As filed with the Securities and Exchange Commission on August 18, 2005
File No. 333-126370
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. 1
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Post-Effective Amendment No.
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(Check appropriate box or boxes)
PIONEER IBBOTSON ASSET ALLOCATION SERIES
(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.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment, which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall be effective on
such date as the Commission, acting pursuant to Section 8(a), may determine.
COMBINED PROXY STATEMENT OF
AMSOUTH FUNDS
on behalf of its Series:
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
(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 CLASSIC BALANCED FUND
PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND
PIONEER IBBOTSON GROWTH ALLOCATION FUND
PIONEER IBBOTSON MODERATE ALLOCATION 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 SEPTEMBER 22, 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 AmSouth Bank, AmSouth Center, 1900
Fifth Avenue North, Birmingham, AL 35203, on Thursday, September 22, 2005 at
9:00 a.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. 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. The Pioneer Fund also
will assume, in the case of reorganizations into Pioneer Funds that
have previously commenced investment operations, 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 and,
in the case of newly organized Pioneer Funds, all of your AmSouth
Fund's liabilities. 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 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 July 29, 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,
/s/ Michael C. Daniel
Michael C. Daniel
President
[ ], 2005
COMBINED PROXY STATEMENT OF
AMSOUTH FUNDS
on behalf of its Series:
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
(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 CLASSIC BALANCED FUND
PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND
PIONEER IBBOTSON GROWTH ALLOCATION FUND
PIONEER IBBOTSON MODERATE ALLOCATION 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
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.
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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 AmSouth Bank, AmSouth Center, 1900 Fifth Avenue North,
Birmingham, AL 35203, on Thursday, September 22, 2005 at 9:00 a.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 a Delaware statutory 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
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PROPOSAL 1(a) AmSouth Balanced Fund Pioneer Classic Balanced AmSouth Balanced Fund shareholders 8
Fund
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PROPOSAL 1(b) AmSouth Strategic Pioneer Ibbotson AmSouth Strategic Portfolios: Aggressive Growth 22
Portfolios: Aggressive Aggressive Allocation Portfolio shareholders
Growth Portfolio Fund
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PROPOSAL 1(c) AmSouth Strategic Pioneer Ibbotson Growth AmSouth Strategic Portfolios: Growth Portfolio 48
Portfolios: Growth Allocation Fund shareholders
Portfolio
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PROPOSAL 1(d) AmSouth Strategic Pioneer Ibbotson AmSouth Strategic Portfolios: Growth and Income 73
Portfolios: Growth and Moderate Allocation Fund Portfolio shareholders
Income Portfolio
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PROPOSAL 1(e) AmSouth Strategic Pioneer Ibbotson AmSouth Strategic Portfolios: Moderate Growth 99
Portfolios: Moderate Moderate Allocation Fund and Income Portfolio shareholders
Growth and Income
Portfolio
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Where to Get More Information
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The AmSouth Funds' prospectus dated December 1, 2004, Available to you free of charge by calling 1-800-451-8382.
as supplemented January 12, 2005, April 26, 2005, Each prospectus is also on file with the SEC.
June 1, 2005, June 27, 2005 and July 1, 2005.
Available to you free of charge by calling 1-800-451-8382.
The AmSouth Funds' statement of additional information Each statement of additional information is also on file
dated December 1, 2004, as supplemented March 22, with the SEC.
2005.
Available to you free of charge by calling 1-800-451-8382.
The AmSouth Funds' annual report dated July 31, 2004 Also on file with the SEC. See "Available Information."
and semiannual report dated January 31, 2005.
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Each Pioneer Fund's current prospectus and each Pioneer Available to you free of charge by calling 1-800-225-6292.
Fund's most recent annual and semiannual reports and These prospectuses and reports are also on file with the
supplements (as they apply) to shareholders. SEC.
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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 August [ ], 2005. Also on file with the SEC. This SAI is incorporated by
It contains additional information about your AmSouth reference into this Proxy Statement/Prospectus.
Funds and the Pioneer Funds.
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To ask questions about this Proxy Statement/Prospectus. Call your AmSouth Fund's toll-free telephone number: 1-800-
451-8382.
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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. 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").
In early 2005, AmSouth Bank and AAMI conducted a search for a purchaser of
AAMI's mutual fund investment advisory business. AmSouth Bancorporation engaged
Goldman, Sachs & Co. to identify potential purchasers and solicited indications
of interest. AmSouth Funds' management and AAMI reviewed proposals submitted by
several investment advisory firms and selected a limited number to evaluate
more carefully. Management and AAMI conducted, with respect to this selected
group, a comparative evaluation of their investment processes and capabilities;
availability of mutual funds with similar investment objectives and strategies;
historical investment performance of the proposed funds into which the AmSouth
Funds would be reorganized; expense ratios of the proposed counterpart funds to
the historical gross and net expenses of the AmSouth Funds; their breadth of
product line; their compliance culture and infrastructure; and reputation in
the marketplace. Based upon this review, management and AAMI recommended that
the Trustees approve the reorganization of the AmSouth Funds into the Pioneer
Funds as being in the best interest of shareholders.
Based on AAMI's recommendations, the Trustees met twice in May 2005, twice
in June 2005 and again in August 2005 to consider the potential consolidation of
the AmSouth Funds with the Pioneer Funds. At those meetings, the Trustees met
with representatives of Pioneer and reviewed information provided by AAMI and
Pioneer requested by the independent Trustees for the purposes of evaluating the
Reorganizations. In the course of their evaluation of Pioneer and the Pioneer
Funds, the Trustees reviewed various factors, including but not limited to, the
impact of the Reorganizations on the shareholders of the AmSouth Funds, the
comparability of the investment objectives and investment strategies of the
AmSouth Funds and the Pioneer Funds; the expense ratios of the Pioneer Funds
compared with those of the AmSouth Funds; the performance of the Pioneer Funds
compared with that of the AmSouth Funds; the experience and qualifications of
key personnel, including portfolio managers; and the financial resources, cash
flow, and business reputation of the Pioneer Funds. In connection with their
review of the Funds' existing and estimated pro forma expense ratios, the
Trustees also considered that AmSouth Bank and its affiliates would no longer
continue to subsidize the AmSouth Funds' operations by voluntarily capping
expenses. In addition, the Trustees considered the background and reputation of
the officers and members of the Board of Trustees of the Pioneer Funds.
In conducting their review, the Trustees considered information provided
by Pioneer relating to the education, experience and number of its investment
professionals and other senior personnel. The Trustees received information
concerning the investment philosophy and investment process applied by Pioneer
in managing the Pioneer Funds. The Trustees concluded that Pioneer's investment
processes, research capabilities and philosophy were well suited to the AmSouth
Funds.
The Trustees considered the quality of the services to be provided by
Pioneer. The Trustees evaluated Pioneer's record with respect to regulatory
compliance and compliance with the investment policies of the Pioneer Funds.
The Trustees also evaluated the procedures of Pioneer designed to fulfill
Pioneer's fiduciary duty to the Pioneer Funds with respect to possible
conflicts of interest, including Pioneer's code of ethics (regulating the
personal trading of its officers and employees), the procedures by which
Pioneer allocates trades among its various investment advisory clients, the
integrity of the systems in place to ensure compliance with the foregoing and
the record of Pioneer in these matters.
The Trustees also considered information relating to each Pioneer Fund's
investment performance relative to its performance benchmark(s). The Trustees
reviewed performance over various periods, including one, three, five and ten
year periods when applicable, performance under different market conditions and
during different legs of the market cycle, and the volatility of the Pioneer
Funds' returns. The Trustees concluded that the scope and quality of Pioneer's
services, including the investment performance of the Pioneer Funds, was
sufficient, in light of market conditions, the resources brought to bear by
Pioneer, Pioneer's integrity, its personnel and systems, and its financial
resources to warrant recommending that AmSouth Funds' shareholders approve the
proposed Reorganizations.
In reaching that conclusion, the Trustees also gave substantial
consideration to the proposed advisory fees. The Trustees considered possible
economies of scale to Pioneer from the proposed consolidations with the AmSouth
Funds.
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
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they determined to be necessary and appropriate to evaluate the proposed
Reorganizations. On June 23, 2005, June 27, 2005 and August 1, 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 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;
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 therefore will not be treated as a taxable sale of your
AmSouth Fund's shares;
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 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 For purposes of determining any contingent deferred sales charge
("CDSC"), the same commission schedule that applied to the shares of
the AmSouth Fund will apply to the shares of the Pioneer Fund issued
in the Reorganization and the holding period for determining the CDSC
will be calculated from when the shares were initially purchased.
o Following the Reorganizations, Pioneer will continue to act as
investment adviser to each Pioneer Fund and AAMI will not be involved
in the management of the Pioneer Funds.
o The Reorganizations will not result in income, gain or loss being
recognized for federal income tax purposes by any of the Pioneer
Funds, the AmSouth Funds or the shareholders of the AmSouth Funds.
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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.
o If the Reorganizations are approved by the AmSouth Funds'
shareholders, 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
Reorganizations, 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 Reorganizations. AAMI or an affiliate
will otherwise be responsible for all costs and expenses of the AmSouth Funds
in connection with the Reorganizations. See "Information Concerning the
Meeting."
Will Pioneer and AmSouth Bancorporation Benefit from the Reorganizations
Pioneer will benefit from managing a larger pool of assets which will
produce increased advisory fees and, in the case of certain of the Pioneer
Funds, eliminate or reduce Pioneer's obligation under its expense limitation
agreement with the Pioneer Fund. 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 redeemed
(subject to certain conditions, including threshold amounts) from the Pioneer
Funds within four years after the closing of the Reorganizations.
Pioneer has also agreed to provide to AmSouth Bank, an affiliate of AAMI,
ongoing servicing payments with respect to Class Y shares issued in the
Reorganizations. This arrangement will remain in effect for as long as Class Y
shares issued in the Reorganizations are held by clients of AmSouth Bank. The
agreement requires AmSouth Bank to provide certain record keeping and
shareholder communication services, including mailing prospectuses and other
fund related materials to shareholders for which AmSouth Bank acts as
shareholder of record, communicating to Pioneer Funds Distributor, Inc. requests
for purchase, exchange and redemption transactions in shares of the Pioneer
Funds and answering inquiries from beneficial holders of the Pioneer Funds'
shares. 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 service fees under the Class A and
Class B Rule 12b-1 Plans.
What Are the Federal Income Tax Consequences of the Reorganizations
The Reorganizations will not result in any income, gain or loss being
recognized for federal income tax purposes by any of the AmSouth Funds, their
shareholders or the Pioneer Funds as a direct result of the Reorganizations.
However, in accordance with the AmSouth Funds' policy to distribute any net
realized capital gains at least once each year (and thus to avoid federal
income tax thereon at the Fund level), each AmSouth Fund that is being merged
into an existing Pioneer Fund will declare and pay a distribution of such gains
to its shareholders shortly before the Reorganizations. Each such distribution
will be taxable to those shareholders. Additionally, following the
Reorganizations, in accordance with the Pioneer Funds' similar policy, each
Pioneer Fund will declare and pay before the end of 2005 a distribution of such
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gains to its shareholders (including current shareholders of the AmSouth Funds
who will be shareholders of the Pioneer Funds following the Reorganizations).
Those distributions will be fully taxable to all shareholders of the Pioneer
Funds, including those former AmSouth Funds shareholders, even though those
distributions may include a portion of the Pioneer Fund's net capital gains
that were realized before the Closing Date.
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.
Additional Information
The staff of the SEC has been conducting an investigation into the mutual
fund servicing business of BISYS Group, Inc., the parent company of ASO Services
Company, the AmSouth Funds' administrator, and BISYS Fund Services, the AmSouth
Funds' distributor and transfer agent (collectively, "BISYS"). In a press
release dated April 19, 2005, BISYS stated that it believes that the SEC's
investigation relates to the structure and accounting for certain arrangements
pursuant to which BISYS agreed with the advisers of certain U.S. mutual funds,
including AmSouth Funds, to use a portion of the fees paid to BISYS by the
mutual funds to pay for, among other things, expenses relating to the marketing
and distribution of fund shares, to make payments to certain advisers, and to
pay for cerain other expenses. As part of its investigation of BISYS, the SEC is
reviewing the relationships and agreements among BISYS, AmSouth Funds, AAMI and
AmSouth Bank. AmSouth Funds, AAMI and AmSouth Bank are cooperating fully with
the review. Additionally, AmSouth Bank and AAMI, in cooperation with a special
review committee of the Board of Trustees of AmSouth Funds, are conducting a
review of this matter and are taking appropriate steps to protect the interests
of shareholders, including making payments to the AmSouth Funds.
Who Is Eligible to Vote
Shareholders of record on July 29, 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 single 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.
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TABLE OF CONTENTS
Page
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INTRODUCTION ........................................................................... 2
PROPOSAL 1(a) -- AMSOUTH BALANCED FUND ................................................. 8
PROPOSAL 1(b) -- AMSOUTH STRATEGIC PORTFOLIOS: AGGRESSIVE GROWTH PORTFOLIO ............. 22
PROPOSAL 1(c) -- AMSOUTH STRATEGIC PORTFOLIOS: GROWTH PORTFOLIO ........................ 48
PROPOSAL 1(d) -- AMSOUTH STRATEGIC PORTFOLIOS: GROWTH AND INCOME PORTFOLIO ............. 73
PROPOSAL 1(e) -- AMSOUTH STRATEGIC PORTFOLIOS: MODERATE GROWTH AND INCOME PORTFOLIO .... 99
TERMS OF EACH AGREEMENT AND PLAN OF REORGANIZATION ..................................... 125
TAX STATUS OF EACH REORGANIZATION ...................................................... 125
VOTING RIGHTS AND REQUIRED VOTE ........................................................ 127
COMPARISON OF DELAWARE STATUTORY TRUST AND MASSACHUSETTS BUSINESS TRUST ................ 127
ADDITIONAL INFORMATION ABOUT THE PIONEER FUNDS ......................................... 128
FINANCIAL HIGHLIGHTS ................................................................... 136
INFORMATION CONCERNING THE MEETING ..................................................... 139
OWNERSHIP OF SHARES OF THE AMSOUTH FUNDS ............................................... 141
OWNERSHIP OF SHARES OF THE PIONEER FUNDS ............................................... 145
EXPERTS ................................................................................ 146
AVAILABLE INFORMATION .................................................................. 146
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-16
EXHIBIT B ADDITIONAL INFORMATION ABOUT PIONEER ....................................... B-1
EXHIBIT C PORTFOLIO MANAGER'S DISCUSSION OF PERFORMANCE .............................. C-1
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AmSouth Balanced Fund and
Pioneer Classic Balanced 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 exhibits, which
include additional information that is not included in the summary and are a
part of the Proxy Statement/Prospectus. Exhibit A-2 is the form of Agreement and
Plan of Reorganization. Exhibit B includes some additional information regarding
Pioneer. The most recent portfolio manager's discussion of AmSouth Classic
Balanced Fund's performance is attached as Exhibit C.
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, A newly created, diversified series of
an open-end management investment Pioneer Series Trust IV, an open-end
company organized as a Massachusetts management investment company organized
business trust. as a Delaware statutory trust.
- -------------------------------------------------------------------------------------------------------------------------
Net assets as of $182.74 million None. Pioneer Classic Balanced Fund is newly
March 31, 2005 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 Managers: Portfolio Managers:
Day-to-day management of AmSouth Day-to-day management of the Fund's
Balanced Fund's portfolio is the portfolio is the responsibility of John A.
responsibility of John P. Boston, CFA, and Carey, portfolio manager, and Walter
Brian B. Sullivan, CFA Mr. Boston has Hunnewell, Jr., assistant portfolio manager.
co-managed the Balanced Fund since 1994. Mr. Carey and Mr. Hunnewell are supported
Mr. Sullivan has co-managed the Balanced by the domestic equity team. Members of
Fund since June 2004. Mr. Sullivan has this team manage other Pioneer mutual
been an officer of AAMI since 1996 and funds investing primarily in U.S. equity
joined AmSouth Bank in 1982. Prior to securities. The portfolio managers and the
serving as Director of Fixed Income for team also draw upon the research and
AmSouth Bank's Trust Department, investment management expertise of the
Mr. Sullivan managed equity portfolios and global research team, which provides
held the position of equity research fundamental research on companies and
coordinator for AmSouth Bank's Trust includes members from Pioneer's affiliate,
Department. Mr. Boston is Chief Fixed Pioneer Investment Management Limited.
Income Officer for AmSouth Asset
Management, Inc. Mr. Boston began his Mr. Carey is director of portfolio
career in investment management with management and an executive vice
AmSouth Bank in 1988 and has been president of Pioneer. Mr. Carey joined
associated with AAMI since 1996. 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 1985. Prior to joining Pioneer,
Mr. Hunnewell was an independent
investment manager and a fiduciary of
private asset portfolios from 2000 to 2001.
- -------------------------------------------------------------------------------------------------------------------------
8
- -------------------------------------------------------------------------------------------------------------------------
AmSouth Balanced Fund Pioneer Classic Balanced Fund
- -------------------------------------------------------------------------------------------------------------------------
Investment objective AmSouth Balanced Fund seeks to obtain Pioneer Classic Balanced Fund seeks to
long-term capital growth and produce a obtain capital growth and current income.
reasonable amount of current income through
a moderately aggressive investment strategy.
- -------------------------------------------------------------------------------------------------------------------------
Primary investments AmSouth Balanced Fund invests in a Pioneer allocates the Fund's assets between
broadly diversified portfolio of equity and equity and debt securities based on its
debt securities consisting primarily of assessment of current business, economic
common stocks and bonds. and market conditions. Normally, equity and
debt securities each represent 35% to 65% of
The Fund normally invests between 45-75% the Fund's assets.
of 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 stocks, convertible debt, equity interests in
depending upon economic conditions, the real estate investment trusts (REITs), and
general level of stock prices, interest rates securities with common stock characteristics,
and other factors, including the risks such as preferred stocks. The Fund's
associated with each investment. The Fund's investments in debt securities include U.S.
equity investments consist primarily of government securities, corporate debt
common stocks of companies that AAMI securities, mortgage- and asset-backed
believes are undervalued and have a securities, short-term debt securities, cash
favorable outlook or are reasonably priced and cash equivalents. Cash and cash
with the potential to produce above-average equivalents include cash balances, accrued
earnings growth. The Fund's fixed-income interest and receivables for items such as the
investments consist primarily of "high- proceeds, not yet received, from the sale of
grade" bonds, notes and debentures. The the Fund's portfolio investments. Debt
Fund invests in securities issued by: (i) the securities in which the Fund invests may have
Government National Mortgage Association fixed or variable principal payments and all
("GNMA"), which are supported by the full types of interest rate payment and reset
faith and credit of the U.S. government; and terms, including fixed rate, adjustable rate,
(ii) the Federal National Mortgage zero coupon, contingent, deferred, payment-
Association ("FNMA") and the Federal Home in-kind and auction rate features.
Loan Mortgage Corporation ("FHLMC")
which are supported by the right of the The Fund may invest in U.S. government
issuer to borrow from the U.S. Treasury. securities. U.S. government securities include
The Fund also invests in U.S. Treasury obligations: directly issued by or supported by
obligations. 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.
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.
- -------------------------------------------------------------------------------------------------------------------------
9
- -------------------------------------------------------------------------------------------------------------------------
AmSouth Balanced Fund Pioneer Classic Balanced Fund
- -------------------------------------------------------------------------------------------------------------------------
Investment strategies In managing the equity portion of the Fund, In selecting equity securities, Pioneer uses a
the AAMI combines fundamental and value approach to select the Fund's
quantitative analysis with risk management investments. Pioneer seeks securities selling
to identify value opportunities, construct the at reasonable prices or substantial discounts
portfolio and make sell decisions. AAMI to their underlying values and then holds
selects investments believed to have basic these securities until the market values
investment value that will eventually be reflect their intrinsic values. Pioneer
recognized by other investors. In addition, evaluates a security's potential value,
the AAMI may identify companies with a including the attractiveness of its market
history of above-average growth or valuation, based on the company's assets
companies that are expected to enter and prospects for earnings growth. In
periods of above-average growth or are making that assessment, Pioneer employs
positioned in emerging growth industries. due diligence and fundamental research, an
evaluation of the issuer based on its
AAMI's fixed income portfolio management financial statements and operations. Pioneer
process focuses on the four key areas of also considers a security's potential to
duration management, sector weights, provide a reasonable amount of income.
position on the yield curve, and security Pioneer relies on the knowledge, experience
selection; AAMI's goal is to add value in and judgment of its staff who have access
each of these four areas through the active to a wide variety of research. Pioneer
management of the Fund's portfolio. focuses on the quality and price of
Beginning with rigorous fundamental individual issuers, not on economic sector
analysis of the economy and taking into or market-timing strategies. Factors Pioneer
account characteristics of the current looks for in selecting investments include:
business and interest rate cycles, AAMI
arrives at a projection of the likely trend in o Favorable expected returns relative to
interest rates and adjusts duration perceived risk
accordingly. Analysis of the shape of the o Above average potential for earnings and
yield curve and yield spreads among bond revenue growth
market sectors leads to further refinements o Low market valuations relative to
in strategy for companies that appear earnings forecast, book value, cash flow
undervalued. 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 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.
- -------------------------------------------------------------------------------------------------------------------------
10
- -------------------------------------------------------------------------------------------------------------------------
AmSouth Balanced Fund Pioneer Classic Balanced Fund
- -------------------------------------------------------------------------------------------------------------------------
Other investments AmSouth Balanced Fund may also invest in Up to 10% of Pioneer Classic Balanced
debt securities, preferred stock and that Fund's total assets may be invested in debt
portion of the value of securities convertible securities rated below investment grade,
in to common stock, including convertible including convertible debt. A debt security is
preferred stock and convertible debt, which investment grade if it is rated in one of the
is attributable to the fixed income top four categories by a nationally
characteristics of those securities. 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.
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 Normally, Pioneer Classic Balanced Fund
strategies conditions exist, AmSouth Balanced Fund invests substantially all of its assets to meet
may invest entirely in cash positions, its investment objective. The Fund may
directly in U.S. government securities and invest the remainder of its assets in
short-term paper, such as bankers' securities with remaining maturities of less
acceptances. than one year, cash 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 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").
- -------------------------------------------------------------------------------------------------------------------------
11
- -------------------------------------------------------------------------------------------------------------------------
AmSouth Balanced Fund Pioneer Classic Balanced Fund
- -------------------------------------------------------------------------------------------------------------------------
Industry AmSouth Balanced Fund may not purchase Pioneer Classic Balanced Fund may not
concentration any securities which would cause more than invest more than 25% of its assets in any
25% of the value of the Fund's total assets one 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.
- -------------------------------------------------------------------------------------------------------------------------
Restricted and AmSouth Balanced Fund may not invest Pioneer Classic Balanced Fund may not
illiquid securities more than 15% of its net assets in invest more than 15% of its net assets in
securities that are restricted as to resale, or securities that are illiquid and other
for which no readily available market exists, securities that are not readily marketable.
including repurchase agreements providing Repurchase agreements maturing in more
for settlement more than seven days after than seven days will be included for
notice. purposes of the foregoing limit.
- -------------------------------------------------------------------------------------------------------------------------
Borrowing AmSouth Balanced Fund may not borrow Pioneer Classic Balanced Fund may not
money or issue senior securities, except borrow money, except the Fund may: (a)
that the Fund may borrow from banks or borrow from banks or through reverse
enter into reverse repurchase agreements repurchase agreements in an amount up to
for temporary emergency purposes in 33 1/3% of the Fund's total assets (including
amounts up to 33 1/3% of the value of its the amount borrowed); (b) to the extent
total assets at the time of such borrowing. permitted by applicable law, borrow up to
The Fund will not purchase securities while an additional 5% of the Fund's assets for
borrowings (including reverse repurchase temporary purposes; (c) obtain such short-
agreements) in excess of 5% of its total term credits as are necessary for the
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.
- -------------------------------------------------------------------------------------------------------------------------
12
- -------------------------------------------------------------------------------------------------------------------------
AmSouth Balanced Fund Pioneer Classic Balanced Fund
- -------------------------------------------------------------------------------------------------------------------------
Lending AmSouth Balanced Fund may not make Pioneer Classic Balanced 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
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 debt
repurchase agreements. securities, bank loan participation interests,
bank certificates of deposit, bankers'
In addition, the Fund is permitted to acceptances, debentures or other securities,
participate in a credit facility whereby the whether or not the purchase is made upon the
Fund may directly lend to and borrow original issuance of the securities, (iv)
money from other AmSouth funds for participate in a credit facility whereby the Fund
temporary purposes, provided that the loans may directly lend to and borrow money from
are made in accordance with an order of other affiliated funds to the extent permitted
exemption from the SEC and any conditions under the Investment Company Act or an
thereto. 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 AmSouth Balanced Fund may invest in The Fund may use futures and options on
instruments futures contracts and options thereon securities, indices and currencies, forward
(interest rate futures contracts or index foreign currency exchange contracts and other
futures contracts, as applicable) to commit derivatives. A derivative is a security or
funds awaiting investment, to maintain cash instrument whose value is determined by
liquidity or for other hedging purposes. The reference to the value or the change in value
value of the Fund's contracts may equal or of one or more securities, currencies, indices
exceed 100% of the Fund's total assets, or other financial instruments. Although there
although the Fund will not purchase or sell is no specific limitation on investing in
a futures contract unless immediately derivatives, the Fund does not use derivatives
afterwards the aggregate amount of margin as a primary investment technique and
deposits on its existing futures positions generally limits their use to hedging. However,
plus the amount of premiums paid for the Fund may use derivatives for a variety of
related futures options entered into for other non-principal purposes, including:
than bona fide hedging purposes is 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
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.
- -------------------------------------------------------------------------------------------------------------------------
13
- -------------------------------------------------------------------------------------------------------------------------
AmSouth Balanced Fund Pioneer Classic Balanced Fund
- -------------------------------------------------------------------------------------------------------------------------
Short-term trading The AmSouth Fund may engage in the Pioneer Classic Balanced Fund usually does
technique of short-term trading. Such not trade for short-term profits. The Fund
trading involves the selling of securities held will sell an investment, however, even if it
for a short time, ranging from several has only been held for a short time, if it no
months to less than a day. The object of longer meets the Fund's investment criteria.
such 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
policies and and policies. Certain of the non-principal investment policies and restrictions are different.
restrictions 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 Class A shares are offered with an initial Class A shares are offered with an initial
charges and Rule sales charge of up to 5.50% of the offering sales charge of up to 5.75% of the offering
12b-1 fees price, which is reduced depending upon the price, which is reduced or waived for large
amount invested or, in certain purchases and certain types of investors. At
circumstances, waived. Class A shares the time of your purchase, your investment
bought as part of an investment of $1 firm may receive a commission from
million or more are not subject to an initial Pioneer Funds Distributor, Inc. ("PFD"), the
sales charge, but may be charged a Fund's distributor, of up to 4% declining as
contingent deferred sales charge ("CDSC") the size of your investment increases.
of 1.00% if sold within one year
of purchase. There is no CDSC, except in certain
circumstances when the initial sales charge
Class A shares pay a shareholder servicing is waived.
fee (non 12b-1) of up to 0.25%
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 Class B shares are offered without an initial Class B shares are offered without an initial
charges and Rule sales charge, but are subject to a CDSC of sales charge, but are subject to a CDSC of up to
12b-1 fees up to 5%. For Class B shares held 4% if you sell your shares. The charge is
continuously, the CDSC declines over six reduced over time and is not charged after five
years, starting with year one and ending in years. Your investment firm may receive a
year seven from: 5%, 4%, 3%, 2%, 1%. commission from PFD, the Fund's distributor, at
Eight years after purchase Class B shares the time of your purchase of up to 4%.
automatically convert to Class A shares.
Class B shares are subject to distribution and
Class B shares pay a shareholder servicing service (12b-1) fees of up to 1% of average
fee (non 12b-1) of up to 0.25% of average daily net assets.
daily net assets. This fee is in the form of a
separate non-Rule 12b-1 fee. All Funds bear Class B shares acquired through the
a distribution (12b-1) fee of up to 0.75%. Reorganization will retain the holding period,
CDSC and commission schedules applicable to
Maximum investment for all Class B the original purchase.
purchases 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 B shares convert to Class A shares eight
years after the date of purchase.
- -------------------------------------------------------------------------------------------------------------------------
14
- -------------------------------------------------------------------------------------------------------------------------
AmSouth Balanced Fund Pioneer Classic Balanced Fund
- -------------------------------------------------------------------------------------------------------------------------
Class I and Class Y AmSouth Balanced Fund does not impose The Fund does not impose any initial,
sales charges and any 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 daily net assets. The fee is The distributor incurs the expenses of
computed daily and paid monthly. distributing the Fund's Class Y shares, none of
which are reimbursed by the Fund or the
Class Y shareowners.
- -------------------------------------------------------------------------------------------------------------------------
Management and AmSouth Balanced Fund pays an advisory fee Pioneer Classic Balanced Fund will pay
other fees on a monthly basis at an annual rate of Pioneer an advisory fee as follows: 0.65%
0.80% of the Fund's average daily net assets. of the Fund's average daily net assets on
the first $1 billion, 0.60% on the next $4
ASO Services Company, Inc. ("ASO") serves billion, and 0.55% on assets over $5 billion.
as administrator and fund accounting agent The fee is computed daily and paid monthly.
for the Fund. The Fund pays ASO an
administrative services fee of 0.15% of the In addition, the Fund will reimburse Pioneer
Fund's average daily net assets. for certain fund accounting and legal
expenses incurred on behalf of the Fund
For the fiscal year ended July 31, 2004, other and pay a separate shareholder servicing/
expenses of the Fund were limited to 0.54% transfer agency fee to PIMSS, an affiliate of
for Class A shares, 0.54% for Class B shares Pioneer.
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,
For the fiscal year ended July 31, 2004, the 1.99% for Class B shares, and 0.78% for
Fund's annual operating expenses for Class A Class Y shares 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 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
through BISYS Fund Services, the Fund's firm that has a sales agreement with PFD,
distributor, or through brokers, registered the 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 Pioneer
Fund by telephone or online.
Certain account transactions may be done by
telephone.
- -------------------------------------------------------------------------------------------------------------------------
15
- -------------------------------------------------------------------------------------------------------------------------
AmSouth Balanced Fund Pioneer Classic Balanced Fund
- -------------------------------------------------------------------------------------------------------------------------
Exchanging shares You can exchange your shares in the Fund for You may exchange your shares for shares
shares of the same class of another AmSouth of 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 least $1,000. The Fund allows you to
investment requirements for the Fund into exchange your shares at net asset value
which you are exchanging. Exchanges from without charging you either an initial or
one Fund to another are taxable. Class A contingent deferred shares charge at the
shares may be exchanged for Class I shares time of the exchange. Shares you acquire as
of the same Fund or another AmSouth Fund if part of an exchange will continue to be
you become eligible to purchase Class I subject to any contingent deferred sales
shares. Class I shares may be exchanged for charge that applies to the shares you
Class A shares of the same Fund. No originally purchased. When you ultimately
transaction fees are currently charged for sell your shares, the date of your original
exchanges. 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
associated with short-term trading, such as or 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
Fund directly in writing or by telephone or your request to sell shares to PIMSS. You
by contacting a financial intermediary as can also sell your shares by contacting the
described in the Fund's prospectus. Fund 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.
- -------------------------------------------------------------------------------------------------------------------------
16
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)
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
17
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.
AmSouth Balanced Fund -- Class A Shares
Calendar Year Total Returns*
[THE BAR CHART IS A REPRESENTATION OF THE PRINTED MATERIAL]
'95 '96 '97 '98 '99 '00 '01 '02 '03 '04
23.51 9.72 20.84 13.12 1.33 10.18 4.84 -6.86 15.69 6.60
* 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
18
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 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.
Pioneer Pioneer Pioneer
Classic Classic Classic
AmSouth Balanced AmSouth Balanced AmSouth Balanced
Balanced Fund Balanced Fund Balanced Fund
Fund(1) (Pro Forma) Fund(1) (Pro Forma) Fund(1) (Pro Forma)
Shareholder transaction fees Class A Class A Class B Class B Class I Class Y
(paid directly from your investment) -------- ----------- -------- ----------- -------- -----------
Maximum sales charge (load) when you buy shares as a
percentage of offering price ............................. 5.50%(2) 5.75%(2) 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 5.00%(3) 4.00% None None
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 and service (12b-1) fee ...................... None 0.25% 0.75% 1.00% None None
Other expenses ............................................ 0.60%(5) 0.23% 0.63%(5) 0.34% 0.50%(5) 0.13%
Total fund operating expenses ............................. 1.40% 1.13%(6) 2.18% 1.99%(6) 1.30% 0.78%(6)
Expense reimbursement/reduction ........................... 0.07% N/A 0.10% N/A 0.12% N/A
Net fund operating expenses ............................... 1.33% 1.13% 2.08% 1.99% 1.18% 0.78%
(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.
(5) For the period ended January 31, 2005, other expenses for your AmSouth Fund
were 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.
19
- --------------------------------------------------------------------------------
Pro Forma
Pioneer
AmSouth Classic
Balanced Balanced
Number of years you own your shares 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 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 the U.S. advisory subsidiary of Pioneer Global Asset
Management, S.p.A. ("PGAM"), a global asset management group and wholly-owned
subsidiary of UniCredito Italiano S.p.A., one of the largest banking groups in
Italy. The PGAM companies provide investment management and financial services
to mutual funds, institutional and other clients. As December 31, 2004, assets
under management of the PGAM companies 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 money market funds 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
20
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 have
currently.
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 Bancorporation will pay all costs of preparing and
printing the Funds' proxy statements and solicitation costs incurred by the
Funds in connection with the Reorganizations. AAMI or an affiliate 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 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 Pioneer Classic Pioneer Classic
Balanced 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
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.
21
AmSouth Strategic Portfolios: Aggressive Growth Portfolio and
Pioneer Ibbotson Aggressive Allocation 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 exhibits, which
include additional information that is not included in the summary and are a
part of the Proxy Statement/Prospectus. Exhibit A-1 is the form of Agreement
and Plan of Reorganization. Exhibit B includes some additional information
regarding Pioneer. The most recent portfolio manager's discussion of each
Fund's performance is attached as Exhibit C.
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: Pioneer Ibbotson Aggressive
Aggressive Growth Portfolio Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Business A diversified series of AmSouth Funds, an A series of Pioneer Ibbotson Asset
open-end management investment company Allocation Series, a diversified open-end
organized as a Massachusetts business management investment company organized
trust. as a Delaware statutory trust.
- -----------------------------------------------------------------------------------------------------------------------
Net assets as of $51.9 million $19.1 million
March 31, 2005
- -----------------------------------------------------------------------------------------------------------------------
Investment advisers Investment Adviser: Investment Adviser:
and portfolio AAMI Pioneer
managers
Portfolio Manager: Investment Subadviser:
Day-to-day management of AmSouth Ibbotson Associates Advisors, LLC
Strategic Portfolios: Aggressive Growth ("Ibbotson")
Portfolio is the responsibility of the
AmSouth Strategy Committee, and no Portfolio Managers:
person is primarily responsible for making Day-to-day management of Pioneer
recommendations to the Committee. The Ibbotson Aggressive Allocation Fund is the
Committee members consist of John P. responsibility of portfolio managers and
Boston, CFA, Fred Crown, CFA, Paige B. members of Ibbotson's Investment
Daniel, David M. Dasari, CFA, Joseph T. Committee headed by Roger Ibbotson.
Keating, Ronald E. Lindquist, John Mark Roger Ibbotson founded Ibbotson in 1977
McKenzie, Matt Smith, CFA, Brian B. and is the firm's Chairman. Peng Chen,
Sullivan, CFA, Doug S. Williams and Ph.D., managing director and chief
Jason Waters. investment officer at Ibbotson, conducts
research projects on asset allocation,
portfolio risk measurement, nontraditional
assets, and global financial markets. Dr.
Chen joined
- -----------------------------------------------------------------------------------------------------------------------
22
- -----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive
Aggressive Growth Portfolio Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Investment advisers Mr. Boston is Chief Fixed Income Officer for Ibbotson in 1997. Michael E. Annin,
and portfolio AAMI. He began his career in investment managing director, manages the investment
managers management with AmSouth Bank in 1987 management services and data products
(continued) and has been associated with AAMI since group for Ibbotson. Scott Wentsel, senior
1996. Mr. Boston received his CFA charter portfolio manager, is responsible for
in 1993 and is an active member and past management of the firm's fund-of-funds
president of the Alabama Society of business which includes oversight of its
Financial Analysts. He also serves as the investment management staff and process.
portfolio manager for the AmSouth High Alexander E. Kaye, portfolio manager, is
Quality Bond Fund. Mr. Boston is a Senior responsible for managing the delivery of
Vice President of AmSouth Bank and Vice fund-of-funds programs for institutional and
President of AAMI. retail clients, which includes asset allocation
modeling, portfolio construction, fund
Mr. Crown has been employed with classification and manager due diligence.
AmSouth Bank since 1982 and AAMI since Brian Huckstep, portfolio manager, is
2001. He was an Institutional Fund Manager responsible for managing the delivery of
with AAMI (2001-2003) and has been a fund-of-funds programs for institutional and
Regional Manager since 2003. Mr. Crown is retail clients, which includes asset allocation
a Senior Vice President of AmSouth Bank. modeling, portfolio construction, fund
classification, and manager due diligence.
Ms. Daniel has been employed with
AmSouth 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.
- -----------------------------------------------------------------------------------------------------------------------
23
- -----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive
Aggressive Growth Portfolio Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Investment advisers Mr. Lindquist has been employed with AAMI
and portfolio since December 1999. Prior to December
managers 1999, Mr. Lindquist was employed by First
(continued) 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 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.
- -----------------------------------------------------------------------------------------------------------------------
24
- -----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive
Aggressive Growth Portfolio Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Investment advisers Mr. Williams has been employed with
and portfolio AmSouth Bank since 2002. He has been
managers employed as a Regional Manager with AAMI
(continued) 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.
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.
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 Equity Fund Fixed Income Fund
Investments Allocation Allocation
Allocation
0-5% 75-95% 5-15%
- -----------------------------------------------------------------------------------------------------------------------
25
- -----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive
Aggressive Growth Portfolio Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Primary investments Based upon the analysis described under "Asset allocation process," the Fund initially expects
(continued) to invest its assets in underlying mutual funds within the following ranges:
Fund Name Percentage of
Fund 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 0-20%
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.
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.
- -----------------------------------------------------------------------------------------------------------------------
26
- -----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive
Aggressive Growth Portfolio Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Borrowing AmSouth Strategic Portfolios: Aggressive Pioneer Ibbotson Aggressive Allocation Fund
Growth Portfolio may not borrow money or issue may not borrow money, except on a
senior securities, except that the Fund may temporary basis and to the extent permitted
borrow from banks or enter into reverse by applicable law, the Fund may: (a) borrow
repurchase agreements for temporary emergency from banks or through reverse repurchase
purposes in amounts up to 33 1/3% of the value agreements in an amount up to 33 1/3% of
of its total assets at the time of such the Fund's total assets (including the
borrowing. AmSouth Strategic Portfolios: amount borrowed); (b) borrow up to an
Aggressive Growth Portfolio will not purchase additional 5% of the Fund's assets for
securities while borrowings (including reverse temporary purposes; (c) obtain such short-
repurchase agreements) in excess of 5% of its term credits as are necessary for the
total assets are outstanding. In addition, clearance of portfolio transactions; (d)
AmSouth Strategic Portfolios: Aggressive purchase securities on margin; and (e)
Growth Portfolio is permitted to participate engage in transactions in mortgage dollar
in a credit facility whereby the Fund may rolls that are accounted for as financings.
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
policies and and policies. Certain of the non-principal investment policies and restrictions are different.
restrictions 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 Class A shares are offered with an initial Class A shares are offered with an initial
charges and Rule sales charge of up to 5.50% of the offering sales charge of up to 5.75% of the offering
12b-1 fees price, which is reduced depending upon the price, which is reduced or waived for large
amount invested or, in certain purchases and certain types of investors. At
circumstances, waived. Class A shares the time of your purchase, your investment
bought as part of an investment of $1 firm may receive a commission from
million or more are not subject to an initial Pioneer Funds Distributor, Inc. ("PFD"), the
sales charge, but may be charged a Fund's distributor, of up to 2% declining as
contingent deferred sales charge ("CDSC") the size of your investment increases.
of 1.00% if sold within one year of
purchase. There is no CDSC, except in certain
circumstances when the initial sales charge
Class A shares pay a shareholder servicing is waived.
fee (non 12b-1) of up to 0.25% of average
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.
- -----------------------------------------------------------------------------------------------------------------------
27
- -----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive
Aggressive Growth Portfolio Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Class B sales Class B shares are offered without an initial Class B shares are offered without an initial
charges and Rule sales charge, but are subject to a CDSC of sales charge, but are subject to a CDSC of
12b-1 fees up to 5%. For Class B shares issued to up to 2% if you sell your shares. The
former ISG Funds shareholders in charge is reduced over time and is not
connection with the combination of charged after five years. Your investment
AmSouth Funds with ISG Funds, the CDSC firm may receive a commission from PFD,
on such Class B shares held continuously the Fund's distributor, at the time of your
declines over six years, starting with year purchase of up to 2%.
one and ending in year seven from: 4%,
3%, 3%, 2%, 2%, 1%. For all other Class B Class B shares are subject to distribution
shares held continuously, the CDSC declines and service (12b-1) fees of up to 1% of
over six years, starting with year one and average daily net assets.
ending in year seven from: 5%, 4%, 3%,
3%, 2%, 1%. Eight years after purchase Class B shares acquired through the
(seven years in the case of shares acquired Reorganization will retain the holding
in the ISG combination), Class B shares period, CDSC and commission schedules
automatically convert to Class A shares. applicable to the original purchase.
Class B shares pay a shareholder servicing Maximum purchase of Class B shares in a
fee (non 12b-1) of up to 0.25% of average single transaction is $49,999.
daily net assets and a distribution (12b-1)
fee of up to 0.75% of average daily net Class B shares convert to Class A shares
assets. eight years after the date of purchase. Class
B shares issued to former ISG Funds
Maximum investment for all Class B shareholders will convert to Class A shares
purchases by a shareholder for the Fund's seven years after the date of purchase.
shares is $99,999.
- -----------------------------------------------------------------------------------------------------------------------
Class I and Class Y AmSouth Strategic Portfolios: Aggressive The Fund does not impose any initial,
sales charges and Growth Portfolio does not impose any initial contingent deferred or asset based sales
Rule 12b-1 fees or CDSC on Class I shares. charge on Class Y shares.
The Fund may impose a shareholder The distributor incurs the expenses of
servicing fee (non 12b-1) of up to 0.15% of distributing the Fund's Class Y shares, none
average daily net assets. of which are reimbursed by the Fund or the
Class Y shareowners.
- -----------------------------------------------------------------------------------------------------------------------
28
- -----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive
Aggressive Growth Portfolio Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
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
monthly basis at an annual rate of 0.20% of equal to 0.13% of average daily net assets
the 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 attributable to other investments, including
for 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
Fund's average daily net assets. asset levels. Since Pioneer currently
manages all of the underlying funds, the
For the fiscal year ended July 31, 2004, management fee will initially be 0.13% of
other expenses of the Fund were limited to average daily net assets.
0.36% for Class A shares, 0.35% for Class
B shares and 0.31% 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 indirectly separate shareholder servicing/transfer
bear a pro rata share of the fees and agency fee to PIMSS, an affiliate of Pioneer.
expenses of the underlying funds.
Pioneer has contractually agreed not to
For the fiscal year ended July 31, 2004, the impose all or a portion of its fees or to limit
Fund's annual operating expenses for Class other direct ordinary operating expenses to
A shares, after giving effect to the expense the extent required to reduce expenses,
limitation were 0.56%, and without giving other than "Estimated average expense ratio
effect to the expense limitation, were of underlying funds," to 0.85% of the
0.79% of average daily net assets. As of average daily net assets attributable to Class
January 12, 2005, estimated total direct and A shares and 1.64% of average daily net
indirect expenses were 2.04% of average assets attributable to Class B shares. There
daily net assets. is no expense limitation with respect to the
Class Y shares. This expense limitation is in
For the fiscal year ended July 31, 2004, the effect for Class A shares until December 1,
Fund's annual operating expenses for Class 2008 and in effect for Class B shares until
B shares, after giving effect to the expense December 1, 2006. There can be no
limitation were 1.30%, and without giving assurance that Pioneer will extend these
effect to the expense limitation, were expense limitations past such dates. The
1.53% of average daily net assets. As of expense limitation does not limit the
January 12, 2005, estimated total direct and expenses of the underlying funds indirectly
indirect expenses were 2.78% of average incurred by a shareholder.
daily net assets.
Class Y shares of the Pioneer Fund are
For the fiscal year ended July 31, 2004, the being offered for the first time in connection
Fund's annual operating expenses for Class with the Reorganization.
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.
