Preliminary Statement of Additional Information
Subject to completion, dated December __, 2003
The information in this statement of additional information is not complete and
may be changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
statement of additional information is not an offer to sell these securities and
is not soliciting an offer to buy these securities in any state where the offer
or sale is not permitted.

PIONEER PAPP STOCK FUND

(Pioneer Series Trust II)
60 State Street
Boston, Massachusetts 02109

STATEMENT OF ADDITIONAL INFORMATION

Class A, Class B, Class C and Class R Shares

December __, 2003

This statement of additional information is not a prospectus. It should be read
in conjunction with the fund's Class A, Class B, Class C and Class R shares
prospectuses, dated December __, 2003, as supplemented or revised from time to
time. A copy of each prospectus can be obtained free of charge by calling
Shareholder Services at 1-800-225-6292 or by written request to the fund at 60
State Street, Boston, Massachusetts 02109. You can also obtain a copy of each
prospectus from our website at: www.pioneerfunds.com.

TABLE OF CONTENTS

Page
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1. Fund History.........................................................2
2. Investment Policies, Risks and Restrictions..........................2
3. Trustees and Officers................................................18
4. Investment Adviser...................................................29
5. Principal Underwriter and Distribution Plans.........................32
6. Shareholder Servicing/Transfer Agent.................................37
7. Custodian............................................................37
8. Independent Auditors.................................................37
9. Portfolio Transactions...............................................37
10. Description of Shares................................................38
11. Sales Charges........................................................40
12. Redeeming Shares.....................................................44
13. Telephone and Online Transactions....................................45
14. Pricing of Shares....................................................46
15. Tax Status...........................................................47
16. Investment Results...................................................53
17. Financial Statements.................................................56
18. Annual Fee, Expense and Other Information............................58
19. Appendix A - Description of Short-Term Debt, Corporate Bond
and Preferred Stock Ratings..........................................61
20. Appendix B - Performance Statistics..................................65
21. Appendix C - Other Pioneer Information...............................70
22. Appendix D - Proxy Voting Policies and Procedures....................71

1. FUND HISTORY

The fund is a diversified series of Pioneer Series Trust II, an open-end
management investment company. The fund originally was established as Papp Stock
Fund, Inc., a Maryland corporation, on September 15, 1989. Prior to April 1999,
Papp Stock Fund, Inc. was named The L. Roy Papp Stock Fund, Inc. Pursuant to an
agreement and plan of reorganization, the fund was reorganized as a series of
Pioneer Series Trust II, a Delaware statutory trust, on ____ __, 2003.

2. INVESTMENT POLICIES, RISKS AND RESTRICTIONS

The prospectus presents the investment objective and the principal investment
strategies and risks of the fund. This section supplements the disclosure in the
fund's prospectuses and provides additional information on the fund's investment
policies or restrictions. Restrictions or policies stated as a maximum
percentage of the fund's assets are only applied immediately after a portfolio
investment to which the policy or restriction is applicable (other than the
limitations on borrowing and illiquid securities). Accordingly, any later
increase or decrease resulting from a change in values, net assets or other
circumstances will not be considered in determining whether the investment
complies with the fund's restrictions and policies.

Principal Investments
Normally, the fund invests at least 80% of its net assets in equity securities.
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. 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.

NON-PRINCIPAL INVESTMENT POLICIES AND RISKS

Illiquid Securities

The fund will not invest more than 15% of its net assets in illiquid and other
securities that are not readily marketable. Repurchase agreements maturing in
more than seven days will be included for purposes of the foregoing limit.
Securities subject to restrictions on resale under the Securities Act of 1933,
as amended (the "1933 Act"), are considered illiquid unless they are eligible
for resale pursuant to Rule 144A or another exemption from the registration
requirements of the 1933 Act and are determined to be liquid by Pioneer
Investment Management, Inc. ("Pioneer"), the fund's investment adviser, or the
subadviser. Pioneer or the subadviser determines the liquidity of Rule 144A and
other restricted securities according to procedures adopted by the Board of
Trustees. Under the direction of the Board of Trustees, Pioneer monitors the
application of these guidelines and procedures. The inability of the fund to
dispose of illiquid investments readily or at reasonable prices could impair the
fund's ability to raise cash for redemptions or other purposes. If the fund sold
restricted securities other than pursuant to an exception from registration
under the 1933 Act such as Rule 144A, it may be deemed to be acting as an
underwriter and subject to liability under the 1933 Act.

Investments in Initial Public Offerings

To the extent consistent with its investment objective, the fund may invest in
initial public offerings of equity securities. The market for such securities
may be more volatile and entail greater risk of loss than investments in more
established companies. Investments in initial public offerings may represent a
significant portion of the fund's investment performance. The fund cannot assure
that investments in initial public offerings will continue to be available to
the fund or, if available, will result in positive investment performance. In
addition, as the fund's portfolio grows in size, the impact of investments in
initial public offerings on the overall performance of the fund is likely to
decrease.

Debt Securities Selection

In selecting fixed income securities for the fund, Pioneer or the subadviser
gives primary consideration to the fund's investment objective, the
attractiveness of the market for debt securities given its outlook for the
equity markets and the fund's liquidity requirements. Once Pioneer or the
subadviser determines to allocate a portion of the fund's assets to debt
securities, it generally focuses on short-term instruments to provide liquidity
and may invest in a range of fixed income securities if the fund is investing in
such instruments for income or capital gains. Pioneer or the subadviser selects
individual securities based on broad economic factors and issuer specific
factors including the terms of the securities (such as yields compared to U.S.
Treasuries or comparable issues), liquidity and rating, sector and issuer
diversification.

Convertible Debt Securities

The fund may invest in convertible debt securities which are debt obligations
convertible at a stated exchange rate or formula into common stock or other
equity securities of or owned by the issuer. Convertible securities rank senior
to common stocks in an issuer's capital structure and consequently may be of
higher quality and entail less risk than the issuer's common stock. As with all
debt securities, the market values of convertible securities tend to increase
when interest rates decline and, conversely, tend to decline when interest rates
increase.

Debt Securities Rating Criteria

Investment grade debt securities are those rated "BBB" or higher by Standard &
Poor's Ratings Group ("Standard & Poor's") or the equivalent rating of other
nationally recognized securities rating organizations. Debt securities rated BBB
are considered medium grade obligations with speculative characteristics, and
adverse economic conditions or changing circumstances may weaken the issuer's
ability to pay interest and repay principal. If the rating of an investment
grade debt security falls below investment grade, Pioneer or the subadviser will
consider if any action is appropriate in light of the fund's investment
objective and policies.

Below investment grade debt securities are those rated "BB" and below by
Standard & Poor's or the equivalent rating of other nationally recognized
securities rating organizations. See Appendix A for a description of rating
categories. The fund may invest in debt securities rated "C" or better.

Below investment grade debt securities or comparable unrated securities are
commonly referred to as "junk bonds" and are considered predominantly
speculative and may be questionable as to principal and interest payments.
Changes in economic conditions are more likely to lead to a weakened capacity to
make principal payments and interest payments. The amount of high yield
securities outstanding has proliferated as an increasing number of issuers have
used high yield securities for corporate financing. An economic downturn could
severely affect the ability of highly leveraged issuers to service their debt
obligations or to repay their obligations upon maturity. Factors having an
adverse impact on the market value of lower quality securities will have an
adverse effect on the fund's net asset value to the extent that it invests in
such securities. In addition, the fund may incur additional expenses to the
extent it is required to seek recovery upon a default in payment of principal or
interest on its portfolio holdings.

The secondary market for high yield securities may not be as liquid as the
secondary market for more highly rated securities, a factor which may have an
adverse effect on the fund's ability to dispose of a particular security when
necessary to meet its liquidity needs. Under adverse market or economic
conditions, the secondary market for high yield securities could contract
further, independent of any specific adverse changes in the condition of a
particular issuer. As a result, the fund could find it more difficult to sell
these securities or may be able to sell the securities only at prices lower than
if such securities were widely traded. Prices realized upon the sale of such
lower rated or unrated securities, under these circumstances, may be less than
the prices used in calculating the fund's net asset value.

Since investors generally perceive that there are greater risks associated with
lower quality debt securities of the type in which the fund may invest a portion
of its assets, the yields and prices of such securities may tend to fluctuate
more than those for higher rated securities. In the lower quality segments of
the debt securities market, changes in perceptions of issuers' creditworthiness
tend to occur more frequently and in a more pronounced manner than do changes in
higher quality segments of the debt securities market, resulting in greater
yield and price volatility.

Lower rated and comparable unrated debt securities tend to offer higher yields
than higher rated securities with the same maturities because the historical
financial condition of the issuers of such securities may not have been as
strong as that of other issuers. However, lower rated securities generally
involve greater risks of loss of income and principal than higher rated
securities. Pioneer or the subadviser will attempt to reduce these risks through
portfolio diversification and by analysis of each issuer and its ability to make
timely payments of income and principal, as well as broad economic trends and
corporate developments.

Short-Term Investments

For temporary defensive or cash management purposes, the fund may invest in all
types of short-term investments including, but not limited to, corporate
commercial paper and other short-term commercial obligations issued by domestic
companies; obligations (including certificates of deposit, time deposits, demand
deposits and bankers' acceptances) of banks located in the U.S.; obligations
issued or guaranteed by the U.S. government or its agencies or
instrumentalities; and repurchase agreements.

Risks of Non-U.S. Investments

Investing in securities of non-U.S. issuers involves considerations and risks
not typically associated with investing in the securities of issuers in the U.S.
These risks are heightened with respect to investments in countries with
emerging markets and economies. The risks of investing in securities of non-U.S.
issuers generally, or in issuers with significant exposure to non-U.S. markets,
may be related, among other things, to (i) differences in size, liquidity and
volatility of, and the degree and manner of regulation of, the securities
markets of certain non-U.S. markets compared to the securities markets in the
U.S.; (ii) economic, political and social factors; and (iii) foreign exchange
matters, such as restrictions on the repatriation of capital, fluctuations in
exchange rates between the U.S. dollar and the currencies in which the fund's
portfolio securities are quoted or denominated, exchange control regulations and
costs associated with currency exchange. The political and economic structures
in certain countries, particularly emerging markets, are expected to undergo
significant evolution and rapid development, and such countries may lack the
social, political and economic stability characteristic of more developed
countries. Unanticipated political or social developments may affect the values
of the fund's investments in such countries. The economies and securities and
currency markets of many emerging markets have experienced significant
disruption and declines. There can be no assurances that these economic and
market disruptions will not occur again or spread to other countries in the
region.

Non-U.S. Securities Markets and Regulations. There may be less publicly
available information about non-U.S. markets and issuers than is available with
respect to U.S. securities and issuers. Non-U.S. companies generally are not
subject to accounting, auditing and financial reporting standards, practices and
requirements comparable to those applicable to U.S. companies. The trading
markets for most non-U.S. securities are generally less liquid and subject to
greater price volatility than the markets for comparable securities in the U.S.
The markets for securities in certain emerging markets are in the earliest
stages of their development. Even the markets for relatively widely traded
securities in certain non-U.S. markets, including emerging market countries, may
not be able to absorb, without price disruptions, a significant increase in
trading volume or trades of a size customarily undertaken by institutional
investors in the U.S. Additionally, market making and arbitrage activities are
generally less extensive in such markets, which may contribute to increased
volatility and reduced liquidity. The less liquid a market, the more difficult
it may be for the fund to price its portfolio securities accurately or to
dispose of such securities at the times determined by Pioneer or the subadviser
to be appropriate. The risks associated with reduced liquidity

may be particularly acute in situations in which the fund's operations require
cash, such as in order to meet redemptions and to pay its expenses.

Economic, Political and Social Factors. Certain countries, including emerging
markets, may be subject to a greater degree of economic, political and social
instability than is the case in the U.S. and Western European countries. Such
instability may result from, among other things: (i) authoritarian governments
or military involvement in political and economic decision making; (ii) popular
unrest associated with demands for improved economic, political and social
conditions; (iii) internal insurgencies; (iv) hostile relations with neighboring
countries; and (v) ethnic, religious and racial disaffection and conflict. Such
economic, political and social instability could significantly disrupt the
financial markets in such countries and the ability of the issuers in such
countries to repay their obligations. Investing in emerging market countries
also involves the risk of expropriation, nationalization, confiscation of assets
and property or the imposition of restrictions on foreign investments and on
repatriation of capital invested. In the event of such expropriation,
nationalization or other confiscation in any emerging country, the fund could
lose its entire investment in that country.

Certain emerging market countries restrict or control foreign investment in
their securities markets to varying degrees. These restrictions may limit the
fund's investment in those markets and may increase the expenses of the fund. In
addition, the repatriation of both investment income and capital from certain
markets in the region is subject to restrictions such as the need for certain
governmental consents. Even where there is no outright restriction on
repatriation of capital, the mechanics of repatriation may affect certain
aspects of the fund's operation.

Economies in individual countries may differ favorably or unfavorably from the
U.S. economy in such respects as growth of gross domestic product, rates of
inflation, currency valuation, capital reinvestment, resource self-sufficiency
and balance of payments positions. Many countries have experienced substantial,
and in some cases extremely high, rates of inflation for many years. Inflation
and rapid fluctuations in inflation rates have had, and may continue to have,
very negative effects on the economies and securities markets of certain
emerging countries.

Unanticipated political or social developments may also affect the values of the
fund's investments and the availability to the fund of additional investments in
such countries. During 1997 and 1998, the political stability, economies and
securities and currency markets of many markets in India and the Asian
subcontinent experienced significant disruption and declines. There can be no
assurances that these might not occur again or spread to other countries in the
region.

Economies in emerging market countries generally are dependent heavily upon
international trade and, accordingly, have been and may continue to be affected
adversely by trade barriers, exchange controls, managed adjustments in relative
currency values and other protectionist measures imposed or negotiated by the
countries with which they trade. These economies also have been, and may
continue to be, affected adversely by economic conditions in the countries with
which they trade.

Currency Risks. The value of the securities quoted or denominated in foreign
currencies may be adversely affected by fluctuations in the relative currency
exchange rates and by exchange control regulations. The fund's investment
performance may be negatively affected by a devaluation of a currency in which
the fund's investments are quoted or denominated. Further, the fund's investment
performance may be significantly affected, either positively or negatively, by
currency exchange rates because the U.S. dollar value of securities quoted or
denominated in another currency will increase or decrease in response to changes
in the value of such currency in relation to the U.S. dollar.

have been unable to keep pace with the volume of securities transactions, making
it difficult to conduct such transactions. The inability of the fund to make
intended securities purchases due to settlement problems could cause the fund to
miss attractive investment opportunities. Inability to dispose of a portfolio
security caused by settlement problems could result either in losses to the fund
due to a subsequent decline in value of the portfolio security or could result
in possible liability to the fund. In addition, security settlement and
clearance procedures in some emerging countries may not fully protect the fund
against loss or theft of its assets.

Withholding and Other Taxes. The fund will be subject to taxes, including
withholding taxes, on income (possibly including, in some cases, capital gains)
that are or may be imposed by certain countries with respect to the fund's
investments in such countries. These taxes will reduce the return achieved by
the fund. Treaties between the U.S. and such countries may not be available to
reduce the otherwise applicable tax rates.

Economic and Monetary Union (EMU). On January 1, 1999, 11 European countries
adopted a single currency - the euro. The conversion to the euro was phased in
over a three-year period. As of January 1, 2003, there were 15 participating
countries, and 12 of these countries share the euro as a single currency and
single official interest rate and are adhering to agreed upon limits on
government borrowing. Budgetary decisions will remain in the hands of each
participating country but will be subject to each country's commitment to avoid
"excessive deficits" and other more specific budgetary criteria. A European
Central Bank is responsible for setting the official interest rate to maintain
price stability within the euro zone.

EMU is driven by the expectation of a number of economic benefits, including
lower transaction costs, reduced exchange risk, greater competition, and a
broadening and deepening of European financial markets. However, there are a
number of significant risks associated with EMU. Monetary and economic union on
this scale has never been attempted before. There is a significant degree of
uncertainty as to whether participating countries will remain committed to EMU
in the face of changing economic conditions. This uncertainty may increase the
volatility of European markets. A participating country's withdrawal from the
EMU could have a negative effect on the fund's non-U.S. investments.

Real Estate Investment Trusts ("REITs") and Associated Risk Factors

REITs are companies which invest primarily in income producing real estate or
real estate related loans or interests. REITs are generally classified as equity
REITs, mortgage REITs or a combination of equity and mortgage REITs. Equity
REITs invest the majority of their assets directly in real property and derive
income primarily from the collection of rents. Equity REITs can also realize
capital gains by selling properties that have appreciated in value. Mortgage
REITs invest the majority of their assets in real estate mortgages and derive
income from the collection of interest payments. REITs are not taxed on income
distributed to shareholders provided they comply with the applicable
requirements of the Internal Revenue Code of 1986, as amended (the "Code"). In
some cases, the fund will indirectly bear its proportionate share of any
management and other expenses paid by REITs in which it invests in addition to
the expenses paid by the fund. Debt securities issued by REITs are, for the most
part, general and unsecured obligations and are subject to risks associated with
REITs.

Investing in REITs involves certain unique risks in addition to those risks
associated with investing in the real estate industry in general. An equity REIT
may be affected by changes in the value of the underlying properties owned by
the REIT. A mortgage REIT may be affected by changes in interest rates and the
ability of the issuers of its portfolio mortgages to repay their obligations.
REITs are dependent upon the skills of their managers and are not diversified.
REITs are generally dependent upon maintaining cash flows to repay borrowings
and to make distributions to shareholders and are subject to the risk of default
by lessees or borrowers. REITs whose underlying assets are concentrated in
properties used by a particular industry, such as health care, are also subject
to risks associated with such industry.

value of a REIT's investment in fixed rate obligations can be expected to
decline. If the REIT invests in adjustable rate mortgage loans the interest
rates on which are reset periodically, yields on a REIT's investments in such
loans will gradually align themselves to reflect changes in market interest
rates. This causes the value of such investments to fluctuate less dramatically
in response to interest rate fluctuations than would investments in fixed rate
obligations.

REITs may have limited financial resources and may trade less frequently and in
a more limited volume than larger company securities.

Investments in Depositary Receipts. The fund may hold securities of non-U.S.
issuers in the form of American Depositary Receipts ("ADRs"), European
Depositary Receipts ("EDRs"), Global Depositary Receipts ("GDRs") and other
similar instruments. Generally, ADRs in registered form are designed for use in
U.S. securities markets, and EDRs and GDRs and other similar global instruments
in bearer form are designed for use in non-U.S. securities markets.

ADRs are denominated in U.S. dollars and represent an interest in the right to
receive securities of non-U.S. issuers deposited in a U.S. bank or correspondent
bank. ADRs do not eliminate all the risk inherent in investing in the securities
of non-U.S. issuers. However, by investing in ADRs rather than directly in
equity securities of non-U.S. issuers, the fund will avoid currency risks during
the settlement period for either purchases or sales. EDRs and GDRs are not
necessarily denominated in the same currency as the underlying securities which
they represent.

For purposes of the fund's investment policies, investments in ADRs, GDRs and
similar instruments will be deemed to be investments in the underlying equity
securities of non-U.S. issuers. The fund may acquire depositary receipts from
banks that do not have a contractual relationship with the issuer of the
security underlying the depositary receipt to issue and secure such depositary
receipt. To the extent the fund invests in such unsponsored depositary receipts
there may be an increased possibility that the fund may not become aware of
events affecting the underlying security and thus the value of the related
depositary receipt. In addition, certain benefits (i.e., rights offerings) which
may be associated with the security underlying the depositary receipt may not
inure to the benefit of the holder of such depositary receipt.

Other Investment Companies

The fund may invest in the securities of other investment companies to the
extent that such investments are consistent with the fund's investment objective
and policies and permissible under the Investment Company Act of 1940, as
amended (the "1940 Act"). Under the 1940 Act, the fund may not acquire the
securities of other domestic or non-U.S. investment companies if, as a result,
(i) more than 10% of the fund's total assets would be invested in securities of
other investment companies, (ii) such purchase would result in more than 3% of
the total outstanding voting securities of any one investment company being held
by the fund, or (iii) more than 5% of the fund's total assets would be invested
in any one investment company. These limitations do not apply to the purchase of
shares of any investment company in connection with a merger, consolidation,
reorganization or acquisition of substantially all the assets of another
investment company. The fund may invest in money market funds managed by Pioneer
in reliance on an exemptive order granted by the Securities and Exchange
Commission (the "SEC").

The fund, as a holder of the securities of other investment companies, will bear
its pro rata portion of the other investment companies' expenses, including
advisory fees. These expenses are in addition to the direct expenses of the
fund's own operations.

Repurchase Agreements

The fund may enter into repurchase agreements with broker-dealers, member banks
of the Federal Reserve System and other financial institutions. Repurchase
agreements are arrangements under which the fund purchases securities and the
seller agrees to repurchase the securities within a specific time and at a
specific price. The repurchase price is generally higher than the fund's
purchase price, with the difference being income to the fund. Under the
direction of the Board of Trustees, Pioneer reviews and monitors the
creditworthiness of any institution which enters into a repurchase agreement
with the fund. The counterparty's obligations under the repurchase agreement are
collateralized with U.S. Treasury and/or agency obligations with a market value
of not less than 100% of the obligations, valued daily. Collateral is held by
the fund's custodian in a segregated, safekeeping account for the benefit of the
fund. Repurchase agreements afford the fund an opportunity to earn income on
temporarily available cash at low risk. In the event of commencement of
bankruptcy or insolvency proceedings with respect to the seller of the security
before repurchase of the security under a repurchase agreement, the fund may
encounter delay and incur costs before being able to sell the security. Such a
delay may involve loss of interest or a decline in price of the security. If the
court characterizes the transaction as a loan and the fund has not perfected a
security interest in the security, the fund may be required to return the
security to the seller's estate and be treated as an unsecured creditor of the
seller. As an unsecured creditor, the fund would be at risk of losing some or
all of the principal and interest involved in the transaction.

Short Sales Against the Box

The fund may sell securities "short against the box." A short sale involves the
fund borrowing securities from a broker and selling the borrowed securities. The
fund has an obligation to return securities identical to the borrowed securities
to the broker. In a short sale against the box, the fund at all times owns an
equal amount of the security sold short or securities convertible into or
exchangeable for, with or without payment of additional consideration, an equal
amount of the security sold short. The fund intends to use short sales against
the box to hedge. For example, when the fund believes that the price of a
current portfolio security may decline, the fund may use a short sale against
the box to lock in a sale price for a security rather than selling the security
immediately. In such a case, any future losses in the fund's long position
should be offset by a gain in the short position and, conversely, any gain in
the long position should be reduced by a loss in the short position.

If the fund effects a short sale against the box at a time when it has an
unrealized gain on the security, it may be required to recognize that gain as if
it had actually sold the security (a "constructive sale") on the date it effects
the short sale. However, such constructive sale treatment may not apply if the
fund closes out the short sale with securities other than the appreciated
securities held at the time of the short sale provided that certain other
conditions are satisfied. Uncertainty regarding certain tax consequences of
effecting short sales may limit the extent to which the fund may make short
sales against the box. The fund may not engage in short sales, except short
sales against the box.

Asset Segregation

The 1940 Act requires that the fund segregate assets in connection with certain
types of transactions that may have the effect of leveraging the fund's
portfolio. If the fund enters into a transaction requiring segregation, such as
a forward commitment, the custodian or Pioneer will segregate liquid assets in
an amount required to comply with the 1940 Act. Such segregated assets will be
valued at market daily. If the aggregate value of such segregated assets
declines below the aggregate value required to satisfy the 1940 Act, additional
liquid assets will be segregated.

When-Issued and Delayed Delivery Securities

settlement period, but no payment or delivery is made by the fund prior to the
actual delivery or payment by the other party to the transaction. The fund will
not earn income on these securities until delivered. The purchase of securities
on a when-issued or delayed delivery basis involves the risk that the value of
the securities purchased will decline prior to the settlement date. The sale of
securities for delayed delivery involves the risk that the prices available in
the market on the delivery date may be greater than those obtained in the sale
transaction. The fund's obligations with respect to when-issued and delayed
delivery transactions will be fully collateralized by segregating liquid assets
with a value equal to the fund's obligations. See "Asset Segregation."

Portfolio Turnover

It is the policy of the fund not to engage in trading for short-term profits
although portfolio turnover rate is not considered a limiting factor in the
execution of investment decisions for the fund. See Annual Fee, Expense and
Other Information for the fund's annual portfolio turnover rate.

Foreign Currency Transactions

The fund may engage in foreign currency transactions. These transactions may be
conducted at the prevailing spot rate for purchasing or selling currency in the
foreign exchange market. The fund also has authority to enter into forward
foreign currency exchange contracts involving currencies of the different
countries in which the fund invests as a hedge against possible variations in
the foreign exchange rates between these currencies and the U.S. dollar. This is
accomplished through contractual agreements to purchase or sell a specified
currency at a specified future date and price set at the time of the contract.

Transaction hedging is the purchase or sale of forward foreign currency
contracts with respect to specific receivables or payables of the fund, accrued
in connection with the purchase and sale of its portfolio securities quoted in
foreign currencies. Portfolio hedging is the use of forward foreign currency
contracts to offset portfolio security positions denominated or quoted in such
foreign currencies. There is no guarantee that the fund will be engaged in
hedging activities when adverse exchange rate movements occur. The fund will not
attempt to hedge all of its foreign portfolio positions and will enter into such
transactions only to the extent, if any, deemed appropriate by Pioneer or the
subadviser.

Hedging against a decline in the value of a currency does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of such securities decline. Such transactions also limit the opportunity
for gain if the value of the hedged currency should rise. Moreover, it may not
be possible for the fund to hedge against a devaluation that is so generally
anticipated that the fund is not able to contract to sell the currency at a
price above the devaluation level it anticipates.

The cost to the fund of engaging in foreign currency transactions varies with
such factors as the currency involved, the size of the contract, the length of
the contract period, differences in interest rates between the two currencies
and the market conditions then prevailing. Since transactions in foreign
currency and forward contracts are usually conducted on a principal basis, no
fees or commissions are involved. The fund may close out a forward position in a
currency by selling the forward contract or by entering into an offsetting
forward contract.

The precise matching of the forward contract amounts and the value of the
securities involved will not generally be possible because the future value of
such securities in foreign currencies will change as a consequence of market
movements in the value of those securities between the date on which the
contract is entered into and the date it matures. Using forward contracts to
protect the value of the fund's portfolio securities against a decline in the
value of a currency does not eliminate fluctuations in the underlying prices of
the securities. It simply establishes a rate of exchange which the fund can
achieve at some future point in time. The precise projection of short-term
currency market movements is not possible, and short-term hedging provides a
means of fixing the U.S. dollar value of only a portion of the fund's foreign
assets.

While the fund will enter into forward contracts to reduce currency exchange
rate risks, transactions in such contracts involve certain other risks. While
the fund may benefit from such transactions, unanticipated changes in currency
prices may result in a poorer overall performance for the fund than if it had
not engaged in any such transactions. Moreover, there may be imperfect
correlation between the fund's portfolio holdings of securities quoted or
denominated in a particular currency and forward contracts entered into by the
fund. Such imperfect correlation may cause the fund to sustain losses which will
prevent the fund from achieving a complete hedge or expose the fund to risk of
foreign exchange loss.

Over-the-counter markets for trading foreign forward currency contracts offer
less protection against defaults than is available when trading in currency
instruments on an exchange. Since a forward foreign currency exchange contract
is not guaranteed by an exchange or clearinghouse, a default on the contract
would deprive the fund of unrealized profits or force the fund to cover its
commitments for purchase or resale, if any, at the current market price.

If the fund enters into a forward contract to purchase foreign currency, the
custodian or Pioneer will segregate liquid assets. See "Asset Segregation."

Options on Foreign Currencies

The fund may purchase and write options on foreign currencies for hedging
purposes in a manner similar to that of transactions in forward contracts. For
example, a decline in the dollar value of a foreign currency in which portfolio
securities are quoted or denominated will reduce the dollar value of such
securities, even if their value in the foreign currency remains constant. In an
attempt to protect against such decreases in the value of portfolio securities,
the fund may purchase put options on the foreign currency. If the value of the
currency declines, the fund will have the right to sell such currency for a
fixed amount of dollars which exceeds the market value of such currency. This
would result in a gain that may offset, in whole or in part, the negative effect
of currency depreciation on the value of the fund's securities quoted or
denominated in that currency.

Conversely, if a rise in the dollar value of a currency is projected for those
securities to be acquired, thereby increasing the cost of such securities, the
fund may purchase call options on such currency. If the value of such currency
increases, the purchase of such call options would enable the fund to purchase
currency for a fixed amount of dollars which is less than the market value of
such currency. Such a purchase would result in a gain that may offset, at least
partially, the effect of any currency related increase in the price of
securities the fund intends to acquire. As in the case of other types of options
transactions, however, the benefit the fund derives from purchasing foreign
currency options will be reduced by the amount of the premium and related
transaction costs. In addition, if currency exchange rates do not move in the
direction or to the extent anticipated, the fund could sustain losses on
transactions in foreign currency options which would deprive it of a portion or
all of the benefits of advantageous changes in such rates.

