As filed with the Securities and Exchange Commission on August 3, 2006
File No. 333-135471
United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. ___1___
Post-Effective Amendment No. _______
(Check appropriate box or boxes)
PIONEER SERIES TRUST II
(Exact Name of Registrant as Specified in Charter)
(617) 742-7825
(Area Code and Telephone Number)
60 State Street, Boston, Massachusetts 02109
(Address of Principal Executive Offices: Number, Street, City, State, Zip Code)
Dorothy E. Bourassa, Esq.
Secretary, Pioneer Series Trust II
60 State Street
Boston, Massachusetts 02109
(Name and Address of Agent for Service)
Copies to: Christopher P. Harvey, Esq.
Wilmer Cutler Pickering Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this Registration Statement.
Calculation of Registration Fee under the Securities Act of 1933: No filing fee
is due because of reliance on Section 24(f) of the Investment Company Act of
1940, which permits registration of an indefinite number of securities.
Title of Securities Being Registered: Shares of beneficial interest of the
Registrant.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment, which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall be effective on
such date as the Commission, acting pursuant to Section 8(a), may determine.
COMBINED PROXY STATEMENT OF
PIONEER AMERICA INCOME TRUST
PIONEER BALANCED FUND
PIONEER FLORIDA TAX FREE INCOME FUND
(a series of Pioneer Series Trust IV)
PIONEER FOCUSED EQUITY FUND
(a series of Pioneer Series Trust IV)
PROSPECTUS FOR
CLASS A, CLASS B, CLASS C, CLASS R AND INVESTOR CLASS SHARES OF
PIONEER GOVERNMENT INCOME FUND
(a series of Pioneer Series Trust IV)
CLASS A, CLASS B, CLASS C AND INVESTOR CLASS SHARES OF
PIONEER CLASSIC BALANCED FUND
(a series of Pioneer Series Trust IV)
CLASS A, CLASS B, CLASS C AND CLASS Y SHARES OF
PIONEER AMT-FREE MUNICIPAL FUND
(a series of Pioneer Series Trust II)
CLASS A, CLASS B, CLASS C AND CLASS Y SHARES OF
PIONEER RESEARCH FUND
(each, a "Pioneer Fund" and collectively, the "Pioneer Funds")
The address and telephone number of each Pioneer Fund is:
60 State Street
Boston, Massachusetts 02109
1-800-225-6292
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
SCHEDULED FOR OCTOBER 17, 2006
To the Shareholders of the Pioneer Funds:
This is the formal agenda for your fund's shareholder meeting (the
"meeting"). It tells you what matters will be voted on and the time and place
of the meeting, in case you want to attend in person.
A joint special shareholder meeting for your fund will be held at the
offices of Wilmer Cutler Pickering Hale and Dorr LLP, 60 State Street, 26th
Floor, Boston, Massachusetts on October 17, 2006, at 2:00 p.m., Eastern Time,
to consider the following:
1. A proposal to approve an Agreement and Plan of Reorganization between
your fund and a similarly managed Pioneer Fund. Under this Agreement
and Plan of Reorganization, your fund will transfer all of its assets
to a Pioneer Fund in exchange for the same class of shares of your
fund. Shares of each Pioneer Fund will be distributed to your fund's
shareholders in proportion to their holdings of the applicable class
of shares of your fund on the closing date of the reorganization. The
Pioneer Fund also will assume all of your fund's liabilities. Your
fund will then be dissolved.
2. Any other business that may properly come before the meeting.
YOUR TRUSTEES RECOMMEND THAT YOU VOTE IN FAVOR OF THE PROPOSAL.
Shareholders of record as of the close of business on July 31, 2006 are
entitled to vote at the meeting and any related follow-up meetings.
By Order of the Board of Trustees,
/s/ Dorothy E. Bourassa
Dorothy E. Bourassa
Secretary
Boston, Massachusetts
August 11, 2006
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE AND RETURN THE
ENCLOSED PROXY. If shareholders do not return their proxies in sufficient
numbers, your fund may be required to make additional solicitations.
COMBINED PROXY STATEMENT OF
PIONEER AMERICA INCOME TRUST
PIONEER BALANCED FUND
PIONEER FLORIDA TAX FREE INCOME FUND
(a series of Pioneer Series Trust IV)
PIONEER FOCUSED EQUITY FUND
(a series of Pioneer Series Trust IV)
PROSPECTUS FOR
CLASS A, CLASS B, CLASS C, CLASS R AND INVESTOR CLASS SHARES OF
PIONEER GOVERNMENT INCOME FUND
(a series of Pioneer Series Trust IV)
CLASS A, CLASS B, CLASS C AND INVESTOR CLASS SHARES OF
PIONEER CLASSIC BALANCED FUND
(a series of Pioneer Series Trust IV)
CLASS A, CLASS B, CLASS C AND CLASS Y SHARES OF
PIONEER AMT-FREE MUNICIPAL FUND
(a series of Pioneer Series Trust II)
CLASS A, CLASS B, CLASS C AND CLASS Y SHARES OF
PIONEER RESEARCH FUND
(each, a "Pioneer Fund" and collectively, the "Pioneer Funds")
The address and telephone number of each Pioneer Fund is:
60 State Street
Boston, Massachusetts 02109
1-800-225-6292
Shares of the Pioneer Funds have not been approved or disapproved by the
Securities and Exchange Commission (the "SEC"). The SEC has not passed on upon
the adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
An investment in any Pioneer Fund (each sometimes referred to herein as a
"fund") is not a bank deposit and is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency.
1
INTRODUCTION
This combined proxy statement/prospectus, dated August 11, 2006 (the "Proxy
Statement/Prospectus"), is being furnished to shareholders of the Pioneer Funds
in connection with the solicitation by the Board of Trustees (the "Board" or
the "Trustees") of the Pioneer Funds of proxies to be used at a joint special
meeting of the shareholders of the Pioneer Funds to be held at the offices of
Wilmer Cutler Pickering Hale and Dorr LLP, 26th Floor, Boston, Massachusetts on
October 17, 2006, at 2:00 p.m., Eastern Time. The Proxy Statement/ Prospectus
is being mailed to shareholders of the Pioneer Funds on or about August 11,
2006.
The Proxy Statement/Prospectus contains information you should know before
voting on the proposed Agreement and Plan of Reorganization that provides for
the Reorganization of your fund into a corresponding Pioneer Fund (each, a
"Reorganization"). Please read the Proxy Statement/Prospectus carefully,
including Exhibit A and Exhibit B, because they are a part of this Proxy
Statement/Prospectus and contain details that are not in the summary.
The following table indicates (a) the corresponding Pioneer Fund shares
that shareholders would receive if the Agreement and Plan of Reorganization is
approved, (b) which shareholders may vote on each proposal, and (c) what page
of this Proxy Statement/Prospectus the discussion regarding each proposal
begins. On each proposal, all shareholders of a Pioneer Fund, regardless of the
class of shares held, will vote together as a single class. Although each
Reorganization is similar in structure, you should read carefully the specific
discussion regarding your fund's Reorganization.
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Your Fund
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PROPOSAL 1(a) Pioneer America Income Trust
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PROPOSAL 1(b) Pioneer Balanced Fund
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PROPOSAL 1(c) Pioneer Florida Tax Free Income Fund
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PROPOSAL 1(d) Pioneer Focused Equity Fund
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Corresponding Pioneer Fund Shareholders Entitled to Vote Page
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PROPOSAL 1(a) Pioneer Government Income Fund Pioneer America Income Trust 6
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PROPOSAL 1(b) Pioneer Classic Balanced Fund Pioneer Balanced Fund 22
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PROPOSAL 1(c) Pioneer AMT-Free Municipal Fund Pioneer Florida Tax Free Income Fund 38
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PROPOSAL 1(d) Pioneer Research Fund Pioneer Focused Equity Fund 53
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The date of this Proxy Statement/Prospectus is August 11, 2006.
Additional information about each Pioneer Fund has been filed with the SEC
(http://www.sec.gov) and is available upon oral or written request and without
charge. See "Where to Get More Information" below.
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Where to Get More Information
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Each Pioneer Fund's current prospectus, and any On file with the SEC (http://www.sec.gov) and available at no charge
applicable supplements. by calling our toll-free number: 1-800-225-6292.
Each Pioneer Fund's current statement of additional On file with the SEC (http://www.sec.gov) and available at no charge
information, and any applicable supplements. by calling our toll-free number: 1-800-225-6292.
Each Pioneer Fund's most recent annual and semi-annual On file with the SEC (http://www.sec.gov) and available at no charge
reports to shareholders. by calling our toll-free number: 1-800-225-6292. See "Available
Information."
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A statement of additional information for this Proxy On file with the SEC (http://www.sec.gov) and available at no charge
Statement/Prospectus (the "SAI"), dated August 11, 2006. It by calling our toll-free number: 1-800-225-6292. This SAI is
contains additional information about the Pioneer Funds. incorporated by reference into this Proxy Statement/Prospectus.
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To ask questions about this Proxy Statement/Prospectus. Call our toll-free telephone number: 1-800-225-6292.
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How Each Reorganization Will Work
o Your fund will transfer all of its assets to a corresponding Pioneer
Fund. The Pioneer Fund will assume your fund's liabilities.
o Shares of the corresponding Pioneer Fund will be distributed to your
fund's shareholders in proportion to their holdings of the applicable
class of shares of your fund on the closing date of the Reorganization
(the "Closing Date"). These shares will be distributed to shareholders
in proportion to the relative net asset value of their share holdings on
the Closing Date. On the Closing Date, each shareholder will hold shares
of the corresponding Pioneer Fund with the same aggregate net asset
value as their holdings of the applicable class of shares of your fund
immediately prior to the Reorganization.
2
o Your fund will be dissolved after the Closing Date.
o The Reorganizations will not result in income, gain or loss being
recognized for federal income tax purposes by any of the Pioneer Funds
or the shareholders of the Pioneer Funds.
o In recommending each of the Reorganizations, the Board of Trustees of
each Pioneer Fund, including all of the Trustees who are not
"interested" persons (as defined in the Investment Company Act of 1940,
as amended (the "1940 Act")) of the Pioneer Funds, Pioneer Investment
Management, Inc., the Pioneer Funds' investment adviser ("Pioneer") or
Pioneer Funds Distributor, Inc., the Pioneer Funds' principal
underwriter and distributor ("PFD") (the "Independent Trustees") have
determined that the Reorganization is in the best interest of each
Pioneer Fund and will not dilute the interests of shareholders of each
Pioneer Fund. The Trustees have made this determination based on factors
that are discussed below and in greater detail under each proposal.
Why Your Fund's Trustees Recommend the Reorganization
The Trustees believe that reorganizing your fund into a similarly managed
Pioneer Fund offers you potential benefits. These potential benefits and
considerations include:
o The opportunity to be part of a combined Pioneer Fund with greater
assets that may be better positioned in the market to further increase
asset size and achieve economies of scale. Economies of scale have
potential benefits to the combined fund in two ways. First, a larger
fund, which trades in larger blocks of securities, will be able to hold
larger positions in individual securities and, consequently, have an
enhanced ability to achieve better net prices on securities trades. In
addition, each Pioneer Fund incurs substantial operating costs for
insurance, accounting, legal, and custodial services. The combination of
the Pioneer Funds resulting from the Reorganization may spread fixed
expenses over a larger asset base, potentially contributing to a lower
expense ratio in the long term than your fund would achieve separately.
o The transaction will qualify as a tax free reorganization under Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code") and
therefore will not be treated as a taxable sale of your fund's shares.
o In most instances, the pro forma expense ratio for each of the combined
Pioneer Funds' class of shares is anticipated to be the same or lower
than the historical expense ratio of the corresponding class of shares
of the fund being acquired.
Therefore, your fund's Trustees recommend that you vote FOR the
Reorganization.
What are the Federal Income Tax Consequences of the Reorganizations
The Reorganizations will not result in any income, gain or loss being
recognized for federal income tax purposes by any of the Pioneer Funds or their
shareholders as a direct result of the Reorganizations. However, in accordance
with the Pioneer Funds' policy to distribute its investment company taxable
income, net tax-exempt income and net capital gains for the taxable year (in
order to qualify for tax treatment as a regulated investment company and avoid
federal income tax thereon at the fund level), each Pioneer Fund that is being
merged into a corresponding Pioneer Fund will declare and pay a distribution of
such income and gains to its shareholders shortly before the Reorganizations.
Each such distribution, other than distributions of exempt-interest dividends,
will be taxable to those shareholders. Additionally, following the
Reorganizations, each Pioneer Fund will declare and pay before the end of 2006
a distribution of such income and gains to its shareholders. Those
distributions will be fully taxable to all shareholders of the Pioneer Funds,
including those of the merged Pioneer Funds, even though those distributions
may include a portion of the Pioneer Fund's income and gains that were realized
before the Closing Date.
Who Bears the Expenses Associated with the Reorganizations
Pioneer has agreed to pay 50% of the costs of preparing and printing the
Proxy Statement/Prospectus and the solicitation costs incurred in connection
with the Reorganizations. The Pioneer Funds will each pay an equal portion of
the remaining 50% of the costs incurred in connection with the Reorganizations.
What Happens if a Reorganization is Not Approved
If the required approval of shareholders of a Pioneer Fund is not
obtained, the meeting with respect to such Fund may be adjourned as more fully
described in this Proxy Statement/Prospectus, and such Fund will continue to
engage in the business as a separate mutual fund and the Board will consider
what further action may be appropriate.
3
Who is Eligible to Vote?
Shareholders of record on July 31, 2006 are entitled to attend and vote at
the meeting or any adjourned meeting. Each share is entitled to one vote.
Shares represented by properly executed proxies, unless revoked before or at
the meeting, will be voted according to shareholders' instructions. If you sign
a proxy but do not fill in a vote, your shares will be voted to approve the
Agreement and Plan of Reorganization. If any other business comes before the
meeting, your shares will be voted at the discretion of the persons named as
proxies.
4
TABLE OF CONTENTS
Page
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INTRODUCTION ................................................................................ 2
PROPOSAL 1(a) -- PIONEER AMERICA INCOME TRUST ............................................... 6
PROPOSAL 1(b) -- PIONEER BALANCED FUND ...................................................... 22
PROPOSAL 1(c) -- PIONEER FLORIDA TAX FREE INCOME FUND ....................................... 38
PROPOSAL 1(d) -- PIONEER FOCUSED EQUITY FUND ................................................ 53
TERMS OF EACH AGREEMENT AND PLAN OF REORGANIZATION .......................................... 68
TAX STATUS OF EACH REORGANIZATION ........................................................... 69
VOTING RIGHTS AND REQUIRED VOTE ............................................................. 69
COMPARISON OF MASSACHUSETTS BUSINESS TRUST AND DELAWARE STATUTORY TRUST (Proposal 1(a) only) 70
ADDITIONAL INFORMATION ABOUT THE PIONEER FUNDS .............................................. 71
FINANCIAL HIGHLIGHTS ........................................................................ 81
INFORMATION CONCERNING THE MEETING .......................................................... 97
OWNERSHIP OF SHARES OF THE PIONEER FUNDS .................................................... 98
EXPERTS ..................................................................................... 106
AVAILABLE INFORMATION ....................................................................... 106
EXHIBIT A -- FORM OF AGREEMENT AND PLAN OF REORGANIZATION ................................... A-1
EXHIBIT B -- PORTFOLIO MANAGEMENT DISCUSSION OF FUND PERFORMANCE ............................ B-1
5
PIONEER AMERICA INCOME TRUST
AND
PIONEER GOVERNMENT INCOME FUND
PROPOSAL 1(a)
SUMMARY
The following is a summary of more complete information appearing later in
this Proxy Statement/Prospectus or incorporated herein. You should read
carefully the entire Proxy Statement/Prospectus, including the form of
Agreement and Plan of Reorganization attached as Exhibit A, because they
contain details that are not in the summary.
If Proposal 1(a) is approved, your fund will be reorganized into Pioneer
Government Income Fund, as described above.
Both your fund and Pioneer Government Income Fund share a similar
investment objective of seeking current income as is consistent with the
preservation of capital and consequently, both funds have similar investment
policies and risks. However, Pioneer Government Income Fund may invest in a
broader range of U.S. government securities and derivatives, and is therefore
subject to additional risks associated with such investments. The table below
provides a comparison of the two funds. In the table below, if a row extends
across the entire table, the policy disclosed applies to both your fund and
Pioneer Government Income Fund.
Comparison of Pioneer America Income Trust to Pioneer Government Income Fund
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Pioneer America Income Trust Pioneer Government Income Fund
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Business A diversified, open-end investment A diversified series of Pioneer Series Trust IV,
management company organized as a an open-end investment management
Massachusetts business trust. company organized as a Delaware statutory
trust.
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Net assets, as of $175.0 million $100.8 million
May 31, 2006
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Investment adviser and Investment Adviser:
portfolio manager Pioneer Investment Management, Inc. ("Pioneer")
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Portfolio Manager:
Day-to-day management of each fund's portfolio is the responsibility of Richard Schlanger and
Charles Melchreit. Mr. Schlanger and Mr. Melchreit are supported by the fixed income team.
Members of this team manage other Pioneer funds investing primarily in fixed income
securities. The portfolio managers and the team also may draw upon the research and
investment management expertise of the global research team, which provides fundamental
research on companies and includes members from Pioneer's affiliate, Pioneer Investment
Management Limited. Mr. Schlanger, a vice president, joined Pioneer as a portfolio manager
in 1988 after spending 12 years with Irving Trust Company in New York, where he had overall
responsibility for managing nearly $1.5 billion in fixed income assets. Mr. Melchreit, a vice
president, joined Pioneer in 2006. From 2003 to 2004 Mr. Melchreit was a managing director
at Cigna Investment Management. Prior thereto, he was senior vice president and portfolio
manager at Aeltus Investment Management. Mr. Melchreit received an MS degree in Statistics
from Yale University in 2005.
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Investment objective The fund seeks as high a level of current The fund seeks current income as is
income as is consistent with preservation of consistent with preservation of capital.
capital and prudent investment risk.
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6
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Pioneer America Income Trust Pioneer Government Income Fund
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Primary investments The fund invests exclusively in securities that Normally, the fund invests at least 80% of its
are backed by the full faith and credit of the net assets (plus the amount of borrowings, if
U.S. government, and repurchase agreements any, for investment purposes) in U.S.
and "when-issued" commitments with respect government securities, and repurchase
to these securities. These securities include: agreements and "when-issued" commitments
with respect to these securities.
o U.S. Treasury obligations, which differ only
in their interest rates, maturities and times U.S. government securities include U.S.
of issuance, including U.S. Treasury bills Treasury obligations, such as bills, bonds and
(maturities of one year or less), U.S. notes, and obligations issued or guaranteed
Treasury notes (maturities of one to 10 by U.S. government agencies or
years), and U.S. Treasury bonds (generally instrumentalities.
maturities greater than 10 years)
Securities in which the fund may invest include:
o Obligations issued by or guaranteed as to
principal and interest by the U.S. Treasury o U.S. Treasury obligations, which differ only
and certain agencies and instrumentalities of in their interest rates, maturities and
the U.S. government, such as Government times of issuance, including U.S. Treasury
National Mortgage Association (GNMA) bills (maturities of one year or less), U.S.
certificates and Federal Housing Treasury notes (maturities of one to 10
Administration (FHA) debentures, for which years), and U.S. Treasury bonds (generally
the U.S. Treasury unconditionally guarantees maturities greater than 10 years)
payment of principal and interest.
o Obligations issued by or guaranteed as to
The fund's investments may have all types of principal and interest by the U.S. Treasury
interest rate payment and reset terms, and certain agencies and instrumentalities
including fixed rate, adjustable rate, zero of the U.S. government, such as GNMA
coupon, contingent, deferred, payment-in-kind certificates and FHA debentures, for which
and auction rate features. The fund may invest the U.S. Treasury unconditionally guarantees
in securities of any maturity. Although the payment of principal and interest
average dollar weighted maturity of the fund's
portfolio may vary significantly, it generally will o Obligations of issuers that are supported by
not exceed 20 years. the ability of the issuer to borrow from the
U.S. Treasury
The fund may invest in Treasury Inflation
Protected Securities ("TIPS"). TIPS are fixed o Obligations of the Private Export Funding
and floating rate debt securities of varying Corporation ("PEFCO"), which may be
maturities issued by the U.S. government and guaranteed by the Export-Import Bank of the
its agencies and instrumentalities whose U.S. ("Exim Bank"), an agency of the U.S.
principal value is periodically adjusted
according to the rate of inflation. TIPS pay o Obligations of government sponsored entities
interest every six months, based on a fixed that do not have any form of credit support
rate that is applied to the adjusted principal. from the U.S. government, including the
With inflation, the value of the principal and Federal Farm Credit Banks ("FFCB") and
the amount of interest payable on these Tennessee Valley Authority ("TVA").
securities increases. With deflation, the value
of the principal and the amount of interest Government sponsored entities, such as the
payable on these securities decreases. Upon Federal Home Loan Mortgage Corporation
maturity, the original or adjusted principal (Freddie Mac), the Federal National Mortgage
amount is paid, whichever is greater. Although Association (FNMA), the Federal Home Loan
repayment of the original bond principal upon Banks (FHLBs), the Private Export Funding
maturity (and as adjusted for inflation) is Corporation, the Federal Farm Credit Banks
guaranteed, the current market value of TIPS is and the Tennessee Valley Authority, although
not guaranteed and will fluctuate.
7
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Pioneer America Income Trust Pioneer Government Income Fund
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chartered or sponsored by Congress, are not
funded by congressional appropriations and
the debt and mortgage-backed securities
issued by them are neither guaranteed nor
issued by the U.S. government.
The fund will provide written notice to
shareholders at least 60 days prior to any
change to the requirement that it invest at
least 80% of its assets in U.S. government
securities.
The fund's investments may have all types
of interest rate payment and reset terms,
including fixed rate, adjustable rate, zero
coupon, contingent, deferred, payment-in-kind
and auction rate features. The fund may invest
in securities with a broad range of maturities
and maintains an average portfolio maturity
which varies based upon the judgment
of Pioneer.
In pursuing its investment strategy, Pioneer
Government Income Fund may over time
dispose of securities acquired through the
reorganization in the ordinary course of
business. This may result in Pioneer
Government Income Fund realizing gains on
previously existing Pioneer America Income
Trust holdings, which capital gains will be
distributed to all of Pioneer Government
Income Fund's shareholders after the closing
date, and incurring transactions costs. The
amount of such gains and any transaction
costs cannot be accurately estimated at this
time. Pioneer intends to take such factors into
consideration in selecting any portfolio
positions for sale.
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Each fund may invest in mortgage-backed securities issued by agencies or instrumentalities of the U.S.
government. These securities represent direct or indirect participation in, or are collateralized by and
payable from, mortgage loans secured by real estate. Certain debt instruments may only pay principal at
maturity or may only represent the right to receive payments of principal or payments of interest on
underlying pools of mortgage or government securities, but not both. The value of these types of instruments
may change more drastically than debt securities that pay both principal and interest during periods of
changing interest rates. Principal only mortgage-backed securities generally increase in value if interest
rates decline, but are also subject to the risk of prepayment. Interest only instruments generally increase
in value in a rising interest rate environment when fewer of the underlying mortgages are prepaid.
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Each fund may invest in repurchase agreements. Repurchase agreements are arrangements under which the fund
purchases securities and the seller agrees to repurchase the securities
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8
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Pioneer America Income Trust Pioneer Government Income Fund
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within a specific time and at a specific price. The repurchase price is generally higher than a fund's
purchase price, with the difference being income to the fund. The other party'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. Repurchase agreements afford a fund an opportunity to
earn income on temporarily available cash at low risk. However, in the event that the other party to the
repurchase agreement defaults on its obligations, a 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.
In addition, if a fund is characterized by a court as an unsecured creditor, it would be at risk of losing
some or all of the principal and interest involved in the transaction.
Each fund may purchase and sell securities, including GNMA certificates, on a when-issued or delayed delivery
basis. These transactions arise when securities are purchased or sold by a fund with payment and delivery
taking place at a fixed future date. Each fund will not earn income on these securities until delivered. Each
fund may engage in these transactions when it believes they would result in a favorable price and yield for
the security being purchased or sold. The market value of when-issued or delayed delivery transactions may
increase or decrease as a result of changes in interest rates. These transactions involve risk of loss if the
value of the underlying security changes unfavorably before the settlement date. There is also a risk that
the other party to the transaction will default on its obligation to purchase or sell the security, which may
result in a fund missing the opportunity to obtain a favorable price or yield elsewhere.
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Investment strategies Pioneer, each fund's investment adviser, considers both broad economic factors and issuer specific factors in
selecting a portfolio designed to achieve the fund's investment objective. In assessing the appropriate
maturity and sector weighting of a fund's portfolio, Pioneer considers a variety of factors that are expected
to influence economic activity and interest rates. These factors include fundamental economic indicators,
such as the rates of economic growth and inflation, Federal Reserve monetary policy and the relative value of
the U.S. dollar compared to other currencies. Once Pioneer determines the preferable portfolio
characteristics, Pioneer selects individual securities based upon the terms of the securities (such as yields
compared to U.S. Treasuries or comparable issues) and sector diversification.
In making portfolio decisions, Pioneer relies on the knowledge, experience and judgment of its staff and the
staff of its affiliates who have access to a wide variety of research.
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9
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Pioneer America Income Trust Pioneer Government Income Fund
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Other investments The fund may use futures and options on
securities, indices and other derivatives. A
derivative is a security or instrument whose
value is determined by reference to the value
or the change in value of one or more
securities, currencies, indices or other
financial instruments. Although there is no
specific limitation on investing in
derivatives, the fund does not use derivatives
as a primary investment technique and
generally limits their use to hedging.
However, the fund may use derivatives for a
variety of non-principal purposes, including:
o As a hedge against adverse changes in
interest rates
o As a substitute for purchasing or selling
securities
o To increase the fund's return as a non-
hedging strategy that may be considered
speculative.
Even a small investment in derivatives can
have a significant impact on the fund's
exposure to interest rates. If changes in a
derivative's value do not correspond to
changes in the value of the fund's other
investments, the fund may not fully benefit
from or could lose money on the derivative
position. In addition, some derivatives
involve risk of loss if the person who issued
the derivative defaults on its obligation.
Certain derivatives may be less liquid and
more difficult to value. The fund will only
invest in derivatives to the extent Pioneer
believes these investments do not prevent the
fund from seeking its investment objective.
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Temporary defensive Normally, each fund invests substantially all of its assets to meet its investment objective. Each fund may
strategies invest the remainder of its assets in securities with remaining maturities of less than one year, cash
equivalents or may hold cash. For temporary defensive purposes, including during periods of unusual cash
flows, each fund may depart from its principal investment strategies and invest part or all of its assets in
these securities or may hold cash. During such periods, a fund may not be able to achieve its investment
objective.
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Short-term trading Each fund usually does not trade for short-term profits. Each fund will sell an investment, however, even if
it has only been held for a short time, if it no longer meets the fund's investment criteria. If a fund does
a lot of trading, it may incur additional operating expenses, which would reduce performance, and could cause
shareowners to incur a higher level of taxable income or capital gains.
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10
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Classes of Shares, Fees and Expenses
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Pioneer America Income Trust Pioneer Government Income Fund
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Class A sales charges The Class A shares of both funds have the same characteristics and fee structure.
and fees
o Class A shares are offered with initial sales charges up to 4.50% of the
offering price, which is reduced or waived for large purchases and certain
types of investors. At the time of your purchase, your investment firm may
receive a commission from Pioneer Funds Distributor, Inc. ("PFD"), the funds'
distributor, of up to 4% declining as the size of your investment increases.
o There are no contingent deferred sales charges, except in certain
circumstances when the initial sales charge is waived.
o Class A shares are subject to distribution and service (12b-1) fees of up to
0.25% of average daily net assets. These fees are paid out of a fund's assets
on an ongoing basis. Over time these fees will increase the cost of
investments and may cost more than other types of sales charges.
- ------------------------------------------------------------------------------------------------------------------------------------
Class B sales charges The Class B shares of both funds have the same characteristics and fee structure.
and fees
o Class B shares are offered without an initial sales charge, but are subject to
contingent deferred sales charges of up to 4% if you sell your shares. The
charge is reduced over time and is not charged after five years. Your
investment firm may receive a commission from PFD, the funds' distributor, at
the time of your purchase of up to 4%.
o Class B shares are subject to distribution and service (12b-1) fees of up to
1% of average daily net assets. Both of these fees are paid out of a fund's
assets on an ongoing basis. Over time these fees will increase the cost of
investments and may cost more than other types of sales charges.
- ------------------------------------------------------------------------------------------------------------------------------------
Class C sales charges The Class C shares of both funds have the same characteristics and fee structure.
and fees
o Class C shares are offered without an initial sales charge.
o Class C shares are subject to a contingent deferred sales charge of 1% if you
sell your shares within one year of purchase. Your investment firm may receive
a commission from PFD at the time of your purchase of up to 1%.
o Class C shares are subject to distribution and service (12b-1) fees of up to
1% of average daily net assets. These fees are paid out of a fund's assets on
an ongoing basis. Over time these fees will increase the cost of investments
and may cost more than other types of sales charges.
- ------------------------------------------------------------------------------------------------------------------------------------
Class R sales charges The Class R shares of both funds have the same characteristics and fee structure.
and fees
o Class R shares are offered without an initial sales charge.
o Class R shares are not subject to a contingent deferred sales charge.
o Class R shares are subject to distribution and service (12b-1) fees of up to
0.50% of average daily net assets. These fees are paid out of a fund's assets
on an ongoing basis. Over time these fees will increase the cost of
investments and may cost more than other types of sales charges.
- ------------------------------------------------------------------------------------------------------------------------------------
11
- ------------------------------------------------------------------------------------------------------------------------------------
Classes of Shares, Fees and Expenses
- ------------------------------------------------------------------------------------------------------------------------------------
Pioneer America Income Trust Pioneer Government Income Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Investor Class sales The Investor Class shares of both funds have the same characteristics and fee structure.
charges and fees
o Investor Class shares are offered without an initial sales charge.
o Investor Class shares are not subject to a contingent deferred sales charge.
o Investor Class shares are not subject to distribution and service (12b-1) fees.
o All Investor Class shares of a fund, whenever issued, convert to Class A shares of the fund on December
10, 2006.
- ------------------------------------------------------------------------------------------------------------------------------------
Management fees Both funds have the same management fee structure. Pioneer's annual fee is equal to 0.50% of each fund's
average daily net assets. The fee is accrued daily and paid monthly.
A discussion regarding the basis for the Board of Trustees' approval of the management contract is
available in Pioneer America Income Trust's December 31, 2005 annual report to shareholders and in
Pioneer Government Income Fund's January 31, 2006 semi-annual report to shareholders.
- ------------------------------------------------------------------------------------------------------------------------------------
Buying, Selling and Exchanging Shares
- ------------------------------------------------------------------------------------------------------------------------------------
Pioneer America Income Trust Pioneer Government Income Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Buying shares You may buy shares from any investment firm that has a sales agreement with PFD, the funds' distributor.
You can buy shares at the offering price. You may use securities you own to purchase shares of the fund
provided that Pioneer, in its sole discretion, determines that the securities are consistent with the
fund's objective and policies and their acquisition is in the best interests of the fund.
Class R shares are available to certain tax-deferred retirement plans (including 401(k) plans,
employer-sponsored 403(b) plans, 457 plans, profit sharing and money purchase pension plans, defined
benefit plans and non-qualified deferred compensation plans) held in plan level or omnibus accounts.
Class R shares also are available to IRA rollovers from eligible retirement plans that offered one or
more Class R share Pioneer funds as investment options. Class R shares are not available to
non-retirement accounts, traditional or Roth IRAs, Coverdell Education Savings Accounts, SEPs, SAR-SEPs,
SIMPLE IRAs, individual 403(b)s and most individual retirement accounts or retirement plans that are not
subject to the Employee Retirement Income Security Act of 1974 (ERISA).
Investor Class Shares have been issued in connection with the Reorganization. The fund is not offering
additional Investor Class shares except in connection with the reinvestment of dividends on the fund's
outstanding Investor Class shares. Holders of Investor Class Shares of the fund may be eligible to
purchase Class A shares of the fund without paying a sales load, pursuant to the prospectus for that
Class. All Investor Class shares of the fund, whenever issued, convert to Class A shares of the fund on
December 10, 2006.
If you have an existing non-retirement account, you may purchase shares of a fund by telephone or online.
Certain IRAs also may use the telephone purchase privilege.
- ------------------------------------------------------------------------------------------------------------------------------------
Minimum initial Your initial investment must be at least $1,000 for Class A, Class B or Class C shares. There is no
investment minimum initial investment amount for Class R shares. Additional investments must be at least $100 for
Class A shares, $500 for Class B shares or Class C shares, and there is no minimum additional investment
amount for Class R shares. You may qualify for lower initial or subsequent investment minimums if you are
opening a retirement plan account, establishing an automatic investment plan or placing your trade
through your investment firm.
- ------------------------------------------------------------------------------------------------------------------------------------
12
- ------------------------------------------------------------------------------------------------------------------------------------
Buying, Selling and Exchanging Shares
- ------------------------------------------------------------------------------------------------------------------------------------
Pioneer America Income Trust Pioneer Government Income Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Maximum purchase Purchases of fund shares are limited to $49,999 for Class B shares and $999,999 for Class C shares. There
amounts is no maximum purchase for Class A shares or Class R shares. These limits are applied on a per
transaction basis.
- ------------------------------------------------------------------------------------------------------------------------------------
Exchanging shares You may exchange your shares for shares of the same class of another Pioneer mutual fund. Your exchange
request must be for at least $1,000. Each fund allows you to exchange your shares at net asset value
without charging you either an initial or contingent deferred shares charge at the time of the exchange.
Shares you acquire as part of an exchange will continue to be subject to any contingent deferred sales
charge that applies to the shares you originally purchased. When you ultimately sell your shares, the
date of your original purchase will determine your contingent deferred sales charge. An exchange
generally is treated as a sale and a new purchase of shares for federal income tax purposes.
The fund is not offering additional Investor Class shares except in connection with the reinvestment of
dividends on the fund's outstanding Investor Class shares. Holders of Investor Class Shares of the fund
may be eligible to purchase Class A shares of the fund without paying a sales load, pursuant to the
prospectus for that Class. All Investor Class shares of a fund, whenever issued, convert to Class A
shares of the fund on December 10, 2006.
In connection with the Reorganization, Pioneer Government Income Fund's Class A shareholders will have
the opportunity to exchange their shares for Class Y shares of Pioneer Government Income Fund at net
asset value without any initial or contingent sales charge.
After you establish an eligible fund account, you can exchange fund shares by telephone or online.
- ------------------------------------------------------------------------------------------------------------------------------------
Selling shares Your shares will be sold at net asset value per share next calculated after a fund receives your request
in good order. If the shares you are selling are subject to a deferred sales charge, it will be deducted
from the sale proceeds.
If you have an eligible non-retirement account, you may sell up to $100,000 per account per day by
telephone or online. You may sell fund shares held in a retirement plan account by telephone only if your
account is an eligible IRA (tax penalties may apply).
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value Each fund's net asset value is the value of its portfolio of securities plus any other assets minus its
operating expenses and any other liabilities. Each fund calculates a net asset value for each class of
shares every day the New York Stock Exchange is open when regular trading closes (normally 4:00 p.m.
Eastern time).
- ------------------------------------------------------------------------------------------------------------------------------------
You buy or sell shares at the share price. When you buy Class A shares, you pay an initial sales charge
unless you qualify for a waiver or reduced sales charge. When you sell Class A, Class B or Class C
shares, you may pay a contingent deferred sales charge depending on how long you have owned your shares.
- ------------------------------------------------------------------------------------------------------------------------------------
Comparison of Principal Risks of Investing in the Funds
Because each fund has similar investment objectives and investment
strategies, the funds are subject to some of the same principal risks. You
could lose money on your investment or not make as much as if you invested
elsewhere if:
o Interest rates go up causing the value of the fund's investments to
decline.
o During periods of declining interest rates, the issuer of a security may
exercise its option to prepay principal earlier than scheduled, forcing
the fund to reinvest in lower yielding securities. This is known as call
or prepayment risk.
13
o During periods of rising interest rates, the average life of certain
types of securities may be extended because of slower than expected
principal payments. This may lock in a below market interest rate,
increase the security's duration (the estimated period until the
security is paid in full) and reduce the value of the security. This is
known as extension risk.
o Pioneer's judgment about the attractiveness, relative value or potential
appreciation of a particular sector, security or investment strategy
prove to be incorrect.
To the extent either fund invests significantly in mortgage-backed
securities, its exposure to prepayment and extension risks may be greater than
other investments in fixed income securities.
Unlike your fund, Pioneer Government Income Fund is subject to the risks
of investing in government-sponsored entities. Government sponsored entities
such as the Federal Home Loan Mortgage Corporation (Freddie Mac), the Federal
National Mortgage Association (FNMA) and the Federal Home Loan Banks (FHLBs),
although chartered or sponsored by Congress, are not funded by congressional
appropriations and the debt and mortgage-backed securities issued by them are
neither guaranteed nor issued by the U.S. government.
The Funds' Fees and Expenses
Shareholders of both funds pay various fees and expenses, either directly
or indirectly. The tables below show the fees and expenses that you would pay
if you were to buy and hold shares of each fund. The expenses in the tables
appearing below are based on (i) for your fund, the expenses of your fund for
the twelve-month period ended December 31, 2005, and (ii) for Pioneer
Government Income Fund, the expenses of Pioneer Government Income Fund for the
twelve-month period ended January 31, 2006. Future expenses for all share
classes may be greater or less. The tables also show the pro forma expenses of
the combined fund assuming the Reorganization occurred on January 31, 2006.
Combined
Pioneer
Pioneer Pioneer Government Pioneer
America Government Income America
Income Income Fund Income
Trust Fund (Pro Forma Trust
(12 months (12 months 12 months (12 months
ended ended ended ended
December 31, January 31, January 31, December 31,
2005) 2006) 2006) 2005)
-------------- ------------- ------------- --------------
Shareholder transaction fees
(paid directly from your investment) Class A Class A Class A Class B
Maximum sales charge (load)
when you buy shares as a percentage
of offering price 4.50% 4.50% 4.50% None
Maximum deferred sales charge (load)
as a percentage of offering price or
the amount you receive when you sell
shares, whichever is less None(1) None(1) None(1) 4%
Redemption fee as a percentage of
amount redeemed, if applicable None None None None
Annual fund operating expenses
(deducted from fund assets) as a
% of average daily net assets
Management Fee 0.50% 0.50% 0.50% 0.50%
Distribution and Service (12b-1) Fee 0.25% 0.25% 0.25% 1.00%
Other Expenses 0.45% 0.32% 0.42% 0.53%
Total Annual Fund Operating Expenses(2) 1.20% 1.07% 1.17% 2.03%
- -------------------------------------------------------------------------------------------------
Less: Fee Waiver and Expense Limitations N/A N/A N/A N/A
Net Expenses 1.20% 1.07% 1.17% 2.03%
Combined Combined
Pioneer Pioneer
Pioneer Government Pioneer Pioneer Government
Government Income America Government Income
Income Fund Income Income Fund
Fund (Pro Forma Trust Fund (Pro Forma
(12 months 12 months (12 months (12 months 12 months
ended ended ended ended ended
January 31, January 31, December 31, January 31, January 31,
2006) 2006) 2005) 2006) 2006)
----------- ----------- ------------ ----------- -----------
Shareholder transaction fees
(paid directly from your investment) Class B Class B Class C Class C Class C
Maximum sales charge (load)
when you buy shares as a percentage
of offering price None None None None None
Maximum deferred sales charge (load)
as a percentage of offering price or
the amount you receive when you sell
shares, whichever is less 4% 4% 1% 1% 1%
Redemption fee as a percentage of
amount redeemed, if applicable None None None None None
Annual fund operating expenses
(deducted from fund assets) as a
% of average daily net assets
Management Fee 0.50% 0.50% 0.50% 0.50% 0.50%
Distribution and Service (12b-1) Fee 1.00% 1.00% 1.00% 1.00% 1.00%
Other Expenses 0.39% 0.50% 0.43% 0.66% 0.43%
Total Annual Fund Operating Expenses(2) 1.89% 2.00% 1.93% 2.16% 1.93%
- --------------------------------------------------------------------------------------------------------------------
Less: Fee Waiver and Expense Limitations N/A (0.11)%(3) N/A N/A N/A
Net Expenses 1.89% 1.89%(3) 1.93% 2.16% 1.93%
14
Combined Combined
Pioneer Pioneer
Pioneer Pioneer Government Pioneer Pioneer Government
America Government Income America Government Income
Income Income Fund Income Income Fund
Trust Fund (Pro Forma Trust Fund (Pro Forma
(12 months (12 months 12 months (12 months (12 months 12 months
ended ended ended ended ended ended
December 31, January 31, January 31, December 31, January 31, January 31,
2005) 2006) 2006) 2005) 2006) 2006)
------------ ----------- ----------- ------------ ----------- -----------
Shareholder transaction fees Investor Investor Investor
(paid directly from your investment) Class R Class R Class R Class Class Class
Maximum sales charge (load)
when you buy shares as a percentage
of offering price None N/A None None N/A None
Maximum deferred sales charge (load)
as a percentage of offering price or
the amount you receive when you sell
shares, whichever is less None N/A None None N/A None
Redemption fee as a percentage of
amount redeemed, if applicable None N/A None None N/A None
Annual fund operating expenses
(deducted from fund assets) as a
% of average daily net assets
Management Fee 0.50% N/A 0.50% 0.50% N/A 0.50%
Distribution and Service (12b-1) Fee 0.50% N/A 0.50% 0.00% N/A 0.00%
Other Expenses 0.61% N/A 0.61% 0.33% N/A 0.33%
Total Annual Fund Operating Expenses(2) 1.61% N/A 1.61% 0.83%(4) N/A 0.83%(4)
- ---------------------------------------------------------------------------------------------------------------------------------
The hypothetical examples below help you compare the cost of investing in
each fund. It assumes that: (a) you invest $10,000 in each fund for the time
periods shown, (b) you reinvest all dividends and distributions, (c) your
investment has a 5% return each year, (d) each fund's operating expenses remain
the same and (e) Pioneer's contractual expense limitation for the combined
Pioneer Government Income Fund's Class B shares is in effect for year one. Pro
forma expenses are included assuming a Reorganization with your fund and
Pioneer Government Income Fund. The examples are for comparison purposes only
and are not a representation of either fund's actual expenses or returns,
either past or future.
Combined
Pioneer
Pioneer Pioneer Government
Number of years America Government Income Fund
you own your shares Income Trust Income Fund (Pro Forma)
- ------------------- ------------ ----------- -----------
Class A -- assuming redemption at end of period
Year 1 ....................................... $ 567 $ 554 $ 564
Year 3 ....................................... $ 814 $ 775 $ 805
Year 5 ....................................... $1,080 $1,014 $1,065
Year 10 ...................................... $1,839 $1,697 $1,806
Class A -- assuming no redemption
Year 1 ....................................... $ 567 $ 554 $ 564
Year 3 ....................................... $ 814 $ 775 $ 805
Year 5 ....................................... $1,080 $1,014 $1,065
Year 10 ...................................... $1,839 $1,697 $1,806
Class B -- assuming redemption at end of period
Year 1 ....................................... $ 606 $ 592 $ 592
Year 3 ....................................... $ 937 $ 894 $ 917
Year 5 ....................................... $1,193 $1,121 $1,168
Year 10 ...................................... $2,145 $1,998 $2,104
15
Combined
Pioneer
Pioneer Pioneer Government
Number of years America Government Income Fund
you own your shares Income Trust Income Fund (Pro Forma)
- ------------------- ------------ ----------- -----------
Class B -- assuming no redemption
Year 1 ......................................... $ 206 $ 192 $ 192
Year 3 ......................................... $ 637 $ 594 $ 617
Year 5 ......................................... $1,093 $1,021 $1,068
Year 10 ........................................ $2,145 $1,998 $2,104
Class C -- assuming redemption at end of period
Year 1 ......................................... $ 296 $ 319 $ 296
Year 3 ......................................... $ 606 $ 676 $ 606
Year 5 ......................................... $1,042 $1,159 $1,042
Year 10 ........................................ $2,254 $2,493 $2,254
Class C -- assuming no redemption
Year 1 ......................................... $ 196 $ 219 $ 196
Year 3 ......................................... $ 606 $ 676 $ 606
Year 5 ......................................... $1,042 $1,159 $1,042
Year 10 ........................................ $2,254 $2,493 $2,254
Class R
Year 1 ......................................... $ 164 N/A $ 164
Year 3 ......................................... $ 508 N/A $ 508
Year 5 ......................................... $ 876 N/A $ 876
Year 10 ........................................ $1,911 N/A $1,911
Investor Class(4)
Year 1 ......................................... $ 85 N/A $ 85
Year 3 ......................................... $ 344 N/A $ 338
Year 5 ......................................... $ 624 N/A $ 611
Year 10 ........................................ $1,422 N/A $1,390
- ----------
(1) Purchases of $1 million or more and purchases by participants in certain
group plans are not subject to an initial sales charge but may be subject to
a contingent deferred sales charge of 1%.
(2) The funds' total annual operating expenses in the table have not been
reduced by any expense offset arrangements.
(3) Net expenses in the table reflect the expense limitation that will be in
effect upon the closing of the Reorganization, under which Pioneer has
contractually agreed not to impose all or a portion of its management fee
and, if necessary, to limit other ordinary operating expenses to the extent
required to reduce fund expenses to 1.89% of the average daily net assets
attributable to Class B shares. This expense limitation is in effect from
the closing date of the Reorganization through December 1, 2007. There can
be no assurance that Pioneer will extend the expense limitation beyond such
time.
(4) The funds' Investor Class shares, whenever issued, convert to Class A shares
of the fund on December 10, 2006.
Comparison of Fund Performance
The bar charts show the year-by-year performance of each fund's Class A
shares since inception. Class B, Class C, Class R and Investor Class shares
will have different performance. The chart does not reflect any sales charge
you may pay when you buy or sell fund shares. Any sales charge will reduce your
return. The tables show average annual total return (before and after sales
taxes) for each fund over time for each class of shares (including deductions
for sales charges) compared with a broad-based securities market index. The
after-tax returns shown for each fund are for Class A only; after-tax returns
for other classes will vary. Past performance (before and after taxes) does not
indicate future results.
16
[THE FOLLOWING DATA WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL]
Pioneer America Income Trust Annual Return -- Class A Shares*
(Year ended December 31)
'96 2.29
'97 8.51
'98 7.78
'99 -2.53
'00 11.58
'01 5.92
'02 9.77
'03 1.47
'04 2.78
'05 1.84
- ----------
* During the period shown in the bar chart, Pioneer America Income Trust's
highest quarterly return was 4.51% for the quarter ended September 30, 2001,
and the lowest quarterly return was (2.07)% for the quarter ended March 31,
1996. For the period from January 1, 2006 to June 30, 2006, Pioneer America
Income Trust's return was (1.68%).
Pursuant to an agreement and plan of reorganization, Pioneer Government
Income Fund acquired the assets and liabilities of AmSouth Government Income
Fund (the predecessor fund) on September 23, 2005. In the reorganization, the
predecessor fund exchanged all of its assets for shares of the fund. The
predecessor fund offered classes of shares similar to the fund's Class A and
Class B shares. As a result of the reorganization, the fund is the accounting
successor of the predecessor fund. The performance of the Class A and Class B
shares of the fund set forth in the table below includes the performance of the
predecessor fund's Class A and Class B shares prior to the Reorganization,
which has been restated to reflect differences in any applicable sales charges
(but not differences in expenses). Class C shares were not previously offered
by the predecessor fund. The performance of the fund's Class C shares is based
upon the performance of the predecessor fund's Class B shares as adjusted to
reflect sales charges applicable to the fund's Class C shares (but not other
differences in expenses). If the performance had been adjusted to reflect all
differences in expenses, the performance of the fund would be lower.
[THE FOLLOWING DATA WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL]
Pioneer Government Income Fund's Annual Return -- Class A Shares*
(Year ended December 31)
'96 4.05
'97 9.35
'98 7.14
'99 0.63
'00 10.67
'01 7.01
'02 8.70
'03 1.46
'04 2.39
'05 1.49
- ----------
* During the period shown in the bar chart, Pioneer Government Income Fund's
highest quarterly return was 4.47% for the quarter ended September 30, 2002,
and the lowest quarterly return was (1.77)% for the quarter ended June 30,
2004. For the period from January 1, 2006 to June 30, 2006, Pioneer Government
Income Fund's return was (1.24%).
17
Average Annual Total Return
(for periods ended December 31, 2005)
- ----------------------------------------------------------------------------------------------------------------------------
1 Year 5 Years 10 Years Since Inception
- ----------------------------------------------------------------------------------------------------------------------------
Pioneer America Income Trust
- ----------------------------------------------------------------------------------------------------------------------------
Class A -- Before Taxes (2.73)% 3.36% 4.38% 6.08%
(6/1/88)
- ----------------------------------------------------------------------------------------------------------------------------
Class A -- After Taxes on Distributions(1) (4.22)% 1.60% 2.24% 3.70%
(6/1/88)
- ----------------------------------------------------------------------------------------------------------------------------
Class A -- After Taxes on Distributions and (1.78)% 1.80% 2.38% 3.75%
Sale of Fund Shares(1) (6/1/88)
- ----------------------------------------------------------------------------------------------------------------------------
Class B -- Before Taxes (2.90)% 3.46% 4.04% 4.65%
(4/29/94)
- ----------------------------------------------------------------------------------------------------------------------------
Class C -- Before Taxes(2) 1.02% 3.52% N/A 4.06%
(1/31/96)
- ----------------------------------------------------------------------------------------------------------------------------
Class R -- Before Taxes 1.53% 3.99% 4.44% 5.89%
(6/1/88)
- ----------------------------------------------------------------------------------------------------------------------------
Investor Class -- Before Taxes 2.27% N/A N/A 2.11%
(12/10/04)
- ----------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Government Bond Index 2.65% 5.39% 5.94% 7.51%(5)
(reflects no deduction for taxes)(3)
- ----------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Fixed Rate Mortgage-Backed Securities Index 2.61% 5.44% 6.17% 7.63%(6)
(reflects no deduction for taxes)(4)
- ----------------------------------------------------------------------------------------------------------------------------
Pioneer Government Income Fund
- ----------------------------------------------------------------------------------------------------------------------------
Class A -- Before Taxes (3.04)% 3.21% 4.75% 4.97%(7)
(10/1/93)
- ----------------------------------------------------------------------------------------------------------------------------
Class A -- After Taxes on Distribution(1) (4.65)% 1.40% 2.64% 2.74%(7)
(10/1/93)
- ----------------------------------------------------------------------------------------------------------------------------
Class A -- After Taxes on Distributions and (1.78)% 1.69% 2.75% 2.84%(7)
Sale of Fund Shares(1) (10/1/93)
- ----------------------------------------------------------------------------------------------------------------------------
Class B -- Before Taxes (3.11)% 3.40% N/A 4.45%(7)
(3/13/00)
- ----------------------------------------------------------------------------------------------------------------------------
Class C -- Before Taxes(2) 0.80% 3.42% N/A 4.47%(7)
(3/13/00)
- ----------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Government Bond Index 2.65% 5.39% 5.94% 5.86%(7)(8)
(reflects no deduction taxes)(3)
- ----------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Fixed Rate Mortgage-Backed Securities Index 2.61% 5.44% 6.17% 6.31%(7)(8)
(reflects no deduction for taxes)(4)
(1) After-tax returns are calculated using the historical highest individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Actual after-tax returns depend on the investor's tax situation
and may differ from those shown. Furthermore, the after-tax returns shown
are not relevant to shareholders who hold fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement accounts.
After-tax returns for Class B and Class C shares will vary from the
after-tax returns presented for Class A shares.
18
(2) The performance of Class C shares does not reflect the 1% front-end sales
charge in effect prior to February 1, 2004. If you paid a 1% sales charge,
your returns would be lower than those shown above.
(3) 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.
(4) The Lehman Brothers Fixed Rate Mortgage-Backed Securities Index is an
unmanaged index including 15- and 30-year fixed rate securities backed by
mortgage pools of the GNMA, Federal Home Loan Mortgage Corporation (FHLMC)
and Federal National Mortgage Association (FNMA).
(5) Reflects the return of the index since the inception of Class A and Class R
shares. Index returns since the inception of other classes are as follows:
Class B shares: 6.63%. Class C shares: 5.92%. Investor Class shares: 2.65%.
(6) Reflects the return of the index since the inception of Class A and Class R
shares. Index returns since the inception of other classes are as follows:
Class B shares: 6.81%. Class C shares: 6.15%. Investor Class shares: 2.61%.
(7) Reflects the inception dates of the predecessor fund (the predecessor fund's
Class B shares' inception date is applicable in the case of the fund's Class
C shares). The fund began offering its Class C shares on September 23, 2005.
(8) Reflects the return of the index since the inception of Class A shares. The
returns of the Lehman Brothers Government Bond Index and the Lehman Brothers
Fixed Rate Mortgage-Backed Securities Index since the inception of Class B
shares were 6.34% and 6.40%, respectively.
The most recent portfolio management discussion of each fund's performance is
attached as Exhibit B.
CAPITALIZATION
The following table sets forth the capitalization of each fund as of May
31, 2006 and the pro forma combined capitalization of the combined fund as if
the Reorganization had occurred on that date. If the Reorganization is
consummated, the actual exchange ratios on the Closing Date may vary from the
exchange ratios indicated. This is due to changes in the market value of the
portfolio securities of both funds between May 31, 2006 and the Closing Date,
changes in the amount of undistributed net investment income and net realized
capital gains of both funds during that period resulting from income and
distributions, and changes in the accrued liabilities of both funds during the
same period.
Pro Forma
Pioneer America Pioneer Government Pioneer Government
Income Trust Income Fund Income Fund
(May 31, 2006) (May 31, 2006) (May 31, 2006)
-------------- -------------- --------------
Net Assets ....................... $175,022,925 $100,848,861 $275,871,787
Class A ......................... $ 93,795,355 $ 12,229,793 $106,025,148
Class B ......................... $ 26,441,611 $ 4,459,597 $ 30,901,207
Class C ......................... $ 20,768,730 $ 221,493 $ 20,990,223
Class Y ......................... N/A $ 83,937,979 $ 83,937,979
Class R ......................... $ 788,563 N/A $ 788,563
Investor Class .................. $ 33,228,667 N/A $ 33,228,667
Net Asset Value Per Share
Class A ......................... $ 9.21 $ 9.16 $ 9.16
Class B ......................... $ 9.16 $ 9.16 $ 9.16
Class C ......................... $ 9.18 $ 9.17 $ 9.17
Class Y ......................... N/A $ 9.17 $ 9.17
Class R ......................... $ 9.29 N/A $ 9.16
Investor Class .................. $ 9.21 N/A $ 9.16
Shares Outstanding
Class A ......................... 10,186,125 1,335,314 11,574,982
Class B ......................... 2,888,187 486,951 3,373,589
Class C ......................... 2,261,606 24,166 2,289,022
Class Y ......................... N/A 9,153,825 9,153,825
Class R ......................... 84,908 N/A 86,088
Investor Class .................. 3,608,210 N/A 3,627,584
19
It is impossible to predict how many shares of Pioneer Government Income
Fund will actually be received and distributed by your fund on the Closing
Date. The table should not be relied upon to determine the amount of Pioneer
Government Income Fund shares that will actually be received and distributed.
PROPOSAL TO APPROVE THE AGREEMENT AND PLAN OF REORGANIZATION
The Reorganization
o The Reorganization is scheduled to occur as of the close of business on
November 10, 2006, but may occur on such later date as the parties may
agree in writing. Your fund will transfer all of its assets to Pioneer
Government Income Fund, and Pioneer Government Income Fund will assume
all of your fund's liabilities. This will result in the addition of your
fund's assets to Pioneer Government Income Fund's portfolio. The net
asset value of both funds will be computed as of the close of regular
trading on the New York Stock Exchange on the Closing Date.
o Pioneer Government Income Fund will issue to your fund Class A shares
with an aggregate net asset value equal to the net assets attributable
to your fund's Class A shares. As part of the liquidation of your fund,
these shares will immediately be distributed to Class A shareholders of
record of your fund in proportion to their holdings on the Closing Date.
As a result, Class A shareholders of your fund will end up as Class A
shareholders of Pioneer Government Income Fund.
o Pioneer Government Income Fund will issue to your fund Class B shares
with an aggregate net asset value equal to the net assets attributable
to your fund's Class B shares. As part of the liquidation of your fund,
these shares will immediately be distributed to Class B shareholders of
record of your fund in proportion to their holdings on the Closing Date.
As a result, Class B shareholders of your fund will end up as Class B
shareholders of Pioneer Government Income Fund.
o Pioneer Government Income Fund will issue to your fund Class C shares
with an aggregate net asset value equal to the net assets attributable
to your fund's Class C shares. As part of the liquidation of your fund,
these shares will immediately be distributed to Class C shareholders of
record of your fund in proportion to their holdings on the Closing Date.
As a result, Class C shareholders of your fund will end up as Class C
shareholders of Pioneer Government Income Fund.
o Pioneer Government Income Fund will issue to your fund Class R shares
with an aggregate net asset value equal to the net assets attributable
to your fund's Class R shares. As part of the liquidation of your fund,
these shares will immediately be distributed to Class R shareholders of
record of your fund in proportion to their holdings on the Closing Date.
As a result, Class R shareholders of your fund will end up as Class R
shareholders of Pioneer Government Income Fund.
o Pioneer Government Income Fund will issue to your fund Investor Class
shares with an aggregate net asset value equal to the net assets
attributable to your fund's Investors Class shares. As part of the
liquidation of your fund, these shares will immediately be distributed
to Investor Class shareholders of record of your fund in proportion to
their holdings on the Closing Date. As a result, Investor Class
shareholders of your fund will end up as Investor Class shareholders of
Pioneer Government Income Fund. All Investor Class shares of Pioneer
Government Income Fund, whenever issued, convert to Class A shares of
Pioneer Government Income Fund on December 10, 2006.
o After the shares are issued, your fund will be dissolved.
Reasons for the Proposed Reorganization
The Trustees of your fund believe that the proposed Reorganization will be
advantageous to the shareholders of your fund for several reasons. The Trustees
considered the following matters, among others, in approving the proposal.
First, the Reorganization would eliminate confusion in the marketplace
caused by having two substantially similar funds and enhancing the potential
for one of the two funds to achieve growth in assets. The combined fund may be
better positioned to attract assets than your fund. After the Reorganization,
the combined fund's greater asset size may allow it, relative to your fund, to
(i) obtain better net prices on securities trades, and (ii) reduce per share
expenses as fixed expenses are shared over a larger asset base.
Second, the long-term historical investment performance of each fund is
similar. Although Pioneer America Income Trust's average annual total returns
for the one- and five-year periods is higher, Pioneer Government Income Fund's
long-term performance for the 10-year period is higher. For the one, five and
10-year periods ended December 31, 2005, Class A shares of Pioneer Government
Income Fund had average annual total returns of -3.04% (one year); 3.21% (five
year); and 4.75% (10 year), compared to average annual total returns of the
Class A shares of Pioneer America Income Trust of -2.73% (one year); 3.36%
(five year); and 4.38% (10 year), during the same periods.
20
Third, since the management fee rate is the same for both funds, there
will be no increase in management fee (as a percentage of average daily net
assets) as a result of the Reorganization. With the exception of Class C
shares (due to its relatively small size), the historical total expenses of
Pioneer Government Income Fund's shares are lower than Pioneer America Income
Trust's historical expenses for its shares. In addition, it is anticipated that
the pro forma expense ratio for each class of shares will be the same or lower
than the historical expense ratio of Pioneer America Income Trust after the
Reorganization and has the potential to decrease further with asset growth.
Pioneer has agreed not to impose all or a portion of its management fee and, if
necessary, to limit other ordinary operating expenses to the extent required to
limit Pioneer Government Income Fund's Class B shares to 1.89% of the average
daily net assets attributable to Class B shares through December 1, 2007.
Although Pioneer Government Income Fund has historically not had Class R or
Investor Class shares outstanding, these classes will be issued in the
Reorganization, and the resulting expense ratio of each is expected to be
approximately the same as the expense ratio of your fund's Class R and
Investor Class shares.
The Boards of both funds considered that each fund would bear equally half
of all of the expenses associated with the preparation, printing and mailing of
any shareholder communications, including this Proxy Statement/Prospectus, and
any filings with the SEC and other governmental agencies in connection with the
Reorganization. Pioneer will bear the balance of these expenses. The Boards of
both funds estimate that these expenses in the aggregate will not exceed
$84,500.
The Boards of both funds considered that the funds' investment adviser and
principal distributor would benefit from the Reorganization. For example,
Pioneer might achieve cost savings from managing one larger fund compared to
managing more than one fund with similar investment strategies, which would
result in a decrease in the combined fund's gross expenses and a corresponding
decrease in fees waived under the current expense limit agreement. The Boards
believe, however, that these savings will not amount to a significant economic
benefit to Pioneer or the principal distributor.
The Boards of Trustees of both funds also considered that the
Reorganization presents an excellent opportunity for the shareholders of each
fund to become investors in a combined fund that has a larger asset size than
either fund alone without the obligation to pay commissions or other
transaction costs that a fund normally incurs when purchasing securities. This
opportunity provides an economic benefit to both funds and their shareholders.
BOARDS' EVALUATION AND RECOMMENDATION
For the reasons described above, the Board of Trustees of your fund,
including the Independent Trustees, approved the Reorganization. In particular,
the Trustees determined that the Reorganization is in the best interest of your
fund and that the interests of your fund's shareholders would not be diluted as
a result of the Reorganization. Similarly, the Board of Trustees of Pioneer
Series Trust IV, including the Independent Trustees, approved the
Reorganization. They also determined that the Reorganization is in the best
interests of Pioneer Government Income Fund and that the interests of Pioneer
Government Income Fund's shareholders would not be diluted as a result of the
Reorganization.
The Trustees of your fund recommend that shareholders of your fund vote
FOR the proposal to approve the Agreement and Plan of Reorganization.
21
PIONEER BALANCED FUND
AND PIONEER CLASSIC BALANCED FUND
PROPOSAL 1(b)
SUMMARY
The following is a summary of more complete information appearing later in
this Proxy Statement/Prospectus or incorporated herein. You should read
carefully the entire Proxy Statement/Prospectus, including the form of
Agreement and Plan of Reorganization attached as Exhibit A, because they
contain details that are not in the summary.
If Proposal 1(b) is approved, your fund will be reorganized into Pioneer
Classic Balanced Fund, as described above.
Each fund has substantially similar investment objectives and principal
investment strategies, except that Pioneer Classic Balanced Fund's investment
strategy focuses on value-oriented equity securities while your fund focuses on
growth-oriented equity securities. The table below provides a comparison of the
two funds. In the table below, if a row extends across the entire table, the
policy disclosed applies to both your fund and Pioneer Classic Balanced Fund.
Comparison of Pioneer Balanced Fund to Pioneer Classic Balanced Fund
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Pioneer Balanced Fund Pioneer Classic Balanced Fund
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Business A diversified, open-end investment A diversified series of Pioneer Series Trust IV,
management company organized as a Delaware an open-end investment management
statutory trust. company organized as a Delaware statutory
trust.
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Net assets, as of $121.9 million $122.5 million
May 31, 2006
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Investment adviser and Investment Adviser:
portfolio managers Pioneer Investment Management, Inc. ("Pioneer")
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Portfolio Managers: Portfolio Managers:
Day-to-day management of the fund's portfolio Day-to-day management of the fund's portfolio
is the responsibility of co-managers Timothy is the responsibility of co-managers John A.