- -----------------------------------------------------------------------------------------------------------------------
29
- -----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive
Aggressive Growth Portfolio Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Buying shares You may buy shares of the Fund directly You may buy shares from any investment
through BISYS Fund Services, the Fund's firm that has a sales agreement with PFD,
distributor, or through brokers, registered the 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
distributor, as described in the Fund's also purchase additional shares of the 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
shares of the same class of another AmSouth of 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 least $1,000.
investment requirements for the Fund into which
you are exchanging. Exchanges from one fund After you establish an eligible fund account,
to another are taxable. Class A shares may be you can exchange Fund shares by telephone
exchanged for Class I shares of the same Fund or online.
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.
- -----------------------------------------------------------------------------------------------------------------------
30
- -----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive
Aggressive Growth Portfolio Allocation 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
Fund directly in writing or by telephone or your request to sell shares to PIMSS. You
by contacting a financial intermediary as can also sell your shares by contacting the
described in the Fund's prospectus. Fund 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
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.
31
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:
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
32
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 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*
[THE BAR CHART IS A REPRESENTATION OF THE PRINTED MATERIAL]
'00 '01 '02 '03 '04
1.50 -9.40 -22.32 28.31 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.
33
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
- -----------------------------------------------------------------------------------------------------------------------------
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) (reflects no deduction for fees, expenses or taxes) 10.87% -2.30% 0.66%
- -----------------------------------------------------------------------------------------------------------------------------
(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.
34
AmSouth AmSouth
Strategic Pioneer Strategic
Portfolios: Ibbotson Portfolios:
Aggressive Aggressive Combined Aggressive
Growth Allocation Fund Growth
Portfolio(1) Fund (Pro Forma) Portfolio
Shareholder transaction fees Class A Class A Class A Class B
(paid directly from your investment) ----------- ---------- ----------- -----------
Maximum sales charge (load) when you buy
shares as a percentage of offering price ......... 5.50%(2) 5.75% 5.75% 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)
Redemption fees ................................... 2.00%(4) None None 2.00%(4)
Annual fund operating expenses
(deducted from fund assets)
(as a % of average net assets)
Management fee .................................... 0.20% 0.17% 0.17% 0.20%
Distribution and service (12b-1) fee .............. None 0.25% 0.25% 0.75%
Other expenses(5) ................................. 0.71% 0.78% 0.48% 0.68%
Estimated indirect expenses ....................... 1.62% 0.81% 1.00%(8) 2.37%
Total fund operating expenses ..................... 2.53% 2.01%(6) 1.90% 4.00%
Expense reimbursement/reduction ................... 0.35% 0.27% 0.05% 0.38%
Net fund operating expenses ....................... 2.18% 1.74% 1.85% 3.62%
AmSouth
Pioneer Strategic
Ibbotson Portfolios:
Aggressive Combined Aggressive Combined
Allocation Fund Growth Fund
Fund (Pro Forma) Portfolio (Pro Forma)
Shareholder transaction fees Class B Class B Class I Class Y(7)
(paid directly from your investment) ---------- ----------- ----------- -----------
Maximum sales charge (load) when you buy
shares as a percentage of offering price ......... 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
Redemption fees ................................... None None 2.00%(4) None
Annual fund operating expenses
(deducted from fund assets)
(as a % of average net assets)
Management fee .................................... 0.17% 0.17% 0.20% 0.17%
Distribution and service (12b-1) fee .............. 1.00% 1.00% None None
Other expenses(5) ................................. 0.92% 0.70% 0.59% 0.30%
Estimated indirect expenses ....................... 0.81% 1.00%(8) 1.57% 1.00%(8)
Total fund operating expenses ..................... 2.90%(6) 2.87% 2.36% 1.47%
Expense reimbursement/reduction ................... 0.27% 0.23% 0.31% N/A
Net fund operating expenses ....................... 2.63% 2.64% 2.05% 1.47%
(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) For the period ended January 31, 2005, other expenses for your AmSouth Fund
were 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 indirect expenses," 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.
(8) "Estimated indirect expenses" for the Pioneer Funds reflect the estimated
gross indirect expenses as of the most recent fiscal period for the
underlying funds. Several of the underlying funds are subject to expense
limitations, which expire as of various dates. Giving effect to such
expense limitations, the estimated indirect expenses would be 0.85%, and
the pro forma combined net expenses for the Pioneer Fund would be 1.70%,
2.49% and 1.32% for Class A, Class B and Class Y shares, respectively.
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.
35
- ---------------------------------------------------------------------------------------------------------------------
AmSouth
Strategic Pioneer
Portfolios: Ibbotson
Aggressive Aggressive Combined
Growth Allocation Fund
Number of years you own your shares Portfolio Fund (Pro Forma)
- ---------------------------------------------------------------------------------------------------------------------
Class A
- ---------------------------------------------------------------------------------------------------------------------
Year 1 $ 758 $ 742 $ 752
- ---------------------------------------------------------------------------------------------------------------------
Year 3 $1,192 $1,091 $1,123
- ---------------------------------------------------------------------------------------------------------------------
Year 5 $1,650 N/A $1,529
- ---------------------------------------------------------------------------------------------------------------------
Year 10 $2,916 N/A $2,657
- ---------------------------------------------------------------------------------------------------------------------
Class B -- assuming redemption at end of period
- ---------------------------------------------------------------------------------------------------------------------
Year 1 $ 798 $ 666 $ 667
- ---------------------------------------------------------------------------------------------------------------------
Year 3 $1,213 $1,172 $1,167
- ---------------------------------------------------------------------------------------------------------------------
Year 5 $1,752 N/A $1,693
- ---------------------------------------------------------------------------------------------------------------------
Year 10 $3,087 N/A $2,948
- ---------------------------------------------------------------------------------------------------------------------
Class B -- assuming no redemption
- ---------------------------------------------------------------------------------------------------------------------
Year 1 $ 298 $ 266 $ 267
- ---------------------------------------------------------------------------------------------------------------------
Year 3 $ 913 $ 872 $ 867
- ---------------------------------------------------------------------------------------------------------------------
Year 5 $1,552 N/A $1,493
- ---------------------------------------------------------------------------------------------------------------------
Year 10 $3,087 N/A $2,948
- ---------------------------------------------------------------------------------------------------------------------
Class I Class Y
- ---------------------------------------------------------------------------------------------------------------------
Year 1 $ 211 N/A $ 150
- ---------------------------------------------------------------------------------------------------------------------
Year 3 $ 652 N/A $ 465
- ---------------------------------------------------------------------------------------------------------------------
Year 5 $1,119 N/A $ 803
- ---------------------------------------------------------------------------------------------------------------------
Year 10 $2,410 N/A $1,757
- ---------------------------------------------------------------------------------------------------------------------
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 the U.
S. advisory subsidiary of Pioneer Global Asset Management, S.p.A. ("PGAM"), a
global asset management group and wholly-owned subsidiary of UniCredito
Italiano S.p.A., one of the largest banking groups in Italy. The PGAM companies
provide investment management and financial services to mutual funds,
institutional and other clients. As of December 31, 2004, assets under
management of the PGAM companies 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 money market funds 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 servicing fees paid by the Class A and Class B
36
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.
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 have currently. 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 Bancorporation will pay all costs of preparing and
printing the Funds' proxy statements and solicitation costs incurred by the
Funds in connection with the Reorganizations. AAMI or an affiliate will
otherwise be responsible for 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 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
Portfolios: Pioneer Ibbotson
Aggressive Ibbotson 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.
37
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.
38
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
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,
39
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)
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.
40
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.
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.
41
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 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.
42
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.
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.
43
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.
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
44
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,
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.
45
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
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.
46
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
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
47
AmSouth Strategic Portfolios: Growth Portfolio and
Pioneer Ibbotson Growth Allocation 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 exhibits, which
include additional information that is not included in the summary and are a
part of the Proxy Statement/Prospectus. Exhibit A-1 is the form of Agreement
and Plan of Reorganization. Exhibit B includes some additional information
regarding Pioneer. The most recent portfolio manager's discussion of each
Fund's performance is attached as Exhibit C.
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
open-end management investment company Allocation Series, a diversified open-end
organized as a Massachusetts business management investment company organized
trust. as a Delaware statutory trust.
- ----------------------------------------------------------------------------------------------------------------------
Net assets as of $64.9 million $32.8 million
March 31, 2005
- ----------------------------------------------------------------------------------------------------------------------
Investment advisers Investment Adviser: Investment Adviser:
and portfolio AAMI Pioneer
managers
Portfolio Manager: Investment Subadviser:
Day-to-day management of the AmSouth Ibbotson Associates Advisors, LLC
Strategic Portfolios: Growth Portfolio is ("Ibbotson")
the responsibility of the AmSouth Strategy
Committee, and no person is primarily Portfolio Managers:
responsible for making recommendations Day-to-day management of Pioneer
to the Committee. The Committee members Ibbotson Growth Allocation Fund is the
consist of John P. Boston, CFA, Fred Crown, responsibility of portfolio managers and
CFA, Paige B. Daniel, David M. Dasari, CFA, members of Ibbotson's Investment
Joseph T. Keating, Ronald E. Lindquist, Committee headed by Roger Ibbotson.
John Mark McKenzie, Matt Smith, CFA, Roger Ibbotson founded Ibbotson in 1977
Brian B. Sullivan, CFA, Doug S. Williams and is the firm's Chairman. Peng Chen,
and Jason Waters. Ph.D., managing director and chief
investment officer at Ibbotson, conducts
research projects on asset allocation,
portfolio risk measurement, nontraditional
assets,
- ----------------------------------------------------------------------------------------------------------------------
48
- ----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios:
Growth Portfolio Pioneer Ibbotson Growth Allocation Fund
- ----------------------------------------------------------------------------------------------------------------------
Investment advisers Mr. Boston is Chief Fixed Income Officer for and global financial markets. Dr. Chen
and portfolio AAMI. He began his career in investment joined Ibbotson in 1997. Michael E. Annin,
managers management with AmSouth Bank in 1987 and managing director, manages the investment
(continued) has been associated with AAMI since 1996. management services and data products
Mr. Boston received his CFA charter in 1993 group for Ibbotson. Scott Wentsel, senior
and is an active member and past president of portfolio manager, is responsible for
the Alabama Society of Financial Analysts. He management of the firm's fund- of-
also serves as the portfolio manager for the funds business which includes oversight
AmSouth High Quality Bond Fund. Mr. Boston of its investment management staff and
is a Senior Vice President of AmSouth Bank process. Alexander E. Kaye, portfolio
and Vice President of AAMI. manager, is responsible for managing the
delivery of fund-of-funds programs for
Mr. Crown has been employed with AmSouth institutional and retail clients, which
Bank since 1982 and AAMI since 2001. He includes asset allocation modeling, portfolio
was an Institutional Fund Manager with AAMI construction, fund classification and
(2001-2003) and has been a Regional manager due diligence. Brian Huckstep,
Manager since 2003. Mr. Crown is a Senior portfolio manager, is responsible for
Vice President of AmSouth Bank. managing the delivery of fund-of-funds
programs for institutional and retail clients,
Ms. Daniel has been employed with AmSouth which includes asset allocation modeling,
Bank since 1999. She has been employed by portfolio construction, fund classification,
AAMI as the Director of Alternative Strategies and manager due diligence.
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.
- ----------------------------------------------------------------------------------------------------------------------
49
- ----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios:
Growth Portfolio Pioneer Ibbotson Growth Allocation Fund
- ----------------------------------------------------------------------------------------------------------------------
Investment advisers Mr. McKenzie has been involved in
and portfolio investment management since 1981, with
managers portfolio management expertise in both
(continued) 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 Growth Allocation Fund
Portfolio seeks to provide investors with seeks long-term capital growth and income.
long term capital growth.
- ----------------------------------------------------------------------------------------------------------------------
50
- ----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios:
Growth Portfolio Pioneer Ibbotson Growth Allocation Fund
- ----------------------------------------------------------------------------------------------------------------------
Primary investments Each Fund allocates its investments among underlying funds within pre-determined strategy
ranges.
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.
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 Equity Fund Fixed Income Fund
Investments Allocation Allocation
Allocation
0-5% 70-80% 20-30%
- ----------------------------------------------------------------------------------------------------------------------
51
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AmSouth Strategic Portfolios:
Growth Portfolio Pioneer Ibbotson Growth Allocation Fund
- ----------------------------------------------------------------------------------------------------------------------
Primary investments Based upon the analysis described under "Asset allocation process," the Fund initially expects
(continued) to invest its assets in underlying mutual funds within the following ranges:
Fund Name Percentage of
Fund 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.
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.
- ----------------------------------------------------------------------------------------------------------------------
52
- ----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios:
Growth Portfolio Pioneer Ibbotson Growth Allocation Fund
- ----------------------------------------------------------------------------------------------------------------------
Borrowing AmSouth Strategic Portfolios: Growth Pioneer Ibbotson Growth Allocation Fund
Portfolio may not borrow money or issue may not borrow money, except on a
senior securities, except that the Fund may temporary basis and to the extent permitted
borrow from banks or enter into reverse by applicable law, the Fund may: (a) borrow
repurchase agreements for temporary from banks or through reverse repurchase
emergency purposes in amounts up to agreements in an amount up to 33 1/3% of
33 1/3% of the value of its total assets at the the Fund's total assets (including the
time of such borrowing. AmSouth Strategic amount borrowed); (b) borrow up to an
Portfolios: Growth Portfolio will not additional 5% of the Fund's assets for
purchase securities while borrowings temporary purposes; (c) obtain such short-
(including reverse repurchase agreements) term credits as are necessary for the
in excess of 5% of its total assets are clearance of portfolio transactions; (d)
outstanding. In addition, AmSouth Strategic purchase securities on margin; and (e)
Portfolios: Growth Portfolio is permitted to engage in transactions in mortgage dollar
participate in a credit facility whereby the rolls that are 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 As described above, the Funds have substantially similar principal investment strategies
policies and and policies. Certain of the non-principal investment policies and restrictions are different.
restrictions 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 Class A shares are offered with an initial Class A shares are offered with an initial
charges and Rule sales charge of up to 5.50% of the offering sales charge of up to 5.75% of the offering
12b-1 fees price, which is reduced depending upon the price, which is reduced or waived for large
amount invested or, in certain purchases and certain types of investors. At
circumstances, waived. Class A shares the time of your purchase, your investment
bought as part of an investment of $1 firm may receive a commission from
million or more are not subject to an initial Pioneer Funds Distributor, Inc. ("PFD"), the
sales charge, but may be charged a Fund's distributor, of up to 2% declining as
contingent deferred sales charge ("CDSC") the size of your investment increases.
of 1.00% if sold within one year There is no CDSC, except in certain
of purchase. circumstances when the initial sales charge
is waived.
Class A shares pay a shareholder servicing
fee (non 12b-1) of up to 0.25% of average Class A shares are subject to distribution
daily net assets. and service (12b-1) fees of up to 0.25% of
average daily net assets.
- ----------------------------------------------------------------------------------------------------------------------
53
- ----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios:
Growth Portfolio Pioneer Ibbotson Growth Allocation Fund
- ----------------------------------------------------------------------------------------------------------------------
Class B sales Class B shares are offered without an initial Class B shares are offered without an initial
charges and Rule sales charge, but are subject to a CDSC of sales charge, but are subject to CDSC of up
12b-1 fees up to 5%. For Class B shares issued to to 2% if you sell your shares. The charge is
former ISG Funds shareholders in reduced over time and is not charged after
connection with the combination of five years. Your investment firm may receive
AmSouth Funds with ISG Funds, the CDSC a commission from PFD, the Fund's
on such Class B shares held continuously distributor, at the time of your purchase of
declines over six years, starting with year up to 2%.
one and ending in year seven from: 4%,
3%, 3%, 2%, 2%, 1%. For all other Class B Class B shares are subject to distribution
shares held continuously, the CDSC declines and service (12b-1) fees of up to 1% of
over six years, starting with year one and average daily net assets.
ending in year seven from: 5%, 4%, 3%,
3%, 2%, 1%. Eight years after purchase Class B shares acquired through the
(seven years in the case of shares acquired Reorganization will retain the holding
in the ISG combination), Class B shares period, CDSC and commission schedules
automatically convert to Class A shares. applicable to the original purchase.
Class B shares pay a shareholder servicing Maximum purchase of Class B shares in a
fee (non 12b-1) of up to 0.25% of average single transaction is $49,999.
daily net assets and a distribution (12b-1)
fee of up to 0.75% of average daily Class B shares convert to Class A shares
net assets. eight years after the date of purchase. Class
B shares issued to former ISG Funds
Maximum investment for all Class B shareholders will convert to Class A shares
purchases by a shareholder for the Fund's seven years after the date of purchase.
shares is $99,999.
- ----------------------------------------------------------------------------------------------------------------------
Class I and Class Y AmSouth Strategic Portfolios: Growth The Fund does not impose any initial,
sales charges and Portfolio does not impose any initial or contingent deferred or asset based sales
Rule 12b-1 fees CDSC on Class I shares. charge on Class Y shares.
The Fund may impose a shareholder The distributor incurs the expenses of
servicing fee (non 12b-1) of up to 0.15% distributing the Fund's Class Y shares, none of
of average daily net assets. which are reimbursed by the Fund or the
Class Y shareowners.
- ----------------------------------------------------------------------------------------------------------------------
54
- ----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios:
Growth Portfolio Pioneer Ibbotson Growth Allocation Fund
- ----------------------------------------------------------------------------------------------------------------------
Management and AmSouth Strategic Portfolios: Growth The management fee payable by Pioneer
other fees Portfolio pays an advisory fee on a monthly Ibbotson Growth Allocation Fund is equal to
basis at an annual rate of 0.20% of the 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 attributable to other investments, including
for the Fund. The Fund pays ASO an underlying funds that are not managed by
administrative services fee of 0.15% of Pioneer, with breakpoints at incremental
the Fund's average daily net assets. asset levels. Since currently all of the
underlying funds are managed by Pioneer,
For the fiscal year ended July 31, 2004, the management fee will initially be 0.13%
other expenses of the Fund were limited to of average daily net assets.
0.30% for Class A shares, 0.29% for Class In addition, the Fund reimburses Pioneer for
B shares and 0.25 % for Class I shares. certain fund accounting and legal expenses
Any fee waiver or expense reimbursement incurred on behalf of the Fund and pays a
arrangement is voluntary and may be separate shareholder servicing/transfer
discontinued at any time. You also indirectly agency fee to PIMSS, an affiliate of Pioneer.
bear a pro rata share of the fees and
expenses of the underlying funds. Pioneer has contractually agreed not to
For the fiscal year ended July 31, 2004, the impose all or a portion of its fees or to limit
Fund's annual operating expenses for Class other direct ordinary operating expenses to
A shares, after giving effect to the expense the extent required to reduce expenses,
limitation were 0.50%, and without giving other than "Estimated average expense ratio
effect to the expense limitation, were of underlying funds," to 0.79% of the
0.73% of average daily net assets. As of average daily net assets attributable to Class
January 12, 2005, estimated total direct A shares and 1.57% of average daily net
and indirect expenses were 1.92% of assets attributable to Class B shares. There
average daily net assets. is no expense limitation with respect to the
Class Y shares. This expense limitation is in
For the fiscal year ended July 31, 2004, the effect for Class A shares until December 1,
Fund's annual operating expenses for Class 2008 and in effect for Class B shares until
B shares, after giving effect to the expense December 1, 2006. There can be no
limitation were 1.24%, and without giving assurance that Pioneer will extend these
effect to the expense limitation, were expense limitations past such dates. The
1.47% of average daily net assets. As of expense limitation does not limit the
January 12, 2005, estimated total direct expenses of the underlying funds indirectly
and indirect expenses were 2.66% of incurred by a shareholder.
average daily net assets.
Class Y shares of the Pioneer Fund are
For the fiscal year ended July 31, 2004, the being offered for the first time in connection
Fund's annual operating expenses for Class with the Reorganization.
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.
- ----------------------------------------------------------------------------------------------------------------------
55
- ----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios:
Growth Portfolio Pioneer Ibbotson Growth Allocation Fund
- ----------------------------------------------------------------------------------------------------------------------
Buying shares You may buy shares of the Fund directly You may buy shares from any investment
through BISYS Fund Services, the Fund's firm that has a sales agreement with PFD,
distributor, or through brokers, registered the 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
shares of the same class of another AmSouth of 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 least $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 you can exchange fund shares by telephone
shares may be exchanged for Class I shares or online.
of 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.
- ----------------------------------------------------------------------------------------------------------------------
56
- ----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios:
Growth Portfolio Pioneer Ibbotson Growth Allocation 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
Fund directly in writing or by telephone or your request to sell shares to PIMSS. You
by contacting a financial intermediary as can also sell your shares by contacting the
described in the Fund's prospectus. Fund 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
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.
57
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:
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
58
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 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*
[THE BAR CHART IS A REPRESENTATION OF THE PRINTED MATERIAL]
'00 '01 '02 '03 '04
0.59 -5.77 -13.63 21.84 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.
59
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%
- ---------------------------------------------------------------------------------------------------------------------
S&P 500 Index(1) (reflects no deduction for fees, expenses or taxes) 10.87% -2.30% 0.66%
- ---------------------------------------------------------------------------------------------------------------------
(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.
60
AmSouth Pioneer AmSouth
Strategic Ibbotson Strategic
Portfolios Growth Combined Portfolios
Growth Allocation Fund Growth
Portfolio(1) Fund (Pro Forma) Portfolio
Shareholder transaction fees Class A Class A Class A Class B
(paid directly from your investment) ---------- ---------- ----------- ----------
Maximum sales charge (load) when you buy
shares as a percentage of offering price ...... 5.50%(2) 5.75% 5.75% 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)
Redemption fees ................................ 2.00%(4) None None 2.00%(4)
Annual fund operating expenses
(deducted from fund assets)
(as a % of average net assets)
Management fee ................................. 0.20% 0.17% 0.17% 0.20%
Distribution and service (12b-1) fee ........... None 0.25% 0.25% 0.75%
Other expenses(5) .............................. 0.64% 0.70% 0.45% 0.65%
Estimated indirect expenses .................... 1.52% 0.78% 0.99%(8) 2.26%
Total fund operating expenses6 ................. 2.36% 1.90%(6) 1.86% 3.86%
Expense reimbursement/reduction ................ 0.33% 0.19% 0.08% 0.35%
Net fund operating expenses .................... 2.03% 1.71% 1.78% 3.51%
Pioneer AmSouth
Ibbotson Strategic
Growth Combined Portfolios Combined
Allocation Fund Growth Fund
Fund (Pro Forma) Portfolio (Pro Forma)
Shareholder transaction fees Class B Class B Class I Class Y(7)
(paid directly from your investment) ---------- ----------- ---------- -----------
Maximum sales charge (load) when you buy
shares as a percentage of offering price ...... 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
Redemption fees ................................ None None 2.00%(4) None
Annual fund operating expenses
(deducted from fund assets)
(as a % of average net assets)
Management fee ................................. 0.17% 0.17% 0.20% 0.17%
Distribution and service (12b-1) fee ........... 1.00% 1.00% None None
Other expenses(5) ............................. 0.86% 0.67% 0.60% 0.27%
Estimated indirect expenses .................... 0.78% 0.99%(8) 1.47% 0.99%(8)
Total fund operating expenses(6) ............... 2.81%(6) 2.83% 2.27% 1.43%
Expense reimbursement/reduction ................ 0.19% 0.27% 0.34% N/A
Net fund operating expenses .................... 2.62% 2.56% 1.93% 1.43%
(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) For the period ended January 31, 2005, other expenses for your AmSouth Fund
were 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 indirect expenses," 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 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.
(8) "Estimated indirect expenses" for the Pioneer Funds reflect the estimated
gross indirect expenses as of the most recent fiscal period for the
underlying funds. Several of the underlying funds are subject to expense
limitations, which expire as of various dates. Giving effect to such
expense limitations, the estimated indirect expenses would be 0.81%, and
the pro forma combined net expenses for the Pioneer Fund would be 1.60%,
2.38% and 1.25% for Class A, Class B and Class Y shares, respectively.
61
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
Strategic Ibbotson
Portfolios: Growth Combined
Growth Allocation Fund
Number of years you own your shares Portfolio Fund (Pro Forma)
- --------------------------------------------------------------------------------------------------------------
Class A
- --------------------------------------------------------------------------------------------------------------
Year 1 $ 747 $ 739 $ 745
- --------------------------------------------------------------------------------------------------------------
Year 3 $1,157 $1,120 $1,103
- --------------------------------------------------------------------------------------------------------------
Year 5 $1,593 N/A $1,501
- --------------------------------------------------------------------------------------------------------------
Year 10 $2,798 N/A $2,610
- --------------------------------------------------------------------------------------------------------------
Class B -- assuming redemption at end of period
- --------------------------------------------------------------------------------------------------------------
Year 1 $ 784 $ 665 $ 659
- --------------------------------------------------------------------------------------------------------------
Year 3 $1,171 $1,153 $1,152
- --------------------------------------------------------------------------------------------------------------
Year 5 $1,684 N/A $1,670
- --------------------------------------------------------------------------------------------------------------
Year 10 $2,957 N/A $2,906
- --------------------------------------------------------------------------------------------------------------
Class B -- assuming no redemption
- --------------------------------------------------------------------------------------------------------------
Year 1 $ 284 $ 265 $ 259
- --------------------------------------------------------------------------------------------------------------
Year 3 $ 871 $ 853 $ 852
- --------------------------------------------------------------------------------------------------------------
Year 5 $1,484 N/A $1,470
- --------------------------------------------------------------------------------------------------------------
Year 10 $2,957 N/A $2,906
- --------------------------------------------------------------------------------------------------------------
Class I Class Y
- --------------------------------------------------------------------------------------------------------------
Year 1 $ 204 N/A $ 146
- --------------------------------------------------------------------------------------------------------------
Year 3 $ 630 N/A $ 452
- --------------------------------------------------------------------------------------------------------------
Year 5 $ 1083 N/A $ 782
- --------------------------------------------------------------------------------------------------------------
Year 10 $2,338 N/A $1,713
- --------------------------------------------------------------------------------------------------------------
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 the U.S.
advisory subsidiary of Pioneer Global Asset Management, S.p.A. ("PGAM"), a
global asset management group and wholly-owned subsidiary of UniCredito
Italiano S.p.A., one of the largest banking groups in Italy. The PGAM companies
provide investment management and financial services to mutual funds,
institutional and other clients. As of December 31, 2004, assets under
management of the PGAM companies 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 money market funds 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
62
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 have currently. 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 Bancorporation will pay all costs of preparing and
printing the Funds' proxy statements and solicitation costs incurred by the
Funds in connection with the Reorganizations. AAMI or an affiliate will
otherwise be responsible for 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 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 Ibbotson
AmSouth Strategic Pioneer Ibbotson Growth
Portfolios: Growth Growth Allocation Fund
Portfolio Fund Allocation Fund (Pro 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
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.
63
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
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,
64
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)
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.
65
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.
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.
66
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 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.
67
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.
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
68
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.
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.
69
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,
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
70
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
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.
71
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
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
72
AmSouth Strategic Portfolios: Growth and Income Portfolio and
Pioneer Ibbotson Moderate Allocation 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 exhibits, which
include additional information that is not included in the summary and are a
part of the Proxy Statement/Prospectus. Exhibit A-1 is the form of Agreement
and Plan of Reorganization. Exhibit B includes some additional information
regarding Pioneer. The most recent portfolio manager's discussion of each
Fund's performance is attached as Exhibit C.
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 and Income Portfolio to
Pioneer Ibbotson Moderate Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Growth and
Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Business A diversified series of AmSouth Funds, an A series of Pioneer Ibbotson Asset
open-end management investment company Allocation Series, a diversified open-end
organized as a Massachusetts business management investment company organized
trust. as a Delaware statutory trust.
- -----------------------------------------------------------------------------------------------------------------------
Net assets as of $112.5 million $34.3 million
March 31, 2005
- -----------------------------------------------------------------------------------------------------------------------
Investment advisers Investment Adviser: Investment Adviser:
and portfolio AAMI Pioneer
managers
Portfolio Manager: Investment Subadviser:
Day-to-day management of AmSouth Ibbotson Associates Advisors, LLC
Strategic Portfolios: Growth & Income ("Ibbotson")
Portfolio is the responsibility of the
AmSouth Strategy Committee, and no Portfolio Managers:
person is primarily responsible for making Day-to-day management of Pioneer
recommendations to the Committee. The Ibbotson Moderate Allocation Fund is the
Committee members consist of John P. responsibility of portfolio managers and
Boston, CFA, Fred Crown, CFA, Paige B. members of Ibbotson's Investment
Daniel, David M. Dasari, CFA, Joseph T. Committee headed by Roger Ibbotson.
Keating, Ronald E. Lindquist, John Mark Roger Ibbotson founded Ibbotson in 1977
McKenzie, Matt Smith, CFA, Brian B. and is the firm's Chairman. Peng Chen,
Sullivan, CFA, Doug S. Williams and Jason Ph.D., managing director and chief
Waters. investment officer at Ibbotson, conducts
research projects on asset allocation,
portfolio risk measurement, nontraditional
assets,
- -----------------------------------------------------------------------------------------------------------------------
73
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AmSouth Strategic Portfolios: Growth and
Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Investment advisers Mr. Boston is Chief Fixed Income Officer for and global financial markets. Dr. Chen
and portfolio AAMI. He began his career in investment joined Ibbotson in 1997. Michael E. Annin,
managers management with AmSouth Bank in 1987 managing director, manages the investment
(continued) and has been associated with AAMI since management services and data products
1996. Mr. Boston received his CFA charter group for Ibbotson. Scott Wentsel, senior
in 1993 and is an active member and past portfolio manager, is responsible for
president of the Alabama Society of management of the firm's fund- of-
Financial Analysts. He also serves as the funds business which includes oversight of
portfolio manager for the AmSouth High its investment management staff and
Quality Bond Fund. Mr. Boston is a Senior process. Alexander E. Kaye, portfolio
Vice President of AmSouth Bank and Vice manager, is responsible for managing the
President of AAMI. delivery of fund-of-funds programs for
institutional and retail clients, which
Mr. Crown has been employed with includes asset allocation modeling, portfolio
AmSouth Bank since 1982 and AAMI since construction, fund classification and
2001. He was an Institutional Fund Manager manager due diligence. Brian Huckstep,
with AAMI (2001-2003) and has been a portfolio manager, is responsible for
Regional Manager since 2003. Mr. Crown is managing the delivery of fund-of-funds
a Senior Vice President of AmSouth Bank. programs for institutional and retail clients,
which includes asset allocation modeling,
Ms. Daniel has been employed with portfolio construction, fund classification,
AmSouth Bank since 1999. She has been and manager due diligence.
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
- -----------------------------------------------------------------------------------------------------------------------
74
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AmSouth Strategic Portfolios: Growth and
Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Investment advisers are predecessors of AmSouth Bank and
and portfolio affiliates of AAMI. He also serves as the
managers portfolio manager for the AmSouth Large
(continued) 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 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.
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75
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AmSouth Strategic Portfolios: Growth and
Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Investment objective AmSouth Strategic Portfolios: Growth and Pioneer Ibbotson Moderate Allocation Fund
Income Portfolio seeks to provide investors seeks long-term capital growth and current
with long-term capital growth and a income.
moderate level of current income.
- -----------------------------------------------------------------------------------------------------------------------
Primary investments Each Fund allocates its investments among underlying funds within pre-determined strategy
ranges.
AmSouth Strategic Portfolios: Growth and Income Portfolio:
AmSouth Strategic Portfolios: Growth and 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 and Income
Portfolio's shareholders.
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 Equity Fund Fixed Income Fund
Investments Allocation Allocation
Allocation
0-5% 55-65% 35-45%
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76
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AmSouth Strategic Portfolios: Growth and
Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Primary investments Based upon the analysis described under "Asset allocation process," the Fund initially expects
(continued) 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 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.
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.
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77
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AmSouth Strategic Portfolios: Growth and
Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Borrowing AmSouth Strategic Portfolios: Growth and Pioneer Ibbotson Moderate Allocation Fund
Income Portfolio may not borrow money or may not borrow money, except on a
issue senior securities, except that the Fund temporary basis and to the extent permitted
may borrow from banks or enter into by applicable law, the Fund may: (a) borrow
reverse repurchase agreements for temporary from banks or through reverse repurchase
emergency purposes in amounts up to 33 1/3% agreements in an amount up to 33 1/3% of
of the value of its total assets at the the Fund's total assets (including the
time of such borrowing. AmSouth Strategic amount borrowed); (b) borrow up to an
Portfolios: Growth and Income Portfolio will additional 5% of the Fund's assets for
not purchase securities while borrowings temporary purposes; (c) obtain such short-
(including reverse repurchase agreements) term credits as are necessary for the
in excess of 5% of its total assets are clearance of portfolio transactions; (d)
outstanding. In addition, AmSouth Strategic purchase securities on margin; and (e)
Portfolios: Growth and Income Portfolio is engage in transactions in mortgage dollar
permitted to participate in a credit facility rolls that are accounted for as financings.
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
policies and and policies. Certain of the non-principal investment policies and restrictions are different.
restrictions 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 Class A shares are offered with an initial Class A shares are offered with an initial
charges and Rule sales charge of up to 5.50% of the offering sales charge of up to 5.75% of the offering
12b-1 fees price, which is reduced depending upon the price, which is reduced or waived for large
amount invested or, in certain purchases and certain types of investors. At
circumstances, waived. Class A shares the time of your purchase, your investment
bought as part of an investment of $1 firm may receive a commission from
million or more are not subject to an initial Pioneer Funds Distributor, Inc. ("PFD"), the
sales charge, but may be charged a Fund's distributor, of up to 2% declining as
contingent deferred sales charge ("CDSC") the size of your investment increases.
of 1.00% if sold within one year
of purchase. There is no CDSC, except in certain
circumstances when the initial sales charge
Class A shares pay a shareholder servicing is waived.
fee (non 12b-1) of up to 0.25% of average
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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78
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AmSouth Strategic Portfolios: Growth and
Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Class B sales Class B shares are offered without an initial Class B shares are offered without an initial
charges and Rule sales charge, but are subject to a CDSC sales charge, but are subject to a CDSC of
12b-1 fees of up to 5%. For Class B shares issued up to 2% if you sell your shares. The
to former ISG Funds shareholders in charge is reduced over time and is not
connection with the combination of charged after three years. Your investment
AmSouth Funds with ISG Funds, the CDSC firm may receive a commission from PFD,
on such Class B shares held continuously the Fund's distributor, at the time of your
declines over six years, starting with year purchase of up to 2%.
one and ending in year seven from: 4%,
3%, 3%, 2%, 2%, 1%. For all other Class B Class B shares are subject to distribution
shares held continuously, the CDSC declines and service (12b-1) fees of up to 1% of
over six years, starting with year one and average daily net assets.
ending in year seven from: 5%, 4%, 3%,
3%, 2%, 1%. Eight years after purchase Class B shares acquired through the
(seven years in the case of shares acquired Reorganization will retain the holding
in the ISG combination), Class B shares period, CDSC and commission schedules
automatically convert to Class A shares. applicable to the original purchase.
Class B shares pay a shareholder servicing Maximum purchase of Class B shares in a
fee (non 12b-1) of up to 0.25% of average single transaction is $49,999.
daily net assets and a distribution (12b-1)
fee of 0.75% of up to average daily Class B shares convert to Class A shares
net assets. eight years after the date of purchase. Class
B shares issued to former ISG Funds
Maximum investment for all Class B shareholders will convert to Class A shares
purchases by a shareholder for the Fund's seven years after the date of purchase.
shares is $99,999.
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Class I and Class Y AmSouth Strategic Portfolios: Growth and The Fund does not impose any initial,
sales charges and Income Portfolio does not impose any initial contingent deferred or asset based sales
Rule 12b-1 fees or CDSC on Class I shares. charge on Class Y shares.
The Fund may impose a shareholder The distributor incurs the expenses of
servicing fee (non 12b-1) of up to 0.15% distributing the Fund's Class Y shares, none
of average daily net assets. of which are reimbursed by the Fund or the
Class Y shareowners.
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79
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AmSouth Strategic Portfolios: Growth and
Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Management and AmSouth Strategic Portfolios: Growth and The management fee payable by Pioneer
other fees Income Portfolio pays an advisory fee on a Ibbotson Moderate Allocation Fund is equal
monthly basis at an annual rate of 0.20% of to 0.13% of average daily net assets
the Fund's average daily net assets. attributable to the Fund's investments in
underlying funds managed by Pioneer and
ASO Services Company, Inc. ("ASO") cash and 0.17% of average daily net assets
serves as administrator and fund accounting attributable to other investments, including
agent for 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
Fund's average daily net assets. asset levels. Since currently all of the
underlying funds are managed by Pioneer,
For the fiscal year ended July 31, 2004, the management fee will initially be 0.13%
other expenses of the Fund were limited to of average daily net assets.
0.33% for Class A shares, 0.33% for Class
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 indirectly separate shareholder servicing/transfer
bear a pro rata share of the fees and agency fee to PIMSS, an affiliate of Pioneer.
expenses of the underlying funds.
Pioneer has contractually agreed not to
For the fiscal year ended July 31, 2004, the impose all or a portion of its fees or to limit
Fund's annual operating expenses for Class other direct ordinary operating expenses to
A shares, after giving effect to the expense the extent required to reduce expenses,
limitation were 0.53%, and without giving other than "Estimated average expense ratio
effect to the expense limitation, were of underlying funds," to 0.74% of the
0.66% of average daily net assets. As of average daily net assets attributable to Class
January 12, 2005, estimated total direct A shares and 1.64% of average daily net
and indirect expenses were 1.81% of assets attributable to Class B shares. There
average daily net assets. is no expense limitation with respect to the
Class Y shares. This expense limitation is in
For the fiscal year ended July 31, 2004, the effect for Class A shares until December 1,
Fund's annual operating expenses for Class 2008 and in effect for Class B shares until
B shares, after giving effect to the expense December 1, 2006. There can be no
limitation were 1.28%, and without giving assurance that Pioneer will extend these
effect to the expense limitation, were expense limitations past such dates. The
1.41% of average daily net assets. As of expense limitation does not limit the
January 12, 2005, estimated total direct expenses of the underlying funds indirectly
and indirect expenses were 2.56% of incurred by a shareholder.
average daily net assets.
Class Y shares of the Pioneer Fund are
For the fiscal year ended July 31, 2004, the being offered for the first time in connection
Fund's annual operating expenses for Class with the Reorganization.
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.
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80
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AmSouth Strategic Portfolios: Growth and
Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Buying shares You may buy shares of the Fund directly You may buy shares from any investment
through BISYS Fund Services, the Fund's firm that has a sales agreement with PFD,
distributor, or through brokers, registered the Pioneer 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
distributor, as described in the Fund's also purchase additional shares of the Fund
prospectus. 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 You may exchange your shares for shares
for shares of the same class of another of the same class of another Pioneer mutual
AmSouth fund, usually without paying fund. Your exchange request must be for at
additional sales charges. You must meet the least $1,000.
minimum investment requirements for the
Fund into which you are exchanging. After you establish an eligible fund account,
Exchanges from one fund to another are you can exchange Fund shares by telephone
taxable. Class A shares may be exchanged or online.
for Class I shares of 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.
- -----------------------------------------------------------------------------------------------------------------------
81
- -----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Growth and
Income Portfolio Pioneer Ibbotson Moderate Allocation 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
Fund directly in writing or by telephone or your request to sell shares to PIMSS. You
by contacting a financial intermediary as can also sell your shares by contacting the
described in the Fund's prospectus. Fund 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
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.
82
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:
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:
83
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 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 and Income Portfolio. The bar charts show how AmSouth
Strategic Portfolios: Growth and 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 and Income Portfolio -- Class A Shares
Calendar Year Total Returns*
[THE BAR CHART IS A REPRESENTATION OF THE PRINTED MATERIAL]
'00 '01 '02 '03 '04
4.21 -2.29 -8.54 17.38 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.
84
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 and Income Portfolio
Average Annual Total Returns (for the periods ending December 31, 2004)
- ------------------------------------------------------------------------------------------------------------------------------------
Since Inception
1 Year 5 Years (1/27/99)
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Growth and 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 and Income Portfolio, Class B Shares
- ------------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 1.77% 2.16% 3.00%
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Growth and 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)
(reflects no deduction for fees, expenses or taxes) 10.87% -2.30% 0.66%
- ------------------------------------------------------------------------------------------------------------------------------------
(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 and 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.
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
and Income Portfolio, the expenses of AmSouth Strategic Portfolios: Growth and
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 and 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 and Income
Portfolio into Pioneer Ibbotson Moderate Allocation Fund also occurred on
January 31, 2005.
85
Combined
Fund
(including
AmSouth AmSouth AmSouth
Strategic Pioneer Moderate Strategic
Portfolios Ibbotson Growth Portfolios
Growth Moderate Combined and Income Growth
and Income Allocation Fund Portfolio) and Income
Shareholder transaction Portfolio(1) Fund (Pro Forma) (Pro Forma) Portfolio
fees (paid directly Class A Class A Class A Class A Class B
from your investment) ------------ ---------- ----------- ----------- -----------
Maximum sales charge
(load) when you buy
shares as a percentage
of offering price ......... 5.50%(2) 5.75% 5.75% 5.75% 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 5.00%(3)
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 ............. 0.20% 0.17%(6) 0.17%(6) 0.17%(6) 0.20%
Distribution and service
(12b-1) fee ............... None 0.25% 0.25% 0.25% 0.75%
Other expenses(5) .......... 0.57% 0.68% 0.38% 0.35% 0.61%
Estimated indirect
expenses .................. 1.50% 0.68% 0.92%(9) 0.92%(9) 2.24%
Total fund operating
expenses .................. 2.27% 1.78%(7) 1.72% 1.69% 3.05%
Expense reimbursement/
reduction ................. 0.25% 0.20% 0.06% 0.03% 0.30%
Net fund operating
expenses .................. 2.02% 1.58% 1.66% 1.66% 2.75%
Combined Combined
Fund Fund
(including (including
AmSouth AmSouth AmSouth
Pioneer Moderate Strategic Moderate
Ibbotson Growth Portfolios Growth
Moderate Combined and Income Growth Combined and Income
Allocation Fund Portfolio) and Income Fund Portfolio)
Shareholder transaction Fund (Pro Forma) (Pro Forma) Portfolio (Pro Forma) (Pro Forma)
fees (paid directly Class B Class B Class B Class I Class Y(8) Class Y(8)
from your investment) ------------ ------------- ------------- ------------ ------------- ------------
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% 4.00% None None None
Redemption fees ............ None None None 2.00%(4) None None
Annual fund operating
expenses (deducted
from fund assets)
(as a % of average
net assets)
Management fee ............. 0.17%(6) 0.17%(6) 0.17%(6) 0.20% 0.17%(6) 0.17%(6)
Distribution and service
(12b-1) fee ............... 1.00% 1.00% 1.00% None None None
Other expenses(5) .......... 0.80% 0.60% 0.57% 0.47% 0.20% 0.15%
Estimated indirect
expenses .................. 0.68% 0.92%(9) 0.92%(9) 1.45% 0.92%(9) 0.92%9
Total fund operating
expenses .................. 2.65%(7) 2.69% 2.66% 2.12% 1.29% 1.24%
Expense reimbursement/
reduction ................. 0.20% 0.25% 0.22% 0.20% N/A N/A
Net fund operating
expenses .................. 2.45% 2.44% 2.44% 1.92% 1.29% 1.24%
(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) For the period ended January 31, 2005, other expenses for your AmSouth Fund
were 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 indirect expenses," 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
86
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.
(9) "Estimated indirect expenses" for the Pioneer Funds reflect the estimated
gross indirect expenses as of the most recent fiscal period for the
underlying funds. Several of the underlying funds are subject to expense
limitations, which expire as of various dates. Giving effect to such
expense limitations, the estimated indirect expenses would be 0.73%, and
the pro forma combined net expenses for the Pioneer Fund (assuming the
reorganization of AmSouth Strategic Portfolios: Moderate Growth & Income
Portfolio into the Pioneer Fund also occurs) would be 1.47%, 2.25% and
1.05% for Class A, Class B and Class Y shares, respectively.