The fund may also write options on foreign currencies for hedging purposes. For
example, if the fund anticipated a decline in the dollar value of securities
quoted or denominated in a foreign currency because of declining exchange rates,
it could, instead of purchasing a put option, write a covered call option on the
relevant currency. If the expected decline occurs, the option will most likely
not be exercised, and the decrease in value of portfolio securities will be
partially offset by the amount of the premium received by the fund.

Similarly, the fund could write a put option on the relevant currency, instead
of purchasing a call option, to hedge against an anticipated increase in the
dollar cost of securities to be acquired. If exchange rates move in the manner
projected, the put option will expire unexercised and allow the fund to offset
such increased cost up to the amount of the premium. However, as in the case of
other types of options transactions, the writing of a foreign currency option
will constitute only a partial hedge up to the amount of the premium, only if
rates move in the expected direction. If unanticipated exchange rate
fluctuations occur, the option may be exercised and the fund would be required
to purchase or sell the underlying currency at a loss which may not be fully
offset by the amount of the

premium. As a result of writing options on foreign currencies, the fund also may
be required to forgo all or a portion of the benefits which might otherwise have
been obtained from favorable movements in currency exchange rates.

A call option written on foreign currency by the fund is "covered" if the fund
owns the underlying foreign currency subject to the call, or if it has an
absolute and immediate right to acquire that foreign currency without additional
cash consideration. A call option is also covered if the fund holds a call on
the same foreign currency for the same principal amount as the call written
where the exercise price of the call held is (a) equal to or less than the
exercise price of the call written or (b) greater than the exercise price of the
call written if the amount of the difference is maintained by the fund in cash
or liquid securities. See "Asset Segregation."

The fund may close out its position in a currency option by either selling the
option it has purchased or entering into an offsetting option. An
exchange-traded options position may be closed out only on an options exchange
which provides a secondary market for an option of the same series. Although the
fund will generally purchase or write only those options for which there appears
to be an active secondary market, there is no assurance that a liquid secondary
market on an exchange will exist for any particular option, or at any particular
time. For some options no secondary market on an exchange may exist. In such
event, it might not be possible to effect closing transactions in particular
options, with the result that the fund would have to exercise its options in
order to realize any profit and would incur transaction costs upon the sale of
underlying currencies pursuant to the exercise of put options. If the fund as a
covered call option writer is unable to effect a closing purchase transaction in
a secondary market, it will not be able to sell the underlying currency (or
security quoted or denominated in that currency) until the option expires or it
delivers the underlying currency upon exercise.

The fund may purchase and write over-the-counter options to the extent
consistent with its limitation on investments in illiquid securities. Trading in
over-the-counter options is subject to the risk that the other party will be
unable or unwilling to close out options purchased or written by the fund.

Options on Securities and Securities Indices

To hedge against changes in securities prices or currency exchange rates or to
seek to increase total return, the fund may purchase put and call options on any
security in which it may invest or options on any securities index based on
securities in which it may invest. The fund would also be able to enter into
closing sale transactions in order to realize gains or minimize losses on
options it has purchased. The fund does not anticipate that it will generate a
significant amount of income from its use of options on securities and
securities indices.

Writing Call and Put Options on Securities. A call option written by the fund
obligates the fund to sell specified securities to the holder of the option at a
specified price if the option is exercised at any time before the expiration
date. All call options written by the fund are covered, which means that the
fund will own the securities subject to the options as long as the options are
outstanding, or the fund will use the other methods described below. The fund's
purpose in writing covered call options is to realize greater income than would
be realized on portfolio securities transactions alone. However, the fund may
forgo the opportunity to profit from an increase in the market price of the
underlying security.

A put option written by the fund would obligate the fund to purchase specified
securities from the option holder at a specified price if the option is
exercised at any time before the expiration date. All put options written by the
fund would be covered, which means that the fund would have segregated assets
with a value at least equal to the exercise price of the put option. The purpose
of writing such options is to generate additional income for the fund. However,
in return for the option premium, the fund accepts the risk that it may be
required to purchase the underlying security at a price in excess of its market
value at the time of purchase.

the fund. In addition, a written call option or put may be covered by entering
into an offsetting forward contract and/or by purchasing an offsetting option or
any other option which, by virtue of its exercise price or otherwise, reduces
the fund's net exposure on its written option position.

Writing Call and Put Options on Securities Indices. The fund may also write
(sell) covered call and put options on any securities index composed of
securities in which it may invest. Options on securities indices are similar to
options on securities, except that the exercise of securities index options
requires cash payments and does not involve the actual purchase or sale of
securities. In addition, securities index options are designed to reflect price
fluctuations in a group of securities or segments of the securities market
rather than price fluctuations in a single security.

The fund may cover call options on a securities index by owning securities whose
price changes are expected to be similar to those of the underlying index, or by
having an absolute and immediate right to acquire such securities without
additional cash consideration (or for additional consideration if cash in such
amount is segregated) upon conversion or exchange of other securities in its
portfolio. The fund may cover call and put options on a securities index by
segregating assets with a value equal to the exercise price.

Purchasing Call and Put Options. The fund would normally purchase call options
in anticipation of an increase in the market value of securities of the type in
which it may invest. The purchase of a call option would entitle the fund, in
return for the premium paid, to purchase specified securities at a specified
price during the option period. The fund would ordinarily realize a gain if,
during the option period, the value of such securities exceeded the sum of the
exercise price, the premium paid and transaction costs; otherwise the fund would
realize either no gain or a loss on the purchase of the call option.

The fund would normally purchase put options in anticipation of a decline in the
market value of securities in its portfolio ("protective puts") or in securities
in which it may invest. The purchase of a put option would entitle the fund, in
exchange for the premium paid, to sell specified securities at a specified price
during the option period. The purchase of protective puts is designed to offset
or hedge against a decline in the market value of the fund's securities. Put
options may also be purchased by the fund for the purpose of affirmatively
benefiting from a decline in the price of securities which it does not own. The
fund would ordinarily realize a gain if, during the option period, the value of
the underlying securities decreased below the exercise price sufficiently to
more than cover the premium and transaction costs; otherwise the fund would
realize either no gain or a loss on the purchase of the put option. Gains and
losses on the purchase of protective put options would tend to be offset by
countervailing changes in the value of the underlying portfolio securities.

The fund may terminate its obligations under an exchange-traded call or put
option by purchasing an option identical to the one it has written. Obligations
under over-the-counter options may be terminated only by entering into an
offsetting transaction with the counterparty to such option. Such purchases are
referred to as "closing purchase transactions."

Risks of Trading Options. There is no assurance that a liquid secondary market
on an options exchange will exist for any particular exchange-traded option, or
at any particular time. If the fund is unable to effect a closing purchase
transaction with respect to covered options it has written, the fund will not be
able to sell the underlying securities or dispose of its segregated assets until
the options expire or are exercised. Similarly, if the fund is unable to effect
a closing sale transaction with respect to options it has purchased, it will
have to exercise the options in order to realize any profit and will incur
transaction costs upon the purchase or sale of underlying securities.

on an exchange; (v) the facilities of an exchange or the Options Clearing
Corporation (the "OCC") may not at all times be adequate to handle current
trading volume; or (vi) one or more exchanges could, for economic or other
reasons, decide or be compelled at some future date to discontinue the trading
of options (or a particular class or series of options), in which event the
secondary market on that exchange (or in that class or series of options) would
cease to exist, although outstanding options on that exchange, if any, that had
been issued by the OCC as a result of trades on that exchange would continue to
be exercisable in accordance with their terms.

The fund may purchase and sell both options that are traded on U.S. and non-U.S.
exchanges and options traded over the counter with broker-dealers who make
markets in these options. The ability to terminate over-the-counter options is
more limited than with exchange-traded options and may involve the risk that
broker-dealers participating in such transactions will not fulfill their
obligations. Until such time as the staff of the SEC changes its position, the
fund will treat purchased over-the-counter options and all assets used to cover
written over-the-counter options as illiquid securities, except that with
respect to options written with primary dealers in U.S. government securities
pursuant to an agreement requiring a closing purchase transaction at a formula
price, the amount of illiquid securities may be calculated with reference to the
formula.

Transactions by the fund in options on securities and indices will be subject to
limitations established by each of the exchanges, boards of trade or other
trading facilities governing the maximum number of options in each class which
may be written or purchased by a single investor or group of investors acting in
concert. Thus, the number of options which the fund may write or purchase may be
affected by options written or purchased by other investment advisory clients of
Pioneer or the subadviser. An exchange, board of trade or other trading facility
may order the liquidations of positions found to be in excess of these limits,
and it may impose certain other sanctions.

The writing and purchase of options is a highly specialized activity which
involves investment techniques and risks different from those associated with
ordinary portfolio securities transactions. The successful use of protective
puts for hedging purposes depends in part on Pioneer's or the subadviser's
ability to predict future price fluctuations and the degree of correlation
between the options and securities markets.

The hours of trading for options may not conform to the hours during which the
underlying securities are traded. To the extent that the options markets close
before the markets for the underlying securities, significant price movements
can take place in the underlying markets that cannot be reflected in the options
markets.

In addition to the risks of imperfect correlation between the fund's portfolio
and the index underlying the option, the purchase of securities index options
involves the risk that the premium and transaction costs paid by the fund in
purchasing an option will be lost. This could occur as a result of unanticipated
movements in the price of the securities comprising the securities index on
which the option is based.

Futures Contracts and Options on Futures Contracts

To hedge against changes in securities prices or currency exchange rates or to
seek to increase total return, the fund may purchase and sell various kinds of
futures contracts, and purchase and write (sell) call and put options on any of
such futures contracts. The fund may also enter into closing purchase and sale
transactions with respect to any of such contracts and options. The futures
contracts may be based on various securities (such as U.S. government
securities), securities indices, foreign currencies and other financial
instruments and indices. The fund will engage in futures and related options
transactions for bona fide hedging and non-hedging purposes as described below.
All futures contracts entered into by the fund are traded on U.S. exchanges or
boards of trade that are licensed and regulated by the Commodity Futures Trading
Commission (the "CFTC") or on non-U.S. exchanges. The fund does not anticipate
that it will generate a significant amount of income from its use of futures
contracts or options on futures contracts.

settlement price, in the case of a contract relating to an index or otherwise
not calling for physical delivery at the end of trading in the contract).

When interest rates are rising or securities prices are falling, the fund can
seek to offset a decline in the value of its current portfolio securities
through the sale of futures contracts. When interest rates are falling or
securities prices are rising, the fund, through the purchase of futures
contracts, can attempt to secure better rates or prices than might later be
available in the market when it effects anticipated purchases. Similarly, the
fund can sell futures contracts on a specified currency to protect against a
decline in the value of such currency and a decline in the value of its
portfolio securities which are denominated in such currency. The fund can
purchase futures contracts on a foreign currency to establish the price in U.S.
dollars of a security denominated in such currency that the fund has acquired or
expects to acquire.

Positions taken in the futures markets are not normally held to maturity but are
instead liquidated through offsetting transactions which may result in a profit
or a loss. While futures contracts on securities or currency will usually be
liquidated in this manner, the fund may instead make, or take, delivery of the
underlying securities or currency whenever it appears economically advantageous
to do so. A clearing corporation associated with the exchange on which futures
on securities or currency are traded guarantees that, if still open, the sale or
purchase will be performed on the settlement date.

Hedging Strategies. Hedging, by use of futures contracts, seeks to establish
with more certainty the effective price, rate of return and currency exchange
rate on portfolio securities and securities that the fund owns or proposes to
acquire. The fund may, for example, take a "short" position in the futures
market by selling futures contracts in order to hedge against an anticipated
rise in interest rates or a decline in market prices or foreign currency rates
that would adversely affect the value of the fund's portfolio securities. Such
futures contracts may include contracts for the future delivery of securities
held by the fund or securities with characteristics similar to those of the
fund's portfolio securities. Similarly, the fund may sell futures contracts in a
foreign currency in which its portfolio securities are denominated or in one
currency to hedge against fluctuations in the value of securities denominated in
a different currency if there is an established historical pattern of
correlation between the two currencies. If, in the opinion of Pioneer or the
subadviser, there is a sufficient degree of correlation between price trends for
the fund's portfolio securities and futures contracts based on other financial
instruments, securities indices or other indices, the fund may also enter into
such futures contracts as part of its hedging strategies. Although under some
circumstances prices of securities in the fund's portfolio may be more or less
volatile than prices of such futures contracts, Pioneer or the subadviser will
attempt to estimate the extent of this volatility difference based on historical
patterns and compensate for any such differential by having the fund enter into
a greater or lesser number of futures contracts or by attempting to achieve only
a partial hedge against price changes affecting the fund's portfolio securities.
When hedging of this character is successful, any depreciation in the value of
portfolio securities will be substantially offset by appreciation in the value
of the futures position. On the other hand, any unanticipated appreciation in
the value of the fund's portfolio securities would be substantially offset by a
decline in the value of the futures position.

On other occasions, the fund may take a "long" position by purchasing futures
contracts. This may be done, for example, when the fund anticipates the
subsequent purchase of particular securities when it has the necessary cash, but
expects the prices or currency exchange rates then available in the applicable
market to be less favorable than prices or rates that are currently available.

Options on Futures Contracts. The acquisition of put and call options on futures
contracts will give the fund the right (but not the obligation) for a specified
price to sell or to purchase, respectively, the underlying futures contract at
any time during the option period. As the purchaser of an option on a futures
contract, the fund obtains the benefit of the futures position if prices move in
a favorable direction but limits its risk of loss in the event of an unfavorable
price movement to the loss of the premium and transaction costs.

The writing of a call option on a futures contract generates a premium which may
partially offset a decline in the value of the fund's assets. By writing a call
option, the fund becomes obligated, in exchange for the premium, to sell a
futures contract (if the option is exercised), which may have a value higher
than the exercise price. Conversely, the writing of a put option on a futures
contract generates a premium which may partially offset an increase in the price
of securities that the fund intends to purchase. However, the fund becomes
obligated to purchase a futures contract (if the option is exercised) which may
have a value lower than the exercise price. Thus, the loss incurred by the fund
in writing options on futures is potentially unlimited and may exceed the amount
of the premium received. The fund will incur transaction costs in connection
with the writing of options on futures.

The holder or writer of an option on a futures contract may terminate its
position by selling or purchasing an offsetting option on the same series. There
is no guarantee that such closing transactions can be effected. The fund's
ability to establish and close out positions on such options will be subject to
the development and maintenance of a liquid market.

Other Considerations. The fund will engage in futures and related options
transactions only for bona fide hedging or non-hedging speculative purposes in
accordance with CFTC regulations which permit principals of an investment
company registered under the 1940 Act to engage in such transactions without
registering as commodity pool operators. The fund will determine that the price
fluctuations in the futures contracts and options on futures used for hedging
purposes are substantially related to price fluctuations in securities held by
the fund or which the fund expects to purchase. Except as stated below, the
fund's futures transactions will be entered into for traditional hedging
purposes--i.e., futures contracts will be sold to protect against a decline in
the price of securities (or the currency in which they are denominated) that the
fund owns, or futures contracts will be purchased to protect the fund against an
increase in the price of securities (or the currency in which they are
denominated) it intends to purchase. As evidence of this hedging intent, the
fund expects that on 75% or more of the occasions on which it takes a long
futures or option position (involving the purchase of futures contracts), the
fund will have purchased, or will be in the process of purchasing, equivalent
amounts of related securities or assets denominated in the related currency in
the cash market at the time when the futures or option position is closed out.
However, in particular cases, when it is economically advantageous for the fund
to do so, a long futures position may be terminated or an option may expire
without the corresponding purchase of securities or other assets.

As an alternative to literal compliance with the bona fide hedging definition, a
CFTC regulation permits the fund to elect to comply with a different test, under
which the sum of the amounts of initial margin deposits on the fund's existing
non-hedging futures contracts and premiums paid for options on futures entered
into for non-hedging purposes (net of the amount the positions are "in the
money") would not exceed 5% of the market value of the fund's total assets. The
fund will engage in transactions in futures contracts and related options only
to the extent such transactions are consistent with the requirements of the Code
for maintaining its qualification as a regulated investment company for U.S.
federal income tax purposes.

Futures contracts and related options involve brokerage costs, require margin
deposits and, in the case of contracts and options obligating the fund to
purchase securities or currencies, require the fund to segregate assets to cover
such contracts and options.

While transactions in futures contracts and options on futures may reduce
certain risks, such transactions themselves entail certain other risks. Thus,
while the fund may benefit from the use of futures and options on futures,
unanticipated changes in interest rates, securities prices or currency exchange
rates may result in a poorer overall performance for the fund than if it had not
entered into any futures contracts or options transactions. In the event of an
imperfect correlation between a futures position and a portfolio position which
is intended to be protected, the desired protection may not be obtained and the
fund may be exposed to risk of loss. It is not possible to hedge fully or
perfectly against the effect of currency fluctuations on the value of non-U.S.
securities because currency movements impact the value of different securities
in differing degrees.

Equity Swaps, Caps, Floors and Collars. The fund may enter into equity swaps,
caps, floors and collars to hedge assets or liabilities or to seek to increase
total return. Equity swaps involve the exchange by a fund with another party of
their respective commitments to make or receive payments based on notional
equity securities. The purchase of an equity cap entitles the purchaser, to the
extent that the market value of a specified equity security or benchmark exceeds
a predetermined level, to receive payments of a contractually-based amount from
the party selling the cap. The purchase of an equity floor entitles the
purchaser, to the extent that the market value of a specified equity security or
benchmark falls below a predetermined level, to receive payments of a
contractually-based amount from the party selling the floor. A collar is a
combination of a cap and a floor that preserves a certain return within a
predetermined range of values. Investments in swaps, caps, floors and collars
are highly specialized activities which involve investment techniques and risks
different from those associated with ordinary portfolio transactions. If Pioneer
or the subadviser is incorrect in its forecast of market values, these
investments could negatively impact the fund's performance. These investments
also are subject to default risk of the counterparty and may be less liquid than
other portfolio securities. Moreover, investments in swaps, caps, floors and
collars may involve greater transaction costs than investments in other equity
securities.

Warrants and Stock Purchase Rights

The fund may invest in warrants, which are securities permitting, but not
obligating, their holder to subscribe for other securities. Warrants do not
carry with them the right to dividends or voting rights with respect to the
securities that they entitle their holders to purchase, and they do not
represent any rights in the assets of the issuer.

The fund may also invest in stock purchase rights. Stock purchase rights are
instruments, frequently distributed to an issuer's shareholders as a dividend,
that entitle the holder to purchase a specific number of shares of common stock
on a specific date or during a specific period of time. The exercise price on
the rights is normally at a discount from market value of the common stock at
the time of distribution. The rights do not carry with them the right to
dividends or to vote and may or may not be transferable. Stock purchase rights
are frequently used outside of the United States as a means of raising
additional capital from an issuer's current shareholders.

As a result, an investment in warrants or stock purchase rights may be
considered more speculative than certain other types of investments. In
addition, the value of a warrant or a stock purchase right does not necessarily
change with the value of the underlying securities, and warrants and stock
purchase rights expire worthless if they are not exercised on or prior to their
expiration date.

Preferred Shares

The fund may invest in preferred shares of beneficial interest of trust
instruments. Preferred shares are equity securities, but they have many
characteristics of fixed income securities, such as a fixed dividend payment
rate and/or a liquidity preference over the issuer's common shares. However,
because preferred shares are equity securities, they may be more susceptible to
risks traditionally associated with equity investments than the fund's fixed
income securities.

Lending of Portfolio Securities

The fund may lend portfolio securities to registered broker-dealers or other
institutional investors deemed by Pioneer to be of good standing under
agreements which require that the loans be secured continuously by collateral in
cash, cash equivalents or U.S. Treasury bills maintained on a current basis at
an amount at least equal to the market value of the securities loaned. The fund
continues to receive the equivalent of the interest or dividends paid by the
issuer on the securities loaned as well as the benefit of an increase and the
detriment of any decrease in the market value of the securities loaned and would
also receive compensation based on investment of the collateral. The fund would
not, however, have the right to vote any securities having voting rights during
the

existence of the loan, but would call the loan in anticipation of an important
vote to be taken among holders of the securities or of the giving or withholding
of consent on a material matter affecting the investment.

As with other extensions of credit, there are risks of delay in recovery or even
loss of rights in the collateral should the borrower of the securities fail
financially. The fund will lend portfolio securities only to firms that have
been approved in advance by the Board of Trustees, which will monitor the
creditworthiness of any such firms. At no time would the value of the securities
loaned exceed 33-1/3% of the value of the fund's total assets.

Investment Restrictions

In compliance with an informal position taken by the staff of the SEC regarding
leverage, the fund will not purchase securities during the current fiscal year
at any time that outstanding borrowings exceed 5% of the fund's total assets.

Fundamental Investment Restrictions. The fund has adopted certain fundamental
investment restrictions which, along with the fund's investment objective, may
not be changed without the affirmative vote of the holders of a "majority of the
outstanding voting securities" (as defined in the 1940 Act) of the fund.
Statements in italics are not part of the restriction. For this purpose, a
majority of the outstanding shares of the fund means the vote of the lesser of:

1. 67% or more of the shares represented at a meeting, if the holders of more
than 50% of the outstanding shares are present in person or by proxy, or

2. more than 50% of the outstanding shares of the fund.

The fund may not:

(1) Issue senior securities, except to the extent permitted by applicable law,
as amended and interpreted or modified from time to time by any regulatory
authority having jurisdiction. Senior securities that the fund may issue in
accordance with the 1940 Act include borrowing, futures, when-issued and delayed
delivery securities and forward foreign currency exchange transactions.

(2) Borrow money, except on a temporary basis and to the extent permitted by
applicable law, as amended and interpreted or modified from time to time by any
regulatory authority having jurisdiction. Under current regulatory requirements,
the fund may: (a) borrow from banks or through reverse repurchase agreements or
mortgage dollar rolls that are accounted for as financings in an amount up to
33-1/3% of the fund's total assets (including the amount borrowed); (b) borrow
up to an additional 5% of the fund's assets for temporary purposes; (c) obtain
such short-term credits as are necessary for the clearance of portfolio
transactions; and (d) purchase securities on margin to the extent permitted by
applicable laws.

(3) Invest in real estate, except (a) that the fund may invest in securities of
issuers that invest in real estate or interests therein, securities that are
secured by real estate or interests therein, securities of real estate
investment trusts, mortgage-backed securities and other securities that
represent a similar indirect interest in real estate; and (b) the fund may
acquire real estate or interests therein through exercising rights or remedies
with regard to an instrument or security.

(4) Make loans, except that the fund may (i) lend portfolio securities in
accordance with the fund's investment policies, (ii) enter into repurchase
agreements, (iii) purchase all or a portion of an issue of publicly distributed
debt securities, bank loan participation interests, bank certificates of
deposit, bankers' acceptances, debentures or other securities, whether or not
the purchase is made upon the original issuance of the securities, (iv)
participate in a credit facility whereby the fund may directly lend to and
borrow money from other affiliated funds to the extent permitted under the 1940
Act or an exemption therefrom, and (v) make loans in any other manner consistent
with

applicable law, as amended and interpreted or modified from time to time by any
regulatory authority having jurisdiction.

(5) Invest in commodities or commodity contracts, except that the fund may
invest in currency instruments and currency contracts and financial instruments
and financial contracts that might be deemed to be commodities and commodity
contracts in accordance with applicable law. A futures contract, for example,
may be deemed to be a commodity contract.

(6) Make any investment inconsistent with its classification as a diversified
open-end investment company (or series thereof) under the 1940 Act. Currently,
diversification means that, with respect to 75% of its total assets, the fund
may not purchase securities of an issuer (other than the U.S. government, its
agencies or instrumentalities), if

(a) such purchase would cause more than 5% of the fund's total assets,
taken at market value, to be invested in the securities of such issuer, or

(b) such purchase would at the time result in more than 10% of the
outstanding voting securities of such issuer being held by the fund.

(7) Act as an underwriter, except insofar as the fund technically may be deemed
to be an underwriter in connection with the purchase or sale of its portfolio
securities.

It is the fundamental policy of the fund not to concentrate its investments in
securities of companies in any particular industry. In the opinion of the SEC,
investments are concentrated in a particular industry if such investments
aggregate 25% or more of the fund's total assets. The fund's policy does not
apply to investments in U.S. government securities.

For purposes of investment restriction (2) above, mortgage dollar rolls
accounted for as financings involve the sale by the fund of a mortgage-backed
securitiy to a financial institution and an agreement by the fund to repurchase
the security at a later date at a price agreed upon at the time of the sale to
provide cash for short-term purposes such as to satisfy redemption requests and
avoid liquidating securities during unfavorable market conditions.

Non-Fundamental Investment Restrictions

The following restriction has been designated as non-fundamental and may be
changed by a vote of the trust's Board of Trustees without approval of
shareholders:

[the fund may not engage in short sales, except short sales against the box].

3. TRUSTEES AND OFFICERS

The trust's Board of Trustees provides broad supervision over the fund's
affairs. The officers of the trust are responsible for the fund's operations.
The trust's Trustees and officers are listed below, together with their
principal occupations during the past five years. Trustees who are interested
persons of the fund within the meaning of the 1940 Act are referred to as
Interested Trustees. Trustees who are not interested persons of the fund are
referred to as Independent Trustees. Each of the Trustees serves as a trustee of
each of the 51 U.S. registered investment portfolios for which Pioneer serves as
investment adviser (the "Pioneer Funds"). The address for all Interested
Trustees and all officers of the fund is 60 State Street, Boston, Massachusetts
02109. The appointment of each Trustee other than Mr. Hood is effective
September 8, 2003.

