLAZA
14TH FLOOR
JERSEY CITY NJ 07399 10488.014 5.09%
AMSOUTH TENNESSEE TAX-EXEMPT FUND - CLASS I
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202
1772994.531 62.92%
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 995331.856 35.32%
AMSOUTH TREASURY RESERVES MONEY MARKET FUND - CLASS A
HARE & CO
111 SANDERS CREEK PKY
ATTN STIF/MASTER NOTE
E SYRACUSE NY 13057 38299358.430 52.54%
PERSHING LLC FOR EXCLUSIVE BENEFIT OF
1 PERSHING PLAZA
ATTN CASH MANAGEMENT
JERSEY CITY NJ 073990002 12126285.150 16.63%
KENNEBERT & CO
PO BOX 11426 PROPRIETARY FUNDS
ATTN PROPRIETARY FUNDS-RCS 5
BIRMINGHAM AL 352021426 8066816.700 11.07%
AMSOUTH TREASURY RESERVES MONEY MARKET FUND - CLASS I
KENNEBERT & CO
PO BOX 11426 PROPRIETARY FUNDS
ATTN PROPRIETARY FUNDS-RCS 5
BIRMINGHAM AL 352021426 94810912.500 89.50%
AMSOUTH VALUE FUND - CLASS A
AMVESCAP NATL TR CO AS AGENT FOR AM
BANK FBO AMSOUTH THRIFT PLAN
PO BOX 105779
ATLANTA GA 30348 2180962.955 27.62%
AMVESCAP NATIONAL TRUST CO AS AGENT
FOR AMSOUTH BANK FBO BCBS ALABAMA
PO BOX 105779
ATLANTA GA 30348 866126.184 10.97%
40
AMSOUTH VALUE FUND - CLASS I
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 9568628.617 49.61%
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 3850594.742 19.96%
KENNEBURT & COMPANY FBO ASO TRUST
ATTN MUTUAL FUND OPERATIONS
PO BOX 12365
BIRMINGHAM AL 35202 2691930.204 13.96%
As of May 31, 2005, the trustees and officers of your AmSouth Fund, as a
group, owned in the aggregate less than 1% of the outstanding shares of your
AmSouth Fund.
AmSouth Bank or other companies controlled by AmSouth Bancorporation (the
"AmSouth Companies") beneficially own shares of certain AmSouth Funds. The
AmSouth Companies intend to hire an independent fiduciary to vote their shares
in a fiduciary capacity.
OWNERSHIP OF SHARES OF THE PIONEER FUNDS
To the knowledge of your Pioneer Fund, as of May 31, 2005, the following
persons owned of record or beneficially 5% or more of the outstanding shares of
each of the Pioneer Funds.
- -----------------------------------------------------------------------------------
Fund/Class Shareholder Name and Address Percentage of Class
Held by Shareholder
- -----------------------------------------------------------------------------------
Pioneer America Income Fund
- -----------------------------------------------------------------------------------
Class B MLPF&S For the Sole Benefit of its
Customers 11.07%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -----------------------------------------------------------------------------------
Class C MLPF&S For the Sole Benefit of its
Customers 27.84%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -----------------------------------------------------------------------------------
Citigroup Global Markets Inc.
Attn Peter Booth 7.41%
333 West 24th St. 7th Fl.
New York, NY 10001-2402
- -----------------------------------------------------------------------------------
Class R MLPF&S For the Sole Benefit of its
Customers 31.00%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -----------------------------------------------------------------------------------
41
- -----------------------------------------------------------------------------------
Fund/Class Shareholder Name and Address Percentage of Class
Held by Shareholder
- -----------------------------------------------------------------------------------
MCB Trust Services Cust FBO
Skyland Automotive Inc Emplo 12.60%
700 17th St. Ste 300
Denver, CO 80202-3531
- -----------------------------------------------------------------------------------
MCB Trust Services Cust FBO
Big Boy 401(K) Plan & Trust 24.93%
700 17th St. Ste 300
Denver, CO 80202-3531
- -----------------------------------------------------------------------------------
MCB Trust Services Cust FBO
United Construction Trades & 8.13%
Industrial Emp Int'l Union 401(K) Plan
700 17th St. Ste 300
Denver, CO 80202-3531
- -----------------------------------------------------------------------------------
MCB Trust Services Cust. F/B/O
Citizens Bank of Hartsville 7.37%
700 17th St. Ste 300
Denver, CO 80202-3531
- -----------------------------------------------------------------------------------
Charles Schwab & Co Inc.
Investor Class Exclusive Benefit of its Cust. 5.79%
Shares Attn: Mutual Fund Dept.
101 Montgomery St.
San Francisco, CA 94104-4122
- -----------------------------------------------------------------------------------
Pioneer Bond Fund
- -----------------------------------------------------------------------------------
MLPF&S
Class B For the Sole Benefit of its Customers 9.87%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -----------------------------------------------------------------------------------
MLPF&S
Class C For the Sole Benefit of its Customers 13.13%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -----------------------------------------------------------------------------------
Citigroup Global Markets Inc.
Attn Peter Booth 24.02%
333 West 24th St. 7th Fl.
New York, NY 10001-2402
- -----------------------------------------------------------------------------------
MCB Trust Services Cust. FBO
Class R ABI Companies Inc/CLW Real Estate 10.28%
700 17th St. Ste 300
Denver, CO 80202-3531
- -----------------------------------------------------------------------------------
MLPF&S
For the Sole Benefit of its Customers 76.36%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -----------------------------------------------------------------------------------
MCB Trust Services Cust FBO
United Construction Trades & Industrial 8.37%
- -----------------------------------------------------------------------------------
42
- -----------------------------------------------------------------------------------
Fund/Class Shareholder Name and Address Percentage of Class
Held by Shareholder
- -----------------------------------------------------------------------------------
Emp Int'l Union 401(K)
700 17th St. Ste 300
Denver, CO 80202-3531
- --------------------------------------------------------------------------------
Class Y John F. Cogan Jr.
C/O Hale and Dorr 6.06%
60 State Street
Boston, MA 02109-1800
- -----------------------------------------------------------------------------------
FISERV Securities, Inc.
Attn: Mutual Funds 12.59%
One Commerce Square
2005 Market Street Suite 1200
Philadelphia, PA 19103-7084
- -----------------------------------------------------------------------------------
FISERV Securities, Inc.
Attn: Mutual Funds 25.16%
One Commerce Square
2005 Market Street Suite 1200
Philadelphia, PA 19103-7084
- -----------------------------------------------------------------------------------
FISERV Securities, Inc.
Attn: Mutual Funds 33.24%
One Commerce Square
2005 Market Street Suite 1200
Philadelphia, PA 19103-7084
- -----------------------------------------------------------------------------------
MLPF&S For the Sole Benefit of its
Customers 14.09%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -----------------------------------------------------------------------------------
PIM IRA Cust For
Investor Class Theodore R Lundberg 9.48%
Shares 2526 174th Ave NE
Redmond, WA 98052-6222
- -----------------------------------------------------------------------------------
PIM IRA Cust for
Marilyn M Davis 5.04%
1974 W Macarthur St
RCH Palos VRD, CA 90275-1110
- -----------------------------------------------------------------------------------
Pioneer Cash Reserves Fund
- -----------------------------------------------------------------------------------
Citigroup Global Markets Inc.
Class B Attn Peter Booth 5.53%
333 West 24th St. 7th Fl.
New York, NY 10001-2402
- -----------------------------------------------------------------------------------
Patterson & Co. FBO
Class R Global Power Systems & FL 401K Plan 39.94%
1525 West Wt Harris Blvd
Charlotte, NC 28288-0001
- -----------------------------------------------------------------------------------
MCB Trust Services Cust FBO
Big Boy 401(K) Plan & Trust 33.64%
700 17th St. Ste 300
Denver, CO 80202-3531
- -----------------------------------------------------------------------------------
MCB Trust Services Cust FBO
Gerken Retirement Savings Plan 14.19%
700 17th St. Ste 300
Denver, CO 80202-3531
- -----------------------------------------------------------------------------------
43
- -----------------------------------------------------------------------------------
Fund/Class Shareholder Name and Address Percentage of Class
Held by Shareholder
- -----------------------------------------------------------------------------------
Pioneer Funds Distributor Inc.
Class Y Attn: Melissa Semenza 100%
60 State Street
Boston, MA 02109-1800
- -----------------------------------------------------------------------------------
Pioneer Fund
- -----------------------------------------------------------------------------------
MLPF&S
Class B For the Sole Benefit of its Customers 14.40%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -----------------------------------------------------------------------------------
MLPF&S
Class C For the Sole Benefit of its Customers 35.36%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -----------------------------------------------------------------------------------
Citigroup Global Markets Inc.
Attn Peter Booth 8.70%
333 West 24th St. 7th Fl.
New York, NY 10001-2402
- -----------------------------------------------------------------------------------
ING National Trust, Trustee
Class R Agreement And AETNA 403 (B) (7) 50.01%
Custodial Acct 3/26/97 Trustee for
Thomas J Botticelli DTD 04/22/1996
151 Farmington Ave - TN41
Hartford, CT 06156
- -----------------------------------------------------------------------------------
AETNA Life Insurance & Annuity Co
151 Farmington Ave - TN41 28.19%
Hartford, CT 06156-0001
- -----------------------------------------------------------------------------------
Pioneer Protected Principal Plus
Class Y Fund II 9.90%
60 State Street
Boston, MA 02109-1800
- -----------------------------------------------------------------------------------
MLPF&S
For the Sole Benefit of its Customers 5.15%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -----------------------------------------------------------------------------------
State St Bank and Trust Trustee
FBO Pacificorp K Plus Savings Plan 59.13%
Trust DTD 1/9/1996
805 Pennsylvania Ave
5th Floor, Tower 2
Kansas City, MO 64105-1307
- -----------------------------------------------------------------------------------
State of Florida Public Employees
Optional Retirement Program 10.29%
1801 Hermitage Blvd Ste 100
Tallahassee, FL 32308-7743
- -----------------------------------------------------------------------------------
44
- -----------------------------------------------------------------------------------
Fund/Class Shareholder Name and Address Percentage of Class
Held by Shareholder
- -----------------------------------------------------------------------------------
Charles Schwab & Co Inc.
Investor Class Exclusive Benefit of its Cust. 17.71%
Attn: Mutual Fund Dept.
101 Montgomery St.
San Francisco, CA 94104-4122
- -----------------------------------------------------------------------------------
Pioneer Growth Opportunities Fund
- -----------------------------------------------------------------------------------
Charles Schwab & Co Inc.
Class A Exclusive Benefit of its Cust. 32.20%
Attn: Mutual Fund Dept.
101 Montgomery St.
San Francisco, CA 94104-4122
- -----------------------------------------------------------------------------------
State Street Bank & Trust Co TTEE
U/A Dated 02/01/00 43.87%
Lowe's 401(K) Plan
105 Rosemont Rd #1
Westwood, MA 02090-2318
- -----------------------------------------------------------------------------------
First Clearing, LLC
Class B Michael Reiman TTE 24.97%
Mae Edison C R U TR DTD 6/8/98
PO Box 654
Palm Beach, FL 33480-0654
- -----------------------------------------------------------------------------------
PIM USA 401(K) TTEE for
Susanne M Berneski 7.77%
4718 Warm Hearth Circle
Fairfax, VA 22033-5075
- -----------------------------------------------------------------------------------
MCB Trust Services Cust FBO
Class C Drew Pearson Marketing Inc. 50.13%
401(K) Plan
700 17th St. Ste 300
Denver, CO 80202-3531
- -----------------------------------------------------------------------------------
First Clearing, LLC
Michael Reiman TTE 5.49%
Mae Edison C R U TR DTD 6/8/98
PO Box 654
Palm Beach, FL 33480-0654
- -----------------------------------------------------------------------------------
Wells Fargo Investments LLC
625 Marguette Ave S 13th Floor 9.33%
Minneapolis MN 55402-2308
- -----------------------------------------------------------------------------------
PIM USA 401(K) TTEE for
Estes Electrical Service 5.23%
David R. Estes
806 Boulder DR
Prescott, AZ 86303-5251
- -----------------------------------------------------------------------------------
Investor Class Charles Schwab & Co Inc. 19.02%
Shares Exclusive Benefit of its Cust.
Attn: Mutual Fund Dept.
101 Montgomery St.
San Francisco, CA 94104-4122
- -----------------------------------------------------------------------------------
45
- -----------------------------------------------------------------------------------
Fund/Class Shareholder Name and Address Percentage of Class
Held by Shareholder
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Pioneer Ibbotson Aggressive Allocation Fund
- -----------------------------------------------------------------------------------
MLPF&S
Class A For the Sole Benefit of its Customers 5.83%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -----------------------------------------------------------------------------------
MLPF&S
Class B For the Sole Benefit of its Customers 18.33%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -----------------------------------------------------------------------------------
MLPF&S
Class C For the Sole Benefit of its Customers 31.43%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -----------------------------------------------------------------------------------
Pioneer Ibbotson Growth Allocation Fund
- -----------------------------------------------------------------------------------
MLPF&S
Class A For the Sole Benefit of its Customers 5.33%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -----------------------------------------------------------------------------------
MLPF&S
Class C For the Sole Benefit of its Customers 30.10%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville FL 32246-6484
- -----------------------------------------------------------------------------------
Pioneer Ibbotson Moderate Allocation Fund
- -----------------------------------------------------------------------------------
MLPF&S
Class A For the Sole Benefit of its Customers 17.48%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -----------------------------------------------------------------------------------
MLPF&S
Class B For the Sole Benefit of its Customers 7.51%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -----------------------------------------------------------------------------------
MLPF&S
Class C For the Sole Benefit of its Customers 28.89%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -----------------------------------------------------------------------------------
Pioneer Mid Cap Value Fund
- -----------------------------------------------------------------------------------
MLPF&S
Class B For the Sole Benefit of its Customers 8.16%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -----------------------------------------------------------------------------------
46
- -----------------------------------------------------------------------------------
Fund/Class Shareholder Name and Address Percentage of Class
Held by Shareholder
- -----------------------------------------------------------------------------------
MLPF&S
Class C For the Sole Benefit of its Customers 18.73%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -----------------------------------------------------------------------------------
Citigroup Global Markets Inc.
Attn Peter Booth 9.61%
333 West 24th St. 7th Fl.
New York, NY 10001-2402
- -----------------------------------------------------------------------------------
Hartford Life Insurance Company
Class R PO Box 2999 33.37%
Hartford, CT 06104-2999
- -----------------------------------------------------------------------------------
ING National Trust, Trustee
Agreement And AETNA 403(B) (7) 8.54%
Custodial Acct 3/26/97 Trustee for
Thomas J Botticelli DTD 04/22/1996
151 Farmington Ave - TN41
Hartford, CT 06156
- -----------------------------------------------------------------------------------
MLPF&S
For the Sole Benefit of its Customers 7.75%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -----------------------------------------------------------------------------------
AETNA Life Insurance & Annuity Co
151 Farmington Ave - TN41 16.18%
Hartford, CT 06156-0001
- -----------------------------------------------------------------------------------
Capinco C/O US Bank
Class Y PO Box 1787 13/74%
Milwaukee, WI 53201-1787
- -----------------------------------------------------------------------------------
Raymond James & Assoc Inc.
FBO Helios Educatio 9.09%
880 Carillon PKWY
St Petersburg, FL 33716-1100
- -----------------------------------------------------------------------------------
First Command Bank
Attn: Trust Department 53.08%
PO Box 901075
Fort Worth, TX 76101-2075
- -----------------------------------------------------------------------------------
MLPF&S
For the Sole Benefit of its Customers 6.16%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -----------------------------------------------------------------------------------
Charles Schwab & Co Inc.
Investor Class Exclusive Benefit of its Cust. 5.51%
Shares Attn: Mutual Fund Dept.
101 Montgomery St.
San Francisco, CA 94104-4122
- -----------------------------------------------------------------------------------
Pioneer Oak Ridge Large Cap Growth Fund
- -----------------------------------------------------------------------------------
SEI Private Trust Co
Class A C/O Wachovia Bank 10.58%
Attn: Mutual Funds Administrators
One Freedom Valley Drive
Oaks, PA 19456
- -----------------------------------------------------------------------------------
47
- -----------------------------------------------------------------------------------
Fund/Class Shareholder Name and Address Percentage of Class
Held by Shareholder
- -----------------------------------------------------------------------------------
MLPF&S
For the Sole Benefit of its Customers 13.44%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -----------------------------------------------------------------------------------
MLPF&S
Class B For the Sole Benefit of its Customers 15.24%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -----------------------------------------------------------------------------------
Citigroup Global Markets Inc.
Attn Peter Booth 8.29%
333 West 24th St. 7th Fl.
New York, NY 10001-2402
- -----------------------------------------------------------------------------------
MLPF&S
Class C For the Sole Benefit of its Customers 46.00%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -----------------------------------------------------------------------------------
Citigroup Global Markets Inc.
3. Attn Peter Booth 9.03%
333 West 24th St. 7th Fl.
New York, NY 10001-2402
- -----------------------------------------------------------------------------------
Wilmington Trust Comp Cust FBO
Class R Grand Lake Ace Hardware, Inc. 36.01%
Profit Sharing PL A/C
C/O Mutual Funds
PO Box 8971
Wilmington, DE 19899-8971
- -----------------------------------------------------------------------------------
MLPF&S
For the Sole Benefit of its Customers 29.36%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -----------------------------------------------------------------------------------
MCB Trust Services Cust FBO
Temple Inc 401K Plan 34.34%
700 17th St Ste 300
Denver CO 80202-3531
- -----------------------------------------------------------------------------------
First Command Bank
Class Y Attn: Trust Dept 89.34%
PO Box 901075
Forth Worth, TX 76101-2075
- -----------------------------------------------------------------------------------
Pioneer Short Term Income Fund
- -----------------------------------------------------------------------------------
A G Edwards & Sons Inc FBO
Class A City of Lincoln 43.44%
One North Jefferson
St. Louis, MO 63103-2205
- -----------------------------------------------------------------------------------
48
- -----------------------------------------------------------------------------------
Fund/Class Shareholder Name and Address Percentage of Class
Held by Shareholder
- -----------------------------------------------------------------------------------
A G Edwards & Sons Inc FBO
City of Lincoln 18.77%
One North Jefferson
St. Louis, MO 63103-2205
- -----------------------------------------------------------------------------------
Grand Lodge FOP
C/O Thomas Penzoa Natl Treasurer 12.15%
215 Sterling Ave
New Castle, DE 19720-4729
- -----------------------------------------------------------------------------------
Pioneer Funds Distributor Inc
Class B Attn Carrie Cuscia 7.56%
60 State St
Boston, MA 02109-1800
- -----------------------------------------------------------------------------------
MLPF&S
For the Sole Benefit of its Customers 69.87%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -----------------------------------------------------------------------------------
Pershing LLC
Class C PO Box 2052 6.02%
Jersey City NJ 07303-2052
- -----------------------------------------------------------------------------------
MLPF&S
For the Sole Benefit of its Customers 34.48%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville FL 32246-6484
- -----------------------------------------------------------------------------------
Attn: Mutual Funds
Class Y FISERV Securities, Inc. 35.31%
One Commerce Square
2005 Market Street Suite 1200
Philadelphia, PA 19103-7084
- -----------------------------------------------------------------------------------
Attn: Mutual Funds
FISERV Securities, Inc. 57.07%
One Commerce Square
2005 Market Street Suite 1200
Philadelphia, PA 19103-7084
- -----------------------------------------------------------------------------------
Pioneer Tax Free Income Fund
- -----------------------------------------------------------------------------------
Citigroup Global Markets Inc.
Class B Attn Peter Booth 11.04%
333 West 24th St. 7th Fl.
New York, NY 10001-2402
- -----------------------------------------------------------------------------------
MLPF&S
For the Sole Benefit of its Customers 17.44%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -----------------------------------------------------------------------------------
MLPF&S For the Sole Benefit of its
Class C Customers 20.37%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -----------------------------------------------------------------------------------
49
- -----------------------------------------------------------------------------------
Fund/Class Shareholder Name and Address Percentage of Class
Held by Shareholder
- -----------------------------------------------------------------------------------
Citigroup Global Markets Inc.
Attn Peter Booth 14.28%
333 West 24th St. 7th Fl.
New York, NY 10001-2402
- -----------------------------------------------------------------------------------
John F Cogan Jr
Class Y C/O Hale and Dorr 100%
60 State Street
Boston, MA 02109-1800
- -----------------------------------------------------------------------------------
Charles Schwab & Co Inc.
Investor Class Exclusive Benefit of its Cust. 12.13%
Shares Attn: Mutual Fund Dept.
101 Montgomery St.
San Francisco, CA 94104-4122
- -----------------------------------------------------------------------------------
William A Helsell
10653 Culpepper CT NW 16.64%
Seattle, WA 98177-5319
- -----------------------------------------------------------------------------------
Howard C Lincoln and
Grace V Lincoln Com Prop 9.50%
6 Holly Hill Dr
Mercer Island, WA 98040-5326
- -----------------------------------------------------------------------------------
Pioneer Tax Free Money Market Fund
- -----------------------------------------------------------------------------------
Anne H Hagedorn &
Class A Fritz G Hagedorn JTWROS 10.54%
5224 69th Dr NE
Marysville, WA 98270-8840
- -----------------------------------------------------------------------------------
Robert L Odegard &
Elizabeth A Odegard JT WROS 5.05%
PO Box 165
Medina, WA 98039-0165
- -----------------------------------------------------------------------------------
Alton Jennings
10 E Roanoke St Apt 13 5.41%
Seattle, WA 98102-3259
- -----------------------------------------------------------------------------------
Prema Bharath
318 15th Ave SE 7.62%
Devils Lake, ND 58301-7000
- -----------------------------------------------------------------------------------
Victor C Moses And
Mary K Moses JTWROS 25.69%
5210 NE 43rd St
Seattle, WA 98105-4915
- -----------------------------------------------------------------------------------
Debra A Tessier &
Richard K Timbrell JT TEN 7.45%
92 Addison Dr
Short Hills, NJ 07078-1833
- -----------------------------------------------------------------------------------
Doris J Moehring
Investor Class 3718 W Commodore Way 5.42%
Shares Seattle, WA 98199-1104
- -----------------------------------------------------------------------------------
Pioneer Value Fund
- -----------------------------------------------------------------------------------
PFPC
Class A FBO Primerica Shareholder Services 20.95%
211 S Gulf Rd
King of Prussia, PA 19406
- -----------------------------------------------------------------------------------
50
- -----------------------------------------------------------------------------------
Fund/Class Shareholder Name and Address Percentage of Class
Held by Shareholder
- -----------------------------------------------------------------------------------
Nuernberger Lebensversicherung AG
KA-Controlling 5.88%
Ostendstr. 100
D-90334 Nurnberg
Mittelfr, Germany
- -----------------------------------------------------------------------------------
Circle Trust Co Custodian For
Class R GoldK Omnibus Account 31.63%
401K Plan
1 Thorndal Cir
Darien, CT 06820-5421
- -----------------------------------------------------------------------------------
Francis Cassidy & Dennis Mathias
TTEES FBO Athletic Clubs 65.15%
International 401K PSP
2729 St Marys Rd
Ardmore, PA 19003-2026
- -----------------------------------------------------------------------------------
FISERV Securities, Inc.
Class Y Attn: Mutual Funds 24.52%
One Commerce Square
2005 Market Street Suite 1200
Philadelphia, PA 19103-7084
- -----------------------------------------------------------------------------------
FISERV Securities, Inc.
Attn: Mutual Funds 34.26%
One Commerce Square
2005 Market Street Suite 1200
Philadelphia, PA 19103-7084
- -----------------------------------------------------------------------------------
FISERV Securities, Inc.
Attn: Mutual Funds 28.06%
One Commerce Square
2005 Market Street Suite 1200
Philadelphia, PA 19103-7084
- -----------------------------------------------------------------------------------
FISERV Securities, Inc.
Attn: Mutual Funds 5.21%
One Commerce Square
2005 Market Street Suite 1200
Philadelphia, PA 19103-7084
- -----------------------------------------------------------------------------------
Charles Schwab & Co Inc.
Investor Class Exclusive Benefit of its Cust. 8.92%
Shares Attn: Mutual Fund Dept.
101 Montgomery St.
San Francisco, CA 94104-4122
- -----------------------------------------------------------------------------------
As of May 31, 2005, the trustees and officers of each Pioneer Fund owned less
than 1% of the outstanding shares of each Pioneer Fund.
EXPERTS
51
AmSouth Funds
The financial statements and financial highlights of each AmSouth Fund
incorporated by reference in the respective AmSouth Funds' Annual Report for the
most recent fiscal year end have been audited by Ernst & Young LLP, independent
registered public accounting firm, as set forth in their reports thereon
incorporated by reference into this registration statement. Such financial
statements and financial highlights are incorporated herein by reference in
reliance on such reports given on the authority of such firm as experts in
accounting and auditing.
Pioneer Funds
The financial statements and financial highlights of each Pioneer Fund
incorporated by reference in the respective Pioneer Fund's Annual Report for the
most recent fiscal year end have been audited by Ernst & Young LLP, independent
registered public accounting firm, as set forth in their reports thereon
incorporated by reference into this registration statement. Such financial
statements and financial highlights are incorporated herein by reference in
reliance on such reports given the authority of such firm as experts in
accounting and auditing.
AVAILABLE INFORMATION
The AmSouth Funds and the Pioneer Funds are subject to the informational
requirements of the Securities Exchange Act of 1934 and the Investment Company
Act and file reports, proxy statements and other information with the SEC. These
reports, proxy statements and other information filed by the Funds can be
inspected and copied (for a duplication fee) at the public reference facilities
of the SEC at 450 Fifth Street, N.W., Washington, D.C. Copies of these materials
can also be obtained by mail from the Public Reference Branch, Office of
Consumer Affairs and Information Services, SEC, Washington, D.C. 20549, at
prescribed rates. In addition, copies of these documents may be viewed on-screen
or downloaded from the SEC's Internet site at http://www.sec.gov.
52
Draft
Exhibit A-1--Form of Agreement and Plan of Reorganization
(C/D Reorganizations)
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of the
__ day of _______ 2005, by and between Pioneer [____] Fund, a Delaware statutory
trust (the "Acquiring Trust"), on behalf of its sole series Pioneer [____] Fund
(the "Acquiring Fund"), with its principal place of business at 60 State Street,
Boston, Massachusetts 02109, and AmSouth Funds, a Massachusetts business trust
(the "AmSouth Trust"), on behalf of its series [ ] Fund (the "Acquired Fund"),
with its principal place of business at 3435 Stelzer Road, Columbus, Ohio 43219.
The Acquiring Fund and the Acquired Fund are sometimes referred to collectively
herein as the "Funds" and individually as a "Fund."
This Agreement is intended to be and is adopted as a plan of a
"reorganization" as defined in Section 368(a)(1)[(C)/(D)] of the United States
Internal Revenue Code of 1986, as amended (the "Code") and the Treasury
Regulations thereunder. The reorganization (the "Reorganization") will consist
of (1) the transfer of all of the assets of the Acquired Fund to the Acquiring
Fund in exchange solely for (A) the issuance of Class A, Class B and Class Y
shares of beneficial interest of the Acquiring Fund (collectively, the
"Acquiring Fund Shares" and each, an "Acquiring Fund Share") to the Acquired
Fund, and (B) the assumption by the Acquiring Fund of the liabilities of the
Acquired Fund that are both set forth on the Statements of Assets and
Liabilities (as defined below) and also included in the calculation of net asset
value ("NAV") on the closing date of the Reorganization (the "Closing Date")
(collectively, the "Assumed Liabilities"), and (2) the distribution by the
Acquired Fund, on or promptly after the Closing Date as provided herein, of the
Acquiring Fund Shares to the shareholders of the Acquired Fund in liquidation
and dissolution of the Acquired Fund, all upon the terms and conditions
hereinafter set forth in this Agreement.
WHEREAS, the Acquiring Trust and the AmSouth Trust are each registered
investment companies classified as management companies of the open-end type.
WHEREAS, the Acquiring Fund is authorized to issue shares of beneficial
interest.
WHEREAS, the Board of Trustees of the AmSouth Trust and the Board of Trustees
of the Acquiring Trust have determined that the Reorganization is in the best
interests of the Acquired Fund shareholders and the Acquiring Fund shareholders,
respectively, and is not dilutive of the interests of those shareholders.
NOW, THEREFORE, in consideration of the premises 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; 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 will
transfer all of its assets as set forth in Paragraph 1.2 (the "Acquired Assets")
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: (i)
to issue to the Acquired Fund the number of Acquiring Fund Shares, including
fractional Acquiring Fund Shares, of each class with an aggregate NAV equal to
the NAV of the Acquired Fund attributable to the corresponding class of the
Acquired Fund's shares, as determined in the manner set forth in Paragraphs 2.1
and 2.2; and (ii) to assume the Assumed Liabilities. Such transactions shall
take place at the Closing (as defined in Paragraph 3.1 below).
1.2 (a) The Acquired Assets shall consist of all of the Acquired Fund's
property, including, without limitation, all portfolio securities and
instruments, dividends and interest receivables, cash, goodwill, contractual
rights and choses in action of the Acquired Fund or the AmSouth Trust in respect
of the Acquired Fund, all other intangible property owned by the Acquired Fund,
originals or copies of all books and records of the
Acquired Fund, and all other assets of the Acquired Fund on the Closing Date.
The Acquiring Fund shall also be entitled to receive (or, to the extent agreed
upon between the AmSouth Trust and the Acquiring Trust, be provided access to)
copies of all records that the AmSouth Trust is required to maintain under the
Investment Company Act of 1940, as amended (the "Investment Company Act"), and
the rules of the Securities and Exchange Commission (the "Commission")
thereunder to the extent such records pertain to 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 execution of
this Agreement, and the Acquiring Fund has provided the Acquired Fund with a
copy of the current fundamental investment policies and restrictions and fair
value procedures applicable to the Acquiring Fund. The Acquired Fund reserves
the right to sell any of such securities or other assets before the Closing Date
(except to the extent sales may be limited by representations of the Acquired
Fund contained herein and made in connection with the issuance of the tax
opinion provided for in Paragraph 8.5 hereof).
1.3 The Acquired Fund will endeavor to discharge all of its known liabilities
and obligations that are or will become due prior to the Closing.
1.4 On or as soon after the Closing Date as is conveniently practicable (the
"Liquidation Date"), the AmSouth Trust shall liquidate the Acquired Fund and
distribute pro rata to its shareholders of record, determined as of the close of
regular trading on the New York Stock Exchange on the Closing Date (the
"Acquired Fund Shareholders"), the Acquiring Fund Shares received by the
Acquired Fund pursuant to Paragraph 1.1 hereof. Each Acquired Fund Shareholder
shall receive the number of Acquiring Fund Shares of the class corresponding to
the class of shares of beneficial interest of the Acquired Fund (the "Acquired
Fund Shares") held by such Acquired Fund Shareholder that have an aggregate NAV
equal to the aggregate NAV of the Acquired Fund Shares held of record by such
Acquired Fund Shareholder on the Closing Date. Such liquidation and distribution
will be accomplished by the AmSouth Trust instructing the Acquiring Trust 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 established and maintained by the Acquiring Fund's transfer
agent in the names of the Acquired Fund Shareholders and representing the
respective pro rata number of the Acquiring Fund Shares due the Acquired Fund
Shareholders. The AmSouth Trust shall promptly provide the Acquiring Trust with
evidence of such liquidation and distribution. All issued and outstanding
Acquired Fund Shares will simultaneously be cancelled on the books of the
Acquired Fund, and the Acquired Fund will be dissolved. The Acquiring Fund shall
not issue certificates representing the Acquiring Fund Shares in connection with
such exchange.
1.5 Ownership of Acquiring Fund Shares will be shown on the books of the
Acquiring Fund's transfer agent. Any certificates representing ownership of
Acquired Fund Shares that remain outstanding on the Closing Date shall be deemed
to be cancelled and shall no longer evidence ownership of Acquired Fund Shares.
1.6 Any transfer taxes payable upon issuance of 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 that time 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 AmSouth Trust with respect to the
Acquired Fund for taxable periods ending on or before the Closing Date,
including, but not limited to, the responsibility for filing of regulatory
reports, Tax Returns (as defined in Paragraph 4.1), or other documents with the
Commission, any state securities commissions, and any federal, state or local
tax authorities or any other relevant regulatory authority, is and shall remain
the responsibility of the AmSouth Trust.
2. VALUATION
2.1 The NAV of the Acquiring Fund Shares and the NAV of the Acquired Fund
shall, in each case, be determined as of the close of business (4:00 p.m.,
Boston time) on the Closing Date (the "Valuation Time"). The NAV of each
Acquiring Fund Share shall be computed by Pioneer Investment Management, Inc.
(the "Acquiring Fund Adviser") in the manner set forth in the Acquiring Fund's
Declaration of Trust (the "Declaration"), or By-Laws, and the Acquiring Fund's
then-current prospectus and statement of additional information. The NAV of the
-2-
Acquired Fund shall be computed by ASO Services Company, Inc. (the "Acquired
Fund Administrator") by calculating the value of the Acquired Assets and by
subtracting therefrom the amount of the liabilities of the Acquired Fund on the
Closing Date included on the Statement of Assets and Liabilities of the Acquired
Fund delivered pursuant to Paragraph 5.7 (the "Statement of Assets and
Liabilities"), said assets and liabilities to be valued in the manner set forth
in the Acquiring Fund's then current prospectus and statement of additional
information. The Acquiring Fund Adviser shall confirm to the Acquiring Fund the
NAV of the Acquired Fund.
2.2 The number of Acquiring Fund Shares to be issued (including fractional
shares, if any) in exchange for the Acquired Assets and the assumption of the
Assumed Liabilities shall be determined by the Acquiring Fund Adviser by
dividing the NAV of the Acquired Fund, as determined in accordance with
Paragraph 2.1, by the NAV of each Acquiring Fund Share, as determined in
accordance with Paragraph 2.1.
2.3 The Acquiring Fund and the Acquired Fund shall cause the Acquiring Fund
Adviser and the Acquired Fund Administrator, respectively, to deliver a copy of
its valuation report to the other party at Closing. All computations of value
shall be made by the Acquiring Fund Adviser and the Acquired Fund Administrator
in accordance with its regular practice as pricing agent for the Acquiring Fund
and the Acquired Fund, respectively.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be [ ], 2005, or such later date as the parties
may agree to in writing. All acts necessary to consummation the Reorganization
(the "Closing") shall be deemed to take place simultaneously as of 5:00 p.m.
(Eastern time) on the Closing Date unless otherwise provided. The Closing shall
be held at the offices of Wilmer Cutler Pickering Hale and Dorr LLP, 60 State
Street, Boston, Massachusetts, or at such other place as the parties may agree.
3.2 Portfolio securities that are held other than in book-entry form in the
name of AmSouth Bank (the "Acquired Fund Custodian") as record holder for the
Acquired Fund shall be presented by the Acquired Fund to Brown Brothers Harriman
& Co. (the "Acquiring Fund Custodian") for examination no later than three
business days preceding the Closing Date. Such portfolio securities shall be
delivered by the Acquired Fund to the Acquiring Fund Custodian for the account
of the Acquiring Fund on the Closing Date, duly endorsed in proper form for
transfer, in such condition as to constitute good delivery thereof in accordance
with the custom of brokers, and shall be accompanied by all necessary federal
and state stock transfer stamps or a check for the appropriate purchase price
thereof. Portfolio securities held of record by the Acquired Fund Custodian in
book-entry form on behalf of the Acquired Fund shall be delivered by the
Acquired Fund Custodian through the Depository Trust Company to the Acquiring
Fund Custodian and by the Acquiring Fund Custodian recording the beneficial
ownership thereof by the Acquiring Fund on the Acquiring Fund Custodian's
records. Any cash shall be delivered by the Acquired Fund Custodian transmitting
immediately available funds by wire transfer to the Acquiring Fund Custodian the
cash balances maintained by the Acquired Fund Custodian and the Acquiring Fund
Custodian crediting such amount to the account of the Acquiring Fund.
3.3 The Acquiring Fund Custodian shall deliver within one business day after
the Closing a certificate of an authorized officer stating that: (a) the
Acquired 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 has been made in conjunction with the delivery of portfolio
securities as part of the Acquired Assets.
3.4 If on the Closing Date (a) the New York Stock Exchange is closed to
trading or trading thereon shall be restricted or (b) trading or the reporting
of trading on such exchange or elsewhere is disrupted so that accurate appraisal
of the NAV of the Acquiring Fund Shares or the Acquired Fund pursuant to
Paragraph 2.1 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.
3.5 The Acquired Fund shall deliver at the Closing a list of the names,
addresses, federal taxpayer identification numbers and backup withholding and
nonresident alien withholding status and certificates of the Acquired Fund
Shareholders and the number and percentage ownership of outstanding Acquired
Fund Shares owned by each Acquired Fund Shareholder as of the Valuation Time,
certified by the President or a Secretary of the
-3-
AmSouth Trust and its Treasurer, Secretary or other authorized officer (the
"Shareholder List") as being an accurate record of the information (a) provided
by the Acquired Fund Shareholders, (b) provided by the Acquired Fund Custodian,
or (c) derived from the AmSouth Trust's records by such officers or one of the
AmSouth Trust's service providers. The Acquiring Fund shall issue and deliver to
the Acquired Fund a confirmation evidencing the Acquiring Fund Shares to be
credited on the Closing Date, 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, stock
certificates, receipts or other documents as such other party or its counsel may
reasonably request.
4. REPRESENTATIONS AND WARRANTIES
4.1 Except as set forth on a disclosure schedule previously provided by the
AmSouth Trust to the Acquiring Trust (which disclosure schedule shall be
organized by the sections of this Section 4.1 and any disclosure shall only
modify the portions of this Section 4.1 expressly identified in such schedule),
the AmSouth Trust, on behalf of the Acquired Fund, represents, warrants and
covenants to the Acquiring Fund, which representations, warranties and covenants
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 series of the AmSouth Trust. The AmSouth Trust
is a business trust validly existing and in good standing under the laws of the
Commonwealth of Massachusetts and has the power to own all of its properties and
assets and, subject to approval by the Acquired Fund's 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 subject it to any material liability or
disability. Each of the AmSouth Trust and the Acquired 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 AmSouth Trust 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 AmSouth Trust is not in violation of, and the execution and
delivery of this Agreement and the performance of its obligations under this
Agreement in respect of the Acquired Fund will not result in a violation of, any
provision of the AmSouth Trust's Trust Instrument or By-Laws or any material
agreement, indenture, instrument, contract, lease or other undertaking with
respect to the Acquired Fund to which the AmSouth Trust is a party or by which
the Acquired Fund or any of its assets are bound;
(d) No litigation or administrative proceeding or investigation of or
before any court or governmental body is currently pending or to its knowledge
threatened against the Acquired Fund or any of the Acquired Fund's properties or
assets. The Acquired Fund knows of no facts which might form the basis for the
institution of such proceedings. Neither the AmSouth Trust nor the Acquired Fund
is a party to or subject to the provisions of any order, decree or judgment of
any court or governmental body which materially adversely affects the Acquired
Fund's business or its ability to consummate the transactions contemplated
herein or would be binding upon the Acquiring Fund as the successor to the
Acquired Fund;
(e) The Acquired Fund has no material contracts or other commitments
(other than this Agreement or agreements for the purchase and sale of securities
entered into in the ordinary course of business and consistent with its
obligations under this Agreement) which will not be terminated at or prior to
the Closing Date and no such termination will result in liability to the
Acquired Fund (or the Acquiring Fund);
(f) The statement of assets and liabilities of the Acquired Fund, and the
related statements of operations and changes in net assets, as of and for the
fiscal year ended July 31, 2004, have been audited by Ernst & Young LLP,
independent registered public accounting firm, and are in accordance with
generally accepted accounting principles ("GAAP") consistently applied and
fairly reflect,
-4-
in all material respects, the financial condition of the Acquired Fund as of
such date and the results of its operations for the period then ended, and all
known liabilities, whether actual or contingent, of the Acquired Fund as of the
date thereof are disclosed therein. The Statement of Assets and Liabilities will
be in accordance with GAAP consistently applied and will fairly reflect, in all
material respects, the financial condition of the Acquired Fund as of such date
and the results of its operations for the period then ended. Except for the
Assumed Liabilities, the Acquired Fund will not have any known or contingent
liabilities on the Closing Date. No significant deficiency, material weakness,
fraud, significant change or other factor that could significantly affect the
internal controls of the Acquired Fund has been disclosed or is required to be
disclosed in the Acquired Fund's reports on Form N-CSR to enable the chief
executive officer and chief financial officer or other officers of the Acquired
Fund to make the certifications required by the Sarbanes-Oxley Act, and no
deficiency, weakness, fraud, change, event or other factor exists that will be
required to be disclosed in the Acquiring Fund's Form N-CSR after the Closing
Date;
(g) Since the most recent fiscal year end, except as specifically
disclosed in the Acquired Fund's prospectus, its statement of additional
information as in effect on the date of this Agreement, or its semi-annual
report for the period ended January 31, 2005, 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) (but not for any
other purpose of this Agreement), a decline in NAV per Acquired Fund Share
arising out of its normal investment operations or a decline in market values of
securities in the Acquired Fund's portfolio or a decline in net assets of the
Acquired Fund as a result of redemptions shall not constitute a material adverse
change;
(h) (A) For each taxable year of its operation since its inception, the
Acquired Fund has met, and for the current taxable year it will meet, the
requirements of Subchapter M of the Code for qualification and treatment as a
regulated investment company. The Acquired Fund will qualify as such as of the
Closing Date and will satisfy the diversification requirements of Section
851(b)(3) of the Code without regard to the last sentence of Section 851(d) of
the Code. The Acquired Fund has not taken any action, caused any action to be
taken or caused any action to fail to be taken which action or failure could
cause the Acquired Fund to fail to qualify as a regulated investment company
under the Code;
(B) Within the times and in the manner prescribed by law, the Acquired
Fund has properly filed on a timely basis all Tax Returns (as defined below)
that it was required to file, and all such Tax Returns were complete and
accurate in all respects. The Acquired Fund has not been informed by any
jurisdiction that the jurisdiction believes that the Acquired Fund was required
to file any Tax Return that was not filed; and the Acquired Fund does not know
of any basis upon which a jurisdiction could assert such a position;
(C) The Acquired Fund has timely paid, in the manner prescribed by
law, all Taxes (as defined below), which were due and payable or which were
claimed to be due;
(D) All Tax Returns filed by the Acquired Fund constitute complete and
accurate reports of the respective Tax liabilities and all attributes of the
Acquired Fund or, in the case of information returns and payee statements, the
amounts required to be reported, and accurately set forth all items required to
be included or reflected in such returns;
(E) The Acquired Fund has not waived or extended any applicable
statute of limitations relating to the assessment or collection of Taxes;
(F) The Acquired Fund has not been notified that any examinations of
the 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, to its knowledge, no such deficiency has been
proposed or threatened;
(G) The Acquired Fund has no actual or potential liability for any Tax
obligation of any taxpayer other than itself. The Acquired Fund is not and has
never been a member of a group of corporations with which it has filed (or been
required to file) consolidated, combined or unitary Tax Returns. The Acquired
Fund is not a party to any Tax allocation, sharing, or indemnification
agreement;
-5-
(H) The unpaid Taxes of the Acquired Fund for tax periods through the
Closing Date do not exceed the accruals and reserves for Taxes (excluding
accruals and reserves for deferred Taxes established to reflect timing
differences between book and Tax income) set forth on the Statement of Assets
and Liabilities, rather than in any notes thereto (the "Tax Reserves"). All
Taxes that the Acquired Fund is or was required by law to withhold or collect
have been duly withheld or collected and, to the extent required, have been
timely paid to the proper governmental agency;
(I) The Acquired Fund has delivered to the Acquiring Fund or made
available to the Acquiring Fund complete and accurate copies of all Tax Returns
of the Acquired Fund, together with all related examination reports and
statements of deficiency for all periods not closed under the applicable
statutes of limitations and complete and correct copies of all private letter
rulings, revenue agent reports, information document requests, notices of
proposed deficiencies, deficiency notices, protests, petitions, closing
agreements, settlement agreements, pending ruling requests and any similar
documents submitted by, received by or agreed to by or on behalf of the Acquired
Fund. The Acquired Fund has disclosed on its federal income Tax Returns all
positions taken therein that could give rise to a substantial understatement of
federal income Tax within the meaning of Section 6662 of the Code;
(J) The Acquired Fund has not undergone, has not agreed to undergo,
and is not required to undergo (nor will it be required as a result of the
transactions contemplated in this Agreement to undergo) a change in its method
of accounting resulting in an adjustment to its taxable income pursuant to
Section 481 of the Code. The Acquired Fund will not be required to include any
item of income in, or exclude any item of deduction from, taxable income for any
taxable period (or portion thereof) ending after the Closing Date as a result of
any (i) change in method of accounting for a taxable period ending on or prior
to the Closing Date under Section 481(c) of the Code (or any corresponding or
similar provision of state, local or foreign income Tax law); (ii) "closing
agreement" as described in Section 7121 of the Code (or any corresponding or
similar provision of state, local or foreign income Tax law) executed on or
prior to the Closing Date; (iii) installment sale or open transaction
disposition made on or prior to the Closing Date; or (iv) prepaid amount
received on or prior to the Closing Date;
(K) The Acquired Fund has not taken or agreed to take any action, and
is not aware of any agreement, plan or other circumstance, that is inconsistent
with the representations set forth in Annex B;
(L) There are (and as of immediately following the Closing there will
be) no liens on the assets of the Acquired Fund relating to or attributable to
Taxes, except for Taxes not yet due and payable;
(M) The Tax bases of the assets of the Acquired Fund are accurately
reflected on the Acquired Fund's Tax books and records;
(N) The Acquired Fund has not incurred (or been allocated) an "overall
foreign loss" as defined in Section 904(f)(2) of the Code which has not been
previously recaptured in full as provided in Sections 904(f)(2) and/or 904(f)(3)
of the Code;
(O) The Acquired Fund is not a party to a gain recognition agreement
under Section 367 of the Code;
(P) The Acquired Fund does not own any interest in an entity that is
characterized as a partnership for income tax purposes;
(Q) The Acquired Fund's Tax attributes are not limited under the Code
(including but not limited to any capital loss carry forward limitations under
Sections 382 or 383 of the Code and the Treasury Regulations thereunder) or
comparable provisions of state law; and
(R) For purposes of this Agreement, "Taxes" or "Tax" shall mean all
taxes, charges, fees, levies or other similar assessments or liabilities,
including without limitation income, gross receipts, ad valorem, premium,
value-added, excise, real property, personal property, sales, use, transfer,
withholding, employment, unemployment, insurance, social security, business
license, business organization, environmental,
-6-
workers compensation, payroll, profits, license, lease, service, service use,
severance, stamp, occupation, windfall profits, customs, duties, franchise and
other taxes imposed by the United States of America or any state, local or
foreign government, or any agency thereof, or other political subdivision of the
United States or any such government, and any interest, fines, penalties,
assessments or additions to tax resulting from, attributable to or incurred in
connection with any tax or any contest or dispute thereof; and "Tax Returns"
shall mean all reports, returns, declarations, statements or other information
required to be supplied to a governmental or regulatory authority or agency, or
to any other person, in connection with Taxes and any associated schedules or
work papers produced in connection with such items;
(i) All issued and outstanding Acquired Fund Shares are, and at the
Closing Date will be, duly and validly issued and outstanding, fully paid and
nonassessable by the Acquired Fund. All of the issued and outstanding Acquired
Fund Shares will, at the time of Closing, be held of record by the persons and
in the amounts set forth in the Shareholder List submitted to the Acquiring Fund
pursuant to Paragraph 3.5 hereof. The Acquired Fund does not have outstanding
any options, warrants or other rights to subscribe for or purchase any Acquired
Fund Shares, nor is there outstanding any security convertible into any Acquired
Fund Shares;
(j) At the Closing Date, the Acquired Fund will have good and marketable
title to the Acquired Assets, and full right, power and authority to sell,
assign, transfer and deliver the Acquired Assets to the Acquiring Fund, and,
upon delivery and payment for the Acquired 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;
(k) The AmSouth Trust has the trust power and authority to enter into and
perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement have been duly authorized by all necessary action
on the part of the AmSouth Trust's Board of Trustees, and, subject to the
approval of the Acquired Fund's 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) The information to be furnished by the Acquired Fund to the Acquiring
Fund for use in applications for orders, registration statements, proxy
materials and other documents which may be necessary in connection with the
transactions contemplated hereby and any information necessary to compute the
total return of the Acquired Fund shall be accurate and complete and shall
comply in all material respects with federal securities and other laws and
regulations applicable thereto;
(m) The information included in the proxy statement (the "Proxy
Statement") forming part of the Acquiring Fund's Registration Statement on Form
N-14 filed in connection with this Agreement (the "Registration Statement") that
has been furnished in writing by the Acquired Fund to the Acquiring Fund for
inclusion in the Registration Statement, on the effective date of that
Registration Statement and on the Closing Date, will conform in all material
respects to the applicable requirements of the Securities Act, the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the Investment
Company Act and the rules and regulations of the Commission thereunder and will
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) Upon the effectiveness of the Registration Statement, no consent,
approval, authorization or order of any court or governmental authority is
required for the consummation by the AmSouth Trust or the Acquired Fund of the
transactions contemplated by this Agreement;
(o) All of the issued and outstanding Acquired Fund Shares have been
offered for sale and sold in conformity with all applicable federal and state
securities laws, except as may have been previously disclosed in writing to the
Acquiring Fund;
(p) The prospectus and statement of additional information of the Acquired
Fund and any amendments or supplements thereto, 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
-7-
stated therein or necessary to make the statements therein, in light of the
circumstances in which such statements were made, not misleading;
(q) 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 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 AmSouth Trust
with respect to 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
Investment Company 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;
(r) Neither the Acquired Fund nor, to the knowledge of the Acquired Fund,
any "affiliated person" of the Acquired 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 Acquired Fund, has any affiliated person of the Acquired
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, as amended (the
"Investment Advisers Act"), 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; and
(s) The tax representation certificate to be delivered by AmSouth Trust on
behalf of the Acquired Fund to the Acquiring Trust and Wilmer Cutler Pickering
Hale and Dorr LLP at the Closing pursuant to Paragraph 7.4 (the "Acquired Fund
Tax Representation Certificate") will not on the Closing Date contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein not misleading.