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 Combined Fund
Strategic Pioneer (including AmSouth
Portfolios: Ibbotson Strategic Portfolios:
Growth & Moderate Combined Moderate Growth &
Income Allocation Fund Income Portfolio)
Number of years you own your shares Portfolio Fund (Pro Forma) (Pro Forma)
- ----------------------------------------------------------------------------------------------------------------------------------
Class A
- ----------------------------------------------------------------------------------------------------------------------------------
Year 1 $ 737 $ 726 $ 734 $ 734
- ----------------------------------------------------------------------------------------------------------------------------------
Year 3 $1,129 $1,085 $1.068 $1.068
- ----------------------------------------------------------------------------------------------------------------------------------
Year 5 $1,544 N/A $1,432 $1,432
- ----------------------------------------------------------------------------------------------------------------------------------
Year 10 $2,700 N/A $2,450 $2,450
- ----------------------------------------------------------------------------------------------------------------------------------
Class B -- assuming redemption at end of period
- ----------------------------------------------------------------------------------------------------------------------------------
Year 1 $ 777 $ 648 $ 647 $ 647
- ----------------------------------------------------------------------------------------------------------------------------------
Year 3 $1,150 $1,104 $1,106 $1,106
- ----------------------------------------------------------------------------------------------------------------------------------
Year 5 $1,650 N/A $1,590 $1,590
- ----------------------------------------------------------------------------------------------------------------------------------
Year 10 $2,881 N/A $2,741 $2,741
- ----------------------------------------------------------------------------------------------------------------------------------
Class B -- assuming no redemption
- ----------------------------------------------------------------------------------------------------------------------------------
Year 1 $ 277 $ 248 $ 247 $ 247
- ----------------------------------------------------------------------------------------------------------------------------------
Year 3 $ 850 $ 804 $ 806 $ 806
- ----------------------------------------------------------------------------------------------------------------------------------
Year 5 $1,450 N/A $1,390 $1,390
- ----------------------------------------------------------------------------------------------------------------------------------
Year 10 $2,881 N/A $2,741 $2,741
- ----------------------------------------------------------------------------------------------------------------------------------
Class I Class Y
- ----------------------------------------------------------------------------------------------------------------------------------
Year 1 $ 188 N/A $ 131 $ 126
- ----------------------------------------------------------------------------------------------------------------------------------
Year 3 $ 582 N/A $ 409 $ 393
- ----------------------------------------------------------------------------------------------------------------------------------
Year 5 $ 1001 N/A $ 708 $ 681
- ----------------------------------------------------------------------------------------------------------------------------------
Year 10 $2,169 N/A $1,556 $1,500
- ----------------------------------------------------------------------------------------------------------------------------------
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.
87
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 the U.S. advisory subsidiary of Pioneer Global Asset
Management, S.p.A. ("PGAM"), a global asset management group and wholly-owned
subsidiary of UniCredito Italiano S.p.A., one of the largest banking groups in
Italy. The PGAM companies provide investment management and financial services
to mutual funds, institutional and other clients. As of December 31, 2004,
assets under management of the PGAM companies 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 money market funds 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 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 have currently. 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 Bancorporation will pay all costs of preparing and
printing the Funds' proxy statements and solicitation costs incurred by the
Funds in connection with the Reorganizations. AAMI or an affiliate will
otherwise be responsible for 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 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.
88
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 and
Income Portfolio approve the reorganization of their fund into Pioneer Ibbotson
Moderate Allocation Fund.
Pro Forma
Pioneer Ibbotson
Moderate
Allocation Fund
Pro Forma (including AmSouth
AmSouth Strategic Pioneer Ibbotson Pioneer Ibbotson Strategic Portfolios:
Portfolios: Growth and Moderate Moderate Moderate Growth and
Income Portfolio Fund Allocation Fund Allocation Fund Income 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
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.
89
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
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,
90
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)
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.
91
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.
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.
92
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 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.
93
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.
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
94
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.
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.
95
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,
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
96
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
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.
97
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
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
98
AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio and
Pioneer Ibbotson Moderate Allocation 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 exhibits, which
include additional information that is not included in the summary and are a
part of the Proxy Statement/Prospectus. Exhibit A-1 is the form of Agreement
and Plan of Reorganization. Exhibit B includes some additional information
regarding Pioneer. The most recent portfolio manager's discussion of each
Fund's performance is attached as Exhibit C.
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 and Income
Portfolio to Pioneer Ibbotson Moderate Allocation Fund
- ---------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Moderate
Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- ---------------------------------------------------------------------------------------------------------------------------
Business A diversified series of AmSouth Funds, an A series of Pioneer Ibbotson Asset
open-end management investment company Allocation Series, a diversified open-end
organized as a Massachusetts business management investment company organized
trust. as a Delaware statutory trust.
- ---------------------------------------------------------------------------------------------------------------------------
Net assets as of $50.6 million $34.3 million
March 31, 2005
- ---------------------------------------------------------------------------------------------------------------------------
Investment advisers Investment Adviser: Investment Adviser:
and portfolio AAMI Pioneer
managers
Portfolio Manager: Investment Subadviser:
Day-to-day management of AmSouth Ibbotson Associates Advisors, LLC
Strategic Portfolios: Moderate Growth & ("Ibbotson")
Income Portfolio is the responsibility of
the AmSouth Strategy Committee, and no Portfolio Managers:
person is primarily responsible for making Day-to-day management of Pioneer
recommendations to the Committee. The Ibbotson Moderate Allocation Fund is the
Committee members consist of John P. responsibility of portfolio managers and
Boston, CFA, Fred Crown, CFA, Paige B. members of Ibbotson's Investment
Daniel, David M. Dasari, CFA, Joseph T. Committee headed by Roger Ibbotson.
Keating, Ronald E. Lindquist, John Mark Roger Ibbotson founded Ibbotson in 1977
McKenzie, Matt Smith, CFA, Brian B. and is the firm's Chairman. Peng Chen,
Sullivan, CFA, Doug S. Williams and Jason Ph.D., managing director and chief
Waters. investment officer at Ibbotson, conducts
research projects on asset allocation,
portfolio risk measurement, nontraditional
assets,
- ---------------------------------------------------------------------------------------------------------------------------
99
- ---------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Moderate
Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- ---------------------------------------------------------------------------------------------------------------------------
Investment advisers Mr. Boston is Chief Fixed Income Officer for and global financial markets. Dr. Chen
and portfolio AAMI. He began his career in investment joined Ibbotson in 1997. Michael E. Annin,
managers management with AmSouth Bank in 1987 managing director, manages the investment
(continued) and has been associated with AAMI since management services and data products
1996. Mr. Boston received his CFA charter group for Ibbotson. Scott Wentsel, senior
in 1993 and is an active member and past portfolio manager, is responsible for
president of the Alabama Society of management of the firm's fund- of-
Financial Analysts. He also serves as the funds business which includes oversight
portfolio manager for the AmSouth High of its investment management staff and
Quality Bond Fund. Mr. Boston is a Senior process. Alexander E. Kaye, portfolio
Vice President of AmSouth Bank and Vice manager, is responsible for managing the
President of AAMI. delivery of fund-of-funds programs for
institutional and retail clients, which
Mr. Crown has been employed with includes asset allocation modeling, portfolio
AmSouth Bank since 1982 and AAMI since construction, fund classification and
2001. He was an Institutional Fund Manager manager due diligence. Brian Huckstep,
with AAMI (2001-2003) and has been a portfolio manager, is responsible for
Regional Manager since 2003. Mr. Crown is managing the delivery of fund-of-funds
a Senior Vice President of AmSouth Bank. programs for institutional and retail clients,
which includes asset allocation modeling,
Ms. Daniel has been employed with portfolio construction, fund classification,
AmSouth Bank since 1999. She has been and manager due diligence.
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.
- ---------------------------------------------------------------------------------------------------------------------------
100
- ---------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Moderate
Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- ---------------------------------------------------------------------------------------------------------------------------
Investment advisers Mr. Lindquist has been employed with AAMI
and portfolio since December 1999. Prior to December
managers 1999, Mr. Lindquist was employed by First
(continued) 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 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.
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101
- ---------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Moderate
Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- ---------------------------------------------------------------------------------------------------------------------------
Investment advisers Mr. Williams has been employed with
and portfolio AmSouth Bank since 2002. He has been
managers employed as a Regional Manager with AAMI
(continued) 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 Pioneer Ibbotson Moderate Allocation Fund
Growth and Income Portfolio seeks to seeks long-term capital growth and current
provide investors with current income income.
and a moderate level of capital growth.
- ---------------------------------------------------------------------------------------------------------------------------
Primary investments Each Fund allocates its investments among underlying funds within pre-determined strategy
ranges.
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.
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 Equity Fund Fixed Income Fund
Investments Allocation Allocation
Allocation
0-5% 55-65% 35-45%
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102
- ---------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Moderate
Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- ---------------------------------------------------------------------------------------------------------------------------
Primary investments Based upon the analysis described under "Asset allocation process," the fund initially expects
(continued) 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.
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.
- ---------------------------------------------------------------------------------------------------------------------------
103
- ---------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Moderate
Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- ---------------------------------------------------------------------------------------------------------------------------
Borrowing AmSouth Strategic Portfolios: Moderate Pioneer Ibbotson Moderate Allocation Fund
Growth and Income Portfolio may not borrow may not borrow money, except on a
money or issue senior securities, except temporary basis and to the extent permitted
that the Fund may borrow from banks or by applicable law, the Fund may: (a) borrow
enter into reverse repurchase agreements from banks or through reverse repurchase
for temporary emergency purposes in agreements in an amount up to 33 1/3% of
amounts up to 33 1/3% of the value of its the Fund's total assets (including the
total assets at the time of such borrowing. amount borrowed); (b) borrow up to an
AmSouth Strategic Portfolios: Moderate additional 5% of the Fund's assets for
Growth and Income Portfolio will not temporary purposes; (c) obtain such short-
purchase securities while borrowings term credits as are necessary for the
(including reverse repurchase agreements) clearance of portfolio transactions; (d)
in excess of 5% of its total assets are purchase securities on margin; and (e)
outstanding. In addition, AmSouth Strategic engage in transactions in mortgage dollar
Portfolios: Moderate Growth and Income rolls that are accounted for as financings.
Portfolio 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 As described above, the Funds have substantially similar principal investment strategies
policies and and policies. Certain of the non-principal investment policies and restrictions are different.
restrictions 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 Class A shares are offered with an initial Class A shares are offered with initial sales
charges and Rule sales charge of up to 5.50% of the offering charges up to 5.75% of the offering price,
12b-1 Fees price, which is reduced depending upon the which is reduced or waived for large
amount invested or, in certain purchases and certain types of investors. At
circumstances, waived. Class A shares the time of your purchase, your investment
bought as part of an investment of $1 firm may receive a commission from
million or more are not subject to an initial Pioneer Funds Distributor, Inc. ("PFD"), the
sales charge, but may be charged a Fund's distributor, of up to 2% declining as
contingent deferred sales charge ("CDSC") the size of your investment increases.
of 1.00% if sold within one year
of purchase. There is no CDSC, except in certain
circumstances when the initial sales charge
Class A shares pay a shareholder servicing is waived.
fee (non 12b-1) of up to 0.25% of average
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.
- ---------------------------------------------------------------------------------------------------------------------------
104
- ---------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Moderate
Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- ---------------------------------------------------------------------------------------------------------------------------
Class B sales Class B shares are offered without an initial Class B shares are offered without an initial
charges and Rule sales charge, but are subject to a CDSC sales charge, but are subject to a CDSC of
12b-1 fees of up to 5%. For Class B shares issued up to 2% if you sell your shares. The
to former ISG Funds shareholders in charge is reduced over time and is not
connection with the combination of charged after five years. Your investment
AmSouth Funds with ISG Funds, the CDSC firm may receive a commission from PFD,
on such Class B shares held continuously the Fund's distributor, at the time of your
declines over six years, starting with year purchase of up to 2%.
one and ending in year seven from: 4%,
3%, 3%, 2%, 2%, 1%. For all other Class B Class B shares are subject to distribution
shares held continuously, the CDSC declines and service (12b-1) fees of up to 1% of
over six years, starting with year one and average daily net assets.
ending in year seven from: 5%, 4%, 3%,
3%, 2%, 1%. Eight years after purchase Class B shares acquired through the
(seven years in the case of shares acquired Reorganization will retain the holding period,
in the ISG combination), Class B shares CDSC and commission schedules applicable
automatically convert to Class A shares. to the original purchase.
Class B shares pay a shareholder servicing Maximum purchase of Class B shares in a
fee (non 12b-1) of up to 0.25% of average single transaction is $49,999.
daily net assets and a distribution (12b-1)
fee of up to 0.75% of average daily Class B shares convert to Class A shares
net assets. eight years after the date of purchase. Class
B shares issued to former ISG Funds
Maximum investment for all Class B shareholders will convert to Class A shares
purchases by a shareholder for the Fund's seven years after the date of purchase.
shares is $99,999.
- ---------------------------------------------------------------------------------------------------------------------------
Class I and Class Y AmSouth Strategic Portfolios: Moderate The Fund does not impose any initial,
sales charges and Growth and Income Portfolio does not impose contingent deferred or asset based sales
Rule 12b-1 fees any initial or CDSC on Class I shares. charge on Class Y shares.
The Fund may impose a shareholder The distributor incurs the expenses of
servicing fee (non 12b-1) of up to 0.15% distributing the Fund's Class Y shares, none
of average daily net assets. of which are reimbursed by the Fund or the
Class Y shareowners.
- ---------------------------------------------------------------------------------------------------------------------------
105
- ---------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Moderate
Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- ---------------------------------------------------------------------------------------------------------------------------
Management and AmSouth Strategic Portfolios: Moderate The management fee payable by Pioneer
other fees Growth and Income Portfolio pays an Ibbotson Moderate Allocation Fund is equal
advisory fee on a monthly basis at an to 0.13% of average daily net assets
annual rate of 0.20% of the Fund's average attributable to the Fund's investments in
daily net assets. underlying funds managed by Pioneer and
cash and 0.17% of average daily net assets
ASO Services Company, Inc. ("ASO") attributable to other investments, including
serves as administrator and fund accounting underlying funds that are not managed by
agent for the Fund. The Fund pays ASO an 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%
For the fiscal year ended July 31, 2004, of average daily net assets.
other expenses of the Fund were limited to
0.38% for Class A shares, 0.37% for Class In addition, the Fund reimburses Pioneer for
B shares and 0.33% for Class I shares. Any certain fund accounting and legal expenses
fee waiver or expense reimbursement incurred on behalf of the Fund and pays a
arrangement is voluntary and may be separate shareholder servicing/transfer
discontinued at any time. You also indirectly agency fee to PIMSS, an affiliate of Pioneer.
bear a pro rata share of the fees and
expenses of the underlying funds. Pioneer has contractually agreed not to
impose all or a portion of its fees or to limit
For the fiscal year ended July 31, 2004, the other direct ordinary operating expenses to
Fund's annual operating expenses for Class the extent required to reduce expenses,
A shares, after giving effect to the expense other than "Estimated average expense ratio
limitation were 0.58%, and without giving of underlying funds," to 0.74% of the
effect to the expense limitation, were average daily net assets attributable to Class
0.81% of average daily net assets. As of A shares and 1.52% of average daily net
January 12, 2005, estimated total direct assets attributable to Class B shares. There
and indirect expenses were 1.94% of is no expense limitation with respect to the
average daily net assets. Class Y shares. This expense limitation is in
effect for Class A shares until December 1,
For the fiscal year ended July 31, 2004, the 2008 and in effect for Class B shares until
Fund's annual operating expenses for Class December 1, 2006. There can be no
B shares, after giving effect to the expense assurance that Pioneer will extend these
limitation were 1.32%, and without giving expense limitations past such dates. The
effect to the expense limitation, were expense limitation does not limit the
1.55% of average daily net assets. As of expenses of the underlying funds indirectly
January 12, 2005, estimated total direct incurred by a shareholder.
and indirect 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
For the fiscal year ended July 31, 2004, the with 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.
- ---------------------------------------------------------------------------------------------------------------------------
106
- ---------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Moderate
Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- ---------------------------------------------------------------------------------------------------------------------------
Buying shares You may buy shares of the Fund directly You may buy shares from any investment
through BISYS Fund Services, the Fund's firm that has a sales agreement with PFD,
distributor, or through brokers, registered the 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
distributor, as described in the Fund's also purchase additional shares of the Fund
prospectus. by telephone or online.
Certain account transactions may be done
by telephone.
- ---------------------------------------------------------------------------------------------------------------------------
Exchanging shares You can exchange your shares in the Fund You may exchange your shares for shares
for shares of the same class of another of the same class of another Pioneer mutual
AmSouth Fund, usually without paying fund. Your exchange request must be for at
additional sales charges. You must meet least $1,000.
the minimum investment requirements for
the Fund into which you are exchanging. After you establish an eligible fund account,
Exchanges from one Fund to another are you can exchange fund shares by telephone
taxable. Class A shares may be exchanged or online.
for Class I shares of 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.
- ---------------------------------------------------------------------------------------------------------------------------
107
- ---------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Moderate
Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation 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
Fund directly in writing or by telephone or your request to sell shares to PIMSS. You
by contacting a financial intermediary as can also sell your shares by contacting the
described in the Fund's prospectus. Fund 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
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.
108
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:
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:
109
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 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 and Income Portfolio. The bar chart shows how
AmSouth Strategic Portfolios: Moderate Growth and 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 and Income Portfolio --
Class A Shares
Calendar Year Total Returns*
[THE BAR CHART IS A REPRESENTATION FOR THE PRINTED MATERIAL]
'00 '01 '02 '03 '04
0.59 -5.77 -13.33 21.81 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.
110
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 and 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 and 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 and Income Portfolio, Class B Shares
- ------------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 0.75% 2.96% 2.90%
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Moderate Growth and 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) (reflects no deduction for fees, expenses or taxes) 10.87% -2.30% 0.66%
- ------------------------------------------------------------------------------------------------------------------------------------
(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 and 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.
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 and Income Portfolio, the expenses of AmSouth Strategic Portfolios:
Moderate Growth and 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 and 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 and Income Portfolio
into Pioneer Ibbotson Moderate Allocation Fund also occurred on January 31,
2005.
111
Combined
AmSouth Fund AmSouth
Strategic (including Strategic
Portfolios Pioneer AmSouth Portfolios
Moderate Ibbotson Growth and Moderate
Growth and Moderate Combined Income Growth and
Income Allocation Fund Portfolio) Income
Shareholder transaction Portfolio(1) Fund (Pro Forma) (Pro Forma) Portfolio
fees (paid directly Class A Class A Class A Class A Class B
from your investment) ------------ ---------- ----------- ----------- -----------
Maximum sales charge
(load) when you buy
shares as a percentage
of offering price ......... 5.50%(2) 5.75% 5.75% 5.75% 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 5.00%(3)
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 ............. 0.20% 0.17%(6) 0.17%(6) 0.17%(6) 0.20%
Distribution and service
(12b-1) fee ............... None 0.25% 0.25% 0.25% 0.75%
Other expenses(5) .......... 0.68% 0.68% 0.52% 0.35%(5) 0.71%
Estimated indirect
expenses .................. 1.49% 0.68% 0.92%(9) 0.92%(9) 2.24%
Total fund operating
expenses .................. 2.37% 1.78%(7) 1.86% 1.69% 3.90%
Expense reimbursement/
reduction ................. 0.35% 0.20% 0.20% 0.03% 0.38%
Net fund operating
expenses .................. 2.02% 1.58% 1.66% 1.66% 3.52%
Combined Combined
Fund AmSouth Fund
(including Strategic (including
AmSouth Portfolios AmSouth
Pioneer Growth and Moderate Growth and
Ibbotson Combined Income Growth and Combined Income
Moderate Fund Portfolio) Income Fund Portfolio)
Shareholder transaction Allocation (Pro Forma) (Pro Forma) Portfolio (Pro Forma) (Pro Forma)
fees (paid directly Fund Class B Class B Class I Class Y(8) Class Y(8)
from your investment) ---------- ----------- ----------- ---------- ----------- -----------
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% 4.00% None None None
Redemption fees ............ None None None 2.00%(4) None None
Annual fund operating
expenses (deducted
from fund assets)
(as a % of average
net assets)
Management fee ............. 0.17%(6) 0.17%(6) 0.17%(6) 0.20% 0.17%(6) 0.17%(6)
Distribution and service
(12b-1) fee ............... 1.00% 1.00% 1.00% None None None
Other expenses(5) .......... 0.80% 0.74% 0.57% 0.59% 0.34% 0.15%
Estimated indirect
expenses .................. 0.68% 0.92%(9) 0.92%(9) 1.44% 0.92%(9) 0.92%(9)
Total fund operating
expenses .................. 2.65%(7) 2.83% 2.66% 2.23% 1.43% 1.24%
Expense reimbursement/
reduction ................. 0.45% 0.39% 0.22% 0.31% N/A N/A
Net fund operating
expenses .................. 2.20% 2.44% 2.44% 1.92% 1.43% 1.24%
(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) For the period ended January 31, 2005, other expenses for your AmSouth Fund
were 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 indirect expenses," 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
112
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.
(9) "Estimated indirect expenses" for the Pioneer Funds reflect the estimated
gross indirect expenses as of the most recent fiscal period for the
underlying funds. Several of the underlying funds are subject to expense
limitations, which expire as of various dates. Giving effect to such
expense limitations, the estimated indirect expenses would be 0.73%, and
the pro forma combined net expenses for the Pioneer Fund (assuming the
reorganization of AmSouth Strategic Portfolios: Growth and Income Portfolio
into the Pioneer Fund also occurs) would be 1.47%, 2.25% and 1.05% for
Class A, Class B and Class Y shares, respectively.
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
Pioneer (including AmSouth
AmSouth Strategic Ibbotson Strategic Portfolios:
Portfolios: Moderate Moderate Growth and Income
Number of years you own Growth and Income Allocation Combined Fund Portfolio)
your shares Portfolio Fund (Pro Forma) (Pro Forma)
- ------------------------------------------------------------------------------------------------------------------------------------
Class A
- ------------------------------------------------------------------------------------------------------------------------------------
Year 1 $ 747 $ 726 $ 714 $ 734
- ------------------------------------------------------------------------------------------------------------------------------------
Year 3 $1,157 $1,085 $1,007 $1,068
- ------------------------------------------------------------------------------------------------------------------------------------
Year 5 $1,593 N/A $1,349 $1,432
- ------------------------------------------------------------------------------------------------------------------------------------
Year 10 $2,798 N/A $2,312 $2,450
- ------------------------------------------------------------------------------------------------------------------------------------
Class B -- assuming redemption at end of period
- ------------------------------------------------------------------------------------------------------------------------------------
Year 1 $ 786 $ 648 $ 734 $ 647
- ------------------------------------------------------------------------------------------------------------------------------------
Year 3 $1,177 $1,104 $1,106 $1,106
- ------------------------------------------------------------------------------------------------------------------------------------
Year 5 $1,694 N/A $1,590 $1,590
- ------------------------------------------------------------------------------------------------------------------------------------
Year 10 $2,971 N/A $2,741 $2,741
- ------------------------------------------------------------------------------------------------------------------------------------
Class B -- assuming no redemption
- ------------------------------------------------------------------------------------------------------------------------------------
Year 1 $ 286 $ 248 $ 247 $ 247
- ------------------------------------------------------------------------------------------------------------------------------------
Year 3 $ 877 $ 804 $ 806 $ 806
- ------------------------------------------------------------------------------------------------------------------------------------
Year 5 $1,494 N/A $1,390 $1,390
- ------------------------------------------------------------------------------------------------------------------------------------
Year 10 $2,971 N/A $2,741 $2,741
- ------------------------------------------------------------------------------------------------------------------------------------
Class I Class Y
- ------------------------------------------------------------------------------------------------------------------------------------
Year 1 $ 199 N/A $ 146 $ 126
- ------------------------------------------------------------------------------------------------------------------------------------
Year 3 $ 615 N/A $ 452 $ 393
- ------------------------------------------------------------------------------------------------------------------------------------
Year 5 $ 1057 N/A $ 782 $ 681
- ------------------------------------------------------------------------------------------------------------------------------------
Year 10 $2,285 N/A $1,713 $1,500
- ------------------------------------------------------------------------------------------------------------------------------------
Reasons for the Proposed Reorganization
The Trustees believe that the proposed Reorganization is in the best
interests of AmSouth Strategic Portfolios: Moderate Growth and 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.
113
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 the U.S.
advisory subsidiary of Pioneer Global Asset Management, S.p.A. ("PGAM"), a
global asset management group and wholly-owned subsidiary of UniCredito
Italiano S.p.A., one of the largest banking groups in Italy. The PGAM companies
provide investment management and financial services to mutual funds,
institutional and other clients. As of December 31, 2004, assets under
management of the PGAM companies 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 money market funds 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 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 have currently. 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 Bancorporation will pay all costs of preparing and
printing the Funds' proxy statements and solicitation costs incurred by the
Funds in connection with the Reorganizations. AAMI or an affiliate will
otherwise be responsible for 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 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.
114
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 and Income
Portfolio approve the reorganization of their fund into Pioneer Ibbotson
Moderate Allocation Fund.
Pro Forma
Pioneer Ibbotson
Moderate
Allocation Fund
(including
AmSouth Strategic Pro Forma AmSouth Strategic
Portfolios: Moderate Pioneer Ibbotson Pioneer Ibbotson Portfolios:
Growth and Income Moderate Moderate Growth and Income
Portfolio Allocation Fund Allocation 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
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.
115
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
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,
116
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)
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.
117
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.
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.
118
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 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.
119
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.
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
120
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.
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.
121
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,
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
122
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
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.
123
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
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
124
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 September 23, 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, in the case of reorganizations
into Pioneer Funds that have previously commenced investment
operations, your AmSouth Fund's liabilities that are included in the
calculation of your AmSouth Fund's net asset value on the Closing Date
and, in the case of newly organized Pioneer Funds, all of your AmSouth
Fund's liabilities. 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 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 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 includes the material provisions of the Plan but this description 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' declaration of trust 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.
TAX STATUS OF EACH REORGANIZATION
Each Reorganization will not result in any 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;
125
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.
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.
The foregoing consequences may not apply to certain classes of taxpayers
who are subject to special tax circumstances, such as shareholders who are not
citizens or residents of the United States, insurance companies, tax-exempt
organizations, financial institutions, dealers in securities or foreign
currencies, or persons who hold their shares as part of a straddle or
conversion transaction. 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.
126
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 proxy Shares "present" in person will be voted in
are counted towards a quorum. person at the Meeting. Shares present by
proxy will be voted in accordance with
instructions.
- ------------------------------------------------------------------------------------------------------------------------------
Broker Non-Vote (where the Considered "present" at Meeting for Broker non-votes do not count as a vote
underlying holder has not purposes of quorum. "for" and effectively result in a vote
voted and the broker does "against" Proposals 1(a)-(e).
not have discretionary
authority to vote the shares)
- ------------------------------------------------------------------------------------------------------------------------------
Proxy with No Voting Considered "present" at Meeting for Voted "for" the Proposals.
Instruction (other than Broker purposes of quorum.
Non-Vote)
- ------------------------------------------------------------------------------------------------------------------------------
Vote to Abstain Considered "present" at Meeting for Abstentions do not constitute a vote "for"
purposes of quorum. and effectively result in a vote "against"
Proposals 1(a)-(e).
- ------------------------------------------------------------------------------------------------------------------------------
COMPARISON OF DELAWARE STATUTORY TRUST AND MASSACHUSETTS BUSINESS TRUST
Each of the AmSouth Funds is a series of a Massachusetts business trust.
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 may,
under certain circumstances, be liable 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 greater 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 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
127
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, 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). In connection with its
approval of the Reorganizations, the Board of the AmSouth Funds adopted the
valuation procedures of the Pioneer Funds. This change did not have a material
effect on the valuation methodology employed by the AmSouth Funds.
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 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
128
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.
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. However, if you sell Class B
shares 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 retain the holding periods and be subject to the same contingent deferred
sales charge as your Class B shares of the AmSouth Funds. Class B shares
convert to Class A shares eight years after the original date of purchase.
Class B shares issued to the former ISG Fund shareholders will convert to Class
A shares seven years after the 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.
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.
129
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 and
$500 for Class B 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, such 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.
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
130
Buying, Exchanging and Selling Pioneer Fund Shares
------------------------------------------------------------------------------------------
Buying Shares Exchanging Shares
------------------------------------------------------------------------------------------
Through Normally, your investment firm will send Normally, your investment firm will send
your investment your purchase request to the Pioneer your exchange request to the Pioneer
firm Funds' transfer agent. Consult your Fund's transfer agent. Consult your
investment professional for more investment professional for more
information. Your investment firm may information about exchanging your
receive a commission from the distributor shares.
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 online You can use the telephone or online After you establish your Pioneer Fund
privilege if you have an existing non- account, you can exchange Fund
retirement account or certain IRAs. You shares by phone or online if:
can purchase additional fund shares by o You are exchanging into an existing
phone if: account or using the exchange to
o You established your bank account of establish a new account, provided the
record at least 30 days ago new account has a registration
o Your bank information has not identical to the original account
changed for at least 30 days o The fund into which you are
o You are not purchasing more than exchanging offers the same class of
$25,000 worth of shares per account shares
per day o You are not exchanging more than
o You can provide the proper account $500,000 worth of shares per account
identification information per day
o You can provide the proper account
When you request a telephone or online identification information
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 mail You can purchase Pioneer Fund shares You can exchange fund shares by
or by fax for an existing fund account by mailing mailing or faxing a letter of instruction
a check to the transfer agent. Make to the transfer agent. You can exchange
your check payable to the Pioneer Fund. Pioneer Fund shares directly through the
Neither initial nor subsequent Pioneer Fund only if your account is
investments should be made by third registered in your name. However, you
party check. Your check must be in U.S. may not fax an exchange request for
dollars and drawn on a U.S. bank. more than $500,000. Include in your
Include in your purchase request the letter:
fund's name, the account number and o The name, social security number and
the name or names in the account signature of all registered owners
registration. o A signature guarantee for each
registered owner if the amount of the
exchange is more than $500,000
o The name of the fund out of which
you are exchanging and the name of
the fund into which you are
exchanging
o The class of shares you are
exchanging
o The dollar amount or number of
shares you are exchanging
131
---------------------------------------------------------------------------------------
Selling Shares How to Contact Pioneer
---------------------------------------------------------------------------------------
Normally, your investment firm will send By phone
your request to sell shares to the For information or to request a
Pioneer Fund's transfer agent. Consult telephone transaction between 8:00 a.m.
your investment professional for more and 7:00 p.m. (Eastern time) by
information. Each Pioneer Fund has speaking with a shareholder services
authorized PFD to act as its agent in the representative call 1-800-225-6292
repurchase of Pioneer Fund shares from To request a transaction using
qualified investment firms. Each Pioneer FactFone(SM) call 1-800-225-4321
Fund reserves the right to terminate this Telecommunications Device for the Deaf
procedure at any time. (TDD) 1-800-225-1997
You may sell up to $100,000 per By mail
account per day by phone or online. Send your written instructions to:
You may sell Pioneer Fund shares held Pioneer Investment Management
in a retirement plan account by phone Shareholder Services, Inc.
only if your account is an eligible IRA P.O. Box 55014
(tax penalties may apply). You may not Boston, Massachusetts 02205-5014
sell your shares by phone or online if
you have changed your address (for By fax
checks) or your bank information (for Fax your exchange and sale requests to:
wires and transfers) in the last 30 days. 1-800-225-4240
You may receive your sale proceeds: Exchange Privilege
o By check, provided the check is made You may make up to four exchange
payable exactly as your account is redemptions of $25,000 or more per
registered account per calendar year.
o By bank wire or by electronic funds
transfer, provided the sale proceeds
are being sent to your bank address
of record
You can sell some or all of your Pioneer
Fund 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
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.
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,
132
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 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."
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 Pioneer 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 Pioneer 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 Date of the Reorganizations will be deemed to
be cancelled and will no longer represent shares of the Funds.
133
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.
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 and Class B shares (each, a
"Plan"). 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
134
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 B Plan is a compensation plan, which provides for a fixed level
of fees. Payments under this plan 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 Plans on December 2, 2004. Pursuant to the Plans, at least quarterly,
PFD will provide each Fund with a written report of the amounts expended under
the Plans 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.
135
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.
PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND
For the period 8/9/04(a) to 1/31/05
-----------------------------------
Class A Class B
Net asset value, beginning of period .................................. $10.00 $10.00
------ ------
Increase (decrease) from investment operations:
Net investment income (loss) (b) ..................................... $ - $ 0.01
Net realized and unrealized gain (loss) on investments ............... 1.36 0.97
------ ------
Net increase (decrease) from investment operations ................... $ 1.36 $ 0.98
------ ------
Distributions to shareowners:
Net investment income ................................................ $(0.02) $ -
Net realized gain .................................................... (0.30) (0.30)
------ -------
Net increase (decrease) in net asset value ........................... $ 1.04 $ 0.68
------ -------
Net asset value, end of period ....................................... $11.04 $10.68
====== =======
Total return* ......................................................... 13.54% 9.73%
Ratio of net expenses to average net assets**++ ....................... 0.93% 1.83%
Ratio of net investment income (loss) to average net assets** ......... (0.02)% 0.18%
Portfolio turnover rate** ............................................. 12% 12%
Net assets, end of period (in thousands) .............................. $6,604 $1,962
- ----------
(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% and 9.32% of average net assets, respectively, for
Class A and Class B shares.
136
PIONEER IBBOTSON GROWTH ALLOCATION FUND
For the period 8/9/04(a) to 1/31/05
-----------------------------------
Class A Class B
Net asset value, beginning of period ............................ $ 10.00 $10.00
------- ------
Increase (decrease) from investment operations:
Net investment income (loss) (b) ............................... $ 0.03 $ 0.04
Net realized and unrealized gain (loss) on investments ......... 1.09 0.16
------- ------
Net increase (decrease) from investment operations ............. $ 1.12 $ 0.20
------- ------
Distributions to shareowners:
Net investment income .......................................... $ (0.03) $ -
Net realized gain .............................................. (0.25) (0.25)
------- ------
Net increase (decrease) in net asset value ..................... $ 0.84 $(0.05)
------- ------
Net asset value, end of period ................................. $ 10.84 $ 9.95
======= ======
Total return* ................................................... 11.19% 1.95%
Ratio of net expenses to average net assets**++ ................. 0.93% 1.83%
Ratio of net investment income to average net assets** .......... 0.62% 0.72%
Portfolio turnover rate** ....................................... 13% 13%
Net assets, end of period (in thousands) ........................ $11,580 $3,226
- ----------
(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% and 5.34% of average net assets, respectively, for
Class A and Class B shares.
137
PIONEER IBBOTSON MODERATE ALLOCATION FUND
For the period 8/9/04(a) to 1/31/05
-----------------------------------
Class A Class B
Net asset value, beginning of period ............................ $ 10.00 $10.00
------- ------
Increase (decrease) from investment operations:
Net investment income (loss) (b) ............................... $ 0.06 $ 0.01
Net realized and unrealized gain (loss) on investments ......... 0.84 0.54
------- ------
Net increase (decrease) from investment operations ............. $ 0.90 $ 0.55
------- ------
Distributions to shareowners:
Net investment income .......................................... $ (0.04) $ -
Net realized gain .............................................. (0.23) (0.23)
------- -------
Net increase (decrease) in net asset value ..................... $ 0.63 $ 0.32
------- -------
Net asset value, end of period ................................. $ 10.63 $10.32
======= =======
Total return* ................................................... 9.04% 5.51%
Ratio of net expenses to average net assets**++ ................. 0.90% 1.80%
Ratio of net investment income to average net assets** .......... 1.15% 0.19%
Portfolio turnover rate** ....................................... 20% 20%
Net assets, end of period (in thousands) ........................ $13,612 $3,274
- ----------
(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% and 4.35% of average net assets, respectively, for
Class A and Class B shares.
138
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. ComputerShare Fund Services
has been retained to provide proxy solicitation services to the Funds at a cost
of approximately $70,000. 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 July 29, 2005 (the "record date") are
entitled to notice of and to vote at the Meeting. As of the record date, the
following shares of each AmSouth Fund were outstanding.
Shares Outstanding
AmSouth Fund (as of July 29, 2005)
- ------------ ----------------------
AmSouth Balanced Fund
Class A ........................................ 8,239,735.118
Class B ........................................ 1,947,581.903
Class I ........................................ 4,078,106.501
AmSouth Strategic Portfolios: Aggressive
Growth Portfolio
Class A ........................................ 2,314,936.570
Class B ........................................ 1,678,844.581
Class I ........................................ 1,508,323.999
AmSouth Strategic Portfolios: Growth Portfolio
Class A ........................................ 3,157,976.420
Class B ........................................ 3,190,213.840
Class I ........................................ 802,043.030
AmSouth Strategic Portfolios: Growth and
Income Portfolio
Class A ........................................ 4,991,158.141
Class B ........................................ 1,944,651.410
Class I ........................................ 3,907,604.281
AmSouth Strategic Portfolios: Moderate Growth
and Income Portfolio
Class A ........................................ 2,173,088.324
Class B ........................................ 1,411,005.230
Class I ........................................ 1,371,469.350
139
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)-(e). 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 to
adjourn 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 of adjournment 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 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 Touchtone telephone voting information is noted on the enclosed proxy
card(s).
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 to 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 1-800-451-8382 if you have any problems.
140
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 Internet voting information is noted on the enclosed proxy card(s).
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 your AmSouth Fund to Michael C. Daniel, President, AmSouth
Funds, c/o AmSouth Bank, 1900 Fifth Avenue North, Birmingham, AL 35203 within a
reasonable time before any meeting. If the Reorganization is completed, your
AmSouth Fund will not hold another shareholder meeting.
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 1,715,208.626 20.75%
BANK FBO AMSOUTH THRIFT PLAN
PO BOX 105779
ATLANTA GA 30348
- ---------------------------------------------------------------------------------
AMVESCAP NATIONAL TRUST CO AS AGENT 1,471,810.189 17.80%
FOR AMSOUTH BANK FBO BCBS ALABAMA
PO BOX 105779
ATLANTA GA 30348
- ---------------------------------------------------------------------------------
AMVESCAP NATL TR CO AS AGENT FOR AM 516,827.177 6.25%
BANK FBO BRASFIELD GORRIE EMPLOYE
PO BOX 105779
ATLANTA GA 30348
- ---------------------------------------------------------------------------------
AMSOUTH BALANCED FUND -- CLASS I
- ---------------------------------------------------------------------------------
KENNEBURT & COMPANY FBO ASO TRUST 1,699,127.878 42.24%
ATTN MUTUAL FUND OPERATIONS
P O BOX 12365
BIRMINGHAM AL 35202
- ---------------------------------------------------------------------------------
AMVESCAP NATIONAL TRUST COMPANY 410,690.141 10.21%
AS AGENT FOR AMSOUTH BANK
PO BOX 105779
ATLANTA GA 303485779
- ---------------------------------------------------------------------------------
141
- -----------------------------------------------------------------------------------------------------------------------
Percent of the
Class Held by
Fund/Class No. of Shares Shareholder
- -----------------------------------------------------------------------------------------------------------------------
BISYS RETIREMENT SERVICES FBO 398,294.497 9.90%
WARRIOR TRACTOR EQUIPMENT 401 K
SUITE 300
DENVER CO 80202
- -----------------------------------------------------------------------------------------------------------------------
KENNEBURT & COMPANY FBO ASO TRUST 388,726.276 9.66%
ATTN MUTUAL FUND OPERATIONS
P O BOX 12365
BIRMINGHAM AL 35202
- -----------------------------------------------------------------------------------------------------------------------
AMVESCAP NATL TR CO AS AGENT FOR 275,539.796 6.85%
AMSOUTH FBO TRACTOR EQUIPMENT
PO BOX 105779
ATLANTA GA 30348
- -----------------------------------------------------------------------------------------------------------------------
AMSOUTH STRATEGIC PORTFOLIOS: GROWTH & INCOME PORTFOLIO 977,512.782 6.94%
3435 STELZER RD
ATTN FUND ACCOUNTING
COLUMBUS OH 43219
- -----------------------------------------------------------------------------------------------------------------------
KENNEBURT & COMPANY FBO ASO TRUST 875,083.106 6.21%
ATTN MUTUAL FUND OPERATIONS
P O BOX 12365
BIRMINGHAM AL 35202
- -----------------------------------------------------------------------------------------------------------------------
AMSOUTH STRATEGIC PORTFOLIOS: AGGRESSIVE GROWTH FUND -- CLASS I
- -----------------------------------------------------------------------------------------------------------------------
KENNEBURT & COMPANY FBO ASO TRUST 466,778.020 29.81%
ATTN MUTUAL FUND OPERATIONS
P O BOX 12365
BIRMINGHAM AL 35202
- -----------------------------------------------------------------------------------------------------------------------
BISYS RETIREMENT SERVICES FBO 229,924.893 14.68%
C C CLARK INC 401 K PLAN
SUITE 300
DENVER CO 80202
- -----------------------------------------------------------------------------------------------------------------------
BISYS RETIREMENT SERVICES FBO 144,952.998 9.26%
WALKER-J-WALKER INC PROFIT SHARIN
SUITE 300
DENVER CO 80202
- -----------------------------------------------------------------------------------------------------------------------
BISYS RETIREMENT SERVICES FBO 92,304.222 5.89%
SEABROOK EES PROFIT SHARING RETIREM
SUITE 300
DENVER CO 80202
- -----------------------------------------------------------------------------------------------------------------------
142
- ---------------------------------------------------------------------------------------------------------------
Percent of the
Class Held by
Fund/Class No. of Shares Shareholder
- ---------------------------------------------------------------------------------------------------------------
AMSOUTH STRATEGIC PORTFOLIOS: GROWTH & INCOME PORTFOLIO -- CLASS A
- ---------------------------------------------------------------------------------------------------------------
BISYS RETIREMENT SERVICES FBO 551,605.180 10.00%
THE WOMEN S CLINIC AMC P S PLAN
SUITE 300
DENVER CO 80202
- ---------------------------------------------------------------------------------------------------------------
BISYS RETIREMENT SERVICES FBO 450,593.183 8.17%
ACE BOLT SCREW CO INC PROFIT SHA
SUITE 300
DENVER CO 80202
- ---------------------------------------------------------------------------------------------------------------
BISYS RETIREMENT SERVICES FBO 431,874.127 7.83%
HEART CNTR CARDIOVASC SPECIALISTS 4
SUITE 300
DENVER CO 80202
- ---------------------------------------------------------------------------------------------------------------
BISYS RETIREMENT SERVICES FBO 392,323.861 7.11%
EAR NOSE THROAT PHYS N MISS 4
SUITE 300
DENVER CO 80202
- ---------------------------------------------------------------------------------------------------------------
AMSOUTH STRATEGIC PORTFOLIOS: GROWTH & INCOME PORTFOLIO -- CLASS I
- ---------------------------------------------------------------------------------------------------------------
KENNEBURT & COMPANY FBO ASO TRUST 2,021,724.353 52.75%
ATTN MUTUAL FUND OPERATIONS
P O BOX 12365
BIRMINGHAM AL 35202
- ---------------------------------------------------------------------------------------------------------------
BISYS RETIREMENT SERVICES FBO 493,107.625 12.87%
C C CLARK INC 401 K PLAN
SUITE 300
DENVER CO 80202
- ---------------------------------------------------------------------------------------------------------------
BISYS RETIREMENT SERVICES FBO 324,655.761 8.47%
EAR NOSE THROAT CENTER RET SAVIN
SUITE 300
DENVER CO 80202
- ---------------------------------------------------------------------------------------------------------------
AMSOUTH STRATEGIC PORTFOLIOS: GROWTH PORTFOLIO -- CLASS A
- ---------------------------------------------------------------------------------------------------------------
AMVESCAP NATIONAL TRUST COMPANY 320,083.181 10.22%
AS AGENT FOR AMSOUTH BANK
PO BOX 105779
ATLANTA GA 30348
- ---------------------------------------------------------------------------------------------------------------
KENNEBURT & COMPANY FBO ASO TRUST 249,833.742 7.98%
ATTN MUTUAL FUND OPERATIONS
P O BOX 12365
BIRMINGHAM AL 35202
- ---------------------------------------------------------------------------------------------------------------
BISYS RETIREMENT SERVICES FBO 177,625.115 5.67%
NORTH MISSISSIPPI ORAL 401 K PS PL
SUITE 300
DENVER CO 80202
- ---------------------------------------------------------------------------------------------------------------
143
- ---------------------------------------------------------------------------------------------------------------
Percent of the
Class Held by
Fund/Class No. of Shares Shareholder
- ---------------------------------------------------------------------------------------------------------------
AMSOUTH STRATEGIC PORTFOLIOS: GROWTH PORTFOLIO -- CLASS I
- ---------------------------------------------------------------------------------------------------------------
KENNEBURT & COMPANY FBO ASO TRUST 338,956.524 39.79%
ATTN MUTUAL FUND OPERATIONS
P O BOX 12365
BIRMINGHAM AL 35202
- ---------------------------------------------------------------------------------------------------------------
AMSOUTH BANK 180,856.121 21.23%
COOK YANCEY KING GALLOWAY
PO BOX 12365
BIRMINGHAM AL 35202
- ---------------------------------------------------------------------------------------------------------------
BISYS RETIREMENT SERVICES FBO 61,057.862 7.17%
SEABROOK EES PROFIT SHARING RETIREM
SUITE 300
DENVER CO 80202
- ---------------------------------------------------------------------------------------------------------------
BISYS RETIREMENT SERVICES FBO 54,070.165 6.35%
WALKER-J-WALKER INC PROFIT SHARIN
SUITE 300
DENVER CO 80202
- ---------------------------------------------------------------------------------------------------------------
AMSOUTH STRATEGIC PORTFOLIOS: MODERATE GROWTH & INCOME PORTFOLIO -- CLASS A
- ---------------------------------------------------------------------------------------------------------------
MCB TRUST SERVICES AS AGENT FOR 258,695.800 10.98%
FRONTIER TRUST CO AS TRUSTEE
SUITE 300
700 17TH STREET
DENVER CO 80202
- ---------------------------------------------------------------------------------------------------------------
BISYS RETIREMENT SERVICES FBO 159,234.626 6.76%
WEST QUALITY FOOD SERVICE INC 401
SUITE 300
DENVER CO 80202
- ---------------------------------------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY 122,492.770 5.20%
200 HOPMEADOW STREET
SIMSBURY CT 06089
- ---------------------------------------------------------------------------------------------------------------
AMSOUTH STRATEGIC PORTFOLIOS: MODERATE GROWTH & INCOME PORTFOLIO -- CLASS I
- ---------------------------------------------------------------------------------------------------------------
KENNEBURT & COMPANY FBO ASO TRUST 924,772.196 65.62%
ATTN MUTUAL FUND OPERATIONS
P O BOX 12365
BIRMINGHAM AL 35202
- ---------------------------------------------------------------------------------------------------------------
BISYS RETIREMENT SERVICES FBO 125,779.661 8.93%
C C CLARK INC 401 K PLAN
SUITE 300
DENVER CO 80202
- ---------------------------------------------------------------------------------------------------------------
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.