Mulrenan (equity securities) and Richard Carey and Walter Hunnewell, Jr. (equity
Schlanger (fixed income securities). securities) and Kenneth J. Taubes (fixed
Mr. Mulrenan and Mr. Schlanger are supported income securities). Mr. Carey, Mr. Hunnewell
by the fixed income team and the domestic and Mr. Taubes are supported by the domestic
equity team. Members of these teams manage equity team and the fixed income team.
other Pioneer funds that invest primarily in Members of these teams manage other
fixed income securities and U.S. equity Pioneer funds that invest primarily in fixed
securities, respectively. The portfolio managers income securities and U.S. equity securities,
and the team also may draw upon the research respectively. The portfolio managers and the
and investment management expertise of the teams also may draw upon the research and
global research team, which provides investment management expertise of the
fundamental research on companies and global research team, which provides
includes members from Pioneer's affiliate, fundamental research on companies and
Pioneer Investment Management Limited. includes members from Pioneer's affiliate,
Mr. Mulrenan, a vice president, joined Pioneer Pioneer Investment Management Limited.
in 1997 as an analyst and has managed Mr. Carey is a director of portfolio
portfolios since 1998. Mr. Schlanger, a vice management and an executive vice president
president, joined Pioneer as a portfolio of Pioneer. Mr. Carey joined Pioneer as an
manager in 1988 after spending 12 years with analyst in 1979. Mr. Hunnewell is a vice
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Pioneer Balanced Fund Pioneer Classic Balanced Fund
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Irving Trust Company in New York, where he president of Pioneer. He joined Pioneer in
had overall responsibility for managing nearly August 2001 and has been an investment
$1.5 billion in fixed income assets. professional since 1985. Prior to joining
Pioneer, Mr. Hunnewell was an independent
investment manager and a fiduciary of private
asset portfolios from 2000 to 2001.
Mr. Taubes is responsible for overseeing the
U.S. and global fixed income teams. He joined
Pioneer as a senior vice president in
September 1998 and has been an investment
professional since 1982.
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Investment objective The fund seeks capital growth and current The fund seeks capital growth and current
income by actively managing investments in a income through a diversified portfolio of
diversified portfolio of equity securities and equity securities and bonds.
bonds.
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23
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Pioneer Balanced Fund Pioneer Classic Balanced Fund
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Primary investments Pioneer allocates each fund's assets between equity and debt securities based on its assessment of
current business, economic and market conditions. Normally, equity and debt securities each represent
35% to 65% of each fund's net assets. For purposes of each fund's investment policies, equity
investments include common stocks, convertible debt and securities with common stock characteristics,
such as equity interests in real estate investment trusts (REITs), exchange-traded funds (ETFs) that
invest primarily in equity securities and preferred stocks. Each fund's investments in debt securities
include U.S. government securities, corporate debt securities, mortgage- and asset-backed securities,
short term debt securities, cash and cash equivalents. Cash and cash equivalents include cash balances,
accrued interest and receivables for items such as the proceeds, not yet received, from the sale of a
fund's portfolio investments.
Debt securities in which each fund invests may have fixed or variable principal payments and all types
of interest rate payment and reset terms, including fixed rate, adjustable rate, zero coupon,
contingent, deferred, payment-in-kind and auction rate features.
Each fund may invest up to 25% of its total assets in equity and debt securities of non-U.S. issuers.
Each fund will not invest more than 5% of its total assets in the securities of emerging markets
issuers. Each fund invests in non-U.S. securities to diversify its portfolio when they offer similar or
greater potential for capital appreciation.
Each fund may invest in U.S. government securities. U.S. government securities include obligations:
directly issued by or supported by the full faith and credit of the U.S. government, like Treasury
bills, notes and bonds and Government National Mortgage Association certificates; supported by the right
of the issuer to borrow from the U.S. Treasury, like those of the Federal Home Loan Banks; supported by
the discretionary authority of the U.S. government to purchase the agency's securities like those of the
Federal National Mortgage Association; or supported only by the credit of the issuer itself, like the
Tennessee Valley Authority.
Each fund may invest in mortgage-backed and asset-backed securities. Mortgage-related securities may be
issued by private companies or by agencies of the U.S. government and represent direct or indirect
participation in, or are collateralized by and payable from, mortgage loans secured by real property.
Asset-backed securities represent participations in, or are secured by and payable from, assets such as
installment sales or loan contracts, leases, credit card receivables and other categories of
receivables.
In pursuing its investment strategy, Pioneer Classic Balanced Fund may over time dispose of securities
acquired through the reorganization in the ordinary course of business. This may result in Pioneer
Classic Balanced Fund realizing gains on previously existing Pioneer Balanced Fund holdings, which
capital gains will be distributed to all of Pioneer Classic Balanced Fund's shareholders after the
closing date, and incurring transactions costs. The amount of such gains and any transaction costs
cannot be accurately estimated at this time. Pioneer intends to take such factors into consideration in
selecting any portfolio positions for sale.
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24
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Pioneer Balanced Fund Pioneer Classic Balanced Fund
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The fund's investments in mortgage-related
securities may include mortgage derivatives
and structured securities.
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The fund may invest up to 20% of its net The fund may invest up to 25% of its total
assets in REITs. assets in REITs.
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Investment strategies In selecting equity securities, Pioneer seeks In selecting equity securities, Pioneer uses a
securities selling at reasonable prices and then value approach to select the fund's
holds these securities until the market values investments. Using this investment style,
reflect their intrinsic values. Pioneer seeks securities selling at reasonable
prices or substantial discounts to their
underlying values and then holds these
securities until the market values reflect their
intrinsic values.
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Pioneer evaluates a security's potential value, including the attractiveness of its market valuation,
based on the company's assets and prospects for earnings growth. In making that assessment, Pioneer
employs due diligence and fundamental research, an evaluation of the issuer based on its financial
statements and operations. Pioneer also considers a security's potential to provide a reasonable amount
of income. Pioneer relies on the knowledge, experience and judgment of its staff who have access to a
wide variety of research. Pioneer focuses on the quality and price of individual issuers, not on
economic sector or market-timing strategies. Factors Pioneer looks for in selecting investments include:
o Favorable expected returns relative to perceived risk
o Above average potential for earnings and revenue growth
o Low market valuations relative to earnings forecast, book value, cash flow and sales
o A sustainable competitive advantage, such as a brand name, customer base, proprietary technology or
economics of scale.
In selecting debt securities, Pioneer considers both broad economic and issuer specific factors in
selecting a portfolio designed to achieve the fund's investment objectives. In assessing the appropriate
maturity, rating and sector weighting of the fund's portfolio, Pioneer considers a variety of factors
that are expected to influence economic activity and interest rates. These factors include fundamental
economic indicators, such as the rates of economic growth and inflation, Federal Reserve monetary policy
and the relative value of the U.S. dollar compared to other currencies. Once Pioneer determines the
preferable portfolio characteristics, Pioneer selects individual securities based upon the terms of the
securities (such as yields compared to U.S. Treasuries or comparable issuers), liquidity and rating,
sector and issuer diversification. Pioneer also employs fundamental research and due diligence to assess
an issuer's credit quality, taking into account financial condition and profitability, future capital
needs, potential for change in rating, industry outlook, the competitive environment and management
ability.
In making portfolio decisions, Pioneer relies on the knowledge, experience and judgment of its staff and
the staff of its affiliates who have access to a wide variety of research.
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Pioneer generally sells a portfolio security
when it believes that the issuer no longer
offers the potential for above average earnings
and revenue growth. Pioneer makes that
determination based upon the same criteria it
uses to select portfolio securities.
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25
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Pioneer Balanced Fund Pioneer Classic Balanced Fund
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Other investments Up to 10% of each fund's total assets may be invested in debt securities rated below investment grade,
including convertible debt. A debt security is investment grade if it is rated in one of the top four
categories by a nationally recognized statistical rating organization or determined to be of equivalent
credit quality by Pioneer. Debt securities rated below investment grade are commonly referred to as
"junk bonds" and are considered speculative. Below investment grade debt securities involve greater risk
of loss, are subject to greater price volatility and are less liquid, especially during periods of
economic uncertainty or change, than higher quality debt securities. Each fund may invest in debt
securities rated "D" or higher by a nationally recognized statistical rating organization.
For purposes of each fund's credit quality policies, if a security receives different ratings from
nationally recognized statistical rating organizations, each fund will use the rating chosen by the
portfolio manager as most representative of the security's credit quality. If a rating organization
changes the quality rating assigned to one or more of each fund's portfolio securities, Pioneer will
consider if any action is appropriate in light of the fund's investment objective and policies.
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Derivatives The funds may use futures and options on securities, indices and currencies, forward foreign currency
exchange contracts and other derivatives. A derivative is a security or instrument whose value is
determined by reference to the value or the change in value of one or more securities, currencies,
indices or other financial instruments. Although there is no specific limitation on investing in
derivatives, neither fund uses derivatives as a primary investment technique and generally limits their
use to hedging. However, each fund may use derivatives for a variety of non-principal purposes,
including:
o As a hedge against adverse changes in market prices of securities, interest rates or currency exchange
rates
o As a substitute for purchasing or selling securities
o To increase the fund's return as a non-hedging strategy that may be considered speculative
Even a small investment in derivatives can have a significant impact on the funds' exposure to the
market prices of securities, interest rates or currency exchange rates. If changes in a derivative's
value do not correspond to changes in the value of the funds' other investments, the funds may not fully
benefit from or could lose money on the derivative position. In addition, some derivatives involve risk
of loss if the person who issued the derivative defaults on its obligation. Certain derivatives may be
less liquid and more difficult to value. The funds will only invest in derivatives to the extent Pioneer
believes these investments do not prevent the funds from seeking their investment objective.
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Temporary defensive Normally, each fund invests substantially all of its assets to meet its investment objective. Each fund
strategies may invest the remainder of its assets in securities with remaining maturities of less than one year,
cash equivalents or may hold cash. For temporary defensive purposes, including during periods of unusual
cash flows, each fund may depart from its principal investment strategies and invest part or all of its
assets in these securities or may hold cash. During such periods, a fund may not be able to achieve its
investment objective.
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Short-term trading Each fund usually does not trade for short-term profits. Each fund will sell an investment, however,
even if it has only been held for a short time, if it no longer meets the fund's investment criteria. If
the funds do a lot of trading, they may incur additional operating expenses, which would reduce
performance, and could cause shareowners to incur a higher level of taxable income or capital gains.
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26
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Classes of Shares, Fees and Expenses
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Pioneer Balanced Fund Pioneer Classic Balanced Fund
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Class A sales charges The Class A shares of both funds have the same characteristics and fee structure.
and fees
o Class A shares are offered with initial sales charges up to 4.50% of the offering price, which is
reduced or waived for large purchases and certain types of investors. At the time of your purchase, your
investment firm may receive a commission from Pioneer Funds Distributor, Inc. ("PFD"), the funds'
distributor, of up to 4% declining as the size of your investment increases.
o There are no contingent deferred sales charges, except in certain circumstances when the initial sales
charge is waived.
o Class A shares are subject to distribution and service (12b-1) fees of up to 0.25% of average daily
net assets. These fees are paid out of a fund's assets on an ongoing basis. Over time these fees will
increase the cost of investments and may cost more than other types of sales charges.
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Class B sales charges The Class B shares of both funds have the same characteristics and fee structure.
and fees
o Class B shares are offered without an initial sales charge, but are subject to contingent deferred
sales charges of up to 4% if you sell your shares. The charge is reduced over time and is not charged
after five years. Your investment firm may receive a commission from PFD, the funds' distributor, at the
time of your purchase of up to 4%.
o Class B shares are subject to distribution and service (12b-1) fees of up to 1% of average daily net
assets. Both of these fees are paid out of a fund's assets on an ongoing basis. Over time these fees
will increase the cost of investments and may cost more than other types of sales charges.
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Class C sales charges The Class C shares of both funds have the same characteristics and fee structure.
and fees
o Class C shares are offered without an initial sales charge.
o Class C shares are subject to a contingent deferred sales charge of 1% if you sell your shares within
one year of purchase. Your investment firm may receive a commission from PFD at the time of your
purchase of up to 1%.
o Class C shares are subject to distribution and service (12b-1) fees of up to 1% of average daily net
assets. These fees are paid out of a fund's assets on an ongoing basis. Over time these fees will
increase the cost of investments and may cost more than other types of sales charges.
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Investor Class sales The Investor Class shares of both funds have the same characteristics and fee structure.
charges and fees
o Investor Class shares are offered without an initial sales charge.
o Investor Class shares are not subject to a contingent deferred sales charge.
o Investor Class shares are not subject to distribution and service (12b-1) fees.
o All Investor Class shares of a fund, whenever issued, convert to Class A shares of the fund on
December 10, 2006.
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Management fees Both funds have the same management fee structure. Pioneer's annual fee is equal to 0.65% of each fund's
average daily net assets up to $1 billion, 0.60% of the next $4 billion and 0.55% on the assets over $5
billion. The fee is accrued daily and paid monthly.
A discussion regarding the basis for the Board of Trustees' approval of the management contract is
available in Pioneer Balanced Fund's December 31, 2005 annual report to shareholders and in Pioneer
Classic Balanced Fund's statement of additional information, dated December 1, 2005.
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27
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Buying, Selling and Exchanging Shares
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Pioneer Balanced Fund Pioneer Classic Balanced Fund
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Buying shares You may buy shares from any investment firm that has a sales agreement with PFD, the funds' distributor.
You can buy shares at the offering price. You may use securities you own to purchase shares of the fund
provided that Pioneer, in its sole discretion, determines that the securities are consistent with the
fund's objective and policies and their acquisition is in the best interests of the fund.
Investor Class shares have been issued in connection with the Reorganization. The fund is not offering
additional Investor Class shares except in connection with the reinvestment of dividends on the fund's
outstanding Investor Class shares. Holders of Investor Class Shares of the fund may be eligible to
purchase Class A shares of the fund without paying a sales load, pursuant to the prospectus for that
Class. All Investor Class shares of the fund, whenever issued, convert to Class A shares of the fund on
December 10, 2006.
If you have an existing non-retirement account, you may purchase shares of a fund by telephone or
online. Certain IRAs also may use the telephone purchase privilege.
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Minimum initial
investment Your initial investment must be at least $1,000 for Class A, Class B or Class C shares. Additional
investments must be at least $100 for Class A shares, $500 for Class B shares or Class C shares. You may
qualify for lower initial or subsequent investment minimums if you are opening a retirement plan
account, establishing an automatic investment plan or placing your trade through your investment firm.
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Maximum purchase
amounts Purchases of fund shares are limited to $49,999 for Class B shares and $999,999 for Class C shares.
There is no maximum purchase for Class A shares. These limits are applied on a per transaction basis.
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Exchanging shares You may exchange your shares for shares of the same class of another Pioneer mutual fund. Your exchange
request must be for at least $1,000. Each fund allows you to exchange your shares at net asset value
without charging you either an initial or contingent deferred shares charge at the time of the exchange.
Shares you acquire as part of an exchange will continue to be subject to any contingent deferred sales
charge that applies to the shares you originally purchased. When you ultimately sell your shares, the
date of your original purchase will determine your contingent deferred sales charge. An exchange
generally is treated as a sale and a new purchase of shares for federal income tax purposes.
The fund is not offering additional Investor Class shares except in connection with the reinvestment of
dividends on the fund's outstanding Investor Class shares. Holders of Investor Class shares of the Fund
may be eligible to purchase Class A shares of the fund without paying a sales load, pursuant to the
prospectus for that Class. All Investor Class shares of the fund, whenever issued, convert to Class A
shares of the fund on December 10, 2006.
After you establish an eligible fund account, you can exchange fund shares by telephone or online.
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Selling shares Your shares will be sold at net asset value per share next calculated after a fund receives your request
in good order. If the shares you are selling are subject to a deferred sales charge, it will be deducted
from the sale proceeds.
If you have an eligible non-retirement account, you may sell up to $100,000 per account per day by
telephone or online. You may sell fund shares held in a retirement plan account by telephone only if your
account is an eligible IRA (tax penalties may apply).
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Net asset value Each fund's net asset value is the value of its portfolio of securities plus any other assets minus its
operating expenses and any other liabilities. Each fund calculates a net asset value for each class of
shares every day the New York Stock Exchange is open when regular trading closes (normally 4:00 p.m.
Eastern time).
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28
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Buying, Selling and Exchanging Shares
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Pioneer Balanced Fund Pioneer Classic Balanced Fund
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You buy or sell shares at the share price. When you buy Class A shares, you pay an initial sales charge
unless you qualify for a waiver or reduced sales charge. When you sell Class A, Class B or Class C
shares, you may pay a contingent deferred sales charge depending on how long you have owned your shares.
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Comparison of Principal Risks of Investing in the Funds
Because each fund has substantially similar investment objectives and
investment strategies, the funds are also subject to some of the same risks.
You could lose money on your investment or not make as much as if you invested
elsewhere if:
o The stock market goes down or performs poorly relative to other
investments (this risk may be greater in the short term)
o The fund's equity investments do not have the growth potential
originally expected
o Stocks selected for income do not achieve the same return as securities
selected for capital growth
o Value stocks fall out of favor with investors
o The fund's assets remain undervalued or do not have the potential value
originally expected
Risks of debt securities. Each fund has risks associated with investing in
debt securities. Each fund could underperform other investments if:
o Interest rates go up causing the value of the fund's portfolio to
decline
o The issuer of a debt security owned by the fund defaults on its
obligation to pay principal or interest or has its credit rating
downgraded
o During periods of declining interest rates, the issuer of a security may
exercise its option to prepay principal earlier than scheduled, forcing
the fund to reinvest in lower yielding securities. This is known as call
or prepayment risk
o During periods of rising interest rates, the average life of certain
types of securities may be extended because of slower than expected
principal payments. This may lock in a below market interest rate,
increase the security's duration (the estimated period until the
security is paid in full) and reduce the value of the security. This is
known as extension risk
o Pioneer's judgment about the attractiveness, relative value or potential
appreciation of a particular sector, security or investment strategy
proves to be incorrect
Non-U.S. securities risks. Each fund may invest in non-U.S. securities.
Investing in non-U.S. issuers may involve unique risks compared to investing in
securities of U.S. issuers. These risks are more pronounced for issuers in
emerging markets or to the extent that the fund invests significantly in one
region or country. These risks may include:
o Less information about non-U.S. issuers or markets may be available due
to less rigorous disclosure or accounting standards or regulatory
practices
o Many non-U.S. markets are smaller, less liquid and more volatile. In a
changing market, Pioneer may not be able to sell the fund's portfolio
securities at times, in amounts and at prices it considers reasonable
o Adverse effect of currency exchange rates or controls on the value of
the fund's investments
o The economies of non-U.S. countries may grow at slower rates than
expected or may experience a downturn or recession
o Economic, political and social developments may adversely affect the
securities markets
o Withholding and other non-U.S. taxes may decrease the fund's return
Risks of REITs. Both funds may invest in REITs but to different degrees.
REITs are companies that invest primarily in real estate or real estate related
loans. Investing in REITs involves unique risks. They are significantly
affected by the market for real estate and are dependent upon management skills
and cash flow. In addition to its own expenses, the fund will indirectly bear
its proportionate share of any management and other expenses paid by REITs in
which it invests.
29
Risks of mortgage- and asset-backed securities and mortgage derivatives.
Certain debt instruments may only pay principal at maturity or may only
represent the right to receive payments of principal or payments of interest on
underlying pools of mortgage or government securities, but not both. The value
of these types of instruments may change more drastically than debt securities
that pay both principal and interest during periods of changing interest rates.
Principal only instruments generally increase in value if interest rates
decline, but are also subject to the risk of prepayment. Interest only
instruments generally increase in value in a rising interest rate environment
when fewer of the underlying mortgages are prepaid.
Pioneer Balanced Fund may invest in mortgage derivatives and structured
securities that have imbedded leverage features. As a result, small changes in
interest or prepayment rates may cause large and sudden price movements.
Mortgage derivatives can also become illiquid and hard to value in declining
markets.
Market segment risks. To the extent either fund emphasizes, from time to
time, investments in a market segment, the fund will be subject to a greater
degree to the risks particular to the industries in that segment, and may
experience greater market fluctuation, than a fund without the same focus. For
example, industries in the financial segment, such as banks, insurance
companies, broker-dealers and REITs, may be sensitive to changes in interest
rates and general economic activity and are subject to extensive government
regulation. Industries in the technology segment, such as information
technology, communications equipment, computer hardware and software, and
office and scientific equipment, are subject to risks of rapidly evolving
technology, short product lives, rates of corporate expenditures, falling
prices and profits, competition from new market entrants, and general economic
conditions.
The Funds' Fees and Expenses
Shareholders of both funds pay various fees and expenses, either directly
or indirectly. The tables below show the fees and expenses that you would pay
if you were to buy and hold shares of each fund. The expenses in the tables
appearing below are based on (i) for your fund, the expenses of your fund for
the twelve-month period ended December 31, 2005, and (ii) for Pioneer Classic
Balanced Fund, the expenses of Pioneer Classic Balanced Fund for the
twelve-month period ended January 31, 2006. Future expenses for all share
classes may be greater or less. The tables also show the pro forma expenses of
the combined fund assuming the Reorganization occurred on January 31, 2006.
Combined
Pioneer
Pioneer Classic
Pioneer Classic Balanced Pioneer
Balanced Balanced Fund Balanced
Fund Fund (Pro Forma Fund
(12 months (12 months 12 months (12 months
ended ended ended ended
December 31, January 31, January 31, December 31,
2005) 2006) 2006) 2005)
----------- ----------- ----------- -----------
Shareholder transaction fees
(paid directly from your investment) Class A Class A Class A Class B
Maximum sales charge (load)
when you buy shares as a percentage
of offering price 4.50% 4.50% 4.50% None
Maximum deferred sales charge (load)
as a percentage of offering price or
the amount you receive when you sell
shares, whichever is less None(1) None(1) None(1) 4%
Redemption fee as a percentage of
amount redeemed, if applicable None None None None
Annual fund operating expenses
(deducted from fund assets) as a
% of average daily net assets
Management Fee 0.65% 0.65% 0.65% 0.65%
Distribution and Service (12b-1) Fee 0.25% 0.25% 0.25% 1.00%
Other Expenses 0.45% 0.37% 0.40% 0.65%
Total Annual Fund Operating Expenses(2) 1.35% 1.27% 1.30% 2.30%
- -------------------------------------------------------------------------------------------------
Less: Fee Waiver and Expense Limitations N/A N/A (0.14)%(3) N/A
Net Expenses 1.35% 1.27% 1.16%(3) 2.30%
Combined Combined
Pioneer Pioneer
Pioneer Classic Pioneer Classic
Classic Balanced Pioneer Classic Balanced
Balanced Fund Balanced Balanced Fund
Fund (Pro Forma Fund Fund (Pro Forma
(12 months 12 months (12 months (12 months 12 months
ended ended ended ended ended
January 31, January 31, December 31, January 31, January 31,
2006) 2006) 2005) 2006) 2006)
----------- ----------- ------------ ---------- -----------
Shareholder transaction fees
(paid directly from your investment) Class B Class B Class C Class C Class C
Maximum sales charge (load)
when you buy shares as a percentage
of offering price None None None None None
Maximum deferred sales charge (load)
as a percentage of offering price or
the amount you receive when you sell
shares, whichever is less 4% 4% 1% 1% 1%
Redemption fee as a percentage of
amount redeemed, if applicable None None None None None
Annual fund operating expenses
(deducted from fund assets) as a
% of average daily net assets
Management Fee 0.65% 0.65% 0.65% 0.65% 0.65%
Distribution and Service (12b-1) Fee 1.00% 1.00% 1.00% 1.00% 1.00%
Other Expenses 0.60% 0.59% 0.47% 0.43% 0.47%
Total Annual Fund Operating Expenses(2) 2.25% 2.24% 2.12% 2.08% 2.12%
- -------------------------------------------------------------------------------------------------------------
Less: Fee Waiver and Expense Limitations N/A (0.18)%(3) N/A N/A (0.06)%(3)
Net Expenses 2.25% 2.06%(3) 2.12% 2.08% 2.06%(3)
30
Combined
Pioneer
Pioneer Classic
Pioneer Classic Balanced
Balanced Balanced Fund
Fund Fund (Pro Forma
(12 months (12 months 12 months
ended ended ended
December 31, January 31, January 31,
2005) 2006) 2006)
------------ ----------- -----------
Shareholder transaction fees Investor Investor Investor
(paid directly from your investment) Class Class Class
Maximum sales charge (load)
when you buy shares as a percentage
of offering price None None None
Maximum deferred sales charge (load)
as a percentage of offering price or
the amount you receive when you sell
shares, whichever is less None None None
Redemption fee as a percentage of
amount redeemed, if applicable None None None
Annual fund operating expenses
(deducted from fund assets) as a
% of average daily net assets
Management Fee 0.65% N/A 0.65%
Distribution and Service (12b-1) Fee 0.00% N/A 0.00%
Other Expenses 0.49% N/A 0.49%
Total Annual Fund Operating Expenses(2) 1.14% N/A 1.14%
The hypothetical examples below help you compare the cost of investing in
each fund. It assumes that: (a) you invest $10,000 in each fund for the time
periods shown, (b) you reinvest all dividends and distributions, (c) your
investment has a 5% return each year, (d) each fund's operating expenses remain
the same, and (e) Pioneer's contractual expense limitation for the combined
Pioneer Classic Balanced Fund's Class A, Class B and Class C shares is in
effect for year one. Pro forma expenses are included assuming a Reorganization
with your fund and Pioneer Classic Balanced Fund. The examples are for
comparison purposes only and are not a representation of either fund's actual
expenses or returns, either past or future.
Combined
Pioneer
Pioneer Classic
Number of years Pioneer Classic Balanced Fund
you own your shares Balanced Fund Balanced Fund (Pro Forma)
- ------------------- ------------- ------------- -----------
Class A -- assuming redemption at end of period
Year 1 ....................................... $ 581 $ 574 $ 563
Year 3 ....................................... $ 858 $ 835 $ 830
Year 5 ....................................... $1,156 $1,116 $1,118
Year 10 ...................................... $2,001 $1,915 $1,935
Class A -- assuming no redemption
Year 1 ....................................... $ 581 $ 574 $ 563
Year 3 ....................................... $ 858 $ 835 $ 830
Year 5 ....................................... $1,156 $1,116 $1,118
Year 10 ...................................... $2,001 $1,915 $1,935
Class B -- assuming redemption at end of period
Year 1 ....................................... $ 633 $ 628 $ 609
Year 3 ....................................... $1,018 $1,003 $ 983
Year 5 ....................................... $1,330 $1,305 $1,284
Year 10 ...................................... $2,397 $2,338 $2,323
31
Combined
Pioneer
Pioneer Classic
Number of years Pioneer Classic Balanced Fund
you own your shares Balanced Fund Balanced Fund (Pro Forma)
- ------------------- ------------- ------------- -----------
Class B -- assuming no redemption
Year 1 ....................................... $ 233 $ 228 $ 209
Year 3 ....................................... $ 718 $ 703 $ 683
Year 5 ....................................... $1,230 $1,205 $1,184
Year 10 ...................................... $2,397 $2,338 $2,323
Class C -- assuming redemption at end of period
Year 1 ....................................... $ 315 $ 311 $ 309
Year 3 ....................................... $ 664 $ 652 $ 658
Year 5 ....................................... $1,139 $1,119 $1,134
Year 10 ...................................... $2,452 $2,410 $2,447
Class C -- assuming no redemption
Year 1 ....................................... $ 215 $ 211 $ 209
Year 3 ....................................... $ 664 $ 652 $ 658
Year 5 ....................................... $1,139 $1,119 $1,134
Year 10 ...................................... $2,452 $2,410 $2,447
Investor Class(4)
Year 1 ....................................... $ 116 N/A $ 116
Year 3 ....................................... $ 407 N/A $ 396
Year 5 ....................................... $ 719 N/A $ 698
Year 10 ...................................... $1,606 N/A $1,554
- ----------
(1) Purchases of $1 million or more and purchases by participants in certain
group plans are not subject to an initial sales charge but may be subject
to a contingent deferred sales charge of 1%.
(2) The funds' total annual operating expenses in the table have not been
reduced by any expense offset arrangements.
(3) Net expenses in the table reflect the expense limitations that will be in
effect upon the closing of the Reorganization, under which Pioneer has
contractually agreed to limit ordinary operating expenses to the extent
required to reduce fund expenses to 1.16%, 2.06% and 2.06% of the average
daily net assets attributable to Class A, Class B and Class C shares,
respectively. These expense limitations are in effect through December 1,
2009 for Class A shares and through December 1, 2007 for Class B and Class
C shares. There can be no assurance that Pioneer will extend the expense
limitations beyond such time. See the statement of additional information
for details regarding the expense limitation agreement.
(4) The funds' Investor Class shares, whenever issued, convert to Class A
shares of the fund on December 10, 2006.
Comparison of Fund Performance
The bar charts show the year-by-year performance of each fund's Class A
shares since inception. Class B, Class C and Investor Class shares will have
different performance. The chart does not reflect any sales charge you may pay
when you buy or sell fund shares. Any sales charge will reduce your return. The
tables show average annual total return (before and after sales taxes) for each
fund over time for each class of shares (including deductions for sales
charges) compared with a broad-based securities market index. The after-tax
returns shown for each fund are for Class A only; after-tax returns for other
classes will vary. Past performance (before and after taxes) does not indicate
future results.
Pioneer Balanced Fund began to invest for capital growth and current
income in February 1997. Before that time, Pioneer Balanced Fund's objective
was income from a portfolio of income producing bonds and stocks.
32
[THE FOLLOWING DATA WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL]
Pioneer Balanced Fund Annual Return -- Class A Shares*
(Year ended December 31)
'96 9.89
'97 13.92
'98 1.15
'99 3.14
'00 5.38
'01 -2.88
'02 -11.20
'03 15.99
'04 4.43
'05 3.24
- ----------
* During the period shown in the bar chart, Pioneer Balanced Fund's highest
quarterly return was 8.99% for the quarter ended June 30, 2003, and the
lowest quarterly return was (11.66)% for the quarter ended September 30,
2002. For the period from January 1, 2006 to June 30, 2006, Pioneer Balanced
Fund's return was 0.00%.
Pursuant to an agreement and plan of reorganization, the Pioneer Classic
Balanced Fund acquired the assets and liabilities of AmSouth Balanced Fund (the
predecessor fund) on September 23, 2005. In the reorganization, the predecessor
fund exchanged all of its assets for shares of the fund. The predecessor fund
offered classes of shares similar to the fund's Class A and Class B shares. As
a result of the Reorganization, the fund is the accounting successor of the
predecessor fund. The performance of the Class A and Class B shares of the fund
set forth in the table below includes the performance of the predecessor fund's
Class A and Class B shares prior to the reorganization, which has been restated
to reflect differences in any applicable sales charges (but not differences in
expenses). Class C shares were not previously offered by the predecessor fund.
The performance of the fund's Class C shares is based upon the performance of
the predecessor fund's Class B shares as adjusted to reflect sales charges
applicable to the fund's Class C shares (but not other differences in
expenses). If the performance had been adjusted to reflect all differences in
expenses, the performance of the fund would be lower.
[THE FOLLOWING DATA WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL]
Pioneer Classic Balanced Fund's Annual Return -- Class A Shares*
(Year ended December 31)
'96 9.72
'97 20.84
'98 13.12
'99 1.32
'00 10.18
'01 4.61
'02 -6.86
'03 15.70
'04 7.60
'05 4.60
- ----------
* During the period shown in the bar chart, Pioneer Classic Balanced Fund's
highest quarterly return was 10.62% for the quarter ended June 30, 2003 and
the lowest quarterly return was (6.78)% for the quarter ended September 30,
2002. For the period January 1, 2006 to June 30, 2006, Pioneer Classic
Balanced Fund's return was 5.60%.
33
Average Annual Total Return
(for periods ended December 31, 2005)
- -------------------------------------------------------------------------------------------------------------------
1 Year 5 Years 10 Years Since Inception
- -------------------------------------------------------------------------------------------------------------------
Pioneer Balanced Fund
- -------------------------------------------------------------------------------------------------------------------
Class A -- Before Taxes (1.42)% 0.59% 3.55% 7.33%
(5/17/68)
- -------------------------------------------------------------------------------------------------------------------
Class A -- After Taxes on Distributions(1) (1.75)% 0.10% 2.10% 3.68%
(5/17/68)
- -------------------------------------------------------------------------------------------------------------------
Class A -- After Taxes on Distributions and (0.75)% 0.24% 2.20% 3.67%
Sale of Fund Shares(1) (5/17/68)
- -------------------------------------------------------------------------------------------------------------------
Class B -- Before Taxes (1.71)% 0.59% 3.10% 4.14%
(4/28/95)
- -------------------------------------------------------------------------------------------------------------------
Class C -- Before Taxes(2) 2.51% 0.54% N/A 2.99%
(1/31/96)
- -------------------------------------------------------------------------------------------------------------------
Investor Class -- Before Taxes 3.62% N/A N/A 4.03%
(12/10/04)
- -------------------------------------------------------------------------------------------------------------------
Standard & Poor's 500 Index 4.91% 0.54% 9.07% 10.56%(6)
(reflects no deduction for taxes)(3)
- -------------------------------------------------------------------------------------------------------------------
Lehman Brothers Aggregate Bond Index(4) 2.43% 5.87% 6.16% 8.75%(7)
(reflects no deduction for taxes)
- -------------------------------------------------------------------------------------------------------------------
Pioneer Classic Balanced Fund
- -------------------------------------------------------------------------------------------------------------------
Class A -- Before Taxes (0.08)% 3.92% 7.33% 8.89%
(12/19/91)(8)
- -------------------------------------------------------------------------------------------------------------------
Class A -- After Taxes on Distribution(1) (3.39)% 2.31% 4.92% 6.55%
(12/19/91)(8)
- -------------------------------------------------------------------------------------------------------------------
Class A -- After Taxes on Distributions and 3.64% 2.76% 5.23% 6.62%
Sale of Fund Shares(1) (12/19/91)(8)
- -------------------------------------------------------------------------------------------------------------------
Class B -- Before Taxes 0.35% 4.07% N/A 5.48%
(9/3/97)(8)
- -------------------------------------------------------------------------------------------------------------------
Class C -- Before Taxes(2) 3.90% 4.12% N/A 5.51%
(9/3/97)(8)
- -------------------------------------------------------------------------------------------------------------------
Standard & Poor's 500 Index 4.91% 0.54% 9.07% 10.28%(9)
(reflects no deduction for taxes)(3)
- -------------------------------------------------------------------------------------------------------------------
Lehman Brothers Government/Credit 2.37% 6.11% 6.17% 6.77%(9)
Bond Index (reflects no deduction for taxes)(5)
- -------------------------------------------------------------------------------------------------------------------
(1) After-tax returns are calculated using the historical highest individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Actual after-tax returns depend on the investor's tax situation
and may differ from those shown. Furthermore, the after-tax returns shown
are not relevant to shareholders who hold fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement accounts.
After-tax returns for Class B and Class C shares will vary from the
after-tax returns presented for Class A shares.
(2) The performance of Class C shares does not reflect the 1% front-end sales
charge in effect prior to February 1, 2004. If you paid a 1% sales charge,
your returns would be lower than those shown above.
34
(3) The Standard & Poor's 500 Index is an unmanaged measure of the performance
of 500 widely held common stocks listed on the New York Stock Exchange,
American Stock Exchange and the over-the-counter market.
(4) 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.
(5) The Lehman Brothers Government/Credit Bond Index is an unmanaged index
representative of U.S. government, U.S. Treasury and agency securities, and
corporate bonds.
(6) Since January 1976. Index return information is not available for prior
periods. Return of the index since the inception of Class B shares: 10.50%.
Class C shares: 8.79%. Investor Class shares: 4.91%.
(7) Since January 1976. Index return information is not available for prior
periods. Return of the index since the inception of Class B shares: 6.83%.
Class C shares: 6.15%. Investor Class shares: 2.43%.
(8) Reflects the inception dates of the predecessor fund (the predecessor fund's
Class B shares' inception date is applicable in the case of the fund's Class
C shares). The fund began offering its Class C shares on September 23, 2005.
(9) Reflects the return of the index since the inception of Class A shares. The
returns of the S&P 500 Index and the Lehman Brothers Government/Credit Bond
Index since the inception of Class B shares were 5.00% and 6.36%,
respectively.
The most recent portfolio management discussion of each fund's performance is
attached as Exhibit B.
CAPITALIZATION
The following table sets forth the capitalization of each fund as of May
31, 2006 and the pro forma combined capitalization of both funds as if the
Reorganization had occurred on that date. If the Reorganization is consummated,
the actual exchange ratios on the Closing Date may vary from the exchange
ratios indicated. This is due to changes in the market value of the portfolio
securities of both funds between May 31, 2006 and the Closing Date, changes in
the amount of undistributed net investment income and net realized capital
gains of both funds during that period resulting from income and distributions,
and changes in the accrued liabilities of both funds during the same period.
Pro Forma
Pioneer Pioneer Classic Pioneer Classic
Balanced Fund Balanced Fund Balanced Fund
(May 31, 2006) (May 31, 2006) (May 31, 2006)
-------------- -------------- --------------
Net Assets ..................... $121,974,420 $122,542,870 $244,517,290
Class A ....................... $ 89,269,427 $ 66,380,126 $155,649,553
Class B ....................... $ 13,805,493 $ 20,275,959 $ 34,081,452
Class C ....................... $ 10,689,666 $ 93,681 $ 10,783,348
Class Y ....................... N/A $ 35,793,103 $ 35,793,103
Investor Class ................ $ 8,209,834 N/A $ 8,209,834
Net Asset Value Per Share
Class A ....................... $ 9.95 $ 11.15 $ 11.15
Class B ....................... $ 9.81 $ 11.08 $ 11.08
Class C ....................... $ 9.89 $ 11.15 $ 11.15
Class Y ....................... N/A $ 11.16 $ 11.16
Investor Class ................ $ 9.95 N/A $ 11.15
Shares Outstanding
Class A ....................... 8,973,784 5,954,311 13,960,538
Class B ....................... 1,407,743 1,829,566 3,075,549
Class C ....................... 1,080,603 8,399 967,113
Class Y ....................... N/A 3,207,056 3,207,056
Investor Class ................ 824,995 N/A 736,308
It is impossible to predict how many shares of Pioneer Classic Balanced
Fund will actually be received and distributed by your fund on the Closing
Date. The table should not be relied upon to determine the amount of Pioneer
Classic Balanced Fund shares that will actually be received and distributed.
35
PROPOSAL TO APPROVE THE AGREEMENT AND PLAN OF REORGANIZATION
The Reorganization
o The Reorganization is scheduled to occur as of the close of business on
November 10, 2006, but may occur on such later date as the parties may
agree in writing. Your fund will transfer all of its assets to Pioneer
Classic Balanced Fund, and Pioneer Classic Balanced Fund will assume all
of your fund's liabilities. This will result in the addition of your
fund's assets to Pioneer Classic Balanced Fund's portfolio. The net
asset value of both funds will be computed as of the close of regular
trading on the New York Stock Exchange on the Closing Date.
o Pioneer Classic Balanced Fund will issue to your fund Class A shares
with an aggregate net asset value equal to the net assets attributable
to your fund's Class A shares. As part of the liquidation of your fund,
these shares will immediately be distributed to Class A shareholders of
record of your fund in proportion to their holdings on the Closing Date.
As a result, Class A shareholders of your fund will end up as Class A
shareholders of Pioneer Classic Balanced Fund.
o Pioneer Classic Balanced Fund will issue to your fund Class B shares
with an aggregate net asset value equal to the net assets attributable
to your fund's Class B shares. As part of the liquidation of your fund,
these shares will immediately be distributed to Class B shareholders of
record of your fund in proportion to their holdings on the Closing Date.
As a result, Class B shareholders of your fund will end up as Class B
shareholders of Pioneer Classic Balanced Fund.
o Pioneer Classic Balanced Fund will issue to your fund Class C shares
with an aggregate net asset value equal to the net assets attributable
to your fund's Class C shares. As part of the liquidation of your fund,
these shares will immediately be distributed to Class C shareholders of
record of your fund in proportion to their holdings on the Closing Date.
As a result, Class C shareholders of your fund will end up as Class C
shareholders of Pioneer Classic Balanced Fund.
o Pioneer Classic Balanced Fund will issue to your fund Investor Class
shares with an aggregate net asset value equal to the net assets
attributable to your fund's Investors Class shares. As part of the
liquidation of your fund, these shares will immediately be distributed
to Investor Class shareholders of record of your fund in proportion to
their holdings on the Closing Date. As a result, Investor Class
shareholders of your fund will end up as Investor Class shareholders of
Pioneer Classic Balanced Fund. All Investor Class shares of Pioneer
Classic Balanced Fund, whenever issued, convert to Class A shares of
Pioneer Classic Balanced Fund on December 10, 2006.
o After the shares are issued, your fund will be dissolved.
Agreement and Plan of Reorganization
The shareholders of your fund are being asked to approve the Agreement, the
form of which is attached to this Proxy Statement/ Prospectus as Exhibit A and
incorporated herein by this reference. The description of the Agreement
contained herein, which include all the material provisions of the Agreement, is
qualified in its entirety by the attached copy.
Reasons for the Proposed Reorganization
The Trustees of your fund believe that the proposed Reorganization will be
advantageous to the shareholders of your fund for several reasons. The Trustees
considered the following matters, among others, in approving the proposal.
First, the Reorganization would eliminate confusion in the marketplace
caused by having two substantially similar funds and enhancing the potential
for one of the two funds to achieve growth in assets. The combined fund may be
better positioned to attract assets than your fund. After the Reorganization,
the combined fund's greater asset size may allow it, relative to your fund, to
(i) obtain better net prices on securities trades, and (ii) reduce per share
expenses as fixed expenses are shared over a larger asset base.
Second, the long-term historical investment performance of Pioneer Classic
Balanced Fund is higher than your fund. For the one, five and 10-year periods
ended December 31, 2005, Class A shares of Pioneer Classic Balanced Fund had
average annual total returns of -0.08% (one year); 3.92% (five year); and 7.33%
(10 year), compared to average annual total returns of the Class A shares of
Pioneer Balanced Fund of -1.42% (one year); 0.59% (five year); and 3.55% (10
year), during the same periods.
Third, since the management fee rate is the same for both funds, there
will be no increase in management fee (as a percentage of average daily net
assets) as a result of the Reorganization. The historical total expenses of
Pioneer Classic Balanced Fund for Class A, Class B and Class C shares are lower
than Pioneer Balanced Fund's historical expenses for Class A, Class B and Class
C shares. In addition, it is anticipated that the pro forma expense ratio for
each class of shares will be lower than the historical expense ratio of Pioneer
Balanced
36
Fund after the Reorganization and has the potential to decrease further with
asset growth. Pioneer has agreed not to impose all or a portion of its
management fee and, if necessary, to limit other ordinary operating expenses to
the extent required to reduce Pioneer Classic Balanced Fund's expenses to
1.16%, 2.06% and 2.06% of the average daily net assets attributable to Class A,
Class B and Class C shares, respectively. These expense limitations are in
effect through December 1, 2009 for Class A shares and through December 1, 2007
for Class B and Class C shares. Although Pioneer Classic Balanced Fund has
historically not had Investor Class shares outstanding, this class will be
issued in the Reorganization, and the resulting expense ratio is expected to be
approximately the same as the expense ratio of your fund's Investor Class
shares.
The Boards of both funds considered that each fund would bear equally half
of all of the expenses associated with the preparation, printing and mailing of
any shareholder communications, including this Proxy Statement/Prospectus, and
any filings with the SEC and other governmental agencies in connection with the
Reorganization. Pioneer will bear the balance of these expenses. The Boards of
both funds estimate that these expenses in the aggregate will not exceed
$78,500.
The Boards of both funds considered that the funds' investment adviser and
principal distributor would benefit from the Reorganization. For example,
Pioneer might achieve cost savings from managing one larger fund compared to
managing more than one fund with similar investment strategies, which would
result in a decrease in the combined fund's gross expenses and a corresponding
decrease in fees waived under the current expense limit agreement. The Boards
believe, however, that these savings will not amount to a significant economic
benefit to Pioneer or the principal distributor.
The Boards of Trustees of both funds also considered that the
Reorganization presents an excellent opportunity for the shareholders of each
fund to become investors in a combined fund that has a larger asset size than
either fund alone without the obligation to pay commissions or other
transaction costs that a fund normally incurs when purchasing securities. This
opportunity provides an economic benefit to both funds and their shareholders.
BOARDS' EVALUATION AND RECOMMENDATION
For the reasons described above, the Board of Trustees of your fund,
including the Independent Trustees, approved the Reorganization. In particular,
the Trustees determined that the Reorganization is in the best interest of your
fund and that the interests of your fund's shareholders would not be diluted as
a result of the Reorganization. Similarly, the Board of Trustees of Pioneer
Series Trust IV, including the Independent Trustees, approved the
Reorganization. They also determined that the Reorganization is in the best
interests of Pioneer Classic Balanced Fund and that the interests of Pioneer
Classic Balanced Fund's shareholders would not be diluted as a result of the
Reorganization.
The Trustees of your fund recommend that shareholders of your fund vote
FOR the proposal to approve the Agreement and Plan of Reorganization.
37
PIONEER FLORIDA TAX FREE INCOME FUND
AND
PIONEER AMT-FREE MUNICIPAL FUND
PROPOSAL 1(c)
SUMMARY
The following is a summary of more complete information appearing later in
this Proxy Statement/Prospectus or incorporated herein. You should read
carefully the entire Proxy Statement/Prospectus, including the form of
Agreement and Plan of Reorganization attached as Exhibit A, because they
contain details that are not in the summary.
If Proposal 1(c) is approved, your fund will be reorganized into Pioneer
AMT-Free Municipal Fund, as described above.
Each fund has similar investment objectives and investment strategies.
However, your fund is a non-diversified fund that invests primarily in Florida
municipal securities that are exempt from Florida intangible personal property
tax while Pioneer AMT-Free Municipal Fund is a diversified fund that invests in
a broader range of municipal securities than your fund and its shares are not
exempt from the Florida intangible personal property tax. In addition, your
fund may invest in securities the income from which is a tax preference item
for purposes of the federal alternative minimum tax while Pioneer AMT-Free
Municipal Fund offers the benefit of avoiding income which is a tax preference
item for non-corporate shareholders for purposes of the federal alternative
minimum tax. The table below provides a comparison of the two funds. In the
table below, if a row extends across the entire table, the policy disclosed
applies to both your fund and Pioneer AMT-Free Municipal Fund.
Comparison of Pioneer Florida Tax Free Income Fund to Pioneer AMT-Free
Municipal Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Pioneer Florida Tax Free Income Fund Pioneer AMT-Free Municipal Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Business A non-diversified series of Pioneer Series Trust A diversified series of Pioneer Series Trust II,
IV, an open-end investment management an open-end investment management company
company organized as a Delaware statutory trust. organized as a Delaware statutory trust.
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, as of $39.2 million $476.9 million
May 31, 2006
- ------------------------------------------------------------------------------------------------------------------------------------
Investment adviser and Investment Adviser: Pioneer Investment Management, Inc. ("Pioneer")
portfolio managers
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Portfolio Manager: Portfolio Managers:
Day-to-day management of the fund's portfolio Day-to-day management of the fund's portfolio
is the responsibility of David Eurkus. is the responsibility of Stephen C. Bauer, lead
Mr. Eurkus is supported by the fixed income portfolio manager. Mr. Bauer is supported by
team. Members of this team manage other David Eurkus, portfolio manager, and the fixed
Pioneer funds investing primarily in fixed income team. Members of this team manage
income securities. The portfolio manager and other Pioneer funds investing primarily in
the team also may draw upon the research and fixed income securities. The portfolio
investment management expertise of Pioneer's managers and the team also may draw upon
affiliate, Pioneer Investment Management the research and investment management
Limited. Mr. Eurkus joined Pioneer as a senior expertise of Pioneer's affiliate, Pioneer
vice president in January 2000 and has been Investment Management Limited. Mr. Bauer
an investment professional since 1969. joined Pioneer in November 2004. Prior to
joining Pioneer, Mr. Bauer was president and
director of Safeco Asset Management
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38
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Pioneer Florida Tax Free Income Fund Pioneer AMT-Free Municipal Fund
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Company, and previously served as a portfolio
manager of the fund's predecessor fund from
1983 until Pioneer assumed management in
August 2004. Mr. Eurkus joined Pioneer as a
senior vice president in January 2000 and has
been an investment professional since 1969.
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Investment objective The fund seeks as high a level of current The fund seeks as high a level of current
interest income exempt from federal income interest income exempt from federal income
tax as is consistent with the relative stability tax as is consistent with the relative stability
of capital. of capital.
The fund's objective with respect to Florida The investment objective of the fund is
intangible personal property tax is non- fundamental and cannot be changed without
fundamental and may be revised without shareholder approval.
shareholder approval. The fund will provide
shareholders with at least 60 days' notice prior to
elimination of this component of the objective.
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Primary investments and Normally, the fund invests at least 80% of its Normally, the fund invests at least 80% of its
related tax matters net assets (plus the amount of borrowings, if net assets (plus the amount of borrowings, if
any, for investment purposes) in securities the any, for investment purposes) in investment
income from which is exempt from regular grade municipal bonds with a maturity of
federal income tax and is not subject to the more than one year, the interest on which is
alternative minimum tax for individuals and in a exempt from regular federal income tax. The
manner so that its shares will be exempt from fund will not invest in securities the interest
Florida intangible personal property tax. The on which is a tax preference item for non-
fund may invest in securities the income from corporate shareholders for purposes of the
which is a tax preference item for purposes of federal alternative minimum tax. The fund's
the federal alternative minimum tax. policy of investing at least 80% of its net
assets in investments the income from which
The fund invests primarily in investment is exempt from regular federal income tax, as
grade securities. well as its policy of not investing in securities
the interest on which is a tax preference item
The fund may invest in tax-exempt securities of for purposes of the federal alternative
issuers located outside the state of Florida. minimum tax, are fundamental policies that
may not be changed without shareholder
The fund may invest in securities with a broad approval.
range of maturities and maintains an average
portfolio maturity which varies based upon the The fund's shares are not exempt from the
judgment of Pioneer. Municipal securities with Florida intangible personal property tax.
longer maturities are generally more volatile
than other fixed income securities with
shorter maturities.
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39
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Pioneer Florida Tax Free Income Fund Pioneer AMT-Free Municipal Fund
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The fund's investments include bonds, notes
and other debt instruments issued by or on
behalf of states, counties, municipalities,
territories and possessions of the United
States and the District of Columbia and their
authorities, political subdivisions, agencies
or instrumentalities.
The fund will limit its investment in
municipal securities whose issuers are located
in the same state to less than 25% of the
fund's total assets.
The fund may invest in municipal securities of
any maturity, although under normal
circumstances it is anticipated that the fund
will generally invest in longer-term
investments. Municipal securities with longer
maturities are generally more volatile than
other fixed income securities with shorter
maturities.
In pursuing its investment strategy, Pioneer
AMT-Free Municipal Fund may over time dispose
of securities acquired through the
reorganization in the ordinary course of
business. This may result in Pioneer AMT-Free
Municipal Fund realizing gains on previously
existing Pioneer Florida Tax Free Income Fund
holdings, which capital gains will be
distributed to all of Pioneer AMT-Free
Municipal Fund's shareholders after the
closing date, and incurring transactions
costs. The amount of such gains and any
transaction costs cannot be accurately
estimated at this time. Pioneer intends to
take such factors into consideration in
selecting any portfolio positions for sale.
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Each fund's investments may have fixed or variable principal payments and all types of interest rate
payment and reset terms, including fixed and floating rates, inverse floating rate, zero coupon,
contingent, deferred and payment in kind and auction rate features.
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40
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Pioneer Florida Tax Free Income Fund Pioneer AMT-Free Municipal Fund
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Investment strategies Pioneer considers both broad economic factors and issuer specific factors in selecting a portfolio
designed to achieve each fund's investment objective. In assessing the appropriate maturity and
rating weighting of each fund's portfolio, Pioneer considers a variety of factors that are expected
to influence economic activity and interest rates. These factors include fundamental economic
indicators, such as the rates of economic growth and inflation, Federal Reserve monetary policy and
the relative value of the U.S. dollar compared to other currencies. Once Pioneer determines the
preferable portfolio characteristics, Pioneer selects individual securities based upon the terms of
the securities (such as yields compared to U.S. Treasuries or comparable issues), liquidity and
rating and issuer diversification. Pioneer also employs due diligence and fundamental research, an
evaluation of the issuer based on its financial statements and operations, to assess an issuer's
credit quality, taking into account financial condition, future capital needs and potential for
change in rating. In making these portfolio decisions, Pioneer relies on the knowledge, experience
and judgment of its staff and affiliates who have access to a wide variety of research.
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Other investments The fund may invest up to 20% of its net assets The fund may invest up to 20% of its net assets in
in securities that are subject to regular federal securities of other investment companies, investment
income tax, and which may be a preference grade commercial paper, U.S. government securities
item for alternative minimum tax of individuals, U.S. or foreign bank instruments and repurchase
including other investment companies, agreements.
investment grade commercial paper, U.S.
government securities, U.S. or foreign bank
instruments and repurchase agreements.
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Each fund may invest up to 10% of its net assets in inverse floating rate obligations (a type of
derivative instrument). Inverse floating rate obligations represent interests in tax exempt bonds.
The interest rate on inverse floating rate obligations will generally decrease as short-term interest
rates increase, and increase as short-term rates decrease. Due to their leveraged structure, the
sensitivity of the market value of an inverse floating rate obligation to changes in interest rates
is generally greater than a comparable long term bond issued by the same municipality and with
similar credit quality, redemption and maturity provisions. Inverse floating rate obligations may be
volatile and involve leverage risk.
Each fund may invest up to 10% of its net assets in debt securities rated below investment grade
(including securities in default) or, if unrated, of equivalent quality as determined by Pioneer.
Debt securities rated below investment grade are commonly referred to as "junk bonds" and are
considered speculative. Below investment grade debt securities involve greater risk of loss, are
subject to greater price volatility and are less liquid, especially during periods of economic
uncertainty or change, than higher quality debt securities.
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Temporary defensive Normally, each fund invests substantially all of its assets to meet its investment objective.
strategies Each fund may invest the remainder of its assets in securities with remaining maturities of
less than one year, cash equivalents or may hold cash. For temporary defensive purposes, including
during periods of unusual cash flows, each fund may depart from its principal investment strategies
and invest part or all of its assets in these securities or may hold cash. During such periods, a
fund may not be able to achieve its investment objective. Each fund intends to adopt a defensive
strategy when Pioneer believes securities in which the fund normally invests have extraordinary risks
due to political or economic factors and in other extraordinary circumstances.
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41
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Pioneer Florida Tax Free Income Fund Pioneer AMT-Free Municipal Fund
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Short-term trading Each fund usually does not trade for short-term profits. Each fund will sell an investment, however,
even if it has only been held for a short time, if it no longer meets the fund's investment criteria.
If a fund does a lot of trading, it may incur additional operating expenses, which would reduce
performance, and could cause shareowners to incur a higher level of taxable income or capital gains.
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Derivatives Each fund may use futures and options on securities, indices and other derivatives. A derivative is a
security or instrument whose value is determined by reference to the value or the change in value of
one or more securities, indices or other financial instruments. Although there is no specific
limitation on investing in derivatives, each fund does not use derivatives as a primary investment
technique and generally limits their use to hedging. However, each fund may use derivatives for a
variety of non-principal purposes, including:
o As a hedge against adverse changes in the market prices of securities or interest rates
o As a substitute for purchasing or selling securities
o To increase the fund's return as a non-hedging strategy that may be considered speculative
Even a small investment in derivatives can have a significant impact on the fund's exposure to the
market prices of securities or interest rates. If changes in a derivative's value do not correspond
to changes in the value of the fund's other investments, the fund may not fully benefit from or could
lose money on the derivative position. In addition, some derivatives involve risk of loss if the
person who issued the derivative defaults on its obligation. Certain derivatives may be less liquid
and more difficult to value. The fund will only invest in derivatives to the extent Pioneer believes
these investments do not prevent the fund from seeking its investment objective.
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Classes of Shares, Fees and Expenses
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Pioneer Florida Tax Free Income Fund Pioneer AMT-Free Municipal Fund
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Class A sales charges The Class A shares of both funds have the same characteristics and fee structure.
and fees
o Class A shares are offered with initial sales charges up to 4.50% of the offering price, which is
reduced or waived for large purchases and certain types of investors. At the time of your purchase,
your investment firm may receive a commission from Pioneer Funds Distributor, Inc. ("PFD"), the
funds' distributor, of up to 4% declining as the size of your investment increases.
o There are no contingent deferred sales charges, except in certain circumstances when the initial
sales charge is waived.
o Class A shares are subject to distribution and service (12b-1) fees of up to 0.25% of average daily
net assets. These fees are paid out of a fund's assets on an ongoing basis. Over time these fees will
increase the cost of investments and may cost more than other types of sales charges.
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Class B sales charges The Class B shares of both funds have the same characteristics and fee structure.
and fees
o Class B shares are offered without an initial sales charge, but are subject to contingent deferred
sales charges of up to 4% if you sell your shares. The charge is reduced over time and is not charged
after five years. Your investment firm may receive a commission from PFD, the funds' distributor, at
the time of your purchase of up to 4%.
o Class B shares are subject to distribution and service (12b-1) fees of up to 1% of average daily
net assets. Both of these fees are paid out of a fund's assets on an ongoing basis. Over time these
fees will increase the cost of investments and may cost more than other types of sales charges.
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42
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Pioneer Florida Tax Free Income Fund Pioneer AMT-Free Municipal Fund
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Class C sales charges The Class C shares of both funds have the same characteristics and fee structure.
and fees
o Class C shares are offered without an initial sales charge.
o Class C shares are subject to a contingent deferred sales charge of 1% if you sell your shares
within one year of purchase. Your investment firm may receive a commission from PFD at the time of
your purchase of up to 1%.
o Class C shares are subject to distribution and service (12b-1) fees of up to 1% of average daily
net assets. These fees are paid out of a fund's assets on an ongoing basis. Over time these fees will
increase the cost of investments and may cost more than other types of sales charges.
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Class Y sales charges The Class Y shares of both funds have the same characteristics and fee structure.
and fees
o Class Y shares are offered without an initial sales charge.
o Class Y shares are not subject to a contingent deferred sales charge.
o Class Y shares are not subject to distribution and service (12b-1) fees.
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Management fees Both funds have the same management fee structure. Pioneer's annual fee for each fund is equal to
0.50% of the fund's average daily net assets on the first $250 million, 0.45% on assets greater than
$250 million to $750 million and 0.40% on assets greater than $750 million. The fee is accrued daily
and paid monthly.
A discussion regarding the basis for the Board of Trustees' approval of the management contract is
available in the Pioneer Florida Tax Free Income Fund's statement of additional information dated
December 1, 2005 and in Pioneer AMT-Free Municipal Fund's December 31, 2005 annual report to
shareholders.
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Buying, Selling and Exchanging Shares
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Pioneer Florida Tax Free Income Fund Pioneer AMT-Free Municipal Fund
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Buying shares You may buy shares from any investment firm that has a sales agreement with PFD, the funds'
distributor. You can buy shares at the offering price. You may use securities you own to purchase
shares of the fund provided that Pioneer, in its sole discretion, determines that the securities are
consistent with the fund's objective and policies and their acquisition is in the best interests of
the fund.
If you have an existing non-retirement account, you may purchase shares of a fund by telephone or online.
Certain IRAs also may use the telephone purchase privilege.
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Minimum initial Your initial investment must be at least $1,000 for Class A, Class B or Class C shares, and
investment $5,000,000 for Class Y shares. Additional investments must be at least $100 for Class A shares, $500
for Class B or Class C shares, and there is no minimum initial investment amount for Class Y shares.
You may qualify for lower initial or subsequent investment minimums if you are opening a retirement
plan account, establishing an automatic investment plan or placing your trade through your investment
firm.
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Maximum purchase amounts Purchases of fund shares are limited to $49,999 for Class B shares and $999,999 for Class C shares.
There is no maximum purchase for Class A shares or Class Y shares. These limits are applied on a per
transaction basis.
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43
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Pioneer Florida Tax Free Income Fund Pioneer AMT-Free Municipal Fund
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Exchanging shares You may exchange your shares for shares of the same class of another Pioneer mutual fund. Your
exchange request must be for at least $1,000. Each fund allows you to exchange your shares at net
asset value without charging you either an initial or contingent deferred shares charge at the time
of the exchange. Shares you acquire as part of an exchange will continue to be subject to any
contingent deferred sales charge that applies to the shares you originally purchased. When you
ultimately sell your shares, the date of your original purchase will determine your contingent
deferred sales charge. An exchange generally is treated as a sale and a new purchase of shares for
federal income tax purposes.
After you establish an eligible fund account, you can exchange fund shares by telephone or online.
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Selling shares Your shares will be sold at net asset value per share next calculated after a fund receives your
request in good order. If the shares you are selling are subject to a deferred sales charge, it will
be deducted from the sale proceeds.
If you have an eligible non-retirement account, you may sell up to $100,000 per account per day by
telephone or online. You may sell fund shares held in a retirement plan account by telephone only if
your account is an eligible IRA (tax penalties may apply).
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Net asset value Each fund's net asset value is the value of its portfolio of securities plus any other assets minus
its operating expenses and any other liabilities. Each fund calculates a net asset value for each
class of shares every day the New York Stock Exchange is open when regular trading closes (normally
4:00 p.m. Eastern time).
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You buy or sell shares at the share price. When you buy Class A shares, you pay an initial sales
charge unless you qualify for a waiver or reduced sales charge. When you sell Class A, Class B or
Class C shares, you may pay a contingent deferred sales charge depending on how long you have owned
your shares.
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Comparison of Principal Risks of Investing in the Funds
Principal risks for both funds
Because each fund has similar investment objectives, investment strategies
and principal investments, the funds are subject to some of the same principal
risks. You could lose money on your investment or not make as much as if you
invested elsewhere if:
o Interest rates go up, causing the value of the fund's investments to
decline
o The issuer of a security owned by the fund defaults on its obligation to
pay principal and/or interest or has its credit rating downgraded
o New federal or state legislation adversely affects the tax-exempt status
of securities held by the fund or the financial ability of
municipalities to repay these obligations
o The issuer of a security owned by the fund may not be able to make
timely payments because of a general economic downturn or increased
governmental costs
o Pioneer is incorrect in its expectation of changes in interest rates or
the credit quality of an issuer
Although distributions of interest income from each fund's tax-exempt
securities are generally exempt from regular federal income tax, distributions
from other sources, including capital gain distributions and any gain on the
sale of your shares, are not. You should consult a tax adviser about state and
local taxes on your fund's distributions.
Market segment risks. To the extent either fund emphasizes, from time to
time, investments in a market segment, the fund will be subject to a greater
degree to the risks particular to the industries in that segment, and may
experience greater market fluctuation, than a fund without the same focus. At
times, more than 25% of the Pioneer AMT-Free Municipal Fund's assets may be
invested in the same market segment.
44
Principal risks of investing in Pioneer Florida Tax Free Income Fund
Concentration risk. Because Pioneer Florida Tax Free Income Fund
concentrates its investments in a single state, there may be more fluctuation
in the value of its securities than is the case for mutual funds whose
portfolios are more geographically diverse. Because the fund invests primarily
in securities issued by Florida and its municipalities, it is more vulnerable
to unfavorable developments in Florida than are funds that invest in municipal
securities of many states. Unfavorable developments in any economic sector may
adversely affect the overall Florida municipal market.
Non-diversification risk. Pioneer Florida Tax Free Income Fund is not
diversified, which means that it can invest a higher percentage of its assets
in any one issuer than a diversified fund. Being non-diversified may magnify
the fund's losses from adverse events affecting a particular issuer. Pioneer
Florida Tax Free Income Fund generally invests in a limited number of
securities and, as a result, the fund's performance may be more volatile than
the performance of funds holding more securities.
The Funds' Fees and Expenses
Shareholders of both funds pay various fees and expenses, either directly
or indirectly. The tables below show the fees and expenses that you would pay
if you were to buy and hold shares of each fund. The expenses in the tables
appearing below are based on (i) for your fund, the expenses of your fund for
the twelve-month period ended January 31, 2006, and (ii) for Pioneer AMT-Free
Municipal Fund, the expenses of Pioneer AMT-Free Municipal Fund for the
twelve-month period ended December 31, 2005. Future expenses for all share
classes may be greater or less. The tables also show the pro forma expenses of
the combined fund assuming the Reorganization occurred on December 31, 2005.
