File No. 33-65822
811-07870
As filed with the Securities and Exchange Commission on April 30, 2009
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
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Pre-Effective Amendment No. __ / /
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Post-Effective Amendment No. 27 / X /
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and/or
PIONEER REAL ESTATE SHARES
(Exact Name of Registrant as Specified in Charter)
60 State Street, Boston, Massachusetts 02109
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (617) 742-7825
Dorothy E. Bourassa, Secretary, Pioneer Real Estate Shares,
60 State Street, Boston, Massachusetts 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box):
___ immediately upon filing pursuant to paragraph (b)
_X__ on May 1, 2009 pursuant to paragraph (b)
___ 60 days after filing pursuant to paragraph (a)(1)
___ on [date] pursuant to paragraph (a)(1)
___ 75 days after filing pursuant to paragraph (a)(2)
___ on [date] pursuant to paragraph (a)(2)of Rule 485.
If appropriate, check the following box:
___ This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Prospectus
May 1, 2009
Class A, Class B and Class C Shares
Basic information about the fund ............................................ 1 Management .................................................................. 14 Buying, exchanging and selling shares ....................................... 16 Dividends, capital gains and taxes .......................................... 47 Financial highlights ........................................................ 49 |
Neither the Securities and Exchange Commission nor any state securities agency has approved or disapproved the fund's shares or determined whether this prospectus is accurate or complete. Any representation to the contrary is a crime.
[LOGO]PIONEER
Investments(R)
Basic information about the fund
Investment objectives
Long-term growth of capital. Current income is a secondary objective.
Principal investment strategies
Normally, the fund invests at least 80% of its total assets in equity securities of real estate investment trusts (REITs) and other real estate industry issuers. For purposes of the fund's investment policies, equity securities include common stocks, debt convertible to equity securities and other equity instruments, such as exchange-traded funds (ETFs) that invest primarily in equity securities, warrants, rights, and preferred stocks.
The fund will provide written notice to shareholders at least 60 days prior to any change to its policy to invest at least 80% of its assets in equity securities of REITs and other real estate industry issuers.
REITs are companies that primarily invest in income producing real estate or real estate related loans or interests. Some REITs invest directly in real estate and derive their income from the collection of rents and capital gains on the sale of properties. Other REITs invest primarily in mortgages secured by real estate and derive their income from collection of interest.
The fund may invest up to 20% of its total assets in debt securities of real estate industry issuers, mortgage-backed securities and short-term investments. Generally, the fund acquires 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 and convertible debt. The fund invests in debt securities when the subadviser believes they are consistent with the fund's investment objectives of long-term capital growth and current income, for diversification or for greater liquidity.
The fund uses a "growth at a reasonable price" style of management. Pioneer,
the fund's investment adviser, has engaged AEW Capital Management, L.P., to act
as the fund's subadviser under Pioneer's supervision. Using this investment
style, the subadviser seeks to invest in companies with above average potential
for earnings and revenue growth that are also trading at attractive market
valuations. To select stocks, the subadviser employs fundamental and
qualitative research, and an evaluation of the issuer based on its financial
statements and operations. The subadviser relies on the knowledge, experience
and judgment of its staff who have access to a wide variety of research. The
subadviser focuses on the quality and price of individual issuers and
securities, not on economic sector or market-timing strategies. Factors the
subadviser looks for in selecting investments include:
o Favorable expected returns relative to perceived risk
o Increasing cash flow or favorable prospects for cash flow growth
o Low market valuations relative to earnings forecast, net asset value and cash
flow
Basic information about the fund
o Favorable prospects for dividend growth
The subadviser generally sells a portfolio security when it believes that the issuer no longer offers the potential for above average earnings and revenue growth. The subadviser makes that determination based upon the same criteria it uses to select portfolio securities.
Principal risks of investing in the fund
o You could lose money on your investment in the fund. The ongoing global
financial crisis has caused a significant decline in the value of many
securities, including securities held by the fund, and the continuation or
further deterioration of market conditions may lead to additional losses of
value
o The values of securities held by the fund may fall due to general market
conditions, such as real or perceived adverse economic, political, or
regulatory conditions, inflation, changes in interest or currency rates or
adverse investor sentiment. Adverse market conditions may be prolonged and
may not have the same impact on all types of securities. The values of
securities may fall due to factors affecting a particular issuer or the
securities market as a whole
o The stock market goes down or performs poorly relative to other investments
(this risk may be greater in the short term)
o REITs and other real estate industry issuers fall out of favor with investors
o The fund's investments do not have the growth potential originally expected
o The subadviser's judgment about the attractiveness, growth potential or potential appreciation of a particular sector, security or investment strategy proves to be incorrect
Risks of REITs
The fund also has risks associated with the real estate industry. Although the
fund does not invest directly in real estate, it does invest in REITs and other
equity securities of real estate industry issuers and concentrates its
investments in the real estate industry. These risks may include:
o The U.S. or a local real estate market declines due to adverse economic conditions, foreclosures, overbuilding and high vacancy rates, reduced or regulated rents or other causes
o Interest rates go up. Rising interest rates can adversely affect the
availability and cost of financing for property acquisitions and other
purposes and reduce the value of a REIT's fixed income investments
o The values of properties owned by a REIT or the prospects of other real
estate industry issuers may be hurt by property tax increases, zoning
changes, other governmental actions, environmental liabilities, natural
disasters or increased operating expenses
o A REIT in the fund's portfolio is, or is perceived by the market to be,
poorly managed
Investing in REITs involves certain unique risks. REITs are dependent on management skills, are not diversified and are subject to the risks of financing projects. REITs are subject to heavy cash flow dependency, default by borrowers, self-liquidation and the possibility of failing to qualify for certain tax and regulatory exemptions. REITs may have limited financial resources and may experience sharper swings in market values and trade less frequently and in a more limited volume than securities of larger issuers. 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.
Many real estate companies, including REITs, utilize leverage (and some may be highly leveraged), which increases investment risk and could adversely affect a real estate company's operations and market value In addition, capital to pay or refinance a REIT's debt may not be available or reasonably priced. Financial covenants related to real estate company leveraging may affect the company's ability to operate effectively.
Risks of debt securities
Debt securities are subject to the risk of an issuer's inability to meet
principal or interest payments on its obligations. Factors that could
contribute to a decline in the market value of debt securities in the fund's
portfolio include rising interest rates, if the issuer or other obligor of a
security held by the fund fails to pay principal and/or interest, otherwise
defaults or has its credit rating downgraded or is perceived to be less
creditworthy, or the credit quality or value of any underlying assets declines.
The fund may incur expenses to protect the fund's interest in securities
experiencing these events. If the fund invests in securities that are
subordinated to other securities, or which represent interests in pools of such
subordinated securities, those investments may be disproportionately affected
by a default or even a perceived decline in creditworthiness of the issuer. 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 the subadviser. 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.
Basic information about the fund
Market segment risks
To the extent the 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 real
estate investment trusts (REITs), may be sensitive to changes in interest rates
and general economic activity and are generally subject to extensive government
regulation.
The fund's past performance
The bar chart and table indicate the risks of investing in the fund by showing
how the fund has performed in the past. The fund's performance will vary from
year to year.
The fund's past performance (before and after taxes) does not necessarily indicate how it will perform in the future. As a shareowner, you may lose or make money on your investment.
Fund performance
The chart shows the year-by-year performance of the fund's Class A shares. Class B and Class C shares have different performance because they have different expenses. 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.
Annual return Class A shares (%)
(Year ended December 31)
[THE FOLLOWING DATA WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL]
'99 -4.70 '00 29.30 '01 7.47 '02 3.61 '03 33.27 '04 35.26 '05 14.79 '06 35.79 '07 -19.39 '08 -38.31 |
For the period covered by the bar chart:
The highest calendar quarterly return was 16.77% (10/01/2004 to 12/31/2004)
The lowest calendar quarterly return was -38.88% (10/01/2008 to 12/31/2008)
Basic information about the fund
Comparison with the Morgan Stanley Capital International (MSCI) REIT Index The table shows the average annual total returns for each class of the fund over time and compares these returns to the returns of the Morgan Stanley Capital International (MSCI) REIT Index. The Morgan Stanley Capital International (MSCI) REIT Index is a widely-used index comprised of a broad representation of the most actively traded real estate trusts and is designed to be a measure of real estate equity performance.
Unlike the fund, the index is not managed and does not incur fees, expenses or taxes. You cannot invest directly in the index. The table:
o Reflects sales charges applicable to the class
o Assumes that you sell your shares at the end of the period
o Assumes that you reinvest all of your dividends and distributions
Average annual total return (%)
(for periods ended December 31, 2008)
Since Inception
1 Year 5 Years 10 Years Inception Date
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Class A 10/25/93
Return before taxes -41.86 -0.24 6.09 6.39
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Return after taxes on distributions -42.36 -1.84 4.37 4.63
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Return after taxes on distributions
and sale of shares -27.08 0.02 4.85 4.88
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Class B 1/31/96
Return before taxes -41.38 -0.01 5.81 6.46
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Class C + 1/31/96
Return before taxes -38.85 0.12 5.89 6.52
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Morgan Stanley Capital
International (MSCI) REIT Index
(reflects no deduction for fees,
expenses or taxes)* -37.97 0.67 7.19 N/A**
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+ 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.
* Effective April 1, 2008, the fund's benchmark changed to the MSCI REIT Index. The securities in the MSCI REIT Index better reflect the types of securities in which the fund is likely to invest. Previously, the benchmark was the Dow Jones Wilshire Real Estate Securities Index (RESI), which changed investment models in mid-2007, thus rendering it less appropriate as a benchmark for the fund. Returns for the Dow Jones Wilshire RESI were no longer available for Pioneer's shareowner reporting purposes after June 30, 2008.
** Since the inception of Class A shares. Class B and Class C shares: 7.86%.
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, and the after-tax returns shown are not relevant to investors 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.
Basic information about the fund
Fees and expenses
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.
Shareowner fees paid directly from your investment Class A Class B Class C ---------------------------------------------------------------------------------- Maximum sales charge (load) when you buy shares as a percentage of offering price 5.75% None None ---------------------------------------------------------------------------------- Maximum deferred sales charge (load) as a percent- age of offering price or the amount you receive when you sell shares, whichever is less None(1) 4% 1% ---------------------------------------------------------------------------------- |
Annual fund operating expenses paid from the assets of the fund as a percentage of average daily net assets Class A Class B Class C -------------------------------------------------------------------------------- Management Fee 0.80% 0.80% 0.80% -------------------------------------------------------------------------------- Distribution and Service (12b-1) Fee 0.25% 1.00% 1.00% -------------------------------------------------------------------------------- Other Expenses 0.99% 1.77% 1.30% -------------------------------------------------------------------------------- Total Annual Fund Operating Expenses(2) 2.04% 3.57% 3.10% -------------------------------------------------------------------------------- |
Example
This example helps you compare the cost of investing in the fund with the cost
of investing in other mutual funds. It assumes that: a) you invest $10,000 in
the fund for the time periods shown, b) you reinvest all dividends and
distributions, c) your investment has a 5% return each year and d) the fund's
operating expenses remain the same.
Although your actual costs may be higher or lower, under these assumptions your costs would be:
If you sell your shares If you do not sell your shares
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Number of years you own your shares
---------------------------------------------------------------------------
1 3 5 10 1 3 5 10
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Class A $770 $1,178 $1,610 $2,808 $770 $1,178 $1,610 $2,808
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Class B 760 1,394 1,950 3,495 360 1,094 1,850 3,495
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Class C 413 957 1,625 3,411 313 957 1,625 3,411
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1 Class A purchases of $500,000 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%. See "Buying, exchanging and selling shares."
2 Other expenses and total annual operating expenses have been restated based on an estimate of current expenses. Expenses will vary based on changes in the fund's net asset levels. Total annual fund operating expenses shown have not been reduced by any expense offset arrangements.
Basic information about the fund
Additional information about investment strategies and risks
The following sections provide additional information about the fund's investment strategies and risks. To learn more about these investments and risks, you should obtain and read the statement of additional information (SAI). The fund's investment objective and strategies may be changed without shareholder approval.
Mortgage-backed securities
The fund may invest in mortgage-backed securities. Mortgage-backed securities may be issued by private companies or issued or guaranteed by the U.S. government or agencies or instrumentalities 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. The fund's investments in mortgage-related securities may include mortgage derivatives and structured securities.
The repayment of certain mortgage-backed securities depends primarily on the cash collections received from the issuer's underlying asset fund and, in certain cases, the issuer's ability to issue replacement securities. As a result, there could be losses to the fund in the event of credit or market value deterioration in the issuer's underlying portfolio, mismatches in the timing of the cash flows of the underlying asset interests and the repayment obligations of maturing securities, or the issuer's inability to issue new or replacement securities. Upon the occurrence of certain triggering events or defaults or if an issuer of such a security has difficulty meeting its obligations, the investors in a security held by the fund may become the holder of a restructured security or of underlying assets that it could not otherwise purchase at a time when those assets may be difficult to sell or may be sold only at a loss. In addition, the value of underlying assets may be insufficient to pay certain expenses, such as litigation and foreclosure expenses, and inadequate to pay any principal or unpaid interest. Privately issued mortgage- backed securities are not traded on an exchange and may have a limited market. Without an active trading market, these securities may be particularly difficult to value given the complexities in valuing the underlying collateral.
Certain mortgage-backed securities may pay principal only at maturity or may represent only the right to receive payments of principal or interest on the underlying obligations, 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 obligations are prepaid. Interest-only instruments could lose their entire value in a declining interest-rate environment if the underlying obligations are prepaid.
Unlike mortgage-related securities issued or guaranteed by the U. S. government or its agencies and instrumentalities, mortgage-related securities issued by private issuers do not have a government or government-sponsored entity guarantee (but may have other credit enhancement), and may, and frequently do, have less favorable collateral, credit risk or other characteristics. The fund may invest in other mortgage-related securities, including mortgage derivatives and structured securities. These securities typically are not secured by real property. Because these securities have imbedded leverage features, small changes in interest or prepayment rates may cause large and sudden price movements. These securities also can become illiquid and difficult to value in volatile or declining markets.
Non-U.S. securities
The fund may invest up to 10% of its total assets in securities of non-U.S.
issuers provided that purchases of Canadian securities are not subject to the
non-U.S. issuer limitation. The fund will not invest more than 5% of its total
assets in the securities of emerging markets issuers. Investing in Canadian and
non-U.S. issuers may involve unique risks compared to investing in securities
of U.S. issuers. These risks are more pronounced to the extent the fund invests
in issuers in emerging markets or concentrates its non-U.S. investments in one
region. 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 than the
U.S. market. 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, or its ability to convert non-U.S. currencies to U.S.
dollars
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, regulatory and social developments or uncertainties may
adversely affect the securities markets
o Withholding and other non-U.S. taxes may decrease the fund's return
Debt rating criteria
For purposes of the fund's credit quality policies, if a security receives different ratings from nationally recognized statistical rating organizations, the fund will use the rating chosen by the portfolio manager as most representative of the security's credit quality. The ratings of nationally recognized statistical rating organizations represent their opinions as to the quality of the securities that they undertake to rate, and may not accurately describe the risks of the securities. If a rating organization changes the quality rating assigned to one or more of the fund's portfolio securities, or the credit quality deteriorates, Pioneer will consider if any action is appropriate in light of the fund's investment objective and policies.
Basic information about the fund
Derivatives
The fund may, but is not required to, 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, 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 purposes, including:
o As a hedge against adverse changes in the 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
Derivatives may be subject to market risk, interest rate risk and credit risk. The fund's use of certain derivatives may, in some cases, involve forms of financial leverage, which involves risk and may increase the volatility of the fund's net asset value. Even a small investment in derivatives can have a significant impact on the fund's exposure to the market prices of securities, interest rates or currency exchange rates. Therefore, using derivatives can disproportionately increase losses and reduce opportunities for gain. If changes in a derivative's value do not correspond to changes in the value of the fund's other investments or do not correlate well with the underlying assets, rate or index, the fund may not fully benefit from or could lose money on the derivative position. Derivatives involve risk of loss if the issuer of the derivative defaults on its obligation. Certain derivatives may be less liquid, which may reduce the returns of the fund if it cannot sell or terminate the derivative at an advantageous time or price. Some derivatives may involve the risk of improper valuation. The fund will only invest in derivatives to the extent the subadviser believes these investments are consistent with the fund's investment objectives, but derivatives may not perform as intended. Suitable derivatives may not be available in all circumstances or at reasonable prices and may not be used by the fund for a variety of reasons.
Cash management and temporary investments
Normally, the fund invests substantially all of its assets to meet its investment objectives. The fund may invest the remainder of its assets in securities with remaining maturities of less than one year or cash equivalents, or may hold cash. For temporary defensive purposes, including during periods of unusual cash flows, the fund may depart from its principal investment strategies and invest part or all of its assets in these securities or may hold cash. To the extent that the fund has any uninvested cash, the fund would also be subject to risk with respect to the depository institution holding the cash. During such periods, it may be more difficult for the fund to achieve its investment objectives. The fund may adopt a
defensive strategy when the subadviser believes securities in which the fund normally invests have special or unusual risks or are less attractive due to adverse market, economic, political or other conditions.
Securities lending
The fund may lend securities in its portfolio to certain broker-dealers or
other institutional investors under agreements which require that the loans be
secured continuously by collateral, typically cash, which the fund will invest
during the term of the loan. The fund will continue to have market risk and
other risks associated with owning the securities on loan, as well as the risks
associated with the investment of the cash collateral received in connection
with the loan. Securities lending also is subject to other risks, including the
risk that the borrower fails to return a loaned security, and/or there is a
shortfall on the collateral to be returned to the borrower, and the risk that
the fund is unable to recall a security in time to exercise valuable rights or
sell the security.
Reverse repurchase agreements and borrowing The fund may enter into reverse repurchase agreements pursuant to which the fund transfers securities to a counterparty in return for cash, and the fund agrees to repurchase the securities at a later date and for a higher price. Reverse repurchase agreements are treated as borrowings by the fund, are a form of leverage and may make the value of an investment in the fund more volatile and increase the risks of investing in the fund. This is because leverage generally magnifies the effect of any increase or decrease in the value of the fund's underlying assets or creates investment risk with respect to a larger pool of assets than the fund would otherwise have. The fund also may borrow money from banks or other lenders for temporary purposes. Entering into reverse repurchase agreements and other borrowing transactions may cause the fund to liquidate positions when it may not be advantageous to do so in order to satisfy its obligations or meet segregation requirements.
Short-term trading
The fund usually does not trade for short-term profits. The 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 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.
See "Financial highlights" for actual annual turnover rates.
Disclosure of portfolio holdings
The fund's policies and procedures with respect to disclosure of the fund's
portfolio securities are described in the statement of additional information.
Management
Pioneer, the fund's investment adviser,
oversees the fund's operations and supervises the fund's subadviser, which is
responsible for the day-to-day management of the fund's portfolio.
Pioneer is an indirect, wholly owned subsidiary of UniCredit 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, 2009, assets under management were approximately $205 billion worldwide, including over $44 billion in assets under management by Pioneer.
Investment adviser
Pioneer's main office is at 60 State Street, Boston, Massachusetts 02109. The
firm's U.S. mutual fund investment history includes creating in 1928 one of the
first mutual funds.
Pioneer has received an order from the Securities and Exchange Commission that permits Pioneer, subject to the approval of the fund's Board of Trustees, to hire and terminate a subadviser or to materially modify an existing subadvisory contract for the fund without shareholder approval. Pioneer retains the ultimate responsibility to oversee and recommend the hiring, termination and replacement of any subadviser. To the extent that the Securities and Exchange Commission adopts a rule that would supersede the order, or would provide greater flexibility than the order, Pioneer and the fund intend to rely on such rule to permit Pioneer, subject to the approval of the fund's Board of Trustees and any other applicable conditions of the rule, to hire and terminate a subadviser or to materially modify an existing subadvisory contract for the fund without shareholder approval.
Investment subadviser
AEW Capital Management, L.P. (AEW), is the fund's subadviser. AEW, which is located at World Trade Center East, Two Seaport Lane, Boston, Massachusetts 02210, provides real estate investment advice to public, corporate, union and government pension plans and endowments. As of December 31, 2008, AEW and its affiliates had approximately $29 billion in assets under management.
Portfolio management
Day-to-day management of the fund's portfolio is the responsibility of Matthew
A. Troxell, CFA (since 2004). Mr. Troxell is a Principal and Portfolio Manager
at AEW with responsibility for construction and management of all the firm's
publicly traded real estate equities portfolios. He has been employed at AEW as
part of the REIT group since 1994 and has over 23 years of experience in
investment analysis and portfolio management.
The fund's statement of additional information provides additional information about the portfolio manager's compensation, other accounts managed by the portfolio manager, and the portfolio manager's ownership of shares of the fund.
Management fee
The fund pays Pioneer a fee for managing the fund and to cover the cost of
providing certain services to the fund. Pioneer's annual fee is equal to 0.80%
of the fund's average daily net assets. The fee is accrued daily and paid
monthly.
For the fiscal year ended December 31, 2008, the fund paid management fees equivalent to 0.80% of the fund's average daily net assets.
Pioneer, and not the fund, pays a portion of the fee it receives from the fund to AEW as compensation for AEW's subadvisory services to the fund.
A discussion regarding the basis for the Board of Trustees' approval of the management contract is available in the fund's semi-annual report to shareholders, for the period ended June 30, 2008.
A discussion regarding the basis for the Board of Trustees' approval of the subadvisory contract is available in the fund's annual report to shareholders for the period ended December 31, 2008.
Distributor and transfer agent
Pioneer Funds Distributor, Inc. is the fund's distributor. Pioneer Investment
Management Shareholder Services, Inc. is the fund's transfer agent. The fund
compensates the distributor and transfer agent for their services. The
distributor and the transfer agent are affiliates of Pioneer.
Buying, exchanging and selling shares
Net asset value
The fund's net asset value is the value of its securities plus any other assets minus its accrued operating expenses and other liabilities. The 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).
The fund generally values its 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 fair value methods to value its securities pursuant to procedures adopted by the Board of Trustees. Valuing securities using fair value methods may cause the net asset value of the fund's 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.
The fund uses fair value methods for 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 specific events in the securities markets or the specific issuer may occur between the time the primary market closes and the time the fund determines its net asset value. 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 methods rather than market prices. The fund uses a pricing matrix to determine the value of fixed income securities that may 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. The fund values cash equivalent securities with remaining maturities of 60 days or less at amortized cost. Certain securities may trade in relatively thin markets and/or in markets that experience significant volatility. The prices used by the fund to value its securities may differ from the amounts that would be realized if these securities were sold and these differences could be significant. To the extent that the 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 methods to value their securities and the effects of using the fair value methodology.
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 B or Class C shares, or Class A shares under certain circumstances, you may pay a contingent deferred sales charge depending on how long you have owned your shares.
Choosing a class of shares
The fund offers three classes of shares through this prospectus. Each class has
different sales charges and expenses, allowing you to choose the class that
best meets your needs.
Factors you should consider include:
o How long you expect to own the shares
o The expenses paid by each class
o Whether you qualify for any reduction or waiver of sales charges
Your investment professional can help you determine which class meets your goals. Your investment firm may receive different compensation depending upon which class you choose. If you are not a U.S. citizen and are purchasing shares outside the U.S., you may pay different sales charges under local laws and business practices.
Distribution plan
The fund has adopted a distribution plan for each class of shares offered through this prospectus in accordance with Rule 12b-1 under the Investment Company Act of 1940. Under the plan, the fund pays distribution and service fees to the distributor. 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.
Buying, exchanging and selling shares
Additional payments to financial intermediaries
There are two principal ways you compensate the financial intermediary through which you buy shares of the fund - directly, by the payment of sales commissions, if any; and indirectly, as a result of the fund paying Rule 12b-1 fees. The fund also may pay intermediaries for administrative services and transaction processing.
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 the 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, which may include profits derived from services provided to the fund. Pioneer may base these payments on a variety of criteria, including the amount of sales or assets of the Pioneer funds 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 may 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 (in addition to amounts that may be paid by the fund) 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 Pioneer 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. The intermediary may earn a profit on these payments if the amount of the payment to the intermediary exceeds 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 in 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 Pioneer funds, such as providing omnibus account services or effecting portfolio transactions for the Pioneer funds. If your intermediary provides these 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 Pioneer funds.
Buying, exchanging and selling shares
Comparing classes of shares
Class A Class B Class C
--------------------------------------------------------------------------------------------------------------
Why you might Class A shares may be You may prefer Class B You may prefer Class C
prefer each class your best alternative if shares if you do not want shares if you do not wish
you prefer to pay an ini- to pay an initial sales to pay an initial sales
tial sales charge and charge, or if you plan to charge and you would
have lower annual hold your investment for rather pay higher annual
expenses, or if you at least five years. expenses over time.
qualify for any reduction
or waiver of the initial
sales charge.
--------------------------------------------------------------------------------------------------------------
Initial sales charge Up to 5.75% of the offer- None None
ing price, which is
reduced or waived for
large purchases and cer-
tain types of investors. At
the time of your pur-
chase, your investment
firm may receive a com-
mission from the distribu-
tor of up to 5%, declining
as the size of your invest-
ment increases.
--------------------------------------------------------------------------------------------------------------
Contingent None, except in certain Up to 4% is charged if A 1% charge if you sell
deferred sales circumstances when no you sell your shares. The your shares within one
charges initial sales charge is charge is reduced over year of purchase. Your
charged. time and not charged investment firm may
after five years. Your receive a commission
investment firm may from the distributor at the
receive a commission time of your purchase of
from the distributor at the up to 1%.
time of your purchase of
up to 4%.
--------------------------------------------------------------------------------------------------------------
Distribution and 0.25% of average daily 1% of average daily net 1% of average daily net
service fees net assets. assets. assets.
--------------------------------------------------------------------------------------------------------------
Annual expenses Lower than Class B or Higher than Class A Higher than Class A
(including Class C. shares; Class B shares shares; Class C shares
distribution and convert to Class A do not convert to any
service fees) shares after eight years. other class of shares. You
continue to pay higher
annual expenses.
--------------------------------------------------------------------------------------------------------------
Exchange privilege Class A shares of other Class B shares of other Class C shares of other
Pioneer mutual funds. Pioneer mutual funds. Pioneer mutual funds.
--------------------------------------------------------------------------------------------------------------
Maximum purchase None $49,999 $499,999
amount (per
transaction)
--------------------------------------------------------------------------------------------------------------
|
Other classes of shares may be available that are not offered in this prospectus.
Sales charges: Class A shares
You pay the offering price when you buy Class A shares unless you qualify to purchase shares at net asset value. You pay a lower sales charge as the size of your investment increases. You do not pay a sales charge when you reinvest dividends or capital gain distributions paid by the fund. You do not pay a contingent deferred sales charge when you sell shares purchased through reinvestment of dividends or capital gain distributions.
Sales charges for Class A shares
Sales charge as % of
------------------------
Offering Net amount
Amount of purchase price invested
--------------------------------------------------------------------------------
Less than $50,000 5.75 6.10
--------------------------------------------------------------------------------
$50,000 but less than $100,000 4.50 4.71
--------------------------------------------------------------------------------
$100,000 but less than $250,000 3.50 3.63
--------------------------------------------------------------------------------
$250,000 but less than $500,000 2.50 2.56
--------------------------------------------------------------------------------
$500,000 or more 0.00 0.00
--------------------------------------------------------------------------------
|
The dollar amount of the sales charge is the difference between the offering price of the shares purchased (based on the applicable sales charge in the table) and the net asset value of those shares. Since the offering price is calculated to two decimal places using standard rounding methodology, the dollar amount of the sales charge as a percentage of the offering price and of the net amount invested for any particular purchase of fund shares may be higher or lower due to rounding.
Reduced sales charges
You may qualify for a reduced Class A sales charge if you own or are purchasing
shares of Pioneer mutual funds. The investment levels required to obtain a
reduced sales charge are commonly referred to as "breakpoints." Pioneer offers
two principal means of taking advantage of breakpoints in sales charges for
aggregate purchases of Class A shares of the Pioneer funds over time if:
o The amount of shares you own of the Pioneer funds plus the amount you are
investing now is at least $50,000 (Rights of accumulation)
o You plan to invest at least $50,000 over the next 13 months (Letter of
intent)
Buying, exchanging and selling shares
Rights of accumulation
If you qualify for rights of accumulation, your sales charge will be based on
the combined value (at the current offering price) of all your Pioneer mutual
fund shares, the shares of your spouse and the shares of any children under the
age of 21.
Letter of intent
You can use a letter of intent to qualify for reduced sales charges in two
situations:
o If you plan to invest at least $50,000 (excluding any reinvestment of
dividends and capital gain distributions) in the fund's Class A shares
during the next 13 months
o If you include in your letter of intent the value (at the current offering
price) of all of your Class A shares of the fund and Class A, Class B or
Class C shares of all other Pioneer mutual fund shares held of record in the
amount used to determine the applicable sales charge for the fund shares you
plan to buy
Completing a letter of intent does not obligate you to purchase additional shares, but if you do not buy enough shares to qualify for the projected level of sales charges by the end of the 13-month period (or when you sell your shares, if earlier), the distributor will recalculate your sales charge. You must pay the additional sales charge within 20 days after you are notified of the recalculation or it will be deducted from your account (or your sale proceeds). Any share class for which no sales charge is paid cannot be included under the letter of intent. For more information regarding letters of intent, please contact your investment professional or obtain and read the statement of additional information.
Qualifying for a reduced Class A sales charge
In calculating your total account value in order to determine whether you have net sales charge breakpoints, you can include your Pioneer mutual fund shares, those of your spouse and the shares of any children under the age of 21. Pioneer will use each fund's current offering price to calculate your total account value. Certain trustees and fiduciaries may also qualify for a reduced sales charge.
To receive a reduced sales charge, you or your investment professional must, at the time of purchase, notify the distributor of your eligibility. In order to verify your eligibility for a discount, you may need to provide your investment professional or the fund with information or records, such as account numbers or statements, regarding shares of the fund or other Pioneer mutual funds held in all accounts by you, your spouse or children under the age of 21 with that investment professional or with any other financial intermediary. Eligible accounts may include joint accounts, retirement plan accounts, such as IRA and 401k accounts, and custodial accounts, such as ESA, UGMA and UTMA accounts.
It is your responsibility to confirm that your investment professional has notified the distributor of your eligibility for a reduced sales charge at the time of sale. If you or your investment professional do not notify the distributor of your eligibility, you will risk losing the benefits of a reduced sales charge.
For this purpose, Pioneer mutual funds include any fund for which the distributor is principal underwriter and, at the distributor's discretion, may include funds organized outside the U.S. and managed by Pioneer or an affiliate.
You can locate information regarding the reduction or waiver of sales charges, in a clear and prominent format and free of charge, on Pioneer's website at www.pioneerinvestments.com. The website includes hyperlinks that facilitate access to this information.
Class A purchases at a reduced initial sales charge or net asset value are also available to:
Group plans if the sponsoring organization:
o recommends purchases of Pioneer mutual funds to,
o permits solicitation of, or
o facilitates purchases by its employees, members or participants.
Buying, exchanging and selling shares
Class A purchases at net asset value
You may purchase Class A shares at net asset value (without a sales charge) as
follows. If you believe you qualify for any of the Class A sales charge waivers
discussed below, contact your investment professional or the distributor. You
are required to provide written confirmation of your eligibility. You may not
resell these shares except to or on behalf of the fund.
Investments of $500,000 or more and certain retirement plans You do not pay a sales charge when you purchase Class A shares if you are investing $500,000 or more, are a participant in an employer-sponsored retirement plan with at least $500,000 in total plan assets or are a participant in certain employer-sponsored retirement plans with accounts established with Pioneer on or before March 31, 2004 with 100 or more eligible employees or at least $500,000 in total plan assets. However, you may pay a deferred sales charge if you sell your Class A shares within 12 months of purchase. The sales charge is equal to 1% of your investment or your sale proceeds, whichever is less.
Class A purchases at net asset value are available to:
o Current or former trustees and officers of the fund;
o Partners and employees of legal counsel to the fund (at the time of initial
share purchase);
o Directors, officers, employees or sales representatives of Pioneer and its
affiliates (at the time of initial share purchase);
o Directors, officers, employees or sales representatives of any subadviser or
a predecessor adviser (or their affiliates) to any investment company for
which Pioneer serves as investment adviser (at the time of initial share
purchase);
o Officers, partners, employees or registered representatives of broker-dealers
(at the time of initial share purchase) which have entered into sales
agreements with the distributor;
o Employees of Regions Financial Corporation and its affiliates (at the time of initial share purchase);
o Members of the immediate families of any of the persons above;
o Any trust, custodian, pension, profit sharing or other benefit plan of the
foregoing persons;
o Insurance company separate accounts;
o Certain wrap accounts for the benefit of clients of investment professionals
or other financial intermediaries adhering to standards established by the
distributor;
o Other funds and accounts for which Pioneer or any of its affiliates serve as
investment adviser or manager;
o Investors in connection with certain reorganization, liquidation or
acquisition transactions involving other investment companies or personal
holding companies;
o Certain unit investment trusts;
o Participants in employer-sponsored retirement plans with at least $500,000 in total plan assets;
o Participants in employer-sponsored retirement plans with accounts established
with Pioneer on or before March 31, 2004 with 100 or more eligible employees
or at least $500,000 in total plan assets;
o Participants in Optional Retirement Programs if (i) your employer has
authorized a limited number of mutual funds to participate in the program,
(ii) all participating mutual funds sell shares to program participants at
net asset value, (iii) your employer has agreed in writing to facilitate
investment in Pioneer mutual funds by program participants and (iv) the
program provides for a matching contribution for each participant
contribution;
o Participants in an employer-sponsored 403(b) plan or employer-sponsored 457
plan if (i) your employer has made special arrangements for your plan to
operate as a group through a single broker, dealer or financial intermediary
and (ii) all participants in the plan who purchase shares of a Pioneer
mutual fund do so through a single broker, dealer or other financial
intermediary designated by your employer;
o Individuals receiving a distribution consisting of Class Y shares of a
Pioneer fund from a trust, fiduciary, custodial or other similar account who
purchase Class A shares of the same Pioneer fund within 90 days of the date
of the distribution;
o Shareholders of record (i.e., shareholders whose shares are not held in the name of a broker or an omnibus account) on the date of the reorganization of a predecessor Safeco fund into a corresponding Pioneer fund, shareholders who owned shares in the name of an omnibus account provider on that date that agrees with the fund to distinguish beneficial holders in the same manner, and retirement plans with assets invested in the predecessor Safeco fund on that date.
In addition, Class A shares may be purchased at net asset value through certain mutual fund programs sponsored by qualified intermediaries, such as broker- dealers and investment advisers. In each case, the intermediary has entered into an agreement with Pioneer to include the Pioneer funds in their program without the imposition of a sales charge. The intermediary provides investors participating in the program with additional services, including advisory, asset allocation, recordkeeping or other services. You should ask your investment firm if it offers and you are eligible to participate in such a mutual fund program and whether participation in the program is consistent with your investment goals. The intermediaries sponsoring or participating in these mutual fund programs also may offer their clients other classes of shares of the funds and investors may receive different levels of services or pay different fees depending upon the class of shares included in the program. Investors should consider carefully any separate transaction and other fees charged by these programs in connection with investing in each available share class before selecting a share class.
Buying, exchanging and selling shares
Reinstatement privilege for Class A and Class B shares
If you recently sold all or part of your Class A or Class B shares, you may be
able to reinvest all or part of your sale proceeds without a sales charge in
Class A shares of any Pioneer mutual fund. To qualify for reinstatement:
o You must send a written request to the transfer agent no more than 90 days
after selling your shares and
o The registration of the account in which you reinvest your sale proceeds must
be identical to the registration of the account from which you sold your
shares.
Your purchases pursuant to the reinstatement privilege are subject to limitations on investor transactions, including the limitation on the purchase of the fund's shares within 30 calendar days of a redemption. See "Excessive trading."
When you elect reinstatement, you are subject to the provisions outlined in the selected fund's prospectus, including the fund's minimum investment requirement. Your sale proceeds will be reinvested in shares of the fund at the Class A net asset value per share determined after the transfer agent receives your written request for reinstatement.
You may realize a gain or loss for federal income tax purposes as a result of your sale of fund shares, and special tax rules may apply if you elect reinstatement. Consult your tax adviser for more information.
Class A shares that are subject to a contingent deferred sales charge
Purchases of Class A shares of $500,000 or more, or by participants in a group plan which were not subject to an initial sales charge, may be subject to a contingent deferred sales charge upon redemption. A contingent deferred sales charge is payable to the distributor in the event of a share redemption within 12 months following the share purchase at the rate of 1% of the lesser of the value of the shares redeemed (exclusive of reinvested dividend and capital gain distributions) or the total cost of such shares. However, the contingent deferred sales charge is waived for redemptions of Class A shares purchased by an employer-sponsored retirement plan that has at least $500,000 in total plan assets (or that has 1,000 or more eligible employees for plans with accounts established with Pioneer on or before March 31, 2004).
Sales charges: Class B shares
You buy Class B shares at net asset value per share without paying an initial sales charge. However, if you sell your Class B shares within five years of purchase, you will pay the distributor a contingent deferred sales charge. The contingent deferred sales charge decreases as the number of years since your purchase increases.
Contingent deferred sales charge
On shares sold As a % of before the dollar amount subject end of year to the sales charge -------------------------------------------------------------------------------- 1 4 -------------------------------------------------------------------------------- 2 4 -------------------------------------------------------------------------------- 3 3 -------------------------------------------------------------------------------- 4 2 -------------------------------------------------------------------------------- 5 1 -------------------------------------------------------------------------------- 6+ -0- -------------------------------------------------------------------------------- |
Shares purchased prior to December 1, 2004 remain subject to the contingent deferred sales charges in effect at the time you purchased those shares. Shares purchased as part of an exchange or acquired as a result of a reorganization of another fund into the fund remain subject to any contingent deferred sales charge that applied to the shares you originally purchased.
Conversion to Class A shares
Class B shares automatically convert into Class A shares. This helps you
because Class A shares pay lower expenses.
Your Class B shares will convert to Class A shares eight years after the date
of purchase except that:
o Shares purchased by reinvesting dividends and capital gain distributions will
convert to Class A shares over time in the same proportion as other shares
held in the account
o Shares purchased by exchanging shares from another fund will convert on the
date that the shares originally acquired would have converted into Class A
shares
Currently, the Internal Revenue Service permits the conversion of shares to take place without imposing a federal income tax. Conversion may not occur if the Internal Revenue Service deems it a taxable event for federal tax purposes.
Buying, exchanging and selling shares
Sales charges: Class C shares
You buy Class C shares at net asset value per share without paying an initial sales charge. However, if you sell your Class C shares within one year of purchase, you will pay the distributor a contingent deferred sales charge of 1% of the current market value or the original cost of the shares you are selling, whichever is less.
Waiver or reduction of contingent deferred sales charges (CDSC) It is your responsibility to confirm that your investment professional has notified the distributor of your eligibility for a reduced sales charge at the time of sale. If you or your investment professional do not notify the distributor of your eligibility, you will risk losing the benefits of a reduced sales charge.
Class A, Class B and Class C shares
The distributor may waive or reduce the CDSC for Class A shares that are
subject to a CDSC or for Class B or Class C shares if:
o The distribution results from the death of all registered account owners or a
participant in an employer-sponsored plan. For UGMAs, UTMAs and trust
accounts, the waiver applies only upon the death of all beneficial owners;
o You become disabled (within the meaning of Section 72 of the Internal Revenue
Code) after the purchase of the shares being sold. For UGMAs, UTMAs and
trust accounts, the waiver only applies upon the disability of all
beneficial owners;
o The distribution is made in connection with limited automatic redemptions as
described in "Systematic withdrawal plans" (limited in any year to 10% of
the value of the account in the fund at the time the withdrawal plan is
established);
Buying, exchanging and selling shares
o The distribution is from any type of IRA, 403(b) or employer-sponsored plan
described under Section 401(a) or 457 of the Internal Revenue Code and, in
connection with the distribution, one of the following applies:
- It is part of a series of substantially equal periodic payments made over
the life expectancy of the participant or the joint life expectancy of the
participant and his or her beneficiary (limited in any year to 10% of the
value of the participant's account at the time the distribution amount is
established);
- It is a required minimum distribution due to the attainment of age 701/2,
in which case the distribution amount may exceed 10% (based solely on
total plan assets held in Pioneer mutual funds);
- It is rolled over to or reinvested in another Pioneer mutual fund in the
same class of shares, which will be subject to the CDSC of the shares
originally held; or
- It is in the form of a loan to a participant in a plan that permits loans
(each repayment applied to the purchase of shares will be subject to a
CDSC as though a new purchase);
o The distribution is to a participant in an employer-sponsored retirement plan
described under Section 401(a) of the Internal Revenue Code or to a
participant in an employer-sponsored 403(b) plan or employer-sponsored 457
plan if (i) your employer has made special arrangements for your plan to
operate as a group through a single broker, dealer or financial intermediary
and (ii) all participants in the plan who purchase shares of a Pioneer
mutual fund do so through a single broker, dealer or other financial
intermediary designated by your employer and is or is in connection with:
- A return of excess employee deferrals or contributions;
- A qualifying hardship distribution as described in the Internal Revenue
Code. For Class B shares, waiver is granted only on payments of up to 10%
of total plan assets held by Pioneer for all participants, reduced by the
total of any prior distributions made in that calendar year;
- Due to retirement or termination of employment. For Class B shares, waiver
is granted only on payments of up to 10% of total plan assets held in a
Pioneer mutual fund for all participants, reduced by the total of any
prior distributions made in the same calendar year; or
- From a qualified defined contribution plan and represents a participant's
directed transfer, provided that this privilege has been preauthorized
through a prior agreement with the distributor regarding participant
directed transfers (not available to Class B shares);
o The distribution is made pursuant to the fund's right to liquidate or
involuntarily redeem shares in a shareholder's account; or
o The selling broker elects, with the distributor's approval, to waive receipt
of the commission normally paid at the time of the sale.
Please see the fund's statement of additional information for more information regarding reduced sales charges and breakpoints.
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 discussed in this prospectus. Ask your investment professional or financial intermediary for more information.
If you invest in the fund through investment professionals or other financial intermediaries, including wrap programs and similar programs, additional conditions may apply to your investment in the 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 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 fund
shares 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. The 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.
Buying, exchanging and selling shares
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:
o For new accounts, complete the online section of the account application
o For existing accounts, complete an account options form, write to the
transfer agent or complete the online authorization screen at
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. The fund may implement other procedures from time to time. Different procedures may apply if you have a non-U.S. account or if your account is registered in the name of an institution, broker-dealer or other third party. You may not be able to use the online transaction privilege for certain types of accounts, including most retirement accounts.
General rules on buying, exchanging and selling your fund shares
Share price
If you place an order to purchase, exchange or sell shares with the transfer agent or an authorized agent by the close of regular trading on the New York Stock Exchange (usually 4:00 p.m. Eastern time), your transaction will be completed at the share price determined as of the close of regular trading on the New York Stock Exchange on that day. If your order is placed with the transfer agent or an authorized agent after the close of regular trading on the New York Stock Exchange, 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. The authorized agent is responsible for transmitting your order to the fund in a timely manner.
Transaction limitations
Your transactions are subject to certain limitations, including the limitation
on the purchase of the fund's shares within 30 calendar days of a redemption.
See "Excessive trading."
Buying
You may buy fund shares from any investment firm that has a sales agreement
with the distributor.
You can buy fund shares at the offering price. The distributor may reject any order until it has confirmed the order in writing and received payment. The fund reserves the right to stop offering any class of shares.
Buying, exchanging and selling shares
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 the fund accepts your securities, they will be valued for purposes of determining the number of fund shares to be issued to you in the same way the fund will value the securities for purposes of determining its net asset value. For federal income tax purposes, you may be taxed in the same manner as if you sold the securities that you use to purchase fund shares for cash in an amount equal to the value of the fund shares that you purchase. Your broker may also impose a fee in connection with processing your purchase of fund shares with securities.
Minimum investment amounts
Your initial investment must be at least $1,000. Additional investments must be
at least $100 for Class A shares and $500 for Class B 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. The fund may waive the initial
or subsequent investment minimums. Minimum investment amounts may be waived
for, among other things, share purchases made through certain mutual fund
programs (e.g., asset based fee program accounts) sponsored by qualified
intermediaries, such as broker-dealers and investment advisers, that have
entered into an agreement with Pioneer.
Maximum purchase amounts
Purchases of fund shares are limited to $49,999 for Class B shares and $499,999 for Class C shares. These limits are applied on a per transaction basis. Class A shares are not subject to a maximum purchase amount.
Your initial investment for most types of retirement plan accounts must be at least $250. Additional investments for most types of retirement plans must be at least $100.
Identity verification
To help the government fight the funding of terrorism and money laundering
activities, federal law requires all financial institutions to obtain, verify
and record information that identifies each person who opens an account. When
you open an account, you will need to supply your name, address, date of birth,
and other information that will allow the fund to identify you.
The fund may close your account if we cannot adequately verify your identity. The redemption price will be the net asset value on the date of redemption.
Exchanging
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. The fund allows you to exchange your shares at net asset value without charging you either an initial or contingent deferred sales charge at the time of the exchange. Shares you acquire as part of an exchange will continue to be subject to any contingent deferred sales charge that applies to the shares you originally purchased. When you ultimately sell your shares, the date of your original purchase will determine your contingent deferred sales charge.
Before you request an exchange, consider each fund's investment objective and policies as described in the fund's prospectus.
Selling
Your shares will be sold at net asset value per share next calculated after the
fund or its authorized agent, such as a broker-dealer, receives your request in
good order.
If the shares you are selling are subject to a deferred sales charge, it will be deducted from the sale proceeds. The 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 recently sent a check to purchase the shares being sold, the fund may delay payment of the sale proceeds until your check has cleared. This may take up to 10 calendar days from the purchase date.
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 generally will have to pay income taxes on a sale or an exchange.
Buying, exchanging and selling shares
Buying shares
Through your investment firm
Normally, your investment firm will send your purchase request to the fund's
distributor and/or transfer agent. Consult your investment professional for
more information. Your investment firm receives a commission from the
distributor, and may receive additional compensation from Pioneer, for your
purchase of fund shares.
By phone or online
You can use the telephone or online purchase privilege if you have an existing
non-retirement account. Certain IRAs can use the telephone purchase privilege.
If your account is eligible, you can purchase additional fund shares by phone
or online if:
o You established your bank account of record at least 30 days ago
o Your bank information has not changed for at least 30 days
o You are not purchasing more than $100,000 worth of shares per account per day
o You can provide the proper account 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.
In writing, by mail
You can purchase fund shares for an existing fund account by mailing a check to
the transfer agent. Make your check payable to the fund. Neither initial nor
subsequent investments should be made by third party check, travelers check, or
credit card check. Your check must be in U.S. dollars and drawn on a U.S. bank.
Include in your purchase request the fund's name, the account number and the
name or names in the account registration.
Exchanging shares
Through your investment firm
Normally, your investment firm will send your exchange request to the fund's
transfer agent. Consult your investment professional for more information about
exchanging your shares.
By phone or online
After you establish an eligible fund account, you can exchange fund shares by
phone or online if:
o You are exchanging into an existing account or using the exchange to
establish a new account, provided the new account has a registration
identical to the original account
o The fund into which you are exchanging offers the same class of shares
o You are not exchanging more than $500,000 worth of shares per account per day
o You can provide the proper account identification information
In writing, by mail or by fax
You can exchange fund shares by mailing or faxing a letter of instruction to
the transfer agent. You can exchange fund shares directly through the fund only
if your account is registered in your name. However, you may not fax an
exchange request for more than $500,000. Include in your letter:
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 you are exchanging
Buying, exchanging and selling shares
Selling shares
Through your investment firm
Normally, your investment firm will send your request to sell shares to the
fund's transfer agent. Consult your investment professional for more
information. The fund has authorized the distributor to act as its agent in the
repurchase of fund shares from qualified investment firms. The fund reserves
the right to terminate this procedure at any time.
By phone or online
If you have an eligible non-retirement account, you may sell up to $100,000 per
account per day by phone or online. You may sell fund shares held in a
retirement plan account by phone only if your account is an eligible IRA (tax
penalties may apply). You may not sell your shares by phone or online if you
have changed your address (for checks) or your bank information (for wires and
transfers) in the last 30 days.
You may receive your sale proceeds:
o By check, provided the check is made payable exactly as 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
In writing, by mail or by fax
You can sell some or all of your fund shares by writing directly to the fund
only if your account is registered in your name. Include in your request your
name, your social security number, the fund's name, your fund account number,
the class of shares to be sold, the dollar amount or number of shares to be
sold and any other applicable requirements as described below. The transfer
agent will send the sale proceeds to your address of record unless you provide
other instructions. Your request must be signed by all registered owners and be
in good order.
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.
How to contact us
By phone
For information or to request a telephone transaction between 8:00 a.m. and
7:00 p.m. (Eastern time) by speaking with a shareholder services representative
call
1-800-225-6292
To request a transaction using FactFone(SM) call 1-800-225-4321
Telecommunications Device for the Deaf (TDD) 1-800-225-1997
By mail
Send your written instructions to:
Pioneer Investment Management
Shareholder Services, Inc.
P.O. Box 55014
Boston, Massachusetts 02205-5014
Pioneer website
www.pioneerinvestments.com
By fax
Fax your exchange and sale requests to:
1-800-225-4240
Buying, exchanging and selling shares
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 indicate 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 or other intermediary has engaged in excessive short-term trading that we believe may be harmful to the fund, we will ask the investor, broker or other intermediary to cease such activity and we will refuse to process purchase orders (including purchases by exchange) of such investor, broker, other intermediary 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. Because the fund may invest a significant portion of its portfolio in securities that are valued using fair value pricing methods, this risk may be greater. 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 or other intermediary, are aggregated. Our ability to monitor trading practices by investors purchasing shares through omnibus accounts may be limited and dependent upon the cooperation of the broker or other intermediary in taking steps to limit this type of activity.
The fund may reject a purchase or exchange order before its acceptance or the issuance of shares. The fund may also restrict additional purchases or exchanges in an account. Each of these steps may be taken for any transaction, 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 or exchange 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.
To limit the negative effects of excessive trading on the fund, the fund has adopted the following restriction on investor transactions. If an investor redeems $5,000 or more (including redemptions that are a part of an exchange transaction) from the fund, that investor shall be prevented (or "blocked") from purchasing shares of the fund (including purchases that are a part of an exchange transaction) for 30 calendar days after the redemption. This policy does not apply to systematic purchase or withdrawal plan transactions, transactions made through employer-sponsored retirement plans described under
Section 401(a), 403(b) or 457 of the Internal Revenue Code or employee benefit plans, scheduled (Internal Revenue Code Section 72(t) election) or mandatory (required minimum distribution) withdrawals from IRAs, rebalancing transactions made through certain asset allocation or "wrap" programs, transactions by insurance company separate accounts or transactions by other funds that invest in the fund. This policy does not apply to purchase or redemption transactions of less than $5,000 or to the Pioneer money market funds.
We rely on financial intermediaries that maintain omnibus accounts to apply to their customers either the fund's policy described above or their own policies or restrictions designed to limit excessive trading of fund shares. However, we do not impose this policy at the omnibus account level.
Purchases pursuant to the reinstatement privilege (for Class A and Class B shares) are subject to this policy.
Account options
See the account application form for more details on each of the following
options.
Automatic investment plans
You can make regular periodic investments in the fund by setting up monthly
bank drafts, government allotments, payroll deductions, a Pioneer Investomatic
Plan and other similar automatic investment plans. You may use an automatic
investment
Buying, exchanging and selling shares
plan to establish a Class A share account with a small initial investment. If you have a Class B or Class C share account and your balance is at least $1,000, you may establish an automatic investment plan.
Pioneer Investomatic Plan
If you establish a Pioneer Investomatic Plan, the transfer agent will make a
periodic investment in fund shares by means of a preauthorized electronic funds
transfer from your bank account. Your plan investments are voluntary. You may
discontinue your plan at any time or change the plan's dollar amount, frequency
or investment date by calling or writing to the transfer agent. You should
allow up to 30 days for the transfer agent to establish your plan.
Automatic exchanges
You can automatically exchange your fund shares for shares of the same class of
another Pioneer mutual fund. The automatic exchange will begin on the day you
select when you complete the appropriate section of your account application or
an account options form. In order to establish automatic exchange:
o You must select exchanges on a monthly or quarterly basis
o Both the originating and receiving accounts must have identical registrations
o The originating account must have a minimum balance of $5,000
You may have to pay income taxes on an exchange.
Distribution options
The 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.
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 option on your account to option (1) until you request a different option in writing. If the amount of a distribution check would be less than $10, the fund may reinvest the amount in additional shares of the fund instead of sending a check. Additional shares of the fund 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.
Systematic withdrawal plans
When you establish a systematic withdrawal plan for your account, the transfer
agent will sell the number of fund shares you specify on a periodic basis and
the proceeds will be paid to you or to any person you select. You must obtain a
signature guarantee to direct payments to another person after you have
established your systematic withdrawal plan. Payments can be made either by
check or by electronic transfer to a bank account you designate.
To establish a systematic withdrawal plan:
o Your account must have a total value of at least $10,000 when you establish
your plan
o You must request a periodic withdrawal of at least $50
o You may not request a periodic withdrawal of more than 10% of the value of
any Class B or Class C share account (valued at the time the plan is
implemented)
These requirements do not apply to scheduled (Internal Revenue Code Section 72(t) election) or mandatory (required minimum distribution) withdrawals from IRAs and certain retirement plans.
Systematic sales of fund shares may be taxable transactions for you. While you are making systematic withdrawals from your account, you may pay unnecessary initial sales charges on additional purchases of Class A shares or contingent deferred sales charges.
Direct deposit
If you elect to take dividends or dividends and capital gain distributions in
cash, or if you establish a systematic withdrawal plan, you may choose to have
those cash payments deposited directly into your savings, checking or NOW bank
account.
Voluntary tax withholding
You may have the transfer agent withhold 28% of the dividends and capital gain
distributions paid from your fund account (before any reinvestment) and forward
the amount withheld to the Internal Revenue Service as a credit against your
federal income taxes. Voluntary tax withholding is not available for retirement
plan accounts or for accounts subject to backup withholding.