Any shares beneficially owned by AmSouth Bank or other companies
controlled by AmSouth Bancorporation (the "AmSouth Companies") and shares over
which AmSouth Companies have discretionary voting power will be voted in the
manner determined by a special fiduciary independent of the AmSouth Companies.
144
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.
- -------------------------------------------------------------------------------------------------------------
Percentage of
Class Held by
Fund/Class Shareholder Name and Address Shareholder
- -------------------------------------------------------------------------------------------------------------
Pioneer Ibbotson Aggressive Allocation Fund
- -------------------------------------------------------------------------------------------------------------
Class A MLPF&S 5.83%
For the Sole Benefit of its Customers
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -------------------------------------------------------------------------------------------------------------
Class B MLPF&S 18.33%
For the Sole Benefit of its Customers
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -------------------------------------------------------------------------------------------------------------
Class C MLPF&S 31.43%
For the Sole Benefit of its Customers
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -------------------------------------------------------------------------------------------------------------
Pioneer Ibbotson Growth Allocation Fund
- -------------------------------------------------------------------------------------------------------------
Class A MLPF&S 5.33%
For the Sole Benefit of its Customers
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -------------------------------------------------------------------------------------------------------------
Class C MLPF&S 30.10%
For the Sole Benefit of its Customers
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville FL 32246-6484
- -------------------------------------------------------------------------------------------------------------
Pioneer Ibbotson Moderate Allocation Fund
- -------------------------------------------------------------------------------------------------------------
Class A MLPF&S 17.48%
For the Sole Benefit of its Customers
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -------------------------------------------------------------------------------------------------------------
Class B MLPF&S 7.51%
For the Sole Benefit of its Customers
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -------------------------------------------------------------------------------------------------------------
145
- -------------------------------------------------------------------------------------------------------------
Percentage of
Class Held by
Fund/Class Shareholder Name and Address Shareholder
- -------------------------------------------------------------------------------------------------------------
Class C MLPF&S 28.89%
For the Sole Benefit of its Customers
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -------------------------------------------------------------------------------------------------------------
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
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 on 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.
146
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 Statement 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
A-1
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) and agrees not to acquire any portfolio
security that is not an eligible investment for, or that would violate an
investment policy or restriction of, the Acquiring Fund.
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 in 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 regular trading on the
New York Stock Exchange (generally, 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 Trust'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 Acquired Fund shall be
computed by ASO Services Company, Inc. (the "Acquired Fund Administrator") in
the manner set forth in the Acquiring Trust's Declaration of Trust, or By-laws,
and 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.
A-2
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 consummate 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 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, 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
A-3
Declaration of Trust 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, 2005, have been audited by an
independent registered public accounting firm retained by the Acquired
Fund, 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 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 satisfied, and for the current taxable year it will
satisfy, 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 material 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;
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(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, as defined in paragraph 5.7,
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'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
(O) 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 incurred in
connection with any tax or any contest or dispute thereof; and "Tax
Returns" shall mean all reports, returns, declarations, statements or
other
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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, legally 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 compliance in all material respects 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 materially 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,
A-6
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, 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 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;
(c) The current prospectus and statement of additional information of
the Acquiring Fund and each prospectus and statement of additional
information for the Acquiring Fund used during the three years previous to
the date of this Agreement, and any amendment or supplement to any of the
foregoing, conform or conformed at the time their distribution to the
public 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 and do not or did not at the time of their
distribution to the public include 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
under which they were made, not materially misleading;
(d) 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;
(e) 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;
(f) 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
A-7
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;
(g) 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;
(h) 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;
(i) 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 ____, 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 (i) (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;
(j) (A) For each taxable year of its operation since its inception, the
Acquiring Fund has satisfied, and for the current taxable year it will
satisfy, 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 material 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;
(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 unpaid Taxes of the Acquiring 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 in
the financial statements referred to in paragraph 4.2(h). All Taxes
that the Acquiring Fund is or was required
A-8
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 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;
(J) 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;
(K) 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;
(L) There are (and as of immediately following the Closing there
will be) no liens on the assets of the Acquiring Fund relating to or
attributable to Taxes, except for Taxes not yet due and payable;
(M) The Tax bases of the assets of the Acquiring Fund are
accurately reflected on the Acquiring Fund's Tax books and records;
(N) 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;
(k) 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 legally issued and outstanding, 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;
(l) All issued and outstanding Acquiring Fund Shares are, and on the
Closing Date will be, legally issued, fully paid and non-assessable and
have been offered and sold in every state and the District of Columbia in
compliance in all material respects with all applicable federal and state
securities laws;
(m) 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;
(n) 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;
A-9
(o) 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;
(p) The Acquiring 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 Acquiring 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 Acquiring Trust with respect to
the Acquiring Fund. All advertising and sales material used by the
Acquiring 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 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 Acquiring Fund have been duly filed and have been approved or
declared effective, if such approval or declaration of effectiveness is
required by law. Such registration statements, prospectuses, reports, proxy
materials and other filings under the Securities Act, the Exchange Act and
the Investment Company Act (i) are or were in compliance in all material
respects with the requirements of all applicable statutes and the rules and
regulations thereunder and (ii) do not or did not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances in which they were made, not false or misleading;
(q) 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
(r) 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.
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.
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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 ("Statement of
Assets and Liabilities") 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.
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 in all
material respects as of the date hereof (in each case, as such representations
and warranties would read as if all qualifications as to materiality were
deleted therefrom) 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
in all material respects 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, in a form mutually acceptable to
the Acquiring Trust and the AmSouth Trust, 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.
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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 in all
material respects as of the date hereof (in each case, as such representations
and warranties would read as if all qualifications as to materiality were
deleted therefrom) 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 in all material respects 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, in a form mutually acceptable to the
AmSouth Trust and the Acquiring Trust, 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 Declaration of Trust 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
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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;
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; and
8.7 The Acquiring Fund shall have made a distribution of at least 80%
of its accumulated undistributed realized net capital gains as of seven business
days before the Closing Date (the "Determination Date") to its shareholders on
or about three business days before the Closing Date; provided that the
Acquiring Fund shall not be required to make such distribution if (i) such gains
do not exceed 3% of the net assets of the Acquiring Fund on such date, both as
determined in accordance with GAAP consistently applied and certified by the
Acquiring Fund's Treasurer or Assistant Treasurer, or (ii) the Acquiring Fund
shall have been notified by the staff of the Commission in response to a request
in accordance with Rule 19b-1(e) under the Investment Company Act that the staff
objects to the proposed distribution. If the Acquiring Fund distributes income
monthly, the dividend distribution that the Acquiring Fund would make in
September 2005 shall have been made to shareholders of record prior to closing.
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 certain non-parties will
pay (with each of AmSouth Bancorporation or 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
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(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., 1900 Fifth Avenue North, 10th Floor, Birmingham,
Alabama 35203, Attention: Andrew Chambless, 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 [sec] 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 Declaration 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
Declaration of Trust of the AmSouth Trust, respectively.
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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
A-15
Exhibit A-2 -- Form of Agreement and Plan of Reorganization (F 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 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 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) and
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agrees not to acquire any portfolio security that is not an eligible investment
for, or that would violate an investment policy or restriction of, the Acquiring
Fund.
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 in 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 regular trading on the
New York Stock Exchange (generally, 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") in the manner set forth in the Acquiring Trust's
Declaration of Trust, or By-laws, and 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 consummate 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.
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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
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, 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 Declaration of Trust 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
A-18
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, 2005, have been audited by an
independent registered public accounting firm retained by the Acquired
Fund, 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 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 satisfied, and for the current taxable year it will
satisfy, 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 material respects. [The Agreement for
the AmSouth International Equity Fund will include an exception for
Forms 1099-DIV distributed in January 2005.] 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 [The Agreement for the AmSouth International Equity Fund
will include an exception for Forms 1099-DIV distributed in January
2005.];
(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
A-19
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, as defined in paragraph 5.7,
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'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
(O) 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 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, legally 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
A-20
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 compliance in all material respects 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 materially 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) 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
A-21
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, 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;
(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;
A-22
(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 legally issued and outstanding, 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;
(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.
A-23
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 ("Statement of
Assets and Liabilities") 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 in all
material respects as of the date hereof (in each case, as such representations
and warranties would read as if all qualifications as to materiality were
deleted therefrom) 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 in
all material respects at and as of the Closing Date, except as they may be
affected
A-24
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, in a form mutually acceptable to
the Acquiring Trust and the AmSouth Trust, 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 in all
material respects as of the date hereof (in each case, as such representations
and warranties would read as if all qualifications as to materiality were
deleted therefrom) 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 in all material respects 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, in a form mutually acceptable to the
Acquiring Trust and the AmSouth Trust, 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 Declaration of Trust 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;
A-25
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 certain non-parties will
pay (with each of AmSouth Bancorporation or 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, 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
A-26
(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., 1900 Fifth Avenue North, 10th Floor, Birmingham,
Alabama 35203, Attention: Andrew Chambless, 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 [sec] 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 Declaration 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
Declaration of Trust of the AmSouth Trust, respectively.
A-27
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
A-28
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.
- ------------------------------------------------------------------------------------------------------------------
Net assets of Fund Management fee rate (as a percentage of average
Fund (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 Balanced VCT Portfolio $ 45,294,667 0.65%
- ------------------------------------------------------------------------------------------------------------------
B-1
Exhibit C -- Portfolio Manager's Discussion of Performance
PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND
Performance Update 1/31/05 Class A Shares
Share Prices and Distributions
1/31/05 8/9/04
Net Asset Value per Share $ 11.07 $ 10.00
Distributions per Share Dividends Short-Term Long-Term
(8/9/04 -- 1/31/05) Capital Gains Capital Gains
$ 0.0218 $ -- $ 0.2979
Investment Returns
The mountain chart 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.
[THE MOUNTAIN CHART IS A REPRESENTATION OF THE PRINTED MATERIAL]
8/04 10000 10000
1/05 10702 11186
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.
C-1
Performance Update 1/31/05 Class B Shares
Share Prices and Distributions
1/31/05 8/9/04
Net Asset Value per Share $ 10.68 $ 10.00
Distributions per Share Dividends Short-Term Long-Term
(8/9/04 -- 1/31/05) Capital Gains Capital Gains
$-- $ -- $ 0.2979
Investment Returns
The mountain chart 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.
[THE MOUNTAIN CHART IS A REPRESENTATION OF THE PRINTED MATERIAL]
8/04 10000 10000
1/05 10573 11186
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.
C-2
Pioneer Ibbotson Allocation Series
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 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.
Any information in this 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-3
PIONEER IBBOTSON GROWTH ALLOCATION FUND
Performance Update 1/31/05 Class A Shares
Share Prices and Distributions
1/31/05 8/9/04
Net Asset Value per Share $ 10.84 $ 10.00
Distributions per Share Dividends Short-Term Long-Term
(8/9/04 -- 1/31/05) Capital Gains Capital Gains
$ 0.0342 $ -- $ 0.249
Investment Returns
The mountain chart 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.
[THE MOUNTAIN CHART IS A REPRESENTATION OF THE PRINTED MATERIAL]
8/04 10000 10000
1/05 10480 11186
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.
C-4
Performance Update 1/31/05 Class B Shares
Share Prices and Distributions
1/31/05 8/9/04
Net Asset Value per Share $ 9.95 $ 10.00
Distributions per Share Dividends Short-Term Long-Term
(8/9/04 -- 1/31/05) Capital Gains Capital Gains
$-- $ -- $ 0.249
Investment Returns
The mountain chart 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.
[THE MOUNTAIN CHART IS A REPRESENTATION OF THE PRINTED MATERIAL]
8/04 10000 10000
1/05 9797 11186
Average Annual Total Returns
(As of January 31, 2005)
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.
C-5
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 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.
Any information in this 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-6
PIONEER IBBOTSON MODERATE ALLOCATION FUND
Performance Update 1/31/05 Class A Shares
Share Prices and Distributions
1/31/05 8/9/04
Net Asset Value per Share $ 10.63 $ 10.00
Distributions per Share Dividends Short-Term Long-Term
(8/9/04 -- 1/31/05) Capital Gains Capital Gains
$ 0.0433 $ -- $ 0.2339
Investment Returns
The mountain chart 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.
[THE MOUNTAIN CHART IS A REPRESENTATION OF THE PRINTED MATERIAL]
8/04 10000 10000
1/05 10277 11186
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.
C-7
Performance Update 1/31/05 Class B Shares
Share Prices and Distributions
1/31/05 8/9/04
Net Asset Value per Share $ 10.32 $ 10.00
Distributions per Share Dividends Short-Term Long-Term
(8/9/04 -- 1/31/05) Capital Gains Capital Gains
$-- $ -- $ 0.2339
Investment Returns
The mountain chart 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.
[THE MOUNTAIN CHART IS A REPRESENTATION OF THE PRINTED MATERIAL]
8/04 10000 10000
1/05 10151 11186
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.
C-8
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 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.
Any information in this 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-9
- --------------------------------------------------------------------------------
AmSouth Balanced Fund
- --------------------------------------------------------------------------------
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 GRAPHIC]
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.
+ The Fund's portfolio is current to January 31, 2005 and subject to change.
(1)See Glossary of Terms for additional information.
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.+
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.+
C-10
- --------------------------------------------------------------------------------
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, commensurate with investors' specific time
horizons and tolerance for risk. Each of our 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 managers periodically rebalance
stock, bond and money market holdings--based on analysis of economic and market
trends.
- --------------------------------------------------------------------------------
[Q&A GRAPHIC]
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): 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.
(1) See Glossary of Terms for additional information.
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 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 international equities, all of which
generated strong gains during the six-month period.
The bond funds in which the Portfolios invested lagged their benchmarks,
weighing down relative returns.
+ The Fund's portfolio is current to January 31, 2005 and subject to change.
C-11
S88568 17973-00-0805
COMBINED PROXY STATEMENT OF
AMSOUTH FUNDS
on behalf of its Series:
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
(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 CLASSIC BALANCED FUND
PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND
PIONEER IBBOTSON GROWTH ALLOCATION FUND
PIONEER IBBOTSON MODERATE ALLOCATION 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 SEPTEMBER 22, 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 AmSouth Bank, AmSouth Center, 1900
Fifth Avenue North, Birmingham, AL 35203, on Thursday, September 22, 2005 at
9:00 a.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. 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. The Pioneer Fund also
will assume, in the case of reorganizations into Pioneer Funds that
have previously commenced investment operations, 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 and,
in the case of newly organized Pioneer Funds, all of your AmSouth
Fund's liabilities. 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 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 July 29, 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,
/s/ Michael C. Daniel
Michael C. Daniel
President
[ ], 2005
COMBINED PROXY STATEMENT OF
AMSOUTH FUNDS
on behalf of its Series:
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
(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 CLASSIC BALANCED FUND
PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND
PIONEER IBBOTSON GROWTH ALLOCATION FUND
PIONEER IBBOTSON MODERATE ALLOCATION 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
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.
1
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 AmSouth Bank, AmSouth Center, 1900 Fifth Avenue North,
Birmingham, AL 35203, on Thursday, September 22, 2005 at 9:00 a.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 a Delaware statutory 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."
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth Fund Pioneer Fund Shareholders Entitled to Vote Page
- ------------------------------------------------------------------------------------------------------------------------------------
PROPOSAL 1(a) AmSouth Balanced Fund Pioneer Classic Balanced AmSouth Balanced Fund shareholders 8
Fund
- ------------------------------------------------------------------------------------------------------------------------------------
PROPOSAL 1(b) AmSouth Strategic Pioneer Ibbotson AmSouth Strategic Portfolios: Aggressive Growth 22
Portfolios: Aggressive Aggressive Allocation Portfolio shareholders
Growth Portfolio Fund
- ------------------------------------------------------------------------------------------------------------------------------------
PROPOSAL 1(c) AmSouth Strategic Pioneer Ibbotson Growth AmSouth Strategic Portfolios: Growth Portfolio 48
Portfolios: Growth Allocation Fund shareholders
Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
PROPOSAL 1(d) AmSouth Strategic Pioneer Ibbotson AmSouth Strategic Portfolios: Growth and Income 73
Portfolios: Growth and Moderate Allocation Fund Portfolio shareholders
Income Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
PROPOSAL 1(e) AmSouth Strategic Pioneer Ibbotson AmSouth Strategic Portfolios: Moderate Growth 99
Portfolios: Moderate Moderate Allocation Fund and Income Portfolio shareholders
Growth and Income
Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Where to Get More Information
- ------------------------------------------------------------------------------------------------------------------------------------
The AmSouth Funds' prospectus dated December 1, 2004, Available to you free of charge by calling 1-800-451-8382.
as supplemented January 12, 2005, April 26, 2005, Each prospectus is also on file with the SEC.
June 1, 2005, June 27, 2005 and July 1, 2005.
Available to you free of charge by calling 1-800-451-8382.
The AmSouth Funds' statement of additional information Each statement of additional information is also on file
dated December 1, 2004, as supplemented March 22, with the SEC.
2005.
Available to you free of charge by calling 1-800-451-8382.
The AmSouth Funds' annual report dated July 31, 2004 Also on file with the SEC. See "Available Information."
and semiannual report dated January 31, 2005.
- ------------------------------------------------------------------------------------------------------------------------------------
Each Pioneer Fund's current prospectus and each Pioneer Available to you free of charge by calling 1-800-225-6292.
Fund's most recent annual and semiannual reports and These prospectuses and reports are also on file with the
supplements (as 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 August [ ], 2005. Also on file with the SEC. This SAI is incorporated by
It contains additional information about your AmSouth reference into this Proxy Statement/Prospectus.
Funds and the Pioneer Funds.
- ------------------------------------------------------------------------------------------------------------------------------------
To ask questions about this Proxy Statement/Prospectus. Call your AmSouth Fund's toll-free telephone number: 1-800-
451-8382.
- ------------------------------------------------------------------------------------------------------------------------------------
2
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. 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").
In early 2005, AmSouth Bank and AAMI conducted a search for a purchaser of
AAMI's mutual fund investment advisory business. AmSouth Bancorporation engaged
Goldman, Sachs & Co. to identify potential purchasers and solicited indications
of interest. AmSouth Funds' management and AAMI reviewed proposals submitted by
several investment advisory firms and selected a limited number to evaluate
more carefully. Management and AAMI conducted, with respect to this selected
group, a comparative evaluation of their investment processes and capabilities;
availability of mutual funds with similar investment objectives and strategies;
historical investment performance of the proposed funds into which the AmSouth
Funds would be reorganized; expense ratios of the proposed counterpart funds to
the historical gross and net expenses of the AmSouth Funds; their breadth of
product line; their compliance culture and infrastructure; and reputation in
the marketplace. Based upon this review, management and AAMI recommended that
the Trustees approve the reorganization of the AmSouth Funds into the Pioneer
Funds as being in the best interest of shareholders.
Based on AAMI's recommendations, the Trustees met twice in May 2005, twice
in June 2005 and again in August 2005 to consider the potential consolidation of
the AmSouth Funds with the Pioneer Funds. At those meetings, the Trustees met
with representatives of Pioneer and reviewed information provided by AAMI and
Pioneer requested by the independent Trustees for the purposes of evaluating the
Reorganizations. In the course of their evaluation of Pioneer and the Pioneer
Funds, the Trustees reviewed various factors, including but not limited to, the
impact of the Reorganizations on the shareholders of the AmSouth Funds, the
comparability of the investment objectives and investment strategies of the
AmSouth Funds and the Pioneer Funds; the expense ratios of the Pioneer Funds
compared with those of the AmSouth Funds; the performance of the Pioneer Funds
compared with that of the AmSouth Funds; the experience and qualifications of
key personnel, including portfolio managers; and the financial resources, cash
flow, and business reputation of the Pioneer Funds. In connection with their
review of the Funds' existing and estimated pro forma expense ratios, the
Trustees also considered that AmSouth Bank and its affiliates would no longer
continue to subsidize the AmSouth Funds' operations by voluntarily capping
expenses. In addition, the Trustees considered the background and reputation of
the officers and members of the Board of Trustees of the Pioneer Funds.
In conducting their review, the Trustees considered information provided
by Pioneer relating to the education, experience and number of its investment
professionals and other senior personnel. The Trustees received information
concerning the investment philosophy and investment process applied by Pioneer
in managing the Pioneer Funds. The Trustees concluded that Pioneer's investment
processes, research capabilities and philosophy were well suited to the AmSouth
Funds.
The Trustees considered the quality of the services to be provided by
Pioneer. The Trustees evaluated Pioneer's record with respect to regulatory
compliance and compliance with the investment policies of the Pioneer Funds.
The Trustees also evaluated the procedures of Pioneer designed to fulfill
Pioneer's fiduciary duty to the Pioneer Funds with respect to possible
conflicts of interest, including Pioneer's code of ethics (regulating the
personal trading of its officers and employees), the procedures by which
Pioneer allocates trades among its various investment advisory clients, the
integrity of the systems in place to ensure compliance with the foregoing and
the record of Pioneer in these matters.
The Trustees also considered information relating to each Pioneer Fund's
investment performance relative to its performance benchmark(s). The Trustees
reviewed performance over various periods, including one, three, five and ten
year periods when applicable, performance under different market conditions and
during different legs of the market cycle, and the volatility of the Pioneer
Funds' returns. The Trustees concluded that the scope and quality of Pioneer's
services, including the investment performance of the Pioneer Funds, was
sufficient, in light of market conditions, the resources brought to bear by
Pioneer, Pioneer's integrity, its personnel and systems, and its financial
resources to warrant recommending that AmSouth Funds' shareholders approve the
proposed Reorganizations.
In reaching that conclusion, the Trustees also gave substantial
consideration to the proposed advisory fees. The Trustees considered possible
economies of scale to Pioneer from the proposed consolidations with the AmSouth
Funds.
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
3
they determined to be necessary and appropriate to evaluate the proposed
Reorganizations. On June 23, 2005, June 27, 2005 and August 1, 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 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;
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 therefore will not be treated as a taxable sale of your
AmSouth Fund's shares;
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 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 For purposes of determining any contingent deferred sales charge
("CDSC"), the same commission schedule that applied to the shares of
the AmSouth Fund will apply to the shares of the Pioneer Fund issued
in the Reorganization and the holding period for determining the CDSC
will be calculated from when the shares were initially purchased.
o Following the Reorganizations, Pioneer will continue to act as
investment adviser to each Pioneer Fund and AAMI will not be involved
in the management of the Pioneer Funds.
o The Reorganizations will not result in income, gain or loss being
recognized for federal income tax purposes by any of the Pioneer
Funds, the AmSouth Funds or the shareholders of the AmSouth Funds.
4
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.
o If the Reorganizations are approved by the AmSouth Funds'
shareholders, 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
Reorganizations, 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 Reorganizations. AAMI or an affiliate
will otherwise be responsible for all costs and expenses of the AmSouth Funds
in connection with the Reorganizations. See "Information Concerning the
Meeting."
Will Pioneer and AmSouth Bancorporation Benefit from the Reorganizations
Pioneer will benefit from managing a larger pool of assets which will
produce increased advisory fees and, in the case of certain of the Pioneer
Funds, eliminate or reduce Pioneer's obligation under its expense limitation
agreement with the Pioneer Fund. 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 redeemed
(subject to certain conditions, including threshold amounts) from the Pioneer
Funds within four years after the closing of the Reorganizations.
Pioneer has also agreed to provide to AmSouth Bank, an affiliate of AAMI,
ongoing servicing payments with respect to Class Y shares issued in the
Reorganizations. This arrangement will remain in effect for as long as Class Y
shares issued in the Reorganizations are held by clients of AmSouth Bank. The
agreement requires AmSouth Bank to provide certain record keeping and
shareholder communication services, including mailing prospectuses and other
fund related materials to shareholders for which AmSouth Bank acts as
shareholder of record, communicating to Pioneer Funds Distributor, Inc. requests
for purchase, exchange and redemption transactions in shares of the Pioneer
Funds and answering inquiries from beneficial holders of the Pioneer Funds'
shares. 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 service fees under the Class A and
Class B Rule 12b-1 Plans.
What Are the Federal Income Tax Consequences of the Reorganizations
The Reorganizations will not result in any income, gain or loss being
recognized for federal income tax purposes by any of the AmSouth Funds, their
shareholders or the Pioneer Funds as a direct result of the Reorganizations.
However, in accordance with the AmSouth Funds' policy to distribute any net
realized capital gains at least once each year (and thus to avoid federal
income tax thereon at the Fund level), each AmSouth Fund that is being merged
into an existing Pioneer Fund will declare and pay a distribution of such gains
to its shareholders shortly before the Reorganizations. Each such distribution
will be taxable to those shareholders. Additionally, following the
Reorganizations, in accordance with the Pioneer Funds' similar policy, each
Pioneer Fund will declare and pay before the end of 2005 a distribution of such
5
gains to its shareholders (including current shareholders of the AmSouth Funds
who will be shareholders of the Pioneer Funds following the Reorganizations).
Those distributions will be fully taxable to all shareholders of the Pioneer
Funds, including those former AmSouth Funds shareholders, even though those
distributions may include a portion of the Pioneer Fund's net capital gains
that were realized before the Closing Date.
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.
Additional Information
The staff of the SEC has been conducting an investigation into the mutual
fund servicing business of BISYS Group, Inc., the parent company of ASO Services
Company, the AmSouth Funds' administrator, and BISYS Fund Services, the AmSouth
Funds' distributor and transfer agent (collectively, "BISYS"). In a press
release dated April 19, 2005, BISYS stated that it believes that the SEC's
investigation relates to the structure and accounting for certain arrangements
pursuant to which BISYS agreed with the advisers of certain U.S. mutual funds,
including AmSouth Funds, to use a portion of the fees paid to BISYS by the
mutual funds to pay for, among other things, expenses relating to the marketing
and distribution of fund shares, to make payments to certain advisers, and to
pay for cerain other expenses. As part of its investigation of BISYS, the SEC is
reviewing the relationships and agreements among BISYS, AmSouth Funds, AAMI and
AmSouth Bank. AmSouth Funds, AAMI and AmSouth Bank are cooperating fully with
the review. Additionally, AmSouth Bank and AAMI, in cooperation with a special
review committee of the Board of Trustees of AmSouth Funds, are conducting a
review of this matter and are taking appropriate steps to protect the interests
of shareholders, including making payments to the AmSouth Funds.
Who Is Eligible to Vote
Shareholders of record on July 29, 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 single 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.
6
TABLE OF CONTENTS
Page
----
INTRODUCTION ........................................................................... 2
PROPOSAL 1(a) -- AMSOUTH BALANCED FUND ................................................. 8
PROPOSAL 1(b) -- AMSOUTH STRATEGIC PORTFOLIOS: AGGRESSIVE GROWTH PORTFOLIO ............. 22
PROPOSAL 1(c) -- AMSOUTH STRATEGIC PORTFOLIOS: GROWTH PORTFOLIO ........................ 48
PROPOSAL 1(d) -- AMSOUTH STRATEGIC PORTFOLIOS: GROWTH AND INCOME PORTFOLIO ............. 73
PROPOSAL 1(e) -- AMSOUTH STRATEGIC PORTFOLIOS: MODERATE GROWTH AND INCOME PORTFOLIO .... 99
TERMS OF EACH AGREEMENT AND PLAN OF REORGANIZATION ..................................... 125
TAX STATUS OF EACH REORGANIZATION ...................................................... 125
VOTING RIGHTS AND REQUIRED VOTE ........................................................ 127
COMPARISON OF DELAWARE STATUTORY TRUST AND MASSACHUSETTS BUSINESS TRUST ................ 127
ADDITIONAL INFORMATION ABOUT THE PIONEER FUNDS ......................................... 128
FINANCIAL HIGHLIGHTS ................................................................... 136
INFORMATION CONCERNING THE MEETING ..................................................... 139
OWNERSHIP OF SHARES OF THE AMSOUTH FUNDS ............................................... 141
OWNERSHIP OF SHARES OF THE PIONEER FUNDS ............................................... 145
EXPERTS ................................................................................ 146
AVAILABLE INFORMATION .................................................................. 146
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-16
EXHIBIT B ADDITIONAL INFORMATION ABOUT PIONEER ....................................... B-1
EXHIBIT C PORTFOLIO MANAGER'S DISCUSSION OF PERFORMANCE .............................. C-1
7
AmSouth Balanced Fund and
Pioneer Classic Balanced 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 exhibits, which
include additional information that is not included in the summary and are a
part of the Proxy Statement/Prospectus. Exhibit A-2 is the form of Agreement and
Plan of Reorganization. Exhibit B includes some additional information regarding
Pioneer. The most recent portfolio manager's discussion of AmSouth Classic
Balanced Fund's performance is attached as Exhibit C.
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, A newly created, diversified series of
an open-end management investment Pioneer Series Trust IV, an open-end
company organized as a Massachusetts management investment company organized
business trust. as a Delaware statutory trust.
- -------------------------------------------------------------------------------------------------------------------------
Net assets as of $182.74 million None. Pioneer Classic Balanced Fund is newly
March 31, 2005 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 Managers: Portfolio Managers:
Day-to-day management of AmSouth Day-to-day management of the Fund's
Balanced Fund's portfolio is the portfolio is the responsibility of John A.
responsibility of John P. Boston, CFA, and Carey, portfolio manager, and Walter
Brian B. Sullivan, CFA Mr. Boston has Hunnewell, Jr., assistant portfolio manager.
co-managed the Balanced Fund since 1994. Mr. Carey and Mr. Hunnewell are supported
Mr. Sullivan has co-managed the Balanced by the domestic equity team. Members of
Fund since June 2004. Mr. Sullivan has this team manage other Pioneer mutual
been an officer of AAMI since 1996 and funds investing primarily in U.S. equity
joined AmSouth Bank in 1982. Prior to securities. The portfolio managers and the
serving as Director of Fixed Income for team also draw upon the research and
AmSouth Bank's Trust Department, investment management expertise of the
Mr. Sullivan managed equity portfolios and global research team, which provides
held the position of equity research fundamental research on companies and
coordinator for AmSouth Bank's Trust includes members from Pioneer's affiliate,
Department. Mr. Boston is Chief Fixed Pioneer Investment Management Limited.
Income Officer for AmSouth Asset
Management, Inc. Mr. Boston began his Mr. Carey is director of portfolio
career in investment management with management and an executive vice
AmSouth Bank in 1988 and has been president of Pioneer. Mr. Carey joined
associated with AAMI since 1996. 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 1985. Prior to joining Pioneer,
Mr. Hunnewell was an independent
investment manager and a fiduciary of
private asset portfolios from 2000 to 2001.
- -------------------------------------------------------------------------------------------------------------------------
8
- -------------------------------------------------------------------------------------------------------------------------
AmSouth Balanced Fund Pioneer Classic Balanced Fund
- -------------------------------------------------------------------------------------------------------------------------
Investment objective AmSouth Balanced Fund seeks to obtain Pioneer Classic Balanced Fund seeks to
long-term capital growth and produce a obtain capital growth and current income.
reasonable amount of current income through
a moderately aggressive investment strategy.
- -------------------------------------------------------------------------------------------------------------------------
Primary investments AmSouth Balanced Fund invests in a Pioneer allocates the Fund's assets between
broadly diversified portfolio of equity and equity and debt securities based on its
debt securities consisting primarily of assessment of current business, economic
common stocks and bonds. and market conditions. Normally, equity and
debt securities each represent 35% to 65% of
The Fund normally invests between 45-75% the Fund's assets.
of 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 stocks, convertible debt, equity interests in
depending upon economic conditions, the real estate investment trusts (REITs), and
general level of stock prices, interest rates securities with common stock characteristics,
and other factors, including the risks such as preferred stocks. The Fund's
associated with each investment. The Fund's investments in debt securities include U.S.
equity investments consist primarily of government securities, corporate debt
common stocks of companies that AAMI securities, mortgage- and asset-backed
believes are undervalued and have a securities, short-term debt securities, cash
favorable outlook or are reasonably priced and cash equivalents. Cash and cash
with the potential to produce above-average equivalents include cash balances, accrued
earnings growth. The Fund's fixed-income interest and receivables for items such as the
investments consist primarily of "high- proceeds, not yet received, from the sale of
grade" bonds, notes and debentures. The the Fund's portfolio investments. Debt
Fund invests in securities issued by: (i) the securities in which the Fund invests may have
Government National Mortgage Association fixed or variable principal payments and all
("GNMA"), which are supported by the full types of interest rate payment and reset
faith and credit of the U.S. government; and terms, including fixed rate, adjustable rate,
(ii) the Federal National Mortgage zero coupon, contingent, deferred, payment-
Association ("FNMA") and the Federal Home in-kind and auction rate features.
Loan Mortgage Corporation ("FHLMC")
which are supported by the right of the The Fund may invest in U.S. government
issuer to borrow from the U.S. Treasury. securities. U.S. government securities include
The Fund also invests in U.S. Treasury obligations: directly issued by or supported by
obligations. 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.
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.
- -------------------------------------------------------------------------------------------------------------------------
9
- -------------------------------------------------------------------------------------------------------------------------
AmSouth Balanced Fund Pioneer Classic Balanced Fund
- -------------------------------------------------------------------------------------------------------------------------
Investment strategies In managing the equity portion of the Fund, In selecting equity securities, Pioneer uses a
the AAMI combines fundamental and value approach to select the Fund's
quantitative analysis with risk management investments. Pioneer seeks securities selling
to identify value opportunities, construct the at reasonable prices or substantial discounts
portfolio and make sell decisions. AAMI to their underlying values and then holds
selects investments believed to have basic these securities until the market values
investment value that will eventually be reflect their intrinsic values. Pioneer
recognized by other investors. In addition, evaluates a security's potential value,
the AAMI may identify companies with a including the attractiveness of its market
history of above-average growth or valuation, based on the company's assets
companies that are expected to enter and prospects for earnings growth. In
periods of above-average growth or are making that assessment, Pioneer employs
positioned in emerging growth industries. due diligence and fundamental research, an
evaluation of the issuer based on its
AAMI's fixed income portfolio management financial statements and operations. Pioneer
process focuses on the four key areas of also considers a security's potential to
duration management, sector weights, provide a reasonable amount of income.
position on the yield curve, and security Pioneer relies on the knowledge, experience
selection; AAMI's goal is to add value in and judgment of its staff who have access
each of these four areas through the active to a wide variety of research. Pioneer
management of the Fund's portfolio. focuses on the quality and price of
Beginning with rigorous fundamental individual issuers, not on economic sector
analysis of the economy and taking into or market-timing strategies. Factors Pioneer
account characteristics of the current looks for in selecting investments include:
business and interest rate cycles, AAMI
arrives at a projection of the likely trend in o Favorable expected returns relative to
interest rates and adjusts duration perceived risk
accordingly. Analysis of the shape of the o Above average potential for earnings and
yield curve and yield spreads among bond revenue growth
market sectors leads to further refinements o Low market valuations relative to
in strategy for companies that appear earnings forecast, book value, cash flow
undervalued. 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 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.
- -------------------------------------------------------------------------------------------------------------------------
10
- -------------------------------------------------------------------------------------------------------------------------
AmSouth Balanced Fund Pioneer Classic Balanced Fund
- -------------------------------------------------------------------------------------------------------------------------
Other investments AmSouth Balanced Fund may also invest in Up to 10% of Pioneer Classic Balanced
debt securities, preferred stock and that Fund's total assets may be invested in debt
portion of the value of securities convertible securities rated below investment grade,
in to common stock, including convertible including convertible debt. A debt security is
preferred stock and convertible debt, which investment grade if it is rated in one of the
is attributable to the fixed income top four categories by a nationally
characteristics of those securities. 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.
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 Normally, Pioneer Classic Balanced Fund
strategies conditions exist, AmSouth Balanced Fund invests substantially all of its assets to meet
may invest entirely in cash positions, its investment objective. The Fund may
directly in U.S. government securities and invest the remainder of its assets in
short-term paper, such as bankers' securities with remaining maturities of less
acceptances. than one year, cash 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 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").
- -------------------------------------------------------------------------------------------------------------------------
11
- -------------------------------------------------------------------------------------------------------------------------
AmSouth Balanced Fund Pioneer Classic Balanced Fund
- -------------------------------------------------------------------------------------------------------------------------
Industry AmSouth Balanced Fund may not purchase Pioneer Classic Balanced Fund may not
concentration any securities which would cause more than invest more than 25% of its assets in any
25% of the value of the Fund's total assets one 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.
- -------------------------------------------------------------------------------------------------------------------------
Restricted and AmSouth Balanced Fund may not invest Pioneer Classic Balanced Fund may not
illiquid securities more than 15% of its net assets in invest more than 15% of its net assets in
securities that are restricted as to resale, or securities that are illiquid and other
for which no readily available market exists, securities that are not readily marketable.
including repurchase agreements providing Repurchase agreements maturing in more
for settlement more than seven days after than seven days will be included for
notice. purposes of the foregoing limit.
- -------------------------------------------------------------------------------------------------------------------------
Borrowing AmSouth Balanced Fund may not borrow Pioneer Classic Balanced Fund may not
money or issue senior securities, except borrow money, except the Fund may: (a)
that the Fund may borrow from banks or borrow from banks or through reverse
enter into reverse repurchase agreements repurchase agreements in an amount up to
for temporary emergency purposes in 33 1/3% of the Fund's total assets (including
amounts up to 33 1/3% of the value of its the amount borrowed); (b) to the extent
total assets at the time of such borrowing. permitted by applicable law, borrow up to
The Fund will not purchase securities while an additional 5% of the Fund's assets for
borrowings (including reverse repurchase temporary purposes; (c) obtain such short-
agreements) in excess of 5% of its total term credits as are necessary for the
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.
- -------------------------------------------------------------------------------------------------------------------------
12
- -------------------------------------------------------------------------------------------------------------------------
AmSouth Balanced Fund Pioneer Classic Balanced Fund
- -------------------------------------------------------------------------------------------------------------------------
Lending AmSouth Balanced Fund may not make Pioneer Classic Balanced 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
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 debt
repurchase agreements. securities, bank loan participation interests,
bank certificates of deposit, bankers'
In addition, the Fund is permitted to acceptances, debentures or other securities,
participate in a credit facility whereby the whether or not the purchase is made upon the
Fund may directly lend to and borrow original issuance of the securities, (iv)
money from other AmSouth funds for participate in a credit facility whereby the Fund
temporary purposes, provided that the loans may directly lend to and borrow money from
are made in accordance with an order of other affiliated funds to the extent permitted
exemption from the SEC and any conditions under the Investment Company Act or an
thereto. 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 AmSouth Balanced Fund may invest in The Fund may use futures and options on
instruments futures contracts and options thereon securities, indices and currencies, forward
(interest rate futures contracts or index foreign currency exchange contracts and other
futures contracts, as applicable) to commit derivatives. A derivative is a security or
funds awaiting investment, to maintain cash instrument whose value is determined by
liquidity or for other hedging purposes. The reference to the value or the change in value
value of the Fund's contracts may equal or of one or more securities, currencies, indices
exceed 100% of the Fund's total assets, or other financial instruments. Although there
although the Fund will not purchase or sell is no specific limitation on investing in
a futures contract unless immediately derivatives, the Fund does not use derivatives
afterwards the aggregate amount of margin as a primary investment technique and
deposits on its existing futures positions generally limits their use to hedging. However,
plus the amount of premiums paid for the Fund may use derivatives for a variety of
related futures options entered into for other non-principal purposes, including:
than bona fide hedging purposes is 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
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.
- -------------------------------------------------------------------------------------------------------------------------
13
- -------------------------------------------------------------------------------------------------------------------------
AmSouth Balanced Fund Pioneer Classic Balanced Fund
- -------------------------------------------------------------------------------------------------------------------------
Short-term trading The AmSouth Fund may engage in the Pioneer Classic Balanced Fund usually does
technique of short-term trading. Such not trade for short-term profits. The Fund
trading involves the selling of securities held will sell an investment, however, even if it
for a short time, ranging from several has only been held for a short time, if it no
months to less than a day. The object of longer meets the Fund's investment criteria.
such 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
policies and and policies. Certain of the non-principal investment policies and restrictions are different.
restrictions 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 Class A shares are offered with an initial Class A shares are offered with an initial
charges and Rule sales charge of up to 5.50% of the offering sales charge of up to 5.75% of the offering
12b-1 fees price, which is reduced depending upon the price, which is reduced or waived for large
amount invested or, in certain purchases and certain types of investors. At
circumstances, waived. Class A shares the time of your purchase, your investment
bought as part of an investment of $1 firm may receive a commission from
million or more are not subject to an initial Pioneer Funds Distributor, Inc. ("PFD"), the
sales charge, but may be charged a Fund's distributor, of up to 4% declining as
contingent deferred sales charge ("CDSC") the size of your investment increases.
of 1.00% if sold within one year
of purchase. There is no CDSC, except in certain
circumstances when the initial sales charge
Class A shares pay a shareholder servicing is waived.
fee (non 12b-1) of up to 0.25%
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 Class B shares are offered without an initial Class B shares are offered without an initial
charges and Rule sales charge, but are subject to a CDSC of sales charge, but are subject to a CDSC of up to
12b-1 fees up to 5%. For Class B shares held 4% if you sell your shares. The charge is
continuously, the CDSC declines over six reduced over time and is not charged after five
years, starting with year one and ending in years. Your investment firm may receive a
year seven from: 5%, 4%, 3%, 2%, 1%. commission from PFD, the Fund's distributor, at
Eight years after purchase Class B shares the time of your purchase of up to 4%.
automatically convert to Class A shares.
Class B shares are subject to distribution and
Class B shares pay a shareholder servicing service (12b-1) fees of up to 1% of average
fee (non 12b-1) of up to 0.25% of average daily net assets.
daily net assets. This fee is in the form of a
separate non-Rule 12b-1 fee. All Funds bear Class B shares acquired through the
a distribution (12b-1) fee of up to 0.75%. Reorganization will retain the holding period,
CDSC and commission schedules applicable to
Maximum investment for all Class B the original purchase.
purchases 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 B shares convert to Class A shares eight
years after the date of purchase.
- -------------------------------------------------------------------------------------------------------------------------
14
- -------------------------------------------------------------------------------------------------------------------------
AmSouth Balanced Fund Pioneer Classic Balanced Fund
- -------------------------------------------------------------------------------------------------------------------------
Class I and Class Y AmSouth Balanced Fund does not impose The Fund does not impose any initial,
sales charges and any 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 daily net assets. The fee is The distributor incurs the expenses of
computed daily and paid monthly. distributing the Fund's Class Y shares, none of
which are reimbursed by the Fund or the
Class Y shareowners.
- -------------------------------------------------------------------------------------------------------------------------
Management and AmSouth Balanced Fund pays an advisory fee Pioneer Classic Balanced Fund will pay
other fees on a monthly basis at an annual rate of Pioneer an advisory fee as follows: 0.65%
0.80% of the Fund's average daily net assets. of the Fund's average daily net assets on
the first $1 billion, 0.60% on the next $4
ASO Services Company, Inc. ("ASO") serves billion, and 0.55% on assets over $5 billion.
as administrator and fund accounting agent The fee is computed daily and paid monthly.
for the Fund. The Fund pays ASO an
administrative services fee of 0.15% of the In addition, the Fund will reimburse Pioneer
Fund's average daily net assets. for certain fund accounting and legal
expenses incurred on behalf of the Fund
For the fiscal year ended July 31, 2004, other and pay a separate shareholder servicing/
expenses of the Fund were limited to 0.54% transfer agency fee to PIMSS, an affiliate of
for Class A shares, 0.54% for Class B shares Pioneer.
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,
For the fiscal year ended July 31, 2004, the 1.99% for Class B shares, and 0.78% for
Fund's annual operating expenses for Class A Class Y shares 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 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
through BISYS Fund Services, the Fund's firm that has a sales agreement with PFD,
distributor, or through brokers, registered the 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 Pioneer
Fund by telephone or online.
Certain account transactions may be done by
telephone.