4.2 Except as set forth on a disclosure schedule previously provided by the
Acquiring Trust to the AmSouth Trust (which disclosure schedule shall be
organized by the sections of this Section 4.2 and any disclosure shall only
modify the portions of this Section 4.2 expressly identified in such schedule),
the Acquiring Trust, on behalf of the Acquiring Fund, represents, warrants and
covenants to the Acquired Fund, which representations, warranties and covenants
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 Trust is a statutory trust duly organized, validly
existing and in good standing under the laws of the State of Delaware. The
Acquiring Trust has the power to own all of its properties and assets and to
perform the 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 subject it to any material liability or
disability. Each of the Acquiring Trust and 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 Trust 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;
-8-
(c) The Acquiring Fund's registration statement on Form N-1A that will be
in effect on the Closing Date, and the prospectus and statement of additional
information of the Acquiring Fund included therein, 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 did not as of the effective date thereof and will not 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 Registration Statement, the Proxy Statement and statement of
additional information with respect to the Acquiring Fund, and any amendments or
supplements thereto in effect on or prior to the Closing Date included in the
Registration Statement (other than written information furnished by the Acquired
Fund for inclusion therein, as covered by the Acquired Fund's warranty in
Paragraph 4.1(m) hereof) will conform in all material respects to the applicable
requirements of the Securities Act and the Investment Company Act and the rules
and regulations of the Commission thereunder. Neither the Registration Statement
nor the Proxy Statement (other than written information furnished by the
Acquired Fund for inclusion therein, as covered by the Acquired Fund's warranty
in Paragraph 4.1(m) hereof) includes or will include any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading;
(e) The Acquiring Trust is not in violation of, and the execution and
delivery of this Agreement and performance of its obligations under this
Agreement will not result in a violation of, any provisions of the Declaration
of Trust or by-laws of the Acquiring Trust or any material agreement, indenture,
instrument, contract, lease or other undertaking with respect to the Acquiring
Fund to which the Acquiring Trust is a party or by which the Acquiring Fund or
any of its assets is bound;
(f) No litigation or administrative proceeding or investigation of or
before any court or governmental body is currently pending or threatened against
the Acquiring Fund or any of the Acquiring Fund's properties or assets. The
Acquiring Fund knows of no facts which might form the basis for the institution
of such proceedings. Neither the Acquiring Trust nor the Acquiring Fund is a
party to or subject to the provisions of any order, decree or judgment of any
court or governmental body which materially adversely affects the Acquiring
Fund's business or its ability to consummate the transactions contemplated
herein;
(g) The statement of assets and liabilities of the Acquiring Fund, and the
related statements of income and changes in NAV, as of and for the fiscal year
ended [ ] have been audited by Ernst & Young LLP, independent registered public
accounting firm, and are in accordance with GAAP consistently applied and fairly
reflect, in all material respects, the financial condition of the Acquiring Fund
as of such date and the results of its operations for the period then ended, and
all known liabilities, whether actual or contingent, of the Acquiring Fund as of
the date thereof are disclosed therein;
(h) (A) For each taxable year of its operation since its inception, the
Acquiring Fund has met, and for the current taxable year it will meet, the
requirements of Subchapter M of the Code for qualification and treatment as a
regulated investment company and will qualify as such as of the Closing Date and
will satisfy the diversification requirements of Section 851(b)(3) of the Code
without regard to the last sentence of Section 851(d) of the Code. The Acquiring
Fund has not taken any action, caused any action to be taken or caused any
action to fail to be taken which action or failure could cause the Acquiring
Fund to fail to qualify as a regulated investment company under the Code;
(B) Within the times and in the manner prescribed by law, the
Acquiring Fund has properly filed on a timely basis all Tax Returns that it was
required to file, and all such Tax Returns were complete and accurate in all
respects. The Acquiring Fund has not been informed by any jurisdiction that the
jurisdiction believes that the Acquiring Fund was required to file any Tax
Return that was not filed; and the Acquiring Fund does not know of any basis
upon which a jurisdiction could assert such a position;
(C) The Acquiring Fund has timely paid, in the manner prescribed by
law, all Taxes that were due and payable or that were claimed to be due;
-9-
(D) All Tax Returns filed by the Acquiring Fund constitute complete
and accurate reports of the respective liabilities for Taxes and all attributes
of the Acquiring Fund or, in the case of information returns and payee
statements, the amounts required to be reported, and accurately set forth all
items required to be included or reflected in such returns;
(E) The Acquiring Fund has not waived or extended any applicable
statute of limitations relating to the assessment or collection of Taxes;
(F) The Acquiring Fund has not been notified that any examinations of
the Tax Returns 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, to its knowledge, no such deficiency has been
proposed or threatened;
(G) The Acquiring Fund has no actual or potential liability for any
Tax obligation of any taxpayer other than itself. The Acquiring Fund is not and
has never been a member of a group of corporations with which it has filed (or
been required to file) consolidated, combined or unitary Tax Returns. The
Acquiring Fund is not a party to any Tax allocation, sharing, or indemnification
agreement;
(H) The Acquiring Trust has delivered to AmSouth Trust or made
available to AmSouth Trust complete and accurate copies of all Tax Returns of
the Acquiring Fund, together with all related examination reports and statements
of deficiency for all periods not closed under the applicable statutes of
limitations and complete and correct copies of all private letter rulings,
revenue agent reports, information document requests, notices of proposed
deficiencies, deficiency notices, protests, petitions, closing agreements,
settlement agreements, pending ruling requests and any similar documents
submitted by, received by or agreed to by or on behalf of the Acquiring Fund.
The Acquiring Fund has disclosed on its federal income Tax Returns all positions
taken therein that could give rise to a substantial understatement of federal
income Tax within the meaning of Section 6662 of the Code;
(I) The Acquiring Fund has not undergone, has not agreed to undergo,
and is not required to undergo (nor will it be required as a result of the
transactions contemplated in this Agreement to undergo) a change in its method
of accounting resulting in an adjustment to its taxable income pursuant to
Section 481 of the Code. The Acquiring Fund will not be required to include any
item of income in, or exclude any item of deduction from, taxable income for any
taxable period (or portion thereof) ending after the Closing Date as a result of
any (i) change in method of accounting for a taxable period ending on or prior
to the Closing Date under Section 481(c) of the Code (or any corresponding or
similar provision of state, local or foreign income Tax law); (ii) "closing
agreement" as described in Section 7121 of the Code (or any corresponding or
similar provision of state, local or foreign income Tax law) executed on or
prior to the Closing Date; (iii) installment sale or open transaction
disposition made on or prior to the Closing Date; or (iv) prepaid amount
received on or prior to the Closing Date;
(J) The Acquiring Fund has not taken or agreed to take any action, and
is not aware of any agreement, plan or other circumstance, that is inconsistent
with the representations set forth in Annex A;
(K) The Acquiring Fund has not incurred (or been allocated) an
"overall foreign loss" as defined in Section 904(f)(2) of the Code which has not
been previously recaptured in full as provided in Sections 904(f)(2) and/or
904(f)(3) of the Code;
(L) The Acquiring Fund is not a party to a gain recognition agreement
under Section 367 of the Code;
(M) The Acquiring Fund's Tax attributes are not limited under the Code
(including but not limited to any capital loss carry forward limitations under
Sections 382 or 383 of the Code and the Treasury Regulations thereunder) or
comparable provisions of state law, except as set forth on Schedule 4.2;
(i) The authorized capital of the Acquiring Fund consists of an unlimited
number of shares of beneficial interest, no par value per share. As of the
Closing Date, the Acquiring Fund will be authorized to issue
-10-
an unlimited number of shares of beneficial interest, no par value per share.
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 have been duly authorized on the Closing Date and, when so issued
and delivered, will be duly and validly issued, 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 Acquiring Fund shares;
(j) The Acquiring Trust has the trust power and authority to enter into
and perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement have been duly authorized by all necessary action
on the part of the Acquiring Trust'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;
(k) The information to be furnished in writing by the Acquiring Fund or
the Acquiring Fund Adviser for use in applications for orders, registration
statements, 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, and shall not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the information provided not misleading;
(l) No consent, approval, authorization or order of or filing with any
court or governmental authority is required for the execution of this Agreement
or the consummation of the transactions contemplated by the Agreement by the
Acquiring Fund, except for the registration of the Acquiring Fund Shares under
the Securities Act and the Investment Company Act;
(m) 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 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; and
(n) Since the most recent fiscal year end, except as specifically
disclosed in the Acquiring Fund's prospectus, its statement of additional
information as in effect on the date of this Agreement, or its semi-annual
report for the period ended January 31, 2005, there has not been any material
adverse change in the Acquiring Fund's financial condition, assets, liabilities,
business or prospects, or any incurrence by the Acquiring 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 (n) (but not for any
other purpose of this Agreement), a decline in NAV per Acquiring Fund Share
arising out of its normal investment operations or a decline in market values of
securities in the Acquiring Fund's portfolio or a decline in net assets of the
Acquiring Fund as a result of redemptions shall not constitute a material
adverse change;
(o) The tax representation certificate to be delivered by the Acquiring
Trust on behalf of the Acquiring Fund to the AmSouth Trust and Wilmer Cutler
Pickering Hale and Dorr LLP at Closing pursuant to Section 6.3 (the "Acquiring
Fund Tax Representation Certificate") will not on the Closing Date contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein not misleading.
5. COVENANTS OF THE FUNDS
5.1 The Acquired Fund will operate the Acquired Fund's business in the
ordinary course of business between the date hereof and the Closing Date. It is
understood that such ordinary course of business will include the
-11-
declaration and payment of customary dividends and other distributions and any
other dividends and other distributions necessary or advisable (except to the
extent dividends or other distributions that are not customary may be limited by
representations made in connection with the issuance of the tax opinion
described in Paragraph 8.5 hereof), in each case payable either in cash or in
additional shares.
5.2 The AmSouth Trust will call a special meeting of the Acquired Fund's
shareholders to consider approval of this Agreement and act upon the matters set
forth in the Proxy Statement.
5.3 The Acquiring Fund will prepare the notice of meeting, form of proxy and
Proxy Statement (collectively, "Proxy Materials") to be used in connection with
such meeting, and will promptly prepare and file with the Commission the
Registration Statement. The AmSouth Trust will provide the Acquiring Fund with
information reasonably requested for the preparation of the Registration
Statement in compliance with the Securities Act, the Exchange Act, and the
Investment Company Act.
5.4 The Acquired Fund covenants that the Acquiring Fund Shares to be issued
hereunder are not being acquired by the Acquired Fund for the purpose of making
any distribution thereof other than in accordance with the terms of this
Agreement.
5.5 The Acquired Fund will assist the Acquiring Fund in obtaining such
information as the Acquiring Fund reasonably requires concerning the beneficial
ownership of the Acquired Fund Shares.
5.6 Subject to the provisions of this Agreement, each 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 the transactions
contemplated by this Agreement.
5.7 The Acquired Fund shall furnish to the Acquiring Fund on the Closing Date
a Statement of Assets and Liabilities of the Acquired Fund as of the Closing
Date setting forth the NAV (as computed pursuant to Paragraph 2.1) of the
Acquired Fund as of the Valuation Time, which statement shall be prepared in
accordance with GAAP consistently applied and certified by the AmSouth Trust's
Treasurer or Assistant Treasurer. As promptly as practicable, but in any case
within 30 days after the Closing Date, the AmSouth Trust shall furnish to the
Acquiring Trust, in such form as is reasonably satisfactory to the Acquiring
Trust, 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 under the Code, and which statement
will be certified by the Treasurer of the AmSouth Trust.
5.8 Neither 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.
5.9 From and after the date of this Agreement and until the Closing Date,
each of the Funds and the AmSouth Trust and the Acquiring Trust shall use its
commercially reasonable efforts to cause the Reorganization to qualify, and will
not knowingly take any action, cause any action to be taken, fail to take any
action or cause any action to fail to be taken, which action or failure to act
could prevent the Reorganization from qualifying, as a reorganization under the
provisions of Section 368(a) of the Code. The parties hereby adopt this
Agreement as a "plan of reorganization" within the meaning of Sections
1.368-2(g) and 1.368-3(a) of the income tax regulations promulgated under the
Code. Unless otherwise required pursuant to a "determination" within the meaning
of Section 1313(a) of the Code, the parties hereto shall treat and report the
transactions contemplated hereby as a reorganization within the meaning of
Section [368(a)(1)(C)/(D)] of the Code and shall not take any position
inconsistent with such treatment.
5.10 From and after the date of this Agreement and through the time of the
Closing, each Fund shall use its commercially reasonable efforts to cause it to
qualify, and will not knowingly take any action, cause any action to be taken,
fail to take any action or cause any action to fail to be taken, which action or
failure to act could prevent it from qualifying as a regulated investment
company under the provisions of Subchapter M of the Code.
-12-
5.11 Each Fund shall prepare, or cause to be prepared, all of its Tax Returns
for taxable periods that end on or before the Closing Date and shall timely
file, or cause to be timely filed, all such Tax Returns. Each Fund shall make
any payments of Taxes required to be made by it with respect to any such Tax
Returns.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Acquired Fund to complete the transactions provided
for herein shall be, at its election, subject to the performance by the
Acquiring Fund of all 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:
6.1 All representations and warranties by the Acquiring Trust on behalf of
the Acquiring Fund contained in this Agreement shall be true and correct 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;
6.2 The Acquiring Trust shall have delivered to the AmSouth Trust on the
Closing Date a certificate of the Acquiring Trust on behalf of the Acquiring
Fund executed in its name by its President or Vice President and its Treasurer
or Assistant Treasurer, in form and substance satisfactory to the AmSouth Trust
and dated as of the Closing Date, to the effect that the representations and
warranties of the Acquiring Trust made in this Agreement are true and correct at
and as of the Closing Date, except as they may be affected by the transactions
contemplated by this Agreement, that each of the conditions to Closing in this
Article 6 have been met, and as to such other matters as the AmSouth Trust shall
reasonably request;
6.3 The Acquiring Trust on behalf of the Acquiring Fund shall have delivered
to the AmSouth Trust and Wilmer Cutler Pickering Hale and Dorr LLP an Acquiring
Fund Tax Representation Certificate, satisfactory to the AmSouth Trust and
Wilmer Cutler Pickering Hale and Dorr LLP, substantially in the form attached to
this Agreement as Annex A, concerning certain tax-related matters with respect
to the Acquiring Fund;
6.4 With respect to the Acquiring Fund, the Board of Trustees of the
Acquiring Trust shall have determined that the Reorganization is in the best
interests of the Acquiring Fund and, based upon such determination, shall have
approved this Agreement and the transactions contemplated hereby; and
6.5 The AmSouth Trust shall have received at the Closing a favorable opinion
as to the due authorization of this Agreement by the Acquiring Trust and related
matters of Wilmer Cutler Pickering Hale and Dorr LLP, dated as of the Closing
Date, in a form reasonably satisfactory to the AmSouth Trust.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Fund to complete the transactions provided
for herein shall be, at its election, subject to the performance by the Acquired
Fund of all 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 Acquiring Fund in writing:
7.1 All representations and warranties of the AmSouth Trust on behalf of the
Acquired Fund contained in this Agreement shall be true and correct 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 AmSouth Trust shall have delivered to the Acquiring Fund the
Statement of Assets and Liabilities of the Acquired Fund pursuant to Paragraph
5.7, together with a list of its portfolio securities showing the federal income
tax bases and holding periods of such securities, as of the Closing Date,
certified by the AmSouth Trust's Treasurer or Assistant Treasurer;
-13-
7.3 The AmSouth Trust shall have delivered to the Acquiring Trust on the
Closing Date a certificate of the AmSouth Trust on behalf of the Acquired Fund
executed in its name by its President or Vice President and a Treasurer or
Assistant Treasurer, in form and substance reasonably satisfactory to the
Acquiring Trust and dated as of the Closing Date, to the effect that the
representations and warranties of the AmSouth Trust contained in this Agreement
are true and correct at and as of the Closing Date, except as they may be
affected by the transactions contemplated by this Agreement, that each of the
conditions to Closing in this Article 7 have been met, and as to such other
matters as the Acquiring Trust shall reasonably request;
7.4 The AmSouth Trust on behalf of the Acquired Fund shall have delivered to
the Acquiring Trust and Wilmer Cutler Pickering Hale and Dorr LLP an Acquired
Fund Tax Representation Certificate, satisfactory to the Acquiring Trust and
Wilmer Cutler Pickering Hale and Dorr LLP, substantially in the form attached to
this Agreement as Annex B, concerning certain tax-related matters with respect
to the Acquired Fund;
7.5 The Acquiring Trust shall have received at the Closing a favorable
opinion as to the due authorization of this Agreement by the AmSouth Trust and
related matters of Kirkpatrick & Lockhart Nicholson Graham LLP, dated as of the
Closing Date, in a form reasonably satisfactory to the Acquiring Trust; and
7.6 With respect to the Acquired Fund, the Board of Trustees of the AmSouth
Trust shall have determined that the Reorganization is in the best interests of
the Acquired Fund and, based upon such determination, shall have approved this
Agreement and the transactions contemplated hereby.
8. FURTHER CONDITIONS PRECEDENT
If any of the conditions set forth below does 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:
8.1 This Agreement and the transactions contemplated herein shall have been
approved by the requisite vote of the Acquired Fund's shareholders in accordance
with the provisions of the AmSouth Trust's Trust Instrument and By-Laws, and
certified copies of the resolutions evidencing such approval by the Acquired
Fund's shareholders shall have been delivered by the Acquired Fund to the
Acquiring Fund. Notwithstanding anything herein to the contrary, neither party
hereto may waive the conditions set forth in this Paragraph 8.1;
8.2 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;
8.3 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 waive any such conditions for itself;
8.4 The Acquiring Trust's Registration Statement on Form N-14 shall have
become effective under the Securities Act and no stop orders suspending the
effectiveness of such Registration Statement 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;
8.5 The parties shall have received an opinion of Wilmer Cutler Pickering
Hale and Dorr LLP, satisfactory to the AmSouth Trust and the Acquiring Trust and
subject to customary assumptions and qualifications, substantially to the effect
that for federal income tax purposes the acquisition by the Acquiring Fund of
the Acquired Assets solely in exchange for the issuance of Acquiring Fund Shares
to the Acquired Fund and the assumption 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
-14-
Shares and the termination of the Acquired Fund, will constitute a
"reorganization" within the meaning of Section 368(a) of the Code; and
8.6 The Acquired Fund shall have distributed to its shareholders, in a
distribution or distributions qualifying for the deduction for dividends paid
under Section 561 of the Code, all of its investment company taxable income (as
defined in Section 852(b)(2) of the Code determined without regard to Section
852(b)(2)(D) of the Code) for its taxable year ending on the Closing Date, all
of the excess of (i) its interest income excludable from gross income under
Section 103(a) of the Code over (ii) its deductions disallowed under Sections
265 and 171(a)(2) of the Code for its taxable year ending on the Closing Date,
and all of its net capital gain (as such term is used in Sections 852(b)(3)(A)
and (C) of the Code), after reduction by any available capital loss
carryforward, for its taxable year ending on the Closing Date.
9. BROKERAGE FEES AND EXPENSES
9.1 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.
9.2 The parties have been informed by AmSouth Asset Management Inc. ("AAMI")
and the Acquiring Fund Adviser -- and the parties have entered into this
Agreement in reliance on such information -- that such non-parties will pay
(with each of AAMI and the Acquiring Fund Adviser being responsible for 50% of
such amounts) all proxy statement and solicitation costs of the Funds associated
with the Reorganization including, but not limited to, the expenses associated
with the preparation, printing and mailing of any and all shareholder notices,
communications, proxy statements, and necessary filings with the SEC or any
other governmental authority in connection with the transactions contemplated by
this Agreement and the fees and expenses of any proxy solicitation firm retained
in connection with the Reorganization. Except for the foregoing, the AAMI shall
bear the expenses of the Acquired Fund in connection with the transactions
contemplated by this Agreement.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Acquiring Trust and the AmSouth Trust each agrees that neither party
has made any representation, warranty or covenant not set forth herein or
referred to in Paragraphs 4.1 or 4.2 hereof and that this Agreement constitutes
the entire agreement between the parties.
10.2 The representations and warranties contained in this Agreement or in any
document delivered pursuant hereto or in connection herewith shall not survive
the consummation of the transactions contemplated hereunder.
11. TERMINATION
11.1 This Agreement may be terminated by the mutual agreement of the
Acquiring Trust and the AmSouth Trust. In addition, either party may at its
option terminate this Agreement at or prior to the Closing Date:
(a) because of a material breach by the other of any representation,
warranty, covenant or agreement contained herein to be performed at or prior to
the Closing Date;
(b) because of a condition herein expressed to be precedent to the
obligations of the terminating party which has not been met and which reasonably
appears will not or cannot be met;
(c) by resolution of the Acquiring Trust's Board of Trustees if
circumstances should develop that, in the good faith opinion of such Board, make
proceeding with the Agreement not in the best interests of the Acquiring Fund's
shareholders;
(d) by resolution of the AmSouth Trust's Board of Trustees if
circumstances should develop that, in the good faith opinion of such Board, make
proceeding with the Agreement not in the best interests of the Acquired Fund's
shareholders; or
-15-
(e) if the transactions contemplated by this Agreement shall not have
occurred on or prior to December 31, 2005 or such other date as the parties may
mutually agree upon in writing.
11.2 In the event of any such termination, there shall be no liability for
damages on the part of the Acquiring Fund, the Acquiring Trust, the AmSouth
Trust or the Acquired Fund, or the trustees or officers of the AmSouth Trust, or
the Acquiring Trust, but, subject to Paragraph 9.2, each party shall bear the
expenses incurred by it incidental to the preparation and carrying out of this
Agreement.
12. 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 AmSouth
Trust and the Acquiring Trust; provided, however, that following the meeting of
the Acquired Fund's shareholders called by the AmSouth Trust pursuant to
Paragraph 5.2 of this Agreement, no such amendment may have the effect of
changing the provisions regarding the method for determining the number of
Acquiring Fund Shares to be received by the Acquired Fund Shareholders under
this Agreement to their detriment without their further approval; provided that
nothing contained in this Section 12 shall be construed to prohibit the parties
from amending this Agreement to change the Closing Date.
13. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by prepaid
telegraph, telecopy or certified mail addressed to the Acquired Fund, c/o
AmSouth Asset Management Inc., 3435 Stelzer Road, Columbus, Ohio 43219,
Attention: [ ], with copies to Kirkpatrick & Lockhart Nicholson Graham LLP, 1800
Massachusetts Avenue, N.W., Washington, DC, 20036-1221, Attention: Clifford J.
Alexander, and to the Acquiring Fund, c/o Pioneer Investment Management, Inc.,
60 State Street, Boston, Massachusetts 02109, Attention: Dorothy E. Bourassa,
Esq., with copies to Wilmer Cutler Pickering Hale and Dorr LLP, 60 State Street,
Boston, Massachusetts 02109, Attention: David C. Phelan.
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
14.1 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.
14.2 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
14.3 This Agreement shall be governed by and construed in accordance with the
internal laws of the State of Delaware, without giving effect to conflict of
laws principles (other than Delaware Code Title 6 ss. 2708); provided that, in
the case of any conflict between those laws and the federal securities laws, the
latter shall govern.
14.4 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 prior 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 or 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.
14.5 It is expressly agreed that the obligations of the Acquiring Trust and
the AmSouth Trust shall not be binding upon any of their respective trustees,
shareholders, nominees, officers, agents or employees personally, but bind only
to the property of the Acquiring Fund or the Acquired Fund, as the case may be,
as provided in the trust instruments of the Acquiring Trust and the Instrument
of Trust of the AmSouth Trust, respectively. The execution and delivery of this
Agreement have been authorized by the trustees of the Acquiring Trust and of the
AmSouth Trust and this Agreement has been executed by authorized officers of the
Acquiring Trust and the AmSouth Trust, 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
-16-
them individually or to imposed 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 trust instruments of the Acquiring Trust and the
Instrument of Trust of the AmSouth Trust, respectively.
* * * * *
-17-
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed as of the date first set forth above by its President or Vice
President and attested by its Secretary or Assistant Secretary.
Attest: AMSOUTH FUNDS
on behalf of AMSOUTH [ ] FUND
By: ____________________________ By: _______________________________
Name: Name:
Title: [Assistant] Secretary Title: [Vice] President
Attest: PIONEER [ ] FUND
on behalf of PIONEER [ ] FUND
By: ____________________________ By: _______________________________
Name: Christopher J. Kelley Name: Osbert M. Hood
Title: Assistant Secretary Title: Executive Vice President
-18-
Annex A
TAX REPRESENTATION CERTIFICATE OF
PIONEER [ ] FUND
ON BEHALF OF PIONEER [ ] FUND
This certificate is being delivered in connection with the transactions to be
effected pursuant to the Agreement and Plan of Reorganization made as of [ ],
2005 between Pioneer [ ] Fund, a Delaware statutory trust ("Acquiring Trust"),
on behalf of its sole series Pioneer [ ] Fund ("Acquiring Fund"), and AmSouth
Funds, a Massachusetts business trust, on behalf of its series AmSouth [ ] Fund
("Acquired Fund") (the "Agreement"). Pursuant to the Agreement, Acquiring Fund
will acquire all of the assets of Acquired Fund in exchange solely for (i) the
assumption by Acquiring Fund of the Assumed Liabilities of Acquired Fund and
(ii) the issuance of shares of beneficial interest of Acquiring Fund (the
"Acquiring Fund Shares") to Acquired Fund, followed by the distribution by
Acquired Fund, in liquidation of Acquired Fund, of the Acquiring Fund Shares to
the shareholders of Acquired Fund and the termination of Acquired Fund (the
foregoing together constituting the "transaction").
The undersigned officer of Acquiring Trust, after consulting with its
counsel, auditors and tax advisers regarding the meaning of and factual support
for the following representations on behalf of Acquiring Fund, hereby certifies
and represents that the following statements are true, complete and correct and
will be true, complete and correct on the date of the transaction and thereafter
as relevant. Unless otherwise indicated, all capitalized terms used but not
defined herein shall have the meanings ascribed to them in the Agreement.
1. Acquiring Fund is a series of Acquiring Trust, a statutory trust organized
under the laws of the State of Delaware, and Acquiring Fund is, and has been at
all times, treated as a corporation for federal tax purposes.
2. Neither Acquiring Fund nor any person "related" to Acquiring Fund (as
defined in Treasury Regulation Section 1.368-1(e)(3)), nor any partnership of
which Acquiring Fund or any such related person is a partner, has any plan or
intention to redeem or otherwise acquire any of the Acquiring Fund Shares
received by shareholders of Acquired Fund in the transaction except in the
ordinary course of Acquiring Fund's business in connection with its legal
obligation under Section 22(e) of the Investment Company Act of 1940, as amended
(the "1940 Act"), as a series of a registered open-end investment company to
redeem its own shares.
3. After the transaction, Acquiring Fund will continue the historic business
(as defined in Treasury Regulation Section 1.368-1(d)(2)) of Acquired Fund or
will use a significant portion of the historic business assets (as defined in
Treasury Regulation Section 1.368-1(d)(3)) acquired from Acquired Fund in a
business.
4. Acquiring Fund has no plan or intention to sell or otherwise dispose of
any assets of Acquired Fund acquired in the transaction, except for dispositions
made in the ordinary course of its business or to maintain its qualification as
a regulated investment company under Subchapter M of the Internal Revenue Code
of 1986, as amended (the "Code").
5. Any expenses of Acquired Fund incurred in connection with the transaction
which are paid or assumed by Acquiring Fund will be expenses of Acquired Fund
solely and directly related to the transaction in accordance with Rev. Rul.
73-54, 1973-1 C.B. 187. Acquiring Fund will not pay or assume the expenses, if
any, incurred by any Acquired Fund Shareholders in connection with the
transaction.
6. There is no, and never has been any, indebtedness between Acquiring Fund
and Acquired Fund.
7. Acquiring Fund has properly elected to be a regulated investment company
under Subchapter M of the Code, has qualified for the special tax treatment
afforded regulated investment companies under the Code for each taxable year
since inception and qualifies for such treatment as of the time of the Closing.
A-1
8. Acquiring Fund meets the requirements of an "investment company" in
Section 368(a)(2)(F) of the Code.
9. Acquiring Fund is not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of Section 368(a)(3)(A) of the Code.
10. Acquiring Fund does not now own and has never owned, directly or
indirectly, any shares of Acquired Fund.
11. As of the date of the transaction, the fair market value of the Acquiring
Fund Shares issued to Acquired Fund will be approximately equal to the fair
market value of the Acquired Assets minus the Assumed Liabilities. Acquiring
Fund will not furnish any consideration in connection with the acquisition of
the Acquired Assets other than the assumption of the Assumed Liabilities and the
issuance of such Acquiring Fund Shares.
12. Acquired Fund Shareholders will [not] be in control (within the meaning
of Sections 368(a)(2)(H)(i) and 304(c)(1) of the Code) of Acquiring Fund after
the transaction.
13. The transaction is being undertaken for valid and substantial business
purposes, including facilitating Acquired Fund's becoming a member of the
Pioneer family of mutual funds, which, in the long term, is intended to result
in lower expenses and increased assets.
14. No Acquired Fund shareholder is acting as agent for Acquiring Fund in
connection with the transaction or approval thereof. Acquiring Fund will not
reimburse any Acquired Fund shareholder for Acquired Fund Shares such
shareholder may have purchased or for other obligations such shareholder may
have incurred.
15. Acquiring Fund has no outstanding warrants, options, convertible
securities or any other type of right pursuant to which any person could acquire
stock in Acquiring Fund.
* * * * *
The undersigned officer of Acquiring Trust is authorized to make all of the
representations set forth herein, and the undersigned is authorized to execute
this certificate on behalf of Acquiring Fund. The undersigned recognizes that
Wilmer Cutler Pickering Hale and Dorr LLP will rely upon the foregoing
representations in evaluating the United States federal income tax consequences
of the transaction and rendering its opinion pursuant to Section 8.5 of the
Agreement. If, prior to the date of the transaction, any of the representations
set forth herein ceases to be accurate, the undersigned agrees to deliver
immediately to Wilmer Cutler Pickering Hale and Dorr LLP a written notice to
that effect.
PIONEER [ ] FUND
on behalf of PIONEER [ ] FUND
By: _______________________________
Name: _______________________________
Title: _______________________________
Dated: _________, 2005
A-2
Annex B
TAX REPRESENTATION CERTIFICATE OF
AMSOUTH FUNDS
ON BEHALF OF AMSOUTH [ ] FUND
This certificate is being delivered in connection with the transactions to be
effected pursuant to the Agreement and Plan of Reorganization made as of [ ],
2005 between Pioneer [ ] Fund, a Delaware statutory trust, on behalf of its
series Pioneer [ ] Fund ("Acquiring Fund"), and AmSouth Funds, a Massachusetts
business trust ("AmSouth Trust"), on behalf of its series AmSouth [ ] Fund
("Acquired Fund") (the "Agreement"). Pursuant to the Agreement, Acquiring Fund
will acquire all of the assets of Acquired Fund in exchange solely for (i) the
assumption by Acquiring Fund of the Assumed Liabilities of Acquired Fund and
(ii) the issuance of shares of beneficial interest of Acquiring Fund (the
"Acquiring Fund Shares") to Acquired Fund, followed by the distribution by
Acquired Fund, in liquidation of Acquired Fund, of the Acquiring Fund Shares to
the shareholders of Acquired Fund and the termination of Acquired Fund (the
foregoing together constituting the "transaction").
The undersigned officer of AmSouth Trust, after consulting with its counsel,
auditors and tax advisers regarding the meaning of and factual support for the
following representations, on behalf of Acquired Fund, hereby certifies and
represents that the following statements are true, complete and correct and will
be true, complete and correct on the date of the transaction and thereafter as
relevant. Unless otherwise indicated, all capitalized terms used but not defined
herein shall have the meanings ascribed to them in the Agreement.
1. Acquired Fund is a series of AmSouth Funds, a business trust organized
under the laws of the Commonwealth of Massachusetts, and Acquired Fund is, and
has been at all times, treated as a separate corporation for federal tax
purposes.
2. As of the date of the transaction, the fair market value of the Acquiring
Fund Shares received by each shareholder that holds shares of Acquired Fund (the
"Acquired Fund Shares") will be approximately equal to the fair market value of
the Acquired Fund Shares with respect to which such Acquiring Fund Shares are
received, and the aggregate consideration received by Acquired Fund shareholders
in exchange for their Acquired Fund Shares will be approximately equal to the
fair market value of all of the outstanding Acquired Fund Shares immediately
prior to the transaction. No property other than Acquiring Fund Shares will be
distributed to shareholders of Acquired Fund in exchange for their Acquired Fund
Shares, nor will any such shareholder receive cash or other property as part of
the transaction.
3. Neither Acquired Fund nor any person "related" to Acquired Fund (as
defined in Treasury Regulation Section 1.368-1(e)(3)), nor any partnership in
which Acquired Fund or any such related person is a partner, has redeemed,
acquired or otherwise made any distributions with respect to any shares of
Acquired Fund as part of the transaction, or otherwise pursuant to a plan of
which the transaction is a part, other than redemptions and distributions made
in the ordinary course of Acquired Fund's business as a series of an open-end
investment company. To the best knowledge of management of Acquired Fund, there
is no plan or intention on the part of the shareholders of Acquired Fund to
engage in any transaction with Acquired Fund, Acquiring Fund, or any person
treated as related to Acquired Fund or Acquiring Fund under Treasury Regulation
Section 1.368-1(e)(3) or any partnership in which Acquired Fund, Acquiring Fund,
or any person treated as related to Acquired Fund or Acquiring Fund under
Treasury Regulation Section 1.368-1(e)(3) is a partner involving the sale,
redemption or exchange of any of the Acquired Fund Shares or any of the
Acquiring Fund Shares to be received in the transaction, as the case may be,
other than in the ordinary course of Acquired Fund's business as a series of an
open-end investment company.
4. Pursuant to the transaction, Acquired Fund will transfer to Acquiring
Fund, and Acquiring Fund will acquire, at least 90% of the fair market value of
the net assets, and at least 70% of the fair market value of the gross assets,
Acquired Fund held immediately before the transaction. For the purposes of the
foregoing, any amounts Acquired Fund uses to pay its transaction expenses and to
make redemptions and distributions immediately before the transaction (except
(a) redemptions in the ordinary course of its business required by section 22(e)
of the
B-1
Investment Company Act and (b) regular, normal dividend distributions made to
conform to its policy of distributing all or substantially all of its income and
gains to avoid the obligation to pay federal income tax and/or the excise tax
under Section 4982 of the Code) will be included as assets it held immediately
before the transaction.
5. As of the date of the transaction, the fair market value of the Acquiring
Fund Shares issued to Acquired Fund will be approximately equal to the fair
market value of the Acquired Assets minus the Assumed Liabilities. Acquired Fund
will not receive any consideration from Acquiring Fund in connection with the
acquisition of the Acquired Assets other than the assumption of the Assumed
Liabilities and the issuance of such Acquiring Fund Shares.
6. The Assumed Liabilities assumed by Acquiring Fund plus the Assumed
Liabilities, if any, to which the transferred assets are subject were incurred
by Acquired Fund in the ordinary course of its business. Acquired Fund is not
aware of any liabilities of any kind other than the Assumed Liabilities.
7. As of the Closing Date, the adjusted basis and fair market value of the
Acquired Assets will equal or exceed the Assumed Liabilities assumed for
purposes of Section 357(d) of the Code.
8. Acquired Fund currently conducts its historic business within the meaning
of Treasury Regulation Section 1.368-1(d)(2), which provides that, in general, a
corporation's historic business is the business it has conducted most recently,
but does not include a business that the corporation enters into as part of a
plan of reorganization. The Acquired Fund assets transferred to Acquiring Fund
will be Acquired Fund's historic business assets within the meaning of Treasury
Regulation Section 1.368-1(d)(3), which provides that a corporation's historic
business assets are the assets used in its historic business.
9. Acquired Fund will distribute to its shareholders the Acquiring Fund
Shares it receives pursuant to the transaction, and its other properties, if
any, and will be liquidated promptly thereafter.
10. The expenses of Acquired Fund incurred by it in connection with the
transaction will be only such expenses that are solely and directly related to
the transaction in accordance with Rev. Rul. 73-54, 1973-1 C.B. 187. Acquired
Fund will not pay any expenses incurred by its shareholders in connection with
the transaction.
11. There is no, and never has been any, indebtedness between Acquiring Fund
and Acquired Fund.
12. Acquired Fund has properly elected to be a regulated investment company
under Subchapter M of the Code, has qualified for the special tax treatment
afforded regulated investment companies under Subchapter M of the Code for each
taxable year since inception, and qualifies for such treatment as of the time of
the Closing.
13. Acquired Fund meets the requirements of an "investment company" in
Section 368(a)(2)(F) of the Code.
14. Acquired Fund is not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of Section 368(a)(3)(A) of the Code.
15. Acquired Fund does not pay compensation to any shareholder-employee.
16. Acquired Fund shareholders will not have dissenters' or appraisal rights
in the transaction.
17. The transaction is being undertaken for valid and substantial business
purposes, including facilitating Acquired Fund's becoming a member of the
Pioneer family of material funds, which, in the long term, is intended to result
in lower expenses and increased assets.
18. Acquired Fund has no outstanding warrants, options, convertible
securities or any other type of right pursuant to which any person could acquire
stock in Acquired Fund.
* * * * *
B-2
The undersigned officer of AmSouth Trust is authorized to make all of the
representations set forth herein, and the undersigned is authorized to execute
this certificate on behalf of Acquired Fund. The undersigned recognizes that
Wilmer Cutler Pickering Hale and Dorr LLP will rely upon the foregoing
representations in evaluating the United States federal income tax consequences
of the transaction and rendering its opinion pursuant to Section 8.5 of the
Agreement. If, prior to the date of the transaction, any of the representations
set forth herein ceases to be accurate, the undersigned agrees to deliver
immediately to Wilmer Cutler Pickering Hale and Dorr LLP a written notice to
that effect.
AMSOUTH FUNDS
on behalf of AMSOUTH [ ] FUND
By: ________________________________
Name: ________________________________
Title: ________________________________
Dated: __________, 2005
B-3
Draft
Exhibit A-2--Form of Agreement and Plan of Reorganization (F Reorganization)
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of the
__ day of _________, 2005, by and between Pioneer [ ] Fund, a Delaware statutory
trust (the "Acquiring Trust"), on behalf of its series Pioneer [_________] Fund
(the "Acquiring Fund"), with its principal place of business at 60 State Street,
Boston, Massachusetts 02109, and AmSouth Funds, a Massachusetts business trust
(the "AmSouth Trust"), on behalf of its series AmSouth [ ] Fund (the "Acquired
Fund"), with its principal place of business at 3435 Stelzer Road, Columbus,
Ohio 43219. The Acquiring Fund and the Acquired Fund are sometimes referred to
collectively herein as the "Funds" and individually as a "Fund."
This Agreement is intended to be and is adopted as a plan of a
"reorganization" as defined in Section 368(a)(1)(F) of the United States
Internal Revenue Code of 1986, as amended (the "Code") and the Treasury
Regulations thereunder. The reorganization (the "Reorganization") will consist
of (1) the transfer of all of the assets of the Acquired Fund to the Acquiring
Fund in exchange solely for (A) the issuance of Class A, Class B and Class Y
shares of beneficial interest of the Acquiring Fund (collectively, the
"Acquiring Fund Shares" and each, an "Acquiring Fund Share") to the Acquired
Fund, and (B) the assumption by the Acquiring Fund of all liabilities of the
Acquired Fund (collectively, the "Assumed Liabilities"), and (2) the
distribution by the Acquired Fund, on or promptly after the closing date of the
Reorganization (the "Closing Date") as provided herein, of the Acquiring Fund
Shares to the shareholders of the Acquired Fund in liquidation and dissolution
of the Acquired Fund, all upon the terms and conditions hereinafter set forth in
this Agreement.
WHEREAS, the Acquiring Trust and the AmSouth Trust are each registered
investment companies classified as management companies of the open-end type.
WHEREAS, the Acquiring Fund is authorized to issue shares of beneficial
interest.
WHEREAS, the Board of Trustees of the AmSouth Trust has determined that the
Reorganization is in the best interests of the Acquired Fund shareholders and is
not dilutive of the interests of those shareholders.
NOW, THEREFORE, in consideration of the premises 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; 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 will
transfer all of its assets as set forth in Paragraph 1.2 (the "Acquired Assets")
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: (i)
to issue to the Acquired Fund the number of Acquiring Fund Shares, including
fractional Acquiring Fund Shares, of each class with an aggregate net asset
value ("NAV") equal to the NAV of the Acquired Fund attributable to the
corresponding class of the Acquired Fund's shares, as determined in the manner
set forth in Paragraphs 2.1 and 2.2; and (ii) to assume the Assumed Liabilities.
Such transactions shall take place at the Closing (as defined in Paragraph 3.1
below).
1.2 (a) The Acquired Assets shall consist of all of the Acquired Fund's
property, including, without limitation, all portfolio securities and
instruments, dividends and interest receivables, cash, goodwill, contractual
rights and choses in action of the Acquired Fund or the AmSouth Trust in respect
of the Acquired Fund, all other intangible property owned by the Acquired Fund,
originals or copies of all books and records of the Acquired Fund, and all other
assets of the Acquired Fund on the Closing Date. The Acquiring Fund shall also
be entitled to receive (or, to the extent agreed upon between the AmSouth Trust
and the Acquiring Trust, be provided
1
access to) copies of all records that the AmSouth Trust is required to maintain
under the Investment Company Act of 1940, as amended (the "Investment Company
Act"), and the rules of the Securities and Exchange Commission (the
"Commission") thereunder to the extent such records pertain to 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 execution
of this Agreement, and the Acquiring Fund has provided the Acquired Fund with a
copy of the current fundamental investment policies and restrictions and fair
value procedures applicable to the Acquiring Fund. The Acquired Fund reserves
the right to sell any of such securities or other assets before the Closing Date
(except to the extent sales may be limited by representations of the Acquired
Fund contained herein and made in connection with the issuance of the tax
opinion provided for in Paragraph 8.5 hereof).
1.3 The Acquired Fund will endeavor to discharge all of its known liabilities
and obligations that are or will become due prior to the Closing.
1.4 On or as soon after the Closing Date as is conveniently practicable (the
"Liquidation Date"), the AmSouth Trust shall liquidate the Acquired Fund and
distribute pro rata to its shareholders of record, determined as of the close of
regular trading on the New York Stock Exchange on the Closing Date (the
"Acquired Fund Shareholders"), the Acquiring Fund Shares received by the
Acquired Fund pursuant to Paragraph 1.1 hereof. Each Acquired Fund Shareholder
shall receive the number of Acquiring Fund Shares of the class corresponding to
the class of shares of beneficial interest of the Acquired Fund (the "Acquired
Fund Shares") held by such Acquired Fund Shareholder that have an aggregate NAV
equal to the aggregate NAV of the Acquired Fund Shares held of record by such
Acquired Fund Shareholder on the Closing Date. Such liquidation and distribution
will be accomplished by the AmSouth Trust instructing the Acquiring Trust 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 established and maintained by the Acquiring Fund's transfer
agent in the names of the Acquired Fund Shareholders and representing the
respective pro rata number of the Acquiring Fund Shares due the Acquired Fund
Shareholders. The AmSouth Trust shall promptly provide the Acquiring Trust with
evidence of such liquidation and distribution. All issued and outstanding
Acquired Fund Shares will simultaneously be cancelled on the books of the
Acquired Fund, and the Acquired Fund will be dissolved. The Acquiring Fund shall
not issue certificates representing the Acquiring Fund Shares in connection with
such exchange.
1.5 Ownership of Acquiring Fund Shares will be shown on the books of the
Acquiring Fund's transfer agent. Any certificates representing ownership of
Acquired Fund Shares that remain outstanding on the Closing Date shall be deemed
to be cancelled and shall no longer evidence ownership of Acquired Fund Shares.
1.6 Any transfer taxes payable upon issuance of 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 that time 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 AmSouth Trust with respect to the
Acquired Fund for taxable periods ending on or before the Closing Date,
including, but not limited to, the responsibility for filing of regulatory
reports, Tax Returns (as defined in Paragraph 4.1), or other documents with the
Commission, any state securities commissions, and any federal, state or local
tax authorities or any other relevant regulatory authority, is and shall remain
the responsibility of the AmSouth Trust.
2. VALUATION
2.1 The NAV of the Acquiring Fund Shares and the NAV of the Acquired Fund
shall, in each case, be determined as of the close of business (4:00 p.m.,
Boston time) on the Closing Date (the "Valuation Time"). The NAV of each class
of Acquiring Fund Shares shall be equal to the NAV of the corresponding class of
the Acquired Fund Shares as of the Valuation Time. The NAV of the Acquired Fund
and of each Class A, B and I share thereof shall be computed by ASO Services
Company, Inc. (the "Acquired Fund Administrator") by calculating the value of
the Acquired Assets and by subtracting therefrom the amount of the liabilities
of the Acquired Fund on the Closing Date included on the Statement of Assets and
Liabilities of the Acquired Fund delivered pursuant to
2
Paragraph 5.7 (the "Statement of Assets and Liabilities"), said assets and
liabilities to be valued in the manner set forth in the Acquiring Fund's then
current prospectus and statement of additional information. Pioneer Investment
Management, Inc. (the "Acquiring Fund Adviser") shall confirm to the Acquiring
Fund the NAV of the Acquired Fund.
2.2 The number of Acquiring Fund Shares to be issued (including fractional
shares, if any) in exchange for the Acquired Assets and the assumption of the
Assumed Liabilities shall be determined by Acquiring Fund Adviser by dividing
the NAV of the Acquired Fund, as determined in accordance with Paragraph 2.1, by
the NAV of each Acquiring Fund Share, as determined in accordance with Paragraph
2.1.
2.3 The Acquired Fund shall cause the Acquired Fund Administrator to deliver
a copy of its valuation report to the Acquiring Fund at Closing. All
computations of value shall be made by the Acquired Fund Administrator 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 [ ], 2005, or such later date as the parties
may agree to in writing. All acts necessary to consummation the Reorganization
(the "Closing") shall be deemed to take place simultaneously as of 5:00 p.m.
(Eastern time) on the Closing Date unless otherwise provided. The Closing shall
be held at the offices of Wilmer Cutler Pickering Hale and Dorr LLP, 60 State
Street, Boston, Massachusetts, or at such other place as the parties may agree.
3.2 Portfolio securities that are held other than in book-entry form in the
name of AmSouth Bank (the "Acquired Fund Custodian") as record holder for the
Acquired Fund shall be presented by the Acquired Fund to Brown Brothers Harriman
& Co. (the "Acquiring Fund Custodian") for examination no later than three
business days preceding the Closing Date. Such portfolio securities shall be
delivered by the Acquired Fund to the Acquiring Fund Custodian for the account
of the Acquiring Fund on the Closing Date, duly endorsed in proper form for
transfer, in such condition as to constitute good delivery thereof in accordance
with the custom of brokers, and shall be accompanied by all necessary federal
and state stock transfer stamps or a check for the appropriate purchase price
thereof. Portfolio securities held of record by the Acquired Fund Custodian in
book-entry form on behalf of the Acquired Fund shall be delivered by the
Acquired Fund Custodian through the Depository Trust Company to the Acquiring
Fund Custodian and by the Acquiring Fund Custodian recording the beneficial
ownership thereof by the Acquiring Fund on the Acquiring Fund Custodian's
records. Any cash shall be delivered by the Acquired Fund Custodian transmitting
immediately available funds by wire transfer to the Acquiring Fund Custodian the
cash balances maintained by the Acquired Fund Custodian and the Acquiring Fund
Custodian crediting such amount to the account of the Acquiring Fund.
3.3 The Acquiring Fund Custodian shall deliver within one business day after
the Closing a certificate of an authorized officer stating that: (a) the
Acquired 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 has been made in conjunction with the delivery of portfolio
securities as part of the Acquired Assets.
3.4 If on the Closing Date (a) the New York Stock Exchange is closed to
trading or trading thereon shall be restricted or (b) trading or the reporting
of trading on such exchange or elsewhere is disrupted so that accurate appraisal
of the NAV of the Acquired Fund pursuant to Paragraph 2.1 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.
3.5 The Acquired Fund shall deliver at the Closing a list of the names,
addresses, federal taxpayer identification numbers and backup withholding and
nonresident alien withholding status and certificates of the Acquired Fund
Shareholders and the number and percentage ownership of outstanding Acquired
Fund Shares owned by each Acquired Fund Shareholder as of the Valuation Time,
certified by the President or a Secretary of the AmSouth Trust and its
Treasurer, Secretary or other authorized officer (the "Shareholder List") as
being an accurate record of the information (a) provided by the Acquired Fund
Shareholders, (b) provided by the Acquired Fund Custodian, or (c) derived from
the AmSouth Trust's records by such officers or one of the AmSouth Trust's
3
service providers. The Acquiring Fund shall issue and deliver to the Acquired
Fund a confirmation evidencing the Acquiring Fund Shares to be credited on the
Closing Date, 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, stock certificates, receipts or
other documents as such other party or its counsel may reasonably request.