- --------------------------------------------------------------------------------------------------------------------------
Term of Office
Name, Age and Position Held and Length of Principal Occupation During Past Other Directorships Held by
Address With the Fund Service Five Years this Trustee
- --------------------------------------------------------------------------------------------------------------------------
Interested Trustees:
- --------------------------------------------------------------------------------------------------------------------------

John F. Cogan, Chairman of the Trustee since Deputy Chairman and a Director Director of Harbor Global
Jr. (76)* Board, Trustee 2003. Serves of Pioneer Global Asset Company, Ltd.
and President until retirement Management S.p.A. ("PGAM");
or removal. Non-Executive Chairman and a
Director of Pioneer
Investment Management
USA Inc. ("PIM-USA");
Chairman and a
Director of Pioneer;
Director of Pioneer
Alternative Investment
Management Limited
(Dublin); President
and a Director of
Pioneer Alternative
Investment Management
(Bermuda) Limited and
affiliated
funds;President and
Director of Pioneer
Funds Distributor,
Inc. ("PFD");
President of all of
the Pioneer Funds; and
Of Counsel (since
2000, partner prior to
2000), Hale and Dorr
LLP (counsel to
PIM-USA and the
Pioneer Funds)
- --------------------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------------

Osbert M. Hood Trustee and Trustee since President and Chief Executive None
(50)** Executive Vice 2003. Serves Officer, PIM-USA since May, 2003
President until retirement (Director since January, 2001);
or removal. President and Director of
Pioneer since May,
2003; Chairman and
Director of Pioneer
Investment Management
Shareholder Services,
Inc. ("PIMSS") since
May, 2003; Executive
Vice President of all
of the Pioneer Funds
since June 3, 2003;
Executive Vice
President and Chief
Operating Officer of
PIM-USA, November
2000-May 2003;
Executive Vice
President, Chief
Financial Officer and
Treasurer, John
Hancock Advisers, LLC,
Boston, MA, November
1999-November 2000;
Senior Vice President
and Chief Financial
Officer, John Hancock
Advisers, LLC, April
1997-November 1999
- --------------------------------------------------------------------------------------------------------------------------
Independent Trustees:
- --------------------------------------------------------------------------------------------------------------------------
Mary K. Bush (54) Trustee Trustee since President, Bush International Director of Brady
3509 Woodbine Street, 2003. Serves (international financial Corporation (industrial
Chevy Chase, MD 20815 until retirement advisory firm) identification and
or removal. specialty coated material
products manufacturer),
Millenium Chemicals, Inc.
(commodity chemicals),
Mortgage Guaranty Insurance
Corporation, and R.J.
Reynolds Tobacco Holdings,
Inc. (tobacco)
- --------------------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------------

Richard H. Egdahl, Trustee Trustee since Alexander Graham Bell Professor None
M.D. (76) 2003. Serves of Health Care Entrepreneurship,
Boston University until retirement Boston University; Professor of
Healthcare or removal. Management, Boston University
Entrepreneurship School of Management; Professor
Program, 53 Bay State of Public Health, Boston
Road, Boston, MA 02215 University School of Public
Health; Professor of Surgery,
Boston University School of
Medicine; and University
Professor, Boston University
- --------------------------------------------------------------------------------------------------------------------------
Margaret B.W. Graham Trustee Trustee since Founding Director, The Winthrop None
(55) 2003. Serves Group, Inc. (consulting firm);
1001 Sherbrooke Street until Professor of Management, Faculty
West, Montreal, retirement or of Management, McGill University
Quebec, Canada removal.
- --------------------------------------------------------------------------------------------------------------------------
Marguerite A. Piret Trustee Trustee since President and Chief Executive None
(54) 2003. Serves Officer, Newbury, Piret &
One Boston Place, 28th until retirement Company, Inc. (investment
Floor, Boston, MA 02108 or removal. banking firm)
- --------------------------------------------------------------------------------------------------------------------------
Stephen K. West (74) Trustee Trustee since Senior Counsel, Sullivan & Director, The Swiss
125 Broad Street, New 2003. Serves Cromwell (law firm) Helvetia Fund, Inc.
York, NY 10004 until retirement (closed-end investment
or removal. company) and AMVESCAP PLC
(investment managers)
- --------------------------------------------------------------------------------------------------------------------------
John Winthrop (66) Trustee Trustee since President, John Winthrop & Co., None
One North Adgers 2003. Serves Inc. (private investment firm)
Wharf, Charleston, SC until retirement
29401 or removal.
- --------------------------------------------------------------------------------------------------------------------------

Fund Officers:
- --------------------------------------------------------------------------------------------------------------------------

Dorothy E. Secretary Serves at the Secretary of PIM-USA; Senior None
Bourassa (55) discretion of Vice President- Legal of
Board Pioneer; and Secretary/Clerk of
most of PIM-USA's subsidiaries
since October 2000; Secretary of
all of the Pioneer Funds since
September 2003 (Assistant
Secretary from november 2000 to
September 2003); and Senior
Counsel, Assistant Vice
President and Director of
Compliance of PIM-USA from April
1998 through October 2000
- --------------------------------------------------------------------------------------------------------------------------
Christopher J. Assistant Serves at the Assistant Vice President and None
Kelley (38) Secretary discretion of Senior Counsel of Pioneer since
Board July 2002; Vice President and
Senior Counsel of BISYS Fund
Services, Inc. (April 2001 to
June 2002); Senior Vice
President and Deputy General
Counsel of Funds Distributor,
Inc. (July 2000 to April 2001;
Vice President and Associate
General Counsel from July 1996
to July 2000); Assistant
Secretary of all Pioneer Funds
since September 2003
- --------------------------------------------------------------------------------------------------------------------------
David C. Phelan Assistant Serves at the Partner, Hale and Dorr LLP; None
(46) Secretary discretion of Assistant Secretary of all
the Board Pioneer Funds since September
2003
- --------------------------------------------------------------------------------------------------------------------------
Vincent Nave (57) Treasurer Serves at the Vice President-Fund Accounting, None
discretion of Administration and Custody
Board Services of Pioneer (Manager
from September 1996 to
February 1999); and
Treasurer of all of
the Pioneer Funds
(Assistant Treasurer
from June 1999 to
November 2000)
- --------------------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------------

Luis I. Presutti Assistant Serves at the Assistant Vice President-Fund None
(37) Treasurer discretion of Accounting, Administration and
Board Custody Services of
Pioneer (Fund
Accounting Manager
from 1994 to 1999);
and Assistant
Treasurer of all of
the Pioneer Funds
since November 2000
- --------------------------------------------------------------------------------------------------------------------------
Gary Sullivan (44) Assistant Serves at the Fund Accounting Manager - Fund None
Treasurer discretion of Accounting, Administration and
Board Custody Services of Pioneer; and
Assistant Treasurer of all of
the Pioneer Funds since May 2002
- --------------------------------------------------------------------------------------------------------------------------
Katharine Kim Assistant Serves at the Fund Administration Manager - None
Sullivan (29) Treasurer discretion of Fund Accounting, Administration
Board and Custody Services since June
2003; Assistant Vice President -
Mutual Fund Operations of State
Street Corporation from June
2002 to June 2003 (formerly
Deutsche Bank Asset Management);
Pioneer Fund Accounting,
Administration and Custody
Services (Fund Accounting
Manager from August 199 to May
2002, Fund Accounting Services
Supervisor from 1997 to July
1999); Assistant Treasurer of
all Pioneer Funds since
September 2003
- --------------------------------------------------------------------------------------------------------------------------

*Mr. Cogan and Mr. Hood are interested trustees because each is an officer or
director of the fund's investment adviser and certain of its affiliates.

The outstanding capital stock of PFD, Pioneer and PIMSS is indirectly wholly
owned by UniCredito Italiano S.p.A. ("UniCredito Italiano"), one of the largest
banking groups in Italy. Pioneer, the fund's investment adviser, provides
investment management and financial services to mutual funds, institutional and
other clients.

The table below lists all of the U.S.-registered Pioneer mutual funds currently
offered to the public and the investment adviser and principal underwriter for
each fund.

- --------------------------------------------------------------------------------------------------
Investment Principal
Fund Name Adviser Underwriter
- --------------------------------------------------------------------------------------------------

Pioneer America Income Trust Pioneer PFD
Pioneer Balanced Fund Pioneer PFD
Pioneer Bond Fund Pioneer PFD
Pioneer Cash Reserves Fund Pioneer PFD
Pioneer Core Equity Fund Pioneer PFD
Pioneer Emerging Growth Fund Pioneer PFD

Pioneer Emerging Markets Fund Pioneer PFD
Pioneer Equity Income Fund Pioneer PFD
Pioneer Europe Fund Pioneer PFD
Pioneer Europe Select Fund Pioneer PFD
Pioneer Fund Pioneer PFD
Pioneer Global High Yield Fund Pioneer PFD
Pioneer Growth Shares Pioneer PFD
Pioneer High Income Trust Pioneer Note 2
Pioneer High Income Municipal Advantage Trust Pioneer Note 2
Pioneer High Yield Fund Pioneer PFD
Pioneer Independence Fund Pioneer Note 1
Pioneer Interest Shares Pioneer Note 2
Pioneer International Equity Fund Pioneer PFD
Pioneer International Value Fund Pioneer PFD
Pioneer Large Cap Growth Fund Pioneer PFD
Pioneer Large Cap Value Fund Pioneer PFD
Pioneer Market Neutral Fund Pioneer PFD
Pioneer Mid Cap Growth Fund Pioneer PFD
Pioneer Mid Cap Value Fund Pioneer PFD
Pioneer Municipal High Income Trust Pioneer Note 2
Pioneer Protected Principal Plus Fund Pioneer PFD
Pioneer Protected Principal Plus Fund II Pioneer PFD
Pioneer Real Estate Shares Pioneer PFD
Pioneer Small Cap Value Fund Pioneer PFD
Pioneer Small Company Fund Pioneer PFD
Pioneer Strategic Income Fund Pioneer PFD
Pioneer Tax Free Income Fund Pioneer PFD
Pioneer Value Fund Pioneer PFD
Pioneer Variable Contracts Trust Pioneer Note 3

Note 1 This fund is available to the general public only through Pioneer
Independence Plans, a systematic investment plan sponsored by PFD.

Note 2 This fund is a closed-end fund.

Note 3 This is a series of 16 separate portfolios designed to provide investment
vehicles for the variable annuity and variable life insurance contracts of
various insurance companies or for certain qualified pension plans.

Board Committees

The Board of Trustees has an Audit Committee, an Independent Trustees Committee,
a Nominating Committee, a Valuation Committee and a Policy Administration
Committee. Committee members are as follows:

Audit
Marguerite A. Piret (Chair), Stephen K. West and John Winthrop

Independent Trustees
Mary K. Bush, Richard H. Egdahl, Margaret B.W. Graham (Chair), Marguerite A.
Piret, Stephen K. West and John Winthrop

Nominating
Mary K. Bush, Richard H. Egdahl (Chair) and Marguerite A. Piret

Valuation
Marguerite A. Piret (Chair), Stephen K. West and John Winthrop

Policy Administration
Mary K. Bush (Chair), Richard H. Egdahl and Margaret B.W. Graham

[During the most recent fiscal year, the Audit, Nominating, Valuation,
Independent Trustees and Policy Administration Committees held 11, 1, 5, 11 and
0 meetings, respectively.]

The Board of Trustees has adopted a charter for the Audit Committee. In
accordance with its charter, the purposes of the Audit Committee are to:

o act as a liaison between the fund's independent auditors and the full Board
of Trustees of the trust;

o discuss with the fund's independent auditors their judgments about the
quality of the fund's accounting principles and underlying estimates as
applied in the fund's financial reporting;

o review and assess the renewal materials of all related party contracts and
agreements, including management advisory agreements, underwriting
contracts, administration agreements, distribution contracts, and transfer
agency contracts, among any other instruments and agreements that may be
appropriate from time to time;

o review and approve insurance coverage and allocations of premiums between
the management and the fund and among the Pioneer Funds;

o review and approve expenses under the administration agreement between
Pioneer and the fund and allocations of such expenses among the Pioneer
Funds; and

o receive on a periodic basis a formal written statement delineating all
relationships between the auditors and the fund or Pioneer; to actively
engage in a dialogue with the independent auditors with respect to any
disclosed relationships or services that may impact the objectivity and
independence of the independent auditors; and to recommend that the
Trustees take appropriate action in response to the independent auditors'
report to satisfy itself of the independent auditors' independence.

The Nominating Committee reviews the qualifications of any candidate recommended
by the Independent Trustees to serve as an Independent Trustee a7nd makes a
recommendation regarding that person's qualifications. The Committee does not
accept nominations from shareholders.

The Valuation Committee reviews the valuation assigned to certain securities by
Pioneer in accordance with the fund's valuation procedures.

The Policy Administration Committee reviews the implementation of certain of the
fund's administrative policies and procedures.

The Independent Trustees Committee reviews the fund's management contract and
other related party contracts annually and is also responsible for any other
action required to be taken, under the 1940 Act, by the Independent Trustees
acting alone.

in good faith in the reasonable belief that their actions were in the best
interests of the fund or that such indemnification would relieve any officer or
Trustee of any liability to the fund or its shareholders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of his or her
duties.

Compensation of Officers and Trustees

The fund pays no salaries or compensation to any of its officers. The Pioneer
Funds, including the fund, compensate their trustees as follows:

o each fund with assets greater than $250 million pays each Trustee who is
not affiliated with PIM-USA, Pioneer, PFD, PIMSS or UniCredito Italiano
(i.e., Independent Trustees) an annual base fee calculated on the basis of
the fund's net assets.
o each fund with assets less than $250 million pays each Independent Trustee
an annual fee of $1,000.
o each fund with assets greater than $50 million pays each Interested Trustee
an annual fee of $500 and each fund with assets less than $50 million pays
each Interested Trustee an annual fee of $200 (Pioneer reimburses the fund
for these fees).
o each fund with assets greater than $250 million pays each Independent
Trustee who serves on each board committee an annual committee fee based on
the fund's net assets (with additional compensation for chairpersons of
such committees).

See "Compensation of Officers and Trustees" in Annual Fee, Expense and Other
Information.

Sales Loads. The fund offers its shares to Trustees and officers of the trust
and employees of Pioneer and its affiliates without a sales charge in order to
encourage investment in the fund by individuals who are responsible for its
management and because the sales to such persons do not entail any sales effort
by the fund, brokers or other intermediaries.

Other Information

Material Relationships of the Independent Trustees. For purposes of the
statements below:

o the immediate family members of any person are their spouse, children
in the person's household (including step and adoptive children) and
any dependent of the person.

o an entity in a control relationship means any person who controls, is
controlled by or is under common control with the named person. For
example, UniCredito Italiano is an entity that is in a control
relationship with Pioneer.

o a related fund is a registered investment company or an entity exempt
from the definition of an investment company pursuant to Sections
3(c)(1) or 3(c)(7) of the 1940 Act, for which Pioneer or any of its
affiliates act as investment adviser or for which PFD or any of its
affiliates act as principal underwriter. For example, the fund's
related funds include all of the Pioneer Funds and any non-U.S. funds
managed by Pioneer or its affiliates.

As of December 31, 2002, none of the Independent Trustees, nor any of their
immediate family members, beneficially owned any securities issued by Pioneer,
UniCredito Italiano or any other entity in a control relationship to Pioneer or
PFD. During the calendar years 2001 and 2002, none of the Independent Trustees,
nor any of their immediate family members, had any direct or indirect interest
(the value of which exceeded $60,000), whether by contract, arrangement or
otherwise, in Pioneer, UniCredito Italiano, or any other entity in a control
relationship to Pioneer or PFD. During the calendar years 2001 and 2002, none of
the Independent Trustees, nor any of their immediate family members, had an
interest in a transaction or a series of transactions in which the

aggregate amount involved exceeded $60,000 and to which any of the following
were a party (each a "fund related party"):

o the fund
o an officer of the trust
o a related fund
o an officer of any related fund
o Pioneer
o PFD
o an officer of Pioneer or PFD
o any affiliate of Pioneer or PFD
o an officer of any such affiliate

During the calendar years 2001 and 2002, none of the Independent Trustees, nor
any of their immediate family members, had any relationship (the value of which
exceeded $60,000) with any fund related party, including, but not limited to,
relationships arising out of (i) the payment for property and services, (ii) the
provision of legal services, (iii) the provision of investment banking services
(other than as a member of the underwriting syndicate) or (iv) the provision of
consulting services, except that Mr. West, an Independent Trustee, is Senior
Counsel to Sullivan & Cromwell and acts as counsel to the Independent Trustees
and the Independent Trustees of the other Pioneer Funds. The aggregate
compensation paid to Sullivan & Cromwell by the fund and the other Pioneer Funds
was approximately $67,000 and $53,000 in 2001 and 2002, respectively.

During the calendar years 2001 and 2002, none of the Independent Trustees, nor
any of their immediate family members, served as a member of a board of
directors on which an officer of any of the following entities also serves as a
director:

o Pioneer
o PFD
o UniCredito Italiano
o any other entity in a control relationship with Pioneer or PFD

None of the trust's Trustees or officers has any arrangement with any other
person pursuant to which that Trustee or officer serves on the Board of
Trustees. During the calendar years 2001 and 2002, none of the Independent
Trustees, nor any of their immediate family members, had any position, including
as an officer, employee, director or partner, with any of the following:

o the trust
o any related fund
o Pioneer
o PFD
o any affiliated person of the fund, Pioneer or PFD
o UniCredito Italiano
o any other entity in a control relationship to the fund, Pioneer or PFD

its shareholders. In making such determinations, the Independent Trustees met
independently from the Interested Trustees of the trust and any officers of
Pioneer, L. Roy Papp & Associates, LLP or their affiliates. The Independent
Trustees also relied upon the assistance of counsel to the Independent Trustees
and counsel to the trust.

In evaluating the management contract and the subadvisory agreement, the
Independent Trustees reviewed materials furnished by Pioneer, including
information regarding Pioneer, UniCredito Italiano, their respective affiliates
and their personnel, operations and financial condition, and materials furnished
by L. Roy Papp & Associates, LLP and its affiliates, personnel, operations and
financial condition. The Independent Trustees discussed with representatives of
both firms the fund's operations and their respective abilities to provide
advisory and other services to the fund. The Independent Trustees also reviewed:

o the investment performance of the fund and other Pioneer Funds with
similar investment strategies and of funds with similar investment
strategies managed by L. Roy Papp & Associates, LLP;

o the fee charged by Pioneer for investment advisory and administrative
services, as well as other compensation received by PFD and PIMSS, and
the fees Pioneer would pay to L. Roy Papp & Associates, LLP;

o the fund's projected total operating expenses;

o the investment performance, fees and total expenses of investment
companies with similar objectives and strategies managed by other
investment advisers;

o the experience of the investment advisory and other personnel
providing services to the fund and the historical quality of the
services provided by Pioneer and L. Roy Papp & Associates, LLP; and

o the profitability to Pioneer and L. Roy Papp & Associates, LLP of
managing the fund.

The Independent Trustees considered the following as relevant to their
recommendations: (1) the favorable history, reputation, qualification and
background of Pioneer and UniCredito Italiano and L. Roy Papp & Associates, LLP,
as well as the qualifications of their personnel and their respective financial
conditions; (2) that the fee and expense ratios of the fund are reasonable given
the quality of services expected to be provided and are comparable to the fee
and expense ratios of similar investment companies; and (3) the relative
performance of similar funds advised by Pioneer and L. Roy Papp & Associates,
LLP since commencement of operations to comparable investment companies and
unmanaged indices. The Independent Trustees deemed each of these factors to be
relevant to their consideration of the fund's management contract and
subadvisory agreement.

Share Ownership. See Annual Fee, Expense and Other Information for annual
information on the ownership of fund shares by the Trustees, the trust's
officers and owners in excess of 5% of any class of shares of the fund and a
table indicating the value of shares that each Trustee beneficially owns in the
fund and in all the Pioneer Funds.

Code of Ethics. The trust's Board of Trustees approved a code of ethics under
Rule 17j-1 under the 1940 Act that covers the fund, Pioneer and certain of
Pioneer's affiliates. The code of ethics establishes procedures for personal
investing and restricts certain transactions. Employees subject to the code of
ethics may invest in securities for their personal investment accounts,
including securities that may be purchased or held by the fund.

4. INVESTMENT ADVISER

The trust has contracted with Pioneer to act as the fund's investment adviser.
Pioneer is an indirect, wholly owned subsidiary of UniCredito Italiano. Certain
Trustees or officers of the trust are also directors and/or officers of certain
of UniCredito Italiano's subsidiaries (see management biographies above).
Pioneer has entered into an agreement with its affiliate, Pioneer Investment
Management Limited ("PIML"), pursuant to which PIML provides certain services
and personnel to Pioneer.

Pioneer has engaged L. Roy Papp & Associates, LLP ("Papp") to act as the fund's
subadviser. As the fund's investment adviser, Pioneer oversees the fund's
operations and supervises Papp, which is responsible for the day-to-day
management of the fund's portfolio (see "Investment Subadviser" below). Except
as otherwise provided under "Investment Subadviser" below, Pioneer also
maintains books and records with respect to the fund's securities transactions,
and reports to the Trustees on the fund's investments and performance.

Under the terms of the management contract, Pioneer pays all the operating
expenses, including executive salaries and the rental of office space, relating
to its services for the fund, with the exception of the following, which are
paid by the fund: (a) charges and expenses for fund accounting, pricing and
appraisal services and related overhead, including, to the extent such services
are performed by personnel of Pioneer or its affiliates, office space and
facilities and personnel compensation, training and benefits; (b) the charges
and expenses of auditors; (c) the charges and expenses of any custodian,
transfer agent, plan agent, dividend disbursing agent, registrar or other agent
appointed by the trust with respect to the fund; (d) issue and transfer taxes
chargeable to the fund in connection with securities transactions to which the
fund is a party; (e) insurance premiums, interest charges, dues and fees for
membership in trade associations and all taxes and corporate fees payable by the
fund to federal, state or other governmental agencies; (f) fees and expenses
involved in registering and maintaining registrations of the fund and/or its
shares with federal regulatory agencies, state or blue sky securities agencies
and foreign jurisdictions, including the preparation of prospectuses and
statements of additional information for filing with such regulatory
authorities; (g) all expenses of shareholders' and Trustees' meetings and of
preparing, printing and distributing prospectuses, notices, proxy statements and
all reports to shareholders and to governmental agencies; (h) charges and
expenses of legal counsel to the trust and the Trustees; (i) any fees paid by
the fund in accordance with Rule 12b-1 promulgated by the SEC pursuant to the
1940 Act; (j) compensation of those Trustees of the trust who are not affiliated
with, or interested persons of, Pioneer, the trust (other than as Trustees),
PIM-USA or PFD; (k) the cost of preparing and printing share certificates; (l)
interest on borrowed money, if any; and (m) any other expense that the fund,
Pioneer or any other agent of the fund may incur (A) as a result of a change in
the law or regulations, (B) as a result of a mandate from the Board of Trustees
with associated costs of a character generally assumed by similarly structured
investment companies or (C) that is similar to the expenses listed above, and
that is approved by the Board of Trustees (including a majority of the
Independent Trustees) as being an appropriate expense of the fund. In addition,
the fund shall pay all brokers' and underwriting commissions chargeable to the
fund in connection with securities transactions to which the fund is a party.

Advisory Fee. As compensation for its management services and expenses incurred,
the fund pays Pioneer a fee at the annual rate of 0.75% of the fund's average
daily net assets up to $1 billion and 0.70% on assets over $1 billion. The fee
is normally computed daily and paid monthly.

Prior to the reorganization of Papp Stock Fund into the fund, the subadviser was
the fund's investment adviser. The investment advisory services of Papp were
performed under an investment advisory agreement, pursuant to which the fund
paid Papp an annual fee equal to 1.00% of the average daily net assets of the
fund.

See the table in Annual Fee, Expense and Other Information for management fees
paid during recently completed fiscal years.

Investment Subadviser. As described in the prospectus, Papp serves as the fund's
investment subadviser with respect to a portion of the fund's assets that
Pioneer designates from time to time. With respect to the current fiscal year,
Pioneer anticipates that it will designate Papp as being responsible for the
management of all the fund's assets[, with the exception of the fund's cash
balances, which will be invested by Pioneer]. Papp will, among other things,
continuously review and analyze the investments in the fund's portfolio and,
subject to the supervision of Pioneer, manage the investment and reinvestment of
the fund's assets. Papp, an investment adviser to individuals, trusts,
retirement plans, endowments and foundations, Papp is registered as an
investment adviser under the Investment Advisers Act of 1940, as amended (the
"Advisers Act"), was established in 1978 and had approximately $480 billion in
assets under management as of September 30, 2003. Papp is an Arizona limited
liability partnership owned and controlled by its partners, of whom there were
eleven at the date of this Statement of Additional Information: L. Roy Papp,
Harry A. Papp, Robert L. Mueller, Rosellen C. Papp, Jeffrey N. Edwards, Victoria
S. Cavallero, Julie A. Hein, Jane E. Couperus, John L Stull, Russell A. Biehl
and Timothy K. Hardaway. L. Roy Papp owns a majority interest in the
partnership. Papp's principal place of business is located at 6225 North 24th
Street, Suite 150, Phoenix, AZ 85016.

Pioneer and Papp have entered into a subadvisory contract, dated [ ],
2003, pursuant to which Papp has agreed, among other things, to:

o comply with the provisions of the trust's Declaration of Trust and
By-laws, the 1940 Act, the Advisers Act and the investment objectives,
policies and restrictions of the fund;

o cause the trust to comply with the requirements of Subchapter M of the
Code for qualification as a regulated investment company;

o comply with any policies, guidelines, procedures and instructions as
Pioneer may from time to time establish;

o be responsible for voting proxies and acting on other corporate
actions;

o maintain separate books and detailed records of all matters pertaining
to the portion of the fund's assets advised by Papp required by Rule
31a-1 under the 1940 Act relating to its responsibilities provided
hereunder with respect to the fund;

o ensure that its Access Persons comply in all respects with Papp's Code
of Ethics, as in effect from time to time; and

o furnish reports to the Trustees and Pioneer.

Subadvisory Fee. For its services, Papp is entitled to a subadvisory fee from
Pioneer at an annual rate of 0.40% of the fund's average daily net assets up to
$500 million and 0.30% of the fund's average daily net assets greater than $500
million. The fee will be paid monthly in arrears. The fund does not pay a fee to
the subadviser.

Pioneer has received an order from the Securities and Exchange Commission that
permits Pioneer, subject to the approval of the trust's Board of Trustees, to
hire and terminate a subadviser or to materially modify an existing subadvisory
contract for the fund without shareholder approval. Pioneer retains the ultimate
responsibility to oversee and recommend the hiring, termination and replacement
of any subadviser.

Pioneer or the subadviser. Pioneer and the subadviser, however, are is not
protected against liability by reason of willful misfeasance, bad faith or gross
negligence in the performance of its their duties or by reason of its their
reckless disregard of its their obligations and duties under the management or
subadvisory contract. The management contract and subadvisory agreement
terminate if assigned and may be terminated without penalty upon not more than
60 days' nor less than 30 days' written notice to the other party or by vote of
a majority of the fund's outstanding voting securities.

Expense Limit. Pioneer has agreed to waive all or part of its management fee or
to reimburse the fund for other expenses (other than extraordinary expenses) to
the extent the expenses of the fund's Class A shares exceed 1.25% of average
daily net assets. The portion of fund expenses attributable to Class B, Class C
and Class R shares will be reduced only to the extent such expenses were reduced
for the fund's Class A shares. If Pioneer waives any fee or reimburses any
expenses, and the expenses of the fund's Class A shares are subsequently less
than 1.25% of average daily net assets, the fund will reimburse Pioneer for such
waived fees or reimbursed expenses provided that such reimbursement does not
cause the fund's Class A expenses to exceed 1.25% of average daily net assets.
In addition, the fund will not reimburse Pioneer for such waived fees or
reimbursed expenses more than three years after such fees were waived or such
expenses were incurred. Each class will reimburse Pioneer no more than the
amount by which that class' expenses were reduced. Any differences in the fee
waiver and expense limitation among classes result from rounding in the daily
calculation of a class' net assets and expense limit, which may exceed 0.01%
annually. Pioneer expects to continue its limitation of expenses and subsequent
reimbursement from the fund unless the expense limit and reimbursement agreement
with the trust is terminated pursuant to the terms of the expense limit and
reimbursement agreement.

Administration Agreement. The trust has entered into an administration agreement
with Pioneer pursuant to which certain accounting and legal services which are
expenses payable by the fund under the management contract are performed by
Pioneer and pursuant to which Pioneer is reimbursed for its costs of providing
such services.

Potential Conflict of Interest. Pioneer and the subadviser serve as investment
adviser to other mutual funds and other accounts with investment objectives
identical or similar to those of the fund. Securities frequently meet the
investment objectives of the fund and these other accounts. In such cases, the
decision to recommend a purchase to one fund or account rather than another is
based on a number of factors. The determining factors in most cases are the
amount of securities of the issuer then outstanding, the value of those
securities and the market for them. Other factors considered in the investment
recommendations include other investments which each fund or account presently
has in a particular industry and the availability of investment funds in each
fund or account.

It is possible that at times identical securities will be held by more than one
fund and/or account. However, positions in the same issue may vary and the
length of time that any fund or account may choose to hold its investment in the
same issue may likewise vary. To the extent that more than one of the accounts
managed by Pioneer or the subadviser, including the fund, seeks to acquire the
same security at about the same time, the fund may not be able to acquire as
large a position in such security as it desires or it may have to pay a higher
price for the security. Similarly, the fund may not be able to obtain as large
an execution of an order to sell or as high a price for any particular portfolio
security if Pioneer or the subadviser decides to sell on behalf of another
account the same portfolio security at the same time. On the other hand, if the
same securities are bought or sold at the same time by more than one fund or
account, the resulting participation in volume transactions could produce better
executions for the fund. In the event more than one account purchases or sells
the same security on a given date, the purchases and sales will normally be made
as nearly as practicable on a pro rata basis in proportion to the amounts
desired to be purchased or sold by each account. Although the other accounts
managed by Pioneer or the subadviser may have the same or similar investment
objectives and policies as the fund, their portfolios do not generally consist
of the same investments as the fund or each other, and their performance results
are likely to differ from those of the fund.

Personal Securities Transactions. The trust, Pioneer, PFD and the subadviser
have each adopted a code of ethics under Rule 17j-1 under the 1940 Act which is
applicable to officers, trustees/directors and designated employees, including,
in the case of Pioneer's code, designated employees of PIML. Each code permits
such persons to engage in personal securities transactions for their own
accounts, including securities that may be purchased or held by the fund, and is
designed to prescribe means reasonably necessary to prevent conflicts of
interest from arising in connection with personal securities transactions. Each
code is on public file with and available from the SEC.

5. PRINCIPAL UNDERWRITER AND DISTRIBUTION PLANS

Principal Underwriter

PFD, 60 State Street, Boston, Massachusetts 02109, is the principal underwriter
for the fund in connection with the continuous offering of its shares. PFD is an
indirect wholly owned subsidiary of PIM-USA.

The trust entered into an underwriting agreement with PFD which provides that
PFD will bear expenses for the distribution of the fund's shares, except for
expenses incurred by PFD for which it is reimbursed or compensated by the fund
under the distribution plans (discussed below). PFD bears all expenses it incurs
in providing services under the underwriting agreement. Such expenses include
compensation to its employees and representatives and to securities dealers for
distribution-related services performed for the fund. PFD also pays certain
expenses in connection with the distribution of the fund's shares, including the
cost of preparing, printing and distributing advertising or promotional
materials, and the cost of printing and distributing prospectuses and
supplements to prospective shareholders. The fund bears the cost of registering
its shares under federal and state securities law and the laws of certain
non-U.S. countries. Under the underwriting agreement, PFD will use its best
efforts in rendering services to the fund.