- -------------------------------------------------------------------------------------------------------------------------
15
- -------------------------------------------------------------------------------------------------------------------------
AmSouth Balanced Fund Pioneer Classic Balanced Fund
- -------------------------------------------------------------------------------------------------------------------------
Exchanging shares You can exchange your shares in the Fund for You may exchange your shares for shares
shares of the same class of another AmSouth of 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 least $1,000. The Fund allows you to
investment requirements for the Fund into exchange your shares at net asset value
which you are exchanging. Exchanges from without charging you either an initial or
one Fund to another are taxable. Class A contingent deferred shares charge at the
shares may be exchanged for Class I shares time of the exchange. Shares you acquire as
of the same Fund or another AmSouth Fund if part of an exchange will continue to be
you become eligible to purchase Class I subject to any contingent deferred sales
shares. Class I shares may be exchanged for charge that applies to the shares you
Class A shares of the same Fund. No originally purchased. When you ultimately
transaction fees are currently charged for sell your shares, the date of your original
exchanges. 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
associated with short-term trading, such as or 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
Fund directly in writing or by telephone or your request to sell shares to PIMSS. You
by contacting a financial intermediary as can also sell your shares by contacting the
described in the Fund's prospectus. Fund 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.
- -------------------------------------------------------------------------------------------------------------------------
16
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)
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
17
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.
AmSouth Balanced Fund -- Class A Shares
Calendar Year Total Returns*
[THE BAR CHART IS A REPRESENTATION OF THE PRINTED MATERIAL]
'95 '96 '97 '98 '99 '00 '01 '02 '03 '04
23.51 9.72 20.84 13.12 1.33 10.18 4.84 -6.86 15.69 6.60
* 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
18
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 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.
Pioneer Pioneer Pioneer
Classic Classic Classic
AmSouth Balanced AmSouth Balanced AmSouth Balanced
Balanced Fund Balanced Fund Balanced Fund
Fund(1) (Pro Forma) Fund(1) (Pro Forma) Fund(1) (Pro Forma)
Shareholder transaction fees Class A Class A Class B Class B Class I Class Y
(paid directly from your investment) -------- ----------- -------- ----------- -------- -----------
Maximum sales charge (load) when you buy shares as a
percentage of offering price ............................. 5.50%(2) 5.75%(2) 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 5.00%(3) 4.00% None None
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 and service (12b-1) fee ...................... None 0.25% 0.75% 1.00% None None
Other expenses ............................................ 0.60%(5) 0.23% 0.63%(5) 0.34% 0.50%(5) 0.13%
Total fund operating expenses ............................. 1.40% 1.13%(6) 2.18% 1.99%(6) 1.30% 0.78%(6)
Expense reimbursement/reduction ........................... 0.07% N/A 0.10% N/A 0.12% N/A
Net fund operating expenses ............................... 1.33% 1.13% 2.08% 1.99% 1.18% 0.78%
(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.
(5) For the period ended January 31, 2005, other expenses for your AmSouth Fund
were 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.
19
- --------------------------------------------------------------------------------
Pro Forma
Pioneer
AmSouth Classic
Balanced Balanced
Number of years you own your shares 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 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 the U.S. advisory subsidiary of Pioneer Global Asset
Management, S.p.A. ("PGAM"), a global asset management group and wholly-owned
subsidiary of UniCredito Italiano S.p.A., one of the largest banking groups in
Italy. The PGAM companies provide investment management and financial services
to mutual funds, institutional and other clients. As December 31, 2004, assets
under management of the PGAM companies 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 money market funds 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
20
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 have
currently.
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 Bancorporation will pay all costs of preparing and
printing the Funds' proxy statements and solicitation costs incurred by the
Funds in connection with the Reorganizations. AAMI or an affiliate 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 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 Pioneer Classic Pioneer Classic
Balanced 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
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.
21
AmSouth Strategic Portfolios: Aggressive Growth Portfolio and
Pioneer Ibbotson Aggressive Allocation 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 exhibits, which
include additional information that is not included in the summary and are a
part of the Proxy Statement/Prospectus. Exhibit A-1 is the form of Agreement
and Plan of Reorganization. Exhibit B includes some additional information
regarding Pioneer. The most recent portfolio manager's discussion of each
Fund's performance is attached as Exhibit C.
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: Pioneer Ibbotson Aggressive
Aggressive Growth Portfolio Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Business A diversified series of AmSouth Funds, an A series of Pioneer Ibbotson Asset
open-end management investment company Allocation Series, a diversified open-end
organized as a Massachusetts business management investment company organized
trust. as a Delaware statutory trust.
- -----------------------------------------------------------------------------------------------------------------------
Net assets as of $51.9 million $19.1 million
March 31, 2005
- -----------------------------------------------------------------------------------------------------------------------
Investment advisers Investment Adviser: Investment Adviser:
and portfolio AAMI Pioneer
managers
Portfolio Manager: Investment Subadviser:
Day-to-day management of AmSouth Ibbotson Associates Advisors, LLC
Strategic Portfolios: Aggressive Growth ("Ibbotson")
Portfolio is the responsibility of the
AmSouth Strategy Committee, and no Portfolio Managers:
person is primarily responsible for making Day-to-day management of Pioneer
recommendations to the Committee. The Ibbotson Aggressive Allocation Fund is the
Committee members consist of John P. responsibility of portfolio managers and
Boston, CFA, Fred Crown, CFA, Paige B. members of Ibbotson's Investment
Daniel, David M. Dasari, CFA, Joseph T. Committee headed by Roger Ibbotson.
Keating, Ronald E. Lindquist, John Mark Roger Ibbotson founded Ibbotson in 1977
McKenzie, Matt Smith, CFA, Brian B. and is the firm's Chairman. Peng Chen,
Sullivan, CFA, Doug S. Williams and Ph.D., managing director and chief
Jason Waters. investment officer at Ibbotson, conducts
research projects on asset allocation,
portfolio risk measurement, nontraditional
assets, and global financial markets. Dr.
Chen joined
- -----------------------------------------------------------------------------------------------------------------------
22
- -----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive
Aggressive Growth Portfolio Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Investment advisers Mr. Boston is Chief Fixed Income Officer for Ibbotson in 1997. Michael E. Annin,
and portfolio AAMI. He began his career in investment managing director, manages the investment
managers management with AmSouth Bank in 1987 management services and data products
(continued) and has been associated with AAMI since group for Ibbotson. Scott Wentsel, senior
1996. Mr. Boston received his CFA charter portfolio manager, is responsible for
in 1993 and is an active member and past management of the firm's fund-of-funds
president of the Alabama Society of business which includes oversight of its
Financial Analysts. He also serves as the investment management staff and process.
portfolio manager for the AmSouth High Alexander E. Kaye, portfolio manager, is
Quality Bond Fund. Mr. Boston is a Senior responsible for managing the delivery of
Vice President of AmSouth Bank and Vice fund-of-funds programs for institutional and
President of AAMI. retail clients, which includes asset allocation
modeling, portfolio construction, fund
Mr. Crown has been employed with classification and manager due diligence.
AmSouth Bank since 1982 and AAMI since Brian Huckstep, portfolio manager, is
2001. He was an Institutional Fund Manager responsible for managing the delivery of
with AAMI (2001-2003) and has been a fund-of-funds programs for institutional and
Regional Manager since 2003. Mr. Crown is retail clients, which includes asset allocation
a Senior Vice President of AmSouth Bank. modeling, portfolio construction, fund
classification, and manager due diligence.
Ms. Daniel has been employed with
AmSouth 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.
- -----------------------------------------------------------------------------------------------------------------------
23
- -----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive
Aggressive Growth Portfolio Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Investment advisers Mr. Lindquist has been employed with AAMI
and portfolio since December 1999. Prior to December
managers 1999, Mr. Lindquist was employed by First
(continued) 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 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.
- -----------------------------------------------------------------------------------------------------------------------
24
- -----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive
Aggressive Growth Portfolio Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Investment advisers Mr. Williams has been employed with
and portfolio AmSouth Bank since 2002. He has been
managers employed as a Regional Manager with AAMI
(continued) 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.
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.
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 Equity Fund Fixed Income Fund
Investments Allocation Allocation
Allocation
0-5% 75-95% 5-15%
- -----------------------------------------------------------------------------------------------------------------------
25
- -----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive
Aggressive Growth Portfolio Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Primary investments Based upon the analysis described under "Asset allocation process," the Fund initially expects
(continued) to invest its assets in underlying mutual funds within the following ranges:
Fund Name Percentage of
Fund 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 0-20%
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.
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.
- -----------------------------------------------------------------------------------------------------------------------
26
- -----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive
Aggressive Growth Portfolio Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Borrowing AmSouth Strategic Portfolios: Aggressive Pioneer Ibbotson Aggressive Allocation Fund
Growth Portfolio may not borrow money or issue may not borrow money, except on a
senior securities, except that the Fund may temporary basis and to the extent permitted
borrow from banks or enter into reverse by applicable law, the Fund may: (a) borrow
repurchase agreements for temporary emergency from banks or through reverse repurchase
purposes in amounts up to 33 1/3% of the value agreements in an amount up to 33 1/3% of
of its total assets at the time of such the Fund's total assets (including the
borrowing. AmSouth Strategic Portfolios: amount borrowed); (b) borrow up to an
Aggressive Growth Portfolio will not purchase additional 5% of the Fund's assets for
securities while borrowings (including reverse temporary purposes; (c) obtain such short-
repurchase agreements) in excess of 5% of its term credits as are necessary for the
total assets are outstanding. In addition, clearance of portfolio transactions; (d)
AmSouth Strategic Portfolios: Aggressive purchase securities on margin; and (e)
Growth Portfolio is permitted to participate engage in transactions in mortgage dollar
in a credit facility whereby the Fund may rolls that are accounted for as financings.
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
policies and and policies. Certain of the non-principal investment policies and restrictions are different.
restrictions 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 Class A shares are offered with an initial Class A shares are offered with an initial
charges and Rule sales charge of up to 5.50% of the offering sales charge of up to 5.75% of the offering
12b-1 fees price, which is reduced depending upon the price, which is reduced or waived for large
amount invested or, in certain purchases and certain types of investors. At
circumstances, waived. Class A shares the time of your purchase, your investment
bought as part of an investment of $1 firm may receive a commission from
million or more are not subject to an initial Pioneer Funds Distributor, Inc. ("PFD"), the
sales charge, but may be charged a Fund's distributor, of up to 2% declining as
contingent deferred sales charge ("CDSC") the size of your investment increases.
of 1.00% if sold within one year of
purchase. There is no CDSC, except in certain
circumstances when the initial sales charge
Class A shares pay a shareholder servicing is waived.
fee (non 12b-1) of up to 0.25% of average
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.
- -----------------------------------------------------------------------------------------------------------------------
27
- -----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive
Aggressive Growth Portfolio Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Class B sales Class B shares are offered without an initial Class B shares are offered without an initial
charges and Rule sales charge, but are subject to a CDSC of sales charge, but are subject to a CDSC of
12b-1 fees up to 5%. For Class B shares issued to up to 2% if you sell your shares. The
former ISG Funds shareholders in charge is reduced over time and is not
connection with the combination of charged after five years. Your investment
AmSouth Funds with ISG Funds, the CDSC firm may receive a commission from PFD,
on such Class B shares held continuously the Fund's distributor, at the time of your
declines over six years, starting with year purchase of up to 2%.
one and ending in year seven from: 4%,
3%, 3%, 2%, 2%, 1%. For all other Class B Class B shares are subject to distribution
shares held continuously, the CDSC declines and service (12b-1) fees of up to 1% of
over six years, starting with year one and average daily net assets.
ending in year seven from: 5%, 4%, 3%,
3%, 2%, 1%. Eight years after purchase Class B shares acquired through the
(seven years in the case of shares acquired Reorganization will retain the holding
in the ISG combination), Class B shares period, CDSC and commission schedules
automatically convert to Class A shares. applicable to the original purchase.
Class B shares pay a shareholder servicing Maximum purchase of Class B shares in a
fee (non 12b-1) of up to 0.25% of average single transaction is $49,999.
daily net assets and a distribution (12b-1)
fee of up to 0.75% of average daily net Class B shares convert to Class A shares
assets. eight years after the date of purchase. Class
B shares issued to former ISG Funds
Maximum investment for all Class B shareholders will convert to Class A shares
purchases by a shareholder for the Fund's seven years after the date of purchase.
shares is $99,999.
- -----------------------------------------------------------------------------------------------------------------------
Class I and Class Y AmSouth Strategic Portfolios: Aggressive The Fund does not impose any initial,
sales charges and Growth Portfolio does not impose any initial contingent deferred or asset based sales
Rule 12b-1 fees or CDSC on Class I shares. charge on Class Y shares.
The Fund may impose a shareholder The distributor incurs the expenses of
servicing fee (non 12b-1) of up to 0.15% of distributing the Fund's Class Y shares, none
average daily net assets. of which are reimbursed by the Fund or the
Class Y shareowners.
- -----------------------------------------------------------------------------------------------------------------------
28
- -----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive
Aggressive Growth Portfolio Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
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
monthly basis at an annual rate of 0.20% of equal to 0.13% of average daily net assets
the 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 attributable to other investments, including
for 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
Fund's average daily net assets. asset levels. Since Pioneer currently
manages all of the underlying funds, the
For the fiscal year ended July 31, 2004, management fee will initially be 0.13% of
other expenses of the Fund were limited to average daily net assets.
0.36% for Class A shares, 0.35% for Class
B shares and 0.31% 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 indirectly separate shareholder servicing/transfer
bear a pro rata share of the fees and agency fee to PIMSS, an affiliate of Pioneer.
expenses of the underlying funds.
Pioneer has contractually agreed not to
For the fiscal year ended July 31, 2004, the impose all or a portion of its fees or to limit
Fund's annual operating expenses for Class other direct ordinary operating expenses to
A shares, after giving effect to the expense the extent required to reduce expenses,
limitation were 0.56%, and without giving other than "Estimated average expense ratio
effect to the expense limitation, were of underlying funds," to 0.85% of the
0.79% of average daily net assets. As of average daily net assets attributable to Class
January 12, 2005, estimated total direct and A shares and 1.64% of average daily net
indirect expenses were 2.04% of average assets attributable to Class B shares. There
daily net assets. is no expense limitation with respect to the
Class Y shares. This expense limitation is in
For the fiscal year ended July 31, 2004, the effect for Class A shares until December 1,
Fund's annual operating expenses for Class 2008 and in effect for Class B shares until
B shares, after giving effect to the expense December 1, 2006. There can be no
limitation were 1.30%, and without giving assurance that Pioneer will extend these
effect to the expense limitation, were expense limitations past such dates. The
1.53% of average daily net assets. As of expense limitation does not limit the
January 12, 2005, estimated total direct and expenses of the underlying funds indirectly
indirect expenses were 2.78% of average incurred by a shareholder.
daily net assets.
Class Y shares of the Pioneer Fund are
For the fiscal year ended July 31, 2004, the being offered for the first time in connection
Fund's annual operating expenses for Class with the Reorganization.
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.
- -----------------------------------------------------------------------------------------------------------------------
29
- -----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive
Aggressive Growth Portfolio Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Buying shares You may buy shares of the Fund directly You may buy shares from any investment
through BISYS Fund Services, the Fund's firm that has a sales agreement with PFD,
distributor, or through brokers, registered the 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
distributor, as described in the Fund's also purchase additional shares of the 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
shares of the same class of another AmSouth of 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 least $1,000.
investment requirements for the Fund into which
you are exchanging. Exchanges from one fund After you establish an eligible fund account,
to another are taxable. Class A shares may be you can exchange Fund shares by telephone
exchanged for Class I shares of the same Fund or online.
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.
- -----------------------------------------------------------------------------------------------------------------------
30
- -----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive
Aggressive Growth Portfolio Allocation 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
Fund directly in writing or by telephone or your request to sell shares to PIMSS. You
by contacting a financial intermediary as can also sell your shares by contacting the
described in the Fund's prospectus. Fund 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
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.
31
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:
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
32
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 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*
[THE BAR CHART IS A REPRESENTATION OF THE PRINTED MATERIAL]
'00 '01 '02 '03 '04
1.50 -9.40 -22.32 28.31 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.
33
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
- -----------------------------------------------------------------------------------------------------------------------------
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) (reflects no deduction for fees, expenses or taxes) 10.87% -2.30% 0.66%
- -----------------------------------------------------------------------------------------------------------------------------
(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.
34
AmSouth AmSouth
Strategic Pioneer Strategic
Portfolios: Ibbotson Portfolios:
Aggressive Aggressive Combined Aggressive
Growth Allocation Fund Growth
Portfolio(1) Fund (Pro Forma) Portfolio
Shareholder transaction fees Class A Class A Class A Class B
(paid directly from your investment) ----------- ---------- ----------- -----------
Maximum sales charge (load) when you buy
shares as a percentage of offering price ......... 5.50%(2) 5.75% 5.75% 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)
Redemption fees ................................... 2.00%(4) None None 2.00%(4)
Annual fund operating expenses
(deducted from fund assets)
(as a % of average net assets)
Management fee .................................... 0.20% 0.17% 0.17% 0.20%
Distribution and service (12b-1) fee .............. None 0.25% 0.25% 0.75%
Other expenses(5) ................................. 0.71% 0.78% 0.48% 0.68%
Estimated indirect expenses ....................... 1.62% 0.81% 1.00%(8) 2.37%
Total fund operating expenses ..................... 2.53% 2.01%(6) 1.90% 4.00%
Expense reimbursement/reduction ................... 0.35% 0.27% 0.05% 0.38%
Net fund operating expenses ....................... 2.18% 1.74% 1.85% 3.62%
AmSouth
Pioneer Strategic
Ibbotson Portfolios:
Aggressive Combined Aggressive Combined
Allocation Fund Growth Fund
Fund (Pro Forma) Portfolio (Pro Forma)
Shareholder transaction fees Class B Class B Class I Class Y(7)
(paid directly from your investment) ---------- ----------- ----------- -----------
Maximum sales charge (load) when you buy
shares as a percentage of offering price ......... 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
Redemption fees ................................... None None 2.00%(4) None
Annual fund operating expenses
(deducted from fund assets)
(as a % of average net assets)
Management fee .................................... 0.17% 0.17% 0.20% 0.17%
Distribution and service (12b-1) fee .............. 1.00% 1.00% None None
Other expenses(5) ................................. 0.92% 0.70% 0.59% 0.30%
Estimated indirect expenses ....................... 0.81% 1.00%(8) 1.57% 1.00%(8)
Total fund operating expenses ..................... 2.90%(6) 2.87% 2.36% 1.47%
Expense reimbursement/reduction ................... 0.27% 0.23% 0.31% N/A
Net fund operating expenses ....................... 2.63% 2.64% 2.05% 1.47%
(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) For the period ended January 31, 2005, other expenses for your AmSouth Fund
were 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 indirect expenses," 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.
(8) "Estimated indirect expenses" for the Pioneer Funds reflect the estimated
gross indirect expenses as of the most recent fiscal period for the
underlying funds. Several of the underlying funds are subject to expense
limitations, which expire as of various dates. Giving effect to such
expense limitations, the estimated indirect expenses would be 0.85%, and
the pro forma combined net expenses for the Pioneer Fund would be 1.70%,
2.49% and 1.32% for Class A, Class B and Class Y shares, respectively.
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.
35
- ---------------------------------------------------------------------------------------------------------------------
AmSouth
Strategic Pioneer
Portfolios: Ibbotson
Aggressive Aggressive Combined
Growth Allocation Fund
Number of years you own your shares Portfolio Fund (Pro Forma)
- ---------------------------------------------------------------------------------------------------------------------
Class A
- ---------------------------------------------------------------------------------------------------------------------
Year 1 $ 758 $ 742 $ 752
- ---------------------------------------------------------------------------------------------------------------------
Year 3 $1,192 $1,091 $1,123
- ---------------------------------------------------------------------------------------------------------------------
Year 5 $1,650 N/A $1,529
- ---------------------------------------------------------------------------------------------------------------------
Year 10 $2,916 N/A $2,657
- ---------------------------------------------------------------------------------------------------------------------
Class B -- assuming redemption at end of period
- ---------------------------------------------------------------------------------------------------------------------
Year 1 $ 798 $ 666 $ 667
- ---------------------------------------------------------------------------------------------------------------------
Year 3 $1,213 $1,172 $1,167
- ---------------------------------------------------------------------------------------------------------------------
Year 5 $1,752 N/A $1,693
- ---------------------------------------------------------------------------------------------------------------------
Year 10 $3,087 N/A $2,948
- ---------------------------------------------------------------------------------------------------------------------
Class B -- assuming no redemption
- ---------------------------------------------------------------------------------------------------------------------
Year 1 $ 298 $ 266 $ 267
- ---------------------------------------------------------------------------------------------------------------------
Year 3 $ 913 $ 872 $ 867
- ---------------------------------------------------------------------------------------------------------------------
Year 5 $1,552 N/A $1,493
- ---------------------------------------------------------------------------------------------------------------------
Year 10 $3,087 N/A $2,948
- ---------------------------------------------------------------------------------------------------------------------
Class I Class Y
- ---------------------------------------------------------------------------------------------------------------------
Year 1 $ 211 N/A $ 150
- ---------------------------------------------------------------------------------------------------------------------
Year 3 $ 652 N/A $ 465
- ---------------------------------------------------------------------------------------------------------------------
Year 5 $1,119 N/A $ 803
- ---------------------------------------------------------------------------------------------------------------------
Year 10 $2,410 N/A $1,757
- ---------------------------------------------------------------------------------------------------------------------
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 the U.
S. advisory subsidiary of Pioneer Global Asset Management, S.p.A. ("PGAM"), a
global asset management group and wholly-owned subsidiary of UniCredito
Italiano S.p.A., one of the largest banking groups in Italy. The PGAM companies
provide investment management and financial services to mutual funds,
institutional and other clients. As of December 31, 2004, assets under
management of the PGAM companies 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 money market funds 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 servicing fees paid by the Class A and Class B
36
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.
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 have currently. 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 Bancorporation will pay all costs of preparing and
printing the Funds' proxy statements and solicitation costs incurred by the
Funds in connection with the Reorganizations. AAMI or an affiliate will
otherwise be responsible for 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 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
Portfolios: Pioneer Ibbotson
Aggressive Ibbotson 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.
37
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.
38
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
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,
39
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)
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.
40
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.
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.
41
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 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.
42
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.
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.
43
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.
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
44
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,
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.
45
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
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.
46
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
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
47
AmSouth Strategic Portfolios: Growth Portfolio and
Pioneer Ibbotson Growth Allocation 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 exhibits, which
include additional information that is not included in the summary and are a
part of the Proxy Statement/Prospectus. Exhibit A-1 is the form of Agreement
and Plan of Reorganization. Exhibit B includes some additional information
regarding Pioneer. The most recent portfolio manager's discussion of each
Fund's performance is attached as Exhibit C.
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
open-end management investment company Allocation Series, a diversified open-end
organized as a Massachusetts business management investment company organized
trust. as a Delaware statutory trust.
- ----------------------------------------------------------------------------------------------------------------------
Net assets as of $64.9 million $32.8 million
March 31, 2005
- ----------------------------------------------------------------------------------------------------------------------
Investment advisers Investment Adviser: Investment Adviser:
and portfolio AAMI Pioneer
managers
Portfolio Manager: Investment Subadviser:
Day-to-day management of the AmSouth Ibbotson Associates Advisors, LLC
Strategic Portfolios: Growth Portfolio is ("Ibbotson")
the responsibility of the AmSouth Strategy
Committee, and no person is primarily Portfolio Managers:
responsible for making recommendations Day-to-day management of Pioneer
to the Committee. The Committee members Ibbotson Growth Allocation Fund is the
consist of John P. Boston, CFA, Fred Crown, responsibility of portfolio managers and
CFA, Paige B. Daniel, David M. Dasari, CFA, members of Ibbotson's Investment
Joseph T. Keating, Ronald E. Lindquist, Committee headed by Roger Ibbotson.
John Mark McKenzie, Matt Smith, CFA, Roger Ibbotson founded Ibbotson in 1977
Brian B. Sullivan, CFA, Doug S. Williams and is the firm's Chairman. Peng Chen,
and Jason Waters. Ph.D., managing director and chief
investment officer at Ibbotson, conducts
research projects on asset allocation,
portfolio risk measurement, nontraditional
assets,
- ----------------------------------------------------------------------------------------------------------------------
48
- ----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios:
Growth Portfolio Pioneer Ibbotson Growth Allocation Fund
- ----------------------------------------------------------------------------------------------------------------------
Investment advisers Mr. Boston is Chief Fixed Income Officer for and global financial markets. Dr. Chen
and portfolio AAMI. He began his career in investment joined Ibbotson in 1997. Michael E. Annin,
managers management with AmSouth Bank in 1987 and managing director, manages the investment
(continued) has been associated with AAMI since 1996. management services and data products
Mr. Boston received his CFA charter in 1993 group for Ibbotson. Scott Wentsel, senior
and is an active member and past president of portfolio manager, is responsible for
the Alabama Society of Financial Analysts. He management of the firm's fund- of-
also serves as the portfolio manager for the funds business which includes oversight
AmSouth High Quality Bond Fund. Mr. Boston of its investment management staff and
is a Senior Vice President of AmSouth Bank process. Alexander E. Kaye, portfolio
and Vice President of AAMI. manager, is responsible for managing the
delivery of fund-of-funds programs for
Mr. Crown has been employed with AmSouth institutional and retail clients, which
Bank since 1982 and AAMI since 2001. He includes asset allocation modeling, portfolio
was an Institutional Fund Manager with AAMI construction, fund classification and
(2001-2003) and has been a Regional manager due diligence. Brian Huckstep,
Manager since 2003. Mr. Crown is a Senior portfolio manager, is responsible for
Vice President of AmSouth Bank. managing the delivery of fund-of-funds
programs for institutional and retail clients,
Ms. Daniel has been employed with AmSouth which includes asset allocation modeling,
Bank since 1999. She has been employed by portfolio construction, fund classification,
AAMI as the Director of Alternative Strategies and manager due diligence.
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.
- ----------------------------------------------------------------------------------------------------------------------
49
- ----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios:
Growth Portfolio Pioneer Ibbotson Growth Allocation Fund
- ----------------------------------------------------------------------------------------------------------------------
Investment advisers Mr. McKenzie has been involved in
and portfolio investment management since 1981, with
managers portfolio management expertise in both
(continued) 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 Growth Allocation Fund
Portfolio seeks to provide investors with seeks long-term capital growth and income.
long term capital growth.
- ----------------------------------------------------------------------------------------------------------------------
50
- ----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios:
Growth Portfolio Pioneer Ibbotson Growth Allocation Fund
- ----------------------------------------------------------------------------------------------------------------------
Primary investments Each Fund allocates its investments among underlying funds within pre-determined strategy
ranges.
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.
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 Equity Fund Fixed Income Fund
Investments Allocation Allocation
Allocation
0-5% 70-80% 20-30%
- ----------------------------------------------------------------------------------------------------------------------
51
- ----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios:
Growth Portfolio Pioneer Ibbotson Growth Allocation Fund
- ----------------------------------------------------------------------------------------------------------------------
Primary investments Based upon the analysis described under "Asset allocation process," the Fund initially expects
(continued) to invest its assets in underlying mutual funds within the following ranges:
Fund Name Percentage of
Fund 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.
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.
- ----------------------------------------------------------------------------------------------------------------------
52
- ----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios:
Growth Portfolio Pioneer Ibbotson Growth Allocation Fund
- ----------------------------------------------------------------------------------------------------------------------
Borrowing AmSouth Strategic Portfolios: Growth Pioneer Ibbotson Growth Allocation Fund
Portfolio may not borrow money or issue may not borrow money, except on a
senior securities, except that the Fund may temporary basis and to the extent permitted
borrow from banks or enter into reverse by applicable law, the Fund may: (a) borrow
repurchase agreements for temporary from banks or through reverse repurchase
emergency purposes in amounts up to agreements in an amount up to 33 1/3% of
33 1/3% of the value of its total assets at the the Fund's total assets (including the
time of such borrowing. AmSouth Strategic amount borrowed); (b) borrow up to an
Portfolios: Growth Portfolio will not additional 5% of the Fund's assets for
purchase securities while borrowings temporary purposes; (c) obtain such short-
(including reverse repurchase agreements) term credits as are necessary for the
in excess of 5% of its total assets are clearance of portfolio transactions; (d)
outstanding. In addition, AmSouth Strategic purchase securities on margin; and (e)
Portfolios: Growth Portfolio is permitted to engage in transactions in mortgage dollar
participate in a credit facility whereby the rolls that are 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 As described above, the Funds have substantially similar principal investment strategies
policies and and policies. Certain of the non-principal investment policies and restrictions are different.
restrictions 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 Class A shares are offered with an initial Class A shares are offered with an initial
charges and Rule sales charge of up to 5.50% of the offering sales charge of up to 5.75% of the offering
12b-1 fees price, which is reduced depending upon the price, which is reduced or waived for large
amount invested or, in certain purchases and certain types of investors. At
circumstances, waived. Class A shares the time of your purchase, your investment
bought as part of an investment of $1 firm may receive a commission from
million or more are not subject to an initial Pioneer Funds Distributor, Inc. ("PFD"), the
sales charge, but may be charged a Fund's distributor, of up to 2% declining as
contingent deferred sales charge ("CDSC") the size of your investment increases.
of 1.00% if sold within one year There is no CDSC, except in certain
of purchase. circumstances when the initial sales charge
is waived.
Class A shares pay a shareholder servicing
fee (non 12b-1) of up to 0.25% of average Class A shares are subject to distribution
daily net assets. and service (12b-1) fees of up to 0.25% of
average daily net assets.
- ----------------------------------------------------------------------------------------------------------------------
53
- ----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios:
Growth Portfolio Pioneer Ibbotson Growth Allocation Fund
- ----------------------------------------------------------------------------------------------------------------------
Class B sales Class B shares are offered without an initial Class B shares are offered without an initial
charges and Rule sales charge, but are subject to a CDSC of sales charge, but are subject to CDSC of up
12b-1 fees up to 5%. For Class B shares issued to to 2% if you sell your shares. The charge is
former ISG Funds shareholders in reduced over time and is not charged after
connection with the combination of five years. Your investment firm may receive
AmSouth Funds with ISG Funds, the CDSC a commission from PFD, the Fund's
on such Class B shares held continuously distributor, at the time of your purchase of
declines over six years, starting with year up to 2%.
one and ending in year seven from: 4%,
3%, 3%, 2%, 2%, 1%. For all other Class B Class B shares are subject to distribution
shares held continuously, the CDSC declines and service (12b-1) fees of up to 1% of
over six years, starting with year one and average daily net assets.
ending in year seven from: 5%, 4%, 3%,
3%, 2%, 1%. Eight years after purchase Class B shares acquired through the
(seven years in the case of shares acquired Reorganization will retain the holding
in the ISG combination), Class B shares period, CDSC and commission schedules
automatically convert to Class A shares. applicable to the original purchase.
Class B shares pay a shareholder servicing Maximum purchase of Class B shares in a
fee (non 12b-1) of up to 0.25% of average single transaction is $49,999.
daily net assets and a distribution (12b-1)
fee of up to 0.75% of average daily Class B shares convert to Class A shares
net assets. eight years after the date of purchase. Class
B shares issued to former ISG Funds
Maximum investment for all Class B shareholders will convert to Class A shares
purchases by a shareholder for the Fund's seven years after the date of purchase.
shares is $99,999.
- ----------------------------------------------------------------------------------------------------------------------
Class I and Class Y AmSouth Strategic Portfolios: Growth The Fund does not impose any initial,
sales charges and Portfolio does not impose any initial or contingent deferred or asset based sales
Rule 12b-1 fees CDSC on Class I shares. charge on Class Y shares.
The Fund may impose a shareholder The distributor incurs the expenses of
servicing fee (non 12b-1) of up to 0.15% distributing the Fund's Class Y shares, none of
of average daily net assets. which are reimbursed by the Fund or the
Class Y shareowners.
- ----------------------------------------------------------------------------------------------------------------------
54
- ----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios:
Growth Portfolio Pioneer Ibbotson Growth Allocation Fund
- ----------------------------------------------------------------------------------------------------------------------
Management and AmSouth Strategic Portfolios: Growth The management fee payable by Pioneer
other fees Portfolio pays an advisory fee on a monthly Ibbotson Growth Allocation Fund is equal to
basis at an annual rate of 0.20% of the 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 attributable to other investments, including
for the Fund. The Fund pays ASO an underlying funds that are not managed by
administrative services fee of 0.15% of Pioneer, with breakpoints at incremental
the Fund's average daily net assets. asset levels. Since currently all of the
underlying funds are managed by Pioneer,
For the fiscal year ended July 31, 2004, the management fee will initially be 0.13%
other expenses of the Fund were limited to of average daily net assets.
0.30% for Class A shares, 0.29% for Class In addition, the Fund reimburses Pioneer for
B shares and 0.25 % for Class I shares. certain fund accounting and legal expenses
Any fee waiver or expense reimbursement incurred on behalf of the Fund and pays a
arrangement is voluntary and may be separate shareholder servicing/transfer
discontinued at any time. You also indirectly agency fee to PIMSS, an affiliate of Pioneer.
bear a pro rata share of the fees and
expenses of the underlying funds. Pioneer has contractually agreed not to
For the fiscal year ended July 31, 2004, the impose all or a portion of its fees or to limit
Fund's annual operating expenses for Class other direct ordinary operating expenses to
A shares, after giving effect to the expense the extent required to reduce expenses,
limitation were 0.50%, and without giving other than "Estimated average expense ratio
effect to the expense limitation, were of underlying funds," to 0.79% of the
0.73% of average daily net assets. As of average daily net assets attributable to Class
January 12, 2005, estimated total direct A shares and 1.57% of average daily net
and indirect expenses were 1.92% of assets attributable to Class B shares. There
average daily net assets. is no expense limitation with respect to the
Class Y shares. This expense limitation is in
For the fiscal year ended July 31, 2004, the effect for Class A shares until December 1,
Fund's annual operating expenses for Class 2008 and in effect for Class B shares until
B shares, after giving effect to the expense December 1, 2006. There can be no
limitation were 1.24%, and without giving assurance that Pioneer will extend these
effect to the expense limitation, were expense limitations past such dates. The
1.47% of average daily net assets. As of expense limitation does not limit the
January 12, 2005, estimated total direct expenses of the underlying funds indirectly
and indirect expenses were 2.66% of incurred by a shareholder.
average daily net assets.
Class Y shares of the Pioneer Fund are
For the fiscal year ended July 31, 2004, the being offered for the first time in connection
Fund's annual operating expenses for Class with the Reorganization.
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.
- ----------------------------------------------------------------------------------------------------------------------
55
- ----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios:
Growth Portfolio Pioneer Ibbotson Growth Allocation Fund
- ----------------------------------------------------------------------------------------------------------------------
Buying shares You may buy shares of the Fund directly You may buy shares from any investment
through BISYS Fund Services, the Fund's firm that has a sales agreement with PFD,
distributor, or through brokers, registered the 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
shares of the same class of another AmSouth of 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 least $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 you can exchange fund shares by telephone
shares may be exchanged for Class I shares or online.
of 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.
- ----------------------------------------------------------------------------------------------------------------------
56
- ----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios:
Growth Portfolio Pioneer Ibbotson Growth Allocation 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
Fund directly in writing or by telephone or your request to sell shares to PIMSS. You
by contacting a financial intermediary as can also sell your shares by contacting the
described in the Fund's prospectus. Fund 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
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.
57
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:
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
58
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 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*
[THE BAR CHART IS A REPRESENTATION OF THE PRINTED MATERIAL]
'00 '01 '02 '03 '04
0.59 -5.77 -13.63 21.84 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.
59
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%
- ---------------------------------------------------------------------------------------------------------------------
S&P 500 Index(1) (reflects no deduction for fees, expenses or taxes) 10.87% -2.30% 0.66%
- ---------------------------------------------------------------------------------------------------------------------
(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.
60
AmSouth Pioneer AmSouth
Strategic Ibbotson Strategic
Portfolios Growth Combined Portfolios
Growth Allocation Fund Growth
Portfolio(1) Fund (Pro Forma) Portfolio
Shareholder transaction fees Class A Class A Class A Class B
(paid directly from your investment) ---------- ---------- ----------- ----------
Maximum sales charge (load) when you buy
shares as a percentage of offering price ...... 5.50%(2) 5.75% 5.75% 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)
Redemption fees ................................ 2.00%(4) None None 2.00%(4)
Annual fund operating expenses
(deducted from fund assets)
(as a % of average net assets)
Management fee ................................. 0.20% 0.17% 0.17% 0.20%
Distribution and service (12b-1) fee ........... None 0.25% 0.25% 0.75%
Other expenses(5) .............................. 0.64% 0.70% 0.45% 0.65%
Estimated indirect expenses .................... 1.52% 0.78% 0.99%(8) 2.26%
Total fund operating expenses6 ................. 2.36% 1.90%(6) 1.86% 3.86%
Expense reimbursement/reduction ................ 0.33% 0.19% 0.08% 0.35%
Net fund operating expenses .................... 2.03% 1.71% 1.78% 3.51%
Pioneer AmSouth
Ibbotson Strategic
Growth Combined Portfolios Combined
Allocation Fund Growth Fund
Fund (Pro Forma) Portfolio (Pro Forma)
Shareholder transaction fees Class B Class B Class I Class Y(7)
(paid directly from your investment) ---------- ----------- ---------- -----------
Maximum sales charge (load) when you buy
shares as a percentage of offering price ...... 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
Redemption fees ................................ None None 2.00%(4) None
Annual fund operating expenses
(deducted from fund assets)
(as a % of average net assets)
Management fee ................................. 0.17% 0.17% 0.20% 0.17%
Distribution and service (12b-1) fee ........... 1.00% 1.00% None None
Other expenses(5) ............................. 0.86% 0.67% 0.60% 0.27%
Estimated indirect expenses .................... 0.78% 0.99%(8) 1.47% 0.99%(8)
Total fund operating expenses(6) ............... 2.81%(6) 2.83% 2.27% 1.43%
Expense reimbursement/reduction ................ 0.19% 0.27% 0.34% N/A
Net fund operating expenses .................... 2.62% 2.56% 1.93% 1.43%
(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) For the period ended January 31, 2005, other expenses for your AmSouth Fund
were 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 indirect expenses," 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 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.
(8) "Estimated indirect expenses" for the Pioneer Funds reflect the estimated
gross indirect expenses as of the most recent fiscal period for the
underlying funds. Several of the underlying funds are subject to expense
limitations, which expire as of various dates. Giving effect to such
expense limitations, the estimated indirect expenses would be 0.81%, and
the pro forma combined net expenses for the Pioneer Fund would be 1.60%,
2.38% and 1.25% for Class A, Class B and Class Y shares, respectively.
61
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
Strategic Ibbotson
Portfolios: Growth Combined
Growth Allocation Fund
Number of years you own your shares Portfolio Fund (Pro Forma)
- --------------------------------------------------------------------------------------------------------------
Class A
- --------------------------------------------------------------------------------------------------------------
Year 1 $ 747 $ 739 $ 745
- --------------------------------------------------------------------------------------------------------------
Year 3 $1,157 $1,120 $1,103
- --------------------------------------------------------------------------------------------------------------
Year 5 $1,593 N/A $1,501
- --------------------------------------------------------------------------------------------------------------
Year 10 $2,798 N/A $2,610
- --------------------------------------------------------------------------------------------------------------
Class B -- assuming redemption at end of period
- --------------------------------------------------------------------------------------------------------------
Year 1 $ 784 $ 665 $ 659
- --------------------------------------------------------------------------------------------------------------
Year 3 $1,171 $1,153 $1,152
- --------------------------------------------------------------------------------------------------------------
Year 5 $1,684 N/A $1,670
- --------------------------------------------------------------------------------------------------------------
Year 10 $2,957 N/A $2,906
- --------------------------------------------------------------------------------------------------------------
Class B -- assuming no redemption
- --------------------------------------------------------------------------------------------------------------
Year 1 $ 284 $ 265 $ 259
- --------------------------------------------------------------------------------------------------------------
Year 3 $ 871 $ 853 $ 852
- --------------------------------------------------------------------------------------------------------------
Year 5 $1,484 N/A $1,470
- --------------------------------------------------------------------------------------------------------------
Year 10 $2,957 N/A $2,906
- --------------------------------------------------------------------------------------------------------------
Class I Class Y
- --------------------------------------------------------------------------------------------------------------
Year 1 $ 204 N/A $ 146
- --------------------------------------------------------------------------------------------------------------
Year 3 $ 630 N/A $ 452
- --------------------------------------------------------------------------------------------------------------
Year 5 $ 1083 N/A $ 782
- --------------------------------------------------------------------------------------------------------------
Year 10 $2,338 N/A $1,713
- --------------------------------------------------------------------------------------------------------------
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 the U.S.
advisory subsidiary of Pioneer Global Asset Management, S.p.A. ("PGAM"), a
global asset management group and wholly-owned subsidiary of UniCredito
Italiano S.p.A., one of the largest banking groups in Italy. The PGAM companies
provide investment management and financial services to mutual funds,
institutional and other clients. As of December 31, 2004, assets under
management of the PGAM companies 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 money market funds 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
62
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 have currently. 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 Bancorporation will pay all costs of preparing and
printing the Funds' proxy statements and solicitation costs incurred by the
Funds in connection with the Reorganizations. AAMI or an affiliate will
otherwise be responsible for 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 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 Ibbotson
AmSouth Strategic Pioneer Ibbotson Growth
Portfolios: Growth Growth Allocation Fund
Portfolio Fund Allocation Fund (Pro 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
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.
63
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
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,
64
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)
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.
65
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.
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.
66
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 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.
67
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.
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
68
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.
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.
69
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,
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
70
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
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.
71
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
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
72
AmSouth Strategic Portfolios: Growth and Income Portfolio and
Pioneer Ibbotson Moderate Allocation 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 exhibits, which
include additional information that is not included in the summary and are a
part of the Proxy Statement/Prospectus. Exhibit A-1 is the form of Agreement
and Plan of Reorganization. Exhibit B includes some additional information
regarding Pioneer. The most recent portfolio manager's discussion of each
Fund's performance is attached as Exhibit C.
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 and Income Portfolio to
Pioneer Ibbotson Moderate Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Growth and
Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Business A diversified series of AmSouth Funds, an A series of Pioneer Ibbotson Asset
open-end management investment company Allocation Series, a diversified open-end
organized as a Massachusetts business management investment company organized
trust. as a Delaware statutory trust.
- -----------------------------------------------------------------------------------------------------------------------
Net assets as of $112.5 million $34.3 million
March 31, 2005
- -----------------------------------------------------------------------------------------------------------------------
Investment advisers Investment Adviser: Investment Adviser:
and portfolio AAMI Pioneer
managers
Portfolio Manager: Investment Subadviser:
Day-to-day management of AmSouth Ibbotson Associates Advisors, LLC
Strategic Portfolios: Growth & Income ("Ibbotson")
Portfolio is the responsibility of the
AmSouth Strategy Committee, and no Portfolio Managers:
person is primarily responsible for making Day-to-day management of Pioneer
recommendations to the Committee. The Ibbotson Moderate Allocation Fund is the
Committee members consist of John P. responsibility of portfolio managers and
Boston, CFA, Fred Crown, CFA, Paige B. members of Ibbotson's Investment
Daniel, David M. Dasari, CFA, Joseph T. Committee headed by Roger Ibbotson.
Keating, Ronald E. Lindquist, John Mark Roger Ibbotson founded Ibbotson in 1977
McKenzie, Matt Smith, CFA, Brian B. and is the firm's Chairman. Peng Chen,
Sullivan, CFA, Doug S. Williams and Jason Ph.D., managing director and chief
Waters. investment officer at Ibbotson, conducts
research projects on asset allocation,
portfolio risk measurement, nontraditional
assets,
- -----------------------------------------------------------------------------------------------------------------------
73
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AmSouth Strategic Portfolios: Growth and
Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Investment advisers Mr. Boston is Chief Fixed Income Officer for and global financial markets. Dr. Chen
and portfolio AAMI. He began his career in investment joined Ibbotson in 1997. Michael E. Annin,
managers management with AmSouth Bank in 1987 managing director, manages the investment
(continued) and has been associated with AAMI since management services and data products
1996. Mr. Boston received his CFA charter group for Ibbotson. Scott Wentsel, senior
in 1993 and is an active member and past portfolio manager, is responsible for
president of the Alabama Society of management of the firm's fund- of-
Financial Analysts. He also serves as the funds business which includes oversight of
portfolio manager for the AmSouth High its investment management staff and
Quality Bond Fund. Mr. Boston is a Senior process. Alexander E. Kaye, portfolio
Vice President of AmSouth Bank and Vice manager, is responsible for managing the
President of AAMI. delivery of fund-of-funds programs for
institutional and retail clients, which
Mr. Crown has been employed with includes asset allocation modeling, portfolio
AmSouth Bank since 1982 and AAMI since construction, fund classification and
2001. He was an Institutional Fund Manager manager due diligence. Brian Huckstep,
with AAMI (2001-2003) and has been a portfolio manager, is responsible for
Regional Manager since 2003. Mr. Crown is managing the delivery of fund-of-funds
a Senior Vice President of AmSouth Bank. programs for institutional and retail clients,
which includes asset allocation modeling,
Ms. Daniel has been employed with portfolio construction, fund classification,
AmSouth Bank since 1999. She has been and manager due diligence.