4. REPRESENTATIONS AND WARRANTIES
4.1 Except as set forth on a disclosure schedule previously provided by the
AmSouth Trust to the Acquiring Trust (which disclosure schedule shall be
organized by the sections of this Section 4.1 and any disclosure shall only
modify the portions of this Section 4.1 expressly identified in such schedule),
the AmSouth Trust, on behalf of the Acquired Fund, represents, warrants and
covenants to the Acquiring Fund, which representations, warranties and covenants
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 series of the AmSouth Trust. The AmSouth Trust
is a business trust validly existing and in good standing under the laws of the
Commonwealth of Massachusetts and has the power to own all of its properties and
assets and, subject to approval by the Acquired Fund's 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 subject it to any material liability or
disability. Each of the AmSouth Trust and the Acquired 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 AmSouth Trust 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 AmSouth Trust is not in violation of, and the execution and
delivery of this Agreement and the performance of its obligations under this
Agreement in respect of the Acquired Fund will not result in a violation of, any
provision of the AmSouth Trust's Trust Instrument or By-Laws or any material
agreement, indenture, instrument, contract, lease or other undertaking with
respect to the Acquired Fund to which the AmSouth Trust is a party or by which
the Acquired Fund or any of its assets are bound;
(d) No litigation or administrative proceeding or investigation of or
before any court or governmental body is currently pending or to its knowledge
threatened against the Acquired Fund or any of the Acquired Fund's properties or
assets. The Acquired Fund knows of no facts which might form the basis for the
institution of such proceedings. Neither the AmSouth Trust nor the Acquired Fund
is a party to or subject to the provisions of any order, decree or judgment of
any court or governmental body which materially adversely affects the Acquired
Fund's business or its ability to consummate the transactions contemplated
herein or would be binding upon the Acquiring Fund as the successor to the
Acquired Fund;
(e) The Acquired Fund has no material contracts or other commitments
(other than this Agreement or agreements for the purchase and sale of securities
entered into in the ordinary course of business and consistent with its
obligations under this Agreement) which will not be terminated at or prior to
the Closing Date and no such termination will result in liability to the
Acquired Fund (or the Acquiring Fund);
(f) The statement of assets and liabilities of the Acquired Fund, and the
related statements of operations and changes in net assets, as of and for the
fiscal year ended July 31, 2004 have been audited by Ernst & Young LLP,
independent registered public accounting firm, and are in accordance with
generally accepted accounting principles ("GAAP") consistently applied and
fairly reflect, in all material respects, the financial condition of the
Acquired Fund as of such date and the results of its operations for the period
then ended, and all known liabilities, whether actual or contingent, of the
Acquired Fund as of the date thereof are disclosed therein. The Statement of
Assets and Liabilities will be in accordance with GAAP consistently applied and
will fairly reflect, in all material respects, the financial condition of the
Acquired Fund as of such date and the results of its operations for the period
then ended. Except for the Assumed Liabilities, the Acquired Fund will not have
any known or contingent liabilities on the Closing Date. No significant
deficiency, material weakness, fraud, significant change or
4
other factor that could significantly affect the internal controls of the
Acquired Fund has been disclosed or is required to be disclosed in the Acquired
Fund's reports on Form N-CSR to enable the chief executive officer and chief
financial officer or other officers of the Acquired Fund to make the
certifications required by the Sarbanes-Oxley Act, and no deficiency, weakness,
fraud, change, event or other factor exists that will be required to be
disclosed in the Acquiring Fund's Form N-CSR after the Closing Date;
(g) Since the most recent fiscal year end, except as specifically
disclosed in the Acquired Fund's prospectus, its statement of additional
information as in effect on the date of this Agreement, or its semi-annual
report for the period ended January 31, 2005, 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) (but not for any
other purpose of this Agreement), a decline in NAV per Acquired Fund Share
arising out of its normal investment operations or a decline in market values of
securities in the Acquired Fund's portfolio or a decline in net assets of the
Acquired Fund as a result of redemptions shall not constitute a material adverse
change;
(h) (A) For each taxable year of its operation since its inception, the
Acquired Fund has met, and for the current taxable year it will meet, the
requirements of Subchapter M of the Code for qualification and treatment as a
regulated investment company and will qualify as such as of the Closing Date and
will satisfy the diversification requirements of Section 851(b)(3) of the Code
without regard to the last sentence of Section 851(d) of the Code. The Acquired
Fund has not taken any action, caused any action to be taken or caused any
action to fail to be taken which action or failure could cause the Acquired Fund
to fail to qualify as a regulated investment company under the Code;
(B) Within the times and in the manner prescribed by law, the
Acquired Fund has properly filed on a timely basis all Tax Returns (as defined
below) that it was required to file, and all such Tax Returns were complete and
accurate in all respects. The Acquired Fund has not been informed by any
jurisdiction that the jurisdiction believes that the Acquired Fund was required
to file any Tax Return that was not filed; and the Acquired Fund does not know
of any basis upon which a jurisdiction could assert such a position;
(C) The Acquired Fund has timely paid, in the manner prescribed by
law, all Taxes (as defined below), which were due and payable or which were
claimed to be due;
(D) All Tax Returns filed by the Acquired Fund constitute complete
and accurate reports of the respective Tax liabilities and all attributes of the
Acquired Fund or, in the case of information returns and payee statements, the
amounts required to be reported, and accurately set forth all items required to
be included or reflected in such returns;
(E) The Acquired Fund has not waived or extended any applicable
statute of limitations relating to the assessment or collection of Taxes;
(F) The Acquired Fund has not been notified that any examinations of
the 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, to its knowledge, no such deficiency has been
proposed or threatened;
(G) The Acquired Fund has no actual or potential liability for any
Tax obligation of any taxpayer other than itself. The Acquired Fund is not and
has never been a member of a group of corporations with which it has filed (or
been required to file) consolidated, combined or unitary Tax Returns. The
Acquired Fund is not a party to any Tax allocation, sharing, or indemnification
agreement;
(H) The unpaid Taxes of the Acquired Fund for tax periods through the
Closing Date do not exceed the accruals and reserves for Taxes (excluding
accruals and reserves for deferred Taxes established to reflect timing
differences between book and Tax income) set forth on the Statement of Assets
and Liabilities, rather than in any notes thereto (the "Tax Reserves"). All
Taxes that the Acquired Fund is or was
5
required by law to withhold or collect have been duly withheld or collected and,
to the extent required, have been timely paid to the proper governmental agency;
(I) The Acquired Fund has delivered to the Acquiring Fund or made
available to the Acquiring Fund complete and accurate copies of all Tax Returns
of the Acquired Fund, together with all related examination reports and
statements of deficiency for all periods not closed under the applicable
statutes of limitations and complete and correct copies of all private letter
rulings, revenue agent reports, information document requests, notices of
proposed deficiencies, deficiency notices, protests, petitions, closing
agreements, settlement agreements, pending ruling requests and any similar
documents submitted by, received by or agreed to by or on behalf of the Acquired
Fund. The Acquired Fund has disclosed on its federal income Tax Returns all
positions taken therein that could give rise to a substantial understatement of
federal income Tax within the meaning of Section 6662 of the Code;
(J) The Acquired Fund has not undergone, has not agreed to undergo,
and is not required to undergo (nor will it be required as a result of the
transactions contemplated in this Agreement to undergo) a change in its method
of accounting resulting in an adjustment to its taxable income pursuant to
Section 481 of the Code. The Acquired Fund will not be required to include any
item of income in, or exclude any item of deduction from, taxable income for any
taxable period (or portion thereof) ending after the Closing Date as a result of
any (i) change in method of accounting for a taxable period ending on or prior
to the Closing Date under Section 481(c) of the Code (or any corresponding or
similar provision of state, local or foreign income Tax law); (ii) "closing
agreement" as described in Section 7121 of the Code (or any corresponding or
similar provision of state, local or foreign income Tax law) executed on or
prior to the Closing Date; (iii) installment sale or open transaction
disposition made on or prior to the Closing Date; or (iv) prepaid amount
received on or prior to the Closing Date;
(K) The Acquired Fund has not taken or agreed to take any action, and
is not aware of any agreement, plan or other circumstance, that is inconsistent
with the representations set forth in Annex B;
(L) There are (and as of immediately following the Closing there will
be) no liens on the assets of the Acquired Fund relating to or attributable to
Taxes, except for Taxes not yet due and payable;
(M) The Tax bases of the assets of the Acquired Fund are accurately
reflected on the Acquired Fund's Tax books and records;
(N) The Acquired Fund has not incurred (or been allocated) an
"overall foreign loss" as defined in Section 904(f)(2) of the Code which has not
been previously recaptured in full as provided in Sections 904(f)(2) and/or
904(f)(3) of the Code;
(O) The Acquired Fund is not a party to a gain recognition agreement
under Section 367 of the Code;
(P) The Acquired Fund does not own any interest in an entity that is
characterized as a partnership for income tax purposes;
(Q) The Acquired Fund's Tax attributes are not limited under the Code
(including but not limited to any capital loss carry forward limitations under
Sections 382 or 383 of the Code and the Treasury Regulations thereunder) or
comparable provisions of state law; and
(R) For purposes of this Agreement, "Taxes" or "Tax" shall mean all
taxes, charges, fees, levies or other similar assessments or liabilities,
including without limitation income, gross receipts, ad valorem, premium,
value-added, excise, real property, personal property, sales, use, transfer,
withholding, employment, unemployment, insurance, social security, business
license, business organization, environmental, workers compensation, payroll,
profits, license, lease, service, service use, severance, stamp, occupation,
windfall profits, customs, duties, franchise and other taxes imposed by the
United States of America or any state, local or foreign government, or any
agency thereof, or other political subdivision of the United States or any such
government, and any interest, fines, penalties, assessments or additions to tax
resulting from, attributable to or
6
incurred in connection with any tax or any contest or dispute thereof; and "Tax
Returns" shall mean all reports, returns, declarations, statements or other
information required to be supplied to a governmental or regulatory authority or
agency, or to any other person, in connection with Taxes and any associated
schedules or work papers produced in connection with such items;
(i) All issued and outstanding Acquired Fund Shares are, and at the
Closing Date will be, duly and validly issued and outstanding, fully paid and
nonassessable by the Acquired Fund. All of the issued and outstanding Acquired
Fund Shares will, at the time of Closing, be held of record by the persons and
in the amounts set forth in the Shareholder List submitted to the Acquiring Fund
pursuant to Paragraph 3.5 hereof. The Acquired Fund does not have outstanding
any options, warrants or other rights to subscribe for or purchase any Acquired
Fund Shares, nor is there outstanding any security convertible into any Acquired
Fund Shares;
(j) At the Closing Date, the Acquired Fund will have good and marketable
title to the Acquired Assets, and full right, power and authority to sell,
assign, transfer and deliver the Acquired Assets to the Acquiring Fund, and,
upon delivery and payment for the Acquired 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;
(k) The AmSouth Trust has the trust power and authority to enter into and
perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement have been duly authorized by all necessary action
on the part of the AmSouth Trust's Board of Trustees, and, subject to the
approval of the Acquired Fund's 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) The information to be furnished by the Acquired Fund to the Acquiring
Fund for use in applications for orders, registration statements, proxy
materials and other documents which may be necessary in connection with the
transactions contemplated hereby and any information necessary to compute the
total return of the Acquired Fund shall be accurate and complete and shall
comply in all material respects with federal securities and other laws and
regulations applicable thereto;
(m) The information included in the proxy statement (the "Proxy
Statement") forming part of the Acquiring Fund's Registration Statement on Form
N-14 filed in connection with this Agreement (the "Registration Statement") that
has been furnished in writing by the Acquired Fund to the Acquiring Fund for
inclusion in the Registration Statement, on the effective date of that
Registration Statement and on the Closing Date, will conform in all material
respects to the applicable requirements of the Securities Act, the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the Investment
Company Act and the rules and regulations of the Commission thereunder and will
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) Upon the effectiveness of the Registration Statement, no consent,
approval, authorization or order of any court or governmental authority is
required for the consummation by the AmSouth Trust or the Acquired Fund of the
transactions contemplated by this Agreement;
(o) All of the issued and outstanding Acquired Fund Shares have been
offered for sale and sold in conformity with all applicable federal and state
securities laws, except as may have been previously disclosed in writing to the
Acquiring Fund;
(p) The prospectus and statement of additional information of the
Acquired Fund, and any amendments or supplements thereto, 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 in which such statements were made, not
misleading;
7
(q) 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 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 AmSouth Trust
with respect to 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
Investment Company 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;
(r) The Acquired Fund has previously provided to the Acquiring Fund (and
at the Closing will provide an update through the Closing Date of such
information) data which supports a calculation of the Acquired Fund's total
return for all periods since the organization of the Acquired Fund. Such data
has been prepared in accordance in all material respects with the requirements
of the Investment Company Act and the regulations thereunder and the rules of
the NASD;
(s) Neither the Acquired Fund nor, to the knowledge of the Acquired Fund,
any "affiliated person" of the Acquired 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 Acquired Fund, has any affiliated person of the Acquired
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, as amended (the
"Investment Advisers Act"), 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; and
(t) The tax representation certificate to be delivered by AmSouth Trust
on behalf of the Acquired Fund to the Acquiring Trust and Wilmer Cutler
Pickering Hale and Dorr LLP at the Closing pursuant to Paragraph 7.4 (the
"Acquired Fund Tax Representation Certificate") will not on the Closing Date
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein not misleading.
4.2 Except as set forth on a disclosure schedule previously provided by the
Acquiring Trust to the AmSouth Trust (which disclosure schedule shall be
organized by the sections of this Section 4.2 and any disclosure shall only
modify the portions of this Section 4.2 expressly identified in such schedule),
the Acquiring Trust, on behalf of the Acquiring Fund, represents, warrants and
covenants to the Acquired Fund, which representations, warranties and covenants
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 series of the Acquiring Trust. The Acquiring
Fund has not commenced operations and will not do so until the Closing. The
Acquiring Trust is a statutory trust duly organized, validly existing and in
good standing under the laws of the State of Delaware. The Acquiring Trust has
the power to own all of its properties and assets and to perform the 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 subject it to any material liability or disability. Each of the
Acquiring Trust and 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;
8
(b) The Acquiring Trust 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 Acquiring Fund's registration statement on Form N-1A that will be
in effect on the Closing Date, and the prospectus and statement of additional
information of the Acquiring Fund included therein, 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 did not as of the effective date thereof and will not 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 Registration Statement, the Proxy Statement and statement of
additional information with respect to the Acquiring Fund and any amendments or
supplements thereto in effect on or prior to the Closing Date included in the
Registration Statement (other than written information furnished by the Acquired
Fund for inclusion therein, as covered by the Acquired Fund's warranty in
Paragraph 4.1(m) hereof) will conform in all material respects to the applicable
requirements of the Securities Act and the Investment Company Act and the rules
and regulations of the Commission thereunder. Neither the Registration Statement
nor the Proxy Statement (other than written information furnished by the
Acquired Fund for inclusion therein, as covered by the Acquired Fund's warranty
in Paragraph 4.1(m) hereof) includes or will include any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading;
(e) The Acquiring Trust is not in violation of, and the execution and
delivery of this Agreement and performance of its obligations under this
Agreement will not result in a violation of, any provisions of the Declaration
of Trust or by-laws of the Acquiring Trust or any material agreement, indenture,
instrument, contract, lease or other undertaking with respect to the Acquiring
Fund to which the Acquiring Trust is a party or by which the Acquiring Fund or
any of its assets is bound;
(f) No litigation or administrative proceeding or investigation of or
before any court or governmental body is currently pending or threatened against
the Acquiring Fund or any of the Acquiring Fund's properties or assets. The
Acquiring Fund knows of no facts which might form the basis for the institution
of such proceedings. Neither the Acquiring Trust nor the Acquiring Fund is a
party to or subject to the provisions of any order, decree or judgment of any
court or governmental body which materially adversely affects the Acquiring
Fund's business or its ability to consummate the transactions contemplated
herein;
(g) The Acquiring Fund has no actual or potential liability for any Tax
obligation of any taxpayer. The Acquiring Fund is not and has never been a
member of a group of corporations with which it has filed (or been required to
file) consolidated, combined or unitary Tax Returns. The Acquiring Fund is not a
party to any Tax allocation, sharing, or indemnification agreement;
(h) The Acquiring Fund has not taken or agreed to take any action, and is
not aware of any agreement, plan or other circumstance, that is inconsistent
with the representations set forth in Annex A;
(i) The authorized capital of the Acquiring Fund consists of an unlimited
number of shares of beneficial interest, no par value per share. As of the
Closing Date, the Acquiring Fund will be authorized to issue an unlimited number
of shares of beneficial interest, no par value per share. 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 have
been duly authorized on the Closing Date and, when so issued and delivered, will
be duly and validly issued, 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 Acquiring Fund shares, nor will the Acquiring Fund have any
issued or outstanding shares on or before the Closing Date other than those
issued to the Acquiring Fund Adviser or one of its affiliates, which shares
shall be redeemed, for an amount equal to the price paid therefor, at or before
the Closing;
9
(j) The Acquiring Trust has the trust power and authority to enter into
and perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement have been duly authorized by all necessary action
on the part of the Acquiring Trust'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;
(k) The information to be furnished in writing by the Acquiring Fund or
the Acquiring Fund Adviser for use in applications for orders, registration
statements, 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, and shall not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the information provided not misleading;
(l) No consent, approval, authorization or order of or filing with any
court or governmental authority is required for the execution of this Agreement
or the consummation of the transactions contemplated by the Agreement by the
Acquiring Fund, except for the registration of the Acquiring Fund Shares under
the Securities Act and the Investment Company Act;
(m) 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 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; and
(n) The tax representation certificate to be delivered by the Acquiring
Trust on behalf of the Acquiring Fund to the AmSouth Trust and Wilmer Cutler
Pickering Hale and Dorr LLP at Closing pursuant to Section 6.3 (the "Acquiring
Fund Tax Representation Certificate") will not on the Closing Date contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein not misleading.
5. COVENANTS OF THE FUNDS
5.1 The Acquired Fund will operate the Acquired Fund's business in the
ordinary course of business 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 other distributions and any other
dividends and other distributions necessary or advisable (except to the extent
dividends or other distributions that are not customary may be limited by
representations made in connection with the issuance of the tax opinion
described in Paragraph 8.5 hereof), in each case payable either in cash or in
additional shares.
5.2 The AmSouth Trust will call a special meeting of the Acquired Fund's
shareholders to consider approval of this Agreement and act upon the matters set
forth in the Proxy Statement.
5.3 The Acquiring Fund will prepare the notice of meeting, form of proxy and
Proxy Statement (collectively, "Proxy Materials") to be used in connection with
such meeting, and will promptly prepare and file with the Commission the
Registration Statement. The AmSouth Trust will provide the Acquiring Fund with
information reasonably requested for the preparation of the Registration
Statement in compliance with the Securities Act, the Exchange Act, and the
Investment Company Act.
10
5.4 The Acquired Fund covenants that the Acquiring Fund Shares to be issued
hereunder are not being acquired by the Acquired Fund for the purpose of making
any distribution thereof other than in accordance with the terms of this
Agreement.
5.5 The Acquired Fund will assist the Acquiring Fund in obtaining such
information as the Acquiring Fund reasonably requires concerning the beneficial
ownership of the Acquired Fund Shares.
5.6 Subject to the provisions of this Agreement, each 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 the transactions
contemplated by this Agreement.
5.7 The Acquired Fund shall furnish to the Acquiring Fund on the Closing Date
a Statement of Assets and Liabilities of the Acquired Fund as of the Closing
Date setting forth the NAV of the Acquired Fund as of the Valuation Time, which
statement shall be prepared in accordance with GAAP consistently applied and
certified by the AmSouth Trust's Treasurer or Assistant Treasurer. As promptly
as practicable, but in any case within 30 days after the Closing Date, the
AmSouth Trust shall furnish to the Acquiring Trust, in such form as is
reasonably satisfactory to the Acquiring Trust, 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
under the Code, and which statement will be certified by the Treasurer of the
AmSouth Trust.
5.8 Neither 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.
5.9 From and after the date of this Agreement and until the Closing Date,
each of the Funds and the AmSouth Trust and the Acquiring Trust shall use its
commercially reasonable efforts to cause the Reorganization to qualify, and will
not knowingly take any action, cause any action to be taken, fail to take any
action or cause any action to fail to be taken, which action or failure to act
could prevent the Reorganization from qualifying, as a reorganization under the
provisions of Section 368(a) of the Code. The parties hereby adopt this
Agreement as a "plan of reorganization" within the meaning of Sections
1.368-2(g) and 1.368-3(a) of the income tax regulations promulgated under the
Code. Unless otherwise required pursuant to a "determination" within the meaning
of Section 1313(a) of the Code, the parties hereto shall treat and report the
transactions contemplated hereby as a reorganization within the meaning of
Section 368(a)(1)(F) of the Code and shall not take any position inconsistent
with such treatment.
5.10 From and after the date of this Agreement and through the time of the
Closing, each Fund shall use its commercially reasonable efforts to cause it to
qualify, and will not knowingly take any action, cause any action to be taken,
fail to take any action or cause any action to fail to be taken, which action or
failure to act could prevent it from qualifying, as a regulated investment
company under the provisions of Subchapter M of the Code.
5.11 The Acquired Fund shall prepare, or cause to be prepared, all Tax
Returns of the Acquired Fund for taxable periods that end on or before the
Closing Date and shall timely file, or cause to be timely filed, all such Tax
Returns. The Acquired Fund shall make any payments of Taxes required to be made
by such Fund with respect to any such Tax Returns.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Acquired Fund to complete the transactions provided
for herein shall be, at its election, subject to the performance by the
Acquiring Fund of all 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:
6.1 All representations and warranties by the Acquiring Trust on behalf of
the Acquiring Fund contained in this Agreement shall be true and correct as of
the date hereof and, except as they may be affected by the
11
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;
6.2 The Acquiring Trust shall have delivered to the AmSouth Trust on the
Closing Date a certificate of the Acquiring Trust on behalf of the Acquiring
Fund executed in its name by its President or Vice President and its Treasurer
or Assistant Treasurer, in form and substance satisfactory to the AmSouth Trust
and dated as of the Closing Date, to the effect that the representations and
warranties of the Acquiring Trust made in this Agreement are true and correct at
and as of the Closing Date, except as they may be affected by the transactions
contemplated by this Agreement, that each of the conditions to Closing in this
Article 6 have been met, and as to such other matters as the AmSouth Trust shall
reasonably request;
6.3 The Acquiring Trust on behalf of the Acquiring Fund shall have delivered
to the AmSouth Trust and Wilmer Cutler Pickering Hale and Dorr LLP an Acquiring
Fund Tax Representation Certificate, satisfactory to the AmSouth Trust and
Wilmer Cutler Pickering Hale and Dorr LLP, substantially in the form attached to
this Agreement as Annex A, concerning certain tax-related matters with respect
to the Acquiring Fund;
6.4 With respect to the Acquiring Fund, the Board of Trustees of the
Acquiring Trust shall have determined that the Reorganization is in the best
interests of the Acquiring Fund and, based upon such determination, shall have
approved this Agreement and the transactions contemplated hereby; and
6.5 The AmSouth Trust shall have received at the Closing a favorable opinion
as to the due authorization of this Agreement by the Acquiring Trust and related
matters of Wilmer Cutler Pickering Hale and Dorr LLP, dated as of the Closing
Date, in a form reasonably satisfactory to the AmSouth Trust.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Fund to complete the transactions provided
for herein shall be, at its election, subject to the performance by the Acquired
Fund of all 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 Acquiring Fund in writing:
7.1 All representations and warranties of the AmSouth Trust on behalf of the
Acquired Fund contained in this Agreement shall be true and correct 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 AmSouth Trust shall have delivered to the Acquiring Fund the
Statement of Assets and Liabilities of the Acquired Fund pursuant to Paragraph
5.7, together with a list of its portfolio securities showing the federal income
tax bases and holding periods of such securities, as of the Closing Date,
certified by the AmSouth Trust's Treasurer or Assistant Treasurer;
7.3 The AmSouth Trust shall have delivered to the Acquiring Trust on the
Closing Date a certificate of the AmSouth Trust on behalf of the Acquired Fund
executed in its name by its President or Vice President and a Treasurer or
Assistant Treasurer, in form and substance reasonably satisfactory to the
Acquiring Trust and dated as of the Closing Date, to the effect that the
representations and warranties of the AmSouth Trust contained in this Agreement
are true and correct at and as of the Closing Date, except as they may be
affected by the transactions contemplated by this Agreement, that each of the
conditions to closing in this Article 7 have been met, and as to such other
matters as the Acquiring Trust shall reasonably request;
7.4 The AmSouth Trust on behalf of the Acquired Fund shall have delivered to
the Acquiring Trust and Wilmer Cutler Pickering Hale and Dorr LLP an Acquired
Fund Tax Representation Certificate, satisfactory to the Acquiring Trust and
Wilmer Cutler Pickering Hale and Dorr LLP, substantially in the form attached to
this Agreement as Annex B, concerning certain tax-related matters with respect
to the Acquired Fund;
12
7.5 The Acquiring Trust shall have received at the Closing a favorable
opinion as to the due authorization of this Agreement by the AmSouth Trust and
related matters of Kirkpatrick & Lockhart Nicholson Graham LLP, dated as of the
Closing Date, in a form reasonably satisfactory to the Acquiring Trust; and
7.6 With respect to the Acquired Fund, the Board of Trustees of the AmSouth
Trust shall have determined that the Reorganization is in the best interests of
the Acquired Fund and, based upon such determination, shall have approved this
Agreement and the transactions contemplated hereby.
8. FURTHER CONDITIONS PRECEDENT
If any of the conditions set forth below does 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:
8.1 This Agreement and the transactions contemplated herein shall have been
approved by the requisite vote of the Acquired Fund's shareholders in accordance
with the provisions of the AmSouth Trust's Trust Instrument and By-Laws, and
certified copies of the resolutions evidencing such approval by the Acquired
Fund's shareholders shall have been delivered by the Acquired Fund to the
Acquiring Fund. Notwithstanding anything herein to the contrary, neither party
hereto may waive the conditions set forth in this Paragraph 8.1;
8.2 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;
8.3 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 waive any such conditions for itself;
8.4 The Acquiring Trust's Registration Statement on Form N-14 shall have
become effective under the Securities Act and no stop orders suspending the
effectiveness of such Registration Statement 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; and
8.5 The parties shall have received an opinion of Wilmer Cutler Pickering
Hale and Dorr LLP, satisfactory to the AmSouth Trust and the Acquiring Trust and
subject to customary assumptions and qualifications, substantially to the effect
that for federal income tax purposes the acquisition by the Acquiring Fund of
the Acquired Assets solely in exchange for the issuance of Acquiring Fund Shares
to the Acquired Fund and the assumption 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 and the termination of
the Acquired Fund, will constitute a "reorganization" within the meaning of
Section 368(a) of the Code
9. BROKERAGE FEES AND EXPENSES
9.1 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.
9.2 The parties have been informed by AmSouth Asset Management Inc. ("AAMI")
and the Acquiring Fund Adviser -- and the parties have entered into this
Agreement in reliance on such information -- that such non-parties will pay
(with each of AAMI and the Acquiring Fund Adviser being responsible for 50% of
such amounts) all proxy statement and solicitation costs of the Funds associated
with the Reorganization including, but not limited to, the expenses associated
with the preparation, printing and mailing of any and all shareholder notices,
13
communications, proxy statements, and necessary filings with the SEC or any
other governmental authority in connection with the transactions contemplated by
this Agreement, and the fees and expenses of any proxy solicitation firm
retained in connection with the Reorganization. Except for the foregoing, AAMI
shall bear the expenses of the Acquired Fund in connection with the transactions
contemplated by this Agreement.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Acquiring Trust and the AmSouth Trust each agrees that neither
party has made any representation, warranty or covenant not set forth herein or
referred to in Paragraphs 4.1 or 4.2 hereof and that this Agreement constitutes
the entire agreement between the parties.
10.2 The representations and warranties contained in this Agreement or in
any document delivered pursuant hereto or in connection herewith shall not
survive the consummation of the transactions contemplated hereunder.
11. TERMINATION
11.1 This Agreement may be terminated by the mutual agreement of the
Acquiring Trust and the AmSouth Trust. In addition, either party may at its
option terminate this Agreement at or prior to the Closing Date:
(a) because of a material breach by the other of any representation,
warranty, covenant or agreement contained herein to be performed at or prior to
the Closing Date;
(b) because of a condition herein expressed to be precedent to the
obligations of the terminating party which has not been met and which reasonably
appears will not or cannot be met;
(c) by resolution of the Acquiring Trust's Board of Trustees if
circumstances should develop that, in the good faith opinion of such Board, make
proceeding with the Agreement not in the best interests of the Acquiring Fund's
shareholders;
(d) by resolution of the AmSouth Trust's Board of Trustees if
circumstances should develop that, in the good faith opinion of such Board, make
proceeding with the Agreement not in the best interests of the Acquired Fund's
shareholders; or
(e) if the transactions contemplated by this Agreement shall not have
occurred on or prior to December 31, 2005 or such other date as the parties may
mutually agree upon in writing.
11.2 In the event of any such termination, there shall be no liability for
damages on the part of the Acquiring Fund, the Acquiring Trust, the AmSouth
Trust or the Acquired Fund, or the trustees or officers of the AmSouth Trust, or
the Acquiring Trust, but, subject to Paragraph 9.2, each party shall bear the
expenses incurred by it incidental to the preparation and carrying out of this
Agreement.
12. 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 AmSouth
Trust and the Acquiring Trust; provided, however, that following the meeting of
the Acquired Fund's shareholders called by the AmSouth Trust pursuant to
Paragraph 5.2 of this Agreement, no such amendment may have the effect of
changing the provisions regarding the method for determining the number of
Acquiring Fund Shares to be received by the Acquired Fund Shareholders under
this Agreement to their detriment without their further approval; provided that
nothing contained in this Section 12 shall be construed to prohibit the parties
from amending this Agreement to change the Closing Date.
14
13. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by prepaid
telegraph, telecopy or certified mail addressed to the Acquired Fund, c/o
AmSouth Asset Management Inc., 3435 Stelzer Road, Columbus, Ohio 43219,
Attention: [ ], with copies to Kirkpatrick & Lockhart Nicholson Graham LLP, 1800
Massachusetts Avenue, N.W., Washington, DC 20036-1221, Attention: Clifford J.
Alexander, and to the Acquiring Fund, c/o Pioneer Investment Management, Inc.,
60 State Street, Boston, Massachusetts 02109, Attention: Dorothy E. Bourassa,
Esq., with copies to Wilmer Cutler Pickering Hale and Dorr LLP, 60 State Street,
Boston, Massachusetts 02109, Attention: David C. Phelan.
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
14.1 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.
14.2 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
14.3 This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Delaware, without giving effect to conflict of
laws principles (other than Delaware Code Title 6 ss. 2708); provided that, in
the case of any conflict between those laws and the federal securities laws, the
latter shall govern.
14.4 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 prior 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 or 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.
14.5 It is expressly agreed that the obligations of the Acquiring Trust and
the AmSouth Trust shall not be binding upon any of their respective trustees,
shareholders, nominees, officers, agents or employees personally, but bind only
to the property of the Acquiring Fund or the Acquired Fund, as the case may be,
as provided in the trust instruments of the Acquiring Trust and the Instrument
of Trust of the AmSouth Trust, respectively. The execution and delivery of this
Agreement have been authorized by the trustees of the Acquiring Trust and of the
AmSouth Trust and this Agreement has been executed by authorized officers of the
Acquiring Trust and the AmSouth Trust, 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 imposed 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
trust instruments of the Acquiring Trust and the Instrument of Trust of the
AmSouth Trust, respectively.
* * * * *
15
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed as of the date first set forth above by its President or Vice
President and attested by its Secretary or Assistant Secretary.
Attest: AMSOUTH FUNDS
on behalf of AMSOUTH [ ] FUND
By: ________________________________ By: _______________________________
Name: Name:
Title: [Assistant] Secretary Title: [Vice] President
Attest: PIONEER [ ] FUND
on behalf of PIONEER [ ] FUND
By: ________________________________ By: _______________________________
Name: Christopher J. Kelley Name: Osbert M. Hood
Title: Assistant Secretary Title: Executive Vice President
16
Annex A
TAX REPRESENTATION CERTIFICATE OF
PIONEER [ ] FUND
ON BEHALF OF PIONEER [ ] FUND
This certificate is being delivered in connection with the transactions to be
effected pursuant to the Agreement and Plan of Reorganization made as of [ ],
2005 between Pioneer [ ] Fund, a Delaware statutory trust ("Acquiring Trust"),
on behalf of its series Pioneer [ ] Fund ("Acquiring Fund"), and AmSouth Funds,
a Massachusetts business trust, on behalf of its series AmSouth [ ] Fund
("Acquired Fund") (the "Agreement"). Pursuant to the Agreement, Acquiring Fund
will acquire all of the assets of Acquired Fund in exchange solely for (i) the
assumption by Acquiring Fund of the Assumed Liabilities of Acquired Fund, and
(ii) the issuance of shares of beneficial interest of Acquiring Fund (the
"Acquiring Fund Shares") to Acquired Fund, followed by the distribution by
Acquired Fund, in liquidation of Acquired Fund, of the Acquiring Fund Shares to
the shareholders of Acquired Fund and the termination of Acquired Fund (the
foregoing together constituting the "transaction").
The undersigned officer of Acquiring Trust, after consulting with its
counsel, auditors and tax advisers regarding the meaning of and factual support
for the following representations, on behalf of Acquiring Fund, hereby certifies
and represents that the following statements are true, complete and correct and
will be true, complete and correct on the date of the transaction and thereafter
as relevant. Unless otherwise indicated, all capitalized terms used but not
defined herein shall have the meanings ascribed to them in the Agreement.
1. Acquiring Fund is a series of Acquiring Trust, a statutory trust organized
under the laws of the State of Delaware, and Acquiring Fund will be treated
after the Closing as a separate corporation for federal tax purposes. Acquiring
Fund was newly organized solely for the purpose of effecting the transaction and
continuing thereafter to operate as a regulated investment company. Prior to the
transaction, Acquiring Fund did not and will not engage in any business
activities. There shall be no shares of Acquiring Fund issued and outstanding
prior to the Closing Date other than those issued to Pioneer Investment
Management, Inc. or one of its affiliates in connection with the creation of
Acquiring Fund, which shares shall be redeemed, for an amount equal to the price
paid therefor, at or before the Closing.
2. Neither Acquiring Fund nor any person "related" to Acquiring Fund (as
defined in Treasury Regulation Section 1.368-1(e)(3)), nor any partnership of
which Acquiring Fund or any such related person is a partner, has any plan or
intention to redeem or otherwise acquire any of the Acquiring Fund Shares
received by shareholders of Acquired Fund in the transaction except in the
ordinary course of Acquiring Fund's business in connection with its legal
obligation under Section 22(e) of the Investment Company Act of 1940, as amended
(the "1940 Act"), as a series of a registered open-end investment company to
redeem its own shares.
3. After the transaction, Acquiring Fund will continue the historic business
(as defined in Treasury Regulation Section 1.368-1(d)(2)) of Acquired Fund or
will use a significant portion of the historic business assets (as defined in
Treasury Regulation Section 1.368-1(d)(3)) of Acquired Fund in a business.
4. Acquiring Fund has no plan or intention to sell or otherwise dispose of
any assets of Acquired Fund acquired in the transaction, except for dispositions
made in the ordinary course of its business or to maintain its qualification as
a regulated investment company under Subchapter M of the Internal Revenue Code
of 1986, as amended (the "Code").
5. Any expenses of Acquired Fund incurred in connection with the transaction
which are paid or assumed by Acquiring Fund will be expenses of Acquired Fund
solely and directly related to the transaction in accordance with Rev. Rul. 73
54, 1973 1 C.B. 187. Acquiring Fund will not pay or assume the expenses, if any,
incurred by any Acquired Fund Shareholders in connection with the transaction.
6. There is no, and never has been any, indebtedness between Acquiring Fund
and Acquired Fund.
A-1
7. Acquiring Fund will qualify for the special tax treatment afforded
regulated investment companies under Subchapter M of the Code for all taxable
years ending after the date of the transaction.
8. Acquiring Fund will meet the requirements of an "investment company" in
Section 368(a)(2)(F) of the Code from and after the date of the transaction.
9. Acquiring Fund is not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of Section 368(a)(3)(A) of the Code.
10. Acquiring Fund does not now own and has never owned, directly or
indirectly, any shares of Acquired Fund.
11. As of the date of the transaction, the fair market value of the Acquiring
Fund Shares issued to Acquired Fund will be approximately equal to the fair
market value of the Acquired Assets minus the Assumed Liabilities. Acquiring
Fund will not furnish any consideration in connection with the acquisition of
the Acquired Assets other than the assumption of the Assumed Liabilities and the
issuance of such Acquiring Fund Shares.
12. Immediately following the transaction, the Acquired Fund Shareholders
will own all of the outstanding Acquiring Fund Shares and will own such shares
solely by reason of their ownership of the Acquired Fund Shares immediately
prior to the transaction. Acquiring Fund has no plan or intention to issue as
part of the transaction any shares of Acquiring Fund other than the Acquiring
Fund Shares issued in exchange for the Acquired Assets.
13. The transaction is being undertaken for valid and substantial business
purposes, including facilitating Acquired Fund's becoming a member of the
Pioneer family of mutual funds, which, in the long term, is intended to result
in lower expenses and increased assets.
14. No Acquired Fund shareholder is acting as agent for Acquiring Fund in
connection with the transaction or approval thereof. Acquiring Fund will not
reimburse any Acquired Fund shareholder for Acquired Fund Shares such
shareholder may have purchased or for other obligations such shareholder may
have incurred.
15. Acquiring Fund has no outstanding warrants, options, convertible
securities or any other type of right pursuant to which any person could acquire
stock in Acquiring Fund.
* * * * *
The undersigned officer of Acquiring Trust is authorized to make all of the
representations set forth herein, and the undersigned is authorized to execute
this certificate on behalf of Acquiring Fund. The undersigned recognizes that
Wilmer Cutler Pickering Hale and Dorr LLP will rely upon the foregoing
representations in evaluating the United States federal income tax consequences
of the transaction and rendering its opinion pursuant to Section 8.5 of the
Agreement. If, prior to the date of the transaction, any of the representations
set forth herein ceases to be accurate, the undersigned agrees to deliver
immediately to Wilmer Cutler Pickering Hale and Dorr LLP a written notice to
that effect.
PIONEER [ ] FUND
on behalf of PIONEER [ ] FUND
By: ___________________________
Name: ___________________________
Title: ___________________________
Dated: _________, 2005
A-2
Annex B
TAX REPRESENTATION CERTIFICATE OF
AMSOUTH FUNDS
ON BEHALF OF AMSOUTH [ ] FUND
This certificate is being delivered in connection with the transactions to be
effected pursuant to the Agreement and Plan of Reorganization made as of [ ],
2005 between Pioneer [ ] Fund, a Delaware statutory trust, on behalf of its
series Pioneer [ ] Fund ("Acquiring Fund"), and AmSouth Funds, a Massachusetts
business trust ("AmSouth Trust"), on behalf of its series AmSouth [ ] Fund
("Acquired Fund") (the "Agreement"). Pursuant to the Agreement, Acquiring Fund
will acquire all of the assets of Acquired Fund in exchange solely for (i) the
assumption by Acquiring Fund of the Assumed Liabilities of Acquired Fund and
(ii) the issuance of shares of beneficial interest of Acquiring Fund (the
"Acquiring Fund Shares") to Acquired Fund, followed by the distribution by
Acquired Fund, in liquidation of Acquired Fund, of the Acquiring Fund Shares to
the shareholders of Acquired Fund and the termination of Acquired Fund (the
foregoing together constituting the "transaction").
The undersigned officer of AmSouth Trust, after consulting with its counsel,
auditors and tax advisers regarding the meaning of and factual support for the
following representations, on behalf of Acquired Fund, hereby certifies and
represents that the following statements are true, complete and correct and will
be true, complete and correct on the date of the transaction and thereafter as
relevant. Unless otherwise indicated, all capitalized terms used but not defined
herein shall have the meanings ascribed to them in the Agreement.
1. Acquired Fund is a series of AmSouth Funds, a business trust organized
under the laws of the Commonwealth of Massachusetts, and Acquired Fund is, and
has been at all times, treated as a separate corporation for federal tax
purposes.
2. As of the date of the transaction, the fair market value of the Acquiring
Fund Shares received by each shareholder that holds shares of Acquired Fund (the
"Acquired Fund Shares") will be approximately equal to the fair market value of
the Acquired Fund Shares with respect to which such Acquiring Fund Shares are
received, and the aggregate consideration received by Acquired Fund shareholders
in exchange for their Acquired Fund Shares will be approximately equal to the
fair market value of all of the outstanding Acquired Fund Shares immediately
prior to the transaction. No property other than Acquiring Fund Shares will be
distributed to shareholders of Acquired Fund in exchange for their Acquired Fund
Shares, nor will any such shareholder receive cash or other property as part of
the transaction.
3. Neither Acquired Fund nor any person "related" to Acquired Fund (as
defined in Treasury Regulation Section 1.368-1(e)(3)), nor any partnership in
which Acquired Fund or any such related person is a partner, has redeemed,
acquired or otherwise made any distributions with respect to any shares of
Acquired Fund as part of the transaction, or otherwise pursuant to a plan of
which the transaction is a part, other than redemptions and distributions made
in the ordinary course of Acquired Fund's business as a series of an open-end
investment company. To the best knowledge of management of Acquired Fund, there
is no plan or intention on the part of the shareholders of Acquired Fund to
engage in any transaction with Acquired Fund, Acquiring Fund, or any person
treated as related to Acquired Fund or Acquiring Fund under Treasury Regulation
Section 1.368-1(e)(3) or any partnership in which Acquired Fund, Acquiring Fund,
or any person treated as related to Acquired Fund or Acquiring Fund under
Treasury Regulation Section 1.368-1(e)(3) is a partner involving the sale,
redemption or exchange of any of the Acquired Fund Shares or any of the
Acquiring Fund Shares to be received in the transaction, as the case may be,
other than in the ordinary course of Acquired Fund's business as a series of an
open-end investment company.
4. In the transaction, Acquired Fund will transfer its assets to Acquiring
Fund, which will assume the Assumed Liabilities, such that immediately following
the transfer, Acquiring Fund will possess all of the same assets and liabilities
as were possessed by Acquired Fund immediately prior to the transaction, except
for assets used to pay expenses incurred in connection with the transaction and
assets distributed to shareholders in redemption of their shares immediately
preceding, or in contemplation of, the transaction (other than redemptions and
distributions
B-1
made in the ordinary course of Acquired Fund's business as an open-end
investment company) which assets constitute less than 1% of the net assets of
Acquired Fund.
5. As of the date of the transaction, the fair market value of the Acquiring
Fund Shares issued to Acquired Fund will be approximately equal to the fair
market value of the Acquired Assets minus the Assumed Liabilities. Acquired Fund
will not receive any consideration from Acquiring Fund in connection with the
acquisition of the Acquired Assets other than the assumption of the Assumed
Liabilities and the issuance of such Acquiring Fund Shares.
6. The Assumed Liabilities assumed by Acquiring Fund plus the Assumed
Liabilities, if any, to which the transferred assets are subject were incurred
by Acquired Fund in the ordinary course of its business. Acquired Fund is not
aware of any liabilities of any kind other than the Assumed Liabilities.
7. As of the Closing Date, the adjusted basis and the fair market value of
the Acquired Assets will equal or exceed the Assumed Liabilities assumed for
purposes of Section 357(d) of the Code.
8. Acquired Fund currently conducts its historic business within the meaning
of Treasury Regulation Section 1.368-1(d)(2), which provides that, in general, a
corporation's historic business is the business it has conducted most recently,
but does not include a business that the corporation enters into as part of a
plan of reorganization. The Acquired Fund assets transferred to Acquiring Fund
will be Acquired Fund's historic business assets within the meaning of Treasury
Regulation Section 1.368-1(d), which provides that a corporation's historic
business assets are the assets used in its historic business.
9. Acquired Fund will distribute to its shareholders the Acquiring Fund
Shares it receives pursuant to the transaction, and its other properties, if
any, and will be liquidated promptly thereafter.
10. The expenses of Acquired Fund incurred by it in connection with the
transaction, if any, will be only such expenses that are solely and directly
related to the transaction in accordance with Rev. Rul. 73-54, 1973-1 C.B. 187.
Acquired Fund will not pay any expenses incurred by its shareholders in
connection with the transaction.
11. There is no, and never has been any, indebtedness between Acquiring Fund
and Acquired Fund.
12. Acquired Fund has properly elected to be a regulated investment company
under Subchapter M of the Code, has qualified for the special tax treatment
afforded regulated investment companies under Subchapter M of the Code for each
taxable year since inception, and qualifies for such treatment as of the time of
the Closing.
13. Acquired Fund meets the requirements of an "investment company" in
Section 368(a)(2)(F) of the Code.
14. Acquired Fund is not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of Section 368(a)(3)(A) of the Code.
15. Acquired Fund does not pay compensation to any shareholder-employee.
16. Immediately following the transaction, the Acquired Fund Shareholders
will own all of the outstanding Acquiring Fund Shares and will own such shares
solely by reason of their ownership of the Acquired Fund Shares immediately
prior to the transaction.
17. Acquired Fund shareholders will not have dissenters' or appraisal rights
in the transaction.
18. The transaction is being undertaken for valid and substantial business
purposes, including facilitating Acquired Fund's becoming a member of the
Pioneer family of mutual funds, which, in the long term, is intended to result
in lower expenses and increased assets.
B-2
19. Acquired Fund has no outstanding warrants, options, convertible
securities or any other type of right pursuant to which any person could acquire
stock in Acquired Fund.
* * * * *
The undersigned officer of the AmSouth Trust is authorized to make all of the
representations set forth herein, and the undersigned is authorized to execute
this certificate on behalf of Acquired Fund. The undersigned recognizes that
Wilmer Cutler Pickering Hale and Dorr LLP will rely upon the foregoing
representations in evaluating the United States federal income tax consequences
of the transaction and rendering its opinion pursuant to Section 8.5 of the
Agreement. If, prior to the date of the transaction, any of the representations
set forth herein ceases to be accurate, the undersigned agrees to deliver
immediately to Wilmer Cutler Pickering Hale and Dorr LLP a written notice to
that effect.
AMSOUTH FUNDS
on behalf of AMSOUTH [ ] FUND
By: __________________________
Name: __________________________
Title: __________________________
Dated: __________, 2005
B-3
Exhibit B -- Additional Information Pertaining to Pioneer
PORTFOLIO TRANSACTION POLICIES
All orders for the purchase or sale of portfolio securities are placed on
behalf of each 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 a 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 a
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 any of the funds as well as other
investment companies or other accounts managed by Pioneer, although not all such
research may be useful to any of the funds. 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
any of the funds. 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.
None of the funds used any brokers affiliated with Pioneer during its most
recently completed fiscal year in connection with its portfolio transactions.
SIMILAR FUNDS
Pioneer serves as the investment adviser to each fund in the Pioneer Family
of Funds. The following table identifies other funds in the Pioneer Family of
Funds that have similar investment objectives to the Funds described in this
Proxy Statement/Prospectus and provides other information regarding the similar
funds.
- -------------------------------------------------------------------------------------------------------------
Fund Net assets of Fund Management fee rate (as a percentage of average
(as of March 31, 2005) daily net assets)
- -------------------------------------------------------------------------------------------------------------
Pioneer AmPac Growth Fund $21,122,317 0.75% of the first $1 billion of the Fund's
average net assets and 0.70% of the excess over
$1 billion.
- -------------------------------------------------------------------------------------------------------------
B-1
- ---------------------------------------------------------------------------------------------------------------------------------
Fund Net assets of Fund Management fee rate (as a percentage of average
(as of March 31, 2005) daily net assets)
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer Balanced Fund $138,289,597 0.65% of the Fund's average net assets up to $1
billion, 0.60% of the next $4 billion; and 0.55%
of the excess over $5 billion.
- -------------------------------------------------------------------------------------------------------------------------------
Pioneer Equity Income Fund $959,952,939 0.60% of the Fund's average net assets up to $10
billion and 0.575% on the assets over $10 billion.
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer Growth Leaders Fund $35,682,075 0.75% of the first $1 billion of the Fund's
average net assets and 0.70% of the excess over
$1 billion.
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer Growth Shares $641,452,946 0.70% of the Fund's average net assets up to
$500million, 0.65% of the next $500 million and
0.625% of the excess over $1 billion. +/- .10%
depending on performance vs. Russell 1000 Index.
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer Independence Fund $297,006,363 0.75%
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer International Equity Fund $70,567,529 1.00% of the Fund's average net assets up to
$300million, 0.85% of the next $200 million and
0.75% of the excess over $500 million.
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer International Value Fund $149,193,961 1.00% of the Fund's average net assets up to
$300million, 0.85% of the next $200 million and
0.75% of the excess over $500 million.
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer Large Cap Growth Fund $1,691,675 0.75%
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer Mid Cap Growth Fund $555,333,842 0.625% +/- .20% depending on performance vs. S&P
Mid Cap 400 Index.
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer Oak Ridge Small Cap Growth Fund $170,125,644 0.85% of the first $1 billion of the Fund's
average net assets and 0.80% of the excess over
$1 billion.
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer Research Fund $23,134,484 0.75% of the first $1 billion of the Fund's
average net assets and 0.70% of the excess over
$1 billion.
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer Select Equity Fund $528,795 0.75%
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer Small and Mid Cap Growth Fund $56,864,340 0.85% of the first $1 billion of the Fund's
average net assets and 0.80% of the excess over
$1 billion.