Combined
Pioneer Pioneer Pioneer
Florida Pioneer AMT-Free Florida
Tax Free AMT-Free Municipal Tax-Free
Income Municipal Fund Income
Fund Fund (Pro Forma Fund
(12 months (12 months 12 months (12 months
ended ended ended ended
January 31, December 31, December 31, January 31,
2005) 2005) 2005) 2006)
----------- ------------ ------------ -----------
Shareholder transaction fees
(paid directly from your investment) Class A Class A Class A Class B
Maximum sales charge (load)
when you buy shares as a percentage
of offering price 4.50% 4.50% 4.50% None
Maximum deferred sales charge (load)
as a percentage of offering price or
the amount you receive when you sell
shares, whichever is less None(1) None(1) None(1) 4%
Redemption fee as a percentage of
amount redeemed, if applicable None None None None
Annual fund operating expenses
(deducted from fund assets) as a
% of average daily net assets
Management Fee 0.50% 0.50% 0.50% 0.50%
Distribution and Service (12b-1) Fee 0.25% 0.25% 0.25% 1.00%
Other Expenses 0.36% 0.41% 0.32% 0.39%
Total Annual Fund Operating Expenses(2) 1.11% 1.16% 1.07% 1.89%
- ---------------------------------------------------------------------------------------------------
Less: Fee Waiver and Expense Limitations (0.29)%(3) (0.29)%(4) (0.25)%(5) (0.17)%(3)
Net Expenses 0.82%(3) 0.87%(4) 0.82%(5) 1.72%(3)
Combined Combined
Pioneer Pioneer Pioneer
Pioneer AMT-Free Florida Pioneer AMT-Free
AMT-Free Municipal Tax-Free AMT-Free Municipal
Municipal Fund Income Municipal Fund
Fund (Pro Forma Fund Fund (Pro Forma
(12 months 12 months (12 months (12 months 12 months
ended ended ended ended ended
December 31, December 31, January 31, December 31, December 31,
2005) 2005) 2006) 2005) 2005)
------------ ------------ ----------- ------------ ------------
Shareholder transaction fees
(paid directly from your investment) Class B Class B Class C Class C Class C
Maximum sales charge (load)
when you buy shares as a percentage
of offering price None None None None None
Maximum deferred sales charge (load)
as a percentage of offering price or
the amount you receive when you sell
shares, whichever is less 4% 4% 1% 1% 1%
Redemption fee as a percentage of
amount redeemed, if applicable None None None None None
Annual fund operating expenses
(deducted from fund assets) as a
% of average daily net assets
Management Fee 0.50% 0.50% 0.50% 0.50% 0.50%
Distribution and Service (12b-1) Fee 1.00% 1.00% 1.00% 1.00% 1.00%
Other Expenses 0.18% 0.12% 0.59% 0.13% 0.15%
Total Annual Fund Operating Expenses(2) 1.68% 1.62% 2.09% 1.63% 1.65%
- ----------------------------------------------------------------------------------------------------------------------
Less: Fee Waiver and Expense Limitations 0.00% N/A (0.37)%(3) 0.00% N/A
Net Expenses 1.68%(4) 1.62%(5) 1.72%(3) 1.63%(4) 1.65%(5)
45
Combined
Pioneer Pioneer
Florida Pioneer AMT-Free
Tax-Free AMT-Free Municipal
Income Municipal Fund
Fund Fund (Pro Forma
(12 months (12 months 12 months
ended ended ended
January 31, December 31, December 31,
2006) 2005) 2005)
----------- ------------ ------------
Shareholder transaction fees
(paid directly from your investment) Class Y Class Y Class Y
Maximum sales charge (load)
when you buy shares as a percentage
of offering price None None None
Maximum deferred sales charge (load)
as a percentage of offering price or
the amount you receive when you sell
shares, whichever is less None None None
Redemption fee as a percentage of
amount redeemed, if applicable None None None
Annual fund operating expenses
(deducted from fund assets) as a
% of average daily net assets
Management Fee 0.50% N/A 0.50%
Distribution and Service (12b-1) Fee 0.00% N/A 0.00%
Other Expenses 0.34% N/A 0.06%
Total Annual Fund Operating Expenses2 0.84% N/A 0.56%
The hypothetical examples below help you compare the cost of investing in
each fund. It assumes that: (a) you invest $10,000 in each fund for the time
periods shown, (b) you reinvest all dividends and distributions, (c) your
investment has a 5% return each year, (d) each fund's operating expenses remain
the same and (e) Pioneer's contractual expense limitation for the combined
Pioneer AMT-Free Municipal Fund's Class A shares is in effect for year one. Pro
forma expenses are included assuming a Reorganization with your fund and
Pioneer AMT-Free Municipal Fund. The examples are for comparison purposes only
and are not a representation of either fund's actual expenses or returns,
either past or future.
Combined
Pioneer
Pioneer Pioneer AMT-Free
Number of years Florida Tax Free AMT-Free Municipal Fund
you own your shares Income Fund Municipal Fund (Pro Forma)
- ------------------- ----------- -------------- -----------
Class A -- assuming redemption at end of period
Year 1 ........................................... $ 530 $ 563 $ 530
Year 3 ........................................... $ 759 $ 802 $ 751
Year 5 ........................................... $1,007 $1,060 $ 990
Year 10 .......................................... $1,716 $1,796 $1,675
Class A -- assuming no redemption
Year 1 ........................................... $ 530 $ 563 $ 530
Year 3 ........................................... $ 759 $ 802 $ 751
Year 5 ........................................... $1,007 $1,060 $ 990
Year 10 .......................................... $1,716 $1,796 $1,675
Class B -- assuming redemption at end of period
Year 1 ........................................... $ 575 $ 571 $ 565
Year 3 ........................................... $ 877 $ 830 $ 811
Year 5 ........................................... $1,106 $1,013 $ 981
Year 10 .......................................... $1,994 $1,849 $1,775
46
Combined
Pioneer
Pioneer Pioneer AMT-Free
Number of years Florida Tax Free AMT-Free Municipal Fund
you own your shares Income Fund Municipal Fund (Pro Forma)
- ------------------- ----------- -------------- -----------
Class B -- assuming no redemption
Year 1 ........................................ $ 175 $ 272 $ 165
Year 3 ........................................ $ 577 $ 835 $ 511
Year 5 ........................................ $1,006 $1,425 $ 881
Year 10 ....................................... $1,994 $2,810 $1,775
Class C -- assuming redemption at end of period
Year 1 ........................................ $ 275 $ 365 $ 268
Year 3 ........................................ $ 619 $ 814 $ 520
Year 5 ........................................ $1,090 $1,390 $ 897
Year 10 ....................................... $2,391 $2,954 $1,955
Class C -- assuming no redemption.
Year 1 ........................................ $ 175 $ 265 $ 168
Year 3 ........................................ $ 619 $ 814 $ 520
Year 5 ........................................ $1,090 $1,390 $ 897
Year 10 ....................................... $2,391 $2,954 $1,955
Class Y
Year 1 ........................................ $ 86 N/A $ 57
Year 3 ........................................ $ 268 N/A $ 179
Year 5 ........................................ $ 466 N/A $ 313
Year 10 ....................................... $1,037 N/A $ 701
- ----------
(1) Purchases of $1 million or more and purchases by participants in certain
group plans are not subject to an initial sales charge but may be subject
to a contingent deferred sales charge of 1%.
(2) The funds' total annual operating expenses in the table have not been
reduced by any expense offset arrangements.
(3) The expenses in the table above reflect the expense limitations currently
in effect under which Pioneer has contractually agreed not to impose all or
a portion of its management fee and, if necessary, to limit other ordinary
operating expenses to the extent required to reduce fund expenses to 0.82%,
1.72% and 1.72% of the average daily net assets attributable to Class A,
Class B and Class C shares, respectively. These expense limitations are in
effect through December 1, 2008 for Class A shares and through December 1,
2007 for Class B and Class C shares. There can be no assurance that Pioneer
will extend the expense limitations beyond such time.
(4) The expenses in the table above reflect the expense limitations currently
in effect under which Pioneer has contractually agreed not to impose all or
a portion of its management fee and, if necessary, to limit other ordinary
operating expenses to the extent required to reduce fund expenses to 0.87%,
1.77% and 1.77% of the average daily net assets attributable to Class A,
Class B and Class C shares, respectively. These expense limitations are in
effect through May 1, 2007 for Class A, Class B and Class C shares. There
can be no assurance that Pioneer will extend the expense limitations beyond
such time.
(5) Net expenses in the table reflect the expense limitation that will be in
effect upon the closing of the Reorganization, under which Pioneer has
contractually agreed not to impose all or a portion of its management fee
and, if necessary, to limit other ordinary operating expenses to the extent
required to reduce fund expenses to 0.82% of the average daily net assets
attributable to Class A shares. This expense limitation is in effect from
the closing date of the Reorganization through May 1, 2008. There can be no
assurance that Pioneer will extend the expense limitation beyond such time.
Comparison of Fund Performance
The bar charts show the year-by-year performance of each fund's Class A
shares since inception. Class B, Class C, Class Y and Investor Class shares
will have different performance. The chart does not reflect any sales charge
you may pay when you buy or sell fund shares. Any sales charge will reduce your
return. The tables show average annual total return (before and after sales
taxes) for each fund over time for each class of shares (including deductions
for sales charges) compared with a broad-based securities market index. The
after-tax returns shown for each fund are for Class A only; after-tax returns
for other classes will vary. Past performance (before and after taxes) does not
indicate future results.
47
Pursuant to an agreement and plan of reorganization, Pioneer Florida Tax
Free Income Fund acquired the assets and liabilities of AmSouth Florida
Tax-Exempt Fund (the predecessor fund) on September 23, 2005. In the
reorganization, the predecessor fund exchanged all of its assets for shares of
the fund. The predecessor fund offered classes of shares similar to the fund's
Class A, Class B and Class Y shares. As a result of the reorganization, the
fund is the accounting successor of the predecessor fund. The performance of
the Class A, Class B and Class Y shares of the fund includes the performance of
the predecessor fund's Class A, Class B and Class I shares prior to the
Reorganization, which has been restated to reflect differences in any
applicable sales charges (but not differences in expenses). Class C shares were
not previously offered by the predecessor fund. The performance of the fund's
Class C shares set forth in the table below is based upon the performance of
the predecessor fund's Class B shares as adjusted to reflect sales charges
applicable to the fund's Class C shares (but not other differences in
expenses). If the performance had been adjusted to reflect all differences in
expenses, the performance of the fund would be lower.
[THE FOLLOWING DATA WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL]
Pioneer Florida Tax Free Income Fund's Annual Return -- Class A Shares*
(Year ended December 31)
'96 3.60
'97 6.54
'98 5.44
'99 -1.33
'00 8.36
'01 4.47
'02 8.43
'03 3.04
'04 1.38
'05 0.93
- ----------
* During the period shown in the bar chart, Pioneer Florida Tax Free Income
Fund's highest quarterly return was 3.89% for the quarter ended September
30, 2002 and the lowest quarterly return was (2.12)% for the quarter ended
June 30, 2004. For the period from January 1, 2006 to June 30, 2006, Pioneer
Florida Tax Free Income Fund's return was (0.07%).
Pioneer AMT-Free Municipal Fund acquired the assets and liabilities of
Safeco Municipal Bond Fund (the predecessor fund) on December 10, 2004. In the
reorganization, the predecessor fund exchanged its assets for Investor Class
shares of the fund. As a result of the reorganization, the fund is the
accounting successor of the predecessor fund. The fund's Investor Class shares
are not offered through this prospectus. The performance of Class A, Class B
and Class C shares of Pioneer AMT-Free Municipal Fund includes the net asset
value performance of the predecessor fund's Class A, Class B and Class C shares
prior to the reorganization, which has been restated to reflect differences in
any applicable sales charges (but not differences in expenses). If all the
expenses of the Pioneer fund were reflected, the performance would be lower.
[THE FOLLOWING DATA WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL]
Pioneer AMT-Free Municipal Fund's Annual Return -- Class A Shares*
(Year ended December 31)
'97 10.17
'98 5.75
'99 -6.49
'00 13.75
'01 4.91
'02 9.98
'03 5.66
'04 5.45
'05 4.80
- ----------
* During the period shown in the bar chart, Pioneer AMT-Free Municipal Fund's
highest quarterly return was 6.02% for the quarter ended September 30, 2002,
and the lowest quarterly return was (2.70)% for the quarter ended June 30,
2004. For the period from January 1, 2006 to June 30, 2006, Pioneer AMT-Free
Municipal Fund's return was 0.19%.
48
Average Annual Total Return
(for periods ended December 31, 2005)
- ----------------------------------------------------------------------------------------------------------
1 Year 5 Years 10 Years Since Inception(1)
- ----------------------------------------------------------------------------------------------------------
Pioneer Florida Tax Free Income Fund
- ----------------------------------------------------------------------------------------------------------
Class A -- Before Taxes (3.59)% 2.66% 3.56% 4.03%
(9/30/94)
- ----------------------------------------------------------------------------------------------------------
Class A -- After Taxes on Distributions(2) (3.75)% 2.59% 3.49% 3.96%
- ----------------------------------------------------------------------------------------------------------
Class A -- After Taxes on Distributions and (1.43)% 2.68% 3.53% 3.95%
Sale of Fund Shares(2)
- ----------------------------------------------------------------------------------------------------------
Class B -- Before Taxes (3.88)% 2.81% N/A 2.79%
(3/16/99)
- ----------------------------------------------------------------------------------------------------------
Class C -- Before Taxes 0.07% 2.82% N/A 2.80%
(3/16/99)
- ----------------------------------------------------------------------------------------------------------
Class Y -- Before Taxes(3) 1.00% 3.75% 4.16% 4.56%
(9/30/94)
- ----------------------------------------------------------------------------------------------------------
Merrill Lynch 1-12 Year Municipal Bond Index 1.87% 5.11% 5.35% 5.85%
(reflects no deduction for taxes)(4)
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
1 Year 5 Years 10 Years Since Inception(5)
- ----------------------------------------------------------------------------------------------------------
Pioneer AMT-Free Municipal Fund
- ----------------------------------------------------------------------------------------------------------
Class A -- Before Taxes 0.07% 5.17% N/A 5.34%
(9/30/96
- ----------------------------------------------------------------------------------------------------------)
Class A -- After Taxes on Distribution(2) (0.28)% 3.58% N/A 3.52%
- ----------------------------------------------------------------------------------------------------------
Class A -- After Taxes on Distributions and 1.91% 3.68% N/A 3.57%
Sale of Fund Shares(2)
- ----------------------------------------------------------------------------------------------------------
Class B -- Before Taxes 0.09% 5.33% N/A 5.21%
(9/30/96)
- ----------------------------------------------------------------------------------------------------------
Class C -- Before Taxes 3.77% N/A N/A 4.32%
(10/1/03)
- ----------------------------------------------------------------------------------------------------------
Investor Class -- Before Taxes 4.88% 6.40% 5.90% 9.27%
(11/18/81)
- ----------------------------------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index 3.51% 5.59% 10.71% 5.98%(7)
(reflects no deduction for taxes)(6)
- ----------------------------------------------------------------------------------------------------------
(1) Reflects the inception dates of the predecessor fund (Class B shares'
inception date in the case of the fund's Class C shares). Inception of Class
C shares was September 23, 2005.
(2) After-tax returns are calculated using the historical highest individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Actual after-tax returns depend on the investor's tax situation
and may differ from those shown. Furthermore, the after-tax returns shown
are not relevant to shareholders who hold fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement accounts.
After-tax returns for Class B and Class C shares will vary from the
after-tax returns presented for Class A shares.
(3) Performance prior to commencement of operations of Class I shares of the
predecessor fund on September 2, 1997, is based on the performance of the
predecessor fund's Class A shares (without sales charge).
49
(4) The Merrill Lynch 1-12 Year Municipal Bond Index is an unmanaged index
generally representative of municipal bonds with intermediate maturities of
no less than one year and no more than twelve years. Reflects the return of
the index since the inception of Class A and Class Y shares. The return of
the index since the inception of Class B and Class C shares is 5.07%.
(5) Inception date of the predecessor fund's applicable share class. The fund's
Class A, Class B, Class C and Investor Class shares commenced operations on
December 13, 2004.
(6) The Lehman Brothers Municipal Bond Index measures investment-grade,
tax-exempt, and fixed-rate bonds with long-term maturities (greater than two
years) selected from issues larger than $50 million.
(7) Reflects the return of the index since the inception of Class A and Class B
shares. Index returns since the inception of the other classes are as
follows: Class C shares: 4.58%. Investor Class shares: 8.88%.
The most recent portfolio management discussion of each fund's performance is
attached as Exhibit B.
CAPITALIZATION
The following table sets forth the capitalization of each fund as of May
31, 2006 and the pro forma combined capitalization of both funds as if the
Reorganization had occurred on that date. If the Reorganization is consummated,
the actual exchange ratios on the Closing Date may vary from the exchange
ratios indicated. This is due to changes in the market value of the portfolio
securities of both funds between May 31, 2006 and the Closing Date, changes in
the amount of undistributed net investment income and net realized capital
gains of both funds during that period resulting from income and distributions,
and changes in the accrued liabilities of both funds during the same period.
Pro Forma
Florida Pioneer
Tax Free AMT-Free AMT-Free
Income Fund Municipal Fund Municipal Fund
----------- -------------- --------------
Net Assets (millions) ......... $ 39,243,472 $ 476,943,236 $ 516,186,708
Class A ...................... $ 1,376,611 $ 25,601,741 $ 26,978,352
Class B ...................... $ 1,776,390 $ 3,625,131 $ 5,401,521
Class C ...................... $ 9,701 $ 2,560,626 $ 2,570,327
Class Y ...................... $ 36,080,770 N/A $ 36,080,770
Investor Class ............... N/A $ 445,155,737 $ 445,155,737
Net Asset Value Per Share
Class A ...................... $ 10.18 $ 13.97 $ 13.97
Class B ...................... $ 10.14 $ 13.91 $ 13.91
Class C ...................... $ 10.17 $ 13.88 $ 13.88
Class Y ...................... $ 10.17 N/A $ 13.97
Investor Class ............... N/A $ 13.91 $ 13.91
Shares Outstanding
Class A ...................... 135,169 1,832,245 1,930,786
Class B ...................... 175,238 260,572 388,278
Class C ...................... 954 184,436 185,134
Class Y ...................... 3,546,088 N/A 2,593,873
Investor Class ............... N/A 32,005,154 32,005,154
It is impossible to predict how many shares of Pioneer AMT-Free Municipal
Fund will actually be received and distributed by your fund on the Closing
Date. The table should not be relied upon to determine the amount of Pioneer
AMT-Free Municipal Fund shares that will actually be received and distributed.
50
PROPOSAL TO APPROVE THE AGREEMENT AND PLAN OF REORGANIZATION
The Reorganization
o The Reorganization is scheduled to occur as of the close of business on
November 10, 2006, but may occur on such later date as the parties may
agree in writing. Your fund will transfer all of its assets to Pioneer
AMT-Free Municipal Fund, and Pioneer AMT-Free Municipal Fund will assume
all of your fund's liabilities. This will result in the addition of your
fund's assets to Pioneer AMT-Free Municipal Fund's portfolio. The net
asset value of both funds will be computed as of the close of regular
trading on the New York Stock Exchange on the Closing Date.
o Pioneer AMT-Free Municipal Fund will issue to your fund Class A shares
with an aggregate net asset value equal to the net assets attributable
to your fund's Class A shares. As part of the liquidation of your fund,
these shares will immediately be distributed to Class A shareholders of
record of your fund in proportion to their holdings on the Closing Date.
As a result, Class A shareholders of your fund will end up as Class A
shareholders of Pioneer AMT-Free Municipal Fund.
o Pioneer AMT-Free Municipal Fund will issue to your fund Class B shares
with an aggregate net asset value equal to the net assets attributable
to your fund's Class B shares. As part of the liquidation of your fund,
these shares will immediately be distributed to Class B shareholders of
record of your fund in proportion to their holdings on the Closing Date.
As a result, Class B shareholders of your fund will end up as Class B
shareholders of Pioneer AMT-Free Municipal Fund.
o Pioneer AMT-Free Municipal Fund will issue to your fund Class C shares
with an aggregate net asset value equal to the net assets attributable
to your fund's Class C shares. As part of the liquidation of your fund,
these shares will immediately be distributed to Class C shareholders of
record of your fund in proportion to their holdings on the Closing Date.
As a result, Class C shareholders of your fund will end up as Class C
shareholders of Pioneer AMT-Free Municipal Fund.
o Pioneer AMT-Free Municipal Fund will issue to your fund Class Y shares
with an aggregate net asset value equal to the net assets attributable
to your fund's Class Y shares. As part of the liquidation of your fund,
these shares will immediately be distributed to Class Y shareholders of
record of your fund in proportion to their holdings on the Closing Date.
As a result, Class Y shareholders of your fund will end up as Class Y
shareholders of Pioneer AMT-Free Municipal Fund.
o After the shares are issued, your fund will be dissolved.
Agreement and Plan of Reorganization
The shareholders of your fund are being asked to approve the Agreement, the
form of which is attached to this Proxy Statement/Prospectus as Exhibit A and
incorporated herein by this reference. The description of the Agreement
contained herein, which include all the material provisions of the Agreement, is
qualified in its entirety by the attached copy.
Reasons for the Proposed Reorganization
The Trustees of your fund believe that the proposed Reorganization will be
advantageous to the shareholders of your fund for several reasons. The Trustees
considered the following matters, among others, in approving the proposal.
First, the Reorganization would eliminate confusion in the marketplace
caused by having two substantially similar funds and enhancing the potential
for one of the two funds to achieve growth in assets. The combined fund may be
better positioned to attract assets than your fund. After the Reorganization,
the combined fund's greater asset size may allow it, relative to your fund, to
(i) obtain better net prices on securities trades, and (ii) reduce per share
expenses as fixed expenses are shared over a larger asset base.
Second, the long-term historical investment performance of Pioneer
AMT-Free Municipal Fund is higher than your fund. For the one and five year
periods ended December 31, 2005, Class A shares of Pioneer AMT-Free Municipal
Fund had average annual total returns of 0.07% (one year) and 5.17% (five
year), compared to average annual total returns of the Class A shares of
Pioneer Florida Tax Free Income Fund of -3.59% (one year) and 2.66% (five
year), during the same periods.
Third, since the management fee rate is the same for both funds, there
will be no increase in management fee (as a percentage of average daily net
assets) as a result of the Reorganization. The Reorganization would however
result in Pioneer AMT-Free Municipal Fund's assets exceeding the second
breakpoint level ($500 million) in the fund's management fee schedule. If
assets were to continue to grow the effective rate of the combined fund's
management fee will be reduced as a result. With the exception of Class A
shares, the historical total expenses of Pioneer AMT-Free Municipal Fund's
shares are lower than Pioneer Florida Tax Free Income Fund's historical total
expenses for its shares. In addition, it is anticipated that the pro forma
expense ratio for each class of shares will be the same or lower than the
51
historical expense ratio of Pioneer Florida Tax Free Income Fund after the
Reorganization and has the potential to decrease further with asset growth.
Pioneer has agreed not to impose all or a portion of its management fee and, if
necessary, to limit other ordinary operating expenses to the extent required to
limit Pioneer AMT-Free Municipal Fund's Class A shares to 0.82% of the average
daily net assets attributable to Class A shares through May 1, 2008.
Fourth, the Board was presented with information and considered that
Pioneer AMT-Free Municipal Fund's shares are not exempt from the Florida state
intangible personal property tax. However, the Board also considered the fact
that Pioneer AMT-Free Municipal Fund offers the benefit of not investing in any
securities the income from which is a preference item for purposes of the
alternative minimum tax, whereas Pioneer Florida Tax Free Income Fund may
invest up to 20% of its assets in such securities.
The Boards of both funds considered that each fund would bear equally half
of all of the expenses associated with the preparation, printing and mailing of
any shareholder communications, including this Proxy Statement/Prospectus, and
any filings with the SEC and other governmental agencies in connection with the
Reorganization. Pioneer will bear the balance of these expenses. The Boards of
both funds estimate that these expenses in the aggregate will not exceed
$46,500.
The Boards of both funds considered that the funds' investment adviser and
principal distributor would benefit from the Reorganization. For example,
Pioneer might achieve cost savings from managing one larger fund compared to
managing more than one fund with similar investment strategies, which would
result in a decrease in the combined fund's gross expenses and a corresponding
decrease in fees waived under the current expense limit agreement. The Boards
believe, however, that these savings will not amount to a significant economic
benefit to Pioneer or the principal distributor.
The Boards of Trustees of both funds also considered that the
Reorganization presents an excellent opportunity for the shareholders of each
fund to become investors in a combined fund that has a larger asset size than
either fund alone without the obligation to pay commissions or other
transaction costs that a fund normally incurs when purchasing securities. This
opportunity provides an economic benefit to both funds and their shareholders.
BOARDS' EVALUATION AND RECOMMENDATION
For the reasons described above, the Board of Trustees of your fund,
including the Independent Trustees, approved the Reorganization. In particular,
the Trustees determined that the Reorganization is in the best interest of your
fund and that the interests of your fund's shareholders would not be diluted as
a result of the Reorganization. Similarly, the Board of Trustees of Pioneer
Series Trust II, including the Independent Trustees, approved the
Reorganization. They also determined that the Reorganization is in the best
interests of Pioneer AMT-Free Municipal Fund and that the interests of Pioneer
AMT-Free Municipal Fund's shareholders would not be diluted as a result of the
Reorganization.
The Trustees of your fund recommend that shareholders of your fund vote
FOR the proposal to approve the Agreement and Plan of Reorganization.
52
PIONEER FOCUSED EQUITY FUND
AND
PIONEER RESEARCH FUND
PROPOSAL 1(d)
SUMMARY
The following is a summary of more complete information appearing later in
this Proxy Statement/Prospectus or incorporated herein. You should read
carefully the entire Proxy Statement/Prospectus, including the form of
Agreement and Plan of Reorganization attached as Exhibit A, because they
contain details that are not in the summary.
If Proposal 1(d) is approved, your fund will be reorganized into Pioneer
Research Fund, as described above.
Although each fund has the same investment objective, your fund is a
non-diversified fund that may invest a significant portion of its assets in
equity securities of mid- and large-cap companies, as well as a greater portion
of its assets in non-U.S. securities, than Pioneer Research Fund. Pioneer
Research Fund is a diversified fund that invests primarily in equity securities
of U.S. issuers. The table below provides a comparison of the two funds. In the
table below, if a row extends across the entire table, the policy disclosed
applies to both your fund and Pioneer Research Fund.
Comparison of Pioneer Focused Equity Fund to Pioneer Research Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Pioneer Focused Equity Fund Pioneer Research Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Business A non-diversified series of Pioneer Series Trust A diversified, open-end investment
IV, an open-end investment management management company organized as a
company organized as a Delaware statutory trust. Delaware statutory trust.
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, as of $76.6 million $90.4 million
May 31, 2006
- ------------------------------------------------------------------------------------------------------------------------------------
Investment adviser and Investment Adviser:
portfolio managers Pioneer Investment Management, Inc. ("Pioneer")
- ------------------------------------------------------------------------------------------------------------------------------------
Investment Subadviser:
OakBrook Investments, LLC ("OakBrook" or "subadviser")
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio Managers: Portfolio Managers:
Day-to-day management of the fund's portfolio Day-to-day management of the fund's portfolio
is the responsibility of a team of investment is the responsibility of a team of analysts that
professionals, all of whom take part in the coordinate the fundamental research on
decision making process. Dr. Neil Wright, companies provided by our global research
Ms. Janna Sampson and Dr. Peter Jankovskis department and includes members from
are the team members and have been the Pioneer's affiliate, Pioneer Investment
portfolio managers of the Fund since its Management Limited. John Peckham, vice
inception. Each of the portfolio managers has president, analyst and U.S. Equity Research
been with OakBrook since 1998. Dr. Wright is Coordinator, is responsible for coverage of
OakBrook's President and Chief Investment U.S. electric utilities, gas utilities and
Officer. Ms. Sampson is OakBrook's Director of independent power producers. Prior to joining
Portfolio Management. Dr. Jankovskis is Pioneer in 2002, Mr. Peckham was a senior
OakBrook's Director of Research. manager with Deloitte Consulting's energy
industry practice in Cleveland and Boston.
- ------------------------------------------------------------------------------------------------------------------------------------
53
- ------------------------------------------------------------------------------------------------------------------------------------
Pioneer Focused Equity Fund Pioneer Research Fund
- ------------------------------------------------------------------------------------------------------------------------------------
During his nearly five years with Deloitte
Consulting, Mr. Peckham provided strategy
and financial advisory services to a wide
range of energy and manufacturing industry
clients. J. Clarkson Williams, vice president
and senior analyst, is responsible for coverage
of the telecommunications services sector.
Mr. Williams joined Pioneer in 1995 as an
equity analyst covering the European region.
In 2000 Mr. Williams joined the U.S. domestic
equity research team as a senior analyst
covering wireline telecommunications
companies. Bradley T. Galko, vice president
and senior analyst, is responsible for coverage
of capital goods and industrials. Prior to
joining Pioneer in 2001, Mr. Galko spent ten
years with Morgan Stanley in their Mergers &
Acquisitions, Corporate Strategy and Equity
Research departments.
- ------------------------------------------------------------------------------------------------------------------------------------
Investment objective Each fund seeks long-term capital growth.
- ------------------------------------------------------------------------------------------------------------------------------------
Primary investments Normally, the fund invests at least 80% of its Normally, the fund invests at least 80% of its
net assets (plus the amount of borrowings, if net assets (plus the amount of borrowings, if
any, for investment purposes) in equity any, for investment purposes) in equity
securities. The fund may invest a significant securities, primarily of U.S. issuers.
portion of its assets in equity securities of
medium- and large-capitalization companies. In pursuing its investment strategy, Pioneer
Consequently, the fund will be subject to the Research Fund may over time dispose of
risks of investing in companies with market securities acquired through the reorganization
capitalizations of $1.5 billion or more. in the ordinary course of business. This may
result in Pioneer Research Fund realizing
The fund will provide written notice to gains on previously existing Pioneer Focused
shareholders at least 60 days prior to any Equity Fund holdings, which capital gains will
change to the requirement that it invest at least be distributed to all of Pioneer Research
80% of its assets in equity securities. Fund's shareholders after the closing date,
and incurring transactions costs. The amount
The fund may invest up to 25% of its total of such gains and any transaction costs
assets in equity and debt securities of non- cannot be accurately estimated at this time.
U.S. corporate issuers and debt securities of Pioneer intends to take such factors into
non-U.S. government issuers, including consideration in selecting any portfolio
securities of emerging markets issuers. The positions for sale.
fund invests in non-U.S. securities to diversify
its portfolio when they offer similar or greater
potential for capital appreciation compared to
U.S. securities.
- ------------------------------------------------------------------------------------------------------------------------------------
For purposes of each fund's investment policies, equity securities include common stocks,
convertible debt and other equity instruments, such as exchange-traded funds (ETFs) that invest
primarily in equity securities, equity interests in real estate investment trusts (REITs), preferred
stocks, depositary receipts, rights and warrants.
- ------------------------------------------------------------------------------------------------------------------------------------
54
- ------------------------------------------------------------------------------------------------------------------------------------
Pioneer Focused Equity Fund Pioneer Research Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Investment strategies Pioneer has engaged OakBrook to act as the Pioneer uses a valuation-conscious approach
fund's subadviser under Pioneer's supervision. to select the fund's investments based upon
The subadviser seeks securities that its the recommendations of Pioneer's research
believes possess a dominant market share and team. Pioneer's research team supports the
have barriers, such as a patent or well-known portfolio management teams that manage
brand name, that may shield their market share various Pioneer equity funds and provides
and profits from competitors. The subadviser rankings for a universe of large and mid cap
continuously monitors a universe of companies issuers that are publicly traded in the U.S. and
possessing "market power" to look for abroad. The fund seeks to benefit from this
opportunities to purchase these stocks at research effort by selecting securities that are
reasonable prices. "Market power" is a highly ranked by the research team and selling
combination of dominant market share and a at reasonable prices or substantial discounts
barrier that protects that market share. In to their underlying values. From the universe
selecting individual securities, the subadviser of highly ranked securities, the research team
looks for companies that appear undervalued. constructs a portfolio that is diversified and
The subadviser then conducts a fundamental reflective of overall sector weightings in the
analysis of the stock, the industry and the fund's benchmark index. A security will not be
industry structure. The subadviser then included in the portfolio simply because it is
purchases securities of those companies highly ranked by the research team. A security
whose market power, in the subadviser's may be sold if its ranking by the research
opinion, is intact. As a result, the subadviser team is reduced or the security price reaches
may focus on a relatively limited number of a reasonable valuation.
securities (i.e., generally 25 or fewer).
Pioneer's research team evaluates a security's
The subadviser relies on the knowledge, potential value based on the company's assets
experience and judgment of its staff that have and prospects for earning growth. In making
access to a wide variety of research. The that assessment, it employs due diligence and
subadviser focuses on the quality and price of fundamental research, and an evaluation of the
individual issuers, not on economic sector or issuer based on its financial statements and
market-timing strategies. operations. The research team focuses on the
quality and price of individual issuers, not on
economic sector or market-timing strategies.
The fund's portfolio includes securities from
a broad range of market sectors that have
received favorable rankings from the
research team.
Factors Pioneer looks for in selecting
investments include:
o Favorable expected returns relative to
perceived risk
o Above average potential for earnings and
revenue growth
o Low market valuations relative to earnings
forecast, book value, cash flow and sales
o A sustainable competitive advantage,
such as a brand name, customer base,
proprietary technology or economies
of scale.
- ------------------------------------------------------------------------------------------------------------------------------------
55
- ------------------------------------------------------------------------------------------------------------------------------------
Pioneer Focused Equity Fund Pioneer Research Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Other investments The fund may invest up to 20% of its total The fund may invest up to 10% of its total
assets in debt securities of corporate and assets in equity securities of non-U.S.
government issuers. Generally the fund corporate issuers and debt securities of
acquires debt securities that are investment non-U.S. corporate and government issuers.
grade, but the fund may invest up to 5% of its The fund will not invest more than 5% of its
total assets in below investment grade debt total assets in the securities of emerging
securities issued by both U.S. and non-U.S. markets issuers. The fund invests in non-U.S.
corporate and government issuers, including securities to diversify its portfolio when they
below investment grade convertible debt offer similar or greater potential for capital
securities. The fund invests in debt securities appreciation compared to U.S. securities.
when the subadviser believes they are Investing in non-U.S. issuers may involve
consistent with the fund's investment unique risks compared to investing in
objective, long-term capital growth, or for securities of U.S. issuers.
greater liquidity.
The fund may invest a portion of its assets
not invested in equity securities in debt
securities of corporate and government
issuers. Generally the fund may acquire
investment grade debt securities that are
issued by both U.S. and non-U.S. corporate
and government issuers, but the fund may
invest up to 5% of its net assets in below
investment grade debt securities, including
convertible debt securities. The fund invests in
debt securities when Pioneer believes they are
consistent with the fund's investment objective
of long-term capital growth, to diversify the
fund's portfolio or for greater liquidity.
- ------------------------------------------------------------------------------------------------------------------------------------
Temporary defensive Normally, each fund invests substantially all of its assets to meet its investment objective. Each
strategies fund may invest the remainder of its assets in securities with remaining maturities of less than
one year, cash equivalents or may hold cash. For temporary defensive purposes, including
during periods of unusual cash flows, each fund may depart from its principal investment
strategies and invest part or all of its assets in these securities or may hold cash. During such
periods, a fund may not be able to achieve its investment objective. Each fund intends to adopt
a defensive strategy when Pioneer (or the subadviser, as the case may be) believes securities in
which the fund normally invests have extraordinary risks due to political or economic factors
and in other extraordinary circumstances.
- ------------------------------------------------------------------------------------------------------------------------------------
Short-term trading Each fund usually does not trade for short-term profits. Each fund will sell an investment,
however, even if it has only been held for a short time, if it no longer meets the fund's
investment criteria. If a fund does a lot of trading, it may incur additional operating expenses,
which would reduce performance, and could cause shareowners to incur a higher level of
taxable income or capital gains.
- ------------------------------------------------------------------------------------------------------------------------------------
56
- ------------------------------------------------------------------------------------------------------------------------------------
Pioneer Focused Equity Fund Pioneer Research Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Derivatives Each fund may use futures and options on securities, indices and currencies, forward foreign currency
exchange contracts and other derivatives. A derivative is a security or instrument whose value is
determined by reference to the value or the change in value of one or more securities, currencies,
indices or other financial instruments. Although there is no specific limitation on investing in
derivatives, each fund does not use derivatives as a primary investment technique and generally limits
their use to hedging. However, each fund may use derivatives for a variety of non-principal purposes,
including:
o As a hedge against adverse changes in market prices of securities, interest rates or currency exchange
rates
o As a substitute for purchasing or selling securities
o To increase the fund's return as a non-hedging strategy that may be considered speculative
Even a small investment in derivatives can have a significant impact on the funds' exposure to the market
prices of securities, interest rates or currency exchange rates. If changes in a derivative's value do
not correspond to changes in the value of the funds' other investments, the funds may not fully benefit
from or could lose money on the derivative position. In addition, some derivatives involve risk of loss
if the person who issued the derivative defaults on its obligation. Certain derivatives may be less
liquid and more difficult to value. The funds will only invest in derivatives to the extent Pioneer (or
the subadviser, as the case may be) believes these investments do not prevent the funds from seeking
their investment objective.
- ------------------------------------------------------------------------------------------------------------------------------------
Classes of Shares,Fees and Expenses
- ------------------------------------------------------------------------------------------------------------------------------------
Pioneer Focused Equity Fund Pioneer Research Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Class A sales charges The Class A shares of both funds have the same characteristics and fee structure.
and fees
o Class A shares are offered with initial sales charges up to 5.75% of the offering price, which is
reduced or waived for large purchases and certain types of investors. At the time of your purchase, your
investment firm may receive a commission from Pioneer Funds Distributor, Inc. ("PFD"), the funds'
distributor, of up to 5% declining as the size of your investment increases.
o There are no contingent deferred sales charges, except in certain circumstances when the initial sales
charge is waived.
o Class A shares are subject to distribution and service (12b-1) fees of up to 0.25% of average daily net
assets. These fees are paid out of a fund's assets on an ongoing basis. Over time these fees will
increase the cost of investments and may cost more than other types of sales charges.
- ------------------------------------------------------------------------------------------------------------------------------------
Class B sales charges o The Class B shares of both funds have the same characteristics and fee structure.
and fees
o Class B shares are offered without an initial sales charge, but are subject to contingent deferred
sales charges of up to 4% if you sell your shares. The charge is reduced over time and is not charged
after five years. Your investment firm may receive a commission from PFD, the funds' distributor, at the
time of your purchase of up to 4%.
o Class B shares are subject to distribution and service (12b-1) fees of up to 1% of average daily net
assets. Both of these fees are paid out of a fund's assets on an ongoing basis. Over time these fees will
increase the cost of investments and may cost more than other types of sales charges.
- ------------------------------------------------------------------------------------------------------------------------------------
57
- ------------------------------------------------------------------------------------------------------------------------------------
Classes of Shares,Fees and Expenses
- ------------------------------------------------------------------------------------------------------------------------------------
Pioneer Focused Equity Fund Pioneer Research Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Class C sales charges The Class C shares of both funds have the same characteristics and fee structure.
and fees
o Class C shares are offered without an initial sales charge.
o Class C shares are subject to a contingent deferred sales charge of 1% if you sell your shares within
one year of purchase. Your investment firm may receive a commission from PFD at the time of your purchase
of up to 1%.
o Class C shares are subject to distribution and service (12b-1) fees of up to 1% of average daily net
assets. These fees are paid out of a fund's assets on an ongoing basis. Over time these fees will
increase the cost of investments and may cost more than other types of sales charges.
- ------------------------------------------------------------------------------------------------------------------------------------
Class Y sales charges The Class Y shares of both funds have the same characteristics and fee structure.
and fees
o Class Y shares are offered without an initial sales charge.
o Class Y shares are not subject to a contingent deferred sales charge.
o Class Y shares are not subject to distribution and service (12b-1) fees.
- ------------------------------------------------------------------------------------------------------------------------------------
Management fees Pioneer's annual fee is equal to 0.65% of the Pioneer's annual fee is equal to 0.75% of the
fund's average daily net assets up to $1 billion, fund's average daily net assets up to $1 billion
0.60% of the next $4 billion and 0.55% on the and 0.70% of the assets over $1 billion. The
assets over $5 billion. The fee is accrued daily fee is accrued daily and paid monthly.
and paid monthly.
- ------------------------------------------------------------------------------------------------------------------------------------
A discussion regarding the basis for the Board of Trustees' approval of the management contract is
available in the Pioneer Focused Equity Fund's statement of additional information dated December 1, 2005
and in Pioneer Research Fund's December 31, 2005 annual report to shareholders.
- ------------------------------------------------------------------------------------------------------------------------------------
Buying, Selling and Exchanging Shares
- ------------------------------------------------------------------------------------------------------------------------------------
Pioneer Focused Equity Fund Pioneer Research Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Buying shares You may buy shares from any investment firm that has a sales agreement with PFD, the funds' distributor.
You can buy shares at the offering price. You may use securities you own to purchase shares of the fund
provided that Pioneer, in its sole discretion, determines that the securities are consistent with the
fund's objective and policies and their acquisition is in the best interests of the fund.
If you have an existing non-retirement account, you may purchase shares of a fund by telephone or online.
Certain IRAs also may use the telephone purchase privilege.
- ------------------------------------------------------------------------------------------------------------------------------------
Minimum initial Your initial investment must be at least $1,000 for Class A, Class B or Class C shares, and investment
$5,000,000 for Class Y shares. Additional investments must be at least $100 for Class A shares, $500 for
Class B or Class C shares, and there is no minimum initial investment amount for Class Y shares. You may
qualify for lower initial or subsequent investment minimums if you are opening a retirement plan account,
establishing an automatic investment plan or placing your trade through your investment firm.
- ------------------------------------------------------------------------------------------------------------------------------------
Maximum purchase Purchases of fund shares are limited to $49,999 for Class B shares and $999,999 for Class C shares. There
amounts is no maximum purchase for Class A shares or Class Y shares. These limits are applied on a per
transaction basis.
- ------------------------------------------------------------------------------------------------------------------------------------
58
- ------------------------------------------------------------------------------------------------------------------------------------
Buying, Selling and Exchanging Shares
- ------------------------------------------------------------------------------------------------------------------------------------
Pioneer Focused Equity Fund Pioneer Research Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Exchanging shares You may exchange your shares for shares of the same class of another Pioneer mutual fund. Your exchange
request must be for at least $1,000. Each fund allows you to exchange your shares at net asset value
without charging you either an initial or contingent deferred shares charge at the time of the exchange.
Shares you acquire as part of an exchange will continue to be subject to any contingent deferred sales
charge that applies to the shares you originally purchased. When you ultimately sell your shares, the
date of your original purchase will determine your contingent deferred sales charge. An exchange
generally is treated as a sale and a new purchase of shares for federal income tax purposes.
After you establish an eligible fund account, you can exchange fund shares by telephone or online.
- ------------------------------------------------------------------------------------------------------------------------------------
Selling shares Your shares will be sold at net asset value per share next calculated after a fund receives your request
in good order. If the shares you are selling are subject to a deferred sales charge, it will be deducted
from the sale proceeds.
If you have an eligible non-retirement account, you may sell up to $100,000 per account per day by
telephone or online. You may sell fund shares held in a retirement plan account by telephone only if your
account is an eligible IRA (tax penalties may apply).
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value Each fund's net asset value is the value of its portfolio of securities plus any other assets minus its
operating expenses and any other liabilities. Each fund calculates a net asset value for each class of
shares every day the New York Stock Exchange is open when regular trading closes (normally 4:00 p.m.
Eastern time).
- ------------------------------------------------------------------------------------------------------------------------------------
You buy or sell shares at the share price. When you buy Class A shares, you pay an initial sales charge
unless you qualify for a waiver or reduced sales charge. When you sell Class A, Class B or Class C
shares, you may pay a contingent deferred sales charge depending on how long you have owned your shares.
- ------------------------------------------------------------------------------------------------------------------------------------
Comparison of Principal Risks of Investing in the Funds
Because each fund has the same investment objective and similar investment
policies and strategies, the funds are subject to some of the same principal
risks. You could lose money on your investment or not make as much as if you
invested elsewhere if:
o The stock market goes down or performs poorly relative to other
investments (this risk may be greater in the short term)
o Value stocks fall out of favor with investors
o Pioneer Focused Equity Fund does not have the growth potential
originally expected
o Pioneer Research Fund's investments remain undervalued or do not have
the potential value originally expected
Market segment risks. To the extent either fund emphasizes, from time to
time, investments in a market segment, the fund will be subject to a greater
degree to the risks particular to the industries in that segment, and may
experience greater market fluctuation, than a fund without the same focus. For
example, industries in the financial segment, such as banks, insurance
companies, broker-dealers and REITs, may be sensitive to changes in interest
rates and general economic activity and are subject to extensive government
regulation. Industries in the technology segment, such as information
technology, communications equipment, computer hardware and software, and
office and scientific equipment, are subject to risks of rapidly evolving
technology, short product lives, rates of corporate expenditures, falling
prices and profits, competition from new market entrants, and general economic
conditions.
Non-U.S. securities risks. Each fund is also subject to risks associated
with investments other than U.S. equity securities. Pioneer Focused Equity Fund
may invest in non-U.S. securities to a greater degree than Pioneer Research
Fund. Investing in non-U.S. issuers may involve unique risks compared to
investing in securities of U.S. issuers. Some of these risks do not apply to
larger, more developed non-U.S. countries. However, these risks are more
pronounced for issuers of securities in emerging markets. These risks may
include:
o Less information about non-U.S. issuers or markets may be available due
to less rigorous disclosure or accounting standards or regulatory
practices
59
o Many non-U.S. markets are smaller, less liquid and more volatile. In a
changing market, Pioneer may not be able to sell the fund's portfolio
securities at times, in amounts and at prices it considers reasonable
o Adverse effect of currency exchange rates or controls on the value of
the fund's investments
o The economies of non-U.S. countries may grow at slower rates than
expected or may experience a downturn or recession
o Economic, political and social developments may adversely affect the
securities markets
o Withholding and other non-U.S. taxes may decrease the fund's return
Non-diversification risk (Pioneer Focused Equity Fund). Pioneer Focused
Equity Fund is not diversified, which means that it can invest a higher
percentage of its assets in any one issuer than a diversified fund. Being
non-diversified may magnify the fund's losses from adverse events affecting a
particular issuer. The fund generally invests in a limited number of securities
and, as a result, the fund's performance may be more volatile than the
performance of funds holding more securities.
The Funds' Fees and Expenses
Shareholders of both funds pay various fees and expenses, either directly
or indirectly. The tables below show the fees and expenses that you would pay
if you were to buy and hold shares of each fund. The expenses in the tables
appearing below are based on (i) for your fund, the expenses of your fund for
the twelve-month period ended January 31, 2006, and (ii) for Pioneer Research
Fund, the expenses of Pioneer Research Fund for the twelve-month period ended
December 31, 2005. Future expenses for all share classes may be greater or
less. The tables also show the pro forma expenses of the combined fund assuming
the Reorganization occurred on December 31, 2005.
Combined
Pioneer Pioneer Pioneer
Focused Pioneer Research Focused
Equity Research Fund Equity
Fund Fund (Pro Forma Fund
(12 months (12 months 12 months (12 months
ended ended ended ended
January 31, December 31, December 31, January 31,
2005) 2005) 2005) 2006)
----------- ------------ ------------ -----------
Shareholder transaction fees
(paid directly from your investment) Class A Class A Class A Class B
Maximum sales charge (load)
when you buy shares as a percentage
of offering price 5.75% 5.75% 5.75% None
Maximum deferred sales charge (load)
as a percentage of offering price or
the amount you receive when you sell
shares, whichever is less None(1) None(1) None(1) 4%
Redemption fee as a percentage of
amount redeemed, if applicable None None None None
Annual fund operating expenses
(deducted from fund assets) as a
% of average daily net assets
Management Fee 0.65% 0.75% 0.65% 0.65%
Distribution and Service (12b-1) Fee 0.25% 0.25% 0.25% 1.00%
Other Expenses 0.50% 0.81% 0.49% 0.62%
Total Annual Fund Operating Expenses(2) 1.40% 1.81% 1.39% 2.27%
- ---------------------------------------------------------------------------------------------------------
Less: Fee Waiver and Expense Limitations N/A (0.56)%(3) (0.14)%(4) N/A
Net Expenses 1.40% 1.25%(3) 1.25%(4) 2.27%
Combined Combined
Pioneer Pioneer Pioneer
Pioneer Research Focused Pioneer Research
Research Fund Equity Research Fund
Fund (Pro Forma Fund Fund (Pro Forma
(12 months 12 months (12 months (12 months 12 months
ended ended ended ended ended
December 31, December 31, January 31, December 31, December 31,
2005) 2005) 2006) 2005) 2005)
------------ ------------ ----------- ------------ -----------
Shareholder transaction fees
(paid directly from your investment) Class B Class B Class C Class C Class C
Maximum sales charge (load)
when you buy shares as a percentage
of offering price None None None None None
Maximum deferred sales charge (load)
as a percentage of offering price or
the amount you receive when you sell
shares, whichever is less 4% 4% 1% 1% 1%
Redemption fee as a percentage of
amount redeemed, if applicable None None None None None
Annual fund operating expenses
(deducted from fund assets) as a
% of average daily net assets
Management Fee 0.75% 0.65% 0.65% 0.75% 0.65%
Distribution and Service (12b-1) Fee 1.00% 1.00% 1.00% 1.00% 1.00%
Other Expenses 0.94% 0.58% 0.73% 0.87% 0.68%
Total Annual Fund Operating Expenses(2) 2.69% 2.23% 2.38% 2.62% 2.33%
- --------------------------------------------------------------------------------------------------------------------
Less: Fee Waiver and Expense Limitations (0.54)%(3) (0.08)%(4) N/A (0.47)%(3) (0.18)%(4)
Net Expenses 2.15%(4) 2.15%(4) 2.38% 2.15%(3) 2.15%(4)
60
Combined
Pioneer Pioneer
Focused Pioneer Research
Equity Research Fund
Fund Fund (Pro Forma
(12 months (12 months 12 months
ended ended ended
January 31, December 31, December 31,
2006) 2005) 2005)
----------- ------------ ------------
Shareholder transaction fees
(paid directly from your investment) Class Y Class Y Class Y
Maximum sales charge (load)
when you buy shares as a percentage
of offering price None None None
Maximum deferred sales charge (load)
as a percentage of offering price or
the amount you receive when you sell
shares, whichever is less None None None
Redemption fee as a percentage of
amount redeemed, if applicable None None None
Annual fund operating expenses
(deducted from fund assets) as a
% of average daily net assets
Management Fee 0.65% 0.75% 0.65%
Distribution and Service (12b-1) Fee 0.00% 0.00% 0.00%
Other Expenses 0.47% 0.43% 0.33%
Total Annual Fund Operating Expenses(2) 1.12% 1.18% 0.98%
The hypothetical examples below help you compare the cost of investing in
each fund. It assumes that: (a) you invest $10,000 in each fund for the time
periods shown, (b) you reinvest all dividends and distributions, (c) your
investment has a 5% return each year, (d) each fund's operating expenses remain
the same and (e) Pioneer's contractual expense limitation for the combined
Pioneer Research Fund's Class A, Class B and Class C shares is in effect for
year one. Pro forma expenses are included assuming a Reorganization with your
fund and Pioneer Research Fund. The examples are for comparison purposes only
and are not a representation of either fund's actual expenses or returns,
either past or future.
Pioneer
Number of years Focused Pioneer Combined Fund
you own your shares Equity Fund Research Fund (Pro Forma)
- ------------------- ----------- ------------- -----------
Class A -- assuming redemption at end of period
Year 1 ....................................... $ 709 $ 695 $ 695
Year 3 ....................................... $ 993 $1,060 $ 977
Year 5 ....................................... $1,297 $1,449 $1,279
Year 10 ...................................... $2,158 $2,536 $2,136
Class A -- assuming no redemption
Year 1 ....................................... $ 709 $ 695 $ 695
Year 3 ....................................... $ 993 $1,060 $ 977
Year 5 ....................................... $1,297 $1,449 $1,279
Year 10 ...................................... $2,158 $2,536 $2,136
Class B -- assuming redemption at end of period
Year 1 ....................................... $ 630 $ 672 $ 618
Year 3 ....................................... $1,009 $1,135 $ 990
Year 5 ....................................... $1,315 $1,525 $1,288
Year 10 ...................................... $2,387 $2,810 $2,346
61
Pioneer
Number of years Focused Pioneer Combined Fund
you own your shares Equity Fund Research Fund (Pro Forma)
- ------------------- ----------- ------------- -----------
Class B -- assuming no redemption
Year 1 ....................................... $ 230 $ 272 $ 218
Year 3 ....................................... $ 709 $ 835 $ 690
Year 5 ....................................... $1,215 $1,425 $1,188
Year 10 ...................................... $2,387 $2,810 $2,346
Class C -- assuming redemption at end of period
Year 1 ....................................... $ 341 $ 365 $ 318
Year 3 ....................................... $ 742 $ 814 $ 710
Year 5 ....................................... $1,270 $1,390 $1,229
Year 10 ...................................... $2,716 $2,954 $2,652
Class C -- assuming no redemption
Year 1 ....................................... $ 241 $ 265 $ 218
Year 3 ....................................... $ 742 $ 814 $ 710
Year 5 ....................................... $1,270 $1,390 $1,229
Year 10 ...................................... $2,716 $2,954 $2,652
Class Y
Year 1 ....................................... $ 114 $ 120 $ 100
Year 3 ....................................... $ 356 $ 375 $ 312
Year 5 ....................................... $ 617 $ 649 $ 542
Year 10 ...................................... $1,363 $1,432 $1,201
- ----------
(1) Purchases of $1 million or more and purchases by participants in certain
group plans are not subject to an initial sales charge but may be subject
to a contingent deferred sales charge of 1%.
(2) The funds' total annual operating expenses in the table have not been
reduced by any expense offset arrangements.
(3) The expenses in the table above reflect the expense limitations currently
in effect under which Pioneer has contractually agreed not to impose all or
a portion of its management fee and, if necessary, to limit other ordinary
operating expenses to the extent required to reduce fund expenses to 1.25%,
2.15% and 2.15% of the average daily net assets attributable to Class A,
Class B and Class C shares, respectively. These expense limitations are in
effect through May 1, 2009 for Class A shares and through May 1, 2007 for
Class B and Class C shares. There can be no assurance that Pioneer will
extend the expense limitations beyond such time.
(4) Net expenses in the table reflect the expense limitations that will be in
effect upon the closing of the Reorganization, under which Pioneer has
contractually agreed not to impose all or a portion of its management fee
and, if necessary, to limit other ordinary operating expenses to the extent
required to reduce fund expenses to 1.25%, 2.15% and 2.15% of the average
daily net assets attributable to Class A, Class B and Class C shares,
respectively. These expense limitations are in effect from the closing date
of the Reorganization through May 1, 2009 for Class A shares and through
May 1, 2008 for Class B and Class C shares. There can be no assurance that
Pioneer will extend the expense limitations beyond such time.
Comparison of Fund Performance
The bar charts show the year-by-year performance of each fund's Class A
shares since inception. Class B, Class C and Class Y shares will have different
performance. The chart does not reflect any sales charge you may pay when you
buy or sell fund shares. Any sales charge will reduce your return. The tables
show average annual total return (before and after sales taxes) for each fund
over time for each class of shares (including deductions for sales charges)
compared with a broad-based securities market index. The after-tax returns
shown for each fund are for Class A only; after-tax returns for other classes
will vary. Past performance (before and after taxes) does not indicate future
results.
Pursuant to an agreement and plan of reorganization, Pioneer Focused
Equity Fund acquired the assets and liabilities of AmSouth Select Equity Fund
(the predecessor fund) on September 23, 2005. In the reorganization, the
predecessor fund exchanged all of its assets for shares of the fund. The
predecessor fund offered classes of shares similar to the fund's Class A, Class
B and Class Y shares. As a result of the reorganization, the fund is the
accounting successor of the predecessor fund. The performance of the Class A,
Class B and
62
Class Y shares of the fund includes the performance of the predecessor fund's
Class A, Class B and Class I shares prior to the Reorganization, which has been
restated to reflect differences in any applicable sales charges (but not
differences in expenses). Class C shares were not previously offered by the
predecessor fund. The performance of the fund's Class C shares set forth in the
table below is based upon the performance of the predecessor fund's Class B
shares as adjusted to reflect sales charges applicable to the fund's Class C
shares (but not other differences in expenses). If the performance had been
adjusted to reflect all differences in expenses, the performance of the fund
would be lower.
[THE FOLLOWING DATA WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL]
Pioneer Focused Equity Fund's Annual Return -- Class A Shares*
(Year ended December 31)
'99 -10.12
'00 12.66
'01 7.45
'02 -9.12
'03 26.03
'04 9.93
'05 -6.67
- ----------
* During the period shown in the bar chart, Pioneer Focused Equity Fund's
highest quarterly return was 17.30% for the quarter ended December 31, 2000,
and the lowest quarterly return was (13.07)% for the quarter ended September
30, 1999. For the period from January 1, 2006 to June 30, 2006, Pioneer
Focused Equity Fund's return was 1.85%.
[THE FOLLOWING DATA WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL]
Pioneer Research Fund's Annual Return -- Class A Shares*
(Year ended December 31)
'00 -5.31
'01 -13.81
'02 -22.65
'03 24.62
'04 11.38
'05 7.20
- ----------
* During the period shown in the bar chart, Pioneer Research Fund's highest
quarterly return was 13.91% for the quarter ended June 30, 2003, and the
lowest quarterly return was (16.93)% for the quarter ended September 30,
2002. For the period from January 1, 2006 to June 30, 2006, Pioneer Research
Fund's return was 4.18%.
63
Average Annual Total Return
(for periods ended December 31, 2005)
- ------------------------------------------------------------------------------------------------------
1 Year 5 Years Since Inception(4)
- ------------------------------------------------------------------------------------------------------
Pioneer Focused Equity Fund
- ------------------------------------------------------------------------------------------------------
Class A -- Before Taxes (12.06)% 3.54% 5.23%
(9/1/98)
- ------------------------------------------------------------------------------------------------------
Class A -- After Taxes on Distributions(1) (12.80)% 3.19% 4.51%
- ------------------------------------------------------------------------------------------------------
Class A -- After Taxes on Distributions and (6.96)% 2.92% 4.13%
Sale of Fund Shares(1)
- ------------------------------------------------------------------------------------------------------
Class B -- Before Taxes (10.97)% 3.98% 5.30%
(9/2/98)
- ------------------------------------------------------------------------------------------------------
Class C -- Before Taxes(2) (7.23)% 4.03% 5.34%
(9/2/98)
- ------------------------------------------------------------------------------------------------------
Class Y -- Before Taxes (6.46)% 4.94% 6.26%
(9/1/98)
- ------------------------------------------------------------------------------------------------------
Standard & Poor's 500 Index 4.91% 0.54% 4.45%
(reflects no deduction for taxes)(3)
- ------------------------------------------------------------------------------------------------------
Pioneer Research Fund
- ------------------------------------------------------------------------------------------------------
Class A -- Before Taxes 1.03% (1.34)% (1.11)%
(11/18/99)
- ------------------------------------------------------------------------------------------------------
Class A -- After Taxes on Distribution(1) 0.98% (1.37)% (1.14)%
- ------------------------------------------------------------------------------------------------------
Class A -- After Taxes on Distributions and 0.73% (1.13)% (0.94)%
Sale of Fund Shares(1)
- ------------------------------------------------------------------------------------------------------
Class B -- Before Taxes 2.20% (0.96)% (0.97)%
(11/18/99)
- ------------------------------------------------------------------------------------------------------
Class C -- Before Taxes(2) 6.17% (0.89)% (0.88)%
(11/19/99)
- ------------------------------------------------------------------------------------------------------
Class Y -- Before Taxes 7.35% (0.12)% (0.11)%
(11/18/99)(5)
- ------------------------------------------------------------------------------------------------------
Standard & Poor's 500 Index 4.91% 0.54% (0.18)%
(reflects no deduction for taxes)(3)
- ------------------------------------------------------------------------------------------------------
(1) After-tax returns are calculated using the historical highest individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Actual after-tax returns depend on the investor's tax situation
and may differ from those shown. Furthermore, the after-tax returns shown
are not relevant to shareholders who hold fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement accounts.
After-tax returns for Class B and Class C shares will vary from the
after-tax returns presented for Class A shares.
(2) The performance of Class C shares does not reflect the 1% front-end sales
charge in effect prior to February 1, 2004. If you paid a 1% sales charge,
your returns would be lower than those shown above.
(3) The Standard & Poor's 500 Index measures the performance of 500 leading
companies within leading industries within the U.S.
(4) Reflects the inception dates of the predecessor fund (the predecessor fund's
Class B shares' inception date is applicable in the case of the fund's Class
C shares). The fund began offering its Class C shares on September 23, 2005.
(5) Inception date of the fund's Class A shares. Class Y shares commenced
operations on August 11, 2004.
The most recent portfolio management discussion of each fund's performance is
attached as Exhibit B.
64
CAPITALIZATION
The following table sets forth the capitalization of each fund as of May
31, 2006 and the pro forma combined capitalization of both funds as if the
Reorganization had occurred on that date. If the Reorganization is consummated,
the actual exchange ratios on the Closing Date may vary from the exchange
ratios indicated. This is due to changes in the market value of the portfolio
securities of both funds between May 31, 2006 and the Closing Date, changes in
the amount of undistributed net investment income and net realized capital
gains of both funds during that period resulting from income and distributions,
and changes in the accrued liabilities of both funds during the same period.
Pro Forma
Focused Pioneer
Equity Fund Research Fund Research Fund
----------- ------------- -------------
Net Assets (millions) ......... $ 76,678,921 $ 90,430,295 $ 167,109,216
Class A ...................... $ 13,781,335 $ 7,551,619 $ 21,332,954
Class B ...................... $ 11,024,977 $ 5,723,160 $ 16,748,137
Class C ...................... $ 34,691 $ 2,714,987 $ 2,749,678
Class Y ...................... $ 51,837,918 $ 74,440,530 $ 126,278,447
Net Asset Value Per Share
Class A ...................... $ 13.12 $ 10.17 $ 10.17
Class B ...................... $ 12.62 $ 9.74 $ 9.74
Class C ...................... $ 12.60 $ 9.79 $ 9.79
Class Y ...................... $ 13.20 $ 10.24 $ 10.24
Shares Outstanding
Class A ...................... 1,050,627 742,520 2,097,617
Class B ...................... 873,707 587,718 1,719,645
Class C ...................... 2,754 277,337 280,880
Class Y ...................... 3,926,618 7,267,370 12,329,666
It is impossible to predict how many shares of Pioneer Research Fund will
actually be received and distributed by your fund on the Closing Date. The
table should not be relied upon to determine the amount of Pioneer Research
Fund shares that will actually be received and distributed.
PROPOSAL TO APPROVE THE AGREEMENT AND PLAN OF REORGANIZATION
The Reorganization
o The Reorganization is scheduled to occur as of the close of business on
November 10, 2006, but may occur on such later date as the parties may
agree in writing. Your fund will transfer all of its assets to Pioneer
Research Fund, and Pioneer Research Fund will assume all of your fund's
liabilities. This will result in the addition of your fund's assets to
Pioneer Research Fund's portfolio. The net asset value of both funds
will be computed as of the close of regular trading on the New York
Stock Exchange on the Closing Date.
o Pioneer Research Fund will issue to your fund Class A shares with an
aggregate net asset value equal to the net assets attributable to your
fund's Class A shares. As part of the liquidation of your fund, these
shares will immediately be distributed to Class A shareholders of record
of your fund in proportion to their holdings on the Closing Date. As a
result, Class A shareholders of your fund will end up as Class A
shareholders of Pioneer Research Fund.
o Pioneer Research Fund will issue to your fund Class B shares with an
aggregate net asset value equal to the net assets attributable to your
fund's Class B shares. As part of the liquidation of your fund, these
shares will immediately be distributed to Class B shareholders of record
of your fund in proportion to their holdings on the Closing Date. As a
result, Class B shareholders of your fund will end up as Class B
shareholders of Pioneer Research Fund.
o Pioneer Research Fund will issue to your fund Class C shares with an
aggregate net asset value equal to the net assets attributable to your
fund's Class C shares. As part of the liquidation of your fund, these
shares will immediately be distributed to Class C shareholders of record
of your fund in proportion to their holdings on the Closing Date. As a
result, Class C shareholders of your fund will end up as Class C
shareholders of Pioneer Research Fund.