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
- -----------------------------------------------------------------------------------------------------------------------
74
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AmSouth Strategic Portfolios: Growth and
Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Investment advisers are predecessors of AmSouth Bank and
and portfolio affiliates of AAMI. He also serves as the
managers portfolio manager for the AmSouth Large
(continued) 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 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.
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75
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AmSouth Strategic Portfolios: Growth and
Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Investment objective AmSouth Strategic Portfolios: Growth and Pioneer Ibbotson Moderate Allocation Fund
Income Portfolio seeks to provide investors seeks long-term capital growth and current
with long-term capital growth and a income.
moderate level of current income.
- -----------------------------------------------------------------------------------------------------------------------
Primary investments Each Fund allocates its investments among underlying funds within pre-determined strategy
ranges.
AmSouth Strategic Portfolios: Growth and Income Portfolio:
AmSouth Strategic Portfolios: Growth and 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 and Income
Portfolio's shareholders.
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 Equity Fund Fixed Income Fund
Investments Allocation Allocation
Allocation
0-5% 55-65% 35-45%
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76
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AmSouth Strategic Portfolios: Growth and
Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Primary investments Based upon the analysis described under "Asset allocation process," the Fund initially expects
(continued) 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 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.
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.
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77
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AmSouth Strategic Portfolios: Growth and
Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Borrowing AmSouth Strategic Portfolios: Growth and Pioneer Ibbotson Moderate Allocation Fund
Income Portfolio may not borrow money or may not borrow money, except on a
issue senior securities, except that the Fund temporary basis and to the extent permitted
may borrow from banks or enter into by applicable law, the Fund may: (a) borrow
reverse repurchase agreements for temporary from banks or through reverse repurchase
emergency purposes in amounts up to 33 1/3% agreements in an amount up to 33 1/3% of
of the value of its total assets at the the Fund's total assets (including the
time of such borrowing. AmSouth Strategic amount borrowed); (b) borrow up to an
Portfolios: Growth and Income Portfolio will additional 5% of the Fund's assets for
not purchase securities while borrowings temporary purposes; (c) obtain such short-
(including reverse repurchase agreements) term credits as are necessary for the
in excess of 5% of its total assets are clearance of portfolio transactions; (d)
outstanding. In addition, AmSouth Strategic purchase securities on margin; and (e)
Portfolios: Growth and Income Portfolio is engage in transactions in mortgage dollar
permitted to participate in a credit facility rolls that are accounted for as financings.
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
policies and and policies. Certain of the non-principal investment policies and restrictions are different.
restrictions 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 Class A shares are offered with an initial Class A shares are offered with an initial
charges and Rule sales charge of up to 5.50% of the offering sales charge of up to 5.75% of the offering
12b-1 fees price, which is reduced depending upon the price, which is reduced or waived for large
amount invested or, in certain purchases and certain types of investors. At
circumstances, waived. Class A shares the time of your purchase, your investment
bought as part of an investment of $1 firm may receive a commission from
million or more are not subject to an initial Pioneer Funds Distributor, Inc. ("PFD"), the
sales charge, but may be charged a Fund's distributor, of up to 2% declining as
contingent deferred sales charge ("CDSC") the size of your investment increases.
of 1.00% if sold within one year
of purchase. There is no CDSC, except in certain
circumstances when the initial sales charge
Class A shares pay a shareholder servicing is waived.
fee (non 12b-1) of up to 0.25% of average
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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78
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AmSouth Strategic Portfolios: Growth and
Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Class B sales Class B shares are offered without an initial Class B shares are offered without an initial
charges and Rule sales charge, but are subject to a CDSC sales charge, but are subject to a CDSC of
12b-1 fees of up to 5%. For Class B shares issued up to 2% if you sell your shares. The
to former ISG Funds shareholders in charge is reduced over time and is not
connection with the combination of charged after three years. Your investment
AmSouth Funds with ISG Funds, the CDSC firm may receive a commission from PFD,
on such Class B shares held continuously the Fund's distributor, at the time of your
declines over six years, starting with year purchase of up to 2%.
one and ending in year seven from: 4%,
3%, 3%, 2%, 2%, 1%. For all other Class B Class B shares are subject to distribution
shares held continuously, the CDSC declines and service (12b-1) fees of up to 1% of
over six years, starting with year one and average daily net assets.
ending in year seven from: 5%, 4%, 3%,
3%, 2%, 1%. Eight years after purchase Class B shares acquired through the
(seven years in the case of shares acquired Reorganization will retain the holding
in the ISG combination), Class B shares period, CDSC and commission schedules
automatically convert to Class A shares. applicable to the original purchase.
Class B shares pay a shareholder servicing Maximum purchase of Class B shares in a
fee (non 12b-1) of up to 0.25% of average single transaction is $49,999.
daily net assets and a distribution (12b-1)
fee of 0.75% of up to average daily Class B shares convert to Class A shares
net assets. eight years after the date of purchase. Class
B shares issued to former ISG Funds
Maximum investment for all Class B shareholders will convert to Class A shares
purchases by a shareholder for the Fund's seven years after the date of purchase.
shares is $99,999.
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Class I and Class Y AmSouth Strategic Portfolios: Growth and The Fund does not impose any initial,
sales charges and Income Portfolio does not impose any initial contingent deferred or asset based sales
Rule 12b-1 fees or CDSC on Class I shares. charge on Class Y shares.
The Fund may impose a shareholder The distributor incurs the expenses of
servicing fee (non 12b-1) of up to 0.15% distributing the Fund's Class Y shares, none
of average daily net assets. of which are reimbursed by the Fund or the
Class Y shareowners.
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79
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AmSouth Strategic Portfolios: Growth and
Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Management and AmSouth Strategic Portfolios: Growth and The management fee payable by Pioneer
other fees Income Portfolio pays an advisory fee on a Ibbotson Moderate Allocation Fund is equal
monthly basis at an annual rate of 0.20% of to 0.13% of average daily net assets
the Fund's average daily net assets. attributable to the Fund's investments in
underlying funds managed by Pioneer and
ASO Services Company, Inc. ("ASO") cash and 0.17% of average daily net assets
serves as administrator and fund accounting attributable to other investments, including
agent for 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
Fund's average daily net assets. asset levels. Since currently all of the
underlying funds are managed by Pioneer,
For the fiscal year ended July 31, 2004, the management fee will initially be 0.13%
other expenses of the Fund were limited to of average daily net assets.
0.33% for Class A shares, 0.33% for Class
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 indirectly separate shareholder servicing/transfer
bear a pro rata share of the fees and agency fee to PIMSS, an affiliate of Pioneer.
expenses of the underlying funds.
Pioneer has contractually agreed not to
For the fiscal year ended July 31, 2004, the impose all or a portion of its fees or to limit
Fund's annual operating expenses for Class other direct ordinary operating expenses to
A shares, after giving effect to the expense the extent required to reduce expenses,
limitation were 0.53%, and without giving other than "Estimated average expense ratio
effect to the expense limitation, were of underlying funds," to 0.74% of the
0.66% of average daily net assets. As of average daily net assets attributable to Class
January 12, 2005, estimated total direct A shares and 1.64% of average daily net
and indirect expenses were 1.81% of assets attributable to Class B shares. There
average daily net assets. is no expense limitation with respect to the
Class Y shares. This expense limitation is in
For the fiscal year ended July 31, 2004, the effect for Class A shares until December 1,
Fund's annual operating expenses for Class 2008 and in effect for Class B shares until
B shares, after giving effect to the expense December 1, 2006. There can be no
limitation were 1.28%, and without giving assurance that Pioneer will extend these
effect to the expense limitation, were expense limitations past such dates. The
1.41% of average daily net assets. As of expense limitation does not limit the
January 12, 2005, estimated total direct expenses of the underlying funds indirectly
and indirect expenses were 2.56% of incurred by a shareholder.
average daily net assets.
Class Y shares of the Pioneer Fund are
For the fiscal year ended July 31, 2004, the being offered for the first time in connection
Fund's annual operating expenses for Class with the Reorganization.
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.
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80
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AmSouth Strategic Portfolios: Growth and
Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- -----------------------------------------------------------------------------------------------------------------------
Buying shares You may buy shares of the Fund directly You may buy shares from any investment
through BISYS Fund Services, the Fund's firm that has a sales agreement with PFD,
distributor, or through brokers, registered the Pioneer 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
distributor, as described in the Fund's also purchase additional shares of the Fund
prospectus. 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 You may exchange your shares for shares
for shares of the same class of another of the same class of another Pioneer mutual
AmSouth fund, usually without paying fund. Your exchange request must be for at
additional sales charges. You must meet the least $1,000.
minimum investment requirements for the
Fund into which you are exchanging. After you establish an eligible fund account,
Exchanges from one fund to another are you can exchange Fund shares by telephone
taxable. Class A shares may be exchanged or online.
for Class I shares of 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.
- -----------------------------------------------------------------------------------------------------------------------
81
- -----------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Growth and
Income Portfolio Pioneer Ibbotson Moderate Allocation 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
Fund directly in writing or by telephone or your request to sell shares to PIMSS. You
by contacting a financial intermediary as can also sell your shares by contacting the
described in the Fund's prospectus. Fund 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
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.
82
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:
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:
83
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 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 and Income Portfolio. The bar charts show how AmSouth
Strategic Portfolios: Growth and 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 and Income Portfolio -- Class A Shares
Calendar Year Total Returns*
[THE BAR CHART IS A REPRESENTATION OF THE PRINTED MATERIAL]
'00 '01 '02 '03 '04
4.21 -2.29 -8.54 17.38 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.
84
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 and Income Portfolio
Average Annual Total Returns (for the periods ending December 31, 2004)
- ------------------------------------------------------------------------------------------------------------------------------------
Since Inception
1 Year 5 Years (1/27/99)
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Growth and 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 and Income Portfolio, Class B Shares
- ------------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 1.77% 2.16% 3.00%
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Growth and 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)
(reflects no deduction for fees, expenses or taxes) 10.87% -2.30% 0.66%
- ------------------------------------------------------------------------------------------------------------------------------------
(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 and 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.
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
and Income Portfolio, the expenses of AmSouth Strategic Portfolios: Growth and
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 and 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 and Income
Portfolio into Pioneer Ibbotson Moderate Allocation Fund also occurred on
January 31, 2005.
85
Combined
Fund
(including
AmSouth AmSouth AmSouth
Strategic Pioneer Moderate Strategic
Portfolios Ibbotson Growth Portfolios
Growth Moderate Combined and Income Growth
and Income Allocation Fund Portfolio) and Income
Shareholder transaction Portfolio(1) Fund (Pro Forma) (Pro Forma) Portfolio
fees (paid directly Class A Class A Class A Class A Class B
from your investment) ------------ ---------- ----------- ----------- -----------
Maximum sales charge
(load) when you buy
shares as a percentage
of offering price ......... 5.50%(2) 5.75% 5.75% 5.75% 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 5.00%(3)
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 ............. 0.20% 0.17%(6) 0.17%(6) 0.17%(6) 0.20%
Distribution and service
(12b-1) fee ............... None 0.25% 0.25% 0.25% 0.75%
Other expenses(5) .......... 0.57% 0.68% 0.38% 0.35% 0.61%
Estimated indirect
expenses .................. 1.50% 0.68% 0.92%(9) 0.92%(9) 2.24%
Total fund operating
expenses .................. 2.27% 1.78%(7) 1.72% 1.69% 3.05%
Expense reimbursement/
reduction ................. 0.25% 0.20% 0.06% 0.03% 0.30%
Net fund operating
expenses .................. 2.02% 1.58% 1.66% 1.66% 2.75%
Combined Combined
Fund Fund
(including (including
AmSouth AmSouth AmSouth
Pioneer Moderate Strategic Moderate
Ibbotson Growth Portfolios Growth
Moderate Combined and Income Growth Combined and Income
Allocation Fund Portfolio) and Income Fund Portfolio)
Shareholder transaction Fund (Pro Forma) (Pro Forma) Portfolio (Pro Forma) (Pro Forma)
fees (paid directly Class B Class B Class B Class I Class Y(8) Class Y(8)
from your investment) ------------ ------------- ------------- ------------ ------------- ------------
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% 4.00% None None None
Redemption fees ............ None None None 2.00%(4) None None
Annual fund operating
expenses (deducted
from fund assets)
(as a % of average
net assets)
Management fee ............. 0.17%(6) 0.17%(6) 0.17%(6) 0.20% 0.17%(6) 0.17%(6)
Distribution and service
(12b-1) fee ............... 1.00% 1.00% 1.00% None None None
Other expenses(5) .......... 0.80% 0.60% 0.57% 0.47% 0.20% 0.15%
Estimated indirect
expenses .................. 0.68% 0.92%(9) 0.92%(9) 1.45% 0.92%(9) 0.92%9
Total fund operating
expenses .................. 2.65%(7) 2.69% 2.66% 2.12% 1.29% 1.24%
Expense reimbursement/
reduction ................. 0.20% 0.25% 0.22% 0.20% N/A N/A
Net fund operating
expenses .................. 2.45% 2.44% 2.44% 1.92% 1.29% 1.24%
(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) For the period ended January 31, 2005, other expenses for your AmSouth Fund
were 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 indirect expenses," 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
86
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.
(9) "Estimated indirect expenses" for the Pioneer Funds reflect the estimated
gross indirect expenses as of the most recent fiscal period for the
underlying funds. Several of the underlying funds are subject to expense
limitations, which expire as of various dates. Giving effect to such
expense limitations, the estimated indirect expenses would be 0.73%, and
the pro forma combined net expenses for the Pioneer Fund (assuming the
reorganization of AmSouth Strategic Portfolios: Moderate Growth & Income
Portfolio into the Pioneer Fund also occurs) would be 1.47%, 2.25% and
1.05% for Class A, Class B and Class Y shares, respectively.
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 Combined Fund
Strategic Pioneer (including AmSouth
Portfolios: Ibbotson Strategic Portfolios:
Growth & Moderate Combined Moderate Growth &
Income Allocation Fund Income Portfolio)
Number of years you own your shares Portfolio Fund (Pro Forma) (Pro Forma)
- ----------------------------------------------------------------------------------------------------------------------------------
Class A
- ----------------------------------------------------------------------------------------------------------------------------------
Year 1 $ 737 $ 726 $ 734 $ 734
- ----------------------------------------------------------------------------------------------------------------------------------
Year 3 $1,129 $1,085 $1.068 $1.068
- ----------------------------------------------------------------------------------------------------------------------------------
Year 5 $1,544 N/A $1,432 $1,432
- ----------------------------------------------------------------------------------------------------------------------------------
Year 10 $2,700 N/A $2,450 $2,450
- ----------------------------------------------------------------------------------------------------------------------------------
Class B -- assuming redemption at end of period
- ----------------------------------------------------------------------------------------------------------------------------------
Year 1 $ 777 $ 648 $ 647 $ 647
- ----------------------------------------------------------------------------------------------------------------------------------
Year 3 $1,150 $1,104 $1,106 $1,106
- ----------------------------------------------------------------------------------------------------------------------------------
Year 5 $1,650 N/A $1,590 $1,590
- ----------------------------------------------------------------------------------------------------------------------------------
Year 10 $2,881 N/A $2,741 $2,741
- ----------------------------------------------------------------------------------------------------------------------------------
Class B -- assuming no redemption
- ----------------------------------------------------------------------------------------------------------------------------------
Year 1 $ 277 $ 248 $ 247 $ 247
- ----------------------------------------------------------------------------------------------------------------------------------
Year 3 $ 850 $ 804 $ 806 $ 806
- ----------------------------------------------------------------------------------------------------------------------------------
Year 5 $1,450 N/A $1,390 $1,390
- ----------------------------------------------------------------------------------------------------------------------------------
Year 10 $2,881 N/A $2,741 $2,741
- ----------------------------------------------------------------------------------------------------------------------------------
Class I Class Y
- ----------------------------------------------------------------------------------------------------------------------------------
Year 1 $ 188 N/A $ 131 $ 126
- ----------------------------------------------------------------------------------------------------------------------------------
Year 3 $ 582 N/A $ 409 $ 393
- ----------------------------------------------------------------------------------------------------------------------------------
Year 5 $ 1001 N/A $ 708 $ 681
- ----------------------------------------------------------------------------------------------------------------------------------
Year 10 $2,169 N/A $1,556 $1,500
- ----------------------------------------------------------------------------------------------------------------------------------
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.
87
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 the U.S. advisory subsidiary of Pioneer Global Asset
Management, S.p.A. ("PGAM"), a global asset management group and wholly-owned
subsidiary of UniCredito Italiano S.p.A., one of the largest banking groups in
Italy. The PGAM companies provide investment management and financial services
to mutual funds, institutional and other clients. As of December 31, 2004,
assets under management of the PGAM companies 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 money market funds 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 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 have currently. 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 Bancorporation will pay all costs of preparing and
printing the Funds' proxy statements and solicitation costs incurred by the
Funds in connection with the Reorganizations. AAMI or an affiliate will
otherwise be responsible for 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 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.
88
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 and
Income Portfolio approve the reorganization of their fund into Pioneer Ibbotson
Moderate Allocation Fund.
Pro Forma
Pioneer Ibbotson
Moderate
Allocation Fund
Pro Forma (including AmSouth
AmSouth Strategic Pioneer Ibbotson Pioneer Ibbotson Strategic Portfolios:
Portfolios: Growth and Moderate Moderate Moderate Growth and
Income Portfolio Fund Allocation Fund Allocation Fund Income 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
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.
89
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
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,
90
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)
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.
91
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.
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.
92
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 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.
93
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.
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
94
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.
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.
95
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,
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
96
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
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.
97
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
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
98
AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio and
Pioneer Ibbotson Moderate Allocation 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 exhibits, which
include additional information that is not included in the summary and are a
part of the Proxy Statement/Prospectus. Exhibit A-1 is the form of Agreement
and Plan of Reorganization. Exhibit B includes some additional information
regarding Pioneer. The most recent portfolio manager's discussion of each
Fund's performance is attached as Exhibit C.
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 and Income
Portfolio to Pioneer Ibbotson Moderate Allocation Fund
- ---------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Moderate
Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- ---------------------------------------------------------------------------------------------------------------------------
Business A diversified series of AmSouth Funds, an A series of Pioneer Ibbotson Asset
open-end management investment company Allocation Series, a diversified open-end
organized as a Massachusetts business management investment company organized
trust. as a Delaware statutory trust.
- ---------------------------------------------------------------------------------------------------------------------------
Net assets as of $50.6 million $34.3 million
March 31, 2005
- ---------------------------------------------------------------------------------------------------------------------------
Investment advisers Investment Adviser: Investment Adviser:
and portfolio AAMI Pioneer
managers
Portfolio Manager: Investment Subadviser:
Day-to-day management of AmSouth Ibbotson Associates Advisors, LLC
Strategic Portfolios: Moderate Growth & ("Ibbotson")
Income Portfolio is the responsibility of
the AmSouth Strategy Committee, and no Portfolio Managers:
person is primarily responsible for making Day-to-day management of Pioneer
recommendations to the Committee. The Ibbotson Moderate Allocation Fund is the
Committee members consist of John P. responsibility of portfolio managers and
Boston, CFA, Fred Crown, CFA, Paige B. members of Ibbotson's Investment
Daniel, David M. Dasari, CFA, Joseph T. Committee headed by Roger Ibbotson.
Keating, Ronald E. Lindquist, John Mark Roger Ibbotson founded Ibbotson in 1977
McKenzie, Matt Smith, CFA, Brian B. and is the firm's Chairman. Peng Chen,
Sullivan, CFA, Doug S. Williams and Jason Ph.D., managing director and chief
Waters. investment officer at Ibbotson, conducts
research projects on asset allocation,
portfolio risk measurement, nontraditional
assets,
- ---------------------------------------------------------------------------------------------------------------------------
99
- ---------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Moderate
Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- ---------------------------------------------------------------------------------------------------------------------------
Investment advisers Mr. Boston is Chief Fixed Income Officer for and global financial markets. Dr. Chen
and portfolio AAMI. He began his career in investment joined Ibbotson in 1997. Michael E. Annin,
managers management with AmSouth Bank in 1987 managing director, manages the investment
(continued) and has been associated with AAMI since management services and data products
1996. Mr. Boston received his CFA charter group for Ibbotson. Scott Wentsel, senior
in 1993 and is an active member and past portfolio manager, is responsible for
president of the Alabama Society of management of the firm's fund- of-
Financial Analysts. He also serves as the funds business which includes oversight
portfolio manager for the AmSouth High of its investment management staff and
Quality Bond Fund. Mr. Boston is a Senior process. Alexander E. Kaye, portfolio
Vice President of AmSouth Bank and Vice manager, is responsible for managing the
President of AAMI. delivery of fund-of-funds programs for
institutional and retail clients, which
Mr. Crown has been employed with includes asset allocation modeling, portfolio
AmSouth Bank since 1982 and AAMI since construction, fund classification and
2001. He was an Institutional Fund Manager manager due diligence. Brian Huckstep,
with AAMI (2001-2003) and has been a portfolio manager, is responsible for
Regional Manager since 2003. Mr. Crown is managing the delivery of fund-of-funds
a Senior Vice President of AmSouth Bank. programs for institutional and retail clients,
which includes asset allocation modeling,
Ms. Daniel has been employed with portfolio construction, fund classification,
AmSouth Bank since 1999. She has been and manager due diligence.
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.
- ---------------------------------------------------------------------------------------------------------------------------
100
- ---------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Moderate
Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- ---------------------------------------------------------------------------------------------------------------------------
Investment advisers Mr. Lindquist has been employed with AAMI
and portfolio since December 1999. Prior to December
managers 1999, Mr. Lindquist was employed by First
(continued) 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 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.
- ---------------------------------------------------------------------------------------------------------------------------
101
- ---------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Moderate
Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- ---------------------------------------------------------------------------------------------------------------------------
Investment advisers Mr. Williams has been employed with
and portfolio AmSouth Bank since 2002. He has been
managers employed as a Regional Manager with AAMI
(continued) 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 Pioneer Ibbotson Moderate Allocation Fund
Growth and Income Portfolio seeks to seeks long-term capital growth and current
provide investors with current income income.
and a moderate level of capital growth.
- ---------------------------------------------------------------------------------------------------------------------------
Primary investments Each Fund allocates its investments among underlying funds within pre-determined strategy
ranges.
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.
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 Equity Fund Fixed Income Fund
Investments Allocation Allocation
Allocation
0-5% 55-65% 35-45%
- ---------------------------------------------------------------------------------------------------------------------------
102
- ---------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Moderate
Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- ---------------------------------------------------------------------------------------------------------------------------
Primary investments Based upon the analysis described under "Asset allocation process," the fund initially expects
(continued) 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.
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.
- ---------------------------------------------------------------------------------------------------------------------------
103
- ---------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Moderate
Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- ---------------------------------------------------------------------------------------------------------------------------
Borrowing AmSouth Strategic Portfolios: Moderate Pioneer Ibbotson Moderate Allocation Fund
Growth and Income Portfolio may not borrow may not borrow money, except on a
money or issue senior securities, except temporary basis and to the extent permitted
that the Fund may borrow from banks or by applicable law, the Fund may: (a) borrow
enter into reverse repurchase agreements from banks or through reverse repurchase
for temporary emergency purposes in agreements in an amount up to 33 1/3% of
amounts up to 33 1/3% of the value of its the Fund's total assets (including the
total assets at the time of such borrowing. amount borrowed); (b) borrow up to an
AmSouth Strategic Portfolios: Moderate additional 5% of the Fund's assets for
Growth and Income Portfolio will not temporary purposes; (c) obtain such short-
purchase securities while borrowings term credits as are necessary for the
(including reverse repurchase agreements) clearance of portfolio transactions; (d)
in excess of 5% of its total assets are purchase securities on margin; and (e)
outstanding. In addition, AmSouth Strategic engage in transactions in mortgage dollar
Portfolios: Moderate Growth and Income rolls that are accounted for as financings.
Portfolio 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 As described above, the Funds have substantially similar principal investment strategies
policies and and policies. Certain of the non-principal investment policies and restrictions are different.
restrictions 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 Class A shares are offered with an initial Class A shares are offered with initial sales
charges and Rule sales charge of up to 5.50% of the offering charges up to 5.75% of the offering price,
12b-1 Fees price, which is reduced depending upon the which is reduced or waived for large
amount invested or, in certain purchases and certain types of investors. At
circumstances, waived. Class A shares the time of your purchase, your investment
bought as part of an investment of $1 firm may receive a commission from
million or more are not subject to an initial Pioneer Funds Distributor, Inc. ("PFD"), the
sales charge, but may be charged a Fund's distributor, of up to 2% declining as
contingent deferred sales charge ("CDSC") the size of your investment increases.
of 1.00% if sold within one year
of purchase. There is no CDSC, except in certain
circumstances when the initial sales charge
Class A shares pay a shareholder servicing is waived.
fee (non 12b-1) of up to 0.25% of average
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.
- ---------------------------------------------------------------------------------------------------------------------------
104
- ---------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Moderate
Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- ---------------------------------------------------------------------------------------------------------------------------
Class B sales Class B shares are offered without an initial Class B shares are offered without an initial
charges and Rule sales charge, but are subject to a CDSC sales charge, but are subject to a CDSC of
12b-1 fees of up to 5%. For Class B shares issued up to 2% if you sell your shares. The
to former ISG Funds shareholders in charge is reduced over time and is not
connection with the combination of charged after five years. Your investment
AmSouth Funds with ISG Funds, the CDSC firm may receive a commission from PFD,
on such Class B shares held continuously the Fund's distributor, at the time of your
declines over six years, starting with year purchase of up to 2%.
one and ending in year seven from: 4%,
3%, 3%, 2%, 2%, 1%. For all other Class B Class B shares are subject to distribution
shares held continuously, the CDSC declines and service (12b-1) fees of up to 1% of
over six years, starting with year one and average daily net assets.
ending in year seven from: 5%, 4%, 3%,
3%, 2%, 1%. Eight years after purchase Class B shares acquired through the
(seven years in the case of shares acquired Reorganization will retain the holding period,
in the ISG combination), Class B shares CDSC and commission schedules applicable
automatically convert to Class A shares. to the original purchase.
Class B shares pay a shareholder servicing Maximum purchase of Class B shares in a
fee (non 12b-1) of up to 0.25% of average single transaction is $49,999.
daily net assets and a distribution (12b-1)
fee of up to 0.75% of average daily Class B shares convert to Class A shares
net assets. eight years after the date of purchase. Class
B shares issued to former ISG Funds
Maximum investment for all Class B shareholders will convert to Class A shares
purchases by a shareholder for the Fund's seven years after the date of purchase.
shares is $99,999.
- ---------------------------------------------------------------------------------------------------------------------------
Class I and Class Y AmSouth Strategic Portfolios: Moderate The Fund does not impose any initial,
sales charges and Growth and Income Portfolio does not impose contingent deferred or asset based sales
Rule 12b-1 fees any initial or CDSC on Class I shares. charge on Class Y shares.
The Fund may impose a shareholder The distributor incurs the expenses of
servicing fee (non 12b-1) of up to 0.15% distributing the Fund's Class Y shares, none
of average daily net assets. of which are reimbursed by the Fund or the
Class Y shareowners.
- ---------------------------------------------------------------------------------------------------------------------------
105
- ---------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Moderate
Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- ---------------------------------------------------------------------------------------------------------------------------
Management and AmSouth Strategic Portfolios: Moderate The management fee payable by Pioneer
other fees Growth and Income Portfolio pays an Ibbotson Moderate Allocation Fund is equal
advisory fee on a monthly basis at an to 0.13% of average daily net assets
annual rate of 0.20% of the Fund's average attributable to the Fund's investments in
daily net assets. underlying funds managed by Pioneer and
cash and 0.17% of average daily net assets
ASO Services Company, Inc. ("ASO") attributable to other investments, including
serves as administrator and fund accounting underlying funds that are not managed by
agent for the Fund. The Fund pays ASO an 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%
For the fiscal year ended July 31, 2004, of average daily net assets.
other expenses of the Fund were limited to
0.38% for Class A shares, 0.37% for Class In addition, the Fund reimburses Pioneer for
B shares and 0.33% for Class I shares. Any certain fund accounting and legal expenses
fee waiver or expense reimbursement incurred on behalf of the Fund and pays a
arrangement is voluntary and may be separate shareholder servicing/transfer
discontinued at any time. You also indirectly agency fee to PIMSS, an affiliate of Pioneer.
bear a pro rata share of the fees and
expenses of the underlying funds. Pioneer has contractually agreed not to
impose all or a portion of its fees or to limit
For the fiscal year ended July 31, 2004, the other direct ordinary operating expenses to
Fund's annual operating expenses for Class the extent required to reduce expenses,
A shares, after giving effect to the expense other than "Estimated average expense ratio
limitation were 0.58%, and without giving of underlying funds," to 0.74% of the
effect to the expense limitation, were average daily net assets attributable to Class
0.81% of average daily net assets. As of A shares and 1.52% of average daily net
January 12, 2005, estimated total direct assets attributable to Class B shares. There
and indirect expenses were 1.94% of is no expense limitation with respect to the
average daily net assets. Class Y shares. This expense limitation is in
effect for Class A shares until December 1,
For the fiscal year ended July 31, 2004, the 2008 and in effect for Class B shares until
Fund's annual operating expenses for Class December 1, 2006. There can be no
B shares, after giving effect to the expense assurance that Pioneer will extend these
limitation were 1.32%, and without giving expense limitations past such dates. The
effect to the expense limitation, were expense limitation does not limit the
1.55% of average daily net assets. As of expenses of the underlying funds indirectly
January 12, 2005, estimated total direct incurred by a shareholder.
and indirect 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
For the fiscal year ended July 31, 2004, the with 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.
- ---------------------------------------------------------------------------------------------------------------------------
106
- ---------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Moderate
Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund
- ---------------------------------------------------------------------------------------------------------------------------
Buying shares You may buy shares of the Fund directly You may buy shares from any investment
through BISYS Fund Services, the Fund's firm that has a sales agreement with PFD,
distributor, or through brokers, registered the 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
distributor, as described in the Fund's also purchase additional shares of the Fund
prospectus. by telephone or online.
Certain account transactions may be done
by telephone.
- ---------------------------------------------------------------------------------------------------------------------------
Exchanging shares You can exchange your shares in the Fund You may exchange your shares for shares
for shares of the same class of another of the same class of another Pioneer mutual
AmSouth Fund, usually without paying fund. Your exchange request must be for at
additional sales charges. You must meet least $1,000.
the minimum investment requirements for
the Fund into which you are exchanging. After you establish an eligible fund account,
Exchanges from one Fund to another are you can exchange fund shares by telephone
taxable. Class A shares may be exchanged or online.
for Class I shares of 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.
- ---------------------------------------------------------------------------------------------------------------------------
107
- ---------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Moderate
Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation 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
Fund directly in writing or by telephone or your request to sell shares to PIMSS. You
by contacting a financial intermediary as can also sell your shares by contacting the
described in the Fund's prospectus. Fund 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
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.
108
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:
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:
109
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 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 and Income Portfolio. The bar chart shows how
AmSouth Strategic Portfolios: Moderate Growth and 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 and Income Portfolio --
Class A Shares
Calendar Year Total Returns*
[THE BAR CHART IS A REPRESENTATION FOR THE PRINTED MATERIAL]
'00 '01 '02 '03 '04
0.59 -5.77 -13.33 21.81 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.
110
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 and 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 and 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 and Income Portfolio, Class B Shares
- ------------------------------------------------------------------------------------------------------------------------------------
Return Before Taxes 0.75% 2.96% 2.90%
- ------------------------------------------------------------------------------------------------------------------------------------
AmSouth Strategic Portfolios: Moderate Growth and 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) (reflects no deduction for fees, expenses or taxes) 10.87% -2.30% 0.66%
- ------------------------------------------------------------------------------------------------------------------------------------
(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 and 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.
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 and Income Portfolio, the expenses of AmSouth Strategic Portfolios:
Moderate Growth and 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 and 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 and Income Portfolio
into Pioneer Ibbotson Moderate Allocation Fund also occurred on January 31,
2005.
111
Combined
AmSouth Fund AmSouth
Strategic (including Strategic
Portfolios Pioneer AmSouth Portfolios
Moderate Ibbotson Growth and Moderate
Growth and Moderate Combined Income Growth and
Income Allocation Fund Portfolio) Income
Shareholder transaction Portfolio(1) Fund (Pro Forma) (Pro Forma) Portfolio
fees (paid directly Class A Class A Class A Class A Class B
from your investment) ------------ ---------- ----------- ----------- -----------
Maximum sales charge
(load) when you buy
shares as a percentage
of offering price ......... 5.50%(2) 5.75% 5.75% 5.75% 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 5.00%(3)
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 ............. 0.20% 0.17%(6) 0.17%(6) 0.17%(6) 0.20%
Distribution and service
(12b-1) fee ............... None 0.25% 0.25% 0.25% 0.75%
Other expenses(5) .......... 0.68% 0.68% 0.52% 0.35%(5) 0.71%
Estimated indirect
expenses .................. 1.49% 0.68% 0.92%(9) 0.92%(9) 2.24%
Total fund operating
expenses .................. 2.37% 1.78%(7) 1.86% 1.69% 3.90%
Expense reimbursement/
reduction ................. 0.35% 0.20% 0.20% 0.03% 0.38%
Net fund operating
expenses .................. 2.02% 1.58% 1.66% 1.66% 3.52%
Combined Combined
Fund AmSouth Fund
(including Strategic (including
AmSouth Portfolios AmSouth
Pioneer Growth and Moderate Growth and
Ibbotson Combined Income Growth and Combined Income
Moderate Fund Portfolio) Income Fund Portfolio)
Shareholder transaction Allocation (Pro Forma) (Pro Forma) Portfolio (Pro Forma) (Pro Forma)
fees (paid directly Fund Class B Class B Class I Class Y(8) Class Y(8)
from your investment) ---------- ----------- ----------- ---------- ----------- -----------
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% 4.00% None None None
Redemption fees ............ None None None 2.00%(4) None None
Annual fund operating
expenses (deducted
from fund assets)
(as a % of average
net assets)
Management fee ............. 0.17%(6) 0.17%(6) 0.17%(6) 0.20% 0.17%(6) 0.17%(6)
Distribution and service
(12b-1) fee ............... 1.00% 1.00% 1.00% None None None
Other expenses(5) .......... 0.80% 0.74% 0.57% 0.59% 0.34% 0.15%
Estimated indirect
expenses .................. 0.68% 0.92%(9) 0.92%(9) 1.44% 0.92%(9) 0.92%(9)
Total fund operating
expenses .................. 2.65%(7) 2.83% 2.66% 2.23% 1.43% 1.24%
Expense reimbursement/
reduction ................. 0.45% 0.39% 0.22% 0.31% N/A N/A
Net fund operating
expenses .................. 2.20% 2.44% 2.44% 1.92% 1.43% 1.24%
(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) For the period ended January 31, 2005, other expenses for your AmSouth Fund
were 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 indirect expenses," 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
112
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.
(9) "Estimated indirect expenses" for the Pioneer Funds reflect the estimated
gross indirect expenses as of the most recent fiscal period for the
underlying funds. Several of the underlying funds are subject to expense
limitations, which expire as of various dates. Giving effect to such
expense limitations, the estimated indirect expenses would be 0.73%, and
the pro forma combined net expenses for the Pioneer Fund (assuming the
reorganization of AmSouth Strategic Portfolios: Growth and Income Portfolio
into the Pioneer Fund also occurs) would be 1.47%, 2.25% and 1.05% for
Class A, Class B and Class Y shares, respectively.
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
Pioneer (including AmSouth
AmSouth Strategic Ibbotson Strategic Portfolios:
Portfolios: Moderate Moderate Growth and Income
Number of years you own Growth and Income Allocation Combined Fund Portfolio)
your shares Portfolio Fund (Pro Forma) (Pro Forma)
- ------------------------------------------------------------------------------------------------------------------------------------
Class A
- ------------------------------------------------------------------------------------------------------------------------------------
Year 1 $ 747 $ 726 $ 714 $ 734
- ------------------------------------------------------------------------------------------------------------------------------------
Year 3 $1,157 $1,085 $1,007 $1,068
- ------------------------------------------------------------------------------------------------------------------------------------
Year 5 $1,593 N/A $1,349 $1,432
- ------------------------------------------------------------------------------------------------------------------------------------
Year 10 $2,798 N/A $2,312 $2,450
- ------------------------------------------------------------------------------------------------------------------------------------
Class B -- assuming redemption at end of period
- ------------------------------------------------------------------------------------------------------------------------------------
Year 1 $ 786 $ 648 $ 734 $ 647
- ------------------------------------------------------------------------------------------------------------------------------------
Year 3 $1,177 $1,104 $1,106 $1,106
- ------------------------------------------------------------------------------------------------------------------------------------
Year 5 $1,694 N/A $1,590 $1,590
- ------------------------------------------------------------------------------------------------------------------------------------
Year 10 $2,971 N/A $2,741 $2,741
- ------------------------------------------------------------------------------------------------------------------------------------
Class B -- assuming no redemption
- ------------------------------------------------------------------------------------------------------------------------------------
Year 1 $ 286 $ 248 $ 247 $ 247
- ------------------------------------------------------------------------------------------------------------------------------------
Year 3 $ 877 $ 804 $ 806 $ 806
- ------------------------------------------------------------------------------------------------------------------------------------
Year 5 $1,494 N/A $1,390 $1,390
- ------------------------------------------------------------------------------------------------------------------------------------
Year 10 $2,971 N/A $2,741 $2,741
- ------------------------------------------------------------------------------------------------------------------------------------
Class I Class Y
- ------------------------------------------------------------------------------------------------------------------------------------
Year 1 $ 199 N/A $ 146 $ 126
- ------------------------------------------------------------------------------------------------------------------------------------
Year 3 $ 615 N/A $ 452 $ 393
- ------------------------------------------------------------------------------------------------------------------------------------
Year 5 $ 1057 N/A $ 782 $ 681
- ------------------------------------------------------------------------------------------------------------------------------------
Year 10 $2,285 N/A $1,713 $1,500
- ------------------------------------------------------------------------------------------------------------------------------------
Reasons for the Proposed Reorganization
The Trustees believe that the proposed Reorganization is in the best
interests of AmSouth Strategic Portfolios: Moderate Growth and 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.
113
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 the U.S.
advisory subsidiary of Pioneer Global Asset Management, S.p.A. ("PGAM"), a
global asset management group and wholly-owned subsidiary of UniCredito
Italiano S.p.A., one of the largest banking groups in Italy. The PGAM companies
provide investment management and financial services to mutual funds,
institutional and other clients. As of December 31, 2004, assets under
management of the PGAM companies 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 money market funds 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 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 have currently. 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 Bancorporation will pay all costs of preparing and
printing the Funds' proxy statements and solicitation costs incurred by the
Funds in connection with the Reorganizations. AAMI or an affiliate will
otherwise be responsible for 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 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.
114
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 and Income
Portfolio approve the reorganization of their fund into Pioneer Ibbotson
Moderate Allocation Fund.
Pro Forma
Pioneer Ibbotson
Moderate
Allocation Fund
(including
AmSouth Strategic Pro Forma AmSouth Strategic
Portfolios: Moderate Pioneer Ibbotson Pioneer Ibbotson Portfolios:
Growth and Income Moderate Moderate Growth and Income
Portfolio Allocation Fund Allocation 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
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.
115
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
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,
116
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)
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.
117
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.
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.
118
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 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.
119
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.
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
120
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.
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.
121
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,
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
122
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
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.
123
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
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
124
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 September 23, 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, in the case of reorganizations
into Pioneer Funds that have previously commenced investment
operations, your AmSouth Fund's liabilities that are included in the
calculation of your AmSouth Fund's net asset value on the Closing Date
and, in the case of newly organized Pioneer Funds, all of your AmSouth
Fund's liabilities. 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 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 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 includes the material provisions of the Plan but this description 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' declaration of trust 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.
TAX STATUS OF EACH REORGANIZATION
Each Reorganization will not result in any 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;
125
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.
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.
The foregoing consequences may not apply to certain classes of taxpayers
who are subject to special tax circumstances, such as shareholders who are not
citizens or residents of the United States, insurance companies, tax-exempt
organizations, financial institutions, dealers in securities or foreign
currencies, or persons who hold their shares as part of a straddle or
conversion transaction. 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.
126
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 proxy Shares "present" in person will be voted in
are counted towards a quorum. person at the Meeting. Shares present by
proxy will be voted in accordance with
instructions.
- ------------------------------------------------------------------------------------------------------------------------------
Broker Non-Vote (where the Considered "present" at Meeting for Broker non-votes do not count as a vote
underlying holder has not purposes of quorum. "for" and effectively result in a vote
voted and the broker does "against" Proposals 1(a)-(e).
not have discretionary
authority to vote the shares)
- ------------------------------------------------------------------------------------------------------------------------------
Proxy with No Voting Considered "present" at Meeting for Voted "for" the Proposals.
Instruction (other than Broker purposes of quorum.
Non-Vote)
- ------------------------------------------------------------------------------------------------------------------------------
Vote to Abstain Considered "present" at Meeting for Abstentions do not constitute a vote "for"
purposes of quorum. and effectively result in a vote "against"
Proposals 1(a)-(e).
- ------------------------------------------------------------------------------------------------------------------------------
COMPARISON OF DELAWARE STATUTORY TRUST AND MASSACHUSETTS BUSINESS TRUST
Each of the AmSouth Funds is a series of a Massachusetts business trust.
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 may,
under certain circumstances, be liable 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 greater 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 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
127
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, 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). In connection with its
approval of the Reorganizations, the Board of the AmSouth Funds adopted the
valuation procedures of the Pioneer Funds. This change did not have a material
effect on the valuation methodology employed by the AmSouth Funds.
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 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
128
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.
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. However, if you sell Class B
shares 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 retain the holding periods and be subject to the same contingent deferred
sales charge as your Class B shares of the AmSouth Funds. Class B shares
convert to Class A shares eight years after the original date of purchase.
Class B shares issued to the former ISG Fund shareholders will convert to Class
A shares seven years after the 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.
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.
129
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 and
$500 for Class B 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, such 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.
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
130
Buying, Exchanging and Selling Pioneer Fund Shares
------------------------------------------------------------------------------------------
Buying Shares Exchanging Shares
------------------------------------------------------------------------------------------
Through Normally, your investment firm will send Normally, your investment firm will send
your investment your purchase request to the Pioneer your exchange request to the Pioneer
firm Funds' transfer agent. Consult your Fund's transfer agent. Consult your
investment professional for more investment professional for more
information. Your investment firm may information about exchanging your
receive a commission from the distributor shares.
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 online You can use the telephone or online After you establish your Pioneer Fund
privilege if you have an existing non- account, you can exchange Fund
retirement account or certain IRAs. You shares by phone or online if:
can purchase additional fund shares by o You are exchanging into an existing
phone if: account or using the exchange to
o You established your bank account of establish a new account, provided the
record at least 30 days ago new account has a registration
o Your bank information has not identical to the original account
changed for at least 30 days o The fund into which you are
o You are not purchasing more than exchanging offers the same class of
$25,000 worth of shares per account shares
per day o You are not exchanging more than
o You can provide the proper account $500,000 worth of shares per account
identification information per day
o You can provide the proper account
When you request a telephone or online identification information
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 mail You can purchase Pioneer Fund shares You can exchange fund shares by
or by fax for an existing fund account by mailing mailing or faxing a letter of instruction
a check to the transfer agent. Make to the transfer agent. You can exchange
your check payable to the Pioneer Fund. Pioneer Fund shares directly through the
Neither initial nor subsequent Pioneer Fund only if your account is
investments should be made by third registered in your name. However, you
party check. Your check must be in U.S. may not fax an exchange request for
dollars and drawn on a U.S. bank. more than $500,000. Include in your
Include in your purchase request the letter:
fund's name, the account number and o The name, social security number and
the name or names in the account signature of all registered owners
registration. o A signature guarantee for each
registered owner if the amount of the
exchange is more than $500,000
o The name of the fund out of which
you are exchanging and the name of
the fund into which you are
exchanging
o The class of shares you are
exchanging
o The dollar amount or number of
shares you are exchanging
131
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Selling Shares How to Contact Pioneer
---------------------------------------------------------------------------------------
Normally, your investment firm will send By phone
your request to sell shares to the For information or to request a
Pioneer Fund's transfer agent. Consult telephone transaction between 8:00 a.m.
your investment professional for more and 7:00 p.m. (Eastern time) by
information. Each Pioneer Fund has speaking with a shareholder services
authorized PFD to act as its agent in the representative call 1-800-225-6292
repurchase of Pioneer Fund shares from To request a transaction using
qualified investment firms. Each Pioneer FactFone(SM) call 1-800-225-4321
Fund reserves the right to terminate this Telecommunications Device for the Deaf
procedure at any time. (TDD) 1-800-225-1997
You may sell up to $100,000 per By mail
account per day by phone or online. Send your written instructions to:
You may sell Pioneer Fund shares held Pioneer Investment Management
in a retirement plan account by phone Shareholder Services, Inc.
only if your account is an eligible IRA P.O. Box 55014
(tax penalties may apply). You may not Boston, Massachusetts 02205-5014
sell your shares by phone or online if
you have changed your address (for By fax
checks) or your bank information (for Fax your exchange and sale requests to:
wires and transfers) in the last 30 days. 1-800-225-4240
You may receive your sale proceeds: Exchange Privilege
o By check, provided the check is made You may make up to four exchange
payable exactly as your account is redemptions of $25,000 or more per
registered account per calendar year.
o By bank wire or by electronic funds
transfer, provided the sale proceeds
are being sent to your bank address
of record
You can sell some or all of your Pioneer
Fund 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
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.