See "Sales Charges" for the schedule of initial sales charge reallowed to
dealers as a percentage of the offering price of the fund's Class A and Class C
shares.

See the tables in Annual Fee, Expense and Other Information for commissions
retained by PFD and reallowed to dealers in connection with PFD's offering of
the fund's Class A and Class C shares during recently completed fiscal years.

The trust will not generally issue fund shares for consideration other than
cash. At the trust's sole discretion, however, it may issue fund shares for
consideration other than cash in connection with a bona fide reorganization,
statutory merger or other acquisition of portfolio securities.

It is the fund's general practice to repurchase its shares of beneficial
interest for cash consideration in any amount; however, the redemption price of
shares of the fund may, at Pioneer's discretion, be paid in portfolio
securities. The trust has elected to be governed by Rule 18f-1 under the 1940
Act pursuant to which the trust is obligated to redeem fund shares solely in
cash up to the lesser of $250,000 or 1% of the fund's net asset value during any
90-day period for any one shareholder. Should the amount of redemptions by any
shareholder exceed such limitation, the trust will have the option of redeeming
the excess in cash or portfolio securities. In the latter case, the securities
are taken at their value employed in determining the fund's net asset value. You
may incur additional costs, such as brokerage fees and taxes, and risks,
including a decline in the value of the securities you receive, if the fund
makes an in-kind distribution. The selection of such securities will be made in
such manner as the Board of Trustees deems fair and reasonable; however, the
fund will not distribute illiquid securities in kind.

Distribution and Service Plans

Plan"), a plan of distribution with respect to its Class C shares (the "Class C
Plan"), and a plan of distribution with respect to its Class R shares (the
"Class R Plan") (together, the "Plans"), pursuant to which certain distribution
and service fees are paid to PFD. Because of the Plans, long-term shareholders
may pay more than the economic equivalent of the maximum sales charge permitted
by the National Association of Securities Dealers, Inc. (the "NASD") regarding
investment companies. The 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. The Class BPlan, Class C Plan and Class R Plan are
compensation plans, which means that the amount of payments under the plans are
not linked to PFD's expenditures, and, consequently, PFD can make a profit under
each of those plans. The fund has also adopted a Service Plan with respect to
Class R shares that authorizes the fund to pay securities dealers, plan
administrators or other service organizations for providing certain account
maintenance services to shareowners.

Class A Plan. Pursuant to the Class A Plan the fund reimburses PFD for its
actual expenditures to finance any activity primarily intended to result in the
sale of Class A shares or to provide services to holders of Class A shares,
provided the categories of expenses for which reimbursement is made are approved
by the Board of Trustees. The Board of Trustees has approved the following
categories of expenses that may be reimbursed under the Class A Plan: (i) a
service fee to be paid to qualified broker-dealers in an amount not to exceed
0.25% per annum of the fund's daily net assets attributable to Class A shares;
(ii) reimbursement to PFD for its expenditures for broker-dealer commissions and
employee compensation on certain sales of the fund's Class A shares with no
initial sales charge; and (iii) reimbursement to PFD for expenses incurred in
providing services to Class A shareholders and supporting broker-dealers and
other organizations (such as banks and trust companies) in their efforts to
provide such services. The expenses of the fund pursuant to the Class A Plan are
accrued daily at a rate which may not exceed the annual rate of 0.25% of the
fund's average daily net assets attributable to Class A shares.

The Class A Plan does not provide for the carryover of reimbursable expenses
beyond 12 months from the time the fund is first invoiced for an expense. The
limited carryover provision in the Class A Plan may result in an expense
invoiced to the fund in one fiscal year being paid in the subsequent fiscal year
and thus being treated for purposes of calculating the maximum expenditures of
the fund as having been incurred in the subsequent fiscal year. In the event of
termination or non-continuance of the Class A Plan, the fund has 12 months to
reimburse any expense which it incurs prior to such termination or
non-continuance, provided that payments by the fund during such 12-month period
shall not exceed 0.25% of the fund's average daily net assets attributable to
Class A shares during such period. See Annual Fee, Expense and Other Information
for the amount, if any, of carryover of distribution expenses as of the end of
the most recent calendar year.

Class B Plan. PFD pays the selling broker-dealer a commission on the sale of
Class B shares equal to 3.75% of the amount invested. This commission is paid at
the time of sale of the Class B Shares. In order to be entitled to a commission,
the selling broker-dealer must have entered into a sales agreements with PFD. At
the time of the sale of a Class B share, PFD may also advance to the
broker-dealer, from PFD's own assets, the first-year service fee payable under
the Class B Plan at a rate up to 0.25% of the purchase price of such shares. If
such an advance is made, the broker-dealer would not receive any further service
fee until the 13th month following the purchase of Class B shares. As
compensation for advancing the service fee, PFD may retain the service fee paid
by the fund with respect to such shares for the first year after purchase.

The Class B Plan provides that the fund shall pay to PFD, as the fund's
distributor for its Class B shares:

o a distribution fee equal on an annual basis to 0.75% of the fund's
average daily net assets attributable to Class B shares. The
distribution fee compensates PFD for its distribution services with
respect to Class B shares. PFD pays the commissions to broker-dealers
discussed above and also pays:

o the cost of printing prospectuses and reports used for sales
purposes and the preparation and printing of sales
literature and

o other distribution-related expenses, including, without
limitation, the cost necessary to provide
distribution-related services, or personnel, travel, office
expenses and equipment.

o a service fee equal to 0.25% of the fund's average daily net assets
attributable to Class B shares. PFD in turn pays the service fee to
broker-dealers at a rate of up to 0.25% of the fund's average daily
net assets attributable to Class B shares owned by shareholder for
whom that broker-dealer is the holder or dealer of record. This
service fee compensates the broker-dealer for providing personal
services and/or account maintenance services rendered by the
broker-dealer with respect to Class B shares. PFD may from time to
time require that dealers, in addition to providing these services,
meet certain criteria in order to receive service fees. PFD is
entitled to retain all service fees with respect to Class B shares for
which there is no dealer of record or with respect to which a dealer
is not otherwise entitled to a service fee. Such service fees are paid
to PFD for personal services and/or account maintenance services that
PFD or its affiliates perform for shareholder accounts.

PFD also receives contingent deferred sales charges ("CDSCs") attributable to
Class B shares to compensate PFD for its distribution expenses. When a
broker-dealer sells Class B shares and elects, with PFD's approval, to waive its
right to receive the commission normally paid at the time of the sale, PFD may
cause all or a portion of the distribution fees described above to be paid to
the broker-dealer.

Since PFD pays commissions to broker-dealers at the time of the sale of Class B
shares but only receives compensation for such expenses over time through the
distribution fee and CDSC, the Class B Plan and underwriting agreement permit
PFD to finance the payment of commissions to broker-dealers. In order to
facilitate such financing, the trust has agreed that the distribution fee will
not be terminated or modified (including a modification in the rules relating to
the conversion of Class B shares into Class A shares) with respect to Class B
shares:

o issued prior to the date of any termination or modification;

o attributable to Class B shares issued through one or a series of
exchanges of shares of another investment company for which PFD acts
as principal underwriter which were initially issued prior to the date
of such termination or modification; or

o issued as a dividend or distribution upon Class B shares initially
issued or attributable to Class B shares issued prior to the date of
any such termination or modification.

The foregoing limitation does not apply to Class B shares issued after the
termination or modification. The foregoing limitation on terminating or
modifying the Class B Plan also does not apply to a termination or modification:

o if a change in the 1940 Act, the rules or regulations under the 1940
Act, the Conduct Rules of the NASD or an order of any court or
governmental agency requires such termination or modification (e.g. if
the Conduct Rules were amended to establish a lower limit on the
maximum aggregate sales charges that could be imposed on sales of fund
shares);

o if the trust (or any successor) terminates the Class B Plan and all
payments under the plan and neither the trust (nor any successor)
establishes another class of shares which has substantially similar
characteristics to the Class B Shares of the fund; or

o at any time by the Board of Trustees. However, the Board of Trustees
may terminate or modify the Class B Plan only if the trust and Pioneer
agree that none of the fund, PFD or any of their affiliates will pay,
after the date of termination or modification, a service fee with
respect to the fund's Class B shares and

the termination or modification of the distribution fee applies
equally to all Class B shares outstanding from time to time.

In the underwriting agreement, the trust agrees that subsequent to the issuance
of a Class B share, the fund will not waive or change any CDSC (including a
change in the rules applicable to conversion of Class B shares into another
class) in respect of such Class B share, except:

o as provided in the fund's prospectus or statement of additional
information; or

o as required by a change in the 1940 Act and the rules and regulations
thereunder, the Conduct Rules of the NASD or any order of any court or
governmental agency.

Class C Plan. Commissions on the sale of Class C shares of up to 0.75% of the
amount invested in Class C shares are paid to broker-dealers who have sales
agreements with PFD. PFD may also advance to dealers the first-year service fee
payable under the Class C Plan at a rate up to 0.25% of the purchase price of
such shares. As compensation for such advance of the service fee, PFD may retain
the service fee paid by the fund with respect to such shares for the first year
after purchase.

The Class C Plan provides that the fund will pay PFD, as the fund's distributor
for its Class C shares, a distribution fee accrued daily and paid quarterly,
equal on an annual basis to 0.75% of the fund's average daily net assets
attributable to Class C shares and will pay PFD a service fee equal to 0.25% of
the fund's average daily net assets attributable to Class C shares. PFD will in
turn pay to securities dealers which enter into a sales agreement with PFD a
distribution fee and a service fee at rates of up to 0.75% and 0.25%,
respectively, of the fund's average daily net assets attributable to Class C
shares owned by investors for whom that securities dealer is the holder or
dealer of record. The service fee is intended to be in consideration of personal
services and/or account maintenance services rendered by the dealer with respect
to Class C shares. PFD will advance to dealers the first-year service fee at a
rate equal to 0.25% of the amount invested. As compensation therefor, PFD may
retain the service fee paid by the fund with respect to such shares for the
first year after purchase. Commencing in the 13th month following the purchase
of Class C shares, dealers will become eligible for additional annual
distribution fees and service fees of up to 0.75% and 0.25%, respectively, of
the net asset value of such shares. Dealers may from time to time be required to
meet certain other criteria in order to receive service fees. PFD or its
affiliates are entitled to retain all service fees payable under the Class C
Plan for which there is no dealer of record or for which qualification standards
have not been met as partial consideration for personal services and/or account
maintenance services performed by PFD or its affiliates for shareholder
accounts.

The purpose of distribution payments to PFD under the Class C Plan is to
compensate PFD for its distribution services with respect to Class C shares of
the fund. PFD pays commissions to dealers as well as expenses of printing
prospectuses and reports used for sales purposes, expenses with respect to the
preparation and printing of sales literature and other distribution-related
expenses, including, without limitation, the cost necessary to provide
distribution-related services, or personnel, travel, office expenses and
equipment. The Class C Plan also provides that PFD will receive all CDSCs
attributable to Class C shares. When a broker-dealer sells Class C shares and
elects, with PFD's approval, to waive its right to receive the commission
normally paid at the time of the sale, PFD may cause all or a portion of the
distribution fees described above to be paid to the broker-dealer.

Class R Plans. The Class R Plan provides that the fund will pay PFD, as the
fund's distributor for its Class R shares, a distribution fee accrued daily and
paid quarterly, equal on an annual basis to 0.50% of the fund's average daily
net assets attributable to Class R shares. The Class R Plan also provides that
PFD will receive all CDSCs attributable to Class R shares. PFD pays the selling
broker-dealer a commission at the time of sale of Class R shares equal to 1.00%
of the amount invested and a continuing asset based distribution fee equal on an
annual basis to 0.35% of the average daily net asset value of the Class R shares
for which the broker-dealer is the dealer of record; provided, that the
broker-dealer may elect instead not to receive a commission at the time of sale
and to receive a continuing asset based fee equal on an annual basis to 0.50% of
the average daily net asset value of the

Class R shares for which the broker-dealer is the dealer of record. In order to
be entitled to a commission, the selling broker-dealer must have entered into a
sales agreements with PFD. Dealers may from time to time be required to meet
certain other criteria in order to receive distribution fees.

The purpose of distribution payments to PFD under the Class R Plan is to
compensate PFD for its distribution services with respect to Class R shares of
the fund. PFD pays commissions discussed above to dealers as well as expenses of
printing prospectuses and reports used for sales purposes, expenses with respect
to the preparation and printing of sales literature and other
distribution-related expenses, including, without limitation, the cost necessary
to provide distribution-related services, or personnel, travel, office expenses
and equipment.

If the broker-dealer has elected to waive the 1% commission payable at the time
of sale of Class R shares, PFD also will waive any applicable CDSC. This option
may not be available where the retirement plan offers funds other than Pioneer
funds.

The fund also has adopted a separate Service Plan. The Service Plan authorizes
the fund to pay securities dealers, plan administrators or other service
organizations who agree to provide certain services to plans or plan
participants holding shares of the fund a service fee of up to 0.25% of the
fund's average daily net assets attributable to Class R shares held by such plan
participants. These services may include (a) acting, directly or through an
agent, as the shareholder of record and nominee for all plan participants; (b)
maintaining account records for each plan participant that beneficially owns
Class R shares; (c) processing orders to purchase, redeem and exchange Class R
shares on behalf of plan participants, and handling the transmission of funds
representing the purchase price or redemption proceeds; and (d) addressing plan
participant questions regarding their accounts and the fund.

General

In accordance with the terms of each Plan, PFD provides to the trust for review
by the Trustees a quarterly written report of the amounts expended under the
Plan and the purposes for which such expenditures were made. In the Trustees'
quarterly review of the Plans, they will consider the continued appropriateness
and the level of reimbursement or compensation the Plans provide.

No interested person of the fund, nor any Trustee of the trust who is not an
interested person of the fund, has any direct or indirect financial interest in
the operation of the Plans except to the extent that PFD and certain of its
employees may be deemed to have such an interest as a result of receiving a
portion of the amounts expended under the Plans by the fund and except to the
extent certain officers may have an interest in PFD's ultimate parent,
UniCredito Italiano, or in UniCredito Italiano's subsidiaries.

Each Plan's adoption, terms, continuance and termination are governed by Rule
12b-1 under the 1940 Act. The Board of Trustees believes that there is a
reasonable likelihood that the Plans will benefit the fund and its current and
future shareholders. The Plans may not be amended to increase materially the
annual percentage limitation of average net assets which may be spent for the
services described therein without approval of the shareholders of the fund
affected thereby, and material amendments of the Plans must also be approved by
the Trustees as provided in Rule 12b-1.

See Annual Fee, Expense and Other Information for fund expenses under the Class
A Plan, Class B Plan and Class C Plan and CDSCs paid to PFD for the most
recently completed fiscal year.

Upon redemption, Class A shares may be subject to a 1% CDSC, Class B shares are
subject to a CDSC at a rate declining from a maximum 4% of the lower of the cost
or market value of the shares andeach of Class C and Class R shares may be
subject to a 1% CDSC.

6. SHAREHOLDER SERVICING/TRANSFER AGENT

The trust has contracted with PIMSS, 60 State Street, Boston, Massachusetts
02109, to act as shareholder servicing and transfer agent for the fund.

Under the terms of its contract with the trust, PIMSS services shareholder
accounts, and its duties include: (i) processing sales, redemptions and
exchanges of shares of the fund; (ii) distributing dividends and capital gains
associated with the fund's portfolio; and (iii) maintaining account records and
responding to shareholder inquiries.

PIMSS receives an annual fee of $26.60 for each Class A, Class B, Class C and
Class R shareholder account from the fund as compensation for the services
described above. PIMSS is also reimbursed by the fund for its cash out-of-pocket
expenditures. The fund may compensate entities which have agreed to provide
certain sub-accounting services such as specific transaction processing and
recordkeeping services. Any such payments by the fund would be in lieu of the
per account fee which would otherwise be paid by the fund to PIMSS.

7. CUSTODIAN

Brown Brothers Harriman & Co., 40 Water Street, Boston, Massachusetts 02109, is
the custodian of the fund's assets. The custodian's responsibilities include
safekeeping and controlling the fund's cash and securities, handling the receipt
and delivery of securities, and collecting interest and dividends on the fund's
investments.

8. INDEPENDENT AUDITORS

Ernst & Young, LLP, the fund's independent auditors, provides audit services,
tax return review, and assistance and consultation with respect to the
preparation of filings with the SEC.

9. PORTFOLIO TRANSACTIONS

All orders for the purchase or sale of portfolio securities are placed on behalf
of the fund by Papp, subject to Pioneer's supervision, pursuant to authority
contained in the management contract and subadvisory contract. Pioneer and Papp
seek to obtain the best execution on portfolio trades on behalf of the fund. 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 and Papp consider 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 or Papp may select broker-dealers that provide brokerage and/or research
services to the fund and/or other investment companies or other accounts managed
by Pioneer or Papp. In addition, consistent with Section 28(e) of the Securities
Exchange Act of 1934, as amended, if Pioneer or Papp 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 or Papp maintains a listing of broker-dealers who provide
such services on a regular basis. However, because many transactions on behalf
of the fund and other investment companies or accounts managed by Pioneer or
Papp 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 or Papp in
rendering investment management services to the fund as well as other investment
companies or other accounts managed by them, although not all such research may
be useful to the fund. Conversely, such information provided by brokers or
dealers who have executed transaction orders on behalf of such other accounts
may be useful to Pioneer or Papp in carrying out its obligations to the fund.
The receipt of such research has not reduced Pioneer's normal independent
research activities; however, it enables each of them to avoid the additional
expenses which might otherwise be incurred if they were to attempt to develop
comparable information through their own staffs.

In circumstances where two or more broker-dealers offer comparable prices and
executions, preference may be given to a broker-dealer which has sold shares of
the fund as well as shares of other investment companies managed by Pioneer or
Papp. This policy does not imply a commitment to execute all portfolio
transactions through all broker-dealers that sell shares of the fund.

The Pioneer funds have entered into third-party brokerage and/or expense offset
arrangements to reduce the funds' total operating expenses. Pursuant to
third-party brokerage arrangements, certain of the funds that invest primarily
in U.S. equity securities may incur lower custody fees by directing brokerage to
third-party broker-dealers. Pursuant to expense offset arrangements, the funds
incur lower transfer agency expenses by maintaining their cash balances with the
custodian. See "Financial highlights" in the prospectus.

See the table in Annual Fee, Expense and Other Information for aggregate
brokerage and underwriting commissions paid by the fund in connection with its
portfolio transactions during recently completed fiscal years. The Board of
Trustees periodically reviews Pioneer's and Papp's performance of their
responsibilities in connection with the placement of portfolio transactions on
behalf of the fund.

10. DESCRIPTION OF SHARES

As an open-end management investment company, the trust continuously offers fund
shares to the public and under normal conditions must redeem its shares upon the
demand of any shareholder at the next determined net asset value per share less
any applicable CDSC. See "Sales Charges." When issued and paid for in accordance
with the terms of the prospectus and statement of additional information, shares
of the fund are fully paid and non-assessable. Shares will remain on deposit
with the fund's transfer agent and certificates will not normally be issued.

The trust's Agreement and Declaration of Trust, dated as of September 2, 2003
(the "Declaration"), permits the Board of Trustees to authorize the issuance of
an unlimited number of full and fractional shares of beneficial interest which
may be divided into such separate series as the Trustees may establish.
Currently, the trust consists of four series. The Trustees may, however,
establish additional series of shares and may divide or combine the shares into
a greater
or lesser number of shares without thereby changing the proportionate beneficial
interests in the fund. The Declaration further authorizes the Trustees to
classify or reclassify any series of the shares into one or more classes.
Pursuant thereto, the Trustees have authorized the issuance of five classes of
shares of the fund, designated as Class A shares, Class B shares, Class C
shares, Class R shares and Class Y shares. Each share of a class of the fund
represents an equal proportionate interest in the assets of the fund allocable
to that class. Upon liquidation of the fund, shareholders of each class of the
fund are entitled to share pro rata in the fund's net assets allocable to such
class available for distribution to shareholders. The trust reserves the right
to create and issue additional series or classes of shares, in which case the
shares of each class of a series would participate equally in the earnings,
dividends and assets allocable to that class of the particular series.

The shares of each class represent an interest in the same portfolio of
investments of the fund. Each class has equal rights as to voting, redemption,
dividends and liquidation, except that each class bears different distribution
(including in the case of Class R shares, fees under the Service Plan) and
transfer agent fees and may bear other expenses properly attributable to the
particular class. Class A, Class B and Class C shareholders have exclusive
voting rights with respect to the Rule 12b-1 Plans adopted by holders of those
shares in connection with the distribution of shares.

Shareholders are entitled to one vote for each share held and may vote in the
election of Trustees and on other matters submitted to a meeting of
shareholders. Although Trustees are not elected annually by the shareholders,
shareholders have, under certain circumstances, the right to remove one or more
Trustees. The trust is not required, and does not intend, to hold annual
shareholder meetings although special meetings may be called for the purpose of
electing or removing Trustees, changing fundamental investment restrictions or
approving a management contract.

The shares of each series of the trust are entitled to vote separately to
approve investment advisory agreements or changes in investment restrictions,
but shareholders of all series vote together in the election and selection of
Trustees and accountants. Shares of all series of the trust vote together as a
class on matters that affect all series of the trust in substantially the same
manner. As to matters affecting a single series or class, shares of such series
or class will vote separately. No amendment adversely affecting the rights of
shareholders may be made to the Declaration without the affirmative vote of a
majority of the fund's shares. Shares have no preemptive or conversion rights,
except that under certain circumstances Class B shares may convert to Class A
shares.

As a series of a Delaware business trust, the trust's operations are governed by
the Declaration. Generally, Delaware business trust shareholders are not
personally liable for obligations of the Delaware business trust under Delaware
law. The Delaware Statutory Trust Act (the "Delaware Act") provides that a
shareholder of a Delaware business trust shall be entitled to the same
limitation of liability extended to shareholders of private for-profit
corporations. The Declaration expressly provides that the trust is organized
under the Delaware Act and that the Declaration is to be governed by Delaware
law. There is nevertheless a possibility that a Delaware business trust, such as
the trust, might become a party to an action in another state whose courts
refused to apply Delaware law, in which case the fund's shareholders could
become subject to personal liability.

To guard against this risk, the Declaration (i) contains an express disclaimer
of shareholder liability for acts or obligations of the fund and provides that
notice of such disclaimer may be given in each agreement, obligation or
instrument entered into or executed by the trust or its Trustees, (ii) provides
for the indemnification out of fund property of any shareholders held personally
liable for any obligations of the fund or any series of the trust and (iii)
provides that the trust shall, upon request, assume the defense of any claim
made against any shareholder for any act or obligation of the fund and satisfy
any judgment thereon. Thus, the risk of a shareholder incurring financial loss
beyond his or her investment because of shareholder liability is limited to
circumstances in which all of the following factors are present: (1) a court
refused to apply Delaware law; (2) the liability arose under tort law or, if
not, no contractual limitation of liability was in effect; and (3) the fund
itself would be unable to meet its obligations. In light of Delaware law, the
nature of the fund's business and the nature of its assets, the risk of personal
liability to a fund shareholder is remote.

In addition to the requirements under Delaware law, the Declaration provides
that a shareholder of the fund may bring a derivative action on behalf of the
fund only if the following conditions are met: (a) shareholders eligible to
bring such derivative action under Delaware law who hold at least 10% of the
outstanding shares of the fund, or 10% of the outstanding shares of the series
or class to which such action relates, shall join in the request for the
Trustees to commence such action; and (b) the Trustees must be afforded a
reasonable amount of time to consider such shareholder request and investigate
the basis of such claim. The Trustees shall be entitled to retain counsel or
other advisers in considering the merits of the request and shall require an
undertaking by the shareholders making such request to reimburse the fund for
the expense of any such advisers in the event that the Trustees determine not to
bring such action.

The Declaration further provides that the trust shall indemnify each of its
Trustees and officers against liabilities and expenses reasonably incurred by
them in connection with, or arising out of, any action, suit or proceeding,
threatened against or otherwise involving such Trustee or officer, directly or
indirectly, by reason of being or having been a Trustee or officer of the fund.
The Declaration does not authorize the fund to indemnify any Trustee or officer
against any liability to which he or she would otherwise be subject by reason of
or for willful misfeasance, bad faith, gross negligence or reckless disregard of
such person's duties.

The Declaration provides that any Trustee who is not an "interested person" of
Pioneer shall be considered to be independent for purposes of Delaware law
notwithstanding the fact that such Trustee receives compensation for serving as
a trustee of the trust or other investment companies for which Pioneer acts as
investment adviser.

11. SALES CHARGES

The trust continuously offers three classes of shares designated as Class A,
Class B, Class C and Class R, as described in the prospectuses. The trust offers
fund shares at a reduced sales charge to investors who meet certain criteria
that permit the fund's shares to be sold with low distribution costs. These
criteria are described below or in the prospectus.

Class A Share Sales Charges

You may buy Class A shares at the public offering price, including a sales
charge, as follows:

Sales Charge as a % of
-----------------------
Offering Net Amount Dealer
Amount of Purchase Price Invested Reallowance

Less than $50,000 5.75 6.10 5.00
$50,000 but less than $100,000 4.50 4.71 4.00
$100,000 but less than $250,000 3.50 3.63 3.00
$250,000 but less than $500,000 2.50 2.56 2.00
$500,000 but less than $1,000,000 2.00 2.04 1.75
$1,000,000 or more 0.00 0.00 see below

The schedule of sales charges above is applicable to purchases of Class A shares
of the fund by (i) an individual, (ii) an individual and his or her spouse and
children under the age of 21 and (iii) a trustee or other fiduciary of a trust
estate or fiduciary account or related trusts or accounts including pension,
profit-sharing and other employee benefit trusts qualified under Sections 401 or
408 of the Code although more than one beneficiary is involved. The sales
charges applicable to a current purchase of Class A shares of the fund by a
person listed above is determined by adding the value of shares to be purchased
to the aggregate value (at the then current offering price) of shares of any of
the other Pioneer mutual funds previously purchased and then owned, provided PFD
is notified by such person or his or her broker-dealer each time a purchase is
made which would qualify. Pioneer mutual funds include all mutual funds for
which PFD serves as principal underwriter. At the sole discretion of PFD,
holdings of funds domiciled outside the U.S., but which are managed by
affiliates of Pioneer, may be included for this purpose.

reinvestment of a redemption made during the previous 12 calendar months.
Broker-dealers who receive a commission in connection with Class A share
purchases at net asset value by 401(a) or 401(k) retirement plans with 1,000 or
more eligible participants or with at least $10 million in plan assets will be
required to return any commissions paid or a pro rata portion thereof if the
retirement plan redeems its shares within 12 months of purchase.

If an investor eligible to purchase Class R shares is otherwise qualified to
purchase Class A shares at net asset value or at a reduced sales charge, Class A
shares may be selected where the investor does not require the distribution and
account services needs typically required by Class R share investors and/or the
broker-dealer has elected to forgo the level of compensation that Class R shares
provides.

Letter of Intent ("LOI"). Reduced sales charges are available for purchases of
$50,000 or more of Class A shares (excluding any reinvestments of dividends and
capital gain distributions) made within a 13-month period pursuant to an LOI
which may be established by completing the Letter of Intent section of the
Account Application. The reduced sales charge will be the charge that would be
applicable to the purchase of the specified amount of Class A shares as if the
shares had all been purchased at the same time. A purchase not made pursuant to
an LOI may be included if the LOI is submitted to PIMSS within 90 days of such
purchase. You may also obtain the reduced sales charge by including the value
(at current offering price) of all your Class A shares in the fund and all other
Pioneer mutual funds held of record as of the date of your LOI in the amount
used to determine the applicable sales charge for the Class A shares to be
purchased under the LOI. Five percent of your total intended purchase amount
will be held in escrow by PIMSS, registered in your name, until the terms of the
LOI are fulfilled. When you sign the Account Application, you agree to
irrevocably appoint PIMSS your attorney-in-fact to surrender for redemption any
or all shares held in escrow with full power of substitution. An LOI is not a
binding obligation upon the investor to purchase, or the fund to sell, the
amount specified in the LOI.

If the total purchases, less redemptions, exceed the amount specified under the
LOI and are in an amount which would qualify for a further quantity discount,
all transactions will be recomputed on the expiration date of the LOI to effect
the lower sales charge. Any difference in the sales charge resulting from such
recomputation will be either delivered to you in cash or invested in additional
shares at the lower sales charge. The dealer, by signing the Account
Application, agrees to return to PFD, as part of such retroactive adjustment,
the excess of the commission previously reallowed or paid to the dealer over
that which is applicable to the actual amount of the total purchases under the
LOI.

If the total purchases, less redemptions, are less than the amount specified
under the LOI, you must remit to PFD any difference between the sales charge on
the amount actually purchased and the amount originally specified in the LOI.
When the difference is paid, the shares held in escrow will be deposited to your
account. If you do not pay the difference in sales charge within 20 days after
written request from PFD or your dealer, PIMSS, after receiving instructions
from PFD, will redeem the appropriate number of shares held in escrow to realize
the difference and release any excess.