Buying, exchanging and selling shares
Shareowner services
Pioneer website
www.pioneerinvestments.com
The website includes a full selection of information on mutual fund investing.
You can also use the website to get:
o Your current account information
o Prices, returns and yields of all publicly available Pioneer mutual funds
o Prospectuses, statements of additional information and shareowner reports for
all the Pioneer mutual funds
o A copy of Pioneer's privacy notice
If you or your investment firm authorized your account for the online transaction privilege, you may buy, exchange and sell shares online.
FactFone(SM) 1-800-225-4321
You can use FactFone(SM) to:
o Obtain current information on your Pioneer mutual fund accounts
o Inquire about the prices and yields of all publicly available Pioneer mutual
funds
o Make computer-assisted telephone purchases, exchanges and redemptions for
your fund accounts
o Request account statements
If you plan to use FactFone(SM) to make telephone purchases and redemptions, first you must activate your personal identification number and establish your bank account of record. If your account is registered in the name of a broker-dealer or other third party, you may not be able to use FactFoneSM.
Household delivery of fund documents
With your consent, Pioneer may send a single proxy statement, prospectus and
shareowner report to your residence for you and any other member of your
household who has an account with the fund. If you wish to revoke your consent
to this practice, you may do so by notifying Pioneer, by phone or in writing
(see "How to contact us"). Pioneer will begin mailing separate proxy
statements, prospectuses and shareowner reports to you within 30 days after
receiving your notice.
Confirmation statements
The transfer agent maintains an account for each investment firm or individual
shareowner and records all account transactions. You will be sent confirmation
statements showing the details of your transactions as they occur, except
automatic investment plan transactions, which are confirmed quarterly. If you
have more than one Pioneer mutual fund account registered in your name, the
Pioneer combined account statement will be mailed to you each quarter.
Tax information
Early each year, the fund will mail you information about the tax status of the
dividends and distributions paid to you by the fund.
TDD 1-800-225-1997
If you have a hearing disability and access to TDD keyboard equipment, you can
contact our telephone representatives with questions about your account by
calling our TDD number between 8:30 a.m. and 5:30 p.m. Eastern time any weekday
that the New York Stock Exchange is open.
Privacy
The fund has a policy that protects the privacy of your personal information. A
copy of Pioneer's privacy notice was given to you at the time you opened your
account. The fund will send you a copy of the privacy notice each year. You may
also obtain the privacy notice by calling the transfer agent or through
Pioneer's website.
Shareowner account policies
Signature guarantees and other requirements
You are required to obtain a signature guarantee when:
o Requesting certain types of exchanges or sales of 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 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 fund may accept other forms of guarantee from financial intermediaries in limited circumstances.
Fiduciaries and corporations are required to submit additional documents to sell fund shares.
Minimum account size
The 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.
Buying, exchanging and selling shares
Telephone and website access
You may have difficulty contacting the fund by telephone or accessing www.pioneerinvestments.com during times of market volatility or disruption in telephone or Internet 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 access www.pioneerinvestments.com or reach the fund by telephone, you should communicate with the fund in writing.
Share certificates
The fund does 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 the distributor 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
Securities and Exchange Commission
The fund reserves the right to:
o suspend transactions in shares when trading on the New York Stock Exchange is
closed or restricted, or when the Securities and Exchange Commission
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
o charge transfer, shareholder servicing or similar agent fees, such as an
account maintenance fee for small balance accounts, directly to accounts
upon at least 30 days' notice. The fund may do this by deducting the fee
from your distribution of dividends and/or by redeeming fund shares to the
extent necessary to cover the fee
Dividends, capital gains and taxes
Dividends and capital gains
The fund generally pays any distributions of net short- and long-term capital
gains in November. The fund generally pays dividends from any net investment
income quarterly during March, June, September and December. The 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
shortly before 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 in additional shares or receive it as cash.
Due to the nature or timing of distributions by REITs, the fund anticipates that a portion of its distributions may be treated as a return of capital under the Internal Revenue Code, rather than ordinary income or long-term capital gain. Any return of capital will reduce a shareholder's tax basis in fund shares and, to the extent such basis is exceeded, will generally give rise to capital gains.
Taxes
You will normally have to pay federal income taxes, and any state or local taxes, on the dividends and other distributions you receive from the fund, whether you take the distributions in cash or reinvest them in additional shares. For U.S. federal income tax purposes, distributions from the fund's net capital gains (if any) are considered long-term capital gains and may be taxable to you at reduced rates. Distributions from the fund's net short-term capital gains are taxable as ordinary income.
Other dividends are taxable either as ordinary income or, for taxable years beginning on or before December 31, 2010, if so designated by the fund and certain other conditions, including holding period requirements, are met by the fund and the shareholder, as "qualified dividend income" taxable to individual shareholders at a maximum 15% U.S. federal income tax rate.
"Qualified dividend income" generally is income derived from dividends paid by U.S. corporations or certain foreign corporations that are either incorporated in a U.S. possession or eligible for tax benefits under certain U.S. income tax treaties. In addition, dividends that the fund receives in respect of stock of certain foreign corporations may be "qualified dividend income" if that stock is readily tradable on an established U.S. securities market.
A portion of dividends received from the fund (but none of the fund's capital gain distributions) may qualify for the dividends-received deduction for corporations. Distributions attributable to dividends from REITs generally will not qualify for either the dividends-received deduction for corporations or the maximum 15% U.S. federal income tax rate available to individuals on "qualified dividend income."
The fund will report to shareholders annually the U.S. federal income tax status of all fund distributions.
Dividends, capital gains and taxes
If the fund declares a dividend in October, November or December, payable to shareholders of record in such a month, and pays it in January of the following year, you will be taxed on the dividend as if you received it in the year in which it was declared.
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.
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 other distributions, sale proceeds and any other payments to you that are subject to backup withholding.
You should ask your tax adviser about any federal, state, local and foreign tax considerations relating to an investment in the fund. You may also consult the fund's statement of additional information for a more detailed discussion of the U.S. federal income tax considerations that may affect the fund and its shareowners.
Sales and exchanges generally will be taxable transactions to shareowners.
Financial highlights
The financial highlights table helps you understand the fund's financial performance for the past five years.
Certain information reflects financial results for a single fund share. The total returns in the table represent the rate that you would have earned or lost on an investment in Class A, Class B and Class C shares of the fund (assuming reinvestment of all dividends and distributions).
The information below 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.
Financial highlights
Pioneer Real Estate Shares
Class A shares
Year Ended Year Ended Year Ended Year Ended Year Ended
12/31/08 12/31/07 12/31/06 12/31/05 12/31/04(a)
----------------------------------------------------------------------------------------------------
Net asset value, beginning of year $ 21.94 $ 33.07 $ 25.87 $ 24.52 $ 19.55
-------------------------------------------------------------
Increase (decrease) from
investment operations:
Net investment income $ 0.43 $ 0.36 $ 0.28 $ 0.28 $ 0.39
Net realized and unrealized gain
(loss) on investments (8.62) (6.76) 8.88 3.29 6.31
-------------------------------------------------------------
Net increase (decrease) from
investment operations $ (8.19) $ (6.40) $ 9.16 $ 3.57 $ 6.70
Distributions to shareowners:
Net investment income (0.46) (0.36) (0.28) (0.24) (0.40)
Net realized gain -- (4.37) (1.68) (1.84) (1.33)
Tax return of capital (0.29) -- -- (0.14) --
-------------------------------------------------------------
Net increase (decrease) in net
asset value $ (8.94) $(11.13) $ 7.20 $ 1.35 $ 4.97
-------------------------------------------------------------
Net asset value, end of period $ 13.00 $ 21.94 $ 33.07 $ 25.87 $ 24.52
=============================================================
Total return* (38.31)% (19.39)% 35.79% 14.79% 35.26%
Ratio of net expenses to average
net assets+ 1.63% 1.36% 1.37% 1.50% 1.56%
Ratio of net investment income to
average net assets+ 2.10% 1.10% 0.98% 1.14% 1.85%
Portfolio turnover rate 18% 21% 20% 24% 34%
Net assets, end of period
(in thousands) $55,353 $97,691 $163,088 $110,217 $94,198
Ratios with no waiver of
management fees by the Adviser
and no reduction for fees paid
indirectly:
Net expenses 1.63% 1.36% 1.37% 1.50% 1.56%
Net investment income 2.10% 1.10% 0.98% 1.14% 1.85%
Ratios with waiver of management
fees by the Adviser and reduction
for fees paid indirectly:
Net expenses 1.63% 1.35% 1.36% 1.50% 1.56%
Net investment income 2.10% 1.11% 0.99% 1.14% 1.85%
----------------------------------------------------------------------------------------------------
|
(a) Effective 5/31/04 AEW Capital Management, L.P. became sub-adviser to the fund.
* 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.
Pioneer Real Estate Shares
Class B shares
Year Ended Year Ended Year Ended Year Ended Year Ended
12/31/08 12/31/07 12/31/06 12/31/05 12/31/04(a)
--------------------------------------------------------------------------------------------------
Net asset value, beginning of year $ 21.68 $ 32.74 $ 25.64 $ 24.32 $ 19.40
---------------------------------------------------------
Increase (decrease) from
investment operations:
Net investment income $ 0.19 $ 0.06 $ 0.01 $ 0.06 $ 0.19
Net realized and unrealized gain
(loss) on investments (8.50) (6.68) 8.78 3.24 6.28
---------------------------------------------------------
Net increase (decrease) from
investment operations $ (8.31) $ (6.61) $ 8.79 $ 3.30 $ 6.47
Distributions to shareowners:
Net investment income (0.24) (0.07) (0.01) (0.05) (0.22)
Net realized gain -- (4.37) (1.68) (1.84) (1.33)
Tax return of capital (0.29) -- -- (0.09) --
---------------------------------------------------------
Net increase (decrease) in net
asset value $ (8.84) $(11.06) $ 7.10 $ 1.32 $ 4.92
---------------------------------------------------------
Net asset value, end of period $ 12.84 $ 21.68 $ 32.74 $ 25.64 $ 24.32
=========================================================
Total return* (39.01)% (20.14)% 34.51% 13.72% 34.20%
Ratio of net expenses to average
net assets+ 2.72% 2.28% 2.31% 2.42% 2.37%
Ratio of net investment income to
average net assets+ 0.89% 0.11% 0.00%(b) 0.14% 0.96%
Portfolio turnover rate 18% 21% 20% 24% 34%
Net assets, end of period
(in thousands) $ 8,428 $18,364 $35,442 $29,992 $39,833
Ratios with no waiver of
management fees by the Adviser
and no reduction for fees paid
indirectly:
Net expenses 2.72% 2.28% 2.31% 2.42% 2.37%
Net investment income 0.89% 0.11% 0.00%(b) 0.14% 0.96%
Ratios with waiver of management
fees by the Adviser and reduction
for fees paid indirectly:
Net expenses 2.71% 2.26% 2.30% 2.42% 2.37%
Net investment income 0.90% 0.13% 0.01% 0.14% 0.96%
--------------------------------------------------------------------------------------------------
|
(a) Effective 5/31/04 AEW Capital Management, L.P. became sub-adviser to the fund.
(b) Amount rounds to less than 0.01% per share.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
+ Ratio with no reduction for fees paid indirectly.
Financial highlights
Pioneer Real Estate Shares
Class C shares
Year Ended Year Ended Year Ended Year Ended Year Ended
12/31/08 12/31/07 12/31/06 12/31/05 12/31/04(a)
--------------------------------------------------------------------------------------------------
Net asset value, beginning of year $ 21.72 $ 32.80 $ 25.68 $ 24.35 $ 19.42
-----------------------------------------------------------
Increase (decrease) from
investment operations:
Net investment income $ 0.25 $ 0.10 $ 0.02 $ 0.08 $ 0.20
Net realized and unrealized gain
(loss) on investments (8.53) (6.70) 8.80 3.26 6.29
-----------------------------------------------------------
Net increase (decrease) from
investment operations $ (8.28) $ (6.60) $ 8.82 $ 3.34 $ 6.49
Distributions to shareowners:
Net investment income (0.29) (0.11) (0.02) (0.07) (0.23)
Net realized gain -- (4.37) (1.68) (1.84) (1.33)
Tax return of capital (0.29) -- -- (0.10) --
-----------------------------------------------------------
Net increase (decrease) in net
asset value $ (8.86) $(11.08) $ 7.12 $ 1.33 $ 4.93
-----------------------------------------------------------
Net asset value, end of period $ 12.86 $ 21.72 $ 32.80 $ 25.68 $ 24.35
===========================================================
Total return* (38.85)% (20.07)% 34.60% 13.85% 34.27%
Ratio of net expenses to average
net assets+ 2.50% 2.17% 2.24% 2.32% 2.34%
Ratio of net investment income to
average net assets+ 1.18% 0.26% 0.10% 0.27% 1.02%
Portfolio turnover rate 18% 21% 20% 24% 34%
Net assets, end of period (in
thousands) $ 7,619 $15,139 $27,209 $19,824 $20,675
Ratios with no waiver of
management fees by the Adviser
and no reduction for fees paid
indirectly:
Net expenses 2.50% 2.17% 2.24% 2.32% 2.34%
Net investment income 1.18% 0.26% 0.10% 0.27% 1.02%
Ratios with waiver of management
fees by the Adviser and reduction
for fees paid indirectly:
Net expenses 2.49% 2.16% 2.23% 2.32% 2.34%
Net investment income 1.19% 0.27% 0.11% 0.27% 1.02%
--------------------------------------------------------------------------------------------------
|
(a) Effective 5/31/04 AEW Capital Management, L.P. became sub-adviser to the fund.
* 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.
Pioneer
Real Estate Shares
You can obtain more free information about the fund 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.
Visit our website
www.pioneerinvestments.com
The fund makes available the statement of additional information and shareowner reports, free of charge, on the fund's website at www.pioneerinvestments.com. You also may find other information and updates about Pioneer and the fund, including fund performance information, on the fund's website.
Shareowner reports
Annual and semiannual reports to shareowners, and quarterly reports filed with
the Securities and Exchange Commission, provide additional information about
the fund's investments. The annual report discusses market conditions and
investment strategies that significantly affected the fund's performance during
its last fiscal year.
Statement of additional information
The statement of additional information provides more detailed information about the fund. It is incorporated by reference into this prospectus.
You can also review and copy the fund's shareowner reports, prospectus and statement of additional information at the Securities and Exchange Commission's Public Reference Room in Washington, D.C. Call 1-202-551-8090 for information. The Commission charges a fee for copies. You can get the same information free from the Commission's EDGAR database on the Internet (http://www.sec.gov). You may also e-mail requests for these documents to publicinfo@sec.gov or make a request in writing to the Commission's Public Reference Section, Washington, D.C. 20549-0102.
(Investment Company Act file no. 811-07870)
[LOGO]PIONEER
Investments(R)
Pioneer Funds Distributor, Inc.
60 State Street 19288-03-0509
Boston, MA 02109 (C)2009 Pioneer Funds Distributor, Inc.
www.pioneerinvestments.com Member SIPC
|
Prospectus
May 1, 2009
Class Y Shares
Contents
Basic information about the fund .............. 1 Management .................................... 12 Buying, exchanging and selling shares ......... 14 Dividends, capital gains and taxes ............ 32 Financial highlights .......................... 34 |
Neither the Securities and Exchange Commission nor any state securities agency has approved or disapproved the fund's shares or determined whether this prospectus is accurate or complete. Any representation to the contrary is a crime.
[Logo]PIONEER
Investments(R)
Basic information about the fund
Investment objectives
Long-term growth of capital. Current income is a secondary objective.
Principal investment strategies
Normally, the fund invests at least 80% of its total assets in equity securities of real estate investment trusts (REITs) and other real estate industry issuers. For purposes of the fund's investment policies, equity securities include common stocks, debt convertible to equity securities and other equity instruments, such as exchange-traded funds (ETFs) that invest primarily in equity securities, warrants, rights, and preferred stocks.
The fund will provide written notice to shareholders at least 60 days prior to any change to its policy to invest at least 80% of its assets in equity securities of REITs and other real estate industry issuers.
REITs are companies that primarily invest in income producing real estate or real estate related loans or interests. Some REITs invest directly in real estate and derive their income from the collection of rents and capital gains on the sale of properties. Other REITs invest primarily in mortgages secured by real estate and derive their income from collection of interest.
The fund may invest up to 20% of its total assets in debt securities of real estate industry issuers, mortgage-backed securities and short-term investments. Generally, the fund acquires 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 and convertible debt. The fund invests in debt securities when the subadviser believes they are consistent with the fund's investment objectives of long-term capital growth and current income, for diversification or for greater liquidity.
The fund uses a "growth at a reasonable price" style of management. Pioneer,
the fund's investment adviser, has engaged AEW Capital Management, L.P., to act
as the fund's subadviser under Pioneer's supervision. Using this investment
style, the subadviser seeks to invest in companies with above average potential
for earnings and revenue growth that are also trading at attractive market
valuations. To select stocks, the subadviser employs fundamental and
qualitative research, and an evaluation of the issuer based on its financial
statements and operations. The subadviser relies on the knowledge, experience
and judgment of its staff who have access to a wide variety of research. The
subadviser focuses on the quality and price of individual issuers and
securities, not on economic sector or market-timing strategies. Factors the
subadviser looks for in selecting investments include:
o Favorable expected returns relative to perceived risk
o Increasing cash flow or favorable prospects for cash flow growth
Basic information about the fund
o Low market valuations relative to earnings forecast, net asset value and cash
flow
o Favorable prospects for dividend growth
The subadviser generally sells a portfolio security when it believes that the issuer no longer offers the potential for above average earnings and revenue growth. The subadviser makes that determination based upon the same criteria it uses to select portfolio securities.
Principal risks of investing in the fund
o You could lose money on your investment in the fund. The ongoing global
financial crisis has caused a significant decline in the value of many
securities, including securities held by the fund, and the continuation or
further deterioration of market conditions may lead to additional losses of
value
o The values of securities held by the fund may fall due to general market
conditions, such as real or perceived adverse economic, political, or
regulatory conditions, inflation, changes in interest or currency rates or
adverse investor sentiment. Adverse market conditions may be prolonged and
may not have the same impact on all types of securities. The values of
securities may fall due to factors affecting a particular issuer or the
securities market as a whole
o The stock market goes down or performs poorly relative to other investments
(this risk may be greater in the short term)
o REITs and other real estate industry issuers fall out of favor with investors
o The fund's investments do not have the growth potential originally expected
o The subadviser's judgment about the attractiveness, growth potential or potential appreciation of a particular sector, security or investment strategy proves to be incorrect
Risks of REITs
The fund also has risks associated with the real estate industry. Although the
fund does not invest directly in real estate, it does invest in REITs and other
equity securities of real estate industry issuers and concentrates its
investments in the real estate industry. These risks may include:
o The U.S. or a local real estate market declines due to adverse economic conditions, foreclosures, overbuilding and high vacancy rates, reduced or regulated rents or other causes
o Interest rates go up. Rising interest rates can adversely affect the
availability and cost of financing for property acquisitions and other
purposes and reduce the value of a REIT's fixed income investments
o The values of properties owned by a REIT or the prospects of other real
estate industry issuers may be hurt by property tax increases, zoning
changes, other governmental actions, environmental liabilities, natural
disasters or increased operating expenses
o A REIT in the fund's portfolio is, or is perceived by the market to be,
poorly managed
Investing in REITs involves certain unique risks. REITs are dependent on management skills, are not diversified and are subject to the risks of financing projects. REITs are subject to heavy cash flow dependency, default by borrowers, self-liquidation and the possibility of failing to qualify for certain tax and regulatory exemptions. REITs may have limited financial resources and may experience sharper swings in market values and trade less frequently and in a more limited volume than securities of larger issuers. 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.
Many real estate companies, including REITs, utilize leverage (and some may be highly leveraged), which increases investment risk and could adversely affect a real estate company's operations and market value. In addition capital to pay or refinance a REIT's debt may not be available or reasonably priced. Financial covenants related to real estate company leveraging may affect the company's ability to operate effectively.
Risks of debt securities
Debt securities are subject to the risk of an issuer's inability to meet
principal or interest payments on its obligations. Factors that could
contribute to a decline in the market value of debt securities in the fund's
portfolio include rising interest rates, if the issuer or other obligor of a
security held by the fund fails to pay principal and/or interest, otherwise
defaults or has its credit rating downgraded or is perceived to be less
creditworthy, or the credit quality or value of any underlying assets declines.
The fund may incur expenses to protect the fund's interest in securities
experiencing these events. If the fund invests in securities that are
subordinated to other securities, or which represent interests in pools of such
subordinated securities, those investments may be disproportionately affected
by a default or even a perceived decline in creditworthiness of the issuer. 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 the subadviser. 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
Basic information about the fund
greater price volatility and are less liquid, especially during periods of economic uncertainty or change, than higher quality debt securities.
Market segment risks
To the extent the 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 real
estate investment trusts (REITs), may be sensitive to changes in interest rates
and general economic activity and are generally subject to extensive government
regulation.
The fund's past performance
The bar chart and table indicate the risks of investing in the fund by showing
how the fund has performed in the past. The fund's performance will vary from
year to year.
The performance of Class Y shares for the period prior to the commencement of operations of Class Y on April 9, 1998 is the net asset value performance of the fund's Class A shares, which has not been restated to reflect any differences in expenses, including Rule 12b-1 fees applicable to Class A shares.
The fund's past performance (before and after taxes) does not necessarily indicate how it will perform in the future. As a shareowner, you may lose or make money on your investment.
Fund performance
The chart shows the year-by-year performance of the fund's Class Y shares.
[THE FOLLOWING DATA IS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
Annual return Class Y shares (%)
(Year ended December 31)
'99 -4.10 '00 29.99 '01 8.00 '02 4.21 '03 34.16 '04 35.97 '05 15.36 '06 36.43 '07 -19.03 '08 -37.90 |
For the period covered by the bar chart:
The highest calendar quarterly return was 16.92% (10/01/2004 to 12/31/2004)
The lowest calendar quarterly return was -38.75% (10/01/2008 to 12/31/2008)
Basic information about the fund
Comparison with the Morgan Stanley Capital International (MSCI) REIT Index The table shows the average annual total returns for Class Y shares of the fund over time and compares these returns to the returns of the Morgan Stanley Capital International (MSCI) REIT Index. The Morgan Stanley Capital International (MSCI) REIT Index is a widely-used index comprised of a broad representation of the most actively traded real estate trusts and is designed to be a measure of real estate equity performance.
Unlike the fund, the index is not managed and does not incur fees, expenses or taxes. You cannot invest directly in the index. The table:
o Assumes that you sell your shares at the end of the period
o Assumes that you reinvest all of your dividends and distributions
You do not pay a sales charge on purchases or redemptions of Class Y shares.
Average annual total return (%)
(for periods ended December 31, 2008)
Since Inception
1 Year 5 Years 10 Years Inception Date#
---------------------------------------------------------------------------------------------
Class Y 10/25/93
Return before taxes -37.90 1.48 7.31 7.24
---------------------------------------------------------------------------------------------
Return after taxes on distributions -38.57 -0.34 5.36 5.31
---------------------------------------------------------------------------------------------
Return after taxes on distributions
and sale of shares -24.46 1.40 5.81 5.55
---------------------------------------------------------------------------------------------
Morgan Stanley Capital
International (MSCI) REIT Index
(reflects no deduction for fees,
expenses or taxes)* -37.97 0.67 7.19 N/A
---------------------------------------------------------------------------------------------
|
# Inception date of the fund's Class A shares. Class Y shares commenced operations on April 9, 1998.
* Effective April 1, 2008, the fund's benchmark changed to the MSCI REIT Index. The securities in the MSCI REIT Index better reflect the types of securities in which the fund is likely to invest. Previously, the benchmark was the Dow Jones Wilshire Real Estate Securities Index (RESI), which changed investment models in mid-2007, thus rendering it less appropriate as a benchmark for the fund. Returns for the Dow Jones Wilshire RESI were no longer available for Pioneer's shareowner reporting purposes after June 30, 2008.
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, and the after-tax returns shown are not relevant to investors who hold fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts.
Fees and expenses
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.
Shareowner fees
paid directly from your investment Class Y -------------------------------------------------------------------- Maximum sales charge (load) when you buy shares None -------------------------------------------------------------------- Maximum deferred sales charge (load) when you sell shares None -------------------------------------------------------------------- |
Annual fund operating expenses paid from the assets of the fund as a percentage of average daily net assets Class Y -------------------------------------------------------- Management Fee 0.80% -------------------------------------------------------- Distribution and Service (12b-1) Fee 0.00% -------------------------------------------------------- Other Expenses 0.22% -------------------------------------------------------- Total Annual Fund Operating Expenses(1) 1.02% -------------------------------------------------------- |
Example
This example helps you compare the cost of investing in the fund with the cost
of investing in other mutual funds. It assumes that: a) you invest $10,000 in
the fund for the time periods shown, b) you reinvest all dividends and
distributions, c) your investment has a 5% return each year and d) the fund's
operating expenses remain the same.
Although your actual costs may be higher or lower, under these assumptions your costs would be:
Number of years you own your shares
--------------------------------------------
1 3 5 10
--------------------------------------------------------
Class Y $104 $325 $563 $1,248
--------------------------------------------------------
|
1 Total annual fund operating expenses reflect amounts incurred by the fund during its most recent fiscal year. Expenses will vary based on changes in the fund's net asset levels. Total annual fund operating expenses shown have not been reduced by any expense offset arrangements.
Basic information about the fund
Additional information about investment strategies and risks
The following sections provide additional information about the fund's investment strategies and risks. To learn more about these investments and risks, you should obtain and read the statement of additional information (SAI). The fund's investment objective and strategies may be changed without shareholder approval.
Mortgage-backed securities
The fund may invest in mortgage-backed securities. Mortgage-backed securities may be issued by private companies or issued or guaranteed by the U.S. government or agencies or instrumentalities 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. The fund's investments in mortgage-related securities may include mortgage derivatives and structured securities.
The repayment of certain mortgage-backed securities depends primarily on the cash collections received from the issuer's underlying asset fund and, in certain cases, the issuer's ability to issue replacement securities. As a result, there could be losses to the fund in the event of credit or market value deterioration in the issuer's underlying portfolio, mismatches in the timing of the cash flows of the underlying asset interests and the repayment obligations of maturing securities, or the issuer's inability to issue new or replacement securities. Upon the occurrence of certain triggering events or defaults or if an issuer of such a security has difficulty meeting its obligations, the investors in a security held by the fund may become the holder of a restructured security or of underlying assets that it could not otherwise purchase at a time when those assets may be difficult to sell or may be sold only at a loss. In addition, the value of underlying assets may be insufficient to pay certain expenses, such as litigation and foreclosure expenses, and inadequate to pay any principal or unpaid interest. Privately issued mortgage- backed securities are not traded on an exchange and may have a limited market. Without an active trading market, these securities may be particularly difficult to value given the complexities in valuing the underlying collateral.
Certain mortgage-backed securities may pay principal only at maturity or may represent only the right to receive payments of principal or interest on the underlying obligations, 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 obligations are prepaid. Interest-only instruments could lose their entire value in a declining interest-rate environment if the underlying obligations are prepaid.
Unlike mortgage-related securities issued or guaranteed by the U. S. government or its agencies and instrumentalities, mortgage-related securities issued by private issuers do not have a government or government-sponsored entity guarantee (but may have other credit enhancement), and may, and frequently do, have less favorable collateral, credit risk or other characteristics. The fund may invest in other mortgage-related securities, including mortgage derivatives and structured securities. These securities typically are not secured by real property. Because these securities have imbedded leverage features, small changes in interest or prepayment rates may cause large and sudden price movements. These securities also can become illiquid and difficult to value in volatile or declining markets.
Non-U.S. securities
The fund may invest up to 10% of its total assets in securities of non-U.S.
issuers provided that purchases of Canadian securities are not subject to the
non-U.S. issuer limitation. The fund will not invest more than 5% of its total
assets in the securities of emerging markets issuers. Investing in Canadian and
non-U.S. issuers may involve unique risks compared to investing in securities
of U.S. issuers. These risks are more pronounced to the extent the fund invests
in issuers in emerging markets or concentrates its non-U.S. investments in one
region. 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 than the
U.S. market. 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, or its ability to convert non-U.S. currencies to U.S.
dollars
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, regulatory and social developments or uncertainties may
adversely affect the securities markets
o Withholding and other non-U.S. taxes may decrease the fund's return
Debt rating criteria
For purposes of the fund's credit quality policies, if a security receives different ratings from nationally recognized statistical rating organizations, the fund will use the rating chosen by the portfolio manager as most representative of the security's credit quality. The ratings of nationally recognized statistical rating organizations represent their opinions as to the quality of the securities that they undertake to rate, and may not accurately describe the risks of the securities. If a rating organization changes the quality rating assigned to one or more of the fund's portfolio securities, or the credit quality deteriorates, Pioneer will consider if any action is appropriate in light of the fund's investment objective and policies.
Basic information about the fund
Derivatives
The fund may, but is not required to, 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, 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 purposes, including:
o As a hedge against adverse changes in the 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
Derivatives may be subject to market risk, interest rate risk and credit risk. The fund's use of certain derivatives may, in some cases, involve forms of financial leverage, which involves risk and may increase the volatility of the fund's net asset value. Even a small investment in derivatives can have a significant impact on the fund's exposure to the market prices of securities, interest rates or currency exchange rates. Therefore, using derivatives can disproportionately increase losses and reduce opportunities for gain. If changes in a derivative's value do not correspond to changes in the value of the fund's other investments or do not correlate well with the underlying assets, rate or index, the fund may not fully benefit from or could lose money on the derivative position. Derivatives involve risk of loss if the issuer of the derivative defaults on its obligation. Certain derivatives may be less liquid, which may reduce the returns of the fund if it cannot sell or terminate the derivative at an advantageous time or price. Some derivatives may involve the risk of improper valuation. The fund will only invest in derivatives to the extent the subadviser believes these investments are consistent with the fund's investment objectives, but derivatives may not perform as intended. Suitable derivatives may not be available in all circumstances or at reasonable prices and may not be used by the fund for a variety of reasons.
Cash management and temporary investments
Normally, the fund invests substantially all of its assets to meet its investment objectives. The fund may invest the remainder of its assets in securities with remaining maturities of less than one year or cash equivalents, or may hold cash. For temporary defensive purposes, including during periods of unusual cash flows, the fund may depart from its principal investment strategies and invest part or all of its assets in these securities or may hold cash. To the extent that the fund has any uninvested cash, the fund would also be subject to risk with respect to the depository institution holding the cash. During such periods, it may be more difficult for the fund to achieve its investment objectives. The fund may adopt a
defensive strategy when the subadviser believes securities in which the fund normally invests have special or unusual risks or are less attractive due to adverse market, economic, political or other conditions.
Securities lending
The fund may lend securities in its portfolio to certain broker-dealers or
other institutional investors under agreements which require that the loans be
secured continuously by collateral, typically cash, which the fund will invest
during the term of the loan. The fund will continue to have market risk and
other risks associated with owning the securities on loan, as well as the risks
associated with the investment of the cash collateral received in connection
with the loan. Securities lending also is subject to other risks, including the
risk that the borrower fails to return a loaned security, and/or there is a
shortfall on the collateral to be returned to the borrower, and the risk that
the fund is unable to recall a security in time to exercise valuable rights or
sell the security.
Reverse repurchase agreements and borrowing The fund may enter into reverse repurchase agreements pursuant to which the fund transfers securities to a counterparty in return for cash, and the fund agrees to repurchase the securities at a later date and for a higher price. Reverse repurchase agreements are treated as borrowings by the fund, are a form of leverage and may make the value of an investment in the fund more volatile and increase the risks of investing in the fund. This is because leverage generally magnifies the effect of any increase or decrease in the value of the fund's underlying assets or creates investment risk with respect to a larger pool of assets than the fund would otherwise have. The fund also may borrow money from banks or other lenders for temporary purposes. Entering into reverse repurchase agreements and other borrowing transactions may cause the fund to liquidate positions when it may not be advantageous to do so in order to satisfy its obligations or meet segregation requirements.
Short-term trading
The fund usually does not trade for short-term profits. The 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 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.
See "Financial highlights" for actual annual turnover rates.
Disclosure of portfolio holdings
The fund's policies and procedures with respect to disclosure of the fund's
portfolio securities are described in the statement of additional information.
Management
Pioneer, the fund's investment adviser,
oversees the fund's operations and supervises the fund's subadviser, which is
responsible for the day-to-day management of the fund's portfolio.
Pioneer is an indirect, wholly owned subsidiary of UniCredit 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, 2009, assets under management were approximately $205 billion worldwide, including over $44 billion in assets under management by Pioneer.
Investment adviser
Pioneer's main office is at 60 State Street, Boston, Massachusetts 02109. The
firm's U.S. mutual fund investment history includes creating in 1928 one of the
first mutual funds.
Pioneer has received an order from the Securities and Exchange Commission that permits Pioneer, subject to the approval of the fund's Board of Trustees, to hire and terminate a subadviser or to materially modify an existing subadvisory contract for the fund without shareholder approval. Pioneer retains the ultimate responsibility to oversee and recommend the hiring, termination and replacement of any subadviser. To the extent that the Securities and Exchange Commission adopts a rule that would supersede the order, or would provide greater flexibility than the order, Pioneer and the fund intend to rely on such rule to permit Pioneer, subject to the approval of the fund's Board of Trustees and any other applicable conditions of the rule, to hire and terminate a subadviser or to materially modify an existing subadvisory contract for the fund without shareholder approval.
Investment subadviser
AEW Capital Management, L.P. (AEW), is the fund's subadviser. AEW, which is located at World Trade Center East, Two Seaport Lane, Boston, Massachusetts 02210, provides real estate investment advice to public, corporate, union and government pension plans and endowments. As of December 31, 2008, AEW and its affiliates had approximately $29 billion in assets under management.
Portfolio management
Day-to-day management of the fund's portfolio is the responsibility of Matthew
A. Troxell, CFA (since 2004). Mr. Troxell is a Principal and Portfolio Manager
at AEW with responsibility for construction and management of all the firm's
publicly traded real estate equities portfolios. He has been employed at AEW as
part of the REIT group since 1994 and has over 23 years of experience in
investment analysis and portfolio management.
The fund's statement of additional information provides additional information about the portfolio manager's compensation, other accounts managed by the portfolio manager, and the portfolio manager's ownership of shares of the fund.
Management fee
The fund pays Pioneer a fee for managing the fund and to cover the cost of
providing certain services to the fund. Pioneer's annual fee is equal to 0.80%
of the fund's average daily net assets. The fee is accrued daily and paid
monthly.
Pioneer, and not the fund, pays a portion of the fee it receives from the fund to AEW as compensation for AEW's subadvisory services to the fund.
For the fiscal year ended December 31, 2008, the fund paid management fees equivalent to 0.80% of the fund's average daily net assets.
A discussion regarding the basis for the Board of Trustees' approval of the management contract is available in the fund's semi-annual report to shareholders, for the period ended June 30, 2008.
A discussion regarding the basis for the Board of Trustees' approval of the subadvisory contract is available in the fund's annual report to shareholders for the period ended December 31, 2008.
Distributor and transfer agent
Pioneer Funds Distributor, Inc. is the fund's distributor. Pioneer Investment
Management Shareholder Services, Inc. is the fund's transfer agent. The fund
compensates the distributor and transfer agent for their services. The
distributor and the transfer agent are affiliates of Pioneer.
Buying, exchanging and selling shares
Net asset value
The fund's net asset value is the value of its securities plus any other assets minus its accrued operating expenses and other liabilities. The 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).
The fund generally values its 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 fair value methods to value its securities pursuant to procedures adopted by the Board of Trustees. Valuing securities using fair value methods may cause the net asset value of the fund's 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.
The fund uses fair value pricing methods for 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 specific events in the securities markets or the specific issuer may occur between the time the primary market closes and the time the fund determines its net asset value. 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 pricing methods rather than market prices. The fund uses a pricing matrix to determine the value of fixed income securities that may 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. The fund values cash equivalent securities with remaining maturities of 60 days or less at amortized cost. Certain securities may trade in relatively thin markets and/or in markets that experience significant volatility. The prices used by the fund to value its securities may differ from the amounts that would be realized if these securities were sold and these differences could be significant. To the extent that the 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 methods to value their securities and the effects of using the fair value methodology.
You buy or sell Class Y shares at the share price.
Other classes of shares may be available that are not offered in this prospectus.
Distribution of Class Y shares
The distributor incurs the expenses of distributing the fund's Class Y shares,
none of which are reimbursed by the fund or the Class Y shareowners.
Distribution expenses include fees paid to broker-dealers which have sales
agreements with the distributor and other parties, advertising expenses and the
cost of printing and mailing prospectuses to potential investors.
Payments to financial intermediaries
Pioneer and its affiliates may make 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 the 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 payments (sometimes referred to as "revenue sharing") to financial intermediaries out of its own assets, which may include profits derived from services provided to the fund. Pioneer may base these payments on a variety of criteria, including the amount of sales or assets of the Pioneer funds attributable to the financial intermediary or as a per transaction fee.
Not all financial intermediaries receive compensation and the amount of compensation paid varies for each financial intermediary. In certain cases, these payments may 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 (in addition to amounts that may be paid by the fund) 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
Buying, exchanging and selling shares
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 Pioneer 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. The intermediary may earn a profit on these payments if the amount of the payment to the intermediary exceeds 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 in 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 Pioneer funds, such as providing omnibus account services or effecting portfolio transactions for the Pioneer funds. If your intermediary provides these 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 Pioneer funds.
Opening your account
If you are an individual or other non-institutional investor, open your Class Y share account by completing an account application and sending it to the transfer agent by mail or by fax. If you are any other type of investor, please call the transfer agent to obtain a Class Y share account application and an account number.
If you invest in the fund through investment professionals or other financial intermediaries, including wrap programs and fund supermarkets, additional conditions may apply to your investment in the 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 fund and its affiliates. You should ask your investment professional or financial intermediary about its services and any applicable fees.
The transfer agent must receive your account application before you send your initial check or federal funds wire. In addition, you must provide a bank wire address of record when you establish 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 discussed in this prospectus. Ask your investment professional or financial intermediary for more information.
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 55150
Boston, Massachusetts 02205-5150
Telephone 1-800-665-8839
Telephone transaction privileges
If your account is registered in your name, you can exchange or sell Class Y
shares 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
Buying, exchanging and selling shares
to provide validating information for the account and sends you a written confirmation. The 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.
General rules on buying, exchanging and selling your fund shares
Share price
If you place an order to purchase, exchange or sell shares with the transfer agent or an authorized agent by the close of regular trading on the New York Stock Exchange (usually 4:00 p.m. Eastern time), your transaction will be completed at the share price determined as of the close of regular trading on the New York Stock Exchange on that day. If your order is placed with the transfer agent or an authorized agent after the close of regular trading on the New York Stock Exchange, 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. The authorized agent is responsible for transmitting your order to the fund in a timely manner.
Transaction limitations
Your transactions are subject to certain limitations, including the limitation
on the purchase of the fund's shares within 30 calendar days of a redemption.
See "Excessive trading."
Buying
You can buy Class Y shares at net asset value per share. The fund does not impose any initial, contingent deferred or asset based sales charge on Class Y shares. The distributor may reject any order until it has confirmed the order in
Buying, exchanging and selling shares
writing and received payment. The fund reserves the right to stop offering any class of shares.
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 the fund accepts your securities, they will be valued for purposes of determining the number of fund shares to be issued to you in the same way the fund will value the securities for purposes of determining its net asset value. For federal income tax purposes, you may be taxed in the same manner as if you sold the securities that you use to purchase fund shares for cash in an amount equal to the value of the fund shares that you purchase. Your broker may also impose a fee in connection with processing your purchase of fund shares with securities.
Minimum investment amount
Your initial Class Y share investment must be at least $5 million. This amount
may be invested in one or more of the Pioneer mutual funds that currently offer
Class Y shares. There is no minimum additional investment amount. The fund may
waive the initial investment amount.
Identity verification
To help the government fight the funding of terrorism and money laundering
activities, federal law requires all financial institutions to obtain, verify
and record information that identifies each person who opens an account. When
you open an account, you will need to supply your name, address, date of birth,
and other information that will allow the fund to identify you.
The fund may close your account if we cannot adequately verify your identity. The redemption price will be the net asset value on the date of redemption.
Waivers of the minimum investment amount The fund will accept an initial investment of less than $5 million if:
(a) The investment is made by a trust company or bank trust department which is initially investing at least $1 million in any of the Pioneer mutual funds and, at the time of the purchase, such assets are held in a fiduciary, advisory, custodial or similar capacity over which the trust company or bank trust department has full or shared investment discretion; or
(b) The investment is at least $1 million in any of the Pioneer mutual funds and the purchaser is an insurance company separate account; or
(c) The account is not represented by a broker-dealer and the investment is made by (1) an ERISA-qualified retirement plan that meets the requirements of Section 401 of the Internal Revenue Code, (2) an employer-sponsored retirement plan that meets the requirements of Sections 403 or 457 of the
Internal Revenue Code, (3) a private foundation that meets the requirements of Section 501(c)(3) of the Internal Revenue Code or (4) an endowment or other organization that meets the requirements of Section 509(a)(1) of the Internal Revenue Code; or
(d) The investment is made by an employer-sponsored retirement plan established for the benefit of (1) employees of Pioneer or its affiliates, or (2) employees or the affiliates of broker-dealers who have a Class Y shares sales agreement with the distributor; or
(e) The investment is made through certain mutual fund programs sponsored by qualified intermediaries, such as broker-dealers and investment advisers. In each case, the intermediary has entered into an agreement with Pioneer to include Class Y shares of the Pioneer mutual funds in their program. The intermediary provides investors participating in the program with additional services, including advisory, asset allocation, recordkeeping or other services. You should ask your investment firm if it offers and you are eligible to participate in such a mutual fund program and whether participation in the program is consistent with your investment goals. The intermediaries sponsoring or participating in these mutual fund programs may also offer their clients other classes of shares of the funds and investors may receive different levels of services or pay different fees depending upon the class of shares included in the program. Investors should consider carefully any separate transaction and other fees charged by these programs in connection with investing in each available share class before selecting a share class; or
(f) The investment is made by another Pioneer fund
The fund reserves the right to waive the initial investment minimum in other circumstances.
Exchanging
You may exchange your Class Y shares for the Class Y shares of another Pioneer
mutual fund.
Your exchange request must be for at least $1,000. The fund allows you to exchange your Class Y shares at net asset value without charging you either an initial or 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
Your Class Y shares will be sold at net asset value per share next calculated
after the fund or its authorized agent, such as a broker-dealer, receives your
request in good order. If a signature guarantee is required, you must submit
your request in writing.
Buying, exchanging and selling shares
The 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 recently sent a check to purchase the shares being sold, the fund may delay payment of the sale proceeds until your check has cleared. This may take up to 10 calendar days from the purchase date.
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.
Buying shares
In writing, by mail
You can purchase Class Y shares by mailing a check to the transfer agent. Make
your check payable to the fund. Neither initial nor subsequent investments
should be made by third party check. Your check must be in U.S. dollars and
drawn on a U.S. bank. Include in your purchase request the fund's name, the
account number and the name or names in the account registration.
If you are registering an account in the name of a corporation or other fiduciary, you must send your completed account set-up forms to the transfer agent prior to making your initial purchase.
By wire
If you have an existing Class Y account, you may wire funds to purchase Class Y
shares. Note, however, that:
o State Street Bank must receive your wire no later than 11:00 a.m. Eastern
time on the business day after the fund receives your request to purchase
shares
o If State Street Bank does not receive your wire by 11:00 a.m. Eastern time on
the next business day, your transaction will be canceled at your expense
and risk
o Wire transfers normally take two or more hours to complete and a fee may be
charged by the sending bank
o Wire transfers may be restricted on holidays and at certain other times
Instruct your bank to wire funds to:
Receiving Bank: State Street Bank
and Trust Company
225 Franklin Street
Boston, MA 02101
ABA Routing No. 011000028
For further credit to: Shareholder Name
Existing Pioneer Account No.
Real Estate Shares
|
Through your investment firm
Consult your investment professional for more information.
Buying, exchanging and selling shares
Exchanging shares
In writing, by mail or by fax
You can exchange Class Y shares by mailing or faxing a letter of instruction to
the transfer agent. You can exchange fund shares directly through the fund only
if your account is registered in your name. However, you may not fax an
exchange request for more than $5 million. Include in your letter:
o The name and signature of all registered owners
o A signature guarantee for each registered owner if the amount of the exchange
is more than $5 million
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 dollar amount or number of Class Y shares you are exchanging
By phone
After you establish your Class Y account, you can exchange fund shares by phone
if:
o You are using the exchange to establish a new account, provided the new
account has a registration identical to the original account
o The fund into which you are exchanging offers Class Y shares
o You are not exchanging more than $5 million worth of shares per account per
day
o You can provide the proper account identification information
Through your investment firm
Consult your investment professional for more information about exchanging your
shares.
Selling shares
In writing, by mail or by fax
You can sell some or all of your Class Y shares by writing directly to the fund
only if your account is registered in your name. Include in your request your
name, the fund's name, your fund account number, the dollar amount or number of
Class Y shares to be sold and any other applicable requirements as described
below.
o The transfer agent will send the sale proceeds to your address of record
unless you provide other instructions
o Your request must be signed by all registered owners
o The transfer agent will not process your request until it is received in good
order
By fax
o You may sell up to $5 million per account per day if the proceeds are
directed to your bank account of record
o You may sell up to $100,000 per account per day if the proceeds are not
directed to your bank account of record
By phone or wire
o You may sell up to $5 million per account per day if the proceeds are
directed to your bank account of record
o You may sell up to $100,000 per account per day if the proceeds are not
directed to your bank account of record
You may sell fund shares held in a retirement plan account by phone only if your account is an IRA. You may not sell your shares by phone if you have changed your address (for checks) or your bank information (for wires and transfers) in the last 30 days.
You may receive your sale proceeds:
o By check, provided the check is made payable exactly as 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
Through your investment firm
Consult your investment professional for more information. The fund has
authorized the distributor to act as its agent in the repurchase of fund shares
from qualified investment firms. The fund reserves the right to terminate this
procedure at any time.
Buying, exchanging and selling shares
How to contact us
By phone
For information or to request a telephone transaction between 9:00 a.m. and 5:30
p.m. (Eastern time) by speaking with a shareholder services representative call
1-800-665-8839
To use FactFone(SM) call
1-800-225-4321
By mail
Send your written instructions to:
Pioneer Investment Management
Shareholder Services, Inc.
P.O. Box 55150
Boston, Massachusetts 02205-5150
Pioneer website
www.pioneerinvestments.com
By fax
Fax your exchange and sale requests to:
1-888-294-4485
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 indicate 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 or other intermediary has engaged in excessive short-term trading that we believe may be harmful to the fund, we will ask the investor, broker or other intermediary to cease such activity and we will refuse to process purchase orders (including purchases by exchange) of such investor, broker, other intermediary 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. Because the fund may invest a significant portion of its portfolio in securities that are valued using fair value pricing methods, this risk may be greater. 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 or other intermediary, are aggregated. Our ability to monitor trading practices by investors purchasing shares through omnibus accounts may be limited and dependent upon the cooperation of the broker or other intermediary in taking steps to limit this type of activity.
Buying, exchanging and selling shares
The fund may reject a purchase or exchange order before its acceptance or the issuance of shares. The fund may also restrict additional purchases or exchanges in an account. Each of these steps may be taken for any transaction, 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 or exchange 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.
To limit the negative effects of excessive trading on the fund, the fund has adopted the following restriction on investor transactions. If an investor redeems $5,000 or more (including redemptions that are a part of an exchange transaction) from the fund, that investor shall be prevented (or "blocked") from purchasing shares of the fund (including purchases that are a part of an exchange transaction) for 30 calendar days after the redemption. This policy does not apply to systematic purchase or withdrawal plan transactions, transactions made through employer-sponsored retirement plans described under
Section 401(a), 403(b) or 457 of the Internal Revenue Code or employee benefit plans, scheduled (Internal Revenue Code Section 72(t) election) or mandatory (required minimum distribution) withdrawals from IRAs, rebalancing transactions made through certain asset allocation or "wrap" programs, transactions by insurance company separate accounts or transactions by other funds that invest in the fund. This policy does not apply to purchase or redemption transactions of less than $5,000 or to the Pioneer money market funds.
We rely on financial intermediaries that maintain omnibus accounts to apply to their customers either the fund's policy described above or their own policies or restrictions designed to limit excessive trading of fund shares. However, we do not impose this policy at the omnibus account level.
Account options
Distribution options
The 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.
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 option on your account to option (1) until you request a different option in writing. If the amount of a distribution check would be less than $10, the fund may reinvest the amount in additional shares of the fund instead of sending a check. Additional shares of the fund will be purchased at the then-current net asset value.
Shareowner services
Pioneer website
www.pioneerinvestments.com
The website includes a full selection of information on mutual fund investing.
You can also use the website to get:
o Your current account information
o Prices, returns and yields of all publicly available Pioneer mutual funds
o Prospectuses, statements of additional information and shareowner reports for
all the Pioneer mutual funds
o A copy of Pioneer's privacy notice
FactFone(SM) 1-800-225-4321
You can use FactFone(SM) to:
o Obtain current information on your Pioneer mutual fund accounts
o Inquire about the prices and yields of all publicly available Pioneer mutual
funds
o Request account statements
If your account is registered in the name of a broker-dealer or other third party, you may not be able to use FactFoneSM to obtain account information.
Confirmation statements
The transfer agent maintains an account for each investment firm or individual
shareowner and records all account transactions. You will be sent confirmation
statements showing the details of your transactions as they occur, except
automatic investment plan transactions, which are confirmed quarterly. If you
have more than one Pioneer mutual fund account registered in your name, the
Pioneer combined account statement will be mailed to you each quarter.
Buying, exchanging and selling shares
Tax information
Early each year, the fund will mail you information about the tax status of the
dividends and distributions paid to you by the fund.
Privacy
The fund has a policy that protects the privacy of your personal information. A
copy of Pioneer's privacy notice was given to you at the time you opened your
account. The fund will send you a copy of the privacy notice each year. You may
also obtain the privacy notice by calling the transfer agent or through
Pioneer's website.
Shareowner account policies
Signature guarantees and other requirements
You are required to obtain a signature guarantee when:
o Requesting certain types of exchanges or sales of fund shares
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 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 fund may accept other forms of guarantee from financial intermediaries in limited circumstances.
Fiduciaries and corporations are required to submit additional documents to sell fund shares.
Minimum account size
The 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 or accessing www.pioneerinvestments.com during times of market volatility or disruption in telephone or Internet service. On New York Stock Exchange holidays or on days when the exchange closes early, Pioneer will adjust the hours for the telephone
center accordingly. If you are unable to access www.pioneerinvestments.com or reach the fund by telephone, you should communicate with the fund in writing.
Share certificates
The fund does not offer share certificates. Shares are electronically recorded.
Other policies
The fund and the distributor 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
Securities and Exchange Commission
The fund reserves the right to:
o stop offering Class Y shares
o suspend transactions in shares when trading on the New York Stock Exchange is
closed or restricted, or when the Securities and Exchange Commission
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
o charge transfer, shareholder servicing or similar agent fees, such as an account maintenance fee for small balance accounts, directly to accounts upon at least 30 days' notice. The fund may do this by deducting the fee from your distribution of dividends and/or by redeeming fund shares to the extent necessary to cover the fee
Dividends, capital gains and taxes
Dividends and capital gains
The fund generally pays any distributions of net short- and long-term capital
gains in November. The fund generally pays dividends from any net investment
income quarterly during March, June, September and December. The 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
shortly before 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 in additional shares or receive it as cash.
Due to the nature or timing of distributions by REITs, the fund anticipates that a portion of its distributions may be treated as a return of capital under the Internal Revenue Code, rather than ordinary income or long-term capital gain. Any return of capital will reduce a shareholder's tax basis in fund shares and, to the extent such basis is exceeded, will generally give rise to capital gains.
Taxes
You will normally have to pay federal income taxes, and any state or local taxes, on the dividends and other distributions you receive from the fund, whether you take the distributions in cash or reinvest them in additional shares. For U.S. federal income tax purposes, distributions from the fund's net capital gains (if any) are considered long-term capital gains and may be taxable to you at reduced rates. Distributions from the fund's net short-term capital gains are taxable as ordinary income.
Other dividends are taxable either as ordinary income or, for taxable years beginning on or before December 31, 2010, if so designated by the fund and certain other conditions, including holding period requirements, are met by the fund and the shareholder, as "qualified dividend income" taxable to individual shareholders at a maximum 15% U.S. federal income tax rate.
"Qualified dividend income" generally is income derived from dividends paid by U.S. corporations or certain foreign corporations that are either incorporated in a U.S. possession or eligible for tax benefits under certain U.S. income tax treaties. In addition, dividends that the fund receives in respect of stock of certain foreign corporations may be "qualified dividend income" if that stock is readily tradable on an established U.S. securities market.
A portion of dividends received from the fund (but none of the fund's capital gain distributions) may qualify for the dividends-received deduction for corporations. Distributions attributable to dividends from REITs generally will not qualify for either the dividends-received deduction for corporations or the maximum 15% U.S. federal income tax rate available to individuals on "qualified dividend income."
The fund will report to shareholders annually the U.S. federal income tax status of all fund distributions.
If the fund declares a dividend in October, November or December, payable to shareholders of record in such a month, and pays it in January of the following year, you will be taxed on the dividend as if you received it in the year in which it was declared.
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.
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 other distributions, sale proceeds and any other payments to you that are subject to backup withholding.
You should ask your tax adviser about any federal, state, local and foreign tax considerations relating to an investment in the fund. You may also consult the fund's statement of additional information for a more detailed discussion of the U.S. federal income tax considerations that may affect the fund and its shareowners.
Financial highlights
The financial highlights table helps you understand the fund's financial performance for the past five years.
Certain information reflects financial results for a single fund share. The total returns in the table represent the rate that you would have earned or lost on an investment in Class Y shares of the fund (assuming reinvestment of all dividends and distributions).
The information below 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.