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer Small Cap Value Fund $639,692,666 0.85%
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer Small Company Fund $181,304,365 0.85%
- ---------------------------------------------------------------------------------------------------------------------------------
B-2
- ---------------------------------------------------------------------------------------------------------------------------------
Fund Net assets of Fund Management fee rate (as a percentage of average
(as of March 31, 2005) daily net assets)
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer Strategic Growth Fund $33,528,773 0.75% of the first $1 billion of the Fund's
average net assets and 0.70% of the excess over
$1 billion.
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer Variable Contracts Trust
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer America Income VCT Portfolio $46,258,507 0.55%
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer Balanced VCT Portfolio $45,294,667 0.65%
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer Equity Income VCT Portfolio $297,403,668 0.65%
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer Fund VCT Portfolio $560,671,869 0.65%
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer Growth Shares VCT Portfolio $37,553,901 0.70%
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer International Value VCT Portfolio $25,843,084 1.00%
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer Mid Cap Value VCT Portfolio $890,841,912 0.65%
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer Oak Ridge Large Cap Growth VCT $6,346,744 0.75% of the first $1 billion of the Fund's
Portfolio average net assets and 0.70% of the excess over
$1 billion.
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer Papp America-Pacific Rim VCT $1,703,894 0.75% of the first $1 billion of the Fund's
Portfolio average net assets and 0.70% of the excess over
$1 billion.
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer Papp Small and Mid Cap Growth VCT $3,445,634 0.75% of the first $1 billion of the Fund's
Portfolio average net assets and 0.70% of the excess over
$1 billion.
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer Small Cap Value VCT Portfolio $80,060,269 0.75%
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer Small Company VCT Portfolio $13,328,005 0.75%
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer Value VCT Portfolio $13,065,738 0.75%
- ---------------------------------------------------------------------------------------------------------------------------------
B-3
Exhibit C -- Portfolio Manager's Discussion of Performance
Pioneer Oak Ridge Large Cap Growth Fund
Performance Update 11/30/04 Class A Shares
Net Asset Value per Share 11/30/04 11/30/03
$12.51 $11.18
Distributions per Share
(12/1/03 - 11/30/04)
Net Investment Income $ --
Short-Term Capital Gains $ --
Long-Term Capital Gains $ --
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Oak Ridge Large Cap Growth Fund at public offering
price, compared to that of the Russell 1000 Growth Index.
Average Annual Total Returns
(As of November 30, 2004)
Period Net Asset Value Public Offering Price (POP)
Life-of-Class
(3/1/99) 1.79% 0.75%
5 Years 1.31 0.12
1 Year 11.90 5.48
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Effective 2/17/04, the maximum sales charge for Class A shares is 5.75%. POP
returns reflect deduction of maximum 5.75% sales charge. All results are
historical and assume the reinvestment of dividends and capital gains. Other
share classes are available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers fund performance would be lower. Waivers may
not be in effect for all funds. Certain fee waivers are contractual through a
specified period. Otherwise, fee waivers can be rescinded at any time. See the
prospectus and financial statements for more information. The performance table
and graph do not reflect the deduction of fees and taxes that a shareowner would
pay on Fund distributions or the redemption of Fund shares.
The performance of each class of the Fund from March 1, 1999 to February 13,
2004 is the performance of Oak Ridge Large Cap Equity Fund's single class (Class
A shares), which has been restated to reflect differences in any applicable
sales charges and Rule 12b-1 fees payable on Class B and Class C shares (but not
other differences in expenses). This adjustment has the effect of reducing the
previously reported performance of Oak Ridge Large Cap Equity Fund. Pioneer Oak
Ridge Large Cap Growth fund was created through the reorganization of
predecessor Oak Ridge Funds, Inc. on February 13, 2004.
The Russell 1000 Growth Index is a measure of the performance of the
value-oriented stocks in the Russell 1000 Index. Index returns assume
reinvestment of dividends and, unlike Fund returns, do not reflect any fees,
expenses or sales charges. You cannot invest directly in any index.
Performance Update 11/30/04 Class B Shares
C-1
Net Asset Value per Share 11/30/04 2/17/04
$12.44 $11.86
Distributions per Share
(2/17/04 - 11/30/04)
Net Investment Income $ --
Short-Term Capital Gains $ --
Long-Term Capital Gains $ --
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Oak Ridge Large Cap Growth Fund at public offering
price, compared to that of the Russell 1000 Growth Index.
Average Annual Total Returns
(As of November 30, 2004)
Period If Held If Redeemed
Life-of-Class
(3/1/99) 1.04$ 0.87%
5 Years 0.56 0.37
1 Year 11.09 7.09
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost. "If
redeemed" returns reflect deduction of applicable contingent deferred sales
charge (CDSC). The maximum CDSC is 4% and declines over six years. All results
are historical and assume the reinvestment of dividends and capital gains. Other
share classes are available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers fund performance would be lower. Waivers may
not be in effect for all funds. Certain fee waivers are contractual through a
specified period. Otherwise, fee waivers can be rescinded at any time. See the
prospectus and financial statements for more information. The performance table
and graph do not reflect the deduction of fees and taxes that a shareowner would
pay on Fund distributions or the redemption of Fund shares.
The performance of each class of the Fund from March 1, 1999 to February 13,
2004 is the performance of Oak Ridge Large Cap Equity Fund's single class (Class
A shares), which has been restated to reflect differences in any applicable
sales charges and Rule 12b-1 fees payable on Class B shares (but not other
differences in expenses). This adjustment has the effect of reducing the
previously reported performance of Oak Ridge Large Cap Equity Fund. Pioneer Oak
Ridge Large Cap Growth fund was created through the reorganization of
predecessor Oak Ridge Funds, Inc. on February 13, 2004. The Russell 1000 Growth
Index is a measure of the performance of the value-oriented stocks in the
Russell 1000 Index. Index returns assume reinvestment of dividends and, unlike
Fund returns, do not reflect any fees, expenses or sales charges. You cannot
invest directly in any index.
Performance Update 11/30/04 Class Y Shares
Net Asset Value per Share 11/30/04 8/11/04
$12.53 $11.33
Distributions per Share
(8/11/04 - 11/30/04)
Net Investment Income $ --
Short-Term Capital Gains $ --
Long-Term Capital Gains $ --
C-2
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Oak Ridge Large Cap Growth Fund at public offering
price, compared to that of the Russell 1000 Growth Index.
Average Annual Total Returns
(As of November 30, 2004)
Period If Held If Redeemed
Life-of-Class
(8/10/04) 1.82% 1.82%
5 Years 1.35 1.35
1 Year 12.07 12.07
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Performance for periods prior to the inception of Y shares reflects the NAV
performance of the Fund's A shares. The performance does not reflect differences
in expenses, including the Rule 12b-1 fees applicable to A shares. Since fees
for A shares are generally higher than those of Y shares, the performance shown
for Y shares prior to their inception would have been higher. Class A shares are
used as a proxy from 3/1/99 to 8/10/04. Class Y shares are not subject to sales
charges and are available for limited groups of eligible investors, including
institutional investors. All results are historical and assume the reinvestment
of dividends, and capital gains. Other share classes are available for which
performance and expenses will differ. Performance results reflect any applicable
expense waivers in effect during the periods shown. Without such waivers fund
performance would be lower. Waivers may not be in effect for all funds. Certain
fee waivers are contractual through a specified period. Otherwise, fee waivers
can be rescinded at any time. See the prospectus and financial statements for
more information. The performance table and graph do not reflect the deduction
of fees and taxes that a shareowner would pay on Fund distributions or the
redemption of Fund shares. The performance of each class of the Fund from March
1, 1999 to February 13, 2004 is the performance of Oak Ridge Large Cap Equity
Fund's single class (Class A shares), which has been restated to reflect
differences in any applicable sales charges (but not other differences in
expenses). This adjustment has the effect of reducing the previously reported
performance of Oak Ridge Large Cap Equity Fund. Pioneer Oak Ridge Large Cap
Growth fund was created through the reorganization of predecessor Oak Ridge
Funds, Inc. on February 13, 2004. The Russell 1000 Growth Index is a measure of
the performance of the value-oriented stocks in the Russell 1000 Index. Index
returns assume reinvestment of dividends and, unlike Fund returns, do not
reflect any fees, expenses or sales charges. You cannot invest directly in any
index.
Portfolio Management Discussion 11/30/04
In the following interview, David Klaskin, Pioneer Oak Ridge Large Cap Growth
Fund's Lead Portfolio Manager, discusses the factors that influenced performance
for the twelve months ended November 30, 2004.
Q: How did the U.S. stock market perform during the Fund's fiscal year?
A: Stocks performed very well during the past year, as continued global growth,
favorable earnings results and improving corporate balance sheets combined to
form a solid foundation for the market. While stocks provided a reasonable
return, their upward path was very choppy due to weakness in the second and
third quarters. During this time, the market was pressured by a litany of
concerns that included geopolitical tensions, soaring oil prices and rising U.S.
interest rates. Investors, therefore, began to rotate into higher-quality stocks
with solid fundamentals, and away from the riskier stocks that had been top
performers during 2003 and the first quarter of this year. This shift was a
positive for the Fund, given our focus on higher quality, fundamentally sound
companies.
C-3
Q: How did Pioneer Oak Ridge Large Cap Growth Fund perform?
A: Class A shares of the Fund produced a total return of 11.90% at net asset
value for the twelve-month period ended November 30, 2004, outpacing the 5.83%
return of the Russell 1000 Growth Index. The Fund's Class A shares finished in
the top 7% of the 647 funds in the Lipper Large Cap Growth Funds peer group for
the one-year period. The performance data quoted represents past performance,
which is no guarantee of future results. Investment return and principal value
will fluctuate, and shares, when redeemed, may be worth more or less than their
original cost. We are pleased that the Fund has performed well both on an
absolute basis and relative to its benchmark and peer group. While past
performance is no guarantee of future results, of course, we believe the Fund's
strong showing is the result of our disciplined investment style. Like all
growth managers, we look for companies with accelerating earnings. However, we
also require that two other important factors be in place. First, our research
must indicate to us that an issue's earnings growth is sustainable. And second,
the stocks we purchase must be reasonably valued in our view, since even
fast-growing stocks can be very risky if they are purchased at too rich of a
price. We believe this approach is the best way to find companies that are
poised to perform well over a three- to five-year time horizon.
Q: How is the Fund positioned in the two largest industry sectors in the Russell
1000 Growth Index: technology and health care?
A: We added significant relative value through our approach to the technology
sector, which underperformed the general market due to the prospect of slowing
sales growth in 2005. In this environment, our relatively conservative
positioning - i.e., our focus on reasonably valued, blue chip companies within
the sector - paid off. In addition, performance was helped by the fact that
technology is the Fund's largest sector underweight (a weighting below that of
the benchmark). Two of the Fund's top performers in technology were Qualcomm,
whose business model of earning royalties for its wireless communications
technology has enabled the stock to perform well amid broader tech weakness; and
Dell Computer, which continues to gain market share from its competitors. The
portfolio also was helped by being underweight in the more cyclical areas within
technology, such as semiconductors. In particular, our decision to avoid Intel -
which underperformed by a wide margin during the period - proved to be a
distinct positive for performance. Turning to health care, we added significant
value through our decision to avoid the large-cap pharmaceuticals sector.
Although these stocks are now as inexpensive as they were following President
Clinton's attempt at sweeping health care reform in 1993, we believe there are
not enough new drugs in the pipeline to make up for the lost revenues from drugs
that are coming off patent protection. We looked instead for opportunities among
service providers and equipment companies, such as Zimmer Holdings - a leading
manufacturer of orthopedic products. Zimmer declined in the third quarter on
weaker than expected earnings, prompting us to trim the position, but the stock
was a strong contributor for the full year. On the negative side, the generic
drug maker Teva Pharmaceuticals was one of the Fund's leading detractors. We
continue to hold the stock, however, as we remain confident in its longer term
prospects.
Q: What other elements of the Fund's positioning affected performance?
A: Energy stocks performed very well during the period, as the rising prices of
oil and gas boosted profits for companies in the sector. The Fund was helped by
both an overweight position and strong stock selection within the group. We
received strong performance from XTO Energy, which has demonstrated the ability
to manage its business effectively even during difficult times. Apache, an
exploration and production company that reported record production and 57%
earnings growth during the third quarter, also performed very well for the Fund.
In the consumer discretionary area, the online auction company eBay provided
stellar performance. eBay has emerged as a true "category killer," meaning that
there is no other company that has come close to being able to establish a
stronghold in its market space. While the company's fundamentals remain strong,
we have begun to trim the position on the basis of its valuation. Specialty
retailers such as Staples and Best Buy also contributed positively to
performance. A key detractor within the consumer discretionary group was
IAC/InteractiveCorp, which integrates a variety of online businesses. While we
believed this would allow the company to benefit from increased online activity,
the stock fell following the release of disappointing second quarter results. In
the financial sector, we have gradually reduced the presence of companies that
are sensitive to interest rate movements - such as traditional banks - given
that the Federal Reserve is likely to continue raising rates. At the same time,
we have maintained the Fund's positions in stocks with more diversified business
lines that have the potential to benefit from continued strength in the economy,
such as Sallie Mae and American Express. A top performer among financials was
Popular, which holds a strong market position within Latin America and the
fast-growing Hispanic population in the United States.
Q: What is your outlook for the stock market?
C-4
A: There are a number of factors that continue to work in the market's favor,
including steady worldwide growth, the improvement in corporate balance sheets
and companies' growing focus on dividends and share buybacks. However, the risks
to market performance, which include rising interest rates and the potential for
geopolitical disruptions, remain firmly in place. As a result, we think the
post-bubble rally in lower-quality, higher-risk companies has likely run its
course, and this should translate into a continued investor preference for
higher quality companies with strong fundamentals. In this environment, we
believe we can continue to add value through our disciplined, selective approach
to investing. The Fund invests in a limited number of securities and, as a
result, the Fund's performance may be more volatile than the performance of
funds holding more securities.
Any information in this shareholder report regarding market or economic trends
or the factors influencing the Fund's historical or future performance are
statements of the opinion of Fund management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
C-5
Pioneer Fund
Performance Update 12/31/04 Class A Shares
Shares Prices and Distributions
Net Asset Value per Share 12/31/04 12/31/03
$42.06 $38.00
Distributions per Share
(1/1/04 - 12/31/04)
Income Dividends $0.3363
Short-Term Capital Gains $ --
Long-Term Capital Gains $ --
INVESTMENT RETURNS
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Fund at public offering price, compared to that of
the Standard & Poor's (S&P) 500 Index.
Average Annual Total Returns
(As of December 31, 2004)
Period Net Asset Value Public Offering Price (POP)
Life-of-Class
10 Years 11.95% 11.21%
5 Years -0.27 -1.44
1 Year 11.64 5.21
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost. POP
returns reflect deduction of maximum 5.75% sales charge. All results are
historical and assume the reinvestment of dividends and capital gains. Other
share classes are available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers may
not be in effect for all funds. Certain fee waivers are contractual through a
specified period. Otherwise, fee waivers can be rescinded at any time. See the
prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares. The Standard & Poor's 500 Index is a commonly used measure of the broad
U.S. stock market. Index returns assume reinvestment of dividends and, unlike
Fund returns, do not reflect any fees, expenses or sales charges. You cannot
invest directly in any Index.
Performance Update 12/31/04 Class B Shares
Share Prices and Distributions
Performance Update 11/30/04 Class B Shares
Net Asset Value per Share 12/31/04 12/31/03
$41.15 $37.18
C-6
Distributions per Share
(1/1/04 - 12/31/04)
Income Dividends $ --
Short-Term Capital Gains $ --
Long-Term Capital Gains $ --
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Fund, compared to that of the Standard & Poor's (S&P)
500 Index.
Average Annual Total Returns
(As of December 31, 2004)
Period If Held If Redeemed
Life-of-Class
(7/1/99) 9.04% 9.04%
5 Years -1.14 -1.14
1 Year 10.68 6.68
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost. "If
redeemed" returns reflect the deduction of applicable contingent deferred sales
charge (CDSC). Effective December 1, 2004, the period during which a CDSC is
applied to withdrawals was shortened to 5 years. The maximum CDSC for class B
shares continues to be 4%. For more complete information, please see the
prospectus for details. Note: Shares purchased prior to December 1, 2004 remain
subject to the CDSC in effect at the time you purchased those shares. For
performance information for shares purchased prior to December 1, 2004, please
visit www.pioneerfunds.com/bshares.
All results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses will
differ. Performance results reflect any applicable expense waivers in effect
during the periods shown. Without such waivers Fund performance would be lower.
Waivers may not be in effect for all funds. Certain fee waivers are contractual
through a specified period. Otherwise, fee waivers can be rescinded at any time.
See the prospectus and financial statements for more information. The
performance table and graph do not reflect the deduction of fees and taxes that
a shareowner would pay on Fund distributions or the redemption of Fund shares.
The Standard & Poor's 500 Index is a commonly used measure of the broad U.S.
stock market. Index returns assume reinvestment of dividends and, unlike Fund
returns, do not reflect any fees, expenses or sales charges. You cannot invest
directly in any Index.
Performance Updates 12/31/04 Class Y Shares
Share Prices and Distribution
Net Asset Value per Share 12/31/04 12/31/02
$42.16 $38.09
Distributions per Share
(1/1/04 - 12/31/04)
Income Dividends $0.5142
Short-Term Capital Gains $ --
Long-Term Capital Gains $ --
Investment Returns
C-7
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Fund, compared to that of the Standard & Poor's (S&P)
500 Index.
Average Annual Total Returns
(As of December 31, 2004)
Period If Held If Redeemed
Life-of-Class
10 Years 12.22% 12.22%
5 Years 0.16 0.16
1 Year 12.15 12.15
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Performance for periods prior to the inception of Y shares reflects the NAV
performance of the Fund's A shares. The performance does not reflect differences
in expenses, including the Rule 12b-1 fees applicable to A shares. Since fees
for A shares are generally higher than those of Y shares, the performance shown
for Y shares prior to their inception (5/6/99) would have been higher. Class A
shares are used as a proxy from 2/13/ 1928 to 5/6/99. Class Y shares are not
subject to sales charges and are available for limited groups of eligible
investors, including institutional investors. All results are historical and
assume the reinvestment of dividends and capital gains. Other share classes are
available for which performance and expenses will differ. Performance results
reflect any applicable expense waivers in effect during the periods shown.
Without such waivers Fund performance would be lower. Waivers may not be in
effect for all funds. Certain fee waivers are contractual through a specified
period. Otherwise, fee waivers can be rescinded at any time. See the prospectus
and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares. The Standard & Poor's 500 Index is a commonly used measure of the broad
U.S. stock market. Index returns assume reinvestment of dividends and, unlike
Fund returns, do not reflect any fees, expenses or sales charges. You cannot
invest directly in any Index.
Portfolio Management Discussion 12/31/04
In the following discussion, John Carey, portfolio manager of Pioneer Fund,
reviews the past year and gives an overview of Pioneer Fund's performance over
that period.
Q: How did the Fund perform versus its benchmark and peer group? To what do you
attribute the performance?
A: Pioneer Fund achieved respectable returns in 2004. Class A shares rose
11.64%, at net asset value for the calendar year. Most of the gain came in the
fourth quarter, which saw the Class A shares rise 9.69%. By comparison, the
Standard & Poor's (S&P) 500 Index, an unmanaged index of the general stock
market, increased by 11.04% for the year and 9.23% in the fourth quarter, and
the average fund in the Lipper Large-Cap Core category appreciated by 7.79% for
the year and 8.86% in the fourth quarter. For the second half of 2004, the
corresponding numbers were: +9.41% at net asset value for Pioneer Fund; +7.19%
for the S&P 500 Index; and +5.64% for the average fund in the Lipper Large- Cap
Core category. After a halting start to the year in the first half, the market
performed well in the second half, and Pioneer Fund more than kept pace. The
performance data quoted represents past performance, which is no guarantee of
future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Looking back at our June 30 shareholder letter, we read our description of a
market apparently in disarray, but with some discernible trends. Principally we
noted the disappointing performance of some of the market darlings of the
previous year, 2003, especially in technology, as investors during 2004 rotated
into more moderately priced shares with dividends and more stable earnings.
While it looked as though investors did not know what to do amidst all of their
worries about rising interest rates, the war in Iraq, the weak dollar, rising
oil prices, terrorist threats, and the upcoming Presidential election, they did
in fact have a pretty clear idea. Seeking
C-8
security in dividends and modest valuations, and also in companies likely to
benefit from some of the circumstances causing their worries, investors heavily
bought and drove up the prices of energy, utility, industrial, and materials
stocks. The fourth-quarter rally broadened somewhat towards the end of the year,
but overall, 2004 was distinctly the year of the "old economy." Many of the
best-performing stocks were in industries like coal, copper, and iron-ore
mining, oil and gas, railroads, steel, hotels and lodging, building materials,
machinery, home construction, and ocean shipping. Our founder, Philip Carret,
would have been quite comfortable in the market of 2004 because without
exception all of those industries also existed, and were prospering, in the year
of his birth, 1896. For Pioneer Fund, the better-than-average performance was
derived both from our solid weightings in many of the old-economy stocks,
especially in energy, industrials, and materials, and from our good stock
selection in the four sectors that underperformed the S&P 500 average, consumer
staples, financials, health care, and information technology. Among our
best-performing stocks were Norfolk Southern and PACCAR in industrials and T.
Rowe Price in financials, but we also benefited from having only modest relative
exposure to Pfizer and Cisco Systems (which we sold during the year) and no
holdings of Coca-Cola, all stocks that did poorly. We did suffer from having
above-market weightings in two of the dismal semiconductor names, Applied
Materials and Texas Instruments, but on the whole we managed to avoid most of
the "disaster" stocks. We were particularly pleased that consumer discretionary,
the sector we had highlighted in our annual report for 2003 as the "major
culprit" in our relative underperformance versus the S&P during that year, was a
positive contributor to Fund performance in 2004. Three of our largest gains
were from stocks in that sector: McGraw-Hill, Target, and John Wiley & Sons.
Q: What changes did you make to the portfolio during the second half?
A: The list of 32 additions to and 10 deletions from the portfolio in the second
half of 2004 makes it look as though the period was a singularly busy one for
Pioneer Fund. Actually it was just a normally busy time, but due to the merger
of an acquired fund, the Safeco Core Equity Fund, into Pioneer Fund during
December, we ended up with some 20 new, transferred positions. Most of the
Safeco fund, totaling about $700 million in assets, overlapped with positions
already owned in Pioneer Fund, but we inherited the others as well. Rather than
"throwing them all out with the wash," we thought that we would take our time to
study them in the expectation that some might prove to be worthwhile longer-term
holdings for Pioneer Fund. The merger itself marked an exciting increase to the
asset base of Pioneer Fund, and also to our shareholder family. To our new,
formerly Safeco fund shareholders, a hearty welcome! The total effect of the
portfolio activity on sector weights was modest, with no sector weighting going
up or down by as much as 2%. Materials, industrials, consumer discretionary,
information technology, and telecommunications services all increased as a
percentage of the Fund portfolio, and energy, consumer staples, health care,
financials, and utilities all decreased. As examples, in materials we added: BHP
Billiton, a major Australian-based mining and minerals company; Inco, the
Canadian nickel producer; and Newmont Mining, a leading gold miner. Two new
materials names came from the Safeco fund, Praxair, supplier of industrial
gases, and Ball, a packaging company. Among industrials, Northrup Grumman and
Ingersoll-Rand were both Safeco holdings, and in the case of consumer
discretionary, five of the eight new stocks came from the Safeco fund. The two
largest additions, however, were our own purchases, Nordstrom and Gap, both of
them retailing companies showing signs of meaningful operational improvement
over the past couple of years. Information technology rose somewhat with: our
purchase of Veritas Software, which has received a merger proposal from another
portfolio company, Symantec; the receipt of shares of Freescale Semiconductor
from our holding Motorola; and the inclusion of EMC, an information storage
specialist, from the Safeco fund. Telecommunications saw one purchase by us,
Nextel Communications, and two additions attributable to the Safeco fund,
CenturyTel and Verizon. Subsequent to our purchase of Nextel, the company
entered into merger discussions with Sprint. In regard to the sectors where the
weightings decreased, the reasons in some cases had to do with weaker relative
share-price performance and in other cases with sales from the portfolio. In
energy, we realized a gain on a large position in Smith International and
replaced it with a smaller holding of Schlumberger. With consumer staples,
despite the addition of two small positions from the Safeco portfolio, Kellogg
and Kimberly Clark, the sector declined as a percent of the Fund due to
underperformance versus the market averages. In the case of health care, it was
a combination of selling in excess of purchasing and woeful stock performance
from some of the pharmaceuticals, especially Mylan Labs, which announced an
acquisition that many investors thought ill conceived. During the six months, we
realized significant percentage gains on our sales of Biomet and Wellpoint
Health Networks, while adding two names in the health-care equipment and
supplies industry, Stryker and Medtronic, and one name in biotechnology, Amgen.
Medtronic and Amgen were both from the Safeco fund. Financials saw SouthTrust
stock exchanged for shares of Wachovia in a merger and our shares of Charter One
Financial acquired for cash by the Royal Bank of Scotland. We sold our position
in St. Paul Travelers after discouragement over the company's need to set up
additional reserves following the merger creating the company. Finally, in
utilities, we sold a position in Vectren and received a smaller position in
Exelon from the Safeco fund. We have not listed every change, but rather have
mentioned the more significant ones and summarized the impact on the portfolio.
Q: What is your outlook for 2005?
C-9
A: The economic outlook appears favorable over the coming year. Interest rates
are expected to continue rising, but not so fast that they should present
impediments to further economic growth.
Earnings growth will moderate somewhat, which is normal as a business cycle
lengthens, but should still be adequate to fuel additional share-price advances.
Federal tax law, with the maximum 15% tax rate on qualified dividends and
long-term capital gains, is likewise favorable to the stock market. Of course
there are concerns, including energy and other commodity prices and the high
trade and Federal budget deficits. At some point, too, investors will begin
looking ahead to the next downturn in the economy and thinking about ways to
position themselves more defensively. A lot rides on the length of the current
business cycle. That is, will this be a "normal" cycle of four years or
thereabouts, or could it become another extended cycle like the one of the
1990s, which continued for more than six years? Making the forecasting even more
difficult is the unusual circumstance that this is a wartime cycle, with some
economic activity not conforming to more predictable business patterns. We are
somewhat inclined to the view that this will be an extended cycle, due to the
excruciatingly slow start to the recovery this time around and the persisting
cautiousness of many corporate managements. There generally have to be signs of
"excesses" before an economy rolls over, and we are not speaking of the recent
$44 million apartment sale in New York City or the advertised pricing of some
luxury cars above $300,000. Rather we are speaking of excessive hiring and
capital spending, leading to unneeded productive capacity, unsellable inventory,
and superfluous workers, and none of that has popped up yet at least on our
radar screen. So we think that we have some reasonable amount of time ahead of
us for making money in the market. As always, though, we are mainly interested
in companies that have the financial and management strengths to survive and do
well regardless of the economic climate, and especially companies with the
potential, as well as a plan and the management commitment, to do better than
they have in the past. A good economy creates more opportunities for such
companies to achieve improved results.
Thank you very much for your interest and support.
Any information in this shareholder report regarding market or economic trends
or the factors influencing the Fund's historical or future performance are
statements of the opinion of Fund management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
C-10
Pioneer Mid Cap Value Fund
Performance Update 10/31/04 Class A Shares
Share Price And Distributions
Net Asset Value per Share 10/31/04 10/31/03
$25.57 $22.25
Distributions per Share
(11/1/03 - 10/31/04)
Net Investment Income $ --
Short-Term Capital Gains $0.2084
Long-Term Capital Gains $0.3145
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Mid Cap Value Fund at public offering price, compared
to that of the Russell Midcap Value Index.
Average Annual Total Returns
(As of October 31, 2004)
Period Net Asset Value Public Offering Price (POP)
Life-of-Class
10 Years 11.44% 10.78%
5 Years 12.18 10.86
1 Year 17.65 10.87
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost. POP
returns reflect deduction of maximum 5.75% sales charge. All results are
historical and assume the reinvestment of dividends and capital gains. Other
share classes are available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers may
not be in effect for all funds and can be rescinded at any time. See the
prospectus and financial statements for complete details.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Russell Midcap Value Index measures the performance of U.S. mid-cap value
stocks. Index returns assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in the Index.
Performance Update 10/31/04 Class B Shares
Net Asset Value per Share 10/31/04 10/31/03
$23.32 $20.48
Distributions per Share
(11/1/03 - 10/31/04)
C-11
Net Investment Income $ --
Short-Term Capital Gains $0.1778
Long-Term Capital Gains $0.3145
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Mid Cap Value Fund, compared to that of the Russell
Midcap Value Index.
Average Annual Total Returns
(As of October 31, 2004)
Period If Held If Redeemed
10 Years 10.55% 12.22%
5 Years 11.25 11.12
1 Year 16.64 12.64
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost. "If
redeemed" returns reflect deduction of applicable contingent deferred sales
charge (CDSC). The maximum CDSC is 4% and declines over six years. All results
are historical and assume the reinvestment of dividends and capital gains. Other
share classes are available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers may
not be in effect for all funds and can be rescinded at any time. See the
prospectus and financial statements for complete details. The performance table
and graph do not reflect the deduction of fees and taxes that a shareowner would
pay on Fund distributions or the redemption of Fund shares.
The Russell Midcap Value Index measures the performance of U.S. mid-cap value
stocks. Index returns assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in the Index.
Performance Update 10/31/04 Class Y Shares
Share Price And Distributions
Net Asset Value per Share 10/31/04 10/31/03
$26.17 $22.73
Distributions per Share
(11/1/03 - 10/31/04)
Net Investment Income $ --
Short-Term Capital Gains $0.2913
Long-Term Capital Gains $0.3145
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Mid Cap Value Fund, compared to that of the Russell
Midcap Value Index.
Period If Held If Redeemed
10 Years 11.79% 11.79%
C-12
5 Years 12.73 12.73
1 Year 18.23 18.23
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Performance for periods prior to the inception of Y shares reflects the NAV
performance of the Fund's A shares. The performance does not reflect differences
in expenses, including the Rule 12b-1 fees applicable to A shares. Since fees
for A shares are generally higher than those of Y shares, the performance shown
for Y shares prior to their inception would have been higher. Class A shares are
used as a proxy from 7/25/90 to 7/2/98. Class Y shares are not subject to sales
charges and are available for limited groups of eligible investors, including
institutional investors. All results are historical and assume the reinvestment
of dividends and capital gains. Other share classes are available for which
performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers may
not be in effect for all funds and can be rescinded at any time. See the
prospectus and financial statements for complete details.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
Index comparison begins 7/31/98. The Russell Midcap Value Index measures the
performance of U.S. mid-cap value stocks. Index returns assume reinvestment of
dividends and, unlike Fund returns, do not reflect any fees, expenses or sales
charges. You cannot invest directly in the Index.
Portfolio Management Discussion 10/31/04
Investors reacted to a variety of different influences during the 12-month
period ended October 31, 2004, but the dominant trend in the market was for
stock prices to move higher as the economy expanded and corporate profits grew.
During the period, mid-cap stocks tended to outperform both large-cap and
small-cap stocks, and value stocks outperformed growth stocks. In the following
discussion, Rod Wright, leader of the team that manages Pioneer Mid Cap Value
Fund, provides an update on the Fund, its investment strategies and the economic
environment during the 12-month period.
Q: How did the Fund perform?
A: The Fund did well, outperforming the average return of competitive funds
despite trailing the benchmark Russell Midcap Value Index. The Fund's Class A
shares had a total return of 17.65% for the 12 months ended October 31, 2004,
while Class B and Class C shares returned 16.64% and 16.60%, respectively, all
at net asset value. During the same period, the Russell Midcap Value Index
gained 19.74%, while the average return of the 228 funds in Lipper's Mid-Cap
Value category was 15.64%.
Q: What were the principal factors affecting Fund performance?
A: The market began the period, in the final quarter of calendar 2003, building
on the rally that had characterized much of 2003, with stock prices rising amid
expectations that the economy was entering a period of sustained economic
growth. The surge continued through early spring of 2004, when investors began
to be concerned about a host of other influences, including high stock
valuations, the instability in Iraq, political uncertainty and rapidly rising
oil prices. The combination of these concerns stalled the rally until late in
the period, when prices again advanced amid renewed optimism about the strength
of the economy. The Fund's selections in technology, energy, consumer
discretionary and telecommunications services helped support strong performance,
while investments in industrials and financial services tended to detract from
performance. The underperformance of the Fund, relative to the Russell Midcap
Value Index, was primarily due to the absence of any investments in real estate
investment trusts (REITs), part of the financial services sector. The Fund's
defensive positioning in the financial services sector also held back
performance, as market interest rates did not increase by as much as we had
anticipated and many banks and other interest rate sensitive companies continued
to perform well.
C-13
Q: What were some of the individual investments that most influenced
performance?
A: Foot Locker, a specialty retailer focusing on athletic apparel, was a major
contributor to performance, as its earnings accelerated. Transocean, the world's
largest offshore oil-drilling company, posted big gains, as world oil prices
advanced, stimulating drilling activity. Phelps Dodge, the world's second
largest copper mining company, was another major contributor, as the prices of
copper and other basic materials climbed because of surging economic growth
throughout the world. Foot Locker remained the Fund's largest single holding at
the end of the fiscal year, while we also continued to hold both Transocean and
Phelps Dodge. Other investments that added to returns include: NCR, which
develops and produces electronic processing equipment; Becton, Dickinson, a
medical products company, Occidental Petroleum, an integrated petroleum company;
and Providian Financial, which specializes in credit cards. The Fund still owned
these stocks at the period's end. Two holdings were the subjects of acquisitions
at premiums to their stock valuations, significantly helping performance.
Charter One Financial, which operates banks in nine Eastern and Midwestern
states, was acquired by Citizens Financial, a subsidiary of the Royal Bank of
Scotland. Apogent Technologies, which produces devices and equipment for
clinical and research laboratories, was purchased by Fisher Scientific
International.
Q: What were some of the investments that detracted from performance?
A: In addition to the Fund's defensive positioning in the financial services
sector and lack of exposure to REITs, performance relative to the benchmark
Russell Midcap Value Index was hurt by not owning several strongly performing
stocks, notably TXU, a Texas based utility, and Apple Computer. Other
investments that proved to be disappointments for the fiscal year included: PMI
Group, an insurer of residential mortgages and Mattel, the toy company.
Q: What is your investment outlook?
A: We are reasonably optimistic about the economy and investment opportunities
in the stock market. The economy is expanding at a healthy rate, job growth has
begun to accelerate, interest rates remain low by historical standards, and
inflation continues to be restrained. Stock valuations also appear to be
reasonable, giving us the opportunity to find interesting investments. Although
we expect to continue to de-emphasize the stocks of companies that may be
vulnerable to rapid increases in interest rates, we are moderately bullish about
the overall market.
Investing in mid-sized companies may offer the potential for higher returns, but
these companies are also subject to greater short-term price fluctuations than
larger, more established companies.
Any information in this shareholder report regarding market or economic trends
or the factors influencing the Fund's historical or future performance are
statements of the opinion of Fund management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
C-14
Pioneer Growth Opportunities Fund
Performance Update 12/31/04 Class A Shares
Share Price And Distributions
Net Asset Value per Share 12/31/04 12/31/03
$29.80 $24.38
Distributions per Share
(1/1/04 - 12/31/04)
Income Dividends $ --
Short-Term Capital Gains $ --
Long-Term Capital Gains $ --
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Growth Opportunities Fund at public offering price,
compared to that of the Russell 2000 Index.
Average Annual Total Returns
(As of December 31, 2004)
Period Net Asset Value Public Offering Price (POP)
Life-of-Class
9/30/96 12.53% 11.76%
5 Years 5.13 3.88
1 Year 22.23 15.1
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost. POP
returns reflect deduction of maximum 5.75% sales charge. All results are
historical and assume the reinvestment of dividends and capital gains. Other
share classes are available for which performance and expenses will differ.
The performance of each class of the Fund is the performance of the predecessor
fund's Class A, Class B and Class C shares, which has been restated to reflect
differences in any applicable sales charges (but not differences in expenses).
If all the expenses of the Pioneer fund were reflected, the performance would be
lower.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers may
not be in effect for all funds and can be rescinded at any time. See the
prospectus and financial statements for complete details. The performance table
and graph do not reflect the deduction of fees and taxes that a shareowner would
pay on Fund distributions or the redemption of Fund shares. The Russell 2000
Index measures U.S. small-cap stocks. Index returns are calculated monthly,
assume reinvestment of dividends and, unlike Fund returns, do not reflect any
fees, charges or expenses. You cannot invest directly in the index.
Performance Update Class B Shares
Share Price And Distributions
Net Asset Value per Share 12/31/04 12/31/03
$27.94 $23.05
Distributions per Share
C-15
(1/1/04 - 12/31/04)
Income Dividends $ --
Short-Term Capital Gains $ --
Long-Term Capital Gains $ --
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Growth Opportunities Fund, compared to that of the
Russell 2000 Index.
Period If Held If Redeemed
Life-of Class (9/30/96) 11.67% 11.67%
5 Years 4.36 4.36
1 Year 21.21 17.21
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
"If redeemed" returns reflect the deduction of applicable contingent deferred
sales charge (CDSC). Effective December 1, 2004, the period during which a CDSC
is applied to withdrawals was shortened to 5 years. The maximum CDSC for class B
shares continues to be 4%. For more complete information, please see the
prospectus for details. Note: Shares purchased prior to December 1, 2004 remain
subject to the CDSC in effect at the time you purchased those shares. For
performance information for shares purchased prior to December 1, 2004, please
visit www.pioneerfunds.com/bshares. All results are historical and assume the
reinvestment of dividends and capital gains. Other share classes are available
for which performance and expenses will differ.
The performance of each class of the Fund is the performance of the predecessor
fund's Class A, Class B and Class C shares, which has been restated to reflect
differences in any applicable sales charges (but not differences in expenses).
If all the expenses of the Pioneer fund were reflected, the performance would be
lower. Performance results reflect any applicable expense waivers in effect
during the periods shown. Without such waivers Fund performance would be lower.
Waivers may not be in effect for all funds and can be rescinded at any time. See
the prospectus and financial statements for complete details.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares. The Russell 2000 Index measures U.S. small-cap stocks. Index returns are
calculated monthly, assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, charges or expenses. You cannot invest directly in the
index.
Portfolio Management Discussion 12/31/04
In the following interview, Michael Rega and Diego Franzin, co-managers of
Pioneer Growth Opportunities Fund, discuss the factors that influenced
performance for the twelve months ended December 31, 2004. The current portfolio
team assumed the Fund's management duties on December 10, 2004.
Q: What factors affected the performance of U.S. equities during the past year?
A: The stock market performed very well in 2004, despite a potentially
challenging environment. Investors had to contend with a host of obstacles
throughout the year, including a sharp increase in oil prices, rising short-term
interest rates, the uncertainty associated with the U.S. presidential election
and the ongoing insurgency in Iraq. Nevertheless, the market remained well
supported by its strong underlying fundamentals. The economy continued to grow
at a steady pace, but not so fast that the Federal Reserve felt compelled to
accelerate its measured pace of rate increases. Corporate earnings also remained
robust, finishing the year at a much higher level than most analysts had
anticipated. Strong earnings, in turn, translated to increased dividends and a
continued improvement in corporate balance sheets. Taken together, those factors
helped the stock
C-16
market climb the "wall of worry" and post a double-digit gain for the year. Amid
this generally positive environment, small-cap stocks outperformed their
large-cap counterparts by a wide margin, reflecting the superior earnings growth
of companies in the asset class. Within small-caps, value outperformed growth:
for the year, the Russell 2000 Value Index returned 22.25% versus 14.31% for the
Russell 2000 Growth Index. Given the Fund's focus on reasonably valued small-
and medium-sized companies, the strong returns within those market segments
provided a favorable tailwind to performance.
Q: How did the Fund perform in relation to its benchmark and peer group?
A: Class A shares of the Fund produced a total return of 22.23% at net asset
value during the twelve-month period ended December 31, 2004, compared to a
return of 18.33% for its benchmark, the Russell 2000 Index. The Fund also
outperformed the 18.38% average return of the 556 funds in the Lipper Small-Cap
Core category, finishing in the top quarter of the group.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Q: As new managers of the Fund, what changes do you anticipate making to the
portfolio and its overall investment style?
A: We do not plan to do a major rebalancing of the portfolio, but we expect to
make a series of gradual changes to the Fund throughout the year as market
conditions warrant. First, we intend to bring greater diversification to the
portfolio by owning more stocks and taking smaller positions in individual
names. Second, we plan to keep the Fund sector neutral, meaning that its
industry weightings will usually be very closely in line with those of the
benchmark index. In this way, the majority of the Fund's performance will be the
result of individual stock selection. We believe we can add more value through
company research than by attempting to predict the direction of the overall
market or the relative performance of specific industries.
Q: How do you intend to select stocks for the Fund?
A: We start by dividing the Russell 2000 Index into a number of distinct sectors
and subsectors, then we use a disciplined stock selection model to identify the
most attractive stocks in each sector based on four factors: growth, quality,
valuation and momentum. That enables us to analyze the entire universe of 2,000
companies and select what our criteria show to be the top 20% in each sector.
Next, we focus our research capabilities to conduct a fundamental analysis of
each stock that has been selected. We believe that the approach provides both
breadth and depth to our stock picking. We believe that this investment style
will provide more stability to the portfolio and reduce the extent of the
variation in its return with respect to the benchmark index. Our goal is not to
hit home runs, but to hit singles and doubles and, in the process, try to
deliver market-beating returns on a long-term basis. MANAGEMENT DISCUSSION
12/31/04 (continued)
Q: What is your overall view of the market at this juncture?
A: We believe a focus on individual stock selection will be critical in the year
ahead. Small-caps have outperformed large-caps for six years in a row, which
suggests that a change in market-cap leaders may be in order. What's more, our
analysis shows that on a historical basis, growth stocks have been this
inexpensive in relation to value less than 5% of the time. This has two
implications: first, it means that gains in the small-cap value area are not
likely to come as easily as they did in 2004. As a result, fundamental research
should play a very important role in generating outperformance. Second, it means
that in assessing the outlook for individual stocks, we will place a higher than
normal emphasis on companies with the most attractive growth characteristics. We
believe these steps will help the Fund effectively navigate the year ahead even
in the event that the stellar relative performance of the small-cap value asset
class begins to cool off.
Q: In what areas are you finding the best investment opportunities?
A: In 2004, every major sector in the Russell 2000 Index provided double-digit
returns with the exception of technology. We expect a greater dispersion of
returns in 2005, which again would work to our advantage as individual stock
pickers. We will be looking for opportunities in technology and health care, two
areas that underperformed the broad-based index during 2004. One of the Fund's
top holding, MICROS Systems, is a tech stock that in our view is among those
that have additional upside. MICROS develops and markets software applications
to the hospitality industry, mostly table service restaurants. Their software
allows restaurants to improve coordination between servers and kitchen staff and
reduce costs by improving inventory
C-17
management and product reordering. A key driver of future growth is expansion
into the hotel industry as the industry embarks on a 5- to 7-year technology
infrastructure upgrade cycle. Within health care, we will be closely looking for
opportunities in the biotechnology sector. We believe biotechs are less risky
than in the past, since there are more companies that have been public for four
or five years and, therefore, have a longer earnings history and more
experienced management teams. We will look to capitalize on companies we
identify as quality managed and staffed, along with a proven record of
execution. On the other side of the coin, we find the consumer staples and real
estate areas to be less compelling. And within financials, we intend to focus on
companies that have an asset/liability mix that favors a flattening yield curve
environment and exposure to expanding markets such as Florida and Texas.
Q: Do you have any final thoughts for investors?
A: We believe that the most important aspect of asset management is individual
stock selection, and we will remain committed to our research-driven approach.
Regardless of the direction of the overall market, we believe Fund shareholders
have the potential to benefit from our efforts to identify the highest-quality
small-cap stocks in the market. By concentrating on one industry or on a group
of related industries, the portfolio is more susceptible to adverse economic,
political or regulatory developments affecting those industries than is a
portfolio that invests more broadly. Investing in foreign and/or emerging
markets securities involves risks relating to interest rates, currency exchange
rates, economic, and political conditions. Investing in small companies may
offer the potential for higher returns, but these companies are also subject to
greater short-term price fluctuations than larger, more established companies.
Any information in this shareholder report regarding market or economic trends
or the factors influencing the Fund's historical or future performance are
statements of the opinion of Fund management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
C-18
Pioneer Ibbotson Aggressive Allocation Fund
Performance Update 1/31/05 Class A Shares
Share Price And Distributions
Net Asset Value per Share 1/31/05 8/9/04
$11.07 $10.00
Distributions per Share
(8/9/04 - 1/31/05)
Dividends $0.0218
Short-Term Capital Gains $ --
Long-Term Capital Gains $0.2979 $ --
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Ibbotson Aggressive Allocation Fund at public
offering price, compared to that of the Standard & Poor's 500 Stock Index.
Average Annual Total Returns
(As of January 31, 2005)
Period Net Asset Value Public Offering Price (POP)
Life-of-Class
(8/9/04) 13.54% 7.02%
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost. POP
returns reflect deduction of maximum 5.75% sales charge. All results are
historical and assume the reinvestment of dividends and capital gains. Other
share classes are available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers may
not be in effect for all funds. Certain fee waivers are contractual through a
specified period. Otherwise, fee waivers can be rescinded at any time. See the
prospectus and financial statements for more information. The performance table
and graph do not reflect the deduction of fees and taxes that a shareowner would
pay on Fund distributions or the redemption of Fund shares.
The Standard & Poor's 500 Stock Index (the S&P 500) is a commonly used measure
of the broad U.S. stock market. Index returns are calculated monthly, assume
reinvestment of dividends and, unlike Fund returns, do not reflect any fees,
expenses or sales charges. You cannot invest directly in the Index.
Performance Update 1/31/05 Class B Shares
Share Price And Distributions
Net Asset Value per Share 1/31/05 8/9/04
$10.68 $10.00
Distributions per Share
(8/9/04 - 1/31/05)
Dividends $ --
Short-Term Capital Gains $ --
Long-Term Capital Gains $0.2979
C-19
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Ibbotson Aggressive Allocation Fund, compared to that
of the Standard & Poor's 500 Stock Index.
Average Annual Total Returns
(As of January 31, 2005)
Period If Held If Redeemed
Life-of-Class
(8/9/04) 9.73% 5.73%
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost. "If
redeemed" returns reflect the deduction of applicable contingent deferred sales
charge (CSDC). Effective December 1, 2004, the period during which a CDSC is
applied to withdrawals was shortened to 5 years. The maximum CDSC for class B
shares continues to be 4%. For more complete information, please see the
prospectus for details. Note: Shares purchased prior to December 1, 2004 remain
subject to the CDSC in effect at the time you purchased those shares. For
performance information for shares purchased prior to December 1, 2004, please
visit www.pioneerfunds.com/bshares.
All results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses will
differ. Performance results reflect any applicable expense waivers in effect
during the periods shown. Without such waivers Fund performance would be lower.
Waivers may not be in effect for all funds. Certain fee waivers are contractual
through a specified period. Otherwise, fee waivers can be rescinded at any time.
See the prospectus and financial statements for more information. The
performance table and graph do not reflect the deduction of fees and taxes that
a shareowner would pay on Fund distributions or the redemption of Fund shares.
The Standard & Poor's 500 Stock Index (the S&P 500) is a commonly used measure
of the broad U.S. stock market. Index returns are calculated monthly, assume
reinvestment of dividends and, unlike Fund returns, do not reflect any fees,
expenses or sales charges. You cannot invest directly in the Index.
Portfolio Management Discussion 1/31/05
In the following interview, portfolio manager Peng Chen, Chief Investment
Officer for Ibbotson Associates, discusses the market environment and investment
strategies that applied to the three portfolios in the Pioneer Ibbotson
Allocation Series for the period of almost six months since they began
operations on August 9, 2004.
Q: Could you characterize the economic backdrop against which the three
portfolios began investment operations?
A: The period of nearly six months between the August 9, 2004 launch of the
funds and the end of January 2005 was an uncertain environment for investors.
While the U.S. economy has continued the growth trend that started in the second
half of 2003, the rate of growth has showed signs of decelerating. At the same
time, inflation continues to be a concern, spurred on by the continued strength
in the economy and, to a lesser extent, by oil prices that have been at all-time
highs. On the interest rate front, the Federal Reserve began to raise short-term
rates earlier in 2004 and appears to be maintaining a tightening policy to keep
economic growth in check.
Q: How did the financial markets respond in this climate?
A: Early in the period, equity market levels wavered while basically staying
within a range. As the November 2 date for the U.S. presidential election drew
closer, however, investors became increasingly focused on the accompanying
uncertainties, and
C-20
stocks fell. In contrast, bond prices generally showed strength during this
time. The trends appeared to reverse themselves in the aftermath of the
election. The stock market responded positively to the increased clarity, while
bond market performance was dampened by expectations of a continued lack of
progress on reducing federal budget deficits.
Q: What were the strategic considerations that you applied to the three
portfolios in allocating assets?
A: As the three portfolios in the series were launched and initial investor
dollars were received, assets were invested in keeping with the respective broad
asset allocation and specific mutual fund targets established prior to the
launch of the series. Toward the, middle of the period, in late October, we
implemented two strategic changes across all three portfolios. First, within the
U.S. stock portion of the portfolios, we implemented a moderate emphasis on
value stocks and a corresponding underweighting of more growth-oriented
investments. We did this because we believe the U.S. economy has entered into a
decelerating growth cycle that should favor value equities with relatively
stable earnings prospects. We also believe that the potential for higher
inflation and interest rates favors the value investment style over growth. Our
equity valuation and momentum models further support this assessment, indicating
an overweighting of value and an underweighting of growth equities. That said,
value stocks have now outperformed growth over a period of more than four years.