Class B Shares

You may buy Class B shares at the net asset value per share next computed after
receipt of a purchase order without the imposition of an initial sales charge;
however, Class B shares redeemed within six years of purchase will be subject to
a CDSC at the rates shown in the table below. The charge will be assessed on the
amount equal to the lesser of the current market value or the original purchase
cost of the shares being redeemed. No CDSC will be imposed on increases in
account value above the initial purchase price, including shares derived from
the reinvestment of dividends or capital gain distributions.

shares not subject to any CDSC and then shares held longest during the six-year
period. As a result, you will pay the lowest possible CDSC.

The CDSC for Class B shares subject to a CDSC upon redemption will be determined
as follows:

CDSC as a % of Dollar
Year Since Purchase Amount Subject to CDSC

First 4.0
Second 4.0
Third 3.0
Fourth 3.0
Fifth 2.0
Sixth 1.0
Seventh and thereafter 0.0

Proceeds from the CDSC are paid to PFD and are used in whole or in part to
defray PFD's expenses related to providing distribution-related services to the
fund in connection with the sale of Class B shares, including the payment of
compensation to broker-dealers.

Class B shares will automatically convert into Class A shares eight years after
the purchase date, except as noted below. Class B shares acquired by exchange
from Class B shares of another Pioneer mutual fund will convert into Class A
shares based on the date of the initial purchase and the applicable CDSC. Class
B shares acquired through reinvestment of distributions will convert into Class
A shares based on the date of the initial purchase to which such shares relate.
For this purpose, Class B shares acquired through reinvestment of distributions
will be attributed to particular purchases of Class B shares in accordance with
such procedures as the Trustees may determine from time to time. The conversion
of Class B shares to Class A shares is subject to the continuing availability of
a ruling from the Internal Revenue Service (the "IRS") or an opinion of counsel
that such conversions will not constitute taxable events for U.S. federal income
tax purposes. The conversion of Class B shares to Class A shares will not occur
if such ruling or opinion is not available and, therefore, Class B shares would
continue to be subject to higher expenses than Class A shares for an
indeterminate period.

Class C Shares

You may buy Class C shares at the public offering price, which includes a sales
charge of 1% of the amount invested. Class C shares redeemed within one year of
purchase will also be subject to a CDSC of 1%.

Sales Charge as a % of
----------------------
Offering Net Amount Dealer
Amount of Purchase Price* Invested Reallowance

All amounts 1.00 1.01 1.00

*If you established your Class C share account directly or through an omnibus
account with a broker-dealer on or before September 28, 2001, your shares will
not be subject to the 1% initial sales charge on exchanges or additional
purchases of Class C shares. Your broker-dealer must inform PFD of your
eligibility for a waiver at the time of sale.

The CDSC will be assessed on the amount equal to the lesser of the current
market value or the original purchase cost (less any initial sales charge) of
the shares being redeemed. No CDSC will be imposed on increases in account value
above the initial purchase price or on shares purchased through the reinvestment
of dividends or capital gain distributions. Class C shares do not convert to any
other class of fund shares.

The initial and contingent deferred sales charges are subject to waiver in
certain circumstances as described in the prospectus. As of December 23, 2002,
the following are broker-dealers that have entered into agreements with PFD to
receive a reduced commission at the time of purchase and whose clients are
entitled to a waiver of the initial sales charge:

Merrill Lynch Pierce Fenner & Smith
Mutual of Omaha Investor Services
Kirkpatrick Pettis Smith
Dain Rauscher Incorporated
Capital Financial Services
A. G. Edwards
Morgan Stanley Dean Witter
Stifel, Nicolaus & Co. Inc.
Raymond James Financial, Inc.
Raymond James & Associates, Inc.

Shareholders who held Class C shares of a Pioneer fund on September 28, 2001
directly or through an omnibus account with a broker-dealer ("Grandfathered
Shareholders") are only entitled to a waiver of the initial sales charge if
their broker informs PFD at the time of purchase that the shares are being
purchased for the account of a Grandfathered Shareholder. If you are a
Grandfathered Shareholder you should notify your broker-dealer before purchasing
Class C shares.

In processing redemptions of Class C shares, the fund will first redeem shares
not subject to any CDSC and then shares held for the shortest period of time
during the one-year period. As a result, you will pay the lowest possible CDSC.

Proceeds from the CDSC are paid to PFD and are used in whole or in part to
defray PFD's expenses related to providing distribution-related services to the
fund in connection with the sale of Class C shares, including the payment of
compensation to broker-dealers.

Class R Shares

You may buy Class R shares at the net asset value per share next computed after
receipt of a purchase order without the imposition of an initial sales charge;
however, Class R shares redeemed within eighteen months of purchase will be
subject to a CDSC of 1%, unless you qualify for a waiver. The charge will be
assessed on the amount equal to the lesser of the current market value or the
original purchase cost of the shares being redeemed. No CDSC will be imposed on
increases in account value above the initial purchase price, including shares
derived from the reinvestment of dividends or capital gain distributions.

In processing redemptions of Class R shares, the fund will first redeem shares
not subject to any CDSC and then shares held for the shortest period of time
during the eighteen-month period. As a result, you will pay the lowest possible
CDSC.

Proceeds from the CDSC are paid to PFD and are used in whole or in part to
defray PFD's expenses related to providing distribution-related services to the
fund in connection with the sale of Class R shares, including the payment of
compensation to broker-dealers.

investment options. Class R shares generally are not available to non-retirement
accounts, traditional and Roth IRA's, Coverdell Education Savings Accounts,
SEP's, SAR-SEP's, Simple IRA's, individual 403(b)'s or retirement plans that are
not subject to the Employee Retirement Income Security Act of 1974.

Investors that are eligible to purchase Class R shares may also be eligible to
purchase other share classes. Your investment professional can help you
determine which class is appropriate. You should ask your investment
professional if you qualify for a waiver of sales charges on another class and
take that into consideration when selecting a class of shares. Your investment
firm may receive different compensation depending upon which class is chosen.

Additional Payments to Dealers

From time to time, PFD or its affiliates may elect to make payments to
broker-dealers in addition to the commissions described above. PFD may elect to
reallow the entire initial sales charge to participating dealers for all Class A
sales with respect to which orders are placed during a particular period.
Dealers to whom substantially the entire sales charge is reallowed may be deemed
to be underwriters under federal securities laws. Contingent upon the
achievement of certain sales objectives, PFD may pay to Mutual of Omaha Investor
Services, Inc. a fee of up to 0.20% on qualifying sales of the fund's Class A,
Class B, Class C or Class R shares through such dealer. In addition, PFD or its
affiliates may elect to pay broker-dealers an additional commission based on the
net asset value of all of the fund's Class B, Class C or Class R shares sold by
a dealer during a particular period.

PFD may elect to pay, at its own expense, additional cash or other incentives to
dealers that sell or arrange for the sale of shares of the fund. Such cash or
other incentives may take the form of payment for attendance at preapproved
conferences or seminars, sales or training programs for invited registered
representatives and other employees, payment for travel expenses, including
lodging, incurred by registered representatives and other employees for such
seminars or training programs, seminars for the public, advertising and
preapproved sales campaigns or dealer-sponsored events. PFD may also elect to
make expense reimbursements for special training of a dealer's registered
representatives and other employees in group meetings or to help pay the
expenses of sales contests. PFD will offer such cash and other incentives only
to the extent permitted by applicable law or by a self-regulatory agency such as
the NASD.

12. REDEEMING SHARES

Redemptions may be suspended or payment postponed during any period in which any
of the following conditions exist: the New York Stock Exchange (the "Exchange")
is closed or trading on the Exchange is restricted; an emergency exists as a
result of which disposal by the fund of securities owned by it is not reasonably
practicable or it is not reasonably practicable for the fund to fairly determine
the value of the net assets of its portfolio; or the SEC, by order, so permits.

Redemptions and repurchases are taxable transactions for shareholders that are
subject to U.S. federal income tax. The net asset value per share received upon
redemption or repurchase may be more or less than the cost of shares to an
investor, depending on the market value of the portfolio at the time of
redemption or repurchase.

Systematic Withdrawal Plan(s) ("SWP") (Class A, Class B, Class C and Class R
Shares). A SWP is designed to provide a convenient method of receiving fixed
payments at regular intervals from fund share accounts having a total value of
not less than $10,000. You must also be reinvesting all dividends and capital
gain distributions to use the SWP option.

account at the time the SWP is established. See "Qualifying for a reduced sales
charge" in the prospectus. If you direct that withdrawal payments be paid to
another person, want to change the bank where payments are sent or designate an
address that is different from the account's address of record after you have
opened your account, a signature guarantee must accompany your instructions.
Withdrawals under the SWP are redemptions that may have tax consequences for
you.

Purchases of Class A or Class C shares of the fund at a time when you have a SWP
in effect may result in the payment of unnecessary sales charges and may,
therefore, be disadvantageous. SWP redemptions reduce and may ultimately exhaust
the number of shares in your account. In addition, the amounts received by a
shareholder cannot be considered as yield or income on his or her investment
because part of such payments may be a return of his or her investment.

A SWP may be terminated at any time (1) by written notice to PIMSS or from PIMSS
to the shareholder; (2) upon receipt by PIMSS of appropriate evidence of the
shareholder's death; or (3) when all shares in the shareholder's account have
been redeemed.

You may obtain additional information by calling PIMSS at 1-800-225-6292.

Reinstatement Privilege (Class A and Class B Shares). Subject to the provisions
outlined in the prospectus, you may reinvest all or part of your sale proceeds
from Class A or Class B shares without a sales charge into Class A shares of a
Pioneer mutual fund. However, the distributor will not pay your investment firm
a commission on any reinvested amount.

13. TELEPHONE AND ONLINE TRANSACTIONS

You may purchase, exchange or sell Class A, Class B or Class C shares by
telephone or online. Class R shares may not be purchased by telephone, and Class
R shareowners are not eligible for online transaction privileges. See the
prospectus for more information. For personal assistance, call 1-800-225-6292
between 8:00 a.m. and 9:00 p.m. Eastern time on weekdays. Computer-assisted
telephone transactions may be available to shareholders who have prerecorded
certain bank information (see "FactFone(SM)"). You are strongly urged to
consult with your investment professional prior to requesting any telephone or
online transaction.

Telephone Transaction Privileges. To confirm that each transaction instruction
received by telephone is genuine, the fund will record each telephone
transaction, require the caller to provide the personal identification number
("PIN") for the account and send you a written confirmation of each telephone
transaction. Different procedures may apply to accounts that are registered to
non-U.S. citizens or that are held in the name of an institution or in the name
of an investment broker-dealer or other third party. If reasonable procedures,
such as those described above, are not followed, the fund may be liable for any
loss due to unauthorized or fraudulent instructions. The trust may implement
other procedures from time to time. In all other cases, neither the fund, PIMSS
nor PFD will be responsible for the authenticity of instructions received by
telephone; therefore, you bear the risk of loss for unauthorized or fraudulent
telephone transactions.

Online Transaction Privileges. If your account is registered in your name, you
may be able buy, exchange or sell fund shares online. Your investment firm may
also be able to buy, exchange or sell your fund shares online.

To establish online transaction privileges:
o For new accounts, complete the online section of the account application
o For existing accounts, complete an account options form, write to the
transfer agent or complete the online authorization screen on
www.pioneerfunds.com

electronically records the transaction, requires an authorizing password and
sends a written confirmation. The fund 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.

Telephone and Website Online Access. You may have difficulty contacting the fund
by telephone or accessing pioneerfunds.com during times of market volatility or
disruption in telephone or Internet services. On Exchange holidays or on days
when the Exchange closes early, Pioneer will adjust the hours for the telephone
center and for online transaction processing accordingly. If you are unable to
access pioneerfunds.com or to reach the fund by telephone, you should
communicate with the fund in writing.

FactFone(SM). FactFone(SM) is an automated inquiry and telephone transaction
system available to Pioneer mutual fund shareholders by dialing 1-800-225-4321.
FactFone(SM) allows shareholder access to current information on Pioneer mutual
fund accounts and to the prices and yields of all publicly available Pioneer
mutual funds. In addition, you may use FactFone(SM) to make computer-assisted
telephone purchases, exchanges or redemptions from your Pioneer mutual fund
accounts, access your account balances and last three transactions and order a
duplicate statement if you have activated your PIN. Telephone purchases or
redemptions require the establishment of a bank account of record. You are
strongly urged to consult with your investment professional prior to requesting
any telephone transaction. Shareholders whose accounts are registered in the
name of a broker-dealer or other third party may not be able to use
FactFone(SM). Call PIMSS for assistance.

FactFone(SM) allows shareholders to hear the following recorded fund
information:

o net asset value prices for all Pioneer mutual funds;

o annualized 30-day yields on Pioneer's fixed income funds;

o annualized 7-day yields and 7-day effective (compound) yields for Pioneer's
money market fund; and

o dividends and capital gain distributions on all Pioneer mutual funds.

Yields are calculated in accordance with SEC mandated standard formulas.

All performance numbers communicated through FactFone(SM) represent past
performance, and figures include the maximum applicable sales charge. A
shareholder's actual yield and total return will vary with changing market
conditions. The value of Class A, Class B, Class C and Class R shares (except
for Pioneer Cash Reserves Fund, which seeks to maintain a stable $1.00 share
price) will also vary, and such shares may be worth more or less at redemption
than their original cost.

14. PRICING OF SHARES

The net asset value per share of each class of the fund is determined as of the
close of regular trading on the Exchange (normally 4:00 p.m. Eastern time) on
each day on which the Exchange is open for trading. As of the date of this
statement of additional information, the Exchange is open for trading every
weekday except for the following holidays: New Year's Day, Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day. The net asset value per share of each
class of the fund is also determined on any other day on which the level of
trading in its portfolio securities is sufficiently high that the current net
asset value per share might be materially affected by changes in the value of
its portfolio securities. The fund is not required to determine its net asset
value per share on any day on which no purchase orders in good order for fund
shares are received and no shares are tendered and accepted for redemption.

The fund generally values its portfolio securities using closing market prices
or readily available market quotations. Securities which have not traded on the
date of valuation or securities for which sales prices are not generally
reported are valued at the mean between the current bid and asked prices.
Securities quoted in foreign currencies are converted to U.S. dollars utilizing
foreign exchange rates employed by the fund's independent pricing services.
Generally, trading in non-U.S. securities is substantially completed each day at
various times prior to the close of regular trading on the Exchange. The values
of such securities used in computing the net asset value of the fund's shares
are determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of regular trading on the Exchange. When
closing market prices or market quotations are not available or are considered
by Pioneer to be unreliable, the fund may 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 trust's
Trustees. The fund also may use the fair value of a security, including a
non-U.S. security, when Pioneer determines that the closing market price on the
primary exchange where the security is traded no longer accurately reflects the
value of the security due to factors affecting one or more relevant securities
markets or the specific issuer. The use of fair value pricing by the 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 the fund could change on a
day you cannot buy or sell shares of the fund. The 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.

The net asset value per share of each class of the fund is computed by taking
the value of all of the fund's assets attributable to a class, less the fund's
liabilities attributable to that class, and dividing the result by the number of
outstanding shares of that class. For purposes of determining net asset value,
expenses of the classes of the fund are accrued daily and taken into account.
The fund's maximum offering price per Class A share is determined by adding the
maximum sales charge to the net asset value per Class A share. The fund's
maximum offering price per Class C share is determined by adding the maximum
sales charge to the net asset value per Class C share (Class C shares may be
subject to a CDSC). Class B and Class R shares are offered at net asset value
without the imposition of an initial sales charge (Class Band Class R shares may
be subject to a CDSC).

15. TAX STATUS

The fund has elected to be treated, has qualified and intends to qualify each
year as a "regulated investment company" under Subchapter M of the Code so that
it will not pay U.S. federal income tax on income and capital gains distributed
to shareholders. In order to qualify as a regulated investment company under
Subchapter M of the Code, the fund must, among other things, derive at least 90%
of its gross income for each taxable year from dividends, interest, payments
with respect to securities loans, gains from the sale or other disposition of
stock, securities or foreign currencies, or other income (including gains from
options, futures and forward contracts) derived with respect to its business of
investing in such stock, securities or currencies (the "90% income test") and
satisfy certain quarterly asset diversification requirements. For purposes of
the 90% income test, the character of income earned by certain entities in which
the fund invests that are not treated as corporations for U.S. federal income
tax purposes (e.g., partnerships or trusts) will generally pass through to the
fund. Consequently, the fund may be required to limit its equity investments in
such entities that earn fee income, rental income or other nonqualifying income.

fund, including "net capital gains" (the excess of net long-term capital gain
over net short-term capital loss), distributed to shareholders. However, if the
fund retains any investment company taxable income or net capital gain, it
generally will be subject to U.S. federal income tax at regular corporate rates
on the amount retained. The fund intends to distribute at least annually all or
substantially all of its investment company taxable income, net tax-exempt
interest, and net capital gain. If the fund did not qualify as a regulated
investment company for any taxable year, it would be treated as a U.S.
corporation subject to U.S. federal incometax.

Under the Code, the fund will be subject to a nondeductible 4% federal excise
tax on a portion of its undistributed ordinary income and capital gain net
income if it fails to meet certain distribution requirements with respect to
each calendar year. The fund intends to make distributions in a timely manner
and accordingly does not expect to be subject to the excise tax.

The fund generally distributes any net short- and long-term capital gains in
November. The fund generally pays dividends from any net investment income in
December. Dividends from income and/or capital gains may also be paid at such
other times as may be necessary for the fund to avoid U.S. federal income or
excise tax.

Unless shareholders specify otherwise, all distributions from the fund will be
automatically reinvested in additional full and fractional shares of the fund.
For U.S. federal income tax purposes, all dividends generally are taxable
whether a shareholder takes them in cash or reinvests them in additional shares
of the fund. In general, assuming that the fund has sufficient earnings and
profits, dividends from investment company taxable income are taxable either as
ordinary income or, if so designated by the fund, as "qualified dividend income"
taxable to individual shareholders at a maximum 15% tax rate.

Dividend distributions to individual shareholders may qualify for the maximum
15% tax rate on dividends to the extent that such dividends are attributable to
"qualified dividend income" that is received by the fund after December 31, 2002
from the fund's investments in stock of certain qualified foreign corporations
and U.S. companies (if any), provided that certain holding period and other
requirements are met. A foreign corporation generally is treated as a qualified
foreign corporation if it is incorporated in a possession of the United States
or it is eligible for the benefits of certain income tax treaties with the
United States. A foreign corporation that does not meet such requirements will
be treated as qualifying with respect to dividends paid by it if the stock with
respect to which the dividends are paid is readily tradable on an established
securities market in the United States. Dividends from foreign personal holding
companies, foreign investment companies and passive foreign investment
companies, however, will not qualify for the maximum 15% tax rate.

Dividends distributed to shareholders attributable to investment company taxable
income from the fund's investments in debt securities, short sales, options,
futures, forward contracts, repurchase agreements or the lending of securities
or any other investments that do not produce qualified dividend income will not
qualify for such maximum 15% tax rate and instead will be taxable to individual
shareholders at ordinary income tax rates.

Dividends from net capital gain, if any, that are designated as capital gain
dividends are taxable as long-term capital gains for U.S. federal income tax
purposes without regard to the length of time the shareholder has held shares of
the fund. Capital gain dividends distributed by the fund to individual
shareholders generally will qualify for the maximum 15% tax rate on long-term
capital gains to the extent that such dividends relate to capital gains
recognized by the fund on or after May 6, 2003. Absent new legislation, the
maximum 15% tax rate on qualified dividend income and long-term capital gains
will cease to apply to taxable years beginning after December 31, 2008.

Distributions by the fund in excess of the fund's current and accumulated
earnings and profits will be treated as a return of capital to the extent of
(and in reduction of) the shareholder's tax basis in its shares and any such
amount in excess of that basis will be treated as gain from the sale of shares,
as discussed below. The U.S. federal income tax status of all distributions will
be reported to shareholders annually.

Although dividends generally will be treated as distributed when paid, any
dividend declared by the fund as of a record date in October, November or
December and paid during the following January will be treated for U.S. federal
income tax purposes as received by shareholders on December 31 of the calendar
year in which it is declared. In addition, certain other distributions made
after the close of a taxable year of the fund may be "spilled back" and treated
as paid by the fund (except for purposes of the 4% excise tax) during such
taxable year. In such case, shareholders generally will be treated as having
received such dividends in the taxable year in which the distributions were
actually made.

Foreign exchange gains and losses realized by the fund in connection with
certain transactions involving foreign currency-denominated debt securities,
certain options and futures contracts relating to foreign currency, foreign
currency forward contracts, foreign currencies, or payables or receivables
denominated in a foreign currency are subject to Section 988 of the Code, which
generally causes such gains and losses to be treated as ordinary income and
losses and may affect the amount, timing and character of distributions to
shareholders. Under Treasury regulations that may be promulgated in the future,
any such transactions that are not directly related to the fund's investments in
stock or securities (or its options contracts or futures contracts with respect
to stock or securities) may have to be limited in order to enable the fund to
satisfy the 90% income test. If the net foreign exchange loss for a year were to
exceed the fund's investment company taxable income (computed without regard to
such loss), the resulting ordinary loss for such year would not be deductible by
the fund or its shareholders in future years.

If the fund acquires any equity interest (under Treasury regulations that may be
promulgated in the future, generally including not only stock but also an option
to acquire stock such as is inherent in a convertible bond) in certain foreign
corporations that receive at least 75% of their annual gross income from passive
sources (such as interest, dividends, certain rents and royalties, or capital
gains) or that hold at least 50% of their assets in investments producing such
passive income ("passive foreign investment companies"), the fund could be
subject to U.S. federal income tax and additional interest charges on "excess
distributions" received from such companies or on gain from the sale of stock in
such companies, even if all income or gain actually received by the fund is
timely distributed to its shareholders. The fund would not be able to pass
through to its shareholders any credit or deduction for such a tax. An election
may generally be available that would ameliorate these adverse tax consequences,
but any such election could require the fund to recognize taxable income or gain
(subject to tax distribution requirements) without the concurrent receipt of
cash. These investments could also result in the treatment of capital gains from
the sale of stock of passive foreign investment companies as ordinary income.
The fund may limit and/or manage its holdings in passive foreign investment
companies to limit its tax liability or maximize its return from these
investments.

The fund may invest in debt obligations that are in the lowest rating categories
or are unrated, including debt obligations of issuers not currently paying
interest or who are in default. Investments in debt obligations that are at risk
of or in default present special tax issues for the fund. Tax rules are not
entirely clear about issues such as when the fund may cease to accrue interest,
original issue discount or market discount, when and to what extent deductions
may be taken for bad debts or worthless securities, how payments received on
obligations in default should be allocated between principal and income and
whether exchanges of debt obligations in a workout context are taxable. These
and other issues will be addressed by the fund, in the event it invests in such
securities, in order to seek to ensure that it distributes sufficient income to
preserve its status as a regulated investment company and does not become
subject to U.S. federal income or excise tax.

If the fund invests in certain pay-in-kind securities, zero coupon securities,
deferred interest securities or, in general, any other securities with original
issue discount (or with market discount if the fund elects to include market
discount in income currently), the fund generally must accrue income on such
investments for each taxable year, which generally will be prior to the receipt
of the corresponding cash payments. However, the fund must distribute, at least
annually, all or substantially all of its investment company taxable income,
including such accrued income, to shareholders to qualify as a regulated
investment company under the Code and avoid U.S. federal income and excise
taxes. Therefore, the fund may have to dispose of its portfolio securities under
disadvantageous circumstances to generate cash, or may have to borrow the cash,
to satisfy distribution requirements.

For U.S. federal income tax purposes, the fund is permitted to carry forward a
net capital loss for any year to offset its capital gains, if any, for up to
eight years following the year of the loss. To the extent subsequent capital
gains are offset by such losses, they would not result in U.S. federal income
tax liability to the fund and are not expected to be distributed as such to
shareholders. See Annual Fee, Expense and Other Information for the fund's
available capital loss carryforwards.

At the time of an investor's purchase of fund shares, a portion of the purchase
price may be attributable to realized or unrealized appreciation in the fund's
portfolio or undistributed taxable income of the fund. Consequently, subsequent
distributions by the fund with respect to these shares from such appreciation or
income may be taxable to such investor even if the net asset value of the
investor's shares is, as a result of the distributions, reduced below the
investor's cost for such shares and the distributions economically represent a
return of a portion of the investment.

Redemptions and exchanges generally are taxable events for shareholders that are
subject to tax. Shareholders should consult their own tax advisers with
reference to their individual circumstances to determine whether any particular
transaction in fund shares is properly treated as a sale for tax purposes, as
the following discussion assumes, and the tax treatment of any gains or losses
recognized in such transactions. In general, if fund shares are sold, the
shareholder will recognize gain or loss equal to the difference between the
amount realized on the sale and the shareholder's adjusted basis in the shares.
Such gain or loss generally will be treated as long-term capital gain or loss if
the shares were held for more than one year and otherwise generally will be
treated as short-term capital gain or loss. Any loss recognized by a shareholder
upon the redemption, exchange or other disposition of shares with a tax holding
period of six months or less will be treated as a long-term capital loss to the
extent of any amounts treated as distributions of long-term capital gain with
respect to such shares.

In addition, if Class A or Class B shares that have been held for less than 91
days are redeemed and the proceeds are reinvested in Class A shares of the fund
or in Class A shares of another mutual fund at net asset value pursuant to the
reinstatement privilege, or if Class A or Class C shares in the fund that have
been held for less than 91 days are exchanged for the same class of shares in
another fund at net asset value pursuant to the exchange privilege, all or a
portion of the sales charge paid on the shares that are redeemed or exchanged
will not be included in the tax basis of such shares under the Code to the
extent a sales charge that would otherwise apply to the shares received is
reduced pursuant to the reinstatement or exchange privilege. In either case, the
portion of the sales charge not included in the tax basis of the shares redeemed
or surrendered in an exchange is included in the tax basis of the shares
acquired in the reinvestment or exchange. Losses on redemptions or other
dispositions of shares may be disallowed under "wash sale" rules in the event of
other investments in the fund (including those made pursuant to reinvestment of
dividends and/or capital gain distributions) within a period of 61 days
beginning 30 days before and ending 30 days after a redemption or other
disposition of shares. In such a case, the disallowed portion of any loss
generally would be included in the U.S. federal tax basis of the shares acquired
in the other investments.

Under recently promulgated Treasury regulations, if a shareholder recognizes a
loss with respect to shares of $2 million or more for an individual shareholder,
or $10 million or more for a corporate shareholder, in any single taxable year
(or greater amounts over a combination of years), the shareholder must file with
the IRS a disclosure statement on Form 8886. Shareholders who own portfolio
securities directly are in many cases excepted from this reporting requirement
but, under current guidance, shareholders of regulated investment companies are
not excepted. The fact that a loss is reportable under these regulations does
not affect the legal determination of whether or nor the taxpayer's treatment of
the loss is proper. Shareholders should consult with their tax advisers to
determine the applicability of these regulations in light of their individual
circumstances.

such futures or forward contracts may not have been performed or closed out. The
tax rules applicable to these contracts may affect the characterization of some
capital gains and losses realized by the fund as long-term or short-term.
Certain options, futures and forward contracts relating to foreign currency may
be subject to Section 988 of the Code, as described above, and accordingly may
produce ordinary income or loss. Additionally, the fund may be required to
recognize gain if an option, futures contract, forward contract, short sale or
other transaction that is not subject to the mark-to-market rules is treated as
a "constructive sale" of an "appreciated financial position" held by the fund
under Section 1259 of the Code. Any net mark-to-market gains and/or gains from
constructive sales may also have to be distributed to satisfy the distribution
requirements referred to above even though the fund may receive no corresponding
cash amounts, possibly requiring the disposition of portfolio securities or
borrowing to obtain the necessary cash. Losses on certain options, futures or
forward contracts and/or offsetting positions (portfolio securities or other
positions with respect to which the fund's risk of loss is substantially
diminished by one or more options, futures or forward contracts) may also be
deferred under the tax straddle rules of the Code, which may also affect the
characterization of capital gains or losses from straddle positions and certain
successor positions as long-term or short-term. Certain tax elections may be
available that would enable the fund to ameliorate some adverse effects of the
tax rules described in this paragraph. The tax rules applicable to options,
futures, forward contracts and straddles may affect the amount, timing and
character of the fund's income and gains or losses and hence of its
distributions to shareholders.