Pioneer Real Estate Shares
Class Y shares
Year Year Year Year Year
Ended Ended Ended Ended Ended
12/31/08 12/31/07 12/31/06 12/31/05 12/31/04 (a)
----------------------------------------------------------------------------------------------------
Net asset value, beginning of year $ 21.90 $ 33.03 $ 25.84 $ 24.49 $ 19.53
-----------------------------------------------------------
Increase (decrease) from
investment operations:
Net investment income $ 0.54 $ 0.49 $ 0.42 $ 0.35 $ 0.50
Net realized and unrealized gain
(loss) on investments (8.59) (6.75) 8.87 3.34 6.31
-----------------------------------------------------------
Net increase (decrease) from
investment operations $ (8.05) $ (6.26) $ 9.29 $ 3.69 $ 6.81
Distributions to shareowners:
Net investment income (0.58) (0.50) (0.42) (0.34) (0.52)
Net realized gain - (4.37) (1.68) (1.84) (1.33)
Tax return of capital (0.29) - - (0.16) -
-----------------------------------------------------------
Net increase (decrease) in net
asset value $ (8.92) $ (11.13) $ 7.19 $ 1.35 $ 4.96
-----------------------------------------------------------
Net asset value, end of period $ 12.98 $ 21.90 $ 33.03 $ 25.84 $ 24.49
===========================================================
Total return* (37.90)% (19.03)% 36.43% 15.36% 35.97%
Ratio of net expenses to average
net assets+ 1.02% 0.90% 0.87% 1.00% 1.01%
Ratio of net investment income to
average net assets+ 2.76% 1.81% 1.54% 1.84% 2.47%
Portfolio turnover rate 18% 21% 20% 24% 34%
Net assets, end of period
(in thousands) $ 26,233 $ 44,729 $46,436 $26,490 $ 9,172
Ratios with no waiver of
management fees by the
Adviser and no reduction for
fees paid indirectly:
Net expenses 1.02% 0.90% 0.87% 1.00% 1.01%
Net investment income 2.76% 1.81% 1.54% 1.84% 2.47%
Ratios with waiver of management
fees by the Adviser and
reduction for fees paid
indirectly:
Net expenses 1.02% 0.90% 0.87% 1.00% 1.01%
Net investment income 2.76% 1.81% 1.54% 1.84% 2.47%
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(a) Effective 5/31/04 AEW Capital Management, L.P. became sub-adviser to the
fund.
* 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.
+ Ratio with no reduction for fees paid indirectly.
Notes
Pioneer
Real Estate Shares
You can obtain more free information about the fund from your investment firm or by writing to Pioneer Investment Management Shareholder Services, Inc., 60 State Street, Boston, Massachusetts 02109. You may also call 1-800-665-8839.
Visit our website
www.pioneerinvestments.com
The fund makes available the statement of additional information and shareowner reports, free of charge, on the fund's website at www.pioneerinvestments.com. You also may find other information and updates about Pioneer and the fund, including fund performance information, on the fund's website.
Shareowner reports
Annual and semiannual reports to shareowners, and quarterly reports filed with
the Securities and Exchange Commission, provide additional information about
the fund's investments. The annual report discusses market conditions and
investment strategies that significantly affected the fund's performance during
its last fiscal year.
Statement of additional information
The statement of additional information provides more detailed information about the fund. It is incorporated by reference into this prospectus.
You can also review and copy the fund's shareowner reports, prospectus and statement of additional information at the Securities and Exchange Commission's Public Reference Room in Washington, D.C. Call 1-202-551-8090 for information. The Commission charges a fee for copies. You can get the same information free from the Commission's EDGAR database on the Internet (http://www.sec.gov). You may also e-mail requests for these documents to publicinfo@sec.gov or make a request in writing to the Commission's Public Reference Section, Washington, D.C. 20549-0102.
(Investment Company Act file no. 811-07870)
[Logo]PIONEER
Investments(R)
Pioneer Funds Distributor, Inc.
60 State Street 19289-03-0509 Boston, MA 02109 (C)2009 Pioneer Funds Distributor, Inc. www.pioneerinvestments.com Member SIPC |
PIONEER REAL ESTATE SHARES
60 State Street
Boston, Massachusetts 02109
|
STATEMENT OF ADDITIONAL INFORMATION
Class A, Class B, Class C and Class Y Shares
May 1, 2009
This statement of additional information is not a prospectus. It should be read in conjunction with the fund's Class A, Class B and Class C shares prospectus and its Class Y shares prospectus, each dated May 1, 2009, as supplemented or revised from time to time. A copy of each prospectus can be obtained free of charge by calling Shareholder Services at 1-800-225-6292 or by written request to the fund at 60 State Street, Boston, Massachusetts 02109. You can also obtain a copy of each prospectus from our website at: www.pioneerinvestments.com. The fund's financial statements for the fiscal year ended December 31, 2008, including the independent registered public accounting firm's report thereon, are incorporated into this statement of additional information by reference.
TABLE OF CONTENTS
Page
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1. Fund History...............................................................................................2
2. Investment Policies, Risks and Restrictions................................................................2
3. Trustees and Officers.....................................................................................31
4. Investment Adviser........................................................................................39
5. Principal Underwriter and Distribution Plan...............................................................41
6. Shareholder Servicing/Transfer Agent......................................................................45
7. Custodian.................................................................................................45
8. Independent Registered Public Accounting Firm.............................................................46
9. Portfolio Management......................................................................................46
10. Portfolio Transactions....................................................................................49
11. Description of Shares.....................................................................................51
12. Sales Charges.............................................................................................54
13. Redeeming Shares..........................................................................................61
14. Telephone and Online Transactions.........................................................................62
15. Pricing of Shares.........................................................................................64
16. Tax Status................................................................................................65
17. Financial Statements......................................................................................72
18. Annual Fee, Expense and Other Information.................................................................73
19. Appendix A - Description of Short-Term Debt, Corporate Bond and
Preferred Stock Ratings...................................................................................78
20. Appendix B - Proxy Voting Policies and Procedures.........................................................83
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1. FUND HISTORY
The fund is a diversified open-end management investment company. The fund is a series of Pioneer Real Estate Shares (the "Trust"). The fund was organized on March 10, 1995 as a series of a Delaware statutory trust which acquired all of the assets and liabilities of Pioneer Winthrop Real Estate Investment Fund, a Massachusetts business trust. Effective September 1, 1995, the fund changed its name to Pioneer Real Estate Shares. Pioneer Investment Management, Inc. ("Pioneer") is the fund's investment adviser.
2. INVESTMENT POLICIES, RISKS AND RESTRICTIONS
The prospectuses present the investment objectives and the principal investment strategies and risks of the fund. This section supplements the disclosure in the fund's prospectuses and provides additional information on the fund's investment policies or restrictions. Restrictions or policies stated as a maximum percentage of the fund's assets are only applied immediately after a portfolio investment to which the policy or restriction is applicable (other than the limitations on borrowing and illiquid securities). Accordingly, any later increase or decrease in a percentage resulting from a change in values, net assets or other circumstances will not be considered in determining whether the investment complies with the fund's restrictions and policies.
Equity Securities and Related Investments
Investments in Equity Securities
Equity securities, such as common stock, generally represent an ownership interest in a company. While equity securities have historically generated higher average returns than fixed income securities, equity securities have also experienced significantly more volatility in those returns. An adverse event, such as an unfavorable earnings report, may depress the value of a particular equity security held by the fund. Also, the prices of equity securities, particularly common stocks, are sensitive to general movements in the stock market. A drop in the stock market may depress the price of equity securities held by the fund.
Warrants and Stock Purchase Rights
The fund may invest in warrants, which are securities permitting, but not obligating, their holder to subscribe for other securities. Warrants do not carry with them the right to dividends or voting rights with respect to the securities that they entitle their holders to purchase, and they do not represent any rights in the assets of the issuer.
The fund may also invest in stock purchase rights. Stock purchase rights are instruments, frequently distributed to an issuer's shareholders as a dividend, that entitle the holder to purchase a specific number of shares of common stock on a specific date or during a specific period of time. The exercise price on the rights is normally at a discount from market value of the common stock at the time of distribution. The rights do not carry with them the right to dividends or to vote and may or may not be transferable. Stock purchase rights are frequently used outside of the United States as a means of raising additional capital from an issuer's current shareholders.
As a result, an investment in warrants or stock purchase rights may be considered more speculative than certain other types of investments. In addition, the value of a warrant or a stock purchase right does not necessarily change with the value of the underlying securities, and
warrants and stock purchase rights expire worthless if they are not exercised on or prior to their expiration date.
Preferred Shares
The fund may invest in preferred shares. Preferred shares are equity securities, but they have many characteristics of fixed income securities, such as a fixed dividend payment rate and/or a liquidity preference over the issuer's common shares. However, because preferred shares are equity securities, they may be more susceptible to risks traditionally associated with equity investments than the fund's fixed income securities.
Preferred stocks may differ in many of their provisions. Among the features that differentiate preferred stocks from one another are the dividend rights, which may be cumulative or noncumulative and participating or non-participating, redemption provisions, and voting rights. Such features will establish the income return and may affect the prospects for capital appreciation or risks of capital loss.
The market prices of preferred stocks are subject to changes in interest rates and are more sensitive to changes in an issuer's creditworthiness than are the prices of debt securities. Shareholders of preferred stock may suffer a loss of value if dividends are not paid. Under ordinary circumstances, preferred stock does not carry voting rights.
Investments in Initial Public Offerings
To the extent consistent with its investment objectives, the fund may invest in initial public offerings ("IPOs") of equity securities. The market for such securities may be more volatile and entail greater risk of loss than investments in more established companies. Investments in initial public offerings may represent a significant portion of the fund's investment performance. The fund cannot assure that investments in initial public offerings will continue to be available to the fund or, if available, will result in positive investment performance. In addition, as the fund's portfolio grows in size, the impact of investments in initial public offerings on the overall performance of the fund is likely to decrease.
Non-U.S. Investments
Equity Securities of Non-U.S. Issuers
The fund may invest in equity securities of non-U.S. issuers, including American Depositary Receipts ("ADRs"), European Depositary Receipts ("EDRs"), Global Depositary Receipts ("GDRs") and other similar instruments.
Debt Obligations of Non-U.S. Governments
The fund may invest in debt obligations of non-U.S. governments. An investment in debt obligations of non-U.S. governments and their political subdivisions (sovereign debt) involves special risks that are not present in corporate debt obligations. The non-U.S. issuer of the sovereign debt or the non-U.S. governmental authorities that control the repayment of the debt may be unable or unwilling to repay principal or interest when due, and the fund may have limited recourse in the event of a default. During periods of economic uncertainty, the market prices of sovereign debt may be more volatile than prices of debt obligations of U.S. issuers. In
the past, certain non-U.S. countries have encountered difficulties in servicing their debt obligations, withheld payments of principal and interest and declared moratoria on the payment of principal and interest on their sovereign debt.
A sovereign debtor's willingness or ability to repay principal and pay interest in a timely manner may be affected by, among other factors, its cash flow situation, the extent of its foreign currency reserves, the availability of sufficient foreign exchange, the relative size of the debt service burden, the sovereign debtor's policy toward its principal international lenders and local political constraints. Sovereign debtors may also be dependent on expected disbursements from non-U.S. governments, multinational agencies and other entities to reduce principal and interest arrearages on their debt. The failure of a sovereign debtor to implement economic reforms, achieve specified levels of economic performance or repay principal or interest when due may result in the cancellation of third-party commitments to lend funds to the sovereign debtor, which may further impair such debtor's ability or willingness to service its debts.
Eurodollar Instruments and Samurai and Yankee Bonds The fund may invest in Eurodollar instruments and Samurai and Yankee bonds. Eurodollar instruments are bonds of corporate and government issuers that pay interest and principal in U.S. dollars but are issued in markets outside the United States, primarily in Europe. Samurai bonds are yen-denominated bonds sold in Japan by non-Japanese issuers. Yankee bonds are U.S. dollar denominated bonds typically issued in the U.S. by non-U.S. governments and their agencies and non-U.S. banks and corporations. The fund may also invest in Eurodollar Certificates of Deposit ("ECDs"), Eurodollar Time Deposits ("ETDs") and Yankee Certificates of Deposit ("Yankee CDs"). ECDs are U.S. dollar-denominated certificates of deposit issued by non-U.S. branches of domestic banks; ETDs are U.S. dollar-denominated deposits in a non-U.S. branch of a U.S. bank or in a non-U.S. bank; and Yankee CDs are U.S. dollar-denominated certificates of deposit issued by a U.S. branch of a non-U.S. bank and held in the U.S. These investments involve risks that are different from investments in securities issued by U.S. issuers, including potential unfavorable political and economic developments, non-U.S. withholding or other taxes, seizure of non-U.S. deposits, currency controls, interest limitations or other governmental restrictions which might affect payment of principal or interest.
Investments in Emerging Markets. The fund may invest in securities of issuers in countries with emerging economies or securities markets. Emerging economies or securities markets will generally include, but not be limited to, countries included in the Morgan Stanley Capital International (MSCI) Emerging Markets Index. The fund will generally focus on emerging markets that do not impose unusual trading requirements which tend to restrict the flow of investments. In addition, the fund may invest in unquoted securities of emerging market issuers.
Risks of Non-U.S. Investments
Investing in securities of non-U.S. issuers involves considerations and risks not typically associated with investing in the securities of issuers in the U.S. These risks are heightened with respect to investments in countries with emerging markets and economies. The risks of investing in securities of non-U.S. issuers generally, or in issuers with significant exposure to non-U.S. markets may be related, among other things, to (i) differences in size, liquidity and volatility of, and the degree and manner of regulation of, the securities markets of certain non-U.S. markets compared to the securities markets in the U.S.; (ii) economic, political and social factors; and (iii) foreign exchange matters, such as restrictions on the repatriation of capital, fluctuations in exchange rates between the U.S. dollar and the currencies in which the fund's portfolio securities are quoted or denominated, exchange control regulations and costs associated with currency
exchange. The political and economic structures in certain countries, particularly emerging markets, may undergo significant evolution and rapid development, and such countries may lack the social, political and economic stability characteristic of more developed countries.
Non-U.S. Securities Markets and Regulations. There may be less publicly available information about non-U.S. markets and issuers than is available with respect to U.S. securities and issuers. Non-U.S. companies generally are not subject to accounting, auditing and financial reporting standards, practices and requirements comparable to those applicable to U.S. companies. The trading markets for most non-U.S. securities are generally less liquid and subject to greater price volatility than the markets for comparable securities in the U.S. The markets for securities in certain emerging markets are in the earliest stages of their development. Even the markets for relatively widely traded securities in certain non-U.S. markets, including emerging market countries, may not be able to absorb, without price disruptions, a significant increase in trading volume or trades of a size customarily undertaken by institutional investors in the U.S. Additionally, market making and arbitrage activities are generally less extensive in such markets, which may contribute to increased volatility and reduced liquidity. The less liquid a market, the more difficult it may be for the fund to accurately price its portfolio securities or to dispose of such securities at the times determined by Pioneer or the subadviser to be appropriate. The risks associated with reduced liquidity may be particularly acute in situations in which the fund's operations require cash, such as in order to meet redemptions and to pay its expenses.
Economic, Political and Social Factors. Certain countries, including emerging
markets, may be subject to a greater degree of economic, political and social
instability than in the U.S. and Western European countries. Such instability
may result from, among other things: (i) authoritarian governments or military
involvement in political and economic decision making; (ii) popular unrest
associated with demands for improved economic, political and social conditions;
(iii) internal insurgencies; (iv) hostile relations with neighboring countries;
and (v) ethnic, religious and racial conflict. Such economic, political and
social instability could significantly disrupt the financial markets in such
countries and the ability of the issuers in such countries to repay their
obligations. Investing in emerging market countries also involves the risk of
expropriation, nationalization, confiscation of assets and property or the
imposition of restrictions on foreign investments and on repatriation of capital
invested. In the event of such expropriation, nationalization or other
confiscation in any emerging country, the fund could lose its entire investment
in that country.
Certain emerging market countries restrict or control foreign investment in their securities markets to varying degrees. These restrictions may limit the fund's investment in those markets and may increase the expenses of the fund. In addition, the repatriation of both investment income and capital from certain markets is subject to restrictions such as the need for certain governmental consents. Even where there is no outright restriction on repatriation of capital, the mechanics of repatriation may affect certain aspects of the fund's operation.
Economies in individual countries may differ favorably or unfavorably from the U.S. economy in such respects as growth of gross domestic product, rates of inflation, currency valuation, capital reinvestment, resource self-sufficiency and balance of payments positions. Many countries have experienced substantial, and in some cases extremely high, rates of inflation for many years. Inflation and rapid fluctuations in inflation rates have had, and may continue to have, very negative effects on the economies and securities markets of certain emerging countries.
Unanticipated political or social developments may affect the values of the fund's investments and the availability to the fund of additional investments in such countries. In the past, the
economies, securities and currency markets of many emerging markets have experienced significant disruption and declines. There can be no assurance that these economic and market disruptions might not occur again.
Economies in emerging market countries generally are dependent heavily upon international trade and, accordingly, have been and may continue to be affected adversely by trade barriers, exchange controls, managed adjustments in relative currency values and other protectionist measures imposed or negotiated by the countries with which they trade. These economies also have been, and may continue to be, affected adversely by economic conditions in the countries with which they trade.
Currency Risks. The value of the securities quoted or denominated in foreign currencies may be adversely affected by fluctuations in the relative currency exchange rates and by exchange control regulations. The fund's investment performance may be negatively affected by a devaluation of a currency in which the fund's investments are quoted or denominated. Further, the fund's investment performance may be significantly affected, either positively or negatively, by currency exchange rates because the U.S. dollar value of securities quoted or denominated in another currency will increase or decrease in response to changes in the value of such currency in relation to the U.S. dollar.
Custodian Services and Related Investment Costs. Custodial services and other costs relating to investment in international securities markets generally are more expensive than in the U.S. Such markets have settlement and clearance procedures that differ from those in the U.S. In certain markets there have been times when settlements have been unable to keep pace with the volume of securities transactions, making it difficult to conduct such transactions. The inability of the fund to make intended securities purchases due to settlement problems could cause the fund to miss attractive investment opportunities. Inability to dispose of a portfolio security caused by settlement problems could result either in losses to the fund due to a subsequent decline in value of the portfolio security or could result in possible liability to the fund. In addition, security settlement and clearance procedures in some emerging countries may not fully protect the fund against loss or theft of its assets.
Withholding and Other Taxes. The fund will be subject to taxes, including withholding taxes, on income (possibly including, in some cases, capital gains) that are or may be imposed by certain countries with respect to the fund's investments in such countries. These taxes will reduce the return achieved by the fund. Treaties between the U.S. and such countries may not be available to reduce the otherwise applicable tax rates.
Investments in Depositary Receipts
The fund may hold securities of non-U.S. issuers in the form of ADRs, EDRs, GDRs and other similar instruments. Generally, ADRs in registered form are designed for use in U.S. securities markets, and EDRs and GDRs and other similar global instruments in bearer form are designed for use in non-U.S. securities markets.
ADRs are denominated in U.S. dollars and represent an interest in the right to receive securities of non-U.S. issuers deposited in a U.S. bank or correspondent bank. ADRs do not eliminate all the risk inherent in investing in the securities of non-U.S. issuers. However, by investing in ADRs rather than directly in equity securities of non-U.S. issuers, the fund will avoid currency risks during the settlement period for either purchases or sales. EDRs and GDRs are not necessarily denominated in the same currency as the underlying securities which they represent.
For purposes of the fund's investment policies, investments in ADRs, EDRs, GDRs and similar instruments will be deemed to be investments in the underlying equity securities of non-U.S. issuers. The fund may acquire depositary receipts from banks that do not have a contractual relationship with the issuer of the security underlying the depositary receipt to issue and secure such depositary receipt. To the extent the fund invests in such unsponsored depositary receipts there may be an increased possibility that the fund may not become aware of events affecting the underlying security and thus the value of the related depositary receipt. In addition, certain benefits (i.e., rights offerings) which may be associated with the security underlying the depositary receipt may not inure to the benefit of the holder of such depositary receipt.
Foreign Currency Transactions
The fund may engage in foreign currency transactions. These transactions may be conducted at the prevailing spot rate for purchasing or selling currency in the foreign exchange market. The fund also has authority to enter into forward foreign currency exchange contracts involving currencies of the different countries in which the fund invests as a hedge against possible variations in the foreign exchange rates between these currencies and the U.S. dollar. This is accomplished through contractual agreements to purchase or sell a specified currency at a specified future date and price set at the time of the contract.
Transaction hedging is the purchase or sale of forward foreign currency contracts with respect to specific receivables or payables of the fund, accrued in connection with the purchase and sale of its portfolio securities quoted in foreign currencies. Portfolio hedging is the use of forward foreign currency contracts to offset portfolio security positions denominated or quoted in such foreign currencies. There is no guarantee that the fund will be engaged in hedging activities when adverse exchange rate movements occur or that its hedging activities will be successful. The fund will not attempt to hedge all of its foreign portfolio positions and will enter into such transactions only to the extent, if any, deemed appropriate by Pioneer or the subadviser.
Hedging against a decline in the value of a currency does not eliminate fluctuations in the prices of portfolio securities or prevent losses if the prices of such securities decline. Such transactions also limit the opportunity for gain if the value of the hedged currency should rise. Moreover, it may not be possible for the fund to hedge against a devaluation that is so generally anticipated that the fund is not able to contract to sell the currency at a price above the devaluation level it anticipates.
The fund may also engage in cross-hedging by using forward contracts in one currency to hedge against fluctuations in the value of securities denominated in a different currency, if Pioneer or the subadviser determines that there is a pattern of correlation between the two currencies. Cross-hedging may also include entering into a forward transaction involving two foreign currencies, using one foreign currency as a proxy for the U.S. dollar to hedge against variations in the other foreign currency.
The cost to the fund of engaging in foreign currency transactions varies with such factors as the currency involved, the size of the contract, the length of the contract period, differences in interest rates between the two currencies and the market conditions then prevailing. Since transactions in foreign currency and forward contracts are usually conducted on a principal basis, no fees or commissions are involved. The fund may close out a forward position in a currency by selling the forward contract or by entering into an offsetting forward contract.
The precise matching of the forward contract amounts and the value of the securities involved will not generally be possible because the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the date on which the contract is entered into and the date it matures. Using forward contracts to protect the value of the fund's portfolio securities against a decline in the value of a currency does not eliminate fluctuations in the underlying prices of the securities. It simply establishes a rate of exchange which the fund can achieve at some future point in time. The precise projection of currency market movements is not possible, and short-term hedging provides a means of fixing the U.S. dollar value of only a portion of the fund's foreign assets.
While the fund will enter into forward contracts to reduce currency exchange rate risks, transactions in such contracts involve certain other risks. While the fund may benefit from such transactions, unanticipated changes in currency prices may result in a poorer overall performance for the fund than if it had not engaged in any such transactions. Moreover, there may be imperfect correlation between the fund's portfolio holdings of securities quoted or denominated in a particular currency and forward contracts entered into by the fund. Such imperfect correlation may cause the fund to sustain losses which will prevent the fund from achieving a complete hedge or expose the fund to risk of foreign exchange loss.
Over-the-counter markets for trading foreign forward currency contracts offer less protection against defaults than is available when trading in currency instruments on an exchange. Since a forward foreign currency exchange contract is not guaranteed by an exchange or clearinghouse, a default on the contract would deprive the fund of unrealized profits or force the fund to cover its commitments for purchase or resale, if any, at the current market price.
If the fund enters into a forward contract to purchase foreign currency, the custodian or Pioneer will segregate liquid assets. See "Asset Segregation."
Options on Foreign Currencies
The fund may purchase and write options on foreign currencies for hedging purposes in a manner similar to that of transactions in forward contracts. For example, a decline in the dollar value of a foreign currency in which portfolio securities are quoted or denominated will reduce the dollar value of such securities, even if their value in the foreign currency remains constant. In an attempt to protect against such decreases in the value of portfolio securities, the fund may purchase put options on the foreign currency. If the value of the currency declines, the fund will have the right to sell such currency for a fixed amount of dollars which exceeds the market value of such currency. This would result in a gain that may offset, in whole or in part, the negative effect of currency depreciation on the value of the fund's securities quoted or denominated in that currency.
Conversely, if a rise in the dollar value of a currency is projected for those securities to be acquired, thereby increasing the cost of such securities, the fund may purchase call options on such currency. If the value of such currency increases, the purchase of such call options would enable the fund to purchase currency for a fixed amount of dollars which is less than the market value of such currency. Such a purchase would result in a gain that may offset, at least partially, the effect of any currency-related increase in the price of securities the fund intends to acquire. As in the case of other types of options transactions, however, the benefit the fund derives from purchasing foreign currency options will be reduced by the amount of the premium and related transaction costs. In addition, if currency exchange rates do not move in the direction or to the
extent anticipated, the fund could sustain losses on transactions in foreign currency options which would deprive it of a portion or all of the benefits of advantageous changes in such rates.
The fund may also write options on foreign currencies for hedging purposes. For example, if the fund anticipated a decline in the dollar value of securities quoted or denominated in a foreign currency because of declining exchange rates, it could, instead of purchasing a put option, write a covered call option on the relevant currency. If the expected decline occurs, the option will most likely not be exercised, and the decrease in value of portfolio securities will be partially offset by the amount of the premium received by the fund.
Similarly, the fund could write a put option on the relevant currency, instead of purchasing a call option, to hedge against an anticipated increase in the dollar cost of securities to be acquired. If exchange rates move in the manner projected, the put option will expire unexercised and allow the fund to offset such increased cost up to the amount of the premium. However, as in the case of other types of options transactions, the writing of a foreign currency option will constitute only a partial hedge up to the amount of the premium, and only if rates move in the expected direction. If unanticipated exchange rate fluctuations occur, the option may be exercised and the fund would be required to purchase or sell the underlying currency at a loss, which may not be fully offset by the amount of the premium. As a result of writing options on foreign currencies, the fund also may be required to forgo all or a portion of the benefits which might otherwise have been obtained from favorable movements in currency exchange rates.
A call option written on foreign currency by the fund is "covered" if the fund owns the underlying foreign currency subject to the call, or if it has an absolute and immediate right to acquire that foreign currency without additional cash consideration. A call option is also covered if the fund holds a call on the same foreign currency for the same principal amount as the call written where the exercise price of the call held is (a) equal to or less than the exercise price of the call written or (b) greater than the exercise price of the call written if the amount of the difference is maintained by the fund in cash or liquid securities. See "Asset Segregation."
The fund may close out its position in a currency option by either selling the option it has purchased or entering into an offsetting option. An exchange-traded options position may be closed out only on an options exchange which provides a secondary market for an option of the same series. Although the fund will generally purchase or write only those options for which there appears to be an active secondary market, there is no assurance that a liquid secondary market on an exchange will exist for any particular option, or at any particular time. For some options no secondary market on an exchange may exist. In such event, it might not be possible to effect closing transactions in particular options, with the result that the fund would have to exercise its options in order to realize any profit and would incur transaction costs upon the sale of underlying currencies pursuant to the exercise of put options. If the fund as a covered call option writer is unable to effect a closing purchase transaction in a secondary market, it will not be able to sell the underlying currency (or security quoted or denominated in that currency) until the option expires or it delivers the underlying currency upon exercise.
The fund may also use options on currencies to cross-hedge, which involves writing or purchasing options on one currency to hedge against changes in exchange rates of a different currency with a pattern of correlation. Cross-hedging may also include using a foreign currency as a proxy for the U.S. dollar, if Pioneer or the subadviser determines that there is a pattern of correlation between that currency and the U.S. dollar.
The fund may purchase and write over-the-counter options to the extent consistent with its limitation on investments in illiquid securities. Trading in over-the-counter options is subject to the risk that the other party will be unable or unwilling to close out options purchased or written by the fund.
Investment Company Securities and Real Estate Investment Trusts
Other Investment Companies
The fund may invest in the securities of other investment companies to the extent that such investments are consistent with the fund's investment objective and policies and permissible under the Investment Company Act of 1940, as amended (the "1940 Act"). Under one provision of the 1940 Act, a fund may not acquire the securities of another investment company if such purchase would result in (i) 3% or more of the total outstanding voting securities of any one investment company being held by the fund, (ii) 5% or more of the fund's total assets being invested in any one investment company, or (iii) 10% or more of the fund's total assets being invested in securities of other investment companies. However, there are several provisions of the 1940 Act and rules thereunder that allow more expansive investment in investment companies. In addition, these limitations do not apply to the purchase of shares of any investment company in connection with a merger, consolidation, reorganization or acquisition of substantially all the assets of another investment company. The fund may also invest without limit in money market funds. Investing in other investment companies subjects the fund to the risks of investing in the underlying securities held by those investment companies.
The fund, as a holder of the securities of other investment companies, will bear its pro rata portion of the other investment companies' expenses, including advisory fees. These expenses are in addition to the direct expenses of the fund's own operations.
Exchange Traded Funds
The fund may invest in exchange traded funds ("ETFs"). ETFs, such as SPDRs, iShares and various country index funds, are funds whose shares are traded on a national exchange or the National Association of Securities Dealers' Automated Quotation System ("NASDAQ"). ETFs may be based on underlying equity or fixed income securities. SPDRs, for example, seek to provide investment results that generally correspond to the performance of the component common stocks of the S&P 500. ETFs do not sell individual shares directly to investors and only issue their shares in large blocks known as "creation units." The investor purchasing a creation unit then sells the individual shares on a secondary market. Therefore, the liquidity of ETFs depends on the adequacy of the secondary market. There can be no assurance that an ETF's investment objective will be achieved. ETFs based on an index may not replicate and maintain exactly the composition and relative weightings of securities in the index. ETFs are subject to the risks of investing in the underlying securities. The fund, as a holder of the securities of the ETF, will bear its pro rata portion of the ETF's expenses, including advisory fees. These expenses are in addition to the direct expenses of the fund's own operations. Many ETFs have received exemptive orders issued by the Securities and Exchange Commission that would permit the fund
to invest in those ETFs beyond the limitations applicable to other investment companies, subject to certain terms and conditions.
Real Estate Investment Trusts ("REITs")
REITs are companies that invest primarily in income producing real estate or real estate-related loans or interests. REITs are generally classified as equity REITs, mortgage REITs or a combination of equity and mortgage REITs. Equity REITs invest the majority of their assets directly in real property and derive income primarily from the collection of rents. Equity REITs can also realize capital gains by selling properties that have appreciated in value. Mortgage REITs invest the majority of their assets in real estate mortgages and derive income from the collection of interest payments. REITs are not taxed on income distributed to shareholders provided they comply with the applicable requirements of the Internal Revenue Code of 1986, as amended (the "Code"). The fund will indirectly bear its proportionate share of any management and other expenses paid by REITs in which it invests in addition to the expenses paid by the fund. Debt securities issued by REITs are, for the most part, general and unsecured obligations and are subject to risks associated with REITs.
Investing in REITs involves certain unique risks in addition to those risks associated with investing in the real estate industry in general. An equity REIT may be affected by changes in the value of the underlying properties owned by the REIT. A mortgage REIT may be affected by changes in interest rates and the ability of the issuers of its portfolio mortgages to repay their obligations. REITs are dependent upon the skills of their managers and are not diversified. REITs are generally dependent upon maintaining cash flows to repay borrowings and to make distributions to shareholders and are subject to the risk of default by lessees or borrowers. REITs whose underlying assets are concentrated in properties used by a particular industry, such as health care, are also subject to risks associated with such industry.
REITs (especially mortgage REITs) are also subject to interest rate risks. When interest rates decline, the value of a REIT's investment in fixed rate obligations can be expected to rise. Conversely, when interest rates rise, the value of a REIT's investment in fixed rate obligations can be expected to decline. If the REIT invests in adjustable rate mortgage loans the interest rates on which are reset periodically, yields on a REIT's investments in such loans will gradually align themselves to reflect changes in market interest rates. This causes the value of such investments to fluctuate less dramatically in response to interest rate fluctuations than would investments in fixed rate obligations.
REITs may have limited financial resources, may trade less frequently and in a limited volume and may be subject to more abrupt or erratic price movements than larger company securities. Historically REITs have been more volatile in price than the larger capitalization stocks included in Standard & Poor's 500 Stock Index (the "S&P 500").
Derivative Instruments
Options on Securities and Securities Indices
For hedging purposes or to seek to increase total return, the fund may purchase put and call options on any security in which it may invest or options on any securities index based on securities in which it may invest. The fund may also be able to enter into closing sale transactions in order to realize gains or minimize losses on options it has purchased.
Writing Call and Put Options on Securities. A call option written by the fund obligates the fund to sell specified securities to the holder of the option at a specified price if the option is exercised at any time before the expiration date. All call options written by the fund are covered, which means that the fund will own the securities subject to the options as long as the options are outstanding, or the fund will use the other methods described below. The fund's purpose in writing covered call options is to realize greater income than would be realized on portfolio securities transactions alone. However, the fund may forgo the opportunity to profit from an increase in the market price of the underlying security.
A put option written by the fund would obligate the fund to purchase specified securities from the option holder at a specified price if the option is exercised at any time before the expiration date. All put options written by the fund would be covered, which means that the fund would have segregated assets with a value at least equal to the exercise price of the put option. The purpose of writing such options is to generate additional income for the fund. However, in return for the option premium, the fund accepts the risk that it may be required to purchase the underlying security at a price in excess of its market value at the time of purchase.
Call and put options written by the fund will also be considered to be covered to the extent that the fund's liabilities under such options are wholly or partially offset by its rights under call and put options purchased by the fund. In addition, a written call option or put may be covered by entering into an offsetting forward contract and/or by purchasing an offsetting option or any other option which, by virtue of its exercise price or otherwise, reduces the fund's net exposure on its written option position.
Writing Call and Put Options on Securities Indices. The fund may also write
(sell) covered call and put options on any securities index composed of
securities in which it may invest. Options on securities indices are similar to
options on securities, except that the exercise of securities index options
requires cash payments and does not involve the actual purchase or sale of
securities. In addition, securities index options are designed to reflect price
fluctuations in a group of securities or segments of the securities market
rather than price fluctuations in a single security.
The fund may cover call options on a securities index by owning securities whose price changes are expected to be similar to those of the underlying index, or by having an absolute and immediate right to acquire such securities without additional cash consideration (or for additional consideration if cash in such amount is segregated) upon conversion or exchange of other securities in its portfolio. The fund may cover call and put options on a securities index by segregating assets with a value equal to the exercise price.
Index options are subject to the timing risk inherent in writing index options. When an index option is exercised, the amount of cash that the holder is entitled to receive is determined by the difference between the exercise price and the closing index level on the date when the option is exercised. If a fund has purchased an index option and exercises it before the closing index value for that day is available, it runs the risk that the level of the underlying index may subsequently change. If such a change causes the exercised option to fall "out-of-the-money", the fund will be required to pay cash in an amount of the difference between the closing index value and the exercise price of the option.
Purchasing Call and Put Options. The fund would normally purchase call options in anticipation of an increase in the market value of securities of the type in which it may invest.
The purchase of a call option would entitle the fund, in return for the premium paid, to purchase specified securities at a specified price during the option period. The fund would ordinarily realize a gain if, during the option period, the value of such securities exceeded the sum of the exercise price, the premium paid and transaction costs; otherwise the fund would realize either no gain or a loss on the purchase of the call option.
The fund would normally purchase put options in anticipation of a decline in the market value of securities in its portfolio ("protective puts") or in securities in which it may invest. The purchase of a put option would entitle the fund, in exchange for the premium paid, to sell specified securities at a specified price during the option period. The purchase of protective puts is designed to offset or hedge against a decline in the market value of the fund's securities. Put options may also be purchased by the fund for the purpose of affirmatively benefiting from a decline in the price of securities which it does not own. The fund would ordinarily realize a gain if, during the option period, the value of the underlying securities decreased below the exercise price sufficiently to more than cover the premium and transaction costs; otherwise the fund would realize either no gain or a loss on the purchase of the put option. Gains and losses on the purchase of protective put options would tend to be offset by countervailing changes in the value of the underlying portfolio securities.
The fund may terminate its obligations under an exchange-traded call or put option by purchasing an option identical to the one it has written. Obligations under over-the-counter options may be terminated only by entering into an offsetting transaction with the counterparty to such option. Such purchases are referred to as "closing purchase transactions."
Risks of Trading Options. There is no assurance that a liquid secondary market on an options exchange will exist for any particular exchange-traded option, or at any particular time. If the fund is unable to effect a closing purchase transaction with respect to covered options it has written, the fund will not be able to sell the underlying securities or dispose of its segregated assets until the options expire or are exercised. Similarly, if the fund is unable to effect a closing sale transaction with respect to options it has purchased, it will have to exercise the options in order to realize any profit and will incur transaction costs upon the purchase or sale of underlying securities.
Reasons for the absence of a liquid secondary market on an exchange include the
following: (i) there may be insufficient trading interest in certain options;
(ii) restrictions may be imposed by an exchange on opening or closing
transactions or both; (iii) trading halts, suspensions or other restrictions may
be imposed with respect to particular classes or series of options; (iv) unusual
or unforeseen circumstances may interrupt normal operations on an exchange; (v)
the facilities of an exchange or the Options Clearing Corporation (the "OCC")
may not at all times be adequate to handle current trading volume; or (vi) one
or more exchanges could, for economic or other reasons, decide or be compelled
at some future date to discontinue the trading of options (or a particular class
or series of options), in which event the secondary market on that exchange (or
in that class or series of options) would cease to exist, although it is
expected that outstanding options on that exchange, if any, that had been issued
by the OCC as a result of trades on that exchange would continue to be
exercisable in accordance with their terms.
The fund may purchase and sell both options that are traded on U.S. and non-U.S. exchanges and options traded over-the-counter with broker-dealers who make markets in these options. The ability to terminate over-the-counter options is more limited than with exchange-traded options and may involve the risk that broker-dealers participating in such transactions will not fulfill their obligations. Until such time as the staff of the SEC changes its position, the fund will treat
purchased over-the-counter options and all assets used to cover written over-the-counter options as illiquid securities, except that with respect to options written with primary dealers in U.S. government securities pursuant to an agreement requiring a closing purchase transaction at a formula price, the amount of illiquid securities may be calculated with reference to the formula.
Transactions by the fund in options on securities and indices will be subject to limitations established by each of the exchanges, boards of trade or other trading facilities governing the maximum number of options in each class which may be written or purchased by a single investor or group of investors acting in concert. Thus, the number of options which the fund may write or purchase may be affected by options written or purchased by other investment advisory clients of Pioneer or the subadviser. An exchange, board of trade or other trading facility may order the liquidations of positions found to be in excess of these limits, and it may impose certain other sanctions.
The writing and purchase of options is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. The successful use of protective puts for hedging purposes depends in part on the ability of Pioneer or the subadviser to predict future price fluctuations and the degree of correlation between the options and securities markets.
The hours of trading for options may not conform to the hours during which the underlying securities are traded. To the extent that the options markets close before the markets for the underlying securities, significant price movements can take place in the underlying markets that cannot be reflected in the options markets.
In addition to the risks of imperfect correlation between the fund's portfolio and the index underlying the option, the purchase of securities index options involves the risk that the premium and transaction costs paid by the fund in purchasing an option will be lost. This could occur as a result of unanticipated movements in the price of the securities comprising the securities index on which the option is based.
Futures Contracts and Options on Futures Contracts
To hedge against changes in securities prices or currency exchange rates or to seek to increase total return, the fund may purchase and sell various kinds of futures contracts, and purchase and write (sell) call and put options on any of such futures contracts. The fund may also enter into closing purchase and sale transactions with respect to any of such contracts and options. The futures contracts may be based on various securities (such as U.S. government securities), securities indices, foreign currencies and other financial instruments and indices. The fund will engage in futures and related options transactions for bona fide hedging and non-hedging purposes as described below. All futures contracts entered into by the fund are traded on U.S. exchanges or boards of trade that are licensed and regulated by the Commodity Futures Trading Commission (the "CFTC") or on non-U.S. exchanges.
Futures Contracts. A futures contract may generally be described as an agreement between two parties to buy and sell particular financial instruments for an agreed price during a designated month (or to deliver the final cash settlement price, in the case of a contract relating to an index or otherwise not calling for physical delivery at the end of trading in the contract).
When interest rates are rising or securities prices are falling, the fund can seek to offset a decline in the value of its current portfolio securities through the sale of futures contracts. When interest
rates are falling or securities prices are rising, the fund, through the purchase of futures contracts, can attempt to secure better rates or prices than might later be available in the market when it effects anticipated purchases. Similarly, the fund can sell futures contracts on a specified currency to protect against a decline in the value of such currency and a decline in the value of its portfolio securities which are denominated in such currency. The fund can purchase futures contracts on a foreign currency to establish the price in U.S. dollars of a security denominated in such currency that the fund has acquired or expects to acquire.
Positions taken in the futures markets are not normally held to maturity but are instead liquidated through offsetting transactions which may result in a profit or a loss. While futures contracts on securities or currency will usually be liquidated in this manner, the fund may instead make, or take, delivery of the underlying securities or currency whenever it appears economically advantageous to do so. A clearing corporation associated with the exchange on which futures on securities or currency are traded guarantees that, if still open, the sale or purchase will be performed on the settlement date.
Hedging Strategies. Hedging, by use of futures contracts, seeks to establish with more certainty the effective price, rate of return and currency exchange rate on portfolio securities and securities that the fund owns or proposes to acquire. The fund may, for example, take a "short" position in the futures market by selling futures contracts in order to hedge against an anticipated rise in interest rates or a decline in market prices or foreign currency rates that would adversely affect the value of the fund's portfolio securities. Such futures contracts may include contracts for the future delivery of securities held by the fund or securities with characteristics similar to those of the fund's portfolio securities. Similarly, the fund may sell futures contracts in a foreign currency in which its portfolio securities are denominated or in one currency to hedge against fluctuations in the value of securities denominated in a different currency if there is an established historical pattern of correlation between the two currencies. If, in the opinion of Pioneer or the subadviser, there is a sufficient degree of correlation between price trends for the fund's portfolio securities and futures contracts based on other financial instruments, securities indices or other indices, the fund may also enter into such futures contracts as part of its hedging strategies. Although under some circumstances prices of securities in the fund's portfolio may be more or less volatile than prices of such futures contracts, Pioneer or the subadviser will attempt to estimate the extent of this volatility difference based on historical patterns and compensate for any such differential by having the fund enter into a greater or lesser number of futures contracts or by attempting to achieve only a partial hedge against price changes affecting the fund's portfolio securities. When hedging of this character is successful, any depreciation in the value of portfolio securities will be substantially offset by appreciation in the value of the futures position. On the other hand, any unanticipated appreciation in the value of the fund's portfolio securities would be substantially offset by a decline in the value of the futures position.
On other occasions, the fund may take a "long" position by purchasing futures contracts. This may be done, for example, when the fund anticipates the subsequent purchase of particular securities when it has the necessary cash, but expects the prices or currency exchange rates then available in the applicable market to be less favorable than prices or rates that are currently available.
Options on Futures Contracts. The acquisition of put and call options on futures contracts will give the fund the right (but not the obligation) for a specified price to sell or to purchase, respectively, the underlying futures contract at any time during the option period. As the purchaser of an option on a futures contract, the fund obtains the benefit of the futures position if
prices move in a favorable direction but limits its risk of loss in the event of an unfavorable price movement to the loss of the premium and transaction costs.
The writing of a call option on a futures contract generates a premium which may partially offset a decline in the value of the fund's assets. By writing a call option, the fund becomes obligated, in exchange for the premium, to sell a futures contract (if the option is exercised), which may have a value higher than the exercise price. Conversely, the writing of a put option on a futures contract generates a premium which may partially offset an increase in the price of securities that the fund intends to purchase. However, the fund becomes obligated to purchase a futures contract (if the option is exercised) which may have a value lower than the exercise price. Thus, the loss incurred by the fund in writing options on futures is potentially unlimited and may exceed the amount of the premium received. The fund will incur transaction costs in connection with the writing of options on futures.
The holder or writer of an option on a futures contract may terminate its position by selling or purchasing an offsetting option on the same series. There is no guarantee that such closing transactions can be effected. The fund's ability to establish and close out positions on such options will be subject to the development and maintenance of a liquid market.
Other Considerations Regarding Futures Contracts. The fund will engage in transactions in futures contracts and related options only to the extent such transactions are consistent with the requirements of the Internal Revenue Code of 1986, as amended (the "Code"), for maintaining its qualification as a regulated investment company for U.S. federal income tax purposes.
Futures contracts and related options involve brokerage costs, require margin deposits and, in the case of contracts and options obligating the fund to purchase securities or currencies, require the fund to segregate assets to cover such contracts and options.
While transactions in futures contracts and options on futures may reduce certain risks, such transactions themselves entail certain other risks. Thus, while the fund may benefit from the use of futures and options on futures, unanticipated changes in interest rates, securities prices or currency exchange rates may result in a poorer overall performance for the fund than if it had not entered into any futures contracts or options transactions. In the event of an imperfect correlation between a futures position and a portfolio position which is intended to be protected, the desired protection may not be obtained and the fund may be exposed to risk of loss. It is not possible to hedge fully or perfectly against the effect of currency fluctuations on the value of non-U.S. securities because currency movements impact the value of different securities in differing degrees.
If the fund were unable to liquidate a futures contract or an option on a futures position due to the absence of a liquid secondary market, the imposition of price limits or otherwise, it could incur substantial losses. The fund would continue to be subject to market risk with respect to the position. In addition, except in the case of purchased options, the fund would continue to be required to make daily variation margin payments and might be required to maintain the position being hedged by the future or option or to maintain cash or securities in a segregated account.
Equity Swaps, Caps, Floors and Collars
The fund may enter into equity swaps, caps, floors and collars to hedge assets or liabilities or to seek to increase total return. Equity swaps involve the exchange by a fund with another party of their respective commitments to make or receive payments based on notional equity securities.
The purchase of an equity cap entitles the purchaser, to the extent that the market value of a specified equity security or benchmark exceeds a predetermined level, to receive payments of a contractually-based amount from the party selling the cap. The purchase of an equity floor entitles the purchaser, to the extent that the market value of a specified equity security or benchmark falls below a predetermined level, to receive payments of a contractually-based amount from the party selling the floor. A collar is a combination of a cap and a floor that preserves a certain return within a predetermined range of values. Investments in swaps, caps, floors and collars are highly specialized activities which involve investment techniques and risks different from those associated with ordinary portfolio transactions. Investments in equity swaps, caps, floors and collars may be considered speculative because they involve significant risk of loss. If Pioneer or the subadviser is incorrect in its forecast of market values, these investments could negatively impact the fund's performance. These investments also are subject to default risk of the counterparty and may be less liquid than other portfolio securities. Moreover, investments in swaps, caps, floors and collars may involve greater transaction costs than investments in other equity securities.
Financial Futures and Options Transactions. The Commodity Futures Trading Commission ("CFTC") does not limit futures transactions and options thereon by registered investment companies, provided that the registered investment company claims an exclusion from regulation as a commodity pool operator. The fund has claimed an exclusion from the definition of the term "commodity pool operator" under the Commodity Exchange Act and therefore is not subject to registration or regulation under the Commodity Exchange Act. As a result, the fund is not restricted in its ability to enter into futures transactions and options thereon under CFTC regulations. The fund, however, has policies with respect to futures and options thereon as set forth herein.
Debt Securities and Related Investments
Debt Securities Selection
In selecting debt securities for the fund, Pioneer or the subadviser gives primary consideration to the fund's investment objectives, the attractiveness of the market for debt securities given the outlook of Pioneer or the subadviser for the equity markets and the fund's liquidity requirements. Once Pioneer or the subadviser determines to allocate a portion of the fund's assets to debt securities, Pioneer or the subadviser generally focuses on short-term instruments to provide liquidity and may invest in a range of fixed income securities if the fund is investing in such instruments for income or capital gains. Pioneer or the subadviser selects individual securities based on broad economic factors and issuer-specific factors including the terms of the securities (such as yields compared to U.S. Treasuries or comparable issues), liquidity and rating, sector and issuer diversification.
Debt Securities Rating Information
Investment grade debt securities are those rated "BBB" or higher by Standard & Poor's Ratings Group ("Standard & Poor's") or the equivalent rating of other nationally recognized statistical rating organizations. Debt securities rated BBB are considered medium grade obligations with speculative characteristics, and adverse economic conditions or changing circumstances may weaken the issuer's ability to pay interest and repay principal.
Below investment grade debt securities are those rated "BB" and below by Standard & Poor's or the equivalent rating of other nationally recognized statistical rating organizations. See "Appendix A" for a description of rating categories. The fund may invest in debt securities rated "C" or better, or comparable unrated securities as determined by Pioneer or the subadviser.
Below investment grade debt securities or comparable unrated securities are commonly referred to as "junk bonds" and are considered predominantly speculative and may be questionable as to principal and interest payments. Changes in economic conditions are more likely to lead to a weakened capacity to make principal payments and interest payments. The amount of high yield securities outstanding has proliferated as an increasing number of issuers have used high yield securities for corporate financing. The current economic downturn is severely affecting the ability of many highly leveraged issuers to service their debt obligations or to repay their obligations upon maturity. Factors having an adverse impact on the market value of lower quality securities will have an adverse effect on the fund's net asset value to the extent that it invests in such securities. In addition, the fund may incur additional expenses to the extent it is required to seek recovery upon a default in payment of principal or interest on its portfolio holdings or to take other steps to protect its investment in an issuer.
The secondary market for high yield securities is not usually as liquid as the secondary market for more highly rated securities, a factor which may have an adverse effect on the fund's ability to dispose of a particular security when necessary to meet its liquidity needs. Under adverse market or economic conditions, such as those currently prevailing, the secondary market for high yield securities could contract further, independent of any specific adverse changes in the condition of a particular issuer. As a result, the fund could find it more difficult to sell these securities or may be able to sell the securities only at prices lower than if such securities were widely traded. Prices realized upon the sale of such lower rated or unrated securities, under these and other circumstances, may be less than the prices used in calculating the fund's net asset value.
Since investors generally perceive that there are greater risks associated with lower quality debt securities of the type in which the fund may invest, the yields and prices of such securities may tend to fluctuate more than those for higher rated securities. In the lower quality segments of the debt securities market, changes in perceptions of issuers' creditworthiness tend to occur more frequently and in a more pronounced manner than do changes in higher quality segments of the debt securities market, resulting in greater yield and price volatility.
Lower rated and comparable unrated debt securities tend to offer higher yields than higher rated securities with the same maturities because the historical financial condition of the issuers of such securities may not have been as strong as that of other issuers. However, lower rated securities generally involve greater risks of loss of income and principal than higher rated securities. Pioneer or the subadviser will attempt to reduce these risks through portfolio diversification and by analysis of each issuer and its ability to make timely payments of income and principal, as well as broad economic trends and corporate developments. There can be no assurances that these attempts will be successful.
For purposes of the fund's credit quality policies, if a security receives different ratings from nationally recognized statistical rating organizations, the fund will use the rating chosen by the portfolio manager as most representative of the security's credit quality. The ratings of nationally recognized statistical rating organizations represent their opinions as to the quality of the securities that they undertake to rate and may not accurately describe the risk of the security. If a rating organization downgrades the quality rating assigned to one or more of the fund's portfolio securities, Pioneer or the subadviser will consider what actions, if any, are appropriate in light of
the fund's investment objectives and policies including selling the downgraded security or purchasing additional investment grade securities of the appropriate credit quality as soon as it is prudent to do so.
U.S. Government Securities
U.S. government securities in which the fund invests include debt obligations of
varying maturities issued by the U.S. Treasury or issued or guaranteed by an
agency, authority or instrumentality of the U.S. government, including the
Federal Housing Administration, Federal Financing Bank, Farmers Home
Administration, Export-Import Bank of the U.S., Small Business Administration,
Government National Mortgage Association ("GNMA"), General Services
Administration, Central Bank for Cooperatives, Federal Farm Credit Banks,
Federal Home Loan Banks ("FHLBs"), Federal Home Loan Mortgage Corporation
("FHLMC"), Federal National Mortgage Association ("FNMA"), Maritime
Administration, Tennessee Valley Authority, District of Columbia Armory Board,
Resolution Trust Corporation and various institutions that previously were or
currently are part of the Farm Credit System (which has been undergoing
reorganization since 1987). Some U.S. government securities, such as U.S.
Treasury bills, Treasury notes and Treasury bonds, which differ only in their
interest rates, maturities and times of issuance, are supported by the full
faith and credit of the United States. Others are supported by: (i) the right of
the issuer to borrow from the U.S. Treasury, such as securities of the FHLBs;
(ii) the discretionary authority of the U.S. government to purchase the agency's
obligations, such as securities of FNMA; or (iii) only the credit of the issuer.
Although the U.S. government has recently provided financial support to FNMA and
FHLMC, no assurance can be given that the U.S. government will provide financial
support in the future to these or other U.S. government agencies, authorities or
instrumentalities that are not supported by the full faith and credit of the
United States. Securities guaranteed as to principal and interest by the U.S.
government, its agencies, authorities or instrumentalities include: (i)
securities for which the payment of principal and interest is backed by an
irrevocable letter of credit issued by the U.S. government or any of its
agencies, authorities or instrumentalities; (ii) participations in loans made to
non-U.S. governments or other entities that are so guaranteed; and (iii) as a
result of initiatives introduced in response to the ongoing financial market
difficulties, securities of commercial issuers or financial institutions that
qualify for guarantees by U.S. government agencies like the Federal Deposit
Insurance Corporation. The secondary market for certain loan participations
described above is limited and, therefore, the participations may be regarded as
illiquid.
U.S. government securities may include zero coupon securities that may be purchased when yields are attractive and/or to enhance portfolio liquidity. Zero coupon U.S. government securities are debt obligations that are issued or purchased at a significant discount from face value. The discount approximates the total amount of interest the security will accrue and compound over the period until maturity or the particular interest payment date at a rate of interest reflecting the market rate of the security at the time of issuance. Zero coupon U.S. government securities do not require the periodic payment of interest. These investments may experience greater volatility in market value than U.S. government securities that make regular payments of interest. The fund accrues income on these investments for tax and accounting purposes, which is distributable to shareholders and which, because no cash is received at the time of accrual, may require the liquidation of other portfolio securities to satisfy the fund's distribution obligations, in which case the fund will forgo the purchase of additional income producing assets with these funds. Zero coupon U.S. government securities include STRIPS and CUBES, which are issued by the U.S. Treasury as component parts of U.S. Treasury bonds and represent scheduled interest and principal payments on the bonds.
