BINGHAM McCUTCHEN LLP
ONE FEDERAL STREET
BOSTON, MASSACHUSETTS 02110
April 26, 2011
VIA EDGAR
--- -----
Securities and Exchange Commission
Division of Investment Management
100 F Street, NE
Washington, D.C. 20549
Re: Pioneer Series Trust X
Registration Statement on Form N-1A
(File Nos. 333-89354; 811-21108)
Ladies and Gentlemen:
This letter is to respond to comments we received on March 23, 2011 from
Mr. Dominic Minore of the Staff of the Division of Investment Management of the
Securities and Exchange Commission (the "Commission") regarding Post-Effective
Amendment No. 11 to the Registration Statement on Form N-1A for Pioneer Series
Trust X (the "Registrant") relating to Pioneer Absolute Return Credit Fund and
Pioneer Multi-Asset Floating Rate Fund (each, a "Fund"). Following are the
Staff's comments and the Registrant's responses thereto:
I. GENERAL COMMENT
1. COMMENT: The Staff asked that the Registrant provide a letter to the
Commission that includes certain "Tandy" acknowledgments with the Registrant's
response to the Staff's comments.
RESPONSE: A Tandy representation letter executed in connection with the
filing of this response is attached hereto as Exhibit A.
---------
II. COMMENTS APPLICABLE TO EACH FUND'S PROSPECTUS
A. FEES AND EXPENSES OF THE FUND
1. COMMENT: The Staff requested that the Registrant remove the statement
that "there can be no assurance that the adviser will extend the expense
limitations beyond such time" from Footnote 2 to the Fee Table regarding the
contractual expense waiver arrangements.
RESPONSE: The Registrant respectfully submits that the statement
referenced by the Staff relates to the period for which the fee waiver
arrangement is expected to continue, in accordance with Instruction 3(e) to Item
3 to Form N-1A, and accordingly has not made the requested change.
2. COMMENT: The Staff requested that the statement "while in effect, the
arrangement may be terminated for a class only by agreement of the adviser and
the Board of Trustees" in Footnote 2 to the Fee Table be clarified to specify
whether the expense waiver arrangement may be terminated for one or for all
classes.
RESPONSE: The Registrant has revised the disclosure to clarify that the
expense waiver arrangement may be terminated for any class.
B. PRINCIPAL INVESTMENT STRATEGIES
1. COMMENT: The Staff requested that the Registrant confirm in its response
to the Staff's comments that the disclosure in each Fund's prospectus regarding
the Fund's use of derivatives addresses the considerations noted in the letter
from the Division of Investment Management to the Investment Company Institute
regarding derivatives-related disclosure by investment companies.
RESPONSE: The Registrant confirms that the disclosure in each Fund's
prospectus regarding the Fund's use of derivatives addresses the considerations
noted in the letter from the Division of Investment Management to the Investment
Company Institute regarding derivatives-related disclosure by investment
companies.
C. PRINCIPAL RISKS OF INVESTING IN THE FUND
1. COMMENT: The Staff requested that the Registrant clarify the disclosure
regarding leveraging risk to make clear that certain transactions have a
leveraging effect on the Fund's portfolio because such investments involve
borrowing by the Fund or because leverage is embedded in the investments
themselves. The Staff requested that the Registrant make conforming changes to
the analogous disclosure in the "More on the Risks of Investing in the Fund"
section of the prospectus.
RESPONSE: The Registrant has revised the disclosure to address the Staff's
request.
2. COMMENT: The Staff noted that if the Fund expects to borrow and if
interest expense on borrowings is expected to equal or exceed 0.05%, a separate
line item in the Fee Table with respect to such interest expenses on borrowings
would be required.
RESPONSE: The Registrant notes that it does not expect the Fund to incur
0.05% or more in interest expense on borrowings.
3. COMMENT: The Staff noted that the Registrant includes a risk factor
titled "Risk of Increase in Expenses" in the "Principal Risks of Investing in
the Fund" and in the "More on the Risks of Investing in the Fund" sections of
the prospectus, and requested that the Registrant confirm in its response that
it will supplement the Fund's prospectus if there is a material change in the
Registrant's expense ratio.
RESPONSE: The Registrant confirms that it understands the disclosure
requirements of Item 3 of Form N-1A.
4. COMMENT: The Staff requested that the Registrant replace "factors" in the
statement "please note that there are many other factors that could adversely
affect your investment and that could prevent the portfolio from achieving its
goals" with "non-material factors." The Staff requested that the Registrant
make conforming changes to the analogous disclosure in the "More on the Risks of
Investing in the Fund" section of the prospectus.