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,
132
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 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."
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 Pioneer 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 Pioneer 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 Date of the Reorganizations will be deemed to
be cancelled and will no longer represent shares of the Funds.
133
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.
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 and Class B shares (each, a
"Plan"). 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
134
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 B Plan is a compensation plan, which provides for a fixed level
of fees. Payments under this plan 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 Plans on December 2, 2004. Pursuant to the Plans, at least quarterly,
PFD will provide each Fund with a written report of the amounts expended under
the Plans 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.
135
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.
PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND
For the period 8/9/04(a) to 1/31/05
-----------------------------------
Class A Class B
Net asset value, beginning of period .................................. $10.00 $10.00
------ ------
Increase (decrease) from investment operations:
Net investment income (loss) (b) ..................................... $ - $ 0.01
Net realized and unrealized gain (loss) on investments ............... 1.36 0.97
------ ------
Net increase (decrease) from investment operations ................... $ 1.36 $ 0.98
------ ------
Distributions to shareowners:
Net investment income ................................................ $(0.02) $ -
Net realized gain .................................................... (0.30) (0.30)
------ -------
Net increase (decrease) in net asset value ........................... $ 1.04 $ 0.68
------ -------
Net asset value, end of period ....................................... $11.04 $10.68
====== =======
Total return* ......................................................... 13.54% 9.73%
Ratio of net expenses to average net assets**++ ....................... 0.93% 1.83%
Ratio of net investment income (loss) to average net assets** ......... (0.02)% 0.18%
Portfolio turnover rate** ............................................. 12% 12%
Net assets, end of period (in thousands) .............................. $6,604 $1,962
- ----------
(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% and 9.32% of average net assets, respectively, for
Class A and Class B shares.
136
PIONEER IBBOTSON GROWTH ALLOCATION FUND
For the period 8/9/04(a) to 1/31/05
-----------------------------------
Class A Class B
Net asset value, beginning of period ............................ $ 10.00 $10.00
------- ------
Increase (decrease) from investment operations:
Net investment income (loss) (b) ............................... $ 0.03 $ 0.04
Net realized and unrealized gain (loss) on investments ......... 1.09 0.16
------- ------
Net increase (decrease) from investment operations ............. $ 1.12 $ 0.20
------- ------
Distributions to shareowners:
Net investment income .......................................... $ (0.03) $ -
Net realized gain .............................................. (0.25) (0.25)
------- ------
Net increase (decrease) in net asset value ..................... $ 0.84 $(0.05)
------- ------
Net asset value, end of period ................................. $ 10.84 $ 9.95
======= ======
Total return* ................................................... 11.19% 1.95%
Ratio of net expenses to average net assets**++ ................. 0.93% 1.83%
Ratio of net investment income to average net assets** .......... 0.62% 0.72%
Portfolio turnover rate** ....................................... 13% 13%
Net assets, end of period (in thousands) ........................ $11,580 $3,226
- ----------
(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% and 5.34% of average net assets, respectively, for
Class A and Class B shares.
137
PIONEER IBBOTSON MODERATE ALLOCATION FUND
For the period 8/9/04(a) to 1/31/05
-----------------------------------
Class A Class B
Net asset value, beginning of period ............................ $ 10.00 $10.00
------- ------
Increase (decrease) from investment operations:
Net investment income (loss) (b) ............................... $ 0.06 $ 0.01
Net realized and unrealized gain (loss) on investments ......... 0.84 0.54
------- ------
Net increase (decrease) from investment operations ............. $ 0.90 $ 0.55
------- ------
Distributions to shareowners:
Net investment income .......................................... $ (0.04) $ -
Net realized gain .............................................. (0.23) (0.23)
------- -------
Net increase (decrease) in net asset value ..................... $ 0.63 $ 0.32
------- -------
Net asset value, end of period ................................. $ 10.63 $10.32
======= =======
Total return* ................................................... 9.04% 5.51%
Ratio of net expenses to average net assets**++ ................. 0.90% 1.80%
Ratio of net investment income to average net assets** .......... 1.15% 0.19%
Portfolio turnover rate** ....................................... 20% 20%
Net assets, end of period (in thousands) ........................ $13,612 $3,274
- ----------
(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% and 4.35% of average net assets, respectively, for
Class A and Class B shares.
138
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. ComputerShare Fund Services
has been retained to provide proxy solicitation services to the Funds at a cost
of approximately $70,000. 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 July 29, 2005 (the "record date") are
entitled to notice of and to vote at the Meeting. As of the record date, the
following shares of each AmSouth Fund were outstanding.
Shares Outstanding
AmSouth Fund (as of July 29, 2005)
- ------------ ----------------------
AmSouth Balanced Fund
Class A ........................................ 8,239,735.118
Class B ........................................ 1,947,581.903
Class I ........................................ 4,078,106.501
AmSouth Strategic Portfolios: Aggressive
Growth Portfolio
Class A ........................................ 2,314,936.570
Class B ........................................ 1,678,844.581
Class I ........................................ 1,508,323.999
AmSouth Strategic Portfolios: Growth Portfolio
Class A ........................................ 3,157,976.420
Class B ........................................ 3,190,213.840
Class I ........................................ 802,043.030
AmSouth Strategic Portfolios: Growth and
Income Portfolio
Class A ........................................ 4,991,158.141
Class B ........................................ 1,944,651.410
Class I ........................................ 3,907,604.281
AmSouth Strategic Portfolios: Moderate Growth
and Income Portfolio
Class A ........................................ 2,173,088.324
Class B ........................................ 1,411,005.230
Class I ........................................ 1,371,469.350
139
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)-(e). 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 to
adjourn 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 of adjournment 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 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 Touchtone telephone voting information is noted on the enclosed proxy
card(s).
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 to 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 1-800-451-8382 if you have any problems.
140
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 Internet voting information is noted on the enclosed proxy card(s).
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 your AmSouth Fund to Michael C. Daniel, President, AmSouth
Funds, c/o AmSouth Bank, 1900 Fifth Avenue North, Birmingham, AL 35203 within a
reasonable time before any meeting. If the Reorganization is completed, your
AmSouth Fund will not hold another shareholder meeting.
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 1,715,208.626 20.75%
BANK FBO AMSOUTH THRIFT PLAN
PO BOX 105779
ATLANTA GA 30348
- ---------------------------------------------------------------------------------
AMVESCAP NATIONAL TRUST CO AS AGENT 1,471,810.189 17.80%
FOR AMSOUTH BANK FBO BCBS ALABAMA
PO BOX 105779
ATLANTA GA 30348
- ---------------------------------------------------------------------------------
AMVESCAP NATL TR CO AS AGENT FOR AM 516,827.177 6.25%
BANK FBO BRASFIELD GORRIE EMPLOYE
PO BOX 105779
ATLANTA GA 30348
- ---------------------------------------------------------------------------------
AMSOUTH BALANCED FUND -- CLASS I
- ---------------------------------------------------------------------------------
KENNEBURT & COMPANY FBO ASO TRUST 1,699,127.878 42.24%
ATTN MUTUAL FUND OPERATIONS
P O BOX 12365
BIRMINGHAM AL 35202
- ---------------------------------------------------------------------------------
AMVESCAP NATIONAL TRUST COMPANY 410,690.141 10.21%
AS AGENT FOR AMSOUTH BANK
PO BOX 105779
ATLANTA GA 303485779
- ---------------------------------------------------------------------------------
141
- -----------------------------------------------------------------------------------------------------------------------
Percent of the
Class Held by
Fund/Class No. of Shares Shareholder
- -----------------------------------------------------------------------------------------------------------------------
BISYS RETIREMENT SERVICES FBO 398,294.497 9.90%
WARRIOR TRACTOR EQUIPMENT 401 K
SUITE 300
DENVER CO 80202
- -----------------------------------------------------------------------------------------------------------------------
KENNEBURT & COMPANY FBO ASO TRUST 388,726.276 9.66%
ATTN MUTUAL FUND OPERATIONS
P O BOX 12365
BIRMINGHAM AL 35202
- -----------------------------------------------------------------------------------------------------------------------
AMVESCAP NATL TR CO AS AGENT FOR 275,539.796 6.85%
AMSOUTH FBO TRACTOR EQUIPMENT
PO BOX 105779
ATLANTA GA 30348
- -----------------------------------------------------------------------------------------------------------------------
AMSOUTH STRATEGIC PORTFOLIOS: GROWTH & INCOME PORTFOLIO 977,512.782 6.94%
3435 STELZER RD
ATTN FUND ACCOUNTING
COLUMBUS OH 43219
- -----------------------------------------------------------------------------------------------------------------------
KENNEBURT & COMPANY FBO ASO TRUST 875,083.106 6.21%
ATTN MUTUAL FUND OPERATIONS
P O BOX 12365
BIRMINGHAM AL 35202
- -----------------------------------------------------------------------------------------------------------------------
AMSOUTH STRATEGIC PORTFOLIOS: AGGRESSIVE GROWTH FUND -- CLASS I
- -----------------------------------------------------------------------------------------------------------------------
KENNEBURT & COMPANY FBO ASO TRUST 466,778.020 29.81%
ATTN MUTUAL FUND OPERATIONS
P O BOX 12365
BIRMINGHAM AL 35202
- -----------------------------------------------------------------------------------------------------------------------
BISYS RETIREMENT SERVICES FBO 229,924.893 14.68%
C C CLARK INC 401 K PLAN
SUITE 300
DENVER CO 80202
- -----------------------------------------------------------------------------------------------------------------------
BISYS RETIREMENT SERVICES FBO 144,952.998 9.26%
WALKER-J-WALKER INC PROFIT SHARIN
SUITE 300
DENVER CO 80202
- -----------------------------------------------------------------------------------------------------------------------
BISYS RETIREMENT SERVICES FBO 92,304.222 5.89%
SEABROOK EES PROFIT SHARING RETIREM
SUITE 300
DENVER CO 80202
- -----------------------------------------------------------------------------------------------------------------------
142
- ---------------------------------------------------------------------------------------------------------------
Percent of the
Class Held by
Fund/Class No. of Shares Shareholder
- ---------------------------------------------------------------------------------------------------------------
AMSOUTH STRATEGIC PORTFOLIOS: GROWTH & INCOME PORTFOLIO -- CLASS A
- ---------------------------------------------------------------------------------------------------------------
BISYS RETIREMENT SERVICES FBO 551,605.180 10.00%
THE WOMEN S CLINIC AMC P S PLAN
SUITE 300
DENVER CO 80202
- ---------------------------------------------------------------------------------------------------------------
BISYS RETIREMENT SERVICES FBO 450,593.183 8.17%
ACE BOLT SCREW CO INC PROFIT SHA
SUITE 300
DENVER CO 80202
- ---------------------------------------------------------------------------------------------------------------
BISYS RETIREMENT SERVICES FBO 431,874.127 7.83%
HEART CNTR CARDIOVASC SPECIALISTS 4
SUITE 300
DENVER CO 80202
- ---------------------------------------------------------------------------------------------------------------
BISYS RETIREMENT SERVICES FBO 392,323.861 7.11%
EAR NOSE THROAT PHYS N MISS 4
SUITE 300
DENVER CO 80202
- ---------------------------------------------------------------------------------------------------------------
AMSOUTH STRATEGIC PORTFOLIOS: GROWTH & INCOME PORTFOLIO -- CLASS I
- ---------------------------------------------------------------------------------------------------------------
KENNEBURT & COMPANY FBO ASO TRUST 2,021,724.353 52.75%
ATTN MUTUAL FUND OPERATIONS
P O BOX 12365
BIRMINGHAM AL 35202
- ---------------------------------------------------------------------------------------------------------------
BISYS RETIREMENT SERVICES FBO 493,107.625 12.87%
C C CLARK INC 401 K PLAN
SUITE 300
DENVER CO 80202
- ---------------------------------------------------------------------------------------------------------------
BISYS RETIREMENT SERVICES FBO 324,655.761 8.47%
EAR NOSE THROAT CENTER RET SAVIN
SUITE 300
DENVER CO 80202
- ---------------------------------------------------------------------------------------------------------------
AMSOUTH STRATEGIC PORTFOLIOS: GROWTH PORTFOLIO -- CLASS A
- ---------------------------------------------------------------------------------------------------------------
AMVESCAP NATIONAL TRUST COMPANY 320,083.181 10.22%
AS AGENT FOR AMSOUTH BANK
PO BOX 105779
ATLANTA GA 30348
- ---------------------------------------------------------------------------------------------------------------
KENNEBURT & COMPANY FBO ASO TRUST 249,833.742 7.98%
ATTN MUTUAL FUND OPERATIONS
P O BOX 12365
BIRMINGHAM AL 35202
- ---------------------------------------------------------------------------------------------------------------
BISYS RETIREMENT SERVICES FBO 177,625.115 5.67%
NORTH MISSISSIPPI ORAL 401 K PS PL
SUITE 300
DENVER CO 80202
- ---------------------------------------------------------------------------------------------------------------
143
- ---------------------------------------------------------------------------------------------------------------
Percent of the
Class Held by
Fund/Class No. of Shares Shareholder
- ---------------------------------------------------------------------------------------------------------------
AMSOUTH STRATEGIC PORTFOLIOS: GROWTH PORTFOLIO -- CLASS I
- ---------------------------------------------------------------------------------------------------------------
KENNEBURT & COMPANY FBO ASO TRUST 338,956.524 39.79%
ATTN MUTUAL FUND OPERATIONS
P O BOX 12365
BIRMINGHAM AL 35202
- ---------------------------------------------------------------------------------------------------------------
AMSOUTH BANK 180,856.121 21.23%
COOK YANCEY KING GALLOWAY
PO BOX 12365
BIRMINGHAM AL 35202
- ---------------------------------------------------------------------------------------------------------------
BISYS RETIREMENT SERVICES FBO 61,057.862 7.17%
SEABROOK EES PROFIT SHARING RETIREM
SUITE 300
DENVER CO 80202
- ---------------------------------------------------------------------------------------------------------------
BISYS RETIREMENT SERVICES FBO 54,070.165 6.35%
WALKER-J-WALKER INC PROFIT SHARIN
SUITE 300
DENVER CO 80202
- ---------------------------------------------------------------------------------------------------------------
AMSOUTH STRATEGIC PORTFOLIOS: MODERATE GROWTH & INCOME PORTFOLIO -- CLASS A
- ---------------------------------------------------------------------------------------------------------------
MCB TRUST SERVICES AS AGENT FOR 258,695.800 10.98%
FRONTIER TRUST CO AS TRUSTEE
SUITE 300
700 17TH STREET
DENVER CO 80202
- ---------------------------------------------------------------------------------------------------------------
BISYS RETIREMENT SERVICES FBO 159,234.626 6.76%
WEST QUALITY FOOD SERVICE INC 401
SUITE 300
DENVER CO 80202
- ---------------------------------------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY 122,492.770 5.20%
200 HOPMEADOW STREET
SIMSBURY CT 06089
- ---------------------------------------------------------------------------------------------------------------
AMSOUTH STRATEGIC PORTFOLIOS: MODERATE GROWTH & INCOME PORTFOLIO -- CLASS I
- ---------------------------------------------------------------------------------------------------------------
KENNEBURT & COMPANY FBO ASO TRUST 924,772.196 65.62%
ATTN MUTUAL FUND OPERATIONS
P O BOX 12365
BIRMINGHAM AL 35202
- ---------------------------------------------------------------------------------------------------------------
BISYS RETIREMENT SERVICES FBO 125,779.661 8.93%
C C CLARK INC 401 K PLAN
SUITE 300
DENVER CO 80202
- ---------------------------------------------------------------------------------------------------------------
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.
Any shares beneficially owned by AmSouth Bank or other companies
controlled by AmSouth Bancorporation (the "AmSouth Companies") and shares over
which AmSouth Companies have discretionary voting power will be voted in the
manner determined by a special fiduciary independent of the AmSouth Companies.
144
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.
- -------------------------------------------------------------------------------------------------------------
Percentage of
Class Held by
Fund/Class Shareholder Name and Address Shareholder
- -------------------------------------------------------------------------------------------------------------
Pioneer Ibbotson Aggressive Allocation Fund
- -------------------------------------------------------------------------------------------------------------
Class A MLPF&S 5.83%
For the Sole Benefit of its Customers
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -------------------------------------------------------------------------------------------------------------
Class B MLPF&S 18.33%
For the Sole Benefit of its Customers
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -------------------------------------------------------------------------------------------------------------
Class C MLPF&S 31.43%
For the Sole Benefit of its Customers
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -------------------------------------------------------------------------------------------------------------
Pioneer Ibbotson Growth Allocation Fund
- -------------------------------------------------------------------------------------------------------------
Class A MLPF&S 5.33%
For the Sole Benefit of its Customers
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -------------------------------------------------------------------------------------------------------------
Class C MLPF&S 30.10%
For the Sole Benefit of its Customers
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville FL 32246-6484
- -------------------------------------------------------------------------------------------------------------
Pioneer Ibbotson Moderate Allocation Fund
- -------------------------------------------------------------------------------------------------------------
Class A MLPF&S 17.48%
For the Sole Benefit of its Customers
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -------------------------------------------------------------------------------------------------------------
Class B MLPF&S 7.51%
For the Sole Benefit of its Customers
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -------------------------------------------------------------------------------------------------------------
145
- -------------------------------------------------------------------------------------------------------------
Percentage of
Class Held by
Fund/Class Shareholder Name and Address Shareholder
- -------------------------------------------------------------------------------------------------------------
Class C MLPF&S 28.89%
For the Sole Benefit of its Customers
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -------------------------------------------------------------------------------------------------------------
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
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 on 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.
146
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 Statement 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
A-1
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) and agrees not to acquire any portfolio
security that is not an eligible investment for, or that would violate an
investment policy or restriction of, the Acquiring Fund.
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 in 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 regular trading on the
New York Stock Exchange (generally, 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 Trust'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 Acquired Fund shall be
computed by ASO Services Company, Inc. (the "Acquired Fund Administrator") in
the manner set forth in the Acquiring Trust's Declaration of Trust, or By-laws,
and 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.
A-2
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 consummate 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 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, 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
A-3
Declaration of Trust 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, 2005, have been audited by an
independent registered public accounting firm retained by the Acquired
Fund, 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 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 satisfied, and for the current taxable year it will
satisfy, 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 material 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;
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(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, as defined in paragraph 5.7,
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'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
(O) 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 incurred in
connection with any tax or any contest or dispute thereof; and "Tax
Returns" shall mean all reports, returns, declarations, statements or
other
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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, legally 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 compliance in all material respects 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 materially 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,
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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, 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 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;
(c) The current prospectus and statement of additional information of
the Acquiring Fund and each prospectus and statement of additional
information for the Acquiring Fund used during the three years previous to
the date of this Agreement, and any amendment or supplement to any of the
foregoing, conform or conformed at the time their distribution to the
public 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 and do not or did not at the time of their
distribution to the public include 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
under which they were made, not materially misleading;
(d) 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;
(e) 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;
(f) 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
A-7
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;
(g) 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;
(h) 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;
(i) 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 ____, 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 (i) (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;
(j) (A) For each taxable year of its operation since its inception, the
Acquiring Fund has satisfied, and for the current taxable year it will
satisfy, 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 material 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;
(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 unpaid Taxes of the Acquiring 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 in
the financial statements referred to in paragraph 4.2(h). All Taxes
that the Acquiring Fund is or was required
A-8
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 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;
(J) 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;
(K) 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;
(L) There are (and as of immediately following the Closing there
will be) no liens on the assets of the Acquiring Fund relating to or
attributable to Taxes, except for Taxes not yet due and payable;
(M) The Tax bases of the assets of the Acquiring Fund are
accurately reflected on the Acquiring Fund's Tax books and records;
(N) 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;
(k) 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 legally issued and outstanding, 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;
(l) All issued and outstanding Acquiring Fund Shares are, and on the
Closing Date will be, legally issued, fully paid and non-assessable and
have been offered and sold in every state and the District of Columbia in
compliance in all material respects with all applicable federal and state
securities laws;
(m) 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;
(n) 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;
A-9
(o) 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;
(p) The Acquiring 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 Acquiring 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 Acquiring Trust with respect to
the Acquiring Fund. All advertising and sales material used by the
Acquiring 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 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 Acquiring Fund have been duly filed and have been approved or
declared effective, if such approval or declaration of effectiveness is
required by law. Such registration statements, prospectuses, reports, proxy
materials and other filings under the Securities Act, the Exchange Act and
the Investment Company Act (i) are or were in compliance in all material
respects with the requirements of all applicable statutes and the rules and
regulations thereunder and (ii) do not or did not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances in which they were made, not false or misleading;
(q) 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
(r) 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.
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.
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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 ("Statement of
Assets and Liabilities") 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.
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 in all
material respects as of the date hereof (in each case, as such representations
and warranties would read as if all qualifications as to materiality were
deleted therefrom) 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
in all material respects 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, in a form mutually acceptable to
the Acquiring Trust and the AmSouth Trust, 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.
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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 in all
material respects as of the date hereof (in each case, as such representations
and warranties would read as if all qualifications as to materiality were
deleted therefrom) 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 in all material respects 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, in a form mutually acceptable to the
AmSouth Trust and the Acquiring Trust, 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 Declaration of Trust 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
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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;
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; and
8.7 The Acquiring Fund shall have made a distribution of at least 80%
of its accumulated undistributed realized net capital gains as of seven business
days before the Closing Date (the "Determination Date") to its shareholders on
or about three business days before the Closing Date; provided that the
Acquiring Fund shall not be required to make such distribution if (i) such gains
do not exceed 3% of the net assets of the Acquiring Fund on such date, both as
determined in accordance with GAAP consistently applied and certified by the
Acquiring Fund's Treasurer or Assistant Treasurer, or (ii) the Acquiring Fund
shall have been notified by the staff of the Commission in response to a request
in accordance with Rule 19b-1(e) under the Investment Company Act that the staff
objects to the proposed distribution. If the Acquiring Fund distributes income
monthly, the dividend distribution that the Acquiring Fund would make in
September 2005 shall have been made to shareholders of record prior to closing.
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 certain non-parties will
pay (with each of AmSouth Bancorporation or 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
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(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., 1900 Fifth Avenue North, 10th Floor, Birmingham,
Alabama 35203, Attention: Andrew Chambless, 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 [sec] 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 Declaration 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
Declaration of Trust of the AmSouth Trust, respectively.
A-14
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
A-15
Exhibit A-2 -- Form of Agreement and Plan of Reorganization (F 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 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 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) and
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agrees not to acquire any portfolio security that is not an eligible investment
for, or that would violate an investment policy or restriction of, the Acquiring
Fund.
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 in 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 regular trading on the
New York Stock Exchange (generally, 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") in the manner set forth in the Acquiring Trust's
Declaration of Trust, or By-laws, and 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 consummate 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.
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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
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, 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 Declaration of Trust 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
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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, 2005, have been audited by an
independent registered public accounting firm retained by the Acquired
Fund, 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 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 satisfied, and for the current taxable year it will
satisfy, 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 material respects. [The Agreement for
the AmSouth International Equity Fund will include an exception for
Forms 1099-DIV distributed in January 2005.] 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 [The Agreement for the AmSouth International Equity Fund
will include an exception for Forms 1099-DIV distributed in January
2005.];
(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
A-19
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, as defined in paragraph 5.7,
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'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
(O) 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 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, legally 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
A-20
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 compliance in all material respects 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 materially 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) 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
A-21
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, 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;
(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;
A-22
(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 legally issued and outstanding, 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;
(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.
A-23
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 ("Statement of
Assets and Liabilities") 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 in all
material respects as of the date hereof (in each case, as such representations
and warranties would read as if all qualifications as to materiality were
deleted therefrom) 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 in
all material respects at and as of the Closing Date, except as they may be
affected
A-24
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, in a form mutually acceptable to
the Acquiring Trust and the AmSouth Trust, 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 in all
material respects as of the date hereof (in each case, as such representations
and warranties would read as if all qualifications as to materiality were
deleted therefrom) 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 in all material respects 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, in a form mutually acceptable to the
Acquiring Trust and the AmSouth Trust, 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 Declaration of Trust 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;
A-25
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 certain non-parties will
pay (with each of AmSouth Bancorporation or 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, 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
A-26
(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., 1900 Fifth Avenue North, 10th Floor, Birmingham,
Alabama 35203, Attention: Andrew Chambless, 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 [sec] 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 Declaration 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
Declaration of Trust of the AmSouth Trust, respectively.
A-27
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
A-28
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.
- ------------------------------------------------------------------------------------------------------------------
Net assets of Fund Management fee rate (as a percentage of average
Fund (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 Balanced VCT Portfolio $ 45,294,667 0.65%
- ------------------------------------------------------------------------------------------------------------------
B-1
Exhibit C -- Portfolio Manager's Discussion of Performance
PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND
Performance Update 1/31/05 Class A Shares
Share Prices and Distributions
1/31/05 8/9/04
Net Asset Value per Share $ 11.07 $ 10.00
Distributions per Share Dividends Short-Term Long-Term
(8/9/04 -- 1/31/05) Capital Gains Capital Gains
$ 0.0218 $ -- $ 0.2979
Investment Returns
The mountain chart 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.
[THE MOUNTAIN CHART IS A REPRESENTATION OF THE PRINTED MATERIAL]
8/04 10000 10000
1/05 10702 11186
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.
C-1
Performance Update 1/31/05 Class B Shares
Share Prices and Distributions
1/31/05 8/9/04
Net Asset Value per Share $ 10.68 $ 10.00
Distributions per Share Dividends Short-Term Long-Term
(8/9/04 -- 1/31/05) Capital Gains Capital Gains
$-- $ -- $ 0.2979
Investment Returns
The mountain chart 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.
[THE MOUNTAIN CHART IS A REPRESENTATION OF THE PRINTED MATERIAL]
8/04 10000 10000
1/05 10573 11186
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.
C-2
Pioneer Ibbotson Allocation Series
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 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.
Any information in this 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-3
PIONEER IBBOTSON GROWTH ALLOCATION FUND
Performance Update 1/31/05 Class A Shares
Share Prices and Distributions
1/31/05 8/9/04
Net Asset Value per Share $ 10.84 $ 10.00
Distributions per Share Dividends Short-Term Long-Term
(8/9/04 -- 1/31/05) Capital Gains Capital Gains
$ 0.0342 $ -- $ 0.249
Investment Returns
The mountain chart 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.
[THE MOUNTAIN CHART IS A REPRESENTATION OF THE PRINTED MATERIAL]
8/04 10000 10000
1/05 10480 11186
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.
C-4
Performance Update 1/31/05 Class B Shares
Share Prices and Distributions
1/31/05 8/9/04
Net Asset Value per Share $ 9.95 $ 10.00
Distributions per Share Dividends Short-Term Long-Term
(8/9/04 -- 1/31/05) Capital Gains Capital Gains
$-- $ -- $ 0.249
Investment Returns
The mountain chart 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.
[THE MOUNTAIN CHART IS A REPRESENTATION OF THE PRINTED MATERIAL]
8/04 10000 10000
1/05 9797 11186
Average Annual Total Returns
(As of January 31, 2005)
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.
C-5
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 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.
Any information in this 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-6
PIONEER IBBOTSON MODERATE ALLOCATION FUND
Performance Update 1/31/05 Class A Shares
Share Prices and Distributions
1/31/05 8/9/04
Net Asset Value per Share $ 10.63 $ 10.00
Distributions per Share Dividends Short-Term Long-Term
(8/9/04 -- 1/31/05) Capital Gains Capital Gains
$ 0.0433 $ -- $ 0.2339
Investment Returns
The mountain chart 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.
[THE MOUNTAIN CHART IS A REPRESENTATION OF THE PRINTED MATERIAL]
8/04 10000 10000
1/05 10277 11186
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.
C-7
Performance Update 1/31/05 Class B Shares
Share Prices and Distributions
1/31/05 8/9/04
Net Asset Value per Share $ 10.32 $ 10.00
Distributions per Share Dividends Short-Term Long-Term
(8/9/04 -- 1/31/05) Capital Gains Capital Gains
$-- $ -- $ 0.2339
Investment Returns
The mountain chart 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.
[THE MOUNTAIN CHART IS A REPRESENTATION OF THE PRINTED MATERIAL]
8/04 10000 10000
1/05 10151 11186
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.
C-8
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 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.
Any information in this 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-9
- --------------------------------------------------------------------------------
AmSouth Balanced Fund
- --------------------------------------------------------------------------------
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 GRAPHIC]
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.
+ The Fund's portfolio is current to January 31, 2005 and subject to change.
(1)See Glossary of Terms for additional information.
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.+
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.+
C-10
- --------------------------------------------------------------------------------
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, commensurate with investors' specific time
horizons and tolerance for risk. Each of our 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 managers periodically rebalance
stock, bond and money market holdings--based on analysis of economic and market
trends.
- --------------------------------------------------------------------------------
[Q&A GRAPHIC]
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): 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.
(1) See Glossary of Terms for additional information.
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 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 international equities, all of which
generated strong gains during the six-month period.
The bond funds in which the Portfolios invested lagged their benchmarks,
weighing down relative returns.
+ The Fund's portfolio is current to January 31, 2005 and subject to change.
C-11
S88568 17973-00-0805
PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND
PIONEER IBBOTSON GROWTH ALLOCATION FUND
PIONEER IBBOTSON MODERATE ALLOCATION FUND
(each a series of Pioneer Ibbotson Asset Allocation Series)
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 Ibbotson
Aggressive Allocation Fund to be issued in exchange for shares of AmSouth
Strategic Portfolios: Aggressive Growth Portfolio; Class A, B and Y shares of
Pioneer Ibbotson Growth Allocation Fund to be issued in exchange for shares of
AmSouth Strategic Portfolios: Growth Portfolio; and Class A, B and Y shares of
Pioneer Ibbotson Moderate Allocation to be issued in exchange for shares of
AmSouth Strategic Portfolios: Growth & Income Portfolio and AmSouth Strategic
Portfolios: Moderate Growth & Income Portfolio, each 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 IBBOTSON AGGRESSIVE ALLOCATION FUND,
PIONEER IBBOTSON GROWTH ALLOCATION FUND AND PIONEER IBBOTSON MODERATE
ALLOCATION FUND................................................................3
FUND HISTORY..........................................................3
DESCRIPTION OF THE FUND AND ITS INVESTMENT RISKS......................3
MANAGEMENT OF THE FUND................................................3
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES...................3
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............................4
TAXATION OF THE FUND..................................................4
UNDERWRITERS..........................................................4
CALCULATION OF PERFORMANCE DATA.......................................4
FINANCIAL STATEMENTS..................................................4
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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 Strategic Portfolios: Aggressive Growth Portfolio
into Pioneer Ibbotson Aggressive Allocation Fund; AmSouth Strategic Portfolios:
Growth Portfolio into Pioneer Ibbotson Growth Allocation Fund; and AmSouth
Strategic Portfolios: Growth & Income Portfolio and AmSouth Strategic
Portfolios: Moderate Growth & Income Portfolio into Pioneer Ibbotson Moderate
Allocation Fund, and in connection with the solicitation by the management of
AmSouth Funds of proxies to be voted at the Meeting of Shareholders of each of
AmSouth Strategic Portfolios: Aggressive Growth Portfolio, AmSouth Strategic
Portfolios: Growth Portfolio; AmSouth Strategic Portfolios: Growth & Income
Portfolio, and AmSouth Strategic Portfolios: Moderate Growth & Income Portfolio
to be held on September 22, 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 Ibbotson Asset Allocation Series' statement of additional
information for Class A, B and C shares, dated August 6, 2004 (the "SAI")
(File No. 333- 114788), as filed with the Securities and Exchange
Commission on August 6, 2004 (Accession No. 0001016964-04-000333), is
incorporated herein by reference.
2. Pioneer Ibbotson Asset Allocation Series' Semi-Annual Report for the period
ended January 31, 2005 (File No. 811-21569), as filed with the Securities
and Exchange Commission on April 8, 2005 (Accession No.
0001003715-05-000133), 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 Strategic Portfolios: Aggressive Growth Portfolio's Annual Report
for the fiscal year ended July 31, 2004 (File No. 811-05551), as filed with
the Securities and Exchange Commission on October 12, 2004 (Accession No.
0001145443-04-001533), is incorporated by reference.
5. AmSouth Strategic Portfolios: Aggressive Growth Portfolio'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.
6. AmSouth Strategic Portfolios: Growth Portfolio's Annual Report for the
fiscal year ended July 31, 2004 (File No. 811-05551), as filed with the
Securities and Exchange Commission on October 12, 2004 (Accession No.
0001145443-04-001533), is incorporated by reference.
7. AmSouth Strategic Portfolios: Growth Portfolio'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.
8. AmSouth Strategic Portfolios: Growth & Income Portfolio's Annual Report for
the fiscal year ended July 31, 2004 (File No. 811-05551), as filed with the
Securities and Exchange Commission on October 12, 2004 (Accession No.
0001145443-04-001533), is incorporated by reference.
9. AmSouth Strategic Portfolios: Growth & Income Portfolio'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.
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10. AmSouth Strategic Portfolios: Moderate Growth & Income Portfolio's Annual
Report for the fiscal year ended July 31, 2004 (File No. 811-05551), as
filed with the Securities and Exchange Commission on October 12, 2004
(Accession No. 0001145443-04-001533), is incorporated by reference.
11. AmSouth Strategic Portfolios: Moderate Growth & Income Portfolio'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 IBBOTSON AGGRESSIVE ALLOCATION FUND
PIONEER IBBOTSON GROWTH ALLOCATION FUND
PIONEER IBBOTSON MODERATE ALLOCATION FUND
(each a series of Pioneer Ibbotson Asset Allocation Series)
FUND HISTORY
For additional information about Pioneer Ibbotson Aggressive Allocation
Fund, Pioneer Ibbotson Growth Allocation Fund and Pioneer Ibbotson Moderate
Allocation Fund generally and the history of each, see "Fund History" for each
fund in the SAI.
DESCRIPTION OF THE FUND AND ITS INVESTMENT RISKS
For additional information about each of Pioneer Ibbotson Aggressive
Allocation Fund's, Pioneer Ibbotson Growth Allocation Fund's and Pioneer
Ibbotson Moderate Allocation Fund's investment objectives, policies, risks and
restrictions, see "Investment Policies, Risks and Restrictions" for each fund in
the SAI.
MANAGEMENT OF THE FUND
For additional information about Pioneer Ibbotson Asset Allocation Series'
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."
INVESTMENT ADVISORY AND OTHER SERVICES
For additional information, see "Investment Adviser," "Shareholder
Servicing/Transfer Agent," "Custodian" and "Independent Auditors" in the SAI.
Neither Pioneer Investment Management, Inc. ("Pioneer") nor AmSouth Asset
Management Inc. ("AAMI") is entitled to be reimbursed for any amounts that
AmSouth Bank or its affiliates waived or reimbursed series under the expense
limitation arrangement between AAMI and the AmSouth Funds. Neither Pioneer nor
the AmSouth Funds will pay AAMI or any subadviser to any series of AmSouth Funds
a termination fee in connection with the reorganizations of the series of the
AmSouth Funds into corresponding series of Pioneer funds. Pioneer has agreed to
compensate AAMI in connection with the reorganizations as is discussed in the
Proxy Statement/Prospectus.
PORTFOLIO MANAGERS
For addition information, see "Portfolio Management" in the SAI.
BROKERAGE ALLOCATION AND OTHER PRACTICES
For additional information about Pioneer Ibbotson Aggressive Allocation
Fund's, Pioneer Ibbotson Growth Allocation Fund's and Pioneer Ibbotson Moderate
Allocation Fund'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 each of Pioneer Ibbotson
Aggressive Allocation Fund, Pioneer Ibbotson Growth Allocation Fund and Pioneer
Ibbotson Moderate Allocation Fund, see "Description of Shares" in the SAI.
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PURCHASE, REDEMPTION AND PRICING OF SHARES
For additional information about purchase, redemption and pricing of shares
of each of Pioneer Ibbotson Aggressive Allocation Fund, Pioneer Ibbotson Growth
Allocation Fund and Pioneer Ibbotson Moderate Allocation Fund, 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
each of Pioneer Ibbotson Aggressive Allocation Fund, Pioneer Ibbotson Growth
Allocation Fund and Pioneer Ibbotson Moderate Allocation Fund, see "Tax Status"
in the SAI.
UNDERWRITERS
For additional information about of each of Pioneer Ibbotson Aggressive
Allocation Fund's, Pioneer Ibbotson Growth Allocation Fund's and Pioneer
Ibbotson Moderate Allocation Fund'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 each of
Pioneer Ibbotson Aggressive Allocation Fund, Pioneer Ibbotson Growth Allocation
Fund and Pioneer Ibbotson Moderate Allocation Fund, see "Investment Results" in
the SAI.
FINANCIAL STATEMENTS
For additional information, see "Financial Statements" in the SAI.
-4-
PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND
PRO FORMA
Schedule of Investments
January 31, 2005
(Unaudited)
(amounts in thousands, except shares)
Pioneer AmSouth
Ibbotson Strategic
Aggressive Portfolios: % of
Allocation Aggressive Growth Pro Forma Pro Forma
Fund Portfolio Share Combined Combined
Shares Shares Reallocation Shares Net Assets
------ ------ ------------ ------ ----------
INVESTMENT COMPANIES 100.3%
758,989 (758,989) 0 AmSouth Capital Growth Fund, I Shares
889,656 (889,656) 0 AmSouth Enhanced Market Fund, I Shares
397,609 (397,609) 0 AmSouth International Equity Fund, I Shares
270,628 (270,628) 0 AmSouth Large Cap Fund, I Shares
45 (45) 0 AmSouth Limited Term Bond Fund, I Shares
376,949 (376,949) 0 AmSouth Mid Cap Fund, I Shares
493,905 (493,905) 0 AmSouth Prime Money Market Fund, I Shares
344,086 (344,086) 0 AmSouth Select Equity Fund, I Shares
561,617 (561,617) 0 AmSouth Small Cap Fund, I Shares *
477,783 (477,783) 0 AmSouth Value Fund, I Shares
112,586 496,792 609,378 Pioneer Bond Fund Class Y
35,440 156,381 191,821 Pioneer Emerging Markets Fund Class Y
40,016 176,573 216,589 Pioneer Fund Class Y
113,089 499,012 612,101 Pioneer International Equity Fund Class Y
61,095 269,585 330,680 Pioneer Mid-Cap Value Fund Class Y
41,455 182,923 224,378 Pioneer Real Estate Shares Fund Class Y
91,054 401,781 492,835 Pioneer Research Fund Class Y
18,854 83,194 102,048 Pioneer Small Cap Value Fund Class Y
28,627 126,318 154,945 Pioneer Oak Ridge Large Cap Growth Fund Class Y
100,942 445,412 546,354 Pioneer Value Fund Class Y
TOTAL INVESTMENT COMPANIES 100.3%
TOTAL INVESTMENT IN SECURITIES
OTHER ASSETS AND LIABILITIES -0.3%
TOTAL NET ASSETS 100.0%
Total Investments at Cost
AmSouth
Pioneer Strategic
Ibbotson Portfolios:
Aggressive Aggressive
Allocation Growth Pro Forma
Fund Portfolio Combined
Market Market Asset Market
Value Value Reallocation (a) Value
----- ----- ---------------- -----
INVESTMENT COMPANIES
AmSouth Capital Growth Fund, I Shares $ 7,446 $ -7,446 $ 0
AmSouth Enhanced Market Fund, I Shares 10,196 -10,196 0
AmSouth International Equity Fund, I Shares 5,463 -5,463 0
AmSouth Large Cap Fund, I Shares 4,860 -4,860 0
AmSouth Limited Term Bond Fund, I Shares 0 0 0
AmSouth Mid Cap Fund, I Shares 5,209 -5,209 0
AmSouth Prime Money Market Fund, I Shares 494 -494 0
AmSouth Select Equity Fund, I Shares 5,000 -5,000 0
AmSouth Small Cap Fund, I Shares * 5,223 -5,223 0
AmSouth Value Fund, I Shares 7,855 -7,855 0
Pioneer Bond Fund Class Y $ 1,052 4,640 5,692
Pioneer Emerging Markets Fund Class Y 706 3,114 3,819
Pioneer Fund Class Y 1,644 7,255 8,900
Pioneer International Equity Fund Class Y 2,339 10,320 12,658
Pioneer Mid-Cap Value Fund Class Y 1,533 6,767 8,300
Pioneer Real Estate Shares Fund Class Y 928 4,094 5,022
Pioneer Research Fund Class Y 822 3,628 4,450
Pioneer Small Cap Value Fund Class Y 591 2,607 3,198
Pioneer Oak Ridge Large Cap Growth Fund Class Y 352 1,554 1,906
Pioneer Value Fund Class Y 1,760 7,768 9,528
--------- --------- ---------- ---------
$ 11,727 $ 51,746 $ 0 $ 63,473
--------- --------- ---------- ---------
TOTAL INVESTMENT COMPANIES $ 11,727 $ 51,746 $ 63,473
----------------------- ---------
TOTAL INVESTMENT IN SECURITIES $ 11,727 $ 51,746 $ 63,473
----------------------- ---------
OTHER ASSETS AND LIABILITIES $ (48) $ (142) $ (190)
----------------------- ---------
TOTAL NET ASSETS $ 11,679 $ 51,604 $ 63,283
======================= =========
Total Investments at Cost $ 11,638 $ 43,211 $ 54,849
======================= =========
* Non-income producing security.
(a) All shares in AmSouth funds will be sold and re-allocated in accordance
with the Ibbotson Aggressive Allocation Model.
Pioneer Ibbotson Aggressive Allocation Fund
Pro Forma Statement of Assets and Liabilities
January 31, 2005
(unaudited) (Amounts in Thousands, except for per share data)
AmSouth
Pioneer Strategic
Ibbotson Portfolios:
Aggressive Aggressive
Allocation Growth Pro Forma Pro Forma
Fund Portfolio Adjustments Combined
---- --------- ----------- --------
ASSETS:
Investment in securities of affiliated issuers, at value
(cost $11,638 and $43,211, respectively) $ 11,727 $ 51,746 $ 63,473
-------- -------- --------
Total Investments in Securities at value $ 11,727 $ 51,746 $ 63,473
Cash 246 -- 246
Receivables -
Capital stock sold 253 20 273
Interest and Dividends 1 1
Reimbursement from Advisor 3 3
Other -- 11 11
-------- -------- --------
Total assets $ 12,229 $ 51,778 $ $ 64,007
-------- -------- --------
LIABILITIES:
Payables -
Investment securities purchased $ 477 $ -- $ $ 477
Capital stock redeemed -- 141 141
Due to affiliates 22 21 43
Accrued expenses 51 12 63
-------- -------- --------
Total liabilities $ 550 $ 174 $ $ 724
-------- -------- --------
NET ASSETS:
Paid-in capital $ 11,599 $ 50,981 $ $ 62,580
Accumulated net investment income (loss) (8) 57 49
Accumulated net realized loss on investments (1) (7,969) (7,970)
Net unrealized gain on investments 89 8,535 8,624
-------- -------- --------
Total net assets $ 11,679 $ 51,604 $ $ 63,283
======== ======== ========
OUTSTANDING SHARES:
(Unlimited number of shares authorized)
Class A 598 2,378 (332) 2,644
======== ======== ========
Class B 184 1,452 (213) 1,423
======== ======== ========
Class C 288 288
======== ======== ========
Class I 1,662 (1,662) --
======== ======== ========
Class Y 1,445 1,445
======== ======== ========
NET ASSET VALUE PER SHARE:
Class A $ 11.04 9.50 $ 11.04
======== ======== ========
Class B $ 10.68 9.11 $ 10.68
======== ======== ========
Class C $ 10.82 $ 10.82
======== ======== ========
Class I $ 9.60 $ --
======== ======== ========
Class Y $ $ 11.04
======== ======== ========
MAXIMUM OFFERING PRICE:
Class A $ 11.71 10.05 $ 11.71
======== ======== ========
(a) Class A, Class B and Class I shares of AmSouth Strategic Portfolios:
Aggressive Growth Portfolio are exchanged for Class A, Class B and newly
created Class Y shares of Pioneer Ibbotson Aggressive Allocation Fund, to
be established upon consummation of the merger. Initial per share values of
Class Y shares are presumed to equal that of Class A shares.