Convertible Debt Securities
The fund may invest in convertible debt securities which are debt obligations convertible at a stated exchange rate or formula into common stock or other equity securities. Convertible securities rank senior to common stocks in an issuer's capital structure and consequently may be of higher quality and entail less risk than the issuer's common stock. As with all debt securities, the market values of convertible securities tend to increase when interest rates decline and, conversely, tend to decline when interest rates increase.
Mortgage-Backed Securities
The fund may invest in mortgage pass-through certificates and multiple-class pass-through securities, such as real estate mortgage investment conduits ("REMIC") pass-through certificates, collateralized mortgage obligations ("CMOs") and stripped mortgage-backed securities ("SMBS"), and other types of mortgage-backed securities that may be available in the future. A mortgage-backed security is an obligation of the issuer backed by a mortgage or pool of mortgages or a direct interest in an underlying pool of mortgages. Some mortgage-backed securities, such as CMOs, make payments of both principal and interest at a variety of intervals; others make semiannual interest payments at a predetermined rate and repay principal at maturity (like a typical bond). Mortgage-backed securities are based on different types of mortgages including those on commercial real estate or residential properties. Mortgage-backed securities often have stated maturities of up to thirty years when they are issued, depending upon the length of the mortgages underlying the securities. In practice, however, unscheduled or early payments of principal and interest on the underlying mortgages may make the securities' effective maturity shorter than this, and the prevailing interest rates may be higher or lower than the current yield of the fund's portfolio at the time the fund receives the payments for reinvestment. Mortgage-backed securities may have less potential for capital appreciation than comparable fixed income securities, due to the likelihood of increased prepayments of mortgages as interest rates decline. If the fund buys mortgage-backed securities at a premium, mortgage foreclosures and prepayments of principal by mortgagors (which may be made at any time without penalty) may result in some loss of the fund's principal investment to the extent of the premium paid.
The value of mortgage-backed securities may also change due to shifts in the market's perception of issuers. In addition, regulatory or tax changes may adversely affect the mortgage securities markets as a whole. Non-governmental mortgage-backed securities may offer higher yields than those issued by government entities, but also may be subject to greater price changes than governmental issues.
Through its investments in mortgage-backed securities, including those that are issued by private issuers, the fund may have exposure to subprime loans as well as to the mortgage and credit markets generally. Private issuers include commercial banks, savings associations, mortgage companies, investment banking firms, finance companies and special purpose finance entities (called special purpose vehicles or "SPVs") and other entities that acquire and package mortgage loans for resale as MBS.
Unlike mortgage-backed securities issued or guaranteed by the U. S. government or one of its sponsored entities, mortgage-backed securities issued by private issuers do not have a government or government-sponsored entity guarantee, but may have credit enhancement provided by external entities such as banks or financial institutions or achieved through the structuring of the transaction itself. Examples of such credit support arising out of the structure of
the transaction include the issue of senior and subordinated securities (e.g., the issuance of securities by an SPV in multiple classes or "tranches", with one or more classes being senior to other subordinated classes as to the payment of principal and interest, with the result that defaults on the underlying mortgage loans are borne first by the holders of the subordinated class); creation of "reserve funds" (in which case cash or investments, sometimes funded from a portion of the payments on the underlying mortgage loans, are held in reserve against future losses); and "overcollateralization" (in which case the scheduled payments on, or the principal amount of, the underlying mortgage loans exceeds that required to make payment of the securities and pay any servicing or other fees). However, there can be no guarantee that credit enhancements, if any, will be sufficient to prevent losses in the event of defaults on the underlying mortgage loans.
In addition, mortgage-backed securities that are issued by private issuers are not subject to the underwriting requirements for the underlying mortgages that are applicable to those mortgage-backed securities that have a government or government-sponsored entity guarantee. As a result, the mortgage loans underlying private mortgage-backed securities may, and frequently do, have less favorable collateral, credit risk or other underwriting characteristics than government or government-sponsored mortgage-backed securities and have wider variances in a number of terms including interest rate, term, size, purpose and borrower characteristics. Privately issued pools more frequently include second mortgages, high loan-to-value mortgages and manufactured housing loans. The coupon rates and maturities of the underlying mortgage loans in a private mortgage-backed securities pool may vary to a greater extent than those included in a government guaranteed pool, and the pool may include subprime mortgage loans. Subprime loans refer to loans made to borrowers with weakened credit histories or with a lower capacity to make timely payments on their loans. For these reasons, the loans underlying these securities have had in many cases higher default rates than those loans that meet government underwriting requirements.
The risk of non-payment is greater for mortgage-backed securities that are backed by mortgage pools that contain subprime loans, but a level of risk exists for all loans. Market factors adversely affecting mortgage loan repayments may include a general economic turndown, high unemployment, a general slowdown in the real estate market, a drop in the market prices of real estate, or an increase in interest rates resulting in higher mortgage payments by holders of adjustable rate mortgages.
If the fund purchases subordinated mortgage-backed securities, the subordinated mortgage-backed securities may serve as a credit support for the senior securities purchased by other investors. In addition, the payments of principal and interest on these subordinated securities generally will be made only after payments are made to the holders of securities senior to the fund's securities. Therefore, if there are defaults on the underlying mortgage loans, the fund will be less likely to receive payments of principal and interest, and will be more likely to suffer a loss.
Privately issued mortgage-backed securities are not traded on an exchange and there may be a limited market for the securities, especially when there is a perceived weakness in the mortgage and real estate market sectors. Without an active trading market, mortgage-backed securities held in the fund's portfolio may be particularly difficult to value because of the complexities involved in assessing the value of the underlying mortgage loans.
Guaranteed Mortgage Pass-Through Securities. Guaranteed mortgage pass-through securities represent participation interests in pools of residential mortgage loans and are issued by U.S. governmental or private lenders and guaranteed by the U.S. government or one of its agencies or
instrumentalities, including but not limited to GNMA, FNMA and FHLMC. GNMA certificates are guaranteed by the full faith and credit of the U.S. government for timely payment of principal and interest on the certificates. FNMA certificates are guaranteed by FNMA, a federally chartered and privately owned corporation, for full and timely payment of principal and interest on the certificates. FHLMC certificates are guaranteed by FHLMC, a corporate instrumentality of the U.S. government, for timely payment of interest and the ultimate collection of all principal of the related mortgage loans.
Commercial banks, savings and loan institutions, private mortgage insurance companies, mortgage bankers and other secondary market issuers also create pass-through pools of conventional residential mortgage loans. Such issuers may, in addition, be the originators and/or servicers of the underlying mortgage loans as well as the guarantors of the mortgage-related securities. Because there are no direct or indirect government or agency guarantees of payments in pools created by such non-governmental issuers, they generally offer a higher rate of interest than government and government-related pools. Timely payment of interest and principal of these pools may be supported by insurance or guarantees, including individual loan, title, pool and hazard insurance and letters of credit. The insurance and guarantees are issued by governmental entities, private insurers and the mortgage poolers. There can be no assurance that the private insurers or guarantors can meet their obligations under the insurance policies or guarantee arrangements.
Mortgage-related securities without insurance or guarantees may be purchased if Pioneer determines that the securities meet the fund's quality standards. Mortgage-related securities issued by certain private organizations may not be readily marketable.
Multiple-Class Pass-Through Securities and Collateralized Mortgage Obligations ("CMOs"). CMOs and REMIC pass-through or participation certificates may be issued by, among others, U.S. government agencies and instrumentalities as well as private issuers. REMICs are CMO vehicles that qualify for special tax treatment under the Internal Revenue Code of 1986, as amended (the "Code") and invest in mortgages principally secured by interests in real property and other investments permitted by the Code. CMOs and REMIC certificates are issued in multiple classes and the principal of and interest on the mortgage assets may be allocated among the several classes of CMOs or REMIC certificates in various ways. Each class of CMO or REMIC certificate, often referred to as a "tranche," is issued at a specific adjustable or fixed interest rate and must be fully retired no later than its final distribution date. Generally, interest is paid or accrues on all classes of CMOs or REMIC certificates on a monthly basis.
Typically, CMOs are collateralized by GNMA, FNMA or FHLMC certificates but also may be collateralized by other mortgage assets such as whole loans or private mortgage pass-through securities. Debt service on CMOs is provided from payments of principal and interest on collateral of mortgaged assets and any reinvestment income thereon.
Stripped Mortgage-Backed Securities ("SMBS"). SMBS are multiple-class mortgage-backed securities that are created when a U.S. government agency or a financial institution separates the interest and principal components of a mortgage-backed security and sells them as individual securities. The fund may invest in SMBS that are usually structured with two classes that receive different proportions of interest and principal distributions on a pool of mortgage assets. A typical SMBS will have one class receiving some of the interest and most of the principal, while the other class will receive most of the interest and the remaining principal. The holder of the "principal-only" security ("PO") receives the principal payments made by the underlying mortgage-backed security, while the holder of the "interest-only" security ("IO") receives interest
payments from the same underlying security. The prices of stripped mortgage-backed securities may be particularly affected by changes in interest rates. As interest rates fall, prepayment rates tend to increase, which tends to reduce prices of IOs and increase prices of POs. Rising interest rates can have the opposite effect. Pioneer may determine that certain stripped mortgage-backed securities issued by the U.S. government, its agencies or instrumentalities are not readily marketable. If so, these securities, together with privately-issued stripped mortgage-backed securities, will be considered illiquid for purposes of the fund's limitation on investments in illiquid securities. The yields and market risk of interest-only and principal-only SMBS, respectively, may be more volatile than those of other fixed income securities.
The fund also may invest in planned amortization class ("PAC") and target amortization class ("TAC") CMO bonds which involve less exposure to prepayment, extension and interest rate risks than other mortgage-backed securities, provided that prepayment rates remain within expected prepayment ranges or "collars." To the extent that the prepayment rates remain within these prepayment ranges, the residual or support tranches of PAC and TAC CMOs assume the extra prepayment, extension and interest rate risks associated with the underlying mortgage assets.
Risk Factors Associated with Mortgage-Backed Securities. Investing in mortgage-backed securities involves certain risks, including the failure of a counterparty to meet its commitments, adverse interest rate changes and the effects of prepayments on mortgage cash flows. In addition, investing in the lowest tranche of CMOs and REMIC certificates involves risks similar to those associated with investing in equity securities. However, due to adverse tax consequences under current tax laws, the fund does not intend to acquire "residual" interests in REMICs. Further, the yield characteristics of mortgage-backed securities differ from those of traditional fixed income securities. The major differences typically include more frequent interest and principal payments (usually monthly), the adjustability of interest rates of the underlying instrument, and the possibility that prepayments of principal may be made substantially earlier than their final distribution dates.
Prepayment rates are influenced by changes in current interest rates and a variety of economic, geographic, social and other factors and cannot be predicted with certainty. Both adjustable rate mortgage loans and fixed rate mortgage loans may be subject to a greater rate of principal prepayments in a declining interest rate environment and to a lesser rate of principal prepayments in an increasing interest rate environment. Under certain interest rate and prepayment rate scenarios, the fund may fail to recoup fully its investment in mortgage-backed securities notwithstanding any direct or indirect governmental, agency or other guarantee. When the fund reinvests amounts representing payments and unscheduled prepayments of principal, it may obtain a rate of interest that is lower than the rate on existing adjustable rate mortgage pass-through securities. Thus, mortgage-backed securities, and adjustable rate mortgage pass-through securities in particular, may be less effective than other types of U.S. government securities as a means of "locking in" interest rates.
Asset-Backed Securities
The fund may invest in asset-backed securities, which are securities that represent a participation in, or are secured by and payable from, a stream of payments generated by particular assets, most often a pool or pools of similar assets (e.g., trade receivables). The credit quality of these securities depends primarily upon the quality of the underlying assets and the level of credit support and/or enhancement provided.
The underlying assets (e.g., loans) are subject to prepayments which shorten the securities' weighted average maturity and may lower their return. If the credit support or enhancement is exhausted, losses or delays in payment may result if the required payments of principal and interest are not made. The value of these securities also may change because of changes in the market's perception of the creditworthiness of the servicing agent for the pool, the originator of the pool, or the financial institution or trust providing the credit support or enhancement. There may be no perfected security interest in the collateral that relates to the financial assets that support asset-backed securities. Asset backed securities have many of the same characteristics and risks as the mortgage-backed securities described above.
The fund may purchase commercial paper, including asset-backed commercial paper ("ABCP") that is issued by structured investment vehicles or other conduits. These conduits may be sponsored by mortgage companies, investment banking firms, finance companies, hedge funds, private equity firms and special purpose finance entities. ABCP typically refers to a debt security with an original term to maturity of up to 270 days, the payment of which is supported by cash flows from underlying assets, or one or more liquidity or credit support providers, or both. Assets backing ABCP include credit card, car loan and other consumer receivables and home or commercial mortgages, including subprime mortgages. The repayment of ABCP issued by a conduit depends primarily on the cash collections received from the conduit's underlying asset portfolio and the conduit's ability to issue new ABCP. Therefore, there could be losses to a fund investing in ABCP in the event of credit or market value deterioration in the conduit's underlying portfolio, mismatches in the timing of the cash flows of the underlying asset interests and the repayment obligations of maturing ABCP, or the conduit's inability to issue new ABCP. To protect investors from these risks, ABCP programs may be structured with various protections, such as credit enhancement, liquidity support, and commercial paper stop-issuance and wind-down triggers. However there can be no guarantee that these protections will be sufficient to prevent losses to investors in ABCP.
Some ABCP programs provide for an extension of the maturity date of the ABCP if, on the related maturity date, the conduit is unable to access sufficient liquidity through the issue of additional ABCP. This may delay the sale of the underlying collateral and a fund may incur a loss if the value of the collateral deteriorates during the extension period. Alternatively, if collateral for ABCP deteriorates in value, the collateral may be required to be sold at inopportune times or at prices insufficient to repay the principal and interest on the ABCP. ABCP programs may provide for the issuance of subordinated notes as an additional form of credit enhancement. The subordinated notes are typically of a lower credit quality and have a higher risk of default. A fund purchasing these subordinated notes will therefore have a higher likelihood of loss than investors in the senior notes.
Asset-backed securities include collateralized debt obligations ("CDOs"), such as collateralized bond obligations ("CBOs"), collateralized loan obligations ("CLOs") and other similarly structured securities. A CBO is a trust backed by a pool of fixed income securities. A CLO is a trust typically collateralized by a pool of loans, which may include, among others, domestic and foreign senior secured loans, senior unsecured loans, and subordinate corporate loans, including loans that may be rated below investment grade or equivalent unrated loans. CDOs may charge management fees and administrative expenses.
The trust is typically split into two or more portions, called tranches, varying in credit quality and yield. The riskiest portion is the "equity" tranche which bears the bulk of defaults from the bonds or loans in the trust and helps protect the other, more senior tranches from default. Since it is partially protected from defaults, a senior tranche from a CBO trust or CLO trust typically has
higher ratings and lower yields than their underlying securities, and can be rated investment grade. Despite the protection from the equity tranche, CBO or CLO tranches can experience substantial losses due to actual defaults, increased sensitivity to defaults due to collateral default and the disappearance of protecting tranches, market anticipation of defaults, as well as aversion to CBO or CLO securities as a class.
The risks of an investment in a CDO depend largely on the type of the collateral securities and the class of the CDO in which the fund invests. Normally, CBOs, CLOs and other CDOs are privately offered and sold, and thus are not registered under the securities laws. As a result, investments in CDOs may be characterized by the fund as illiquid securities. However, an active dealer market may exist under some market conditions for some CDOs. In addition to the normal risks associated with fixed income securities (e.g., interest rate risk and default risk), CDOs carry additional risks including, but not limited to: (i) the possibility that distributions from collateral securities will not be adequate to make interest or other payments; (ii) the quality of the collateral may decline in value or default; (iii) the fund may invest in CDOs that are subordinate to other classes; and (iv) the complex structure of the security may not be fully understood at the time of investment and may produce disputes with the issuer or unexpected investment results.
Structured Securities
The fund may invest in structured securities. The value of the principal and/or interest on such securities is determined by reference to changes in the value of specific currencies, interest rates, commodities, indices or other financial indicators (the "Reference") or the relative change in two or more References. The interest rate or the principal amount payable upon maturity or redemption may be increased or decreased depending upon changes in the Reference. The terms of the structured securities may provide in certain circumstances that no principal is due at maturity and therefore may result in a loss of the fund's investment. Changes in the interest rate or principal payable at maturity may be a multiple of the changes in the value of the Reference. Structured securities are a type of derivative instrument and the payment and credit qualities from these securities derive from the assets embedded in the structure from which they are issued. Structured securities may entail a greater degree of risk than other types of fixed income securities.
Other Investments and Investment Techniques
Short-Term Investments
For temporary defensive or cash management purposes, the fund may invest in all types of short-term investments including, but not limited to, (a) commercial paper and other short-term commercial obligations; (b) obligations (including certificates of deposit and bankers' acceptances) of banks; (c) obligations issued or guaranteed by a governmental issuer, including governmental agencies or instrumentalities; (d) fixed income securities of non-governmental issuers; and (e) other cash equivalents or cash. Subject to the fund's restrictions regarding investment in non-U.S. securities, these securities may be denominated in any currency. Although these investments generally are rated investment grade or are determined by Pioneer or the subadviser to be of equivalent credit quality, the fund may also invest in these instruments if they are rated below investment grade in accordance with its investment objective, policies and restrictions.
Illiquid Securities
The fund may invest up to 15% of its net assets in illiquid and other securities that are not readily marketable. If due to subsequent fluctuations in value or any other reasons, the value of the fund's illiquid securities exceeds this percentage limitation, the fund will consider what actions, if any, are necessary to maintain adequate liquidity. Repurchase agreements maturing in more than seven days will be included for purposes of the foregoing limit. Securities subject to restrictions on resale under the Securities Act of 1933, as amended (the "1933 Act"), are considered illiquid unless they are eligible for resale pursuant to Rule 144A or another exemption from the registration requirements of the 1933 Act and are determined to be liquid by Pioneer or the subadviser. Pioneer or the subadviser determines the liquidity of Rule 144A and other restricted securities according to procedures adopted by the Board of Trustees. Under the direction of the Board of Trustees, Pioneer monitors the application of these guidelines and procedures. The inability of the fund to dispose of illiquid investments readily or at reasonable prices could impair the fund's ability to raise cash for redemptions or other purposes. If the fund sold restricted securities other than pursuant to an exception from registration under the 1933 Act such as Rule 144A, it may be deemed to be acting as an underwriter and subject to liability under the 1933 Act.
Repurchase Agreements
The fund may enter into repurchase agreements with broker-dealers, member banks of the Federal Reserve System and other financial institutions. Repurchase agreements are arrangements under which the fund purchases securities and the seller agrees to repurchase the securities within a specific time and at a specific price. The repurchase price is generally higher than the fund's purchase price, with the difference being income to the fund. A repurchase agreement may be considered a loan by the fund collateralized by securities. Under the direction of the Board of Trustees, Pioneer reviews and monitors the creditworthiness of any institution which enters into a repurchase agreement with the fund. The counterparty's obligations under the repurchase agreement are collateralized with U.S. Treasury and/or agency obligations with a market value of not less than 100% of the obligations, valued daily. Collateral is held by the fund's custodian in a segregated, safekeeping account for the benefit of the fund. Repurchase agreements afford the fund an opportunity to earn income on temporarily available cash. In the event of commencement of bankruptcy or insolvency proceedings with respect to the seller of the security before repurchase of the security under a repurchase agreement, the fund may encounter delay and incur costs before being able to sell the security. Such a delay may involve loss of interest or a decline in price of the security. If the court characterizes the transaction as a loan and the fund has not perfected a security interest in the security, the fund may be required to return the security to the seller's estate and be treated as an unsecured creditor of the seller. As an unsecured creditor, the fund would be at risk of losing some or all of the principal and interest involved in the transaction.
Reverse Repurchase Agreements
Reverse repurchase agreements involve the sale of securities to a bank or other institution with an agreement that the fund will buy back the securities at a fixed future date at a fixed price plus an agreed amount of "interest" which may be reflected in the repurchase price. Reverse repurchase agreements involve the risk that the market value of securities purchased by the fund with proceeds of the transaction may decline below the repurchase price of the securities sold by the fund that it is obligated to repurchase. The fund will also continue to be subject to the risk of a decline in the market value of the securities sold under the agreements because it will reacquire those securities upon effecting their repurchase. Reverse repurchase agreements may be considered to be a type of borrowing. The 1940 Act permits a fund to borrow money in amounts of up to one-third of the fund's total assets from banks for any purpose and up to 5% of the fund's total assets from banks and other lenders for temporary purposes. The fund will segregate assets in an amount at least equal to the repurchase price of the securities.
Short Sales Against the Box
The fund may sell securities "short against the box." A short sale involves the fund borrowing securities from a broker and selling the borrowed securities. The fund has an obligation to return securities identical to the borrowed securities to the broker. In a short sale against the box, the fund at all times owns an equal amount of the security sold short or securities convertible into or exchangeable for, with or without payment of additional consideration, an equal amount of the security sold short. The fund intends to use short sales against the box to hedge. For example when the fund believes that the price of a current portfolio security may decline, the fund may use a short sale against the box to lock in a sale price for a security rather than selling the security immediately. In such a case, any future losses in the fund's long position should be offset by a gain in the short position and, conversely, any gain in the long position should be reduced by a loss in the short position.
If the fund effects a short sale against the box at a time when it has an unrealized gain on the security, it may be required to recognize that gain as if it had actually sold the security (a "constructive sale") on the date it effects the short sale. However, such constructive sale treatment may not apply if the fund closes out the short sale with securities other than the appreciated securities held at the time of the short sale provided that certain other conditions are satisfied. Uncertainty regarding the tax consequences of effecting short sales may limit the extent to which the fund may make short sales against the box.
Dollar Rolls
The fund may enter into mortgage "dollar rolls" in which the fund sells securities for delivery in the current month and simultaneously contracts with the same counterparty to repurchase similar (same type, coupon and maturity), but not identical securities on a specified future date. During the roll period, the fund loses the right to receive principal and interest paid on the securities sold. However, the fund would benefit to the extent of any difference between the price received for the securities sold and the lower forward price for the future purchase (often referred to as the "drop") or fee income plus the interest earned on the cash proceeds of the securities sold until the settlement date of the forward purchase. Unless such benefits exceed the income, capital appreciation and gain or loss due to mortgage prepayments that would have been realized on the securities sold as part of the mortgage dollar roll, the use of this technique will diminish the investment performance of the fund compared with what such performance would have been
without the use of mortgage dollar rolls. All cash proceeds will be invested in instruments that are permissible investments for the fund. The fund will hold and maintain in a segregated account until the settlement date cash or liquid securities in an amount equal to its forward purchase price.
For financial reporting and tax purposes, the fund treats mortgage dollar rolls as two separate transactions; one involving the purchase of a security and a separate transaction involving a sale.
Dollar rolls involve certain risks including the following: if the broker-dealer to whom the fund sells the security becomes insolvent, the fund's right to purchase or repurchase the securities subject to the dollar roll may be restricted and the instrument which the fund is required to repurchase may be worth less than an instrument which the fund originally held. Successful use of dollar rolls will depend upon Pioneer's ability to manage its interest rate and prepayment exposure. There is no assurance that dollar rolls can be successfully employed.
Asset Segregation
The 1940 Act requires that the fund segregate assets in connection with certain types of transactions that may have the effect of leveraging the fund's portfolio. If the fund enters into a transaction requiring segregation, such as a forward commitment or a reverse repurchase agreement, the custodian or Pioneer will segregate liquid assets in an amount required to comply with the 1940 Act. Such segregated assets will be valued at market daily. If the aggregate value of such segregated assets declines below the aggregate value required to satisfy the 1940 Act, additional liquid assets will be segregated.
Portfolio Turnover
It is the policy of the fund not to engage in trading for short-term profits although portfolio turnover rate is not considered a limiting factor in the execution of investment decisions for the fund. A high rate of portfolio turnover (100% or more) involves correspondingly greater transaction costs which must be borne by the fund and its shareholders. See "Annual Fee, Expense and Other Information" for the fund's annual portfolio turnover rate.
Lending of Portfolio Securities
The fund may lend portfolio securities to registered broker-dealers or other institutional investors deemed by Pioneer to be of good standing under agreements which require that the loans be secured continuously by collateral in the form of cash, cash equivalents, U.S. Government securities or irrevocable letters of credit issued by banks approved by the fund. The value of the collateral is monitored on a daily basis and the borrower is required to maintain the collateral at an amount at least equal to the market value of the securities loaned. The fund continues to receive the equivalent of the interest or dividends paid by the issuer on the securities loaned and continues to have all of the other risks associated with owning the securities. Where the collateral received is cash, the cash will be invested and the fund will be entitled to a share of the income earned on the investment, but will also be subject to investment risk on the collateral. The fund may pay administrative and custodial fees in connection with loans of securities and, where the collateral received is cash, the fund may pay a portion of the income earned on the investment of
collateral to the borrower, lending agent or other intermediary. If the income earned on the investment of the cash collateral is insufficient to pay these amounts or if the value of the cash collateral declines, the fund may take a loss on the loan. Where the fund receives securities as collateral, the fund will earn no income on the collateral, but will earn a fee from the borrower. The fund may not exercise voting rights on loaned securities, but reserves the right to recall loaned securities so that they may be voted according to the fund's Proxy Voting Policies and Procedures.
The risk in lending portfolio securities, as with other extensions of credit, consists of the possibility of loss to the fund due to (i) the inability of the borrower to return the securities, (ii) a delay in receiving additional collateral to adequately cover any fluctuations in the value of securities on loan, (iii) a delay in recovery of the securities, or (iv) the loss of rights in the collateral should the borrower fail financially. Where the collateral delivered by the borrower is cash, the fund will also have the risk of loss of principal and interest in connection with its investment of collateral. If a borrower defaults, the value of the collateral may decline before the fund can dispose of it. The fund will lend portfolio securities only to firms that have been approved in advance by Pioneer, which will monitor the creditworthiness of any such firms. However, this monitoring may not protect the fund from loss. At no time would the value of the securities loaned exceed 33 1/3% of the value of the fund's total assets.
Interfund Lending
To satisfy redemption requests or to cover unanticipated cash shortfalls, a fund may enter into lending agreements ("Interfund Lending Agreements") under which the fund would lend money and borrow money for temporary purposes directly to and from another Pioneer fund through a credit facility ("Interfund Loan"), subject to meeting the conditions of an SEC exemptive order granted to the funds permitting such interfund lending. All Interfund Loans will consist only of uninvested cash reserves that the fund otherwise would invest in short-term repurchase agreements or other short-term instruments.
If a fund has outstanding borrowings, any Interfund Loans to the fund (a) will be at an interest rate equal to or lower than any outstanding bank loan, (b) will be secured at least on an equal priority basis with at least an equivalent percentage of collateral to loan value as any outstanding bank loan that requires collateral, (c) will have a maturity no longer than any outstanding bank loan (and in any event not over seven days) and (d) will provide that, if an event of default occurs under any agreement evidencing an outstanding bank loan to the fund, the event of default will automatically (without need for action or notice by the lending fund) constitute an immediate event of default under the Interfund Lending Agreement entitling the lending fund to call the Interfund Loan (and exercise all rights with respect to any collateral) and that such call will be made if the lending bank exercises its right to call its loan under its agreement with the borrowing fund.
A fund may make an unsecured borrowing through the credit facility if its outstanding borrowings from all sources immediately after the interfund borrowing total 10% or less of its total assets; provided, that if the fund has a secured loan outstanding from any other lender, including but not limited to another Pioneer fund, the fund's interfund borrowing will be secured on at least an equal priority basis with at least an equivalent percentage of collateral to loan value as any outstanding loan that requires collateral. If a fund's total outstanding borrowings immediately after an interfund borrowing would be greater than 10% of its total assets, the fund may borrow through the credit facility on a secured basis only. A fund may not borrow through
the credit facility nor from any other source if its total outstanding borrowings immediately after the interfund borrowing would be more than 33 1/3% of its total assets.
No fund may lend to another fund through the interfund lending credit facility if the loan would cause its aggregate outstanding loans through the credit facility to exceed 15% of the lending fund's net assets at the time of the loan. A fund's Interfund Loans to any one fund shall not exceed 5% of the lending fund's net assets. The duration of Interfund Loans is limited to the time required to receive payment for securities sold, but in no event more than seven days. Loans effected within seven days of each other will be treated as separate loan transactions for purposes of this condition. Each Interfund Loan may be called on one business day's notice by a lending fund and may be repaid on any day by a borrowing fund.
The limitations detailed above and the other conditions of the SEC exemptive order permitting interfund lending are designed to minimize the risks associated with interfund lending for both the lending fund and the borrowing fund. However, no borrowing or lending activity is without risk. When a fund borrows money from another fund, there is a risk that the loan could be called on one day's notice or not renewed, in which case the fund may have to borrow from a bank at higher rates if an Interfund Loan were not available from another fund. A delay in repayment to a lending fund could result in a lost opportunity or additional lending costs.
When-Issued and Delayed Delivery Securities
The fund may purchase securities, including U.S. government securities, on a when-issued basis or may purchase or sell securities for delayed delivery. In such transactions, delivery of the securities occurs beyond the normal settlement period, but no payment or delivery is made by the fund prior to the actual delivery or payment by the other party to the transaction. The fund will not earn income on these securities until delivered. The purchase of securities on a when-issued or delayed delivery basis involves the risk that the value of the securities purchased will decline prior to the settlement date. The sale of securities for delayed delivery involves the risk that the prices available in the market on the delivery date may be greater than those obtained in the sale transaction. When the fund enters into when-issued or delayed delivery transactions it will segregate liquid assets with a value equal to the fund's obligations. See "Asset Segregation."
Disclosure of Portfolio Holdings
The Board of Trustees has adopted policies and procedures relating to disclosure of the Pioneer funds' portfolio securities. These policies and procedures are designed to provide a framework for disclosing information regarding portfolio holdings, portfolio composition or other portfolio characteristics consistent with applicable federal securities laws and regulations and general principles of fiduciary duty relating to fund shareholders. While Pioneer may manage other separate accounts and unregistered products that have substantially similar investment strategies to those of another Pioneer fund, and therefore portfolio holdings that may be substantially similar, and in some cases nearly identical, to such fund, these policies and procedures only relate to the disclosure of portfolio information of the Pioneer funds that are registered management companies. Separate account and unregistered product clients are not subject to these policies and procedures. Separate account and unregistered product clients of Pioneer have access to their portfolio holdings, and prospective clients have access to representative holdings.
Generally, Pioneer will make a fund's portfolio information available to the public on a monthly basis with an appropriate delay based upon the nature of the information disclosed. Pioneer
normally will publish a fund's full portfolio holdings thirty (30) days after the end of each month (this time period may be different for certain funds). Such information shall be made available on the funds' website (www.pioneerinvestments.com) and may be sent to rating agencies, reporting/news services and financial intermediaries, upon request. In addition, Pioneer generally makes publicly available information regarding a fund's top ten holdings (including the percentage of a fund's assets represented by each security), the percentage breakdown of a fund's investments by country, sector and industry, various volatility measures (such as beta, standard deviation, etc.), market capitalization ranges and other portfolio characteristics (such as alpha, average P/E ratio, etc.) three (3) business days after the end of each month.
Pioneer may provide a fund's full portfolio holdings or other information to certain entities prior to the date such information is made public, provided that certain conditions are met. The entities to which such disclosure may be made as of the date of this statement of additional information are rating agencies, plan sponsors, prospective separate account clients and other financial intermediaries (i.e., organizations evaluating a fund for purposes of investment by their clients, such as broker-dealers, investment advisers, banks, insurance companies, financial planning firms, plan sponsors, plan administrators, shareholder servicing organizations and pension consultants). The third party must agree to a limited use of that information which does not conflict with the interests of the fund's shareholders, to use the information only for that authorized purpose, to keep such information confidential, and not to trade on such information. The Board of Trustees considered the disclosure of portfolio holdings information to these categories of entities to be consistent with the best interests of shareholders in light of the agreement to maintain the confidentiality of such information and only to use such information for the limited and approved purposes. Pioneer's compliance department, the local head of investment management and the global chief investment officer may, but only acting jointly, grant exemptions to this policy. Exemptions may be granted only if these persons determine that providing such information is consistent with the interests of shareholders and the third party agrees to limit the use of such information only for the authorized purpose, to keep such information confidential, and not to trade on such information. Although the Board of Trustees will periodically be informed of exemptions granted, granting exemptions entails the risk that portfolio holdings information may be provided to entities that use the information in a manner inconsistent with their obligations and the best interests of a fund.
Currently, Pioneer, on behalf of the Pioneer funds, has ongoing arrangements
whereby the following entities may receive a fund's full portfolio holdings or
other information prior to the date such information is made public:
Metropolitan Life Insurance Company (within 30 days after month end for board
materials and advance preparation of marketing materials); Roszel Advisors
(within 30 days after month end for due diligence and review of certain Pioneer
funds included in fund programs); Oppenheimer & Co. (within 30 days after month
end for due diligence and review of certain Pioneer funds included in fund
programs); UBS (within 15 days after month end for due diligence and review of
certain Pioneer funds included in fund programs); Ibbotson Associates Advisors
LLC (as needed to select Pioneer funds for the Pioneer-Ibbotson fund of funds
products); Beacon Pointe Advisors (as needed for quarterly review of certain
Pioneer funds); and Commonwealth Financial Network (within 30 days after month
end for internal risk analysis).
Compliance with the funds' portfolio holdings disclosure policy is subject to periodic review by the Board of Trustees, including a review of any potential conflicts of interest in the disclosures made by Pioneer in accordance with the policy or the exceptions permitted under the policy. Any change to the policy to expand the categories of entities to which portfolio holdings may be disclosed or an increase in the purposes for which such disclosure may be made would be subject
to approval by the Board of Trustees and, reflected, if material, in a supplement to the fund's statement of additional information.
The funds' portfolio holdings disclosure policy is not intended to prevent the disclosure of any and all portfolio information to the funds' service providers who generally need access to such information in the performance of their contractual duties and responsibilities, such as Pioneer, the funds' custodian, fund accounting agent, principal underwriter, investment sub-adviser, if any, independent registered public accounting firm or counsel. In approving the policy, the Board of Trustees considered that the service providers are subject to duties of confidentiality arising under law or contract that provide an adequate safeguard for such information. None of Pioneer, the funds, or any other party receive any compensation or other consideration from any arrangement pertaining to the release of a fund's portfolio holdings information.
In addition, the funds make their portfolio holdings available semi-annually in shareholder reports filed on Form N-CSR and after the first and third fiscal quarters in regulatory filings on Form N-Q. These shareholder reports and regulatory filings are filed with the SEC, as required by the federal securities laws, and are generally available within seventy (70) days after the end of a fund's fiscal quarter.
Investment Restrictions
Fundamental Investment Policies. The fund has adopted certain fundamental investment policies which may not be changed without the affirmative vote of the holders of a "majority of the outstanding voting securities" (as defined in the 1940 Act) of the fund. For this purpose, a majority of the outstanding shares of the fund means the vote of the lesser of:
1. 67% or more of the shares represented at a meeting, if the holders of more than 50% of the outstanding shares are present in person or by proxy, or
2. more than 50% of the outstanding shares of the fund.
The fund's fundamental policies are as follows:
(1) The fund may not borrow money except as permitted by (i) the 1940 Act, or interpretations or modifications by the SEC, SEC staff or other authority of competent jurisdiction, or (ii) exemptive or other relief or permission from the SEC, SEC staff or other authority of competent jurisdiction.
(2) The fund may not engage in the business of underwriting the securities of other issuers except as permitted by (i) the 1940 Act, or interpretations or modifications by the SEC, SEC staff or other authority of competent jurisdiction, or (ii) exemptive or other relief or permission from the SEC, SEC staff or other authority of competent jurisdiction.
(3) The fund may lend money or other assets to the extent permitted by (i) the 1940 Act, or interpretations or modifications by the SEC, SEC staff or other authority of competent jurisdiction or (ii) exemptive or other relief or permission from the SEC, SEC staff or other authority of competent jurisdiction.
(4) The fund may not issue senior securities except as permitted by (i) the 1940 Act, or interpretations or modifications by the SEC, SEC staff or other authority of competent jurisdiction, or (ii) exemptive or other relief or permission from the SEC, SEC staff or other authority of competent jurisdiction.
(5) The fund may not purchase or sell real estate except as permitted by (i) the 1940 Act, or interpretations or modifications by the SEC, SEC staff or other authority of competent jurisdiction, or (ii) exemptive or other relief or permission from the SEC, SEC staff or other authority of competent jurisdiction.
(6) The fund may purchase or sell commodities or contracts related to commodities to the extent permitted by (i) the 1940 Act, or interpretations or modifications by the SEC, SEC staff or other authority of competent jurisdiction, or (ii) exemptive or other relief or permission from the SEC, SEC staff or other authority of competent jurisdiction.
(7) Except the real estate industry or as permitted by exemptive or other relief or permission from the SEC, SEC staff or other authority of competent jurisdiction, the fund may not make any investment if, as a result, the fund's investments will be concentrated in any one industry.
With respect to the fundamental policy relating to borrowing money set forth in
(1) above, the 1940 Act permits a fund to borrow money in amounts of up to
one-third of the fund's total assets from banks for any purpose, and to borrow
up to 5% of the fund's total assets from banks or other lenders for temporary
purposes. To limit the risks attendant to borrowing, the 1940 Act requires the
fund to maintain at all times an "asset coverage" of at least 300% of the amount
of its borrowings. Asset coverage means the ratio that the value of the fund's
total assets, minus liabilities other than borrowings, bears to the aggregate
amount of all borrowings. Borrowing money to increase a fund's investment
portfolio is known as "leveraging." Borrowing, especially when used for
leverage, may cause the value of a fund's shares to be more volatile than if the
fund did not borrow. This is because borrowing tends to magnify the effect of
any increase or decrease in the value of the fund's portfolio holdings. Borrowed
money thus creates an opportunity for greater gains, but also greater losses. To
repay borrowings, the fund may have to sell securities at a time and at a price
that is unfavorable to the fund. There also are costs associated with borrowing
money, and these costs would offset and could eliminate a fund's net investment
income in any given period. Currently, the fund does not contemplate borrowing
money for leverage, but if the fund does so, it will not likely do so to a
substantial degree. The policy in (1) above will be interpreted to permit the
fund to engage in trading practices and investments that may be considered to be
borrowing to the extent permitted by the 1940 Act. Reverse repurchase agreements
may be considered to be a type of borrowing. Short-term credits necessary for
the settlement of securities transactions and arrangements with respect to
securities lending will not be considered to be borrowings under the policy.
Practices and investments that may involve leverage but are not considered to be
borrowings are not subject to the policy. Such trading practices may include
futures, options on futures, forward contracts and other derivative investments.
With respect to the fundamental policy relating to underwriting set forth in (2) above, the 1940 Act does not prohibit a fund from engaging in the underwriting business or from underwriting the securities of other issuers; in fact, the 1940 Act permits a fund to have underwriting commitments of up to 25% of its assets under certain circumstances. Those circumstances currently are that the amount of the fund's underwriting commitments, when added to the value of the fund's investments in issuers where the fund owns more than 10% of the outstanding voting securities of those issuers, cannot exceed the 25% cap. A fund engaging in transactions involving the acquisition or disposition of portfolio securities may be considered to be an underwriter under the Securities Act of 1933, as amended (the "1933 Act"). Under the 1933 Act, an underwriter may be liable for material omissions or misstatements in an issuer's registration statement or prospectus. Securities purchased from an issuer and not registered for sale under the 1933 Act are considered restricted securities. There may be a limited market for these securities. If these securities are registered under the 1933 Act, they may then be eligible for sale but participating in the sale may
subject the seller to underwriter liability. These risks could apply to a fund investing in restricted securities. Although it is not believed that the application of the 1933 Act provisions described above would cause a fund to be engaged in the business of underwriting, the policy in (2) above will be interpreted not to prevent the fund from engaging in transactions involving the acquisition or disposition of portfolio securities, regardless of whether the fund may be considered to be an underwriter under the 1933 Act.
With respect to the fundamental policy relating to lending set forth in (3) above, the 1940 Act does not prohibit a fund from making loans; however, SEC staff interpretations currently prohibit funds from lending more than one-third of their total assets, except through the purchase of debt obligations or the use of repurchase agreements. (A repurchase agreement is an agreement to purchase a security, coupled with an agreement to sell that security back to the original seller on an agreed-upon date at a price that reflects current interest rates. The SEC frequently treats repurchase agreements as loans.) While lending securities may be a source of income to a fund, as with other extensions of credit, there are risks of delay in recovery or even loss of rights in the underlying securities should the borrower fail financially. However, loans would be made only when the fund's manager or a subadviser believes the income justifies the attendant risks. The fund also will be permitted by this policy to make loans of money, including to other funds. The fund has obtained exemptive relief from the SEC to make loans to other Pioneer funds through a credit facility. The policy in (3) above will be interpreted not to prevent the fund from purchasing or investing in debt obligations and loans. In addition, collateral arrangements with respect to options, forward currency and futures transactions and other derivative instruments, as well as delays in the settlement of securities transactions, will not be considered loans.
With respect to the fundamental policy relating to issuing senior securities set forth in (4) above, "senior securities" are defined as fund obligations that have a priority over the fund's shares with respect to the payment of dividends or the distribution of fund assets. The 1940 Act prohibits a fund from issuing senior securities except that the fund may borrow money in amounts of up to one-third of the fund's total assets from banks for any purpose. A fund also may borrow up to 5% of the fund's total assets from banks or other lenders for temporary purposes, and these borrowings are not considered senior securities. The issuance of senior securities by a fund can increase the speculative character of the fund's outstanding shares through leveraging. Leveraging of a fund's portfolio through the issuance of senior securities magnifies the potential for gain or loss on monies, because even though the fund's net assets remain the same, the total risk to investors is increased. Certain widely used investment practices that involve a commitment by a fund to deliver money or securities in the future are not considered by the SEC to be senior securities, provided that a fund segregates cash or liquid securities in an amount necessary to pay the obligation or the fund holds an offsetting commitment from another party. These investment practices include repurchase and reverse repurchase agreements, swaps, dollar rolls, options, futures and forward contracts. The policy in (4) above will be interpreted not to prevent collateral arrangements with respect to swaps, options, forward or futures contracts or other derivatives, or the posting of initial or variation margin.
With respect to the fundamental policy relating to real estate set forth in (5) above, the 1940 Act does not prohibit a fund from owning real estate; however, a fund is limited in the amount of illiquid assets it may purchase. Investing in real estate may involve risks, including that real estate is generally considered illiquid and may be difficult to value and sell. Owners of real estate may be subject to various liabilities, including environmental liabilities. To the extent that investments in real estate are considered illiquid, the current SEC staff position generally limits a fund's purchases of illiquid securities to 15% of net assets. The policy in (5) above will be interpreted not to prevent the fund from investing in real estate-related companies, companies whose
businesses consist in whole or in part of investing in real estate, instruments (like mortgages) that are secured by real estate or interests therein, or real estate investment trust securities.
With respect to the fundamental policy relating to commodities set forth in (6) above, the 1940 Act does not prohibit a fund from owning commodities, whether physical commodities and contracts related to physical commodities (such as oil or grains and related futures contracts), or financial commodities and contracts related to financial commodities (such as currencies and, possibly, currency futures). However, a fund is limited in the amount of illiquid assets it may purchase. To the extent that investments in commodities are considered illiquid, the current SEC staff position generally limits a fund's purchases of illiquid securities to 15% of net assets. If a fund were to invest in a physical commodity or a physical commodity-related instrument, the fund would be subject to the additional risks of the particular physical commodity and its related market. The value of commodities and commodity-related instruments may be extremely volatile and may be affected either directly or indirectly by a variety of factors. There also may be storage charges and risks of loss associated with physical commodities. The policy in (6) above will be interpreted to permit investments in exchange traded funds that invest in physical and/or financial commodities.
With respect to the fundamental policy relating to concentration set forth in
(7) above, the 1940 Act does not define what constitutes "concentration" in an
industry. The SEC staff has taken the position that investment of 25% or more of
a fund's total assets in one or more issuers conducting their principal
activities in the same industry or group of industries constitutes
concentration. It is possible that interpretations of concentration could change
in the future. A fund that invests a significant percentage of its total assets
in a single industry may be particularly susceptible to adverse events affecting
that industry and may be more risky than a fund that does not concentrate in an
industry. The policy in (7) above will be interpreted to refer to concentration
as that term may be interpreted from time to time. The policy also will be
interpreted to permit investment without limit in the following: securities of
the U.S. government and its agencies or instrumentalities; with respect to
tax-exempt funds that invest 80% of their assets in tax-exempt securities,
securities of state, territory, possession or municipal governments and their
authorities, agencies, instrumentalities or political subdivisions; and
repurchase agreements collateralized by any such obligations. Accordingly,
issuers of the foregoing securities will not be considered to be members of any
industry. The policy also will be interpreted to give broad authority to the
fund as to how to classify issuers within or among industries. When identifying
industries or sectors for purposes of its concentration policy, the fund may
rely upon available industry classifications. As of the date of the SAI, the
fund relies on the MSCI Global Industry Classification Standard (GICS)
classifications.
The fund's fundamental policies are written and will be interpreted broadly. For example, the policies will be interpreted to refer to the 1940 Act and the related rules as they are in effect from time to time, and to interpretations and modifications of or relating to the 1940 Act by the SEC and others as they are given from time to time. When a policy provides that an investment practice may be conducted as permitted by the 1940 Act, the policy will be interpreted to mean either that the 1940 Act expressly permits the practice or that the 1940 Act does not prohibit the practice.
Non-fundamental Investment Restrictions. In addition, the following restrictions have been designated as non-fundamental and may be changed by a vote of the fund's Board of Trustees without approval of shareholders. The fund may not:
(a) Purchase securities on margin or make short sales unless by virtue of its ownership of other securities, the fund has the right to obtain, without payment of additional
consideration, securities equivalent in kind and amount to the securities sold and, if the right is conditional, the sale is made upon the same conditions, except that a fund may obtain such short-term credits as may be necessary for the clearance of purchases and sales of securities and in connection with transactions involving forward foreign currency exchange transactions.
(b) Invest for the purpose of exercising control over or management of any company.
(c) Purchase securities during the current fiscal year at any time that outstanding borrowings exceed 5% of the fund's total assets.
(d) Invest in any investment company in reliance on Section 12(d)(1)(F) of
the 1940 Act, which would allow the fund to invest in other investment
companies, or in reliance on Section 12(d)(1)(G) of the 1940 Act, which would
allow the fund to invest in other Pioneer funds, in each case without being
subject to the limitations discussed above under "Other Investment Companies" so
long as another investment company invests in the fund in reliance on Section
12(d)(1)(G), such as one of the series of Pioneer Ibbotson Asset Allocation
Series.
3. TRUSTEES AND OFFICERS
The Board of Trustees provides broad supervision over the fund's affairs. The officers of the fund are responsible for the fund's operations. The Trustees and officers are listed below, together with their principal occupations during the past five years. Trustees who are interested persons of the fund within the meaning of the 1940 Act are referred to as Interested Trustees. Trustees who are not interested persons of the fund are referred to as Independent Trustees. Each of the Trustees serves as a Trustee of each of the 74 U.S. registered investment portfolios for which Pioneer serves as investment adviser (the "Pioneer Funds"). The address for all Trustees and all officers of the fund is 60 State Street, Boston, Massachusetts 02109.
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Term of Office
Name, Age and Position Held and Length of Principal Occupation During Past Other Directorships Held by
Address With the Fund Service Five Years this Trustee
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Interested Trustees:
----------------------------------------------------------------------------------------------------------------------------
John F. Cogan, Chairman of the Trustee since Deputy Chairman and a Director None
Jr. (82)* Board, Trustee 1995. Serves of Pioneer Global Asset
and President until a Management S.p.A. ("PGAM");
successor Non-Executive Chairman and a
trustee is Director of Pioneer Investment
elected or Management USA Inc. ("PIM-USA");
earlier Chairman and a Director of
retirement or Pioneer; Chairman and Director
removal. of Pioneer Institutional Asset
Management, Inc. (since 2006);
Director of Pioneer Alternative
Investment Management Limited
(Dublin); President and a
Director of Pioneer Alternative
Investment Management (Bermuda)
Limited and affiliated funds;
Director of PIOGLOBAL Real
Estate Investment Fund (Russia)
(until June 2006); Director of
Nano-C, Inc. (since 2003);
Director of Cole Management Inc.
(since 2004); Director of
Fiduciary Counseling, Inc.;
President and Director of
Pioneer Funds Distributor, Inc.
("PFD") (until May 2006);
President of all of the Pioneer
Funds; and Of Counsel, Wilmer
Cutler Pickering Hale and Dorr
LLP
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Daniel K. Trustee and Trustee since Director, CEO and President of None
Kingsbury (50)* Executive Vice 2007. Serves Pioneer Investment Management
President until a USA Inc. (since February 2007);
successor Director and President of
trustee is Pioneer Investment Management,
elected or Inc. and Pioneer Institutional
earlier Asset Management, Inc. (since
retirement or February 2007); Executive Vice
removal. President of all of the Pioneer
Funds (since March 2007);
Director of Pioneer Global Asset
Management S.p.A. (since April
2007); Head of New Markets
Division, Pioneer Global Asset
Management S.p.A. (2000-2007)
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Independent Trustees:
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David R. Bock (65) Trustee Trustee since Managing Partner, Federal City Director of Enterprise
2005. Serves Capital Advisors (boutique Community Investment, Inc.
until a merchant bank) (1997 to 2004 and (privately-held affordable
successor 2008 - present); and Executive housing finance company);
trustee is Vice President and Chief and Director of New York
elected or Financial Officer, I-trax, Inc. Mortgage Trust (publicly
earlier (publicly traded health care traded mortgage REIT); and
retirement or services company) (2004 - 2007) Director of Oxford
removal. Analytica, Inc.
(privately-held research
and consulting company)
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Mary K. Bush (61) Trustee Trustee since President, Bush International, Director of Marriott
1997. Serves LLC (international financial International, Inc.;
until a advisory firm) Director of Discover
successor Financial Services (credit
trustee is card issuer and electronic
elected or payment services); Director
earlier of Briggs & Stratton Co.
retirement or (engine manufacturer);
removal. Director of UAL Corporation
(airline holding company);
Director of Mantech
International Corporation
(national security, defense,
and intelligence technology
firm); and Member, Board of
Governors, Investment
Company Institute
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Benjamin M. Friedman Trustee Trustee since Professor, Harvard University Trustee, Mellon
(64) 2008. Serves Institutional Funds
until a Investment Trust and Mellon
successor Institutional Funds Master
trustee is Portfolio (oversees 17
elected or portfolios in fund complex)
earlier
retirement or
removal.
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Margaret B.W. Graham Trustee Trustee since Founding Director, None
(61) 1995. Serves Vice-President and Corporate
until a Secretary, The Winthrop Group,
successor Inc. (consulting firm); and
trustee is Desautels Faculty of Management,
elected or McGill University
earlier
retirement or
removal.
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Thomas J. Perna (58) Trustee Trustee since Chief Executive Officer, None
2006. Serves Quadriserv, Inc. (technology
until a products for securities lending
successor industry) (2008 - present);
trustee is Private investor (2004 - 2008);
elected or and Senior Executive Vice
earlier President, The Bank of New York
retirement or (financial and securities
removal. services) (1986 - 2004)
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Marguerite A. Piret Trustee Trustee since President and Chief Executive Director of New America
(60) 1995. Serves Officer, Newbury, Piret & High Income Fund, Inc.
until a Company, Inc. (investment (closed-end investment
successor banking firm) company)
trustee is
elected or
earlier
retirement or
removal.
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Stephen K. West (80) Trustee Trustee since Senior Counsel, Sullivan & Director, The Swiss
1995. Serves Cromwell LLP (law firm) Helvetia Fund, Inc.
until a (closed-end investment
successor company)
trustee is
elected or
earlier
retirement or
removal.
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Fund Officers:
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Dorothy E. Secretary Since 2003. Secretary of PIM-USA; Senior None
Bourassa (61) Serves at the Vice President- Legal of
discretion of Pioneer; Secretary/Clerk of most
the Board of PIM-USA's subsidiaries; and
Secretary of all of
the Pioneer Funds
since September 2003
(Assistant Secretary
from November 2000 to
September 2003)
----------------------------------------------------------------------------------------------------------------------------
Christopher J. Assistant Since 2003. Associate General Counsel of None
Kelley (44) Secretary Serves at the Pioneer since January 2008 and
discretion of Assistant Secretary of all of
the Board the Pioneer Funds since
September 2003; Vice President
and Senior Counsel of Pioneer
from July 2002 to December 2007
----------------------------------------------------------------------------------------------------------------------------
Mark E. Bradley Treasurer Since 2008. Vice President-Fund Accounting, None
(49) Serves at the Administration and
discretion of Controllership Services of
the Board Pioneer; and Treasurer of all of
the Pioneer Funds
since March 2008;
Deputy Treasurer of
Pioneer from March
2004 to February 2008;
Assistant Treasurer of
all of the Pioneer
Funds from March 2004
to February 2008; and
Treasurer and Senior
Vice President, CDC
IXIS Asset Management
Services from 2002 to
2003
----------------------------------------------------------------------------------------------------------------------------
Luis I. Presutti Assistant Since 2000. Assistant Vice President-Fund None
(44) Treasurer Serves at the Accounting, Administration and
discretion of Controllership Services of
the Board Pioneer; and Assistant Treasurer
of all of the Pioneer Funds
----------------------------------------------------------------------------------------------------------------------------
Gary Sullivan (51) Assistant Since 2002. Fund Accounting Manager - Fund None
Treasurer Serves at the Accounting, Administration and
discretion of Controllership Services of
the Board Pioneer; and Assistant Treasurer
of all of the Pioneer Funds
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David F. Johnson Assistant Since 2009. Fund Administration Manager - None
(29) Treasurer Serves at the Fund Accounting, Administration
discretion of and Controllership Services
the Board since November 2008 and
Assistant Treasurer of all of
the Pioneer Funds since January
2009; Client Service Manager -
Institutional Investor Services
at State Street Bank from March
2003 to March 2007
----------------------------------------------------------------------------------------------------------------------------
Teri W. Anderholm Chief Compliance Since 2007. Chief Compliance Officer of None
(49) Officer Serves at the Pioneer since December 2006 and
discretion of of all the Pioneer Funds since
the Board January 2007; Vice President and
Compliance Officer, MFS
Investment Management (August
2005 to December 2006);
Consultant, Fidelity Investments
(February 2005 to July 2005);
Independent Consultant (July
1997 to February 2005)
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* Mr. Cogan and Mr. Kingsbury are Interested Trustees because they are officers or directors of the fund's investment adviser and certain of its affiliates.