Dividends received by the fund from U.S. corporations in respect of any share of
stock with a tax holding period of at least 46 days (91 days in the case of
certain preferred stock) extending before and after each dividend held in an
unleveraged position and distributed and designated by the fund (except for
capital gain dividends receivedfrom a regulatedinvestment company) may be
eligible for the 70% dividends-received deduction generally available to
corporations under the Code. Any corporate shareholder should consult its tax
adviser regarding the possibility that its tax basis in its shares may be
reduced, for U.S. federal income tax purposes, by reason of "extraordinary
dividends" received with respect to the shares and, to the extent such basis
would be reduced below zero, current recognition of income may be required. In
order to qualify for the deduction, corporate shareholders must meet the minimum
holding period requirement stated above with respect to their fund shares,
taking into account any holding period reductions from certain hedging or other
transactions or positions that diminish their risk of loss with respect to their
fund shares, and, if they borrow to acquire or otherwise incur debt attributable
to fund shares, they may be denied a portion of the dividends-received
deduction. The entire dividend, including the otherwise deductible amount, will
be included in determining the excess, if any, of a corporation's adjusted
current earnings over its alternative minimum taxable income, which may increase
a corporation's alternative minimum tax liability.

The fund may be subject to withholding and other taxes imposed by foreign
countries, including taxes on interest, dividends and capital gains with respect
to its investments in those countries, which would, if imposed, reduce the yield
on or return from those investments. Tax conventions between certain countries
and the U.S. may reduce or eliminate such taxes in some cases. If more than 50%
of the fund's total assets at the close of any taxable year consists of stock or
securities of foreign corporations, the fund may elect to pass through to its
shareholders their pro rata shares of qualified foreign taxes paid by the fund
(not in excess of its actual tax liability), with the result that shareholders
would be required to include such taxes in their gross incomes (in addition to
dividends and distributions they actually received), would treat such taxes as
foreign taxes paid by them, and may be entitled to a tax deduction for such
taxes or a tax credit, subject to a holding period requirement and other
limitations under the Code.

Qualified foreign taxes generally include taxes that would be treated as income
taxes under U.S. tax regulations but do not include most other taxes, such as
stamp taxes, securities transaction taxes, and similar taxes. If the fund makes
the election described above, shareholders may deduct their pro rata portion of
qualified foreign taxes paid by the fund (not in excess of the tax actually owed
by the fund) in computing their income subject to U.S. federal income taxation
or, alternatively, use them as foreign tax credits, subject to applicable
limitations under the Code, against their U.S. federal income taxes.
Shareholders who do not itemize deductions for U.S. federal income tax purposes
will not, however, be able to deduct their pro rata portion of qualified foreign
taxes paid by the fund, although such shareholders will be required to include
their shares of such taxes in gross income if the fund makes the election
described above.

If the fund makes this election and a shareholder chooses to take a credit for
the foreign taxes deemed paid by such shareholder, the amount of the credit that
may be claimed in any year may not exceed the same proportion of the U.S. tax
against which such credit is taken which the shareholder's taxable income from
foreign sources (but not in excess of the shareholder's entire taxable income)
bears to his entire taxable income. For this purpose, long-term and short-term
capital gains the fund realizes and distributes to shareholders will generally
not be treated as income from foreign sources in their hands, nor will
distributions of certain foreign currency gains subject to Section 988 of the
Code and of any other income realized by the fund that is deemed, under the
Code, to be U.S.-source income in the hands of the fund. This foreign tax credit
limitation may also be applied separately to certain specific categories of
foreign-source income and the related foreign taxes. As a result of these rules,
which may have different effects depending upon each shareholder's particular
tax situation, certain shareholders may not be able to claim a credit for the
full amount of their proportionate share of the foreign taxes paid by the fund.
Shareholders who are not liable for U.S. federal income taxes, including
tax-exempt shareholders, will ordinarily not benefit from this election. If the
fund does make the election, it will provide required tax information to
shareholders. The fund generally may deduct any foreign taxes that are not
passed through to its shareholders in computing its income available for
distribution to shareholders to satisfy applicable tax distribution
requirements.

Shareholders that are exempt from U.S. federal income tax, such as retirement
plans that are qualified under Section 401 of the Code, generally are not
subject to U.S. federal income tax on fund dividends or distributions or on
sales or exchanges of fund shares unless the acquisition of the fund shares was
debt-financed. However, in the case of fund shares held through a non-qualified
deferred compensation plan, fund dividends and distributions received by the
plan and sales and exchanges of fund shares by the plan generally are taxable to
the employer sponsoring such plan in accordance with the U.S. federal income tax
laws governing deferred compensation plans.

A plan participant whose retirement plan invests in the fund, whether such plan
is qualified or not, generally is not taxed on fund dividends or distributions
received by the plan or on sales or exchanges of fund shares by the plan for
U.S. federal income tax purposes. However, distributions to plan participants
from a retirement plan account generally are taxable as ordinary income and
different tax treatment, including penalties on certain excess contributions and
deferrals, certain pre-retirement and post-retirement distributions and certain
prohibited transactions, is accorded to accounts maintained as qualified
retirement plans. Shareholders should consult their tax advisers for more
information.

Federal law requires that the fund withhold (as "backup withholding") 28% of
reportable payments, including dividends, capital gain distributions and the
proceeds of redemptions and exchanges or repurchases of fund shares, paid to
shareholders who have not complied with IRS regulations. In order to avoid this
withholding requirement, shareholders, other than certain exempt entities, must
certify on their Account Applications, or on separate IRS Forms W-9, that the
Social Security Number or other Taxpayer Identification Number they provide is
their correct number and that they are not currently subject to backup
withholding, or that they are exempt from backup withholding. The fund may
nevertheless be required to backup withhold if it receives notice from the IRS
or a broker that the number provided is incorrect or backup withholding is
applicable as a result of previous underreporting of interest or dividend
income.

If, as anticipated, the fund continues to qualify as a regulated investment
company under the Code, it will not be required to pay any Massachusetts income,
corporate excise or franchise taxes.

The description of certain federal tax provisions above relates only to U.S.
federal income tax consequences for shareholders who are U.S. persons, i.e.,
U.S. citizens or residents or U.S. corporations, partnerships, trusts or
estates, and who are subject to U.S. federal income tax and hold their shares as
capital assets. Except as otherwise provided, this description does not address
the special tax rules that may be applicable to particular types of

investors, such as financial institutions, insurance companies, securities
dealers, or tax-exempt or tax-deferred plans, accounts or entities. Investors
other than U.S. persons may be subject to different U.S. federal income tax
treatment, including a non-resident alien U.S. withholding tax at the rate of
30% or at a lower treaty rate on amounts treated as ordinary dividends from the
fund and, unless an effective IRS Form W-8BEN, or other authorized withholding
certificate is on file, to backup withholding at the rate of 28% on certain
other payments from the fund. Shareholders should consult their own tax advisers
on these matters and on state, local, foreign and other applicable tax laws.

16. INVESTMENT RESULTS

Quotations, Comparisons and General Information

From time to time, in advertisements, in sales literature or in reports to
shareholders, the past performance of the fund may be illustrated and/or
compared with that of other mutual funds with similar investment objectives and
to stock or other relevant indices. For example, total return of the fund's
classes may be compared to averages or rankings prepared by Lipper, Inc., a
widely recognized independent service which monitors mutual fund performance;
the Standard & Poor's 500 Stock Index; the Dow Jones Industrial Average;the
Russell U.S. Equity Indexes or the Wilshire Total Market Value Index; or any
other appropriate index.

In addition, the performance of the classes of the fund may be compared to
alternative investment or savings vehicles and/or to indices or indicators of
economic activity, e.g., inflation or interest rates. The fund may also include
securities industry or comparative performance information generally and in
advertising or materials marketing the fund's shares. Performance rankings and
listings reported in newspapers or national business and financial publications,
such as Barron's, Business Week, Consumers Digest, Consumer Reports, Financial
World, Forbes, Fortune, Investors Business Daily, Kiplinger's Personal Finance
Magazine, Money Magazine, New York Times, Smart Money, USA Today, U.S. News and
World Report, The Wall Street Journal and Worth, may also be cited (if the fund
is listed in any such publication) or used for comparison, as well as
performance listings and rankings from various other sources including Bloomberg
Financial Markets, CDA/Wiesenberger, Donoghue's Mutual Fund Almanac, Ibbotson
Associates, Investment Company Data, Inc., Johnson's Charts, Kanon Bloch Carre
and Co., Lipper, Inc., Micropal, Inc., Morningstar, Inc., Schabacker Investment
Management and Towers Data Systems, Inc.

In addition, from time to time quotations from articles from financial
publications such as those listed above may be used in advertisements, in sales
literature or in reports to shareholders of the fund.

The fund may also present, from time to time, historical information depicting
the value of a hypothetical account in one or more classes of the fund since
inception.

In presenting investment results, the fund may also include references to
certain financial planning concepts, including (a) an investor's need to
evaluate his financial assets and obligations to determine how much to invest;
(b) his need to analyze the objectives of various investments to determine where
to invest; and (c) his need to analyze his time frame for future capital needs
to determine how long to invest. The investor controls these three factors, all
of which affect the use of investments in building assets.

One of the primary methods used to measure the performance of a class of the
fund is "total return." Total return will normally represent the percentage
change in value of an account, or of a hypothetical investment in a class of the
fund, over any period up to the lifetime of that class of the fund. Total return
calculations will usually assume the reinvestment of all dividends and capital
gain distributions and will be expressed as a percentage increase or decrease
from an initial value for the entire period or for one or more specified periods
within the entire period. Total return percentages for periods of less than one
year will usually be annualized; total return percentages for periods longer
than one year will usually be accompanied by total return percentages for each
year within the period and/or by the average annual compounded total return for
the period. The income and capital components

of a given return may be separated and portrayed in a variety of ways in order
to illustrate their relative significance. Performance may also be portrayed in
terms of cash or investment values without percentages. Past performance cannot
guarantee any particular future result.

The fund's average annual total return quotations for each of its classes as
that information may appear in the fund's prospectuses, this statement of
additional information or in advertising are calculated by standard methods
prescribed by the SEC.

Standardized Average Annual Total Return Quotations

Average annual total return quotations for each class of shares are computed by
finding the average annual compounded rates of return that would cause a
hypothetical investment in the class made on the first day of a designated
period (assuming all dividends and distributions are reinvested) to equal the
ending redeemable value of such hypothetical investment on the last day of the
designated period in accordance with the following formula:

n
P(1+T) = ERV

Where:

P = a hypothetical initial payment of $1,000, less the
maximum sales load of $57.50 for Class A shares or
the maximum sales load of $10.00 for Class C shares
or the deduction of the CDSC for Class B, Class C and
Class R shares at the end of the period;

T = average annual total return

n = number of years

ERV = ending redeemable value of the hypothetical $1,000
initial payment made at the beginning of the
designated period (or fractional portion thereof)

For purposes of the above computation, it is assumed that all dividends and
distributions made by the fund are reinvested at net asset value during the
designated period. The average annual total return quotation is determined to
the nearest 1/100 of 1%.

In determining the average annual total return (calculated as provided above),
recurring fees, if any, that are charged to all shareholder accounts of a
particular class of shares are taken into consideration. For any account fees
that vary with the size of the account, the account fee used for purposes of the
above computation is assumed to be the fee that would be charged to a class'
mean account size.

See Annual Fee, Expense and Other Information for the annual total returns for
each class of fund shares as of the most recently completed fiscal year.

Standardized Average Annual Total Return Quotations (After Taxes on
Distributions)

Average annual total return quotations (after taxes on distributions) are
computed by finding the average annual compounded rate of return (after taxes on
distributions) that would cause a hypothetical investment in the class made on
the first day of the period (assuming all dividends and distributions are
reinvested) to equal the ending redeemable value of such hypothetical investment
on the last day of the designated period in accordance with the following
formula:

n
P(1+T) = ATV
D
Where:

P = a hypothetical initial payment of $1,000

T = average annual total return (after taxes on distributions)

n = number of years

ATV = ending value of a hypothetical $1,000 payment made at the
D beginning of the 1-, 5-, or 10-year periods at the end of
the 1-, 5-, or 10-year periods (or fractional portion),
after taxes on fund distributions but not after taxes on
redemption

The taxes due on any distributions by the fund are calculated by applying the
highest historical individual federal income tax rates and do not reflect the
impact of state or local taxes. Actual after tax returns depend upon an
investors tax situation and may differ from those used to compute the
quotations. After tax returns will vary by class of shares. The taxable amount
and tax character of each distribution specified by the fund on the dividend
declaration date are generally used in these calculations but may be adjusted to
reflect subsequent recharacterizations of distributions. The distributions are
adjusted to reflect the federal tax impact the distribution would have on an
individual taxpayer on the reinvestment date. The calculation disregards any
potential tax liabilities other than federal tax liabilities (e.g., state and
local taxes); the effect of phaseouts of certain exemptions, deductions and
credits at various income levels; and the impact of the federal alternative
minimum tax.

See Annual Fee, Expense and Other Information for the annual total returns
(after taxes on distributions) for each class of fund shares as of the most
recently completed fiscal year.

Standardized Average Annual Total Return Quotations (After Taxes on
Distributions and Redemption)

Average annual total return quotations (after taxes on distributions and
redemptions) are computed by finding the average annual compounded rate of
return (after taxes on distributions and redemptions) that would cause a
hypothetical investment in the class made on the first day of the period
(assuming all dividends and distributions are reinvested) to equal the ending
redeemable value of such hypothetical investment on the last day of the
designated period in accordance with the following formula:

n
P(1 + T) = ATV
DR
Where:

P = a hypothetical initial payment of $1,000

T = average annual total return (after taxes on distributions
and redemption)

n = number of years

ATV = ending value of a hypothetical $1,000 payment made
DR at the beginning of the 1-, 5-, or 10-year periods at
the end of the 1-, 5-, or 10-year periods (or
fractional portion), after taxes on fund
distributions and redemption

The taxes due on any distributions by the fund and redemptions are calculated by
applying the highest historical individual federal income tax rates and do not
reflect the impact of state or local taxes. Actual after tax returns depend upon
an investors tax situation and may differ from those used to compute the
quotations. After tax returns will vary by class of shares. The taxable amount
and tax character of each distribution specified by the fund on the dividend
declaration date are generally used in these calculations but may be adjusted to
reflect subsequent recharacterizations of distributions. The distributions are
adjusted to reflect the federal tax impact the distribution would have on an
individual taxpayer on the reinvestment date. The calculation disregards any
potential tax liabilities other than federal tax liabilities (e.g., state and
local taxes); the effect of phaseouts of certain exemptions, deductions and
credits at various income levels; and the impact of the federal alternative
minimum tax.

The amount and character (e.g., short-term or long-term) of capital gain or loss
upon redemption are separately determined for shares acquired through the $1,000
initial investment and each subsequent purchase through reinvested
distributions. The calculations does not assume that shares acquired through
reinvestment of distributions have the same holding period as the initial $1,000
investment. The tax character is determined by the length of the measurement
period in the case of the initial $1,000 investment and the length of the period
between reinvestment and the end of the measurement period in the case of
reinvested distributions. Capital gains taxes (or the benefit resulting from tax
losses) are calculated using the highest federal individual capital gains tax
rate for gains of the appropriate character in effect on the redemption date and
in accordance with federal tax law applicable on the redemption date. For
example, applicable federal tax laws are used to determine whether and how gains
and losses from the sale of shares with different holding periods should be
netted, as well as the tax character (e.g., short-term or long-term) of any
resulting gains or losses. The calculations assume that a shareholder has
sufficient capital gains of the same character from other investments to offset
any capital losses from the redemption so that the taxpayer may deduct the
capital losses in full.

See Annual Fee, Expense and Other Information for the annual total returns
(after taxes on distributions and redemptions) for each class of fund shares as
of the most recently completed fiscal year.

17. FINANCIAL STATEMENTS

Papp Stock Fund's (the predecessor to Pioneer Papp Stock Fund) financial
statements and financial highlights for the fiscal year ended [xx]
from the fund's annual report and for the semi-annual period ended [xx]
from the fund's semi-annual report, as filed with the SEC on [xx]
(Accession No. [xx]) and [xx] (Accession No.
[xx]), respectively, are incorporated by reference into this
statement of additional information. The financial statements and financial
highlights for the fiscal year ended [xx] have been audited by
[xx], independent auditors, as indicated in their report
thereon, appearing and incorporated by reference elsewhere herein, and are
included in reliance upon such report, given on the authority of [xx]
as experts in accounting

and auditing. The financial statements and financial highlights for the
semi-annual period ended [xx] have not been audited.

Papp Stock Fund's annual and semi-annual reports include the financial
statements referenced above and are available without charge upon request by
calling Shareholder Services at 1-800-225-6292.

18. ANNUAL FEE, EXPENSE AND OTHER INFORMATION

Portfolio Turnover

Not applicable(1).

Share Ownership

As of September 30, 2003, the Trustees and officers of the fund owned
beneficially in the aggregate less than 1% of the outstanding shares of the
fund. The following is a list of the holders of 5% or more of any class of
Pioneer Papp Stock Fund's outstanding shares as of September 30, 2003:

- --------------------------------------------------------------------------------
Record Holder Share Class Number of Shares % of Class
- --------------------------------------------------------------------------------
None.

Trustee Ownership of Shares of the Fund and Other Pioneer Funds

The following table indicates the value of shares that each Trustee beneficially
owned in the fund and Pioneer Funds in the aggregate as of December 31, 2002.
Beneficial ownership is determined in accordance with SEC rules. The share value
of any closed-end fund is based on its closing market price on December 31,
2002. The share value of any open-end Pioneer Fund is based on the net asset
value of the class of shares on December 31, 2002. The dollar ranges in this
table are in accordance with SEC requirements.

- ----------------------------------------------------------------------------------------------------------
Name of Trustee Dollar Range of Aggregate Dollar Range of Equity
Equity Securities in Securities in All Registered Investment
the Fund Companies in the Pioneer Family of Funds
- ----------------------------------------------------------------------------------------------------------

Interested Trustees
- ----------------------------------------------------------------------------------------------------------
John F. Cogan, Jr. none over $100,000
- ----------------------------------------------------------------------------------------------------------
Daniel T. Geraci* none $1-$10,000
- ----------------------------------------------------------------------------------------------------------
Osbert M. Hood** none $10,001-$50,000
- ----------------------------------------------------------------------------------------------------------
Independent Trustees
- ----------------------------------------------------------------------------------------------------------
Mary K. Bush none $10,001-$50,000
- ----------------------------------------------------------------------------------------------------------
Richard H. Egdahl, M.D. none $50,001-$100,000
- ----------------------------------------------------------------------------------------------------------
Margaret B.W. Graham none $10,001-$50,000
- ----------------------------------------------------------------------------------------------------------
Marguerite A. Piret none $50,001-$100,000
- ----------------------------------------------------------------------------------------------------------
Stephen K. West none $50,001-$100,000
- ----------------------------------------------------------------------------------------------------------
John Winthrop none over $100,000
- ----------------------------------------------------------------------------------------------------------

*Mr. Geraci resigned as a Trustee on April 30, 2003.
**Mr. Hood became a Trustee of the fund effective June 3, 2003.

Compensation of Officers and Trustees

The following table sets forth certain information with respect to the
compensation of each Trustee of the fund.

- ----------------------------------------------------------------------------------------------------------
Pension or
Aggregate Retirement Benefits Total Compensation from
Compensation from Accrued as Part of the Fund and Other Pioneer
Name of Trustee Fund** Fund Expenses Funds***
- ----------------------------------------------------------------------------------------------------------

Interested Trustees:
- ----------------------------------------------------------------------------------------------------------
John F. Cogan, Jr.* $500.00 $0.00 $17,000.00
- ----------------------------------------------------------------------------------------------------------
Daniel T. Geraci*+ $0.00 0.00 17,000.00
- ----------------------------------------------------------------------------------------------------------
Osbert M. Hood*++ $500.00 0.00 0.00
- ----------------------------------------------------------------------------------------------------------
Independent Trustees:
- ----------------------------------------------------------------------------------------------------------
Mary K. Bush $1,000.00 0.00 103,625.00
- ----------------------------------------------------------------------------------------------------------
Richard H. Egdahl, M.D. $1,000.00 0.00 99,375.00
- ----------------------------------------------------------------------------------------------------------
Margaret B.W. Graham $1,000.00 0.00 103,625.00
- ----------------------------------------------------------------------------------------------------------
Marguerite A. Piret $1,000.00 0.00 122,750.00
- ----------------------------------------------------------------------------------------------------------
Stephen K. West $1,000.00 0.00 105,750.00
- ----------------------------------------------------------------------------------------------------------
John Winthrop $1,000.00 0.00 110,500.00
----- ----------
- ----------------------------------------------------------------------------------------------------------
$7,000.00 $0.00 $679,625.00
-----
- ----------------------------------------------------------------------------------------------------------

* Under the management contract, Pioneer reimburses the fund for any
interested Trustees fees paid by the fund.
** Estimated for the fiscal year ended December 31, 2003. There are 51 funds
in the Pioneer Family of Funds.
*** For the calendar year ended December 31, 2002.
+ Mr. Geraci resigned as Trustee effective April 30, 2003.
++ Mr. Hood was elected Trustee effective June 2, 2003.

Approximate Management Fees the Fund Paid or Owed L. Roy Papp & Associates, LLP

For the fiscal years ended December 31,

- --------------------------------------------------------------------------------
2002 2001 2000
- --------------------------------------------------------------------------------

$638,771 $818,013
- --------------------------------------------------------------------------------

Not applicable(1).

Fees the Fund Paid to Pioneer under the Administration Agreement

Not applicable(1).

Carryover of Distribution Expenses

Not applicable(1).

Approximate Net Underwriting Commissions Retained by PFD (Class A Shares)

Not applicable(1).

Approximate Commissions Reallowed to Dealers (Class A Shares)

Not applicable(1).

Approximate Commissions Reallowed to Dealers (Class C Shares)

Not applicable(1).

Fund Expenses under the Distribution Plans

Not applicable(1).

CDSCs

Not applicable(1).

Approximate Brokerage and Underwriting Commissions (Portfolio Transactions)

Not applicable(1).

Capital Loss Carryforwards as of December 31, 2002

Not applicable(1).

Average Annual Total Returns

Not applicable(1).

(1) As of the date of this statement of additional information, the fund had not
yet completed a fiscal year.

19. APPENDIX A - DESCRIPTION OF SHORT-TERM DEBT, CORPORATE BOND AND PREFERRED
STOCK RATINGS

Moody's Investors Service, Inc. ("Moody's") Prime Rating System

Moody's short-term ratings are opinions of the ability of issuers to honor
senior financial obligations and contracts. Such obligations generally have an
original maturity not exceeding one year, unless explicitly noted.

Moody's employs the following designations, all judged to be investment grade,
to indicate the relative repayment ability of rated issuers:

Prime-1: Issuers rated Prime-1 (or supporting institutions) have a superior
ability for repayment of senior short-term debt obligations. Prime-1 repayment
ability will often be evidenced by many of the following characteristics:

Leading market positions in well-established industries.
High rates of return on funds employed.
Conservative capitalization structure with moderate reliance on debt and ample
asset protection.
Broad margins in earnings coverage of fixed financial charges and high internal
cash generation.
Well-established access to a range of financial markets and assured sources of
alternate liquidity.

Prime-2: Issuers (or supporting institutions) rated Prime-2 have a strong
ability to repay senior short-term debt obligations. This will normally be
evidenced by many of the characteristics cited above, but to a lesser degree.
Earnings trends and coverage ratios, while sound, may be more subject to
variation than is the case for Prime-2 securities. Capitalization
characteristics, while still appropriate, may be more affected by external
conditions. Ample alternate liquidity is maintained.

Prime-3: Issuers (or supporting institutions) rated Prime-3 have an acceptable
ability for repayment of senior short-term obligations. The effect of industry
characteristics and market compositions may be more pronounced. Variability in
earnings and profitability may result in changes in the level of debt-protection
measurements and may require relatively high financial leverage. Adequate
alternate liquidity is maintained.

Not Prime: Issuers rated Not Prime do not fall within any of the Prime rating
categories.

In addition, in certain countries the prime rating may be modified by the
issuer's or guarantor's senior unsecured long-term debt rating.

Moody's Debt Ratings

Aaa: Bonds and preferred stock which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are generally
referred to as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.

Aa: Bonds and preferred stock which are rated Aa are judged to be of high
quality by all standards. Together with the Aaa group they comprise what are
generally known as high-grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may be
other elements present which make the long-term risk appear somewhat larger than
the Aaa securities.

adequate, but elements may be present which suggest a susceptibility to
impairment some time in the future.

Baa: Bonds and preferred stock which are rated Baa are considered as
medium-grade obligations (i.e., they are neither highly protected nor poorly
secured). Interest payments and principal security appear adequate for the
present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds lack
outstanding investment characteristics and in fact have speculative
characteristics as well.

Ba: Bonds and preferred stock which are rated Ba are judged to have speculative
elements; their future cannot be considered as well-assured. Often the
protection of interest and principal payments may be very moderate, and thereby
not well safeguarded during both good and bad times over the future. Uncertainty
of position characterizes bonds in this class.

B: Bonds and preferred stock which are rated B generally lack characteristics of
the desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.

Caa: Bonds and preferred stock which are rated Caa are of poor standing. Such
issues may be in default or there may be present elements of danger with respect
to principal or interest.

Ca: Bonds and preferred stock which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings.

C: Bonds and preferred stock which are rated C are the lowest rated class of
bonds, and issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.

Moody's assigns ratings to individual debt securities issued from medium-term
note (MTN) programs, in addition to indicating ratings to MTN programs
themselves. Notes issued under MTN programs with such indicated ratings are
rated at issuance at the rating applicable to all pari passu notes issued under
the same program, at the program's relevant indicated rating, provided such
notes do not exhibit any of the characteristics listed below. For notes with any
of the following characteristics, the rating of the individual note may differ
from the indicated rating of the program:

1) Notes containing features which link the cash flow and/or market value to the
credit performance of any third party or parties.
2) Notes allowing for negative coupons, or negative principal.
3) Notes containing any provision which could obligate the investor to make any
additional payments.

Market participants must determine whether any particular note is rated, and if
so, at what rating level.

Note: Moody's applies numerical modifiers 1, 2, and 3 in each generic rating
classification from Aa through Caa. The modifier 1 indicates that the obligation
ranks in the higher end of its generic rating category; the modifier 2 indicates
a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of
that generic rating category.

Standard & Poor's Short-Term Issue Credit Ratings

A-1: A short-term obligation rated A-1 is rated in the highest category by
Standard & Poor's. The obligor's capacity to meet its financial commitment on
the obligation is strong. Within this category, certain obligations are
designated with a plus sign (+). This indicates that the obligor's capacity to
meet its financial commitment on these obligations is extremely strong.

A-2: A short-term obligation rated A-2 is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher rating categories. However, the obligor's capacity to meet
its financial commitment on the obligation is satisfactory.

A-3: A short-term obligation rated A-3 exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are more likely
to lead to a weakened capacity of the obligor to meet its financial commitment
on the obligation.

B: A short-term obligation rated B is regarded as having significant speculative
characteristics. The obligor currently has the capacity to meet its financial
commitment on the obligation; however, it faces major ongoing uncertainties
which could lead to the obligor's inadequate capacity to meet its financial
commitment on the obligation.

C: A short-term obligation rated C is currently vulnerable to nonpayment and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation.

D: A short-term obligation rated D is in payment default. The D rating category
is used when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The D rating also will be
used upon the filing of a bankruptcy petition or the taking of a similar action
if payments on an obligation are jeopardized.

Standard & Poor's Long-Term Issue Credit Ratings

Issue credit ratings are based, in varying degrees, on the following
considerations:

o Likelihood of payment-capacity and willingness of the obligor to meet
its financial commitment on an obligation in accordance with the terms
of the obligation;
o Nature of and provisions of the obligation;
o Protection afforded by, and relative position of, the obligation in
the event of bankruptcy, reorganization, or other arrangement under
the laws of bankruptcy and other laws affecting creditors' rights.

The issue rating definitions are expressed in terms of default risk. As such,
they pertain to senior obligations of an entity. Junior obligations are
typically rated lower than senior obligations, to reflect the lower priority in
bankruptcy, as noted above. (Such differentiation applies when an entity has
both senior and subordinated obligations, secured and unsecured obligations, or
operating company and holding company obligations.) Accordingly, in the case of
junior debt, the rating may not conform exactly with the category definition.

AAA: An obligation rated AAA has the highest rating assigned by Standard &
Poor's. The obligor's capacity to meet its financial commitment on the
obligation is extremely strong.

AA: An obligation rated AA differs from the highest rated obligations only in
small degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.

A: An obligation rated A is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in higher
rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.

BBB: An obligation rated BBB exhibits adequate protection parameters. However,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity of the obligor to meet its financial commitment on the
obligation.

Obligations rated BB, B, CCC, CC, and C are regarded as having significant
speculative characteristics. BB

indicates the least degree of speculation and C the highest. While such
obligations will likely have some quality and protective characteristics, these
may be outweighed by large uncertainties or major exposures to adverse
conditions.