65
o Pioneer Research Fund will issue to your fund Class Y shares with an
aggregate net asset value equal to the net assets attributable to your
fund's Class Y shares. As part of the liquidation of your fund, these
shares will immediately be distributed to Class Y shareholders of record
of your fund in proportion to their holdings on the Closing Date. As a
result, Class Y shareholders of your fund will end up as Class Y
shareholders of Pioneer Research Fund.
o After the shares are issued, your fund will be dissolved.
Agreement and Plan of Reorganization
The shareholders of your fund are being asked to approve the Agreement and
Plan of Reorganization, the form of which is attached to this Proxy
Statement/Prospectus as Exhibit A and incorporated herein by this reference.
The description of the Agreement and Plan of Reorganization contained herein,
which include all the material provisions of the Agreement and Plan of
Reorganization, is qualified in its entirety by the attached copy.
Reasons for the Proposed Reorganization
The Trustees of your fund believe that the proposed Reorganization will be
advantageous to the shareholders of your fund for several reasons. The Trustees
considered the following matters, among others, in approving the proposal.
First, the Reorganization would eliminate confusion in the marketplace
caused by having two substantially similar funds and enhancing the potential
for one of the two funds to achieve growth in assets. The combined fund may be
better positioned to attract assets than your fund. After the Reorganization,
the combined fund's greater asset size may allow it, relative to your fund, to
(i) obtain better net prices on securities trades, and (ii) reduce per share
expenses as fixed expenses are shared over a larger asset base.
Second, while Pioneer Research Fund's longer term performance was lower
than your fund's performance, Pioneer Research Fund's Class A shares had higher
total returns than your fund during the two most recent calendar years. For the
one and five year periods ended December 31, 2005, Class A shares of Pioneer
Research Fund had average annual total returns of 1.03% (one year) and -1.34%
(five year), compared to average annual total returns of the Class A shares of
Pioneer Focused Equity Fund of -12.06% (one year) and 3.54% (five year), during
the same periods.
Third, although your fund's management fee rate schedule is lower than
that of Pioneer Research Fund, Pioneer has agreed to reduce its management fee
rate upon the closing of the Reorganization for Pioneer Research Fund to equal
your fund's management fee rate. Although the total expenses of your fund's
shares are generally lower than Pioneer Research Fund's shares total expenses,
Pioneer has agreed not to impose all or a portion of its management fee and, if
necessary, to limit other ordinary operating expenses to the extent required to
reduce Pioneer Research Fund's expenses to 1.25%, 2.15% and 2.15% of the
average daily net assets attributable to Class A, Class B and Class C shares,
respectively. These expense limitations are in effect through May 1, 2009 for
Class A shares and through May 1, 2008 for Class B and Class C shares. Further,
the pro forma Class Y share expense ratio of the combined fund is expected to
be lower than the Class Y share expense ratio of your fund.
The Boards of both funds considered that each fund would bear equally half
of all of the expenses of the funds associated with the preparation, printing
and mailing of any shareholder communications, including this Proxy
Statement/Prospectus, and any filings with the SEC and other governmental
agencies in connection with the Reorganization. Pioneer will bear the balance
of these expenses. The Boards of both funds estimate that these expenses in the
aggregate will not exceed $57,500.
The Boards of both funds considered that the funds' investment adviser and
principal distributor would benefit from the Reorganization. For example,
Pioneer might achieve cost savings from managing one larger fund compared to
managing more than one fund with similar investment strategies, which would
result in a decrease in the combined fund's gross expenses and a corresponding
decrease in fees waived under the current expense limit agreement. The Boards
believe, however, that these savings will not amount to a significant economic
benefit to Pioneer or the principal distributor.
The Boards of Trustees of both funds also considered that the
Reorganization presents an excellent opportunity for the shareholders of each
fund to become investors in a combined fund that has a larger asset size than
either fund alone without the obligation to pay commissions or other
transaction costs that a fund normally incurs when purchasing securities. This
opportunity provides an economic benefit to both funds and their shareholders.
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BOARDS' EVALUATION AND RECOMMENDATION
For the reasons described above, the Board of Trustees of your fund,
including the Independent Trustees, approved the Reorganization. In particular,
the Trustees determined that the Reorganization is in the best interest of your
fund and that the interests of your fund's shareholders would not be diluted as
a result of the Reorganization. Similarly, the Board of Trustees of Pioneer
Research Fund, including the Independent Trustees, approved the Reorganization.
They also determined that the Reorganization is in the best interests of
Pioneer Research Fund and that the interests of Pioneer Research Fund's
shareholders would not be diluted as a result of the Reorganization.
The Trustees of your fund recommend that shareholders of your fund vote
FOR the proposal to approve the Agreement and Plan of Reorganization.
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TERMS OF EACH AGREEMENT AND PLAN OF REORGANIZATION
The Reorganizations
o Each Reorganization is scheduled to occur as of the close of business on
November 10, 2006, but may occur on such later date as the parties may
agree to in writing. Your fund will transfer all of its assets to the
corresponding Pioneer Fund. The corresponding Pioneer Fund will assume
all of your fund's liabilities. The net asset value of both funds will
be computed as of the close of regular trading on the New York Stock
Exchange on the reorganization date.
o The corresponding Pioneer Fund will issue classes of shares to your fund
with an aggregate net asset value equal to the net assets attributable
to your fund's corresponding classes of shares. These shares will
immediately be distributed to your fund's shareholders in proportion to
the relative net asset value of their holdings of your fund's shares on
the Closing Date. As a result, your fund's shareholders will end up as
shareholders of the relevant class of the corresponding Pioneer Fund.
o After the shares are issued, your fund will be dissolved.
o Each Reorganization is intended to result in no income, gain or loss for
federal income tax purposes to the corresponding Pioneer Fund, your fund
or the shareholders of your fund and will not take place unless both
Pioneer Funds involved in the Reorganization receive a satisfactory
opinion concerning the tax consequences of the Reorganization from
Wilmer Cutler Pickering Hale and Dorr LLP, counsel to the Pioneer Funds.
Agreement and Plan of Reorganization
The shareholders of your fund are being asked to approve an Agreement and
Plan of Reorganization, the form of which is attached as Exhibit A to this
Proxy Statement/Prospectus and incorporated herein by this reference. The
description of the Agreement and Plan of Reorganization contained herein, which
includes the material provisions of the Agreement and Plan of Reorganization,
is qualified in its entirety by the attached copy.
Cancellation of Share Certificates. If your shares are represented by one
or more share certificates before the Closing Date, on the Closing Date all
certificates will be canceled, will no longer evidence ownership of your fund's
shares and will evidence ownership of the corresponding Pioneer Fund shares.
The corresponding Pioneer Fund will not issue share certificates in the
Reorganization.
Conditions to Closing the Reorganization. The obligation of your fund to
consummate the Reorganization is subject to the satisfaction of certain
conditions, including the performance by the corresponding Pioneer Fund of all
its obligations under the Agreement and Plan of Reorganization and the receipt
of all consents, orders and permits necessary to consummate the Reorganization
(see Agreement and Plan of Reorganization, Section 6).
The obligation of the corresponding Pioneer Fund to consummate the
Reorganization is subject to the satisfaction of certain conditions, including
your fund's performance of all of its obligations under the Agreement and Plan
of Reorganization, the receipt of certain documents and financial statements
from your fund and the receipt of all consents, orders and permits necessary to
consummate the Reorganization (see Agreement and Plan of Reorganization,
Section 7).
The obligations of your fund and the corresponding Pioneer Fund are
subject to approval of the Agreement and Plan of Reorganization by the
necessary vote of the outstanding shares of your fund in accordance with the
provisions of your fund's declaration of trust and by-laws. The funds'
obligations are also subject to the receipt of a favorable opinion of Wilmer
Cutler Pickering Hale and Dorr LLP as to the federal income tax consequences of
the Reorganization (see Agreement and Plan of Reorganization, Section 8.5).
Termination of Agreement and Plan of Reorganization. The Board of Trustees
of your fund or the corresponding Pioneer Fund may terminate the Agreement and
Plan of Reorganization (even if the shareholders of your fund have already
approved it) by their mutual agreement at any time before the Closing Date, if
the Boards believe that proceeding with the Reorganization would no longer be
advisable.
Expenses of the Reorganization. The funds will bear equally half of all
the expenses of both funds incurred in connection with the Reorganization,
including the costs of printing, mailing, legal fees, audit fees and
solicitation expenses. Pioneer will bear the balance of these expenses.
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TAX STATUS OF EACH REORGANIZATION
Each Reorganization will not result in income, gain or loss for U.S.
federal income tax purposes and will not take place unless the funds receive a
satisfactory opinion from Wilmer Cutler Pickering Hale and Dorr LLP, counsel to
the funds, that the Reorganization will be a "reorganization" within the
meaning of Section 368(a) of the Code.
As a result, for federal income tax purposes:
o No gain or loss will be recognized by your fund upon (1) the transfer of
all of its assets to the corresponding Pioneer Fund as described above
or (2) the distribution by your fund of the corresponding Pioneer Fund
shares to your fund's shareholders;
o No gain or loss will be recognized by the corresponding Pioneer Fund
upon the receipt of your fund's assets solely in exchange for the
issuance of the corresponding Pioneer Fund shares to your fund and the
assumption of your fund's liabilities by the corresponding Pioneer Fund;
o The basis of the assets of your fund acquired by the corresponding
Pioneer Fund will be the same as the basis of those assets in the hands
of your fund immediately before the transfer;
o The tax holding period of the assets of your fund in the hands of the
corresponding Pioneer Fund will include your fund's tax holding period
for those assets;
o You will not recognize gain or loss upon the exchange of your shares of
your fund solely for the corresponding Pioneer Fund shares as part of
the Reorganization;
o The basis of the corresponding Pioneer Fund shares received by you in
the Reorganization will be the same as the basis of the shares of your
fund you surrender in exchange; and
o The tax holding period of the corresponding Pioneer Fund shares you
receive will include the tax holding period of the shares of your fund
that you surrender in exchange, provided that the shares of your fund
were held by you as capital assets on the date of the exchange.
In rendering such opinion, counsel shall rely upon, among other things,
reasonable assumptions as well as representations of the corresponding Pioneer
Fund and your fund.
No tax ruling has been or will be received from the Internal Revenue
Service ("IRS") in connection with the Reorganization. An opinion of counsel is
not binding on the IRS or a court, and no assurance can be given that the IRS
would not assert, or a court would not sustain, a contrary position.
The foregoing consequences may not apply to certain classes of taxpayers
who are subject to special circumstances, such as shareholders who are not
citizens of or residents of the United States, insurance companies, tax-exempt
organizations, financial institutions, dealers in securities or foreign
currencies, or persons who hold their shares as part of a straddle or
conversion transaction. You should consult your tax adviser for the particular
tax consequences to you of the transaction, including the applicability of any
state, local or foreign tax laws.
VOTING RIGHTS AND REQUIRED VOTE
Each share of your fund is entitled to one vote. A quorum is required to
conduct business at the meeting. With respect to your fund, the presence in
person or by proxy of a majority of the shares entitled to cast votes at the
meeting will constitute a quorum. A favorable vote of a "majority of the
outstanding voting securities" of your fund is required to approve the proposal
with respect to your fund. For this purpose, a "majority of the outstanding
shares of your fund" means the affirmative vote of the lesser of:
(1) 67% or more of the shares of your fund present at the meeting, if the
holders of more than 50% of the outstanding shares of your fund entitled
to vote are present or represented by proxy, or
(2) more than 50% of the outstanding shares of your fund.
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The table below shows how shares will be treated for the purposes of
quorum and voting requirements.
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Quorum Voting
- ------------------------------------------------------------------------------------------------------------------------------------
In General All shares "present" in person or by proxy are Shares "present" in person will be voted in
counted toward a quorum. person at the meeting. Shares present by proxy
will be voted in accordance with instructions.
- ------------------------------------------------------------------------------------------------------------------------------------
Signed Proxy with no Voting Considered "present" at meeting for purposes Voted "for" the proposal.
Instruction (other than of quorum.
Broker Non-Vote)
- ------------------------------------------------------------------------------------------------------------------------------------
Broker Non-Vote (where the Considered "present" at meeting for purposes Broker non-votes do not count as a vote "for"
underlying holder had not of quorum. the proposal and effectively result in a vote
voted and the broker does not "against" the proposal.
have discretionary authority to
vote the shares)
- ------------------------------------------------------------------------------------------------------------------------------------
Vote to Abstain Considered "present" at meeting for purposes Abstentions do not constitute a vote "for" the
of quorum. proposal and effectively result in a vote
"against" the proposal.
- ------------------------------------------------------------------------------------------------------------------------------------
If the required approval of shareholders is not obtained, the meeting may
be adjourned as more fully described in this Proxy Statement/
Prospectus, and your fund will continue to engage in business as a separate
mutual fund and the Board of Trustees will consider what further action may be
appropriate.
COMPARISON OF MASSACHUSETTS BUSINESS TRUST AND DELAWARE STATUTORY TRUST
As described in Proposal 1(a), it is proposed that Pioneer America Income
Trust be reorganized into Pioneer Government Income Fund. Pioneer America Income
Trust is a Massachusetts business trust. Pioneer Government Income Fund, like
all of the other Pioneer Funds described in this Proxy Statement/Prospectus, is
a Delaware statutory trust (or series thereof). The following is a summary of
the principal differences between Massachusetts business trusts and Delaware
statutory trusts.
Limitation of Shareholders' and Series' Liability
Delaware law provides that the shareholders of a Delaware statutory trust
shall not be subject to liability for the debts or obligations of the trust.
Under Massachusetts law, shareholders of a Massachusetts business trust may,
under certain circumstances, be liability for the debts and obligations of that
trust. Although the risk of liability of shareholders of a Massachusetts
business trust who do not participate in the management of the trust may be
remote, Delaware law affords grater protection against potential shareholder
liability. Similarly, Delaware law provides that, to the extent that a Delaware
statutory trust issues multiple series of shares, each series shall not be
liable for the debts or obligations of any other series, another potential,
although remote, risk in the case of a Massachusetts business trust. While the
trustees believe that a series of a Massachusetts business trust will only be
liable for its own obligations, there is no direct statutory or judicial
support for that position.
Limitation of Trustee Liability
Delaware law provides that, except to the extent otherwise provided in a
trust's declaration of trust or by-laws, trustees will not be personally liable
to any person (other than the statutory trust or a shareholder thereof) for any
act, omission or obligation of the statutory trust or any trustee thereof.
Delaware law also provides that a trustee's actions under a Delaware statutory
trust's declaration of trust or by-laws will not subject the trustee to
liability to the statutory trust or its shareholders if the trustee takes such
action in good faith reliance on the provisions of the statutory trust's
declaration of trust or bylaws. The declaration of trust of a Massachusetts
business trust may limit the liability of a trustee, who is not also an officer
of the corporation, for breach of fiduciary duty except for, among other
things, any act or omission not in good faith which involves intentional
misconduct or a knowing violation of law or any transaction from which such
trustee derives an improper direct or indirect financial benefit. The trustees
believe that such limitations on liability under Delaware law and under the
Pioneer Funds' declarations of trust are consistent with those applicable to
directors of a corporation under Delaware law and will be beneficial in
attracting and retaining in the future qualified persons to act as trustees.
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Shareholder Voting
Delaware law provides that a Delaware statutory trust's declaration of
trust or by-laws may set forth provisions related to voting in any manner. This
provision appears to permit trustee and shareholder voting through computer or
electronic media. For an investment company with a significant number of
institutional shareholders, all with access to computer or electronic networks,
the use of such voting methods could significantly reduce the costs of
shareholder voting. However, the advantage of such methods may not be
realizable unless the SEC modifies its proxy rules. Also, as required by the
1940 Act, votes on certain matters by trustees would still need to be taken at
actual in-person meetings.
Board Composition
Delaware law explicitly provides that separate boards of trustees may be
authorized for each series of a Delaware statutory trust. Whether separate
boards of trustees can be authorized for series of a Massachusetts business
trust is unclear under Massachusetts law. As always, the establishment of any
board of trustees of a registered investment company must comply with
applicable securities laws, including the provision of the 1940 Act regarding
the election of trustees by shareholders. Establishing separate boards of
trustees would, among other things, enable the series of a Delaware statutory
trust to be governed by individuals who are more familiar with such series'
particular operations.
ADDITIONAL INFORMATION ABOUT THE PIONEER FUNDS
Investment Adviser
Pioneer serves as the investment adviser to each Pioneer Fund. Pioneer
oversees each fund's operations and is responsible for the day-to-day
management of the fund's portfolio. In the case of Pioneer Focused Equity Fund,
Pioneer supervises the fund's subadviser, who is responsible for the day-to-day
management of the fund's portfolio. Pioneer is an indirect, wholly owned
subsidiary of UniCredito Italiano S.p.A., one of the largest banking groups in
Italy. Pioneer is part of the global asset management group providing
investment management and financial services to mutual funds, institutional and
other clients. As of March 31, 2006, assets under management were approximately
$199.3 billion worldwide, including over $50.5 billion in assets under
management by Pioneer. Pioneer's main office is at 60 State Street, Boston,
Massachusetts 02109. Pioneer's U.S. mutual fund investment history includes
creating one of the first mutual funds in 1928.
The Board of Trustees of the Pioneer Funds is responsible for overseeing
the performance of Pioneer Funds' investment adviser and determining whether to
approve and renew a fund's investment management agreement.
Distributor and Transfer Agent
PFD is the fund's distributor. Pioneer Investment Management Shareholder
Services, Inc. ("PIMSS") is the fund's transfer agent. The fund compensates PFD
and the transfer agent for their services. PFD and the transfer agent are
affiliates of Pioneer.
Disclosure of Portfolio Holdings
The fund's policies and procedures with respect to the disclosure of the
fund's portfolio securities are described in the statement of additional
information and on Pioneer's website at www.pioneerinvestments.com.
Buying, Exchanging and Selling Shares of the Pioneer Funds
Net Asset Value. Each fund's net asset value is the value of its portfolio
of securities plus any other assets minus its operating expenses and any other
liabilities. Each fund calculates a net asset value for each class of shares
every day the New York Stock Exchange is open when regular trading closes
(normally 4:00 p.m. Eastern time).
Each fund generally values its portfolio securities using closing market
prices or readily available market quotations. When closing market prices or
market quotations are not available or are considered by Pioneer to be
unreliable, the fund uses a security's fair value. All methods of determining
the value of a security used by the fund, including those discussed below, on a
basis other than market value, are forms of fair value. All valuations of
securities on a fair value basis are made pursuant to procedures adopted by the
Board of Trustees. 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 only using market prices. For market prices and quotations, as well
as for some fair value methods, the fund relies upon securities prices provided
by pricing services.
71
Each fund uses 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 at the time the fund calculates its net asset value. This may
occur for a variety of reasons that affect either the relevant securities
markets generally or the specific issuer. For example, with respect to non-U.S.
securities held by the fund, developments relating to the securities market or
the specific issuer may occur between the time the primary market closes and
the time the fund determines its net asset value. In those circumstances, the
fund may use the fair value of the security. International securities markets
may be open on days when the U.S. markets are closed. For this reason, the
values of any international securities owned by the fund could change on a day
you cannot buy or sell shares of the fund.
Certain types of securities, including those discussed in this paragraph,
are priced using fair value rather than market prices. Each fund uses a pricing
matrix to determine the value of fixed income securities that do not trade
daily. A pricing matrix is a means of valuing a debt security on the basis of
current market prices for other debt securities and historical trading patterns
in the market for fixed income securities. Each fund values cash equivalent
securities with remaining maturities of 60 days or less at amortized cost. To
the extent that a fund invests in the shares of other registered open-end
investment companies that are not traded on an exchange (mutual funds), such
shares are valued at their published net asset values per share as reported by
the funds. The prospectuses of these funds explain the circumstances under
which the funds will use fair value pricing and the effects of using fair value
pricing.
Distribution and Service Plans. Each fund has adopted a distribution plan
for its Class A, Class B, Class C and Class R shares (if issued) in accordance
with Rule 12b-1 under the 1940 Act. Under each plan, the fund pays distribution
and service fees to PFD. Because these fees are an ongoing expense of the fund,
over time they increase the cost of your investment and your shares may cost
more than shares that are subject to other types of sales charges.
Additional Payments to Financial Intermediaries. There are two principal
ways you compensate the financial intermediary through which you buy shares of
each fund--directly, by the payment of sales commissions, if any; and
indirectly, as a result of the fund paying Rule 12b-1 fees.
Pioneer and its affiliates may make additional payments to your financial
intermediary. These payments by Pioneer may provide your financial intermediary
with an incentive to favor the Pioneer Funds over other mutual funds or assist
the distributor in its efforts to promote the sale of a fund's shares.
Financial intermediaries include broker-dealers, banks (including bank trust
departments), registered investment advisers, financial planners, retirement
plan administrators and other types of intermediaries.
Pioneer makes these additional payments (sometimes referred to as "revenue
sharing") to financial intermediaries out of its own assets. Revenue sharing is
not an expense of the Pioneer Funds. Pioneer may base these payments on a
variety of criteria, including the amount of sales or assets attributable to
the financial intermediary or as a per transaction fee.
Not all financial intermediaries receive additional compensation and the
amount of compensation paid varies for each financial intermediary. In certain
cases, these payments could be significant. Pioneer determines which firms to
support and the extent of the payments it is willing to make, generally
choosing firms that have a strong capability to effectively distribute shares
of the Pioneer Funds and that are willing to cooperate with Pioneer's
promotional efforts. Pioneer also may compensate financial intermediaries for
providing certain administrative services and transaction processing services.
Pioneer may benefit from revenue sharing if the intermediary features the
Pioneer Funds in its sales system (such as by placing certain Pioneer Funds on
its preferred fund list or giving access on a preferential basis to members of
the financial intermediary's sales force or management). In addition, the
financial intermediary may agree to participate in the distributor's marketing
efforts (such as by helping to facilitate or provide financial assistance for
conferences, seminars or other programs at which Pioneer personnel may make
presentations on the funds to the intermediary's sales force). To the extent
intermediaries sell more shares of the Pioneer Funds or retain shares of the
Pioneer Funds in their clients' accounts, Pioneer receives greater management
and other fees due to the increase in the Pioneer Funds' assets. Although an
intermediary may request additional compensation from Pioneer to offset costs
incurred by the financial intermediary in servicing its clients, the
intermediary may earn a profit on these payments, if the amount of the payment
may exceed the intermediary's costs.
The compensation that Pioneer pays to financial intermediaries is
discussed in more detail in the fund's statement of additional information.
Your intermediary may charge you additional fees or commissions other than
those disclosed in this prospectus. Intermediaries may categorize and disclose
these arrangements differently than the discussion above and in the statement
of additional information. You can ask your financial intermediary about any
payments it receives from Pioneer or the Pioneer Funds, as well as about fees
and/or commissions it charges.
Pioneer and its affiliates may have other relationships with your
financial intermediary relating to the provision of services to the funds, such
as providing omnibus account services or effecting portfolio transactions for
the Pioneer Funds. If your intermediary provides these
72
services, Pioneer or the Pioneer Funds may compensate the intermediary for
these services. In addition, your intermediary may have other relationships
with Pioneer or its affiliates that are not related to the funds.
Opening Your Account. If your shares are held in your investment firm's
name, the options and services available to you may be different from those
described herein or in a Pioneer Fund's prospectus. Ask your investment
professional for more information.
If you invest in a Pioneer Fund through investment professionals or other
financial intermediaries, including wrap programs and fund supermarkets,
additional conditions may apply to your investment in a Pioneer fund, and the
investment professional or intermediary may charge you a transaction-based or
other fee for its services. These conditions and fees are in addition to those
imposed by the Pioneer Fund and its affiliates. You should ask your investment
professional or financial intermediary about its services and any applicable
fees.
Account Options. Use your account application to select options and
privileges for your account. You can change your selections at any time by
sending a completed account options form to the transfer agent. You may be
required to obtain a signature guarantee to make certain changes to an existing
account.
Call or write to the transfer agent for account applications, account
options forms and other account information:
PIONEER INVESTMENT MANAGEMENT SHAREHOLDER SERVICES, INC.
P.O. Box 55014
Boston, Massachusetts 02205-5014
Telephone 1-800-225-6292
Telephone Transaction Privileges. If your account is registered in your
name, you can buy, exchange or sell shares of the Pioneer funds by telephone.
If you do not want your account to have telephone transaction privileges, you
must indicate that choice on your account application or by writing to the
transfer agent.
When you request a telephone transaction the transfer agent will try to
confirm that the request is genuine. The transfer agent records the call,
requires the caller to provide validating information for the account and sends
you a written confirmation. Each Pioneer Fund may implement other confirmation
procedures from time to time. Different procedures may apply if you have a
non-U.S. account or if your account is registered in the name of an
institution, broker-dealer or other third party.
Online Transaction Privileges. If your account is registered in your name,
you may be able to buy, exchange or sell fund shares online. Your investment
firm may also be able to buy, exchange or sell your fund shares online.
To establish online transaction privileges complete an account options
form, write to the transfer agent or complete the online authorization screen
on www.pioneerinvestments.com.
To use online transactions, you must read and agree to the terms of an
online transaction agreement available on the Pioneer website. When you or your
investment firm requests an online transaction the transfer agent
electronically records the transaction, requires an authorizing password and
sends a written confirmation. Each Pioneer 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.
Share Price. If you place an order to purchase, exchange, or sell shares
with the transfer agent, your investment firm or plan administrator by the
close of regular trading on the New York Stock Exchange (currently 4:00 p.m.
Eastern time), your transaction will be completed at the share price determined
as of the close of trading on the New York Stock Exchange on that day. If your
order is placed with the transfer agent, your investment firm or plan
administrator after 4:00 p.m., or your order is not in good order, your
transaction will be completed at the share price next determined after your
order is received in good order by the fund. Your investment firm or plan
administrator is responsible for transmitting your order to the fund in a
timely manner.
Buying Pioneer Fund Shares. You may buy shares of a Pioneer fund from any
investment firm that has a sales agreement with PFD. If you do not have an
investment firm, please call 1-800-225-6292 for information on how to locate an
investment professional in your area. Participants in retirement plans
generally must contact the plan's administrator to purchase shares.
You can buy shares of the Pioneer funds at the offering price. PFD may
reject any order until it has confirmed the order in writing and received
payment. The fund reserves the right to stop offering any class of shares.
Minimum Investment Amounts. Your initial investment for Class A, Class B
and Class C shares must be at least $1,000, and for Class Y shares must be at
least $5,000,000. There is no minimum initial investment amount for Class R
shares. Additional investments must be at least $100 for Class A shares and
$500 for Class B and Class C shares. There is no minimum additional investment
amount
73
for Class Y or Class R shares. You may qualify for lower initial or subsequent
investment minimums if you are opening a retirement plan account, establishing
an automatic investment plan or placing your trade through your investment
firm. The minimum investment amount does not apply for purposes of the
Reorganization.
Maximum Purchase Amounts. Purchases of fund shares are limited to $49,999
for Class B shares and $999,999 for Class C shares. These limits are applied on
a per transaction basis. Class A shares, Class Y shares and Class R shares are
not subject to a maximum purchase amount.
Exchanging Pioneer Fund Shares. You may exchange your shares in a Pioneer
Fund for shares of the same class of another Pioneer mutual fund. In connection
with the Reorganization, Pioneer Government Income Fund's Class A shareholders
will have the opportunity to exchange their shares for Class Y shares of
Pioneer Government Income Fund at net asset value without any initial or
contingent sales charge. Your exchange request must be for at least $1,000
unless the fund you are exchanging into has a different minimum. You may make
up to four exchange redemptions of $25,000 or more per account per calendar
year. In determining whether the exchange redemption limit has been reached,
Pioneer may aggregate a series of exchanges (each valued at less than $25,000)
and/or fund accounts that appear to be under common ownership or control.
Pioneer may view accounts for which one person gives instructions or accounts
that act on advice provided by a single source to be under common control.
The exchange limitation does not apply to automatic exchange transactions
or to exchanges made by participants in employer-sponsored retirement plans
qualified under Section 401(a) of the Code. While financial intermediaries that
maintain omnibus accounts that invest in the fund are requested to apply the
exchange limitation policy to shareholders who hold shares through such
accounts, we do not impose the exchange limitation policy at the level of the
omnibus account and are not able to monitor compliance by the financial
intermediary with this policy.
Each Pioneer Fund allows you to exchange your shares at net asset value
without charging you either an initial or contingent deferred sales charge at
the time of the exchange. An exchange generally is treated as a sale and a new
purchase of shares for federal income tax purposes. Shares you acquire as part
of an exchange and shares your acquire as a result of this Reorganization will
continue to be subject to any contingent deferred sales charge that applies to
the shares you originally purchased. When you ultimately sell your shares, the
date of your original purchase will determine your contingent deferred sales
charge.
Before you request an exchange, consider each fund's investment objective
and policies as described in the fund's prospectus.
Selling Pioneer Fund Shares. Your shares will be sold at net asset value
per share next calculated after the Pioneer Fund or its authorized agent
receives your request in good order. If the shares you are selling are subject
to a deferred sales charge, it will be deducted from the sale proceeds. Each
Pioneer Fund generally will send your sale proceeds by check, bank wire or
electronic funds transfer. Normally you will be paid within seven days. If you
are selling shares from a non-retirement account or certain IRAs, you may use
any of the methods described below. If you are selling shares from a retirement
account other than an IRA, you must make your request in writing.
You may have to pay federal income taxes on a sale or an exchange or any
distributions received in cash or additional shares.
Good order means that:
o You have provided adequate instructions
o There are no outstanding claims against your account
o There are no transaction limitations on your account
o If you have any Pioneer Fund share certificates, you submit them and
they are signed by each record owner exactly as the shares are
registered
o Your request includes a signature guarantee if you:
-- Are selling over $100,000 or exchanging over $500,000 worth of
shares
-- Changed your account registration or address within the last 30 days
-- Instruct the transfer agent to mail the check to an address
different from the one on your account
-- Want the check paid to someone other than the account owner(s)
-- Are transferring the sale proceeds to a Pioneer mutual fund account
with a different registration
74
- --------------------------------------------------------------------------------------------------------------------------
Buying Shares Exchanging Shares
- --------------------------------------------------------------------------------------------------------------------------
THROUGH YOUR Normally, your investment firm will send your Normally, your investment firm will send your
INVESTMENT FIRM purchase request to the Pioneer Funds' transfer exchange request to the Pioneer Fund's
agent. transfer agent.
CONSULT YOUR INVESTMENT PROFESSIONAL CONSULT YOUR INVESTMENT
FOR MORE INFORMATION. PROFESSIONAL FOR MORE INFORMATION
ABOUT EXCHANGING YOUR SHARES.
Your investment firm may receive a
commission from PFD for your purchase of
fund shares, and may receive additional
compensation from Pioneer for your purchase
of fund shares.
- --------------------------------------------------------------------------------------------------------------------------
BY PHONE OR ONLINE You can use the telephone or online privilege if After you establish your eligible fund account,
you have an existing non-retirement account. you can exchange fund shares by phone or online
Certain IRAs can use the telephone purchase if:
privilege. If your account is eligible, you can
purchase additional fund shares by phone or o You are exchanging into an existing account or
online if: using the exchange to establish a new account,
provided the new account has a registration
o You established your bank account of record at identical to the original account
least 30 days ago
o The fund into which you are exchanging offers
o Your bank information has not changed for at the same class of shares
least 30 days
o You are not exchanging more than $500,000
o You are not purchasing more than $25,000 worth worth of shares per account per day
of shares per account per day
o You can provide the proper account
o You can provide the proper account identification information
identification information
When you request a telephone or online purchase,
the transfer agent will electronically debit the
amount of the purchase from your bank account of
record. The transfer agent will purchase fund
shares for the amount of the debit at the
offering price determined after the transfer
agent receives your telephone or online purchase
instruction and good funds. It usually takes
three business days for the transfer agent to
receive notification from your bank that good
funds are available in the amount of your
investment.
- --------------------------------------------------------------------------------------------------------------------------
75
- ----------------------------------------------------------------------------------------------------------------------------
Buying Shares Exchanging Shares
- ----------------------------------------------------------------------------------------------------------------------------
IN WRITING, BY MAIL OR You can purchase fund shares for an existing You can exchange fund shares by mailing or
BY FAX fund account by mailing a check to the transfer faxing a letter of instruction to the transfer
agent. Make your check payable to the fund. agent. You can exchange Pioneer Fund shares
Neither initial nor subsequent investments directly through the Pioneer Fund only if your
should be made by third party check. Your account is registered in your name. However,
check must be in U.S. dollars and drawn on a you may not fax an exchange request for
U.S. bank. Include in your purchase request more than $500,000. Include in your letter:
the fund's name, the account number and the
name or names in the account registration. o The name, social security number and
signature of all registered owners
o A signature guarantee for each registered
owner if the amount of the exchange is
more than $500,000
o The name of the fund out of which you are
exchanging and the name of the fund into
which you are exchanging
o The class of shares you are exchanging
o The dollar amount or number of shares
your are exchanging
- ----------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Selling Shares How to Contact Pioneer
- ------------------------------------------------------------------------------------------------------------------------------
Normally, your investment firm will send your request to sell BY PHONE
shares to the Pioneer Funds' transfer agent. For information or to request a telephone transaction between
8:00 a.m. and 7:00 p.m. (Eastern time) by speaking with a
CONSULT YOUR INVESTMENT PROFESSIONAL FOR MORE shareholder services representative call 1-800-225-6292
INFORMATION.
To request a transaction using FactFone(SM) call 1-800-225-4321
Each Pioneer Fund has authorized PFD to act as its agent in
the repurchase of fund shares from qualified investment Telecommunications Device for the Deaf (TDD) 1-800-225-1997
firms. Pioneer Small Cap Value Fund reserves the right to
terminate this procedure at any time.
- ------------------------------------------------------------------------------------------------------------------------------
IF YOU HAVE AN ELIGIBLE NON-RETIREMENT ACCOUNT, BY MAIL
YOU MAY SELL UP TO $100,000 PER ACCOUNT PER DAY BY Send your written instructions to:
PHONE OR ONLINE. You may sell fund shares held in a PIONEER INVESTMENT MANAGEMENT
retirement plan account by phone only if your account is an SHAREHOLDER SERVICES, INC.
eligible IRA (tax penalties may apply). You may not sell your P.O. Box 55014
shares by phone or online if you have changed your address Boston, Massachusetts 02205-5014
(for checks) or your bank information (for wires and
transfers) in the last 30 days. PIONEER WEBSITE
www.pioneerinvestments.com
You may receive your sale proceeds:
BY FAX
o By check, provided the check is made payable exactly as Fax your exchange and sale requests to: 1-800-225-4240
your account is registered
o By bank wire or by electronic funds transfer, provided the
sale proceeds are being sent to your bank address of
record
- ------------------------------------------------------------------------------------------------------------------------------
76
- ------------------------------------------------------------------------------------------------------------------------------
Selling Shares How to Contact Pioneer
- ------------------------------------------------------------------------------------------------------------------------------
You can sell some or all of your fund shares by WRITING EXCHANGE PRIVILEGE
DIRECTLY TO THE PIONEER FUND only if your account is
registered in your name. Include in your request your name, You may make up to four exchange redemptions of $25,000
your social security number, the fund's name and any other or more per account per calendar year.
applicable requirements as described below. The transfer
agent will send the sale proceeds to your address of record
unless you provide other instructions. Your request must be
signed by all registered owners and be in good order.
The transfer agent will not process your request until it is
received in good order.
You may sell up to $100,000 per account per day by fax.
- ------------------------------------------------------------------------------------------------------------------------------
Pioneer Fund Shareholder Account Policies
Signature Guarantees and Other Requirements. You are required to obtain a
signature guarantee when you are:
o Requesting certain types of exchanges or sales of Pioneer Fund shares
o Redeeming shares for which you hold a share certificate
o Requesting certain types of changes for your existing account
You can obtain a signature guarantee from most broker-dealers, banks,
credit unions (if authorized under state law) and federal savings and loan
associations. You cannot obtain a signature guarantee from a notary public.
The Pioneer Funds generally will accept only medallion signature
guarantees. A medallion signature guarantee may be obtained from a domestic
bank or trust company, broker, dealer, clearing agency, savings association, or
other financial institution that is participating in a medallion program
recognized by the Securities Transfer Association. Signature guarantees from
financial institutions that are not participating in one of these programs are
not accepted as medallion signature guarantees. The Pioneer Funds may accept
other forms of guarantee from financial intermediaries in limited
circumstances.
Fiduciaries and corporations are required to submit additional documents
to sell Pioneer Fund shares.
Exchange Limitation. You may make up to four exchange redemptions of
$25,000 or more per account per calendar year out of the fund. Each fund's
exchange limitation is intended to discourage short-term trading in fund
shares. Short-term trading can increase the expenses incurred by the fund and
make portfolio management less efficient. In determining whether the exchange
redemption limit has been reached, Pioneer may aggregate a series of exchanges
(each valued at less than $25,000) and/or fund accounts that appear to be under
common ownership or control. Pioneer may view accounts for which one person
gives instructions or accounts that act on advice provided by a single source
to be under common control.
The exchange limitation does not apply to automatic exchange transactions
or to exchanges made by participants in employer-sponsored retirement plans
qualified under Section 401(a) of the Code. While financial intermediaries that
maintain omnibus accounts that invest in the fund are requested to apply the
exchange limitation policy to shareholders who hold shares through such
accounts, we do not impose the exchange limitation policy at the level of the
omnibus account and are not able to monitor compliance by the financial
intermediary with this policy.
Distribution Options. Each Pioneer Fund offers three distribution options.
Any fund shares you buy by reinvesting distributions will be priced at the
applicable net asset value per share.
(1) Unless you indicate another option on your account application, any
dividends and capital gain distributions paid to you by the fund will
automatically be invested in additional fund shares.
(2) You may elect to have the amount of any dividends paid to you in cash
and any capital gain distributions reinvested in additional shares.
(3) You may elect to have the full amount of any dividends and/or capital
gain distributions paid to you in cash.
77
Options (2) or (3) are not available to retirement plan accounts or accounts
with a current value of less than $500.
If your distribution check is returned to the transfer agent or you do not
cash the check for six months or more, the transfer agent may reinvest the
amount of the check in your account and automatically change the distribution
on your account to option (1) until you request a different option in writing.
These additional shares will be purchased at the then current net asset value.
Directed Dividends. You can invest the dividends paid by one of your
Pioneer mutual fund accounts in a second Pioneer mutual fund account. The value
of your second account must be at least $1,000. You may direct the investment
of any amount of dividends. There are no fees or charges for directed
dividends. If you have a retirement plan account, you may only direct dividends
to accounts with identical registrations.
Excessive Trading. Frequent trading into and out of the fund can disrupt
portfolio management strategies, harm fund performance by forcing the fund to
hold excess cash or to liquidate certain portfolio securities prematurely and
increase expenses for all investors, including long-term investors who do not
generate these costs. An investor may use short-term trading as a strategy, for
example, if the investor believes that the valuation of the fund's portfolio
securities for purposes of calculating its net asset value does not fully
reflect the then current fair market value of those holdings. The fund
discourages, and does not take any intentional action to accommodate, excessive
and short-term trading practices, such as market timing. Although there is no
generally applied standard in the marketplace as to what level of trading
activity is excessive, we may consider trading in the fund's shares to be
excessive for a variety of reasons, such as if:
o You sell shares within a short period of time after the shares were
purchased;
o You make two or more purchases and redemptions within a short period of
time;
o You enter into a series of transactions that is indicative of a timing
pattern or strategy; or
o We reasonably believe that you have engaged in such practices in
connection with other mutual funds.
The fund's Board of Trustees has adopted policies and procedures with
respect to frequent purchases and redemptions of fund shares by fund investors.
Pursuant to these policies and procedures, we monitor selected trades on a
daily basis in an effort to detect excessive short-term trading. If we
determine that an investor or a client of a broker has engaged in excessive
short-term trading that we believe may be harmful to the fund, we will ask the
investor or broker to cease such activity and we will refuse to process
purchase orders (including purchases by exchange) of such investor, broker or
accounts that we believe are under their control. In determining whether to
take such actions, we seek to act in a manner that is consistent with the best
interests of the fund's shareholders.
While we use our reasonable efforts to detect excessive trading activity,
there can be no assurance that our efforts will be successful or that market
timers will not employ tactics designed to evade detection. If we are not
successful, your return from an investment in the fund may be adversely
affected. Frequently, fund shares are held through omnibus accounts maintained
by financial intermediaries such as brokers and retirement plan administrators,
where the holdings of multiple shareholders, such as all the clients of a
particular broker, are aggregated. Our ability to monitor trading practices by
investors purchasing shares through omnibus accounts is limited and dependent
upon the cooperation of the financial intermediary in observing the fund's
policies.
In addition to monitoring trades, the policies and procedures provide
that:
o The fund imposes limitations on the number of exchanges out of an
account holding the fund's Class A, Class B, Class C or Class R shares
that may occur in any calendar year.
o Certain funds managed by Pioneer have adopted redemption fees that are
incurred if you redeem shares within a short period after purchase,
including exchanges. These redemption fees are described in the
applicable prospectuses under "Fees and expenses."
The fund may reject a purchase or exchange order before its acceptance or
an order prior to issuance of shares. The fund may also restrict additional
purchases or exchanges in an account. Each of these steps may be taken, for any
reason, without prior notice, including transactions that the fund believes are
requested on behalf of market timers. The fund reserves the right to reject any
purchase request by any investor or financial institution if the fund believes
that any combination of trading activity in the account or related accounts is
potentially disruptive to the fund. A prospective investor whose purchase or
exchange order is rejected will not achieve the investment results, whether
gain or loss, that would have been realized if the order were accepted and an
investment made in the fund. The fund and its shareholders do not incur any
gain or loss as a result of a rejected order. The fund may impose further
restrictions on trading activities by market timers in the future. The fund's
prospectus will be amended or supplemented to reflect any material additional
restrictions on trading activities intended to prevent excessive trading.
78
Minimum Account Size. Each Pioneer Fund requires that you maintain a
minimum account value of $500. If you hold less than $500 in your account, the
fund reserves the right to notify you that it intends to sell your shares and
close your account. You will be given 60 days from the date of the notice to
make additional investments to avoid having your shares sold. This policy does
not apply to certain qualified retirement plan accounts.
Telephone and Website Access. You may have difficulty contacting the fund
by telephone during times of market volatility or disruption in telephone
service. On New York Stock 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 reach the fund
by telephone, you should communicate with the fund in writing.
Share Certificates. The Pioneer Funds do not offer share certificates.
Shares are electronically recorded. Any existing certificated shares can only
be sold by returning your certificate to the transfer agent, along with a
letter of instruction or a stock power (a separate written authority
transferring ownership) and a signature guarantee.
Other Policies. The fund and PFD reserve the right to:
o reject any purchase or exchange order for any reason, without prior
notice
o charge a fee for exchanges or to modify, limit or suspend the exchange
privilege at any time without notice. The fund will provide 60 days'
notice of material amendments to or termination of the exchange
privilege
o revise, suspend, limit or terminate the account options or services
available to shareowners at any time, except as required by the rules of
the SEC
The fund reserves the right to:
o suspend transactions in shares when trading on the New York Stock
Exchange is closed or restricted, when the SEC determines an emergency
or other circumstances exist that make it impracticable for the fund to
sell or value its portfolio securities
o redeem in kind by delivering to you portfolio securities owned by the
fund rather than cash. Securities you receive this way may increase or
decrease in value while you hold them and you may incur brokerage and
transaction charges and tax liability when you convert the securities to
cash
Dividends and Capital Gains. Pioneer America Income Trust generally pays
any distributions of net short- and long-term capital gains in November, and
generally pays dividends from any net investment income on the last business
day of the month or shortly thereafter. Pioneer Government Income Fund
generally pays any distributions of net short- and long-term capital gains in
November, and generally pays dividends from any net investment income on the
last business day of the month or shortly thereafter. Pioneer Florida Tax Free
Income Fund generally pays any distributions of net short- and long-term
capital gains in November, and generally pays dividends from any net investment
income on the last business day of the month or shortly thereafter. Pioneer
AMT-Free Municipal Fund generally pays any distributions of net short- and
long-term capital gains in November, and generally pays dividends from any net
investment income on the last business day of the month or shortly thereafter.
Pioneer Balanced Fund generally pays any distributions of net short- and
long-term capital gains in November, and generally pays dividends from any net
investment income quarterly during March, June, September and December. Pioneer
Classic Balanced Fund generally pays any distributions of net short- and
long-term capital gains in November, and generally pays dividends from any net
investment income quarterly during March, June, September and December. Pioneer
Focused Equity Fund generally pays any distributions of net short- and
long-term capital gains in November, and generally pays dividends from any net
investment income in December. Pioneer Research Fund generally pays any
distributions of net short- and long-term capital gains in November, and
generally pays dividends from any net investment income in December. Each
Pioneer Fund may also pay dividends and capital gain distributions at other
times if necessary for the fund to avoid U.S. federal income or excise tax. If
you invest in the fund close to the time that the fund makes a distribution,
generally you will pay a higher price per share and you will pay taxes on the
amount of the distribution whether you reinvest the distribution or receive it
as cash.
Taxes. For U.S. federal income tax purposes, distributions from each
fund's net long-term capital gains (if any) are considered long-term capital
gains and may be taxable to you at different maximum rates depending upon their
source and other factors. Distributions from a fund's net short-term capital
gains are taxable as ordinary income. Dividends, other than exempt-interest
dividends, are taxable either as ordinary income or, if so designated by a fund
and certain other conditions, including holding period requirements, are met by
the fund and the shareholder, as "qualified dividend income" taxable to
individual shareholders at a maximum 15% U.S. federal income tax rate.
Generally, none of the dividends of Pioneer America Income Trust, Pioneer
Government Income Fund, Pioneer Florida Tax Free Income Fund and Pioneer
AMT-Free Municipal Fund meet the requirements to be treated as qualified
dividend income. Dividends, other than exempt-interest dividends, and
distributions are taxable, whether you take payment in cash or reinvest them to
buy additional fund shares.
79
When you sell or exchange fund shares you will generally recognize a
capital gain or capital loss in an amount equal to the difference between the
net amount of sale proceeds (or, in the case of an exchange, the fair market
value of the shares) that you receive and your tax basis for the shares that
you sell or exchange. In January of each year the fund will mail to you
information about your dividends, distributions and any shares you sold in the
previous calendar year.
You must provide your social security number or other taxpayer
identification number to the fund along with the certifications required by the
Internal Revenue Service when you open an account. If you do not or if it is
otherwise legally required to do so, the fund will withhold 28% "backup
withholding" tax from your dividends and distributions, sale proceeds and any
other payments to you.
You should ask your tax adviser about any federal, state, local and
foreign tax considerations, including possible additional withholding taxes for
non-U.S. shareholders. You may also consult the fund's statement of additional
information for a more detailed discussion of qualified dividend income and
other U.S. federal income tax considerations that may affect the fund and its
shareowners.
80
FINANCIAL HIGHLIGHTS
The following tables show the financial performance of each successor
Pioneer Fund for the past five fiscal years and, if applicable, for any recent
semiannual period. Certain information reflects financial results for a single
Pioneer Fund share. The total returns in the tables represent the rate that
your investment in a Pioneer Fund would have increased or decreased during each
period (assuming reinvestment of all dividends and distributions).
PIONEER GOVERNMENT INCOME FUND
FINANCIAL HIGHLIGHTS
The information below for the fiscal years ended July 31, 2001 through
July 31, 2005 has been audited by Ernst & Young LLP, the fund's independent
registered public accounting firm, whose report is included in the fund's
annual report along with the fund's financial statements. The annual report is
available upon request. The information for the semiannual period ended January
31, 2006 has not been audited.
Six Months
Ended
1/31/06 Year Ended
Class A (unaudited) 7/31/05
Net asset value, beginning of period $ 9.65 $ 9.86
---------- ----------
Increase (decrease) from investment operations:
Net investment income $ 0.17 $ 0.35
Net realized and unrealized gain (loss) on investments (0.10) (0.09)
---------- ----------
Net increase from investment operations $ 0.07 $ 0.26
Distributions to shareowners:
Net investment income (0.19) (0.45)
Net realized gain (0.11) (0.03)
---------- ----------
Capital Contribution $ -- $ 0.01
---------- ----------
Net increase (decrease) in net asset value $ (0.23) $ (0.21)
---------- ----------
Net asset value, end of period $ 9.42 $ 9.65
========== ==========
Total return* 1.36% 2.70%
Ratio of net expenses to average net assets+ 1.07%** 1.01%
Ratio of net investment income to average net assets+ 3.52%** 3.60%
Portfolio turnover rate 77%** 79%
Net assets, end of period (in thousands) $ 15,093 $ 17,549
Ratios with no waiver of management fees and assumption
of expenses by the Advisor and no reduction for fees
paid indirectly:
Net expenses 1.07%** 1.14%
Net investment income 3.52%** 3.47%
Ratios with waiver of management fees and assumption of
expenses by Advisor and reduction for fees paid indirectly:
Net expenses 1.07%** 1.01%
Net investment income 3.52%** 3.60%
Year Ended Year Ended Year Ended Year Ended
Class A 7/31/04 7/31/03 7/31/02 7/31/01
Net asset value, beginning of period $ 10.05 $ 10.26 $ 10.10 $ 9.60
---------- ---------- ---------- ----------
Increase (decrease) from investment operations:
Net investment income $ 0.34 $ 0.41 $ 0.48 $ 0.55
Net realized and unrealized gain (loss) on investments (0.11) (0.05) 0.20 0.50
---------- ---------- ---------- ----------
Net increase from investment operations $ 0.23 $ 0.36 $ 0.68 $ 1.05
Distributions to shareowners:
Net investment income (0.41) (0.42) (0.52) (0.55)
Net realized gain (0.01) (0.15) -- --
---------- ---------- ---------- ----------
Capital Contribution $ -- $ -- $ -- $ --
---------- ---------- ---------- ----------
Net increase (decrease) in net asset value $ (0.19) $ (0.21) $ 0.16 $ 0.50
---------- ---------- ---------- ----------
Net asset value, end of period $ 9.86 $ 10.05 $ 10.26 $ 10.10
========== ========== ========== ==========
Total return* 2.36% 3.47% 6.96% 11.25%
Ratio of net expenses to average net assets+ 1.00% 1.01% 1.00% 0.99%
Ratio of net investment income to average net assets+ 3.48% 3.84% 4.74% 5.47%
Portfolio turnover rate 39% 43% 18% 25%
Net assets, end of period (in thousands) $ 16,943 $ 20,721 $ 8,800 $ 5,672
Ratios with no waiver of management fees and assumption
of expenses by the Advisor and no reduction for fees
paid indirectly:
Net expenses 1.23% 1.23% 1.21% 1.20%
Net investment income 3.25% 3.62% 4.53% 5.26%
Ratios with waiver of management fees and assumption of
expenses by Advisor and reduction for fees paid indirectly:
Net expenses 1.00% 1.01% 1.00% 0.99%
Net investment income 3.48% 3.84% 4.74% 5.47%
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period and no sale charges.
Total return would be reduced if sales charges were taken into account.
** Annualized.
+ Ratios with no reduction for fees paid indirectly.
81
Six Months
Ended
1/31/06 Year Ended
Class B (unaudited) 7/31/05
Net asset value, beginning of period $ 9.65 $ 9.85
---------- ----------
Increase (decrease) from investment operations:
Net investment income $ 0.13 $ 0.28
Net realized and unrealized gain (loss) on investments (0.10) (0.08)
---------- ----------
Net increase from investment operations $ 0.03 $ 0.20
Distributions to shareowners:
Net investment income (0.15) (0.38)
Net realized gain (0.11) (0.03)
---------- ----------
Capital Contribution $ -- $ 0.01
---------- ----------
Net increase (decrease) in net asset value $ (0.23) $ (0.20)
---------- ----------
Net asset value, end of period $ 9.42 $ 9.65
========== ==========
Total return* 0.59% 2.06%
Ratio of net expenses to average net assets+ 1.88%** 1.75%
Ratio of net investment income to average net assets+ 2.72%** 2.83%
Portfolio turnover rate 77%** 79%
Net assets, end of period (in thousands) $ 4,834 $ 6
Ratio with no waiver of management fees and assumption
of expenses by the Advisor and no reduction for fees
paid indirectly:
Net expenses 1.89%** 1.84%
Net investment income 2.71%** 2.74%
Ratios with waiver of management fees and assumption of
expenses by Advisor and reduction for fees paid indirectly:
Net expenses 1.88%** 1.75%
Net investment income 2.72%** 2.83%
Year Ended Year Ended Year Ended Year Ended
Class B 7/31/04 7/31/03 7/31/02 7/31/01
Net asset value, beginning of period $ 10.04 $ 10.26 $ 10.10 $ 9.61
---------- ---------- ---------- ----------
Increase (decrease) from investment operations:
Net investment income $ 0.27 $ 0.33 $ 0.42 $ 0.47
Net realized and unrealized gain (loss) on investments (0.11) (0.06) 0.19 0.51
---------- ---------- ---------- ----------
Net increase from investment operations $ 0.16 $ 0.27 $ 0.61 $ 0.98
Distributions to shareowners:
Net investment income (0.34) (0.34) (0.45) (0.49)
Net realized gain (0.01) (0.15) -- --
---------- ---------- ---------- ----------
Capital Contribution $ -- $ -- $ -- $ --
---------- ---------- ---------- ----------
Net increase (decrease) in net asset value $ (0.19) $ (0.22) $ 0.16 $ 0.49
---------- ---------- ---------- ----------
Net asset value, end of period $ 9.85 $ 10.04 $ 10.26 $ 10.10
========== ========== ========== ==========
Total return* 1.58% 2.61% 6.18% 10.36%
Ratio of net expenses to average net assets+ 1.75% 1.76% 1.75% 1.74%
Ratio of net investment income to average net assets+ 2.73% 3.08% 4.00% 4.65%
Portfolio turnover rate 39% 43% 18% 25%
Net assets, end of period (in thousands) $ 7,558 $ 10,228 $ 3,542 $ 1,635
Ratio with no waiver of management fees and assumption
of expenses by the Advisor and no reduction for fees
paid indirectly:
Net expenses 1.98% 1.98% 1.96% 1.95%
Net investment income 2.50% 2.86% 3.79% 4.44%
Ratios with waiver of management fees and assumption of
expenses by Advisor and reduction for fees paid indirectly:
Net expenses 1.75% 1.76% 1.75% 1.74%
Net investment income 2.73% 3.08% 4.00% 4.65%
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period and no sale charges.
Total return would be reduced if sales charges were taken into account.
** Annualized.
+ Ratios with no reduction for fees paid indirectly.
82
9/26/05
to
Class C 1/31/06(a)
Net asset value, beginning of period $ 9.65
------
Increase from investment operations:
Net investment gain $ 0.14
Net realized and unrealized gain on investments (0.14)
------
Net increase from investment operations $ --
Distributions to shareowners:
Net investment income (0.12)
Net realized gain (0.10)
------
Net increase in net asset value $(0.22)
------
Net asset value, end of period $ 9.43
======
Total return* 0.65%
Ratio of net expenses to average net assets+ 2.16%**
Ratio of net investment gain to average net assets+ 2.56%**
Portfolio turnover rate 77%
Net assets, end of period (in thousands) $ 10
Ratio with no waiver of management fees and assumption of expenses by the
Advisor and no reduction for fees paid indirectly:
Net expenses 2.16%**
Net investment income 2.56%**
Ratios with waiver of management fees and assumption of expenses by Advisor
and reduction for fees paid indirectly:
Net expenses 1.99%**
Net investment income 2.73%**
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period and no sales
charges.
** Annualized.
+ Ratios with no reduction for fees paid indirectly.
(a) Class C shares were first publicly offered on September 26, 2005
83
Six Months
Ended
1/31/06 Year Ended
Class Y (unaudited) 7/31/05
Net asset value, beginning of period $ 9.65 $ 9.86
---------- ----------
Increase (decrease) from investment operations:
Net investment income $ 0.18 $ 0.35
Net realized and unrealized gain (loss) on investments (0.10) (0.07)
---------- ----------
Net increase from investment operations $ 0.08 $ 0.28
Distributions to shareowners:
Net investment income (0.20) (0.46)
Net realized gain (0.11) (0.03)
---------- ----------
Capital Contribution $ -- $ 0.01
---------- ----------
Net increase (decrease) in net asset value $ (0.23) $ (0.21)
---------- ----------
Net asset value, end of period $ 9.42 $ 9.65
========== ==========
Total return* 1.57% 2.93%
Ratio of net expenses to average net assets+ 0.78%** 0.85%
Ratio of net investment income to average net assets+ 3.83%** 3.72%
Portfolio turnover rate 77%** 79%
Net assets, end of period (in thousands) $ 98,081 $ 135,844
Ratios with no waiver of management and assumption of expense
by the Advisor and no reduction for fees paid indirectly:
Net expenses 0.78%** 1.02%
Net investment income 3.83%** 3.55%
Ratios with waiver of management fees and assumption of
expense by Advisor and reduction for fees paid indirectly:
Net expenses 0.78%** 0.85%
Net investment income 3.83%** 3.72%
Year Ended Year Ended Year Ended Year Ended
Class Y 7/31/04 7/31/03 7/31/02 7/31/01
Net asset value, beginning of period $ 10.05 $ 10.26 $ 10.10 $ 9.61
---------- ---------- ---------- ----------
Increase (decrease) from investment operations:
Net investment income $ 0.36 $ 0.42 $ 0.49 $ 0.56
Net realized and unrealized gain (loss) on investments (0.11) (0.05) 0.21 0.50
---------- ---------- ---------- ----------
Net increase from investment operations $ 0.25 $ 0.37 $ 0.70 $ 1.06
Distributions to shareowners:
Net investment income (0.43) (0.43) (0.54) (0.57)
Net realized gain (0.01) (0.15) -- --
---------- ---------- ---------- ----------
Capital Contribution $ -- $ -- $ -- $ --
---------- ---------- ---------- ----------
Net increase (decrease) in net asset value $ (0.19) $ (0.21) $ 0.16 $ 0.49
---------- ---------- ---------- ----------
Net asset value, end of period $ 9.86 $ 10.05 $ 10.26 $ 10.10
========== ========== ========== ==========
Total return* 2.51% 3.62% 7.12% 11.30%
Ratio of net expenses to average net assets+ 0.85% 0.86% 0.85% 0.84%
Ratio of net investment income to average net assets+ 3.63% 4.08% 4.88% 5.62%
Portfolio turnover rate 39% 43% 18% 25%
Net assets, end of period (in thousands) $ 218,772 $ 253,447 $ 263,211 $ 302,099
Ratios with no waiver of management and assumption of expense
by the Advisor and no reduction for fees paid indirectly:
Net expenses 1.13% 1.13% 1.11% 1.10%
Net investment income 3.35% 3.81% 4.62% 5.36%
Ratios with waiver of management fees and assumption of
expense by Advisor and reduction for fees paid indirectly:
Net expenses 0.85% 0.86% 0.85% 0.84%
Net investment income 3.63% 4.08% 4.88% 5.62%
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period and no sale charges.
Total return would be reduced if sales charges were taken into account.
** Annualized.
+ Ratios with no reduction for fees paid indirectly.
84
PIONEER CLASSIC BALANCED FUND
FINANCIAL HIGHLIGHTS
The information below for the fiscal years ended July 31, 2001 through
July 31, 2005 has been audited by Ernst & Young LLP, the fund's independent
registered public accounting firm, whose report is included in the fund's
annual report along with the fund's financial statements. The annual report is
available upon request. The information for the semiannual period ended January
31, 2006 has not been audited.
Six Months Ended
1/31/06 Year Ended
Class A (unaudited) 7/31/05
Net asset value, beginning of period $ 13.05 $ 12.10
---------- ----------
Increase (decrease) from investment operations:
Net investment income $ 0.14 $ 0.22
Net realized and unrealized gain (loss) on investments 0.35 1.01
---------- ----------
Net increase (decrease) from investment operations $ 0.49 $ 1.23
Distributions to shareowners:
Net investment income (0.12) (0.25)
Net realized gain (2.39) (0.03)
---------- ----------
Net increase (decrease) in net asset value $ (2.02) $ 0.95
---------- ----------
Net asset value, end of period $ 11.03 $ 13.05
========== ==========
Total return* 4.37% 10.33%
Ratio of net expenses to average net assets+ 1.26%** 1.34%
Ratio of net investment income to average net assets+ 2.28%** 1.77%
Portfolio turnover rate 194%** 70%
Net assets, end of period (in thousands) $ 71,850 $ 107,147
Ratios with no waiver of management fees and assumption of
expenses by Advisor and no reduction for fees paid indirectly:
Net expenses 1.27%** 1.39%
Net investment income 2.27%** 1.72%
Ratios with waiver of management fees and assumption of
expenses by Advisor and reduction for fees paid indirectly:
Net expenses 1.26%** 1.34%
Net investment income 2.28%** 1.77%
Year Ended Year Ended Year Ended Year Ended
Class A 7/31/04 7/31/03 7/31/02 7/31/01
Net asset value, beginning of period $ 11.37 $ 10.89 $ 12.46 $ 12.48
---------- ---------- ---------- ----------
Increase (decrease) from investment operations:
Net investment income $ 0.20 $ 0.22 $ 0.30 $ 0.36
Net realized and unrealized gain (loss) on investments 0.75 0.66 (1.20) 1.28
---------- ---------- ---------- ----------
Net increase (decrease) from investment operations $ 0.95 $ 0.88 $ (0.90) $ 1.64
Distributions to shareowners:
Net investment income (0.22) (0.26) (0.31) (0.39)
Net realized gain 0.00 (0.14) (0.36) (1.27)
---------- ---------- ---------- ----------
Net increase (decrease) in net asset value $ 0.73 $ 0.48 $ (1.57) $ (0.02)
---------- ---------- ---------- ----------
Net asset value, end of period $ 12.10 $ 11.37 $ 10.89 $ 12.46
========== ========== ========== ==========
Total return* 8.36% 8.34% (7.55)% 13.93%
Ratio of net expenses to average net assets+ 1.32% 1.34% 1.34% 1.31%
Ratio of net investment income to average net assets+ 1.64% 2.03% 2.57% 2.90%
Portfolio turnover rate 19% 86% 34% 14%
Net assets, end of period (in thousands) $ 90,369 $ 78,679 $ 69,674 $ 54,978
Ratios with no waiver of management fees and assumption of
expenses by Advisor and no reduction for fees paid indirectly:
Net expenses 1.41% 1.42% 1.41% 1.38%
Net investment income 1.55% 1.95% 2.50% 2.83%
Ratios with waiver of management fees and assumption of
expenses by Advisor and reduction for fees paid indirectly:
Net expenses 1.32% 1.34% 1.34% 1.31%
Net investment income 1.64% 2.03% 2.57% 2.90%
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period and no sale charges.
Total return would be reduced if sales charges were taken into account.
** Annualized.
+ Ratios with no reduction for fees paid indirectly.