The outstanding capital stock of PFD, Pioneer and Pioneer Investment Management Shareholder Services, Inc. ("PIMSS") is indirectly wholly owned by UniCredit S.p.A. ("UniCredit"), one of the largest banking groups in Italy. Pioneer, the fund's investment adviser, provides investment management and financial services to mutual funds, institutional and other clients.
Board Committees
During the most recent fiscal year, the Board of Trustees held 10 meetings. Each Trustee attended at least 75% of such meetings.
The Board of Trustees has an Audit Committee, a Governance Committee (formerly, the Independent Trustees Committee), a Nominating Committee, a Valuation Committee and a Policy Administration Committee. Committee members are as follows:
Audit
David R. Bock (Chair), Benjamin M. Friedman and Marguerite A. Piret
Governance
David R. Bock, Mary K. Bush, Benjamin M. Friedman, Margaret B.W. Graham, Thomas
J. Perna, Marguerite A. Piret and Stephen K. West (Chair)
Nominating
Mary K. Bush (Chair), Benjamin M. Friedman, Margaret B.W. Graham and Marguerite
A. Piret
Valuation
David R. Bock, Benjamin M. Friedman and Marguerite A. Piret (Chair)
Policy Administration
Mary K. Bush, Thomas J. Perna (Chair), Margaret B.W. Graham and Stephen K. West
During the most recent fiscal year, the Audit, Governance, Nominating, Valuation, and Policy Administration Committees held 6, 7, 0, 4 and 5 meetings, respectively.
The Board of Trustees has adopted a charter for the Audit Committee. In accordance with its charter, the purposes of the Audit Committee are to, among other things:
o act as a liaison between the fund's independent registered public accounting firm and the full Board of Trustees of the fund;
o discuss with the fund's independent registered public accounting firm their judgments about the quality of the fund's accounting principles and underlying estimates as applied in the fund's financial reporting; and
o ensure that the fund's independent registered public accounting firm submits on a periodic basis to the Committee a formal written statement delineating all relationships between the independent registered public accounting firm and Pioneer and its affiliates; actively engage in a dialogue with the independent registered public accounting firm with respect to any disclosed relationships or services that may impact the objectivity and independence of the independent registered public accounting firm; and recommend that the Trustees take appropriate action in response to the independent registered public accounting firm's report to satisfy itself of the independent registered public accounting firm's independence.
The Nominating Committee reviews the qualifications of any candidate recommended by the Independent Trustees to serve as an Independent Trustee and makes a recommendation regarding that person's qualifications. The Committee does not accept nominations from shareholders.
The Valuation Committee reviews the valuation assigned to certain securities by Pioneer in accordance with the fund's valuation procedures.
The Policy Administration Committee reviews the implementation of certain of the fund's administrative policies and procedures.
The Governance Committee reviews the fund's management contract and other related party contracts annually and is also responsible for any other action required to be taken, under the 1940 Act, by the Independent Trustees acting alone.
The Amended and Restated Agreement and Declaration of Trust provides that no Trustee, officer or employee of the fund shall be liable to the fund or any shareholder for any action, failure to act, error or mistake except in cases of bad faith, willful misfeasance, gross negligence or reckless disregard of duty. The Amended and Restated Agreement and Declaration of Trust requires the fund to indemnify each Trustee, director, officer, employee and authorized agent to the fullest extent permitted by law against liability and against all expenses reasonably incurred or paid by him in connection with any claim, action, suit or proceeding in which he becomes involved as a party or otherwise by virtue of his being or having been such a Trustee, director, officer, employee, or agent and against amounts paid or incurred by him in settlement thereof. The 1940 Act currently provides that no officer or director shall be protected from liability to the fund or
shareholders for willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties of office. The Amended and Restated Agreement and Declaration of Trust extends to Trustees, officers and employees of the fund the full protection from liability that the law allows.
Compensation of Officers and Trustees
The fund pays no salaries or compensation to any of its officers. The Pioneer Funds, including the fund, compensate their Trustees. The Independent Trustees review and set their compensation annually, taking into consideration the committee and other responsibilities assigned to specific Trustees. The table under "Annual Fees, Expense and Other Information-Compensation of Officers and Trustees" sets forth the compensation paid to each of the Trustees. The compensation paid to the Trustees is then allocated among the funds as follows:
o each fund with assets less than $250 million pays each Independent Trustee an annual fee of $1,000.
o the remaining compensation of the Independent Trustees is allocated to each
fund with assets greater than $250 million based on the fund's net assets.
o the Interested Trustees receive an annual fee of $500 from each fund,
except in the case of funds with net assets of $50 million or less, which
pay each Interested Trustee an annual fee of $200. Pioneer reimburses the
funds for the fees paid to the Interested Trustees.
See "Compensation of Officers and Trustees" in "Annual Fee, Expense and Other Information."
Sales Loads. The fund offers its shares to Trustees and officers of the fund and employees of Pioneer and its affiliates without a sales charge in order to encourage investment in the fund by individuals who are responsible for its management and because the sales to such persons do not entail any sales effort by the fund, brokers or other intermediaries.
Other Information
Material Relationships of the Independent Trustees.
Mr. West, an Independent Trustee, is Senior Counsel to Sullivan & Cromwell, which acts as counsel to the Independent Trustees and the Independent Trustees of the other Pioneer Funds. The aggregate compensation paid to Sullivan & Cromwell by the fund and the other Pioneer Funds was approximately $406,262 and $450,898 in each of 2007 and 2008.
Share Ownership. See "Annual Fee, Expense and Other Information" for information on the ownership of fund shares by the Trustees, the fund's officers and owners in excess of 5% of any class of shares of the fund and a table indicating the value of shares that each Trustee beneficially owns in the fund and in all the Pioneer Funds.
Proxy Voting Policies. Information regarding how the fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is publicly available to shareowners without charge at http://www.pioneerinvestments.com and on the SEC's website at http://www.sec.gov. The fund's "Proxy Voting Policies and Procedures" are attached as "Appendix B".
4. INVESTMENT ADVISER
The fund has entered into an amended and restated management agreement (hereinafter, the "management contract") with Pioneer, effective July 1, 2008, pursuant to which Pioneer continues to act as the fund's investment adviser. Pioneer is an indirect, wholly owned subsidiary of UniCredit. Certain Trustees or officers of the fund are also directors and/or officers of certain of UniCredit's subsidiaries (see management biographies above). Pioneer has entered into an agreement with its affiliate, Pioneer Investment Management Limited ("PIML"), pursuant to which PIML provides certain services and personnel to Pioneer.
Pioneer has engaged AEW Capital Management, L.P. ("AEW" or the "subadviser") to act as the fund's subadviser. As the fund's investment adviser, Pioneer oversees the fund's operations and supervises AEW, which is responsible for the day-to-day management of the fund's portfolio (see "Investment Subadviser" below). Except as otherwise provided under "Investment Subadviser" below, Pioneer also maintains books and records with respect to the fund's securities transactions, and reports to the Trustees on the fund's investments and performance.
The Trustees' approval of and the terms, continuance and termination of the management contract are governed by the 1940 Act. Pursuant to the management contract, Pioneer assumes no responsibility other than to render the services called for under the management contract, in good faith, and Pioneer will not be liable for any error of judgment or mistake of law or for any loss arising out of any investment or for any act or omission in the execution of securities or other transactions for the fund. Pioneer, however, is not protected against liability by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of its reckless disregard of its obligations and duties under the management contract. The management contract requires Pioneer to furnish all necessary services, facilities and personnel in connection with the performance of its services under the management contract, and except as specifically stated therein, Pioneer is not responsible for any of the fund's ordinary and extraordinary expenses.
Advisory fee. As compensation for its management services and expenses incurred, the fund pays Pioneer a fee at the annual rate of 0.80% of the fund's average daily net assets. This fee is computed and accrued daily and paid monthly.
See the table in "Annual Fee, Expense and Other Information" for management fees paid to Pioneer during recently completed fiscal years.
Investment subadviser As described in the prospectus, AEW serves as the fund's investment subadviser with respect to a portion of the fund's assets that Pioneer designates from time to time. With respect to the current fiscal year, Pioneer anticipates that it will designate AEW as being responsible for the management of all the fund's assets, with the exception of the fund's cash balances, which will be invested by Pioneer. AEW will, among other things, continuously review and analyze the investments in the fund's portfolio and, subject to the supervision of Pioneer, manage the investment and reinvestment of the fund's assets. AEW, a Delaware limited partnership, is an investment adviser registered with the SEC. AEW and its affiliates provide real estate investment advice to public, corporate, union and government pension plans and endowments.
As of December 31, 2008, AEW and its affiliates managed $29 billion of client capital. AEW specializes in designing and executing real estate investment strategies focused in three areas: direct investments in real estate, real estate-related securities, such as REITs, and high-return debt and equity investments in real estate projects. AEW is a wholly owned subsidiary of IXIS Asset Management North America. AEW is located at World Trade Center East, Two Seaport Lane, Boston, Massachusetts 02210.
Pioneer and AEW have entered into a subadvisory agreement, dated as of May 3, 2004, pursuant to which AEW has agreed, among other things, to:
o comply with the provisions of the fund's Declaration of Trust and By-laws, the 1940 Act, the Investment Advisers Act of 1940, as amended (the "Advisers Act") and the investment objectives, policies and restrictions of the fund;
o cause the fund to comply with the requirements of Subchapter M of the Code for qualification as a regulated investment company;
o comply with any policies, guidelines, procedures and instructions as Pioneer may from time to time establish;
o be responsible for voting proxies and acting on other corporate actions as may be requested by Pioneer;
o maintain separate books and detailed records of all matters pertaining to the portion of the fund's assets advised by AEW required by Rule 31a-1 under the 1940 Act relating to its responsibilities provided hereunder with respect to the fund;
o ensure that its "access persons" comply in all respects with AEW's Code of Ethics, as in effect from time to time; and
o furnish reports to the Trustees and Pioneer.
Subadvisory fee. For its services, AEW is entitled to a subadvisory fee from Pioneer at an annual rate of 0.40% of the first $100 million of the combined average daily net assets of the fund and Pioneer Real Estate Shares VCT Portfolio (another real estate fund managed by Pioneer) and 0.30% of the combined average daily net assets of the fund and Pioneer Real Estate Shares VCT Portfolio in excess of $100 million. As of December 31, 2008, the combined assets of the fund and Pioneer Real Estate Shares VCT Portfolio were $138,545,429. The fee will be paid monthly in arrears. The fund has no responsibility to pay any fee to AEW.
Pioneer has received an order from the SEC that permits Pioneer, subject to the approval of the fund's Board of Trustees, to hire and terminate a subadviser or to materially modify an existing subadvisory contract for the fund without shareholder approval. Pioneer retains the ultimate responsibility to oversee and recommend the hiring, termination and replacement of any subadviser. To the extent that the SEC adopts a rule that would supersede the order, Pioneer and the fund intend to rely on such rule to permit Pioneer, subject to the approval of the fund's Board of Trustees and any other applicable conditions of the rule, to hire and terminate a subadviser or to materially modify an existing subadvisory contract for the fund without shareholder approval.
Continuance of Subadvisory Agreement. The Trustees' approval of and the terms, continuance and termination of the subadvisory contract are governed by the 1940 Act. Pursuant to the subadvisory contract, the subadviser will not be liable for any error of judgment or mistake of law or for any loss sustained by reason of the adoption of any investment policy or the purchase, sale
or retention of any securities on the recommendation of the subadviser. The subadviser, however, is not protected against liability by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of its reckless disregard of its obligations and duties under the subadvisory contract. The subadvisory agreement terminates if assigned and may be terminated without penalty upon not more than 60 days' nor less than 30 days' written notice to the other party or by vote of a majority of the fund's outstanding voting securities.
Administration Agreement. The fund has entered into an amended and restated administration agreement with Pioneer, effective July 1, 2008, pursuant to which Pioneer continues to act as the fund's administrator, performing certain accounting, administration and legal services for the fund. Pioneer is reimbursed for its cost of providing such services. The cost of providing these services is based on direct costs and costs of overhead, subject to review by the Board of Trustees. See "Annual Fee, Expense and Other Information" for fees the fund paid to Pioneer for administration and related services.
Under the terms of the amended and restated administration agreement with the fund, Pioneer pays or reimburses the fund for expenses relating to its services for the fund, with the exception of the following, which are to be paid by the fund: (a) charges and expenses for fund accounting, pricing and appraisal services and related overhead, including, to the extent such services are performed by personnel of Pioneer, or its affiliates, office space and facilities and personnel compensation, training and benefits; (b) the charges and expenses of auditors; (c) the charges and expenses of any custodian, transfer agent, plan agent, dividend disbursing agent and registrar appointed by the fund; (d) issue and transfer taxes, chargeable to the fund in connection with securities transactions to which the fund is a party; (e) insurance premiums, interest charges, dues and fees for membership in trade associations and all taxes and corporate fees payable by the fund to federal, state or other governmental agencies; (f) fees and expenses involved in registering and maintaining registrations of the fund and/or its shares with federal regulatory agencies, state or blue sky securities agencies and foreign jurisdictions, including the preparation of prospectuses and statements of additional information for filing with such regulatory authorities; (g) all expenses of shareholders' and Trustees' meetings and of preparing, printing and distributing prospectuses, notices, proxy statements and all reports to shareholders and to governmental agencies; (h) charges and expenses of legal counsel to the fund and the Trustees; (i) any distribution fees paid by the fund in accordance with Rule 12b-1 promulgated by the SEC pursuant to the 1940 Act; (j) compensation of those Trustees of the fund who are not affiliated with or interested persons of Pioneer, the fund (other than as Trustees), PIM-USA or PFD; (k) the cost of preparing and printing share certificates; (l) interest on borrowed money, if any; (m) fees payable by the fund under management agreements and the administration agreement; and (n) extraordinary expenses. The fund shall also assume and pay any expense that the fund, Pioneer or any other agent of the fund may incur not listed above, and that is approved by the Board of Trustees (including a majority of the Independent Trustees) as being an appropriate expense of the fund. In addition, the fund shall pay all brokers' and underwriting commissions chargeable to the fund in connection with securities transactions to which the fund is a party.
Potential Conflicts of Interest. The fund is managed by Pioneer and the subadviser, each of which also serves as investment advisers to other mutual funds and other accounts (including separate accounts and unregistered products) including other Pioneer funds, with investment objectives identical or similar to those of the fund. Securities frequently meet the investment objectives of the fund and these other accounts. In such cases, the decision to recommend a purchase to one fund or account rather than another is based on a number of factors. The determining factors in most cases are the amount of securities of the issuer then outstanding, the
value of those securities and the market for them. Other factors considered in the investment recommendations include other investments which each fund or account presently has in a particular industry and the availability of investment funds in each fund or account.
It is possible that at times identical securities will be held by more than one fund and/or account. However, positions in the same issue may vary and the length of time that any fund or account may choose to hold its investment in the same issue may likewise vary. To the extent that more than one of the accounts managed by Pioneer or the subadviser, including the fund, seeks to acquire the same security at about the same time, the fund may not be able to acquire as large a position in such security as it desires or it may have to pay a higher price for the security. Similarly, the fund may not be able to obtain as large an execution of an order to sell or as high a price for any particular portfolio security if Pioneer or the subadviser decides to sell on behalf of another account the same portfolio security at the same time. On the other hand, if the same securities are bought or sold at the same time by more than one fund or account, the resulting participation in volume transactions could produce better executions for the fund. In the event more than one account purchases or sells the same security on a given date, the purchases and sales will normally be made as nearly as practicable on a pro rata basis in proportion to the amounts desired to be purchased or sold by each account. Although the other mutual funds or private accounts managed by Pioneer or the subadviser may have the same or similar investment objectives and policies as the fund, their portfolios do not generally consist of the same investments as the fund or each other, and their performance results are likely to differ from those of the fund.
Personal Securities Transactions. The fund, Pioneer, PFD and the subadviser have each adopted a code of ethics under Rule 17j-1 under the 1940 Act which is applicable to officers, trustees/directors and designated employees, including, in the case of Pioneer's code, designated employees of PIML. Each code permits such persons to engage in personal securities transactions for their own accounts, including securities that may be purchased or held by the fund, and is designed to prescribe means reasonably necessary to prevent conflicts of interest from arising in connection with personal securities transactions. Each code is on public file with and available from the SEC.
5. PRINCIPAL UNDERWRITER AND DISTRIBUTION PLAN
Principal Underwriter
PFD, 60 State Street, Boston, Massachusetts 02109, is the principal underwriter for the fund in connection with the continuous offering of its shares. PFD is an indirect wholly owned subsidiary of PIM-USA.
The fund entered into an underwriting agreement with PFD which provides that PFD will bear expenses for the distribution of the fund's shares, except for expenses incurred by PFD for which it is reimbursed or compensated by the fund under the distribution plan (discussed below). PFD bears all expenses it incurs in providing services under the underwriting agreement. Such expenses include compensation to its employees and representatives and to securities dealers for distribution-related services performed for the fund. PFD also pays certain expenses in connection with the distribution of the fund's shares, including the cost of preparing, printing and distributing advertising or promotional materials, and the cost of printing and distributing prospectuses and supplements to prospective shareholders. The fund bears the cost of registering
its shares under federal and state securities law and the laws of certain non-U.S. countries. Under the underwriting agreement, PFD will use its best efforts in rendering services to the fund.
See "Sales Charges" for the schedule of initial sales charge reallowed to dealers as a percentage of the offering price of the fund's Class A shares.
See the tables under "Annual Fee, Expense and Other Information" for commissions retained by PFD and reallowed to dealers in connection with PFD's offering of the fund's Class A and Class C shares during recently completed fiscal years.
The fund will not generally issue fund shares for consideration other than cash. At the fund's sole discretion, however, it may issue fund shares for consideration other than cash in connection with a bona fide reorganization, statutory merger or other acquisition of portfolio securities.
It is the fund's general practice to repurchase its shares of beneficial interest for cash consideration in any amount; however, the redemption price of shares of the fund may, at Pioneer's discretion, be paid in portfolio securities. The fund has elected to be governed by Rule 18f-1 under the 1940 Act pursuant to which the fund is obligated to redeem shares solely in cash up to the lesser of $250,000 or 1% of the fund's net asset value during any 90-day period for any one shareholder. Should the amount of redemptions by any shareholder exceed such limitation, the fund will have the option of redeeming the excess in cash or portfolio securities. In the latter case, the securities are taken at their value employed in determining the fund's net asset value. You may incur additional costs, such as brokerage fees and taxes, and risks, including a decline in the value of the securities you receive, if the fund makes an in-kind distribution.
Distribution Plan. The fund has adopted a distribution plan (the "Distribution Plan") pursuant to Rule l2b-1 under the 1940 Act with respect to its Class A, Class B and Class C shares. The fund has not adopted a distribution plan with respect to its Class Y shares.
For each Class that has adopted a Distribution Plan, fees under the Distribution Plan may be used to make payments to one or more principal underwriters, broker-dealers, financial intermediaries (which may include banks) and other parties that enter into a distribution, selling or service agreement with respect to the shares of such Class (each of the foregoing, a "Service Party"). The fund, its principal underwriter or other parties also may incur expenses in connection with the distribution or marketing and sales of the fund's shares that may be paid or reimbursed by the fund. The aggregate amount in respect of such fees and expenses with respect to each Class shall be the amount calculated at a percentage per annum of the average daily net assets attributable to such Class as set forth below:
Class Applicable Percentage Per Annum Class A 0.25% Class B 1.00% Class C 1.00% |
Payments are made under the Distribution Plan for distribution services and other activities in respect of the sale of shares of the fund and to make payments for advertising, marketing or other promotional activity, and for preparation, printing, and distribution of prospectuses, statements of additional information and reports for recipients other than regulators and existing shareholders. The fund also may make payments to Service Parties under the Distribution Plan for providing personal service or the maintenance of shareholder accounts. The amounts paid to each recipient
may vary based upon certain factors, including, among other things, the levels of sales of fund shares and/or shareholder services provided; provided, however, that the fees paid to a recipient with respect to a particular Class that may be used to cover expenses primarily intended to result in the sale of shares of that Class, or that may be used to cover expenses primarily intended for personal service and/or maintenance of shareholder accounts, may not exceed the maximum amounts, if any, as may from time to time be permitted for such services under the Financial Industry Regulatory Authority ("FINRA") Conduct Rule 2830 or any successor rule, in each case as amended or interpreted by FINRA.
The Distribution Plan also provides that the Service Parties may receive all or a portion of any sales charges paid by investors.
The Distribution Plan permits the fund to pay fees to the Service Parties as compensation for their services, not as reimbursement for specific expenses incurred. Thus, even if their expenses exceed the fees provided for by the Distribution Plan, the fund will not be obligated to pay more than those fees and, if their expenses are less than the fees paid to them, they will realize a profit. The fund may pay the fees to the Service Parties until the Distribution Plan or any related distribution agreement is terminated or not renewed. In that event, a Service Party's expenses in excess of fees received or accrued through the termination date will be such Service Party's sole responsibility and not obligations of the fund. In their annual consideration of the continuation of the Distribution Plan for the fund, the Trustees will review the Distribution Plan and the expenses for each Class within the fund separately. The fund may participate in joint distribution activities with other Pioneer funds. The costs associated with such joint distribution activities are allocated to a fund based on the number of shares sold.
The Distribution Plan also recognizes that Pioneer, PFD or any other Service Party may make payments for distribution-related expenses out of its own resources, including past profits, or payments received from the fund for other purposes, such as management fees, and that the Service Parties may from time to time use their own resources for distribution-related services, in addition to the fees paid under the Distribution Plan. The Distribution Plan specifically provides that, to the extent that such payments might be deemed to be indirect financing of any activity primarily intended to result in the sale of shares of the fund within the context of Rule 12b-1, then the payments are deemed to be authorized by the Distribution Plan but not subject to the maximum amounts set forth above.
Under its terms, the Distribution Plan continues in effect for one year and thereafter for successive annual periods, provided such continuance is specifically approved at least annually by vote of the Board, including a majority of the Independent Trustees who have no direct or indirect financial interest in the operation of the Distribution Plan. The Distribution Plan may not be amended to increase materially the amount of the service and distribution fees without shareholder approval, and all material amendments of the Distribution Plan also must be approved by the Trustees, including all of the Independent Trustees, in the manner described above. The Distribution Plan may be terminated with respect to a Class of the fund at any time, without penalty, by vote of a majority of the Independent Trustees or by vote of a majority of the outstanding voting securities of such Class of the fund (as defined in the 1940 Act).
See "Annual Fee, Expense and Other Information" for fund expenses under the Distribution Plan paid to PFD for the most recently completed fiscal year.
Class B Shares. PFD pays the selling broker-dealer a commission on the sale of Class B shares equal to 3.75% of the amount invested. This commission is paid at the time of sale of the Class B shares. In order to be entitled to a commission, the selling broker-dealer must have entered into a
sales agreement with PFD. Since PFD pays commissions to broker-dealers at the time of the sale of Class B shares but only receives compensation for such expenses over time through the distribution fee and CDSC, PFD may finance the payment of commissions to broker-dealers. In order to facilitate such financing, the fund has agreed that the distribution fee attributable to the Class B shares will not be terminated or modified (including a modification in the rules relating to the conversion of Class B shares into Class A shares) with respect to Class B shares (or the assets attributable to the Class B shares):
o issued prior to the date of any termination or modification;
o attributable to Class B shares issued through one or a series of exchanges of shares of another investment company for which PFD acts as principal underwriter which were initially issued prior to the date of such termination or modification; or
o issued as a dividend or distribution upon Class B shares initially issued or attributable to Class B shares issued prior to the date of any such termination or modification.
The foregoing limitation does not apply to Class B shares issued after the termination or modification. The foregoing limitation on terminating or modifying the distribution fee attributable to the Class B shares also does not apply to a termination or modification:
o to the extent required by a change in the 1940 Act, the rules or regulations under the 1940 Act, the Conduct Rules of FINRA or an order of any court or governmental agency, in each case enacted, issued or promulgated after September 30, 1998;
o if the fund (or any successor) terminates the Distribution Plan and all payments under the Distribution Plan and neither the fund (nor any successor) establishes another class of shares which has substantially similar characteristics to the Class B shares of the fund; or
o at any time by the Board of Trustees. However, the Board of Trustees may terminate or modify the Class B Plan only if the fund and Pioneer agree that none of the fund, PFD or any of their affiliates will pay, after the date of termination or modification, a service fee with respect to the fund's Class B shares and the termination or modification of the distribution fee applies equally to all Class B shares outstanding from time to time.
In the underwriting agreement, the fund agrees that subsequent to the issuance of a Class B share, the fund will not waive or change any CDSC (including a change in the rules applicable to conversion of Class B shares into another class) in respect of such Class B share, except:
o as provided in the fund's prospectus or statement of additional information; or
o as required by a change in the 1940 Act and the rules and regulations thereunder, the Conduct Rules of FINRA or any order of any court or governmental agency.
PFD pays a service fee to broker-dealers at a rate of up to 0.25% of the fund's average daily net assets attributable to Class B shares owned by shareholders for whom that broker-dealer is the holder or dealer of record. This service fee compensates the broker-dealer for providing personal services and/or account maintenance services rendered by the broker-dealer with respect to Class B shares. PFD may from time to time require that dealers, in addition to providing these services, meet certain criteria in order to receive service fees.
At the time of the sale of a Class B share, PFD also may advance to the broker-dealer, from PFD's own assets, the first-year service fee payable under the Class B Plan at a rate up to 0.25% of the purchase price of such shares. If such an advance is made, the broker-dealer would not receive any further service fee until the 13th month following the purchase of Class B shares. As compensation for advancing the service fee, PFD may retain the service fee paid by the fund with respect to such shares for the first year after purchase.
Class C Shares. PFD will advance to dealers the first-year service fee at a rate equal to 0.25% of the amount invested. As compensation therefor, PFD may retain the service fee paid by the fund with respect to such shares for the first year after purchase. Commencing in the 13th month following the purchase of Class C shares, dealers will become eligible for additional annual distribution fees and service fees of up to 0.75% and 0.25%, respectively, of the net asset value of such shares. Dealers may from time to time be required to meet certain other criteria in order to receive service fees.
6. SHAREHOLDER SERVICING/TRANSFER AGENT
The fund has contracted with PIMSS, 60 State Street, Boston, Massachusetts 02109, to act as shareholder servicing and transfer agent for the fund.
Under the terms of its contract with the fund, PIMSS services shareholder accounts, and its duties include: (i) processing sales, redemptions and exchanges of shares of the fund; (ii) distributing dividends and capital gains associated with the fund's portfolio; and (iii) maintaining account records and responding to shareholder inquiries.
PIMSS receives an annual fee of $24.75 for each shareholder account from the fund as compensation for the services described above. PIMSS is also reimbursed by the fund for its cash out-of-pocket expenditures. The fund may compensate entities which have agreed to provide certain sub-accounting services such as specific transaction processing and recordkeeping services. Any such payments by the fund would be in lieu of the per account fee which would otherwise be paid by the fund to PIMSS.
7. CUSTODIAN
Brown Brothers Harriman & Co., 40 Water Street, Boston, Massachusetts 02109, is the custodian of the fund's assets. The custodian's responsibilities include safekeeping and controlling the fund's cash and securities, handling the receipt and delivery of securities, and collecting interest and dividends on the fund's investments.
8. INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Ernst & Young LLP, 200 Clarendon Street, Boston, Massachusetts 02116-5072, the fund's independent registered public accounting firm, provides audit services, tax return review services, and assistance and consultation with respect to filings with the SEC.
9. PORTFOLIO MANAGEMENT
Additional Information About the Portfolio Managers
Other Accounts Managed by the Portfolio Managers. The table below indicates, for each portfolio manager of the fund, information about the accounts other than the fund over which the portfolio manager has day-to-day investment responsibility. All information on the number of accounts and total assets in the table is as of December 31, 2008. For purposes of the table, "Other Pooled Investment Vehicles" may include investment partnerships, undertakings for collective investments in transferable securities ("UCITS") and other non-U.S. investment funds and group trusts, and "Other Accounts" may include separate accounts for institutions or individuals, insurance company general or separate accounts, pension funds and other similar institutional accounts but generally do not include the portfolio manager's personal investment accounts or those which the manager may be deemed to own beneficially under the code of ethics. Certain funds and other accounts managed by the portfolio manager may have substantially similar investment strategies.
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Name of Portfolio Type of Account Number of Total Assets Number of Assets Managed
Manager Accounts Managed Managed Accounts Managed for which
for which Advisory Fee is
Advisory Fee is Performance-Based
Performance-Based
-----------------------------------------------------------------------------------------------------------------------
Matthew A. Troxell Other Registered 10 $1,006,100,000 N/A N/A
Investment
Companies
-------------------------------------------------------------------------------------------------
Other Pooled 5 $844,600,000 1 $80,100,000
Investment Vehicles
-------------------------------------------------------------------------------------------------
Other Accounts 32 $2,003,400,000 7 $586,400,000
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|
Potential Conflicts of Interest. When a portfolio manager is responsible for the management of more than one account, the potential arises for the portfolio manager to favor one account over another. The principal types of potential conflicts of interest that may arise are discussed below. For the reasons outlined below, Pioneer does not believe that any material conflicts are likely to arise out of a portfolio manager's responsibility for the management of the fund as well as one or more other accounts. Although Pioneer has adopted procedures that it believes are reasonably designed to detect and prevent violations of the federal securities laws and to mitigate the potential for conflicts of interest to affect its portfolio management decisions, there can be no assurance that all conflicts will be identified or that all procedures will be effective in mitigating the potential for such risks. Generally, the risks of such conflicts of interest are increased to the extent that a portfolio manager has a financial incentive to favor one account over another. Pioneer has structured its compensation arrangements in a manner that is intended to limit such potential for conflicts of interest. The fund's investment subadviser also has adopted certain compliance procedures which are designed to address these types of conflicts. However, there is no guarantee that such procedures will detect each situation in which a conflict might arise. See
"Compensation of Portfolio Managers" below.
o A portfolio manager could favor one account over another in allocating new investment opportunities that have limited supply, such as initial public offerings and private placements. If, for example, an initial public offering that was expected to appreciate in value significantly shortly after the offering was allocated to a single account, that account may be expected to have better investment performance than other accounts that did not receive an allocation of the initial public offering. Generally, investments for which there is limited availability are allocated based upon a range of factors including available cash and consistency with the accounts' investment objectives and policies. This allocation methodology necessarily involves some subjective elements but is intended over time to treat each client in an equitable and fair manner. Generally, the investment opportunity is allocated among participating accounts on a pro rata basis. Although Pioneer believes that its practices are reasonably designed to treat each client in an equitable and fair manner, there may be instances where a fund may not participate, or may participate to a lesser degree than other clients, in the allocation of an investment opportunity.
o A portfolio manager could favor one account over another in the order in which trades for the accounts are placed. If a portfolio manager determines to purchase a security for more than one account in an aggregate amount that may influence the market price of the security, accounts that purchased or sold the security first may receive a more favorable price than accounts that made subsequent transactions. The less liquid the market for the security or the greater the percentage that the proposed aggregate purchases or sales represent of average daily trading volume, the greater the potential for accounts that make subsequent purchases or sales to receive a less favorable price. When a portfolio manager intends to trade the same security on the same day for more than one account, the trades typically are "bunched," which means that the trades for the individual accounts are aggregated and each account receives the same price. There are some types of accounts as to which bunching may not be possible for contractual reasons (such as directed brokerage arrangements). Circumstances may also arise where the trader believes that bunching the orders may not result in the best possible price. Where those accounts or circumstances are involved, Pioneer will place the order in a manner intended to result in as favorable a price as possible for such client.
o A portfolio manager could favor an account if the portfolio manager's compensation is tied to the performance of that account to a greater degree than other accounts managed by the portfolio manager. If, for example, the portfolio manager receives a bonus based upon the performance of certain accounts relative to a benchmark while other accounts are disregarded for this purpose, the portfolio manager will have a financial incentive to seek to have the accounts that determine the portfolio manager's bonus achieve the best possible performance to the possible detriment of other accounts. Similarly, if Pioneer receives a performance-based advisory fee, the portfolio manager may favor that account, whether or not the performance of that account directly determines the portfolio manager's compensation.
o A portfolio manager could favor an account if the portfolio manager has a beneficial interest in the account, in order to benefit a large client or to compensate a client that had poor returns. For example, if the portfolio manager held an interest in an investment partnership that was one of the accounts managed by the portfolio manager, the portfolio manager would have an economic incentive to favor the account in which the portfolio manager held an interest.
o If the different accounts have materially and potentially conflicting investment objectives or strategies, a conflict of interest could arise. For example, if a portfolio manager purchases a security for one account and sells the same security for another account, such trading pattern may disadvantage either the account that is long or short. In making portfolio manager assignments, Pioneer seeks to avoid such potentially conflicting situations. However, where a portfolio manager is responsible for accounts with differing investment objectives and policies, it is possible that the portfolio manager will conclude that it is in the best interest of one account to sell a portfolio security while another account continues to hold or increase the holding in such security.
Compensation of Portfolio Manager. Compensation for all of AEW professionals, including its REIT investment professionals, is composed of two parts: base salary (fixed) and incentive compensation. The firm's base salary structure is designed to reflect market rates for the various disciplines within the company, such as investment management, asset management and accounting. To determine appropriate "market ranges" for the various functional areas (based on specific job characteristics and years of experience), AEW uses the services of an independent consulting firm which performs research into the compensation practices of firms similar to AEW within its industry.
Base salaries are supplemented by year-end incentive compensation awards, which account for a significant portion of total compensation. The awarding of incentive compensation is based upon the achievement of corporate objectives and specific individual goals, which are generally tied to the achievement of client objectives. The firm's operating margins for the year determine the availability of funds for incentive compensation. Additionally, AEW's senior professionals (Principals), including Portfolio Manager Matt Troxell, are eligible for participation in AEW's Long-Term Compensation program, which gives Principals of the firm economic interests in a portion of the firm's profits. This program is sponsored by AEW's parent company, IXIS Asset Management North America.
Share Ownership by Portfolio Manager. The following table indicates as of December 31, 2008 the value, within the indicated range, of shares beneficially owned by the portfolio manager of the fund.
-------------------------------------------------------------------------------- Name of Portfolio Manager Beneficial Ownership of the Fund* -------------------------------------------------------------------------------- Matthew A. Troxell A -------------------------------------------------------------------------------- |
*Key to Dollar Ranges
A. None
B. $1 - $10,000
C. $10,001 - $50,000
D. $50,001 - $100,000
E. $100,001 - $500,000
F. $500,001 - $1,000,000
G. Over $1,000,000
10. PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on behalf of the fund by AEW, subject to Pioneer's supervision, pursuant to authority contained in the management contract and subadvisory agreement. Pioneer and AEW seek to obtain the overall best execution on portfolio trades on behalf of the fund. The price of securities and any commission rate paid are always factors, but frequently not the only factors, in judging best execution. In selecting brokers or dealers, Pioneer and AEW consider various relevant factors, including, but not limited to, the size and type of the transaction; the nature and character of the markets for the security to be purchased or sold; the execution efficiency, settlement capability and financial condition of the dealer; the dealer's execution services rendered on a continuing basis; and the reasonableness of any dealer spreads. Transactions in non-U.S. equity securities are executed by broker-dealers in non-U.S. countries in which commission rates may not be negotiable (as such rates are in the U.S.).
Pioneer or AEW may select broker-dealers that provide brokerage and/or research services to the fund and/or other investment companies or other accounts managed by Pioneer or AEW over which they or their affiliates exercise investment discretion. In addition, consistent with Section 28(e) of the Securities Exchange Act of 1934, as amended, if Pioneer or AEW determines in good faith that the amount of commissions charged by a broker-dealer is reasonable in relation to the value of the brokerage and research services provided by such broker, the fund may pay commissions to such broker-dealer in an amount greater than the amount another firm may charge. Such services may include advice concerning the value of securities; the advisability of investing in, purchasing or selling securities; the availability of securities or the purchasers or sellers of securities; providing stock quotation services, credit rating service information and comparative fund statistics; furnishing analyses, electronic information services, manuals and reports concerning issuers, industries, securities, economic factors and trends, portfolio strategy, and performance of accounts and particular investment decisions; and effecting securities transactions and performing functions incidental thereto (such as clearance and settlement). Pioneer or AEW maintains a listing of broker-dealers who provide such services on a regular basis. However, because many transactions on behalf of the fund and other investment companies or accounts managed by Pioneer or AEW are placed with broker-dealers (including broker-dealers on the listing) without regard to the furnishing of such services, it is not possible to estimate the proportion of such transactions directed to such dealers solely because such services were provided. Pioneer believes that no exact dollar value can be calculated for such services.
The research received from broker-dealers may be useful to Pioneer or AEW in rendering investment management services to the fund as well as other investment companies or other accounts managed by them, although not all such research may be useful to the fund. Conversely, such information provided by brokers or dealers who have executed transaction orders on behalf of such other accounts may be useful to Pioneer or AEW in carrying out their obligations to the fund. The receipt of such research has not reduced Pioneer's or AEW's normal independent research activities; however, it enables each of them to avoid the additional expenses which might otherwise be incurred if it were to attempt to develop comparable information through its own staff.
The fund may participate in third-party brokerage and/or expense offset arrangements to reduce the fund's total operating expenses. Pursuant to third-party brokerage arrangements, the fund may incur lower expenses by directing brokerage to third-party broker-dealers which have agreed to use part of their commission to pay the fund's fees to service providers unaffiliated with Pioneer or other expenses. Since the commissions paid to the third party brokers reflect a commission cost that the fund would generally expect to incur on its brokerage transactions but not necessarily the
lowest possible commission, this arrangement is intended to reduce the fund's operating expenses without increasing the cost of its brokerage commissions. Since use of such directed brokerage is subject to the requirement to achieve best execution in connection with the fund's brokerage transactions, there can be no assurance that such arrangements will be utilized. Pursuant to expense offset arrangements, the fund may incur lower transfer agency expenses due to interest earned on cash held with the transfer agent. See "Financial highlights" in the prospectus(es).
See the table in "Annual Fee, Expense and Other Information" for aggregate brokerage and underwriting commissions paid by the fund in connection with its portfolio transactions during recently completed fiscal years. The Board of Trustees periodically reviews Pioneer's and AEW's performance of their responsibilities in connection with the placement of portfolio transactions on behalf of the fund.
11. DESCRIPTION OF SHARES
As an open-end management investment company, the fund continuously offers its shares to the public and under normal conditions must redeem its shares upon the demand of any shareholder at the next determined net asset value per share less any applicable CDSC. See "Sales Charges." When issued and paid for in accordance with the terms of the prospectus and statement of additional information, shares of the fund are fully paid and non-assessable. Shares will remain on deposit with the fund's transfer agent and certificates will not normally be issued.
The fund is a series of Pioneer Real Estate Shares, a Delaware statutory trust (the "Trust"). The Trustees have authorized the issuance of the following classes of shares of the fund, designated as Class A, Class B, Class C, and Class Y. Each share of a class of the fund represents an equal proportionate interest in the assets of the fund allocable to that class. Upon liquidation of the fund, shareholders of each class of the fund are entitled to share pro rata in the fund's net assets allocable to such class available for distribution to shareholders. The Trust reserves the right to create and issue additional series or classes of shares, in which case the shares of each class of a series would participate equally in the earnings, dividends and assets allocable to that class of the particular series.
The shares of each class represent an interest in the same portfolio of investments of the fund. Each class has identical rights (based on relative net asset values) to assets and liquidation proceeds. Share classes can bear different class-specific fees and expenses such as transfer agent and distribution fees. Differences in class-specific fees and expenses will result in differences in net investment income and, therefore, the payment of different dividends by each class. Share classes have exclusive voting rights with respect to matters affecting only that class, including with respect to the distribution plan for that class.
The Trust
The Trust's operations are governed by the Amended and Restated Agreement and
Declaration of Trust, dated as of July 1, 2008 (referred to in this section as
the declaration). A copy of the Trust's Certificate of Trust dated as of March
10, 1995, as amended, is on file with the office of the Secretary of State of
Delaware.
Delaware law provides a statutory framework for the powers, duties, rights and obligations of the board (referred to in this section as the trustees) and shareholders of the Delaware statutory trust, while the more specific powers, duties, rights and obligations of the trustees and the shareholders
are determined by the trustees as set forth in the declaration. Some of the more significant provisions of the declaration are described below.
Shareholder Voting
The declaration provides for shareholder voting as required by the 1940 Act or
other applicable laws but otherwise permits, consistent with Delaware law,
actions by the trustees without seeking the consent of shareholders. The
trustees may, without shareholder approval, where approval of shareholders is
not otherwise required under the 1940 Act, merge or consolidate the Trust into
other entities, reorganize the Trust or any series or class into another trust
or entity or a series or class of another entity, sell the assets of the Trust
or any series or class to another entity, or a series or class of another
entity, or terminate the Trust or any series or class.
The fund is not required to hold an annual meeting of shareholders, but the fund will call special meetings of shareholders whenever required by the 1940 Act or by the terms of the declaration. The declaration gives the board the flexibility to specify either per share voting or dollar-weighted voting. Under per share voting, each share of the fund is entitled to one vote. Under dollar-weighted voting, a shareholder's voting power is determined, not by the number of shares the shareholder owns, but by the dollar value of those shares determined on the record date. All shareholders of all series and classes of the Trust vote together, except where required by the 1940 Act to vote separately by series or by class, or when the trustees have determined that a matter affects only the interests of one or more series or classes of shares.
Election and Removal of Trustees
The declaration provides that the trustees may establish the number of trustees
and that vacancies on the board may be filled by the remaining trustees, except
when election of trustees by the shareholders is required under the 1940 Act.
Trustees are then elected by a plurality of votes cast by shareholders at a
meeting at which a quorum is present. The declaration also provides that a
mandatory retirement age may be set by action of two-thirds of the trustees and
that trustees may be removed at any time or for any reason by a majority of the
board or by a majority of the outstanding shareholders of the Trust.
Amendments to the Declaration
The trustees are authorized to amend the declaration without the vote of
shareholders, but no amendment may be made that impairs the exemption from
personal liability granted in the declaration to persons who are or have been
shareholders, trustees, officers or, employees of the trust or that limit the
rights to indemnification or insurance provided in the declaration with respect
to actions or omissions of persons entitled to indemnification under the
declaration prior to the amendment.
Issuance and Redemption of Shares
The fund may issue an unlimited number of shares for such consideration and on
such terms as the trustees may determine. Shareholders are not entitled to any
appraisal, preemptive, conversion, exchange or similar rights, except as the
trustees may determine. The fund may involuntarily redeem a shareholder's shares
upon certain conditions as may be determined by the trustees, including, for
example, if the shareholder fails to provide the fund with identification
required by law, or if the fund is unable to verify the information received
from the shareholder. Additionally, as discussed below, shares may be redeemed
in connection with the closing of small accounts.
Disclosure of Shareholder Holdings
The declaration specifically requires shareholders, upon demand, to disclose to
the fund information with respect to the direct and indirect ownership of shares
in order to comply
with various laws or regulations, and the fund may disclose such ownership if required by law or regulation.
Small Accounts
The declaration provides that the fund may close out a shareholder's account by
redeeming all of the shares in the account if the account falls below a minimum
account size (which may vary by class) that may be set by the trustees from time
to time. Alternately, the declaration permits the fund to assess a fee for small
accounts (which may vary by class) and redeem shares in the account to cover
such fees, or convert the shares into another share class that is geared to
smaller accounts.
Series and Classes
The declaration provides that the trustees may establish series and classes in
addition to those currently established and to determine the rights and
preferences, limitations and restrictions, including qualifications for
ownership, conversion and exchange features, minimum purchase and account size,
expenses and charges, and other features of the series and classes. The trustees
may change any of those features, terminate any series or class, combine series
with other series in the trust, combine one or more classes of a series with
another class in that series or convert the shares of one class into another
class.
Each share of the fund, as a series of the Trust, represents an interest in the fund only and not in the assets of any other series of the Trust.
Shareholder, Trustee and Officer Liability The declaration provides that shareholders are not personally liable for the obligations of the fund and requires a fund to indemnify a shareholder against liability arising solely from the shareholder's ownership of shares in the fund. In addition, the fund will assume the defense of any claim against a shareholder for personal liability at the request of the shareholder. The declaration further provides that no trustee, officer or employee of the fund shall be liable to the fund or any shareholder for any action, failure to act, error or mistake except in cases of bad faith, willful misfeasance, gross negligence or reckless disregard of duty. The declaration requires the fund to indemnify each trustee, director, officer, employee and authorized agent to the fullest extent permitted by law against liability and against all expenses reasonably incurred or paid by him in connection with any claim, action, suit or proceeding in which he becomes involved as a party or otherwise by virtue of his being or having been such a trustee, director, officer, employee, or agent and against amounts paid or incurred by him in settlement thereof. The 1940 Act currently provides that no officer or director shall be protected from liability to the fund or shareholders for willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties of office. The declaration extends to trustees, officers and employees of the fund the full protection from liability that the law allows.
The declaration provides that the appointment or designation of a trustee as chairperson, a member of a committee, an expert, lead independent trustee, or any other special appointment shall not impose any heightened standard of care or liability on such trustee.
Derivative Actions
The declaration provides a detailed process for the bringing of derivative
actions by shareholders in order to permit legitimate inquiries and claims while
avoiding the time, expense, distraction, and other harm that can be caused to
the fund or its shareholders as a result of spurious shareholder demands and
derivative actions. Prior to bringing a derivative action, a demand by three
unrelated shareholders must first be made on the fund's trustees. The
declaration details various information, certifications, undertakings and
acknowledgements that must be included in the demand. Following receipt of the
demand, the trustees have a period of 90 days, which may
be extended by an additional 60 days, to consider the demand. If a majority of the trustees who are considered independent for the purposes of considering the demand determine that maintaining the suit would not be in the best interests of the fund, the trustees are required to reject the demand and the complaining shareholders may not proceed with the derivative action unless the shareholders are able to sustain the burden of proof to a court that the decision of the trustees not to pursue the requested action was not a good faith exercise of their business judgment on behalf of the fund. The declaration further provides that shareholders owning shares representing at least 10% of the voting power of the affected fund must join in bringing the derivative action. If a demand is rejected, the complaining shareholders will be responsible for the costs and expenses (including attorneys' fees) incurred by the fund in connection with the consideration of the demand, if in the judgment of the independent trustees, the demand was made without reasonable cause or for an improper purpose. If a derivative action is brought in violation of the declaration, the shareholders bringing the action may be responsible for the fund's costs, including attorneys' fees.
The declaration further provides that the fund shall be responsible for payment of attorneys' fees and legal expenses incurred by a complaining shareholder only if required by law, and any attorneys' fees that the fund is obligated to pay shall be calculated using reasonable hourly rates. The declaration also requires that actions by shareholders against the fund be brought only in federal court in Boston, Massachusetts, or if not permitted to be brought in federal court, then in state court in Boston, Massachusetts, and that shareholders have no right to jury trial for such actions.
12. SALES CHARGES
The fund continuously offers the following classes of shares: Class A, Class B, Class C, Class Y and Class Z, as described in the applicable prospectus. The fund offers its shares at a reduced sales charge to investors who meet certain criteria that permit the fund's shares to be sold with low distribution costs. These criteria are described below or in the prospectus.
Class A Share Sales Charges
You may buy Class A shares at the public offering price, including a sales charge, as follows:
Sales Charge as a % of
----------------------
Offering Net Amount Dealer
Amount of Purchase Price Invested Reallowance
Less than $50,000 5.75 6.10 5.00
$50,000 but less than $100,000 4.50 4.71 4.00
$100,000 but less than $250,000 3.50 3.63 3.00
$250,000 but less than $500,000 2.50 2.56 2.00
$500,000 or more 0.00 0.00 see below
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The schedule of sales charges above is applicable to purchases of Class A shares of the fund by (i) an individual, (ii) an individual and his or her spouse and children under the age of 21 and (iii) a trustee or other fiduciary of a trust estate or fiduciary account or related trusts or accounts including pension, profit-sharing and other employee benefit trusts qualified under Sections 401 or 408 of the Code although more than one beneficiary is involved. The sales charges applicable to a current purchase of Class A shares of the fund by a person listed above is determined by adding the value of shares to be purchased to the aggregate value (at the then current offering price) of shares of any of the other
Pioneer mutual funds previously purchased and then owned, provided PFD is notified by such person or his or her broker-dealer each time a purchase is made which would qualify. Pioneer mutual funds include all mutual funds for which PFD serves as principal underwriter. At the sole discretion of PFD, holdings of funds domiciled outside the U.S., but which are managed by affiliates of Pioneer, may be included for this purpose.
No sales charge is payable at the time of purchase on investments of $500,000 or more, or for purchases by participants in employer-sponsored retirement plans described below subject to a CDSC of 1% which may be imposed in the event of a redemption of Class A shares within 12 months of purchase. PFD may, in its discretion, pay a commission to broker-dealers who initiate and are responsible for such purchases as follows:
Accounts Other than Employer-Sponsored Retirement Plans
1.00% Up to $4 million 0.50% Next $46 million 0.25% Over $50 million |
Employer-Sponsored Retirement Plans
0.50% Up to $50 million
0.25% Over $50 million
These commissions shall not be payable if the purchaser is affiliated with the broker-dealer or if the purchase represents the reinvestment of a redemption made during the previous 12 calendar months. Broker-dealers who receive a commission in connection with Class A share purchases at net asset value by employer-sponsored retirement plans with at least $500,000 in total plan assets (or that has 1,000 or more eligible participants for employer-sponsored retirement plans with accounts established with Pioneer on or before March 31, 2004) will be required to return any commissions paid or a pro rata portion thereof if the retirement plan redeems its shares within 12 months of purchase.
Letter of Intent ("LOI"). Reduced sales charges are available for purchases of $50,000 or more of Class A shares (excluding any reinvestments of dividends and capital gain distributions) made within a 13-month period pursuant to an LOI which may be established by completing the Letter of Intent section of the Account Application. The reduced sales charge will be the charge that would be applicable to the purchase of the specified amount of Class A shares as if the shares had all been purchased at the same time. A purchase not made pursuant to an LOI may be included if the LOI is submitted to PIMSS within 90 days of such purchase. You may also obtain the reduced sales charge by including the value (at current offering price) of all your Class A shares in the fund and all other Pioneer mutual funds held of record as of the date of your LOI in the amount used to determine the applicable sales charge for the Class A shares to be purchased under the LOI. Five percent of your total intended purchase amount will be held in escrow by PIMSS, registered in your name, until the terms of the LOI are fulfilled. When you sign the Account Application, you agree to irrevocably appoint PIMSS your attorney-in-fact to surrender for redemption any or all shares held in escrow with full power of substitution. An LOI is not a binding obligation upon the investor to purchase, or the fund to sell, the amount specified in the LOI. Any share class for which no sales charge is paid cannot be included under the LOI.
If the total purchases, less redemptions, exceed the amount specified under the LOI and are in an amount that would qualify for a further quantity discount, all transactions will be recomputed on
the expiration date of the LOI to effect the lower sales charge. Any difference in the sales charge resulting from such recomputation will be either delivered to you in cash or invested in additional shares at the lower sales charge. The dealer, by signing the Account Application, agrees to return to PFD, as part of such retroactive adjustment, the excess of the commission previously reallowed or paid to the dealer over that which is applicable to the actual amount of the total purchases under the LOI.
If the total purchases, less redemptions, are less than the amount specified under the LOI, you must remit to PFD any difference between the sales charge on the amount actually purchased and the amount originally specified in the LOI. When the difference is paid, the shares held in escrow will be deposited to your account. If you do not pay the difference in sales charge within 20 days after written request from PFD or your dealer, PIMSS, after receiving instructions from PFD, will redeem the appropriate number of shares held in escrow to realize the difference and release any excess.
Class B Shares
You may buy Class B shares at the net asset value per share next computed after receipt of a purchase order without the imposition of an initial sales charge; however, Class B shares redeemed within five years of purchase will be subject to a CDSC at the rates shown in the table below. The charge will be assessed on the amount equal to the lesser of the current market value or the original purchase cost of the shares being redeemed. No CDSC will be imposed on increases in account value above the initial purchase price, including shares derived from the reinvestment of dividends or capital gain distributions.
The amount of the CDSC, if any, will vary depending on the number of years from the time of purchase until the time of redemption of Class B shares. In processing redemptions of Class B shares, the fund will first redeem shares not subject to any CDSC and then shares held longest during the five-year period. As a result, you will pay the lowest possible CDSC.
The CDSC for Class B shares subject to a CDSC upon redemption will be determined as follows:
CDSC as a % of Dollar
Year Since Purchase Amount Subject to CDSC
First 4.0
Second 4.0
Third 3.0
Fourth 2.0
Fifth 1.0
Sixth and thereafter 0.0
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Shares purchased prior to December 1, 2004 remain subject to the contingent deferred sales charges in effect at the time you purchased those shares. Shares purchased as part of an exchange or acquired as a result of a reorganization of another fund into the fund remain subject to any CDSC that applied to the shares you originally purchased.
Proceeds from the CDSC are paid to PFD and are used in whole or in part to defray PFD's expenses related to providing distribution-related services to the fund in connection with the sale of Class B shares, including the payment of compensation to broker-dealers.