BB: An obligation rated BB is less vulnerable to nonpayment than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to the
obligor's inadequate capacity to meet its financial commitment on the
obligation.

B: An obligation rated B is more vulnerable to nonpayment than obligations rated
BB, but the obligor currently has the capacity to meet its financial commitment
on the obligation. Adverse business, financial, or economic conditions will
likely impair the obligor's capacity or willingness to meet its financial
commitment on the obligation.

CCC: An obligation rated CCC is currently vulnerable to nonpayment, and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial, or economic conditions, the obligor is not likely
to have the capacity to meet its financial commitment on the obligation.

CC: An obligation rated CC is currently highly vulnerable to nonpayment.

C: A subordinated debt or preferred stock obligation rated C is currently highly
vulnerable to nonpayment. The C rating may be used to cover a situation where a
bankruptcy petition has been filed or similar action taken, but payments on this
obligation are being continued. A C also will be assigned to a preferred stock
issue in arrears on dividends or sinking fund payments, but that is currently
paying.

D: An obligation rated D is in payment default. The D rating category is used
when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The D rating also will be
used upon the filing of a bankruptcy petition or the taking of a similar action
if payments on an obligation are jeopardized.

Plus (+) or minus (-): The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.

r: This symbol is attached to the ratings of instruments with significant
noncredit risks. It highlights risks to principal or volatility of expected
returns which are not addressed in the credit rating.

N.R.: This indicates that no rating has been requested, that there is
insufficient information on which to base a rating, or that Standard & Poor's
does not rate a particular obligation as a matter of policy.

Local Currency and Foreign Currency Risks

Country risk considerations are a standard part of Standard & Poor's analysis
for credit ratings on any issuer or issue. Currency of repayment is a key factor
in this analysis. An obligor's capacity to repay foreign currency obligations
may be lower than its capacity to repay obligations in its local currency due to
the sovereign government's own relatively lower capacity to repay external
versus domestic debt. These sovereign risk considerations are incorporated in
the debt ratings assigned to specific issues. Foreign currency issuer ratings
are also distinguished from local currency issuer ratings to identify those
instances where sovereign risks make them different for the same issuer.

The ratings indicated herein are believed to be the most recent ratings
available at the date of this statement of additional information for the
securities listed. Ratings are generally given to securities at the time of
issuance. While the rating agencies may from time to time revise such ratings,
they undertake no obligation to do so, and the ratings indicated do not
necessarily represent ratings which will be given to these securities on the
date of the fund's fiscal year-end.

20. APPENDIX B - PERFORMANCE STATISTICS

[To be completed.]

Comparative Performance Index Descriptions

The following securities indices are well known, unmanaged measures of market
performance. Advertisements and sales literature for the fund may refer to these
indices or may present comparisons between the performance of the fund and one
or more of the indices. Other indices may also be used if appropriate. The
indices are not available for direct investment. The data presented are not
meant to be indicative of the performance of the fund, do not reflect past
performance and do not guarantee future results.

Standard &Poor's 500 Index. The Standard & Poor's 500 Index is an unmanaged
measure of 500 widely held common stocks listed on the New York Stock Exchange,
American Stock Exchange and the over-the-counter market.

Dow Jones Industrial Average. This is a total return index based on the
performance of stocks of 30 blue chip companies widely held by individuals and
institutional investors. The index serves as a measure of the entire U.S.
market, covering such diverse industries as financial services, technology,
retail, entertainment and consumer goods.

U.S. Inflation. The Consumer Price Index for All Urban Consumers (CPI-U), not
seasonally adjusted, is used to measure inflation, which is the rate of change
of consumer goods prices. Prior to January 1978, the Consumer Price Index (as
compared with CPI-U) was used. Both inflation measures are constructed by the
U.S. Department of Labor, Bureau of Labor Statistics, Washington, DC.

S&P/Barra Indexes. The S&P/Barra Growth and Value Indexes are constructed by
dividing the stocks in the S&P 500 Index according to price-to-book ratios. The
Growth Index contains stocks with higher price-to-book ratios, and the Value
Index contains stocks with lower price-to-book ratios. Both indexes are market
capitalization weighted.

Merrill Lynch High Yield Master II Index. The Merrill Lynch High Yield Master II
Index is a broad-based measure of the performance of the non-investment grade
U.S. domestic bond market.

Merrill Lynch Index of Convertible Bonds (Speculative Quality). The Merrill
Lynch Index of Convertible Bonds (Speculative Quality) is a
market-capitalization weighted index including mandatory and non-mandatory
domestic corporate convertible securities.

Merrill Lynch Global High Yield Index. The Merrill Lynch Global High Yield Index
is a broad-based measure of the performance of the U.S. and non-U.S.
non-investment grade bond markets.

Long-Term U.S. Government Bonds. The total returns on long-term government bonds
after 1977 are constructed with data from The Wall Street Journal and are
calculated as the change in the flat price or and-interest price. From 1926 to
1976, data are obtained from the government bond file at the Center for Research
in Security Prices (CRSP), Graduate School of Business, University of Chicago.

Intermediate-Term U.S. Government Bonds. Total returns of intermediate-term
government bonds after 1987 are calculated from The Wall Street Journal prices,
using the change in flat price. Returns from 1934 to 1986 are obtained from the
CRSP government bond file.

Morgan Stanley Capital International ("MSCI") Indices: These unmanaged indices
are in U.S. dollar terms with or without dividends reinvested and measure the
performance of developed and emerging stock markets in individual countries and
regions around the world.

MSCI Europe, Australasia, Far East (EAFE) Index. The MSCI EAFE Index is a widely
recognized capitalization-weighted measure of 22 international stock markets.

MSCI Emerging Markets Free Index. The MSCI Emerging Markets Free Index is an
unmanaged, capitalization-weighted measure of securities trading in emerging
markets; it reflects only those securities available to foreign investors.

MSCI World Index. The MSCI World Index is a widely recognized
capitalization-weighted index of stocks traded in the United States and in the
22 countries represented in the MSCI EAFE Index.

MSCI All Country (AC) World Free ex USA Index. The MSCI AC World Free ex USA
Index is a widely recognized capitalization-weighted index of stocks traded in
securities markets outside of the U.S.

MSCI Europe Index. The MSCI Europe Index is a capitalization-weighted index of
the 15 European country indexes included in the MSCI EAFE Index. These countries
are: Austria, Belgium Denmark, Finland, France, Germany, Ireland, Italy,
Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United
Kingdom.

6-Month CDs. Data sources include the Federal Reserve Bulletin and The Wall
Street Journal.

Long-Term U.S. Corporate Bonds. Since 1969, corporate bond total returns are
represented by the Salomon Brothers Long-Term High-Grade Corporate Bond Index.
As most large corporate bond transactions take place over-the-counter, a major
dealer is the natural source of these data. The index includes nearly all Aaa-
and Aa-rated bonds with at least 10 years to maturity.

Lehman Brothers Government/Credit Bond Index. The Lehman Brothers
Government/Credit Bond Index is an unmanaged, composite index of the U.S. bond
market. It contains all Treasury and government agency securities, investment
grade corporate bonds and Yankee bonds.

Lehman Brothers Government Bond Index. The Lehman Brothers Government Bond Index
is an unmanaged measure of the performance of U.S. Treasury debt, all publicly
issued debt of U.S. government agencies and quasi-federal corporations, and
corporate debt guaranteed by the U.S. government.

Lehman Brothers Mortgage-Backed Index. The Lehman Brothers Mortgage-Backed Index
is an unmanaged index including 15- and 30-year fixed rate securities backed by
mortgage pools of the Government National Mortgage Association (GNMA), Federal
Home Loan Mortgage Corporation (FHLMC) and Federal National Mortgage Association
(FNMA).

Lehman Brothers Municipal Bond Index. The Lehman Brothers Municipal Bond Index
is an unmanaged measure of approximately 15,000 municipal bonds. Bonds in the
index have a minimum credit rating of BBB, were part of at least a $50 million
issuance made within the past five years and have a maturity of at least two
years.

Lehman Brothers U.S. Universal Index. The Lehman Brothers U.S. Universal Index
is the union of the U.S. Aggregate Index, the U.S. High Yield Corporate Index,
the 144A Index, the Eurodollar Index, the Emerging Markets Index, the non-ERISA
portion of the CMBS Index, and the CMBS High Yield Index. Municipal debt,
private placements and non-dollar-denominated issues are excluded.

U.S. (30-Day) Treasury Bills. For the U.S. Treasury Bill Index, data from The
Wall Street Journal are used after 1977; the CRSP government bond file is the
source until 1976.

National Association of Real Estate Investment Trusts ("NAREIT") Equity REIT
Index. All of the data are based upon the last closing price of the month for
all tax-qualified REITs listed on the NYSE, AMEX and Nasdaq. The data are
market-value-weighted.

Russell U.S. Equity Indexes:

Russell 3000(R) Index. Measures the performance of the 3,000 largest U.S.
companies based on total market capitalization, which represents approximately
98% of the investable U.S. equity market.

Russell 1000(R) Index. Measures the performance of the 1,000 largest companies
in the Russell 3000 Index, which represents approximately 92% of the total
market capitalization of the Russell 3000 Index.

Russell 2000(R) Index. Measures the performance of the 2,000 smallest companies
in the Russell 3000 Index, which represents approximately 8% of the total market
capitalization of the Russell 3000 Index.

Russell Midcap(R) Index. Measures the performance of the 800 smallest companies
in the Russell 1000 Index, which represent approximately 25% of the total market
capitalization of the Russell 1000 Index.

Russell 3000(R) Growth Index. Measures the performance of those Russell 3000
Index companies with higher price-to-book ratios and higher forecasted growth
values. The stocks in this index are also members of either the Russell 1000
Growth or the Russell 2000 Growth indexes.

Russell 3000(R) Value Index. Measures the performance of those Russell 3000
Index companies with lower price-to-book ratios and lower forecasted growth
values. The stocks in this index are also members of either the Russell 1000
Value or the Russell 2000 Value indexes.

Russell 1000(R) Growth Index. Measures the performance of those Russell 1000
companies with higher price-to-book ratios and higher forecasted growth values.

Russell 1000(R) Value Index. Measures the performance of those Russell 1000
companies with lower price-to-book ratios and lower forecasted growth values.

Russell 2000(R) Growth Index. Measures the performance of those Russell 2000
companies with higher price-to-book ratios and higher forecasted growth values.

Russell 2000(R) Value Index. Measures the performance of those Russell 2000
companies with lower price-to-book ratios and lower forecasted growth values.

Russell Midcap(R) Growth Index. Measures the performance of those Russell Midcap
companies with higher price-to-book ratios and higher forecasted growth values.
The stocks are also members of the Russell 1000(R) Growth index.

Russell Midcap(R) Value Index. Measures the performance of those Russell Midcap
companies with lower price-to-book ratios and lower forecasted growth values.
The stocks are also members of the Russell 1000(R) Value index.

Wilshire Real Estate Securities Index. The Wilshire Real Estate Securities Index
is a broad measure of the performance of publicly traded real estate securities,
such as real estate investment trusts (REITs) and real estate operating
companies (REOCs). The index is capitalization-weighted and is rebalanced
monthly. Returns are calculated on a buy and hold basis.

Standard & Poor's MidCap 400 Index. The Standard & Poor's MidCap 400 Index is an
unmanaged measure of 400 domestic stocks chosen for market size, liquidity and
industry group representation.

Lipper Indexes: These indexes represent equally weighted performance, adjusted
for capital gain distributions and income dividends, of mutual funds that are
considered peers of the Pioneer mutual funds. Lipper, Inc. is an independent
firm that tracks mutual fund performance.

Lipper Growth and Income Fund Index. The Lipper Growth and Income Fund Index is
a measure of the investment performance of mutual funds with a growth and income
investment objective.

Lipper Growth Fund Index. The Lipper Growth Fund Index is a measure of the
investment performance of mutual funds with a growth investment objective.

Lehman Brothers Aggregate Bond Index. The Lehman Brothers Aggregate Bond Index
is a widely recognized market value-weighted measure of government and corporate
securities, agency mortgage pass-through securities, asset-backed securities and
commercial mortgage-based securities.

Bank Savings Account. Data sources include the U.S. League of Savings
Institutions Sourcebook; average annual yield on savings deposits in FSLIC
[FDIC] insured savings institutions for the years 1963 to 1987; and The Wall
Street Journal thereafter.

Nasdaq Composite Index. The Nasdaq Composite Index is a capitalization-weighted
index based on the total market value of all the issues that compose it. It
reflects the performance of more than 4,000 companies.

Sources: Dow Jones & Company, Inc., Ibbotson Associates, Morgan Stanley Capital
International, NAREIT, Frank Russell Company, Wilshire Associates Incorporated,
Towers Data Systems, Lipper, Inc. and PIM-USA

21. APPENDIX C - OTHER PIONEER INFORMATION

The Pioneer group of mutual funds was established in 1928 with the creation of
Pioneer Fund. Pioneer is one of the oldest and most experienced money managers
in the U.S.

As of September 30, 2003, Pioneer and its investment management affiliate,
Pioneer Investment Management Limited, employed a professional investment staff
of approximately 180.

Total assets of all Pioneer U.S. mutual funds at September 30, 2003, were
approximately $28 billion representing 1,378,162 shareholder accounts, including
898,430 non-retirement accounts and 479,732 retirement accounts.

22. Appendix D - Proxy Voting Policies and Procedures Pioneer Investment
Management, Inc.
- --------------------------------------------------------------------------------
VERSION 1.0 DATED JULY 8, 2003

Proxy Voting Policies and Procedures of Pioneer Investment Management, Inc.

TABLE OF CONTENTS

Overview......................................................................73
- --------
Proxy Voting Procedures.......................................................73
- -----------------------
Proxy Voting Service..........................................................73
- --------------------
Proxy Coordinator.............................................................74
- -----------------
Referral Items................................................................74
- --------------
Conflicts of Interest.........................................................75
- ---------------------
Securities Lending............................................................75
- ------------------
Share-Blocking................................................................75
- --------------
Record Keeping................................................................75
- --------------
Disclosure....................................................................75
- ----------
Proxy Voting Oversight Group..................................................76
- ----------------------------
Proxy Voting Policies.........................................................76
- ---------------------
Administrative................................................................77
- --------------
Auditors......................................................................78
- --------
Board of Directors............................................................78
- ------------------
Capital Structure.............................................................80
- -----------------
Compensation..................................................................81
- ------------
Corporate Governance..........................................................83
- --------------------
Mergers and Restructurings....................................................84
- --------------------------
Mutual Funds..................................................................84
- ------------
Social Issues.................................................................85
- -------------
Takeover-Related Measures ....................................................85
- -------------------------

Overview
Pioneer is a fiduciary that owes each of its client's duties of care and
loyalty with respect to all services undertaken on the client's behalf,
including proxy voting. When Pioneer has been delegated proxy-voting
authority for a client, the duty of care requires Pioneer to monitor
corporate events and to vote the proxies. To satisfy its duty of loyalty,
Pioneer must cast the proxy votes in a manner consistent with the best
interest of its clients and must place the client's interests ahead of its
own. Pioneer will vote all proxies presented to it in a timely manner on
its behalf.

The Proxy Voting Policies and Procedures are designed to complement
Pioneer's investment policies and procedures regarding its general
responsibility to monitor the performance and/or corporate events of
companies that are issuers of securities held in accounts managed by
Pioneer. These Proxy Voting Policies summarize Pioneer's position on a
number of issues solicited by underlying held companies. The policies are
guidelines that provide a general indication on how Pioneer would vote but
do not include all potential voting scenarios.

Pioneer's Proxy Voting Procedures detail monitoring of voting, exception
votes, and review of conflicts of interest and ensure that case-by-case
votes are handled within the context of the overall guidelines (i.e. best
interest of client). The overriding goal is that all proxies for US and
non-US companies that are received promptly will be voted in accordance
with Pioneer's policies or specific client instructions. All shares in a
company held by Pioneer-managed accounts will be voted alike, unless a
client has given us specific voting instructions on an issue or has not
delegated authority to us or the Director of Portfolio Management US
determines, after consultation with the Proxy Voting Oversight Group, that
the circumstances justify a different approach.

Any questions about these policies and procedures should be directed to the
Proxy Coordinator.

Proxy Voting Procedures

Proxy Voting Service

Pioneer has engaged an independent proxy voting service to assist in the
voting of proxies. The proxy voting service works with custodians to ensure
that all proxy materials are received by the custodians and are processed
in a timely fashion. To the extent applicable, the proxy voting service
votes all proxies in accordance with the proxy voting policies established
by Pioneer. The proxy voting service will refer proxy questions to the
Proxy Coordinator (described below) for instructions under circumstances
where: (1) the application of the proxy voting guidelines is unclear; (2) a
particular proxy question is not covered by the guidelines; or (3) the
guidelines call for specific instructions on a case-by-case basis. The
proxy voting service is also requested to call to the Proxy Coordinator's
attention specific proxy questions that, while governed by a guideline,
appear to involve unusual or controversial issues.

Proxy Coordinator

Pioneer's Director of Investment Operations (the "Proxy Coordinator")
coordinates the voting, procedures and reporting of proxies on behalf of
Pioneer's clients. The Proxy Coordinator will deal directly with the proxy
voting service and, in the case of proxy questions referred by the proxy
voting service, will solicit voting recommendations and instructions from
the Director of Portfolio Management US. The Proxy Coordinator is
responsible for ensuring that these questions and referrals are responded
to in a timely fashion and for transmitting appropriate voting instructions
to the proxy voting service. The Proxy Coordinator is responsible for
verifying with the Compliance Department whether Pioneer's voting power is
subject to any limitations or guidelines issued by the client (or in the
case of an employee benefit plan, the plan's trustee or other fiduciaries).

Referral Items

From time to time, the proxy voting service will refer proxy questions to
the Proxy Coordinator that are described by Pioneer's policy as to be voted
on a case-by-case basis, that are not covered by Pioneer's guidelines or
where Pioneer's guidelines may be unclear with respect to the matter to be
voted on. Under such certain circumstances, the Proxy Coordinator will seek
a written voting recommendation from the Director of Portfolio Management
US. Any such recommendation will include: (i) the manner in which the
proxies should be voted; (ii) the rationale underlying any such decision;
and (iii) the disclosure of any contacts or communications made between
Pioneer and any outside parties concerning the proxy proposal prior to the
time that the voting instructions are provided. In addition, the Proxy
Coordinator will ask the Compliance Department to review the question for
any actual or apparent conflicts of interest as described below under
"Conflicts of Interest." The Compliance Department will provide a
"Conflicts of Interest Report," applying the criteria set forth below under
"Conflicts of Interest," to the Proxy Coordinator summarizing the results
of its review. In the absence of a conflict of interest, the Proxy
Coordinator will vote in accordance with the recommendation of the Director
of Portfolio Management US.

If the matter presents a conflict of interest for Pioneer, then the Proxy
Coordinator will refer the matter to the Proxy Voting Oversight Group for a
decision. In general, when a conflict of interest is present, Pioneer will
vote according to the recommendation of the Director of Portfolio
Management US where such recommendation would go against Pioneer's interest
or where the conflict is deemed to be immaterial. Pioneer will vote
according to the recommendation of its proxy voting service when the
conflict is deemed to be material and the Pioneer's internal vote
recommendation would favor Pioneer's interest, unless a client specifically
requests Pioneer to do otherwise. When making the final determination as to
how to vote a proxy, the Proxy Voting Oversight Group will review the
report from the Director of Portfolio Management US and the Conflicts of
Interest Report issued by the Compliance Department.

Conflicts of Interest

Occasionally, Pioneer may have a conflict that can affect how its votes
proxies. The conflict may be actual or perceived and may exist when the
matter to be voted on concerns:

o An affiliate of Pioneer, such as another company belonging to the
UniCredito Italiano S.p.A. banking group;

o An issuer of a security for which Pioneer acts as a sponsor,
advisor, manager, custodian, distributor, underwriter, broker, or
other similar capacity; or

o A person with whom Pioneer (or any of its affiliates) has an
existing, material contract or business relationship that was not
entered into in the ordinary course of Pioneer's business.

Any associate involved in the proxy voting process with knowledge of any
apparent or actual conflict of interest must disclose such conflict to the
Proxy Coordinator and the Compliance Department. The Compliance Department
will review each item referred to Pioneer to determine whether an actual or
potential conflict of interest with Pioneer exists in connection with the
proposal(s) to be voted upon. The review will be conducted by comparing the
apparent parties affected by the proxy proposal being voted upon against
the Compliance Department's internal list of interested persons and, for
any matches found, evaluating the anticipated magnitude and possible
probability of any conflict of interest being present. For each referral
item, the determination regarding the presence or absence of any actual or
potential conflict of interest will be documented in a Conflicts of
Interest Report to the Proxy Coordinator

Securities Lending

Proxies are not available to be voted when the shares are out on loan
through either Pioneer's Lending Program or a client's managed security
lending program. If the Portfolio Manager would like to vote a block of
previously lent shares, the Proxy Coordinator will work with the Portfolio
Manager and Investment Operations to recall the security, to the extent
possible, to facilitate the vote on the entire block of shares.

Share-Blocking

"Share-blocking" is a market practice whereby shares are sent to a
custodian (which may be different than the account custodian) for record
keeping and voting at the general meeting. The shares are unavailable for
sale or delivery until the end of the blocking period (typically the day
after general meeting date).

Pioneer will vote in those countries with "share-blocking." In the event a
manager would like to sell a security with "share-blocking", the Proxy
Coordinator will work with the Portfolio Manager and

Investment Operations Department to recall the shares (as allowable within
the market time-frame and practices) and/or communicate with executing
brokerage firm. A list of countries with "share-blocking" is available from
the Investment Operations Department upon request.

Record Keeping

The Proxy Coordinator shall ensure that Pioneer's proxy voting service:

o Retains a copy of the proxy statement received (unless the proxy
statement is available from the SEC's Electronic Data Gathering,
Analysis, and Retrieval (EDGAR) system);

o Retains a record of the vote cast;

o Prepares Form N-PX for filing on behalf of each client that is a
registered investment company; and

o Is able to promptly provide Pioneer with a copy of the voting
record upon its request.

The Proxy Coordinator shall ensure that for those votes that may require
additional documentation (i.e. conflicts of interest, exception votes and
case-by-case votes) the following records are maintained:

o A record memorializing the basis for each referral vote cast;

o A copy of any document created by Pioneer that was material in
making the decision on how to vote the subject proxy; and

o A copy of any conflict notice, conflict consent or any other
written communication (including emails or other electronic
communications) to or from the client (or in the case of an
employee benefit plan, the plan's trustee or other fiduciaries)
regarding the subject proxy vote cast by, or the vote
recommendation of, Pioneer.

Pioneer shall maintain the above records in the client's file for a period
not less than six (6) years.

Disclosure

Pioneer shall take reasonable measures to inform its clients of the process
or procedures clients must follow to obtain information regarding how
Pioneer voted with respect to assets held in their accounts. In addition,
Pioneer shall describe to clients its proxy voting policies and procedures
and will furnish a copy of its proxy voting policies and procedures upon
request. This information may be provided to

clients through Pioneer's Form ADV (Part II) disclosure, by separate notice
to the client, or by Pioneer's website.

Proxy Voting Oversight Group

The members of the Proxy Voting Oversight Group are Pioneer's: Director of
Portfolio Management US, Head of Investment Operations, and Director of
Compliance. Other members of Pioneer will be invited to attend meetings and
otherwise participate as necessary.

The Proxy Voting Oversight Group is responsible for developing, evaluating,
and changing (when necessary) Pioneer's Proxy Voting Policies and
Procedures. The group meets at least annually to evaluate and review these
policies and procedures and the services of its third-party proxy voting
service. In addition, the Proxy Voting Oversight Group will meet as
necessary to vote on referral items and address other business as
necessary.

Proxy Voting Policies
Pioneer's sole concern in voting proxies is the economic effect of the
proposal on the value of portfolio holdings, considering both the short-
and long-term impact. In many instances, Pioneer believes that supporting
the company's strategy and voting "for" management's proposals builds
portfolio value. In other cases, however, proposals set forth by management
may have a negative effect on that value, while some shareholder proposals
may hold the best prospects for enhancing it. Pioneer monitors developments
in the proxy-voting arena and will revise this policy as needed.

All proxies for U.S. companies and proxies for non-U.S. companies that are
received promptly will be voted in accordance with the specific policies
listed below. All shares in a company held by Pioneer-managed accounts will
be voted alike, unless a client has given us specific voting instructions
on an issue or has not delegated authority to us. Proxy voting issues will
be reviewed by Pioneer's Proxy Voting Oversight Group, which consists of
the Director of Portfolio Management US, the Director of Investment
Operations (the Proxy Coordinator), and the Director of Compliance.

Pioneer has established Proxy Voting Procedures for identifying and
reviewing conflicts of interest that may arise in the voting of proxies.

Clients may request, at any time, a report on proxy votes for securities
held in their portfolios and Pioneer is happy to discuss our proxy votes
with company management. Pioneer retains a proxy voting service to provide
research on proxy issues and to process proxy votes.

Administrative

While administrative items appear infrequently in U.S. issuer proxies, they
are quite common in non-U.S. proxies.

We will generally support these and similar management proposals:

o Corporate name change.

o A change of corporate headquarters.

o Stock exchange listing.

o Establishment of time and place of annual meeting.

o Adjournment or postponement of annual meeting.

o Acceptance/approval of financial statements.

o Approval of dividend payments, dividend reinvestment plans and
other dividend-related proposals.

o Approval of minutes and other formalities.

o Authorization of the transferring of reserves and allocation of
income.

o Amendments to authorized signatories.

o Approval of accounting method changes or change in fiscal
year-end.

o Acceptance of labor agreements.

o Appointment of internal auditors.

Pioneer will vote on a case-by-case basis on other routine business;
however, Pioneer will oppose any routine business proposal if insufficient
information is presented in advance to allow Pioneer to judge the merit of
the proposal. Pioneer has also instructed its proxy voting service to
inform Pioneer of its analysis of any administrative items inconsistent, in
its view, with supporting the value of Pioneer portfolio holdings so that
Pioneer may consider and vote on those items on a case-by-case basis.

Auditors

We normally vote for proposals to:

o Ratify the auditors. We will consider a vote against if we are
concerned about the auditors' independence or their past work for
the company. Specifically, we will oppose the ratification of
auditors and withhold votes from audit committee members if
non-audit fees paid by the company to the auditing firm exceed
the sum of audit fees plus audit-related fees plus permissible
tax fees according to the disclosure categories proposed by the
Securities and Exchange Commission.

o Restore shareholder rights to ratify the auditors.

We will normally oppose proposals that require companies to:

o Seek bids from other auditors.

o Rotate auditing firms.

o Indemnify auditors.

o Prohibit auditors from engaging in non-audit services for the
company.

Board of Directors

On issues related to the board of directors, Pioneer normally supports
management. We will, however, consider a vote against management in
instances where corporate performance has been very poor or where the board
appears to lack independence.

General Board Issues
Pioneer will vote for:

o Audit, compensation and nominating committees composed of
independent directors exclusively.

o Indemnification for directors for actions taken in good faith in
accordance with the business judgment rule. We will vote against
proposals for broader indemnification.

o Changes in board size that appear to have a legitimate business
purpose and are not primarily for anti-takeover reasons.

o Election of an honorary director.

We will vote against:

o Separate chairman and CEO positions. We will consider voting with
shareholders on these issues in cases of poor corporate
performance.

o Minimum stock ownership by directors.

o Term limits for directors. Companies benefit from experienced
directors, and shareholder control is better achieved through
annual votes.

o Requirements for union or special interest representation on the
board.

o Requirements to provide two candidates for each board seat.

Elections of Directors
In uncontested elections of directors we will vote against:

o Individual directors with absenteeism above 25% without valid
reason. We support proposals that require disclosure of director
attendance.

o Insider directors and affiliated outsiders who sit on the audit,
compensation, stock option or nominating committees. For the
purposes of our policy, we accept the definition of affiliated
directors provided by our proxy voting service.

We will also vote against directors who:

o Have implemented or renewed a dead-hand or modified dead-hand
poison pill (a "dead-hand poison pill" is a shareholder rights
plan that may be altered only by incumbent or "dead " directors.
These plans prevent a potential acquirer from disabling a poison
pill by obtaining control of the board through a proxy vote).

o Have ignored a shareholder proposal that has been approved by
shareholders for two consecutive years.

o Have failed to act on a takeover offer where the majority of
shareholders have tendered their shares.

o Appear to lack independence or are associated with very poor
corporate performance.

We will vote on a case-by case basis on these issues:

o Contested election of directors.

o Prior to phase-in required by SEC, we would consider supporting
election of a majority of independent directors in cases of poor
performance.

o Mandatory retirement policies.

Capital Structure

Managements need considerable flexibility in determining the company's
financial structure, and Pioneer normally supports managements' proposals
in this area. We will, however, reject proposals that impose high barriers
to potential takeovers.