85
Six Months Ended
1/31/06 Year Ended
Class B (unaudited) 7/31/05
Net asset value, beginning of period $ 13.00 $ 12.07
---------- ----------
Increase (decrease) from investment operations:
Net investment income $ 0.08 $ 0.13
Net realized and unrealized gain (loss) on investments 0.36 0.99
---------- ----------
Net increase (decrease) from investment operations $ 0.44 $ 1.12
Distributions to shareowners:
Net investment income (0.08) (0.16)
Net realized gain (2.39) (0.03)
---------- ----------
Net increase (decrease) in net asset value $ (2.03) $ 0.93
---------- ----------
Net asset value, end of period $ 10.97 $ 13.00
========== ==========
Total return* 3.90% 9.40%
Ratio of net expenses to average net assets+ 2.24%** 2.09%
Ratio of net investment income to average net assets+ 1.43%** 1.04%
Portfolio turnover rate 194%** 70%
Net assets, end of period (in thousands) $ 22,030 $ 25,270
Ratios with no waiver of management fees and assumption of
expenses by Advisor and no reduction for fees paid indirectly:
Net expenses 2.25%** 2.16%
Net investment income 1.42%** 0.97%
Ratios with waiver of management fees and assumption of
expenses by Advisor and reduction for fees paid indirectly:
Net expenses 2.24%** 2.09%
Net investment income 1.43%** 1.04%
Year Ended Year Ended Year Ended Year Ended
Class B 7/31/04 7/31/03 7/31/02 7/31/01
Net asset value, beginning of period $ 11.34 $ 10.86 $ 12.42 $ 12.45
---------- ---------- ---------- ----------
Increase (decrease) from investment operations:
Net investment income $ 0.11 $ 0.14 $ 0.22 $ 0.28
Net realized and unrealized gain (loss) on investments 0.75 0.66 (1.19) 1.26
---------- ---------- ---------- ----------
Net increase (decrease) from investment operations $ 0.86 $ 0.80 $ (0.97) $ 1.54
Distributions to shareowners:
Net investment income (0.13) (0.18) (0.23) (0.30)
Net realized gain 0.00 (0.14) (0.36) (1.27)
---------- ---------- ---------- ----------
Net increase (decrease) in net asset value $ 0.73 $ 0.48 $ (1.56) $ (0.03)
---------- ---------- ---------- ----------
Net asset value, end of period $ 12.07 $ 11.34 $ 10.86 $ 12.42
========== ========== ========== ==========
Total return* 7.59% 7.55% (8.17)% 13.03%
Ratio of net expenses to average net assets+ 2.07% 2.09% 2.09% 2.06%
Ratio of net investment income to average net assets+ 0.89% 1.27% 1.81% 2.20%
Portfolio turnover rate 19% 86% 34% 14%
Net assets, end of period (in thousands) $ 24,755 $ 20,004 $ 16,742 $ 9,004
Ratios with no waiver of management fees and assumption of
expenses by Advisor and no reduction for fees paid indirectly:
Net expenses 2.16% 2.17% 2.16% 2.12%
Net investment income 0.80% 1.19% 1.74% 2.14%
Ratios with waiver of management fees and assumption of
expenses by Advisor and reduction for fees paid indirectly:
Net expenses 2.07% 2.09% 2.09% 2.06%
Net investment income 0.89% 1.27% 1.81% 2.20%
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period and no sale charges.
Total return would be reduced if sales charges were taken into account.
** Annualized.
+ Ratios with no reduction for fees paid indirectly.
86
9/24/05 (a)
to
Class C 1/31/06
Net asset value, beginning of period $12.86
------
Increase from investment operations:
Net investment income $ 0.05
Net realized and unrealized gain on investments 0.58
------
Net increase from investment operations $ 0.63
Distributions to shareowners:
Net investment income (0.05)
Net realized gain (2.39)
------
Net decrease in net asset value $(1.81)
------
Net asset value, end of period $11.05
======
Total return* 2.89%
Ratio of net expenses to average net assets+ 2.08%**
Ratio of net investment income to average net assets+ 2.61%**
Portfolio turnover rate 194%
Net assets, end of period (in thousands) $ 9
Ratios with no waiver of management fees and assumption of expenses by
Advisor and no reduction for fees
paid indirectly:
Net expenses 2.08%**
Net investment income 2.61%**
Ratios with waiver of management fees and assumption of expenses by Advisor
and reduction for fees paid indirectly:
Net expenses 1.83%**
Net investment income 2.86%**
(a) Class C shares were first publicly offered on 9/24/05.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period and no sales
charges.
** Annualized.
+ Ratios with no reduction for fees paid indirectly.
87
Six Months Ended
1/31/06 Year Ended
Class Y (unaudited) 7/31/05
Net asset value, beginning of period $ 13.05 $ 12.11
---------- ----------
Increase (decrease) from investment operations:
Net investment income $ 0.15 $ 0.24
Net realized and unrealized gain (loss) on investments 0.36 1.00
---------- ----------
Net increase (decrease) from investment operations $ 0.51 $ 1.24
Distributions to shareowners:
Net investment income (0.13) (0.27)
Net realized gain (2.39) (0.03)
---------- ----------
Net increase (decrease) in net asset value $ (2.01) $ 0.94
---------- ----------
Net asset value, end of period $ 11.04 $ 13.05
========== ==========
Total return* 4.54% 10.40%
Ratio of net expenses to average net assets+ 1.01%** 1.19%
Ratio of net investment income to average net assets+ 2.68%** 1.95%
Portfolio turnover rate 194%** 70%
Net assets, end of period (in thousands) $ 36,026 $ 52,762
Ratios with no waiver of management fees and assumption of
expenses by Advisor and no reduction for fees paid indirectly:
Net expenses 1.01%** 1.29%
Net investment income 2.68%** 1.85%
Ratios with waiver of management fees and assumption of
expenses by Advisor and reduction for fees paid indirectly:
Net expenses 1.01%** 1.19%
Net investment income 2.68%** 1.95%
Year Ended Year Ended Year Ended Year Ended
Class Y 7/31/04 7/31/03 7/31/02 7/31/01
Net asset value, beginning of period $ 11.38 $ 10.90 $ 12.45 $ 12.47
---------- ---------- ---------- ----------
Increase (decrease) from investment operations:
Net investment income $ 0.22 $ 0.23 $ 0.32 $ 0.40
Net realized and unrealized gain (loss) on investments 0.75 0.66 (1.18) 1.26
---------- ---------- ---------- ----------
Net increase (decrease) from investment operations $ 0.97 $ 0.89 $ (0.86) $ 1.66
Distributions to shareowners:
Net investment income (0.24) (0.27) (0.33) (0.41)
Net realized gain 0.00 (0.14) (0.36) (1.27)
---------- ---------- ---------- ----------
Net increase (decrease) in net asset value $ 0.73 $ 0.48 $ (1.55) $ (0.02)
---------- ---------- ---------- ----------
Net asset value, end of period $ 12.11 $ 11.38 $ 10.90 $ 12.45
========== ========== ========== ==========
Total return* 8.52% 8.49% (7.27)% 14.09%
Ratio of net expenses to average net assets+ 1.17% 1.19% 1.19% 1.16%
Ratio of net investment income to average net assets+ 1.80% 2.19% 2.72% 3.16%
Portfolio turnover rate 19% 86% 34% 14%
Net assets, end of period (in thousands) $ 59,080 $ 62,776 $ 68,542 $ 102,780
Ratios with no waiver of management fees and assumption of
expenses by Advisor and no reduction for fees paid indirectly:
Net expenses 1.31% 1.32% 1.31% 1.27%
Net investment income 1.66% 2.06% 2.60% 3.05%
Ratios with waiver of management fees and assumption of
expenses by Advisor and reduction for fees paid indirectly:
Net expenses 1.17% 1.19% 1.19% 1.16%
Net investment income 1.80% 2.19% 2.72% 3.16%
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period and no sale charges.
Total return would be reduced if sales charges were taken into account.
** Annualized.
+ Ratios with no reduction for fees paid indirectly.
88
PIONEER AMT-FREE MUNICIPAL FUND
FINANCIAL HIGHLIGHTS
The information below for the fiscal years ended December 31, 2001 through
December 31, 2005 has been audited by Ernst & Young LLP, the fund's independent
registered public accounting firm, whose report is included in the fund's
annual report along with the fund's financial statements. The annual report is
available upon request.
Year Ended Year Ended Year Ended Year Ended Year Ended
Class A 12/31/05 12/31/04 (a) 12/31/03 12/31/02 12/31/01
Net asset value, beginning of period $ 14.38 $ 14.45 $ 14.46 $ 13.98 $ 13.97
---------- ---------- ---------- ---------- ----------
Increase from investment operations:
Net investment income $ 0.54 $ 0.61(b) $ 0.66 $ 0.66 $ 0.66
Net realized and unrealized gain on investments 0.14 0.14 0.13 0.69 0.02
---------- ---------- ---------- ---------- ----------
Net increase from investment operations $ 0.68 $ 0.75 $ 0.79 $ 1.35 $ 0.68
Distributions to shareowners:
Net income (0.64) (0.60) (0.63) (0.64) (0.64)
Net realized gain (0.29) (0.22) (0.17) (0.23) (0.03)
---------- ---------- ---------- ---------- ----------
Net increase (decrease) in net asset value $ (0.25) $ (0.07) $ (0.01) $ 0.48 $ 0.01
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 14.13 $ 14.38 $ 14.45 $ 14.46 $ 13.98
========== ========== ========== ========== ==========
Total return* 4.81% 5.40% 5.66% 9.99% 4.92%
Ratio of net expenses to average net assets+ 0.87% 0.91% 0.87% 0.89% 0.98%
Ratio of net investment income to average net assets+ 4.42% 4.25% 4.58% 4.74% 4.63%
Portfolio turnover rate 12% 7% 20% 19% 9%
Net assets, end of period (in thousands) $ 16,033 $ 227 $ 6,538 $ 3,787 $ 1,273
Ratios with no waiver of management fees by PIM and no
reduction for fees paid indirectly:
Net expenses 1.16% 0.91% 0.87% 0.89% 0.98%
Net investment income 4.13% 4.25% 4.58% 4.74% 4.63%
Ratios with waiver of management fees by PIM and reduction for
fees paid indirectly:
Net expenses 0.87% 0.91% 0.87% 0.89% 0.98%
Net investment income 4.42% 4.25% 4.58% 4.74% 4.63%
(a) Effective August 2, 2004, PIM became the sub-advisor of the Fund and
subsequently became the advisor on December 10, 2004.
(b) Net investment income per share has been calculated using the average shares
method.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions and the complete redemption of the
investment at net asset value at the end of each period.
+ Ratios assuming no reduction for fees paid indirectly.
89
Year Ended Year Ended Year Ended Year Ended Year Ended
Class B 12/31/05 12/31/04 (a) 12/31/03 12/31/02 12/31/01
Net asset value, beginning of period $ 14.34 $ 14.42 $ 14.42 $ 13.95 $ 13.94
---------- ---------- ---------- ---------- ----------
Increase from investment operations:
Net investment income $ 0.45 $ 0.49(b) $ 0.55 $ 0.55 $ 0.55
Net realized and unrealized gain on investments 0.12 0.14 0.14 0.68 0.02
---------- ---------- ---------- ---------- ----------
Net increase from investment operations $ 0.57 $ 0.63 $ 0.69 $ 1.23 $ 0.57
Distributions to shareowners:
Net income (0.55) (0.49) (0.52) (0.53) (0.53)
Net realized gain (0.29) (0.22) (0.17) (0.23) (0.03)
---------- ---------- ---------- ---------- ----------
Net increase (decrease) in net asset value $ (0.27) $ (0.08) $ -- $ 0.47 $ 0.01
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 14.07 $ 14.34 $ 14.42 $ 14.42 $ 13.95
========== ========== ========== ========== ==========
Total return* 4.02% 4.52% 4.93% 9.07% 4.14%
Ratio of net expenses to average net assets+ 1.41% 1.70% 1.66% 1.68% 1.73%
Ratio of net investment income to average net assets+ 3.90% 3.49% 3.78% 3.86% 3.87%
Portfolio turnover rate 12% 7% 20% 19% 9%
Net assets, end of period (in thousands) $ 2,369 $ 10 $ 3,141 $ 2,494 $ 1,236
Ratios with no waiver of management fees by PIM and no
reduction for fees paid indirectly:
Net expenses 1.68% 1.70% 1.66% 1.68% 1.73%
Net investment income 3.63% 3.49% 3.78% 3.86% 3.87%
Ratios with waiver of management fees by PIM and reduction for
fees paid indirectly:
Net expenses 1.41% 1.70% 1.66% 1.68% 1.73%
Net investment income 3.90% 3.49% 3.78% 3.86% 3.87%
(a) Effective August 2, 2004, PIM became the sub-advisor of the Fund and
subsequently became the advisor on December 10, 2004.
(b) Net investment income per share has been calculated using the average shares
method.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions and the complete redemption of the
investment at net asset value at the end of each period.
+ Ratios assuming no reduction for fees paid indirectly.
90
Year Ended Year Ended 10/01/03 (b)
Class C 12/31/05 12/31/04 (a) to 12/31/03
Net asset value, beginning of period $ 14.34 $ 14.42 $ 14.45
--------- --------- ---------
Increase from investment operations:
Net investment income $ 0.44 $ 0.47(c) $ 0.16
Net realized and unrealized gain on investments 0.09 0.14 0.04
--------- --------- ---------
Net increase from investment operations $ 0.53 $ 0.61 $ 0.20
Distributions to shareowners:
Net income (0.54) (0.47) (0.13)
Net realized gain (0.29) (0.22) (0.10)
--------- --------- ---------
Net increase in net asset value $ (0.30) $ (0.08) $ (0.03)
--------- --------- ---------
Net asset value, end of period $ 14.04 $ 14.34 $ 14.42
========= ========= =========
Total return* 3.78% 4.38% 1.40%^
Ratio of net expenses to average net assets+ 1.38% 1.84% 1.87%**
Ratio of net investment income to average net assets+ 3.87% 3.35% 4.36%**
Portfolio turnover rate 12% 7% 20%
Net assets, end of period (in thousands) $ 1,183 $ 10 $ 100
Ratios assuming no waiver of management fees and assumption of expenses by
PIM and no reduction for fees paid indirectly:
Net expenses 1.63% 1.84% 43.13%**
Net investment income 3.62% 3.35% (36.90)%**
Ratios with waiver of management fees by PIM and reduction for fees paid
indirectly:
Net expenses 1.38% 1.84% 1.87%**
Net investment income 3.87% 3.35% 4.36%**
(a) Effective August 2, 2004, PIM became the sub-advisor of the Fund and
subsequently became the advisor on December 10, 2004.
(b) Initial issue date of Class C Shares.
(c) Net investment income per share has been calculated using the average shares
method.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions and the complete redemption of the
investment at net asset value at the end of each period.
** Annualized.
^ Not annualized.
+ Ratios assuming no reduction for fees paid indirectly.
91
Year Ended Year Ended Year Ended Year Ended Year Ended
INVESTOR CLASS 12/31/05 12/31/04(a) 12/31/03 12/31/02 12/31/01
Net asset value, beginning of period $ 14.36 $ 14.44 $ 14.45 $ 13.97 $ 13.96
---------- ---------- ---------- ---------- ----------
Increase from investment operations:
Net investment income $ 0.79 $ 0.67(b) $ 0.70 $ 0.71 $ 0.71
Net realized and unrealized gain on investments (0.10) 0.11 0.13 0.69 0.02
---------- ---------- ---------- ---------- ----------
Net increase from investment operations $ 0.69 $ 0.78 $ 0.83 $ 1.40 $ 0.73
Distributions to shareowners:
Net income (0.69) (0.64) (0.67) (0.69) (0.69)
Net realized gain (0.29) (0.22) (0.17) (0.23) (0.03)
---------- ---------- ---------- ---------- ----------
Net increase (decrease) in net asset value $ (0.29) $ (0.08) $ (0.01) $ 0.48 $ 0.01
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 14.07 $ 14.36 $ 14.44 $ 14.45 $ 13.97
========== ========== ========== ========== ==========
Total return* 4.88% 5.63% 5.96% 10.33% 5.30%
Ratio of net expenses to average net assets+ 0.58% 0.63% 0.61% 0.61% 0.62%
Ratio of net investment income to average net assets+ 4.69% 4.78% 4.83% 4.91% 5.01%
Portfolio turnover rate 12% 7% 20% 19% 9%
Net assets, end of period (in thousands) $ 463,333 $ 516,442 $ 563,305 $ 569,484 $ 533,803
Ratios assuming no waiver of management fees and assumption
of expenses by PIM and no reduction for fees paid indirectly:
Net expenses 0.58% 0.63% 0.61% 0.61% 0.62%
Net investment income 4.69% 4.78% 4.83% 4.91% 5.01%
Ratios with waiver of management fees by PIM and reduction for
fees paid indirectly:
Net expenses 0.58% 0.63% 0.61% 0.61% 0.62%
Net investment income 4.69% 4.78% 4.83% 4.91% 5.01%
(a) Effective August 2, 2004, PIM became the sub-advisor of the Fund and
subsequently became the advisor on December 10, 2004.
(b) Net investment income per share has been calculated using the average shares
method.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions and the complete redemption of the
investment at net asset value at the end of each period.
+ Ratios assuming no reduction for fees paid indirectly.
92
PIONEER RESEARCH FUND
FINANCIAL HIGHLIGHTS
The information below for the fiscal years ended December 31, 2002 through
December 31, 2005 has been audited by Ernst & Young LLP, the fund's independent
registered public accounting firm, whose report is included in the fund's
annual report along with the fund's financial statements. The information below
for the fiscal year ended December 31, 2001 has been audited by Arthur Andersen
LLP, the fund's previous independent accountants. Arthur Andersen ceased
operations in 2002. The annual report is available upon request.
Year Ended Year Ended Year Ended Year Ended Year Ended
12/31/05 12/31/04 12/31/03(a) 12/31/02 12/31/01
Class A
Net asset value, beginning of period $ 9.17 $ 8.30 $ 6.66 $ 8.61 $ 9.99
---------- ---------- ---------- ---------- ----------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.04 $ 0.07 $ 0.02 $ (0.02) $ (0.04)
Net realized and unrealized gain (loss) on investments 0.62 0.87 1.62 (1.93) (1.34)
---------- ---------- ---------- ---------- ----------
Net increase (decrease) from investment operations $ 0.66 $ 0.94 $ 1.64 $ (1.95) $ (1.38)
Distributions to shareowners:
Net investment income (0.03) (0.07) -- -- --
---------- ---------- ---------- ---------- ----------
Net increase (decrease) in net asset value $ 0.63 $ 0.87 $ 1.64 $ (1.95) $ (1.38)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 9.80 $ 9.17 $ 8.30 $ 6.66 $ 8.61
========== ========== ========== ========== ==========
Total return* 7.20% 11.38% 24.62% (22.65)% (13.81)%
Ratio of net expenses to average net assets+ 1.25% 1.16% 1.40% 1.75% 1.75%
Ratio of net investment income (loss) to average net assets+ 0.44% 0.79% 0.21% (0.28)% (0.43)%
Portfolio turnover rate 89% 106% 74% 6% 24%
Net assets, end of period (in thousands) $ 7,526 $ 8,096 $ 8,244 $ 6,680 $ 9,491
Ratios with no waivers of management fees and assumption of
expenses by PIM and no reduction for fees paid indirectly:
Net expenses 1.81% 2.20% 1.96% 2.08% 1.88%
Net investment loss (0.12)% (0.25)% (0.35)% (0.61)% (0.56)%
Ratios with waiver of management fees and assumption of
expenses by PIM and reduction for fees paid indirectly:
Net expenses 1.25% 1.16% 1.40% 1.75% 1.75%
Net investment income (loss) 0.44% 0.79% 0.21% (0.28)% (0.43)%
(a) Effective December 11, 2003, the Fund began following a policy that focuses
on investment selection regardless of tax impact to shareholders, rather
than following the previous "tax-managed" policy that had focused on
minimizing dividend income and avoided realizing capital gains.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
+ Ratio with no reduction for fees paid indirectly.
93
Year Ended Year Ended Year Ended Year Ended Year Ended
12/31/05 12/31/04 12/31/03 (a) 12/31/02 12/31/01
Class B
Net asset value, beginning of period $ 8.87 $ 8.03 $ 6.50 $ 8.45 $ 9.89
---------- ---------- ---------- ---------- ---------
Increase (decrease) from investment operations:
Net investment loss $ (0.05) $ (0.00)(b) $ (0.04) $ (0.07) $ (0.10)
Net realized and unrealized gain (loss) on investments 0.60 0.84 1.57 (1.88) (1.34)
---------- ---------- ---------- ---------- ---------
Net increase (decrease) from investment operations $ 0.55 $ 0.84 $ 1.53 $ (1.95) $ (1.44)
Distributions to shareowners:
Net investment income -- (0.00)(b) -- -- --
---------- ---------- ---------- ---------- ---------
Net increase (decrease) in net asset value $ 0.55 $ 0.84 $ 1.53 $ (1.95) $ (1.44)
---------- ---------- ---------- ---------- ---------
Net asset value, end of period $ 9.42 $ 8.87 $ 8.03 $ 6.50 $ 8.45
========== ========== ========== ========== =========
Total return* 6.20% 10.51% 23.54% (23.08)% (14.56)%
Ratio of net expenses to average net assets+ 2.15% 1.95% 2.20% 2.45% 2.53%
Ratio of net investment loss to average net assets+ (0.46)% 0.00%(b) (0.59)% (0.97)% (1.21)%
Portfolio turnover rate 89% 106% 74% 6% 24%
Net assets, end of period (in thousands) $ 5,647 $ 6,972 $ 7,532 $ 6,613 $ 9,732
Ratios with no waivers of management fees and assumption of
expenses by PIM and no reduction for fees paid indirectly:
Net expenses 2.69% 2.98% 2.76% 2.78% 2.66%
Net investment loss (1.00)% (1.03)% (1.15)% (1.30)% (1.34)%
Ratios with waiver of management fees and assumption of
expenses by PIM and reduction for fees paid indirectly:
Net expenses 2.15% 1.95% 2.20% 2.45% 2.51%
Net investment loss (0.46)% 0.00%(b) (0.59)% (0.97)% (1.19)%
(a) Effective December 11, 2003, the Fund began following a policy that focuses
on investment selection regardless of tax impact to shareholders, rather
than following the previous "tax-managed" policy that had focused on
minimizing dividend income and avoided realizing capital gains.
(b) Amounts round to less than one cent per share, or for percentages less than
0.01%.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
+ Ratio with no reduction for fees paid indirectly.
94
Year Ended Year Ended Year Ended Year Ended Year Ended
12/31/05 12/31/04 12/31/03 (a) 12/31/02 12/31/01
Class C
Net asset value, beginning of period $ 8.92 $ 8.07 $ 6.53 $ 8.48 $ 9.91
---------- ---------- ---------- ---------- ----------
Increase (decrease) from investment operations:
Net investment loss $ (0.05) $ (0.00)(b) $ (0.04) $ (0.07) $ (0.11)
Net realized and unrealized gain (loss) on investments 0.60 0.85 1.58 (1.88) (1.32)
---------- ---------- ---------- ---------- ----------
Net increase (decrease) from investment operations $ 0.55 $ 0.85 $ 1.54 $ (1.95) $ (1.43)
Distributions to shareowners:
Net investment income -- (0.00)(b) -- -- --
---------- ---------- ---------- ---------- ----------
Net increase (decrease) in net asset value $ 0.55 $ 0.85 $ 1.54 $ (1.95) $ (1.43)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 9.47 $ 8.92 $ 8.07 $ 6.53 $ 8.48
========== ========== ========== ========== ==========
Total return* 6.17% 10.60% 23.58% (23.00)% (14.43)%
Ratio of net expenses to average net assets+ 2.15% 1.92% 2.14% 2.35% 2.45%
Ratio of net investment loss to average net assets+ (0.46)% 0.00%(b) (0.53)% (0.88)% (1.12)%
Portfolio turnover rate 89% 106% 74% 6% 24%
Net assets, end of period (in thousands) $ 3,005 $ 3,572 $ 3,989 $ 3,768 $ 5,508
Ratios with no waivers of management fees and assumption of
expenses by PIM and no reduction for fees paid indirectly:
Net expenses 2.62% 2.94% 2.70% 2.69% 2.57%
Net investment loss (0.93)% (1.02)% (1.09)% (1.22)% (1.24)%
Ratios with waiver of management fees and assumption of
expenses by PIM and reduction for fees paid indirectly:
Net expenses 2.15% 1.92% 2.14% 2.35% 2.44%
Net investment loss (0.46)% 0.00%(b) (0.53)% (0.88)% (1.11)%
(a) Effective December 11, 2003, the Fund began following a policy that focuses
on investment selection regardless of tax impact to shareholders, rather
than following the previous "tax-managed" policy that had focused on
minimizing dividend income and avoided realizing capital gains.
(b) Amounts round to less than one cent per share, or for percentages less than
0.01%.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
+ Ratio with no reduction for fees paid indirectly.
95
8/11/04 (a)
Year Ended to
12/31/05 12/31/04
Class Y
Net asset value, beginning of period $ 9.21 $ 8.01
---------- ----------
Increase from investment operations:
Net investment income $ 0.03 $ 0.03
Net realized and unrealized gain on investments 0.65 1.21
---------- ----------
Net increase from investment operations $ 0.68 $ 1.24
Distributions to shareowners:
Net investment income (0.02) (0.04)
---------- ----------
Net increase in net asset value $ 0.66 $ 1.20
---------- ----------
Net asset value, end of period $ 9.87 $ 9.21
========== ==========
Total return* 7.35% 15.51%(b)
Ratio of net expenses to average net assets+ 1.12% 1.01%**
Ratio of net investment income to average net assets+ 0.76% 2.14%**
Portfolio turnover rate 89% 106%
Net assets, end of period (in thousands) $ 58,070 $ 2,374
Ratios with no waiver of management fees by PIM and
no reduction for fees paid indirectly:
Net expenses 1.18% 2.28%**
Net investment income 0.69% 0.86%**
Ratios with waiver of management fees by PIM and
reduction for fees paid indirectly:
Net expenses 1.12% 1.01%**
Net investment income 0.75% 2.14%**
(a) Class Y shares were first publicly offered on August 11, 2004.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period.
** Annualized.
+ Ratios with no reduction for fees paid indirectly.
(b) Not Annualized.
96
INFORMATION CONCERNING THE MEETING
Solicitation of Proxies
In addition to the mailing of these proxy materials, proxies may be
solicited by telephone, by fax or in person by the Trustees, officers and
employees of your fund; by personnel of Pioneer or PIMSS, or by broker-dealer
firms. Pioneer and its affiliates, together with a third party solicitation
firm, have agreed to provide proxy solicitation services to your fund at a cost
of approximately $267,000. Pioneer has agreed to pay 50% of the costs of
preparing and printing the Proxy Statement/Prospectus and the solicitation
costs incurred in connection with the Reorganizations. With respect to each
Reorganization, the Pioneer Funds will each pay an equal portion of the
remaining 50% of the costs incurred in connection with the such Reorganization.
Revoking Proxies
Each shareholder of your fund signing and returning a proxy has the power
to revoke it at any time before it is exercised:
o By filing a written notice of revocation with your fund's transfer
agent, Pioneer Investment Management Shareholder Services, Inc., 60
State Street, Boston, Massachusetts 02109, or
o By returning a duly executed proxy with a later date before the time of
the meeting, or
o If a shareholder has executed a proxy but is present at the meeting and
wishes to vote in person, by notifying the secretary of your fund
(without complying with any formalities) at any time before it is voted.
Being present at the meeting alone does not revoke a previously executed
and returned proxy.
Outstanding Shares
Only shareholders of record on July 31, 2006 (the "record date") are
entitled to notice of and to vote at the meeting. As of the record date, the
following shares of each fund requesting a vote of its shareholders were
outstanding:
Pioneer Fund Shares Outstanding (as of July 31, 2006)
- ------------ ----------------------------------------
Pioneer America Income Trust
Class A ........................... 9,681,057.708
Class B ........................... 2,685,953.397
Class C ........................... 2,183,748.528
Class R ........................... 91,356.613
Investor Class 3,518,176.794
Pioneer Balanced Fund
Class A ........................... 8,711,311.121
Class B ........................... 1,359,896.513
Class C ........................... 987,339.848
Investor Class .................... 789,677.190
Pioneer Florida Tax Free Income Fund
Class A ........................... 136,065.342
Class B ........................... 169,880.059
Class C ........................... 954.201
Class Y ........................... 3,379,931.145
Pioneer Focused Equity Fund
Class A ........................... 1,004,657.472
Class B ........................... 808,706.282
Class C ........................... 2,807.506
Class Y ........................... 3,686,014.029
97
Other Business
Your fund's Board of Trustees knows of no business to be presented for
consideration at the meeting other than Proposals 1(a) -- 1(d). If other
business is properly brought before the meeting, proxies will be voted
according to the best judgment of the persons named as proxies.
Adjournments
If, by the time scheduled for the meeting, a quorum of shareholders of
fund is not present or if a quorum is present but sufficient votes "for" the
proposal have not been received, the persons named as proxies may propose an
adjournment of the meeting to another date and time, and the meeting may be
held as adjourned within a reasonable time after the date set for the original
meeting without further notice. Any such adjournment will require the
affirmative vote of a majority of the votes cast in person or by proxy at the
session of the meeting to be adjourned. The persons named as proxies will vote
all proxies in favor of the adjournment that voted in favor of the proposal or
that abstained. They will vote against such adjournment those proxies required
to be voted against the proposal. Broker non-votes will be disregarded in the
vote for adjournment. If the adjournment requires setting a new record date or
the adjournment is for more than 120 days of the original meeting (in which
case the Board of Trustees of your fund will set a new record date), your fund
will give notice of the adjourned meeting to its shareholders.
Telephone and Internet Voting
In addition to soliciting proxies by mail, by fax or in person, your fund
may also arrange to have votes recorded by telephone, the Internet or other
electronic means. The voting procedures used in connection with such voting
methods are designed to authenticate shareholders' identities, to allow
shareholders to authorize the voting of their shares in accordance with their
instructions and to confirm that their instructions have been properly
recorded. If these procedures were subject to a successful legal challenge,
such votes would not be counted at the shareholder meeting. The funds are
unaware of any such challenge at this time. In the case of telephone voting,
shareholders would be called at the phone number PIMSS has in its records for
their accounts and would be asked for their Social Security number or other
identifying information. The shareholders would then be given an opportunity to
authorize proxies to vote their shares at the meeting in accordance with their
instructions. In the case of automated telephone and Internet voting,
shareholders would be required to provide their identifying information and
will receive a confirmation of their instructions.
Shareholders' Proposals
Your fund is not required, and does not intend, to hold meetings of
shareholders each year. Instead, meetings will be held only when and if
required. Any shareholders desiring to present a proposal for consideration at
the next meeting for shareholders must submit the proposal in writing, so that
it is received by your fund at 60 State Street, Boston, Massachusetts 02109
within a reasonable time before the meeting.
OWNERSHIP OF SHARES OF THE PIONEER FUNDS
As of July 31, 2006, the Trustees and officers of each fund owned in the
aggregate less than 1% of the outstanding shares of their respective funds.
To the knowledge of each fund, as of July 31, 2006, the following persons
owned of record or beneficially 5% or more of the outstanding shares of a class
of each fund, respectively.
- ----------------------------------------------------------------------------------------------
Number of
Record Holder Share Class Shares Percent of Class
- ----------------------------------------------------------------------------------------------
Pioneer Government Income Fund
BISYS Retirement Services Class A 113,474.813 8.42%
FBO Aeropres Corporation Retirement
700 17th Street, Suite 300
Denver, Co 80202-3531
- ----------------------------------------------------------------------------------------------
Pershing LLC 107,296.831 7.96%
P.O. Box 2052
Jersey City, NJ 07303-2052
- ----------------------------------------------------------------------------------------------
98
- -------------------------------------------------------------------------------------------------------------------
Number of
Record Holder Share Class Shares Percent of Class
- -------------------------------------------------------------------------------------------------------------------
BISYS Retirement Services 101,868.717 7.56%
FBO Ledwell Son Enterprises 401K Plan
700 17th Street, Suite 300
Denver, Co 80202-3531
- -------------------------------------------------------------------------------------------------------------------
BISYS Retirement Services 96,381.301 7.15%
FBO John J. Guth Associates Inc.
700 17th Street, Suite 300
Denver, Co 80202-3531
- -------------------------------------------------------------------------------------------------------------------
BISYS Retirement Services 150,213.745 11.15%
FBO Builders Supply Company Inc.
700 17th Street, Suite 300
Denver, Co 80202-3531
- -------------------------------------------------------------------------------------------------------------------
MLPF&S for the Sole Benefit of its Customers Mutual Fund Class B 43,207.614 9.41%
Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- -------------------------------------------------------------------------------------------------------------------
Raymond James & Associates Inc. Class C 1,174.468 20.80%
880 Carillon Parkway
St. Petersburg, FL 33716-1100
-------------------------------------------------------------------------------------------------------------------
Edward D. Jones & Co. 2,166.391 38.38%
FBO George Ronnie Lowe IRA
P.O. Box 2500
Maryland Heights, MO 63043-8500
- -------------------------------------------------------------------------------------------------------------------
Pioneer Funds Distributor, Inc. 1,036.269 18.36%
60 State Street
Boston, MA 02109-1800
-------------------------------------------------------------------------------------------------------------------
PIM USA 401(k) Trustee for 948.026 16.79%
Industrial Reflooring Specialists
Rodney G. Sims
2511 Centerline Road
Conroe, TX 77384-4301
- ---------------------------------------------------------------------------------------------------------------------------------
Brown Brothers Harriman & Co. Class Y 928,412.882 10.74%
As Custodian
Attn: Investment Funds Global
Distribution Center
525 Washington Blvd.
Jersey City, NJ 07310-1692
- -------------------------------------------------------------------------------------------------------------------
Kenneburt & Company 5,003,671.650 57.91%
FBO ASO Trust
Attn: Mutual Fund Operations
P.O. Box 12365
Birmingham, AL 35202-2365
- -------------------------------------------------------------------------------------------------------------------
Kenneburt & Company 556,480.964 6.44%
FBO ASO Trust
Attn: Mutual Fund Operations
P.O. Box 12365
Birmingham, AL 35202-2365
- -------------------------------------------------------------------------------------------------------------------
Kenneburt & Company 1,338,919.438 15.49%
FBO ASO Trust
Attn: Mutual Fund Operations
P.O. Box 12365
Birmingham, AL 35202-2365
99
- ---------------------------------------------------------------------------------------------------------
Number of
Record Holder Share Class Shares Percent of Class
- ---------------------------------------------------------------------------------------------------------
Pioneer America Income Trust
- ---------------------------------------------------------------------------------------------------------
MLPF&S for the Sole Benefit of its Customers Class B 279,527.470 10.43%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- ---------------------------------------------------------------------------------------------------------
MLPF&S for the Sole Benefit of its Customers Class C 820,598.458 37.57%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- ---------------------------------------------------------------------------------------------------------
MLPF&S for the Sole Benefit of its Customers Class R 20,679.682 22.85%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- ---------------------------------------------------------------------------------------------------------
MCB Trust Services Cust FBO 6,439.029 7.11%
Skyland Automotive Inc Employ
700 17th St Ste 300
Denver, CO 80202-3531
- ---------------------------------------------------------------------------------------------------------
MCB Trust Services Cust FBO 28,039.157 30.98%
Big Boy 401(K) Plan & Trust
700 17th ST Ste 300
Denver, CO 80202-3531
- ---------------------------------------------------------------------------------------------------------
MCB Trust Services Cust FBO 5,433.290 6.00%
Gerken Retirement Savings Plan
700 17th ST Ste 300
Denver, CO 80202-3531
- ---------------------------------------------------------------------------------------------------------
MCB Trust Services Cust FBO 8,828.827 9.75%
United Construction Trades &
Industrial Emp Int'l Union 401(K)
700 17th ST Ste 300
Denver, CO 80202-3531
- ---------------------------------------------------------------------------------------------------------
MCB Trust Services Cust. F/B/O 7,440.680 8.22%
Citizens Bank of Hartsville
Retirement Savings Plan
700 17th ST Ste 300
Denver, CO 80202-3531
- -------------------------------------------------------------------------------------------------------------------
MCB Trust Services Cust. F/B/O 4,713.330 5.20%
Foxcor, Inc.
401(k) Profit Sharing Plan
700 17th ST Ste 300
Denver, CO 80202-3531
- ---------------------------------------------------------------------------------------------------------------------------------
Charles Schwab & Co Inc Investor Class 180,678.790 5.15%
Exclusive Benefit of its Cust
Attn: Mutual Fund Dept
101 Montgomery St
San Francisco, CA 94104-4151
- ---------------------------------------------------------------------------------------------------------
100
- ---------------------------------------------------------------------------------------------------------
Number of
Record Holder Share Class Shares Percent of Class
- ---------------------------------------------------------------------------------------------------------
Pioneer Classic Balanced Fund
- ---------------------------------------------------------------------------------------------------------
Amvescap National Trust Company Class A 2,096,290.324 35.10%
As Agent For AmSouth Bank
FBO AmSouth Thrift Plan
P.O. Box 105779
Atlanta, GA 30348-5779
- ---------------------------------------------------------------------------------------------------------
Pershing LLC 4,602.140 12.09%
P.O. Box 2052
Jersey City, NJ 07303-2052
- ---------------------------------------------------------------------------------------------------------
Pershing LLC 2,714.932 7.13%
P.O. Box 2052
Jersey City, NJ 07303-2052
- ---------------------------------------------------------------------------------------------------------
MLPF&S for the Sole Benefit of its Customers 10,495.932 27.59%
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville, FL 32246-6484
- ---------------------------------------------------------------------------------------------------------
Kenneburt & Company Class Y 271,943.878 10.12%
FBO ASO Trust
Attn: Mutual Fund Operations
P.O. Box 12365
Birmingham, AL 35202-2365
- ---------------------------------------------------------------------------------------------------------
Kenneburt & Company 949,324.850 33.35%
FBO ASO Trust
Attn: Mutual Fund Operations
P.O. Box 12365
Birmingham, AL 35202-2365
- ---------------------------------------------------------------------------------------------------------
Amvescap National Trust Company 347,362.276 12.93%
As Agent For AmSouth Bank
FBO Cas Inc. 401K Plan
P.O. Box 105779
Atlanta, GA 30348-5779
- ---------------------------------------------------------------------------------------------------------
BISYS Retirement Services 496,642.364 18.49%
FBO Warrior Tractor Equipment 401K Plan
700 17th Street, Suite 300
Denver, Co 80202-3531
- ---------------------------------------------------------------------------------------------------------
101
- ------------------------------------------------------------------------------------------------------------
Number of
Record Holder Share Class Shares Percent of Class
- ------------------------------------------------------------------------------------------------------------
Amvescap National Trust Company 347,362.276 12.93%
As Agent For AmSouth Bank
FBO Tractor Equipment Company
401K PS Retirement Plan
P.O. Box 105779
Atlanta, GA 30348-5779
- ------------------------------------------------------------------------------------------------------------
Pioneer Balanced Fund
- ------------------------------------------------------------------------------------------------------------
Merrill Lynch, Pierce, Fenner & Smith Incorporated Class B 89,612.452 6.58%
for the Sole Benefit of its Customers
Mutual Fund Administration
4800 Deer Lake Drive East, 2nd Floor
Jacksonville, FL 32246-6484
- ------------------------------------------------------------------------------------------------------------
Citigroup Global Markets Inc. Class C 269,791.510 26.91%
Attn: Peter Booth
333 West 34th St 7th Fl
New York NY 10001-2402
- ------------------------------------------------------------------------------------------------------------
Pioneer AMT-Free Municipal Fund
- ------------------------------------------------------------------------------------------------------------
UBS Financial Services Inc. Class A 178,420.402 9.18%
FBO Richard C. Gibson
PO Box 3817
Midland, TX 79702-3817
- ------------------------------------------------------------------------------------------------------------
Pershing LLC 144,366.678 7.42%
PO Box 2052
Jersey City, NJ 07303-2052
- ------------------------------------------------------------------------------------------------------------
Janney Montgomery Scott LLC Class B 20,415.387 7.64%
Delores E. Haufler
1801 Market St.
Philadelphia, PA 19103-1628
- ------------------------------------------------------------------------------------------------------------
Janney Montgomery Scott LLC 19,698.946 7.38%
George J. Haufler TR
1801 Market St.
Philadelphia, PA 19103-1628
- ------------------------------------------------------------------------------------------------------------
MLPF&S for the Sole Benefit of 75,389.588 28.24%
Its Customers
Mutual Fund Administration
4800 Deer Lake Dr. E FL 2
Jacksonville FL 32246-6484
- ------------------------------------------------------------------------------------------------------------
G John Runia Class C 28,867.604 14.48%
Estate of George W. Bernall
111 E. Broadway, Ste 250
Salt Lake City, UT 84111-5241
- ------------------------------------------------------------------------------------------------------------
102
- ------------------------------------------------------------------------------------------------
Number of
Record Holder Share Class Shares Percent of Class
- ------------------------------------------------------------------------------------------------
MLPF&S for the Sole Benefit of 73,375.508 36.99%
Its Customers
Mutual Fund Administration
4800 Deer Lake Dr. E FL 2
Jacksonville FL 32246-6484
- ------------------------------------------------------------------------------------------------
Charles Schwab & Co Inc Investor Class 2,102,055.435 6.63%
Exclusive Benefit of Its Cust
Attn: Mutual Fund Dept
101 Montgomery St
San Francisco CA 94104-4122
- ------------------------------------------------------------------------------------------------
Pioneer Florida Tax Free Income Fund
- ------------------------------------------------------------------------------------------------
Kenneburt & Company Class B 19,882.318 11.71%
FBO ASO Trust
Attn: Mutual Fund Operations
P.O. Box 12365
Birmingham, AL 35202-2365
- ------------------------------------------------------------------------------------------------
Pershing LLC 11,606.314 6.83%
P.O. Box 2052
Jersey City, NJ 07303-2052
- ------------------------------------------------------------------------------------------------
Pershing LLC 11,567.106 6.81%
P.O. Box 2052
Jersey City, NJ 07303-2052
- ------------------------------------------------------------------------------------------------
Pershing LLC 23,317.466 13.74%
P.O. Box 2052
Jersey City, NJ 07303-2052
- ------------------------------------------------------------------------------------------------
Pershing LLC 10,226.892 6.02%
P.O. Box 2052
Jersey City, NJ 07303-2052
- ------------------------------------------------------------------------------------------------
NFS LLC FEBO 23,607.177 13.91%
Panagiotis Fotiadis
218 Windward Island
Clearwater, FL 33767-2325
- ------------------------------------------------------------------------------------------------
Pioneer Funds Distributor Inc. Class C 954.198 99.99%
60 State Street
Boston, MA 02109-1800
- ------------------------------------------------------------------------------------------------
Kenneburt & Company Class Y 3,170,955.932 93.81%
FBO ASO Trust
Attn: Mutual Fund Operations
P.O. Box 12365
Birmingham, AL 35202-2365
- ------------------------------------------------------------------------------------------------
Kenneburt & Company 197,033.021 5.82%
FBO ASO Trust
Attn: Mutual Fund Operations
P.O. Box 12365
Birmingham, AL 35202-2365
- ------------------------------------------------------------------------------------------------
103
- -------------------------------------------------------------------------------------------------------------
Number of
Record Holder Share Class Shares Percent of Class
- -------------------------------------------------------------------------------------------------------------
Pioneer Research Fund
Merrill Lynch, Pierce, Fenner & Smith Incorporated Class A 59,628.146 8.35%
for the Sole Benefit of its Customers
4800 Deer Lake Drive East, 2nd Floor
Jacksonville, FL 32246-6484
- -------------------------------------------------------------------------------------------------------------
Merrill Lynch, Pierce, Fenner & Smith Incorporated Class B 190,011.109 33.17%
for the Sole Benefit of its Customers
4800 Deer Lake Drive East, 2nd Floor
Jacksonville, FL 32246-6484
- -------------------------------------------------------------------------------------------------------------
Merrill Lynch, Pierce, Fenner & Smith Incorporated Class C 65,102.757 24.52%
for the Sole Benefit of its Customers
4800 Deer Lake Drive East, 2nd Floor
Jacksonville, FL 32246-6484
- -------------------------------------------------------------------------------------------------------------
MCB Trust Services FBO 32,816.239 12.36%
James R. Thompson Inc. 401(K) Plan
700 17th ST Ste 300
Denver CO 80202-3531
- -------------------------------------------------------------------------------------------------------------
Brown Brothers Harriman & Co Class Y 2,580,303.755 31.66%
As Custodian for its customer
Attn: Investment Funds Global
Distribution Center
525 Washington Blvd.
Jersey City, NJ 07310-1692
- -------------------------------------------------------------------------------------------------------------
Brown Brothers Harriman & Co 425,857.411 5.22%
As Custodian for its customer
Attn: Investment Funds Global
Distribution Center
525 Washington Blvd.
Jersey City, NJ 07310-1692
- -------------------------------------------------------------------------------------------------------------
Brown Brothers Harriman & Co 2,328,427.808 28.57%
As Custodian for its customer
Attn: Investment Funds Global
Distribution Center
525 Washington Blvd.
Jersey City, NJ 07310-1692
- -------------------------------------------------------------------------------------------------------------
Brown Brothers Harriman & Co 1,869,891.901 22.94%
As Custodian for its customer
Attn: Investment Funds Global
Distribution Center
525 Washington Blvd.
Jersey City, NJ 07310-1692
- -------------------------------------------------------------------------------------------------------------
Brown Brothers Harriman & Co 681,383.827 8.36%
As Custodian for its customer
Attn: Investment Funds Global
Distribution Center
525 Washington Blvd.
Jersey City, NJ 07310-1692
- -------------------------------------------------------------------------------------------------------------
104
- ----------------------------------------------------------------------------------------
Number of
Record Holder Share Class Shares Percent of Class
- ----------------------------------------------------------------------------------------
Pioneer Focused Equity Fund
Kenneburt & Company Class A 151,195.145 14.39%
FBO ASO Trust
Attn: Mutual Fund Operations
P.O. Box 12365
Birmingham, AL 35202-2365
- ----------------------------------------------------------------------------------------
Pioneer Funds Distributor Inc. Class C 765.697 27.65%
60 State Street
Boston, MA 02109-1800
- ----------------------------------------------------------------------------------------
PIM IRA Cust for 1,960.227 70.80%
Kathleen D. White
2041 N. Kensington St.
Arlington, VA 22205-3209
- ----------------------------------------------------------------------------------------
Kenneburt & Company Class Y 2,000,440.917 50.94%
FBO ASO Trust
Attn: Mutual Fund Operations
P.O. Box 12365
Birmingham, AL 35202-2365
- ----------------------------------------------------------------------------------------
Kenneburt & Company 948,769.651 24.16%
FBO ASO Trust
Attn: Mutual Fund Operations
P.O. Box 12365
Birmingham, AL 35202-2365
- ----------------------------------------------------------------------------------------
Kenneburt & Company 943,733.262 24.03%
FBO ASO Trust
Attn: Mutual Fund Operations
P.O. Box 12365
Birmingham, AL 35202-2365
- ----------------------------------------------------------------------------------------
105
EXPERTS
The financial highlights and financial statements of each Pioneer Fund for
its most recent fiscal year end are incorporated by reference into this Proxy
Statement/Prospectus. The financial highlights and financial statements of each
Pioneer Fund for its most recent fiscal year end have been audited by Ernst &
Young LLP, independent registered public accounting firm, as set forth in their
reports thereon incorporated by reference into this registration statement.
Such financial statements and financial highlights are incorporated by
reference herein in reliance upon such reports given on the authority of such
firm as experts in accounting and auditing.
AVAILABLE INFORMATION
You can obtain more free information about the funds from your investment
firm or by writing to Pioneer Investment Management Shareholder Services, Inc.,
60 State Street, Boston, Massachusetts 02109. You may also call 1-800-225-6292.
Each fund's statement of additional information and shareholder reports
are available free of charge on the funds' website at
www.pioneerinvestments.com
Shareholder reports. Annual and semiannual reports to shareholders, and
quarterly reports filed with the SEC, provide information about each fund's
investments. The annual report discusses market conditions and investment
strategies that significantly affected each fund's performance during its last
fiscal year.
Visit our website www.pioneerinvestments.com
Each fund is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended and the 1940 Act and files reports, proxy
statements and other information with the SEC. These reports, proxy statements
and other information filed by the funds and their predecessors can be
inspected and copied (for a duplication fee) at the public reference facilities
of the SEC at 100 F Street, N.E., Washington, D.C. Copies of these materials
can also be obtained by mail from the Public Reference Branch, Office of
Consumer Affairs and Information Services, Securities and Exchange Commission,
Washington, D.C. 20549, at prescribed rates. In addition, copies of these
documents may be viewed on-screen or downloaded from the SEC's Internet site at
http://www.sec.gov.
106
EXHIBIT A -- FORM OF AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of
the th day of , 2006, by and between Pioneer Trust, a
Delaware statutory trust (the "Acquiring Trust"), on behalf of its series,
Pioneer Fund (the "Acquiring Fund"), with its principal place of
business at 60 State Street, Boston, Massachusetts 02109, and Pioneer
__________ Trust, a [Delaware statutory] [Massachusetts business] trust (the
"Acquired Trust"), on behalf of its series, Pioneer ____________ Fund (the
"Acquired Fund"), with its principal place of business at 60 State Street,
Boston, Massachusetts 02109. The Acquiring Fund and the Acquired Fund are
sometimes referred to collectively herein as the "Funds" and individually as a
"Fund."
This Agreement is intended to be and is adopted as a plan of a
"reorganization" as defined in Section 368(a)(1)([C/D]) of the United States
Internal Revenue Code of 1986, as amended (the "Code") and the Treasury
Regulations thereunder. The reorganization (the "Reorganization") will consist
of (1) the transfer of all of the assets of the Acquired Fund to the Acquiring
Fund solely in exchange for (A) the issuance of Class A, Class B, Class C,
[Class R] [Class Y] [Investor Class] shares of beneficial interest of the
Acquiring Fund (collectively, the "Acquiring Fund Shares" and each, an
"Acquiring Fund Share") to the Acquired Fund, and (B) the assumption by the
Acquiring Fund of all of the liabilities of the Acquired Fund on the closing
date of the Reorganization (the "Closing Date") (collectively, the "Assumed
Liabilities"), and (2) the distribution by the Acquired Fund, on or promptly
after the Closing Date as provided herein, of the Acquiring Fund Shares to the
shareholders of the Acquired Fund in liquidation and dissolution of the
Acquired Fund, all upon the terms and conditions hereinafter set forth in this
Agreement.
WHEREAS, the Acquiring Trust and the Acquired Trust are each registered
investment companies classified as management companies of the open-end type.
WHEREAS, the Acquiring Fund is authorized to issue shares of beneficial
interest.
WHEREAS, the Board of Trustees of the Acquiring Trust and the Acquired
Trust have determined that the Reorganization is in the best interests of the
Acquiring Fund shareholders and the Acquired Fund shareholders, respectively,
and is not dilutive of the interests of those shareholders.
NOW, THEREFORE, in consideration of the premises of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR THE ACQUIRING FUND
SHARES AND ASSUMPTION OF THE ASSUMED LIABILITIES; LIQUIDATION AND
TERMINATION OF THE ACQUIRED FUND.
1.1 Subject to the terms and conditions herein set forth and on the basis
of the representations and warranties contained herein, the Acquired Fund will
transfer all of its assets as set forth in Paragraph 1.2 (the "Acquired
Assets") to the Acquiring Fund free and clear of all liens and encumbrances
(other than those arising under the Securities Act of 1933, as amended (the
"Securities Act"), liens for taxes not yet due and contractual restrictions on
the transfer of the Acquired Assets) and the Acquiring Fund agrees in exchange
therefor: (i) to issue to the Acquired Fund the number of Acquiring Fund
Shares, including fractional Acquiring Fund Shares, of each class with an
aggregate net asset value ("NAV") equal to the NAV of the Acquired Fund
attributable to the corresponding class of the Acquired Fund's shares, as
determined in the manner set forth in Paragraphs 2.1 and 2.2; and (ii) to
assume the Assumed Liabilities. Such transactions shall take place at the
Closing (as defined in Paragraph 3.1 below).
1.2 (a) The Acquired Assets shall consist of all of the Acquired Fund's
property, including, without limitation, all portfolio securities and
instruments, dividends and interest receivables, cash, goodwill, contractual
rights and choses in action of the Acquired Fund or the Acquired Fund in
respect of the Acquired Fund, all other intangible property owned by the
Acquired Fund, originals or copies of all books and records of the Acquired
Fund, and all other assets of the Acquired Fund on the Closing Date. The
Acquiring Fund shall also be entitled to receive copies of all records that the
Acquired Fund is required to maintain under the Investment Company Act of 1940,
as amended (the "Investment Company Act"), and the rules of the Securities and
Exchange Commission (the "Commission") thereunder to the extent such records
pertain to the Acquired Fund.
(b) The Acquired Fund has provided the Acquiring Fund with a list of all
of the Acquired Fund's securities and other assets as of the date of execution
of this Agreement, and the Acquiring Fund has provided the Acquired Fund with a
copy of the current fundamental investment policies and restrictions and fair
value procedures applicable to the Acquiring Fund. The Acquired Fund reserves
the right to sell any of such securities or other assets before the Closing
Date (except to the extent sales may be limited by representations of the
Acquired Fund contained herein and made in connection with the issuance of the
tax opinion provided for in Paragraph 8.5 hereof) and agrees not to acquire any
portfolio security that is not an eligible investment for, or that would
violate an investment policy or restriction of, the Acquiring Fund.
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1.3 The Acquired Fund will endeavor to discharge all of its known
liabilities and obligations that are or will become due prior to the Closing.
1.4 On or as soon after the Closing Date as is conveniently practicable
(the "Liquidation Date"), the Acquired Trust shall liquidate the Acquired Fund
and distribute pro rata to its shareholders of record, determined as of the
close of regular trading on the New York Stock Exchange on the Closing Date
(the "Acquired Fund Shareholders"), the Acquiring Fund Shares received by the
Acquired Fund pursuant to Paragraph 1.1 hereof. Each Acquired Fund Shareholder
shall receive the number of Acquiring Fund Shares of the class corresponding to
the class of shares of beneficial interest in the Acquired Fund (the "Acquired
Fund Shares") held by such Acquired Fund Shareholder that have an aggregate NAV
equal to the aggregate NAV of the Acquired Fund Shares held of record by such
Acquired Fund Shareholder on the Closing Date. Such liquidation and
distribution will be accomplished by the Acquired Trust instructing the
Acquiring Trust to transfer the Acquiring Fund Shares then credited to the
account of the Acquired Fund on the books of the Acquiring Fund to open
accounts on the share records of the Acquiring Fund established and maintained
by the Acquiring Fund's transfer agent in the names of the Acquired Fund
Shareholders and representing the respective pro rata number of the Acquiring
Fund Shares due the Acquired Fund Shareholders. The Acquired Trust shall
promptly provide the Acquiring Trust with evidence of such liquidation and
distribution. All issued and outstanding Acquired Fund Shares will
simultaneously be cancelled on the books of the Acquired Fund, and the Acquired
Fund will be dissolved. The Acquiring Fund shall not issue certificates
representing the Acquiring Fund Shares in connection with such exchange.
1.5 Ownership of Acquiring Fund Shares will be shown on the books of the
Acquiring Fund's transfer agent. Any certificates representing ownership of
Acquired Fund Shares that remain outstanding on the Closing Date shall be
deemed to be cancelled and shall no longer evidence ownership of Acquired Fund
Shares.
1.6 Any transfer taxes payable upon issuance of Acquiring Fund Shares in a
name other than the registered holder of the Acquired Fund Shares on the books
of the Acquired Fund as of that time shall, as a condition of such issuance and
transfer, be paid by the person to whom such Acquiring Fund Shares are to be
issued and transferred.
1.7 Any reporting responsibility of the Acquired Trust with respect to the
Acquired Fund for taxable periods ending on or before the Closing Date,
including, but not limited to, the responsibility for filing of regulatory
reports, Tax Returns (as defined in Paragraph 4.1), or other documents with the
Commission, any state securities commissions, and any federal, state or local
tax authorities or any other relevant regulatory authority, is and shall remain
the responsibility of the Acquired Fund.
2. VALUATION
2.1 The NAV of the Acquiring Fund Shares and the NAV of the Acquired Fund
shall, in each case, be determined as of the close of regular trading on the
New York Stock Exchange (generally, 4:00 p.m., Boston time) on the Closing Date
(the "Valuation Time"). Pioneer Investment Management, Inc. (the "Acquiring
Fund Adviser") shall compute the NAV per Acquiring Fund Share in the manner set
forth in the Acquiring Trust's Agreement and Declaration of Trust (the
"Declaration"), or By-Laws, and the Acquiring Fund's then-current prospectus
and statement of additional information. The Acquiring Fund Adviser shall
compute the NAV per share of the Acquired Fund in the manner set forth in the
Acquired Trust's Agreement and Declaration of Trust, or By-laws, and the
Acquired Fund's then- current prospectus and statement of additional
information. The Acquiring Fund Adviser shall confirm to the Acquiring Fund the
NAV of the Acquired Fund.
2.2 The number of Acquiring Fund Shares to be issued (including fractional
shares, if any) in exchange for the Acquired Assets and the assumption of the
Assumed Liabilities shall be determined by the Acquiring Fund Adviser by
dividing the NAV of the Acquired Fund, as determined in accordance with
Paragraph 2.1, by the NAV of each Acquiring Fund Share, as determined in
accordance with Paragraph 2.1.
2.3 The Acquiring Fund and the Acquired Fund shall cause the Acquiring
Fund Adviser to deliver a copy of its valuation report to the other party at
Closing (as defined in Paragraph 3.1). All computations of value shall be made
by the Acquiring Fund Adviser in accordance with its regular practice as
pricing agent for the Acquiring Fund and the Acquired Fund.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be ____________, 2006, or such later date as
the parties may agree to in writing. All acts necessary to consummate the
Reorganization (the "Closing") shall be deemed to take place simultaneously as
of 5:00 p.m. (Eastern time) on the Closing Date unless otherwise provided. The
Closing shall be held at the offices of Wilmer Cutler Pickering Hale and Dorr
LLP, 60 State Street, Boston, Massachusetts, or at such other place as the
parties may agree.
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3.2 Portfolio securities that are held other than in book-entry form in
the name of Brown Brothers Harriman & Co. (the "Acquired Fund Custodian") as
record holder for the Acquired Fund shall be presented by the Acquired Fund to
Brown Brothers Harriman & Co. (the "Acquiring Fund Custodian") for examination
no later than three business days preceding the Closing Date. Such portfolio
securities shall be delivered by the Acquired Fund to the Acquiring Fund
Custodian for the account of the Acquiring Fund on the Closing Date, duly
endorsed in proper form for transfer, in such condition as to constitute good
delivery thereof in accordance with the custom of brokers, and shall be
accompanied by all necessary federal and state stock transfer stamps or a check
for the appropriate purchase price thereof. Portfolio securities held of record
by the Acquired Fund Custodian in book-entry form on behalf of the Acquired
Fund shall be delivered by the Acquired Fund Custodian through the Depository
Trust Company to the Acquiring Fund Custodian and by the Acquiring Fund
Custodian recording the beneficial ownership thereof by the Acquiring Fund on
the Acquiring Fund Custodian's records. Any cash shall be delivered by the
Acquired Fund Custodian transmitting immediately available funds by wire
transfer to the Acquiring Fund Custodian the cash balances maintained by the
Acquired Fund Custodian and the Acquiring Fund Custodian crediting such amount
to the account of the Acquiring Fund.
3.3 The Acquiring Fund Custodian shall deliver within one business day
after the Closing a certificate of an authorized officer stating that: (a) the
Acquired Assets have been delivered in proper form to the Acquiring Fund on the
Closing Date, and (b) all necessary transfer taxes including all applicable
federal and state stock transfer stamps, if any, have been paid, or provision
for payment has been made in conjunction with the delivery of portfolio
securities as part of the Acquired Assets.
3.4 If on the Closing Date (a) the New York Stock Exchange is closed to
trading or trading thereon shall be restricted or (b) trading or the reporting
of trading on such exchange or elsewhere is disrupted so that accurate
appraisal of the NAV of the Acquiring Fund Shares or the Acquired Fund pursuant
to Paragraph 2.1 is impracticable, the Closing Date shall be postponed until
the first business day after the day when trading shall have been fully resumed
and reporting shall have been restored.
3.5 The Acquired Fund shall deliver at the Closing a list of the names,
addresses, federal taxpayer identification numbers and backup withholding and
nonresident alien withholding status and certificates of the Acquired Fund
Shareholders and the number and percentage ownership of outstanding Acquired
Fund Shares owned by each Acquired Fund Shareholder as of the Valuation Time,
certified by the President or a Secretary of the Acquired Trust and its
Treasurer, Secretary or other authorized officer (the "Shareholder List") as
being an accurate record of the information (a) provided by the Acquired Fund
Shareholders, (b) provided by the Acquired Fund Custodian, or (c) derived from
the Acquired Trust's records by such officers or one of the Acquired Trust's
service providers. The Acquiring Fund shall issue and deliver to the Acquired
Fund a confirmation evidencing the Acquiring Fund Shares to be credited on the
Closing Date, or provide evidence satisfactory to the Acquired Fund that such
Acquiring Fund Shares have been credited to the Acquired Fund's account on the
books of the Acquiring Fund. At the Closing, each party shall deliver to the
other such bills of sale, checks, assignments, stock certificates, receipts or
other documents as such other party or its counsel may reasonably request.