Class B shares will automatically convert into Class A shares eight years after the purchase date, except as noted below. Class B shares acquired by exchange from Class B shares of another Pioneer mutual fund will convert into Class A shares based on the date of the initial purchase and the applicable CDSC. Class B shares acquired through reinvestment of distributions will convert into Class A shares over time in the same proportion as other shares held in the account. For this purpose, Class B shares acquired through reinvestment of distributions will be attributed to particular purchases of Class B shares in accordance with such procedures as the Trustees may determine from time to time. The conversion of Class B shares to Class A shares is subject to the continuing availability of a ruling from the Internal Revenue Service (the "IRS") or an opinion of counsel that such conversions will not constitute taxable events for U.S. federal income tax purposes. The conversion of Class B shares to Class A shares will not occur if such ruling or opinion is not available and, therefore, Class B shares would continue to be subject to higher expenses than Class A shares for an indeterminate period.
Class C Shares
You may buy Class C shares at the net asset value per share next computed after receipt of a purchase order without the imposition of an initial sales charge; however, Class C shares redeemed within one year of purchase will be subject to a CDSC of 1%. The charge will be assessed on the amount equal to the lesser of the current market value or the original purchase cost of the shares being redeemed. No CDSC will be imposed on increases in account value above the initial purchase price, including shares derived from the reinvestment of dividends or capital gain distributions. Class C shares do not convert to any other class of fund shares.
In processing redemptions of Class C shares, the fund will first redeem shares not subject to any CDSC and then shares held for the longest period of time during the one-year period. As a result, you will pay the lowest possible CDSC.
Proceeds from the CDSC are paid to PFD and are used in whole or in part to defray PFD's expenses related to providing distribution-related services to the fund in connection with the sale of Class C shares, including the payment of compensation to broker-dealers.
Class Y Shares
No front-end, deferred or asset based sales charges are applicable to Class Y shares.
Additional Payments to Financial Intermediaries
The financial intermediaries through which shares are purchased may receive all or a portion of the sales charges and Rule 12b-1 fees discussed above. In addition to those payments, Pioneer or one or more of its affiliates (collectively, "Pioneer Affiliates") may make additional payments to financial intermediaries in connection with the promotion and sale of shares of Pioneer funds. Pioneer Affiliates make these payments from their own resources, which include resources that derive from compensation for providing services to the Pioneer funds. These additional payments are described below. The categories described below are not mutually exclusive. The same financial intermediary may receive payments under more than one or all categories. Many financial intermediaries that sell shares of Pioneer funds receive one or more types of these payments. The financial intermediary typically initiates requests for additional compensation. Pioneer negotiates these arrangements individually with financial intermediaries and the amount of payments and the specific arrangements may differ significantly. A financial intermediary also may receive different levels of compensation with respect to sales or assets attributable to
different types of clients of the same intermediary or different Pioneer funds. Where services are provided, the costs of providing the services and the overall array of services provided may vary from one financial intermediary to another. Pioneer Affiliates do not make an independent assessment of the cost of providing such services. While the financial intermediaries may request additional compensation from Pioneer to offset costs incurred by the financial intermediary in servicing its clients, the financial intermediary may earn a profit on these payments, since the amount of the payment may exceed the financial intermediary's costs. In this context, "financial intermediary" includes any broker, dealer, bank (including bank trust departments), insurance company, transfer agent, registered investment adviser, financial planner, retirement plan administrator and any other financial intermediary having a selling, administrative and shareholder servicing or similar agreement with a Pioneer Affiliate.
A financial intermediary's receipt of additional compensation may create conflicts of interest between the financial intermediary and its clients. Each type of payment discussed below may provide your financial intermediary with an economic incentive to actively promote the Pioneer funds over other mutual funds or cooperate with the distributor's promotional efforts. The receipt of additional compensation for Pioneer Affiliates may be an important consideration in a financial intermediary's willingness to support the sale of the Pioneer funds through the financial intermediary's distribution system. Pioneer Affiliates are motivated to make the payments described above since they promote the sale of Pioneer fund shares and the retention of those investments by clients of financial intermediaries. In certain cases these payments could be significant to the financial intermediary. The financial intermediary may charge additional fees or commissions other than those disclosed in the prospectus. Financial intermediaries may categorize and disclose these arrangements differently than Pioneer Affiliates do. To the extent financial intermediaries sell more shares of the funds or retain shares of the funds in their clients' accounts, Pioneer Affiliates benefit from the incremental management and other fees paid to Pioneer Affiliates by the funds with respect to those assets.
Revenue Sharing Payments. Pioneer Affiliates make revenue sharing payments as incentives to certain financial intermediaries to promote and sell shares of Pioneer funds. The benefits Pioneer Affiliates receive when they make these payments include, among other things, entry into or increased visibility in the financial intermediary's sales system, participation by the intermediary in the distributor's marketing efforts (such as helping facilitate or providing financial assistance for conferences, seminars or other programs at which Pioneer personnel may make presentations on the funds to the intermediary's sales force), placement on the financial intermediary's preferred fund list, and access (in some cases, on a preferential basis over other competitors) to individual members of the financial intermediary's sales force or management. Revenue sharing payments are sometimes referred to as "shelf space" payments because the payments compensate the financial intermediary for including Pioneer funds in its fund sales system (on its "shelf space"). Pioneer Affiliates compensate financial intermediaries differently depending typically on the level and/or type of considerations provided by the financial intermediary.
The revenue sharing payments Pioneer Affiliates make may be calculated on sales of shares of Pioneer funds ("Sales-Based Payments"); although there is no policy limiting the amount of Sales-Based Payments any one financial intermediary may receive, the total amount of such payments normally does not exceed 0.25% per annum of those assets. Such payments also may be calculated on the average daily net assets of the applicable Pioneer funds attributable to that particular financial intermediary ("Asset-Based Payments"); although there is no policy limiting the amount of Asset-Based Payments any one financial intermediary may receive, the total amount of such payments normally does not exceed 0.15% per annum of those assets. Sales-Based Payments primarily create incentives to make new sales of shares of Pioneer funds and
Asset-Based Payments primarily create incentives to retain previously sold shares of Pioneer funds in investor accounts. Pioneer Affiliates may pay a financial intermediary either or both Sales-Based Payments and Asset-Based Payments.
Administrative and Processing Support Payments. Pioneer Affiliates also may make payments to certain financial intermediaries that sell Pioneer fund shares for certain administrative services, including record keeping and sub-accounting shareholder accounts, to the extent that the funds do not pay for these costs directly. Pioneer Affiliates also may make payments to certain financial intermediaries that sell Pioneer fund shares in connection with client account maintenance support, statement preparation and transaction processing. The types of payments that Pioneer Affiliates may make under this category include, among others, payment of ticket charges per purchase or exchange order placed by a financial intermediary, payment of networking fees in connection with certain mutual fund trading systems, or one-time payments for ancillary services such as setting up funds on a financial intermediary's mutual fund trading system.
Other Payments. From time to time, Pioneer Affiliates, at their expense, may provide additional compensation to financial intermediaries which sell or arrange for the sale of shares of the Pioneer funds. Such compensation provided by Pioneer Affiliates may include financial assistance to financial intermediaries that enable Pioneer Affiliates to participate in and/or present at conferences or seminars, sales or training programs for invited registered representatives and other employees, client entertainment, client and investor events, and other financial intermediary-sponsored events, and travel expenses, including lodging incurred by registered representatives and other employees in connection with client prospecting, retention and due diligence trips. Other compensation may be offered to the extent not prohibited by federal or state laws or any self-regulatory agency, such as FINRA. Pioneer Affiliates make payments for entertainment events they deem appropriate, subject to Pioneer Affiliates' guidelines and applicable law. These payments may vary depending upon the nature of the event or the relationship.
As of January 1, 2009, Pioneer anticipates that the following broker-dealers or their affiliates will receive additional payments as described in the fund's prospectuses and statement of additional information:
A.G. Edwards & Sons Inc.
AIG VALIC
Ameriprise Financial Services, Inc.
Associated Securities Corp.
AXA Advisors, LLC
Charles Schwab & Co., Inc.
Chevy Chase Securities, Inc.
Citigroup Global Markets Inc.
Commonwealth Financial Network
D.A. Davidson & Co.
Ferris, Baker Watts Inc.
Fidelity Brokerage Services LLC
First Clearing, LLC
First Command Financial Planning, Inc.
H&R Block Financial Advisors, Inc.
Hartford Securities Distribution Company, Inc.
Hewitt Financial Services LLC
ING
J.J.B. Hilliard, W.L Lyons, Inc.
Janney Montgomery Scott LLC
Jefferson National Securities Corporation
Legend Equities Corporation
Lincoln Investment Planning, Inc.
LPL Financial Corp.
Merrill Lynch & Co., Inc.
Mesirow Financial, Inc.
MetLife Securities Inc.
Morgan Keegan & Co., Inc.
Morgan Stanley & Co., Inc.
Mutual of Omaha Investor Services, Inc.
Mutual Service Corporation
N.I.S. Financial Services, Inc.
National Financial Services LLC
Nationwide Securities, Inc.
Northwestern Investment Services, LLC
OneAmerica Securities, Inc.
Oppenheimer & Co., Inc.
Pershing LLC
PFS Investments Inc
Prudential Financial
Primevest Financial Services, Inc.
Raymond James Financial Services, Inc.
RBC Dain Rauscher Inc.
Ridge Clearing & Outsourcing Solutions, Inc.
Robert W. Baird & Co., Inc.
Scott and Stringfellow, Inc.
Scottrade, Inc.
Securities America, Inc.
Southwest Securities, Inc.
Sterne Agee & Leach, Inc.
Stifel Nicholas & Company, Inc.
Symetra Investment Services, Inc.
UBS Financial Services Inc.
Wachovia Securities
Waterstone Financial Group, Inc.
Wells Fargo Investments, LLC
Please contact your financial intermediary for details about any payments it receives from Pioneer Affiliates or the funds, as well as about fees and/or commissions it charges.
13. REDEEMING SHARES
Redemptions may be suspended or payment postponed during any period in which any of the following conditions exist: the New York Stock Exchange (the "Exchange") is closed or trading on the Exchange is restricted; an emergency exists as a result of which disposal by the fund of securities owned by it is not reasonably practicable or it is not reasonably practicable for the fund to fairly determine the value of the net assets of its portfolio; or the SEC, by order, so permits.
Redemptions and repurchases are taxable transactions for shareholders that are subject to U.S. federal income tax. The net asset value per share received upon redemption or repurchase may be more or less than the cost of shares to an investor, depending on the market value of the portfolio at the time of redemption or repurchase.
Systematic Withdrawal Plan(s) ("SWP") (Class A, B, and C shares). A SWP is designed to provide a convenient method of receiving fixed payments at regular intervals from fund share accounts having a total value of not less than $10,000. You must also be reinvesting all dividends and capital gain distributions to use the SWP option.
Periodic payments of $50 or more will be deposited monthly, quarterly, semiannually or annually directly into a bank account designated by the applicant or will be sent by check to the applicant, or any person designated by the applicant. Payments can be made either by check or electronic funds transfer to a bank account designated by you. Withdrawals from Class B and Class C share accounts are limited to 10% of the value of the account at the time the SWP is established. See "Qualifying for a reduced sales charge" in the prospectus. If you direct that withdrawal payments be paid to another person, want to change the bank where payments are sent or designate an address that is different from the account's address of record after you have opened your account, a medallion signature guarantee must accompany your instructions. Withdrawals under the SWP are redemptions that may have tax consequences for you.
While you are making systematic withdrawals from your account, you may pay unnecessary initial sales charges on additional purchases of Class A shares or contingent deferred sales charges. SWP redemptions reduce and may ultimately exhaust the number of shares in your account. In addition, the amounts received by a shareholder cannot be considered as yield or income on his or her investment because part of such payments may be a return of his or her investment.
A SWP may be terminated at any time (1) by written notice to PIMSS or from PIMSS to the shareholder; (2) upon receipt by PIMSS of appropriate evidence of the shareholder's death; or (3) when all shares in the shareholder's account have been redeemed.
You may obtain additional information by calling PIMSS at 1-800-225-6292.
Reinstatement Privilege (Class A and Class B Shares). Subject to the provisions outlined in the prospectus, you may reinvest all or part of your sale proceeds from Class A and Class B shares without a sales charge into Class A shares of a Pioneer mutual fund. However, the distributor will not pay your investment firm a commission on any reinvested amount.
14. TELEPHONE AND ONLINE TRANSACTIONS
You may purchase, exchange or sell Class A, Class B or Class C shares by
telephone or online. Class Y shares may not be purchased by telephone, and Class
Y shareowners are not eligible for on line transaction privileges. See the
prospectus for more information. For personal assistance, call 1-800-225-6292
between 8:00 a.m. and 7:00 p.m. (Class Y account holders should contact
Pioneer's Group Plans Department at 1-800-665-8839 between 9:00 a.m. and 5:30
p.m.) Eastern time on weekdays. Computer-assisted telephone transactions may be
available to shareholders who have prerecorded certain bank information (see
"FactFoneSM"). You are strongly urged to consult with your investment
professional prior to requesting any telephone or online transaction.
Telephone Transaction Privileges. To confirm that each transaction instruction received by telephone is genuine, the fund will record each telephone transaction, require the caller to provide validating information for the account and send you a written confirmation of each telephone transaction. Different procedures may apply to accounts that are registered to non-U.S. citizens or that are held in the name of an institution or in the name of an investment broker-dealer or other third party. If reasonable procedures, such as those described above, are not followed, the fund may be liable for any loss due to unauthorized or fraudulent instructions. The fund may implement other procedures from time to time. In all other cases, neither the fund, PIMSS nor PFD will be responsible for the authenticity of instructions received by telephone; therefore, you bear the risk of loss for unauthorized or fraudulent telephone transactions.
Online Transaction Privileges. If your account is registered in your name, you may be able buy, exchange or sell fund shares online. Your investment firm may also be able to buy, exchange or sell your fund shares online.
To establish online transaction privileges:
o For new accounts, complete the online section of the account application
o For existing accounts, complete an account options form, write to the transfer agent or complete the online authorization screen on www.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. The fund may implement other procedures from time to time. Different procedures may apply if you have a non-U.S. account or if your account is registered in the name of an institution, broker-dealer or other third party. You may not be able to use the online transaction privilege for certain types of accounts, including most retirement accounts.
Telephone and Website Online Access. You may have difficulty contacting the fund by telephone or accessing www.pioneerinvestments.com during times of market volatility or disruption in telephone or Internet services. On Exchange holidays or on days when the Exchange closes early, Pioneer will adjust the hours for the telephone center and for online transaction processing accordingly. If you are unable to access www.pioneerinvestments.com or to reach the fund by telephone, you should communicate with the fund in writing.
FactFone(SM). FactFone(SM) is an automated inquiry and telephone transaction system available to Pioneer mutual fund shareholders by dialing 1-800-225-4321. FactFone(SM) allows shareholder
access to current information on Pioneer mutual fund accounts and to the prices and yields of all publicly available Pioneer mutual funds. In addition, you may use FactFone(SM) to make computer-assisted telephone purchases, exchanges or redemptions from your Pioneer mutual fund accounts, access your account balances and last three transactions and order a duplicate statement if you have activated your PIN. Telephone purchases or redemptions require the establishment of a bank account of record. Computer-assisted Class Y share telephone purchases, exchanges and redemptions and certain other FactFone(SM) features for Class Y shareholders are not currently available through FactFone(SM). You are strongly urged to consult with your investment professional prior to requesting any telephone transaction. Shareholders whose accounts are registered in the name of a broker-dealer or other third party may not be able to use FactFone(SM). Call PIMSS for assistance.
FactFone(SM) allows shareholders to hear the following recorded fund information:
o net asset value prices for all Pioneer mutual funds;
o annualized 30-day yields on Pioneer's fixed income funds;
o annualized 7-day yields and 7-day effective (compound) yields for Pioneer's money market funds; and
o dividends and capital gain distributions on all Pioneer mutual funds.
Yields are calculated in accordance with SEC mandated standard formulas.
All performance numbers communicated through FactFone(SM) represent past performance, and figures include the maximum applicable sales charge. A shareholder's actual yield and total return will vary with changing market conditions. The value of each class of shares (except for Pioneer Cash Reserves Fund, Pioneer Institutional Money Market Fund, Pioneer Tax Free Money Market Fund and Pioneer Treasury Reserves Fund, which each seek to maintain a stable $1.00 share price) will also vary, and such shares may be worth more or less at redemption than their original cost.
15. PRICING OF SHARES
The net asset value per share of each class of the fund is determined as of the close of regular trading on the Exchange (normally 4:00 p.m. Eastern time) on each day on which the Exchange is open for trading. As of the date of this statement of additional information, the Exchange is open for trading every weekday except for the days the following holidays are observed: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The net asset value per share of each class of the fund is also determined on any other day on which the level of trading in its portfolio securities is sufficiently high that the current net asset value per share might be materially affected by changes in the value of its portfolio securities. The fund is not required to determine its net asset value per share on any day on which no purchase orders in good order for fund shares are received and no shares are tendered and accepted for redemption.
The fund generally values its portfolio securities using closing market prices or readily available market quotations, or, when closing market prices or market quotations are not available or are
considered by Pioneer to be unreliable, the fund uses fair value methods to value its securities in accordance with procedures approved by the fund's Trustees. Securities which have not traded on the date of valuation or securities for which sales prices are not generally reported are valued at the mean between the current bid and asked prices. Securities quoted in foreign currencies are converted to U.S. dollars utilizing foreign exchange rates employed by the fund's independent pricing services. Generally, trading in non-U.S. securities is substantially completed each day at various times prior to the close of regular trading on the Exchange. The values of such securities used in computing the net asset value of the fund's shares are determined as of such times. Foreign currency exchange rates are also generally determined prior to the close of regular trading on the Exchange. The fund also may use fair value pricing methods to value its securities, including a non-U.S. security, when Pioneer determines that the closing market price on the primary exchange where the security is traded no longer accurately reflects the value of the security due to factors affecting one or more relevant securities markets or the specific issuer. Valuing securities using fair value methods may cause the net asset value of the fund's shares to differ from the net asset value that would be calculated using closing market prices. International securities markets may be open on days when the U.S. markets are closed. For this reason, the value of any international securities owned by the fund could change on a day you cannot buy or sell shares of the fund. In connection with making fair value determinations of the value of fixed income securities, the fund's Trustees may use a pricing matrix. The prices used for these securities may differ from the amounts received by the fund upon sale of the securities, and these differences may be substantial. Cash equivalent securities with remaining maturities of 60 days or less are valued at amortized cost, which is a method of determining a security's fair value.
The net asset value per share of each class of the fund is computed by taking the value of all of the fund's assets attributable to a class, less the fund's liabilities attributable to that class, and dividing the result by the number of outstanding shares of that class. For purposes of determining net asset value, expenses of the classes of the fund are accrued daily and taken into account. The fund's maximum offering price per Class A share is determined by adding the maximum sales charge to the net asset value per Class A share. Class B, Class C, and Class Y shares are offered at net asset value without the imposition of an initial sales charge (Class B and Class C shares may be subject to a CDSC).
16. TAX STATUS
The fund is treated as a separate entity for U.S. federal income tax purposes. The fund has elected to be treated, and has qualified and intends to continue to qualify each year, as a "regulated investment company" under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"), so that it will not pay U.S. federal income tax on income and capital gains distributed to shareholders. In order to qualify as a regulated investment company under Subchapter M of the Code, the fund must, among other things, (i) derive at least 90% of its gross income for each taxable year from dividends, interest, payments with respect to certain securities loans, gains from the sale or other disposition of stock, securities or foreign currencies, or other income (including gains from options, futures and forward contracts) derived with respect to its business of investing in such stock, securities or currencies, and net income derived from an interest in a qualified publicly traded partnership (as defined in Section 851(h) of the Code) (the "90% income test") and (ii) diversify its holdings so that, at the end of each quarter of each taxable year: (a) at least 50% of the value of the fund's total assets is represented by (1) cash and cash items, U.S. government securities, securities of other regulated investment companies, and (2) other securities, with such other securities limited, in respect of any one issuer, to an amount not greater than 5% of the value of the fund's total assets and to not more than 10% of the
outstanding voting securities of such issuer and (b) not more than 25% of the
value of the fund's total assets is invested in (1) the securities (other than
U.S. government securities and securities of other regulated investment
companies) of any one issuer, (2) the securities (other than securities of other
regulated investment companies) of two or more issuers that the fund controls
and that are engaged in the same, similar, or related trades or businesses, or
(3) the securities of one or more qualified publicly traded partnerships.
For purposes of the 90% income test, the character of income earned by certain entities in which the fund invests that are not treated as corporations for U.S. federal income tax purposes (e.g., partnerships other than certain publicly traded partnerships or trusts that have not elected to be classified as corporations under the "check-the-box" regulations) will generally pass through to the fund. Consequently, in order to qualify as a regulated investment company, the fund may be required to limit its equity investments in such entities that earn fee income, rental income or other nonqualifying income.
If the fund qualifies as a regulated investment company and properly distributes
to its shareholders each taxable year an amount equal to or exceeding the sum of
(i) 90% of its "investment company taxable income" as that term is defined in
the Code (which includes, among other things, dividends, taxable interest, and
the excess of any net short-term capital gains over net long-term capital
losses, as reduced by certain deductible expenses) without regard to the
deduction for dividends paid and (ii) 90% of the excess of its gross tax-exempt
interest income, if any, over certain disallowed deductions, the fund generally
will not be subject to U.S. federal income tax on any income of the fund,
including "net capital gain" (the excess of net long-term capital gain over net
short-term capital loss), distributed to shareholders. However, if the fund
meets such distribution requirements, but chooses to retain some portion of its
taxable income or gains, it generally will be subject to U.S. federal income tax
at regular corporate rates on the amount retained. The fund may designate
certain amounts retained as undistributed net capital gain in a notice to its
shareholders, who (i) will be required to include in income for U.S. federal
income tax purposes, as long-term capital gain, their proportionate shares of
the undistributed amount so designated, (ii) will be entitled to credit their
proportionate shares of the income tax paid by the fund on that undistributed
amount against their federal income tax liabilities and to claim refunds to the
extent such credits exceed their liabilities and (iii) will be entitled to
increase their tax basis, for federal income tax purposes, in their shares by an
amount equal to the excess of the amount of undistributed net capital gain
included in their respective income over their respective income tax credits.
The fund intends to distribute at least annually all or substantially all of its
investment company taxable income (computed without regard to the dividends-paid
deduction), net tax-exempt interest income, and net capital gain. If, for any
taxable year, the fund does not qualify as a regulated investment company or
does not satisfy the 90% distribution requirement, it will be treated as a U.S.
corporation subject to U.S. federal income tax, thereby subjecting any income
earned by the fund to tax at the corporate level and to a further tax at the
shareholder level when such income is distributed.
Under the Code, the fund will be subject to a nondeductible 4% U.S. federal excise tax on a portion of its undistributed ordinary income and capital gain net income if it fails to meet certain distribution requirements with respect to each calendar year and year ending October 31, respectively. The fund intends to make distributions in a timely manner and accordingly does not expect to be subject to the excise tax.
The fund generally distributes any net short- and long-term capital gains in November. The fund generally pays dividends from any net investment income quarterly during March, June,
September and December. Dividends from income and/or capital gains may also be paid at such other times as may be necessary for the fund to avoid U.S. federal income or excise tax.
Unless a shareholder specifies otherwise, all distributions from the fund to that shareholder will be automatically reinvested in additional full and fractional shares of the fund. For U.S. federal income tax purposes, all dividends generally are taxable whether a shareholder takes them in cash or reinvests them in additional shares of the fund. In general, assuming that the fund has sufficient earnings and profits, dividends from net investment income and net short-term capital gains are taxable either as ordinary income or, if so designated by the fund and certain other conditions are met, as "qualified dividend income," taxable to individual and certain other noncorporate shareholders at a maximum 15% U.S. federal income tax rate.
Dividend income distributed to individual and certain other noncorporate shareholders will qualify for the maximum 15% U.S. federal income tax rate on dividends to the extent that such dividends are attributable to qualified dividend income. Qualified dividend income generally means dividend income received from the fund's investments in common and preferred stock of U.S. companies and stock of certain qualified foreign corporations, provided that certain holding period and other requirements are met by both the fund and the shareholders. Dividends received by the fund from REITs generally are not expected to qualify for treatment as qualified dividend income. If 95% or more of the fund's gross income (calculated without taking into account net capital gain derived from sales or other dispositions of stock or securities) consists of qualified dividend income, the fund may designate all distributions of such income as qualified dividend income.
A foreign corporation is treated as a qualified foreign corporation for this purpose if it is incorporated in a possession of the United States or it is eligible for the benefits of certain income tax treaties with the United States and meets certain additional requirements. Certain foreign corporations that are not otherwise qualified foreign corporations will be treated as qualified foreign corporations with respect to dividends paid by them if the stock with respect to which the dividends are paid is readily tradable on an established securities market in the United States. Passive foreign investment companies are not qualified foreign corporations for this purpose.
A dividend that is attributable to qualified dividend income of the fund that is paid by the fund to a shareholder will not be taxable as qualified dividend income to such shareholder if (1) the dividend is received with respect to any share of the fund held for fewer than 61 days during the 121-day period beginning on the date which is 60 days before the date on which such share became ex-dividend with respect to such dividend, (2) to the extent that the shareholder is under an obligation (whether pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar or related property, or (3) the shareholder elects to have the dividend treated as investment income for purposes of the limitation on deductibility of investment interest. The "ex-dividend" date is the date on which the owner of the share at the commencement of such date is entitled to receive the next issued dividend payment for such share even if the share is sold by the owner on that date or thereafter.
Distributions by the fund in excess of the fund's current and accumulated earnings and profits will be treated as a return of capital to the extent of (and in reduction of) the shareholder's tax basis in its shares and any such amount in excess of that basis will be treated as gain from the sale of shares, as discussed below.
Certain dividends received by the fund from U.S. corporations (generally, dividends received by the fund in respect of any share of stock (1) with a tax holding period of at least 46 days during
the 91-day period beginning on the date that is 45 days before the date on which the stock becomes ex-dividend as to that dividend and (2) that is held in an unleveraged position) and distributed and designated by the fund may be eligible for the 70% dividends-received deduction generally available to corporations under the Code. Dividends received by the fund from REITs will not be eligible for that deduction. Certain preferred stock must have a holding period of at least 91 days during the 181-day period beginning on the date that is 90 days before the date on which the stock becomes ex-dividend as to that dividend in order to be eligible. Capital gain dividends distributed to the fund from other regulated investment companies are not eligible for the dividends-received deduction. The fund is permitted to acquire stock of U.S. domestic corporations other than REITs, and it is therefore possible that a portion of the fund's distributions may qualify for this deduction. In order to qualify for the deduction, corporate shareholders must meet the minimum holding period requirement stated above with respect to their fund shares, taking into account any holding period reductions from certain hedging or other transactions or positions that diminish their risk of loss with respect to their fund shares, and, if they borrow to acquire or otherwise incur debt attributable to fund shares, they may be denied a portion of the dividends-received deduction with respect to those shares. The entire dividend, including the otherwise deductible amount, will be included in determining the excess, if any, of a corporation's adjusted current earnings over its alternative minimum taxable income, which may increase a corporation's alternative minimum tax liability. Any corporate shareholder should consult its tax adviser regarding the possibility that its tax basis in its shares may be reduced, for U.S. federal income tax purposes, by reason of "extraordinary dividends" received with respect to the shares and, to the extent such basis would be reduced below zero, current recognition of income may be required.
Distributions from net capital gains, if any, that are designated as capital gain dividends by the fund are taxable as long-term capital gains for U.S. federal income tax purposes without regard to the length of time the shareholder has held shares of the fund. Capital gain dividends distributed by the fund to individual and certain other noncorporate shareholders generally will qualify for reduced U.S. federal income tax rates (currently, a maximum rate of 15%, with lower rates applying to taxpayers in the 10% and 15% rate brackets) on long-term capital gains, subject to certain limited exceptions. A shareholder should also be aware that the benefits of the favorable tax rate applicable to long-term capital gains and qualified dividend income may be affected by the application of the alternative minimum tax to individual shareholders. Under current law, the reduced maximum 15% U.S. federal income tax rate on qualified dividend income and long-term capital gains will not apply in taxable years beginning after December 31, 2010.
The U.S. federal income tax status of all distributions, including the portion, if any, of such distributions that may qualify for treatment as qualified dividend income, will be reported to shareholders annually.
Although dividends generally will be treated as distributed when paid, any dividend declared by the fund in October, November or December and payable to shareholders of record in such a month that is paid during the following January will be treated for U.S. federal income tax purposes as received by shareholders on December 31 of the calendar year in which it was declared. In addition, certain other distributions made after the close of a taxable year of the fund may be "spilled back" and treated for certain purposes as paid by the fund during such taxable year. In such case, shareholders generally will be treated as having received such dividends in the taxable year in which the distributions were actually made. For purposes of calculating the amount of a regulated investment company's undistributed income and gain subject to the 4% excise tax described above, such "spilled back" dividends are treated as paid by the regulated investment company when they are actually paid.
For U.S. federal income tax purposes, the fund is permitted to carry forward a net capital loss for any year to offset its capital gains, if any, for up to eight years following the year of the loss. To the extent subsequent capital gains are offset by such losses, they would not result in U.S. federal income tax liability to the fund and may not be distributed as such to shareholders. See "Annual Fee, Expense and Other Information" for the fund's available capital loss carryforwards. The fund may not carry forward any losses other than net capital losses.
At the time of an investor's purchase of fund shares, a portion of the purchase price may be attributable to realized or unrealized appreciation in the fund's portfolio or to undistributed taxable income of the fund. Consequently, subsequent distributions by the fund with respect to these shares from such appreciation or income may be taxable to such investor even if the net asset value of the investor's shares is, as a result of the distributions, reduced below the investor's cost for such shares and the distributions economically represent a return of a portion of the investment.
Redemptions and exchanges generally are taxable events for shareholders that are subject to tax. Shareholders should consult their own tax advisers with reference to their individual circumstances to determine whether any particular transaction in fund shares is properly treated as a sale for tax purposes, as the following discussion assumes, and the tax treatment of any gains or losses recognized in such transactions. In general, if fund shares are sold, the shareholder will recognize gain or loss equal to the difference between the amount realized on the sale and the shareholder's adjusted basis in the shares. Such gain or loss generally will be treated as long-term capital gain or loss if the shares were held for more than one year and otherwise generally will be treated as short-term capital gain or loss. Any loss recognized by a shareholder upon the redemption, exchange or other disposition of shares with a tax holding period of six months or less will be treated as a long-term capital loss to the extent of any amounts treated as distributions to the shareholder of long-term capital gain with respect to such shares (including any amounts credited to the shareholder as undistributed capital gains).
Losses on redemptions or other dispositions of shares may be disallowed under "wash sale" rules in the event of other investments in the fund (including those made pursuant to reinvestment of dividends and/or capital gain distributions) within a period of 61 days beginning 30 days before and ending 30 days after a redemption or other disposition of shares. In such a case, the disallowed portion of any loss generally would be included in the U.S. federal tax basis of the shares acquired in the other investments.
Gain may be increased (or loss reduced) upon a redemption of Class A shares of the fund within 90 days after their purchase followed by any purchase (including purchases by exchange or by reinvestment), without payment of an additional sales charge, of Class A shares of the fund or of another Pioneer fund (or any other shares of a Pioneer fund generally sold subject to a sales charge).
Under Treasury regulations, if a shareholder recognizes a loss with respect to fund shares of $2 million or more for an individual shareholder, or $10 million or more for a corporate shareholder, in any single taxable year (or certain greater amounts over a combination of years), the shareholder must file with the IRS a disclosure statement on Form 8886. Shareholders who own portfolio securities directly are in many cases excepted from this reporting requirement but, under current guidance, shareholders of regulated investment companies are not excepted. A shareholder who fails to make the required disclosure to the IRS may be subject to substantial penalties. The fact that a loss is reportable under these regulations does not affect the legal determination of whether or not the taxpayer's treatment of the loss is proper. Shareholders
should consult with their tax advisers to determine the applicability of these regulations in light of their individual circumstances.
Shareholders that are exempt from U.S. federal income tax, such as retirement plans that are qualified under Section 401 of the Code, generally are not subject to U.S. federal income tax on fund dividends or distributions, or on sales or exchanges of fund shares unless the fund shares are "debt-financed property" within the meaning of the Code. However, in the case of fund shares held through a non-qualified deferred compensation plan, fund dividends and distributions received by the plan and sales and exchanges of fund shares by the plan generally are taxable to the employer sponsoring such plan in accordance with the U.S. federal income tax laws that are generally applicable to shareholders receiving such dividends or distributions from regulated investment companies such as the fund.
A plan participant whose retirement plan invests in the fund, whether such plan is qualified or not, generally is not taxed on fund dividends or distributions received by the plan or on sales or exchanges of fund shares by the plan for U.S. federal income tax purposes. However, distributions to plan participants from a retirement plan account generally are taxable as ordinary income, and different tax treatment, including penalties on certain excess contributions and deferrals, certain pre-retirement and post-retirement distributions and certain prohibited transactions, is accorded to accounts maintained as qualified retirement plans. Shareholders should consult their tax advisers for more information.
Foreign exchange gains and losses realized by the fund in connection with certain transactions involving foreign currency-denominated debt securities, certain options and futures contracts relating to foreign currency, foreign currency forward contracts, foreign currencies, or payables or receivables denominated in a foreign currency are subject to Section 988 of the Code, which generally causes such gains and losses to be treated as ordinary income and losses and may affect the amount, timing and character of distributions to shareholders. Under Treasury regulations that may be promulgated in the future, any gains from such transactions that are not directly related to the fund's principal business of investing in stock or securities (or its options contracts or futures contracts with respect to stock or securities) may have to be limited in order to enable the fund to satisfy the 90% income test.
If the fund acquires any equity interest (under Treasury regulations that may be promulgated in the future, generally including not only stock but also an option to acquire stock such as is inherent in a convertible bond) in certain foreign corporations (i) that receive at least 75% of their annual gross income from passive sources (such as interest, dividends, certain rents and royalties, or capital gains) or (ii) where at least 50% of the corporation's assets (computed based on average fair market value) either produce or are held for the production of passive income ("passive foreign investment companies"), the fund could be subject to U.S. federal income tax and additional interest charges on "excess distributions" received from such companies or on gain from the sale of stock in such companies, even if all income or gain actually received by the fund is timely distributed to its shareholders. The fund would not be able to pass through to its shareholders any credit or deduction for such a tax. A "qualified electing fund" election or a "mark to market" election may generally be available that would ameliorate these adverse tax consequences, but such elections could require the fund to recognize taxable income or gain (subject to the distribution requirements applicable to regulated investment companies, as described above) without the concurrent receipt of cash. In order to satisfy the distribution requirements and avoid a tax on the fund, the fund may be required to liquidate portfolio securities that it might otherwise have continued to hold, potentially resulting in additional taxable gain or loss to the fund. These investments could also result in the treatment of gains from
the sale of stock of passive foreign investment companies as ordinary income. In order for the fund to make a "qualified electing fund" election with respect to a "passive foreign investment company", the passive foreign investment company would have to agree to provide certain tax information to the fund on an annual basis, which it might not agree to do. The fund may limit and/or manage its holdings in passive foreign investment companies to limit its tax liability or maximize its return from these investments.
The fund may invest in or hold debt obligations of issuers not currently paying interest or that are in default. Investments in debt obligations that are at risk of or in default present special tax issues for the fund. Federal income tax rules are not entirely clear about issues such as when the fund may cease to accrue interest, original issue discount or market discount, when and to what extent deductions may be taken for bad debts or worthless securities, how payments received on obligations in default should be allocated between principal and interest and whether certain exchanges of debt obligations in a workout context are taxable. These and other issues will be addressed by the fund, in the event it invests in or holds such securities, in order to seek to ensure that it distributes sufficient income to preserve its status as a regulated investment company and does not become subject to U.S. federal income or excise tax.
If the fund invests in certain pay-in-kind securities, zero coupon securities, deferred interest securities or, in general, any other securities with original issue discount (or with market discount if the fund elects to include market discount in income currently), the fund generally must accrue income on such investments for each taxable year, which generally will be prior to the receipt of the corresponding cash payments. However, the fund must distribute to its shareholders, at least annually, all or substantially all of its investment company taxable income (determined without regard to the deduction for dividends paid), including such accrued income, to qualify to be treated as a regulated investment company under the Code and avoid U.S. federal income and excise taxes. Therefore, the fund may have to dispose of its portfolio securities, potentially under disadvantageous circumstances, to generate cash, or may have to borrow the cash, to satisfy distribution requirements. Such a disposition of securities may potentially result in additional taxable gain or loss to the fund.
Options written or purchased and futures contracts entered into by the fund on certain securities, indices and foreign currencies, as well as certain forward foreign currency contracts, may cause the fund to recognize gains or losses from marking-to-market even though such options may not have lapsed or been closed out or exercised, or such futures or forward contracts may not have been performed or closed out. The tax rules applicable to these contracts may affect the characterization of some capital gains and losses realized by the fund as long-term or short-term. Certain options, futures and forward contracts relating to foreign currency may be subject to Section 988 of the Code, as described above, and accordingly may produce ordinary income or loss. Additionally, the fund may be required to recognize gain if an option, futures contract, forward contract, short sale or other transaction that is not subject to the mark-to-market rules is treated as a "constructive sale" of an "appreciated financial position" held by the fund under Section 1259 of the Code. Any net mark-to-market gains and/or gains from constructive sales may also have to be distributed to satisfy the distribution requirements referred to above even though the fund may receive no corresponding cash amounts, possibly requiring the disposition of portfolio securities or borrowing to obtain the necessary cash. Such a disposition of securities may potentially result in additional taxable gain or loss to the fund. Losses on certain options, futures or forward contracts and/or offsetting positions (portfolio securities or other positions with respect to which the fund's risk of loss is substantially diminished by one or more options, futures or forward contracts) may also be deferred under the tax straddle rules of the Code, which may also affect the characterization of capital gains or losses from straddle positions and certain
successor positions as long-term or short-term. Certain tax elections may be available that would enable the fund to ameliorate some adverse effects of the tax rules described in this paragraph. The tax rules applicable to options, futures, forward contracts and straddles may affect the amount, timing and character of the fund's income and gains or losses and hence of its distributions to shareholders.
The fund may be subject to withholding and other taxes imposed by foreign countries, including taxes on interest, dividends and capital gains with respect to its investments in those countries. Any such taxes would, if imposed, reduce the yield on or return from those investments. Tax conventions between certain countries and the U.S. may reduce or eliminate such taxes in some cases. The fund does not expect to satisfy the requirements for passing through to its shareholders any share of foreign taxes paid by the fund, with the result that shareholders will not include such taxes in their gross incomes and will not be entitled to a tax deduction or credit for such taxes on their own tax returns.
The fund is required to withhold (as "backup withholding") 28% of reportable payments, including dividends, capital gain distributions and the proceeds of redemptions and exchanges or repurchases of fund shares, paid to shareholders who have not complied with certain IRS regulations. In order to avoid this withholding requirement, shareholders, other than certain exempt entities, must certify on their Account Applications, or on separate IRS Forms W-9, that the Social Security Number or other Taxpayer Identification Number they provide is their correct number and that they are not currently subject to backup withholding, or that they are exempt from backup withholding. The fund may nevertheless be required to backup withhold if it receives notice from the IRS or a broker that the number provided is incorrect or backup withholding is applicable as a result of previous underreporting of interest or dividend income.
The description of certain federal tax provisions above relates only to U.S. federal income tax consequences for shareholders who are U.S. persons, i.e., generally, U.S. citizens or residents or U.S. corporations, partnerships, trusts or estates, and who are subject to U.S. federal income tax and hold their shares as capital assets. Except as otherwise provided, this description does not address the special tax rules that may be applicable to particular types of investors, such as financial institutions, insurance companies, securities dealers, other regulated investment companies, or tax-exempt or tax-deferred plans, accounts or entities. Investors other than U.S. persons may be subject to different U.S. federal income tax treatment, including a non-resident alien U.S. withholding tax at the rate of 30% or any lower applicable treaty rate on amounts treated as ordinary dividends from the fund (other than, for taxable years of the fund beginning on or before December 31, 2009, certain dividends designated by the fund as (i) interest-related dividends, to the extent such dividends are derived from the fund's "qualified net interest income, " or (ii) short-term capital gain dividends, to the extent such dividends are derived from the fund's "qualified short-term gain") or, in certain circumstances, unless an effective IRS Form W-8BEN or other authorized withholding certificate is on file, to backup withholding at the rate of 28% on certain other payments from the fund. "Qualified net interest income" is the fund's net income derived from U.S.-source interest and original issue discount, subject to certain exceptions and limitations. "Qualified short-term gain" generally means the excess of the net short-term capital gain of the fund for the taxable year over its net long-term capital loss, if any. Backup withholding will not be applied to payments that have been subject to the 30% (or lower applicable treaty rate) withholding tax on shareholders who are neither citizens nor residents of the United States. If the fund meets the requirements for classification as a "United States real property holding corporation" as defined in Section 897(c)(2) of the Code (or if it would meet such requirements, were it not for certain exceptions), then the fund may be required to withhold as much as 35% of a distribution otherwise payable to a non-U.S. individual or corporation that
held more than 5% of a given class of the fund's stock at any time during the one-year period ending on the date of the distribution. In such a case, a non-U.S. individual or corporation may be required to file a U.S. federal income tax return as a result of distributions received from the fund. Shareholders should consult their own tax advisers on these matters and on state, local, foreign and other applicable tax laws.
If, as anticipated, the fund qualifies as a regulated investment company under the Code, it will not be required to pay any Massachusetts income, corporate excise or franchise taxes or any Delaware corporation income tax.
17. FINANCIAL STATEMENTS
The fund's financial statements and financial highlights for the fiscal year ended December 31, 2008 appearing in the fund's annual report, filed with the SEC on February 27, 2009 (Accession No. 0000276776-09-000012) are incorporated by reference into this statement of additional information. Those financial statements and financial highlights have been audited by Ernst & Young LLP, independent registered public accounting firm, as indicated in their report thereon, and are incorporated herein by reference in reliance upon such report, given on the authority of Ernst & Young LLP as experts in accounting and auditing.
The fund's annual report includes the financial statements referenced above and is available without charge upon request by calling Shareholder Services at 1-800-225-6292.
18. ANNUAL FEE, EXPENSE AND OTHER INFORMATION
2008 2007 -------------------------------------------------------------------------------- 18% 21% -------------------------------------------------------------------------------- |
Share Ownership
As of April 1, 2009, the Trustees and officers of the fund owned beneficially in the aggregate less than 1% of the outstanding shares of the fund. The following is a list of the holders of 5% or more of any class of the fund's outstanding shares as of April 1, 2009:
-------------------------------------------------------------------------------------- Record Holder Share Class Number of Shares % of Class -------------------------------------------------------------------------------------- Merrill Lynch, Pierce, Fenner & Smith Class A 492,562.351 11.88 Incorporated, for the sole benefit of its customers 4800 Deer Lake Drive East, 2nd Floor Jacksonville, FL 32246-6484 -------------------------------------------------------------------------------------- PFPC Class B 56,723.685 9.19 FBO Primerica Shareholder Services 211 South Gulf Road King of Prussia, PA 19406 -------------------------------------------------------------------------------------- Merrill Lynch, Pierce, Fenner & Smith Class C 29,599.530 5.23 Incorporated, for the sole benefit of its customers 4800 Deer Lake Drive East, 2nd Floor Jacksonville, FL 32246-6484 -------------------------------------------------------------------------------------- Citigroup Global Markets Inc. Class C 31,074.774 5.50 Attn: Peter Booth 333 West 34th Street, 7th Floor New York, NY 10001-2402 -------------------------------------------------------------------------------------- Brown Brothers Harriman & Co. Class Y 434,608.289 19.76 as custodian Attn: Investment Funds Global Distribution Center 525 Washington Blvd. Jersey City NJ 07310-1692 -------------------------------------------------------------------------------------- Brown Brothers Harriman & Co. Class Y 213,954.564 9.73 as custodian Attn: Investment Funds Global Distribution Center 525 Washington Blvd. Jersey City NJ 07310-1692 -------------------------------------------------------------------------------------- Brown Brothers Harriman & Co. Class Y 412,119.302 18.74 as custodian Attn: Investment Funds Global Distribution Center 525 Washington Blvd. Jersey City NJ 07310-1692 -------------------------------------------------------------------------------------- Brown Brothers Harriman & Co. Class Y 555,169.708 25.24 as custodian Attn: Investment Funds Global Distribution Center 525 Washington Blvd. Jersey City NJ 07310-1692 -------------------------------------------------------------------------------------- Brown Brothers Harriman & Co. Class Y 447,596.667 20.35 as custodian Attn: Investment Funds Global Distribution Center 525 Washington Blvd. Jersey City NJ 07310-1692 -------------------------------------------------------------------------------------- |
-------------------------------------------------------------------------------------------------
Aggregate Dollar Range of Equity
Securities in All Registered
Dollar Range of Investment Companies Overseen by
Equity Securities in Trustee in the Pioneer Family of
Name of Trustee the Fund Funds
-------------------------------------------------------------------------------------------------
Interested Trustees
-------------------------------------------------------------------------------------------------
John F. Cogan, Jr. Over $100,000 Over $100,000
-------------------------------------------------------------------------------------------------
Daniel K. Kingsbury None Over $100,000
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Independent Trustees
-------------------------------------------------------------------------------------------------
David R. Bock None Over $100,000
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Mary K. Bush None Over $100,000
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Benjamin M. Friedman None $10,001-$50,000
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Margaret B.W. Graham $1 - $10,000 $50,001 - $100,000
-------------------------------------------------------------------------------------------------
Thomas J. Perna None Over $100,000
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Marguerite A. Piret None Over $100,000
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Stephen K. West $50,001 - $100,000 Over $100,000
-------------------------------------------------------------------------------------------------
|
Compensation of Officers and Trustees
The following table sets forth certain information with respect to the compensation of each Trustee of the fund.
Pension or
Retirement Benefits Total Compensation from
Aggregate Accrued as Part of the Fund and Other Pioneer
Compensation from Fund Expenses Funds**
Name of Trustee Fund**
Interested Trustees:
John F. Cogan, Jr.* $500.00 $0.00 $31,100.00
Daniel K. Kingsbury $0.00 $0.00 $0.00
Independent Trustees:
David R. Bock $1,000.00 $0.00 $165,067.92
Mary K. Bush $1,000.00 $0.00 $196,300.00
Benjamin M. Friedman+ $625.00 $0.00 $84,000.00
Margaret B.W. Graham $1,000.00 $0.00 $204,300.00
|
Thomas J. Perna $1,000.00 $0.00 $189,816.45
Marguerite A. Piret $1,000.00 $0.00 $233,000.00
Stephen K. West $1,000.00 $0.00 $75,116.72
John Winthrop++ $750.00 $0.00 $161,150.00
------- ----- -----------
Total $7,875.00 $0.00 $1,339,851.09
|
* Under the management contract, Pioneer reimburses the fund for any
Interested Trustee fees paid by the fund.
** For the fiscal year ended December 31, 2008. As of December 31, 2008, there
were 77 U.S. registered investment portfolios in the Pioneer Family of
Funds.
+ Dr. Friedman became a Trustee on May 13, 2008.
++ Mr. Winthrop resigned as Trustee effective September 9, 2008.
Approximate Management Fees the Fund Paid or Owed Pioneer
The following table shows the dollar amount of gross investment management fees incurred by the fund, along with the net amount of fees that were paid after applicable fee waivers or expense reimbursements, if any. The data is for the past three fiscal years or shorter period if the fund has been in operation for a shorter period.
For the Fiscal Years Ended December 31,
2008 2007 2006
Gross Fee $1,202,188 $1,968,708 $1,786,723
Incurred
Net Fee Paid $1,202,188 $1,947,702 $1,772,860
|
Fees the Fund Paid to Pioneer under the Administration Agreement
For the Fiscal Years Ended December 31,
2008 2007 2006 $45,064 $55,370 $48,127 |
2008 2007 2006
--------------------------------------------------------------------------------
Approximate Net $20,363 $64,125 $53,842
Underwriting Expenses
Retained by PFD
--------------------------------------------------------------------------------
|
-------------------------------------------------------------------------------- Approximate Commissions $111,313 $351,395 $295,836 Reallowed to Dealers (Class A shares) -------------------------------------------------------------------------------- Approximate Commissions $0 $0 $0 Reallowed to Dealers (Class C shares) -------------------------------------------------------------------------------- Approximate Brokerage and $110,000 $108,000 $77,000 Underwriting Commissions (Portfolio Transactions) -------------------------------------------------------------------------------- |
Fund Expenses under the Distribution Plans
For the Fiscal Year Ended December 31, 2008
Combined Plan Class A Plan Class B Plan Class C Plan $487,601 $218,437 $145,796 $123,368 |
An estimate by category of the allocation of fees paid by each class of shares of the fund during the fiscal year ended December 31, 2008 is set forth in the following table:
Allocation of Fund Expenses under the Distribution Plan
--------------------------------------------------------------------------------
Payments to Advertising Sales Printing Total
Servicing Meetings And Mailing
Parties(1)
--------------------------------------------------------------------------------
Class A 210,404 7,350 12,050 19,282 249,086
--------------------------------------------------------------------------------
Class B 78,684 403 664 1,069 80,820
--------------------------------------------------------------------------------
Class C 119,727 481 789 1,288 122,285
--------------------------------------------------------------------------------
|
(1)Payments to Servicing Parties include Pioneer Funds Distributor, Inc., broker-dealers, financial intermediaries and other parties that enter into a distribution, selling or service agreement with respect to one or more classes of the fund (annualized for the period ending December 31, 2008).
19. APPENDIX A - DESCRIPTION OF SHORT-TERM DEBT, CORPORATE BOND AND PREFERRED STOCK RATINGS(1)
Description of Moody's Investors Service, Inc.'s ("Moody's") Short-Term Prime Ratings:
Moody's short-term ratings are opinions of the ability of issuers to honor short-term financial obligations. Ratings may be assigned to issuers, short-term programs or to individual short-term debt instruments. Such obligations generally have an original maturity not exceeding thirteen months, unless explicitly noted.
Moody's employs the following designations to indicate the relative repayment ability of rated issuers:
P-1: Issuers (or supporting institutions) rated Prime-1 have a superior ability to repay short-term debt obligations.
P-2: Issuers (or supporting institutions) rated Prime-2 have a strong ability to repay short-term debt obligations.
P-3: Issuers (or supporting institutions) rated Prime-3 have an acceptable ability to repay short-term obligations.
NP: Issuers (or supporting institutions) rated Not Prime do not fall within any of the Prime rating categories.
Note: Canadian issuers rated P-1 or P-2 have their short-term ratings enhanced by the senior-most long-term rating of the issuer, its guarantor or support-provider.
Description of Moody's Debt Ratings:
Aaa: Obligations rated Aaa are judged to be of the highest quality, with minimal credit risk.
Aa: Obligations rated Aa are judged to be of high quality and are subject to very low credit risk.
A: Obligations rated A are considered upper-medium grade and are subject to low credit risk.
Baa: Obligations rated Baa are subject to moderate credit risk. They are considered medium-grade and as such may possess certain speculative characteristics.
Ba: Obligations rated Ba are judged to have speculative elements and are subject to substantial credit risk.
B: Obligations rated B are considered speculative and are subject to high credit risk.
Caa: Obligations rated Caa are judged to be of poor standing and are subject to very high credit risk.
Ca: Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest.
C: Obligations rated C are the lowest rated class of bonds and are typically in default, with little prospect for recovery of principal or interest.
Note: Moody's appends numerical modifiers "1", "2", and "3" to each generic rating classification from "Aa" through "Caa". The modifier "1" indicates that the obligation ranks in the higher end of its generic rating category; the modifier "2" indicates a mid-range ranking; and the modifier "3" indicates a ranking in the lower end of that generic rating category.
Moody's assigns long-term ratings to individual debt securities issued from medium-term note (MTN) programs, in addition to indicating ratings to MTN programs themselves. Notes issued under MTN programs with such indicated ratings are rated at issuance at the rating applicable to all pari passu notes issued under the same program, at the program's relevant indicated rating, provided such notes do not exhibit any of the characteristics listed below:
o Notes containing features that link interest or principal to the
credit performance of any third party or parties (i.e., credit-linked
notes);
o Notes allowing for negative coupons, or negative principal;
o Notes containing any provision that could obligate the investor to
make any additional payments;
o Notes containing provisions that subordinate the claim.
For notes with any of these characteristics, the rating of the individual note may differ from the indicated rating of the program.
Standard & Poor's Long-Term Issue Credit Ratings:
Issue credit ratings are based, in varying degrees, on the following considerations:
o Likelihood of payment--capacity and willingness of the obligor to meet
its financial commitment on an obligation in accordance with the terms
of the obligation;
o Nature of and provisions of the obligation;
o Protection afforded by, and relative position of, the obligation in
the event of bankruptcy, reorganization, or other arrangement under
the laws of bankruptcy and other laws affecting creditors' rights.
Issue ratings are an assessment of default risk, but may incorporate an assessment of relative seniority or ultimate recovery in the event of default. Junior obligations are typically rated lower than senior obligations, to reflect the lower priority in bankruptcy, as noted above. (Such differentiation may apply when an entity has both senior and subordinated obligations, secured and unsecured obligations, or operating company and holding company obligations.)
AAA: An obligation rated "AAA" has the highest rating assigned by Standard & Poor's. The obligor's capacity to meet its financial commitment on the obligation is extremely strong.
AA: An obligation rated "AA" differs from the highest-rated obligations only to a small degree. The obligor's capacity to meet its financial commitment on the obligation is very strong.
A: An obligation rated "A" is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. However, the obligor's capacity to meet its financial commitment on the obligation is still strong.
BBB: An obligation rated "BBB" exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.
BB, B, CCC, CC, and C: Obligations rated "BB", "B", "CCC", "CC", and "C" are regarded as having significant speculative characteristics. "BB" indicates the least degree of speculation and "C" the highest. While such obligations will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions.
BB: An obligation rated "BB" is less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation.
B: An obligation rated "B" is more vulnerable to nonpayment than obligations rated "BB", but the obligor currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial, or economic conditions will likely impair the obligor's capacity or willingness to meet its financial commitment on the obligation.
CCC: An obligation rated "CCC" is currently vulnerable to nonpayment, and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation.
CC: An obligation rated "CC" is currently highly vulnerable to nonpayment.