Pioneer will vote for:

o Changes in par value.

o Reverse splits, if accompanied by a reduction in number of
shares.

o Share repurchase programs, if all shareholders may participate on
equal terms.

o Bond issuance.

o Increases in "ordinary" preferred stock.

o Proposals to have blank-check common stock placements (other than
shares issued in the normal course of business) submitted for
shareholder approval.

o Cancellation of company treasury shares.

We will vote on a case-by-case basis on the following issues:

o Reverse splits not accompanied by a reduction in number of
shares, considering the risk of delisting.

o Increase in authorized common stock. We will make a determination
considering, among other factors:

o Number of shares currently available for issuance;

o Size of requested increase (we would normally approve increases of up
to 100% of current authorization);

o Proposed use of the additional shares; and

o Potential consequences of a failure to increase the number of shares
outstanding (e.g., delisting or bankruptcy).

o Blank-check preferred. We will normally oppose issuance of a new
class of blank-check preferred, but may approve an increase in a
class already outstanding if the company has demonstrated that it
uses this flexibility appropriately.

o Proposals to submit private placements to shareholder vote.

o Other financing plans.

We will vote against preemptive rights that we believe limit a company's
financing flexibility.

Compensation

Pioneer supports compensation plans that link pay to shareholder returns
and believes that management has the best understanding of the level of
compensation needed to attract and retain qualified people. At the same
time, stock-related compensation plans have a significant economic impact
and a direct effect on the balance sheet. Therefore, while we do not want
to micromanage a company's compensation programs, we will place limits on
the potential dilution these plans may impose.

Pioneer will vote for:

o 401(k) benefit plans.

o Employee stock ownership plans (ESOPs), as long as shares
allocated to ESOPs are less than 5% of outstanding shares. Larger
blocks of stock in ESOPs can serve as a takeover defense. We will
support proposals to submit ESOPs to shareholder vote.

o Various issues related to the Omnibus Budget and Reconciliation
Act of 1993 (OBRA), including:

o Amendments to performance plans to conform with OBRA;

o Caps on annual grants or amendments of administrative features;

o Adding performance goals; and

o Cash or cash-and-stock bonus plans.

o Establish a process to link pay, including stock-option grants,
to performance, leaving specifics of implementation to the
company.

o Require that option repricings be submitted to shareholders.

o Require the expensing of stock-option awards.

o Require reporting of executive retirement benefits (deferred
compensation, split-dollar life insurance, SERPs, and pension
benefits).

o Employee stock purchase plans where the purchase price is equal
to at least 85% of the market price, where the offering period is
no greater than 27 months and where potential dilution (as
defined below) is no greater than 10%.

We will vote on a case-by-case basis on the following issues:

o Executive and director stock-related compensation plans. We will
consider the following factors when reviewing these plans:

o The program must be of a reasonable size. We will approve plans where
the combined employee and director plans together would generate less
than 15% dilution. We will reject plans with 15% or more potential
dilution.

Dilution = (A + B + C) / (A + B + C + D), where

A = Shares reserved for plan/amendment,
B = Shares available under continuing plans,
C = Shares granted but unexercised and
D = Shares outstanding.

o The plan must not:

o Explicitly permit unlimited option repricing authority or that
have repriced in the past without shareholder approval.

o Be a self-replenishing "evergreen" plan, plans that grant
discount options and tax offset payments.

o We are generally in favor of proposals that increase participation
beyond executives.

o All other employee stock purchase plans.

o All other compensation-related proposals, including deferred
compensation plans, employment agreements, loan guarantee
programs and retirement plans.

o All other proposals regarding stock compensation plans, including
extending the life of a plan, changing vesting restrictions,
repricing options, lengthening exercise periods or accelerating
distribution of awards and pyramiding and cashless exercise
programs.

We will vote against:

o Limits on executive and director pay.

o Stock in lieu of cash compensation for directors.

o Pensions for non-employee directors. We believe these retirement
plans reduce director objectivity.

o Elimination of stock option plans.

Corporate Governance

Pioneer will vote for:

o Confidential Voting.

o Equal access provisions, which allow shareholders to contribute
their opinion to proxy materials.

o Disclosure of beneficial ownership.

We will vote on a case-by-case basis on the following issues:

o Change in the state of incorporation. We will support
reincorporations supported by valid business reasons. We will
oppose those that appear to be solely for the purpose of
strengthening takeover defenses.

o Bundled proposals. We will evaluate the overall impact of the
proposal.

o Adopting or amending the charter, bylaws or articles of
association.

o Shareholder appraisal rights, which allow shareholders to demand
judicial review of an acquisition price. We believe that the
courts currently handle this situation adequately without this
mechanism.

We will vote against:

o Shareholder advisory committees. While management should solicit
shareholder input, we prefer to leave the method of doing so to
management's discretion.

o Limitations on stock ownership or voting rights.

o Reduction in share ownership disclosure guidelines.

Mergers and Restructurings

Pioneer will vote on the following and similar issues on a case-by-case
basis:

o Mergers and acquisitions.

o Corporate restructurings, including spin-offs, liquidations,
asset sales, joint ventures, conversions to holding company and
conversions to self-managed REIT structure.

o Debt restructurings.

o Conversion of securities.

o Issuance of shares to facilitate a merger.

o Private placements, warrants, convertible debentures.

o Proposals requiring management to inform shareholders of merger
opportunities.

We will normally vote against shareholder proposals requiring that the
company be put up for sale.

Mutual Funds

Many of our portfolios may invest in shares of closed-end mutual funds or
exchange-traded funds. The non-corporate structure of these investments
raises several unique proxy voting issues.

Pioneer will vote for:

o Establishment of new classes or series of shares.

o Establishment of a master-feeder structure.

Pioneer will vote on a case-by-case on:

o Changes in investment policy. We will normally support changes
that do not affect the investment objective or overall risk level
of the fund. We will examine more fundamental changes on a
case-by-case basis.

o Approval of new or amended advisory contracts.

o Changes from closed-end to open-end format.

o Authorization for, or increase in, preferred shares.

o Disposition of assets, termination, liquidation, or mergers.

Social Issues

Pioneer will abstain on proposals calling for greater disclosure of
corporate activities with regard to social issues. We believe these issues
are important and should receive management attention.

Pioneer will vote against proposals calling for changes in the company's
business. We will also normally vote against proposals with regard to
contributions, believing that management should control the routine
disbursement of funds.

Takeover-Related Measures

Pioneer is generally opposed to proposals that may discourage takeover
attempts. We believe that the potential for a takeover helps ensure that
corporate performance remains high.

Pioneer will vote for:

o Cumulative voting.

o Increase ability for shareholders to call special meetings.

o Increase ability for shareholders to act by written consent.

o Restrictions on the ability to make greenmail payments.

o Submitting rights plans to shareholder vote.

o Rescinding shareholder rights plans ("poison pills").

o Opting out of the following state takeover statutes:

o Control share acquisition statutes, which deny large holders voting
rights on holdings over a specified threshold.

o Control share cash-out provisions, which require large holders to
acquire shares from other holders.

o Freeze-out provisions, which impose a waiting period on large holders
before they can attempt to gain control.

o Stakeholder laws, which permit directors to consider interests of
non-shareholder constituencies.

o Disgorgement provisions, which require acquirers to disgorge profits
on purchases made before gaining control.

o Fair price provisions.

o Authorization of shareholder rights plans.

o Labor protection provisions.

o Mandatory classified boards.

We will vote on a case-by-case basis on the following issues:

o Fair price provisions. We will vote against provisions requiring
supermajority votes to approve takeovers. We will also consider
voting against proposals that require a supermajority vote to
repeal or amend the provision. Finally, we will consider the
mechanism used to determine the fair price; we are generally
opposed to complicated formulas or requirements to pay a premium.

o Opting out of state takeover statutes regarding fair price
provisions. We will use the criteria used for fair price
provisions in general to determine our vote on this issue.

o Proposals that allow shareholders to nominate directors.

We will vote against:

o Classified boards.

o Limiting shareholder ability to remove or appoint directors. We
will support proposals to restore shareholder authority in this
area. We will review on a case-by-case basis proposals that
authorize the board to make interim appointments.

o Classes of shares with unequal voting rights.

o Supermajority vote requirements.

o Severance packages ("golden" and "tin" parachutes). We will
support proposals to put these packages to shareholder vote.

o Reimbursement of dissident proxy solicitation expenses. While we
ordinarily support measures that encourage takeover bids, we
believe that management should have full control over corporate
funds.

o Extension of advance notice requirements for shareholder
proposals.

o Granting board authority normally retained by shareholders (e.g.,
amend charter, set board size).

o Shareholder rights plans ("poison pills"). These plans generally
allow shareholders to buy additional shares at a below-market
price in the event of a change in control and may deter some
bids.

PIONEER PAPP SMALL AND MID CAP GROWTH FUND

(Pioneer Series Trust II)
60 State Street
Boston, Massachusetts 02109

STATEMENT OF ADDITIONAL INFORMATION

Class A, Class B, Class C and Class R Shares

December __, 2003

TABLE OF CONTENTS
Page
----

1. Fund History.............................................................3
2. Investment Policies, Risks and Restrictions..............................3
3. Trustees and Officers....................................................21
4. Investment Adviser.......................................................32
5. Principal Underwriter and Distribution Plans.............................36
6. Shareholder Servicing/Transfer Agent.....................................41
7. Custodian................................................................41
8. Independent Auditors.....................................................41
9. Portfolio Transactions...................................................41
10. Description of Shares....................................................43
11. Sales Charges............................................................45
12. Redeeming Shares.........................................................49
13. Telephone and Online Transactions........................................50
14. Pricing of Shares........................................................52
15. Tax Status...............................................................53
16. Investment Results.......................................................59
17. Financial Statements.....................................................63
18. Annual Fee, Expense and Other Information................................64
19. Appendix A - Description of Short-Term Debt, Corporate Bond

and Preferred Stock Ratings..............................................69
20. Appendix B - Performance Statistics......................................74
21. Appendix C - Other Pioneer Information...................................79
22. Appendix D - Proxy Voting Policies and Procedures........................80

1. FUND HISTORY

The fund is a diversified series of Pioneer Series Trust II, an open-end
management investment company. The fund originally was established as Papp Small
and Mid Cap Growth Fund, Inc., a Maryland corporation, on September 14, 1998.
Pursuant to an agreement and plan of reorganization, the fund was reorganized as
a series of Pioneer Series Trust II, a Delaware statutory trust, on ____ __,
2003.

2. INVESTMENT POLICIES, RISKS AND RESTRICTIONS

Principal Investments
Normally, the fund invests at least 80% of its net assets 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.

NON-PRINCIPAL INVESTMENT POLICIES AND RISKS

Illiquid Securities

Investments in Initial Public Offerings

Debt Securities Selection

Convertible Debt Securities

Debt Securities Rating Criteria

obligations or to repay their obligations upon maturity. Factors having an
adverse impact on the market value of lower quality securities will have an
adverse effect on the fund's net asset value to the extent that it invests in
such securities. In addition, the fund may incur additional expenses to the
extent it is required to seek recovery upon a default in payment of principal or
interest on its portfolio holdings.

Short-Term Investments

Risks of Non-U.S. Investments

expenses of the fund. In addition, the repatriation of both investment income
and capital from certain markets in the region is subject to restrictions such
as the need for certain governmental consents. Even where there is no outright
restriction on repatriation of capital, the mechanics of repatriation may affect
certain aspects of the fund's operation.

Custodian Services and Related Investment Costs. Custodial services and other
costs relating to investment in international securities markets generally are
more expensive than in the U.S. Such markets have settlement and clearance
procedures that differ from those in the U.S. In certain markets there have been
times when settlements have been unable to keep pace with the volume of
securities transactions, making it difficult to conduct such transactions. The
inability of the fund to make intended securities purchases due to settlement
problems could cause the fund to miss attractive investment opportunities.
Inability to dispose of a portfolio security caused by settlement problems could
result either in losses to the fund due to a subsequent decline in value of the
portfolio security or could result in possible liability to the fund. In
addition, security settlement and clearance procedures in some emerging
countries may not fully protect the fund against loss or theft of its assets.

Real Estate Investment Trusts ("REITs") and Associated Risk Factors

REITs (especially mortgage REITs) are also subject to interest rate risks. When
interest rates decline, the value of a REIT's investment in fixed rate
obligations can be expected to rise. Conversely, when interest rates rise, the
value of a REIT's investment in fixed rate obligations can be expected to
decline. If the REIT invests in adjustable rate mortgage loans the interest
rates on which are reset periodically, yields on a REIT's investments in such
loans will gradually align themselves to reflect changes in market interest
rates. This causes the value of such investments to fluctuate less dramatically
in response to interest rate fluctuations than would investments in fixed rate
obligations.

REITs may have limited financial resources and may trade less frequently and in
a more limited volume than larger company securities.

Other Investment Companies

Repurchase Agreements

The counterparty's obligations under the repurchase agreement are collateralized
with U.S. Treasury and/or agency obligations with a market value of not less
than 100% of the obligations, valued daily. Collateral is held by the fund's
custodian in a segregated, safekeeping account for the benefit of the fund.
Repurchase agreements afford the fund an opportunity to earn income on
temporarily available cash at low risk. In the event of commencement of
bankruptcy or insolvency proceedings with respect to the seller of the security
before repurchase of the security under a repurchase agreement, the fund may
encounter delay and incur costs before being able to sell the security. Such a
delay may involve loss of interest or a decline in price of the security. If the
court characterizes the transaction as a loan and the fund has not perfected a
security interest in the security, the fund may be required to return the
security to the seller's estate and be treated as an unsecured creditor of the
seller. As an unsecured creditor, the fund would be at risk of losing some or
all of the principal and interest involved in the transaction.

Short Sales Against the Box

Asset Segregation

When-Issued and Delayed Delivery Securities

The fund may purchase securities, including U.S. government securities, on a
when-issued basis or may purchase or sell securities for delayed delivery. In
such transactions, delivery of the securities occurs beyond the normal
settlement period, but no payment or delivery is made by the fund prior to the
actual delivery or payment by the other party to the transaction. The fund will
not earn income on these securities until delivered. The purchase of securities
on a when-issued or delayed delivery basis involves the risk that the value of
the securities purchased will decline prior to the settlement date. The sale of

securities for delayed delivery involves the risk that the prices available in
the market on the delivery date may be greater than those obtained in the sale
transaction. The fund's obligations with respect to when-issued and delayed
delivery transactions will be fully collateralized by segregating liquid assets
with a value equal to the fund's obligations. See "Asset Segregation."

Portfolio Turnover

Foreign Currency Transactions

If the fund enters into a forward contract to purchase foreign currency, the
custodian or Pioneer will segregate liquid assets. See "Asset Segregation."

Options on Foreign Currencies

Options on Securities and Securities Indices

income than would be realized on portfolio securities transactions alone.
However, the fund may forgo the opportunity to profit from an increase in the
market price of the underlying security.

Call and put options written by the fund will also be considered to be covered
to the extent that the fund's liabilities under such options are wholly or
partially offset by its rights under call and put options purchased by the fund.
In addition, a written call option or put may be covered by entering into an
offsetting forward contract and/or by purchasing an offsetting option or any
other option which, by virtue of its exercise price or otherwise, reduces the
fund's net exposure on its written option position.

Reasons for the absence of a liquid secondary market on an exchange include the
following: (i) there may be insufficient trading interest in certain options;
(ii) restrictions may be imposed by an exchange on opening or closing
transactions or both; (iii) trading halts, suspensions or other restrictions may
be imposed with respect to particular classes or series of options; (iv) unusual
or unforeseen circumstances may interrupt normal operations on an exchange; (v)
the facilities of an exchange or the Options Clearing Corporation (the "OCC")
may not at all times be adequate to handle current trading volume; or (vi) one
or more exchanges could, for economic or other reasons, decide or be compelled
at some future date to discontinue the trading of options (or a particular class
or series of options), in which event the secondary market on that exchange (or
in that class or series of options) would cease to exist, although outstanding
options on that exchange, if any, that had been issued by the OCC as a result of
trades on that exchange would continue to be exercisable in accordance with
their terms.

significant price movements can take place in the underlying markets that cannot
be reflected in the options markets.

Futures Contracts and Options on Futures Contracts

Futures Contracts. A futures contract may generally be described as an agreement
between two parties to buy and sell particular financial instruments for an
agreed price during a designated month (or to deliver the final cash settlement
price, in the case of a contract relating to an index or otherwise not calling
for physical delivery at the end of trading in the contract).

the fund may sell futures contracts in a foreign currency in which its portfolio
securities are denominated or in one currency to hedge against fluctuations in
the value of securities denominated in a different currency if there is an
established historical pattern of correlation between the two currencies. If, in
the opinion of Pioneer or the subadviser, there is a sufficient degree of
correlation between price trends for the fund's portfolio securities and futures
contracts based on other financial instruments, securities indices or other
indices, the fund may also enter into such futures contracts as part of its
hedging strategies. Although under some circumstances prices of securities in
the fund's portfolio may be more or less volatile than prices of such futures
contracts, Pioneer or the subadviser will attempt to estimate the extent of this
volatility difference based on historical patterns and compensate for any such
differential by having the fund enter into a greater or lesser number of futures
contracts or by attempting to achieve only a partial hedge against price changes
affecting the fund's portfolio securities. When hedging of this character is
successful, any depreciation in the value of portfolio securities will be
substantially offset by appreciation in the value of the futures position. On
the other hand, any unanticipated appreciation in the value of the fund's
portfolio securities would be substantially offset by a decline in the value of
the futures position.

sold to protect against a decline in the price of securities (or the currency in
which they are denominated) that the fund owns, or futures contracts will be
purchased to protect the fund against an increase in the price of securities (or
the currency in which they are denominated) it intends to purchase. As evidence
of this hedging intent, the fund expects that on 75% or more of the occasions on
which it takes a long futures or option position (involving the purchase of
futures contracts), the fund will have purchased, or will be in the process of
purchasing, equivalent amounts of related securities or assets denominated in
the related currency in the cash market at the time when the futures or option
position is closed out. However, in particular cases, when it is economically
advantageous for the fund to do so, a long futures position may be terminated or
an option may expire without the corresponding purchase of securities or other
assets.

Warrants and Stock Purchase Rights

Preferred Shares

Lending of Portfolio Securities

Investment Restrictions

1. 67% or more of the shares represented at a meeting, if the holders of more
than 50% of the outstanding shares are present in person or by proxy, or

2. more than 50% of the outstanding shares of the fund.

The fund may not:

(a) such purchase would cause more than 5% of the fund's total assets,
taken at market value, to be invested in the securities of such issuer, or

(b) such purchase would at the time result in more than 10% of the
outstanding voting securities of such issuer being held by the fund.

(7) Act as an underwriter, except insofar as the fund technically may be deemed
to be an underwriter in connection with the purchase or sale of its portfolio
securities.

Non-Fundamental Investment Restrictions

The following restriction has been designated as non-fundamental and may be
changed by a vote of the trust's Board of Trustees without approval of
shareholders:

[the fund may not engage in short sales, except short sales against the box].

3. TRUSTEES AND OFFICERS

- ------------------------------------------------------------------------------------------------------------------------
Term of Office
Name, Age and Position Held and Length of Principal Occupation During Past Other Directorships Held by
Address With the Fund Service Five Years this Trustee
- ------------------------------------------------------------------------------------------------------------------------

Interested Trustees:
- ------------------------------------------------------------------------------------------------------------------------
John F. Cogan, Chairman of the Trustee since Deputy Chairman and a Director Director of Harbor Global
Jr. (76)* Board, Trustee 2003. Serves of Pioneer Global Asset Company, Ltd.
and President until retirement Management S.p.A. ("PGAM");
or removal. Non-Executive Chairman and a
Director of Pioneer
Investment Management
USA Inc. ("PIM-USA");
Chairman and a
Director of Pioneer;
Director of Pioneer
Alternative Investment
Management Limited
(Dublin); President
and a Director of
Pioneer Alternative
Investment Management
(Bermuda) Limited and
affiliated
funds;President and
Director of Pioneer
Funds Distributor,
Inc. ("PFD");
President of all of
the Pioneer Funds; and
Of Counsel (since
2000, partner prior to
2000), Hale and Dorr
LLP (counsel to
PIM-USA and the
Pioneer Funds)
- ------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------

Osbert M. Hood Trustee and Trustee since President and Chief Executive None
(50)** Executive Vice 2003. Serves Officer, PIM-USA since May, 2003
President until retirement (Director since January, 2001);
or removal. President and Director of
Pioneer since May,
2003; Chairman and
Director of Pioneer
Investment Management
Shareholder Services,
Inc. ("PIMSS") since
May, 2003; Executive
Vice President of all
of the Pioneer Funds
since June 3, 2003;
Executive Vice
President and Chief
Operating Officer of
PIM-USA, November
2000-May 2003;
Executive Vice
President, Chief
Financial Officer and
Treasurer, John
Hancock Advisers, LLC,
Boston, MA, November
1999-November 2000;
Senior Vice President
and Chief Financial
Officer, John Hancock
Advisers, LLC, April
1997-November 1999
- ------------------------------------------------------------------------------------------------------------------------
Independent Trustees:
- ------------------------------------------------------------------------------------------------------------------------
Mary K. Bush (54) Trustee Trustee since President, Bush International Director of Brady
3509 Woodbine Street, 2003. Serves (international financial Corporation (industrial
Chevy Chase, MD 20815 until retirement advisory firm) identification and
or removal. specialty coated material
products manufacturer),
Millenium Chemicals, Inc.
(commodity chemicals),
Mortgage Guaranty Insurance
Corporation, and R.J.
Reynolds Tobacco Holdings,
Inc. (tobacco)
- ------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------

Richard H. Egdahl, Trustee Trustee since Alexander Graham Bell Professor None
M.D. (76) 2003. Serves of Health Care Entrepreneurship,
Boston University until retirement Boston University; Professor of
Healthcare or removal. Management, Boston University
Entrepreneurship School of Management; Professor
Program, 53 Bay State of Public Health, Boston
Road, Boston, MA 02215 University School of Public
Health; Professor of Surgery,
Boston University School of
Medicine; and University
Professor, Boston University
- ------------------------------------------------------------------------------------------------------------------------
Margaret B.W. Trustee Trustee since Founding Director, The Winthrop None
Graham (55) 2003. Serves Group, Inc. (consulting firm);
1001 Sherbrooke until Professor of Management, Faculty
Street West, retirement of Management, McGill University
Montreal, or removal.
Quebec, Canada
- ------------------------------------------------------------------------------------------------------------------------
Marguerite A. Piret Trustee Trustee since President and Chief Executive None
(54) 2003. Serves Officer, Newbury, Piret &
One Boston Place, 28th until retirement Company, Inc. (investment
Floor, Boston, MA 02108 or removal. banking firm)
- ------------------------------------------------------------------------------------------------------------------------
Stephen K. West (74) Trustee Trustee since Senior Counsel, Sullivan & Director, The Swiss
125 Broad Street, New 2003. Serves Cromwell (law firm) Helvetia Fund, Inc.
York, NY 10004 until retirement (closed-end investment
or removal. company) and AMVESCAP PLC
(investment managers)
- ------------------------------------------------------------------------------------------------------------------------
John Winthrop (66) Trustee Trustee since President, John Winthrop & Co., None
One North Adgers 2003. Serves Inc. (private investment firm)
Wharf, Charleston, SC until retirement
29401 or removal.
- ------------------------------------------------------------------------------------------------------------------------
Fund Officers:
- ------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------

Dorothy E. Secretary Serves at the Secretary of PIM-USA; Senior None
Bourassa (55) discretion of Vice President- Legal of
Board Pioneer; and Secretary/Clerk of
most of PIM-USA's subsidiaries
since October 2000; Secretary of
all of the Pioneer Funds since
September 2003 (Assistant
Secretary from november 2000 to
September 2003); and Senior
Counsel, Assistant Vice
President and Director of
Compliance of PIM-USA from April
1998 through October 2000
- ------------------------------------------------------------------------------------------------------------------------
Christopher J. Assistant Serves at the Assistant Vice President and None
Kelley (38) Secretary discretion of Senior Counsel of Pioneer since
Board July 2002; Vice President and
Senior Counsel of BISYS Fund
Services, Inc. (April 2001 to
June 2002); Senior Vice
President and Deputy General
Counsel of Funds Distributor,
Inc. (July 2000 to April 2001;
Vice President and Associate
General Counsel from July 1996
to July 2000); Assistant
Secretary of all Pioneer Funds
since September 2003
- ------------------------------------------------------------------------------------------------------------------------
David C. Phelan Assistant Serves at the Partner, Hale and Dorr LLP; None
(46) Secretary discretion of Assistant Secretary of all
the Board Pioneer Funds since September
2003
- ------------------------------------------------------------------------------------------------------------------------
Vincent Nave (57) Treasurer Serves at the Vice President-Fund Accounting, None
discretion of Administration and Custody
Board Services of Pioneer (Manager
from September 1996 to
February 1999); and
Treasurer of all of
the Pioneer Funds
(Assistant Treasurer
from June 1999 to
November 2000)
- ------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------

Luis I. Presutti Assistant Serves at the Assistant Vice President-Fund None
(37) Treasurer discretion of Accounting, Administration and
Board Custody Services of
Pioneer (Fund
Accounting Manager
from 1994 to 1999);
and Assistant
Treasurer of all of
the Pioneer Funds
since November 2000
- ------------------------------------------------------------------------------------------------------------------------
Gary Sullivan (44) Assistant Serves at the Fund Accounting Manager - Fund None
Treasurer discretion of Accounting, Administration and
Board Custody Services of Pioneer; and
Assistant Treasurer of all of
the Pioneer Funds since May 2002
- ------------------------------------------------------------------------------------------------------------------------
Katharine Kim Assistant Serves at the Fund Administration Manager - None
Sullivan (29) Treasurer discretion of Fund Accounting, Administration
Board and Custody Services since June
2003; Assistant Vice President -
Mutual Fund Operations of State
Street Corporation from June
2002 to June 2003 (formerly
Deutsche Bank Asset Management);
Pioneer Fund Accounting,
Administration and Custody
Services (Fund Accounting
Manager from August 199 to May
2002, Fund Accounting Services
Supervisor from 1997 to July
1999); Assistant Treasurer of
all Pioneer Funds since
September 2003
- ------------------------------------------------------------------------------------------------------------------------

*Mr. Cogan and Mr. Hood are interested trustees because each is an officer or
director of the fund's investment adviser and certain of its affiliates.

The table below lists all of the U.S.-registered Pioneer mutual funds currently
offered to the public and the investment adviser and principal underwriter for
each fund.

Investment Principal
Fund Name Adviser Underwriter
Pioneer America Income Trust Pioneer PFD
Pioneer Balanced Fund Pioneer PFD
Pioneer Bond Fund Pioneer PFD

Pioneer Cash Reserves Fund Pioneer PFD
Pioneer Core Equity Fund Pioneer PFD
Pioneer Emerging Growth Fund Pioneer PFD
Pioneer Emerging Markets Fund Pioneer PFD
Pioneer Equity Income Fund Pioneer PFD
Pioneer Europe Fund Pioneer PFD
Pioneer Europe Select Fund Pioneer PFD
Pioneer Fund Pioneer PFD
Pioneer Global High Yield Fund Pioneer PFD
Pioneer Growth Shares Pioneer PFD
Pioneer High Income Trust Pioneer Note 2
Pioneer High Income Municipal Advantage Trust Pioneer Note 2
Pioneer High Yield Fund Pioneer PFD
Pioneer Independence Fund Pioneer Note 1
Pioneer Interest Shares Pioneer Note 2
Pioneer International Equity Fund Pioneer PFD
Pioneer International Value Fund Pioneer PFD
Pioneer Large Cap Growth Fund Pioneer PFD
Pioneer Large Cap Value Fund Pioneer PFD
Pioneer Market Neutral Fund Pioneer PFD
Pioneer Mid Cap Growth Fund Pioneer PFD
Pioneer Mid Cap Value Fund Pioneer PFD
Pioneer Municipal High Income Trust Pioneer Note 2
Pioneer Protected Principal Plus Fund Pioneer PFD
Pioneer Protected Principal Plus Fund II Pioneer PFD
Pioneer Real Estate Shares Pioneer PFD
Pioneer Small Cap Value Fund Pioneer PFD
Pioneer Small Company Fund Pioneer PFD
Pioneer Strategic Income Fund Pioneer PFD
Pioneer Tax Free Income Fund Pioneer PFD
Pioneer Value Fund Pioneer PFD
Pioneer Variable Contracts Trust Pioneer Note 3

Note 1 This fund is available to the general public only through Pioneer
Independence Plans, a systematic investment plan sponsored by PFD.

Note 2 This fund is a closed-end fund.

Board Committees

The Board of Trustees has an Audit Committee, an Independent Trustees Committee,
a Nominating Committee, a Valuation Committee and a Policy Administration
Committee. Committee members are as follows:

Audit

Marguerite A. Piret (Chair), Stephen K. West and John Winthrop