RESPONSE: The Registrant confirms that it understands the disclosure
requirements of Item 3 and Item 9 of Form N-1A and respectfully submits that no
change to the disclosure is required. The Registrant notes that the
introductory paragraphs to the "Principal Risks of Investing in the Fund" and
"More on the Risks of Investing in the Fund - Principal Investment Risks"
sections of the prospectus state that the principal risks of investing in the
Fund are described therein.
D. TAX INFORMATION
1. COMMENT: The Staff noted that the Registrant states in the "Tax
Information" section of the prospectus that shareholders "normally will have to
pay income taxes on the dividends and capital gain distributions [they] receive
from the Fund." The Staff stated that this disclosure implies that the Fund
already has made distributions. The Staff suggested that the language provided
in Item 7 of Form N-1A, stating that the Fund intends to make distributions that
may be taxed as ordinary income or capital gains, would be more appropriate
disclosure for the "Tax Information" section because the Fund is newly-offered
and has not yet made distributions.
RESPONSE: The Registrant has made the requested change.
III. COMMENTS APPLICABLE TO THE PROSPECTUS FOR PIONEER ABSOLUTE RETURN
CREDIT FUND
A. PRINCIPAL INVESTMENT STRATEGIES
1. COMMENT: The Staff noted that the Registrant states that "the Fund is
managed using an absolute return approach, which means that it is not managed
relative to an index." The Staff requested that the Registrant clarify the
meaning of "not managed relative to an index."
RESPONSE: The Registrant has added disclosure to address the Staff's
request.
2. The Staff noted that the Registrant states that the Fund may invest in
debt securities, and that such debt securities "may include instruments and
obligations of U.S. and non-U.S. corporate and other issuers and entities."
a. COMMENT: The Staff noted that if the Fund may invest in debt securities
of issuers located in emerging markets, that fact should be disclosed in the
summary section.
RESPONSE: The Registrant has added disclosure to address the Staff's
request.
b. COMMENT: The Staff requested that the Registrant revise the disclosure to
identify the principal categories of debt securities issued by "other issuers
and entities" in which the Fund may invest.
RESPONSE: The Registrant has revised the disclosure to address the Staff's
request.
3. COMMENT: The Staff requested that the Registrant clarify the extent to
which there is a limit on the Fund's investments in debt securities rated below
investment grade and in debt securities that are in default, or, in the
alternative, to state that the Fund may invest without limit in such
instruments.
RESPONSE: The Registrant has revised the disclosure to clarify that the Fund
may invest without limit in debt securities of any quality, including debt
securities rated below investment grade and debt securities that are in default.
4. COMMENT: The Staff noted that the Registrant states that the Fund may
invest in zero coupon and payment in kind securities, and requested that the
Registrant disclose the risk that shareholders may have to pay taxes on a
distribution that is recognized by the Fund in connection with the Fund's
investments in such securities.
RESPONSE: The Registrant has added disclosure to address the Staff's
request.
5. COMMENT: The Staff requested that, to the extent that investment in
investment grade bonds is a principal investment strategy of the Fund, the
Registrant consider adding risk disclosure with respect to credit ratings and
credit rating agencies.
RESPONSE: The Registrant has added disclosure to address the Staff's
request.
6. COMMENT: The Staff noted that the Registrant states that the Fund may
invest in equity securities, and requested that the Registrant clarify that the
Fund may invest up to 20% of its net assets in equity securities.
RESPONSE: The Registrant notes that the Fund's ability to invest in equity
securities is limited by the Fund's stated policy to invest at least 80% of its
net assets in debt securities, and respectfully submits that it does not believe
that stating an additional percentage limitation would be useful to investors.
7. COMMENT: The Staff noted that the Registrant states that "when indicators
signal severe market distress, the investment adviser may employ derivatives
techniques designed to help limit the effects of that distress. In particular,
the Fund may use equity index futures, credit default swaps and Treasury futures
for these purposes, although other instruments may be used to a significant
extent." The Staff requested that the Registrant identify such other
instruments by category.
RESPONSE: The Registrant has revised the disclosure referenced by the Staff,
including to delete the reference to "other instruments that may be used to a
significant extent."
8. COMMENT: The Staff noted that the Registrant states that "the Fund may
use derivatives for a variety of other purposes." The Staff requested that the
Registrant confirm in its response to the Staff's comments that the disclosure
reflects all of the material purposes for which the Fund may use derivatives.