If the economy starts to show signs of more rapid growth, an overweighting of
more growth-oriented investments will be warranted. With respect to the other
equity asset classes, the portfolios' targeted exposure across large-, mid-, and
small-cap equities remained unchanged. We have also maintained neutral target
weightings in the non-U.S. equity market alternatives, both developed and
emerging. The other shift has been within the bond portion of the portfolios,
where we implemented an underweighting of the long-term bond vehicle, with the
difference allocated to the shorter-term fixed income alternative. We believe
that, given the prospect of higher interest rates across all maturities, but
especially on the long end of the yield curve, shorter duration fixed-income
investments are more attractive. Elsewhere within fixed-income, we have
maintained neutral positions in the high yield bond offering, as well as in the
non-U.S. fixed-income option. Going forward, we will closely monitor economic
indicators and interest rate movements to evaluate whether we need to make any
adjustments to the views underlying these allocations. Given the significant
level of uncertainty that continues to impact the financial markets, we believe
that maintaining appropriate diversification across asset classes will be
especially important in the months ahead.
Please the see the Portfolio Reviews beginning on page 10 for information on
specific weightings and performance for each of the three portfolios in the
Pioneer Ibbotson Asset Allocation Series. Any information in this shareholder
report regarding market or economic trends or the factors influencing the Fund's
historical or future performance are statements of the opinion of Fund
management as of the date of this report. These statements should not be relied
upon for any other purposes. Past performance is no guarantee of future results,
and there is no guarantee that market forecasts discussed will be realized.
C-21
Pioneer Ibbotson Growth Allocation Fund
Performance Update 1/31/05 Class A Shares
Share Price And Distributions
Net Asset Value per Share 1/31/05 8/9/04
$10.84 $10.00
Distributions per Share
(8/9/04 - 1/31/05)
Dividends $0.0342
Short-Term Capital Gains $ --
Long-Term Capital Gains $0.249
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Ibbotson Growth Allocation Fund at public offering
price, compared to that of the Standard & Poor's 500 Stock Index.
Average Annual Total Returns
(As of January 31, 2005)
Period Net Asset Value Public Offering Price (POP)
Life-of-Class
(8/9/04) 11.19% 4.80%
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost. POP
returns reflect deduction of maximum 5.75% sales charge. All results are
historical and assume the reinvestment of dividends and capital gains. Other
share classes are available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers may
not be in effect for all funds. Certain fee waivers are contractual through a
specified period. Otherwise, fee waivers can be rescinded at any time. See the
prospectus and financial statements for more information. The performance table
and graph do not reflect the deduction of fees and taxes that a shareowner would
pay on Fund distributions or the redemption of Fund shares.
The Standard & Poor's 500 Stock Index (the S&P 500) is a commonly used measure
of the broad U.S. stock market. Index returns are calculated monthly, assume
reinvestment of dividends and, unlike Fund returns, do not reflect any fees,
expenses or sales charges. You cannot invest directly in the Index.
Performance Update 1/31/05 Class B Shares
Share Price And Distributions
Net Asset Value per Share 1/31/05 8/9/04
$ 9.95 $10.00
Distributions per Share
(8/9/04 - 1/31/05)
Dividends $ --
Short-Term Capital Gains $ --
Long-Term Capital Gains $0.249
C-22
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Ibbotson Growth Allocation Fund, compared to that of
the Standard & Poor's 500 Stock Index.
Period If Held If Redeemed
Life-of-Class
(8/9/04) 1.95% -2.03%
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost. "If
redeemed" returns reflect the deduction of applicable contingent deferred sales
charge (CSDC). Effective December 1, 2004, the period during which a CDSC is
applied to withdrawals was shortened to 5 years. The maximum CDSC for class B
shares continues to be 4%. For more complete information, please see the
prospectus for details. Note: Shares purchased prior to December 1, 2004 remain
subject to the CDSC in effect at the time you purchased those shares. For
performance information for shares purchased prior to December 1, 2004, please
visit www.pioneerfunds.com/bshares.
All results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses will
differ. Performance results reflect any applicable expense waivers in effect
during the periods shown. Without such waivers Fund performance would be lower.
Waivers may not be in effect for all funds. Certain fee waivers are contractual
through a specified period. Otherwise, fee waivers can be rescinded at any time.
See the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Standard & Poor's 500 Stock Index (the S&P 500) is a commonly used measure
of the broad U.S. stock market. Index returns are calculated monthly, assume
reinvestment of dividends and, unlike Fund returns, do not reflect any fees,
expenses or sales charges. You cannot invest directly in the Index.
Portfolio Management Discussion 1/31/05
In the following interview, portfolio manager Peng Chen, Chief Investment
Officer for Ibbotson Associates, discusses the market environment and investment
strategies that applied to the three portfolios in the Pioneer Ibbotson
Allocation Series for the period of almost six months since they began
operations on August 9, 2004.
Q: Could you characterize the economic backdrop against which the three
portfolios began investment operations?
A: The period of nearly six months between the August 9, 2004 launch of the
funds and the end of January 2005 was an uncertain environment for investors.
While the U.S. economy has continued the growth trend that started in the second
half of 2003, the rate of growth has showed signs of decelerating. At the same
time, inflation continues to be a concern, spurred on by the continued strength
in the economy and, to a lesser extent, by oil prices that have been at all-time
highs. On the interest rate front, the Federal Reserve began to raise short-term
rates earlier in 2004 and appears to be maintaining a tightening policy to keep
economic growth in check.
Q: How did the financial markets respond in this climate?
A: Early in the period, equity market levels wavered while basically staying
within a range. As the November 2 date for the U.S. presidential election drew
closer, however, investors became increasingly focused on the accompanying
uncertainties, and
C-23
stocks fell. In contrast, bond prices generally showed strength during this
time. The trends appeared to reverse themselves in the aftermath of the
election. The stock market responded positively to the increased clarity, while
bond market performance was dampened by expectations of a continued lack of
progress on reducing federal budget deficits.
Q: What were the strategic considerations that you applied to the three
portfolios in allocating assets?
A: As the three portfolios in the series were launched and initial investor
dollars were received, assets were invested in keeping with the respective broad
asset allocation and specific mutual fund targets established prior to the
launch of the series. Toward the, middle of the period, in late October, we
implemented two strategic changes across all three portfolios.
First, within the U.S. stock portion of the portfolios, we implemented a
moderate emphasis on value stocks and a corresponding underweighting of more
growth-oriented investments. We did this because we believe the U.S. economy has
entered into a decelerating growth cycle that should favor value equities with
relatively stable earnings prospects. We also believe that the potential for
higher inflation and interest rates favors the value investment style over
growth. Our equity valuation and momentum models further support this
assessment, indicating an overweighting of value and an underweighting of growth
equities. That said, value stocks have now outperformed growth over a period of
more than four years. If the economy starts to show signs of more rapid growth,
an overweighting of more growth-oriented investments will be warranted. With
respect to the other equity asset classes, the portfolios' targeted exposure
across large-, mid-, and small-cap equities remained unchanged. We have also
maintained neutral target weightings in the non-U.S. equity market alternatives,
both developed and emerging. The other shift has been within the bond portion of
the portfolios, where we implemented an underweighting of the long-term bond
vehicle, with the difference allocated to the shorter-term fixed income
alternative. We believe that, given the prospect of higher interest rates across
all maturities, but especially on the long end of the yield curve, shorter
duration fixed-income investments are more attractive. Elsewhere within
fixed-income, we have maintained neutral positions in the high yield bond
offering, as well as in the non-U.S. fixed-income option. Going forward, we will
closely monitor economic indicators and interest rate movements to evaluate
whether we need to make any adjustments to the views underlying these
allocations. Given the significant level of uncertainty that continues to impact
the financial markets, we believe that maintaining appropriate diversification
across asset classes will be especially important in the months ahead.
Please the see the Portfolio Reviews beginning on page 10 for information on
specific weightings and performance for each of the three portfolios in the
Pioneer Ibbotson Asset Allocation Series. Any information in this shareholder
report regarding market or economic trends or the factors influencing the Fund's
historical or future performance are statements of the opinion of Fund
management as of the date of this report. These statements should not be relied
upon for any other purposes. Past performance is no guarantee of future results,
and there is no guarantee that market forecasts discussed will be realized.
C-24
Pioneer Ibbotson Moderate Allocation Fund
Performance Update 1/30/05 Class A Shares
Share Price And Distributions
Net Asset Value per Share 1/31/05 8/9/04
$10.63 $10.00
Distributions per Share
(8/9/04 - 1/31/05)
Dividends $0.0433
Short-Term Capital Gains $ --
Long-Term Capital Gains $0.2339
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Ibbotson Moderate Allocation Fund at public offering
price, compared to that of the Standard & Poor's 500 Stock Index.
Average Annual Total Returns
(As of January 31, 2005)
Period Net Asset Value Public Offering Price (POP)
Life-of-Class
(8/9/04) 9.04% 2.77%
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost. POP
returns reflect deduction of maximum 5.75% sales charge. All results are
historical and assume the reinvestment of dividends and capital gains. Other
share classes are available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers may
not be in effect for all funds. Certain fee waivers are contractual through a
specified period. Otherwise, fee waivers can be rescinded at any time. See the
prospectus and financial statements for more information. The performance table
and graph do not reflect the deduction of fees and taxes that a shareowner would
pay on Fund distributions or the redemption of Fund shares.
The Standard & Poor's 500 Stock Index (the S&P 500) is a commonly used measure
of the broad U.S. stock market. Index returns are calculated monthly, assume
reinvestment of dividends and, unlike Fund returns, do not reflect any fees,
expenses or sales charges. You cannot invest directly in the Index.
Performance Update 1/30/05 Class B Shares
Share Prices and Distributions
Net Asset Value per Share 1/31/05 8/9/04
$10.32 $10.00
Distributions per Share
(8/9/04 - 1/31/05)
Dividends $ --
Short-Term Capital Gains $ --
Long-Term Capital Gains $0.2339
C-25
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Ibbotson Moderate Allocation Fund, compared to that
of the Standard & Poor's 500 Stock Index.
Average Annual Total Returns
(As of January 31, 2005)
Period If Held If Redeemed
Life-of-Class
(8/9/04) 5.51% 1.51%
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost. "If
redeemed" returns reflect the deduction of applicable contingent deferred sales
charge (CSDC). Effective December 1, 2004, the period during which a CDSC is
applied to withdrawals was shortened to 5 years. The maximum CDSC for class B
shares continues to be 4%. For more complete information, please see the
prospectus for details. Note: Shares purchased prior to December 1, 2004 remain
subject to the CDSC in effect at the time you purchased those shares. For
performance information for shares purchased prior to December 1, 2004, please
visit www.pioneerfunds.com/bshares. All results are historical and assume the
reinvestment of dividends and capital gains. Other share classes are available
for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers may
not be in effect for all funds. Certain fee waivers are contractual through a
specified period. Otherwise, fee waivers can be rescinded at any time. See the
prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Standard & Poor's 500 Stock Index (the S&P 500) is a commonly used measure
of the broad U.S. stock market. Index returns are calculated monthly, assume
reinvestment of dividends and, unlike Fund returns, do not reflect any fees,
expenses or sales charges. You cannot invest directly in the Index.
Portfolio Management Discussion 1/31/05
In the following interview, portfolio manager Peng Chen, Chief Investment
Officer for Ibbotson Associates, discusses the market environment and investment
strategies that applied to the three portfolios in the Pioneer Ibbotson
Allocation Series for the period of almost six months since they began
operations on August 9, 2004.
Q: Could you characterize the economic backdrop against which the three
portfolios began investment operations?
A: The period of nearly six months between the August 9, 2004 launch of the
funds and the end of January 2005 was an uncertain environment for investors.
While the U.S. economy has continued the growth trend that started in the second
half of 2003, the rate of growth has showed signs of decelerating. At the same
time, inflation continues to be a concern, spurred on by the continued strength
in the economy and, to a lesser extent, by oil prices that have been at all-time
highs. On the interest rate front, the Federal Reserve began to raise short-term
rates earlier in 2004 and appears to be maintaining a tightening policy to keep
economic growth in check.
Q: How did the financial markets respond in this climate?
C-26
A: Early in the period, equity market levels wavered while basically staying
within a range. As the November 2 date for the U.S. presidential election drew
closer, however, investors became increasingly focused on the accompanying
uncertainties, and stocks fell. In contrast, bond prices generally showed
strength during this time. The trends appeared to reverse themselves in the
aftermath of the election. The stock market responded positively to the
increased clarity, while bond market performance was dampened by expectations of
a continued lack of progress on reducing federal budget deficits.
Q: What were the strategic considerations that you applied to the three
portfolios in allocating assets?
A: As the three portfolios in the series were launched and initial investor
dollars were received, assets were invested in keeping with the respective broad
asset allocation and specific mutual fund targets established prior to the
launch of the series. Toward the, middle of the period, in late October, we
implemented two strategic changes across all three portfolios.
First, within the U.S. stock portion of the portfolios, we implemented a
moderate emphasis on value stocks and a corresponding underweighting of more
growth-oriented investments. We did this because we believe the U.S. economy has
entered into a decelerating growth cycle that should favor value equities with
relatively stable earnings prospects. We also believe that the potential for
higher inflation and interest rates favors the value investment style over
growth. Our equity valuation and momentum models further support this
assessment, indicating an overweighting of value and an underweighting of growth
equities. That said, value stocks have now outperformed growth over a period of
more than four years. If the economy starts to show signs of more rapid growth,
an overweighting of more growth-oriented investments will be warranted. With
respect to the other equity asset classes, the portfolios' targeted exposure
across large-, mid-, and small-cap equities remained unchanged. We have also
maintained neutral target weightings in the non-U.S. equity market alternatives,
both developed and emerging. The other shift has been within the bond portion of
the portfolios, where we implemented an underweighting of the long-term bond
vehicle, with the difference allocated to the shorter-term fixed income
alternative. We believe that, given the prospect of higher interest rates across
all maturities, but especially on the long end of the yield curve, shorter
duration fixed-income investments are more attractive. Elsewhere within
fixed-income, we have maintained neutral positions in the high yield bond
offering, as well as in the non-U.S. fixed-income option.
Going forward, we will closely monitor economic indicators and interest rate
movements to evaluate whether we need to make any adjustments to the views
underlying these allocations. Given the significant level of uncertainty that
continues to impact the financial markets, we believe that maintaining
appropriate diversification across asset classes will be especially important in
the months ahead.
Please the see the Portfolio Reviews beginning on page 10 for information on
specific weightings and performance for each of the three portfolios in the
Pioneer Ibbotson Asset Allocation Series. Any information in this shareholder
report regarding market or economic trends or the factors influencing the Fund's
historical or future performance are statements of the opinion of Fund
management as of the date of this report. These statements should not be relied
upon for any other purposes. Past performance is no guarantee of future results,
and there is no guarantee that market forecasts discussed will be realized.
C-27
Pioneer Bond Fund
Performance Update 12/31/04 Class A Shares
Share Price And Distributions
Net Asset Value per Share 12/31/04 6/30/04
$9.38 $9.18
Distributions per Share
(7/1/04 - 12/31/04)
Net Investment Income $0.2485
Short-Term Capital Gains $ --
Long-Term Capital Gains $ --
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Bond Fund at public offering price, compared to that
of the Lehman Brothers Aggregate Bond Index.
Average Annual Total Returns
(as of December 31, 2004)
Period Net Asset Value Public Offering Price (POP)
10 Years 7.18% 6.69%
5 Years 7.86 6.86
1 Year 5.71 0.96
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
POP returns reflect deduction of maximum 5.75% sales charge. All results are
historical and assume the reinvestment of dividends and capital gains. Other
share classes are available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers may
not be in effect for all funds. Certain fee waivers are contractual through a
specified period. Otherwise, fee waivers can be rescinded at any time. See the
prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares. The Lehman Brothers Aggregate Bond Index is a measure of the U.S. bond
market. Index returns are calculated monthly, assume reinvestment of dividends
and, unlike Fund returns, do not reflect any fees, expenses or sales charges.
You cannot invest directly in the Indexes.
Performance Update 12/31/04 Class B Shares
Share Price And Distributions
Net Asset Value per Share 12/31/04 6/30/04
$9.34 $9.14
Distributions per Share
(7/1/04 - 12/31/04)
Net Investment Income $0.2084
Short-Term Capital Gains $ --
Long-Term Capital Gains $ --
C-28
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Bond Fund, compared to that of the Lehman Brothers
Aggregate Bond Index.
Average Annual Total Returns
(as of December 31, 2004)
Period If Held If Redeemed
10 Years 6.30% 6.30%
5 Years 6.93 6.93
1 Year 4.82 0.82
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost. "If
redeemed" returns reflect the deduction of applicable contingent deferred sales
charge (CSDC). Effective December 1, 2004, the period during which a CDSC is
applied to withdrawals was shortened to 5 years. The maximum CDSC for class B
shares continues to be 4%. For more complete information, please see the
prospectus for details. Note: Shares purchased prior to December 1, 2004 remain
subject to the CDSC in effect at the time you purchased those shares. For
performance information for shares purchased prior to December 1, 2004, please
visit www.pioneerfunds.com/bshares.
All results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses will
differ. Performance results reflect any applicable expense waivers in effect
during the periods shown. Without such waivers Fund performance would be lower.
Waivers may not be in effect for all funds. Certain fee waivers are contractual
through a specified period. Otherwise, fee waivers can be rescinded at any time.
See the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Lehman Brothers Aggregate Bond Index is a measure of the U.S. bond market.
Index returns are calculated monthly, assume reinvestment of dividends and,
unlike Fund returns, do not reflect any fees, expenses or sales charges. You
cannot invest directly in the Indexes.
Performance Update 12/31/04 Class Y Shares
Share Price And Distributions
Net Asset Value per Share 12/31/04 6/30/04
$9.32 $9.12
Distributions per Share
(7/1/04 - 12/31/04)
Net Investment Income $0.2715
Short-Term Capital Gains $ --
Long-Term Capital Gains $ --
C-29
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Bond Fund, compared to that of the Lehman Brothers
Aggregate Bond Index.
Average Annual Total Returns
(as of December 31, 2004)
Period If Held If Redeemed
10 Years 7.34% 7.34%
5 Years 8.18 8.18
1 Year 6.35 6.35
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Performance for periods prior to the inception of Y shares reflects the NAV
performance of the Fund's A shares. The performance does not reflect differences
in expenses, including the Rule 12b-1 fees applicable to A shares. Since fees
for A shares are generally higher than those of Y shares, the performance shown
for Y shares prior to their inception would have been higher. Class A shares are
used as a proxy from 10/31/78 to 9/20/01. Class Y shares are not subject to
sales charges and are available for limited groups of eligible investors,
including institutional investors. All results are historical and assume the
reinvestment of dividends and capital gains. Other share classes are available
for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers may
not be in effect for all funds. Certain fee waivers are contractual through a
specified period. Otherwise, fee waivers can be rescinded at any time. See the
prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares. The Lehman Brothers Aggregate Bond Index is a measure of the U.S. bond
market. Index returns are calculated monthly, assume reinvestment of dividends
and, unlike Fund returns, do not reflect any fees, expenses or sales charges.
You cannot invest directly in the Indexes.
Portfolio Management Discussion 12/31/04
As the domestic economy showed evidence of a sustained recovery during the
second half of 2004, the U.S. Federal Reserve continued to raise short-term
interest rates gradually to contain the risk of inflation and keep the economy
in check. The fixed-income market reacted favorably to the Fed's series of
measured increases in the Fed funds rate, with the yields of longer-term
Treasuries actually declining modestly. Meanwhile corporate bonds and mortgages
continued to outperform Treasuries as investors sought out higher-yielding
investments in an environment of low, by historical standards, interest rates.
In the following discussion, Kenneth J. Taubes discusses the factors that
influenced Pioneer Bond Fund's performance during the six months. Mr. Taubes,
Director of Pioneer's Fixed Income Group, oversees the team responsible for
daily management of the Fund.
Q: How did the Fund perform during six months ended December 31, 2004?
A: Pioneer Bond Fund performed well, outpacing its benchmark as well as the
competitive funds average. For the six-month period, the Fund's Class A shares
returned 4.92%, at net asset value. During the same six months, the Lehman
Brothers Aggregate Bond Index returned 4.18%, while the average total return of
the 224 funds in Lipper's Corporate Debt A-Rated Bond Fund category was also
4.18%. On December 31, 2004, the standardized 30-day SEC Yield on Class A shares
was 4.00%. The performance data quoted represents past performance, which is no
guarantee of future results. Investment return and principal value will
fluctuate, and shares, when redeemed, may be worth more or less than their
original cost.
Q: What factors affected Fund performance?
C-30
A: During a period in which investors sought out yield, the Fund held to its
emphasis on sectors with yield advantages over Treasuries, corporate bonds and
mortgage-backed securities. Both corporate bonds and mortgage securities
outperformed Treasuries, with high-yield corporate securities turning in the
best performance of all sectors of the domestic bond market. Despite rising
short-term rates, the yields of longer maturity Treasuries were relatively
stable, and investors sought out securities with yield advantages over
Treasuries. Against a backdrop of a strengthening economy, corporations
generated additional cash flow, which improved the overall credit quality of
corporate securities and further encouraged investments in both high-yield and
investment-grade corporate debt.
Our emphasis on high-yield and investment-grade corporate bonds as well as
mortgage securities helped support Fund performance throughout the six months.
At the end of the six-month period, about 55% of assets were invested in
mortgage securities and about 40% were invested in corporate debt, including
almost 15% high-yield bonds. We reduced our high-yield positions slightly in the
final quarter of the year. As we did so, we increased our investments in
mortgages, which offered yields competitive with investment-grade corporates but
with higher quality. Overall average credit quality of the portfolio was raised
slightly during the period from A to A+. Less significant but also helpful was
our decision to keep the Fund's sensitivity to interest-rate changes -- as
measured by duration -- either neutral or slightly longer than the benchmark
Lehman Brothers Aggregate Bond Index. In an environment of stable to
slightly-declining market interest rates, this strategy tended to benefit
performance. On December 31, 2004, the Fund's average effective duration was a
somewhat shorter 3.99 years.
Q: What were some of the individual holdings that most influenced portfolio
performance?
A: Among the high-yield holdings that helped performance were the bonds of two
steel companies: International Steel, which we sold to take profits before the
period ended, and ISPAT Inland ULC, which were upgraded in credit rating after
the company was acquired by a Dutch corporation. Other bonds which appreciated
strongly in price were those of financial service corporates Allmerica
Financial, E-Trade and Odyssey Re. Detracting from results were insurance
company Provident, whose bond prices slipped amid controversy over the New York
attorney general's investigation of industry practices, Toys "R" Us, which
announced restructuring plans, and Intelsat, a satellite company that withdrew
plans for an initial public stock offering.
Q: What is your investment outlook?
A: We anticipate that the Federal Reserve will continue to raise the Fed funds
rate at a gradual pace during 2005. The fixed-income market already has
anticipated, in current bond prices, a series of further increases that would
bring the Fed funds rate from 2.25% to near 3.5% by the end of the year. We
believe the market rates of longer-term and intermediate-term securities already
are close to being fairly valued. As a result, we anticipate that the yield
curve -- which measures the relationship between short-term and longer-term
interest rates -- likely will flatten during the year as short-term rates move
up. In general, valuations of corporate securities appear relatively high by
historical standards, but they probably are justified given the strong economic
fundamentals both in the United States and throughout the globe. Strengthening
economies are now helping companies across all sectors, resulting in improved
cash flows and corporate profits. In this environment, we think corporate bonds
should perform well, consistent with their yield advantage over Treasuries. As a
result, we will continue to look for opportunities in the corporate sector.
However, we expect to also put greater emphasis on mortgage securities, which
offer virtually the same yields as investment grade corporate debt but have the
advantage of higher credit ratings.
Investments in high yield or lower-rated securities are subject to greater-than
average risk. When interest rates rise, the prices of fixed income securities in
the Fund will generally fall. Conversely, when interest rates fall the prices of
fixed-income securities in the Fund will generally rise. The portfolio may
invest in mortgage-backed securities, which during times of fluctuating interest
rates may increase or decrease more than other fixed-income securities.
Mortgage-backed securities are also subject to pre-payments. Investments in the
Fund are subject to possible loss due to the financial failure of underlying
securities and their inability to meet their debt obligations.
Any information in this shareholder report regarding market or economic trends
or the factors influencing the Fund's historical or future performance are
statements of the opinion of Fund management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
C-31
Pioneer Tax Free Income Fund
Performance Update 12/31/04 Class A Shares
Performance Update 12/31/04 Class A Shares
Share Price And Distributions
Net Asset Value per Share 12/31/04 12/31/03
$11.67 $11.70
Distributions per Share
(1/1/04 - 12/31/04)
Net Investment Income $0.567
Short-Term Capital Gains $ --
Long-Term Capital Gains $ --
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment in Pioneer Tax Free Income Fund at public offering price, compared to
that of the Lehman Brothers Municipal Bond Index.
Average Annual Total Returns
(As of December 31, 2004)
Period Net Asset Value Public Offering Price (POP)
10 Years 6.33% 5.88%
5 Years 6.64 5.66
1 Year 4.75 0.05
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost. POP
returns reflect deduction of maximum 4.5% sales charge. All results are
historical and assume the reinvestment of dividends and capital gains. Other
share classes are available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers may
not be in effect for all funds. Certain fee waivers are contractual through a
specified period. Otherwise, fee waivers can be rescinded at any time. See the
prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Lehman Brothers Municipal Bond Index is a broad measure of the municipal
bond market. Bonds in the Index have a minimum credit rating of BBB, were part
of at least a $50 million issuance made within the past five years and have a
maturity of at least two years. 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. A portion of
the Fund's income may be subject to the Alternative Minimum Tax (AMT) or state
and local taxes.
Performance update 12/31/04 Class B Shares
Share Price And Distributions
Net Asset Value per Share 12/31/04 12/31/03
$11.57 $11.59
Distributions per Share
(1/1/04 - 12/31/04)
Dividends $0.4764
Short-Term Capital Gains $ --
Long-Term Capital Gains $ --
C-32
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Tax Free Income Fund, compared to that of the Lehman
Brothers Municipal Bond Index.
Average Annual Total Returns
(As of December 31, 2004)
Period If Held If Redeemed
Life-of-Class
(4/28/95) 4.94% 4.94%
5 Years 5.84 5.84
1 Year 4.07 0.07
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost. "If
redeemed" returns reflect the deduction of applicable contingent deferred sales
charge (CDSC). Effective December 1, 2004, the period during which a CDSC is
applied to withdrawals was shortened to 5 years. The maximum CDSC for class B
shares continues to be 4%. For more complete information, please see the
prospectus for details. Note: Shares purchased prior to December 1, 2004 remain
subject to the CDSC in effect at the time you purchased those shares. For
performance information for shares purchased prior to December 1, 2004, please
visit www.pioneerfunds.com/bshares.
All results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses will
differ. Performance results reflect any applicable expense waivers in effect
during the periods shown. Without such waivers Fund performance would be lower.
Waivers may not be in effect for all funds. Certain fee waivers are contractual
through a specified period. Otherwise, fee waivers can be rescinded at any time.
See the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares. The Lehman Brothers Municipal Bond Index is a broad measure of the
municipal bond market. Bonds in the Index have a minimum credit rating of BBB,
were part of at least a $50 million issuance made within the past five years and
have a maturity of at least two years. 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. A
portion of the Fund's income may be subject to the Alternative Minimum Tax (AMT)
or state and local taxes.
Performance Update 12/31/04 Class Y Shares
Share Price And Distributions
Net Asset Value per Share 12/31/04 12/31/03
$11.61 $11.64
Distributions per Share
(1/1/04 - 12/31/04)
Dividends $0.6085
Short-Term Capital Gains $ --
Long-Term Capital Gains $ --
C-33
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Tax Free Income Fund, compared to that of the Lehman
Brothers Municipal Bond Index.
Average Annual Total Returns
(As of December 31, 2004)
Period If Held If Redeemed
10 Year 6.14% 6.14%
5 Year 6.26 6.26
1 Year 5.14 5.14
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Performance for periods prior to the inception of Y shares reflects the NAV
performance of the Fund's A shares. The performance does not reflect differences
in expenses, including the Rule 12b-1 fees applicable to A shares. Since fees
for A shares are generally higher than those of Y shares, the performance shown
for Y shares prior to their inception would have been higher. Class A Shares are
used as a proxy from 11/18/77 to 2/28/02. Class Y shares are not subject to
sales charges and are available for limited groups of eligible investors,
including institutional investors. All results are historical and assume the
reinvestment of dividends and capital gains. Other share classes are available
for which performance and expenses will differ. Performance results reflect any
applicable expense waivers in effect during the periods shown. Without such
waivers Fund performance would be lower. Waivers may not be in effect for all
funds. Certain fee waivers are contractual through a specified period.
Otherwise, fee waivers can be rescinded at any time. See the prospectus and
financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares. The Lehman Brothers Municipal Bond Index is a broad measure of the
municipal bond market. Bonds in the Index have a minimum credit rating of BBB,
were part of at least a $50 million issuance made within the past five years and
have a maturity of at least two years. 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. A
portion of the Fund's income may be subject to the Alternative Minimum Tax (AMT)
or state and local taxes.
Portfolio Management Discussion 12/31/04
During a period when interest rates remained relatively low, Pioneer Tax Free
Income Fund's exposure to investments in a variety of states and a diverse
number of economic sectors provided an attractive level of tax-free income. In
the following interview, David Eurkus, a member of Pioneer's Fixed Income
Management Team, discusses some of the factors that had an impact on the
municipal bond market and your Fund.
Q: How did the Fund perform?
A: For the 12-month period ended December 31, 2004, Pioneer Tax Free Income
Fund's Class A shares produced a 4.75% total return at net asset value. The
Fund's benchmark, the Lehman Brothers Municipal Bond Index, returned 4.48%, and
the average return of the 297 funds in the Lipper General Municipal Debt Funds
Category was 3.70%. Lipper is an independent monitor of mutual fund performance.
The Fund's Class A shares generated a 30-day SEC tax-free yield of 3.88% on
December 31, 2004. That translates into a taxable equivalent yield of 5.97%,
based on the maximum federal income-tax rate of 35%. The performance data quoted
represents past performance, which is no guarantee of future results. Investment
return and principal value will fluctuate, and shares when redeemed, may be
worth more or less than their original cost.
Q: What was the investment environment like during the period?
A: Early in the period, the strength of the economic rebound raised concerns
that inflation and interest rates might rise. In this environment, there was a
significant decline in the bond market, which pushed bond prices down and yields
up. As the fiscal
C-34
year progressed, however, reports associated with the economy indicated that the
rapid pace of growth had shifted to a slower but steady rate. Despite this
slight softening in the economic expansion, the Federal Reserve began tightening
monetary policy, boosting the Federal funds rate on five occasions, each time by
0.25%. By yearend, the Federal funds rate was 2.25%, up from 1.00% at the start
of 2004. (The Federal funds rate is the rate banks charge each other for
overnight loans.) Initially, the Fed's actions caused yields to move higher, but
when it appeared that inflation was under control, the yield curve flattened.
(The yield curve shows the relationship between bond yields and maturity
lengths.) With a flatter yield curve, short-term yields moved higher and prices
declined; and longer-term yields fell or remained stable, boosting bond prices.
Q: How did you manage the Fund in this environment?
A: We maintained a diverse portfolio with assets invested in 154 securities in
38 states. We continued to emphasize sectors that are vital to the growth of the
U.S. economy. These sectors included health care/hospitals, housing,
transportation, and power and energy, areas in which the underlying credit
quality of the fixed-income securities tends to improve as the economy gets
stronger. We also had a position in tobacco revenue bonds, which are
investment-grade securities that are backed by the tobacco settlement money
awarded to states. Most of the portfolio was invested in investment-grade
securities, those rated BBB or better. However, about 10% was allocated to below
investment-grade bonds, which had relatively high yields and which enhanced the
Fund's income stream. At the end of the period, the Fund's overall quality
rating was A+.
Q: What contributed most to performance?
A: As short-term interest rates went up, the portfolio benefited from the price
appreciation that resulted from the declining yields on longer-term securities.
In addition, the below investment-grade bonds in the portfolio helped boost the
tax-free income and prices.
Q: What detracted from performance?
A: There were no significant detractors. Overall the portfolio was positioned
for declining interest rates. Our duration could have been somewhat longer;
however, it exceeded the duration of our benchmark, the Lehman Brothers
Municipal Bond Index, and our peer group, the Lipper General Municipal Debt
Funds Category. (Duration measures a bond's sensitivity to interest-rate
changes. A shorter duration is helpful when interest rates rise, and a longer
duration is usually an advantageous when interest rates decline.)
Q: What is your outlook for the next six months?
A: We believe that the economy is on a positive growth path and expect the Fed
to continue making modest interest-rate hikes over the near term. Therefore, we
expect short-term rates to move higher and long-term rates to remain stable or
possibly decline. In this environment, income could become a larger component of
performance.
A portion of income may be subject to state, federal, and/or alternative minimum
tax. Capital gains, if any, are subject to a capital gains tax. A portion of
income may be subject to state, federal, and/or alternative minimum tax. Capital
gains, if any, are subject to a capital gains tax. When interest rates rise, the
prices of fixed income securities in the fund will generally fall. Conversely,
when interest rates fall the prices of fixed income securities in the fund will
generally rise. If the Internal Revenue Service determines an issuer of a
municipal security has not complied with applicable tax requirements, interest
from the security could become taxable and the security could decline
significantly in value. Investments in the fund are subject to possible loss due
to the financial failure of underlying securities and their inability to meet
their debt obligations. Any information in this shareholder report regarding
market or economic trends or the factors influencing the Fund's historical or
future performance are statements of the opinion of Fund management as of the
date of this report. These statements should not be relied upon for any other
purposes. Past performance is no guarantee of future results, and there is no
guarantee that market forecasts discussed will be realized.
Any information in this shareholder report regarding market or economic trends
or the factors influencing the Fund's historical or future performance are
statements of the opinion of Fund management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
C-35
Pioneer America Income Trust
Performance Update 12/31/04 Class A Shares
Share Price And Distributions
Net Asset Value per Share 12/31/04 12/31/03
$9.79 $9.95
Distributions per Share
(1/1/04 - 12/31/04)
Net Investment Income $0.4286
Short-Term Capital Gains $ --
Long-Term Capital Gains $ --
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer America Income Trust at public offering price,
compared to that of the Lehman Brothers Government Bond Index and of the Lehman
Brothers Fixed-Rate Mortgage-Backed Securities Index.
Average Annual Total Returns
(As of December 31, 2004)
Period Net Asset Value Public Offering Price (POP)
10 Years 6.24% 5.75%
5 Years 6.23 5.26
1 Year 2.77 -1.86
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
POP returns reflect deduction of maximum 4.50% sales charge. All results are
historical and assume the reinvestment of dividends and capital gains. Other
share classes are available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers may
not be in effect for all funds. Certain fee waivers are contractual through a
specified period. Otherwise, fee waivers can be rescinded at any time. See the
prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Trust distributions or the redemption of Trust
shares. The Lehman Brothers Government Bond Index measures the performance of
the U.S. government bond market. The Lehman Brothers Fixed-Rate Mortgage-Backed
Securities Index is an unmanaged index including 15- and 30-year fixed rate
securities backed by mortgage pools of the Government National Mortgage
Association (GNMA), Federal Home Loan Mortgage Corporation (FHLMC) and Federal
National Mortgage Association (FNMA). Index returns assume reinvestment of
dividends and, unlike Trust returns, do not reflect any fees, expenses or sales
charges. You cannot invest directly in the Indexes.
Performance Update 12/31/04 Class B Shares
Share Price And Distributions
Net Asset Value per Share 12/31/04 12/31/03
$9.74 $9.89
C-36
Distributions per Share
(1/1/04 - 12/31/04)
Net Investment Income $0.3452
Short-Term Capital Gains $ --
Long-Term Capital Gains $ --
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer America Income Trust, compared to that of the Lehman
Brothers Government Bond Index and of the Lehman Brothers Fixed-Rate
Mortgage-Backed Securities Index.
Average Annual Total Returns
(As of December 31, 2004)
Period If Held If Redeemed
10 Years 5.41% 5.41%
5 Years 5.37 5.37
1 Year 2.02 -1.92
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost. "If
redeemed" returns reflect the deduction of applicable contingent deferred sales
charge (CSDC). Effective December 1, 2004, the period during which a CDSC is
applied to withdrawals was shortened to 5 years. The maximum CDSC for class B
shares continues to be 4%. For more complete information, please see the
prospectus for details. Note: Shares purchased prior to December 1, 2004 remain
subject to the CDSC in effect at the time you purchased those shares. For
performance information for shares purchased prior to December 1, 2004, please
visit www.pioneerfunds.com/bshares. All results are historical and assume the
reinvestment of dividends and capital gains. Other share classes are available
for which performance and expenses will differ. Performance results reflect any
applicable expense waivers in effect during the periods shown. Without such
waivers Fund performance would be lower. Waivers may not be in effect for all
funds. Certain fee waivers are contractual through a specified period.
Otherwise, fee waivers can be rescinded at any time. See the prospectus and
financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Trust distributions or the redemption of Trust
shares. Index comparisons begin 4/30/94. The Lehman Brothers Government Bond
Index measures the performance of the U.S. government bond market. The Lehman
Brothers Fixed- Rate Mortgage-Backed Securities Index is an unmanaged index
including 15- and 30-year fixed rate securities backed by mortgage pools of the
Government National Mortgage Association (GNMA), Federal Home Loan Mortgage
Corporation (FHLMC) and Federal National Mortgage Association (FNMA). Index
returns assume reinvestment of dividends and, unlike Trust returns, do not
reflect any fees, expenses or sales charges. You cannot invest directly in the
Indexes.
Portfolio Management Discussion 12/31/04
As the U.S. economy expanded, the Federal Reserve began raising interest rates
at a slow but steady pace. Short-term interest rates rose more than long-term
rates, which remained virtually unchanged for the year. For example, at the
beginning of the year, the yield on the two-year Treasury was 1.82%. At the end
of the year, it was 3.07%. The yield on the 10-year Treasury began the year at
4.25% and ended the year at 4.22%. Against this backdrop, investors in U.S.
Government and agency securities were rewarded with a relatively attractive
level of income during the 12-month period ended December 31, 2004. In the
interview below, Richard Schlanger, a member of the Pioneer fixed-income team,
discusses the factors that affected the fixed-income market and the Trust over
the past 12 months.
C-37
Q: How did the Trust perform during the period?
A: For the 12-month period ended December 31, 2004, Class A shares of Pioneer
America Income Trust produced a total return of 2.77% at net asset value. The
Trust underperformed its benchmark, the Lehman Brothers Government Bond Index,
which returned 3.48% for the same period. The Trust also underperformed the
Lehman Brothers Fixed-Rate Mortgage-Backed Index, which returned 4.70%. We
attribute the shortfall relative to the Lehman Brothers Fixed-Rate
Mortgage-Backed Index to the index's significant exposure to securities issued
by the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal
National Mortgage Association (Fannie Mae), which outperformed Ginnie Maes.
Because conventional mortgages--those issued by Freddie Mac and Fannie Mae--do
not have the backing of the full faith and credit of the U.S. Government, we do
not invest in them. The Trust underperformed the 3.19% return generated by the
General U.S. Government Funds Category of Lipper, an independent monitor of
mutual fund performance. At the end of the period, the 30-day SEC yield for
Class A shares was 3.25%. The performance data quoted represents past
performance, which is no guarantee of future results. Investment return and
principal value will fluctuate, and shares, when redeemed, may be worth more or
less than their original cost.
Q. What was the investment environment like during the period?
A. The economy continued to gain strength in 2004, reflected by improving job
growth, relatively strong consumer spending, and higher commodity and oil
prices. With the economy on a firmer footing, the Federal Reserve boosted
short-term interest rates in June and continued raising them through the end of
the year. By year-end, the federal funds rate was 2.25%, up from 1.00% at the
start of 2004. (The federal funds rate is the rate banks charge each other for
overnight loans.) Initially, the Fed's actions caused Treasury yields to move
higher but when it appeared that inflation was under control, the yield curve
flattened. The yield curve shows the relationship between bond yields and
maturity lengths. With a flatter yield curve, short-term yields moved higher and
prices declined; longer-term yields fell or remained stable, boosting prices. An
enormous amount of Treasury buying by overseas investors was also instrumental
in keeping Treasury yields low. Foreign central banks had large cash reserves,
which they invested at record levels in the U.S. Treasury market in an attempt
to stem the decline of the U.S. dollar relative to their own currencies.
Q: How did you manage the Trust in this environment?
A: The Trust was divided between mortgage-backed securities, which accounted for
70.6% of net assets, and Treasury securities, which composed 28.2% of net
assets. The Trust also had a 1.2% cash position. In the mortgage market, we
invested in securities issued by the Government National Mortgage Association
(GNMA), which are backed by the full faith and credit of the U.S. government. (A
full faith and credit backing applies to underlying Trust securities, not to
Trust shares). Because interest rates remained attractive and the housing market
was strong, we sought to avoid prepayment risk. When interest rates decline,
homeowners often "prepay" their existing mortgages and refinance their homes at
a lower rate. Significant prepayment activity can result in declining yields and
share prices in portfolios with investments in mortgages. To mitigate this risk,
we favored mortgages with low loan balances that were not likely to be
refinanced. We also emphasized mortgage pools in slow-paying states, such as New
York and Texas, where the rate of housing turnover is relatively low in
comparison to other states. In addition, we sought mortgages with coupons
(stated rates of interest) in the 4.5% to 5.5% range, which would probably not
be refinanced quickly. In the Treasury portion of the Trust, we emphasized
securities with short to intermediate durations. We expected yields to move
higher and wanted to minimize the price volatility that would naturally occur as
yields rose. Therefore, we kept duration shorter than the benchmark. Measured in
years, duration measures a bond's price sensitivity to interest-rate changes. A
shorter duration can protect a portfolio from price declines as yields rise. We
were premature, however, in our expectation of higher yields. As a result, our
short-duration strategy worked against the Trust. Long-term Treasuries
outperformed, because of the huge demand from overseas investors and the
flattening of the yield curve. For example, the 30-year Treasury bond returned
8.89%; the five-year Treasury returned 2.39%.
Q: What contributed most to performance?
A: The significant overweight in mortgage-backed securities made the largest
positive impact, as mortgages outperformed other fixed income assets. Minimizing
prepayment risk by selecting specific mortgage pools also helped drive
performance. The flatter yield curve, which boosted the prices of longer-term
Treasury securities, also benefited results.
Q: What detracted from performance?
C-38
A: The Trust's underweight in long-term Treasuries. We continue to believe,
however, that yields on such Treasuries are artificially low, given the weak
U.S. dollar, the growing trade imbalance and a Fed that is likely to continue
raising interest rates.
Q: What is your outlook for the next six months?
A: In the short term, we expect the investment environment to remain unchanged
and are unlikely to alter the Trust significantly during the first quarter of
2005. We plan to continue to emphasize mortgage securities. In February, Federal
Reserve Chairman Alan Greenspan will make his semi annual Humphrey-Hawkins
testimony before Congressional committees. At that time, we will learn what to
expect in the way of Fed interest-rate policy and what the central bank's
thinking is about the prospects for accelerating inflation. Whenever the Fed
raises rates, there is a lag effect; and it can take as long as a year for
higher rates to affect the economy. Over the next several months, we will be
closely monitoring data to determine the appropriate action to take should the
economic backdrop change.
Government guarantees apply to the underlying securities only and not to the
prices and yields of the portfolio. When interest rates rise, the prices of
fixed income securities in the fund will generally fall. Conversely, when
interest rates fall the prices of fixed income securities in the fund will
generally rise. The portfolio may invest in mortgage-backed securities, which
during times of fluctuating interest rates may increase or decrease more than
other fixed-income securities. Mortgage-backed securities are also subject to
pre-payments. Investments in the fund are subject to possible loss due to the
financial failure of underlying securities and their inability to meet their
debt obligations.
Any information in this shareholder report regarding market or economic trends
or the factors influencing the Trust's historical or future performance are
statements of the opinion of Trust management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
C-39
Pioneer Short Term Income Fund
Performance Update 12/31/04 Class A Shares
Share Price And Distributions
Net Asset Value per Share 2/28/05 8/31/04
$9.88 $10.02
Distributions per Share
(9/1/04 - 2/28/04)
Net Investment Income $0.1520
Short-Term Capital Gains $ --
Long-Term Capital Gains $ --
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Short Term Income Fund at public offering price,
compared to that of the Lehman Brothers One- to Three-Year Government/Credit
Index.
Average Annual Total Returns
(as of February 28, 2005)
Period Net Asset Value Public Offering Price (POP)
Life-of-Class
(7/8/04) 0.71% -1.84%
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Value of $10,000 Investment
Pioneer Short-Term Lehman Brothers One-to-Three
Income Fund Year Government/Credit Index
7/04 $9,750 $10,000
$9,804 $10,078
2/05 $9,816 $10,061
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
POP returns reflect deduction of maximum 2.5% sales charge. All results are
historical and assume the reinvestment of dividends and capital gains. Other
share classes are available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers may
not be in effect for all funds. Certain fee waivers are contractual through a
specified period. Otherwise, fee waivers can be rescinded at any time. See the
prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of taxes that a
shareowner would pay on Fund distributions or the redemption of Fund shares.
C-40
The Lehman Brothers One- to Three-Year Government/Credit Index measures the
performance of the short term (1 to 3 years) government and investment-grade
corporate bond markets. Index returns are calculated monthly, assume
reinvestment of dividends and, unlike Fund returns, do not reflect any fees,
expenses or sales charges. You cannot invest directly in an Index.
Performance Update 2/28/04 Class B Shares
Share Price And Distributions
Net Asset Value per Share 2/28/05 8/31/04
$9.88 $10.01
Distributions per Share
(9/1/04 - 2/28/05)
Net Investment Income $0.1097
Short-Term Capital Gains $ --
Long-Term Capital Gains $ --
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Short Term Income Fund, compared to that of the
Lehman Brothers One- to Three-Year Government/Credit Index.
Average Annual Total Returns
(as of February 28, 2005)
Period If Held If Redeemed
Life-of Class
(7/8/04) 0.20% -1.78%
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Value of $10,000 Investment
Pioneer Short-Term Lehman Brothers One-to-Three
Income Fund Year Government/Credit Index
7/04 $10,000 $10,000
$ 9,840 $10,061
2/05 $ 9,822 $10,078
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Class B shares reflect the deduction of the maximum applicable contingent
deferred sales charge (CDSC). The maximum CDSC is 4.0% and declines over five
years.
All results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses will
differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers may
not be in effect for all funds. Certain fee waivers are contractual through a
specified period. Otherwise, fee waivers can be rescinded at any time. See the
prospectus and financial statements for more information.
C-41
The performance table and graph do not reflect the deduction of taxes that a
shareowner would pay on Fund distributions or the redemption of Fund shares.
The Lehman Brothers One- to Three-Year Government/Credit Index measures the
performance of the short term (1 to 3 years) government and investment-grade
corporate bond markets. Index returns are calculated monthly, assume
reinvestment of dividends and, unlike Fund returns, do not reflect any fees,
expenses or sales charges. You cannot invest directly in an Index.
Performance Update 2/28/05 Class Y Shares
Share Price And Distributions
Net Asset Value per Share 2/28/05 8/31/04
$9.89 $10.01
Distributions per Share
(9/1/04 - 2/28/05)
Net Investment Income $0.1702
Short-Term Capital Gains $ --
Long-Term Capital Gains $ --
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Short Term Income Fund, compared to that of the
Lehman Brothers One- to Three-Year Government/Credit Index.
Average Annual Total Returns
(as of February 28, 2005)
Period If Held If Redeemed
Life-of Class
(7/8/04) 1.08% 1.08%
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Value of $10,000 Investment
Pioneer Short-Term Lehman Brothers One-to-Three
Income Fund Year Government/Credit Index
7/04 $10,000 $10,000
$10,057 $10,078
2/05 $10,108 $10,061
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Performance for periods prior to the inception of Y shares reflects the NAV
performance of the Fund's A shares. The performance does not reflect differences
in expenses, including the Rule 12b-1 fees applicable to A shares. Since fees
for A shares are generally higher than those of Y shares, the performance shown
for Y shares prior to their inception would have been higher. Class Y shares are
not subject to sales charges and are available for limited groups of eligible
investors, including institutional investors. All results are historical and
assume the reinvestment of dividends and capital gains. Other share classes are
available for which performance and expenses will differ.
C-42
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers may
not be in effect for all funds. Certain fee waivers are contractual through a
specified period. Otherwise, fee waivers can be rescinded at any time. See the
prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of taxes that a
shareowner would pay on Fund distributions or the redemption of Fund shares.
The Lehman Brothers One- to Three-Year Government/Credit Index measures the
performance of the short term (1 to 3 years) government and investment-grade
corporate bond markets. Index returns are calculated monthly, assume
reinvestment of dividends and, unlike Fund returns, do not reflect any fees,
expenses or sales charges. You cannot invest directly in an Index.
Portfolio Management Discussion 2/28/05
In the following interview, Richard Schlanger, the Fund's Lead portfolio
Manager, discusses the factors that influenced performance for the semiannual
period ended February 28, 2005.
Q. How would you characterize the market environment for fixed- income investors
over the six-month period?
A. On balance, the economy continued to show evidence of solid growth, although
some of the employment statistics have not been as robust as in past recoveries.
Given this backdrop, the Federal Reserve continued to execute a "measured"
approach to removing its accommodative stance with respect to short-term
interest rates. This took the form of three separate hikes in the benchmark fed
funds rate (the interbank overnight lending rate) totaling three-quarters of a
percentage point over the period.
While long-term interest rates were relatively stable, shorter-term bonds
experienced yield increases - and corresponding price declines - over the
period. Yields on shorter-maturity issues rose substantially over the period,
with both the six-month and two-year Treasuries experiencing yield increases of
just over one percentage point. By contrast, long-term interest rates ended the
period only slightly higher than where they began, with the ten-year Treasury
yield increasing approximately one-quarter percentage point.