C: A "C" rating is assigned to obligations that are currently highly vulnerable to non-payment, obligations that have payment arrearages allowed by the terms of the documents, or obligations of an issuer that is the subject of a bankruptcy petition or similar action which have not experienced a payment default. Among others, a "C" rating may be assigned to subordinated debt, preferred stock or other obligations on which cash payments have been suspended in accordance with the instrument's terms.
D: An obligation rated "D" is in payment default. The "D" rating category is used when payments on an obligation are not made on the date due even if the applicable grace period has not expired, unless Standard & Poor's believes that such payments will be made during such grace period. The "D" rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized.
Plus (+) or minus (-): The ratings from "AA" to "CCC" may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories.
NR: This indicates that no rating has been requested, that there is insufficient information on which to base a rating, or that Standard & Poor's does not rate a particular obligation as a matter of policy.
Standard & Poor's Short-Term Issue Credit Ratings:
A-1: A short-term obligation rated "A-1" is rated in the highest category by Standard & Poor's. The obligor's capacity to meet its financial commitment on the obligation is strong. Within this category, certain obligations are designated with a plus sign (+). This indicates that the obligor's capacity to meet its financial commitment on these obligations is extremely strong.
A-2: A short-term obligation rated "A-2" is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor's capacity to meet its financial commitment on the obligation is satisfactory.
A-3: A short-term obligation rated "A-3" exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.
B: A short-term obligation rated "B" is regarded as having significant speculative characteristics. Ratings of "B-1", "B-2", and "B-3" may be assigned to indicate finer distinctions within the "B" category. The obligor currently has the capacity to meet its financial commitment on the obligation; however, it faces major ongoing uncertainties which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation.
B-1: A short-term obligation rated "B-1" is regarded as having significant speculative characteristics, but the obligor has a relatively stronger capacity to meet its financial commitments over the short-term compared to other speculative-grade obligors.
B-2: A short-term obligation rated "B-2" is regarded as having significant speculative characteristics, and the obligor has an average speculative-grade capacity to meet its financial commitments over the short-term compared to other speculative-grade obligors.
B-3: A short-term obligation rated "B-3" is regarded as having significant speculative characteristics, and the obligor has a relatively weaker capacity to meet its financial commitments over the short-term compared to other speculative-grade obligors.
C: A short-term obligation rated "C" is currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation.
D: A short-term obligation rated "D" is in payment default. The "D" rating category is used when payments on an obligation are not made on the date due even if the applicable grace period has not expired, unless Standard & Poor's believes that such payments will be made during such grace period. The "D" rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized.
Local Currency and Foreign Currency Risks
Country risk considerations are a standard part of Standard & Poor's analysis for credit ratings on any issuer or issue. Currency of repayment is a key factor in this analysis. An obligor's capacity to repay foreign currency obligations may be lower than its capacity to repay obligations in its local currency due to the sovereign government's own relatively lower capacity to repay external versus domestic debt. These sovereign risk considerations are incorporated in the debt ratings assigned to specific issues. Foreign currency issuer ratings are also distinguished from local currency issuer ratings to identify those instances where sovereign risks make them different for the same issuer.
20. Appendix B
Proxy Voting
POLICY
Each of Pioneer Investment Management, Inc. and Pioneer Institutional Asset Management, Inc. (collectively, "Pioneer") is a fiduciary that owes each of its client's duties of care and loyalty with respect to all services undertaken on the client's behalf, including proxy voting. When Pioneer has been delegated proxy-voting authority for a client, the duty of care requires Pioneer to monitor corporate events and to vote the proxies. To satisfy its duty of loyalty, Pioneer must place its client's interests ahead of its own and must cast proxy votes in a manner consistent with the best interest of its clients. Pioneer will seek to vote all proxies in accordance with this policy, which are presented in a timely manner.
Pioneer's sole concern in voting proxies is the economic effect of the proposal on the value of portfolio holdings, considering both the short- and long-term impact. In many instances, Pioneer believes that supporting the company's strategy and voting "for" management's proposals builds portfolio value. In other cases, however, proposals set forth by management may have a negative effect on that value, while some shareholder proposals may hold the best prospects for enhancing it. Pioneer monitors developments in the proxy-voting arena and will revise this policy as needed.
All proxies that are received in a timely manner will be voted in accordance with the specific policies listed below. All shares in a company held by Pioneer-managed accounts will be voted alike, unless a client has given us specific voting instructions on an issue or has not delegated authority to us. Proxy voting issues will be reviewed by Pioneer's Proxy Voting Oversight Group. Pioneer has established Proxy Voting Procedures for identifying and reviewing conflicts of interest that may arise in the voting of proxies.
Clients may request, at any time, a report on proxy votes for securities held in their portfolios and Pioneer is happy to discuss our proxy votes with company management. Pioneer retains a proxy voting service to provide research on proxy issues and to process proxy votes.
APPLICABILITY
Pioneer's Proxy Voting policy and related procedures are designed to complement Pioneer's investment policies and procedures regarding its general responsibility to monitor the performance and/or corporate events of companies that are issuers of securities held in accounts managed by Pioneer. The Proxy Voting policies and procedures summarize Pioneer's position on a number of issues for which proxies may be solicited. The policies are guidelines that provide a general indication on how Pioneer would vote but do not include all potential voting scenarios or proxy events involving closed-end Funds. Because of the special issues associated with proxy solicitations by closed-end Funds, shares of closed-end Funds will be voted by Pioneer on a case-by-case basis.
PURPOSE
The overriding goal of Pioneer's Proxy Voting Procedure is that proxies for all United States ("US") and non-US companies that are received in a timely manner will be voted in accordance with Pioneer's policies or specific client instructions. All shares in a company held by Pioneer-managed accounts will be voted alike, unless a client has given us specific voting instructions on
an issue or has not delegated authority to us, or the Proxy Voting Oversight Group determines that the circumstances justify a different approach.
Pioneer does not delegate the authority to vote proxies relating to its clients to any of its affiliates, which include other subsidiaries of UniCredito Italiano S.p.A. ("Unicredito").
Any questions about these policies and procedures should be directed to Pioneer's Director of Investment Operations (the "Proxy Coordinator").
PROCEDURES
Proxy Voting Service
Pioneer has engaged an independent proxy voting service to assist in the voting of proxies. The proxy voting service works with custodians to ensure that all proxy materials are received by the custodians and are processed in a timely fashion. To the extent applicable, the proxy voting service votes all proxies in accordance with the proxy voting guidelines established by Pioneer and set forth herein. The proxy voting service will refer proxy questions to the Proxy Coordinator (described below) for instructions under circumstances where: (1) the application of the proxy voting guidelines is unclear; (2) a particular proxy question is not covered by the guidelines; or (3) the guidelines call for specific instructions on a case-by-case basis. The proxy voting service is also requested to call to the Proxy Coordinator's attention specific proxy questions that, while governed by a guideline, appear to involve unusual or controversial issues. Pioneer reserves the right to attend a meeting in person and may do so when it determines that the company or the matters to be voted on at the meeting are strategically important to its clients.
Proxy Coordinator
The Proxy Coordinator coordinates the voting, procedures and reporting of proxies on behalf of Pioneer's clients. The Proxy Coordinator will deal directly with the proxy voting service and, in the case of proxy questions referred by the proxy voting service, will solicit voting recommendations and instructions from the Portfolio Management or, to the extent applicable, investment sub-advisers. The Proxy Coordinator is responsible for ensuring that these questions and referrals are responded to in a timely fashion and for transmitting appropriate voting instructions to the proxy voting service. The Proxy Coordinator is responsible for verifying with the Chief Legal Officer or his or her designee whether Pioneer's voting power is subject to any limitations or guidelines issued by the client (or in the case of an employee benefit plan, the plan's trustee or other fiduciaries).
Referral Items
The proxy voting service will refer proxy questions to the Proxy Coordinator or his or her designee that are described by Pioneer's proxy voting guidelines as to be voted on a case-by-case basis, that are not covered by Pioneer's guidelines or where Pioneer's guidelines may be unclear with respect to the matter to be voted on. Under such circumstances, the Proxy Coordinator will seek a written voting recommendation from the Head of Portfolio Management U.S. or his or her designated equity portfolio-management representative. Any such recommendation will include: (i) the manner in which the proxies should be voted; (ii) the rationale underlying any such
decision; and (iii) the disclosure of any contacts or communications made between Pioneer and any outside parties concerning the proxy proposal prior to the time that the voting instructions are provided.
Securities Lending
In accordance with industry standards proxies are not available to be voted when the shares are out on loan through either Pioneer's lending program or a client's managed security lending program. However, Pioneer will reserve the right to recall lent securities so that they may be voted according to the Pioneer's instructions. If a portfolio manager would like to vote a block of previously lent shares, the Proxy Coordinator will work with the portfolio manager and Investment Operations to recall the security, to the extent possible, to facilitate the vote on the entire block of shares. Certain clients participate in securities lending programs. Although such programs allow for the recall of securities for any reason, Pioneer may determine not to vote securities on loan and it may not always be possible for securities on loan to be recalled in time to be voted.
Share-Blocking
"Share-blocking" is a market practice whereby shares are sent to a custodian (which may be different than the account custodian) for record keeping and voting at the general meeting. The shares are unavailable for sale or delivery until the end of the blocking period (typically the day after general meeting date).
Pioneer will vote in those countries with "share-blocking." In the event a manager would like to sell a security with "share-blocking", the Proxy Coordinator will work with the Portfolio Manager and Investment Operations Department to recall the shares (as allowable within the market time-frame and practices) and/or communicate with executing brokerage firm. A list of countries with "share-blocking" is available from the Investment Operations Department upon request.
Disclosure
Pioneer shall take reasonable measures to inform its clients of the process or procedures clients must follow to obtain information regarding how Pioneer voted with respect to assets held in their accounts. In addition, Pioneer shall describe to clients its proxy voting policies and procedures and will furnish a copy of its proxy voting policies and procedures upon request. This information may be provided to clients through Pioneer's Form ADV (Part II) disclosure, by separate notice to the client, or through Pioneer's website.
Proxy Voting Oversight Group
The members of the Proxy Voting Oversight Group include Pioneer's: Head of Portfolio Management U.S. or his or her designated equity portfolio management representative, the Director of Investment Operations, and the Chief Compliance Officer of the Adviser and Funds. Other members of Pioneer will be invited to attend meetings and otherwise participate as necessary. The Director of Investment Operations will chair the Proxy Voting Oversight Group. The Proxy Voting Oversight Group is responsible for developing, evaluating, and changing (when necessary) Pioneer's Proxy Voting Policies and Procedures. The group meets at least
annually to evaluate and review these policies and procedures and the services of its third-party proxy voting service. In addition, the Proxy Voting Oversight Group will meet as necessary to vote on referral items and address other business as necessary.
Amendments
Pioneer may not amend its Proxy Voting Policies and Procedures without the prior approval of the Proxy Voting Oversight Group and its corporate parent, Pioneer Global Asset Management S.p.A. ("PGAM").
Filing Form NP-X
The Proxy Coordinator and the Regulatory Compliance Manager are responsible for ensuring that Form NP-X documents receive the proper review by a member of the Proxy Voting Oversight Group prior to a Fund officer signing the forms.
The Investment Operations department will provide the Compliance department with a copy of each Form N-PX filing prepared by the proxy voting service.
Compliance files N-PX.
The Compliance department will ensure that a corresponding Form N-PX exists for each Pioneer registered investment company.
Following this review, each Form N-PX is formatted for public dissemination via the EDGAR system.
Prior to submission, each Form N-PX is to be presented to the Fund officer for a final review and signature.
Copies of the Form N-PX filings and their submission receipts are maintained according to Pioneer record keeping policies.
Proxy Voting Guidelines
Administrative
While administrative items appear infrequently in U.S. issuer proxies, they are
quite common in non-U.S. proxies.
We will generally support these and similar management proposals:
o Corporate name change.
o A change of corporate headquarters.
o Stock exchange listing.
o Establishment of time and place of annual meeting.
o Adjournment or postponement of annual meeting.
o Acceptance/approval of financial statements.
o Approval of dividend payments, dividend reinvestment plans and other dividend-related proposals.
o Approval of minutes and other formalities.
o Authorization of the transferring of reserves and allocation of income.
o Amendments to authorized signatories.
o Approval of accounting method changes or change in fiscal year-end.
o Acceptance of labor agreements.
o Appointment of internal auditors.
Pioneer will vote on a case-by-case basis on other routine business; however, Pioneer will oppose any routine business proposal if insufficient information is presented in advance to allow Pioneer to judge the merit of the proposal. Pioneer has also instructed its proxy voting service to inform Pioneer of its analysis of any administrative items that maybe inconsistent, in its view, with Pioneer's goal of supporting the value of client's portfolio holdings so that Pioneer may consider and vote on those items on a case-by-case basis.
Auditors
We normally vote for proposals to:
o Ratify the auditors. We will consider a vote against if we are
concerned about the auditors' independence or their past work for the
company. Specifically, we will oppose the ratification of auditors and
withhold votes from audit committee members if non-audit fees paid by
the company to the auditing firm exceed the sum of audit fees plus
audit-related fees plus permissible tax fees according to the
disclosure categories proposed by the Securities and Exchange
Commission.
o Restore shareholder rights to ratify the auditors.
We will normally oppose proposals that require companies to:
o Seek bids from other auditors.
o Rotate auditing firms, except where the rotation is statutorily required or where rotation would demonstrably strengthen financial disclosure.
o Indemnify auditors.
o Prohibit auditors from engaging in non-audit services for the company.
Board of Directors
On issues related to the board of directors, Pioneer normally supports management. We will, however, consider a vote against management in instances where corporate performance has been very poor or where the board appears to lack independence.
General Board Issues
Pioneer will vote for:
o Audit, compensation and nominating committees composed of independent
directors exclusively.
o Indemnification for directors for actions taken in good faith in accordance with the business judgment rule. We will vote against proposals for broader indemnification.
o Changes in board size that appear to have a legitimate business purpose and are not primarily for anti-takeover reasons.
o Election of an honorary director.
We will vote against:
o Minimum stock ownership by directors.
o Term limits for directors. Companies benefit from experienced directors, and shareholder control is better achieved through annual votes.
o Requirements for union or special interest representation on the board.
o Requirements to provide two candidates for each board seat.
We will vote on a case-by case basis on these issues:
o Separate chairman and CEO positions. We will consider voting with
shareholders on these issues in cases of poor corporate performance.
Elections of Directors
In uncontested elections of directors we will vote against:
o Individual directors with absenteeism above 25% without valid reason.
We support proposals that require disclosure of director attendance.
o Insider directors and affiliated outsiders who sit on the audit, compensation, stock option or nominating committees. For the purposes of our policy, we accept the definition of affiliated directors provided by our proxy voting service.
We will also vote against:
o Directors who have failed to act on a takeover offer where the
majority of shareholders have tendered their shares.
o Directors who appear to lack independence or are associated with very poor corporate performance.
We will vote on a case-by case basis on these issues:
o Re-election of directors who have implemented or renewed a dead-hand
or modified dead-hand poison pill (a "dead-hand poison pill" is a
shareholder rights plan that may be altered only by incumbent or "dead
" directors. These plans prevent a potential acquirer from disabling a
poison pill by obtaining control of the board through a proxy vote).
o Contested election of directors.
o Prior to phase-in required by SEC, we would consider supporting election of a majority of independent directors in cases of poor performance.
o Mandatory retirement policies.
o Directors who have ignored a shareholder proposal that has been approved by shareholders for two consecutive years.
We will vote for:
o Precatory and binding resolutions requesting that the board change the company's bylaws to stipulate that directors need to be elected with affirmative majority of votes cast, provided that the resolutions allow for plurality voting in cases of contested elections.
Takeover-Related Measures
Pioneer is generally opposed to proposals that may discourage takeover attempts.
We believe that the potential for a takeover helps ensure that corporate
performance remains high. Pioneer will vote for:
o Cumulative voting.
o Increase ability for shareholders to call special meetings.
o Increase ability for shareholders to act by written consent.
o Restrictions on the ability to make greenmail payments.
o Submitting rights plans to shareholder vote.
o Rescinding shareholder rights plans ("poison pills").
o Opting out of the following state takeover statutes:
- Control share acquisition statutes, which deny large holders voting rights on holdings over a specified threshold.
- Control share cash-out provisions, which require large holders to acquire shares from other holders
- Freeze-out provisions, which impose a waiting period on large holders before they can attempt to gain control
- Stakeholder laws, which permit directors to consider interests of non-shareholder constituencies.
- Disgorgement provisions, which require acquirers to disgorge profits on purchases made before gaining control.
- Fair price provisions.
- Authorization of shareholder rights plans.
- Labor protection provisions.
- Mandatory classified boards.
We will vote on a case-by-case basis on the following issues:
o Fair price provisions. We will vote against provisions requiring
supermajority votes to approve takeovers. We will also consider voting
against proposals that require a supermajority vote to repeal or amend
the provision. Finally, we will consider the mechanism used to
determine the fair price; we are generally opposed to complicated
formulas or requirements to pay a premium.
o Opting out of state takeover statutes regarding fair price provisions. We will use the criteria used for fair price provisions in general to determine our vote on this issue.
o Proposals that allow shareholders to nominate directors.
We will vote against:
o Classified boards, except in the case of closed-end funds, where we shall vote on a case-by-case basis.
o Limiting shareholder ability to remove or appoint directors. We will support proposals to restore shareholder authority in this area. We will review on case-by-case basis proposals that authorize the board to make interim appointments.
o Classes of shares with unequal voting rights.
o Supermajority vote requirements.
o Severance packages ("golden" and "tin" parachutes). We will support proposals to put these packages to shareholder vote.
o Reimbursement of dissident proxy solicitation expenses. While we ordinarily support measures that encourage takeover bids, we believe that management should have full control over corporate funds.
o Extension of advance notice requirements for shareholder proposals.
o Granting board authority normally retained by shareholders (e.g., amend charter, set board size).
o Shareholder rights plans ("poison pills"). These plans generally allow shareholders to buy additional shares at a below-market price in the event of a change in control and may deter some bids.
Capital Structure
Managements need considerable flexibility in determining the company's financial
structure, and Pioneer normally supports managements' proposals in this area. We
will, however, reject proposals that impose high barriers to potential
takeovers.
Pioneer will vote for:
o Changes in par value.
o Reverse splits, if accompanied by a reduction in number of shares.
o Shares repurchase programs, if all shareholders may participate on equal terms.
o Bond issuance.
o Increases in "ordinary" preferred stock.
o Proposals to have blank-check common stock placements (other than shares issued in the normal course of business) submitted for shareholder approval.
o Cancellation of company treasury shares.
We will vote on a case-by-case basis on the following issues:
o Reverse splits not accompanied by a reduction in number of shares,
considering the risk of delisting.
o Increase in authorized common stock. We will make a determination considering, among other factors:
- Number of shares currently available for issuance;
- Size of requested increase (we would normally approve increases of up to 100% or current authorization);
- Proposed use of the proceeds from the issuance of additional shares, and
- Potential consequences of a failure to increase the number of shares outstanding (e.g., delisting or bankruptcy).
o Blank-check preferred. We will normally oppose issuance of a new class of blank-check preferred, but may approve an increase in a class already outstanding if the company has demonstrated that it uses this flexibility appropriately.
o Proposals to submit private placements to shareholder vote.
o Other financing plans.
We will vote against preemptive rights that we believe limit a company's financing flexibility.
Compensation
Pioneer supports compensation plans that link pay to shareholder returns and
believes that management has the best understanding of the level of compensation
needed to attract and retain qualified people. At the same time, stock-related
compensation plans have a significant economic impact and a direct effect on the
balance sheet. Therefore, while we do not want to micromanage a company's
compensation programs, we will place limits on the potential dilution these
plans may impose. Pioneer will vote for:
o 401(k) benefit plans.
o Employee stock ownership plans (ESOPs), as long as shares allocated to ESOPs are less than 5% of outstanding shares. Larger blocks of stock in ESOPs can serve as a takeover defense. We will support proposals to submit ESOPs to shareholder vote.
o Various issues related to the Omnibus Budget and Reconciliation Act of 1993 (OBRA), including:
- Amendments to performance plans to conform with OBRA;
- Caps on annual grants or amendments of administrative features;
- Adding performance goals, and
- Cash or cash and stock bonus plans.
o Establish a process to link pay, including stock-option grants, to performance, leaving specifics of implementation to the company.
o Require that option repricing be submitted to shareholders.
o Require the expensing of stock-option awards.
o Require reporting of executive retirement benefits (deferred compensation, split-dollar life insurance, SERPs, and pension benefits).
o Employee stock purchase plans where the purchase price is equal to at least 85% of the market price, where the offering period is no greater than 27 months and where potential dilution (as defined below) is no greater than 10%.
We will vote on a case-by-case basis on the following issues:
o Shareholder proposals seeking additional disclosure of executive and director pay information.
o Executive and director stock-related compensation plans. We will consider the following factors when reviewing these plans:
- The program must be of a reasonable size. We will approve plans where the combined employee and director plans together would generate less than 15% dilution. We will reject plans with 15% or more potential dilution.
Dilution = (A + B + C) / (A + B + C + D), where A = Shares reserved for plan/amendment, B = Shares available under continuing plans, C = Shares granted but unexercised and D = Shares outstanding.
- The plan must not:
- Explicitly permit unlimited option repricing authority or that have repriced in the past without shareholder approval
- Be a self-replenishing "evergreen" plan, plans that grant discount options and tax offset payments
- We are generally in favor of proposals that increase participation beyond executives.
- We generally support proposals asking companies to adopt rigorous vesting provisions for stock option plans such as those that vest incrementally over, at least, a three or four-year period with a pro rata portion of the shares becoming exercisable on an annual basis following grant date.
- We generally support proposals asking companies to disclose their window period policies for stock transactions. Window period policies ensure that employees do not exercise options based on insider information contemporaneous with quarterly earnings releases and other material corporate announcements.
- We generally support proposals asking companies to adopt stock holding periods for their executives.
o All other employee stock purchase plans.
o All other compensation-related proposals, including deferred compensation plans, employment agreements, loan guarantee programs and retirement plans.
o All other proposals regarding stock compensation plans, including extending the life of a plan, changing vesting restrictions, repricing options, lengthening exercise periods or accelerating distribution of awards and pyramiding and cashless exercise programs.
We will vote against:
o Pensions for non-employee directors. We believe these retirement plans
reduce director objectivity.
o Elimination of stock option plans.
We will vote on a case-by case basis on these issues:
o Limits on executive and director pay.
o Stock in lieu of cash compensation for directors.
Corporate Governance
Pioneer will vote for:
o Confidential Voting.
o Equal access provisions, which allow shareholders to contribute their opinion to proxy materials.
o Proposals requiring directors to disclose their ownership of shares in the company.
We will vote on a case-by-case basis on the following issues:
o Change in the state of incorporation. We will support reincorporations
supported by valid business reasons. We will oppose those that appear
to be solely for the purpose of strengthening takeover defenses.
o Bundled proposals. We will evaluate the overall impact of the proposal.
o Adopting or amending the charter, bylaws or articles of association.
o Shareholder appraisal rights, which allow shareholders to demand judicial review of an acquisition price.
We will vote against:
o Shareholder advisory committees. While management should solicit
shareholder input, we prefer to leave the method of doing so to
management's discretion.
o Limitations on stock ownership or voting rights.
o Reduction in share ownership disclosure guidelines.
Mergers and Restructurings
Pioneer will vote on the following and similar issues on a case-by-case basis:
o Mergers and acquisitions.
o Corporate restructurings, including spin-offs, liquidations, asset sales, joint ventures, conversions to holding company and conversions to self-managed REIT structure.
o Debt restructurings.
o Conversion of securities.
o Issuance of shares to facilitate a merger.
o Private placements, warrants, convertible debentures.
o Proposals requiring management to inform shareholders of merger opportunities.
We will normally vote against shareholder proposals requiring that the company be put up for sale.
Mutual Funds
Many of our portfolios may invest in shares of closed-end funds or
exchange-traded funds. The non-corporate structure of these investments raises
several unique proxy voting issues. Pioneer will vote for:
o Establishment of new classes or series of shares.
o Establishment of a master-feeder structure.
Pioneer will vote on a case-by-case on:
o Changes in investment policy. We will normally support changes that do
not affect the investment objective or overall risk level of the fund.
We will examine more fundamental changes on a case-by-case basis.
o Approval of new or amended advisory contracts.
o Changes from closed-end to open-end format.
o Authorization for, or increase in, preferred shares.
o Disposition of assets, termination, liquidation, or mergers.
o Classified boards of closed-end funds, but will typically support such proposals.
Social Issues
Pioneer will abstain on stockholder proposals calling for greater disclosure of
corporate activities with regard to social issues. "Social Issues" may generally
be described as shareholder proposals for a company to:
o Conduct studies regarding certain issues of public concern and
interest;
o Study the feasibility of the company taking certain actions with regard to such issues; or
o Take specific action, including ceasing certain behavior and adopting company standards and principles, in relation to issues of public concern and interest.
We believe these issues are important and should receive management attention. Pioneer will vote against proposals calling for substantial changes in the company's business or activities. We will also normally vote against proposals with regard to contributions, believing that management should control the routine disbursement of funds.
aVOIDING CONFLICTS OF INTEREST
Pioneer addresses potential material conflicts of interest by having a
predetermined proxy voting policy. The Proxy Voting Oversight Group is
responsible for monitoring potential conflicts of interest in connection with
the voting of proxies on behalf of the Pioneer Funds and other clients. For
those proposals that are determined to present a material conflict of interest,
the Proxy Voting Oversight Group will follow additional procedures, which may
include consulting with the Board of Trustees in matters concerning the Pioneer
Funds. A conflict of interest occurs when Pioneer's interests interfere, or
appear to interfere with the interests of Pioneer's clients. Occasionally,
Pioneer may have a conflict that can affect how its votes proxies. The conflict
may be actual or perceived and may exist when the matter to be voted on
concerns:
o An affiliate of Pioneer, such as another company belonging to the
UniCredito Italiano S.p.A. banking group (a "UniCredito Affiliate");
o An issuer of a security for which Pioneer acts as a sponsor, advisor, manager, custodian, distributor, underwriter, broker, or other similar capacity (including those securities specifically declared by PGAM to present a conflict of interest for Pioneer);
o An issuer of a security for which UniCredito has informed Pioneer that a UniCredito Affiliate acts as a sponsor, advisor, manager, custodian, distributor, underwriter, broker, or other similar capacity; or
o A person with whom Pioneer (or any of its affiliates) has an existing, material contract or business relationship that was not entered into in the ordinary course of Pioneer's business.
Pioneer will abstain from voting shares of UniCredito Italiano Group, unless otherwise directed by a client. In addition, the Proxy Coordinator will inform PGAM Global Compliance and the PGAM Independent Directors before exercising such rights.
Any associate involved in the proxy voting process with knowledge of any apparent or actual conflict of interest must disclose such conflict to the Proxy Coordinator and the Chief Compliance Officer of the Adviser and Funds. The Proxy Voting Oversight Group will review each item referred to Pioneer by the proxy voting service to determine whether an actual or potential conflict of interest with Pioneer exists in connection with the proposal(s) to be voted upon. The review will be conducted by comparing the apparent parties affected by the proxy proposal being voted upon against the Controller's and Compliance Department's internal list of interested persons and, for any matches found, evaluating the anticipated magnitude and possible
probability of any conflict of interest being present. For each referral item, the determination regarding the presence or absence of any actual or potential conflict of interest will be documented in a Conflicts of Interest Report prepared by the Proxy Coordinator.
SUPERVISION
ESCALATION
It is each associate's responsibility to contact his or her business unit head,
the Proxy Coordinator, a member of the Proxy Voting Oversight Group or Chief
Compliance Officer of the Advisor and the Funds if he or she becomes aware of
any possible deviation from this policy and procedure that may disadvantage a
client or Fund.
tRAINING
Pioneer conducts periodic training on the Proxy Voting Policy and Procedure. It
is the responsibility of the business line policy owner and the applicable
Compliance Department to coordinate and conduct such training.
rELATED POLICIES AND PROCEDURES
Pioneer's Investment Management, Inc. Books and Records Policy and the Books and
Records of the Pioneer Funds' Policy.
RECORD KEEPING
The Proxy Coordinator shall ensure that Pioneer's proxy voting service:
o Retains a copy of the proxy statement received (unless the proxy
statement is available from the SEC's Electronic Data Gathering,
Analysis, and Retrieval (EDGAR) system);
o Retains a record of the vote cast;
o Prepares Form N-PX for filing on behalf of each client that is a registered investment company; and
o Is able to promptly provide Pioneer with a copy of the voting record upon its request.
The Proxy Coordinator shall ensure that for those votes that may require
additional documentation (i.e. conflicts of interest, exception votes and
case-by-case votes) the following records are maintained:
o A record memorializing the basis for each referral vote cast;
o A copy of any document created by Pioneer that was material in making the decision on how to vote the subject proxy; and
o A copy of any conflict notice, conflict consent or any other written communication (including emails or other electronic communications) to or from the client (or in the case of an employee benefit plan, the plan's trustee or other fiduciaries) regarding the subject proxy vote cast by, or the vote recommendation of, Pioneer.
Pioneer shall maintain the above records in the client's file in accordance with applicable regulations.
RELATED REGULATIONS
Form N-1A, ICA Rule 30b1-4, Rule 31a 1-3, Rule 38a-1 & IAA 206 (4) -6, 204 -2
ADOPTED BY THE PIONEER FUNDS' BOARD OF TRUSTEES
October 5, 2004
EFFECTIVE DATE:
October 5, 2004
REVISION DATE:
March 2008
PART C - OTHER INFORMATION
Item 23. Exhibits
Amended Form N-1A
Exhibit Reference
(a)(1) Amended and Restated Agreement and Declaration of Trust(10)
(a)(2) Certificate of Trust (2)
(a)(3) Amendment to Certificate of Trust (2)
(b) Amended and Restated Amended and Restated By-Laws (10)
(c) See Amended and Restated Agreement and Declaration of
Trust and Amended and Restated By-Laws filed under
Items 23(a)(1) and 23(b)
(d)(1) Management Contract between the Fund and Pioneer
Investment Management, Inc. (10)
(d)(2) Sub-Advisory Agreement between Pioneer Investment
Management, Inc. and AEW Capital Management, L.P. (5)
(e)(1) Underwriting Agreement between the Fund and
Pioneer Funds Distributor, Inc. (4)
(e)(2) Dealer Sales Agreement (8)
(f) None
(g)(1) Custodian Agreement between the Fund and Brown Brothers
Harriman & Co. (7)
(g)(2) Amended Appendix A to Custodian Agreeement (8)
(h)(1) Master Investment Company Service Agreement between the
Fund and Pioneer Investment Management Shareholder
Services, Inc. (7)
(h)(2) Amended Exhibit A to Investment Company Service
Agreement (8)
(h)(3) Amendment No. 2 to Master Investment Company
Service Agreement (10)
(h)(4) Amended and Restated Administration Agreement between the
Fund and Pioneer Investment Management, Inc. (10)
(i) Opinion and Consent of Counsel (3)
(j) Consent of Independent Registered Public Accounting
Firm (10)
(k) None
(l) Share Purchase Agreement (1)
(m) Pioneer Funds Distribution Plan (9)
(n) Multiple Class Plan pursuant to Rule 18f-3 (6)
(o) Not applicable
(p)(1) Code of Ethics - Pioneer Investment Management, Inc. (10)
(p)(2) Code of Ethics - Pioneer Funds (6)
(p)(3) Code of Ethics - Pioneer Funds Distributor, Inc. (6)
(p)(4) Code of Ethics - AEW Capital Management, L.P. (8)
N/A(1) Powers of Attorney (8)
N/A(2) Powers of Attorney (Mark E. Bradley) (9)
N/A(3) Powers of Attorney (Benjamin M. Friedman)(10)
---------------------------
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(1)Previously filed. Incorporated herein by reference from the exhibits filed with Post-Effective Amendment No. 4 to the Registration Statement (File No. 33-65822) as filed with the Securities and Exchange Commission (the "SEC") on April 25, 1995 (Accession No. 0000908996-95-000013).
(2) Previously filed. Incorporated herein by reference from the exhibits filed with Post-Effective Amendment No. 5 to the Registration Statement as filed with the SEC on November 7, 1995 (Accession No. 0000908996-95-000034).
(3) Previously filed. Incorporated herein by reference from the exhibit filed with Post-Effective Amendment No. 15 to the Registration Statement as filed with the SEC on April 30, 1999 (Accession No. 0000908996-99-000007).
(4) Previously filed. Incorporated herein by reference from the exhibits filed with Post-Effective Amendment No. 19 to the Registration Statement as filed with the SEC on May 1, 2002 (Accession No. 0001016964-02-000105).
(5) Previously filed. Incorporated herein by reference from the exhibits filed with Post-Effective Amendment No. 22 to the Registration Statement as filed with the SEC on June 1, 2004 (Accession No. 0001016964-04-000197).
(6) Previously filed. Incorporated herein by reference from the exhibits filed with Post-Effective Amendment No. 23 to the Registration Statement as filed with the SEC on April 27, 2005 (Accession No. 0001016964-05-000149).
(7) Previously filed. Incorporated herein by reference from the exhibits filed with Post-Effective Amendment No. 24 to the Registration Statement as filed with the SEC on April 28, 2006 (Accession No. 0000831120-06-000023).
(8) Previously filed. Incorporated herein by reference from the exhibits filed with Post-Effective Amendment No. 25 to the Registration Statement as filed with the SEC on April 30, 2007 (Accession No. 0000908996-07-000009).
(9) Previously filed. Incorporated herein by reference from the exhibits filed with Post-Effective Amendment No. 26 to the Registration Statement as filed with the SEC on April 25, 2008 (Accession No. 0000908996-08-000005).
(10) Filed herewith.
Item 24. Persons Controlled by or Under Common Control with the Fund
None.
Item 25. Indemnification
Except for the Amended and Restated Agreement and Declaration of Trust (the
"Declaration"), establishing the Fund as a statutory trust under Delaware law,
there is no contract, arrangement or statute under which any Trustee, officer,
underwriter or affiliated person of the Fund is insured or indemnified. The
Declaration provides that every person who is, or has been, a Trustee or an
officer, employee or agent of the Fund shall be indemnified by the Fund or the
appropriate Fund series to the fullest extent permitted by law against liability
and against all expenses reasonably incurred or paid by him in connection with
any claim, action, suit or proceeding in which he becomes involved as a party or
otherwise by virtue of his being or having been a Trustee, officer, employee or
agent and against amounts paid or incurred by him in the settlement thereof.
Insofar as indemnification for liability arising under the Securities Act of 1933, as amended (the "1933 Act"), may be available to Trustees, officers and controlling persons of the Fund pursuant to the foregoing provisions, or otherwise, the Fund has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the 1933 Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Fund of expenses incurred or paid by a Trustee, officer or controlling person of the Fund in the successful defense of any action, suit or proceeding) is asserted by such Trustee, officer or controlling person in connection with the securities being registered, the Fund 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 1933 Act and will be governed by the final adjudication of such issue.
Item 26. Business and Other Connections of Investment Adviser
Pioneer Investment Management, Inc. ("Pioneer Investments") is a registered investment adviser under the Investment Advisers Act of 1940, as amended, and is an indirect, wholly owned subsidiary of UniCredit S.p.A.("UniCredit"). Pioneer Investments manages investment companies, pension and profit sharing plans, trusts, estates or charitable organizations and other corporations or business entities.
To the knowledge of the Fund, none of Pioneer Investments' directors or executive officers is or has been during their employment with Pioneer Investments engaged in any other business, profession, vocation or employment of a substantial nature for the past two fiscal years, except as noted below. Certain directors and officers, however, may hold or may have held various positions with, and engage or have engaged in business for, the investment companies that Pioneer Investments manages and/or other UniCredit subsidiaries.
OTHER BUSINESS, PROFESSION, VOCATION OR
EMPLOYMENT OF SUBSTANTIAL NATURE WITHIN LAST TWO
NAME OF DIRECTOR/OFFICER FISCAL YEARS
John F. Cogan, Jr. Of Counsel, Wilmer Cutler Pickering Hale and Dorr
LLP, 60 State Street, Boston, Massachusetts 02109
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Item 27. Principal Underwriters
(a) Pioneer Funds Distributor, Inc. acts as principal underwriter for the following investment companies:
Pioneer Bond Fund
Pioneer Emerging Markets Fund
Pioneer Equity Income Fund
Pioneer Equity Opportunity Fund
Pioneer Fund
Pioneer Fundamental Growth Fund
Pioneer High Yield Fund
Pioneer Ibbotson Asset Allocation Series
Pioneer Independence Fund
Pioneer International Equity Fund
Pioneer Mid Cap Growth Fund
Pioneer Mid Cap Value Fund
Pioneer Money Market Trust
Pioneer Protected Principal Trust
Pioneer Real Estate Shares
Pioneer Research Fund
Pioneer Select Growth Fund
Pioneer Series Trust I
Pioneer Series Trust II
Pioneer Series Trust III
Pioneer Series Trust IV
Pioneer Series Trust V
Pioneer Series Trust VI
Pioneer Series Trust VII
Pioneer Series Trust VIII
Pioneer Series Trust IX
Pioneer Short Term Income Fund
Pioneer Small Cap Value Fund
Pioneer Strategic Income Fund
Pioneer Tax Free Income Fund
Pioneer Value Fund
Pioneer Variable Contracts Trust
(b) Directors and executive officers of Pioneer Funds Distributor,
Inc.:
POSITIONS AND OFFICES POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH FUND
Daniel K. Kingsbury Director None
Joseph D. Kringdon Director and President None
Mark D. Goodwin Executive Vice President
and Chief Operating Officer None
Gregg Dooling Chief Financial Officer None
Christopher E. Saulnier Treasurer None
Dorothy E. Bourassa Senior Vice President
and Secretary Secretary
Nate Algiere Senior Vice President None
John P. Davy Senior Vice President None
Michael B. Glenn Senior Vice President None
Alexander Sarafianos Senior Vice President None
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The principal business address of each of these individuals is 60 State Street, Boston, Massachusetts 02109-1820.
(c) Not applicable.
Item 28. Location of Accounts and Records
The accounts and records are maintained at the Fund's office at 60 State Street, Boston, Massachusetts 02109; contact the Treasurer.
Item 29. Management Services
Not applicable.
Item 30. Undertakings
Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and the Investment Company Act of 1940, as amended, the Fund certifies that it meets all of the requirements for effectiveness of this registration statement under Rule 485(b) under the Securities Act of 1933 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, duly authorized, in the City of Boston and The Commonwealth of Massachusetts on the 27th day of April, 2009.
PIONEER REAL ESTATE SHARES
By: /s/ Daniel K. Kingsbury
Daniel K. Kingsbury
Executive Vice President
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Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities indicated below on April 27, 2009:
Signature Title
John F. Cogan, Jr.* Chairman of the Board,
John F. Cogan, Jr. President (Principal Executive
Officer) and Trustee
Mark E. Bradley* Chief Financial Officer
Mark E. Bradley and Treasurer (Principal
Financial and Accounting
Officer)
David R. Bock* Trustee
David R. Bock
Mary K. Bush* Trustee
Mary K. Bush
Benjamin M. Friedman* Trustee
Benjamin M. Friedmam
Margaret B.W. Graham* Trustee
Margaret B.W. Graham
/s/ Daniel K. Kingsbury Executive Vice President
Daniel K. Kingsbury and Trustee
Thomas J. Perna* Trustee
Thomas J. Perna
Marguerite A. Piret* Trustee
Marguerite A. Piret
Stephen K. West* Trustee
Stephen K. West
*By: /s/ Daniel K. Kingsbury Dated: April 27, 2009
Daniel K. Kingsbury
Attorney-in-Fact
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Exhibit Index
Exhibit
Number Document Title
(a)(1) Amended and Restated Agreement and Declaration of Trust
(b) Amended and Restated Amended and Restated By-Laws
(d)(1) Management Contract between the Fund and Pioneer
Investment Management, Inc.
(h)(3) Amendment No. 2 to Master Investment Company
Service Agreement
(h)(4) Amended and Restated Administration Agreement between the
Fund and Pioneer Investment Management, Inc.
(j) Consent of Independent Registered Public Accounting
Firm
(p)(1) Code of Ethics - Pioneer Investment Management, Inc.
N/A(3) Powers of Attorney (Benjamin M. Friedman)
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AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST
OF
PIONEER REAL ESTATE SHARES
(a Delaware Statutory Trust)
As Amended and Restated as of July 1, 2008
TABLE OF CONTENTS
ARTICLE I - Name and Definitions
Section 1.1 Name..........................................................................1
Section 1.2 Definitions...................................................................1
ARTICLE II - Nature and Purpose of Trust.................................................................4
---------------------------
ARTICLE III -Registered Agent and Registered Office......................................................4
--------------------------------------
ARTICLE IV - Beneficial Interests; Shareholders
Section 4.1 Shares of Beneficial Interest.................................................4
Section 4.2 Issuance of Shares............................................................4
Section 4.3 Rights of Shareholders........................................................5
Section 4.4 Ownership and Transfer of Shares; Small Accounts..............................5
Section 4.5 Voting by Shareholders........................................................6
Section 4.6 Meetings......................................................................7
Section 4.7 Quorum and Action.............................................................7
Section 4.8 Action by Written Consent in Lieu of Meeting of Shareholders..................7
Section 4.9 Series and Classes of Shares..................................................8
Section 4.10 Disclosure of Shareholder Holdings...........................................10
Section 4.11 Access to Trust Records......................................................11
Section 4.12 Communications with Shareholders.............................................11
ARTICLE V - The Trustees
Section 5.1 Management of the Trust......................................................11
Section 5.2 Qualification and Number.....................................................11
Section 5.3 Term and Election............................................................11
Section 5.4 Resignation, Retirement and Removal..........................................11
Section 5.5 Vacancies....................................................................12
ARTICLE VI - Powers of Trustees
Section 6.1 General Powers...............................................................12
Section 6.2 Certain Specific Powers......................................................13
Section 6.3 Issuance and Repurchase of Shares............................................16
Section 6.4 Delegation; Committees.......................................................16
Section 6.5 Collection and Payment.......................................................16
Section 6.6 Expenses.....................................................................16
Section 6.7 Manner of Acting.............................................................16
Section 6.8 Bylaws.......................................................................17
Section 6.9 Principal Transactions.......................................................17
Section 6.10 Effect of Trustees' Determination............................................17
ARTICLE VII - Service Providers
Section 7.1 Investment Adviser and Administrators........................................17
Section 7.2 Underwriting; Transfer Agent; Shareholder Servicing Agent; Custodian ........17
Section 7.3 Parties to Contract..........................................................18
Section 7.4 Further Authority of Trustees................................................18
ARTICLE VIII - Distributions; Redemptions; Determination of Net Asset Value
Section 8.1 Distributions................................................................18
Section 8.2 Redemption of Shares.........................................................19
Section 8.3 Redemption Price.............................................................19
Section 8.4 Payment......................................................................19
Section 8.5 Redemption of Shareholder's Interest by Action of Trust......................19
Section 8.6 Suspension of Right of Redemption............................................20
Section 8.7 Determination of Net Asset Value; Valuation of Portfolio Assets.........20
Section 8.8 Constant Net Asset Value.....................................................20
Section 8.9 Reserves.....................................................................20
Section 8.10 Determination by Trustees....................................................21
ARTICLE IX - Limitation of Liability and Indemnification
Section 9.1 No Personal Liability of and Indemnification of Shareholders.................21
Section 9.2 Limitation of Liability of Trustees and Others...............................21
Section 9.3 Experts; No Bond or Surety...................................................22
Section 9.4 Liability of Third Persons Dealing with the Trust or Trustees................23
Section 9.5 Indemnification and Advancement of Expenses..................................23
Section 9.6 Further Indemnification......................................................24
Section 9.7 Amendments and Modifications.................................................24
Section 9.8 Derivative Actions...........................................................24
ARTICLE X - Termination; Mergers and Sale of Assets
Section 10.1 Termination of Trust or Series...............................................27
Section 10.2 Merger and Consolidation.....................................................28
Section 10.3 Sale of Assets; Reorganization...............................................28
Section 10.4 Conversion...................................................................29
Section 10.5 Combination of Classes.......................................................29
ARTICLE XI - Amendments; Filings; Copies; Miscellaneous
Section 11.1 Amendments to Declaration and Certificate of Trust...........................29
Section 11.2 Filing of Certificate; Copies of Declaration; Counterparts;
Headings.....................................................................29
Section 11.3 Trustees May Resolve Ambiguities.............................................30
Section 11.4 Applicable Law; Forum Selection; Jury Waiver.................................30
Section 11.5 Statutory Trust Only.........................................................31
Section 11.6 Provisions in conflict with Law or Regulations...............................31
Section 11.7 Writings.....................................................................31
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AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST
OF
PIONEER REAL ESTATE SHARES
THIS AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST is made as
of this 1st day of July, 2008 by the Trustees hereunder.
WHEREAS, PIONEER REAL ESTATE SHARES was established pursuant to an Agreement and Declaration of Trust dated March 10, 1995 (as amended to the date hereof, the "Original Declaration") and the filing of a Certificate of Trust with the Delaware Secretary of State for the purposes of carrying on the business of a management investment company;
WHEREAS, the Trustees, pursuant to Section 8, Article IX of the Original Declaration, are authorized to amend the Original Declaration with the vote or consent of the Shareholders as required by such Section;
WHEREAS, this Amended and Restated Agreement and Declaration of Trust has been amended in accordance with the provisions of the Original Declaration in effect as of the date hereof;
NOW, THEREFORE, the Trustees and any successor Trustees elected or appointed in accordance with Article V hereof hereby declare that they will hold all cash, securities and other assets and properties, which the Trust may from time to time acquire in any manner, IN TRUST, and that they will manage and dispose of the same and manage the affairs and business of the Trust upon the following terms and conditions for the benefit of the holders from time to time of shares of beneficial interest in this Trust as hereinafter set forth.
ARTICLE I
NAME AND DEFINITIONS
Section 1.1. Name. This Trust shall be known as Pioneer Real Estate Shares and the Trustees shall conduct the business of the Trust under that name or any other name as they may from time to time determine.
Section 1.2. Definitions. Whenever used herein, unless otherwise required by the context or specifically provided, the following terms have the following respective meanings:
(a) "Bylaws" means the Bylaws of the Trust referred to in Section 6.8 hereof, as from time to time amended, which Bylaws are expressly incorporated by reference herein as part of the Trust's "governing instrument" within the meaning of the Delaware Act (as defined below).
(b) "Certificate of Trust" means the certificate of trust of the Trust, as filed with the Secretary of State of the State of Delaware in accordance with the Delaware Act (as defined below), and as such certificate of trust may be amended or amended and restated from time to time.
(c) "Class" means one or more Shares (as defined below) of a Series (as defined below) of the Trust as may be established and designated as a Class from time to time by the Trustees pursuant to Section 4.9(c) hereof.
(d) "Code" means the Internal Revenue Code of 1986 (or any successor statute), as amended from time to time, and the rules and regulations thereunder, as adopted or amended from time to time.
(e) "Commission" shall have the same meaning given to such term in the 1940 Act.
(f) "Complaining Shareholder" shall refer to a Shareholder making a demand or bringing a claim pursuant to Section 9.8 hereof.
(g) "Declaration" means this Agreement and Declaration of Trust as amended, supplemented or amended and restated from time to time, which, together with the Bylaws and any designations of Series or Classes made in accordance with Section 4.6(c) hereof, shall constitute the Trust's "governing instrument" within the meaning of the Delaware Act. Reference in this Agreement and Declaration of Trust to "Declaration," "hereof," "herein," and "hereunder" shall be deemed to refer to this Declaration rather than exclusively to the article or section in which such words appear.
(h) "Delaware Act" shall refer to the Delaware Statutory Trust Act, as amended from time to time.
(i) "He," "Him" and "His" shall include the feminine and neuter, as well as the masculine, genders.
(j) "Interested Person" shall have the same meaning given to such term in the 1940 Act.
(k) "1940 Act" refers to the Investment Company Act of 1940 (and any successor statute) and the rules thereunder, all as amended from time to time, as may apply to the Trust or any Series or Class thereof, including pursuant to any exemptive, interpretive or other relief or guidance issued by the Commission or the staff of the Commission under such Act.
(l) "Outstanding Shares" means those Shares shown from time to time on the books of the Trust or its transfer agent as then issued and outstanding, but shall not include Shares which have been redeemed, repurchased, cancelled or terminated by the Trust.
(m) "Person" means and includes natural persons, corporations, partnerships, limited partnerships, business trusts, limited liability partnerships, statutory trusts, limited liability companies, trusts, associations, joint ventures, estates, nominees and any other entity in its own or any representative capacity, whether or not legal entities, and governments and agencies and political subdivisions thereof, in each case whether domestic or foreign.
(n) "Prospectus" means the prospectus and statement of additional information with respect to the Trust or one or more Series or Classes thereof as the context shall require, as contained in the most recent effective registration statement filed with the Commission with respect to the Trust or one or more such Series or Classes thereof, as the same may be supplemented or modified from time to time in accordance with the requirements of the federal securities laws.
(o) "Series" individually or collectively means each Series of Shares as may be established and designated from time to time by the Trustees pursuant to Section 4.9(c) hereof.
(p) "Shareholder" means a record owner of Outstanding Shares.
(q) "Shares" means the units of interest into which the beneficial interest in the Trust shall be divided from time to time, including the Shares of any and all Series and Classes which may be established and designated by the Trustees, and includes fractions of Shares as well as whole Shares.
(r) "Trust" refers to the Delaware statutory trust established under the Delaware Act by this Declaration and the filing of the Certificate of Trust with the Secretary of State of the State of Delaware.
(s) "Trust Property" means any and all property, real or personal, tangible or intangible, which is owned or held by or for the account of the Trust or, if the Trust has established one or more Series, any such Series as the context shall require.
(t) "Trustees" means, at any time, the person or persons who have signed this Declaration and all other persons who may from time to time be duly qualified and serving as Trustees in accordance with the provisions of Article V hereof, in each case if they shall at that time continue in office in accordance with the terms hereof, and reference herein to a Trustee or the Trustees shall refer to such person or persons in his capacity or their capacities as Trustees hereunder.
ARTICLE II
NATURE AND PURPOSE OF TRUST
The purpose of the Trust is to engage in, operate and carry on the business of an open-end management investment company through one or more Series, and to do any and all acts or things as are necessary, convenient, appropriate, incidental or customary in connection therewith, both within and without the State of Delaware, and without limiting the foregoing or the other provisions hereof, the Trust may exercise all powers conferred by the laws of the State of Delaware upon a Delaware statutory trust formed pursuant to the Delaware Act.
ARTICLE III
REGISTERED AGENT AND REGISTERED OFFICE
The registered agent and office of the Trust in the State of Delaware are Delaware Corporation Organizers, Inc., 1201 North Market Street, Wilmington, DE 19801. Unless otherwise required by applicable law, the Trust shall at all times maintain at least one resident agent who shall be either a citizen of the State of Delaware who resides in such State or a Delaware corporation. The Trustees may change the registered agent or registered office of the Trust from time to time by making the appropriate filing or filings with the Secretary of State of the State of Delaware.
ARTICLE IV
BENEFICIAL INTERESTS; SHAREHOLDERS
Section 4.1. Shares of Beneficial Interest. The beneficial interest in the Trust shall be divided into such Shares of beneficial interest, of such Series or Classes, and of such designations and par values (if any) and with such rights, preferences, privileges, limitations, restrictions and such other relative terms as shall be determined by the Trustees, from time to time. The number of Shares is unlimited. The Trustees shall have full power and authority to take such action with respect to the Shares as the Trustees may deem desirable.
Section 4.2. Issuance of Shares. (a) Shares may be issued from time to time to such Persons (including, without limitation, any Trustee, officer, or agent of the Trust or any Person in which a Trustee, officer or agent of the Trust has an interest) either for cash or for such other consideration (which may be in any one or more instances a certain specified consideration or certain specified considerations) and on such terms as the Trustees, from time to time, may deem advisable, and the Trust may, in connection with an issuance of Shares, acquire other assets (including the acquisition of assets subject to, and in connection with, the assumption of liabilities), and all Shares so issued hereunder, including without limitation Shares issued in connection with a dividend in Shares or a split or reverse split of Shares, shall be fully paid and nonassessable. The Trust shall have the right to refuse to issue Shares to any Person at any time and for any reason or for no reason whatsoever.
(b) The Trust may issue Shares in fractional denominations to the same extent as its whole Shares, and Shares in fractional denominations shall be Shares having proportionately to the respective fractions represented thereby all the rights of whole Shares, including, without limitation, the right to vote, the right to receive dividends and distributions and the right to participate upon termination of the Trust.
(c) Any Shares issued by the Trust which have been purchased, redeemed or otherwise reacquired by the Trust shall be retired automatically and shall have the status of unissued Shares.
Section 4.3. Rights of Shareholders. The ownership of the Trust Property of every description and the right to conduct any business herein described is vested exclusively in the Trust. The Shareholders shall have no right or title in or to the Trust Property or to call for any partition or division of any property, profits, rights or interests of the Trust or any Series thereof and the Shareholders shall have no interest therein other than the beneficial interest conferred by their Shares. The death, incapacity, dissolution, termination, or bankruptcy of a Shareholder during the continuance of the Trust shall neither operate to terminate the Trust or any Series thereof nor entitle the representative of any such Shareholder to an accounting or to take any action in court or elsewhere against the Trust, any Series thereof or the Trustees, but shall entitle such representative only to the rights of said Shareholder under this Declaration. Neither the Trust nor the Trustees, nor any officer, employee or agent of the Trust shall have any power to bind personally any Shareholder, or to call upon any Shareholder for the payment of any sum of money or assessment whatsoever other than such as the Shareholder may at any time personally agree to pay, provided however that any sales loads or charges, redemption fees, account fees or any other fees or charges not prohibited as charges to Shareholders under applicable law shall not be deemed to be an assessment for the purposes of this Declaration. The Shares shall be personal property giving only the rights specifically set forth in this Declaration. The holders of Shares shall not, as such holders, have any right to acquire, purchase or subscribe for any Shares or securities of the Trust that it may hereafter issue or sell, other than such right, if any, as the Trustees may determine. The holders of Shares shall not be entitled to exercise the rights of objecting shareholders and shall have no appraisal rights with respect to their Shares and, except as otherwise determined by the Trustees from time to time, shall have no exchange or conversion rights with respect to their Shares. Every Shareholder, by virtue of purchasing Shares and becoming a Shareholder, shall be held to have expressly assented and agreed to the terms of this Declaration and any other governing instrument and shall be bound thereby.