RESPONSE: The Registrant confirms that the disclosure reflects all of the
material purposes for which the Fund may use derivatives.
9. COMMENT: The Staff noted that the Registrant indicates in the first
paragraph of the "Principal Investment Strategies" section that the Fund uses
derivatives primarily for hedging purposes, however, the final paragraph of the
"Principal Investment Strategies" section indicates that the Fund has the
ability to use derivatives for speculative purposes to a material degree. The
Staff suggested that the Registrant consider indicating in the first paragraph
of the "Principal Investment Strategies" section that the Fund also may use
derivatives for non-hedging purposes, or indicate in the last paragraph any
limitation on the Fund's use of derivatives for speculative purposes, or
indicate in the last paragraph that the Fund may invest without limit in
derivative instruments for non-hedging purposes.
RESPONSE: The Registrant has revised the disclosure to clarify further that
the Fund may use derivatives for both hedging and non-hedging purposes and to
clarify that the Fund may invest without limit in derivative instruments.
IV. COMMENTS APPLICABLE TO THE PROSPECTUS FOR PIONEER MULTI-ASSET FLOATING
RATE FUND
A. PRINCIPAL INVESTMENT STRATEGIES
1. COMMENT: The Staff noted that the Registrant states that the Fund invests
at least 80% of its net assets in floating rate instruments of U.S. and non-U.S.
issuers, including senior secured loans and "second lien or other subordinated
or unsecured loans or debt issued by banks and other issuers." The Staff
requested that that the Registrant identify the principal categories of such
"other issuers."
RESPONSE: The Registrant has revised the disclosure to address the Staff's
request.
2. COMMENT: The Staff noted that the Registrant states that:
The Fund also considers as floating rate instruments, and the Fund may invest
without limit in, adjustable rate securities, fixed rate securities with
durations of less than or equal to one year and fixed rate securities with
respect to which the Fund has entered into derivative instruments to effectively
convert the fixed rate interest payments into floating rate interest payments.
The Fund believes that these investments have economic characteristics similar
to the floating rate securities in which the Fund invests.
The Staff stated that in order for the Fund to treat the instruments noted in
such disclosure as floating rate instruments for purposes of the Fund's 80%
test, the last sentence of such disclosure should be replaced by a statement
that "these investments are the economic equivalent of floating rate
securities."
RESPONSE: The Registrant has revised the disclosure to address the Staff's
request.
3. COMMENT: The Staff noted that the Registrant states that "the Fund does
not currently intend to invest more than 25% of its total assets in any one
non-U.S. country." The Staff requested that the Registrant confirm in its
response that, should the Fund invest 25% or more of its assets in any one
non-U.S. country, the Registrant will supplement the prospectus to identify such
country and related risk factors.
RESPONSE: The Registrant confirms that should the Fund invest 25% or more of
its assets in any one non-U.S. country, it will supplement the prospectus to
identify such country and related risk factors.
4. COMMENT: The Staff noted that the Registrant states that:
In addition to its investments in floating rate instruments, the Fund also may
invest in other securities, including: convertible securities; bonds not paying
current income; bonds that do not make regular interest payments; U.S.
government securities; zero coupon securities; money market instruments; and
other short-term investments, including cash and cash equivalents, certificates
of deposit, repurchase agreements maturing in one week or less and bankers'
acceptances.
The Staff requested that the Registrant revise such disclosure to clarify
that the Fund may invest up to 20% of its net assets in the instruments
referenced therein.
RESPONSE: The Registrant notes that the Fund's ability to invest in the
securities referenced by the Staff is limited by the Fund's stated policy to
invest at least 80% of its net assets in floating rate instruments, and
respectfully submits that it does not believe that stating an additional
percentage limitation would be useful to investors.
5. COMMENT: The Staff noted that the Registrant states that the Fund may
invest in equity securities, and requested that the Registrant clarify that the
Fund may invest up to 20% of its net assets in equity securities.
RESPONSE: The Registrant notes that the Fund's ability to invest in equity
securities is limited by the Fund's stated policy to invest at least 80% of its
net assets in floating rate instruments, and respectfully submits that it does
not believe that stating an additional percentage limitation would be useful to
investors.
6. COMMENT: The Staff noted that the Registrant states that the Fund may
invest in zero coupon securities and payment in kind securities, and requested
that the Registrant disclose the risk that shareholders may have to pay taxes on
a distribution that is recognized by the Fund in connection with the Fund's
investments in such securities.