Pioneer Ibbotson Aggressive Allocation Fund
Pro Forma Statement of Operations
For the Period Ended January 31, 2005
(unaudited) (Amounts in Thousands)
AmSouth
Pioneer Strategic
Ibbotson Portfolios:
Aggressive Aggressive
Allocation Growth Pro Forma Pro Forma
Fund* Portfolio Adjustments Combined
----- --------- ----------- --------
INVESTMENT INCOME:
Dividends $ 50 $ 334 $ 384
Interest 3 -- 3
Income from securities loaned, net -- -- --
-------- -------- --------
Total investment income $ 53 $ 334 $ 387
EXPENSES:
Management fees $ 5 $ 92 $ (22)(a) $ 75
Transfer agent fees 82 (82)(a) --
Investor Class -- -- --
Class A 14 -- 39(a) 53
Class B 13 -- 44(a) 57
Class C 13 -- 13
Class Y -- -- 40(a) 40
Shareholder Servicing fees --
Class A -- 48 (48)(a) --
Class B -- 26 (26)(a) --
Class I 25 (25)(a) --
Distribution fees
Class A 5 -- 49(a) 54
Class B 8 76 28(a) 112
Class C 11 -- 11
Class Y -- -- 25(a) 25
Administrative expenses -- 103 (92)(a) 11
Custodian fees 46 12 7(a) 65
Registration fees 93 12 105
Professional fees 62 -- 62
Printing 20 -- 20
Fees and expenses of nonaffiliated trustees 9 -- 9
Insurance expense 1 1
Miscellaneous 1 20 21
-------- -------- -------- --------
Total expenses $ 300 $ 496 $ (63) $ 733
Less management fees waived by Advisor (247) (167) 155(b) (259)
Less fees paid indirectly -- -- -- --
-------- -------- -------- --------
Net expenses $ 53 $ 329 $ 92 $ 474
-------- -------- -------- --------
Net investment Income $ (0) $ 5 $ (92) $ (87)
-------- -------- -------- --------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain (loss) on investments $ 193 $ 2,085 $ 2,278
Change in net unrealized gain on investments 89 1,183 1,272
-------- -------- --------
Net gain on investments $ 282 $ 3,268 $ 3,550
-------- -------- --------
Net increase in net assets resulting from
operations $ 282 $ 3,273 $ 3,463
======== ======== ========
* Pioneer Ibbotson Aggressive Allocation Fund's semi-annual income and
expense information has been annualized to represent a full year of income
and expense.
(a) Reflects change in fee structure to conform to Pioneer Ibbotson Aggressive
Allocation Fund's management, transfer agent, custody and distribution plan
agreements.
(b) Reflects reduction in expenses due to elimination of duplicate services.
Pioneer Ibbotson Aggressive Allocation Fund
PRO FORMA NOTES TO COMBINING FINANCIAL STATEMENTS
01/31/05
(Unaudited)
1. Description of the Fund
The Pioneer Ibbotson Aggressive Allocation Fund (the Fund), a fund of the
Pioneer Ibbotson Asset Allocation Series (the Trust), was organized as a
Delaware statutory trust on April 22, 2004 (amended July 1, 2004) and was
registered with the Securities and Exchange Commission under the Investment
Company Act of 1940 (the 1940 Act) as an open-end management investment company.
The Trust consists of three separate non-diversified funds, each issuing three
classes of shares (collectively, the Funds, individually, the Fund) as follows:
Pioneer Ibbotson Moderate Allocation Fund
Pioneer Ibbotson Growth Allocation Fund
Pioneer Ibbotson Aggressive Allocation Fund
The investment objective of the Fund is to seek long-term capital growth.
Each Fund is a "fund of funds," which means that it seeks to achieve its
investment objective by investing in other funds ("underlying funds") rather
than direct investment in securities. The Funds indirectly pay a portion of the
expenses incurred by the underlying funds. Consequently, an investment in the
Funds entails more direct and indirect expenses than direct investment in the
underlying funds.
All initial fund shares outstanding at July 12, 2004, were owned by Pioneer
Funds Distributor, Inc. (PFD), the principal underwriter for the Fund and a
wholly owned indirect subsidiary of UniCredito Italiano S.p.A. (UniCredito
Italiano). In addition, Pioneer Investment Management, Inc. reimbursed each Fund
for all organizational costs of the Funds.
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 Strategic Portfolios: Aggressive Growth Portfolio
(Aggressive Growth Portfolio) by the Fund as if such acquisition had taken place
as of February 1, 2004.
Under the terms of an Agreement and Plan of Reorganization (the
"Reorganization") between these two Funds, the combination of the Fund and
AmSouth Strategic Portfolios: Aggressive Growth Portfolio 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 Strategic
Portfolios: Aggressive Growth Portfolio in exchange for shares of the Fund at
their net asset values. The accompanying schedules of investments, statements of
assets and liabilities and the related statements of operations of the Fund and
AmSouth Strategic Portfolios: Aggressive Growth Portfolio have been combined as
of and for the fiscal year ended January 31, 2005. The Fund's investment income
and expenses have been annualized based upon the semi-annual shareholder reports
dated January 31, 2005 to reflect a full year of data. Following the
acquisition, the Fund 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 Fund and AmSouth Strategic
Portfolios: Aggressive Growth Portfolio included in their respective semi-annual
reports to shareowners dated January 31, 2005. 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 February 1, 2004.
3. Security Valuation
Security transactions are recorded as of the trade date. The net asset value is
computed once daily, on each day the New York Stock Exchange is open, as of the
close of regular trading on the Exchange. In computing the net asset value,
holdings of mutual fund shares are valued at the net asset value of each fund.
Holdings for which market quotation are not readily available are valued at
their fair values as determined by, or under the direction of, the Board of
Trustees. At January 31,
2005 there were no holdings fair valued. Dividend income is recorded on the
ex-dividend date. 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
Fund that would have been issued at January 31, 2005, 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 Strategic Portfolios: Aggressive Growth
Portfolio, as of January 31, 2005, divided by the net asset value per share of
the Fund's shares as of January 31, 2005.
The pro forma number of shares outstanding, by class, for the combined Fund
consists of the following at January 31, 2005 in thousands:
- -------------------------------------------------------------------------------------------------------------
Additional Shares
Assumed Issued to
Shares of Aggressive Growth
The Fund Portfolio Shareholders Total Outstanding Shares
Class of Shares Pre-Combination In Reorganization Post-Combination
- -------------------------------------------------------------------------------------------------------------
Class A 598 2,046 2,644
- -------------------------------------------------------------------------------------------------------------
Class B 184 1,239 1,423
- -------------------------------------------------------------------------------------------------------------
Class C 288 288
- -------------------------------------------------------------------------------------------------------------
Class Y 1,445 1,445
- -------------------------------------------------------------------------------------------------------------
5. Federal Income Taxes
Each Fund has elected to be taxed as a "regulated investment company" under the
Internal Revenue Code. After the acquisition, it will continue to be the Fund's
policy to comply with the requirements of the Internal Revenue Code applicable
to regulated investment companies and to distribute all of its taxable income
and net realized capital gains, if any, to its shareowners. Therefore, no
federal income tax provision is required.
The identified cost of investments for these funds is substantially the same for
both financial and federal income tax purposes. The cost of investments will
remain unchanged for the combined Fund.
PIONEER IBBOTSON GROWTH ALLOCATION FUND
PRO FORMA
Schedule of Investments
January 31, 2005
(Unaudited)
(amounts in thousands, except shares)
AmSouth
Ibbotson Strategic
Growth Portfolios: % of
Allocation Growth Pro Forma Pro Forma
Fund Portfolio Share Combined Combined
Shares Shares Reallocation Shares Net Assets
------ ------ ------------ ------ ----------
INVESTMENT COMPANIES 99.7%
659,253 -659,253 0 AmSouth Capital Growth Fund, I Shares
806,835 -806,835 0 AmSouth Enhanced Market Fund, I Shares
231,375 -231,375 0 AmSouth Government Income Fund, I Shares
693,115 -693,115 0 AmSouth High Quality Bond Fund, I Shares
370,721 -370,721 0 AmSouth International Equity Fund, I Shares
240,660 -240,660 0 AmSouth Large Cap Fund, I Shares
434,079 -434,079 0 AmSouth Limited Term Bond Fund, I Shares
334,313 -334,313 0 AmSouth Mid Cap Fund, I Shares
564,642 -564,642 0 AmSouth Prime Money Market Fund, I Shares
316,944 -316,944 0 AmSouth Select Equity Fund, I Shares
497,237 -497,237 0 AmSouth Small Cap Fund, I Shares *
438,320 -438,320 0 AmSouth Value Fund, I Shares
244,346 720,816 965,162 Pioneer Bond Fund Class Y
52,438 154,691 207,129 Pioneer Emerging Markets Fund Class Y
73,587 217,080 290,667 Pioneer Fund Class Y
72,812 214,794 287,606 Pioneer High Yield Fund Class Y
150,598 444,261 594,859 Pioneer International Equity Fund Class Y
91,786 270,767 362,553 Pioneer Mid Cap Value Fund Class Y
55,206 162,857 218,063 Pioneer Real Estate Shares Fund Class Y
127,025 374,721 501,746 Pioneer Research Fund Class Y
20,085 59,250 79,335 Pioneer Small Cap Value Fund Class Y
50,829 149,945 200,774 Pioneer Oak Ridge Large Cap Growth Fund Class Y
209,081 616,785 825,866 Pioneer Short Term Income Fund Class Y
143,380 422,968 566,348 Pioneer Value Fund Class Y
TOTAL INVESTMENT COMPANIES 99.7%
TOTAL INVESTMENT IN SECURITIES
OTHER ASSETS AND LIABILITIES 0.3%
TOTAL NET ASSETS 100.0%
Total Investments at Cost
Pioneer AmSouth
Ibbotson Strategic
Growth Portfolios:
Allocation Growth Pro Forma
Fund Portfolio Combined
Market Market Asset Market
Value Value Reallocation (a) Value
----- ----- ---------------- -----
INVESTMENT COMPANIES
AmSouth Capital Growth Fund, I Shares $ 6,467 $ -6,467 $ 0
AmSouth Enhanced Market Fund, I Shares 9,247 -9,247 0
AmSouth Government Income Fund, I Shares 2,272 -2,272 0
AmSouth High Quality Bond Fund, I Shares 7,728 -7,728 0
AmSouth International Equity Fund, I Shares 5,094 -5,094 0
AmSouth Large Cap Fund, I Shares 4,322 -4,322 0
AmSouth Limited Term Bond Fund, I Shares 4,497 -4,497 0
AmSouth Mid Cap Fund, I Shares 4,758 -4,758 0
AmSouth Prime Money Market Fund, I Shares 565 -565 0
AmSouth Select Equity Fund, I Shares 4,605 -4,605 0
AmSouth Small Cap Fund, I Shares * 4,624 -4,624 0
AmSouth Value Fund, I Shares 7,206 -7,206 0
Pioneer Bond Fund Class Y $ 2,282 6,732 9,015
Pioneer Emerging Markets Fund Class Y 1,044 3,080 4,124
Pioneer Fund Class Y 3,024 8,920 11,943
Pioneer High Yield Fund Class Y 831 2,451 3,282
Pioneer International Equity Fund Class Y 3,114 9,187 12,302
Pioneer Mid Cap Value Fund Class Y 2,304 6,796 9,100
Pioneer Real Estate Shares Fund Class Y 1,236 3,645 4,880
Pioneer Research Fund Class Y 1,147 3,384 4,531
Pioneer Small Cap Value Fund Class Y 629 1,857 2,486
Pioneer Oak Ridge Large Cap Growth Fund Class Y 625 1,844 2,470
Pioneer Short Term Income Fund Class Y 2,072 6,112 8,184
Pioneer Value Fund Class Y 2,501 7,377 9,877
--------- --------- --------- ----------
$ 20,809 $ 61,385 $ 0 $ 82,194
--------- --------- --------- ----------
TOTAL INVESTMENT COMPANIES $ 20,809 $ 61,385 82,194
----------------------- ----------
TOTAL INVESTMENT IN SECURITIES $ 20,809 $ 61,385 $ 82,194
----------------------- ----------
OTHER ASSETS AND LIABILITIES $ 103 $ 177 $ 280
----------------------- ----------
TOTAL NET ASSETS $ 20,912 $ 61,562 $ 82,474
======================= ==========
Total Investments at Cost $ 20,669 $ 55,193 $ 75,862
======================= ==========
* Non-income producing security.
(a) All shares of AmSouth funds will be sold and re-allocated in accordance
with the Ibbotson Growth Allocation Model.
Pioneer Ibbotson Growth Allocation Fund
Pro Forma Statement of Assets and Liabilities
January 31, 2005
(Unaudited)
(Amounts in thousands, except per share data)
Pioneer AmSouth
Ibbotson Strategic
Growth Portfolios:
Allocation Growth Pro Forma Pro Forma
Fund Portfolio Adjustments Combined
---- --------- ----------- --------
ASSETS:
Investment in securities of affiliated issuers, at value $ 20,809 $ 61,385 $ 82,194
(cost $20,669 and $55,193, respectively)
Cash 671 671
Receivables -
Investment securities sold 1 1
Capital stock sold 595 270 865
Interest and Dividends 1 1
Reimbursement from adviser 7 7
Other 9 9
-------- -------- --------
Total assets $ 22,083 $ 61,665 $ 83,748
-------- -------- --------
LIABILITIES:
Payables -
Securities purchased $ 963 $ $ 963
Capital stock redeemed 137 63 200
Due to affiliates 26 31 57
Accrued expenses and other liabilities 45 9 54
-------- -------- --------
Total liabilities $ 1,171 $ 103 $ 1,274
-------- -------- --------
NET ASSETS:
Paid-in capital $ 20,780 $ 59,131 $ 79,911
Accumulated net investment income (loss) (4) 4 (0)
Accumulated net realized loss on investments (3) (3,765) (3,768)
Net unrealized gain on investments 139 6,192 6,331
-------- -------- --------
Total net assets $ 20,912 $ 61,562 $ 82,474
======== ======== ========
OUTSTANDING SHARES:
(No par value, unlimited number of shares authorized)
Class A 1,068 2,936 (328)(a) 3,676
======== ======== ========
Class B 324 2,624 (116)(a) 2,832
======== ======== ========
Class C 581 -- (a) 581
======== ======== ========
Class I -- 863 (863)(a) --
======== ======== ========
Class Y -- 770(a) 770
======== ======== ========
NET ASSET VALUE PER SHARE:
Class A $ 10.84 $ 9.63 $ 10.84
======== ======== ========
Class B $ 9.95 $ 9.51 $ 9.95
======== ======== ========
Class C $ 10.51 $ $ 10.51
======== ======== ========
Class I $ $ 9.67 $ --
======== ======== ========
Class Y $ $ $ 10.84
======== ======== ========
MAXIMUM OFFERING PRICE:
Class A $ 11.50 $ 10.19 $ 11.50
======== ======== ========
(a) Class A, Class B and Class I shares of AmSouth Strategic Portfolio: Growth
Portfolio are exchanged for Class A, Class B and a newly created Class Y
shares respectively, of Pioneer Ibbotson Growth Allocation Fund. The
Initial per share value Class Y shares are presumed to equal that of
Pioneer Ibbotson Growth Allocation Fund's Class A shares.
See accompanying notes to pro forma financial statements.
Pioneer Ibbotson Growth Allocation Fund
Pro Forma Statement of Operations
For the Year Ended January 31, 2005
(unaudited) (amounts in thousands)
Pioneer AmSouth
Ibbotson Strategic
Growth Portfolios:
Allocation Growth Pro Forma Pro Forma
Fund* Portfolio Adjustments Combined
----- --------- ----------- --------
INVESTMENT INCOME:
Dividends $ 133 $ 780 $ 913
Interest 6 6
-------- -------- --------
Total investment income $ 139 $ 780 $ 919
-------- -------- --------
EXPENSES:
Management fees $ 9 $ 103 $ (24)(a) $ 88
Transfer agent fees and expenses 55 (55)(a) --
Class A 12 47(a) 59
Class B 13 77(a) 90
Class C 16 16
Class Y 25(a) 25
Distribution fees --
Class A 10 59(a) 69
Class B 13 132 51(a) 196
Class C 20 20
Shareholder servicing fee --
Class A 58 (58)(a) --
Class B 44 (44)(a) --
Class I 15 (15)(a) --
Class Y 16(a) 16
Custodian fees 46 14 7(a) 67
Administrative expenses 115 (103)(a) 12
Registration fees 93 12 105
Professional fees 58 58
Printing expense 20 20
Fees and expenses of nonaffiliated trustees 5 5
Insurance Expense 1 1
Miscellaneous 1 23 24
-------- -------- -------- --------
Total expenses $ 318 $ 571 $ (17) $ 872
Less fees waived by Advisor (221) (188) 172(b) (237)
-------- -------- -------- --------
Net expenses $ 97 $ 383 $ 155 $ 635
-------- -------- -------- --------
Net investment income $ 41 $ 397 $ (155) $ 283
-------- -------- -------- --------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments $ 312 $ 1,098 $ 1,410
Change in net unrealized gain on investments 139 1,636 1,775
-------- --------
Net gain on investments $ 451 $ 2,734 $ 3,185
-------- -------- -------- --------
Net decrease in net assets resulting from operations $ 492 $ 3,131 $ (155) $ 3,468
======== ======== ======== ========
* Pioneer Ibbotson Growth Allocation Fund's semi-annual income and expense
information has been annualized to represent a full year of income and
expense.
(a) Reflects change in fee structure to conform to Pioneer Ibbotson Growth
Fund's management, transfer agent, custody and distribution plan
agreements.
(b) Expense limitation conformed to Pioneer Ibbotson Growth Allocation Fund's
management contract.
See accompanying notes to pro forma financial statements.
Pioneer Ibbotson Growth Allocation Fund
PRO FORMA NOTES TO COMBINING FINANCIAL STATEMENTS
01/31/05
(Unaudited)
1. Description of the Fund
The Pioneer Ibbotson Growth Allocation Fund (the Fund), a fund of the Pioneer
Ibbotson Asset Allocation Series (the Trust), was organized as a Delaware
statutory trust on April 22, 2004 (amended July 1, 2004) and was registered with
the Securities and Exchange Commission under the Investment Company Act of 1940
(the 1940 Act) as an open-end management investment company. The Trust consists
of three separate non-diversified funds, each issuing three classes of shares
(collectively, the Funds, individually, the Fund) as follows:
Pioneer Ibbotson Moderate Allocation Fund
Pioneer Ibbotson Growth Allocation Fund
Pioneer Ibbotson Aggressive Allocation Fund
The investment objective of the Fund is to seek a balance between long-term
capital growth and current income.
Each Fund is a "fund of funds," which means that it seeks to achieve its
investment objective by investing in other funds ("underlying funds") rather
than direct investment in securities. The Funds indirectly pay a portion of the
expenses incurred by the underlying funds. Consequently, an investment in the
Funds entails more direct and indirect expenses than direct investment in the
underlying funds.
All initial fund shares outstanding at July 12, 2004, were owned by Pioneer
Funds Distributor, Inc. (PFD), the principal underwriter for the Fund and a
wholly owned indirect subsidiary of UniCredito Italiano S.p.A. (UniCredito
Italiano). In addition, Pioneer Investment Management, Inc. reimbursed each Fund
for all organizational costs of the Funds.
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 Strategic Portfolios: Growth Portfolio (Growth
Portfolio) by the Fund as if such acquisition had taken place as of February 1,
2004.
Under the terms of an Agreement and Plan of Reorganization (the
"Reorganization") between these two Funds, the combination of the Fund and
AmSouth Strategic Portfolios: Growth Portfolio 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 Strategic
Portfolios: Growth Portfolio in exchange for shares of the Fund at their net
asset values. The accompanying schedules of investments, statements of assets
and liabilities and the related statements of operations of the Fund and AmSouth
Strategic Portfolios: Growth Portfolio have been combined as of the fiscal year
ended January 31, 2005. The Fund's investment income and expenses have been
annualized based upon the semi-annual shareholder reports dated January 31, 2005
to reflect a full year of data. Following the acquisition, the Fund 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 Fund and AmSouth Strategic
Portfolios: Growth Portfolio included in their respective semi-annual reports to
shareowners dated January 31, 2005. 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 February 1, 2004.
3. Security Valuation
Security transactions are recorded as of the trade date. The net asset value is
computed once daily, on each day the New York Stock Exchange is open, as of the
close of regular trading on the Exchange. In computing the net asset value,
holdings of mutual fund shares are valued at the net asset value of each fund.
Holdings for which market quotation are not readily available are valued at
their fair values as determined by, or under the direction of, the Board of
Trustees. At January 31, 2005 there were no holdings fair valued. Dividend
income is
recorded on the ex-dividend date. 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
Fund that would have been issued at January 31, 2005, 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 Strategic Portfolios: Growth Portfolio, as
of January 31, 2005, divided by the net asset value per share of the Fund's
shares as of January 31, 2005.
The pro forma number of shares outstanding, by class, for the combined Fund
consists of the following at January 31, 2005 in thousands:
- -------------------------------------------------------------------------------------------------------------
Additional Shares
Shares of Assumed Issued to Growth
The Fund Portfolio Shareholders Total Outstanding Shares
Class of Shares Pre-Combination In Reorganization Post-Combination
- -------------------------------------------------------------------------------------------------------------
Class A 1,068 2,608 3,676
- -------------------------------------------------------------------------------------------------------------
Class B 324 2,508 2,832
- -------------------------------------------------------------------------------------------------------------
Class C 581 581
- -------------------------------------------------------------------------------------------------------------
Class Y 770 770
- -------------------------------------------------------------------------------------------------------------
5. Federal Income Taxes
Each Fund has elected to be taxed as a "regulated investment company" under the
Internal Revenue Code. After the acquisition, it will continue to be the Fund's
policy to comply with the requirements of the Internal Revenue Code applicable
to regulated investment companies and to distribute all of its taxable income
and net realized capital gains, if any, to its shareowners. Therefore, no
federal income tax provision is required.
The identified cost of investments for these funds is substantially the same for
both financial and federal income tax purposes. The cost of investments will
remain unchanged for the combined Fund.
PIONEER IBBOTSON MODERATE ALLOCATION FUND
PRO FORMA
Schedule of Investments
January 31, 2005
(Unaudited)
(amount in thousand, except shares)
AmSouth
Pioneer Strategic Portfolios:
Ibbotson -----------------------
Moderate Growth & Moderate % of
Allocation Income Growth & Income Pro Forma Pro Forma
Fund Portfolio Portfolio Share Combined Combined
Shares Shares Shares Reallocation Shares Net Assets
------ ------ ------------ ------------ ------ ----------
INVESTMENT COMPANIES 99.3%
981,417 396,701 (1,378,118) 0 AmSouth Capital Growth Fund, I Shares
1,218,074 414,203 (1,632,277) 0 AmSouth Enhanced Market Fund, I Shares
975,060 524,380 (1,499,440) 0 AmSouth Government Income Fund, I Shares
1,818,420 1,016,407 (2,834,827) 0 AmSouth High Quality Bond Fund, I Shares
531,002 209,182 (740,184) 0 AmSouth International Equity Fund, I Shares
363,628 143,677 (507,305) 0 AmSouth Large Cap Fund, I Shares
1,302,508 750,428 (2,052,936) 0 AmSouth Limited Term Bond Fund, I Shares
520,041 199,775 (719,816) 0 AmSouth Mid Cap Fund, I Shares
1,046,639 487,620 (1,534,259) 0 AmSouth Prime Money Market Fund, I Shares
479,837 181,400 (661,237) 0 AmSouth Select Equity Fund, I Shares
739,228 276,831 (1,016,059) 0 AmSouth Small Cap Fund, I Shares *
663,573 233,186 (896,759) 0 AmSouth Value Fund, I Shares
319,848 2,523,436 2,843,284 Pioneer Bond Fund Class Y
27,969 220,661 248,630 Pioneer Emerging Markets Fund Class Y
64,861 511,720 576,581 Pioneer Fund Class Y
116,404 918,368 1,034,772 Pioneer High Yield Fund Class Y
117,613 927,906 1,045,519 Pioneer International Equity Fund Class Y
79,993 631,103 711,096 Pioneer Mid Cap Value Fund Class Y
39,411 310,932 350,343 Pioneer Real Estate Shares Fund Class Y
123,009 970,478 1,093,487 Pioneer Research Fund Class Y
14,263 112,528 126,791 Pioneer Small Cap Value Fund Class Y
54,133 427,081 481,214 Pioneer Oak Ridge Large Cap Growth Fund Class Y
334,195 2,636,626 2,970,821 Pioneer Short Term Income Fund Class Y
139,993 1,104,473 1,244,466 Pioneer Value Fund Class Y
TOTAL INVESTMENT COMPANIES 99.3%
TOTAL INVESTMENT IN SECURITIES
OTHER ASSETS AND LIABILITIES 0.7%
TOTAL NET ASSETS 100.0%
Total Investments at Cost
AmSouth Strategic Portfolios:
Pioneer -----------------------------
Ibbotson Moderate
Moderate Growth & Growth &
Allocation Income Income Pro Forma
Fund Portfolio Portfolio Combined
Market Market Market Asset Market
Value Value Value Reallocation (a) Value
----- ----- ----- ---------------- -----
INVESTMENT COMPANIES
AmSouth Capital Growth Fund, I Shares $ 9,628 $ 3,892 $ (13,520) $ 0
AmSouth Enhanced Market Fund, I Shares 13,959 4,747 (18,706) 0
AmSouth Government Income Fund, I Shares 9,575 5,149 (14,724) 0
AmSouth High Quality Bond Fund, I Shares 20,275 11,332 (31,607) 0
AmSouth International Equity Fund, I Shares 7,296 2,874 (10,170) 0
AmSouth Large Cap Fund, I Shares 6,531 2,580 (9,111) 0
AmSouth Limited Term Bond Fund, I Shares 13,494 7,774 (21,268) 0
AmSouth Mid Cap Fund, I Shares 7,187 2,761 (9,948) 0
AmSouth Prime Money Market Fund, I Shares 1,047 488 (1,535) 0
AmSouth Select Equity Fund, I Shares 6,972 2,636 (9,608) 0
AmSouth Small Cap Fund, I Shares * 6,875 2,575 (9,450) 0
AmSouth Value Fund, I Shares 10,909 3,834 (14,743) 0
Pioneer Bond Fund Class Y $ 2,987 23,569 26,556
Pioneer Emerging Markets Fund Class Y 557 4,393 4,950
Pioneer Fund Class Y 2,665 21,027 23,692
Pioneer High Yield Fund Class Y 1,328 10,479 11,807
Pioneer International Equity Fund Class Y 2,432 19,189 21,621
Pioneer Mid Cap Value Fund Class Y 2,008 15,841 17,848
Pioneer Real Estate Shares Fund Class Y 882 6,959 7,841
Pioneer Research Fund Class Y 1,111 8,763 9,874
Pioneer Small Cap Value Fund Class Y 447 3,527 3,974
Pioneer Oak Ridge Large Cap Growth Fund Class Y 666 5,253 5,919
Pioneer Short Term Income Fund Class Y 3,312 26,129 29,441
Pioneer Value Fund Class Y 2,441 19,262 21,703
--------- -------- --------- ---------- ---------
$ 20,837 $113,748 $ 50,642 $ 0 $ 185,227
--------- -------- --------- ---------- ---------
TOTAL INVESTMENT COMPANIES $ 20,837 $113,748 $ 50,642 185,227
---------------------------------------- -------
TOTAL INVESTMENT IN SECURITIES $ 20,837 $113,748 $ 50,642 185,227
---------------------------------------- -------
OTHER ASSETS AND LIABILITIES $ 1,376 $ (63) $ 19 1,332
---------------------------------------- -------
TOTAL NET ASSETS $ 22,213 $113,685 $ 50,661 186,559
======================================== =======
Total Investments at Cost $ 20,644 $102,605 $ 47,477 170,726
======================================== =======
* Non-income producing security.
(a) All shares in AmSouth funds will be sold and re-allocated in accordance
with the Ibbotson Moderate Allcoation Model.
Pioneer Ibbotson Moderate Allocation Fund
Pro Forma Statement of Assets and Liabilities
January 31, 2005
(Unaudited)
(amounts in thousands, except per share data)
AmSouth Strategic Portfolios:
-----------------------------
Pioneer
Ibbotson Moderate
Moderate Growth and Growth and
Allocation Income Income Pro Forma Pro Forma
Fund Portfolio Portfolio Adjustments Combined
---- --------- --------- ----------- --------
ASSETS:
Investment in securities of affliliated issuers, at value
at value (cost $20,644 and $102,605, and $47,477,
respectively) $ 20,837 $113,748 $ 50,642 $185,227
Cash 1,310 1,310
Receivables -
Investment securities sold 3 3
Capital stock sold 506 33 51 590
Interest and dividends 1 1 2
Reimbursement from advisor 2 2
Other 5 2 7
-------- -------- -------- --------
Total assets $ 22,658 $113,787 $ 50,696 $187,141
-------- -------- -------- --------
LIABILITIES:
Payables -
Securities purchased $ 371 $ $ $ 371
Capital stock redeemed 1 61 1 63
Due to affiliates 26 39 21 86
Accrued expenses and other liabilities 47 2 13 62
-------- -------- -------- --------
Total liabilities $ 444 $ 102 $ 35 $ 581
-------- -------- -------- --------
NET ASSETS:
Paid-in capital $ 22,020 $111,286 $ 48,437 $181,743
Accumulated net investment income 4 88 45 137
Accumulated net realized loss on investments (4) (8,832) (986) (9,822)
Net unrealized gain on investments 193 11,143 3,165 14,501
-------- -------- -------- --------
Total net assets $ 22,213 $113,685 $ 50,661 $186,559
======== ======== ======== ========
OUTSTANDING SHARES:
(No par value, unlimited number of shares authorized)
Class A 1,280 5,488 2,236 (451)(a) 8,553
======== ======== ======== ========
Class B 317 1,704 1,276 (106)(a) 3,191
======== ======== ======== ========
Class C 521 521
======== ======== ======== ========
Class I 4,135 1,479 (5,614)(a) --
======== ======== ======== ========
Class Y 5,307 (a) 5,307
======== ======== ======== ========
NET ASSET VALUE PER SHARE:
Class A $ 10.63 $ 10.03 $ 9.96 $ 10.63
======== ======== ======== ========
Class B $ 10.32 $ 9.99 $ 9.90 $ 10.32
======== ======== ======== ========
Class C $ 10.23 $ $ $ 10.23
======== ======== ======== ========
Class I $ $ 10.07 $ 9.99 $ --
======== ======== ======== ========
Class Y $ $ $ $ 10.63
======== ======== ======== ========
MAXIMUM OFFERING PRICE:
Class A $ 11.28 $ 10.61 $ 10.54 $ 11.28
======== ======== ======== ========
(a) Class A, Class B and Class I shares of AmSouth Strategic Portfolios: Growth
& Income Portfolio and Moderate Growth & Income Portfolio are exchanged for
Class A, Class B and newly created Class Y shares of Pioneer Ibbotson
Moderate Allocation Fund, to be established upon consummation of the
mergers. Initial per share values of Class Y shares are presummed to equal
that of Class A shares.
See accompanying notes to pro forma financial statements.
Ibbotson Moderate Allocation Fund
Pro Forma Statement of Operations
For the Period Ended January 31, 2005
(Unaudited) (amounts in thousands)
AmSouth Strategic Portfolios:
-----------------------------
Pioneer
Ibbotson Moderate
Moderate Growth and Growth and
Allocation Income Income Pro Forma Pro Forma
Fund* Portfolio Portfolio Pro Forma Combined
----- --------- --------- ----------- --------
INVESTMENT INCOME:
Dividends $ 220 $ 2,130 $ 1,068 $ $ 3,418
Interest 12 12
-------- -------- -------- --------
Total investment income $ 232 $ 2,130 $ 1,068 $ $ 3,430
-------- -------- -------- --------
EXPENSES:
Management fees $ 13 $ 216 $ 91 $ (75)(a) $ 245
Transfer agent fees and expenses 80 71 (151)(a) --
Class A 12 129(a) 141
Class B 14 100(a) 114
Class C 12 12
Class Y 158(a) 158
Distribution fees --
Class A 16 162(a) 178
Class B 14 98 76 65(a) 253
Class C 23 23
Class Y 99(a) 99
Shareholder Servicing Fees --
Class A 114 54 (168)(a) --
Class B 33 16 (49)(a) --
Class I 73 27 (100)(a) --
Custodian fees 46 28 11 (8)(a) 77
Administrative expenses 239 102 (8)(a) 333
Registration fees 93 3 13 109
Professional fees 63 63
Printing expense 20 20
Fees and expenses of nonaffiliated trustees 5 5
Insurance Expense 1 1
Miscellaneous 1 39 26 66
-------- -------- -------- -------- --------
Total expenses $ 333 $ 923 $ 487 $ 154 $ 1,897
Less fees waived by Advisor (209) (256) (168) 424(b) (209)
-------- -------- -------- -------- --------
Net expenses $ 124 $ 667 $ 319 $ 578 $ 1,688
-------- -------- -------- -------- --------
Net investment income $ 108 $ 1,463 $ 749 $ (578) $ 1,742
-------- -------- -------- -------- --------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments $ 396 $ 2,992 $ 1,263 $ 4,651
Change in net unrealized gain on investments 193 676 53 922
-------- -------- -------- --------
Net gain on investments $ 589 $ 3,668 $ 1,316 $ 5,573
-------- -------- -------- -------- --------
Net increase in net assets resulting from operations $ 697 $ 5,131 $ 2,065 $ (578) $ 7,315
======== ======== ======== ======== ========
* Pioneer Ibbotson Moderate Allocation Fund's semi-annual income and expense
information has been annualized to represent a full year of income and
expense.
(a) Reflects change in fee structure to conform to Pioneer Ibbotson Mderate
Allocation Fund's management, transfer agent, custody and distribution plan
agreements.
(b) Expense limitation conformed to Pioneer Ibbotson Moderate Allocation Fund's
management contract.
See accompanying notes to pro forma financial statements.
Pioneer Ibbotson Moderate Allocation Fund
PRO FORMA NOTES TO COMBINING FINANCIAL STATEMENTS
01/31/05
(Unaudited)
1. Description of the Fund
The Pioneer Ibbotson Moderate Allocation Fund (the Fund), a fund of the Pioneer
Ibbotson Asset Allocation Series (the Trust), was organized as a Delaware
statutory trust on April 22, 2004 (amended July 1, 2004) and was registered with
the Securities and Exchange Commission under the Investment Company Act of 1940
(the 1940 Act) as an open-end management investment company. The Trust consists
of three separate non-diversified funds, each issuing three classes of shares as
follows:
Pioneer Ibbotson Moderate Allocation Fund
Pioneer Ibbotson Growth Allocation Fund
Pioneer Ibbotson Aggressive Allocation Fund
The investment objective of the Fund is to seek a balance between long-term
capital growth and current income.
Each Fund is a "fund of funds," which means that it seeks to achieve its
investment objective by investing in other funds ("underlying funds") rather
than direct investment in securities. The Funds indirectly pay a portion of the
expenses incurred by the underlying funds. Consequently, an investment in the
Funds entails more direct and indirect expenses than direct investment in the
underlying funds.
All initial fund shares outstanding at July 12, 2004, were owned by Pioneer
Funds Distributor, Inc. (PFD), the principal underwriter for the Fund and a
wholly owned indirect subsidiary of UniCredito Italiano S.p.A. (UniCredito
Italiano). In addition, Pioneer Investment Management, Inc. reimbursed each Fund
for all organizational costs of the Funds.
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 Strategic Portfolios: Growth
and Income Portfolio (Growth Portfolio) and AmSouth Strategic Portfolios:
Moderate Growth and Income Portfolio (Moderate Portfolio) by the Fund as if such
acquisition had taken place as of February 1, 2004.
Under the terms of an Agreement and Plan of Reorganization (the
"Reorganization") among these three Funds, the combination of the Fund and
Growth Portfolio and Moderate Portfolio 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 Growth Portfolio and Moderate Portfolio
in exchange for shares of the Fund at their net asset values. The accompanying
schedules of investments, statements of assets and liabilities and the related
statements of operations of the Fund and Growth Portfolio and Moderate Portfolio
have been combined as of and for their fiscal year ended January 31, 2005. The
Fund's investment income and expenses have been annualized based upon the
semi-annual shareholder reports dated January 31, 2005 to reflect a full year of
data. Following the acquisition, the Fund 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 Fund and Growth Portfolio and
Moderate Portfolio included in their respective semi-annual reports to
shareowners dated January 31, 2005. 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 February 1, 2004.
3. Security Valuation
Security transactions are recorded as of the trade date. The net asset value is
computed once daily, on each day the New York Stock Exchange is open, as of the
close of regular trading on the Exchange. In computing the net asset value,
holdings of mutual fund shares are valued at the net asset value of each fund.
Holdings for which market quotation are not readily available are valued at
their fair values as determined by, or under the direction of, the Board of
Trustees. At January 31, 2005 there were no holdings fair valued. Dividend
income is
recorded on the ex-dividend date. 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
Fund that would have been issued at January 31, 2005, in connection with the
proposed acquisition. The number of shares assumed to be issued is equal to the
net asset value of shares of Growth Portfolio or Moderate Portfolio, as of
January 31, 2005, divided by the net asset value per share of the Fund's
respective shares as of January 31, 2005.
The pro forma number of shares outstanding, by class, for the combined Fund
consists of the following at January 31, 2005:
- ---------------------------------------------------------------------------------------------------------------------
Additional Shares Additional Shares
Assumed Issued to Assumed Issued to
Shares of Growth Portfolio Moderate Portfolio Total Outstanding
The Fund Shareholders Shareholders Shares
Class of Shares Pre-Combination In Reorganization In Reorganization Post-Combination
- ---------------------------------------------------------------------------------------------------------------------
Class A 1,280 5,178 2,095 8,553
- ---------------------------------------------------------------------------------------------------------------------
Class B 317 1,650 1,224 3,191
- ---------------------------------------------------------------------------------------------------------------------
Class C 521 521
- ---------------------------------------------------------------------------------------------------------------------
Class Y 3,917 1,390 5,307
- ---------------------------------------------------------------------------------------------------------------------
5. Federal Income Taxes
Each Fund has elected to be taxed as a "regulated investment company" under the
Internal Revenue Code. After the acquisition, it will continue to be the Fund's
policy to comply with the requirements of the Internal Revenue Code applicable
to regulated investment companies and to distribute all of its taxable income
and net realized capital gains, if any, to its shareowners. Therefore, no
federal income tax provision is required.
The identified cost of investments for these funds is substantially the same for
both financial and federal income tax purposes. The cost of investments will
remain unchanged for the combined Fund.
PART C
OTHER INFORMATION
PIONEER IBBOTSON ASSET ALLOCATION SERIES
(On behalf of its series, Pioneer Ibbotson Aggressive Allocation Series,
Pioneer Ibbotson Growth Allocation Series and
Pioneer Ibbotson Moderate Allocation Series)
ITEM 15. INDEMNIFICATION
No change from the information set forth in Item 25 of the most recently filed
Registration Statement of Pioneer Ibbotson Asset Allocation Series (the
"Registrant") on Form N-1A under the Securities Act of 1933 and the Investment
Company Act of 1940 (File Nos. 333-114788 and 811-21569) as filed with the
Securities and Exchange Commission on July 15, 2005 (Accession No.
0001288255-05-000003), which information is incorporated herein by reference.
ITEM 16. EXHIBITS
(1)(a) Agreement and Declaration of Trust (1)
(1)(b) Amended and Restated Declaration of Trust (2)
(1)(c) Amendment to Amended and Restated Agreement and
Declaration of Trust (5)
(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 (2)
(6)(b) Sub-Advisory Agreement between Pioneer Investment (5)
Management, Inc. and Ibbotson Associates Advisors, LLC
("Ibbotson")
(6)(c) Amendment to Sub-Advisory Agreement between Pioneer (7)
Investment Management, Inc. and Ibbotson
(6)(d) Amended and Restated Expense Limitation Agreement (6)
(7)(a) Underwriting Agreement with Pioneer Funds Distributor, Inc. (2)
(7)(b) Dealer Sales Agreement (2)
(8) Not applicable
(9) Custodian Agreement with Brown Brothers Harriman & Co. (2)
("BBH")
(10)(a) Multiple Class Plan Pursuant to Rule 18f-3 for Pioneer Ibbotson (2)
Moderate Allocation Fund
(10)(b) Multiple Class Plan Pursuant to Rule 18f-3 for Pioneer Ibbotson (2)
Growth Allocation Fund
(10)(c) Multiple Class Plan Pursuant to Rule 18f-3 for Pioneer Ibbotson (2)
Aggressive Allocation Fund
(10)(d) Class A Shares Distribution Plan for Pioneer Ibbotson Moderate (2)
Allocation Fund
(10)(e) Class A Shares Distribution Plan for Pioneer Ibbotson Growth (2)
Allocation Fund
(10)(f) Class A Shares Distribution Plan for Pioneer Ibbotson (2)
Aggressive Allocation Fund
(10)(g) Class B Shares Distribution Plan for Pioneer Ibbotson Moderate (2)
Allocation Fund
(10)(h) Class B Shares Distribution Plan for Pioneer Ibbotson Growth (2)
Allocation Fund
(10)(i) Class B Shares Distribution Plan for Pioneer Ibbotson (2)
Aggressive Allocation Fund
(10)(j) Class C Shares Distribution Plan for Pioneer Ibbotson Moderate (2)
Allocation Fund
(10)(k) Class C Shares Distribution Plan for Pioneer Ibbotson Growth (2)
Allocation Fund
(10)(l) Class C Shares Distribution Plan for Pioneer Ibbotson (2)
Aggressive Allocation Fund
(11) Opinion of Counsel (legality of securities being offered) (6)
(12) Form of opinion as to tax matters and consent (*)
(13)(a) Investment Company Service Agreement between the Registrant (2)
and Pioneer Investment Shareholder Services, Inc.
(13)(b) Administration Agreement between the Registrant and Pioneer (3)
Investment Management, Inc. (formerly, Pioneering Services
Corporation)
(13)(c) Administrative and Fund Accounting Agency Agreement
between the Registrant (7)
and BBH
(13)(d) Asset Allocation Administrative Agreement between the
Registrant and BBH (7)
(13)(e) Form of Services Agreement for Class Y Shares (*)
(14) Consent(s) of Independent Registered Public Accounting Firm (*)
(15) Not applicable
(16) Powers of Attorney (7)
(17)(a) Code of Ethics - Pioneer (5)
(17)(b) Code of Ethics - Ibbotson (5)
(17)(b) Form of Proxy Card (6)
(1) Previously filed. Incorporated herein by reference from the exhibits filed
with the Registrant's Initial Registration Statement on Form N-1A (File Nos.
333-114788 and 811-21569), as filed with the Securities and Exchange Commission
on April 23, 2004 (Accession no. 0001288255-04-000006).
(2) Previously filed. Incorporated herein by reference from the exhibits filed
with the Registrant's Pre-effective Amendment No. 2 to the Registration
Statement on Form N-1A (File Nos. 333-114788 and 811-21569), as filed with the
Securities and Exchange Commission on August 6, 2004 (Accession no.
0001016964-04-000333).
(3) Previously filed. Incorporated herein by reference from the exhibits filed
with the Registrant's Post-effective Amendment No. 1 to the Registration
Statement on Form N-1A (File Nos. 333-114788 and 811-21569), as filed with the
Securities and Exchange Commission on August 9, 2004 (Accession no.
0001016964-04-000353).
(4) Previously filed. Incorporated herein by reference from the exhibits filed
with the Registrant's Post-effective Amendment No. 2 to the Registration
Statement on Form N-1A (File Nos. 333-114788 and 811-21569), as filed with the
Securities and Exchange Commission on February 28, 2005 (Accession no.
0001016964-05-000055).
(5) Previously filed. Incorporated herein by reference from the exhibits filed
with the Registrant's Post-effective Amendment No. 3 to the Registration
Statement on Form N-1A (File Nos. 333-114788 and 811-21569), as filed with the
Securities and Exchange Commission on May 6, 2005 (Accession no.
0001016964-05-000218).
(6) Previously filed. Incorporated herein by reference from the exhibits filed
with the Registrant's Registration Statement on Form N-14 (File No. 333-126370),
as filed with the Securities and Exchange Commission on July 5, 2005 (Accession
no. 0001145443-05-001510).
(7) Previously filed. Incorporated herein by reference from the exhibits filed
with the Registrant's Post-effective Amendment No. 4 to the Registration
Statement on Form N-1A (File Nos. 333-114788 and 811-21569), as filed with the
Securities and Exchange Commission on July 15, 2005 (Accession no.
0001288255-05-000003).
(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-14
filed with the SEC upon the consummation of the reorganization contemplated by
this Registration Statement on Form N-14.
(4) Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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
18th day of August, 2005.
Pioneer Ibbotson Asset Allocation Series
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, August 18, 2005
- --------------------------- and President
John F. Cogan, Jr.
/s/ Vincent Nave Chief Financial Officer, August 18, 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 August 18, 2005
- ---------------------------
Osbert M. Hood Trustee
*
- ---------------------------
Marguerite A. Piret Trustee
*
- ---------------------------
Steven K. West Trustee
*
- ---------------------------
John Winthrop Trustee
* By: /s/ Osbert M. Hood August 18, 2005
--------------------------------------
Osbert M. Hood, Attorney-in-Fact
EXHIBIT INDEX
The following exhibits are filed as part of this Registration Statement:
Exhibit No. Description
(12) Form of Opinion as to Tax Matters and Consent
(13)(e) Form of Services Agreement for Class Y Shares
(14) Consent(s) of Independent Registered Public Accounting Firm