4. REPRESENTATIONS AND WARRANTIES
4.1 Except as set forth on a disclosure schedule previously provided by
the Acquired Fund to the Acquiring Fund, the Acquired Trust, on behalf of the
Acquired Fund, represents, warrants and covenants to the Acquiring Fund, which
representations, warranties and covenants will be true and correct on the date
hereof and on the Closing Date as though made on and as of the Closing Date, as
follows:
(a) The Acquired Fund is a series of the Acquired Trust. The Acquired
Trust is a [statutory] [business] trust validly existing and in good
standing under the laws of the [State of Delaware] [Commonwealth of
Massachusetts] and has the power to own all of its properties and assets
and, subject to approval by the Acquired Fund's shareholders, to perform
its obligations under this Agreement. The Acquired Fund is not required to
qualify to do business in any jurisdiction in which it is not so qualified
or where failure to qualify would subject it to any material liability or
disability. Each of the Acquired Trust and the Acquired Fund has all
necessary federal, state and local authorizations to own all of its
properties and assets and to carry on its business as now being conducted;
(b) The Acquired Trust a registered investment company classified as a
management company of the open-end type, and its registration with the
Commission as an investment company under the Investment Company Act is in
full force and effect;
(c) The Acquired Trust is not in violation of, and the execution and
delivery of this Agreement and the performance of its obligations under
this Agreement in respect of the Acquired Fund will not result in a
violation of, any provision of the Acquired Trust's Declaration or By-Laws
or any material agreement, indenture, instrument, contract, lease or other
undertaking with respect to the Acquired Trust to which the Acquired Fund
is a party or by which the Acquired Fund or any of its assets are bound;
(d) No litigation or administrative proceeding or investigation of or
before any court or governmental body is currently pending or to its
knowledge threatened against the Acquired Fund or any of the Acquired
Fund's properties or assets. Neither the Acquired
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Trust nor the Acquired Fund knows of no facts that might form the basis for
the institution of such proceedings. The Acquired Fund is not a party to or
subject to the provisions of any order, decree or judgment of any court or
governmental body which materially adversely affects the Acquired Fund's
business or its ability to consummate the transactions contemplated herein
or would be binding upon the Acquiring Fund as the successor to the Acquired
Fund;
(e) The Acquired Fund has no material contracts or other commitments
(other than this Agreement or agreements for the purchase and sale of
securities entered into in the ordinary course of business and consistent
with its obligations under this Agreement) which will not be terminated at
or prior to the Closing Date and no such termination will result in
liability to the Acquired Fund (or the Acquiring Fund);
(f) The statement of assets and liabilities of the Acquired Fund, and the
related statements of operations and changes in net assets, as of and for
the fiscal year ended [December 31, 2005] [July 31, 2005], have been
audited by an independent registered public accounting firm retained by
the Acquired Fund, and are in accordance with generally accepted
accounting principles ("GAAP") consistently applied and fairly reflect, in
all material respects, the financial condition of the Acquired Fund as of
such date and the results of its operations for the period then ended, and
all known liabilities, whether actual or contingent, of the Acquired Fund
as of the date thereof are disclosed therein. The Statement of Assets and
Liabilities will be in accordance with GAAP consistently applied and will
fairly reflect, in all material respects, the financial condition of the
Acquired Fund as of such date and the results of its operations for the
period then ended. Except for the Assumed Liabilities, the Acquired Fund
will not have any known or contingent liabilities on the Closing Date. No
significant deficiency, material weakness, fraud, significant change or
other factor that could significantly affect the internal controls of the
Acquired Fund has been disclosed or is required to be disclosed in the
Acquired Fund's reports on Form N-CSR to enable the chief executive
officer and chief financial officer or other officers of the Acquired Fund
to make the certifications required by the Sarbanes-Oxley Act, and no
deficiency, weakness, fraud, change, event or other factor exists that
will be required to be disclosed in the Acquiring Fund's Form N-CSR after
the Closing Date;
(g) Since the most recent fiscal year end, except as specifically
disclosed in the Acquired Fund's prospectus, its statement of additional
information as in effect on the date of this Agreement, [or its
semi-annual report for the six-month period ended January 31, 2006,] there
has not been any material adverse change in the Acquired Fund's financial
condition, assets, liabilities, business or prospects, or any incurrence
by the Acquired Fund of indebtedness, except for normal contractual
obligations incurred in the ordinary course of business or in connection
with the settlement of purchases and sales of portfolio securities. For
the purposes of this subparagraph (g) (but not for any other purpose of
this Agreement), a decline in NAV per Acquired Fund Share arising out of
its normal investment operations or a decline in market values of
securities in the Acquired Fund's portfolio or a decline in net assets of
the Acquired Fund as a result of redemptions shall not constitute a
material adverse change;
(h) (A) For each taxable year of its operation since its inception, the
Acquired Fund has satisfied, and for the current taxable year it will
satisfy, the requirements of Subchapter M of the Code for qualification
and treatment as a regulated investment company. The Acquired Fund will
qualify as such as of the Closing Date and will satisfy the
diversification requirements of Section 851(b)(3) of the Code without
regard to the last sentence of Section 851(d) of the Code. The Acquired
Fund has not taken any action, caused any action to be taken or caused
any action to fail to be taken which action or failure could cause the
Acquired Fund to fail to qualify as a regulated investment company
under the Code;
(B) Within the times and in the manner prescribed by law, the Acquired
Fund has properly filed on a timely basis all Tax Returns (as defined
below) that it was required to file, and all such Tax Returns were
complete and accurate in all material respects. The Acquired Fund has not
been informed by any jurisdiction that the jurisdiction believes that the
Acquired Fund was required to file any Tax Return that was not filed; and
the Acquired Fund does not know of any basis upon which a jurisdiction
could assert such a position;
(C) The Acquired Fund has timely paid, in the manner prescribed by law,
all Taxes (as defined below), which were due and payable or which were
claimed to be due;
(D) All Tax Returns filed by the Acquired Fund constitute complete and
accurate reports of the respective Tax liabilities and all attributes of
the Acquired Fund or, in the case of information returns and payee
statements, the amounts required to be reported, and accurately set forth
all items required to be included or reflected in such returns;
(E) The Acquired Fund has not waived or extended any applicable statute
of limitations relating to the assessment or collection of Taxes;
(F) The Acquired Fund has not been notified that any examinations of
the Tax Returns of the Acquired Fund are currently in progress or
threatened, and no deficiencies have been asserted or assessed against
the Acquired Fund as a result of any audit
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by the Internal Revenue Service or any state, local or foreign taxing
authority, and, to its knowledge, no such deficiency has been proposed or
threatened;
(G) The Acquired Fund has no actual or potential liability for any Tax
obligation of any taxpayer other than itself. The Acquired Fund is not
and has never been a member of a group of corporations with which it has
filed (or been required to file) consolidated, combined or unitary Tax
Returns. The Acquired Fund is not a party to any Tax allocation, sharing,
or indemnification agreement;
(H) The unpaid Taxes of the Acquired Fund for tax periods through the
Closing Date do not exceed the accruals and reserves for Taxes (excluding
accruals and reserves for deferred Taxes established to reflect timing
differences between book and Tax income) set forth on the Statement of
Assets and Liabilities, as defined in paragraph 5.7, rather than in any
notes thereto (the "Tax Reserves"). All Taxes that the Acquired Fund is
or was required by law to withhold or collect have been duly withheld or
collected and, to the extent required, have been timely paid to the
proper governmental agency;
(I) The Acquired Fund has delivered to the Acquiring Fund or made
available to the Acquiring Fund complete and accurate copies of all Tax
Returns of the Acquired Fund, together with all related examination
reports and statements of deficiency for all periods not closed under the
applicable statutes of limitations and complete and correct copies of all
private letter rulings, revenue agent reports, information document
requests, notices of proposed deficiencies, deficiency notices, protests,
petitions, closing agreements, settlement agreements, pending ruling
requests and any similar documents submitted by, received by or agreed to
by or on behalf of the Acquired Fund. The Acquired Fund has disclosed on
its federal income Tax Returns all positions taken therein that could
give rise to a substantial understatement of federal income Tax within
the meaning of Section 6662 of the Code;
(J) The Acquired Fund has not undergone, has not agreed to undergo, and
is not required to undergo (nor will it be required as a result of the
transactions contemplated in this Agreement to undergo) a change in its
method of accounting resulting in an adjustment to its taxable income
pursuant to Section 481 of the Code. The Acquired Fund will not be
required to include any item of income in, or exclude any item of
deduction from, taxable income for any taxable period (or portion
thereof) ending after the Closing Date as a result of any (i) change in
method of accounting for a taxable period ending on or prior to the
Closing Date under Section 481(c) of the Code (or any corresponding or
similar provision of state, local or foreign income Tax law); (ii)
"closing agreement" as described in Section 7121 of the Code (or any
corresponding or similar provision of state, local or foreign income Tax
law) executed on or prior to the Closing Date; (iii) installment sale or
open transaction disposition made on or prior to the Closing Date; or
(iv) prepaid amount received on or prior to the Closing Date;
(K) The Acquired Fund will not have taken or agreed to take any action,
and will not be aware of any agreement, plan or other circumstance, that
is inconsistent with the representations set forth in the Acquired Fund
Representation Certificate to be delivered pursuant to paragraph 7.4;
(L) There are (and as of immediately following the Closing there will
be) no liens on the assets of the Acquired Fund relating to or
attributable to Taxes, except for Taxes not yet due and payable;
(M) The Tax bases of the assets of the Acquired Fund are accurately
reflected on the Acquired Fund's Tax books and records; and
(N) For purposes of this Agreement, "Taxes" or "Tax" shall mean all
taxes, charges, fees, levies or other similar assessments or liabilities,
including without limitation income, gross receipts, ad valorem, premium,
value-added, excise, real property, personal property, sales, use,
transfer, withholding, employment, unemployment, insurance, social
security, business license, business organization, environmental, workers
compensation, payroll, profits, license, lease, service, service use,
severance, stamp, occupation, windfall profits, customs, duties,
franchise and other taxes imposed by the United States of America or any
state, local or foreign government, or any agency thereof, or other
political subdivision of the United States or any such government, and
any interest, fines, penalties, assessments or additions to tax resulting
from, attributable to or incurred in connection with any tax or any
contest or dispute thereof; and "Tax Returns" shall mean all reports,
returns, declarations, statements or other information required to be
supplied to a governmental or regulatory authority or agency, or to any
other person, in connection with Taxes and any associated schedules or
work papers produced in connection with such items;
(i) All issued and outstanding Acquired Fund Shares are, and at the
Closing Date will be, legally issued and outstanding, fully paid and
nonassessable by the Acquired Fund. All of the issued and outstanding
Acquired Fund Shares will, at the time of Closing, be held of record by
the persons and in the amounts set forth in the Shareholder List submitted
to the Acquiring Fund pursuant to Paragraph 3.5 hereof. The Acquired Fund
does not have outstanding any options, warrants or other rights to
subscribe for or purchase any Acquired Fund Shares, nor is there
outstanding any security convertible into any Acquired Fund Shares;
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(j) At the Closing Date, the Acquired Fund will have good and marketable
title to the Acquired Assets, and full right, power and authority to sell,
assign, transfer and deliver the Acquired Assets to the Acquiring Fund,
and, upon delivery and payment for the Acquired Assets, the Acquiring Fund
will acquire good and marketable title thereto, subject to no restrictions
on the full transfer thereof, except such restrictions as might arise
under the Securities Act;
(k) The Acquired Fund has the trust power and authority to enter into and
perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement have been duly authorized by all necessary
action on the part of the Acquired Fund's Board of Trustees, and, subject
to the approval of the Acquired Fund's shareholders, assuming due
authorization, execution and delivery by the Acquiring Fund, this
Agreement will constitute a valid and binding obligation of the Acquired
Fund, enforceable in accordance with its terms, subject as to enforcement,
to bankruptcy, insolvency, reorganization, moratorium and other laws
relating to or affecting creditors' rights and to general equity
principles;
(l) The information to be furnished by the Acquired Fund to the Acquiring
Fund for use in applications for orders, registration statements, proxy
materials and other documents which may be necessary in connection with
the transactions contemplated hereby and any information necessary to
compute the total return of the Acquired Fund shall be accurate and
complete and shall comply in all material respects with federal securities
and other laws and regulations applicable thereto;
(m) The information included in the proxy statement (the "Proxy
Statement") forming part of the Acquiring Fund's Registration Statement on
Form N-14 filed in connection with this Agreement (the "Registration
Statement") that has been furnished in writing by the Acquired Fund to the
Acquiring Fund for inclusion in the Registration Statement, on the
effective date of that Registration Statement and on the Closing Date,
will conform in all material respects to the applicable requirements of
the Securities Act, the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the Investment Company Act and the rules and
regulations of the Commission thereunder and will not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading;
(n) Upon the effectiveness of the Registration Statement, no consent,
approval, authorization or order of any court or governmental authority is
required for the consummation by the Acquired Fund or the Acquired Fund of
the transactions contemplated by this Agreement;
(o) All of the issued and outstanding Acquired Fund Shares have been
offered for sale and sold in compliance in all material respects with all
applicable federal and state securities laws, except as may have been
previously disclosed in writing to the Acquiring Fund;
(p) The prospectus and statement of additional information of the Acquired
Fund and any amendments or supplements thereto, furnished to the Acquiring
Fund, did not as of their dates or the dates of their distribution to the
public contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which such statements
were made, not materially misleading;
(q) The Acquired Fund currently complies in all material respects with,
and since its organization has complied in all material respects with, the
requirements of, and the rules and regulations under, the Investment
Company Act, the Securities Act, the Exchange Act, state "Blue Sky" laws
and all other applicable federal and state laws or regulations. The
Acquired Fund currently complies in all material respects with, and since
its organization has complied in all material respects with, all
investment objectives, policies, guidelines and restrictions and any
compliance procedures established by the Acquired Fund with respect to the
Acquired Fund. All advertising and sales material used by the Acquired
Fund complies in all material respects with and has complied in all
material respects with the applicable requirements of the Securities Act,
the Investment Company Act, the rules and regulations of the Commission,
and, to the extent applicable, the Conduct Rules of the National
Association of Securities Dealers, Inc. (the "NASD") and any applicable
state regulatory authority. All registration statements, prospectuses,
reports, proxy materials or other filings required to be made or filed
with the Commission, the NASD or any state securities authorities by the
Acquired Fund have been duly filed and have been approved or declared
effective, if such approval or declaration of effectiveness is required by
law. Such registration statements, prospectuses, reports, proxy materials
and other filings under the Securities Act, the Exchange Act and the
Investment Company Act (i) are or were in compliance in all material
respects with the requirements of all applicable statutes and the rules
and regulations thereunder and (ii) do not or did not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances in which they were made, not false or misleading;
(r) Neither the Acquired Fund nor, to the knowledge of the Acquired Fund,
any "affiliated person" of the Acquired Fund has been convicted of any
felony or misdemeanor, described in Section 9(a)(1) of the Investment
Company Act, nor, to the knowledge
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of the Acquired Fund, has any affiliated person of the Acquired Fund been
the subject, or presently is the subject, of any proceeding or investigation
with respect to any disqualification that would be a basis for denial,
suspension or revocation of registration as an investment adviser under
Section 203(e) of the Investment Advisers Act of 1940, as amended (the
"Investment Advisers Act"), or Rule 206(4)-4(b) thereunder or of a
broker-dealer under Section 15 of the Exchange Act, or for disqualification
as an investment adviser, employee, officer or director of an investment
company under Section 9 of the Investment Company Act; and
(s) The tax representation certificate to be delivered by Acquired Trust,
on behalf of the Acquired Fund, to the Acquiring Fund and Wilmer Cutler
Pickering Hale and Dorr LLP at the Closing pursuant to Paragraph 7.4 (the
"Acquired Fund Tax Representation Certificate") will not on the Closing
Date contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein not misleading.
4.2 Except as set forth on a disclosure schedule previously provided by
the Acquiring Fund to the Acquired Fund, the Acquiring Trust, on behalf of the
Acquiring Fund, represents, warrants and covenants to the Acquired Fund, which
representations, warranties and covenants will be true and correct on the date
hereof and on the Closing Date as though made on and as of the Closing Date, as
follows:
(a) The Acquiring Fund is a series of the Acquiring Trust. The Acquiring
Trust is a statutory trust duly organized, validly existing and in good
standing under the laws of the State of Delaware. The Acquiring Trust has
the power to own all of its properties and assets and to perform the
obligations under this Agreement. The Acquiring Fund is not required to
qualify to do business in any jurisdiction in which it is not so qualified
or where failure to qualify would subject it to any material liability or
disability. Each of the Acquiring Trust and the Acquiring Fund has all
necessary federal, state and local authorizations to own all of its
properties and assets and to carry on its business as now being conducted;
(b) The Acquiring Trust is a registered investment company classified as a
management company of the open-end type, and its registration with the
Commission as an investment company under the Investment Company Act is in
full force and effect;
(c) The current prospectus and statement of additional information of the
Acquiring Fund and each prospectus and statement of additional information
for the Acquiring Fund used during the three years previous to the date of
this Agreement, and any amendment or supplement to any of the foregoing,
conform or conformed at the time their distribution to the public in all
material respects to the applicable requirements of the Securities Act and
the Investment Company Act and the rules and regulations of the Commission
thereunder and do not or did not at the time of their distribution to the
public include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not materially misleading;
(d) The Acquiring Fund's registration statement on Form N-1A that will be
in effect on the Closing Date, and the prospectus and statement of
additional information of the Acquiring Fund included therein, will
conform in all material respects with the applicable requirements of the
Securities Act and the Investment Company Act and the rules and
regulations of the Commission thereunder, and did not as of the effective
date thereof and will not as of the Closing Date contain any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light
of the circumstances in which they were made, not misleading;
(e) The Registration Statement, the Proxy Statement and statement of
additional information with respect to the Acquiring Fund, and any
amendments or supplements thereto in effect on or prior to the Closing
Date included in the Registration Statement (other than written
information furnished by the Acquired Fund for inclusion therein, as
covered by the Acquired Fund's warranty in Paragraph 4.1(m) hereof) will
conform in all material respects to the applicable requirements of the
Securities Act and the Investment Company Act and the rules and
regulations of the Commission thereunder. Neither the Registration
Statement nor the Proxy Statement (other than written information
furnished by the Acquired Fund for inclusion therein, as covered by the
Acquired Fund's warranty in Paragraph 4.1(m) hereof) includes or will
include any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading;
(f) The Acquiring Trust is not in violation of, and the execution and
delivery of this Agreement and performance of its obligations under this
Agreement will not result in a violation of, any provisions of the
Declaration of Trust or by-laws of the Acquiring Trust or any material
agreement, indenture, instrument, contract, lease or other undertaking
with respect to the Acquiring Fund to which the Acquiring Trust is a party
or by which the Acquiring Fund or any of its assets is bound;
(g) No litigation or administrative proceeding or investigation of or
before any court or governmental body is currently pending or threatened
against the Acquiring Fund or any of the Acquiring Fund's properties or
assets. The Acquiring Fund knows of no facts that might form the basis for
the institution of such proceedings. Neither the Acquiring Fund nor the
Acquiring Fund is a party to
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or subject to the provisions of any order, decree or judgment of any court
or governmental body which materially adversely affects the Acquiring Fund's
business or its ability to consummate the transactions contemplated herein;
(h) The statement of assets and liabilities of the Acquiring Fund, and the
related statements of operations and changes in net assets, as of and for
the fiscal year ended [December 31, 2005] [July 31, 2005] have been
audited by Ernst & Young LLP, independent registered public accounting
firm, and are in accordance with GAAP consistently applied and fairly
reflect, in all material respects, the financial condition of the
Acquiring Fund as of such date and the results of its operations for the
period then ended, and all known liabilities, whether actual or
contingent, of the Acquiring Fund as of the date thereof are disclosed
therein;
(i) Since the most recent fiscal year end, except as specifically
disclosed in the Acquiring Fund's prospectus, its statement of additional
information as in effect on the date of this Agreement, [or its
semi-annual report for the period ended January 31, 2006], there has not
been any material adverse change in the Acquiring Fund's financial
condition, assets, liabilities, business or prospects, or any incurrence
by the Acquiring Fund of indebtedness, except for normal contractual
obligations incurred in the ordinary course of business or in connection
with the settlement of purchases and sales of portfolio securities. For
the purposes of this subparagraph (i) (but not for any other purpose of
this Agreement), a decline in NAV per Acquiring Fund Share arising out of
its normal investment operations or a decline in market values of
securities in the Acquiring Fund's portfolio or a decline in net assets of
the Acquiring Fund as a result of redemptions shall not constitute a
material adverse change;
(j) (A) For each taxable year of its operation since its inception, the
Acquiring Fund has satisfied, and for the current taxable year it will
satisfy, the requirements of Subchapter M of the Code for qualification
and treatment as a regulated investment company and will qualify as
such as of the Closing Date and will satisfy the diversification
requirements of Section 851(b)(3) of the Code without regard to the
last sentence of Section 851(d) of the Code. The Acquiring Fund has not
taken any action, caused any action to be taken or caused any action to
fail to be taken which action or failure could cause the Acquiring Fund
to fail to qualify as a regulated investment company under the Code;
(B) Within the times and in the manner prescribed by law, the Acquiring
Fund has properly filed on a timely basis all Tax Returns that it was
required to file, and all such Tax Returns were complete and accurate in
all material respects. The Acquiring Fund has not been informed by any
jurisdiction that the jurisdiction believes that the Acquiring Fund was
required to file any Tax Return that was not filed; and the Acquiring
Fund does not know of any basis upon which a jurisdiction could assert
such a position;
(C) The Acquiring Fund has timely paid, in the manner prescribed by
law, all Taxes that were due and payable or that were claimed to be due;
(D) All Tax Returns filed by the Acquiring Fund constitute complete and
accurate reports of the respective liabilities for Taxes and all
attributes of the Acquiring Fund or, in the case of information returns
and payee statements, the amounts required to be reported, and accurately
set forth all items required to be included or reflected in such returns;
(E) The Acquiring Fund has not waived or extended any applicable
statute of limitations relating to the assessment or collection of Taxes;
(F) The Acquiring Fund has not been notified that any examinations of
the Tax Returns of the Acquiring Fund are currently in progress or
threatened, and no deficiencies have been asserted or assessed against
the Acquiring Fund as a result of any audit by the Internal Revenue
Service or any state, local or foreign taxing authority, and, to its
knowledge, no such deficiency has been proposed or threatened;
(G) The Acquiring Fund has no actual or potential liability for any Tax
obligation of any taxpayer other than itself. The Acquiring Fund is not
and has never been a member of a group of corporations with which it has
filed (or been required to file) consolidated, combined or unitary Tax
Returns. The Acquiring Fund is not a party to any Tax allocation,
sharing, or indemnification agreement;
(H) The unpaid Taxes of the Acquiring Fund for tax periods through the
Closing Date do not exceed the accruals and reserves for Taxes (excluding
accruals and reserves for deferred Taxes established to reflect timing
differences between book and Tax income) set forth in the financial
statements referred to in paragraph 4.2(h). All Taxes that the Acquiring
Fund is or was required by law to withhold or collect have been duly
withheld or collected and, to the extent required, have been timely paid
to the proper governmental agency;
(I) The Acquiring Fund has delivered to Acquired Fund or made available
to Acquired Fund complete and accurate copies of all Tax Returns of the
Acquiring Fund, together with all related examination reports and
statements of deficiency for all periods
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not closed under the applicable statutes of limitations and complete and
correct copies of all private letter rulings, revenue agent reports,
information document requests, notices of proposed deficiencies,
deficiency notices, protests, petitions, closing agreements, settlement
agreements, pending ruling requests and any similar documents submitted
by, received by or agreed to by or on behalf of the Acquiring Fund. The
Acquiring Fund has disclosed on its federal income Tax Returns all
positions taken therein that could give rise to a substantial
understatement of federal income Tax within the meaning of Section 6662 of
the Code;
(J) The Acquiring Fund has not undergone, has not agreed to undergo,
and is not required to undergo (nor will it be required as a result of
the transactions contemplated in this Agreement to undergo) a change in
its method of accounting resulting in an adjustment to its taxable income
pursuant to Section 481 of the Code. The Acquiring Fund will not be
required to include any item of income in, or exclude any item of
deduction from, taxable income for any taxable period (or portion
thereof) ending after the Closing Date as a result of any (i) change in
method of accounting for a taxable period ending on or prior to the
Closing Date under Section 481(c) of the Code (or any corresponding or
similar provision of state, local or foreign income Tax law); (ii)
"closing agreement" as described in Section 7121 of the Code (or any
corresponding or similar provision of state, local or foreign income Tax
law) executed on or prior to the Closing Date; (iii) installment sale or
open transaction disposition made on or prior to the Closing Date; or
(iv) prepaid amount received on or prior to the Closing Date;
(K) The Acquiring Fund will not have taken or agreed to take any
action, and will not be aware of any agreement, plan or other
circumstance, that is inconsistent with the representations set forth in
the Acquiring Fund Tax Representation Certificate to be delivered
pursuant to paragraph 6.3;
(L) There are (and as of immediately following the Closing there will
be) no liens on the assets of the Acquiring Fund relating to or
attributable to Taxes, except for Taxes not yet due and payable; and
(M) The Tax bases of the assets of the Acquiring Fund are accurately
reflected on the Acquiring Fund's Tax books and records;
(k) The authorized capital of the Acquiring Fund consists of an unlimited
number of shares of beneficial interest, no par value per share. As of the
Closing Date, the Acquiring Fund will be authorized to issue an unlimited
number of shares of beneficial interest, no par value per share. The
Acquiring Fund Shares to be issued and delivered to the Acquired Fund for
the account of the Acquired Fund Shareholders pursuant to the terms of
this Agreement will have been duly authorized on the Closing Date and,
when so issued and delivered, will be legally issued and outstanding,
fully paid and non-assessable. The Acquiring Fund does not have
outstanding any options, warrants or other rights to subscribe for or
purchase any Acquiring Fund shares, nor is there outstanding any security
convertible into any Acquiring Fund shares;
(l) All issued and outstanding Acquiring Fund Shares are, and on the
Closing Date will be, legally issued, fully paid and non-assessable and
have been offered and sold in every state and the District of Columbia in
compliance in all material respects with all applicable federal and state
securities laws;
(m) The Acquiring Trust has the trust power and authority to enter into
and perform its obligations under this Agreement. The execution, delivery
and performance of this Agreement have been duly authorized by all
necessary action on the part of the Acquiring Trust's Board of Trustees,
and, assuming due authorization, execution and delivery by the Acquired
Fund, this Agreement will constitute a valid and binding obligation of the
Acquiring Fund, enforceable in accordance with its terms, subject as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors' rights and to general
equity principles;
(n) The information to be furnished in writing by the Acquiring Trust, on
behalf of the Acquiring Fund, or the Acquiring Fund Adviser for use in
applications for orders, registration statements, proxy materials and
other documents which may be necessary in connection with the transactions
contemplated hereby shall be accurate and complete in all material
respects and shall comply in all material respects with federal securities
and other laws and regulations applicable thereto or the requirements of
any form for which its use is intended, and shall not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the information provided not misleading;
(o) No consent, approval, authorization or order of or filing with any
court or governmental authority is required for the execution of this
Agreement or the consummation of the transactions contemplated by the
Agreement by the Acquiring Fund, except for the registration of the
Acquiring Fund Shares under the Securities Act and the Investment Company
Act;
(p) The Acquiring Trust currently complies in all material respects with,
and since its organization has complied in all material respects with, the
requirements of, and the rules and regulations under, the Investment
Company Act, the Securities Act, the Exchange Act, state "Blue Sky" laws
and all other applicable federal and state laws or regulations. The
Acquiring Trust currently complies in
A-9
all material respects with, and since its organization has complied in all
material respects with, all investment objectives, policies, guidelines and
restrictions and any compliance procedures established by the Acquiring
Trust with respect to the Acquiring Fund. All advertising and sales material
used by the Acquiring Trust complies in all material respects with and has
complied in all material respects with the applicable requirements of the
Securities Act, the Investment Company Act, the rules and regulations of the
Commission, and, to the extent applicable, the Conduct Rules of the NASD and
any applicable state regulatory authority. All registration statements,
prospectuses, reports, proxy materials or other filings required to be made
or filed with the Commission, the NASD or any state securities authorities
by the Acquiring Trust have been duly filed and have been approved or
declared effective, if such approval or declaration of effectiveness is
required by law. Such registration statements, prospectuses, reports, proxy
materials and other filings under the Securities Act, the Exchange Act and
the Investment Company Act (i) are or were in compliance in all material
respects with the requirements of all applicable statutes and the rules and
regulations thereunder and (ii) do not or did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not false or misleading;
(q) Neither the Acquiring Fund nor, to the knowledge of the Acquiring
Fund, any "affiliated person" of the Acquiring Fund has been convicted of
any felony or misdemeanor, described in Section 9(a)(1) of the Investment
Company Act, nor, to the knowledge of the Acquiring Fund, has any
affiliated person of the Acquiring Fund been the subject, or presently is
the subject, of any proceeding or investigation with respect to any
disqualification that would be a basis for denial, suspension or
revocation of registration as an investment adviser under Section 203(e)
of the Investment Advisers Act or Rule 206(4)-4(b) thereunder or of a
broker-dealer under Section 15 of the Exchange Act, or for
disqualification as an investment adviser, employee, officer or director
of an investment company under Section 9 of the Investment Company Act;
and
(r) The tax representation certificate to be delivered by the Acquiring
Fund to the Acquired Fund and Wilmer Cutler Pickering Hale and Dorr LLP at
Closing pursuant to Section 6.3 (the "Acquiring Fund Tax Representation
Certificate") will not on the Closing Date contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein not misleading.
5. COVENANTS OF THE FUNDS
5.1 The Acquired Fund will operate the Acquired Fund's business in the
ordinary course of business between the date hereof and the Closing Date. It is
understood that such ordinary course of business will include the declaration
and payment of customary dividends and other distributions and any other
dividends and other distributions necessary or advisable (except to the extent
dividends or other distributions that are not customary may be limited by
representations made in connection with the issuance of the tax opinion
described in Paragraph 8.5 hereof), in each case payable either in cash or in
additional shares.
5.2 The Acquired Trust will call a special meeting of the Acquired Fund's
shareholders to consider approval of this Agreement and act upon the matters
set forth in the Proxy Statement.
5.3 The Acquiring Fund will prepare the notice of meeting, form of proxy
and Proxy Statement (collectively, "Proxy Materials") to be used in connection
with such meeting, and will promptly prepare and file with the Commission the
Registration Statement. The Acquired Fund will provide the Acquiring Fund with
information reasonably requested for the preparation of the Registration
Statement in compliance with the Securities Act, the Exchange Act, and the
Investment Company Act.
5.4 The Acquired Fund covenants that the Acquiring Fund Shares to be
issued hereunder are not being acquired by the Acquired Fund for the purpose of
making any distribution thereof other than in accordance with the terms of this
Agreement.
5.5 The Acquired Fund will assist the Acquiring Fund in obtaining such
information as the Acquiring Fund reasonably requires concerning the beneficial
ownership of the Acquired Fund Shares.
5.6 Subject to the provisions of this Agreement, each Fund will take, or
cause to be taken, all actions, and do or cause to be done, all things
reasonably necessary, proper or advisable to consummate the transactions
contemplated by this Agreement.
5.7 The Acquired Fund shall furnish to the Acquiring Fund on the Closing
Date a statement of assets and liabilities of the Acquired Fund ("Statement of
Assets and Liabilities") as of the Closing Date setting forth the NAV (as
computed pursuant to Paragraph 2.1) of the Acquired Fund as of the Valuation
Time, which statement shall be prepared in accordance with GAAP consistently
applied and certified by the Acquired Fund's Treasurer or Assistant Treasurer.
As promptly as practicable, but in any case within 30 days after the Closing
Date, the Acquired Fund shall furnish to the Acquiring Fund, in such form as is
reasonably satisfactory to the Acquiring Fund, a statement of the earnings and
profits of the Acquired Fund for federal income tax purposes, and of any
capital loss carryovers and other items that will be carried over to the
Acquiring Fund under the Code, and which statement will be certified by the
Treasurer of the Acquired Fund.
A-10
5.8 Neither Fund shall take any action that is inconsistent with the
representations set forth in, with respect to the Acquired Fund, the Acquired
Fund Tax Representation Certificate and, with respect to the Acquiring Fund,
the Acquiring Fund Tax Representation Certificate.
5.9 From and after the date of this Agreement and until the Closing Date,
each of the Funds and the Acquired Fund and the Acquiring Fund shall use its
commercially reasonable efforts to cause the Reorganization to qualify, and
will not knowingly take any action, cause any action to be taken, fail to take
any action or cause any action to fail to be taken, which action or failure to
act could prevent the Reorganization from qualifying, as a reorganization under
the provisions of Section 368(a) of the Code. The parties hereby adopt this
Agreement as a "plan of reorganization" within the meaning of Sections
1.368-2(g) and 1.368-3(a) of the income tax regulations promulgated under the
Code. Unless otherwise required pursuant to a "determination" within the
meaning of Section 1313(a) of the Code, the parties hereto shall treat and
report the transactions contemplated hereby as a reorganization within the
meaning of Section 368(a)(1)([C/D]) of the Code and shall not take any position
inconsistent with such treatment.
5.10 From and after the date of this Agreement and through the time of the
Closing, each Fund shall use its commercially reasonable efforts to cause it to
qualify, and will not knowingly take any action, cause any action to be taken,
fail to take any action or cause any action to fail to be taken, which action
or failure to act could prevent it from qualifying as a regulated investment
company under the provisions of Subchapter M of the Code.
5.11 Each Fund shall prepare, or cause to be prepared, all of its Tax
Returns for taxable periods that end on or before the Closing Date and shall
timely file, or cause to be timely filed, all such Tax Returns. Each Fund shall
make any payments of Taxes required to be made by it with respect to any such
Tax Returns.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Acquired Fund to complete the transactions provided
for herein shall be, at its election, subject to the performance by the
Acquiring Fund of all the obligations to be performed by it hereunder on or
before the Closing Date, and, in addition thereto, the following further
conditions, unless waived by the Acquired Fund in writing:
6.1 All representations and warranties by the Acquiring Trust, on behalf
of the Acquiring Fund, contained in this Agreement shall be true and correct in
all material respects as of the date hereof (in each case, as such
representations and warranties would read as if all qualifications as to
materiality were deleted therefrom) and, except as they may be affected by the
transactions contemplated by this Agreement, as of the Closing Date with the
same force and effect as if made on and as of the Closing Date;
6.2 The Acquiring Trust shall have delivered to the Acquired Trust on the
Closing Date a certificate of the Acquiring Trust, on behalf of the Acquiring
Fund, executed in its name by its President or Vice President and its Treasurer
or Assistant Treasurer, in form and substance satisfactory to the Acquired
Trust and dated as of the Closing Date, to the effect that the representations
and warranties of the Acquiring Trust made in this Agreement are true and
correct in all material respects at and as of the Closing Date, except as they
may be affected by the transactions contemplated by this Agreement, that each
of the conditions to Closing in this Article 6 have been met, and as to such
other matters as the Acquired Trust shall reasonably request;
6.3 The Acquiring Trust, on behalf of the Acquiring Fund, shall have
delivered to the Acquired Trust and Wilmer Cutler Pickering Hale and Dorr LLP
an Acquiring Fund Tax Representation Certificate, satisfactory to the Acquiring
Trust and Wilmer Cutler Pickering Hale and Dorr LLP, in a form mutually
acceptable to the Acquiring Trust and the Acquired Trust, concerning certain
tax-related matters with respect to the Acquired Fund;
6.4 The Board of Trustees of the Acquiring Trust shall have determined
that the Reorganization is in the best interests of the Acquiring Fund and,
based upon such determination, shall have approved this Agreement and the
transactions contemplated hereby; and
6.5 The Acquired Trust, on behalf of the Acquired Fund, shall have
received at the Closing a favorable opinion as to the due authorization of this
Agreement by the Acquiring Trust, on behalf of the Acquiring Fund, and related
matters of Wilmer Cutler Pickering Hale and Dorr LLP, dated as of the Closing
Date, in a form reasonably satisfactory to the Acquired Trust.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Fund to complete the transactions
provided for herein shall be, at its election, subject to the performance by
the Acquired Fund of all the obligations to be performed by it hereunder on or
before the Closing Date and, in addition thereto, the following further
conditions, unless waived by the Acquiring Fund in writing:
7.1 All representations and warranties of the Acquired Trust, on behalf of
the Acquired Fund, contained in this Agreement shall be true and correct in all
material respects as of the date hereof (in each case, as such representations
and warranties would read as if all
A-11
qualifications as to materiality were deleted therefrom) and, except as they
may be affected by the transactions contemplated by this Agreement, as of the
Closing Date with the same force and effect as if made on and as of the Closing
Date;
7.2 The Acquired Trust shall have delivered to the Acquiring Fund the
Statement of Assets and Liabilities of the Acquired Fund pursuant to Paragraph
5.7, together with a list of its portfolio securities showing the federal
income tax bases and holding periods of such securities, as of the Closing
Date, certified by the Acquired Trust's Treasurer or Assistant Treasurer;
7.3 The Acquired Trust shall have delivered to the Acquiring Trust on the
Closing Date a certificate of the Acquired Trust, on behalf of the Acquired
Fund, executed in its name by its President or Vice President and a Treasurer
or Assistant Treasurer, in form and substance reasonably satisfactory to the
Acquiring Trust and dated as of the Closing Date, to the effect that the
representations and warranties of the Acquired Trust contained in this
Agreement are true and correct in all material respects at and as of the
Closing Date, except as they may be affected by the transactions contemplated
by this Agreement, that each of the conditions to Closing in this Article 7
have been met, and as to such other matters as the Acquiring Trust shall
reasonably request;
7.4 The Acquired Trust, on behalf of the Acquired Fund, shall have
delivered to the Acquiring Trust and Wilmer Cutler Pickering Hale and Dorr LLP
an Acquired Fund Tax Representation Certificate, satisfactory to the Acquiring
Trust and Wilmer Cutler Pickering Hale and Dorr LLP, in a form mutually
acceptable to the Acquiring Trust and the Acquired Trust, concerning certain
tax-related matters with respect to the Acquired Fund; and
7.5 The Board of Trustees of the Acquired Trust shall have determined that
the Reorganization is in the best interests of the Acquired Fund and, based
upon such determination, shall have approved this Agreement and the
transactions contemplated hereby.
8. FURTHER CONDITIONS PRECEDENT
If any of the conditions set forth below does not exist on or before the
Closing Date with respect to either party hereto, the other party to this
Agreement shall, at its option, not be required to consummate the transactions
contemplated by this Agreement:
8.1 This Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of the Acquired Fund's shareholders in
accordance with the provisions of the Acquired Trust's Declaration and By-Laws,
and certified copies of the resolutions evidencing such approval by the
Acquired Fund's shareholders shall have been delivered by the Acquired Fund to
the Acquiring Fund. Notwithstanding anything herein to the contrary, neither
party hereto may waive the conditions set forth in this Paragraph 8.1;
8.2 On the Closing Date, no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection with,
this Agreement or the transactions contemplated herein;
8.3 All consents of other parties and all other consents, orders and
permits of federal, state and local regulatory authorities (including those of
the Commission and of state Blue Sky and securities authorities) deemed
necessary by either party hereto to permit consummation, in all material
respects, of the transactions contemplated hereby shall have been obtained,
except where failure to obtain any such consent, order or permit would not
involve a risk of a material adverse effect on the assets or properties of
either party hereto, provided that either party may waive any such conditions
for itself;
8.4 The Acquiring Fund's Registration Statement on Form N-14 shall have
become effective under the Securities Act and no stop orders suspending the
effectiveness of such Registration Statement shall have been issued and, to the
best knowledge of the parties hereto, no investigation or proceeding for that
purpose shall have been instituted or be pending, threatened or contemplated
under the Securities Act;
8.5 The parties shall have received an opinion of Wilmer Cutler Pickering
Hale and Dorr LLP, satisfactory to the Acquired Trust and the Acquiring Trust
and subject to customary assumptions and qualifications, substantially to the
effect that for federal income tax purposes the acquisition by the Acquiring
Fund of the Acquired Assets solely in exchange for the issuance of Acquiring
Fund Shares to the Acquired Fund and the assumption of the Assumed Liabilities
by the Acquiring Fund, followed by the distribution by the Acquired Fund, in
liquidation of the Acquired Fund, of Acquiring Fund Shares to the Acquired Fund
Shareholders in exchange for their Acquired Fund Shares and the termination of
the Acquired Fund, will constitute a "reorganization" within the meaning of
Section 368(a) of the Code.
8.6 The Acquired Fund shall have distributed to its shareholders, in a
distribution or distributions qualifying for the deduction for dividends paid
under Section 561 of the Code, all of its investment company taxable income (as
defined in Section 852(b)(2) of the Code determined without regard to Section
852(b)(2)(D) of the Code) for its taxable year ending on the Closing Date, all
of the excess of (i) its interest income excludable from gross income under
Section 103(a) of the Code over (ii) its deductions disallowed under Sections
A-12
265 and 171(a)(2) of the Code for its taxable year ending on the Closing Date,
and all of its net capital gain (as such term is used in Sections 852(b)(3)(A)
and (C) of the Code), after reduction by any available capital loss
carryforward, for its taxable year ending on the Closing Date.
9. BROKERAGE FEES AND EXPENSES
9.1 Each party hereto represents and warrants to the other party hereto
that there are no brokers or finders entitled to receive any payments in
connection with the transactions provided for herein.
9.2 The parties have been informed by Pioneer Investment Management, Inc.
that it will pay 50% of the expenses incurred in connection with the
Reorganization (including, but not limited to, the preparation of the proxy
statement and solicitation expenses). Each of the Acquired Fund and the
Acquiring Fund agrees to pay 25% of the expenses incurred in connection with
the Reorganization (including, but not limited to, the preparation of the proxy
statement and solicitation expenses).
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Acquiring Trust and the Acquired Trust each agrees that neither
party has made any representation, warranty or covenant not set forth herein or
referred to in Paragraphs 4.1 or 4.2 hereof and that this Agreement constitutes
the entire agreement between the parties.
10.2 The representations and warranties contained in this Agreement or in
any document delivered pursuant hereto or in connection herewith shall not
survive the consummation of the transactions contemplated hereunder.
11. TERMINATION
11.1 This Agreement may be terminated by the mutual agreement of the
Acquiring Trust and the Acquired Trust. In addition, either party may at its
option terminate this Agreement at or prior to the Closing Date:
(a) because of a material breach by the other of any representation,
warranty, covenant or agreement contained herein to be performed at or
prior to the Closing Date;
(b) because of a condition herein expressed to be precedent to the
obligations of the terminating party which has not been met and which
reasonably appears will not or cannot be met;
(c) by resolution of the Acquiring Trust's Board of Trustees if
circumstances should develop that, in the good faith opinion of such
Board, make proceeding with the Agreement not in the best interests of the
Acquiring Fund's shareholders;
(d) by resolution of the Acquired Trust's Board of Trustees if
circumstances should develop that, in the good faith opinion of such
Board, make proceeding with the Agreement not in the best interests of the
Acquired Fund's shareholders; or
(e) if the transactions contemplated by this Agreement shall not have
occurred on or prior to __________, 2006 or such other date as the parties
may mutually agree upon in writing.
11.2 In the event of any such termination, there shall be no liability for
damages on the part of the Acquiring Trust, the Acquiring Fund, the Acquired
Trust or the Acquired Fund, or the trustees or officers of the Acquired Trust
or the Acquiring Trust, but, subject to Paragraph 9.2, each party shall bear
the expenses incurred by it incidental to the preparation and carrying out of
this Agreement.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner as
may be mutually agreed upon in writing by the authorized officers of the
Acquired Trust and the Acquiring Trust; provided, however, that following the
meeting of the Acquired Fund's shareholders called by the Acquired Trust
pursuant to Paragraph 5.2 of this Agreement, no such amendment may have the
effect of changing the provisions regarding the method for determining the
number of Acquiring Fund Shares to be received by the Acquired Fund
Shareholders under this Agreement to their detriment without their further
approval; provided that nothing contained in this Section 12 shall be construed
to prohibit the parties from amending this Agreement to change the Closing
Date.
13. NOTICES
Any notice, report, statement or demand required or permitted by any
provision of this Agreement shall be in writing and shall be given by prepaid
telegraph, telecopy or certified mail addressed to the Acquired Fund and the
Acquiring Fund at 60 State Street, Boston, Massachusetts 02109.
A-13
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
14.1 The article and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
14.3 This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Delaware, without giving effect to conflict
of laws principles (other than Delaware Code Title 6 [sec] 2708); provided
that, in the case of any conflict between those laws and the federal securities
laws, the latter shall govern.
14.4 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by
either party without the prior written consent of the other party hereto.
Nothing herein expressed or implied is intended or shall be construed to confer
upon or give any person, firm or corporation, or other entity, other than the
parties hereto and their respective successors and assigns, any rights or
remedies under or by reason of this Agreement.
14.5 It is expressly agreed that the obligations of the Acquiring Trust
and the Acquired Trust shall not be binding upon any of their respective
trustees, shareholders, nominees, officers, agents or employees personally, but
bind only to the property of the Acquiring Fund or the Acquired Fund, as the
case may be, as provided in the Acquiring Trust's Declaration and the Acquired
Fund's Declaration of Trust, respectively. The execution and delivery of this
Agreement have been authorized by the trustees of the Acquiring Trust and of
the Acquired Trust and this Agreement has been executed by authorized officers
of the Acquiring Trust and the Acquired Trust, acting as such, and neither such
authorization by such trustees nor such execution and delivery by such officers
shall be deemed to have been made by any of them individually or to imposed any
liability on any of them personally, but shall bind only the property of the
Acquiring Fund and the Acquired Fund, as the case may be, as provided in the
Acquiring Trust's Declaration and the Acquired Trust's Declaration of Trust,
respectively.
[Remainder of page left blank intentionally.]
A-14
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed as of the date first set forth above by its President or Vice
President and attested by its Secretary or Assistant Secretary.
Attest: PIONEER __________ TRUST,
on behalf of its series,
PIONEER ________ FUND
By:____________________________________ By: __________________________________
Name: Christopher J. Kelley Name: Osbert M. Hood
Title: Assistant Secretary Title: Executive Vice President
Attest: PIONEER ________ TRUST,
on behalf of its series,
PIONEER ________ FUND
By: ___________________________________ By: __________________________________
Name: Christopher J. Kelley Name: Osbert M. Hood
Title: Assistant Secretary Title: Executive Vice President
A-15
Exhibit B -- Portfolio Manager's Discussion of Performance
PIONEER GOVERNMENT INCOME FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 1/31/06 CLASS A SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of January 31, 2006)
Public
Net Asset Offering
Period Value (NAV) Price (POP)
10 Years 5.17% 4.69%
5 Years 3.94 2.99
1 Year 1.36 (3.17)
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer Government Income Fund at public offering price, compared to that of
the Lehman Brothers Government Bond Index and the Lehman Brothers Fixed Rate
Mortgage-Backed Securities Index.
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Lehman Brothers Fixed
Pioneer Government Lehman Brothers Rate Mortgage-Backed
Income Fund Government Bond Index Securities Index
Jan-96 9,550 10,000 10,000
9,923 10,326 10,535
Jan-98 10,924 11,434 11,562
11,651 12,357 12,334
Jan-00 11,627 12,129 12,365
13,043 13,805 14,082
Jan-02 13,873 14,849 15,145
14,978 16,254 16,357
Jan-04 15,287 17,043 16,923
15,608 17,751 17,702
Jan-06 15,821 18,070 18,127
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
NAV results represent the percent change in net asset value per share. Returns
would have been lower had sales charges been reflected. POP returns reflect
deduction of maximum 4.5% sales charge. All results are historical and assume
the reinvestment of dividends and capital gains. Other share classes are
available for which performance and expenses will differ.
The performance of the Class A shares of the fund includes the performance of
AmSouth Government Income Fund's Class A shares prior to the reorganization,
which has been restated to reflect differences in any applicable sales charges
(but not differences in expenses). Pioneer Government Income Fund was created
through the reorganization of AmSouth Government Income Fund on September 23,
2005. If the performance had been adjusted to reflect all differences in
expenses, the performance of the fund would be lower.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
B-1
PIONEER GOVERNMENT INCOME FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 1/31/06 CLASS B SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of January 31, 2006)
If If
Period Held Redeemed
Life-of-Class
(3/13/00) 4.38% 4.38%
5 Years 3.17 3.17
1 Year 0.59 (3.25)
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer Government Income Fund, compared to that of the Lehman Brothers
Government Bond Index and the Lehman Brothers Fixed Rate Mortgage-Backed
Securities Index.
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Lehman Brothers Fixed
Pioneer Government Lehman Brothers Rate Mortgage-Backed
Income Fund Government Bond Index Securities Index
Mar-00 10,000 10,000 10,000
10,884 11,100 11,136
Jan-02 11,496 11,940 11,976
12,322 13,070 12,936
Jan-04 12,482 13,704 13,384
12,650 14,273 14,000
Jan-06 12,725 14,529 14,336
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
"If Held" results represent the percent change in net asset value per share.
Returns would have been lower had sales charges been reflected. "If Redeemed"
returns reflect the deduction of applicable contingent deferred sales charge
(CDSC). Effective December 1, 2004, the period during which a CDSC is applied
to withdrawals was shortened to 5 years. The maximum CDSC for Class B shares
continues to be 4%. For more complete information, please see the prospectus
for details.
The performance of Class B shares of the fund includes the performance of
AmSouth Government Income Fund's Class B shares prior to the reorganization,
which has been restated to reflect differences in any applicable sales charges
(but not differences in expenses). Pioneer Government Income Fund was created
through the reorganization of AmSouth Government Income Fund on September 23,
2005. If the performance had been adjusted to reflect all differences in
expenses, the performance of the fund would be lower.
All results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses
will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
B-2
PIONEER GOVERNMENT INCOME FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 1/31/06 CLASS C SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of January 31, 2006)
If If
Period Held Redeemed
Life-of-Class
(3/13/00) 4.39% 4.39%
5 Years 3.19 3.19
1 Year 0.65 0.65
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer Government Income Fund, compared to that of the Lehman Brothers
Government Bond Index and the Lehman Brothers Fixed Rate Mortgage-Backed
Securities Index.
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Lehman Brothers Fixed
Pioneer Government Lehman Brothers Rate Mortgage-Backed
Income Fund Government Bond Index Securities Index
Mar-00 10,000 10,000 10,000
10,884 11,100 11,136
Jan-02 11,496 11,940 11,976
12,322 13,070 12,936
Jan-04 12,482 13,704 13,384
12,650 14,273 14,000
Jan-06 12,733 14,529 14,336
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Class C shares held for less than one year are also subject to a 1% contingent
deferred sales charge (CDSC). The performance of Class C shares does not
reflect the 1% front-end sales charge in effect prior to February 1, 2004. If
you paid a 1% sales charge, your returns would be lower than those shown above.
"If Held" results represent the percent change in net asset value per share.
Returns would have been lower had sales charges been reflected. All results are
historical and assume the reinvestment of dividends and capital gains. Other
share classes are available for which performance and expenses will differ.
The performance of the Class C shares is based upon the performance of the
fund's Class B shares as adjusted to reflect sales charges applicable to Class
C shares (but not other differences in expenses). Pioneer Government Income
Fund was created through the reorganization of AmSouth Government Income Fund
on September 23, 2005. If the performance had been adjusted to reflect all
differences in expenses, the performance of the fund would be lower.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
B-3
PIONEER GOVERNMENT INCOME FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 1/31/06 CLASS Y SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of January 31, 2006)
If If
Period Held Redeemed
10 Years 5.30% 5.30%
5 Years 4.10 4.10
1 Year 1.57 1.57
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer Government Income Fund, compared to that of the Lehman Brothers
Government Bond Index and the Lehman Brothers Fixed Rate Mortgage-Backed
Securities Index.
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Lehman Brothers Fixed
Pioneer Government Lehman Brothers Rate Mortgage-Backed
Income Fund Government Bond Index Securities Index
Jan-96 10,000 10,000 10,000
10,388 10,326 10,535
Jan-98 11,441 11,434 11,562
12,203 12,357 12,334
Jan-00 12,202 12,129 12,365
13,709 13,805 14,082
Jan-02 14,603 14,849 15,145
15,790 16,254 16,357
Jan-04 16,139 17,043 16,923
16,503 17,751 17,702
Jan-06 16,762 18,070 18,127
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
The performance of the Class Y shares of the fund includes the performance of
AmSouth Government Income Fund's Class I shares prior to the reorganization,
which has been restated to reflect differences in any applicable sales charges
(but not differences in expenses). Pioneer Government Income Fund was created
through the reorganization of AmSouth Government Income Fund on September 23,
2005. If the performance had been adjusted to reflect all differences in
expenses, the performance of the fund would be lower. Class Y shares are not
subject to sales charges and are available for limited groups of eligible
investors, including institutional investors. All results are historical and
assume the reinvestment of dividends and capital gains. Other share classes are
available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
B-4
PORTFOLIO MANAGEMENT DISCUSSION
PIONEER GOVERNMENT INCOME FUND 1/31/06
Continued economic growth and rising short-term interest rates during the last
six months created the backdrop for the positive return earned by shareholders
in Pioneer Government Income Fund. In the following interview, Richard
Schlanger, the Fund's Portfolio Manager and a member of the Pioneer
fixed-income team, discusses the factors that affected the fixed-income market
and the Fund over the past half year.
Q. How did the Fund perform during the period?
A: For the six-month period ended January 31, 2006, Class A shares of Pioneer
Government Income Fund produced a total return of 0.67% at net asset value.
The Fund underperformed its benchmark, the Lehman Brothers Government Bond
Index, which returned 0.77% for the same period. It also fell short of the
1.28% return of the Lehman Brothers Fixed Rate Mortgage-Backed Securities
Index and the average 0.86% return generated by the funds in the U.S.
Mortgage Funds Category of Lipper, an independent monitor of mutual fund
performance. At the end of the period, the 30-day SEC yield for Class A
shares was 3.58%. The Fund held 106 issues with an average quality of AAA.
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher
than the performance data quoted.
The performance data quoted represents past performance, which is no
guarantee of future results. Investment return and principal value will
fluctuate, and shares, when redeemed, may be worth more or less than their
original cost.
Q. What was the investment environment like during the period?
A: In an environment of relatively strong economic growth, the Federal Reserve
raised the federal funds rate five times from 3.25% to 4.50% during the
period. The Fed's actions resulted in a flattening of the yield curve, with
short-term yields and longer-term yields at approximately the same level. For
a short period, the yield curve inverted slightly, with longer-term yields
falling below short-term yields.
While long-term yields on U.S. Treasury bonds were relatively low, they were
among the highest among the developed countries, making them attractive to
overseas investors. As a result, U.S. Government bonds benefited from an
influx of money from foreign, as well as domestic, investors. The
performance of government bonds was also enhanced by investors seeking
quality. At a time when long-term yields declined and the bonds of corporate
issuers, like General Motors and Ford, were downgraded by credit rating
agencies, domestic investors saw little advantage to take on greater risk.
As a result, they moved to purchasing government securities with relative
safety.
Q. What strategies did you use in managing the Fund?
A: We continued to seek a high level of income without unduly risking capital.
In making our investment decisions, we considered a variety of factors that
influence economic activity and interest rates. These included the rates of
economic growth and inflation, Federal Reserve monetary policy and the
relative value of the U.S. dollar against world currencies. To take advantage
of the flattening yield curve, we extended the portfolio's duration.
At the beginning of the period, the portfolio had a relatively small
Treasury bond position and a large allocation to mortgage-backed securities.
Among mortgages, securities issued by the Federal National Mortgage
Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation
(Freddie Mac) accounted for a far greater percentage of assets than those
issued by the Government National Mortgage Association (Ginnie Mae). Because
we believed mortgages had become too high priced and subject to prepayment,
we lowered the Fund's mortgage holdings, while increasing the percentage of
Treasury bonds. We established a position in Treasury Inflation Protected
Securities (TIPS) on the belief that inflation might pick up. TIPS are
securities whose principal is tied to the consumer price index, which is a
monthly indicator that measures the price inflation of a representative
basket of goods and services. When inflation accelerates, the principal on
TIPS increases in value. The interest-rate payment on TIPS is calculated on
the inflated principal.
Q. What contributed to performance?
A: The TIPS in the portfolio were the biggest contributor to performance. The
portfolio's longer duration also contributed to results. Conventional
mortgages issued by the Federal National Mortgage Association (Fannie Mae)
and the Federal Home Loan Mortgage Corporation (Freddie Mac) underperformed
those issued by the Government National Mortgage Association (Ginnie Mae).
Both Fannie Mae and Freddie Mac are well represented in the top 25 holdings
that constitute over 60% of the portfolio; Fannie Mae with
B-5
33.5% of that total and Freddie Mac with 26.7%. They also have been in the
headlines for more than a year because of accounting irregularities and
concerns that these agencies were undercapitalized. Both agencies sold
portions of their mortgage investment portfolios in order to raise funds to
meet the higher capitalization levels required by the Office of Federal
Housing Enterprise Oversight (OFHEO). The OFHEO has stated that both
agencies are now adequately capitalized.
Q. What is your financial outlook?
A: We are generally positive in our outlook. We think the yield curve will
temporarily invert, with short-term yields rising above long-term yields.
However, we believe that the Fed may be near the end of its rate-raising
cycle. We expect to see some heightened market volatility in the short term,
as investors become familiar with the policies and philosophy of Benjamin
Bernanke, the new Federal Reserve chairman. With the re-issuance of the
30-year Treasury bond, there is likely to be a greater supply of Treasury
bonds in the next several months; however, this increase in supply is
unlikely to affect bond prices significantly, as foreign and domestic demand
for U.S. Treasury bonds continues to be strong. As in the past, we will
carefully monitor the factors that influence the economy, inflation and
monetary policy, and make adjustments to the portfolio that we believe have
potential to increase income and preserve principal.
When interest rates rise, the prices of fixed income securities in the Fund
will generally fall. Conversely, when interest rates fall, the prices of
fixed income securities in the Fund will generally rise. Prepayment risk is
the chance that mortgage-backed bonds will be paid off early if falling
interest rates prompt homeowners to refinance their mortgages. Forced to
reinvest the unanticipated proceeds at lower interest rates, the Fund would
experience a decline in income and lose the opportunity for additional price
appreciation associated with falling interest rates. Investing in the
securities of U.S. issuers with substantial foreign activities involves many
of the same risks as investing in the securities of foreign issuers. The
portfolio may invest in mortgage-backed securities, which during times of
fluctuating interest rates may increase or decrease more than other fixed
income securities. Mortgage-Backed securities are also subject to
pre-payments.
Any information in this shareholder report regarding market or economic
trends or the factors influencing the Fund's historical or future performance
are statements of the opinion of Fund management as of the date of this
report. These opinions should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
B-6
PIONEER AMERICA INCOME TRUST
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 12/31/05 CLASS A SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of December 31, 2005)
Public
Net Asset Offering
Period Value (NAV) Price (POP)
10 Years 4.86% 4.38%
5 Years 4.31 3.36
1 Year 1.84 (2.73)
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer America Income Trust at public offering price, compared to that of
the Lehman Brothers Government Bond Index and of the Lehman Brothers Fixed-Rate
Mortgage-Backed Securities Index.
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Lehman Brothers Fixed-
Pioneer America Lehman Brothers Rate Mortgage-Backed
Income Trust Government Bond Index Securities Index
Dec-95 9,550 10,000 10,000
Dec-97 10,601 11,263 11,535
Dec-99 11,137 12,096 12,567
Dec-01 13,162 14,688 15,118
Dec-03 14,661 16,762 16,944
Dec-05 15,346 17,805 18,205
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
NAV results represent the percent change in net asset value per share. Returns
would have been lower had sales charges been reflected. POP returns reflect
deduction of maximum 4.50% sales charge. All results are historical and assume
the reinvestment of dividends and capital gains. Other share classes are
available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Trust performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Trust distributions or the redemption of Trust
shares.
B-7
PIONEER AMERICA INCOME TRUST
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 12/31/05 CLASS B SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of December 31, 2005)
If If
Period Held Redeemed
10 Years 4.04% 4.04%
5 Years 3.46 3.46
1 Year 0.99 (2.90)
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer America Income Trust, compared to that of the Lehman Brothers
Government Bond Index and of the Lehman Brothers Fixed-Rate Mortgage-Backed
Securities Index.
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Lehman Brothers Fixed-
Pioneer America Lehman Brothers Rate Mortgage-Backed
Income Trust Government Bond Index Securities Index
Dec-95 10,000 10,000 10,000
Dec-97 10,932 11,263 11,535
Dec-99 11,326 12,096 12,567
Dec-01 13,161 14,688 15,118
Dec-03 14,421 16,762 16,944
Dec-05 14,858 17,805 18,205
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
"If Held" results represent the percent change in net asset value per share.
Returns would have been lower had sales charges been reflected. "If redeemed"
returns reflect the deduction of applicable contingent deferred sales charge
(CSDC). Effective December 1, 2004, the period during which a CDSC is applied
to withdrawals was shortened to 5 years. The maximum CDSC for class B shares
continues to be 4%. For more complete information, please see the prospectus
for details. Note: Shares purchased prior to December 1, 2004 remain subject to
the CDSC in effect at the time you purchased those shares. For performance
information for shares purchased prior to December 1, 2004, please visit
www.pioneerinvestments.com/bshares.
All results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses
will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Trust performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Trust distributions or the redemption of Trust
shares.
B-8
PIONEER AMERICA INCOME TRUST
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 12/31/05 CLASS C SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of December 31, 2005)
If If
Period Held Redeemed
Life-of-Class
(1/31/96) 4.06% 4.06%
5 Years 3.52 3.52
1 Year 1.02 1.02
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer America Income Trust, compared to that of the Lehman Brothers
Government Bond Index and of the Lehman Brothers Fixed-Rate Mortgage-Backed
Securities Index.
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Lehman Brothers Fixed-
Pioneer America Lehman Brothers Rate Mortgage-Backed
Income Trust Government Bond Index Securities Index
Jan-96 10,000 10,000 10,000
Dec-97 10,892 11,194 11,449
Dec-99 11,293 12,022 12,473
Dec-01 13,111 14,599 15,005
Dec-03 14,389 16,660 16,818
Dec-05 14,840 17,697 18,069
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Class C shares held for less than one year are also subject to a 1% contingent
deferred sales charge (CDSC). The performance of Class C shares does not
reflect the 1% front-end sales charge in effect prior to February 1, 2004. If
you paid a 1% sales charge, your returns would be lower than those shown above.
"If Held" results represent the percent change in net asset value per share.
Returns would have been lower had sales charges been reflected. All results are
historical and assume the reinvestment of dividends and capital gains. Other
share classes are available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Trust performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Trust distributions or the redemption of Trust
shares.
B-9
PIONEER AMERICA INCOME TRUST
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 12/31/05 INVESTOR CLASS SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of December 31, 2005)
If If
Period Held Redeemed
Life-of-Class
(12/10/04) 2.11% 2.11%
1 Year 2.27 2.27
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Lehman Brothers Fixed-
Pioneer America Lehman Brothers Rate Mortgage-Backed
Income Trust Government Bond Index Securities Index
Dec-04 10,000 10,000 10,000
Dec-05 10,223 10,265 10,261
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Certain Pioneer funds (the "Funds") issued Investor Class shares in connection
with the reorganization of Safeco mutual funds. The Funds are not offering
additional Investor Class shares except in connection with the reinvestment of
dividends on the Funds' outstanding Investor Class shares. All [Investor Class]
shares of the Funds, whenever issued, convert to Class A shares of their
respective Funds on December 10, 2006. Investor Class shares are not subject to
sales charges.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Trust performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table does not reflect the deduction of fees and taxes that a
shareowner would pay on Trust distributions or the redemption of Trust shares.
B-10
PIONEER AMERICA INCOME TRUST
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 12/31/05 CLASS R SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of December 31, 2005)
If If
Period Held Redeemed
10 Years 4.49% 4.49%
5 Years 4.11 4.11
1 Year 1.53 1.53
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer America Income Trust, compared to that of the Lehman Brothers
Government Bond Index and of the Lehman Brothers Fixed-Rate Mortgage-Backed
Securities Index.
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Lehman Brothers Fixed-
Pioneer America Lehman Brothers Rate Mortgage-Backed
Income Trust Government Bond Index Securities Index
Dec-95 10,000 10,000 10,000
Dec-97 10,974 11,263 11,535
Dec-99 11,418 12,096 12,567
Dec-01 13,367 14,688 15,118
Dec-03 14,894 16,762 16,944
Dec-05 15,510 17,805 18,205
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
The performance of Class R shares for the period prior to the commencement of
operations of Class R shares on April 1, 2003 is based on the performance of
Class A shares, reduced to reflect the higher distribution and service fees of
Class R shares. For the period after April 1, 2003, the actual performance of
Class R shares is reflected, which performance may be influenced by the smaller
asset size of Class R shares compared to Class A shares. The performance of
Class R shares does not reflect the 1% CDSC that was in effect prior to July 1,
2004. Class R shares are not subject to sales charges and are available for
limited groups of eligible investors, including institutional investors. All
results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses
will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Trust performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Trust distributions or the redemption of Trust
shares.
B-11
PORTFOLIO MANAGEMENT DISCUSSION
Pioneer America Income Trust 12/31/05
In a year marked by hurricanes, high energy prices, concerns about accelerating
inflation and rising short-term interest rates, shareholders in Pioneer America
Income Trust earned a positive return on their investment. In the interview
below, Richard Schlanger, the Trust's day-to-day Portfolio Manager, discusses
the factors that affected the fixed income market and the Trust over the past
12 months.
Q. How did the Trust perform during the period?
A: For the 12-month period ended December 31, 2005, Class A shares of Pioneer
America Income Trust produced a total return of 1.84% at net asset value. The
Trust underperformed its benchmark, the Lehman Brothers Government Bond
Index, which returned 2.65% for the same period. It also underperformed the
average 2.05% return generated by the General U.S. Government Funds Category
of Lipper, Inc., an independent monitor of mutual fund performance. At the
end of the period, the 30-day SEC yield for Class A shares was 3.17%. The
Trust had 260 issues and the average quality of the portfolio was AAA.
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher
than the performance data quoted.
The performance data quoted represents past performance, which is no
guarantee of future results. Investment return and principal value will
fluctuate, and shares, when redeemed, maybe worth more or less than their
original cost.
Q. What was the investment environment like during the period?
A: Economic growth was relatively strong, and productivity remained high. In
this environment, the Federal Reserve continued to reverse its accommodative
monetary policy and raised interest rates eight times during the year, each
time by a quarter point. At the end of 2005, the federal funds target rate
was 4.25%, up from 2.25% in January 2005. (The federal funds rate is the rate
banks charge for overnight loans. Since June 2004, the Fed has hiked interest
rates 13 times, taking the federal funds rate from a 40-year low of 1% to the
current 4.25%.) The net effect of the Fed's actions was a flattening of the
yield curve, where short-term yields and longer-term yields were
approximately the same. On December 30, 2005, the yield curve inverted
slightly, with longer-term yields falling below short-term yields. (The yield
curve shows the relationship between bond yields and maturity lengths.)
During the year, government bonds benefited from an influx of money from both
foreign and domestic investors. While long-term yields on U.S. Treasuries
were relatively low, they were among the highest of the developed countries
and attractive to overseas investors. The performance of government bonds was
also enhanced by a flight to quality. At a time when long-term yields
declined and the debt of General Motors and Ford was downgraded by credit
rating agencies, domestic investors saw little advantage to taking on risk.
As a result, they moved into the relative safety of government securities.