RESPONSE: The Registrant has added disclosure to address the Staff's
request.
7. COMMENT: The Staff noted that the Registrant states that "the Fund may
use derivatives, such as credit default swaps, for a variety of purposes." The
Staff requested that the Registrant clarify that the Fund may invest without
limit in derivative instruments, or state any limit on the Fund's investment in
derivatives.
RESPONSE: The Registrant has revised the disclosure to clarify that the Fund
may invest without limit in derivative instruments.
V. COMMENTS APPLICABLE TO EACH FUND'S STATEMENT OF ADDITIONAL INFORMATION
1. COMMENT: The Staff requested that the Registrant revise the disclosure
regarding repurchase agreements to note that repurchase agreements are loans for
purposes of the 1940 Act.
RESPONSE: The Registrant has added disclosure to address the Staff's
request.
2. COMMENT: With respect to the disclosure regarding securities lending, the
Staff requested that the Registrant: (i) note that expenses of securities
lending are not reflected in the fee table in the Fund's prospectus; (ii)
clarify that the Fund bears market risk and other risks associated with owning
the securities on loan, as well as the risks associated with the investment of
the cash collateral received in connection with the loan; and (iii) revise the
statement "if the value of the cash collateral declines, the Fund may take a
loss on the loan," to clarify, if correct, that it is the value of the
securities purchased with such cash collateral that may decline.
RESPONSE: The Registrant has revised the disclosure to address the Staff's
request.
3. COMMENT: The Staff noted that in the narrative discussion regarding the
Fund's fundamental investment restriction related to concentration, the
Registrant states that "the SEC Staff has taken the position that investment of
25% or more of a Fund's total assets in one or more issuers conducting their
principal activities in the same industry or group of industries constitutes
concentration." The Staff referred to Instruction 4 to Item 9(b) of Form N-1A,
and stated that the reference to "25% or more of a Fund's total assets" in such
statement should be replaced with a reference to "25% or more of a Fund's net
assets."
RESPONSE: The Registrant notes that the Staff stated in a no-action letter
to The First Australia Fund, Inc. (pub. avail. July 29, 1999), which is
currently posted on the Commission's website, that the Staff has "taken the
position that a fund is concentrated if it invests more than 25% of the value of
its total assets in any one industry." The Registrant notes that, in contrast,
the reference to more than 25% of a fund's net assets in the instruction to Form
N-1A is presented in the Form as an i.e. of "any [fund] policy to concentrate,"
rather than as a statement of the Staff's position regarding when a fund is
concentrated. The Registrant also notes that the instruction referred to by the
Staff was first included in Form N-1A in 1998, and thus antedates the Staff's
position set forth in The First Australia Fund, Inc. no-action letter. The
Registrant respectfully submits that no change to the disclosure is required.
4. COMMENT: The Staff noted the Registrant includes a paragraph in the
"Trustees and Officers" section of the Statement of Additional Information which
states that:
The Trust's Amended and Restated Agreement and Declaration of Trust provides
that the appointment, designation (including in any proxy or registration
statement or other document) of a Trustee as an expert on any topic or in any
area, or as having experience, attributes or skills in any area, or any other
appointment, designation or identification, shall not impose on that person any
standard of care or liability that is greater than that imposed on that person
as a Trustee in the absence of the appointment, designation or identification,
and no Trustee who has special attributes, skills, experience or expertise, or
is appointed, designated, or identified as aforesaid, shall be held to a higher
standard of care by virtue thereof.
The Staff requested that, with respect to the paragraph noted above, the
Registrant (i) expand such disclosure to include statements that
"notwithstanding the foregoing, investors are entitled to rely on the disclosure
regarding trustee qualifications," and "the standard of care owed by any trustee
is ultimately determined by a court of law," or (ii) delete such disclosure.
RESPONSE: The Registrant respectfully submits that the disclosure referenced
by the Staff merely describes a provision of the Trust's Agreement and
Declaration of Trust that is permitted by the provisions of the Delaware
Statutory Trust Act, and that no change to the disclosure is required.
Please call the undersigned at (617) 951-8458 or Toby Serkin at (617)
951-8760 with any questions.
Sincerely,
/s/ Jeremy Kantrowitz
---------------------
Jeremy Kantrowitz
cc: Terrence J. Cullen
Christopher J. Kelley
Roger P. Joseph
Toby R. Serkin