Q. How did the Fund perform in this environment?
A. The Fund's total return from August 31, 2004, through February 28, 2005 was a
positive 0.12%, versus -0.16% for the unmanaged benchmark index, the Lehman
Brothers One-to Three-Year Government/Credit Index. The return number is for
Class A shares and does not include the impact of any sales charge paid.
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and Pioneer Short Term Income Fund
principal value will fluctuate, and shares, when redeemed, may be worth more or
less than their original cost.
The Fund also continued to deliver good income. The 30-day SEC yield for Class A
shares on February 28, 2005, was 2.47%. This yield reflects the waiver of
certain expenses by the investment advisor; without the waiver, the 30-day SEC
yield for Class A shares would have been 1.99%.
The Fund's absolute return for the six-month period primarily reflects a
difficult environment for short-term bonds, as yields increased and prices
generally fell among these issues.
We believe the Fund's comparatively better performance versus its benchmark
index can be attributed to a combination of:
1. shorter overall portfolio duration - a measure of interest rate
sensitivity - which helped cushion against pervasive
price declines;
C-43
2. security selection favoring mortgage pass-through securities, an area of
the bond market that outperformed Treasury securities.
Q. What is your outlook?
A. We continue to believe that, despite some underlying strain, the global
economy is on a path of solid growth, led by the United States, which appears
positioned to deliver GDP growth in the 3.5% to 4.0% range for the
near-to-intermediate term. Growth at this level would support solid expansion in
employment over time and could put some upward pressure on inflation and
interest rates. In addition, the decline of the U.S. dollar and continued high
oil prices both suggest that a rise in inflation would not be surprising, with a
corresponding impact on interest rates. Finally, the lack of progress in
reducing the U.S. budget deficit may also lead to rising interest rates over
time. With respect to short-term rates, we expect the Fed to continue on a
course to raise rates gradually over the next year or so in an effort to contain
potential inflationary pressures while allowing the economy to continue on its
current growth path.
Q. How is the Fund currently positioned?
A. In view of our outlook for continued solid economic growth, the Fund is
somewhat conservatively positioned from the perspective of sensitivity to
changes in interest rates. At the end of February, the Fund's weighted average
maturity was 1.38 years, well under the Fund's maximum of three years.
Average quality of the Fund's portfolio is currently a high "AA." We continue to
maintain broad exposure to a number of areas of the bond market, while seeking
to identify and benefit from relative value among sectors. Currently, yield
differentials are quite narrow among sectors on the short end of the curve. For
instance, high-quality corporates offer less than half of a percentage point of
additional yield versus Treasuries of comparable maturity. At the end of
February, our weighting in corporate bonds accounted for about 22% of Fund
assets, at the low end of our anticipated range.
Nearly 35% of the Fund's assets are invested in mortgage pass-through
securities, down from approximately 40% at the beginning of the period, again
reflecting our view on relative value. Our holdings among pass-throughs are
focused on "balloon" mortgages with shorter maturities, as well as
collateralized mortgage obligations that we believe carry low risk of
experiencing a slowing of prepayments (and corresponding increase in duration.
U.S. Treasury issues totaled about 32% of assets at period end, including a
small position (approximately 3.7%) in short-term "STRIPS" or "zero coupon"
bonds. STRIPS are purchased at a discount to face value and redeemed at par
value upon maturity, and the position is anticipated to provide an additional
measure of support for the Fund's share price.
Going forward, we will continue to seek to provide a high level of current
income while maintaining a relatively stable share price. While the Fund's share
price will fluctuate, our focus on shorter-term bonds is designed to reduce
price volatility in comparison to longer term alternatives. We believe the
Fund's high quality and limited exposure to interest-rate changes makes it an
attractive option for investors seeking to maintain important fixed-income
exposure in an uncertain environment.
Investing in foreign and/or emerging markets securities involves risks relating
to interest rates, currency exchange rates, economic, and political conditions.
When interest rates rise, the prices of fixed income securities in the Fund will
generally fall. Conversely, when interest rates fall the prices of fixed income
securities in the Fund will generally rise. Investments in the Fund are subject
to possible loss due to the financial failure of underlying securities and their
inability to meet their debt obligations.
Any information in this shareholder report regarding market or economic trends
or the factors influencing the Fund's historical or future performance are
statements of the opinion of Fund management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
C-44
Pioneer Cash Reserves Fund
Performance Update 12/31/ 04
Share Prices
Performance Update 12/31/04 Class A Shares
Share Price And Distributions
Net Asset Value per Share 12/31/04 12/31/03
Class A Shares $ $1.00 $1.00
Class B Shares $1.00 $1.00
Class C Shares $1.00 $1.00
Class R Shares $1.00 $1.00
12/31/04 12/11/04
Investor Class Shares $1.00 $100
Distributions Per Share
(1/1/04 - 12/31/04) Income Dividends Short-Term Capital Gains Long-Term Capital Gain
Class A Shares $0.00448 $ -- $ --
Class B Shares 0.00060
Class C Shares 0.00060
Class R Shares 0.00268
(12/11/04 - 12/31/04)
Investor Class Shares 0.00067
Yields *
7-Day Annualized 7-Day Effective**
Class A Shares 1.12% 1.13%
Class B Shares 0.24% 0.24%
Class C Shares 0.13% 0.13%
Class R Shares 0.91% 0.91%
Investor Class Shares 1.33% 1.34%
* The 7-day yields do not reflect the deduction of the contingent deferred sales
charge (CDSC) for Class B (maximum 4%) and Class C (maximum 1%) shares. Please
contact Pioneer to obtain the Fund's current 7-day yields.
** Assumes daily compounding of dividends. The 7-day effective yield if fees and
expenses were not subsidized would be as follows: Investor Class Shares 1.25%.
Class A, Class B, Class C and Class R fees and expenses were not subsidized.
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results.
Current performance may be lower or higher than the performance data quoted. The
performance data quoted represents past performance, which is no guarantee of
future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Pioneer has agreed to limit the Fund's expenses for any class of shares or waive
a portion of its management fee to maintain a net asset value of $1.00. Under
certain circumstances, this limitation may result in a 0.00% yield for one or
more classes of shares. From time to time, Pioneer and its affiliates may limit
the expenses of one or more classes for the purpose of increasing its yield
during the period of the limitation. These expense limitation policies are
voluntary and temporary and may be revised
C-45
or terminated by Pioneer at any time without notice. Performance does not
reflect the deduction of taxes that a shareowner would pay on Fund distributions
or the redemption of Fund shares.
Portfolio Management Discussion 12/31/04
Although the U.S. Federal Reserve started to raise short-term interest rates
from the lowest levels reached in more than four decades, 2004 remained a year
in which money market investments offered extremely low yields by historical
measures. Despite five increases in interest rates between June 30 and December
31, the key Fed Funds Rate ended the year at just 2.25%. Throughout the 12
months ended December 31, 2004, Pioneer Cash Reserves Fund maintained a $1 share
price and provided modest income consistent with the yields available in the
money market. The Fund invests exclusively in high quality money market
instruments issued by the U.S. government and domestic corporations and banks.
All issues have the highest ratings from the two nationally recognized ratings
organizations: A1 by Standard & Poor's Investors Services and P1 by Moody's
Investor Services. (Ratings apply to underlying securities, not Fund shares.) In
the following discussion, Andrew D. Feltus reviews the investment environment
and the strategies that affected Pioneer Cash Reserves Fund over the 12 months
ended December 31, 2004. Mr. Feltus is a member of Pioneer's Fixed Income Group,
which is responsible for the daily management of the Fund.
Q: How did the Fund perform during 2004?
A: For the 12 months ended December 31, 2004, Class A shares of Pioneer Cash
Reserves Fund had a total return of 0.45%, at net asset value. On December 31,
2004, the Fund's seven-day effective yield for Class A shares was 1.13%. For the
12 months, the average total return among the 395 funds in Lipper's Money Market
Fund category was 0.60%. The performance data quoted represents past
performance, which is no guarantee of future results. Investment return and
principal value will fluctuate, and shares, when redeemed, may be worth more or
less than their original cost.
Q: What was the investment environment like during the year?
A: For virtually the entire first half of 2004, the influential Fed Funds Rate
remained at a 46-year low of 1.00%. The situation began to change when the
Federal Reserve raised the rate on June 30 by one-quarter of one percentage
point and signaled that it intended to initiate further increases on a gradual
basis. The central bank raised the rate four more times, and the Fed Funds Rate
stood at 2.25% at the end of the year. The rate increases occurred against a
backdrop of continued economic growth and hints of an increase in inflationary
pressure. Economic growth, as measured by growth in Gross Domestic Product
(GDP), rose by an average annualized rate of 4.6% during the first nine months
of 2004. Affected by the higher costs of energy, the Consumer Price Index rose
to about 3.5% by the end of November. While periodic concerns about low new-job
creation did arise, in general the Federal Reserve Board believed that the
economy was gathering enough strength that monetary policy could be tightened to
avert the possibility of increasing inflationary threats. At the end of the
year, the Federal Reserve was widely expected to continue to raise short-term
rates further in 2005.
Q: What were your principal strategies in this low-interest rate environment?
A: We held to our commitment to high quality money market instruments. We
started gradually to lower the Fund's effective duration so that we could take
advantage of higher yields available as the Federal Reserve Board proceeded with
its rate increases. At the end of the year, the effective duration of the Fund
was 60 days, and we were moving to have a target duration of about 45 days as
the new year unfolded.
Q: What is your investment outlook?
A: We anticipate that the economy will show sustained growth in 2005 and that
the Federal Reserve Board will maintain its policy of raising short-term grates
gradually. At the same time, because of budget pressures and concern about the
federal deficit, the government is likely to put new brakes on spending. The
combination of the tighter monetary policy and restrained fiscal policy may act
as a drag on the pace of economic growth and ultimately cause a possible change
in monetary policy.
If economic growth does begin to slow, the Federal Reserve may revise its
current bias toward raising short-term rates. However, until that appears to be
imminent, we intend to continue to keep the Fund's effective duration relatively
short to enable us to invest in newer, higher-yielding securities that have the
potential to raise the level of income to be distributed to
C-46
shareholders. Investing in foreign and/or emerging markets securities involves
risks relating to interest rates, currency exchange rates, economic, and
political conditions. Although the Fund seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing in the
Fund. Fund shares are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board or any other government agency.
Any information in this shareholder report regarding market or economic trends
or the factors influencing the Fund's historical or future performance are
statements of the opinion of Fund management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
C-47
Pioneer Tax Free Money Market Fund
Performance Update 12/31/04
Share Prices
Net Asset Value per Share 12/31/04 2/11/04
Class A Shares $1.00 $1.00
12/31/04 12/31/03
Investor Class Shares $1.00 $1.00
Performance Update 12/31/04 Class A Shares
Share Price And Distributions
Distributions per Share Class A Shares
(12/11/04 - 12/31/04)
Income Dividends $0.0004
Short-Term Capital Gains $ --
Long-Term Capital Gains $ --
(1/1/04 - 12/31/04) Investor Class Shares
Income Dividends $.0059
Short-Term Capital Gains $ --
Long-Term Capital Gains $ --
Yields 7-Day Annualized 7-Day Effective
Class A Shares 0.83% 0.83%
Investor Class Shares 1.01% 1.01%
** Assumes daily compounding of dividends. The 7-day effective yield if fees and
expenses were not subsidized would be as follows: Class A 0.76% and Investor
Class shares 0.76%.
Performance data shown represents past performance. Past performance does not
guarantee future results. Investment returns will fluctuate, and there can be no
guarantee the Fund will be able to maintain a stable net asset value of $1.00
per share. 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 $1.00 per share, it is
possible to lose money by investing in the Fund. The performance of each class
of the Fund is the performance of the predecessor fund's Investor Class, which
has been restated to reflect differences in any applicable sales charges (but
not Rule 12b-1 fees or other differences in expenses). If all the expenses of
the Pioneer fund were reflected, the performance would be lower. Performance
does not reflect the deduction of taxes that a shareowner would pay on Fund
distributions or the redemption of Fund shares.
Portfolio Management Discussion 12/31/04
On August 2, 2004, Pioneer Investments assumed management of the former Safeco
Funds. In the following interview, David Eurkus, a member of the fixed income
team, details the investment environment for tax-free money funds during the
12-month period ended December 31, 2004, the Fund's performance for the period,
and the Fund's portfolio strategy going forward.
Q: Will you describe what, if anything, has changed and what has remained the
same in the transition of Fund management to Pioneer?
A: As a Safeco product, and now as Pioneer Tax Free Money Market Fund, this has
been and will continue to be a very conservative offering. We are keeping the
Fund as a high quality, liquid product. We will not compromise stability of
principal in any way by taking on additional risk to secure a more competitive
yield than our peers. Safety of principal is paramount and, as part of the
objective, we will continue to seek tax-free income for the Fund's shareholders.
C-48
Q: How did the Fund perform during its most recent fiscal year?
A: For the 12-month period ended December 31, 2004, the Fund's Class A shares
posted a 0.58% total return at net asset value. (The performance of each class
of the Fund is the performance of the predecessor fund's Investor Class, which
has been restated to reflect differences in any applicable sales charges (but
not Rule 12b-1 fees or other differences in expenses). If all the expenses of
the Pioneer fund were reflected, the performance would be lower.) In comparison,
the Lipper Tax-Exempt Money Market Average returned 0.56%. The performance data
quoted represents past performance, which is no guarantee of future results.
Investment return and principal value will fluctuate, and shares, when redeemed,
may be worth more or less than their original cost.
Q: Will you describe the investing environment for tax-exempt money funds during
the time period?
A: Prior to June 2004, short- and long-term interest rates had continued to fall
since the stock market bubble burst in 2001. Early last year, one-year tax-free
money market rates fell as low as 0.50%. Then, as the U.S. economy began to show
modest improvement in the first half of 2004, the Federal Reserve indicated that
the economy and job growth were showing signs of improvement and that the Fed
was becoming more concerned about the possibility of rising inflation rather
than deflation. The Fed also hinted that it would begin to raise short-term
interest rates in the second half of 2004, but at a "measured" pace. The Fed
then raised short-term interest rates by 25 basis points at each of its five
meetings in the second half of the year. As a result, the one-year Bond Buyer
Index, the market's measurement of tax-exempt money market rates, rose from
0.50% at the start of the year to 1.25% at year end. Historically, those are
still extremely low rates. Supply and demand for tax-exempt money market
securities continue to be well balanced. This is evidenced by the still
significant amount of assets being held in taxable as well as tax-free money
market funds. Investor demand continues to be substantial, and there is ample
supply to deal with the asset base.
Q: What has been your strategy since assuming management of the Fund last
August?
A: We continue to maintain broad diversification, both on a regional and
national basis, with AAA credits in revenue as well as general obligation
issues. As a Seattle-based fund, the previous Safeco product was regionally
focused, with investments based in Colorado, Texas and Alaska as its top three
portfolio concentrations. As we continue to emphasize safety of principal we
will be changing to a more nationally focused diversification strategy. The Fund
invests in floating rate securities (55% of portfolio assets as of December 31,
2004) as well as fixed-rate instruments (45% of assets). The interest rate of
floating rate securities adjusts periodically based on indices such as the Bond
Buyer Index and the Fed funds rate. As of December 31, the Fund's effective
maturity was 56 days. With the Fed's series of short term interest rate
increases, the yield curve is changing, and we will adjust the portfolio
accordingly. As some six- and 12-month securities in the portfolio mature we are
converting them to cash in anticipation of further short-term interest rate
increases. That will gradually decrease the Fund's weighted average maturity in
the short term. Over the long term this strategy should benefit shareholders
because we will be reinvesting at higher rates than the yields that are
currently available. In terms of portfolio quality, over 90% of the portfolio is
AAA-rated, with the balance rated AA. (Ratings apply to underlying securities,
not Fund shares.)
Q: What is your outlook?
A: In the months ahead, we foresee continued modest growth in the U.S. economy.
We also think that the Fed will maintain its bias for measured increases in
short-term interest rates over the next several months. A portion of income may
be subject to state, federal, and/or alternative minimum tax. Capital gains, if
any, are subject to a capital gains tax. Investing in foreign and/or emerging
markets securities involves risks relating to interest rates, currency exchange
rates, economic, and political conditions. When interest rates rise, the prices
of fixed income securities in the Fund will generally fall. Conversely, when
interest rates fall the prices of fixed income securities in the Fund will
generally rise. Although the Fund seeks to preserve the value of your investment
at $1.00 per share, it is possible to lose money by investing in the Fund. Fund
shares are not federally insured by the Federal Deposit Insurance Corporation,
the Federal Reserve Board or any other government agency.
Any information in this shareholder report regarding market or economic trends
or the factors influencing the Fund's historical or future performance are
statements of the opinion of Fund management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
C-49
================================================================================
AMSOUTH VALUE FUND
================================================================================
PORTFOLIO MANAGER
Brian B. Sullivan, CFA
Director, Value Equity Strategies
AmSouth Bank
AmSouth Asset Management, Inc.
Brian Sullivan has been the portfolio manager for the AmSouth Value and AmSouth
Balanced Fund since June 2004. Mr. Sullivan has more than 18 years of investment
management experience and holds an MBA in finance and a bachelor's degree in
economics.
INVESTMENT CONCERNS
Value-based investments are subject to the risk that the broad market may not
recognize their intrinsic value.
Equity securities (stocks) are more volatile and carry more risk than other
forms of investments, including investments in high-grade fixed income
securities. The net asset value per share of this Fund will fluctuate as the
value of the securities in the portfolio changes.
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER'S PERSPECTIVE
"The AmSouth Value Fund uses a 'value investing' approach. Rather than pursue
hot stocks that are in high demand, we search for solid companies with good
fundamentals that are available that attractive prices. By adhering to this
investment approach through entire market cycles, we seek to achieve above
average long-term results with less volatility than the overall market."
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Q & A
Q. How did the Fund perform during the six-month period ended January 31, 2005?
A. The Fund delivered a total return of 11.37% (Class A Shares at NAV. Had the
effects of the front-end sales charge been included, the return would have been
lower). That compared to a 10.47% total return for the Fund's benchmark, the S&P
500/BARRA Value Index.(1)
The Fund's total return does not reflect the deduction of a sales charge on
Class A Shares. If reflected, the sales charge would reduce the performance
quoted.
With the maximum sales charge of 5.50% and recurring fees, the Fund's six month,
1 Year, 5 Year and 10 Year average annual total returns for the period ended
January 31, 2005, were 5.27%, 4.36%, 1.77% and 9.18%, respectively, for Class A
Shares. The returns quoted assume the reinvestment of dividends and capital
gains distributions.
Past performance does not guarantee future results. The performance data quoted
represents past performance and current returns may be lower or higher. Total
return figures include change in share price, reinvestment of dividends and
capital gains and does not reflect the deduction of taxes that a shareholder
would pay on distributions and redemptions. The investment return and principal
value will fluctuate so that an investor's shares, when redeemed may be worth
more or less than the original cost. For performance data current to the most
recent month end please visit www.amsouthfunds.com.
Q. What factors affected the Fund's performance?
A. A favorable backdrop, characterized by economic growth, the resolution of the
presidential election and a pullback in oil prices, helped stocks rally during
the fourth quarter of 2004. Value stocks performed particularly well, boosting
this Fund's returns
Stock selection produced the largest contribution to the Fund's relative
performance. Strong performance by particular stocks in the restaurant and
retail industries helped the Fund's consumer- discretionary stocks outperform
the corresponding sector in the index.
2
The Fund's relative returns also benefited from our strategy in the energy
sector whereby we reduced the Fund's energy holdings during the period as prices
on energy stocks increased. That strategy boosted performance against the
benchmark, as energy stocks declined late in the period in response to falling
oil prices. +
The Fund held an underweight position in utilities stocks during the period.
That stake weighed slightly on relative returns, as utilities stocks led the
benchmark. The reverse was true for performance data quoted represents past
performance telecommunications services stocks. We over-weighted that sector,
and current returns may be lower or higher. Total return so its relatively weak
performance modestly reduced the Fund's figures include change in share price,
reinvestment of return relative to the returns of the benchmark. +
+ The Fund's portfolio is current to January 31, 2005 and subject to change.
(1) See Glossary of Terms for additional information.
3
================================================================================
AMSOUTH SELECT EQUITY FUND
================================================================================
PORTFOLIO MANAGERS
OakBrook Investments, LLC (sub-advisor)
Neil Wright, President and Chief Investment Officer
Janna Sampson, Director of Portfolio Management
Peter Jankovskis, Director of Research
As portfolio managers for the AmSouth Select Equity Fund, Neil Wright, Janna
Sampson and Peter Jankovskis are three veteran investment professionals who have
more than 50 years of combined experience. Neil and Peter hold PhDs in
economics, and Janna holds an MA in economics. They have worked together for the
past 12 years. They also serve as the portfolio managers for the AmSouth
Enhanced Market Fund and the AmSouth Mid Cap Fund.
INVESTMENT CONCERNS
A concentrated portfolio may add a measure of volatility to performance, as
major fluctuations in any one holding will likely affect the fund more than a
fund with a greater diversification.
Equity securities (stocks) are more volatile and carry more risk than other
forms of investments, including investments in high-grade fixed income
securities. The net asset value per share of this Fund will fluctuate as the
value of the securities in the portfolio changes.
- --------------------------------------------------------------------------------
PORTFOLIO MANAGERS' PERSPECTIVE
"Our goal in managing the AmSouth Select Equity Fund is to outperform the S&P
500 Stock Index(1) over a complete market cycle while experiencing less
volatility than the broad stock market. We look for 20 to 25 leading companies
that have a dominant market position, or well-known brand name, yet whose stock
price is undervalued. To make this 'growth at a reasonable price' strategy work,
we use economic theory to determine whether a company is likely to recover its
dominant position after a dip. We believe our patient, long-term approach offers
excellent defensive protection, which can reduce losses when the market is
weak."
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Q & A
Q. How did the Fund perform during the six-month period ended January 31, 2005?
A. The Fund delivered a total return of 8.94% (Class A Shares at NAV. Had the
effects of the front-end sales charge been included, the return would have been
lower), compared to a 8.15% total return for its benchmark, the S&P 500 Stock
Index.(1)
The Fund's total return does not reflect the deduction of a sales charge on
Class A Shares. If reflected, the sales charge would reduce the performance
quoted.
With the maximum sales charge of 5.50% and recurring fees, the Fund's six month,
1 Year, 5 Year and Since Inception (9/1/98) average annual total returns for the
period ended January 31, 2005, were 2.92%, 1.41%, 8.79% and 6.94%, respectively,
for Class A Shares. The returns quoted assume the reinvestment of dividends and
capital gains distributions.
Past performance does not guarantee future results. The performance data quoted
represents past performance and current returns may be lower or higher. Total
return figures include change in share price, reinvestment of dividends and
capital gains and does not reflect the deduction of taxes that a shareholder
would pay on distributions and redemptions. The investment return and principal
value will fluctuate so that an investor's shares, when redeemed may be worth
more or less than the original cost. For performance data current to the most
recent month end please visit www.amsouthfunds.com.
Q. What factors affected the Fund's performance?
A. Large-cap stocks generated gains during most of the period, which included a
strong rally during November and December. That environment helped the Fund and
its benchmark produce positive returns.
This Fund's sub-advisor, OakBrook Investments, invests in select shares of
industry-leading companies with steady and predictable earnings growth. We
believe the Fund's managers positioned the portfolio to benefit from an economic
recovery, while avoiding exposure to stocks that were likely to be hurt by
rising interest rates.
4
That strategy helped the Fund stay even with the market during the first five
months of the period, as short-term interest rates increased and a cyclical
pick-up did occur. A decline in long-term interest rates offset some of the
benefits of the managers' strategy, however. What's more, rising commodity
prices had a negative impact on the Fund's holdings. Shares of the
industry-leading firms in which this Fund invests tend to be consumers of
commodities, rather than producers of them, and therefore suffer from rising
commodity prices.+
The market experienced a sell-off in January. This Fund's holdings fared better
than the benchmark in that environment, and generated most of the Fund's
relative gains for the six-month period. This may reflect the fact that
investors during January prized the earnings stability and predictability that
this Fund emphasizes. +
+ The Fund's portfolio is current to January 31, 2005 and subject to change.
(1) See Glossary of Terms for additional information.
The AmSouth Select Equity Fund is subadvised by OakBrook Investments, LLC, which
is paid a fee for its services.
5
================================================================================
AMSOUTH ENHANCED MARKET FUND
================================================================================
PORTFOLIO MANAGERS
OakBrook Investments, LLC (sub-advisor):
Neil Wright, President and Chief Investment Officer
Janna Sampson, Director of Portfolio Management
Peter Jankovskis, Director of Research
As portfolio managers for the AmSouth Enhanced Market Fund, Neil Wright, Janna
Sampson and Peter Jankovskis are three veteran investment professionals who have
more than 50 years of combined experience. Neil and Peter have PhDs in
economics, and Janna holds an MA in economics. They have worked together for the
past 12 years. In addition to the Enhanced Market Fund, they also serve as
portfolio managers of the AmSouth Select Equity Fund and the AmSouth Mid Cap
Fund.
INVESTMENT CONCERNS
Equity securities (stocks) are more volatile and carry more risk than other
forms of investments, including investments in high-grade fixed income
securities. The net asset value per share of this Fund will fluctuate as the
value of the securities in the portfolio changes.
- --------------------------------------------------------------------------------
PORTFOLIO MANAGERS' PERSPECTIVE
"Our stock selection strategy for the AmSouth Enhanced Market fund is fairly
conservative, with Fund returns having a very close correlation to those of the
S&P 500 Stock Index.(1) We try to be 100% invested and do not try to time the
market. Through the use of a sophisticated computer model, we attempt to
identify and invest in 350 to 400 stocks within the S&P 500 that are starting to
experience a widening range of investor expectations. We look to overweight
those stocks that we believe may outperform the overall market."
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Q & A
Q. How did the Fund perform during the six-month period ended January 31, 2005?
A. The Fund delivered a total return of 8.07% (Class A Shares at NAV. Had the
effects of the front-end sales charge been included, the return would have been
lower). The Fund's benchmark, the S&P 500 Stock Index(1), returned 8.15%.
The Fund's total return does not reflect the deduction of a sales charge on
Class A Shares. If reflected, the sales charge would reduce the performance
quoted.
With the maximum sales charge of 5.50% and recurring fees, the Fund's six month,
1 Year, 5 Year and Since Inception (9/1/98) average annual total returns for the
period ended January 31, 2005, were 2.15%, -0.20%, -3.52% and 3.42%,
respectively, for Class A Shares. The returns quoted assume the reinvestment of
dividends and capital gains distributions.
Past performance does not guarantee future results. The performance data quoted
represents past performance and current returns may be lower or higher. Total
return figures include change in share price, reinvestment of dividends and
capital gains and does not reflect the deduction of taxes that a shareholder
would pay on distributions and redemptions. The investment return and principal
value will fluctuate so that an investor's shares, when redeemed may be worth
more or less than the original cost. For performance data current to the most
recent month end please visit www.amsouthfunds.com.
Q. What factors affected the Fund's performance?
A. Large-cap stocks produced positive returns during most of the period,
including strong gains during the fourth quarter of 2004. That environment
helped the Fund and its benchmark generate positive returns.
This Fund's sub-advisor, OakBrook Investments, emphasizes or deemphasizes the
stocks in the index based on a quantitative model that monitors investor
expectations for each stock. That approach enhanced the Fund's relative returns
during the period. Stock selection boosted returns against the benchmark,
particularly in the consumer discretionary and financial sectors. Sector
allocation also boosted relative returns slightly. The Fund benefited from an
over-weight position in energy stocks and underweight stakes in
telecommunications and consumer discretionary shares. +
6
The Fund held a modest cash position throughout the period, to manage
shareholder redemptions and capture developing investment opportunities. That
cash stake weighed on returns versus the benchmark, as did trading costs and
fees. Those factors caused the Fund to lag its benchmark by a small margin. +
+ The Fund's portfolio is current to January 31, 2005 and subject to change.
(1) See Glossary of Terms for additional information.
The AmSouth Enhanced Market Fund is subadvised by OakBrook Investments, LLC,
which is paid a fee for its services
7
================================================================================
AMSOUTH LARGE CAP FUND
================================================================================
PORTFOLIO MANAGER
Ronald E. Lindquist
Co-Director, Growth Equity Strategy
AmSouth Bank
AmSouth Asset Management, Inc.
Ron Lindquist has more than 35 years of focused investment management
experience. He has served as portfolio manager of AmSouth's Large Cap Fund since
its inception and also serves as co-director of growth equity strategies for
AmSouth Asset Management, Inc. A founding member of the Financial Analysts
Society of South Florida, Mr. Lindquist holds a master's degree in management
science from Florida International University and a bachelor's degree in finance
from Florida State University.
INVESTMENT CONCERNS
Equity securities (stocks) are more volatile and carry more risk than other
forms of investments, including investments in high-grade fixed income
securities. The net asset value per share of this Fund will fluctuate as the
value of the securities in the portfolio changes.
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER'S PERSPECTIVE
"The AmSouth Large Cap Fund is managed in a traditional large-cap growth style.
Our goal is to outperform the S&P 500 Stock Index(1) over multiple market
cycles. We look for industry leaders that have shown the potential to generate
relatively predictable, above-average 3- to 5-year earnings streams. We
typically purchase stocks of large, high-equality companies with superior
earnings per share growth rates and correspondingly appropriate price/earnings
ratios(2). We consider sales when a stock's relative price/earnings ratio is
well in excess of historical, similar-market norms or when a significant and
ongoing earnings stream deterioration is forecast."
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Q & A
Q. How did the Fund perform during the six-month period ended January 31, 2005?
A. The Fund delivered a total return of 5.33% (Class A Shares at NAV. Had the
effects of the front-end sales charge been included, the return would have been
lower). That compared to a 8.15% total return for the Fund's benchmark, the S&P
500 Stock Index. (1)
The Fund's total return does not reflect the deduction of a sales charge on
Class A Shares. If reflected, the sales charge would reduce the performance
quoted.
With the maximum sales charge of 5.50% and recurring fees, the Fund's six month,
1 Year, 5 Year and 10 Year average annual total returns for the period ended
January 31, 2005, were -0.48%, -5.88%, -3.62% and 10.70%, respectively, for
Class A Shares. The returns quoted assume the reinvestment of dividends and
capital gains distributions.
Past performance does not guarantee future results. The performance data quoted
represents past performance and current returns may be lower or higher. Total
return figures include change in share price, reinvestment of dividends and
capital gains and does not reflect the deduction of taxes that a shareholder
would pay on distributions and redemptions. The investment return and principal
value will fluctuate so that an investor's shares, when redeemed may be worth
more or less than the original cost. For performance data current to the most
recent month end please visit www.amsouthfunds.com.
Q. What factors affected the Fund's performance during the period?
A. The equity market posted solid gains during the six-month period through
January, boosting the returns of the Fund and giving an even stronger lift to
the broad-market S&P 500.
The Fund has long emphasized large and high-quality growth stocks. That
philosophy muted its performance relative to its benchmark. The disparity
between the Fund's market-capitalization size, and that of its target, weighed
heavily on comparative returns during this period, as smaller and sometimes
riskier stocks significantly outperformed larger-company shares.+
Moreover, our Fund's traditional, long-term and rigorously focused growth style
approach typically leads it to hold larger stakes than its benchmark in both the
health care and the technology sectors. The recent powerful performance of
energy stocks undermined the
8
Fund's relative returns. Our stock selection in the industrials and, to some
extent, the health care sectors also hurt our Fund's relative performance.+
Our consumer discretionary and consumer staples allocations provided a modest
lift against all of the comparative indices. Conversely, our significantly
underweight position in the dramatically outperforming utilities sector hurt
relative performance. Our long-established practice of eschewing the sector
caused the Fund to lose some ground.+
We believe our Fund is well-positioned to compete successfully when large-cap
growth stocks resume market leadership. Until then, we will continue to execute
in the focused, traditional-growth style that historically has provided our
Fund's above-average long term returns. +
+ The Fund's portfolio is current to January 31, 2005 and subject to change.
(1) See Glossary of Terms for additional information.
(2) Price to Earnings Ratio is a valuation ratio of a company's current share
price to its per-share earnings. A high P/E could mean high projected earnings
in the future
9
================================================================================
AMSOUTH CAPITAL GROWTH FUND
================================================================================
PORTFOLIO MANAGER
John Mark McKenzie
Co-Director, Growth Equity Strategy
AmSouth Asset Management, Inc.
John Mark McKenzie has been an investment manager since 1981. His experience
includes both equity portfolio and fixed income portfolio management. He has
managed a number of AmSouth Mutual Funds and was named portfolio manager of the
AmSouth Capital Growth Fund in 2004. In addition, he serves as Co-Director of
Growth Equity Strategy for AmSouth Asset Management, Inc. Mr. McKenzie holds a
bachelor's degree in banking and finance from the University of Mississippi, and
earned his law degree from the University of Mississippi School of Law. He is a
member of the Mississippi Society of Financial Analysts and the Mississippi
State Bar Association.
INVESTMENT CONCERNS
Equity securities (stocks) are more volatile and carry more risk than other
forms of investments, including investments in high-grade fixed income
securities. The net asset value per share of this Fund will fluctuate as the
value of the securities in the portfolio changes.
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER'S PERSPECTIVE
"As a growth-oriented fund, the Capital Growth Fund focuses on industry leaders
with high earnings per share. We generally look for annual earnings growth of
15% or higher. After identifying strong themes, such as technology or health
care, we select companies that have financial strength, good return on equity,
reasonable debt-to-equity ratios and strong revenue growth. We apply sell
discipline through price targets and downside alerts."
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Q & A
Q. How did the Fund perform during the six-month period ended January 31, 2005?
A. The Fund delivered a total return of 6.03% (Class A Shares at NAV. Had the
effects of the front-end sales charge been included, the return would have been
lower). That compared to a 5.80% total return for the Fund's benchmark, the S&P
500/BARRA Growth Index.(1)
The Fund's total return does not reflect the deduction of a sales charge on
Class A Shares. If reflected, the sales charge would reduce the performance
quoted.
With the maximum sales charge of 5.50% and recurring fees, the Fund's six month,
1 Year, 5 Year and 10 Year average annual total returns for the period ended
January 31, 2005, were 0.19%, -5.49%, -6.16% and 8.66%, respectively, for Class
A Shares. The returns quoted assume the reinvestment of dividends and capital
gains distributions.
Past performance does not guarantee future results. The performance data quoted
represents past performance and current returns may be lower or higher. Total
return figures include change in share price, reinvestment of dividends and
capital gains and does not reflect the deduction of taxes that a shareholder
would pay on distributions and redemptions. The investment return and principal
value will fluctuate so that an investor's shares, when redeemed may be worth
more or less than the original cost. For performance data current to the most
recent month end please visit www.amsouthfunds.com.
Q. What factors affected the Fund's performance?
A. The stock market posted solid gains during the period, helping the returns of
the Fund and its benchmark. Value stocks led the market, however, creating a
headwind for this growth-oriented Fund.
Stock selection provided the largest benefit to the Fund's performance relative
to its benchmark. On the whole, the stocks in the Fund's portfolio showed
increases in sales and earnings growth and in returns on assets and returns on
equity. Those improvements helped the Fund's performance compared to its index.
In particular, the Fund's holdings in the health care and consumer discretionary
sectors significantly outperformed those sectors in the index. Individual
selections in the consumer staples sector did drag somewhat on relative
returns.+
10
We increased the Fund's stake in mid-capitalization shares during the period.
That change boosted returns against the benchmark, as smaller stocks generally
outperformed larger stocks. We also increased the Fund's emphasis on stocks with
relatively high growth rates and capital gains potential. That strategy reduced
the Fund's exposure to dividend-paying stocks, causing a decrease in yield
pay-outs to the Fund. That said, the more-aggressive strategy helped the Fund
out-gain its benchmark in a rising market. +
This Fund emphasizes long-term earnings growth. As a result we did not increase
the Fund's weightings in the energy or basic materials sectors, since those
sectors showed little long-term earnings growth potential.
+ The Fund's portfolio is current to January 31, 2005 and subject to change.
(1) See Glossary of Terms for additional information.
11
================================================================================
AMSOUTH MID CAP FUND
================================================================================
PORTFOLIO MANAGERS
OakBrook Investments, LLC (sub-advisor):
Neil Wright, President and Chief Investment Officer
Janna Sampson, Director of Portfolio Management
Peter Jankovskis, Director of Research
As portfolio managers for the AmSouth Mid Cap Fund, Neil Wright, Janna Sampson
and Peter Jankovskis are three veteran investment professionals who have more
than 50 years of combined experience. Neil and Peter have PhDs in economics, and
Janna holds an MA in economics. They have worked together for the past 12 years.
The team also manages the AmSouth Select Equity Fund and the AmSouth Enhanced
Market Fund.
INVESTMENT CONCERNS
Equity securities (stocks) are more volatile and carry more risk than other
forms of investments, including investments in high-grade fixed income
securities. The net asset value per share of this Fund will fluctuate as the
value of the securities in the portfolio changes.
Mid-capitalization stocks typically carry additional risk, since smaller
companies generally have higher risk of failure and, historically, their stocks
have experienced a greater degree of volatility.
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER'S PERSPECTIVE
"Our stock selection strategy for the AmSouth Mid Cap Fund is fairly
conservative, with Fund returns having a very close correlation to those of the
S&P Mid Cap 400 Stock Index(1). We try to be 100% invested and do not try to
time the market. Through the use of sophisticated computer model, we attempt to
identify and invest in 320 to 380 stocks within the S&P Mid Cap 400 that are
starting to experience a widening range of investor expectations. We look to
overweight those stocks that we believe may outperform the overall market."
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Q & A
Q. How did the Fund perform during the six-month period ended January 31, 2005?
A. The Fund delivered a total return of 12.31% (Class A Shares at NAV. Had the
effects of the front-end sales charge been included, the return would have been
lower). That compared to a 12.24% total return for the Fund's benchmark, the S&P
MidCap 400 Index.(1)
The Fund's total return does not reflect the deduction of a sales charge on
Class A Shares. If reflected, the sales charge would reduce the performance
quoted.
With the maximum sales charge of 5.50% and recurring fees, the Fund's six month,
1 Year, 5 Year and Since Inception (5/4/99) average annual total returns for the
periods ended January 31, 2005, were 6.16%, 4.63%, -5.43% and 4.74%,
respectively, for Class A Shares. The returns quoted assume the reinvestment of
dividends and capital gains distributions.
Past performance does not guarantee future results. The performance data quoted
represents past performance and current returns may be lower or higher. Total
return figures include change in share price, reinvestment of dividends and
capital gains and does not reflect the deduction of taxes that a shareholder
would pay on distributions and redemptions. The investment return and principal
value will fluctuate so that an investor's shares, when redeemed may be worth
more or less than the original cost. For performance data current to the most
recent month end please visit www.amsouthfunds.com.
Q. What factors affected the Fund's performance during the period?
A. Mid-cap stocks posted strong returns during the period. Medium-sized stocks
lost ground during August, but surged from September through December before
slipping back in January. That environment helped the Fund and its benchmark
generate strong gains.
This Fund's sub-advisor, OakBrook Investments, over- or under-weights the stocks
in its benchmark based on a quantitative model that monitors investor
expectations surrounding each stock. That methodology boosted relative returns
during the period. Stock
12
selection added to relative gains, as the Fund's holdings in the information
technology, consumer discretionary and industrials sectors out-performed the
respective sectors in the benchmark. +
Those positive factors were partly offset by the Fund's sector weightings--in
particular an overweight position in energy stocks during the last three months
of the period. Mid-cap energy stocks performed well during the first two months
of the recent period, but subsequently retrenched as energy prices declined. +
+ The Fund's portfolio is current to January 31, 2005 and subject to change.
(1) See Glossary of Terms for additional information
The AmSouth Mid Cap Fund is subadvised by OakBrook Investments, LLC, which is
paid a fee for its services.
13
================================================================================
AMSOUTH SMALL CAP FUND
================================================================================
PORTFOLIO MANAGER
Sawgrass Asset Management, LLC (sub-advisor):
Dean McQuiddy, CFA
Principal and Director of Equity Investments
Dean McQuiddy serves as portfolio manager for the AmSouth Small Cap Fund. He has
nearly 20 years of experience in investment management and holds a BS in
finance. He created and managed the small-cap growth product at Barnett Capital
Advisors for 11 years.
INVESTMENT CONCERNS
Small capitalization funds typically carry additional risks since smaller
companies generally have a higher risk of failure.
Equity securities (stocks) are more volatile and carry more risk than other
forms of investments, including investments in high-grade fixed income
securities. The net asset value per share of this Fund will fluctuate as the
value of the securities in the portfolio changes.
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER'S PERSPECTIVE
"For the AmSouth Small Cap Fund, we use a disciplined investment process to
identify 60 to 80 fundamentally attractive small companies that share certain
attributes: above-market sales and earnings growth, increasing estimates of
future earnings and reasonable valuations. We aim to buy these companies in the
early stages of their--before their stocks get overvalued in the marketplace."
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Q & A
Q. How did the Fund perform during the six-month period ended January 31, 2005?
A. The Fund delivered a total return of 12.53% (Class A Shares at NAV. Had the
effects of the front-end sales charge been included, the return would have been
lower). That compared to a 13.48% total return for the Fund's benchmark, the
Russell 2000(R) Growth Index.(1)
The Fund's total return does not reflect the deduction of a sales charge on
Class A Shares. If reflected, the sales charge would reduce the performance
quoted.
With the maximum sales charge of 5.50% and recurring fees, the Fund's six month,
1 Year, 5 Year and Since Inception (3/3/98) average annual total returns for the
periods ended January 31, 2005, were 6.39%, 4.09%, -2.43% and -0.54%,
respectively, for Class A Shares. The returns quoted assume the reinvestment of
dividends and capital gains distributions.
Past performance does not guarantee future results. The performance data quoted
represents past performance and current returns may be lower or higher. Total
return figures include change in share price, reinvestment of dividends and
capital gains and does not reflect the deduction of taxes that a shareholder
would pay on distributions and redemptions. The investment return and principal
value will fluctuate so that an investor's shares, when redeemed may be worth
more or less than the original cost. For performance data current to the most
recent month end please visit www.amsouthfunds.com.
Q. What factors affected the Fund's performance during the period?
A. Small stocks rallied, helping the Fund and its benchmark post solid gains.
Growth shares lagged value stocks, creating a headwind for this growth-oriented
portfolio.
This Fund's sub-advisor, Sawgrass Asset Management, held a significantly
underweight position in health care stocks: The Fund held an average of 13.5% of
its assets in the health care sector, compared to an average of 21.5% for the
benchmark. That comparatively small stake boosted performance against the index,
as health care stocks lagged the market. Stock selection in the health care
sector also had a modestly beneficial effect on relative returns. +
The managers also under-weighted the technology sector, with an average
allocation of 22%, versus an average allocation of 27% for the benchmark.
Technology stocks trailed the market, so the Fund's smaller stake increased
relative gains. Stock selection in this sector also boosted returns against the
index. Selection among consumer discretionary stocks helped the Fund's relative
performance as well.+
14
Stock selection hurt relative returns in the basic materials sector, as the Fund
did not fully participate in a strong rally by shares of steel and aluminum
producers. The Fund held an overweight stake in energy stocks. That sector
generally posted strong performance, but the Fund's energy holdings did not keep
pace with those in the index. As a result, the Fund's holdings in that sector
weighed on the portfolio's relative performance. +
Similarly, the Fund's overweight position in industrial stocks included some
individual holdings that did not perform as well as the sector, which taken as a
whole posted relatively strong gains. As a result, the Fund's allocation to
industrial stocks hurt the portfolio's returns against the index. +
+ The Fund's portfolio is current to January 31, 2005 and subject to change.
(1) See Glossary of Terms for additional information.
The AmSouth Small Cap Fund is subadvised by Sawgrass Asset Management, LLC,
which is paid a fee for its services.
15
================================================================================
AMSOUTH INTERNATIONAL EQUITY FUND
================================================================================
PORTFOLIO MANAGERS
Dimensional Fund Advisors Inc. (sub-advisor)
Dimensional Fund Advisors Inc. employs a team approach in subadvising the
International Equity Fund. The Investment Committee sets policy and procedures,
and portfolio managers make daily decisions regarding the Fund. Karen Umland, VP
and portfolio manager heads the international group. Portfolio managers on the
international team are located in Los Angeles, London and Sydney.
INVESTMENT CONCERNS
An investment in this Fund entails the special risks of international investing,
including currency exchange fluctuation, government regulations, and the
potential for political and economic instability. The Fund's share price is
expected to be more volatile than that of a U.S.-only fund.
Equity securities (stocks) are more volatile and carry more risk than other
forms of investments, including investments in high-grade fixed income
securities. The net asset value per share of this Fund will fluctuate as the
value of the securities in the portfolio changes.
Value-based investments are subject to the risk that the broad market may not
recognize their intrinsic value.
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER'S PERSPECTIVE
"The AmSouth International Equity Fund is designed to provide diversified
exposure to the international large cap value asset class. The portfolio invest
in large cap stocks with high book values relative to price (value stocks). The
"value" parameter is determined on a country basis. Currently, the Fund
systematically invest in a broadly diversified portfolio of large "value" stocks
in 21 developed-market countries."
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Q & A
Q. How did the Fund perform during the six-month period ended January 31, 2005?
A. The Fund delivered a total return of 20.47% (Class A Shares at NAV. Had the
effects of the front-end sales charge been included, the return would have been
lower). That compared to a 16.68% total return for the Fund's benchmark, the
Morgan Stanley Capital International EAFE(R) (Europe, Australasia and Far East)
Index.(1)
The Fund's total return does not reflect the deduction of a sales charge on
Class A Shares. If reflected, the sales charge would reduce the performance
quoted.
With the maximum sales charge of 5.50% and recurring fees, the Fund's six month,
1 Year, 5 Year and Since Inception (8/18/97) average annual total returns for
the periods ended January 31, 2005, were 13.81%, 14.95%, 2.05% and 4.43%,
respectively, for Class A Shares. The returns quoted assume the reinvestment of
dividends and capital gains distributions.
Past performance does not guarantee future results. The performance data quoted
represents past performance and current returns may be lower or higher. Total
return figures include change in share price, reinvestment of dividends and
capital gains and does not reflect the deduction of taxes that a shareholder
would pay on distributions and redemptions. The investment return and principal
value will fluctuate so that an investor's shares, when redeemed may be worth
more or less than the original cost. For performance data current to the most
recent month end please visit www.amsouthfunds.com.
Q. What factors affected the Fund's performance?
A. Developed international stock markets generated strong returns during the
period, helping the Fund and the benchmark produce solid gains. The dollar
weakened compared to most foreign currencies. The Fund does not hedge its
exposure to foreign currencies, so dollar weakness increased the Fund's returns.
Strong performance among value and small-cap stocks also boosted the Fund's
absolute performance. +
16
The Fund's sub-advisor, Dimensional Fund Advisors, employs a strict value
methodology to construct a portfolio that is broadly diversified across
geographical regions. The managers rank the stocks in each of the 21 developed
markets represented in the index primarily using book value-to-market
capitalization, and invest in approximately the top 30% of stocks, by number, in
each country. +
That approach helped the Fund outperform its benchmark, since value stocks led
global stock markets during the period. The Fund's value discipline also
typically leads it to hold shares with smaller average market capitalizations
than the average stocks that comprise the Fund's benchmark. That dynamic also
boosted relative returns, as smaller shares outperformed larger stocks for the
six-month period. +
+ The Fund's portfolio is current to January 31, 2005 and subject to change.
(1) See Glossary of Terms for additional information.
The AmSouth International Equity Fund is subadvised by Dimensional Fund Advisor
Inc, which is paid a fee for its services.
17
================================================================================
AMSOUTH BALANCED FUND
================================================================================
PORTFOLIO MANAGERS
Brian B. Sullivan, CFA
Director, Value Equity Strategies
John P. Boston, CFA
Chief Fixed Income Officer
AmSouth Bank
AmSouth Asset Investment Management, Inc.
Brian Sullivan has been the portfolio manager for the AmSouth Value and AmSouth
Balanced Fund since June 2004. Mr. Sullivan has more than 18 years of investment
management experience and holds an MBA in finance and a bachelor's degree in
economics.
John Boston manages the AmSouth High Quality Bond Fund and co-manages the
AmSouth Government Income Fund, AmSouth Limited Term Bond Fund and the AmSouth
Balanced Fund. Mr. Boston joined the Asset Management Division in 1987. Mr.
Boston earned his B.S. in Finance and Political Science from the University of
North Alabama. He is a member and past president of the Alabama Society of
Financial Analysts and holds the Chartered Financial Analyst designation.
- --------------------------------------------------------------------------------
PORTFOLIO MANAGERS' PERSPECTIVE
"The AmSouth Balanced Fund is a diversified fund that offers investors a simple
and easy way to balance their investments between stocks and bonds. Within the
equity component, our diversified equity strategy invests in a broad array of
high quality stocks to provide long term growth. The fixed income component
contains a mix of investment grade bonds to generate income. We assess market
opportunities between the two asset classes and allocate assets in the Fund to
potentially achieve high risk-adjusted returns.
- --------------------------------------------------------------------------------
INVESTMENT CONCERNS
Equity securities (stocks) are more volatile and carry more risk than other
forms of investments, including investments in high-grade fixed income
securities. The net asset value per share of this Fund will fluctuate as the
value of the securities in the portfolio changes. Bonds offer a relatively
stable level of income, although bond prices will fluctuate providing the
potential for principal gain or loss. Intermediate-term, higher-quality bonds
generally offer less risk than longer-term bonds and a lower rate of return.