Q. What strategies did you use in managing the Trust?
A: As interest rates rose, we extended duration, or sensitivity to interest-rate
changes, by reducing exposure to mortgage securities and adding to positions
in Treasury issues and Treasury Inflation Protected Securities (TIPS). TIPS
are securities whose principal is tied to the consumer price index, a monthly
indicator that measures the price inflation of a representative basket of
goods and services. When inflation accelerates, the principal on TIPS
increases in value. The interest-rate payment on TIPS is calculated on the
inflated principal. While inflation was not a problem in 2005, we are
concerned about the potential for it to pick up. Oil prices are over $60 a
barrel, the price of gold is at a 25-year high and the unemployment rate fell
below 5%. These factors and others could lead to an upturn in inflation. At
the end of the period, 59% of the portfolio was in mortgage pass-through
securities issued by the Government National Mortgage Association, 40% was in
Treasury issues and TIPS, and 1% was in cash.
Q. What detracted from performance?
A: Our positioning on the yield curve held back return. Throughout the 12
months, we maintained a bulleted strategy, which means we invested in bonds
across the maturity spectrum, with the biggest concentration in the
intermediate-term range of two-years to ten-years. While our short-term and
long-term bonds did well, intermediate-term bonds detracted from performance.
In hindsight, it would have been more advantageous to have had a barbelled
configuration, overweighting the short and long ends of the yield curve and
holding relatively few intermediate-term bonds.
B-12
Q. What contributed to performance?
A: During the second half of 2005, yields on 10-year Treasuries traded in a
relatively narrow range of roughly 3.90% to a high of roughly 4.68%. As
10-year Treasuries declined in price and rose in yield, we extended duration.
This aided results because 10-year Treasuries closed the year at 4.40%, down
from their highs. A longer duration usually benefits a portfolio when yields
decline. The performance of TIPS also helped boost the Trust's return.
Q. What is your outlook?
A: In general we are positive when looking ahead. While we believe the inverted
yield curve may be indicating some moderating in economic growth, we do not
think it is signaling recession. When the Fed began raising interest rates,
the federal funds rate was extremely low at 1%. We think that the current
4.25% level is not restrictive, especially with an inflation rate of roughly
2.0% to 2.5%. While we think the consumer may cut back on spending, it is
likely that business will pick up the slack. An increase in capital spending
on the part of corporations may be enough to keep the economy growing at a
respectable rate. The Fed may be in the late stages of its rate-raising
cycle. Should the Fed ease rates somewhat, we believe intermediate-term
securities will outperform longer-term securities. We are well-positioned
should this occur. As we move into 2006, we believe the Trust should continue
to provide income diversification for investors who want to avoid the risk
associated with the more volatile areas of the fixed-income market and with
equities.
When interest rates rise, the prices of fixed income securities in the fund
will generally fall. Conversely, when interest rates fall, the prices of
fixed income securities in the fund will generally rise. Prepayment risk is
the chance that mortgage-backed bonds will be paid off early if falling
interest rates prompt homeowners to refinance their mortgages. Forced to
reinvest the unanticipated proceeds at lower interest rates, the fund would
experience a decline in income and lose the opportunity for additional price
appreciation associated with falling interest rates. The portfolio may invest
in mortgage-backed securities, which during times of fluctuating interest
rates may increase or decrease more than other fixed-income securities.
Mortgage-Backed securities are also subject to pre-payments. Government
guarantees apply to the underlying securities only and not to the prices and
yields of the portfolio. At times, the fund's investments may represent
industries or industry sectors that are interrelated or have common risks,
making it more susceptible to any economic, political, or regulatory
developments or other risks affecting those industries and sectors.
Any information in this shareholder report regarding market or economic
trends or the factors influencing the Trust's historical or future
performance are statements of the opinion of Trust management as of the date
of this report. These opinions should not be relied upon for any other
purposes. Past performance is no guarantee of future results, and there is no
guarantee that market forecasts discussed will be realized.
B-13
PIONEER CLASSIC BALANCED FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 1/31/06 CLASS A SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of January 31, 2006)
Public
Net Asset Offering
Period Value (NAV) Price (POP)
10 Years 7.87% 7.37%
5 Years 5.14 4.18
1 Year 8.38 3.48
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer Classic Balanced Fund at public offering price, compared to that of
the Standard & Poor's 500 Index and the Lehman Brothers Government/Credit Bond
Index.
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Lehman Brothers
Pioneer Classic Government/Credit Standard & Poor's
Balanced Fund Bond Index 500 Index
Jan-96 9,550 10,000 10,000
10,467 10,239 12,633
Jan-98 12,508 11,383 16,031
14,013 12,375 21,243
Jan-00 13,812 12,021 23,439
15,845 13,675 23,228
Jan-02 16,321 14,700 19,480
14,972 16,202 14,999
Jan-04 17,962 17,113 20,180
18,786 17,793 21,436
Jan-06 20,361 18,056 23,660
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
POP returns reflect deduction of maximum 4.50% sales charge. NAV results
represent the percent change in net asset value per share. Returns would have
been lower had sales charges been reflected. All results are historical and
assume the reinvestment of dividends and capital gains. Other share classes are
available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The performance of Class A and Class B shares of the Fund includes the
performance of AmSouth Balanced Fund's Class A and Class B shares prior to the
reorganization, which has been restated to reflect differences in any
applicable sales charges (but not differences in expenses). Pioneer Classic
Balanced Fund was created through the reorganization of AmSouth Balanced Fund
on September 23, 2005. If the performance had been adjusted to reflect all
differences in expenses, the performance of the Fund would be lower. All
results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses
will differ.
B-14
PIONEER CLASSIC BALANCED FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 1/31/06 CLASS B SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of January 31, 2006)
If If
Period Held Redeemed
Life-of-Class
(9/3/97) 5.74% 5.74%
5 Years 4.33 4.33
1 Year 7.51 4.03
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer Classic Balanced Fund, compared to that of the Standard & Poor's 500
Index and the Lehman Brothers Government/Credit Bond Index.
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Lehman Brothers
Pioneer Classic Government/Credit Standard & Poor's
Balanced Fund Bond Index 500 Index
Sep-97 10,000 10,000 10,000
Jan-98 10,200 10,467 10,401
11,345 11,379 13,782
Jan-00 11,095 11,053 15,208
12,645 12,574 15,070
Jan-02 12,931 13,516 12,639
11,772 14,896 9,731
Jan-04 14,016 15,735 13,093
14,543 16,361 13,907
Jan-06 15,634 16,602 15,350
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
"If Held" results represent the percent change in net asset value per share.
Returns would have been lower had sales charges been reflected. "If Redeemed"
returns reflect the deduction of applicable contingent deferred sales charge
(CDSC). Effective December 1, 2004, the period during which a CDSC is applied
to withdrawals was shortened to 5 years. The maximum CDSC for Class B shares
continues to be 4%. For more complete information, please see the prospectus
for details.
All results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses
will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The performance of Class A and Class B shares of the Fund includes the
performance of AmSouth Balanced Fund's Class A and Class B shares prior to the
reorganization, which has been restated to reflect differences in any
applicable sales charges (but not differences in expenses). Pioneer Classic
Balanced Fund was created through the reorganization of AmSouth Balanced Fund
on September 23, 2005. If the performance had been adjusted to reflect all
differences in expenses, the performance of the Fund would be lower. All
results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses
will differ.
B-15
PIONEER CLASSIC BALANCED FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 1/31/06 CLASS C SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of January 31, 2006)
If If
Period Held Redeemed
Life-of-Class
(9/3/97) 5.81% 5.81%
5 Years 4.45 4.45
1 Year 8.10 8.10
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer Classic Balanced Fund, compared to that of the Standard & Poor's 500
Index and the Lehman Brothers Government/Credit Bond Index.
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Lehman Brothers
Pioneer Classic Government/Credit Standard & Poor's
Balanced Fund Bond Index 500 Index
Sep-97 10,000 10,000 10,000
Jan-98 10,467 10,200 10,401
11,379 11,345 13,782
Jan-00 11,053 11,095 15,208
12,574 12,645 15,070
Jan-02 13,516 12,931 12,639
14,896 11,772 9,731
Jan-04 15,735 14,016 13,093
16,361 14,543 13,907
Jan-06 16,602 15,721 15,350
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Class C shares held for less than one year are also subject to a 1% contingent
deferred sales charge (CDSC). "If Held" results represent the percent change in
net asset value per share. Returns would have been lower had sales charges been
reflected. All results are historical and assume the reinvestment of dividends
and capital gains. Other share classes are available for which performance and
expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The performance of Class C shares is based upon the performance of the Fund's
Class B shares as adjusted to reflect sales charges applicable to Class C
shares (but not other differences in expenses). Pioneer Classic Balanced Fund
was created through the reorganization of AmSouth Balanced Fund on September
23, 2005. If the performance had been adjusted to reflect all differences in
expenses, the performance of the Fund would be lower. All results are
historical and assume the reinvestment of dividends and capital gains. Other
share classes are available for which performance and expenses will differ.
B-16
PIONEER CLASSIC BALANCED FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 1/31/06 CLASS Y SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of January 31, 2006)
If If
Period Held Redeemed
10 Years 8.04% 8.04%
5 Years 5.33 5.33
1 Year 8.64 8.64
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer Classic Balanced Fund, compared to that of the Standard & Poor's 500
Index and the Lehman Brothers Government/Credit Bond Index.
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Lehman Brothers
Pioneer Classic Government/Credit Standard & Poor's
Balanced Fund Bond Index 500 Index
Jan-96 10,000 10,000 10,000
10,964 10,239 12,633
Jan-98 13,107 11,383 16,031
14,732 12,375 21,243
Jan-00 14,546 12,021 23,439
16,716 13,675 23,228
Jan-02 17,255 14,700 19,480
15,868 16,202 14,999
Jan-04 19,046 17,113 20,180
19,948 17,793 21,436
Jan-06 21,671 18,056 23,660
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
The performance of the Class Y shares of the Fund includes the performance of
AmSouth Balanced Fund's Class I shares prior to the reorganization, which has
been restated to reflect differences in any applicable sales charges (but not
differences in expenses). Pioneer Classic Balanced Fund was created through the
reorganization of AmSouth Balanced Fund on September 23, 2005. If the
performance had been adjusted to reflect all differences in expenses, the
performance of the Fund would be lower. All results are historical and assume
the reinvestment of dividends and capital gains. Other share classes are
available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
B-17
PORTFOLIO MANAGEMENT DISCUSSION
Pioneer Classic Balanced Fund 1/31/06
With a sustained economic recovery and steady corporate profit growth as a
backdrop, domestic equities performed relatively well during the six months
ended January 31, 2006. However, returns generally were more modest in the
fixed-income markets as the Federal Reserve Board continued to raise short-term
rates and the yield differences between long- and short-term securities
narrowed. The yield advantages of corporate bonds over government securities
also grew tighter, making investments in corporate bonds less attractive to
investors. In the following interview, Walter Hunnewell, Jr., who is one of
Pioneer Classic Balanced Fund's co-managers, and Richard Schlanger, who is a
member of Pioneer's Fixed Income team, discuss the markets and the factors that
affected performance during the six months.
Q. How did the Fund perform during the six months ended January 31, 2006?
A: Pioneer Classic Balanced Fund (Class A shares) returned 4.37% during the
six-month period, at net asset value. During the same period, the average
return of the 698 funds in Lipper's balanced Fund category was 4.47%. In
comparison, the Standard and Poor's 500 Index and the Lehman Brothers
Government/Credit Bond Index returned 4.67% and 0.58%, respectively, over the
same period.
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher
than the performance data quoted.
The performance data quoted represents past performance, which is no
guarantee of future results. Investment return and principal value will
fluctuate, and shares, when redeemed, may be worth more or less than their
original cost.
Q. What strategies do you use in managing the Fund?
A: Almost two months into the period, on September 23, 2005, the former AmSouth
Balanced Fund was reorganized as the Pioneer Classic Balanced Fund, and
Pioneer Investment Management assumed portfolio management responsibilities.
Since then, the Fund has been managed in accord with our equity and
fixed-income disciplines, emphasizing fundamental research and drawing on the
global resources of the Pioneer organization.
As a balanced fund, the Fund is managed with the goal of seeking both capital
growth and current income through a diversified portfolio of both equity and
fixed-income securities. The Fund has a normal allocation of 60% equities and
40% fixed income, but the allocation can vary depending upon Pioneer's
assessment of relative opportunities in the markets. Since Pioneer assumed
management responsibilities, the equity portfolio has increased from about
60% of Fund assets to about 65% of assets. That was the result of both a
deliberate policy to increase the Fund's emphasis on stocks and the
appreciation of the value of equity assets in the portfolio.
Q: What were the principal factors that affected the performance of the Fund's
bond portfolio for the period?
A: We believed that corporate bonds were becoming less attractive relative to
mortgages and governments as their yield advantages narrowed. As a
consequence, we reduced our corporate positions. We also de-emphasized bonds
in the finance sector, whose earnings we believed were vulnerable as the
Federal Reserve continued to raise short-term interest rates. We sold, for
example, bonds issued by Prudential Funding and by Devon Financing. In
addition, we sold DaimlerChrysler holdings because of our concerns
surrounding the auto sector. At the same time, we added to our mortgage
holdings and invested in long-term Treasuries because of the attractive
income that they offered relative to other types of fixed-income securities.
While we maintained a high quality portfolio, we looked for selective
opportunities in corporate bonds where we had confidence in the underlying
credit fundamentals of the companies behind them.
The average credit quality of the portfolio's holdings was AA on January 31,
2006. About one-third of the portfolio's assets was invested in Treasuries
and another one-third was invested in mortgages. Government agencies
accounted for about 10% of fixed income assets, while corporate industrial
bonds accounted for 21%. Bank and finance bonds were reduced to about 12% of
fixed income assets. We kept average maturity and duration - both of which
measure sensitivity to changes in interest rates - consistent with that of
the benchmark Lehman Brothers Government/Credit Bond Index.
The increasing emphasis on mortgage-backed securities helped performance, as
did the lack of exposure to some of the more notable poor-performing
corporate bonds, including securities issued by General Motors and Ford, the
credit ratings of which have fallen from investment-grade to below
investment-grade.
B-18
Q: What were the principal factors that affected the performance of the Fund's
equity portfolio during the six months?
A: We shifted the portfolio's focus from a growth-oriented style to more of a
value-oriented style, with an emphasis on reasonably priced large- and
mid-cap stocks. We also looked to increase the dividend income from our stock
holdings. Reflecting this shift, by January 31, 2006, the average price - as
reflected by price/earnings ratios - of our holdings was lower than that of
the benchmark Standard & Poor's 500 Index, but the average dividend yield was
higher than the S&P 500's.
In repositioning the equity portfolio, we sold our positions in many
higher-priced growth stocks, including those of technology companies Cisco
Systems and Qualcomm, biotechnology leader Amgen, and eBay, the Internet
auctioneer. We established large positions in less expensively priced,
higher-yielding companies, including Bristol-Myers and Merck, two
pharmaceutical companies that our research indicated offered potential
interesting opportunities after being out of favor in the market. Another new
holding was Washington Mutual, which was trading at a low price and offered a
relatively high yield. In addition, we invested in some companies, such as
Federated Department Stores, not because we were attracted by their dividend
yield, but because we believed they offered superior capital appreciation
potential as the result of their unrecognized earnings power. We also
established a relatively small position in several real estate investment
trusts (REITs), which had been absent from the portfolio. However, we limited
the Fund's exposure because of our concern about the vulnerability of REITs
to increases in interest rates. One of our larger REIT positions was
Brandywine Realty.
Q: What were some of the individual equity investments that particularly
influenced results?
A: We overweighted the energy sector, which helped performance substantially as
energy stocks rallied and the prices of commodities increased. Among the
better performers were oil services companies such as Global Santa Fe and
Schlumberger, as well as Marathon Oil, an integrated oil company. Deere, the
farm equipment company, was our largest individual holding by the end of the
six months and made a substantial contribution to performance. We increased
our weighting in Deere because it was selling at what we thought was a very
low price. In our opinion the dividend yield was not high, but we believed it
offered superior price appreciation potential because we think the overall
stock market is underestimating how long demand for farm equipment will be
sustained. Merck, which we added to the portfolio, also performed well as its
stock value recovered from a depressed level. One of the disappointing
performers was Dow Chemical, whose stock price fell because investors had
questions about pricing for ethylene products, a significant part of Dow's
business. However, we believed that ethylene inventories are generally low
and Dow should have an opportunity to sustain good pricing for its products.
As a result, we continue to favor the company.
Q. What is your investment outlook?
A: We think that the economy will continue to expand and corporate profits
should continue to improve, but the rates of economic growth and corporate
earnings growth may begin to slow during the current year. As we enter 2006,
we believe the stock market is reasonably valued. We also think the emphasis
on higher dividend-paying stocks gives the Fund the potential to do well in
the current environment. We have found interesting opportunities among
higher-dividend pharmaceutical companies and telecommunication services
companies and in companies that have demonstrated abilities to produce cash
flow to support and increase their dividend payouts to shareholders.
We believe the Federal Reserve is likely to continue to raise short-term
interest rates, at least in the near term. In managing the fixed-income
portfolio, we will look for signals about any shifts in policy emphasis under
new Federal Reserve Chairman Ben Bernanke, although we think the Fed will
remain determined to keep inflationary pressures under control. If
longer-term interest rates were to increase significantly, bonds could
provide an interesting opportunity for investment. Overall, we believe demand
for U.S. securities by foreign investors should help provide continued
support for bond prices in the United States.
When interest rates rise, the prices of fixed income securities in the Fund
will generally fall. Conversely, when interest rates fall, the prices of
fixed income securities in the Fund will generally rise. Investments in the
Fund are subject to possible loss due to the financial failure of underlying
securities and their inability to meet their debt obligations. Prepayment
risk is the chance that mortgage-backed bonds will be paid off early if
falling interest rates prompt homeowners to refinance their mortgages. Forced
to reinvest the unanticipated proceeds at lower interest rates, the Fund
would experience a decline in income and lose the opportunity for additional
price appreciation associated with falling interest rates. The portfolio
invests in REIT securities, the value of which can fall for a variety of
reasons, such as declines in rental income, fluctuating interest rates, poor
property management, environmental liabilities, uninsured damage, increased
competition, or changes in real estate tax laws. Investing in foreign and/or
emerging markets securities involves risks relating to interest rates,
currency exchange rates, economic, and
B-19
political conditions. The portfolio may invest in mortgage-backed securities,
which during times of fluctuating interest rates may increase or decrease
more than other fixed-income securities. Mortgage-Backed securities are also
subject to pre-payments. At times, the Fund's investments may represent
industries or industry sectors that are interrelated or have common risks,
making it more susceptible to any economic, political, or regulatory
development or other risks affecting those industries and sectors.
Any information in this shareholder report regarding market or economic
trends or the factors influencing the Fund's historical or future performance
are statements of the opinion of Fund management as of the date of this
report. These statements should not be relied upon for any other purposes.
Past performance is no guarantee of future results, and there is no guarantee
that market forecasts discussed will be realized.
B-20
PIONEER BALANCED FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 12/31/05 CLASS A SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of December 31, 2005)
Public
Net Asset Offering
Period Value (NAV) Price (POP)
10 Years 4.03% 3.55%
5 Years 1.52 0.59
1 Year 3.25 (1.42)
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer Balanced Fund at public offering price, compared to that of the
Standard & Poor's 500 Index and the Lehman Brothers Aggregate Bond Index.
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Pioneer Lehman Brothers Standard & Poor's
Balanced Fund Aggregate Bond Index 500 Index
Dec-95 9,550 10,000 10,000
10,490 10,363 12,295
Dec-97 11,951 11,364 16,395
12,087 12,351 21,084
Dec-99 12,467 12,249 25,518
13,138 13,673 23,196
Dec-01 12,760 14,828 20,441
11,331 16,348 15,925
Dec-03 13,143 17,019 20,490
13,726 17,758 22,718
Dec-05 14,171 18,189 23,833
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
NAV results represent the percent change in net asset value per share. Returns
would have been lower had sales charges been reflected. POP returns reflect
deduction of maximum 5.75% sales charge. All results are historical and assume
the reinvestment of dividends and capital gains. Other share classes are
available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Fund adopted its current name and investment objective on February 3, 1997.
Prior to that date, the Fund's name was Pioneer Income Fund and its objective
was income from a portfolio of income-producing bonds and stocks.
B-21
PIONEER BALANCED FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 12/31/05 CLASS B SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of December 31, 2005)
If If
Period Held Redeemed
10 Years 3.10% 3.10%
5 Years 0.59 0.59
1 Year 2.29 (1.71)
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer Balanced Fund, compared to that of the Standard & Poor's 500 Index
and the Lehman Brothers Aggregate Bond Index.
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Pioneer Lehman Brothers Standard & Poor's
Balanced Fund Aggregate Bond Index 500 Index
Dec-95 9,550 10,000 10,000
10,902 10,363 12,295
Dec-97 12,317 11,364 16,395
12,341 12,351 21,084
Dec-99 12,617 12,249 25,518
13,171 13,673 23,196
Dec-01 12,680 14,828 20,441
11,172 16,348 15,925
Dec-03 12,815 17,019 20,490
13,260 17,758 22,718
Dec-05 13,564 18,189 23,833
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
"If Held" results represent the percent change in net asset value per share.
Returns would have been lower had sales charges been reflected. "If Redeemed"
returns reflect the deduction of applicable contingent deferred sales charge
(CDSC). Effective December 1, 2004, the period during which a CDSC is applied
to withdrawals was shortened to 5 years. The maximum CDSC for Class B shares
continues to be 4%. For more complete information, please see the prospectus
for details. Note: Shares purchased prior to December 1, 2004 remain subject to
the CDSC in effect at the time you purchased those shares. For performance
information for shares purchased prior to December 1, 2004, please visit
www.pioneerinvestments.com/bshares.
All results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses
will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Fund adopted its current name and investment objective on February 3, 1997.
Prior to that date, the Fund's name was Pioneer Income Fund and its objective
was income from a portfolio of income-producing bonds and stocks.
B-22
PIONEER BALANCED FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 12/31/05 CLASS C SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of December 31, 2005)
If If
Period Held Redeemed
Life-of-Class
(1/31/96) 2.99% 2.99%
5 Years 0.54 0.54
1 Year 2.51 2.51
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer Balanced Fund, compared to that of the Standard & Poor's 500 Index
and the Lehman Brothers Aggregate Bond Index.
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Pioneer Lehman Brothers Standard & Poor's
Balanced Fund Aggregate Bond Index 500 Index
Jan-96 10,000 10,000 10,000
10,812 10,294 11,890
Dec-97 12,269 11,289 15,856
12,302 12,269 20,390
Dec-99 12,550 12,168 24,679
13,045 13,583 22,433
Dec-01 12,508 14,730 19,769
11,004 16,241 15,401
Dec-03 12,635 16,907 19,817
13,067 17,641 21,971
Dec-05 13,394 18,069 23,049
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Class C shares held for less than one year are also subject to a 1% contingent
deferred sales charge (CDSC). The performance of Class C shares does not
reflect the 1% front-end sales charge in effect prior to February 1, 2004. If
you paid a 1% sales charge, your returns would be lower than those shown above.
"If Held" results represent the percent change in net asset value per share.
Returns would have been lower had sales charges been reflected. All results are
historical and assume the reinvestment of dividends and capital gains. Other
share classes are available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Fund adopted its current name and investment objective on February 3, 1997.
Prior to that date, the Fund's name was Pioneer Income Fund and its objective
was income from a portfolio of income-producing bonds and stocks.
B-23
PIONEER BALANCED FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 12/31/05 INVESTOR CLASS SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of December 31, 2005)
If If
Period Held Redeemed
Life-of-Class
(12/10/04) 4.03% 4.03%
1 Year 3.62 3.62
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer Balanced Fund, compared to that of the Standard & Poor's 500 Index
and the Lehman Brothers Aggregate Bond Index.
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Pioneer Lehman Brothers Standard & Poor's
Balanced Fund Aggregate Bond Index 500 Index
Dec-04 10,000 10,000 10,000
Dec-05 10,362 10,243 10,491
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Certain Pioneer funds (the "Funds") issued Investor Class shares in connection
with the reorganization of Safeco mutual funds. The Funds are not offering
additional Investor Class shares except in connection with the reinvestment of
dividends on the Funds' outstanding Investor Class shares. All Investor Class
shares of the Funds, whenever issued, convert to Class A shares of their
respective Funds on December 10, 2006. Investor Class shares are not subject to
sales charges.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Fund adopted its current name and investment objective on February 3, 1997.
Prior to that date, the Fund's name was Pioneer Income Fund and its objective
was income from a portfolio of income-producing bonds and stocks.
B-24
Portfolio Management Discussion
Pioneer Balanced Fund 12/31/05
The nation's economy grew persistently throughout 2005, producing strong
earnings growth and healthier corporate balance sheets. The economy proved
resilient to the effects of a variety of challenges, from hurricane damage in
the Gulf Coast to sharply rising energy and commodity prices. To head off the
possibility that inflationary pressures would build up as the economy grew, the
U.S. Federal Reserve continued to tighten monetary policy. The Fed raised the
Fed Funds rate eight different times during the calendar year. In the following
interview, Timothy Mulrenan, who is responsible for the equity portfolio of
Pioneer Balanced Fund, and Richard Schlanger, who is responsible for the Fund's
fixed-income portfolio, discuss the markets and the factors that affected
performance.
Q. How did the Fund perform?
A: Class A shares of Pioneer Balanced Fund returned 3.25% at net asset value
during the 12 months ended December 31, 2005. In comparison, the Standard &
Poor's 500 Index and the Lehman Brothers Aggregate Bond Index returned 4.91%
and 2.43%, respectively, over the same period. Additionally, the average
return of the 650 funds in Lipper's Balanced Fund category was 4.69%.
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher
than the performance data quoted.
The performance data quoted represents past performance, which is no
guarantee of future results. Investment return and principal value will
fluctuate, and shares, when redeemed, may be worth more or less than their
original cost.
Q. What were the principal factors that affected Fund performance?
A: Throughout the 12 months, we overweighted equities, with a target allocation
of about 64% of Fund assets versus a 60% normal allocation. We invested the
remaining 36% of assets in fixed income securities. We placed this emphasis
on stocks because of the favorable earnings environment and our view that
stocks were likely to produce positive returns during the year. At the same
time, we were not sure how far the Federal Reserve Board intended to push
short-term interest rates, and we believed bonds, in general, were fully
valued in the market.
The equity market had a positive year, buoyed by positive earnings - profits
of S&P 500 companies grew approximately 13%. Despite rising short-term
interest rates and higher commodity prices, long-term interest rates were
essentially unchanged over the 12 months. Other factors giving support to
stock valuations included many stock buyback programs, initiated by
corporations with more cash on their balance sheets, and increasing merger
and acquisition activity. Despite all these positive factors, stock
performance was held back by a number of concerns, including fears that
higher short-term interest rates and high energy costs might undermine future
corporate profitability.
The major development in the fixed-income market was the dramatic flattening
of the yield curve - which reflects the difference in yields between
short-term and long-term securities. Normally, the yield curve steepens -
yield differences become greater - the greater the difference in maturity
between short- and long-term securities. However, the yield curve became so
flat that it actually partially inverted by the end of the year, a highly
unusual phenomenon in which 10-year yields actually became slightly lower
than two-year yields. Despite the efforts of the Federal Reserve to raise
short-term rates, long-term rates tended to fall or remain stable because of
strong demand for U.S. Treasuries by international bond investors.
Q. What areas in the equity and fixed income market performed better than
others?
A: In the equity market, mid-cap stocks did better than either small or
large-cap stocks, continuing a multi-year run for medium-sized companies. The
value style of investing slightly outperformed the growth style, but the
growth style performed somewhat better in the final two months of the year.
We manage the Fund in a large cap growth style.
Driven by the dramatic increases in oil and natural gas prices, energy stocks
were by far the performance leaders in the equity market. On average, energy
stocks rose by 30%. Utilities also performed relatively well, while consumer
discretionary stocks - especially in the automotive and media industries -
lagged.
In the fixed-income market, long-term investments outperformed short- and
intermediate-term investments. With a backdrop of rising profits, investment
grade and high-yield corporate bonds tended to do well. The notable exception
was among a few fallen angels whose financial problems led to credit rating
downgrades. Two highly visible examples were General Motors and Ford, both of
which were downgraded from investment grade to high yield. Among governments,
Treasuries outperformed mortgages, with long-term Treasuries performing
especially well.
B-25
Q. What equity investments had the greatest influence on performance?
A: Our overweight position in energy stocks for most of the year and our stock
selection within the energy sector helped boost performance. Two standout
selections were National Oilwell Varco, a leading provider of oil field
equipment, and ENSCO International, a prominent offshore contract driller.
National Oilwell Varco's stock price rose substantially, driven by robust
earnings, favorable pricing and a growing backlog of orders. We trimmed the
position and took profits during the year. ENSCO's stock price appreciated by
about 40% as the day rates for its oil rigs surged against a backdrop of
growing demand and a tight supply of the drilling platforms. By the end of
the year, we had taken some profits, but still held ENSCO, and moved to a
slight underweight position in energy.
Our investments in health care also did well. Shares of generic
pharmaceutical manufacturer IVAX doubled. The company was helped by both an
impressive pipeline of new drugs approaching market and an acquisition offer
from a competitor. Amgen, a major biotechnology firm, benefited from strong
revenue gains across all its product lines and its own promising pipeline of
new products under development, including prospective drugs for treatment of
cancer and arthritis. Among the more disappointing positions was our
investment in Symantec, a leading software security firm. Its stock price
declined in the second half of the year after the company announced earnings
that failed to meet expectations. Investors also became concerned about price
competition in the software security industry and the possibility of new
competition from Microsoft. The U.K.- based telecommunications services giant
Vodafone also declined as its profit margins came under pressure because of
difficulties in operations in Japan and in Europe. Also detracting from
results was our investment in Family Dollar, a low-price retailer. Lower
income consumers, who make up a substantial part of Family Dollar's customer
base, were particularly hard hit by rising energy prices. We eliminated our
positions in Symantec and in Family Dollar.
Q. What fixed-income investments had the greatest influence on performance?
A: Our positioning on the yield curve did not help. In a period in which
short-term interest rates were rising and longer-term rates were relatively
stable, the best positioning would have been a bar-belled approach. That
would place greater emphasis both on short-term securities - to take
advantage of rising yields - and on long-term securities to take advantage of
their high yields and price stability. However, we pursued a
bulleted-approach with investments throughout the yield curve - including
intermediate-term securities, which tended to under perform other parts of
the market. Also holding back results was our investment in bonds of auto
parts manufacturer Delphi, which filed for bankruptcy protection during the
year. We had liquidated our position in Delphi prior to the bankruptcy
filing. During the year, as yields in many part of the market rose, we
extended duration - a measure of sensitivity to interest rate changes.
Duration on December 31, 2005, was 4.55 years, compared to 3.98 years six
months earlier. Average credit quality remained at AA-, although we did
reduce our exposure to high yield securities. We also cut our mortgage
position, while raising our allocation to Treasuries and agencies. Mortgages,
however, still represented the largest sector weighting, at 44.7% of fixed
income assets at year's end. Treasuries and agencies represented 24% of
assets, and industrials and utilities were 20%.
Q. What is your investment outlook?
A: We expect positive performance in the equity market if an environment of
rising profits and strengthening balance sheets continues. We believe two key
factors should influence the equity markets in 2006: the continued revival of
corporate capital spending, which already grew by 20% during 2005 and the
emergence of a performance edge by growth stocks, which have underperformed
value stocks for several years. As we enter a new year, value stocks have
reached price levels on a par with growth stocks, and we believe growth
stocks should begin to outperform because of their greater earnings growth
potential.
Given this view, we have added to our positions in companies that can benefit
from increasing capital spending, with investments in industrials,
telecommunications equipment and information technology companies. We have
also reduced our exposure to consumer discretionary stocks, although we
continue to emphasize consumer staples with their more consistent earnings.
For the fixed-income market, we anticipate that the Federal Reserve will move
cautiously because of concerns about high debt levels of consumers. We
believe the Fed may raise short-term rates two or three times more. We think
the Fed Funds rate may level off in the range of 4.75% to 5.00%.
Historically, the Fed has begun lowering rates four to six months after the
end of its rate-hike cycles, and we believe this may occur again late in
2006. If that occurs, we expect the short-end and the intermediate parts of
the yield curve to outperform the long-end, and we would position the
portfolio accordingly. Because of the tightening labor supply and high energy
costs, we are carefully watching inflation trends and are prepared to become
more defensive. We already have established a position in Treasury Inflation
Protective Securities (TIPS) to guard against the impact of higher inflation.
When interest rates rise, the prices of fixed income securities in the Fund
will generally fall. Conversely, when interest rates fall, the prices of
fixed income securities in the Fund will generally rise. Investments in the
Fund are subject to possible loss due to the financial
B-26
failure of underlying securities and their inability to meet their debt
obligations. Prepayment risk is the chance that mortgage-backed bonds will be
paid off early if falling interest rates prompt homeowners to refinance their
mortgages. Forced to reinvest the unanticipated proceeds at lower interest
rates, the Fund would experience a decline in income and lose the opportunity
for additional price appreciation associated with falling interest rates. The
portfolio invests in REIT securities, the value of which can fall for a
variety of reasons, such as declines in rental income, fluctuating interest
rates, poor property management, environmental liabilities, uninsured damage,
increased competition, or changes in real estate tax laws.
Investing in foreign and/or emerging markets securities involves risks
relating to interest rates, currency exchange rates, economic, and political
conditions.
The portfolio may invest in mortgage-backed securities, which during times of
fluctuating interest rates may increase or decrease more than other
fixed-income securities. Mortgage-Backed securities are also subject to
pre-payments. At times, the Fund's investments may represent industries or
industry sectors that are interrelated or have common risks, making it more
susceptible to any economic, political, or regulatory developments or other
risks affecting those industries and sectors.
Any information in this shareholder report regarding market or economic
trends or the factors influencing the Fund's historical or future performance
are statements of the opinion of Fund management as of the date of this
report. These opinions should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
B-27
PIONEER AMT-FREE MUNICIPAL FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 12/31/05 CLASS A SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of December 31, 2005)
Public
Net Asset Offering
Period Value (NAV) Price (POP)
Life-of-Class
(9/30/96) 5.98% 5.34%
5 Years 6.14 5.17
1 Year 4.81 0.07
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
The mountain chart below shows the change in value of a $10,000 investment in
Pioneer AMT-Free Municipal Fund at public offering price, compared to that of
the Lehman Brothers Municipal Bond Index.
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Pioneer AMT-Free Lehman Brothers
Municipal Fund Municipal Bond Index
Sep-96 10,000 9,550
Dec-97 11,197 10,677
Dec-99 11,678 10,559
Dec-01 13,711 12,600
Dec-03 15,826 14,641
Dec-05 17,116 16,181
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
NAV results represent the percent change in net asset value per share. Returns
would have been lower had sales charges been reflected. POP returns reflect
deduction of maximum 4.5% sales charge. All results are historical and assume
the reinvestment of dividends and capital gains. Other share classes are
available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance of each class of the fund includes the performance of the
predecessor fund's Class A, Class B and Class C shares, which has been restated
to reflect differences in any applicable sales charges (but not differences in
expenses). This adjustment has the effect of reducing the previously reported
performance of predecessor fund. Pioneer AMT-Free Municipal Fund was created
through the reorganization of predecessor Safeco Funds on December 10, 2004. If
all the expenses of the Pioneer fund were reflected, the performance would be
lower.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
B-28
PIONEER AMT-FREE MUNICIPAL FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 12/31/05 CLASS B SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of December 31, 2005)
If If
Period Held Redeemed
Life-of-Class
(9/30/96) 5.21% 5.21%
5 Years 5.33 5.33
1 Year 4.02 0.09
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer AMT-Free Municipal Fund, compared to that of the Lehman Brothers
Municipal Bond Index.
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Pioneer AMT-Free Lehman Brothers
Municipal Fund Municipal Bond Index
Sep-96 10,000 10,000
Dec-97 11,197 11,189
Dec-99 11,678 10,931
Dec-03 13,711 12,847
Dec-05 15,826 14,703
Dec-07 17,116 15,993
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
"If Held" results represent the percent change in net asset value per share.
Returns would have been lower had sales charges been reflected. "If redeemed"
returns reflect the deduction of applicable contingent deferred sales charge
(CDSC). Class B shares reflect the deduction of the maximum applicable
contingent deferred sales charge (CDSC). The maximum CDSC is 4.0% and declines
over five years.
All results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses
will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance of each class of the fund includes the performance of the
predecessor fund's Class A, Class B and Class C shares, which has been restated
to reflect differences in any applicable sales charges (but not differences in
expenses). This adjustment has the effect of reducing the previously reported
performance of predecessor fund. Pioneer AMT-Free Municipal Fund was created
through the reorganization of predecessor Safeco funds on December 10, 2004. If
all the expenses of the Pioneer fund were reflected, the performance would be
lower.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
B-29
PIONEER AMT-FREE MUNICIPAL FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 12/31/05 CLASS C SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of December 31, 2005)
If If
Period Held Redeemed
Life-of-Class
(10/1/03) 4.32% 4.32%
1 Year 3.78 3.77
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer AMT-Free Municipal Fund, compared to that of the Lehman Brothers
Municipal Bond Index.
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Pioneer AMT-Free Lehman Brothers
Municipal Fund Municipal Bond Index
Oct-03 10,000 10,000
Dec-03 10,188 10,210
Dec-04 10,644 10,664
Dec-05 11,018 11,066
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Class C shares held for less than one year are also subject to a 1% contingent
deferred sales charge (CDSC). The performance of Class C shares does not
reflect the 1% front-end sales charge in effect prior to February 1, 2004. If
you paid a 1% sales charge, your returns would be lower than those shown above.
"If Held" results represent the percent change in net asset value per share.
Returns would have been lower had sales charges been reflected. All results are
historical and assume the reinvestment of dividends and capital gains. Other
share classes are available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance of each class of the fund includes the performance of the
predecessor fund's Class A, Class B and Class C shares, which has been restated
to reflect differences in any applicable sales charges (but not differences in
expenses). This adjustment has the effect of reducing the previously reported
performance of predecessor fund. Pioneer AMT-Free Municipal Fund was created
through the reorganization of predecessor Safeco funds on December 10, 2004. If
all the expenses of the Pioneer fund were reflected, the performance would be
lower.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
B-30
PIONEER AMT-FREE MUNICIPAL FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 12/31/05 INVESTOR CLASS SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of December 31, 2005)
If If
Period Held Redeemed
10 Years 5.90% 5.90%
5 Years 6.40 6.40
1 Year 4.88 4.88
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer AMT-Free Municipal Fund, compared to that of the Lehman Brothers
Municipal Bond Index.
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Pioneer AMT-Free Lehman Brothers
Municipal Fund Municipal Bond Index
Dec-95 10,000 10,000
Dec-97 11,403 11,420
Dec-99 11,892 11,393
Dec-01 13,962 13,695
Dec-03 16,116 16,007
Dec-05 17,430 17,734
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Certain Pioneer funds (the "Funds") issued Investor Class shares in connection
with the reorganization of Safeco mutual funds. The Funds are not offering
additional Investor Class shares except in connection with the reinvestment of
dividends on the Funds' outstanding Investor Class shares. All Investor Class
shares of the Fund, whenever issued, convert to Class A shares of their
respective Funds on December 10, 2006. Investor Class shares are not subject to
sales charges.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance of each class of the fund includes the performance of the
predecessor fund's Class A, Class B and Class C shares, which has been restated
to reflect differences in any applicable sales charges (but not differences in
expenses). This adjustment has the effect of reducing the previously reported
performance of predecessor fund. Pioneer AMT-Free Municipal Fund was created
through the reorganization of predecessor Safeco funds on December 10, 2004. If
all the expenses of the Pioneer fund were reflected, the performance would be
lower.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
B-31
PORTFOLIO MANAGEMENT DISCUSSION
Pioneer AMT-Free Municipal Fund 12/31/05
In the following interview, Portfolio Manager Stephen C. Bauer outlines the
investment environment for tax-free bonds during the Fund's most recent fiscal
year, Fund performance, his investment philosophy and strategy, and his
outlook.
Q. How did the Fund perform during its most recent fiscal year?
A: For the 12-month period ended December 31, 2005, Pioneer AMT-Free Municipal
Fund's Class A shares produced a 4.81% return; Class B shares returned 4.02%;
and Class C shares 3.78%, each at net asset value. The Fund's benchmark, the
Lehman Brothers Municipal Bond Index, returned 3.51% and the average return
of the Lipper General Municipal Debt Funds category was 3.00%. Lipper is an
independent monitor of mutual fund performance.
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher
than the performance data quoted.
The performance data quoted represents past performance, which is no
guarantee of future results. Investment return and principal value will
fluctuate, and shares, when redeemed, may be worth more or less than their
original cost.
Q: Will you describe the investing environment for tax-exempt bonds during the
time period?
A: For the second year in a row, the environment for long-term municipals was
remarkably stable. The U.S. economy maintained steady Gross Domestic Product
growth throughout the year, energy prices soared, but inflation was muted.
Yields of long-term municipals and Treasury securities continue to be low,
close to their all-time low in June 2003. (The Bond Buyer 40 Municipal Index,
an industry standard for measuring long-term municipal bond interest rates,
closed the period at 4.77%.) The trading range for long-term municipals was
extremely narrow for the period. This was mildly surprising given that the
Federal Reserve continued to raise short term interest rates aggressively
throughout 2005, and that most economists had once again predicted that
long-term rates would increase. Intermediate-term rates rose, but long-term
rates, where this portfolio is concentrated, were slightly lower during the
past 12 months. This meant that long-term municipal investors generally
earned their coupon interest rate, plus some price appreciation (as bond
yields decline, bond prices rise, and vice versa).
Q. How would you characterize supply and demand for municipal bonds?
A: The year 2005 set a record for total volume of new municipal issues during
the year, over $400 billion. The volume was much higher than anticipated and
largely related to tax-free bond refundings, where issuers take advantage of
declining interest rates and refinance higher yielding bonds at lower rates.
Though demand from individual investors remained flat during the period,
tremendous demand for municipal bonds came from property and casualty
insurance companies. These firms have actually experienced strong profit
growth during a terrible year for natural disasters in 2005, as they have
been able to raise their rates and benefit from increased demand from
businesses and consumers for property and casualty insurance.
Q. Will you restate your philosophy in managing the Fund?
A: My investment philosophy is to stay fully invested in long-term bonds.
Pioneer AMT-Free Municipal Fund is a long-term fund, and I feel responsible
to maintain it as such, and not to try to predict the direction or magnitude
of interest rate changes and make maturity or other investment decisions on
that basis. At the close of the period, the Fund's average maturity was
approximately 21 years.
In addition, I believe that being invested in long-term municipal bonds is a
sound strategy for two reasons: First, long-term municipal bonds consistently
yield and more than shorter-term bonds.
There have been no inverse yield curves in the municipal bond market (i.e.,
where long-term rates are lower than short-term rates). Of course, the reason
that longer-term municipal bonds yield more is that they are more volatile
than bonds of shorter maturity. Greater interest rate risk is the trade-off
for more total return through the accumulation of higher yield over the long
term.
The second reason is that I take a very long-term view of the bond market. I
rarely make any transactions that I think will pay off only over the short
term. As I see it, many of the best investment decisions take years to bear
fruit. This long-term view means that the Fund will generally have a very low
turnover ratio and reasonably low transaction costs.
B-32
Q. Will you discuss your portfolio strategy during the 12-month period?
A: I pursued two main strategies over the period. First, I sold a number of
municipal bonds with short call dates. These bonds were purchased
inexpensively several years ago and had performed well for the Fund. But with
their call protection running out (at the call date, the issuer can refund
the proceeds of the bond for cash at "par," the original offering price), the
price appreciation potential for the bonds was limited. In their place, the
Fund purchased municipal bonds with more attractive call features. This call
protection strategy is meant to optimize the Fund's performance
characteristics and has worked well over the long term.
Second, during the 12-month period I purchased several par bonds for the
Fund. Typically these bonds have limited appeal because - in terms of their
price performance - they may have marginal upside and higher than normal
downside should interest rates rise. However, the par bonds purchased during
the period carried high yields and were very attractively priced. Several
years ago, when California was in the midst of a fiscal crisis and issuing
billions in debt in order to maintain services, I purchased a number of
California bonds for the Fund because they were so inexpensive. Now that
California's economy is performing much better, the state is beginning to
make progress in dealing with its budget deficit. In light of this, two major
ratings agencies upgraded California's debt in July 2005 and its bonds have
been trading extremely strongly. Because the yields on the state's bonds have
declined in the face of this progress, the Fund took profits on a number of
California issues during the period.
Q. How is the Fund positioned in terms of credit quality and diversification?
A: Approximately 44% of the Fund's portfolio is rated AAA or the equivalent (the
highest rating). In addition, the Fund is broadly diversified among 24 states
and Puerto Rico. For the period, the Fund generally avoided purchasing any
bonds with ratings lower than AAA. Purchasing lower quality bonds has been a
popular strategy in the municipal marketplace in recent years, and "spreads"
- or differences in yield between higher and lower quality municipal bonds -
have narrowed considerably. At present, I do not believe investors are being
adequately compensated in additional yield for the risk of buying lower
quality bonds.
Q. What is your outlook going forward?
A: Every year brings unexpected events that move the market, but at present,
long-term municipal bonds look very stable. Inflation figures seem modest,
and it is hard to find economic factors or other trends that might change
that. With an inverted yield curve in the Treasury market in December 2005
(where short-term rates were modestly higher than long-term rates), some have
predicted an economic slowdown in 2006. If this occurs, it would be good news
for long-term municipal bonds, because such slowdowns tend to reduce
inflationary pressures. We will be monitoring the progress of the economy and
markets over the course of the coming year, as well as the actions of the
incoming Fed chairman Bernanke.
We believe that Pioneer AMT-Free Municipal Fund continues to be a suitable
vehicle for long-term investors seeking high income free from federal taxes.
When interest rates rise, the prices of fixed income securities in the fund
will generally fall. Conversely, when interest rates fall, the prices of
fixed income securities in the fund will generally rise. Investments in the
fund are subject to possible loss due to the financial failure of underlying
securities and their inability to meet their debt obligations. Investing in
foreign and/or emerging markets securities involves risks relating to
interest rates, currency exchange rates, economic, and political conditions.
At times, the fund's investments may represent industries or industry sectors
that are interrelated or have common risks, making it more susceptible to any
economic, political, or regulatory developments or other risks affecting
those industries and sectors.
Any information in this shareholder report regarding market or economic
trends or the factors influencing the fund's historical or future performance
are statements of the opinion of fund management as of the date of this
report. These opinions should not be relied upon for any other purposes. Past
performance is not guarantee of future results, and there is no guarantee
that market forecasts discussed will be realized.
B-33
PIONEER FLORIDA TAX FREE INCOME FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 1/31/06 CLASS A SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of January 31, 2006)
Public
Net Asset Offering
Period Value (NAV) Price (POP)
10 Years 3.96% 3.48%
5 Years 3.43 2.49
1 Year 0.67 (3.84)
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer Florida Tax Free Income Fund at public offering price, compared to
that of the Merrill Lynch 1-12 Year Municipal Bond Index.
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Pioneer Florida Merrill Lynch 1-12 Year
Tax Free Income Fund Municipal Bond Index
Jan-96 9,550 10,000
9,820 10,371
Jan-98 10,519 11,226
11,149 11,995
Jan-00 10,805 11,789
11,892 13,164
Jan-02 12,461 13,887
13,293 14,955
Jan-04 13,756 15,855
13,982 16,378
Jan-06 14,076 16,680
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
NAV results represent the percent change in net asset value per share. Returns
would have been lower had sales charges been reflected. POP returns reflect
deduction of maximum 4.5% sales charge. All results are historical and assume
the reinvestment of dividends and capital gains. Other share classes are
available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers fund performance would be lower. Waivers
may not be in effect for all funds and can be rescinded at any time. See the
prospectus and financial statements for complete details.
The performance of the Class A and Class B shares of the fund includes the
performance of AmSouth Florida Tax-Exempt Fund's Class A and Class B shares
prior to the reorganization, which has been restated to reflect differences in
any applicable sales charges (but not differences in expenses). Pioneer Florida
Tax Free Income Fund was created through the reorganization of AmSouth Florida
Tax-Exempt Fund on September 23, 2005. If the performance had been adjusted to
reflect all differences in expenses, The Merrill Lynch 1-12 Year Municipal Bond
Index is an unmanaged index generally representative of municipal bonds with
intermediate maturities of no less than one year and no more than twelve years.
Index returns are calculated monthly, assume reinvestment of dividends and,
unlike Fund returns, do not reflect any fees, expenses or sales charges. You
cannot invest directly in an Index.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
B-34
PIONEER FLORIDA TAX FREE INCOME FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 1/31/06 CLASS B SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of January 31, 2006)
If If
Period Held Redeemed
Life-of-Class
(3/16/99) 2.76% 2.76%
5 Years 2.62 2.62
1 Year (0.20) (4.06)
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer Florida Tax Free Income Fund, compared to that of the Merrill Lynch
1-12 Year Municipal Bond Index.
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Pioneer Florida Merrill Lynch 1-12 Year
Tax Free Income Fund Municipal Bond Index
Mar-99 10,000 10,000
Jan-00 9,710 9,895
10,607 11,049
Jan-02 11,019 11,657
11,682 12,553
Jan-04 12,000 13,309
12,096 13,747
Jan-06 12,071 14,000
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Class B shares reflect the deduction of the maximum applicable contingent
deferred sales charge (CDSC). The maximum CDSC is 4.0% and declines over five
years.
All results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses
will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers fund performance would be lower. Waivers
may not be in effect for all funds and can be rescinded at any time. See the
prospectus and financial statements for complete details.
The performance of the Class A and Class B shares of the fund includes the
performance of AmSouth Florida Tax-Exempt Fund's Class A and Class B shares
prior to the reorganization, which has been restated to reflect differences in
any applicable sales charges (but not differences in expenses). Pioneer Florida
Tax Free Income Fund was created through the reorganization of AmSouth Florida
Tax-Exempt Fund on September 23, 2005. If the performance had been adjusted to
reflect all differences in expenses, The Merrill Lynch 1-12 Year Municipal Bond
Index is an unmanaged index generally representative of municipal bonds with
intermediate maturities of no less than one year and no more than twelve years.
Index returns are calculated monthly, assume reinvestment of dividends and,
unlike Fund returns, do not reflect any fees, expenses or sales charges. You
cannot invest directly in an Index.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
B-35
PIONEER FLORIDA TAX FREE INCOME FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 1/31/06 CLASS C SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of January 31, 2006)
If If
Period Held Redeemed
Life-of-Class
(3/16/99) 2.78% 2.78%
5 Year 2.65 2.65
1 Year (0.04) (0.04)
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer Florida Tax Free Income Fund, compared to that of the Merrill Lynch
1-12 Year Municipal Bond Index.
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Pioneer Florida Merrill Lynch 1-12 Year
Tax Free Income Fund Municipal Bond Index
Mar-99 10,000 10,000
Jan-00 9,710 9,895
10,607 11,049
Jan-02 11,019 11,657
11,682 12,553
Jan-04 12,000 13,309
12,096 13,747
Jan-06 12,091 14,000
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Returns would have been lower had sales charges been reflected. All results are
historical and assume the reinvestment of dividends and capital gains. Other
share classes are available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers fund performance would be lower. Waivers
may not be in effect for all funds and can be rescinded at any time. See the
prospectus and financial statements for complete details.
The performance of the Class C shares is based upon the performance of the
fund's Class B shares as adjusted to reflect sales charges applicable to Class
C shares (but not other differences in expenses). Pioneer Florida Tax Free
Income Fund was created through the reorganization of AmSouth Florida
Tax-Exempt Fund on September 23, 2005. If the performance had been adjusted to
reflect all differences in expenses.
The Merrill Lynch 1-12 Year Municipal Bond Index is an unmanaged index
generally representative of municipal bonds with intermediate maturities of no
less than one year and no more than twelve years. Index returns are calculated
monthly, assume reinvestment of dividends and, unlike Fund returns, do not
reflect any fees, expenses or sales charges. You cannot invest directly in an
Index.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
B-36
PIONEER FLORIDA TAX FREE INCOME FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 1/31/06 CLASS Y SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of January 31, 2006)
If If
Period Held Redeemed
10 Years 4.08% 4.08%
5 Years 3.56 3.56
1 Year 0.82 0.82
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer Florida Tax Free Income Fund compared to that of the Merrill Lynch
1-12 Year Municipal Bond Index.
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Pioneer Florida Merrill Lynch 1-12 Year
Tax Free Income Fund Municipal Bond Index
Jan-96 10,000 10,000
10,287 10,371
Jan-98 11,025 11,226
11,696 11,995
Jan-00 11,357 11,789
12,518 13,164
Jan-02 13,124 13,887
14,033 14,955
Jan-04 14,543 15,855
14,790 16,378
Jan-06 14,911 16,680
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers fund performance would be lower. Waivers
may not be in effect for all funds and can be rescinded at any time. See the
prospectus and financial statements for complete details.
The performance of the Class Y shares of the fund includes the performance of
AmSouth Florida Tax-Exempt Fund's Class I shares prior to the reorganization,
which has been restated to reflect differences in any applicable sales charges
(but not differences in expenses). Pioneer Florida Tax Free Income Fund was
created through the reorganization of AmSouth Florida Tax-Exempt Fund on
September 23, 2005. If the performance had been adjusted to reflect all
differences in expenses, the performance of the fund would be lower.
The Merrill Lynch 1-12 Year Municipal Bond Index is an unmanaged index
generally representative of municipal bonds with intermediate maturities of no
less than one year and no more than twelve years. Index returns are calculated
monthly, assume reinvestment of dividends and, unlike Fund returns, do not
reflect any fees, expenses or sales charges. You cannot invest directly in an
Index.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
B-37
PORTFOLIO MANAGEMENT DISCUSSION
Pioneer Florida Tax Free Income Fund 1/31/06
Despite rising short-term interest rates during the last six months,
shareholders in Pioneer Florida Tax Free Income Fund earned a positive return.
In the following interview, David Eurkus, a Portfolio Manager and member of the
Pioneer fixed-income team, discusses some of the factors that had an impact on
the Fund's performance over the past six months.
Q. How did the Fund perform during the six-month period ended January 31, 2006?
A: During the six months, Class A shares of Pioneer Florida Tax Free Income Fund
produced a total return of 0.85% at net asset value. The Fund underperformed
its benchmark, the Merrill Lynch 1-12 Year Municipal Bond Index, which
returned 1.16% for the same period. It also fell short of the average 0.90%
return generated by the funds in the Florida Intermediate Municipal Debt
Funds Category of Lipper, Inc., an independent monitor of mutual fund
performance. At the end of the period, the 30-day SEC yield for Class A
shares was 3.02% or a 4.65% taxable equivalent yield based on the maximum 35%
federal tax bracket. The Fund had 42 issues with an average quality of AAA.
Call 1-800-225-6292 or visit for the most recent month-end performance
results. Current performance may be lower or higher than the performance data
quoted.
The performance data quoted represents past performance, which is no
guarantee of future results. Investment return and principal value will
fluctuate, and shares, when redeemed, may be worth more or less than their
original cost.
Q. What was the investment environment like during the period?
A: In an environment of relatively strong economic growth, the Federal Reserve
continued to tighten monetary policy, boosting interest rates five times from
3.25% to 4.50% during the period. The net effect of the Fed's actions was a
flattening of the yield curve, with short-term yields moving higher and
longer-term yields remaining stable or declining slightly. In Florida, the
rate of economic growth was greater than the national average, as solid gains
in housing, personal income, tourism and international trade resulted in
relatively low unemployment and added to the stability and strength of the
Florida economy.
Q. In this environment, what strategies did you use in managing the Fund?
A: The Fund sought to balance the preservation of capital, while increasing
current income that is exempt from federal income tax and Florida's
intangible state personal property tax.
Early in the period, most of the Fund's assets were invested in the short and
intermediate part of the yield curve. Because we wanted to create a more
diversified portfolio that would provide more income, we sold some
short-maturity bonds, then selectively added longer-maturity bonds to the
Fund. That had the effect of modestly extending the Fund's duration, or price
sensitivity to interest-rate changes. It also boosted the Fund's income
stream. When adding investments to the portfolio, we favored high-quality
municipal securities in sectors that are essential to the growth of the
Florida economy. These included health care and hospitals, public power,
energy, transportation and education. We based our investment decisions on
the fundamental attributes of each security, focusing on each bond's yield,
liquidity, credit rating, call protection, issuer diversification and
relative value.
Q. What effect did the portfolio changes have on performance?
A: To build upon my previous answer, Pioneer took over the assets from the
AmSouth Florida Tax-Exempt Fund in late September 2005 when we sought a more
flexible portfolio that could boost income by choosing longer-term bonds.
That move enhanced performance. However, the Fund's relatively short duration
at the beginning of the period resulted in a modest amount of
underperformance.
Q. What is your outlook for the next six months?
A: The expansion in the national economy appears solid. Core inflation is
relatively low, and longer-term inflation expectations appear to be
contained. The Fed has indicated that it may be near the end of its
rate-raising cycle, and so we may see fewer interest-rate hikes in the next
several months. While we expect the overall business expansion in Florida to
continue, it is likely that some sectors, such as housing, will slow down.
The damage caused by the recent rash of hurricanes has presented the state
and counties with big challenges. However, reconstruction of the damaged
areas should continue to help solidify economic growth. In managing the Fund,
we plan to remain fully invested and to maintain our diversification strategy
among the broad range of Florida's municipal bond issuers.
B-38
When interest rates rise, the prices of fixed income securities in the Fund
will generally fall. Conversely, when interest rates fall, the prices of
fixed income securities in the Fund will generally rise. Investments in the
Fund are subject to possible loss due to the financial failure of underlying
securities and their inability to meet their debt obligations. Investing
primarily in the securities issued by Florida and its municipalities makes
the Fund more vulnerable to unfavorable developments in Florida than are
funds that invest in municipal securities of many states. The Fund invests in
a limited number of securities and, as a result, the Fund's performance may
be more volatile than the performance of other funds holding more securities.
At times, the Fund's investments may represent industries or industry sectors
that are interrelated or have common risks, making it more susceptible to any
economic, political, or regulatory developments or other risks affecting
those industries and sectors.
Any information in this shareholder report regarding market or economic
trends or the factors influencing the Fund's historical or future performance
are statements of the opinion of Fund management as of the date of this
report. These statements should not be relied upon for any other purposes.
Past performance is no guarantee of future results, and there is no guarantee
that market forecasts discussed will be realized.
B-39
PIONEER RESEARCH FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 12/31/05 CLASS A SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of December 31, 2005)
Public
Net Asset Offering
Period Value (NAV) Price (POP)
Life-of-Class
(11/18/99) (0.15)% (1.11)%
5 Year (0.16) (1.34)
1 Year 7.20 1.03
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer Research Fund at public offering price, compared to that of the
Standard & Poor's 500 Index.
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Pioneer Standard & Poor's
Research Fund 500 Index
Nov-99 9,425 10,000
Dec-99 10,067 10,588
9,532 9,624
Dec-01 8,216 8,481
6,355 6,608
Dec-03 7,920 8,502
8,821 9,426
Dec-05 9,456 9,889
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
NAV results represent the percent change in net asset value per share. Returns
would have been lower had sales charges been reflected. POP returns reflect
deduction of maximum 5.75% sales charge. All results are historical and assume
the reinvestment of dividends and capital gains. Other share classes are
available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
B-40
PIONEER RESEARCH FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 12/31/05 CLASS B SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of December 31, 2005)
If If
Period Held Redeemed
Life-of-Class
(11/18/99) (0.97)% (0.97)%
5 Year (0.96) (0.96)
1 Year 6.20 2.20
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer Research Fund, compared to that of the Standard & Poor's 500 Index.
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Pioneer Standard & Poor's
Research Fund 500 Index
Nov-99 10,000 10,000
Dec-99 10,669 10,588
10,030 9,624
Dec-01 8,570 8,481
6,592 6,608
Dec-03 8,144 8,502
9,000 9,426
Dec-05 9,558 9,889
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
"If Held" results represent the percent change in net asset value per share.
Returns would have been lower had sales charges been reflected. "If Redeemed"
returns reflect the deduction of applicable contingent deferred sales charge
(CDSC). Effective December 1, 2004, the period during which a CDSC is applied
to withdrawals was shortened to 5 years. The maximum CDSC for Class B shares
continues to be 4%. For more complete information, please see the prospectus
for details. Note: Shares purchased prior to December 1, 2004 remain subject to
the CDSC in effect at the time you purchased those shares. For performance
information for shares purchased prior to December 1, 2004, please visit
www.pioneerinvestments.com/bshares.
All results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses
will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
B-41
PIONEER RESEARCH FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 12/31/05 CLASS C SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of December 31, 2005)
If If
Period Held Redeemed
Life-of-Class
(11/19/99) (0.88)% (0.88)%
5 Year (0.89) (0.89)
1 Year 6.17 6.17
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer Research Fund, compared to that of the Standard & Poor's 500 Index.
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Pioneer Standard & Poor's
Research Fund 500 Index
Nov-99 10,000 10,000
Dec-99 10,668 10,588
10,030 9,624
Dec-01 8,583 8,481
6,609 6,608
Dec-03 8,168 8,502
9,033 9,426
Dec-05 9,590 9,889
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Class C shares held for less than one year are also subject to a 1% contingent
deferred sales charge (CDSC). The performance of Class C shares does not
reflect the 1% front-end sales charge in effect prior to February 1, 2004. If
you paid a 1% sales charge, your returns would be lower than those shown above.
"If Held" results represent the percent change in net asset value per share.
Returns would have been lower had sales charges been reflected. All results are
historical and assume the reinvestment of dividends and capital gains. Other
share classes are available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
B-42
PIONEER RESEARCH FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 12/31/05 CLASS Y SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of December 31, 2005)
If If
Period Held Redeemed
Life-of-Class
(8/11/04) (0.11)% (0.11)%
5 Years (0.12) (0.12)
1 Year 7.35 7.35
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer Research Fund, compared to that of the Standard & Poor's 500 Index.
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Pioneer Standard & Poor's
Research Fund 500 Index
Nov-99 10,000 10,000
Dec-99 10,678 10,588
10,111 9,624
Dec-01 8,715 8,481
6,741 6,608
Dec-03 8,401 8,502
9,364 9,426
Dec-05 10,053 9,889
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Performance for periods prior to the inception of Y shares reflects the NAV
performance of the Fund's A shares. The performance does not reflect
differences in expenses, including the Rule 12b-1 fees applicable to A shares.
Since fees for A shares are generally higher than those of Y shares, the
performance shown for Y shares prior to their inception would have been higher.
Class A shares are used as a proxy from November 18, 1999 to August 11, 2004.
Class Y shares are not subject to sales charges and are available for limited
groups of eligible investors, including institutional investors.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
B-43
PORTFOLIO MANAGEMENT DISCUSSION
Pioneer Research Fund 12/31/05
In the following interview, John Peckham, U.S. Equity Research Coordinator and
member of the Pioneer Research Fund team, discusses the factors that influenced
performance for the twelve months ended December 31, 2005.
Q. How did the US stock market perform in 2005?
A: In a year that was notable for the variety of potential obstacles to market
performance - including rising interest rates, a spike in energy prices, and
September's Gulf Coast hurricanes - the U.S. market nonetheless produced
solid returns on the strength of steady economic growth and impressive
corporate earnings results. This generally positive environment, which lacked
the speculative element that often characterizes sharply rising markets,
provided a favorable backdrop for our bottom-up, research-based approach.
Q. How did the Fund perform in relation to its benchmark and peer group?
A: Class A shares of the Fund produced a total return of 7.20% at net asset
value during the 12-month period ended December 31, 2005, outperforming the
4.91% of the Fund's benchmark, the S&P 500 Index. The Fund also beat the
4.84% average return of the 890 funds in the Fund's Lipper Large-Cap Core
category during the annual period.
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher
than the performance data quoted.
The performance data quoted represents past performance, which is no
guarantee of future results. Investment return and principal value will
fluctuate, and shares, when redeemed, may be worth more or less than their
original cost.
Naturally, past performance is no guarantee of future results. Having said
that, we believe the Fund's strong showing in both 2004 and 2005 reflects the
effectiveness of our investment process. We manage the portfolio with an
emphasis on individual stock picking. We do not strive to predict the outlook
for the economy, the market, or individual sectors, and we therefore keep the
Fund's sector weightings as close to the S&P 500 as possible. The result is
that the Fund's performance is almost entirely the result of the quality of
our stock selection. And during 2005, we were successful in this endeavor: of
the 25 subsectors we track, our stock picks outperformed the benchmark in 19.