- --------------------------------------------------------------------------------
Q & A
Q. How did the Fund perform during the six-month period ended January 31, 2005?
A. The Fund delivered a total return of 6.26% (Class A Shares at NAV. Had the
effects of the front-end sales charge been included, the return would have been
lower). The Fund's benchmarks, the S&P 500 Stock Index(1) and the Lehman
Brothers Government/Credit Bond Index(1), returned 8.15% and 4.02%,
respectively.
The Fund's total return does not reflect the deduction of a sales charge on
Class A Shares. If reflected, the sales charge would reduce the performance
quoted.
The Fund held an average of approximately 60% of its assets in stocks and
roughly 40% of its assets in bonds. Stocks significantly outperformed bonds
during the period, so the Fund's emphasis on stocks helped boost returns.
With the maximum sales charge of 5.50% and recurring fees, the Fund's six month,
1 Year, 5 Year and 10 Year average annual total returns for the periods ended
January 31, 2005, were 0.44%, -1.15%, 5.15% and 8.72%, respectively, for Class A
Shares. The returns quoted assume the reinvestment of dividends and capital
gains distributions.
Past performance does not guarantee future results. The performance data quoted
represents past performance and current returns may be lower or higher. Total
return figures include change in share price, reinvestment of dividends and
capital gains and does not reflect the deduction of taxes that a shareholder
would pay on distributions and redemptions. The investment return and principal
value will fluctuate so that an investor's shares, when redeemed may be worth
more or less than the original cost. For performance data current to the most
recent month end please visit www.amsouthfunds.com.
Q. What factors affected the Fund's performance?
A. Stocks posted solid returns during the period, particularly during the fourth
calendar quarter of 2004. That trend boosted the returns of the Fund's equity
allocation. Yields on long-term bonds declined, while yields on short-term bonds
rose. The Fund's fixed-income portion generated modest gains in that
environment.+
18
We maintained a higher-than-neutral stock allocation throughout the period. The
Fund held 60% of its assets in stocks, compared to its neutral position of 50%.
The emphasis on equities boosted the Fund's returns relative to its neutral
weightings, as stocks significantly outperformed bonds. +
Stock selection helped the Fund's equity allocation outperform the S&P 500.
Selection in the health care sector was especially beneficial: The Fund's health
care stake out-gained the health care stocks in the S&P 500 by approximately
eight percentage points, largely because we avoided or under-weighted several
stocks that suffered very poor returns. The Fund's superior performance in the
health care sector made a significant impact on relative performance, because
health care stocks comprise a sizable portion of the index and this Fund. Stock
selection in the technology sector weighed on the equity allocation's returns
against the stock benchmark, largely due to weak returns among certain hardware
and networking stocks in the Fund's portfolio. +
The Fund's bond allocation lagged its benchmark for the period. We maintained a
short average duration relative to the fixed-income index, to protect against
rising interest rates. That strategy left the Fund underexposed to long-term
bonds, which saw their yields decline and their prices rise. We increased the
Fund's average duration late in the period. +
The bond allocation's returns relative to the fixed-income benchmark benefited
from an emphasis on corporate bonds, which outperformed government credit. The
Fund's high-quality focus prevented it from benefiting from even stronger
performance among lower-quality issues, however. +
+ The Fund's portfolio is current to January 31, 2005 and subject to change.
(1) See Glossary of Terms for additional information.
19
================================================================================
AMSOUTH STRATEGIC PORTFOLIOS
================================================================================
Aggressive Growth
Growth
Growth and Income
Moderate Growth and Income
The AmSouth Strategic Portfolios are managed by a team of AmSouth investment
managers, including both equity and fixed income specialists. The team has more
than 40 years of combined investment management experience.
INVESTMENT CONCERNS
The Funds invest in underlying funds, so the investment performance is directly
related to the performance of those underlying funds. Before investing in the
Fund, investors should assess the risks associated with and types of investments
made by each of the underlying funds in which the Funds invests.
- --------------------------------------------------------------------------------
PORTFOLIO MANAGERS' PERSPECTIVE
The Portfolios seek to provide investors with the potential to achieve a variety
of long- and short-term goals, commersurate with investors' specific time
horizons and tolerance for risk. Each of the four Strategic Portfolios invests
in a combination of underlying mutual funds from the AmSouth fund family. Based
on each Portfolio's asset-allocation target, the mangers periodically rebalance
stock, bond and money market holdings--based on analysis of economic and market
trends.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Q & A
Q. How did the Funds perform during the period?
A. During the six-month period ended January 31, 2005, the Funds' total returns,
benchmark returns and other comparative returns were as follows:
AmSouth Aggressive Growth Portfolio
(Class A Shares at NAV. Had the effects of the front-end sales charge been
included, the return would have been lower): 9.87%
S&P 500 Stock Index(1): 8.15%
Lipper Multi-Cap Core Funds Average(1): 9.47%
AmSouth Growth Portfolio
(Class A Shares at NAV. Had the effects of the front-end sales charge been
included, the return would have been lower): 7.91%
S&P 500 Stock Index(1): 8.15%
Lipper Multi-Cap Growth Funds Average(1): 10.47%
AmSouth Growth and Income Portfolio
(Class A Shares at NAV. Had the effects of the front-end sales charge been
included, the return would have been lower): 6.73%
S&P 500 Stock Index(1): 8.15%
Merrill Lynch Government/Corporate Master Index(1)1: 3.98%
Lipper Large Cap Value Funds Average(1): 8.99%
AmSouth Moderate Growth and Income Portfolio
(Class A Shares at NAV. Had the effects of the front-end sales charge been
included, the return would have been lower): 6.03%
S&P 500 Stock Index(1): 8.15%
Merrill Lynch Government/Corporate Master Index(1): 3.98%
Lipper Flexible Portfolio Funds Average(1): 7.54%
With the maximum sales charge of 5.50% and recurring fees, the six-month, 1
Year, 5 Year and Since Inceptions average annual total returns for the Class A
Shares for the periods ended January 31, 2005 were 3.87%, 1.11%, -0.53% and
1.60%, respectively, for the Aggressive Growth Portfolio; 2.00%, 0.06%, 0.73%
and 1.61%, respectively, for the Growth Portfolio; 0.88%, -0.81%, 2.21% and
2.44%, respectively, for the Growth and Income Portfolio; and 0.22%, -1.28%,
2.95% and 2.83%, respectively, for the Moderate Growth and Income Portfolio. The
returns quoted assume reinvestment of dividends and capital gains distributions.
Past performance does not guarantee future results. The performance data quoted
represents past performance and current returns may be lower or higher. Total
return figures include change in share price, reinvestment of dividends and
capital gains and does not reflect the deduction of taxes that a shareholder
would pay on distributions and redemptions. The
20
investment return and principal value will fluctuate so that an investor's
shares, when redeemed may be worth more or less than the original cost. For
performance data current to the most recent month end please visit
www.amsouthfunds.com.
Q. What factors affected the Portfolios' performance?
A. The stock market staged a strong rally during the fourth quarter of 2004,
helping the Strategic Portfolios generate gains for the six-month period. The
Portfolios' returns benefited from their broad diversification in the stock
market, including funds that invest in various styles and market-cap sizes as
well as international shares.
Above-neutral allocations to stocks throughout the period boosted the
Portfolios' returns. The Aggressive Growth Portfolio held 99% of its assets in
stock during the period, compared to its neutral allocation of 85%. The Growth,
Growth and Income and Moderate Growth and Income Portfolios all held equity
allocations ten percentage points higher than their neutral positions.+
The diversification of the Portfolios' equity holdings helped those equity
stakes outperform the broad market, as measured by the Standard & Poor's 500
Index. In particular, the Portfolios benefited from their allocations to small
and medium-sized stocks, value shares and inter-national equities, all of which
generated strong gains during the six-month period.
The bond funds in which the Portfolios invested lagged their bench-marks,
weighing down relative returns.
+ The Fund's portfolio is current to January 31, 2005 and subject to change.
(1) See Glossary of Terms for additional information.
21
================================================================================
AMSOUTH GOVERNMENT INCOME FUND
================================================================================
PORTFOLIO MANAGERS
John P. Boston, CFA
Chief Fixed Income Officer
Michael T. Lytle, CFA
Fund Manager
AmSouth Bank
AmSouth Asset Management, Inc.
John Boston manages the AmSouth High Quality Bond Fund and co-manages the
AmSouth Government Income Fund, AmSouth Limited Term Bond Fund and the AmSouth
Balanced Fund. Mr. Boston joined the Asset Management Division in 1987. Mr.
Boston earned his B.S. in Finance and Political Science from the University of
North Alabama. He is a member and past president of the Alabama Society of
Financial Analysts and holds the Chartered Financial Analyst designation.
Michael Lytle co-manages the AmSouth Government Income Fund. He joined the
AmSouth Asset management Division in 1999 after completing AmSouth Bank's
Management Associate Program. He earned his B.S. in Interdisciplinary Studies
from Berry College and holds the Chartered Financial Analyst designation.
- --------------------------------------------------------------------------------
PORTFOLIO MANAGERS' PERSPECTIVE
"The AmSouth Government Income Fund is more suitable for investors who seek
income but also demand the safety of U.S. government securities. Although we
attempt to consistently generate a high level of income, investors should be
aware that yields and principal values vary and that the Fund is not guaranteed
by the U.S. Government."
- --------------------------------------------------------------------------------
INVESTMENT CONCERNS
U.S. Government guarantees apply only to certain underlying securities of the
Fund's portfolio and not the Fund's shares.
Bonds offer a relatively stable level of income, although bond prices will
fluctuate providing the potential for principal gain or loss. Intermediate-term,
higher-quality bonds generally offer less risk than longer-term bonds and a
lower rate of return.
- --------------------------------------------------------------------------------
Q & A
Q. How did the Fund perform during the six-month period ended January 31, 2005?
A. The Fund delivered a total return of 2.00% (Class A Shares at NAV. Had the
effects of the front-end sales charge been included, the return would have been
lower). That compared to a 3.53% total return for the Fund's benchmark, the
Lehman Brothers Mortgage Index.(1)
The Fund's total return does not reflect the deduction of a sales charge on
Class A Shares. If reflected, the sales charge would reduce the performance
quoted.
With the maximum sales charge of 4.00% and recurring fees, the Fund's six month,
1 Year, 5 Year and 10 Year average annual total returns for the periods ended
January 31, 2005, were -2.07%, -1.99%, 5.21% and 5.91%, respectively, for Class
A Shares. The returns quoted assume the reinvestment of dividends and capital
gains distributions.
Past performance does not guarantee future results. The performance data quoted
represents past performance and current returns may be lower or higher. Total
return figures include change in share price, reinvestment of dividends and
capital gains and does not reflect the deduction of taxes that a shareholder
would pay on distributions and redemptions. The investment return and principal
value will fluctuate so that an investor's shares, when redeemed may be worth
more or less than the original cost. For performance data current to the most
recent month end please visit www.amsouthfunds.com.
Q. What factors affected the Fund's performance during the period?
This Fund invests primarily in mortgage-backed securities. Such issues fared
well during the period, as investors prized their relatively high yields and the
protection they offered against rising interest rates. That environment helped
the Fund and its benchmark post positive returns.
The Fund began the period with 50% of its assets in mortgage-backed securities,
40% in agency issues and 10% in Treasuries. We maintained those allocations
through December. In January we significantly increased the Fund's weighting in
mortgage-backed securities, to 82% of the Fund's assets, in order to take
advantage of the attractive yields and outlook those bonds offered. This Fund's
benchmark is comprised entirely of mortgage-backed securities, so the Fund's
smaller weighting dragged on relative returns as those bonds performed well.
That dynamic was the primary reason that the Fund lagged its benchmark. +
22
The Fund held an average duration that was modestly shorter than the benchmark
throughout the period, to help protect against rising interest rates. That
strategy had a slightly negative impact on returns against the benchmark, as
bonds with longer durations generally performed best. +
+ The Fund's portfolio is current to January 31, 2005 and subject to change.
(1) See Glossary of Terms for additional information.
23
================================================================================
AMSOUTH LIMITED TERM BOND FUND
================================================================================
PORTFOLIO MANAGER
John P. Boston, CFA
Chief Fixed Income Officer
Scott Flurry, CFA
Fund Manager
AmSouth Bank
AmSouth Asset Management, Inc.
John Boston manages the AmSouth High Quality Bond Fund and co-manages the
AmSouth Government Income Fund, AmSouth Limited Term Bond Fund and the AmSouth
Balanced Fund. Mr. Boston joined the Asset Management Division in 1987. Mr.
Boston earned his B.S. in Finance and Political Science from the University of
North Alabama. He is a member and past president of the Alabama Society of
Financial Analysts and holds the Chartered Financial Analyst designation.
Scott Flurry co-manages the AmSouth Limited Term Bond Fund. Mr. Flurry joined
AmSouth Asset Management in 2003. Prior to joining AmSouth, Mr. Flurry managed
equity and fixed income portfolios at a large, regional bank since 1993. Mr.
Flurry earned his B.S. in Finance from the University of Alabama and holds the
Chartered Financial Analyst designation.
- --------------------------------------------------------------------------------
PORTFOLIO MANAGERS' PERSPECTIVE
"The AmSouth Limited Term Bond Fund was designed to fill the gap between money
market funds and long-term bond funds. For investors looking for a diversified
bond fund, this Fund represents the first step out on the 'risk/return' spectrum
from the money market arena."
- --------------------------------------------------------------------------------
INVESTMENT CONCERNS
Short- or intermediate-term investment grade bonds offer less risk and generally
a lower rate of return than longer-term higher yielding bonds.
Bonds offer a relatively stable level of income, although bond prices will
fluctuate providing the potential for principal gain or loss. Intermediate-term,
higher-quality bonds generally offer less risk than longer-term bonds and a
lower rate of return.
- --------------------------------------------------------------------------------
Q & A
Q. How did the Fund perform during the six-month period ended January 31, 2005?
A. The Fund delivered a total return of 0.55% (Class A Shares at NAV. Had the
effects of the front-end sales charge been included, the return would have been
lower). That compared to a 1.22% total return for the Fund's benchmark, the
Merrill Lynch 1-5-Year Government/Corporate Bond Index.(1)
The Fund's total return does not reflect the deduction of a sales charge on
Class A Shares. If reflected, the sales charge would reduce the performance
quoted.
With the maximum sales charge of 2.00% and recurring fees, the Fund's six month,
1 Year, 5 Year and 10 Year average annual total returns for the periods ended
January 31, 2005, were -3.51%, -3.57%, 4.19% and 5.06%, respectively, for Class
A Shares. The returns quoted assume the reinvestment of dividends and capital
gains distributions.
Past performance does not guarantee future results. The performance data quoted
represents past performance and current returns may be lower or higher. Total
return figures include change in share price, reinvestment of dividends and
capital gains and does not reflect the deduction of taxes that a shareholder
would pay on distributions and redemptions. The investment return and principal
value will fluctuate so that an investor's shares, when redeemed may be worth
more or less than the original cost. For performance data current to the most
recent month end please visit www.amsouthfunds.com
Q. What factors affected the Fund's performance?
The Fund held a shorter average duration than the benchmark throughout the
period, in order to protect against the risk of rising interest rates. That
strategy hurt relative performance during the first three months, as short-term
yields declined. The Fund's relatively short average duration then helped
returns against the bench- mark when yields rose during the second half of the
recent period. The Fund sacrificed some yield to pursue its low-duration
strategy, particularly early in the period when the yield curve was steeper,
with higher yields on longer-term issues+
24
The Fund was overweight corporate bonds during the entire period, which helped
relative returns significantly. One- to five-year corporate bonds returned 43
basis points (0.43%) more than the index for the period as a whole. The
beneficial effect of the Fund's overweight position in corporate bonds was
tempered somewhat by the overall superior credit quality of the Fund, as lower
rated corporate bonds were by far the best performers. +
We further increased the Fund's overweight position in corporate bonds during
the period. The Fund held 53% of its assets in corporate issues as of August 1,
2004, compared to 60% by the end of the period. +
+ The Fund's portfolio is current to January 31, 2005 and subject to change.
(1) See Glossary of Terms for additional information.
25
================================================================================
AMSOUTH HIGH QUALITY BOND FUND (formerly the AMSOUTH BOND FUND)
================================================================================
PORTFOLIO MANAGER
John P. Boston, CFA
Chief Fixed Income Officer
AmSouth Bank
AmSouth Asset Management, Inc.
John Boston manages the AmSouth High Quality Bond Fund and co-manages the
AmSouth Government Income Fund, AmSouth Limited Term Bond Fund and the AmSouth
Balanced Fund. Mr. Boston joined the Asset Management Division in 1987. Mr.
Boston earned his B.S. in Finance and Political Science from the University of
North Alabama. He is a member and past president of the Alabama Society of
Financial Analysts and holds the Chartered Financial Analyst designation.
INVESTMENT CONCERNS
Bonds offer a relatively stable level of income, although bond prices will
fluctuate providing the potential for principal gain or loss. Intermediate-term,
higher-quality bonds generally offer less risk than longer-term bonds and a
lower rate of return.
- --------------------------------------------------------------------------------
PORTFOLIO MANAGERS' PERSPECTIVE
"The AmSouth High Quality Bond Fund seeks to take advantage of changes in
interest rates to pursue strong returns. We buy longer bonds when interest rates
are high and expected to fall, and shorter bonds when interest rates are low and
expected to rise. The change in the average maturity or duration is one of the
most powerful determinants of return. Through the active use of high-quality
investments, we strive to obtain excellent returns."
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Q & A
Q. How did the Fund perform during the six-month period ended January 31, 2005?
A. The Fund delivered a total return of 2.94% (Class A Shares at NAV. Had the
effects of the front-end sales charge been included, the return would have been
lower). That compared to a 4.02% total return for the Fund's benchmark, the
Lehman Brothers Government/Credit Bond Index.(1)
The Fund's total return does not reflect the deduction of a sales charge on
Class A Shares. If reflected, the sales charge would reduce the performance
quoted.
With the maximum sales charge of 4.00% and recurring fees, the Fund's six month,
1 Year, 5 Year and 10 Year average annual total returns for the periods ended
January 31, 2005, were -1.16%, -1.30%, 6.31% and 6.54%, respectively, for Class
A Shares. The returns quoted assume the reinvestment of dividends and capital
gains distributions.
Past performance does not guarantee future results. The performance data quoted
represents past performance and current returns may be lower or higher. Total
return figures include change in share price, reinvestment of dividends and
capital gains and does not reflect the deduction of taxes that a shareholder
would pay on distributions and redemptions. The investment return and principal
value will fluctuate so that an investor's shares, when redeemed may be worth
more or less than the original cost. For performance data current to the most
recent month end please visit www.amsouthfunds.com.
Q. What factors affected the Fund's performance?
A. Yields on short-term bonds rose during the period, while yields on
longer-term bonds declined. The decline in long-term bond yields helped the Fund
produce positive returns. The Fund benefited from its position in corporate
issues, which outperformed Treasury bonds. +
The Fund held an average duration shorter than that of the benchmark throughout
the period. We established and maintained that position to protect against a
rise in interest rates. That strategy left the Fund underexposed to long-term
bonds, so the relative strength of those securities weighed on returns versus
the benchmark. +
We lengthened the Fund's duration late in the period to benefit from any further
flattening of the yield curve--that is, any further decline in long-term rates
relative to short-term rates. That strategy boosted the Fund's relative returns
during January. The Fund
26
began the recent six-month period with an average duration of 4.61 years, and
ended the period with an average duration of 5.05 years.+
The Fund held an overweight position in corporate bonds throughout the period.
That helped relative returns, as corporate bonds significantly outperformed
government-issued securities. The Fund's high-quality focus prevented it from
benefiting from even stronger performance among lower-quality corporate bonds,
which resulted in the Fund lagging its benchmark. +
+ The Fund's portfolio is current to January 31, 2005 and subject to change.
(1) See Glossary of Terms for additional information.
27
================================================================================
AMSOUTH HIGH QUALITY MUNICIPAL BOND FUND (formerly the AmSouth Municipal Bond
Fund)
================================================================================
PORTFOLIO MANAGER
Dorothy E. Thomas, CFA
Fund Manager
AmSouth Bank
AmSouth Asset Management, Inc.
Dorothy Thomas manages the AmSouth Municipal Bond Fund, AmSouth Florida
Tax-Exempt Fund and the AmSouth Tennessee Tax-Exempt Fund. Ms. Thomas joined the
Asset Management Division in 1983 after working in Corporate Finance since 1973.
Prior to moving to the Fixed Income team, she held positions as an equity
analyst and a portfolio manager. She earned a B.A. in Economics from Stanford
University and her MBA from the University of Alabama. She is a member of the
Alabama Society of Financial Analysts and holds the Chartered Financial Analyst
designation.
- --------------------------------------------------------------------------------
PORTFOLIO MANAGERS' PERSPECTIVE
"With the AmSouth High Quality Municipal Bond Fund, we concentrate on
high-quality municipal bonds--those in the top three rating classes, or of
comparable quality. As with other AmSouth bond funds, we strive to achieve
strong returns by taking advantage of anticipated changes in interest rates."
- --------------------------------------------------------------------------------
INVESTMENT CONCERNS
The Fund's income may be subject to certain state and local taxes and, depending
on your tax status, the federal alternative minimum tax.
Bond funds will tend to experience smaller fluctuations in value than stock
funds. However, investors in any bond fund should anticipate fluctuations in
price, especially for longer-term issues and in environments of rising interest
rates.
- --------------------------------------------------------------------------------
Q & A
Q. How did the Fund perform during the six-month period ended January 31, 2005?
A. The Fund delivered a total return of 2.01% (Class A Shares at NAV. Had the
effects of the front-end sales charge been included, the return would have been
lower) during the period. In comparison, the Fund's benchmark the Merrill Lynch
1-12-Year Municipal Bond Index(1) returned 3.46%.
The Fund's total return does not reflect the deduction of a sales charge on
Class A Shares. If reflected, the sales charge would reduce the performance
quoted.
With the maximum sales charge of 4.00% and recurring fees, the Fund's six month,
1 Year, 5 Year and 10 Year average annual total returns for the periods ended
January 31, 2005, were -2.10%, -2.59%, 4.57% and 4.49%, respectively, for Class
A Shares. The returns quoted assume the reinvestment of dividends and capital
gains distributions.
Past performance does not guarantee future results. The performance data quoted
represents past performance and current returns may be lower or higher. Total
return figures include change in share price, reinvestment of dividends and
capital gains and does not reflect the deduction of taxes that a shareholder
would pay on distributions and redemptions. The investment return and principal
value will fluctuate so that an investor's shares, when redeemed may be worth
more or less than the original cost. For performance data current to the most
recent month end please visit www.amsouthfunds.com.
Q. What factors affected the Fund during the period?
A. Yields on long-term municipal bonds declined, while yields on short-term
municipal bonds rose. Yields on the four- to five-year securities which we
overweighted declined only slightly, so capital appreciation contributed
relatively little to Fund gains. Instead, bond yields generated most of the
Fund's positive returns. +
The Fund held a shorter average duration than that of the benchmark throughout
the period, in order to protect against rising interest rates. That approach
weighed on relative returns, since it prevented the Fund from holding many of
the longer-term issues that
28
performed the best. We lengthened the Fund's average duration late in the period
in order to obtain additional yield for shareholders. The Fund held an average
duration of 3.91 years as of August 1, 2004, and ended the period on January 31,
2005 with an average duration of 4.80 years. +
The Fund held bonds with very high credit quality, in keeping with its
high-quality mandate. That had a mildly negative effect on returns against the
benchmark, as lower-quality bonds led the market. +
+ The Fund's portfolio is current to January 31, 2005 and subject to change.
(1) See Glossary of Terms for additional information.
29
================================================================================
AMSOUTH FLORIDA TAX-EXEMPT FUND
================================================================================
PORTFOLIO MANAGER
Dorothy E. Thomas, CFA
Fund Manager
AmSouth Bank
AmSouth Asset Management, Inc.
Dorothy Thomas manages the AmSouth Municipal Bond Fund, AmSouth Florida
Tax-Exempt Fund and the AmSouth Tennessee Tax-Exempt Fund. Ms. Thomas joined the
Asset Management Division in 1983 after working in Corporate Finance since 1973.
Prior to moving to the Fixed Income team, she held positions as an equity
analyst and a portfolio manager. She earned a B.A. in Economics from Stanford
University and her MBA from the University of Alabama. She is a member of the
Alabama Society of Financial Analysts and holds the Chartered Financial Analyst
designation.
INVESTMENT CONCERNS
The geographical concentration of portfolio holdings in this Fund may involve
increased risk.
The Fund's income may be subject to certain state and local taxes and, depending
on your tax status, the federal alternative minimum tax.
Bond funds will tend to experience smaller fluctuations in value than stock
funds. However, investors in any bond fund should anticipate fluctuations in
price, especially for longer-term issues and in environments of rising interest
rates.
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER'S PERSPECTIVE
"The AmSouth Florida Tax-Exempt Fund has a portfolio of high-quality issues in a
fast-growing state with a strong economic base. Interest on the bonds is exempt
from both Federal income tax and the Florida intangibles tax. This portfolio is
managed to potentially benefit from anticipated interest rate moves."
- --------------------------------------------------------------------------------
Q & A
Q. How did the Fund perform during the six-month period ended January 31, 2005?
A. The Fund delivered a total return of 2.29% (Class A Shares at NAV. Had the
effects of the front-end sales charge been included, the return would have been
lower). That compared to a 3.46% return for the Fund's benchmark, the Merrill
Lynch 1-12-Year Municipal Bond Index.(1)
The Fund's total return does not reflect the deduction of a sales charge on
Class A Shares. If reflected, the sales charge would reduce the performance
quoted.
With the maximum sales charge of 4.00% and recurring fees, the Fund's six month,
1 Year, 5 Year and 10 Year average annual total returns for the periods ended
January 31, 2005, were -1.78%, -2.39%, 4.44% and 4.50%, respectively, for Class
A Shares. The returns quoted assume the reinvestment of dividends and capital
gains distributions.
Past performance does not guarantee future results. The performance data quoted
represents past performance and current returns may be lower or higher. Total
return figures include change in share price, reinvestment of dividends and
capital gains and does not reflect the deduction of taxes that a shareholder
would pay on distributions and redemptions. The investment return and principal
value will fluctuate so that an investor's shares, when redeemed may be worth
more or less than the original cost. For performance data current to the most
recent month end please visit www.amsouthfunds.com.
Q. What factors affected the Fund's performance?
30
A. The market for Florida municipal debt was similar to the national municipal
market: Yields on long-term municipal bonds fell, while yields on short-term
issues rose. This Fund over-weighted securities with durations of between four
and five years. Yields on those issues declined only slightly, so capital
appreciation was not a major factor in producing Fund returns. +
We maintained a shorter average duration than that of the Fund's benchmark
throughout the period, to protect against the potential for rising interest
rates. That strategy prevented the Fund from holding many of the longer-term
issues that performed the best during the period, hurting the Fund's returns
relative to the index. We lengthened the Fund's average duration late in the
period in order to capture additional yield. The Fund's holdings had an average
duration of 3.86 years as of August 1, 2004, and an average duration of 4.63
years as of January 31, 2005. +
The Fund invests in bonds with high credit quality. Lower-quality bonds led the
market, so this Fund's high-quality mandate weighed slightly on relative
returns. +
+ The Fund's portfolio is current to January 31, 2005 and subject to change.
(1) See Glossary of Terms for additional information.
31
================================================================================
AMSOUTH TENNESSEE TAX EXEMPT FUND
================================================================================
PORTFOLIO MANAGER
Dorothy E. Thomas, CFA
Fund Manager
AmSouth Bank
AmSouth Asset Management, Inc.
Dorothy Thomas manages the AmSouth Municipal Bond Fund, AmSouth Florida
Tax-Exempt Fund and the AmSouth Tennessee Tax-Exempt Fund. Ms. Thomas joined the
Asset Management Division in 1983 after working in Corporate Finance since 1973.
Prior to moving to the Fixed Income team, she held positions as an equity
analyst and a portfolio manager. She earned a B.A. in Economics from Stanford
University and her MBA from the University of Alabama. She is a member of the
Alabama Society of Financial Analysts and holds the Chartered Financial Analyst
designation.
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER'S PERSPECTIVE
"The AmSouth Tennessee Tax-Exempt Fund generates income that is exempt from both
federal and the state of Tennessee income tax. The Fund only invests in
securities in the top three rating classes, or of comparable quality. As with
the other AmSouth bond funds, we strive to enhance long-term performance by
capitalizing on expected changes in interest rates."
- --------------------------------------------------------------------------------
INVESTMENT CONCERNS
The geographical concentration of portfolio holdings in this Fund may involve
increased risk.
The Fund's income may be subject to certain state and local taxes and, depending
on your tax status, the federal alternative minimum tax.
Bond funds will tend to experience smaller fluctuations in value than stock
funds. However, investors in any bond fund should anticipate fluctuations in
price, especially for longer-term issues and in environments of rising interest
rates.
- --------------------------------------------------------------------------------
Q & A
Q. How did the Fund perform during the six-month period ended January 31, 2005?
A. The Fund delivered a total return of 1.59% (Class A Shares at NAV. Had the
effects of the front-end sales charge been included, the return would have been
lower). The Fund's benchmark, the Merrill Lynch 1-12-Year Municipal Bond
Index(1), returned 3.46%.
The Fund's total return does not reflect the deduction of a sales charge on
Class A Shares. If reflected, the sales charge would reduce the performance
quoted.
With the maximum sales charge of 4.00% and recurring fees, the Fund's six month,
1 Year, 5 Year and 10 Year average annual total returns for the periods ended
January 31, 2005, were -2.50%, -3.10%, 4.09% and 3.96%, respectively, for Class
A Shares. The returns quoted assume the reinvestment of dividends and capital
gains distributions.
Past performance does not guarantee future results. The performance data quoted
represents past performance and current returns may be lower or higher. Total
return figures include change in share price, reinvestment of dividends and
capital gains and does not reflect the deduction of taxes that a shareholder
would pay on distributions and redemptions. The investment return and principal
value will fluctuate so that an investor's shares, when redeemed may be worth
more or less than the original cost. For performance data current to the most
recent month end please visit www.amsouthfunds.com.
Q. What factors affected the Fund's performance during the period?
A. Tennessee municipal bonds generally performed in line with other states'
municipal bonds during this period, as yields fell on the long end of the yield
curve and rose on the short end. The Fund over-weighted securities with
durations between four and five years. Yields in that section of the curve
declined only modestly, so the yields produced by the Fund's portfolio were a
major factor in generating returns.+
32
We maintained a relatively short average duration throughout the period, to
protect shareholders' capital in case interest rates increased. The Fund held
few of the long-term issues that led the market, so the strategy dragged on
relative returns for the period as a whole. We lengthened the Fund's average
duration late in the period in order to capture additional yield. The Fund's
portfolio held securities with an average duration of 3.75 years as of August 1,
2004, and an average duration of 4.39 years as of January 31, 2005. +
This Fund's mandate calls for it to maintain a portfolio with high credit
quality. High-quality bonds lagged lower-quality issues during this period, so
the Fund's emphasis on high-quality securities dragged modestly on relative
returns. +
+ The Fund's portfolio is current to January 31, 2005 and subject to change.
(1) See Glossary of Terms for additional information.
33
================================================================================
AMSOUTH MONEY MARKET FUNDS
================================================================================
PORTFOLIO MANAGERS
Christine Taylor
Fund Manager
Kristie K. Jones
Fund Manager
AmSouth Bank
AmSouth Asset Management, Inc.
Ms. Taylor manages the taxable AmSouth Money Market mutual funds. She joined the
AmSouth Asset Management Division in 2002 after completing AmSouth Bank's
Management Associate Program. Prior to moving to the Fixed Income team, she was
a portfolio manager managing personal portfolios at AmSouth. She earned a B.S.
in Finance from the University of South Alabama. Ms. Taylor holds a Series 65
license and is a Level II candidate for the Chartered Financial Analyst
designation.
Ms. Jones manages the AmSouth Tax-Exempt Money Market Fund. Prior to moving to
the Fixed Income team, she was a portfolio manager managing personal portfolios
at AmSouth. She earned her B.S. in Finance with a concentration in Real Estate
from the University of Alabama. She holds her Series 7 and Series 65 licenses.
Ms. Jones is currently a candidate for Level II of the Chartered Financial
Analyst designation.
INVESTMENT CONCERNS
Investments in the Prime, the Treasury Reserve, the Tax-Exempt, and the
Institutional Prime Obligations Money Market Funds are neither insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although the Funds seek to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the Funds.
The AmSouth Tax Exempt Money Market Fund's income may be subject to certain
state and local taxes and, depending on one's tax status, the federal
alternative minimum tax.
- --------------------------------------------------------------------------------
Q & A
Q. What factors affected the Funds' performance during the six-month period
ended January 31, 2005?
A. The Federal Reserve Board raised its target short-term interest rate four
times, for a total increase of one percentage point. Those increases pushed up
yields on short-term debt. Rising short-term yields allowed the Funds to capture
additional yield for shareholders as the period progressed.
The Funds' investments had average maturities shorter than those of their
benchmarks throughout the period. That strategy provided the flexibility to
invest in higher-yielding securities as rates rose, while protecting
shareholders' capital. The Funds' relatively short average maturities boosted
performance against their benchmarks. +
These Funds, except for the Tax-Exempt Money Market Fund, focus on high-quality
fixed- and variable-rate securities. A limited supply of high-quality commercial
paper prevented the Funds from adding multiple new commercial paper names to the
portfolios. The Funds found opportunities in overnight repurchase agreements,
which adjust their yields on a day-to-day basis and therefore reflected changes
in Federal Reserve policy. The Tax-Exempt Money Market Fund emphasized
variable-rate securities, which benefited from the rising-rate environment. +
o As of January 31, 2005, the Prime Obligations Fund's average maturity
was 28 days, compared with 28 days on July 31, 2004 and 59 days on
January 31, 2004. +
o As of January 31, 2005, the Tax-Exempt Fund's average maturity was 20
days, compared with 19 days on July 31, 2004 and 35 days on January
31, 2004. +
34
o As of January 31, 2005, the Treasury Reserve Fund's average maturity
was 19 days, compared with 22 days on July 31, 2004 and 45 days on
January 31, 2004. +
o As of January 31, 2005, the Institutional Prime Obligations Fund's
average maturity was 27 days, compared with 29 days on July 31, 2004
and 64 days on January 31, 2004. +
+ The Fund's portfolio is current to January 31, 2005 and subject to change.
35
PIONEER AMERICA INCOME TRUST
STATEMENT OF ADDITIONAL INFORMATION
[ ], 2005
This Statement of Additional Information is not a Prospectus. It should be
read in conjunction with the related combined Proxy Statement and Prospectus
(also dated [ ], 2005), which covers Class A, B and Y shares of Pioneer America
Income Trust to be issued in exchange for shares of AmSouth Government Income
Fund, a series of AmSouth Funds. Please retain this Statement of Additional
Information for further reference.
The Prospectus is available to you free of charge (please call
1-800-225-6292).
INTRODUCTION...................................................................2
EXHIBITS AND DOCUMENTS INCORPORATED BY REFERENCE...............................2
ADDITIONAL INFORMATION ABOUT PIONEER AMERICA INCOME TRUST......................2
FUND HISTORY..........................................................2
DESCRIPTION OF THE FUND AND ITS INVESTMENT RISKS......................2
MANAGEMENT OF THE FUND................................................2
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES...................2
INVESTMENT ADVISORY AND OTHER SERVICES................................3
PORTFOLIO MANAGERS....................................................3
BROKERAGE ALLOCATION AND OTHER PRACTICES..............................3
CAPITAL STOCK AND OTHER SECURITIES....................................3
PURCHASE, REDEMPTION AND PRICING OF SHARES............................3
TAXATION OF THE FUND..................................................3
UNDERWRITERS..........................................................3
CALCULATION OF PERFORMANCE DATA.......................................3
FINANCIAL STATEMENTS..................................................3
-1-
INTRODUCTION
This Statement of Additional Information is intended to supplement the
information provided in a combined Proxy Statement and Prospectus dated [ ],
2005 (the "Proxy Statement and Prospectus") relating to the proposed
reorganization of AmSouth Government Income Fund, a series of AmSouth Funds,
into Pioneer American Income Trust, and in connection with the solicitation by
the management of AmSouth Funds of proxies to be voted at the Meeting of
Shareholders of AmSouth Government Income Fund to be held on [ ], 2005.
EXHIBITS AND DOCUMENTS INCORPORATED BY REFERENCE
The following documents are incorporated herein by reference, unless
otherwise indicated. Shareholders will receive a copy of each document that is
incorporated by reference upon any request to receive a copy of this Statement
of Additional Information.
1. Pioneer America Income Trust's statement of additional information for
Class A, B, C, R and Investor Class shares, dated May 1, 2005 (the "SAI")
(File No. 33-20795), as filed with the Securities and Exchange Commission
April 29, 2005 (Accession No. 0001016964-05-000186), is incorporated herein
by reference.
2. Pioneer America Income Trust's Annual Report for the fiscal year ended
December 31, 2004 (File No. 811-05516), as filed with the Securities and
Exchange Commission on March 11, 2005 (Accession No. 0000908996-05-000015),
is incorporated herein by reference.
3. AmSouth Fund's statement of additional information, dated December 1, 2004
(File No. 33-21660), as filed with the Securities and Exchange Commission
on December 8, 2004 (Accession No. 0000898432-04-001009), is incorporated
herein by reference.
4. AmSouth Government Income Fund's Annual Report for the fiscal year ended
July 31, 2004 (File No. 81105551), as filed with the Securities and
Exchange Commission on October 12, 2004 (Accession No.
0001145443-04-001533), is incorporated by reference.
5. AmSouth Government Income Fund's Semi-Annual Report for the period ended
January 31, 2005 (File No. 811-05551), as filed with the Securities and
Exchange Commission on April 11, 2005 (Accession No. 0001206774-05-000567),
is incorporated herein by reference.
ADDITIONAL INFORMATION ABOUT
PIONEER AMERICA INCOME TRUST
FUND HISTORY
For additional information about Pioneer America Income Trust generally and
its history, see "Fund History" in the SAI.
DESCRIPTION OF THE FUND AND ITS INVESTMENT RISKS
For additional information about Pioneer America Income Trust's investment
objective, policies, risks and restrictions, see "Investment Policies, Risks and
Restrictions" in the SAI.
MANAGEMENT OF THE FUND
For additional information about Pioneer America Income Trust's Board of
Trustees and officers, see "Trustees and Officers" in the SAI.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
For additional information, see "Annual Fee, Expense and Other Information
- - Share ownership."
-2-
INVESTMENT ADVISORY AND OTHER SERVICES
For additional information, see "Investment Adviser," "Shareholder
Servicing/Transfer Agent," "Custodian" and "Independent Auditors" in Pioneer
America Income Trust's SAI.
PORTFOLIO MANAGERS
For addition information, see "Portfolio Management" in Pioneer America
Income Trust's SAI.
BROKERAGE ALLOCATION AND OTHER PRACTICES
For additional information about Pioneer America Income Trust's brokerage
allocation practices, see "Portfolio Transactions" in the SAI.
CAPITAL STOCK AND OTHER SECURITIES
For additional information about the voting rights and other
characteristics of shares of beneficial interest of Pioneer America Income
Trust, see "Description of Shares" in the SAI.
PURCHASE, REDEMPTION AND PRICING OF SHARES
For additional information about purchase, redemption and pricing of shares
of Pioneer America Income Trust, see "Sales Charges," "Redeeming Shares,"
"Telephone and Online Transactions" and "Pricing of Shares" in the SAI.
TAXATION OF THE FUND
For additional information about tax matters related to an investment in
Pioneer America Income Trust, see "Tax Status" in the SAI.
UNDERWRITERS
For additional information about Pioneer America Income Trust's principal
underwriter and distribution plans, see "Principal Underwriter and Distribution
Plans" and "Sales Charges" in the SAI.
CALCULATION OF PERFORMANCE DATA
For additional information about the investment performance of Pioneer
America Income Trust, see "Investment Results" in the SAI.
FINANCIAL STATEMENTS
For additional information, see "Financial Statements" in Pioneer America
Income Trust's SAI.