Q. What factors helped performance during the reporting period?
A: We added value through our stock selection in the health care, energy and
consumer discretionary sectors. In health care, three stocks provided
outstanding returns for the Fund.
Cubist Pharmaceuticals, a biotechnology company that developed a drug to
treat hospital infections, returned over 80% for the year. Vertex
Pharmaceuticals also climbed, as promising studies for its hepatitis drug led
investors to boost their future earnings estimates for the company. And our
position in IVAX Pharmaceuticals, a generic drug maker, was taken over by
Israel's Teva Pharmaceuticals. Health care was a potentially challenging area
in which to invest during 2005, and so we are pleased that we were able to
add value in this sector.
Energy was the strongest performing sector in the market during the year, as
the rising prices of oil and gas led to robust profit growth for companies in
the industry. A number of our stock picks did well, but the best performer
was Premcor, an independent refiner that was purchased at a premium by
Valero. Among large, diversified oil and gas companies, positive
contributions came from ConocoPhillips and Occidental Petroleum, both of
which outperformed. Weatherford International and Noble Corporation also
benefited from the strength in their markets: equipment/services and
drilling, respectively. It was relatively easy to find strong performing
energy stocks during 2005, but we are gratified that our research process led
us to invest in stocks that, as a group, outperformed the sector as a whole.
Consumer discretionary stocks, which had a difficult year in 2005, were also
a source of out performance for the Fund. In the automotive sector, we were
helped by our avoidance of Ford and General Motors, both of which performed
very poorly. The Fund instead owned Johnson Controls, an auto components
manufacturer with a diversified customer base that provided exposure to the
strong growth of the Asian car makers. In retail, our decision to own JC
Penney and Target paid off as both executed well and posted gains in a year
when retailers, as a group, provided only a flat return.
B-44
Q. What elements of your positioning detracted from performance?
A: Given the strength of our stock selection during the year, there were few
meaningful detractors to performance. Our picks underperformed in six of the
25 industry subsectors, but in none of these was the shortfall meaningful.
One detractor of note was Avon Products, which struggled with its U.S. and
international sales efforts. Our performance was also disappointing in
telecommunications services, where the Fund's investment in Vodafone lost
ground due to the company's issues with increasing competition in Europe and
its difficulty growing market share in Japan. Another notable misstep was our
investment in Symantec, a software company that experienced
lower-than-expected sales for its virus and security software.
Q: Financials and technology are the two largest sectors in the S&P 500. How
effective was your stock selection in these industries?
A: In financials, our stock picks outperformed the financial stocks in the
benchmark by a little more than two percentage points. The most significant
drivers of performance were our positions in the investment banks/brokers
Merrill Lynch and Goldman Sachs, both of which benefited from the strong
market for initial public offerings as well as rising merger and acquisition
activity. In bank stocks, where it was difficult to make money due to the
interest rate environment, we benefited from our strategy of sticking to
reasonably-priced stocks with diversified business mixes and yield curve
exposures below the industry average. Such holdings included Bank of America,
which was helped by the successful integration of Fleet Bank, as well as
Wachovia Bank.
In technology, we generated slight out performance. While Symantec hurt
performance in software and services, we offset this through the out
performance we generated in the semiconductor sector. Here, Texas Instruments
benefited from the strong demand for the products in which its chips are
used, including cell phones and high definition TVs. In hardware, the Fund's
position in Hewlett-Packard performed well after the appointment of a new CEO
raised hopes that its business will undergo the restructuring investors had
been demanding. SanDisk, whose sales were boosted by the rapidly growing
demand for flash memory, also made a positive contribution to Fund
performance.
Q. Do you have any closing thoughts for shareholders?
A: While the year ahead is likely to be more volatile than 2005, we will
continue to look past short-term market noise to identify fundamentally
sound, reasonably valued companies. Given the favorable growth environment
and the fact that the market as a whole is reasonably valued, we believe the
environment will remain fertile for our bottom-up, research-driven investment
process.
At times, the Fund's investments may represent industries or industry sectors
that are interrelated or have common risks, making it more susceptible to any
economic, political, or regulatory developments or other risks affecting
those industries and sectors.
Any information in this shareholder report regarding market or economic
trends or the factors influencing the Fund's historical or future performance
are statements of the opinion of Fund management as of the date of this
report. These opinions should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
B-45
PIONEER FOCUSED EQUITY FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 1/31/06 CLASS A SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of January 31, 2006)
Public
Net Asset Offering
Period Value (NAV) Price (POP)
Life-of-Class
(9/1/98) 6.20% 5.35%
5 Years 5.92 4.67
1 Year (4.01) (9.51)
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer Focused Equity Fund at public offering price, compared to that of
the Standard & Poor's (S&P) 500 Index.
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Pioneer Focused Standard & Poor's
Equity Fund 500 Index
Sep-98 9,425 10,000
10,715 12,635
Jan-00 9,054 13,941
10,515 13,815
Jan-02 11,640 11,586
10,384 8,920
Jan-04 13,607 12,003
14,603 12,749
Jan-06 14,018 14,072
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
POP returns reflect deduction of maximum 5.75% sales charge. NAV results
represent the percent change in net asset value per share. Returns would have
been lower had sales charges been reflected. All results are historical and
assume the reinvestment of dividends and capital gains. Other share classes are
available for which performance and expenses will differ.
The performance of the Class A and Class B shares of the Fund includes the
performance of AmSouth Select Equity Fund's Class A and Class B shares prior to
the reorganization, which has been restated to reflect differences in any
applicable sales charges (but not differences in expenses). Pioneer Focused
Equity Fund was created through the reorganization of AmSouth Select Equity
Fund on September 23, 2005. If the performance had been adjusted to reflect all
differences in expenses, the performance of the Fund would be lower. All
results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses
will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
B-46
PIONEER FOCUSED EQUITY FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 1/31/06 CLASS B SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of January 31, 2006)
If If
Period Held Redeemed
Life-of-Class
(9/1/98) 5.42% 5.42%
5 Years 5.11 5.11
1 Year (4.80) (8.42)
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer Focused Equity Fund, compared to that of the Standard & Poor's (S&P)
500 Index.
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Pioneer Focused Standard & Poor's
Equity Fund 500 Index
Sep-98 10,000 10,000
11,329 12,635
Jan-00 9,509 13,941
10,978 13,815
Jan-02 12,059 11,586
10,685 8,920
Jan-04 13,892 12,003
14,798 12,749
Jan-06 14,087 14,072
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
"If Held" results represent the percent change in net asset value per share.
Returns would have been lower had sales charges been reflected. "If Redeemed"
returns reflect the deduction of applicable contingent deferred sales charge
(CDSC). Effective December 1, 2004, the period during which a CDSC is applied
to withdrawals was shortened to 5 years. The maximum CDSC for Class B shares
continues to be 4%. For more complete information, please see the prospectus
for details.
All results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses
will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
B-47
PIONEER FOCUSED EQUITY FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 1/31/06 CLASS C SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of January 31, 2006)
If If
Period Held Redeemed
Life-of-Class
(9/1/98) 5.44% 5.44%
5 Years 5.15 5.15
1 Year (4.65) (4.65)
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer Focused Equity Fund at public offering price, compared to that of
the Standard & Poor's (S&P) 500 Index.
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Pioneer Focused Standard & Poor's
Equity Fund 500 Index
Sep-98 10,000 10,000
11,329 12,635
Jan-00 9,509 13,941
10,978 13,815
Jan-02 12,059 11,586
10,685 8,920
Jan-04 13,892 12,003
14,798 12,749
Jan-06 14,110 14,072
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
The performance of the Class C shares is based upon the performance of the
Fund's Class B shares as adjusted to reflect sales charges applicable to Class
C shares (but not other differences in expenses). Pioneer Focused Equity Fund
was created through the reorganization of AmSouth Select Equity Fund on
September 23, 2005. If the performance had been adjusted to reflect all
differences in expenses, the performance of the Fund would be lower. All
results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses
will differ. All results are historical and assume the reinvestment of
dividends and capital gains. Other share classes are available for which
performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
B-48
PIONEER FOCUSED EQUITY FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 1/31/06 CLASS Y SHARES
- --------------------------------------------------------------------------------
Investment Returns
Average Annual Total Returns
(As of January 31, 2006)
If If
Period Held Redeemed
Life-of-Class
(9/1/98) 6.39% 6.39%
5 Years 6.10 6.10
1 Year (3.74) (3.74)
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Value of $10,000 Investment
The mountain chart below shows the change in value of a $10,000 investment made
in Pioneer Focused Equity Fund, compared to that of the Standard & Poor's (S&P)
500 Index.
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Pioneer Focused Standard & Poor's
Equity Fund 500 Index
Sep-98 10,000 10,000
11,368 12,635
Jan-00 9,638 13,941
11,206 13,815
Jan-02 12,420 11,586
11,091 8,920
Jan-04 14,560 12,003
15,653 12,749
Jan-06 15,068 14,072
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
The performance of the Class Y shares of the Fund includes the performance of
AmSouth Select Equity Fund's Class I shares prior to the reorganization, which
has been restated to reflect differences in any applicable sales charges (but
not differences in expenses). Pioneer Focused Equity Fund was created through
the reorganization of AmSouth Select Equity Fund on September 23, 2005. If the
performance had been adjusted to reflect all differences in expenses, the
performance of the Fund would be lower. All results are historical and assume
the reinvestment of dividends and capital gains. Other share classes are
available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and chart do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
B-49
PORTFOLIO MANAGEMENT DISCUSSION
Pioneer Focused Equity Fund 1/31/06
In the following interview, portfolio managers Neil Wright, Janna Sampson and
Peter Jankovskis discuss the factors that influenced Pioneer Focused Equity
Fund's performance for the semiannual period ended January 31, 2006. Pioneer
Focused Equity Fund was created through the reorganization of AmSouth Select
Equity Fund on September 23, 2005.
Q: Can you characterize the market environment for the Fund over the six-month
period ended January 31, 2006?
A: The semiannual period saw generally modest equity returns with the notable
exception of energy and other commodity-related stocks. At the end of August
2005, Hurricane Katrina devastated the Gulf Coast, and this was followed a
few weeks later by Rita. One of the results of this catastrophic hurricane
season was a significant short-term disruption in the U.S. oil supply. That
resulted in soaring energy prices, with a barrel of crude oil briefly topping
the $70 mark, as compared to prices in the $30 range two years earlier. Other
commodities, such as paper and metals, followed suit. As a result, commodity
producing companies generally experienced substantial earnings increases
during the period, while earnings - and share prices - in industries that
rely on commodities in the manufacture or delivery of their products suffered
from increased costs.
Q. How did the Fund perform in this environment?
A: Class A shares of the Fund returned (3.03)% at net asset value from July 31,
2005, through January 31, 2006, versus 4.67% for the Standard & Poor's 500
Index, the Fund's unmanaged benchmark. The Fund's long-term investment
strategy of focusing on companies with strong brands constrained performance
over a period in which market leadership was highly concentrated among
commodity producers. In addition, many of the companies in our investment
universe are heavy commodity consumers.
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher
than the performance data quoted.
The performance data quoted represents past performance, which is no
guarantee of future results. Investment return and principal value will
fluctuate, and shares, when redeemed, may be worth more or less than their
original cost.
Q. Can you outline the Fund's overall investment approach?
A: Our investment universe is approximately 150 mid- and large capitalization
companies with dominant market share positions that are supported by some
barrier to entry such as a well-known brand name. Within our universe, we
employ an actively managed, stock-by-stock approach to identify companies
that we believe are trading at discounts to their long-term value. The result
is a portfolio of 20 to 25 leading "market power" companies whose stock
prices we believe are undervalued. We believe that a portfolio constructed in
this fashion has the potential to outperform the broader market over a
complete market cycle, with less volatility.
Q. Can you discuss what helped and hurt performance of the Fund over the
period?
A: Unfortunately, the universe of companies from which we select investments was
out of favor, and that was reflected in the Fund's results over the six
months. We typically do not invest in the energy sector, and during the
period we had no exposure to energy, which was by far the best performing
sector. In addition, we made a decision to avoid the financial sector because
we thought the Federal Reserve would continue to raise rates on the short
end, and we expected longer-term rates to rise along with commodity prices.
However, long-term rates were stable as the market did not perceive inflation
as a threat, and in retrospect exposure to financials would have helped
performance.
Because one of our principal areas of focus is on companies with strong
brands, we are generally overweighted versus the broad market in the
consumer-oriented sectors, which underperformed during the semiannual period.
At the end of January, the consumer discretionary and consumer staples
sectors comprised over 36% and 21%, respectively, of the Fund. Our biggest
holding in this area and one of our better performers was McDonald's, a
bellwether consumer discretionary stock. McDonald's managed to grow sales and
maintain strong earnings on the basis of well received new products and
promotions. In addition, McDonald's has taken steps to reduce its paper
costs, by reducing the size of the containers used to deliver food to
consumers.
A number of holdings were affected more decisively during the period by
higher paper costs, including newspaper publisher Tribune. A tepid
advertising environment also contributed to weaker results for publishers.
Among consumer staples, Kimberly Clark was hit especially hard by the
increased cost of paper. The company relies heavily on sales of paper-based
products such as diapers and facial tissues, and recently sold its paper
mill, making its earnings more subject to fluctuations in the price of that
commodity. In
B-50
addition, Kimberly Clark incurred significant research costs during the
period, which acted to lower short-term earnings, but which we believe will
serve the company well in the longer run.
The Fund is also overweight the industrial sector, which stood at over 21% of
assets at the end of January. The Fund's largest holding in this area is
Automatic Data Processing (ADP) the leading provider of payroll processing
services to employers. We expected the company's shares to perform well given
both the growth in U.S. employment and rising short-term interest rates,
which provide a boost to earnings on cash held by ADP pending its
disbursement to employees of its client companies. However, concerns about
economic growth and the sustainability of recent employment gains held back
the performance of ADP's stock during the period.
As we are long-term investors in a fairly concentrated number of companies,
turnover in the portfolio is typically low. The biggest change among our
holdings during the period was the elimination of Wal-Mart Stores from the
portfolio. Our decision was made in view of a change in banking regulations
that took effect in January of 2006 and that has resulted in a doubling of
minimum credit card payments for millions of consumers. While the change has
not yet been reflected in the company's business results or share price
performance, we believe it has the potential to hurt Wal-Mart more than its
peers.
Q. How are you positioning the Fund going forward?
A: We expect energy prices and commodity prices in general to moderate, giving
the companies on which we focus an opportunity gradually to raise prices and
restore profitability. Historically, the Fund's universe of "market power"
companies has traded at a premium to the overall market based on such
valuation measures as price-earnings ratios, which indicate how much
investors are willing to pay per dollar of a company's earnings. However,
many of the companies we hold are currently priced at below-market price
earnings ratios and dramatically below their long-term average valuations. We
believe the Fund is well positioned for the next phase of the market cycle,
even if commodity prices remain near their current levels. The biggest risk
to this outlook is a sharp increase in energy prices during the first quarter
of 2006, which we do not view as likely.
Going forward, we will continue to use intensive fundamental research to
target leading companies benefiting from competitive barriers that help
protect their market shares and profits, with a focus on those companies that
are selling at reasonable valuations. Our goal remains to outperform the
broader market over the long term, with less short-term volatility.
The Fund invests in a limited number of securities and, as a result, the
Fund's performance may be more volatile than the performance of other funds
holding more securities. Investing in foreign and/or emerging markets
securities involves risks relating to interest rates, currency exchange
rates, economic, and political conditions. At times, the Fund's investments
may represent industries or industry sectors that are interrelated or have
common risks, making it more susceptible to any economic, political, or
regulatory developments or other risks affecting those industries and
sectors.
Any information in this shareholder report regarding market or economic
trends or the factors influencing the Fund's historical or future performance
are statements of the opinion of Fund management as of the date of this
report. These statements should not be relied upon for any other purposes.
Past performance is no guarantee of future results, and there is no guarantee
that market forecasts discussed will be realized.
B-51
PIONEER AMT-FREE MUNICIPAL FUND
(a series of Pioneer Series Trust II)
STATEMENT OF ADDITIONAL INFORMATION
August 11, 2006
This Statement of Additional Information is not a Prospectus. It should be
read in conjunction with the combined Proxy Statement and Prospectus dated
August 11, 2006 (the "Proxy Statement and Prospectus"), which covers Class A,
Class B, Class C and Class Y shares of Pioneer AMT-Free Municipal Fund to be
issued in exchange for the corresponding Class of shares of Pioneer Florida Tax
Free Income Fund, a series of Pioneer Series Trust IV. Please retain this
Statement of Additional Information for further reference.
The Proxy Statement and Prospectus is available to you free of charge
(please call 1-800-225-6292).
INTRODUCTION..................................................................2
DOCUMENTS INCORPORATED BY REFERENCE...........................................2
EXHIBITS......................................................................2
ADDITIONAL INFORMATION ABOUT PIONEER AMT-FREE MUNICIPAL FUND..................3
PORTFOLIO HISTORY........................................................3
DESCRIPTION OF THE FUND AND ITS INVESTMENT RISKS.........................3
MANAGEMENT OF THE FUND...................................................3
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES......................3
INVESTMENT ADVISORY AND OTHER SERVICES...................................3
PORTFOLIO MANAGERS.......................................................3
BROKERAGE ALLOCATION AND OTHER PRACTICES.................................3
CAPITAL STOCK AND OTHER SECURITIES.......................................3
PURCHASE, REDEMPTION AND PRICING OF SHARES...............................3
TAXATION OF THE FUND.....................................................3
UNDERWRITERS.............................................................4
CALCULATION OF PERFORMANCE DATA..........................................4
FINANCIAL STATEMENTS.....................................................4
INTRODUCTION
This Statement of Additional Information is intended to supplement the
information provided in the Proxy Statement and Prospectus dated August 11, 2006
relating to the proposed reorganization of the Pioneer Florida Tax Free Income
Fund into the Pioneer AMT-Free Municipal Fund.
The Proxy Statement and Prospectus is in connection with the solicitation
by the management of Pioneer Series Trust II of proxies to be voted at a special
meeting of shareholders of Pioneer Florida Tax Free Income Fund to be held on
October 17, 2006.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents are incorporated herein by reference, unless
otherwise indicated. Shareholders will receive a copy of each document that is
incorporated by reference upon any request to receive a copy of this Statement
of Additional Information.
1. Pioneer AMT-Free Municipal Fund's Statement of Additional Information,
dated May 1, 2006 ("SAI") (File Nos. 333-110037; 811-21460), as filed with
the Securities and Exchange Commission on April 28, 2006 (Accession No.
0001265389-06-000020) is incorporated herein by reference.
2. Pioneer AMT-Free Municipal Fund's Annual Report for the fiscal year ended
December 31, 2005 (File No. 811-21460), as filed with the Securities and
Exchange Commission on March 6, 2006 (Accession No. 0001265389-06-000012)
is incorporated herein by reference.
3. Pioneer Florida Tax Free Income Fund's Statement of Additional Information,
dated December 1, 2005 (File Nos. 333-126384; 811-21781), as filed with the
Securities and Exchange Commission on November 23, 2005 (Accession No.
0001331854-05-000017) is incorporated herein by reference.
4. AmSouth Florida Tax-Exempt Fund's Annual Report (the predecessor fund to
Pioneer Florida Tax Free Income Fund) for the fiscal year ended July 31,
2005 (File No. 811-05551), as filed with the Securities and Exchange
Commission on October 11, 2005 (Accession No. 0001145443-05-002392) is
incorporated herein by reference.
5. Pioneer Florida Tax Free Income Fund's Semi-Annual Report relating to
Pioneer Florida Tax Free Income Fund for the reporting period ended January
31, 2006 (File No. 811-21781), as filed with the Securities and Exchange
Commission on March 31, 2006 (Accession No. 0001331854-06-000002) is
incorporated herein by reference.
EXHIBITS
6. Pro forma financial statements for the fiscal year ended December 31, 2005
for Pioneer Florida Tax Free Income Fund into Pioneer AMT-Free Municipal
Fund.
2
ADDITIONAL INFORMATION ABOUT
PIONEER AMT-FREE MUNICIPAL FUND
PORTFOLIO HISTORY
For additional information about the fund generally and its history, see
"Fund History" in the fund's SAI.
DESCRIPTION OF THE FUND AND ITS INVESTMENT RISKS
For additional information about the fund's investment objective, policies,
risks and restrictions, see "Investment Policies, Risks and Restrictions" in the
fund's SAI.
MANAGEMENT OF THE FUND
For additional information about the fund's Board of Trustees and officers,
see "Trustees and Officers" in the fund's SAI.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
For addition information on share ownership of the fund, see "Annual Fee,
Expense and Other Information" in the fund's SAI.
INVESTMENT ADVISORY AND OTHER SERVICES
For additional information on the fund, see "Investment Adviser,"
"Custodian" and "Independent Registered Public Accounting Firm" in the fund's
SAI.
PORTFOLIO MANAGERS
For additional information, see "Portfolio Management" in the fund's SAI.
BROKERAGE ALLOCATION AND OTHER PRACTICES
For additional information about the fund's brokerage allocation practices,
see "Portfolio Transactions" in the fund's SAI.
CAPITAL STOCK AND OTHER SECURITIES
For additional information about the voting rights and other
characteristics of shares of beneficial interest of the fund, see "Description
of Shares" in the fund's SAI.
PURCHASE, REDEMPTION AND PRICING OF SHARES
For additional information about purchase, redemption and pricing of shares
of the fund, see "Pricing of Shares" in the fund's SAI.
TAXATION OF THE FUND
For additional information about tax matters related to an investment in
the fund, see "Tax Status" in the fund's SAI.
3
UNDERWRITERS
For additional information about the fund's principal underwriter, see
"Principal Underwriter and Distribution Plans" in the fund's SAI.
CALCULATION OF PERFORMANCE DATA
For additional information about the investment performance of the fund,
see "Investment Results" in the fund's SAI.
FINANCIAL STATEMENTS
For additional information on the fund, see "Financial Statements" in the
fund's SAI.
4
Pioneer AMT-Free Municipal Fund
Pro Forma Statement of Assets & Liabilities
December 31, 2005
(unaudited)
Pioneer Pioneer
AMT-Free AMT-Free
Pioneer Pioneer Fund Portfolio Municipal Fund
AMT-Free Florida Tax-Free Pro Forma Pro Forma
Municipal Fund Fund Adjustments Combined
------------------------------------------------------------------
ASSETS:
Investment in securities, at value
(cost $431,267,651 and $46,041,403, respectively) $ 476,852,794 $ 46,857,550 $ $ 523,710,344
Cash - - -
Receivables -
Investment securities sold - -
Fund shares sold 260,507 486,851 747,358
Dividends, interest and foreign taxes withheld 7,084,781 646,844 7,731,625
Other 5,111 2,802 7,913
-------------------------------- --------------
Total assets $ 484,203,193 $ 47,994,047 $ $ 532,197,240
-------------------------------- --------------
LIABILITIES:
Payables -
Investment securities purchased $ - $ 1,027,060 $ $ 1,027,060
Fund shares repurchased 239,832 45,048 284,880
Dividends 656,218 131,234 787,452
Upon return of securities loaned 119,504 - 119,504
Variation margin 38,749 - 38,749
Due to Custodian - 22,475 22,475
Due to affiliates 204,368 23,831 228,199
Accrued expenses 27,242 34,637 23,250 (b) 85,129
-------------- ---------------- --------------
Total liabilities $ 1,285,913 $ 1,284,285 2,593,448
-------------- ---------------- --------------
NET ASSETS:
Paid-in capital $ 432,553,369 $ 46,167,095 $ $ 478,720,464
Undistributed net investment income 3,149,562 75,233 (23,250)(b) 3,201,545
Accumulated undistributed net realized gain (loss) 1,629,206 (348,713) 1,280,493
Net unrealized gain on:
Investments 45,585,143 816,147 46,401,290
Futures contracts - - -
-------------- ---------------- --------------
Total net assets $ 482,917,280 $ 46,709,762 $ $ 529,603,792
-------------- ---------------- --------------
NET ASSET VALUE PER SHARE:
OUTSTANDING SHARES:
(No par value, unlimited number of shares authorized)
Class A 1,134,813 359,588 (97,213)(a) $ 1,397,188
============== ================ ==============
Class B 168,335 185,024 (49,971)(a) $ 303,388
============== ================ ==============
Class C 84,265 954 (254)(a) $ 84,965
============== ================ ==============
Investor Class 32,938,017 - $ 32,938,017
============== ================ ==============
Class Y - 3,987,068 (1,077,891)(c) $ 2,909,177
============== ================ ==============
NET ASSET VALUE PER SHARE:
Class A $ 14.13 $ 10.31 $ 14.13
============== ================ ==============
Class B $ 14.07 $ 10.27 $ 14.07
============== ================ ==============
Class C $ 14.04 $ 10.29 $ 14.04
============== ================ ==============
Investor Class $ 14.07 $ - $ 14.07
============== ================ ==============
Class Y $ - $ 10.31 $ 14.13
============== ================ ==============
MAXIMUM OFFERING PRICE:
Class A $ 14.80 $ 10.80 $ 14.80
============== ================ ==============
(a) Class A, B, C shares of Pioneer Florida Tax Free Income Fund are exchanged
for Class A, B, and Class C shares of Pioneer AMT-Free Municipal Fund,
respectively.
(b) Reflects costs of the reorganization.
(c) assumes shares exchanged using AMT-Free Municipal Fund's class A NAV.
The accompanying notes are an integral part of these financial statements.
PIONEER AMT-FREE MUNICIPAL FUND
Pro Forma Statement of Operations
For the Year Ended December 31, 2005
(unaudited)
Pioneer Pioneer
AMT-Free AMT-Free
Pioneer Pioneer Fund Fund
AMT-Free Florida Tax-Free Pro Forma Pro Forma
Fund Fund Adjustments Combined
--------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $ - $ 29,000 $ $ 29,000
Interest 25,939,992 2,266,567 28,206,559
Income on securities loaned, net - - -
------------ ---------------- -------------
Total investment income $ 25,939,992 $ 2,295,567 $ - $ 28,235,559
------------ ---------------- -------------
EXPENSES:
Management fees $ 2,339,272 $ 294,872 $ (57,733) (b) $ 2,576,411
Transfer agent fees 30,849 (30,849) (b) -
Class A 27,055 - 6,254 (b) 33,309
Class B 886 - 1,531 (b) 2,417
Class C 482 - 16 (b) 498
Investor Class 248,133 - 30,051 (b) 278,184
Class Y - - 2,284 (b) 2,284
Shareholder servicing fees (Non-Rule 12b-1 Plan) (d)
Class A - 11,820 (11,820) (b) -
Class B - 7,000 (7,000) (b) -
Class I - 53,349 (53,349) (b) -
Distribution and/or service fees (Rule 12b-1 Plan) (d) - 22,176 (22,176) (b) -
Class A 18,129 - 12,315 (b) 30,444
Class B 6,419 - 24,234 (b) 30,653
Class C 4,597 - 63 (b) 4,660
Investor Class - - -
Class Y - - -
Administrative reimbursements 98,065 76,865 (64,946) (b) 109,984
Custodian fees 11,927 9,856 2,388 (a) 24,171
Registration fees 66,347 - 36,035 (a) 102,382
Professional fees 33,520 33,439 (15,418) (a) 51,541
Printing 32,639 1,689 1,029 (a) 35,357
Fees and expenses of nonaffiliated trustees 11,883 4,709 (429) (a) 16,163
Miscellaneous 18,605 32,909 (5,959) (a)(c) 45,555
------------ ---------------- ----------- -------------
Total expenses $ 2,917,959 579,533 (153,479) 3,344,013
Less management fees waived and expenses
assumed by Pioneer Investment Management,
Inc. (23,424) (128,919) 122,209 (b) (30,134)
Less fees paid indirectly (4,167) - - (4,167)
------------ ---------------- ----------- -------------
Net expenses $ 2,890,368 $ 450,614 $ (31,270) $ 3,309,712
------------ ---------------- ----------- -------------
Net investment income (loss) $ 23,049,624 $ 1,844,953 $ 31,270 $ 24,925,847
------------ ---------------- ----------- -------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS :
Net realized gain from:
Investments $ 10,655,557 $ 327,173 $ 10,982,730
------------ ---------------- -------------
$ 10,655,557 $ 327,173 $ 10,982,730
------------ ---------------- -------------
Change in net unrealized gain or loss from:
Investments $(10,336,729) $ (1,673,118) $ (12,009,847)
------------ ---------------- -------------
$(10,336,729) $ (1,673,118) $ (12,009,847)
------------ ---------------- -------------
Net gain on investments and futures contracts $ 318,828 $ (1,345,945) $ (1,027,117)
------------ ---------------- ----------- -------------
Net increase in net assets resulting from
operations $ 23,368,452 $ 499,008 $ 31,270 $ 23,898,730
============ ================ =========== =============
(a) Reflects estimated expenses of the combined fund. Expense adjustments
are based on the higher or lower expense structure (e.g., custodian
fees, printing fees and other expenses) of the combined fund.
(b) Expense adjustments conform to the combined fund's contracts with
affiliated parties. Expense adjustments are based on the higher or lower
contractual expense structure (e.g., transfer agency fees, Rule 12b-1
distribution and service fees, and administrative expenses), as well
as the expense characteristics of the combined fund and its share
classes (e.g., net assets, average shareholder account size and number
of shareholder accounts), which differs from those of each fund on an
uncombined basis and also differs from any predecessor fund.
(c) Includes costs of the reorganization.
(d) The predecessor fund to Pioneer Florida Tax Free Income Fund charged a
shareholder servicing (non-Rule 12b-1) fee that ranged from 0.15% up to
0.25% of that predecessor fund's average daily net assets, depending on
the share class. After the closing of the reorganization on September 23,
2005, the predecessor fund's shareholder servicing fees terminated and
Pioneer Florida Tax Free Income Fund adopted plans of distribution
pursuant to Rule 12b-1 ("Rule 12b-1 Plans") with respect to its Class A,
Class B and Class C shares providing for fees payable at the annual rates
of 0.25%, 1.00% and 1.00% of the fund's average daily net assets
attributable to these respective classes. Pursuant to the Pioneer Rule
12b-1 Plans, each fund's Class B and Class C shares pay a combined
distribution and service fee of 1.00%, of which 0.75% is paid for
distribution services and 0.25% is paid for shareholder services. The pro
forma adjustments reflect the Rule 12b-1 Plans of the combined fund.
See accompanying notes to pro forma financial statements.
The accompanying notes are an integral part of these financial statements.
PIONEER AMT-FREE FUND
PRO FORMA
Schedule of Investments (a)
December 31, 2005
(Unaudited)
Pioneer
AMT-Free
Pioneer Pioneer Pioneer Fund
Florida AMT-Free % of AMT-Free Florida Tax Pro Forma
PIONEER AMT-Free Tax-Free Pro Forma Pro Forma Value Fund Combined
FUND FUND Combined Combined Market Market Market
Shares Shares Shares Net Assets Value Value Value
- ---------------- --------- ---------- ---------- ------------ ----------- ------------
MUNICIPAL BONDS 97.0%
Alabama 1.6%
5,000,000 5,000,000 Alabama Drinking Water Finance
Authority, 4.0%, 8/15/28 $ 4,600,500 $ $ 4,600,500
3,855,000 3,855,000 Jefferson County Alabama Sewer Revenue,
4.75%, 2/1/38 4,105,806 4,105,806
-------------------------------------
$ 8,706,306 $ $ 8,706,306
-------------------------------------
Arizona 1.0%
5,000,000 5,000,000 Scottsdale Healthcare, 6.8%, 12/1/31 $ 5,363,000 $ $ 5,363,000
-------------------------------------
$ 5,363,000 $ $ 5,363,000
-------------------------------------
California 18.0%
8,000,000 8,000,000 California Infrastructure & Economic
Development, 5.0%, 7/1/36 $ 8,316,880 $ $ 8,316,880
7,000,000 7,000,000 California State, 5.0%, 2/1/32 7,207,620 7,207,620
6,345,000 6,345,000 California State Department of Veteran
Affairs, 4.75%, 12/1/25 6,455,720 6,455,720
10,020,000 10,020,000 Golden State Tobacco Security Corp.
California, 5.5%, 6/1/43 11,141,438 11,141,438
3,000,000 3,000,000 Los Angeles County Sanitation Districts
Financing Authority Revenue,
4.5%, 10/1/35 2,965,830 2,965,830
3,550,000 3,550,000 Northern California Power Agency, 5.0%,
7/1/09 3,703,112 3,703,112
11,995,000 11,995,000 Pittsburg California Redevelopment
Agency, 5.8%, 8/1/34 13,586,497 13,586,497
7,010,000 7,010,000 San Joaquin County California, 4.75%,
11/15/19 7,012,804 7,012,804
25,000,000 25,000,000 San Joaquin Hills Transportation
Corridor Agency, 5.0%, 1/1/33 23,757,500 23,757,500
10,865,000 10,865,000 San Jose California Redevelopment Agency
Tax, 4.9%, 8/1/33 11,040,687 11,040,687
-------------------------------------
$ 95,188,088 $ $ 95,188,088
-------------------------------------
Colorado 3.6%
6,555,000 6,555,000 Colorado Springs Colorado Hospital
Revenue, 6.375%, 12/15/30 $ 7,154,324 $ $ 7,154,324
8,220,000 8,220,000 Colorado Water & Power Development
Authority, 4.375%, 8/1/35 7,928,765 7,928,765
4,000,000 4,000,000 University of Colorado Hospital
Authority Revenue, 5.6%, 11/15/31 4,184,360 4,184,360
-------------------------------------
$ 19,267,449 $ $ 19,267,449
-------------------------------------
Florida 12.7%
545,000 545,000 Altamonte Springs Florida Health, 5.6%,
10/1/10 $ $ 596,181 $ 596,181
1,085,000 1,085,000 Boca Raton Florida General Obligation,
3.375%, 7/1/15 1,023,198 1,023,198
1,165,000 1,165,000 Boynton Beach Community Revenue, 5.0%,
10/1/17 1,251,140 1,251,140
500,000 500,000 Broward County Florida Gas Tax, 5.25%,
9/1/09 531,935 531,935
1,000,000 1,000,000 Broward County Florida School Board,
5.0%, 7/1/30 1,043,820 1,043,820
700,000 700,000 Clearwater Florida Municipal Utility,
6.1%, 12/1/07 737,254 737,254
1,200,000 1,200,000 Collier County Florida Gas Tax, 5.25%,
6/1/14 1,311,780 1,311,780
8,000,000 8,000,000 Escambia County Florida Health
Facilities, 5.25%, 11/15/32 8,337,200 8,337,200
1,000,000 1,000,000 Escambia County, 5.0%, 1/1/08 1,032,290 1,032,290
1,000,000 1,000,000 Flagler County Florida Capital
Improvement Revenue, 5.0%, 10/1/35 1,047,100 1,047,100
230,000 230,000 Florida Housing Finance Agency, 5.65%,
1/1/09 234,614 234,614
1,000,000 1,000,000 Florida State Board of Education
Lottery, 5.0%, 1/1/14 1,084,710 1,084,710
1,000,000 1,000,000 Florida State Board of Education
Lottery, 5.25%, 7/1/09 1,054,450 1,054,450
2,000,000 2,000,000 Florida State Board of Education, Public
Education, 4.5%, 6/1/28 1,996,000 1,996,000
1,000,000 1,000,000 Florida State Department Children and
Families CTFS, 5.0%, 10/1/25 1,046,290 1,046,290
2,000,000 2,000,000 Florida State Division of Finance, 5.0%,
7/1/12 2,067,000 2,067,000
1,000,000 1,000,000 Florida State Education System, 5.0%,
5/1/27 1,056,150 1,056,150
2,750,000 2,750,000 Florida State Mid-Bay Bridge Authority
Revenue, 6.05%, 10/1/22 2,873,860 2,873,860
1,000,000 1,000,000 Florida Water Pollution, 5.5%,
1/15/14 1,091,100 1,091,100
1,000,000 1,000,000 Greater Orlando Aviation Authority,
6.375%, 11/15/26 978,590 978,590
Highlands County Florida Health
1,000,000 1,000,000 Facilities Authority Revenue, 5.0%,
11/15/35 1,010,820 1,010,820
1,000,000 1,000,000 Jacksonville Florida Sales Tax, 5.0%,
10/1/09 1,056,960 1,056,960
75,000 75,000 Jefferson County Florida Water & Sewer,
Prerefunded-B, 5.25%, 10/10/09 79,982 79,982
1,500,000 1,500,000 Key West Florida Utility Board Electric,
6.0%, 10/1/13 1,726,770 1,726,770
1,000,000 1,000,000 Lee County Florida Airport Revenue,
5.0%, 10/1/33 1,047,100 1,047,100
1,000,000 1,000,000 Lee County Transportation Facilities
Revenue, 5.0%, 10/1/35 1,039,050 1,039,050
1,500,000 1,500,000 Lee County Transportation Facilities
Revenue, 5.5%, 10/1/11 1,650,495 1,650,495
500,000 500,000 Manatee County Florida School Board,
5.75%, 7/1/09 516,075 516,075
1,000,000 1,000,000 Martin County Florida School Board,
5.0%, 7/1/31 1,040,670 1,040,670
1,000,000 1,000,000 Miami-Dade County Florida Facilities,
5.0%, 7/1/31 1,048,560 1,048,560
1,060,000 1,060,000 Miami-Dade County Florida Facilities,
5.75%, 4/1/13 1,159,481 1,159,481
750,000 750,000 Miami-Dade County Florida School Board,
5.25%, 8/1/06 758,153 758,153
1,675,000 1,675,000 Okeechobee Florida Utility Authority,
5.25%, 10/1/14 1,791,245 1,791,245
1,025,000 1,025,000 Orange County Health Facilities, 5.0%,
1/1/16 1,106,682 1,106,682
1,000,000 1,000,000 Orange County Sales Tax Revenue, 4.8%,
1/1/17 1,014,290 1,014,290
1,095,000 1,095,000 Palm Beach County Florida Criminal
Justice Facilities Revenue, 5.0%,
6/1/12 1,180,060 1,180,060
1,000,000 1,000,000 Palm Beach County Florida Public
Improvement Revenue, 5.0%, 8/1/16 1,076,550 1,076,550
1,000,000 1,000,000 Polk County Florida Public Facilities
Revenue, 5.0%, 12/1/33 1,046,140 1,046,140
1,000,000 1,000,000 Referendum-Department of Transportation
- Right of Way, 5.0%, 7/1/26 1,063,010 1,063,010
800,000 800,000 Sarasota County Florida Public Hospital
Board, Floating Rate Note, 7/1/37 800,000 800,000
1,000,000 1,000,000 Seminole County Florida Water & Sewer,
5.0%, 10/1/16 1,085,090 1,085,090
1,000,000 1,000,000 St. Lucie County Florida Pollution
Control, Floating Rate Note, 9/1/28 1,000,000 1,000,000
7,500,000 7,500,000 Tallahassee Florida Health, 6.375%,
12/1/30 8,059,350 8,059,350
1,000,000 1,000,000 Tampa Florida Occupational License Tax,
5.375%, 10/1/14 1,097,780 1,097,780
1,000,000 1,000,000 Tampa-Hillsborough County Florida, 5.0%,
7/1/10 1,035,140 1,035,140
1,000,000 1,000,000 University of Central Florida
Association Partnership, 5.0%,
10/1/35 1,039,050 1,039,050
1,000,000 1,000,000 Village Center Community Development
Florida, 5.0%, 11/1/32 1,036,430 1,036,430
1,000,000 1,000,000 Volusia County Florida Sales Tax
Revenue, 5.0%, 10/1/13 1,048,340 1,048,340
-------------------------------------
$ 21,266,410 $45,741,525 $ 67,007,935
-------------------------------------
Illinois 7.5%
9,000,000 9,000,000 Chicago Illinois, 5.5%, 1/1/35 $ 9,623,250 $ $ 9,623,250
2,000,000 2,000,000 Chicago, Illinois Sales Tax Revenue,
5.375%, 1/1/27 2,118,860 2,118,860
10,000,000 10,000,000 Illinois Educational Facilities
Authority, 6.25%, 5/1/30 10,931,900 10,931,900
10,000,000 10,000,000 Metropolitan Pier & Expo, 5.25%,
6/15/42 10,502,100 10,502,100
5,000,000 5,000,000 Metropolitan Pier & Expo, 7.0%,
7/1/26 6,605,700 6,605,700
-------------------------------------
$ 39,781,810 $ $ 39,781,810
-------------------------------------
Indiana 5.4%
6,450,000 6,450,000 Indianapolis Indiana Utilities District,
4.0%, 6/1/11 $ 6,591,771 $ $ 6,591,771
19,000,000 19,000,000 Indianapolis State Development Finance
Authority, 5.6%, 12/1/32 19,676,970 19,676,970
2,500,000 2,500,000 St. Joseph County Indiana Authority,
4.5%, 8/15/18 2,517,675 2,517,675
-------------------------------------
$ 28,786,416 $ $ 28,786,416
-------------------------------------
Kentucky 0.4%
2,000,000 2,000,000 Kentucky Economic Development Finance
Authority, 6.625%, 10/1/28 $ 2,184,840 $ $ 2,184,840
-------------------------------------
$ 2,184,840 $ $ 2,184,840
-------------------------------------
Massachusetts 5.8%
4,250,000 4,250,000 Massachusetts Bay Transportation
Authority, 4.5%, 3/1/26 $ 4,252,380 $ $ 4,252,380
20,000,000 20,000,000 Massachusetts State Housing Finance
Agency, 5.4%, 12/1/28 20,457,400 20,457,400
5,740,000 5,740,000 Massachusetts State Housing Finance
Agency, 6.2%, 7/1/38 5,924,024 5,924,024
-------------------------------------
$ 30,633,804 $ $ 30,633,804
--------------------------------------
Maryland 1.9%
3,400,000 3,400,000 Baltimore Maryland Project Revenue,
5.0%, 7/1/24 $ 3,752,104 $ $ 3,752,104
1,725,000 1,725,000 Baltimore Maryland Project Revenue,
5.0%, 7/1/24 1,896,603 1,896,603
4,000,000 4,000,000 Maryland State Health & Higher
Educational Facilities, 6.75%,
7/1/30 4,569,640 4,569,640
-------------------------------------
$ 10,218,347 $ $ 10,218,347
-------------------------------------
Michigan 1.4%
5,000,000 5,000,000 Michigan State Hospital Finance
Authority, 5.5%, 11/15 $ 5,256,250 $ $ 5,256,250
1,000,000 1,000,000 North Muskegon Michigan Public Schools,
5.25%, 5/1/28 1,066,950 1,066,950
1,210,000 1,210,000 North Muskegon Michigan Public Schools,
5.25%, 5/1/33 1,283,943 1,283,943
-------------------------------------
$ 7,607,143 $ $ 7,607,143
-------------------------------------
Minnesota 1.0%
5,000,000 5,000,000 Minnesota Health Care Revenue, 5.75%,
11/15/32 $ 5,347,500 $ $ 5,347,500
-------------------------------------
$ 5,347,500 $ $ 5,347,500
-------------------------------------
Missouri 0.2%
1,000,000 1,000,000 Missouri State Health & Educational
Facilities, 5.25%, 6/1/28 $ 1,086,730 $ $ 1,086,730
-------------------------------------
$ 1,086,730 $ $ 1,086,730
-------------------------------------
Mississippi 1.0%
5,500,000 5,500,000 Harrison County Mississippi Wastewater,
4.75%, 2/1/27 $ 5,517,985 $ $ 5,517,985
-------------------------------------
$ 5,517,985 $ $ 5,517,985
-------------------------------------
Montana 0.5%
2,785,000 2,785,000 Forsyth Montana Pollution Control
Revenue, 5.0%, 3/1/31 $ 2,896,539 $ $ 2,896,539
------------ ----------- -----------
$ 2,896,539 $ $ 2,896,539
-------------------------------------
North Carolina 2.6%
12,000,000 12,000,000 North Carolina Eastern Municipal Power,
6.0%, 1/1/22 $ 13,947,720 $ $ 13,947,720
-------------------------------------
$ 13,947,720 $ $ 13,947,720
-------------------------------------
North Dakota 0.6%
3,000,000 3,000,000 Grand Forks North Dakota Health Care
Systems, 7.125%, 8/15/24 $ 3,293,880 $ $ 3,293,880
------------ ----------- -----------
$ 3,293,880 $ $ 3,293,880
-------------------------------------
New York 4.7%
900,000 900,000 Long Island Power Authority NY Electric
Systems, Revenue, 5.125%, 12/1/22 $ 942,750 $ $ 942,750
3,820,000 3,820,000 Metropolitan Transportation Authority
NY, 4.75%, 4/1/28 4,111,619 4,111,619
5,500,000 5,500,000 New York State Dormitory Authority
Revenue, 5.25%, 5/15/15 6,008,585 6,008,585
1,425,000 1,425,000 New York State Dormitory Authority
Revenue, 7.5%, 5/15/11 1,630,058 1,630,058
2,410,000 2,410,000 New York State Dormitory Authority
Revenue, 7.5%, 5/15/11 2,716,552 2,716,552
5,250,000 5,250,000 New York State Dormitory Authority
Revenue, 7.5%, 5/15/13 6,463,380 6,463,380
1,000,000 1,000,000 New York State Urban Development Corp.,
5.125%, 7/1/21 1,061,160 1,061,160
1,500,000 1,500,000 Port Authority of NY & NJ, Ninety Third
Series, 6.125%, 6/1/94 1,792,455 $ 1,792,455
-------------------------------------
$ 24,726,559 $ 24,726,559
-------------------------------------
Ohio 0.7%
4,000,000 4,000,000 Cleveland-Cuyahoga County Ohio Port
Authority Revenue, 4.5%, 8/1/36 $ 3,884,000 $ $ 3,884,000
------------------------- -----------
$ 3,884,000 $ $ 3,884,000
-------------------------------------
Oklahoma 1.3%
5,590,000 5,590,000 McGee Creek Authority Water Revenue,
6.0%, 1/1/23 $ 6,638,349 $ $ 6,638,349
-------------------------------------
$ 6,638,349 $ $ 6,638,349
-------------------------------------
Pennsylvania 3.5%
10,000,000 10,000,000 Lehigh County PA Industrial Development
Authority Pollution Control,
4.75%, 2/15/27 $ 10,192,400 $ $ 10,192,400
5,000,000 5,000,000 Pennsylvania State Higher Education,
6.0%, 1/15/31 5,428,950 5,428,950
3,000,000 3,000,000 Southeastern PA Transportation Authority
PA, 4.75%, 3/1/29 3,021,690 3,021,690
------------- -----------------------
$ 18,643,040 $ $ 18,643,040
-------------------------------------
Puerto Rico 1.0%
5,000,000 5,000,000 Puerto Rico Electric Power Authority,
5.125%, 7/1/29 $ 5,177,300 $ $ 5,177,300
-------------------------------------
$ 5,177,300 $ $ 5,177,300
-------------------------------------
South Carolina 6.2%
1,000,000 1,000,000 Dorchester, SC County School District,
5.25%, 12/1/29 $ 1,036,710 $ $ 1,036,710
7,000,000 7,000,000 Greenville, SC County School District,
5.5%, 12/1/28 7,545,230 7,545,230
15,000,000 15,000,000 Piedmont Municipal Power Agency, 5.25%,
1/1/21 15,210,450 15,210,450
7,500,000 7,500,000 South Carolina Jobs Economic Development
Authority, 7.375%, 12/15/21 8,912,775 8,912,775
-------------------------------------
$ 32,705,165 $ $ 32,705,165
-------------------------------------
Texas 5.1%
2,245,000 2,245,000 Austin Texas Utilities System Revenue,
12.5%, 11/15/07 $ 2,612,237 $ $ 2,612,237
7,755,000 7,755,000 Austin Texas Utility System Revenue,
12.5%, 11/15/07 9,015,498 9,015,498
3,000,000 3,000,000 Houston TX Independent School District,
4.75%, 2/15/22 3,033,690 3,033,690
7,500,000 7,500,000 Houston, TX Independent School District,
4.25%, 2/15/26 7,206,075 7,206,075
10,000 10,000 Lower Colorado River Authority Texas
Revenue, 5.625%, 1/1/17 11,364 11,364
5,000,000 5,000,000 San Antonio Texas Electricity & Gas,
Series A, 4.5%, 2/1/21 5,031,300 5,031,300
--------------------------------------
$ 26,910,164 $ $ 26,910,164
--------------------------------------
Virginia 1.5% $
2,500,000 2,500,000 Loudoun County VA Sanitation Authority,
4.75%, 1/1/30 $ 2,528,825 $ 2,528,825
3,085,000 3,085,000 Virginia State Public School Revenue,
4.75%, 8/1/26 3,163,637 3,163,637
2,235,000 2,235,000 Virginia State Public School Revenue,
4.75%, 8/1/27 2,288,752 2,288,752
--------------------------------------
$ 7,981,214 $ $ 7,981,214
--------------------------------------
Washington 4.4%
700,000 700,000 CDP-King County III WA Lease Revenue,
5.25%, 6/1/26 $ 721,581 $ $ 721,581
5,055,000 5,055,000 Douglas County WA Public Utilities,
8.75%, 9/1/18 5,530,069 5,530,069
3,054,000 3,054,000 Seattle, WA Housing Authority, 6.6%,
8/20/38 3,205,845 3,205,845
6,290,000 6,290,000 Vancouver WA Housing Authority 5.65%,
3/1/31 6,173,509 6,173,509
7,750,000 7,750,000 Washington State, 4.5%, 7/1/23 7,769,995 7,769,995
--------------------------------------
$ 23,400,999 $ $ 23,400,999
--------------------------------------
West Virginia 3.2%
12,055,000 12,055,000 West VA State Hospital Finance
Authority, 6.75%, 9/1/30 $ 13,810,329 $ $ 13,810,329
2,945,000 2,945,000 West VA State Hospital Finance
Authority, 6.75%, 9/1/30 3,221,535 3,221,535
--------------------------------------
$ 17,031,864 $ $ 17,031,864
--------------------------------------
TOTAL MUNICIPAL BONDS $468,192,621 $45,741,525 $513,934,146
--------------------------------------
Shares Shares Shares
- -------------------------------------
TAX-EXEMPT MONEY MARKET MUTUAL FUND 1.8%
6,638,222 1,116,025 7,754,247 Blackrock Provident Institutional Fund $ 8,660,173 $ 1,116,025 $ 9,776,198
--------------------------------------
TOTAL TAX-EXEMPT MONEY MARKET MUTUAL FIND
1.8% $ 8,660,173 $ 1,116,025 $ 9,776,198
--------------------------------------
TOTAL INVESTMENT IN SECURITIES
$476,852,794 $46,857,550 $523,710,344
--------------------------------------
OTHER ASSETS AND LIABILITIES 1.1% $ 6,064,486 $ (147,788) $ 5,916,698
--------------------------------------
TOTAL NET ASSETS 100.0% $482,917,280 $46,709,762 $529,627,042(b)
======================================
Total Investments at Cost $431,267,651 $46,041,403 $477,309,054
======================================
* Non-income producing security
144A Security is exempt from registration
under Rule 144A of the Securities Act
of 1933. Such securities may be
resold normally to qualified
institutional buyers in a transaction
exempt from registration.
(a) No adjustments are shown to the
unaudited pro forma combined schedule
of investments due to the fact that
upon consummation of the merger no
securities would need to be sold in
order for Pioneer AMT-Free Municipal
Fund to comply with its prospectus
restrictions. The foregoing sentence
shall not restrict in any way the
ability of the investment adviser of
the funds from buying or selling
securities in the normal course of
such fund's business and operations.
(b) Includes costs of the reorganization.
The accompanying notes are an integral part of these financial statements.
Pioneer AMT-Free Municipal Fund
PRO FORMA NOTES TO COMBINING FINANCIAL STATEMENTS
12/31/05
(Unaudited)
1. Description of the Fund
Pioneer AMT-Free Municipal Fund (the Fund) is one of eight series of portfolios
comprising Pioneer Series Trust II, a Delaware statutory trust registered under
the Investment Company Act of 1940 as a diversified, open-end management
investment company. The Fund is the successor to the Safeco Municipal Bond Fund,
Inc. Safeco Municipal Bond Fund transferred all of its net assets in exchange
for the Fund's Investor Class shares on December 10, 2004 pursuant to an
agreement and plan of reorganization (the "reorganization" which was approved by
the shareholders of Safeco Municipal Bond Fund on December 8, 2004). The Fund
had no assets or liabilities prior to the reorganization. Accordingly, the
reorganization, which was a tax-free exchange, had no effect on the Fund's
operations. The investment objective of the Fund is to seek a high level of
current income exempt from federal income tax as is consistent with the relative
stability of capital.
The Trustees have authorized the issuance of five classes of shares of the Fund.
The Fund offers five classes of shares designated as Class A, Class B, Class C,
Class Y and Investor Class shares. The Fund is not offering additional Investor
Class shares except in connection with the reinvestment of dividends on the
Fund's outstanding Investor Class shares. Each class of shares represents an
interest in the same portfolio of investments of the Fund and have equal rights
to voting, redemptions, dividends and liquidations, except that each class of
shares can bear different transfer agent and distribution fees and has exclusive
voting rights with respect to the distribution plans that have been adopted by
Class A, Class B and Class C shareowners, respectively. There is no distribution
plan for Class Y and Investor Class shares.
2. Basis of Combination
The accompanying pro forma combining financial statements, and related notes,
are presented to show the effect of the proposed acquisition (the "acquisition")
of Pioneer Florida Tax Free Income Fund by the Fund, as if such acquisition had
taken place as of December 31, 2005.
Under the terms of an Agreement and Plan of Reorganization (the
"Reorganization") between these two Funds, the combination of the Fund and
Florida Tax Free Income Fund will be treated as a tax-free business combination
and accordingly will be accounted for by a method of accounting for tax-free
mergers of investment companies. The acquisition will be accomplished by an
acquisition of the net assets of Pioneer Florida Tax Free Income Fund in
exchange for shares of the Fund at their net asset values. The accompanying
schedules of investments, statements of assets and liabilities and the related
statements of operations of the Fund and Pioneer Florida Tax Free Income Fund
have been combined as of and for the most recent fiscal year ended December 31,
2005. Following the acquisition, the Fund will be the accounting survivor. The
Advisor has agreed to pay 50% of the expenses associated with the
reorganizations, and AMT-Free Municipal Fund and Florida Tax Free Income Fund
will equally bear the remaining costs of the reorganization. These costs are
reflected in the proforma financial statements.
These pro forma financial statements and related notes should be read in
conjunction with the financial statements of the Fund and Pioneer Florida Tax
Free Income Fund included in their annual reports to shareowners dated December
31, 2005 and July 31, 2005, respectively. Adjustments have been made to
eliminate duplicate expenses that would not have been incurred if the merger had
taken place on December 31, 2005, and to reflect the expenses for contractual
rates that will exist after the merger, based on actual contract rates that
exist for the AMT-Free Municipal Fund at December 31, 2005.
3. Security Valuation
Security transactions are recorded as of trade date. Securities are valued at
prices supplied by independent pricing services, which consider such factors as
Treasury spreads, yields, maturities and ratings. Valuations may be supplemented
by dealers and other sources, as required. Securities for which there are no
other readily available market quotations are valued at their fair values as
determined by, or under the direction of the Board of Trustees. The Fund also
may use the fair value of a security including a non-U.S. security when the
closing market price on the principal exchange where the security is traded no
longer reflects the value of the security. Temporary cash investments are valued
at amortized cost.
Discount and premium on debt securities are accreted or amortized, respectfully
daily into interest income on a yield-to-maturity basis with a corresponding
increase or decrease in the cost basis of the security. Interest income is
recorded on the accrual basis.
4. Capital Shares
The pro forma net asset value per share assumes the issuance of shares of the
Fund that would have been issued at December 31, 2005, in connection with the
proposed acquisition. The number of shares assumed to be issued is equal to the
net asset value of
shares of Pioneer Florida Tax Free Income Fund, as of December 31, 2005, divided
by the net asset value per share of the Fund's shares as of December 31, 2005.
The pro forma number of shares outstanding, by class, for the combined Fund
consists of the following at December 31, 2005:
Shares of Additional Shares Total Outstanding
The Fund Assumed Issued Shares
Class of Shares Pre-Combination In Reorganization Post-Combination
- ----------------------------------------------------------------------
Class A 1,134,813 262,375 1,387,188
- ----------------------------------------------------------------------
Class B 168,335 135,053 303,338
- ----------------------------------------------------------------------
Class C 84,265 700 84,965
- ----------------------------------------------------------------------
Investor 32,938,017 - 32,938,017
- ----------------------------------------------------------------------
Class Y 2,909,177 2,909,177
- ----------------------------------------------------------------------
5. Federal Income Taxes
Each Fund has elected to be taxed as a "regulated investment company" under the
Internal Revenue Code. After the acquisition, it will continue to be the Fund's
policy to comply with the requirements of the Internal Revenue Code applicable
to regulated investment companies and to distribute all of its taxable income
and net realized capital gains, if any, to its shareowners. Therefore, no
federal income tax provision is required.
The identified cost of investments for these Funds is substantially the same for
both financial and federal income tax purposes. The cost of investments will
remain unchanged for the combined Fund.
PART C
OTHER INFORMATION
PIONEER SERIES TRUST II
(on behalf of its series,
Pioneer AMT-Free Municipal Fund)
ITEM 15. INDEMNIFICATION
No change from the information set forth in Item 25 of the most recently filed
Registration Statement of Pioneer Series Trust II (the "Registrant") on Form
N-1A under the Securities Act of 1933 and the Investment Company Act of 1940
(File Nos. 333-110037 and 811-21460) as filed with the Securities and Exchange
Commission on April 28, 2006 (Accession No. 0001265389-06-000020), which
information is incorporated herein by reference.
ITEM 16. EXHIBITS
(1)(a) Agreement and Declaration of Trust (1)
(1)(b) Amendment to Agreement and Declaration of Trust (2)
(1)(c) Certificate of Trust (1)
(2) Amended and Restated By-Laws (6)
(3) Not applicable
(4) Form of Agreement and Plan of Reorganization (*)
(5) Reference is made to Exhibits (1) and (2) hereof
(6)(a) Management Contract for Pioneer AMT-Free Municipal Fund (formerly Pioneer Municipal (3)
Bond Fund)
(6)(b) Master Expense Limitation Agreement (6)
(6)(c) Form of Expense Limitation Agreement (7)
(7)(a) Underwriting Agreement for Pioneer Growth Opportunities Fund, Pioneer AMT-Free (4)
Municipal Fund (formerly Pioneer Municipal Bond Fund), Pioneer AMT-Free CA Municipal
Fund (formerly California Tax Free Income Fund) and Pioneer Tax Free Money Market Fund
(7)(b) Dealer Sales Agreement (5)
(8) Not applicable
(9) Custodian Agreement with Brown Brothers Harriman & Co. (6)
(10)(a) Class A Distribution Plan for Pioneer AMT-Free Municipal Bond Fund (4)
(10)(b) Class B Distribution Plan for Pioneer AMT-Free Municipal Fund (4)
(10)(c) Class C Distribution Plan for Pioneer AMT-Free Municipal Fund (4)
(10)(d) Class R Distribution Plan for Pioneer AMT-Free Municipal Fund (4)
(10)(e) Multiclass Plan Pursuant to Rule 18f-3 (4)
(11) Opinion of Counsel (legality of securities being offered) (7)
(12) Form of opinion as to tax matters and consent (7)
(13)(a) Investment Company Service Agreement (6)
(13)(b) Administration Agreement (6)
(14) Consents of Independent Registered Public Accounting Firm (**)
(15) Not applicable
(16) Powers of Attorney (7)
(17)(a) Code of Ethics - Pioneer Investment Management, Inc. (4)
Code of Ethics - Pioneer Funds
Code of Ethics - Pioneer Funds Distributor, Inc.
(17)(b) Form of Proxy Cards (**)
(1) Previously filed. Incorporated herein by reference from the exhibits filed
in the Registrant's Registration Statement on Form N-1A (File No. 333-110037) as
filed with the Securities and Exchange Commission (the "SEC") on October 28,
2003 (Accession No. 0001265389-03-000007).
(2) Previously filed. Incorporated herein by reference from the exhibits filed
in the registrant's Registration Statement on Form N-14 (File No. 333-118444) as
filed with the SEC on August 20, 2004 (Accession No. 0001145443-04-001274 ).
(3) Previously filed. Incorporated herein by reference from the exhibits filed
in Post-effective Amendment No. 8 to the Registrant's Registration Statement on
Form N-1A (File No. 333-110037) as filed with the SEC on December 13, 2004
(Accession No. 0001016964-04-000499).
(4) Previously filed. Incorporated herein by reference from the exhibits filed
in Post-effective Amendment No. 9 to the Registrant's Registration Statement on
Form N-1A(File No. 333-110037) as filed with the SEC on April 22, 2005
(Accession No. 0001016964-05-000146).
(5) Previously filed. Incorporated herein by reference from the exhibits filed
in Post-effective Amendment No. 11 to the Registrant's Registration Statement on
Form N-1A(File No. 333-110037) as filed with the SEC on September 20, 2005
(Accession No. 0001265389-05-000016).
(6) Previously filed. Incorporated herein by reference from the exhibits filed
in Post-effective Amendment No. 12 to the Registrant's Registration Statement on
Form N-1A (File No. 333-110037) as filed with the SEC on April 28, 2006
(Accession No. 0001265389-06-000020).
(7) Previously filed. Incorporated by reference from the exhibits filed in the
Registrant's Initial Registration Statement on Form N-14 (File No. 333- 135471),
as filed with the SEC on June 29, 2006 (Accession No. 0001265389-06-000041).
(*) Filed herewith as Exhibit A to the Proxy Statement and Prospectus included
as Part A of this Registration Statement.
(**) Filed herewith.
ITEM 17. UNDERTAKINGS.
(1) The undersigned Registrant agrees that prior to any public reoffering of the
securities registered through the use of a prospectus which is part of this
Registration Statement by any person or party which is deemed to be an
underwriter within the meaning of Rule 145(c) of the 1933 Act, the reoffering
prospectus will contain the information called for by the applicable
registration form for the reofferings by persons who may be deemed underwriters,
in addition to the information called for by the other items of the applicable
form.
(2) The undersigned Registrant agrees that every prospectus that is filed under
paragraph (1) above will be filed as part of an amendment to the Registration
Statement and will not be used until the amendment is effective, and that, in
determining any liability under the 1933 Act, each post-effective amendment
shall be deemed to be a new registration statement for the securities offered
therein, and the offering of the securities at that time shall be deemed to be
the initial bona fide offering of them.
(3) The undersigned Registrant agrees that it shall file a final executed
version of the legal and consent opinion as to tax matters as an exhibit to the
subsequent post-effective amendment to its registration statement on Form N-14
filed with the SEC upon the consummation of the reorganization contemplated by
this Registration Statement on Form N-14.
(4) Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement on Form N-14 has been signed on behalf of the
Registrant, in the City of Boston and the Commonwealth of Massachusetts, on the
3rd day of August, 2006
PIONEER SERIES TRUST II
By: /s/ Osbert M. Hood
-----------------------
Osbert M. Hood
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ John F. Cogan, Jr. Chairman of the Board, Trustee, August 3, 2006
- --------------------------- and President
John F. Cogan, Jr.
/s/ Vincent Nave Chief Financial Officer, August 3, 2006
- --------------------------- Principal Accounting Officer, and
Vincent Nave Treasurer
*
- --------------------------- Trustee
David R. Bock
*
- --------------------------- Trustee
Mary K. Bush
*
- --------------------------- Trustee
Margaret B.W. Graham
*
- --------------------------- Trustee
Thomas J. Perna
*
- --------------------------- Trustee
Marguerite A. Piret
*
- --------------------------- Trustee
John Winthrop
* By:/s/ Osbert M. Hood August 3, 2006
------------------------------
Osbert M. Hood, Attorney-in-Fact
EXHIBIT INDEX
The following exhibits are filed as part of this Registration Statement:
Exhibit No. Description
(14) Consents of Independent Registered Public Accounting Firm
(17)(b) Form of Proxy Card