-3-
PIONEER AMERICA INCOME TRUST
PRO FORMA
Schedule of Investments (a)
December 31, 2004
(Unaudited)
Pioneer AmSouth Pioneer AmSouth
America Government Pro Forma % of America Government Pro Forma
Income Trust Income Fund Combined Pro Forma Income Trust Income Fund Combined
Principal Principal Principal Combined Market Market Market
Amount Amount Amount Net Assets Value Value Value
CORPORATE BONDS 5.98%
Miscellaneous 5.98%
$ 1,200,000 $ 1,200,000 Private Export Funding, 7.11%, 04/15/07 $ $ 1,300,500 $ 1,300,500
2,000,000 2,000,000 Private Export Funding, 6.49%, 07/15/07 2,140,000 2,140,000
3,000,000 3,000,000 Private Export Funding, 5.87%, 07/31/08 3,225,000 3,225,000
4,300,000 4,300,000 Private Export Funding, 5.75%, 01/15/08 4,579,500 4,579,500
990,000 990,000 Private Export Funding, 5.34%, 03/15/06 1,015,988 1,015,988
3,500,000 3,500,000 Private Export Funding, 5.53%, 04/30/06 3,609,375 3,609,375
1,000,000 1,000,000 Private Export Funding, 4.974%, 08/15/13 1,035,000 1,035,000
5,000,000 5,000,000 Tennessee Valley Authority, 6.75%, 11/01/25 5,981,250 5,981,250
3,850,000 3,850,000 Tennessee Valley Authority, 5.375%, 11/13/08 4,086,513 4,086,513
------------------------------------
TOTAL CORPORATE BONDS $ $26,973,126 $26,973,126
------------------------------------
U.S. TREASURY OBLIGATIONS 1.07%
4,700,000 4,700,000 U.S. Treasury Notes, 4.625%, 5/15/06 $4,808,321 $ $ 4,808,321
------------------------------------
TOTAL U.S. TREASURY OBLIGATIONS $4,808,321 $ $ 4,808,321
------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS 90.11%
3,000,000 3,000,000 Federal Farm Credit Bank, 2.48%, 02/27/06 $ $ 2,981,250 $ 2,981,250
8,000,000 8,000,000 Federal Farm Credit Bank, 3.00%, 12/15/06 7,962,104 7,962,104
5,000,000 5,000,000 Federal Farm Credit Bank, 5.05%, 12/27/12 5,050,000 5,050,000
7,000,000 7,000,000 Federal Farm Credit Bank, 5.70%, 09/03/08 7,489,930 7,489,930
500,000 500,000 Federal Farm Credit Bank, 5.75%, 09/01/05 509,580 509,580
375,000 375,000 Federal Home Loan Bank, 5.50%, 08/15/08 397,969 397,969
1,000,000 1,000,000 Federal Home Loan Bank, 5.82%, 03/30/09 1,082,350 1,082,350
5,000,000 5,000,000 Federal Home Loan Bank, 5.885%, 03/30/09 5,424,385 5,424,385
1,000,000 1,000,000 Federal Home Loan Bank, 7.25%, 05/13/05 1,017,310 1,017,310
2,000,000 2,000,000 Federal Home Loan Mortgage Corp., 3.25% 03/14/08 1,977,236 1,977,236
4,500,000 4,500,000 Federal Home Loan Mortgage Corp., 3.80% 06/28/07 4,539,132 4,539,132
2,414,004 2,414,004 Federal Home Loan Mortgage Corp., 4.00% 02 01 10 2,405,024 2,405,024
4,500,000 4,500,000 Federal Home Loan Mortgage Corp., 4.72% 05/19/09 4,534,551 4,534,551
544,988 544,988 Federal Home Loan Mortgage Corp., 5.50% 08/01/08 557,076 557,076
486,988 486,988 Federal Home Loan Mortgage Corp., 6.00% 08/01/18 507,713 507,713
558,078 558,078 Federal Home Loan Mortgage Corp., 6.00% 05/01/16 584,760 584,760
473,864 473,864 Federal Home Loan Mortgage Corp., 6.00% 06/01/16 496,494 496,494
973,087 973,087 Federal Home Loan Mortgage Corp., 6.00% 10/01/16 1,019,611 1,019,611
3,163,651 3,163,651 Federal Home Loan Mortgage Corp., 6.00% 11/01/33 3,270,518 3,270,518
2,000,000 2,000,000 Federal Home Loan Mortgage Corp., 6.25%, 03/05/12 2,092,500 2,092,500
243,232 243,232 Federal Home Loan Mortgage Corp., 6.50% 05/01/31 255,540 255,540
559,023 559,023 Federal Home Loan Mortgage Corp., 7.00% 06/01/31 592,645 592,645
3,500,000 3,500,000 Federal National Mortgage Association, 3.30%, 07/30/07 3,489,934 3,489,934
1,000,000 1,000,000 Federal National Mortgage Association, 5.00%, 06/30/15 993,587 993,587
250,000 250,000 Federal National Mortgage Association, 5.75%, 06/15/05 253,523 253,523
7,000,000 7,000,000 Federal National Mortgage Association, 6.00%, 05/15/08 7,538,041 7,538,041
500,000 500,000 Federal National Mortgage Association, 6.44%, 08/14/07 537,995 537,995
5,645,027 5,645,027 Federal National Mortgage Association, 6.50%, 12/01/31 5,933,747 5,933,747
6,186,158 6,186,158 Federal National Mortgage Association, 6.5%, 05/01/32 6,497,658 6,497,658
1,068,935 1,068,935 Federal National Mortgage Association, 6.50%, 07/01/32 1,122,309 1,122,309
5,247,927 5,247,927 Federal National Mortgage Association, 6.50%, 02/01/34 5,507,017 5,507,017
353,519 353,519 Federal National Mortgage Association, 7.50%, 04/01/15 375,501 375,501
293,213 293,213 Federal National Mortgage Association, 7.50%, 06/01/15 311,445 311,445
429,121 429,121 Federal National Mortgage Association, 8.00%, 07/01/15 456,611 456,611
2,443,382 2,443,382 Government National Mortgage Association, 4.5%, 07/15/18 2,458,653 2,458,653
1,808,387 1,808,387 Government National Mortgage Association, 4.5%, 08/15/18 1,819,690 1,819,690
4,253,141 4,253,141 Government National Mortgage Association, 4.5%, 08/15/18 4,279,733 4,279,733
2,485,749 2,485,749 Government National Mortgage Association, 4.5%, 08/15/18 2,501,285 2,501,285
2,835,185 2,835,185 Government National Mortgage Association, 4.5%, 11/15/18 2,852,904 2,852,904
225,418 225,418 Government National Mortgage Association, 4.5%, 12/15/19 226,461 226,461
648,057 648,057 Government National Mortgage Association, 4.5%, 4/15/18 652,055 652,055
1,955,420 1,955,420 Government National Mortgage Association, 4.5%, 6/15/34 1,909,215 1,909,215
1,487,455 1,487,455 Government National Mortgage Association, 4.5%, 6/15/34 1,452,308 1,452,308
426,396 426,396 Government National Mortgage Association, 4.5%, 8/15/19 428,371 428,371
920,545 920,545 Government National Mortgage Association, 4.5%, 8/15/33 899,128 899,128
126,357 126,357 Government National Mortgage Association, 5.00%, 05/15/18 129,713 129,713
2,055,794 2,055,794 Government National Mortgage Association, 5.00%, 12/15/17 2,111,506 2,111,506
1,776,302 1,776,302 Government National Mortgage Association, 5.0%, 2/15/19 1,822,244 1,822,244
980,422 980,422 Government National Mortgage Association, 5.0%, 7/15/19 1,005,780 1,005,780
1,742,065 1,742,065 Government National Mortgage Association, 5.00%, 01/15/18 1,788,136 1,788,136
2,096,684 2,096,684 Government National Mortgage Association, 5.00%, 02/15/18 2,152,372 2,152,372
2,185,850 2,185,850 Government National Mortgage Association, 5.00%, 05/15/18 2,243,906 2,243,906
2,329,482 2,329,482 Government National Mortgage Association, 5.00%, 06/15/18 2,391,353 2,391,353
1,971,338 1,971,338 Government National Mortgage Association, 5.50%, 08/15/17 2,056,953 2,056,953
516,873 516,873 Government National Mortgage Association, 5.50%, 02/15/14 539,807 539,807
1,348,983 1,348,983 Government National Mortgage Association, 5.50%, 02/15/17 1,407,570 1,407,570
196,321 196,321 Government National Mortgage Association, 5.50%, 03/15/16 204,848 204,848
1,254,575 1,254,575 Government National Mortgage Association, 5.50%, 10/15/28 1,285,939 1,285,939
870,762 870,762 Government National Mortgage Association, 5.5%, 1/15/29 892,384 892,384
2,419,169 2,419,169 Government National Mortgage Association, 5.5%, 2/15/19 2,523,119 2,523,119
452,603 452,603 Government National Mortgage Association, 5.5%, 4/15/19 472,022 472,022
573,699 573,699 Government National Mortgage Association, 5.5%, 4/15/31 587,089 587,089
3,394,855 3,394,855 Government National Mortgage Association, 5.5%, 4/15/34 3,469,049 3,469,049
3,271,341 3,271,341 Government National Mortgage Association, 5.5%, 5/15/33 3,344,311 3,344,311
288,370 288,370 Government National Mortgage Association, 5.5%, 6/15/18 300,759 300,759
1,909,838 1,909,838 Government National Mortgage Association, 5.5%, 7/15/19 1,991,778 1,991,778
978,409 978,409 Government National Mortgage Association, 5.5%, 7/15/19 1,020,386 1,020,386
3,585,980 3,585,980 Government National Mortgage Association, 5.5%, 7/15/33 3,665,969 3,665,969
1,391,876 1,391,876 Government National Mortgage Association, 5.5%, 8/15/33 1,422,923 1,422,923
2,840,579 2,840,579 Government National Mortgage Association, 5.5%, 9/15/33 2,903,941 2,903,941
341,981 341,981 Government National Mortgage Association, 5.5%, 9/15/33 349,931 349,931
688,186 688,186 Government National Mortgage Association, 5.5%, 10/15/19 717,712 717,712
935,892 935,892 Government National Mortgage Association, 5.5%, 10/15/33 956,768 956,768
747,238 747,238 Government National Mortgage Association, 5.5%, 10/15/33 763,906 763,906
498,744 498,744 Government National Mortgage Association, 5.5%, 10/15/34 509,644 509,644
1,498,291 1,498,291 Government National Mortgage Association, 5.5%, 10/15/34 1,531,036 1,531,036
2,496,884 2,496,884 Government National Mortgage Association, 5.5%, 11/15/34 2,551,453 2,551,453
4,993,201 4,993,201 Government National Mortgage Association, 5.5%, 11/15/34 5,102,327 5,102,327
5,189,211 5,189,211 Government National Mortgage Association, 5.5%, 11/20/34 5,297,744 5,297,744
1,570,376 1,570,376 Government National Mortgage Association, 6.00%, 04/15/17 1,655,271 1,655,271
1,451,008 1,451,008 Government National Mortgage Association, 6.0%, 02/15/17 1,529,449 1,529,449
4,592,656 4,592,656 Government National Mortgage Association, 6.0%, 12/15/23 4,796,433 4,796,433
1,124,602 1,124,602 Government National Mortgage Association, 6.00%, 02/15/29 1,169,172 1,169,172
918,069 918,069 Government National Mortgage Association, 6.00%, 03/15/19 959,951 959,951
643,901 643,901 Government National Mortgage Association, 6.00%, 03/15/19 673,276 673,276
327,409 327,409 Government National Mortgage Association, 6.00%, 05/15/16 345,109 345,109
704,621 704,621 Government National Mortgage Association, 6.00%, 06/15/16 742,713 742,713
1,032,924 1,032,924 Government National Mortgage Association, 6.00%, 06/15/31 1,072,620 1,072,620
1,656,909 1,656,909 Government National Mortgage Association, 6.00%, 12/15/23 1,730,426 1,730,426
142,682 142,682 Government National Mortgage Association, 6.0%, 1/15/24 148,829 148,829
508,122 508,122 Government National Mortgage Association, 6.0%, 1/15/33 526,961 526,961
1,856,267 1,856,267 Government National Mortgage Association, 6.0%, 1/15/33 1,943,777 1,943,777
1,839,593 1,839,593 Government National Mortgage Association, 6.0%, 1/15/33 1,929,032 1,929,032
776,056 776,056 Government National Mortgage Association, 6.0%, 1/15/33 805,364 805,364
1,301,544 1,301,544 Government National Mortgage Association, 6.0%, 1/20/33 1,348,174 1,348,174
806,566 806,566 Government National Mortgage Association, 6.0%, 2/15/33 836,471 836,471
1,270,626 1,270,626 Government National Mortgage Association, 6.0%, 2/15/33 1,317,737 1,317,737
829,040 829,040 Government National Mortgage Association, 6.0%, 2/15/33 859,779 859,779
1,271,272 1,271,272 Government National Mortgage Association, 6.0%, 2/15/33 1,318,406 1,318,406
183,150 183,150 Government National Mortgage Association, 6.0%, 2/15/33 189,941 189,941
493,780 493,780 Government National Mortgage Association, 6.0%, 3/15/33 512,088 512,088
983,001 983,001 Government National Mortgage Association, 6.0%, 3/15/33 1,019,448 1,019,448
282,033 282,033 Government National Mortgage Association, 6.0%, 3/15/33 292,490 292,490
938,669 938,669 Government National Mortgage Association, 6.0%, 3/15/34 973,528 973,528
477,551 477,551 Government National Mortgage Association, 6.0%, 4/15/33 495,258 495,258
1,540,687 1,540,687 Government National Mortgage Association, 6.0%, 4/15/33 1,615,823 1,615,823
1,285,170 1,285,170 Government National Mortgage Association, 6.0%, 5/15/17 1,354,220 1,354,220
516,290 516,290 Government National Mortgage Association, 6.0%, 5/15/33 535,433 535,433
1,925,917 1,925,917 Government National Mortgage Association, 6.0%, 6/15/34 1,997,440 1,997,440
460,133 460,133 Government National Mortgage Association, 6.0%, 7/20/19 483,328 483,328
484,531 484,531 Government National Mortgage Association, 6.0%, 8/15/34 502,966 502,966
996,345 996,345 Government National Mortgage Association, 6.0%, 8/15/34 1,033,346 1,033,346
1,048,463 1,048,463 Government National Mortgage Association, 6.0%, 9/15/32 1,087,925 1,087,925
1,299,105 1,299,105 Government National Mortgage Association, 6.0%, 9/15/32 1,348,000 1,348,000
598,877 598,877 Government National Mortgage Association, 6.0%, 9/15/33 621,082 621,082
484,003 484,003 Government National Mortgage Association, 6.0%, 9/15/34 501,977 501,977
36,888 36,888 Government National Mortgage Association, 6.0%, 10/15/28 38,368 38,368
219,742 219,742 Government National Mortgage Association, 6.0%, 10/15/32 228,013 228,013
527,704 527,704 Government National Mortgage Association, 6.0%, 10/15/32 547,566 547,566
1,855,763 1,855,763 Government National Mortgage Association, 6.0%, 10/15/32 1,925,611 1,925,611
1,420,575 1,420,575 Government National Mortgage Association, 6.0%, 10/15/32 1,474,043 1,474,043
1,197,357 1,197,357 Government National Mortgage Association, 6.0%, 10/15/32 1,249,675 1,249,675
800,810 800,810 Government National Mortgage Association, 6.0%, 10/15/32 830,950 830,950
708,506 708,506 Government National Mortgage Association, 6.0%, 10/15/32 735,172 735,172
1,497,224 1,497,224 Government National Mortgage Association, 6.0%, 10/15/34 1,552,826 1,552,826
499,065 499,065 Government National Mortgage Association, 6.0%, 10/15/34 517,598 517,598
405,309 405,309 Government National Mortgage Association, 6.0%, 10/15/34 420,361 420,361
1,486,651 1,486,651 Government National Mortgage Association, 6.0%, 10/20/33 1,544,987 1,544,987
1,473,436 1,473,436 Government National Mortgage Association, 6.0%, 11/15/32 1,529,960 1,529,960
1,680,350 1,680,350 Government National Mortgage Association, 6.0%, 11/15/32 1,749,703 1,749,703
251,347 251,347 Government National Mortgage Association, 6.0%, 11/15/32 260,807 260,807
270,915 270,915 Government National Mortgage Association, 6.0%, 11/15/32 281,111 281,111
1,646,153 1,646,153 Government National Mortgage Association, 6.0%, 11/15/32 1,718,230 1,718,230
3,495,077 3,495,077 Government National Mortgage Association, 6.0%, 11/15/32 3,637,502 3,637,502
1,242,974 1,242,974 Government National Mortgage Association, 6.0%, 11/15/33 1,289,060 1,289,060
1,378,302 1,378,302 Government National Mortgage Association, 6.0%, 12/15/32 1,438,161 1,438,161
581,020 581,020 Government National Mortgage Association, 6.0%, 12/15/32 606,460 606,460
1,403,866 1,403,866 Government National Mortgage Association, 6.0%, 12/15/32 1,472,226 1,472,226
904,016 904,016 Government National Mortgage Association, 6.0%, 12/15/32 939,725 939,725
205,924 205,924 Government National Mortgage Association, 6.0%, 12/15/32 213,675 213,675
514,375 514,375 Government National Mortgage Association, 6.0%, 12/15/32 536,826 536,826
397,963 397,963 Government National Mortgage Association, 6.0%, 12/15/32 412,942 412,942
1,334,446 1,334,446 Government National Mortgage Association, 6.0%, 12/15/32 1,392,940 1,392,940
2,393,020 2,393,020 Government National Mortgage Association, 6.5%, 02/15/17 2,553,042 2,553,042
262,349 262,349 Government National Mortgage Association, 6.50%, 01/15/15 279,892 279,892
333,425 333,425 Government National Mortgage Association, 6.50%, 02/15/29 351,553 351,553
1,727,672 1,727,672 Government National Mortgage Association, 6.50%, 03/15/33 1,819,446 1,819,446
417,557 417,557 Government National Mortgage Association, 6.50%, 05/15/31 440,001 440,001
900,961 900,961 Government National Mortgage Association, 6.50%, 07/15/14 961,487 961,487
543,783 543,783 Government National Mortgage Association, 6.50%, 09/15/16 580,146 580,146
114,662 114,662 Government National Mortgage Association, 6.5%, 1/15/32 120,808 120,808
1,272,907 1,272,907 Government National Mortgage Association, 6.5%, 1/15/32 1,343,359 1,343,359
302,961 302,961 Government National Mortgage Association, 6.5%, 1/15/32 319,201 319,201
210,038 210,038 Government National Mortgage Association, 6.5%, 1/15/32 221,297 221,297
559,568 559,568 Government National Mortgage Association, 6.5%, 2/15/28 590,162 590,162
442,466 442,466 Government National Mortgage Association, 6.5%, 2/15/32 466,183 466,183
355,659 355,659 Government National Mortgage Association, 6.5%, 2/15/32 374,724 374,724
155,157 155,157 Government National Mortgage Association, 6.5%, 2/15/32 163,474 163,474
232,171 232,171 Government National Mortgage Association, 6.5%, 2/15/32 244,617 244,617
433,830 433,830 Government National Mortgage Association, 6.5%, 2/15/32 457,085 457,085
93,113 93,113 Government National Mortgage Association, 6.5%, 2/15/32 98,105 98,105
665,108 665,108 Government National Mortgage Association, 6.5%, 3/15/28 701,867 701,867
260,089 260,089 Government National Mortgage Association, 6.5%, 3/15/29 274,130 274,130
434,291 434,291 Government National Mortgage Association, 6.5%, 3/15/29 457,736 457,736
848,761 848,761 Government National Mortgage Association, 6.5%, 3/15/32 894,258 894,258
241,645 241,645 Government National Mortgage Association, 6.5%, 4/15/17 257,757 257,757
186,780 186,780 Government National Mortgage Association, 6.5%, 4/15/28 196,992 196,992
356,792 356,792 Government National Mortgage Association, 6.5%, 4/15/28 376,382 376,382
1,133,091 1,133,091 Government National Mortgage Association, 6.5%, 4/15/32 1,193,829 1,193,829
158,610 158,610 Government National Mortgage Association, 6.5%, 4/15/32 167,112 167,112
259,515 259,515 Government National Mortgage Association, 6.5%, 4/15/32 273,426 273,426
183,977 183,977 Government National Mortgage Association, 6.5%, 4/15/33 193,717 193,717
728,284 728,284 Government National Mortgage Association, 6.5%, 4/15/33 766,841 766,841
223,928 223,928 Government National Mortgage Association, 6.5%, 4/20/31 235,439 235,439
92,632 92,632 Government National Mortgage Association, 6.5%, 5/15/29 97,633 97,633
166,685 166,685 Government National Mortgage Association, 6.5%, 5/15/32 175,620 175,620
120,912 120,912 Government National Mortgage Association, 6.5%, 5/15/32 127,393 127,393
86,180 86,180 Government National Mortgage Association, 6.5%, 5/15/32 90,799 90,799
799,640 799,640 Government National Mortgage Association, 6.5%, 5/15/32 842,504 842,504
179,846 179,846 Government National Mortgage Association, 6.5%, 6/15/17 191,837 191,837
109,241 109,241 Government National Mortgage Association, 6.5%, 6/15/28 115,246 115,246
85,855 85,855 Government National Mortgage Association, 6.5%, 6/15/29 90,490 90,490
78,264 78,264 Government National Mortgage Association, 6.5%, 6/15/31 82,459 82,459
72,881 72,881 Government National Mortgage Association, 6.5%, 6/15/31 76,787 76,787
27,936 27,936 Government National Mortgage Association, 6.5%, 6/15/31 29,433 29,433
222,941 222,941 Government National Mortgage Association, 6.5%, 6/15/31 234,889 234,889
83,054 83,054 Government National Mortgage Association, 6.5%, 6/15/32 87,506 87,506
126,745 126,745 Government National Mortgage Association, 6.5%, 6/15/32 133,539 133,539
240,399 240,399 Government National Mortgage Association, 6.5%, 6/15/32 254,109 254,109
550,380 550,380 Government National Mortgage Association, 6.5%, 7/15/31 579,876 579,876
714,338 714,338 Government National Mortgage Association, 6.5%, 7/15/32 752,629 752,629
205,080 205,080 Government National Mortgage Association, 6.5%, 7/15/32 216,073 216,073
181,356 181,356 Government National Mortgage Association, 6.5%, 8/15/28 191,271 191,271
155,440 155,440 Government National Mortgage Association, 6.5%, 8/15/31 163,770 163,770
512,357 512,357 Government National Mortgage Association, 6.5%, 8/15/32 540,700 540,700
561,575 561,575 Government National Mortgage Association, 6.5%, 8/15/32 591,677 591,677
251,777 251,777 Government National Mortgage Association, 6.5%, 9/15/31 265,270 265,270
319,881 319,881 Government National Mortgage Association, 6.5%, 9/15/31 337,024 337,024
513,361 513,361 Government National Mortgage Association, 6.5%, 9/15/32 540,879 540,879
314,403 314,403 Government National Mortgage Association, 6.5%, 10/15/28 331,593 331,593
23,306 23,306 Government National Mortgage Association, 6.5%, 10/15/31 24,555 24,555
22,689 22,689 Government National Mortgage Association, 6.5%, 10/15/33 23,891 23,891
351,574 351,574 Government National Mortgage Association, 6.5%, 12/15/31 370,415 370,415
655,040 655,040 Government National Mortgage Association, 6.75%, 04/15/26 695,161 695,161
179,190 179,190 Government National Mortgage Association, 7.0%, 1/15/30 190,666 190,666
182,472 182,472 Government National Mortgage Association, 7.0%, 1/15/31 193,946 193,946
257,720 257,720 Government National Mortgage Association, 7.0%, 2/15/28 274,350 274,350
159,729 159,729 Government National Mortgage Association, 7.0%, 2/15/31 169,774 169,774
252,840 252,840 Government National Mortgage Association, 7.0%, 2/15/32 268,718 268,718
225,879 225,879 Government National Mortgage Association, 7.0%, 3/15/28 240,455 240,455
582,030 582,030 Government National Mortgage Association, 7.0%, 3/15/32 618,582 618,582
265,111 265,111 Government National Mortgage Association, 7.0%, 4/15/28 282,218 282,218
252,980 252,980 Government National Mortgage Association, 7.0%, 4/15/29 269,098 269,098
102,963 102,963 Government National Mortgage Association, 7.0%, 4/15/31 109,437 109,437
273,818 273,818 Government National Mortgage Association, 7.0%, 4/15/32 291,015 291,015
272,685 272,685 Government National Mortgage Association, 7.0%, 5/15/29 290,059 290,059
61,396 61,396 Government National Mortgage Association, 7.0%, 5/15/31 65,257 65,257
143,102 143,102 Government National Mortgage Association, 7.0%, 6/15/29 152,219 152,219
96,973 96,973 Government National Mortgage Association, 7.0%, 6/15/31 103,071 103,071
369,573 369,573 Government National Mortgage Association, 7.0%, 7/15/25 394,805 394,805
283,281 283,281 Government National Mortgage Association, 7.0%, 7/15/28 301,662 301,662
128,852 128,852 Government National Mortgage Association, 7.0%, 7/15/29 137,061 137,061
744,950 744,950 Government National Mortgage Association, 7.0%, 9/15/24 795,892 795,892
142,484 142,484 Government National Mortgage Association, 7.0%, 9/15/29 151,562 151,562
285,315 285,315 Government National Mortgage Association, 7.0%, 9/15/31 303,257 303,257
384,494 384,494 Government National Mortgage Association, 7.0%, 10/15/16 409,634 409,634
73,071 73,071 Government National Mortgage Association, 7.0%, 10/15/31 77,665 77,665
124,277 124,277 Government National Mortgage Association, 7.0%, 11/15/26 132,594 132,594
251,945 251,945 Government National Mortgage Association, 7.0%, 11/15/29 267,997 267,997
69,038 69,038 Government National Mortgage Association, 7.0%, 11/15/31 73,379 73,379
332,574 332,574 Government National Mortgage Association, 7.00%, 01/15/28 354,085 354,085
305,491 305,491 Government National Mortgage Association, 7.00%, 06/15/27 325,443 325,443
453,267 453,267 Government National Mortgage Association, 7.00%, 07/15/28 482,585 482,585
84,239 84,239 Government National Mortgage Association, 7.00%, 08/15/11 89,767 89,767
114,849 114,849 Government National Mortgage Association, 7.00%, 09/15/11 122,385 122,385
20,736 20,736 Government National Mortgage Association, 7.00%, 12/15/26 22,117 22,117
478,171 478,171 Government National Mortgage Association, 7.00%, 12/15/30 508,501 508,501
219,417 219,417 Government National Mortgage Association, 7.50%, 03/15/23 237,313 237,313
406,426 406,426 Government National Mortgage Association, 7.50%, 03/15/27 437,542 437,542
208,508 208,508 Government National Mortgage Association, 7.50%, 04/15/23 225,514 225,514
97,011 97,011 Government National Mortgage Association, 7.50%, 05/15/10 103,347 103,347
297,651 297,651 Government National Mortgage Association, 7.50%, 05/15/23 321,927 321,927
13,330 13,330 Government National Mortgage Association, 7.50%, 06/15/24 14,383 14,383
31,578 31,578 Government National Mortgage Association, 7.50%, 07/15/25 34,045 34,045
109,314 109,314 Government National Mortgage Association, 7.50%, 08/15/11 116,521 116,521
28,272 28,272 Government National Mortgage Association, 7.50%, 08/15/25 30,481 30,481
72,291 72,291 Government National Mortgage Association, 7.50%, 09/15/25 77,938 77,938
43,938 43,938 Government National Mortgage Association, 7.50%, 09/15/25 47,371 47,371
59,960 59,960 Government National Mortgage Association, 7.50%, 10/15/11 63,913 63,913
294,987 294,987 Government National Mortgage Association, 7.50%, 10/15/23 319,046 319,046
167,286 167,286 Government National Mortgage Association, 7.50%, 10/15/29 179,779 179,779
26,292 26,292 Government National Mortgage Association, 7.50%, 12/15/25 28,346 28,346
173,053 173,053 Government National Mortgage Association, 7.5%, 1/15/32 185,852 185,852
200,535 200,535 Government National Mortgage Association, 7.5%, 2/15/27 215,848 215,848
50,964 50,964 Government National Mortgage Association, 7.5%, 2/15/31 54,736 54,736
118,601 118,601 Government National Mortgage Association, 7.5%, 3/15/31 127,379 127,379
181,919 181,919 Government National Mortgage Association, 7.5%, 3/15/32 195,374 195,374
104,337 104,337 Government National Mortgage Association, 7.5%, 6/15/29 112,114 112,114
27,745 27,745 Government National Mortgage Association, 7.5%, 6/15/30 29,801 29,801
42,781 42,781 Government National Mortgage Association, 7.5%, 8/15/29 45,958 45,958
24,707 24,707 Government National Mortgage Association, 7.5%, 8/15/29 26,542 26,542
616,538 616,538 Government National Mortgage Association, 7.5%, 9/15/29 662,318 662,318
13,007 13,007 Government National Mortgage Association, 7.5%, 9/15/30 13,971 13,971
427,841 427,841 Government National Mortgage Association, 7.5%, 10/15/27 460,511 460,511
249,964 249,964 Government National Mortgage Association, 7.5%, 11/15/30 268,491 268,491
16,113 16,113 Government National Mortgage Association, 7.5%, 11/15/32 17,305 17,305
256,484 256,484 Government National Mortgage Association, 7.5%, 12/15/31 275,466 275,466
306,909 306,909 Government National Mortgage Association, 8.0%, 12/15/29 333,280 333,280
397,934 397,934 Government National Mortgage Association, 8.00%, 07/15/29 432,255 432,255
123 123 Government National Mortgage Association, 8.50%, 02/15/23 135 135
4,005 4,005 Government National Mortgage Association, 8.50%, 08/15/21 4,411 4,411
14,711 14,711 Government National Mortgage Association, 8.50%, 11/15/20 16,209 16,209
428,602 428,602 Government National Mortgage Association, 8.25%, 5/15/20 469,862 469,862
84,496 84,496 Government National Mortgage Association, 8.5%, 7/15/24 92,647 92,647
9,838 9,838 Government National Mortgage Association, 9.0%, 4/15/20 11,051 11,051
1,485 1,485 Government National Mortgage Association, 9.0%, 9/15/16 1,661 1,661
5,247 5,247 Government National Mortgage Association, 9.0%, 10/15/16 5,871 5,871
23,755 23,755 Government National Mortgage Association, 9.00%, 01/15/20 26,710 26,710
1,593 1,593 Government National Mortgage Association, 9.00%, 01/15/22 1,793 1,793
21,215 21,215 Government National Mortgage Association, 9.00%, 02/15/21 23,880 23,880
4,282 4,282 Government National Mortgage Association, 9.00%, 03/15/20 4,814 4,814
3,590 3,590 Government National Mortgage Association, 9.00%, 04/15/22 4,041 4,041
6,179 6,179 Government National Mortgage Association, 9.00%, 06/15/18 6,932 6,932
5,628 5,628 Government National Mortgage Association, 9.00%, 06/15/22 6,335 6,335
4,059 4,059 Government National Mortgage Association, 9.00%, 08/15/18 4,554 4,554
2,843 2,843 Government National Mortgage Association, 9.00%, 09/15/21 3,200 3,200
4,000 4,000 Government National Mortgage Association, 9.00%, 09/15/21 4,502 4,502
3,765 3,765 Government National Mortgage Association, 9.00%, 09/15/22 4,238 4,238
7,832 7,832 Government National Mortgage Association, 9.00%, 10/15/21 8,816 8,816
10,131 10,131 Government National Mortgage Association, 9.00%, 12/15/19 11,382 11,382
11,523 11,523 Government National Mortgage Association, 9.50%, 02/15/19 13,014 13,014
2,967 2,967 Government National Mortgage Association, 9.50%, 05/15/18 3,350 3,350
6,500 6,500 Government National Mortgage Association, 9.50%, 05/15/20 7,343 7,343
17,210 17,210 Government National Mortgage Association, 9.50%, 06/15/19 19,437 19,437
14,039 14,039 Government National Mortgage Association, 9.50%, 08/15/21 15,869 15,869
283 283 Government National Mortgage Association, 9.50%, 09/15/20 320 320
24,050 24,050 Government National Mortgage Association, 9.50%, 09/15/20 27,168 27,168
8,248 8,248 Government National Mortgage Association, 9.50%, 11/15/20 9,318 9,318
9,066 9,066 Government National Mortgage Association, 9.50%, 11/15/20 10,242 10,242
113,003 113,003 Government National Mortgage Association, 10.0%, 1/15/19 125,946 125,946
57,931 57,931 Government National Mortgage Association, 10.0%, 3/15/20 64,620 64,620
910 910 Government National Mortgage Association, 10.0%, 11/15/18 1,013 1,013
279,032 279,032 Government National Mortgage Association I, 6.5%, 5/15/32 293,990 293,990
366,321 366,321 Government National Mortgage Association I, 6.5%, 9/15/32 385,957 385,957
414,029 414,029 Government National Mortgage Association I, 6.5%, 11/15/31 436,218 436,218
154,625 154,625 Government National Mortgage Association I, 7.0%, 12/15/30 164,363 164,363
315,893 315,893 Government National Mortgage Association I, 7.0%, 12/15/30 335,786 335,786
289,673 289,673 Government National Mortgage Association I, 7.5%, 8/15/23 309,482 309,482
4,184,281 4,184,281 Government National Mortgage Association II, 5.00%, 04/20/18 4,280,202 4,280,202
2,589,585 2,589,585 Government National Mortgage Association II, 5.00%, 05/20/18 2,648,653 2,648,653
892,666 892,666 Government National Mortgage Association II, 5.0%, 2/20/19 912,301 912,301
878,394 878,394 Government National Mortgage Association II, 5.0%, 12/20/18 898,256 898,256
1,310,599 1,310,599 Government National Mortgage Association II, 5.50%, 02/20/32 1,340,088 1,340,088
498,462 498,462 Government National Mortgage Association II, 5.50%, 08/20/16 518,555 518,555
842,940 842,940 Government National Mortgage Association II, 5.50%, 12/20/17 876,836 876,836
3,171,697 3,171,697 Government National Mortgage Association II, 5.5%, 2/20/34 3,238,033 3,238,033
5,923,896 5,923,896 Government National Mortgage Association II, 5.5%, 3/20/34 6,047,793 6,047,793
2,627,984 2,627,984 Government National Mortgage Association II, 5.5%, 7/20/19 2,732,533 2,732,533
578,020 578,020 Government National Mortgage Association II, 6.0%, 2/20/19 607,158 607,158
2,365,437 2,365,437 Government National Mortgage Association II, 6.0%, 3/20/33 2,450,183 2,450,183
1,868,919 1,868,919 Government National Mortgage Association II, 6.0%, 6/20/34 1,935,989 1,935,989
375,666 375,666 Government National Mortgage Association II, 6.0%, 7/20/17 394,678 394,678
339,349 339,349 Government National Mortgage Association II, 6.0%, 10/20/31 351,875 351,875
1,234,726 1,234,726 Government National Mortgage Association II, 6.0%, 11/20/31 1,280,304 1,280,304
7,236,574 7,236,574 Government National Mortgage Association II, 6.0%, 11/20/33 7,495,838 7,495,838
950,152 950,152 Government National Mortgage Association II, 6.0%, 12/20/18 998,311 998,311
4,252,925 4,252,925 Government National Mortgage Association II, 6.0%, 12/20/33 4,405,222 4,405,222
1,182,755 1,182,755 Government National Mortgage Association II, 6.00%, 09/20/17 1,242,993 1,242,993
200,416 200,416 Government National Mortgage Association II, 6.5%, 1/20/24 211,611 211,611
801,383 801,383 Government National Mortgage Association II, 6.5%, 3/20/34 842,021 842,021
153,797 153,797 Government National Mortgage Association II, 6.5%, 6/20/31 161,702 161,702
613,509 613,509 Government National Mortgage Association II,
6.5%, 8/20/28 645,882 645,882
695,553 695,553 Government National Mortgage Association II,
6.5%, 10/20/32 731,313 731,313
788,980 788,980 Government National Mortgage Association II,
6.5%, 10/20/33 829,021 829,021
168,598 168,598 Government National Mortgage Association II,
7.0%, 1/20/31 178,620 178,620
77,321 77,321 Government National Mortgage Association II,
7.0%, 3/20/31 81,917 81,917
113,112 113,112 Government National Mortgage Association II,
7.0%, 5/20/26 120,217 120,217
301,674 301,674 Government National Mortgage Association II,
7.0%, 7/20/31 319,606 319,606
113,900 113,900 Government National Mortgage Association II,
7.0%, 11/20/32 120,671 120,671
34,354 34,354 Government National Mortgage Association II,
7.0%, 12/20/08 35,981 35,981
84,374 84,374 Government National Mortgage Association II,
7.00%, 02/20/29 89,489 89,489
277,041 277,041 Government National Mortgage Association II,
7.00%, 06/20/28 294,010 294,010
291,871 291,871 Government National Mortgage Association II,
7.00%, 08/20/27 309,929 309,929
161,200 161,200 Government National Mortgage Association II,
7.50%, 05/20/30 172,484 172,484
192,461 192,461 Government National Mortgage Association II,
7.50%, 07/20/30 205,934 205,934
203,104 203,104 Government National Mortgage Association II,
7.50%, 08/20/30 217,322 217,322
133,040 133,040 Government National Mortgage Association II,
7.50%, 09/20/15 141,397 141,397
47,442 47,442 Government National Mortgage Association II,
7.5%, 6/20/30 50,750 50,750
74,048 74,048 Government National Mortgage Association II,
7.5%, 12/20/30 79,211 79,211
303,189 303,189 Government National Mortgage Association II,
8.00%, 04/20/30 327,917 327,917
164,655 164,655 Government National Mortgage Association II,
8.00%, 05/20/30 178,084 178,084
202,770 202,770 Government National Mortgage Association II,
8.00%, 06/20/30 219,307 219,307
104,322 104,322 Government National Mortgage Association II,
8.0%, 3/20/30 112,801 112,801
659 659 Government National Mortgage Association II,
8.0%, 5/20/25 716 716
48,586 48,586 Government National Mortgage Association II,
9.0%, 3/20/22 54,438 54,438
6,724 6,724 Government National Mortgage Association II,
9.0%, 4/20/22 7,533 7,533
16,769 16,769 Government National Mortgage Association II,
9.0%, 9/20/21 18,785 18,785
101,579 101,579 Government National Mortgage Association II,
9.0%, 11/20/24 113,697 113,697
1,797 1,797 Government National Mortgage Association II,
10.0%, 1/20/06 1,867 1,867
3,200,000 3,200,000 U.S. Treasury Bonds, 6.25%, 08/15/23 3,747,376 3,747,376
800,000 800,000 U.S. Treasury Bonds, 6.25%, 8/15/23 936,594 936,594
250,000 250,000 U.S. Treasury Bonds, 6.5%, 11/15/26 303,721 303,721
10,270,000 10,270,000 U.S. Treasury Bonds, 7.25%, 5/15/16 12,855,154 12,855,154
500,000 500,000 U.S. Treasury Bonds, 8.75%, 5/15/20 721,270 721,270
3,100,000 3,100,000 U.S. Treasury Bonds, 10.0%, 5/15/10 3,182,342 3,182,342
1,500,000 1,500,000 U.S. Treasury Notes, 1.125%, 6/30/05 1,489,921 1,489,921
1,000,000 1,000,000 U.S. Treasury Notes, 1.625%, 4/30/05 997,538 997,538
5,000,000 5,000,000 U.S. Treasury Notes, 3.25%, 08/15/07 5,008,950 5,008,950
3,500,000 3,500,000 U.S. Treasury Notes, 3.5%, 11/15/06 3,529,533 3,529,533
3,000,000 3,000,000 U.S. Treasury Notes, 4.0%, 11/15/12 2,994,960 2,994,960
650,000 650,000 U.S. Treasury Notes, 4.75%, 11/15/08 680,799 680,799
1,950,000 1,950,000 U.S. Treasury Notes, 4.75%, 5/15/14 2,032,113 2,032,113
1,750,000 1,750,000 U.S. Treasury Notes, 5.5%, 2/15/08 1,864,707 1,864,707
2,000,000 2,000,000 U.S. Treasury Notes, 5.5%, 8/15/28 2,164,688 2,164,688
4,500,000 4,500,000 U.S. Treasury Notes, 5.625%, 02/15/06 4,640,630 4,640,630
3,300,000 3,300,000 U.S. Treasury Notes, 5.75%, 11/15/05 3,384,563 3,384,563
250,000 250,000 U.S. Treasury Notes, 6.125%, 8/15/29 293,516 293,516
1,100,000 1,100,000 U.S. Treasury Notes, 6.25%, 2/15/07 1,170,813 1,170,813
5,525,000 5,525,000 U.S. Treasury Notes, 6.375%, 8/15/27 6,634,315 6,634,315
13,800,000 13,800,000 U.S. Treasury Notes, 6.5%, 2/15/10 15,623,642 15,623,642
2,000,000 2,000,000 U.S. Treasury Notes, 6.625%, 5/15/07 2,157,578 2,157,578
----------------------------------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS $234,633,889 $171,617,329 $406,251,218
----------------------------------------
Shares Shares Shares MONEY MARKET MUTUAL FUNDS 1.67%
5,675,061 5,675,061 AIM TREASURY $ $ 5,675,061 $ 5,675,061
1,838,462 1,838,462 AmSouth Treasury Reserve Money Market Fund 1,838,462 1,838,462
----------------------------------------
TOTAL MONEY MARKET MUTUAL FUNDS $ $ 7,513,523 $ 7,513,523
----------------------------------------
Principal Principal Principal
Amount Amount Amount TEMPORARY CASH INVESTMENT 0.69%
Repurchase Agreement 0.69%
$3,100,000 $3,100,000 UBS Warburg, Inc., 1.00%, dated 12/31/04,
repurchase price of 3,100,000 plus
accrued interest on 1/3/05 collateralized
by $3,089,000 U.S. Treasury Bill, 6.75%,
5/15/05 $ 3,100,000 $ $ 3,100,000
----------------------------------------
TOTAL TEMPORARY CASH INVESTMENT $ 3,100,000 $ $ 3,100,000
----------------------------------------
TOTAL INVESTMENTS IN SECURITIES 99.51% $242,542,210 $206,103,978 $448,646,188
----------------------------------------
OTHER ASSETS AND LIABILITIES 0.49% $ 760,431 $ 1,450,206 $ 2,210,637
----------------------------------------
TOTAL NET ASSETS 100.00% $243,302,641 $207,554,184 $450,856,825
========================================
Investments at Cost $240,840,583 $200,582,029 $441,422,612
========================================
(a) No adjustments are shown to the unaudited pro forma combined schedule of
investments due to the fact that upon consumation of the merger no
securities would need to be sold in order for Pioneer America Income Trust
to comply with its prospectus restrictions. The foregoing sentence shall
not restrict in any way the ability of the investment adviser of the funds
from buying or selling securities in the normal course of such fund's
business and operations.
The accompanying notes are an integral part of these pro forma financial
statements.
Pioneer America Income Trust Fund
Pro Forma Statement of Assets and Liabilities
December 31, 2004
(unaudited) (Amounts in Thousands, except for per share data)
Pioneer AmSouth
America Income Government Pro Forma Pro Forma
Trust Income Fund Adjustments Combined
-------------- ----------- ----------- ---------
ASSETS:
Investment in securities (Cost $240,841
and $200,582, respectively) $242,542 $206,104 $ $448,646
Cash 47 - 47
Receivables -
Fund shares sold 444 - 444
Interest 1,680 1,610 3,290
Due from Pioneer Investment Management, Inc. 4 - 4
Other 6 57 63
-------- -------- --------
Total assets $244,723 $207,771 $ $452,494
-------- -------- --------
LIABILITIES:
Payables -
Investment securities purchased $ 503 $ - $ $ 503
Fund shares repurchased 411 111 522
Dividends 154 - 154
Due to affiliates 270 70 340
Accrued expenses 82 36 118
-------- -------- --------
Total liabilities $ 1,420 $ 217 $ $ 1,637
-------- -------- --------
NET ASSETS:
Paid-in capital $253,478 $202,389 $ $455,867
Distribtuions in excess of net investment income (1,304) (1,102) (2,406)
Accumulated net realized loss on investments (10,573) 745 (9,828)
Net unrealized gain on investments 1,702 5,522 7,224
-------- -------- --------
Total net assets $243,303 $207,554 $ $450,857
======== ======== ========
OUTSTANDING SHARES:
(No par value, unlimited number of shares authorized)
Class A 12,614 1,697 7 (a) 14,318
======== ======== ========
Class B 4,071 686 6 (a) 4,763
======== ======== ========
Class C 2,849 - 2,849
======== ======== ========
Investor Class 5,257 - 5,257
======== ======== ========
Class I - 18,725 (18,725)(a) -
======== ======== ========
Class R 84 - 84
======== ======== ========
Class Y - - 18,802 (a) 18,802
======== ======== ========
NET ASSET VALUE PER SHARE:
Class A $ 9.79 $ 9.83 $ 9.79
======== ======== ========
Class B $ 9.74 $ 9.83 $ 9.74
======== ======== ========
Class C $ 9.77 $ - $ 9.77
======== ======== ========
Investor Class $ 9.79 $ - $ 9.79
======== ======== ========
Class I $ - $ 9.83 $ -
======== ======== ========
Class R $ 9.89 $ - $ 9.89
======== ======== ========
Class Y $ - $ - $ 9.79
======== ======== ========
MAXIMUM OFFERING PRICE:
Class A $ 10.25 $ $ $ 10.25
======== ======== ========
(a) Class A, Class B, and Class I shares of AmSouth Government Income Fund are
exchanged for Class A, Class B, and newly created Class Y shares of Pioneer
America Income Trust, to be established upon consummation of the merger.
Initial per share values of Class Y shares are presumed to equal Class A
shares.
Pioneer America Income Trust Fund
Pro Forma Statement of Operations
For the Year Ended December 31, 2004
(unaudited) (Amounts in Thousands)
Pioneer AmSouth
America Income Government Pro Forma Pro Forma
Trust Income Fund Adjustments Combined
-------------- ----------- ----------- ---------
INVESTMENT INCOME:
Interest $9,079 $10,747 $19,826
------ ------- -------
Total investment income $9,079 $10,747 $19,826
------ ------- -------
EXPENSES:
Management fees $1,080 $ 1,532 $ (344)(c) $ 2,268
Transfer agent fees and expenses - 54 (54)(c) -
Class A 404 - 53 (c) 457
Class B 167 - 27 (c) 194
Class C 88 - - 88
Class R 1 - - 1
Class Y - - 22 (c) 22
Investor Class 11 - - 11
Distribution fees
Class A 337 45 (1)(c) 381
Class B 461 77 (1)(c) 537
Class C 314 - - 314
Class R 3 - - 3
Class I 321 (321)(c) -
Administrative reimbursements 70 549 (494)(c) 125
Custodian fees 19 66 (42)(c) 43
Registration fees 74 23 97
Professional fees 52 49 (49)(a) 52
Printing expense 20 17 37
Fees and expenses of nonaffiliated trustees 4 9 (9)(a) 4
Miscellaneous 3 29 32
------ ------- -------- -------
Total expenses $3,108 $ 2,771 $(1,213) $ 4,666
Less management fees waived and expenses
reimbursed by PIM (7) (640) 640 (b) (7)
Less fees paid indirectly (3) - - (3)
------ ------- -------- -------
Net expenses $3,098 $ 2,131 $ (573) $ 4,656
------ ------- -------- -------
Net investment income $5,981 $ 8,616 $ 573 $15,170
------ ------- -------- -------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments $ (285) $ 2,459 $ 2,174
Change in net unrealized gain (loss) on investments (509) 5,522 5,013
------ ------- -------
Net gain (loss) on investments $ (794) $ 7,981 $ 7,187
------ ------- -------- -------
Net increase in net assets resulting from operations $5,187 $16,597 $ 573 $22,357
====== ======= ======== =======
(a) Reflects reduction in expenses due to elimination of duplicate services.
(b) Expense limitation conformed to Pioneer America Income Trust's management
contract.
(c) Reflects change is fee structure to conform with Pioneer America Income
Trust's management, transfer agent and distribution plan agreements.
See accompanying notes to pro forma financial statements.
Pioneer America Income Trust
PRO FORMA NOTES TO COMBINING FINANCIAL STATEMENTS
12/31/04
(Unaudited)
1. Description of the Trust
Pioneer America Income Trust (the Trust), is a Massachusetts statutory trust
registered under the Investment Company Act of 1940 as a diversified, open-end
management investment company. The investment objective of the Trust is to
provide a high level of current income consistent with preservation of capital
and prudent investment risk.
The Trustees have authorized the issuance of five classes of shares of the
Trust. After the merger, the Trust will offer six classes of shares - Class A,
Class B, Class C, Investor Class, Class R and Class Y shares. Class Y shares are
being offered as part of the acquisition. Class R shares were first publicly
offered on April 1, 2003. Investor Class shares were first publicly offered on
December 10, 2004. The Trust is not offering additional Investor Class shares
except in connection with the reinvestment of dividends on the Trust's
outstanding Investor Class shares. Each class of shares represents an interest
in the same portfolio of investments of the Trust and have equal rights to
voting, redemptions, dividends and liquidations, except that each class of
shares can bear different transfer agent and distribution fees and has exclusive
voting rights with respect to the distribution plans that have been adopted by
Class A, Class B, Class C, and Class R shareowners, respectively. There is no
distribution plan for Class Y shares and Investor Class shares.
2. Basis of Combination
The accompanying pro forma combining financial statements, and related notes,
are presented to show the effect of the proposed acquisition (the "acquisition")
of AmSouth Government Income Fund by the Trust, as if such acquisition had taken
place as of January 1, 2004.
Under the terms of an Agreement and Plan of Reorganization (the
"Reorganization") between these two Trusts, the combination of the Trust and
AmSouth Government Income 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 will be accomplished
by an acquisition of the net assets of AmSouth Government Income Fund in
exchange for shares of the Trust at their net asset values. The accompanying
schedules of investments, statements of assets and liabilities and the related
statements of operations of the Trust and AmSouth Government Income Fund have
been combined as of and for the most recent fiscal year ended December 31, 2004.
Following the acquisition, the Trust will be the accounting survivor. All
related acquisition costs will be borne by the Advisors.
These pro forma financial statements and related notes should be read in
conjunction with the financial statements of the Trust and AmSouth Government
Income Fund included in their annual reports to shareowners dated December 31,
2004 and July 31, 2004, respectively. Adjustments have been made to expenses for
Pioneer affiliate contractual rates and duplicate services that would not have
been incurred if the merger took place on January 1, 2004.
3. Security Valuation
Security transactions are recorded as of trade date. Securities are valued at
prices supplied by independent pricing services, which consider such factors as
Treasury spreads, yields, maturities and ratings. Valuations may be supplemented
by dealers and other sources, as required. Securities for which market
quotations are not readily available are valued at their fair values as
determined by, or under the direction of the Board of Trustees. Principal
amounts of mortgage-backed securities are adjusted for monthly paydowns.
Premiums and discounts related to certain mortgage-backed securities are
amortized or accreted in proportion to the underlying monthly paydowns.
Securities for which there are no other readily available valuation methods are
valued at their fair values as determined by, or under the direction of the
Board of Trustees. As of December 31, 2004, there were no securities fair
valued. All discounts/premiums on debt securities are accreted/amortized for
financial reporting purposes. Interest income is recorded on the accrual basis.
Temporary cash investments are valued at amortized cost.
4. Capital Shares
The pro forma net asset value per share assumes the issuance of shares of the
Trust that would have been issued at December 31, 2004, in connection with the
proposed acquisition. The number
of shares assumed to be issued is equal to the net asset value of shares of
AmSouth Government Income Fund, as of December 31, 2004, divided by the net
asset value per share of the Trust's shares as of December 31, 2004. The pro
forma number of shares outstanding, by class, for the combined Trust consists of
the following at December 31, 2004:
- --------------------------------------------------------------------------------------
Shares of Additional Shares Total Outstanding
The Trust Assumed Issued Shares
Class of Shares Pre-Combination In Reorganization Post-Combination
- --------------------------------------------------------------------------------------
Class A 12,614 1,704 14,318
- --------------------------------------------------------------------------------------
Class B 4,071 692 4,763
- --------------------------------------------------------------------------------------
Class C 2,849 2,849
- --------------------------------------------------------------------------------------
Class R 84 84
- --------------------------------------------------------------------------------------
Class Y 0 18,802 18,802
- --------------------------------------------------------------------------------------
Investor Class 5,257 5,257
- --------------------------------------------------------------------------------------
5. Federal Income Taxes
Each Trust has elected to be taxed as a "regulated investment company"
under the Internal Revenue Code. After the acquisition, it will continue to
be the Trust's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its taxable income and net realized capital gains, if any, to its
shareowners. Therefore, no federal income tax provision is required.
The identified cost of investments for these Trusts is substantially the
same for both financial and federal income tax purposes. The cost of
investments will remain unchanged for the combined Trust.
PART C
OTHER INFORMATION
PIONEER AMERICA INCOME TRUST
ITEM 15. INDEMNIFICATION
No change from the information set forth in Item 25 of the most recently filed
Registration Statement of Pioneer America Income Trust (the "Registrant") on
Form N-1A under the Securities Act of 1933 and the Investment Company Act of
1940 (File Nos. 33-20795 and 811-05516), as filed with the Securities and
Exchange Commission on April 29, 2005 (Accession No. 0001016964-05-000186),
which information is incorporated herein by reference.
ITEM 16. EXHIBITS
(1)(a) Amended and Restated Declaration of Trust (1)
(1)(b) Amendment to Amended and Restated Declaration of Trust to establish Investor (6)
Class Shares
(2) By-Laws (2)
(3) Not applicable
(4) Form of Agreement and Plan of Reorganization (8)
(5) Reference is made to Exhibits (1) and (2) hereof
(6)(a) Management Contract (3)
(6)(b) Expense Limitation Agreement for Investor Class shares (7)
(7)(a) Underwriting Agreement with Pioneer Funds Distributor, Inc. (3)
(7)(b) Dealer Sales Agreement (5)
(8) Not applicable
(9) Custodian Agreement with Brown Brothers Harriman & Co. (7)
(10)(a) Multiple Class Plan Pursuant to Rule 18f-3 (7)
(10)(b) Class A Shares Distribution Plan (3)
(10)(c) Class B Shares Distribution Plan (3)
(10)(d) Class C Shares Distribution Plan (2)
(10)(e) Class R Shares Distribution Plan (4)
(10)(f) Class R Shares Service Plan (4)
(11) Opinion of Counsel (legality of securities being offered) (*)
(12) Form of Opinion as to Tax Matters and Consent (*)
(13)(a) Investment Company Service Agreement (7)
(13)(b) Administration Agreement (7)
(14) Consent(s) of Independent Registered Public Accounting Firm (*)
(15) Not applicable
(16) Powers of Attorney (7)
(17)(a) Code of Ethics (7)
(17)(b) Form of Proxy Card (*)
(1) Previously filed. Incorporated herein by reference from the exhibits filed
with Post-Effective Amendment No. 9 to the Registrant's Registration Statement
on Form N-1A (File Nos. 33-20795; 811-05516), as filed with the Securities and
Exchange Commission on April 27, 1995 (Accession no. 0000831120-95-000006).
(2) Previously filed. Incorporated herein by reference from the exhibits filed
with Post-Effective Amendment No. 10 to the Registrant's Registration Statement
on Form N-1A (File Nos. 33-20795; 811-05516), as filed with the Securities and
Exchange Commission on April 22, 1996 (Accession no. 0000831120-96-000005).
(3) Previously filed. Incorporated herein by reference from the exhibits filed
with Post-Effective Amendment No. 19 to the Registrant's Registration Statement
on Form N-1A (File Nos. 33-20795; 811-05516), as filed with the Securities and
Exchange Commission on May 1, 2002 (Accession no. 0000831120-02-000041).
(4) Previously filed. Incorporated herein by reference from the exhibits filed
with Post-Effective Amendment No. 20 to the Registrant's Registration Statement
on Form N-1A (File Nos. 33-20795; 811-05516), as filed with the Securities and
Exchange Commission on February 18, 2003 (Accession no. 0000831120-03-000003).
(5) Previously filed. Incorporated herein by reference from the exhibits filed
with Post-Effective Amendment No. 22 to the Registrant's Registration Statement
on Form N-1A (File Nos. 33-20795; 811-05516), as filed with the Securities and
Exchange Commission on April 29, 2004 (Accession no. 0001016964-04-000116).
(6) Previously filed. Incorporated herein by reference from the exhibits filed
with the Registrant's Registration Statement on Form N-14 (File No. 333-118424),
as filed with the Securities and Exchange Commission on August 20, 2004
(Accession no. 0001145443-04-001266).
(7) Previously filed. Incorporated herein by reference from the exhibits filed
with Post-Effective Amendment No. 25 to the Registrant's Registration Statement
on Form N-1A (File Nos. 33-20795; 811-05516), as filed with the Securities and
Exchange Commission on April 29, 2005 (Accession no. 0001016964-05-000186).
(8)) Filed herewith as Exhibit A to the Proxy Statement and Prospectus included
as Part A of this Registration Statement.
(*) Filed herewith.
ITEM 17. UNDERTAKINGS.
(1) The undersigned Registrant agrees that prior to any public reoffering
of the securities registered through the use of a prospectus which is part of
this Registration Statement by any person or party which is deemed to be an
underwriter within the meaning of Rule 145(c) of the Securities Act of 1933, the
reoffering prospectus will contain the information called for by the applicable
registration form for the 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 undersigned 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 Securities Act of 1933, 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.
(3) The undersigned Registrant agrees that it shall file a final executed
version of the legal and consent opinion as to tax matters as an exhibit to the
subsequent post-effective amendment to its registration statement on Form N-1A
filed with the SEC after the consummation of the reorganization contemplated by
this Registration Statement on Form N-14.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement on Form N-14 has been signed on behalf of the
Registrant, in the City of Boston and the Commonwealth of Massachusetts, on the
1st day of July, 2005.
Pioneer America Income Trust
By: /s/ Osbert M. Hood
-------------------------------
Osbert M. Hood
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 dates indicated.
Signature Title Date
/s/ John F. Cogan, Jr. Chairman of the Board, Trustee, July 1, 2005
- --------------------------- and President
John F. Cogan, Jr.
/s/ Vincent Nave Chief Financial Officer, July 1, 2005
- --------------------------- Principal Accounting
Vincent Nave Officer, and Treasurer
*
- ---------------------------
Mary K. Bush Trustee
*
- ---------------------------
David R. Bock Trustee
*
- ---------------------------
Margaret B.W. Graham Trustee
/s/ Osbert M. Hood July 1, 2005
- ---------------------------
Osbert M. Hood Trustee
*
- ---------------------------
Marguerite A. Piret Trustee
*
- ---------------------------
Steven K. West Trustee
*
- ---------------------------
John Winthrop Trustee
* By: /s/ Osbert M. Hood July 1, 2005
--------------------------------
Osbert M. Hood, Attorney-in-Fact
EXHIBIT INDEX
The following exhibits are filed as part of this Registration Statement:
Exhibit No. Description
(11) Opinion of Counsel (legality of securities being offered)
(12) Form of Opinion as to Tax Matters and Consent
(14) Consents of Independent Registered Public Accounting Firm
(17)(b) Form of Proxy Card