Section 4.4. Ownership and Transfer of Shares; Small Accounts. (a) The ownership and transfer of Shares shall be recorded on the books of the Trust or, if there is a transfer or similar agent with respect to such Shares, on the books and records of such transfer or similar agent with respect to such Shares, which records shall be maintained separately for the Shares of each Series or Class of the Trust. No certificates representing the ownership of Shares shall be issued except as the Trustees may otherwise determine from time to time. The Trustees may make such rules or impose such restrictions as they consider necessary or appropriate for the issuance of Share certificates, transfer of Shares and similar matters. The record books of the Trust, as kept by the Trust or any transfer or similar agent of the Trust, shall be conclusive as to who are the holders of Shares and as to the number of Shares held from time to time by each Shareholder. No Shareholder shall be entitled to receive any payment of a dividend or distribution, or to have notice given to him as provided herein or in the Bylaws, until he has provided such information as shall be required to the Trust or, as applicable, the Trust's transfer or similar agent with respect to his Shares.
(b) In the event any certificates representing Outstanding Shares are at any time outstanding, the Trustees may at any time or from time to time determine that Shares shall no longer be represented by certificates, and in connection therewith, upon written notice to any Shareholder holding certificates representing Outstanding Shares, such certificates shall be cancelled, provided that such cancellation shall not affect the ownership by such Shareholder of such Shares, and following such cancellation, ownership and transfer of such Shares shall be recorded by book entry on the books of the Trust or its transfer or similar agent.
(c) The Trustees may establish, from time to time, one or more minimum investment amounts for Shareholder accounts, which may differ within and among any Series or Classes, and may impose account fees on (which may be satisfied by involuntarily redeeming the requisite number of Shares in any such account in the amount of such fee), and/or require the involuntary redemption of Shares held in, those accounts the net asset value of which for any reason falls below such established minimum investment amounts, or may authorize the Trust to convert any such Shares in such account to Shares of another Class or Series, or take any other such action with respect to minimum investment amounts as may be deemed necessary or appropriate by the Trustees, in each case upon such terms as shall be established by the Trustees.
Section 4.5. Voting by Shareholders. (a) Shareholders shall not have the power to vote on any matter except: (i) for the election or removal of Trustees to the extent and as provided in Article V hereof; and (ii) with respect to such additional matters relating to the Trust as may be required by law or as the Trustees may consider and determine necessary or desirable.
(b) As determined by the trustees without the vote or consent of Shareholders, on any matter submitted to a vote of Shareholders either (i) each whole Share shall be entitled to one vote as to any matter on which it is entitled to vote and each fractional Share shall be entitled to a proportionate fractional vote, or (ii) each whole Share or fractional Share outstanding on the record date shall entitle the holder thereof to a number of votes as to any matter on which the Shareholder is entitled to vote equal to the net asset value of the Share or fractional Share in United States dollars determined at the close of business on the record date. Without limiting the power of the Trustees in any way to designate otherwise in accordance with the preceding sentence, the Trustees hereby establish that each whole Share shall be entitled to one vote as to any matter on which it is entitled to vote and each fractional Share shall be entitled to a proportionate fractional vote. There shall be no cumulative voting in the election of Trustees or on any other matter submitted to a vote of the Shareholders. Shares may be voted in person or by proxy. Until Shares of the Trust or any Series or Class are issued, the Trustees may exercise all rights of Shareholders of the Trust or such Series or Class and may take any action required or permitted by law, this Declaration or the Bylaws of the Trust to be taken by Shareholders of the Trust, such Series or Class.
(c) On any matter submitted to a vote of the Shareholders of the Trust, all Shares of all Series and Classes then entitled to vote shall be voted together, except that (i) when required by the 1940 Act to be voted by individual Series or Class, Shares shall be voted by individual Series or Class, and (ii) when the Trustees have determined that the matter affects only the interests of Shareholders of one or more Series or Classes, only Shareholders of such one or more Series or Classes shall be entitled to vote thereon.
Section 4.6. Meetings. Meetings of the Shareholders of the Trust or any one or more Series or Classes thereof may be called and held from time to time for the purpose of taking action upon any matter requiring the vote or authority of the Shareholders as herein provided or upon any other matter deemed by the Trustees to be necessary or desirable. The Trustees may set in the Bylaws provisions relating to the calling and holding of meetings (including the holding of meetings by electronic or other similar means), notice of meetings, record dates, place of meetings, conduct of meetings, voting by proxy, postponement, adjournment or cancellation of meetings and related matters.
Section 4.7. Quorum and Action. (a) The Trustees shall set forth in the Bylaws the quorum required for the transaction of business by the Shareholders at a meeting, which quorum shall in no event be less than Shares representing thirty percent (30%) of the voting power of the Shares entitled to vote at such meeting. If a quorum is present when a duly called and held meeting is convened, the Shareholders present may continue to transact business until adjournment, even though the withdrawal of a number of Shareholders originally present leaves less than the proportion or number otherwise required for a quorum.
(b) The Shareholders shall take action by the affirmative vote of the holders of Shares entitled to vote and representing a majority of votes cast at a meeting of Shareholders at which a quorum is present, except in the case of the election of Trustees which shall only require a plurality and except as may be otherwise required by applicable law or any provision of this Declaration or the Bylaws.
Section 4.8. Action by Written Consent in Lieu of Meeting of Shareholders. Any action required or permitted to be taken at a meeting of the Shareholders may be taken, if so directed by the Trustees, without a meeting by written action executed by Shareholders, as of a record date specified in accordance with the Bylaws, holding not less than the minimum voting power that would have been necessary to take the action at a meeting, assuming that the Shareholders holding all of the Outstanding Shares entitled to vote on that action were present and voting at that meeting. The written action shall be effective when it has been executed by the requisite number of Shareholders and delivered to the secretary of the Trust, unless a different effective time is provided in the written action. Such a consent may be executed and delivered by electronic means in accordance with any procedures that may be adopted by the Trustees from time to time.
Section 4.9. Series and Classes of Shares.
(a) Series. The current Series of the Trust are set forth on Schedule A hereto. The Trustees may from time to time authorize the division of Shares into additional Series. The relative rights, preferences, privileges, limitations, restrictions and other relative terms of any Series shall be established and designated by the Trustees, and may be modified by the Trustees from time to time, upon and subject to the following provisions:
(i) Subject to variations between Classes of Shares of a Series, all Shares shall be identical except that there may be such variations as shall be fixed and determined by the Trustees from time to time between different Series, including, without limitation, as to qualifications for ownership, minimum purchase amounts, minimum account size, purchase price, fees and expenses, redemptions, conversions and exchanges, and special and relative rights as to dividends and on liquidation, and each Series shall have such business purpose or investment objective as shall be determined by the Trustees. Each Share of a Series shall represent a beneficial interest in the net assets allocated or belonging to such Series only, and such interest shall not extend to the assets of the Trust generally (except to the extent that General Assets (as defined below) are allocated to such Series). All references to Shares in this Declaration shall be deemed to include references to Shares of any or all Series as the context may require.
(ii) The number of authorized Shares of each Series and the number of Shares of each Series that may be issued shall be unlimited. The Trustees may divide or combine any issued or unissued Shares of any Series into a greater or lesser number; classify or reclassify any issued or unissued Shares into one or more Series; terminate any one or more Series; change the name of a Series; and take such other action with respect to the Series as the Trustees may deem desirable.
(iii) All consideration received by the Trust for the issue or sale of Shares of a particular Series, together with all assets in which such consideration is invested or reinvested, all income, earnings, profits and proceeds thereof, including any proceeds derived from the sale, exchange or liquidation of such assets, and any funds or payments derived from any reinvestment of such proceeds in whatever form the same may be (collectively, the "Assets"), shall irrevocably belong to that Series for all purposes, subject only to the rights of creditors of such Series, and shall be so recorded upon the books of the Trust. Such Assets, together with any General Assets (as hereinafter defined) allocated to that Series as provided in the following sentence, are herein referred to as "Assets belonging to" that Series. In the event that there are any assets, income, earnings, profits or proceeds thereof, funds or payments which are not readily identifiable as Assets belonging to any particular Series (collectively, the "General Assets"), the Trustees shall allocate such General Assets to and among any one or more of the Series created from time to time in such manner and on such basis as they deem fair and equitable; and any General Assets allocated to a particular Series shall be Assets belonging to that Series. Each such allocation by the Trustees shall be conclusive and binding upon the Shareholders of all Series for all purposes. Separate and distinct records shall be maintained for each Series and the Assets belonging to each Series shall be held and accounted for in such separate and distinct records separately from the Assets belonging to all other Series and the General Assets of the Trust not allocated to such Series.
(iv) The Assets belonging to a particular Series shall be charged with the debts, liabilities and obligations of the Trust in respect of that Series and with all expenses, costs, charges and reserves attributable to that Series (collectively, the "Liabilities"), which Liabilities shall be recorded upon the books of the Trust. Such Liabilities together with any General Liabilities (as hereinafter defined) allocated to that Series as provided in the following sentence, are herein referred to as "Liabilities belonging to" that Series. In the event there are any debts, liabilities, obligations, expenses, costs, charges or reserves of the Trust that are not readily identifiable as belonging to any particular Series (collectively, the "General Liabilities"), the Trustees shall allocate and charge such General Liabilities to and among any one or more of the Series created from time to time in such manner and on such basis as they deem fair and equitable; and any General Liabilities so allocated to a particular Series shall belong to that Series. Each such allocation by the Trustees shall be conclusive and binding upon all concerned for all purposes. Without limiting the foregoing, but subject to the right of the Trustees to allocate General Liabilities as herein provided, the Liabilities belonging to a particular Series shall be enforceable only against the Assets belonging to such Series and not against the assets of the Trust generally or against the Assets belonging to any other Series, and none of the General Liabilities incurred, contracted for or otherwise existing with respect to the Trust generally or any Liabilities incurred, contracted for or otherwise existing with respect to any other Series shall be enforceable against the Assets belonging to such Series. Notice of this contractual limitation on liabilities among Series shall be set forth in the Certificate of Trust (whether originally or by amendment) as filed or to be filed with the Secretary of State of the State of Delaware pursuant to the Delaware Act, and upon the giving of such notice in the Certificate of Trust, the statutory provisions of ss.3804(a) of the Delaware Act relating to limitations on liabilities among Series (and the statutory effect under ss.3804(a) of setting forth such notice in the Certificate of Trust) shall become applicable to the Trust and each Series. Any Person extending credit to, contracting with or having any claim against any Series may look only to the Assets belonging to that Series to satisfy or enforce any Liability belonging to that Series. No Shareholder or former Shareholder of any Series, in such capacity, shall have a claim on or any right to any Assets belonging to any other Series or the Trust generally.
(b) Classes. The current Classes are set forth on Schedule B hereto with respect to those Series identified on such Schedule. The Trustees may from time to time authorize the division of Shares of the Trust or any Series thereof into additional Classes. The relative rights, preferences, privileges, limitations, restrictions and other relative terms of a Class shall be established and designated by the Trustees and may be modified by the Trustees from time to time. All Shares of a Class of a Series shall be identical with each other and with the Shares of each other Class of the same Series except for such variations between Classes as may be authorized by the Trustees from time to time and not prohibited by the 1940 Act, including, without limitation, as to qualifications for ownership, minimum purchase amounts, minimum account size, purchase price, fees and expenses, right of redemption, and the price, terms and manner of redemption, conversion and exchange rights and features and special and relative rights as to dividends and on liquidation. The number of authorized Shares of each Class and the number of Shares of each Class that may be issued shall be unlimited. The Trustees may divide or combine the issued or unissued Shares of any Class into a greater or lesser number; classify or reclassify any issued or unissued Shares of any Class into one or more Classes; combine two or more Classes of a Series into a single Class of such Series; terminate any one or more Classes of Shares; change the name or other designation of a Class; and take such other action with respect to the Classes as the Trustees may deem desirable. To the extent necessary or appropriate to give effect to the preferences and special or relative rights and privileges of any Classes, the Trustees may allocate assets, liabilities, income and expenses of a Series to a particular Class of that Series or apportion the same among two or more Classes of that Series. All references to Shares in this Declaration shall be deemed to include references to Shares of any or all Classes as the context may require.
(c) Establishment and Designation of Series and Classes. The establishment and designation of any Series or Class of Shares shall be made either by the vote of a majority of the Trustees or by the execution by a majority of the Trustees of an instrument in each case setting forth such establishment and designation, the effective date of such establishment and designation and the relative rights, preferences, privileges, limitations, restrictions and other relative terms of such Series and/or Class, whether directly in such resolution or instrument or by reference to one or more documents or instruments outside this Declaration and outside the resolutions, as the same may be in effect from time to time, including any Prospectus relating to such Series or Class, and any such resolutions or instruments shall be deemed to be incorporated by reference herein as part of the Trust's "governing instrument" within the meaning of the Delaware Act. Additions or modifications to a designation, including, without limitation, any termination of an existing Series or Class, shall be made in the same manner as is permitted for the establishment and designation of such Series or Class.
Section 4.10. Disclosure of Shareholder Holdings. The holders of Shares or other securities of the Trust shall upon demand disclose to the Trust in writing such information with respect to direct and indirect ownership of Shares or other securities of the Trust as the Trustees deem necessary to comply with the provisions of the Code; to comply with the requirements of any other law or regulation; or as the Trustees may otherwise decide, and ownership of Shares may be disclosed by the Trust if so required by applicable law or as the Trustees may otherwise decide.
Section 4.11. Access to Trust Records. As provided in Section 3819 of the Delaware Act, Shareholders shall only have such right to inspect the such records, documents, accounts and books of the Trust as may be granted from time to time by the Trustees, and subject to such reasonable standards (including standards governing what information and documents are to be furnished at what time and location and at whose expense as may be established from time to time by the Trustees.
Section 4.12. Communications with Shareholders. Any notices, reports, statements, or communications with Shareholders of any kind required under this Declaration, including any such communications with Shareholders or their counsel or other representatives required under Section 9.8 hereof, or otherwise made by the Trust or its agents on behalf of the Trust shall be governed by the provisions pertaining thereto in the Bylaws.
ARTICLE V
THE TRUSTEES
Section 5.1. Management of the Trust. The business and affairs of the Trust shall be managed under the direction of the Trustees, and they shall have all powers necessary and desirable to carry out that responsibility, including, without limitation, those powers described more fully in Article VI hereof.
Section 5.2. Qualification and Number. Each Trustee shall be a natural person. A Trustee need not be a citizen of the United States or a resident of the State of Delaware. By a majority vote or consent of the Trustees as may then be in office, the Trustees may from time to time establish the number of Trustees. No decrease in the number of Trustees shall have the effect of removing any Trustee from office prior to the expiration of his term, but the number of Trustees may be decreased in conjunction with the resignation, retirement or removal of a Trustee pursuant to Section 5.4 hereof.
Section 5.3. Term and Election. Except as provided in Section 5.4 below, each Trustee shall hold office until the next meeting of Shareholders called for the purpose of considering the election or re-election of such Trustee or of a successor to such Trustee, and until his successor, if any, is elected, qualified and serving as a Trustee hereunder. Any Trustee vacancy may be filled by the affirmative vote or consent of a majority of the Trustees then in office, except as prohibited by the 1940 Act, or, if for any reason there are no Trustees then in office, vacancies may be filled by the officers of the Trust elected pursuant to Section 6.2(b)(iii) hereof, or may be filled in any other manner permitted by the 1940 Act.
Section 5.4. Resignation, Retirement and Removal. Any Trustee may resign or retire as a Trustee by an instrument in writing signed by him and delivered or mailed to the Chair, if any, the president or the secretary, and such resignation or retirement shall be effective upon such delivery, or at a later date according to the terms of the instrument. Any Trustee who has attained a mandatory retirement age or term limit established pursuant to, or who is otherwise required to retire in accordance with, any written policy adopted from time to time by at least two-thirds (2/3) of the Trustees shall, automatically and without action of such Trustee or the remaining Trustees, be deemed to have retired in accordance with the terms of such policy, effective as of the date determined in accordance with such policy. Except as aforesaid, any Trustee may be removed from office only (i) by action of at least two-thirds (2/3) of the voting power of the Outstanding Shares, or (ii) by the action of a majority of the remaining Trustees, specifying the date when such removal shall become effective. Except to the extent expressly provided in a written agreement to which the Trust is a party or in a written policy adopted by the Trustees, no resigning, retiring or removed Trustee shall have any right to any compensation for any period following his resignation, retirement or removal, or any right to damages on account of such resignation, retirement or removal.
Section 5.5. Vacancies. The death, resignation, retirement, removal, or incapacity of one or more of the Trustees, or all of them, shall not operate to annul the Trust or to revoke any existing agency created pursuant to the terms of this Declaration. Whenever a vacancy in the number of Trustees shall occur, until such vacancy is filled as provided herein, or the number of Trustees as fixed is reduced, the Trustees in office, regardless of their number, shall have all the powers granted to the Trustees, and during the period during which any such vacancy shall occur, only the Trustees then in office shall be counted for the purposes of the existence of a quorum or any action to be taken by such Trustees.
ARTICLE VI
POWERS OF TRUSTEES
Section 6.1. General Powers. The Trustees shall have exclusive and absolute control over the Trust Property and over the business of the Trust but with full powers of delegation, except as may otherwise be expressly prohibited by this Declaration. The Trustees shall have the power to direct the business and affairs of the Trust and carry on the Trust's operations and maintain offices both within and outside the State of Delaware, and to do or authorize all such other things and execute or authorize the execution of all such instruments as they deem necessary, proper or desirable in order to promote the interests of the Trust. With respect to any power or authority of the Trustees hereunder, whether stated or implied, the Trustees shall have all further powers and authority as may be necessary, incidental, relative, conductive, appropriate or desirable for the accomplishment, carrying out or attainment of any action authorized by the Trustees. In construing the provisions of this Declaration, the presumption shall be in favor of a grant of power to the Trustees. Without limiting the foregoing, the Trustees shall have power and authority to operate and carry on the business of an investment company and the Trustees shall exercise all the powers as are necessary, convenient, appropriate, incidental or customary in connection therewith and may exercise all powers which are ordinarily exercised by the trustees of a statutory trust. The enumeration of any specific power herein shall not be construed as limiting the aforesaid general powers. Such powers of the Trustees may be exercised without order of or resort to any court. Whenever in this Declaration the Trustees are given authority to act on behalf of the Trust or to direct, authorize or cause the Trust to take any action, such power and authority shall apply, mutatis mutandis, to any action of the Trust on behalf of any Series or Class, whether or not specific reference is made to Series or Classes.
Section 6.2. Certain Specific Powers. (a) Investments. The Trustees shall not in any way be bound or limited by present or future laws, rules, regulations, or customs in regard to investments by fiduciaries, but shall have full authority and power to authorize the Trust to make, invest and reinvest in, to buy or otherwise acquire, to hold, for investment or otherwise, to borrow, to sell, terminate, exercise or otherwise dispose of, to lend or to pledge, to write, enter into, engage, trade or deal in any and all investments or investment strategies as they may deem proper at any time and from time to time to accomplish the purpose of the Trust or any Series thereof. In furtherance of, and in no way limiting, the foregoing, the Trustees shall have power and authority to authorize the Trust:
(i) to exercise powers and rights of subscription or otherwise which in any manner arise out of ownership of securities or other assets;
(ii) to hold any security or property in a form not indicating any trust, whether in bearer, unregistered or other negotiable form or either in the Trust's name or in the name of a custodian or a nominee or nominees;
(iii) to exercise all rights, powers and privileges of ownership or interest in all securities and other assets included in the Trust Property, including the right to vote thereon and otherwise act with respect thereto and to do all acts for the preservation, protection, improvement and enhancement in value of all such assets;
(iv) to acquire (by purchase, lease or otherwise) and to hold, use, maintain, develop and dispose of (by sale or otherwise) any property, real or personal, tangible or intangible, including cash, securities, currencies, any commodities, and any interest therein;
(v) to borrow money for any purpose and in this connection issue notes or other evidence of indebtedness;
(vi) to secure borrowings by mortgaging, pledging or otherwise subjecting as security all or any portion of the Trust Property;
(vii) to endorse, guarantee, or undertake the performance of any obligation or engagement of any other Person;
(viii) to lend money or any other Trust Property;
(ix) to aid by further investment any corporation, company, trust, association or firm, any obligation of or interest in which is included in the Trust Property or in the affairs of which the Trustees have any direct or indirect interest and to do all acts and things designed to protect, preserve, improve or enhance the value of such obligation or interest;
(x) to guarantee or become surety on any or all of the contracts, stocks, bonds, notes, debentures and other obligations of any such corporation, company, trust, association or firm;
(xi) to consent to or participate in any plan for the reorganization, consolidation or merger of any corporation or issuer, any security or property of which is held in the Trust;
(xii) to consent to any contract, lease, mortgage, purchase, or sale of property by such corporation or issuer;
(xiii) to pay calls or subscriptions with respect to any security held in the Trust; and
(xiv) to join with other security holders in acting through a committee, depositary, voting trustee or otherwise, and in that connection to deposit any security with, or transfer any security to, any such committee, depositary or trustee, and to delegate to them such power and authority with relation to any security (whether or not so deposited or transferred) as the Trustees shall deem proper, and to agree to pay, and to pay, such portion of the expenses and compensation of such committee, depositary or trustee as the Trustees shall deem proper.
(b) Additional Powers. The Trustees shall have the power and authority on behalf of the Trust:
(i) to employ, engage or contract with, or make payments to, such Persons as the Trustees may deem desirable for the transaction of the business of the Trust or any Series thereof, including, without limitation, any Trustee or officer of the Trust or any firm of which any such Trustee or officer is a member, whether as agents or independent contractors of the Trust or any Series thereof, or as delegates of the Trustees, officers, or any other Person who may be involved with the management of the business affairs of the Trust or any Series thereof, to have such titles, and such rights, powers and duties as the Trustees may determine from time to time, to terminate any such employment, engagement or contract or other relationship, and to delegate to any such Person the supervision of any other Person that has been so employed, engaged or contracted with;
(ii) to authorize the Trust to enter into joint ventures, partnerships and any other combinations or associations;
(iii) to elect and remove such officers as they consider appropriate, including, without limitation, a president and a secretary;
(iv) to authorize the Trust to indemnify any Person with whom the Trust has dealings, including, without limitation, any service provider employed pursuant to Article VII hereof, to such extent as the Trustees shall determine;
(v) to authorize the Trust to purchase, and pay for out of Trust Property, (A) insurance policies insuring the Shareholders, Trustees, officers, employees and any other Persons, including, without limitation, any service provider employed pursuant to Article VII hereof, against any or all claims arising by reason of holding any such position or by reason of any action taken or omitted by any such Person in such capacity whether or not the Trust would have the power to indemnify such Person against such liability, (B) insurance for the protection of Trust Property, (C) insurance as may be required by applicable law, or (D) such other insurance as the Trustees shall deem advisable, in each case as the Trustees shall determine;
(vi) to authorize the Trust to establish pension, profit-sharing, share purchase, and other retirement, incentive and benefit plans, including the purchasing of life insurance and annuity contracts as a means of providing such retirement and other benefits, for any Trustees, officers, employees and agents of the Trust;
(vii) to authorize the Trust to guarantee indebtedness or contractual obligations of others;
(viii) to determine and change the fiscal year of the Trust or any Series and the method by which its accounts shall be kept;
(ix) to adopt a seal for the Trust, but the absence of such seal shall not impair the validity of any instrument executed on behalf of the Trust; and
(x) to engage in any other lawful act or activity in connection with or incidental to any of the powers enumerated in this Declaration, to do everything necessary, suitable or proper for the accomplishment of any purpose or the attainment of any object or the furtherance of any power herein set forth, either alone or in association with others, and to do every other act or thing incidental or appurtenant to or growing out of or connected with the aforesaid business or purposes, objects or powers.
(c) The foregoing enumeration of the powers and authority of the Trustees shall be read as broadly and liberally as possible, it being the intent of the foregoing in no way to limit the Trustees' powers and authority.
Section 6.3. Issuance and Repurchase of Shares. The Trustees shall have the power to authorize the Trust to issue, sell, repurchase, redeem, retire, cancel, acquire, hold, resell, reissue, dispose of, transfer, and otherwise deal in Shares and in any options, warrants or other rights to purchase Shares or any other interests in the Trust other than Shares.
Section 6.4. Delegation; Committees. The Trustees shall have power to delegate from time to time to one or more of their number or to officers, employees or agents of the Trust the doing of such things and the execution of such instruments either in the name of the Trust or the names of the Trustees or otherwise as the Trustees may deem expedient, except to the extent such delegation is prohibited by applicable law. Without limiting the foregoing, and notwithstanding any provisions herein to the contrary, the Trustees may by resolution appoint committees consisting of one or more, but less than the whole number of, Trustees then in office and such other members as the Trustees shall approve, which committees may be empowered to act for and bind the Trustees and the Trust, as if the acts of such committees were the acts of all the Trustees then in office.
Section 6.5. Collection and Payment. The Trustees shall have the power to authorize the Trust or its agents to: collect all money or other property due to the Trust; to pay all claims, including taxes, against the Trust Property; to prosecute, defend, arbitrate, compromise or abandon any claims relating to the Trust Property; to foreclose any security interest securing any obligations, by virtue of which any money or other property is owed to the Trust; and to enter into releases, agreements and other instruments; but the Trustees shall have no liability for failing to authorize any of the foregoing.
Section 6.6. Expenses. The Trustees shall have the power to authorize the Trust to incur and pay any expenses which, in the opinion of the Trustees, are necessary or incidental to carry out any of the purposes of this Declaration, to pay compensation from the funds of the Trust to themselves as Trustees and to reimburse themselves from the funds of the Trust for their expenses and disbursements. The Trustees shall fix the compensation of all officers, employees and Trustees.
Section 6.7. Manner of Acting. Except as otherwise provided herein, under applicable law or in the Bylaws, any action to be taken or determination made by the Trustees may be taken or made by a majority of the Trustees present at a meeting of Trustees (a quorum being present), including any meeting held by means of a conference telephone circuit or similar communications equipment by means of which all persons participating in the meeting can hear each other, or by written consents of a majority of Trustees then in office. Any such action or determination may be made by reference to one or more documents or instruments or policies or procedures outside this Declaration and outside the resolutions of the Trustees. Except as set forth specifically in this Declaration, any action that may be taken by the Trustees may be taken by them in their sole discretion and without the vote or consent of Shareholders.
Section 6.8. Bylaws. The Trustees may adopt Bylaws not inconsistent with this Declaration to provide for the conduct of the business of the Trust and shall have the exclusive power to amend or repeal such Bylaws.
Section 6.9. Principal Transactions. Except in transactions not permitted by the 1940 Act, the Trustees may authorize the Trust to buy any securities or other assets from or sell or lend any securities or other assets of the Trust to, any affiliate of the Trust or any account managed by an affiliate of the Trust, any Trustee or officer of the Trust or any firm of which any such Trustee or officer is a member acting as principal, or have any such dealings with any service provider employed pursuant to Article VII hereof.
Section 6.10. Effect of Trustees' Determination. Any action taken or determination made by or pursuant to the direction of the Trustees in good faith and consistent with the provisions of this Declaration shall be final and conclusive and shall be binding upon the Trust, every holder at any time of Shares and any other Person.
ARTICLE VII
SERVICE PROVIDERS
Section 7.1. Investment Adviser and Administrator. The Trust may enter into contracts with one or more Persons, to act as investment adviser, investment sub-adviser, manager, administrator, sub-administrator or other agent to the Trust or Series, and as such to perform such functions as the Trustees may deem reasonable and proper, including, without limitation, investment advisory, management, research, valuation of assets, clerical and administrative functions, under such terms and conditions, and for such compensation, as the Trustees may deem advisable. The Trustees may also authorize any adviser or sub-adviser to employ one or more sub-advisers from time to time and any administrator to employ one or more sub-administrators from time to time, upon such terms and conditions as shall be approved by the Trustees.
Section 7.2. Underwriter; Transfer Agent; Shareholder Servicing Agent; Custodian. The Trust may enter into a contract or contracts with one or more Persons to act as underwriters, distributors or placement agents whereby the Trust may either agree to sell Shares of the Trust or any Series or Class to the other party or parties to the contract or appoint such other party or parties its sales agent or agents for such Shares and with such other provisions as the Trustees may deem reasonable and proper, and the Trust may from time to time enter into transfer agency, sub-transfer agency and/or shareholder servicing contract(s), in each case with such terms and conditions, and providing for such compensation, as the Trustees may deem advisable.
All securities and cash of the Trust shall be held pursuant to a written contract or contracts with one or more custodians and subcustodians or shall otherwise be held in accordance with the 1940 Act.
Section 7.3. Parties to Contract. Any contract of the character described in this Article VII may be entered into with any Person, including, without limitation, the investment adviser, any investment sub-adviser or an affiliate of the investment adviser or sub-adviser, although one or more of the Trustees, officers, or Shareholders of the Trust may be an officer, director, trustee, shareholder, or member of such other party to the contract, or otherwise interested in such contract, and no such contract shall be invalidated or rendered voidable by reason of the existence of any such relationship, nor shall any Person holding such relationship be liable merely by reason of such relationship for any loss or expense to the Trust under or by reason of said contract or accountable for any profit realized directly or indirectly therefrom, provided that the contract when entered into was not inconsistent with the provisions of this Article VII or the Bylaws. The same Person may be a party to more than one contract entered into pursuant to this Article VII and any individual may be financially interested or otherwise affiliated with Persons who are parties to any or all of the contracts mentioned in this Article VII.
Section 7.4. Further Authority of Trustees. The authority of the Trustees hereunder to authorize the Trust to enter into contracts or other agreements or arrangements shall include the authority of the Trustees to modify, amend, waive any provision of, supplement, assign all or a portion of, novate, or terminate such contracts, agreements or arrangements. The enumeration of any specific contracts in this Article VII shall in no way be deemed to limit the power and authority of the Trustees as set forth in Section 6.2 hereof to authorize the Trust to employ, contract with or make payments to such Persons as the Trustees may deem desirable for the transaction of the business of the Trust.
ARTICLE VIII
DISTRIBUTIONS; REDEMPTIONS; DETERMINATION OF NET ASSET VALUE
Section 8.1. Distributions. The Trustees may from time to time declare and authorize the payment of, or may prescribe and set forth in a duly adopted vote or votes of the Trustees, the bases and time or frequency, which may be monthly or otherwise, for the declaration and payment of, such dividends and distributions on Shares of a particular Series or Class thereof as they may deem necessary or desirable, after providing for actual and accrued expenses and liabilities (including such reserves as the Trustees may establish) determined in accordance with good accounting practices. All dividends and distributions on Shares of a particular Series shall be distributed only from the Assets belonging to that Series, as such term is defined in Section 4.9 hereof, and shall be distributed pro rata to the Shareholders of that Series in proportion to the number of Shares of that Series held by such Shareholders at the date and time of record for the payment of such dividends or distributions, subject to any variations with respect to Classes of Shares of such Series, if any, and in a manner consistent with the 1940 Act and the Code. Such distributions may be paid in cash and/or in securities or other property, and the composition of any such distribution shall be determined by the Trustees and may be different among Shareholders (including differences among Shareholders in the same Series or Class).
Section 8.2. Redemption of Shares. All shares of the Trust shall be redeemable, at the redemption price determined in the manner set out in this Declaration. The Trust shall redeem the Shares of the Trust or any Series or Class thereof at the price determined as hereinafter set forth, at such offices or agencies and in accordance with such conditions, not inconsistent with the 1940 Act, regarding the redemption of Shares as may be described in the applicable Prospectus.
Section 8.3. Redemption Price. Shares of the Trust, or of any Series or Class thereof shall be redeemed at their net asset value determined as set forth in Section 8.7 hereof as of such time or times as the Trustees shall have theretofore prescribed, less such fees and/or charges, if any, as may be established by the Trustees from time to time.
Section 8.4. Payment. Payment of the redemption price of Shares of the Trust or any Series or Class thereof shall be made in cash or in property or any combination thereof, out of the assets of the Trust or, as applicable, the Assets belonging to such Series, as such term is defined in Section 4.9 hereof, and the composition of any such payment may be different among Shareholders (including differences among Shareholders in the same Series or Class), at such time and in the manner as may be specified from time to time in the applicable Prospectus. In no event shall the Trust be liable for any delay of any other Person in transferring securities or other property selected for delivery as all or part of any such payment.
Section 8.5. Redemption of Shareholder's Interest By Action of Trust. Subject to the provisions of the 1940 Act, the Trust may redeem some or all of the Shares of the Trust or one or more Series or Classes held by any Shareholder for any reason and under terms set by the Trustees, including by way of illustration, for the following reasons:
(a) the value of such Shares held by such Shareholder being less than the minimum amount established from time to time by the Trustees;
(b) the determination that direct or indirect ownership of Shares by any Person has become concentrated in such Shareholder to any extent that would disqualify that Series as a regulated investment company under the Code;
(c) the failure of a Shareholder to supply a tax identification or other identification or if the Trust is unable to verify a Shareholder's identity;
(d) the failure of a Shareholder to pay when due for the purchase of Shares issued to such Shareholder;
(e) the failure of a Shareholder to meet or maintain the qualifications for ownership of a particular Class or Series of Shares;
(f) the payment of account fees or other charges, expenses and/or fees as set by the Trustees, including without limitation any small account fees permitted by Section 4.4 hereof;
(g) the determination that ownership of Shares by a particular Shareholder is not in the best interests of the remaining Shareholders of the Trust or applicable Series or Class;
(h) the failure of a holder of Shares or other securities of the Trust to comply with a demand pursuant to Section 4.10 hereof;
(i) in connection with the termination of any Series or Class of Shares; or
(j) when the Trust is requested or compelled to do so by governmental authority or applicable law.
Section 8.6. Suspension of Right of Redemption. Notwithstanding the foregoing, the Trust may postpone payment of the redemption price and may suspend the right of the holders of Shares to require the Trust to redeem Shares to the extent permissible under the 1940 Act.
Section 8.7. Determination of Net Asset Value; Valuation of Portfolio Assets. The Trustees may from time to time prescribe such bases and times for determining the per Share net asset value of the Shares of the Trust or any Series or Class thereof and may prescribe or approve the procedures and methods for determining the value of portfolio assets as they may deem necessary or desirable.
The Trust may suspend the determination of net asset value during any period when it may suspend the right of the holders of Shares to require the Trust to redeem Shares.
Section 8.8. Constant Net Asset Value. With respect to any Series that holds itself out as a money market or stable value fund, the Trustees shall have the power to reduce the number of Outstanding Shares of the Series by reducing the number of Shares in the account of each Shareholder on a pro rata basis, or to take such other measures as are not prohibited by the 1940 Act, so as to maintain the net asset value per share of such Series at a constant dollar amount.
Section 8.9. Reserves. The Trustees may set apart, from time to time, out of any funds of the Trust or Series or out of funds allocable to a Class thereof a reserve or reserves for any proper purpose, and may abolish any such reserve.
Section 8.10. Determination by Trustees. The Trustees may make any determinations they deem necessary with respect to the provisions of this Article VIII, including, but not limited to, the following matters: the amount of the assets, obligations, liabilities and expenses of the Trust; the amount of the net income of the Trust from dividends, capital gains, interest or other sources for any period and the amount of assets at any time legally available for the payment of dividends or distributions; which items are to be treated as income and which as capital; the amount, purpose, time of creation, increase or decrease, alteration or cancellation of any reserves or charges and the propriety thereof (whether or not any obligation or liability for which such reserves or charges were created shall have been paid or discharged); the market value, or any other price to be applied in determining the market value, or the fair value, of any security or other asset owned or held by the Trust; the number of Shares of the Trust issued or issuable; the net asset value per Share; and any of the foregoing matters as it may pertain to any Series or Class.
ARTICLE IX
LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 9.1. No Personal Liability of and Indemnification of Shareholders. No personal liability for any debt, liability or obligation or expense incurred by, contracted for, or otherwise existing with respect to, the Trust or any Series or Class shall attach to any Shareholder or former Shareholder of the Trust. In case any Shareholder or former Shareholder of the Trust shall be held to be personally liable solely by reason of his being or having been a Shareholder and not because of his acts or omissions or for some other reason, the Shareholder or former Shareholder (or his heirs, executors, administrators or other legal representatives or in the case of a corporation or other entity, its corporate or other general successor) shall be entitled out of the assets of the Trust or, if the Trust has more than one Series, the applicable Series, to be held harmless from and indemnified against all loss and expense arising from such liability; provided, however, there shall be no liability or obligation of the Trust or any Series arising hereunder to reimburse any Shareholder for taxes paid by reason of such Shareholder's ownership of any Shares or for losses suffered by reason of any changes in value of any Trust assets. The Trust shall, upon request by the Shareholder or former Shareholder, assume the defense of any claim made against the Shareholder for any act or obligation of the Trust and satisfy any judgment thereon.
Section 9.2. Limitation of Liability of Trustees and Others. (a) No Liability to Third Parties. No person who is or has been a Trustee, officer, or employee of the Trust shall be subject to any personal liability whatsoever to any Person, other than the Trust or its Shareholders, in connection with the affairs of the Trust; and all Persons shall look solely to the Trust Property or Property of a Series for satisfaction of claims of any nature arising in connection with the affairs of the Trust or such Series.
Every note, bond, contract, instrument, certificate, Share or undertaking and every other act or thing whatsoever executed or done by or on behalf of the Trust or the Trustees or any of them in connection with the Trust shall be conclusively deemed to have been executed or done only in or with respect to their or his capacity as Trustees or Trustee and neither such Trustees or Trustee nor the Shareholders shall be personally liable thereon.
All Persons extending credit to, contracting with or having any claim against the Trust or a Series shall look only to the assets of the Trust Property or the Trust Property of such Series for payment under such credit, contract or claim; and neither the Trustees, nor any of the Trust's officers, employees or agents, whether past, present or future, shall be personally liable therefor.
(b) Limitation of Liability to Trust and Shareholders. No person who is or has been a Trustee, officer or employee of the Trust shall be liable to the Trust or to any Shareholder for any action or failure to act except for his or her own bad faith, willful misfeasance, gross negligence or reckless disregard of his or her duties involved in the conduct of the individual's office, and for nothing else, and shall not be liable for errors of judgment or mistakes of fact or law.
(c) No Liability for Acts of Others. Without limiting the foregoing limitations of liability contained in this Section 9.2, a Trustee shall not be responsible for or liable in any event for any neglect or wrongdoing of any officer, employee, investment adviser, sub-adviser, principal underwriter, custodian or other agent of the Trust, nor shall any Trustee be responsible or liable for the act or omission of any other Trustee (or for the failure to compel in any way any former or acting Trustee to redress any breach of trust), except in the case of such Trustee's own willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office.
Section 9.3. Experts; No Bond or Surety. The Trustees may rely upon advice of counsel or other experts with respect to the meaning and operation of this Declaration and their duties as Trustees hereunder, and shall be under no liability for any act or omission in accordance with such advice or for merely failing to follow such advice. In discharging their duties, the Trustees, when acting in good faith, shall be entitled to rely upon the books of account of the Trust and upon written reports made to the Trustees by any officer appointed by them, any independent registered public accounting firm and (with respect to the subject matter of the contract involved) any officer, partner or responsible employee of any other party to any contract entered into hereunder. The appointment, designation or identification of a Trustee as chair of the Trustees, a member or chair of a committee of the Trustees, an expert on any topic or in any area (including an audit committee financial expert), or the lead independent Trustee, or any other special appointment, designation or identification of a Trustee, shall not impose on that person any standard of care or liability that is greater than that imposed on that person as a Trustee in the absence of the appointment, designation or identification, and no Trustee who has special skills or expertise, or is appointed, designated or identified as aforesaid, shall be held to a higher standard of care by virtue thereof. In addition, no appointment, designation or identification of a Trustee as aforesaid shall affect in any way that Trustee's rights or entitlement to indemnification or advancement of expenses. The Trustees shall not be required to give any bond as such, nor any surety if a bond is required.
Section 9.4. Liability of Third Persons Dealing with the Trust or Trustees. No third Person dealing with the Trust or the Trustees shall be bound to make any inquiry concerning the validity of any transaction made or to be made by the Trust or Trustees or to see to the application of any payments made or property transferred to the Trust or upon its order.
Section 9.5. Indemnification and Advancement of Expenses. Subject to the exceptions and limitations contained in this Section 9.5, every person who is, or has been, a Trustee, officer, or employee of the Trust, including persons who serve at the request of the Trust as directors, trustees, officers, employees or agents of another organization in which the Trust has an interest as a shareholder, creditor or otherwise (hereinafter referred to as a "Covered Person"), shall be indemnified by the Trust or the applicable Series to the fullest extent permitted by law against liability and against all expenses reasonably incurred or paid by him in connection with any claim, action, suit or proceeding in which he becomes involved as a party or otherwise by virtue of his being or having been such a Trustee, director, officer, employee or agent and against amounts paid or incurred by him in settlement thereof.
No indemnification shall be provided hereunder to a Covered Person to the extent such indemnification is prohibited by applicable federal law.
The rights of indemnification herein provided may be insured against by policies maintained by the Trust, shall be severable, shall not affect any other rights to which any Covered Person may now or hereafter be entitled, shall continue as to a person who has ceased to be such a Covered Person and shall inure to the benefit of the heirs, executors and administrators of such a person.
Subject to applicable federal law, expenses of preparation and
presentation of a defense to any claim, action, suit or proceeding subject to a
claim for indemnification under this Section 9.5 shall be advanced by the Trust
or the applicable Series prior to final disposition thereof upon receipt of an
undertaking by or on behalf of the recipient to repay such amount if it is
ultimately determined that he is not entitled to indemnification under this
Section 9.5.
To the extent that any determination is required to be made as to whether a Covered Person engaged in conduct for which indemnification is not provided as described herein, or as to whether there is reason to believe that a Covered Person ultimately will be found entitled to indemnification, the Person or Persons making the determination shall afford the Covered Person a rebuttable presumption that the Covered Person has not engaged in such conduct and that there is reason to believe that the Covered Person ultimately will be found entitled to indemnification.
As used in this Section 9.5, the words "claim," "action," "suit" or "proceeding" shall apply to all claims, demands, actions, suits, investigations, regulatory inquiries, proceedings or any other occurrence of a similar nature, whether actual or threatened and whether civil, criminal, administrative or other, including appeals, and the words "liability" and "expenses" shall include without limitation, attorneys' fees, costs, judgments, amounts paid in settlement, fines, penalties and other liabilities.
Section 9.6. Further Indemnification. Nothing contained herein shall affect any rights to indemnification to which any Covered Person or other Person may be entitled by contract or otherwise under law or prevent the Trust from entering into any contract to provide indemnification to any Covered Person or other Person. Without limiting the foregoing, the Trust may, in connection with the acquisition of assets subject to liabilities pursuant to Section 4.2 hereof or a merger or consolidation pursuant to Section 10.2 hereof, assume the obligation to indemnify any Person including a Covered Person or otherwise contract to provide such indemnification, and such indemnification shall not be subject to the terms of this Article IX.
Section 9.7. Amendments and Modifications. Without limiting the provisions of Section 11.1(b) hereof, in no event will any amendment, modification or change to the provisions of this Declaration or the Bylaws adversely affect in any manner the rights of any Covered Person to (a) indemnification under Section 9.5 hereof in connection with any proceeding in which such Covered Person becomes involved as a party or otherwise by virtue of being or having been a Trustee, officer or employee of the Trust or (b) any insurance payments under policies maintained by the Trust, in either case with respect to any act or omission of such Covered Person that occurred or is alleged to have occurred prior to the time such amendment, modification or change to this Declaration or the Bylaws.
Section 9.8. Derivative Actions. (a) Subject to the Delaware Act, no Shareholder may bring a derivative or similar action or proceeding in the right of the Trust or any Series to recover a judgment in its favor (a "derivative action") unless each of the following conditions is met:
(i) Each Complaining Shareholder was a Shareholder of (A) the Series on behalf of or in the right of which the action is proposed to be brought and (B) a Class of the Series affected by the action or failure to act complained of, to the extent that fewer than all Classes were affected (the "affected Series or Class"), at the time of the action or failure to act complained of, or acquired the Shares afterwards by operation of law from a Person who was a Shareholder at that time;
(ii) Each Complaining Shareholder was a Shareholder of the affected Series or Class at the time the demand required by subparagraph (iii) below was made;
(iii) Prior to the commencement of such derivative action, the Complaining Shareholders have made a written demand on the Trustees requesting that the Trustees cause the Trust to file the action itself on behalf of the affected Series or Class (a "demand"), which demand (A) shall be executed by or on behalf of no less than three Complaining Shareholders, each of which shall be unaffiliated and unrelated (by blood or by marriage) to any other Complaining Shareholder executing such written demand and (B) shall include at least the following:
(1) a detailed description of the action or failure to act complained of, the facts upon which each such allegation is made and the reasonably estimated damages or other relief sought;
(2) a statement to the effect that the Complaining Shareholders believe in good faith that they will fairly and adequately represent the interests of similarly situated Shareholders in enforcing the right of the affected Series or Class and an explanation of why the Complaining Shareholders believe that to be the case;
(3) a certification that the requirements of subparagraphs (i) and (ii) of this paragraph (a) have been met, as well as information reasonably designed to allow the Trustees to verify that certification;
(4) a list of all other derivative or class actions in which any of the Complaining Shareholders is or was a named plaintiff, the court in which such action was filed, the date of filing, the name of all counsel to any plaintiffs and the outcome or current status of such actions;
(5) a certification of the number of Shares of the affected Series or Class owned beneficially or of record by each Complaining Shareholder at the time set forth in subparagraphs (i), (ii) and (iii) of this paragraph (a) and an undertaking that each Complaining Shareholder will be a Shareholder of the affected Series or Class as of the commencement of and throughout the derivative action and will notify the Trust in writing of any sale, transfer or other disposition by any of the Complaining Shareholders of any such Shares within three business days thereof; and
(6) an acknowledgment of the provisions of paragraphs (e) and (f) of this Section 9.8 below;
(iv) Shareholders owning Shares representing at least ten percent (10%) of the voting power of the affected Series or Class must join in initiating the derivative action; and
(v) A copy of the proposed derivative complaint must be served
on the Trust, assuming the requirements of subparagraphs (i) through
(iv) above have already been met and the derivative action has not been
barred in accordance with paragraph (c) below.
(b) Within 90 calendar days of the receipt of a Shareholder demand submitted in accordance with the requirements above, those Trustees who are independent for purposes of considering the demand or a committee comprised of some or all of such Trustees (the "independent Trustees") will consider, with the assistance of counsel who may be retained by such Trustees on behalf and at the expense of the Trust, the merits of the claim and determine whether maintaining a suit would be in the best interests of the Trust. If, during this 90-day period, those independent Trustees conclude that a determination as to the maintenance of a suit cannot reasonably be made within the 90-day period, those independent Trustees may extend the 90-day period by a period of time that the independent Trustees consider will be sufficient to permit them to make such a determination, not to exceed 60 calendar days from the end of the initial 90-day period (such 90-day period, as may be extended as provided hereunder, the "review period"). Notice of any such decision to extend the review period shall be sent in accordance with the provisions of Section 4.12 hereof to the Complaining Shareholders, or, the Shareholders' counsel if represented by counsel, in writing within five business days of any decision to extend the period. Trustees who are not deemed to be Interested Persons of the Trust are deemed independent for all purposes, including for the purpose of approving or dismissing a derivative action. A Trustee otherwise independent for purposes of considering the demand shall not be considered not to be independent solely by virtue of (i) the fact that such Trustee receives remuneration for his service as a Trustee of the Trust or as a trustee or director of one or more investment companies with the same or an affiliated investment adviser or underwriter, (ii) the amount of such remuneration, (iii) the fact that such Trustee was identified in the demand as a potential defendant or witness, or (iv) the fact that the Trustee approved the act being challenged in the demand if the act resulted in no material personal benefit to the Trustee or, if the Trustee is also a Shareholder, no material personal benefit that is not shared pro rata with other Shareholders.
(c) If the demand has been properly made under paragraph (a) of this
Section 9.8, and a majority of the independent Trustees have considered the
merits of the claim and have determined that maintaining a suit would not be in
the best interests of the Trust, the demand shall be rejected and the
Complaining Shareholders shall not be permitted to maintain a derivative action
unless they first sustain the burden of proof to the court that the decision of
the Trustees not to pursue the requested action was not a good faith exercise of
their business judgment on behalf of the Trust. If upon such consideration a
majority of the independent Trustees determine that such a suit should be
maintained, then the appropriate officers of the Trust shall cause the Trust to
commence that suit and such suit shall proceed directly rather than derivatively
or permit the Complaining Shareholders to proceed derivatively, provided however
that any counsel representing the interests of the Trust shall be approved by
the Trustees. The Trustees, or the appropriate officers of the Trust, shall
inform the Complaining Shareholders of any decision reached under this paragraph
(c) by sending in accordance with the provisions of Section 4.12 hereof written
notice to each Complaining Shareholder, or the Shareholder's counsel, if
represented by counsel, within five business days of such decision having been
reached.
(d) If notice of a decision has not been sent to the Complaining
Shareholders or the Shareholders' counsel within the time permitted by paragraph
(c) above, and subparagraphs (i) through (v) of paragraph (a) above have been
complied with, the Complaining Shareholders shall not be barred by this
Declaration from commencing a derivative action.
(e) A Complaining Shareholder whose demand is rejected pursuant to
paragraph (c) above shall be responsible for the costs and expenses (including
attorneys' fees) incurred by the Trust and/or the affected Series in connection
with the Trust's consideration of the demand if a court determines that the
demand was made without reasonable cause or for an improper purpose. A
Shareholder who commences or maintains a derivative action in violation of this
Section 9.8 shall reimburse the Trust and/or the affected Series for the costs
and expenses (including attorneys' fees) incurred by the Trust and/or the
affected Series in connection with the action if the action is dismissed on the
basis of the failure to comply with this Section 9.8. If a court determines that
any derivative action has been brought without reasonable cause or for an
improper purpose, the costs and expenses (including attorneys' fees) incurred by
the Trust and/or the affected Series in connection with the action shall be
borne by the Shareholders who commenced the action.
(f) The Trust or the affected Series shall be responsible for payment of attorneys' fees and legal expenses incurred by a Complaining Shareholder in any circumstances only if required by law. Neither the Trust nor the affected Series shall be obligated to pay any attorneys' fees so incurred by a Complaining Shareholder other than fees that are reasonable and that do not exceed an amount calculated using reasonable hourly rates.
(g) No Shareholder may make demand or commence a derivative action on behalf of any Series of the Trust of which he or she is not a shareholder.
ARTICLE X
TERMINATION; MERGERS AND SALE OF ASSETS
Section 10.1. Termination of Trust or Series. (a) Unless terminated as provided herein, the Trust shall continue without limitation of time. The Trust or any Series of the Trust may be terminated at any time by the Trustees for any reason they deem appropriate, with notice to the Shareholders of the Trust or such Series as the case may be.
(b) Upon the requisite action of the Trustees to terminate the Trust or such Series, after paying or otherwise providing for all charges, taxes, expenses and liabilities, whether due or accrued or anticipated, as may be determined by the Trustees and as required by the Delaware Act, which may include the establishment of a liquidating trust or similar vehicle, the Trust shall, in accordance with such procedures as the Trustees consider appropriate, reduce the remaining assets of the Trust or assets of the particular Series thereof to distributable form in cash or other securities, or any combination thereof, and distribute the proceeds to the Shareholders of the Shares of the Trust or such Series in the manner determined by the Trustees, provided that Shareholders of a particular Series shall be entitled to receive a pro rata share of the net assets of such Series only, subject to any variations with respect to Classes of Shares of such Series, if any. Thereupon, the Trust or any affected Series shall terminate, and the Trustees and the Trust shall be discharged of any and all further liabilities and duties relating thereto or arising therefrom, and the right, title, and interest of all parties with respect to the Trust or such Series shall be canceled and discharged.
(c) Any Class of the Trust or Series thereof may be terminated by the Trustees as provided in Article IV hereof.
(d) Upon termination of the Trust, following completion of winding up of its business, the Trustees (or, if there is no remaining Trustee at that time, any remaining officer of the Trust) shall direct that a Certificate of Cancellation of the Trust be executed and filed with the Secretary of State of the State of Delaware.
Section 10.2. Merger and Consolidation. Subject to applicable law, the Trust may merge or consolidate with or into one or more statutory trusts or other business entities or series or classes thereof formed or organized or existing under the laws of Delaware or any other state or the United States or any foreign country or other foreign jurisdiction by the affirmative vote of two-thirds (2/3) of the Trustees. Pursuant to and in accordance with ss.3815(f) of the Delaware Act, and notwithstanding anything to the contrary contained in this Declaration, an agreement of merger or consolidation so approved by the Trustees in accordance with this Section 10.2 may (a) effect any amendment to the governing instrument of the Trust; or (b) effect the adoption of a new governing instrument of the Trust if it is the surviving or resulting trust in the merger or consolidation.
Section 10.3. Sale of Assets; Reorganization. The Trustees may authorize the Trust or any Series or Class thereof, to sell, lease, transfer, pledge, exchange, convey or dispose of all or substantially all of the Trust Property (or all or substantially all of the Trust Property allocated or belonging to a particular Series or Class), including its good will, to any one or more business or statutory trusts or other business entities or series or classes thereof (including another Series or Class of the Trust) upon such terms and conditions and for such consideration (which may include the assumption of some or all of the outstanding obligations and liabilities, accrued or contingent, whether known or unknown, of the Trust or such Series or Class) as may be authorized by the Trustees. Without limiting the generality of the foregoing, this provision may be utilized to permit the Trust or any Series or Class thereof to pursue its investment program through one or more subsidiary vehicles or to operate in a master-feeder or fund of funds structure.
Section 10.4. Conversion. The Trustees may authorize the creation of one or more statutory trusts to which all or any part of the assets, liabilities, profits, or losses of the Trust or any Series or Class thereof may be transferred and may provide for the conversion of Shares of the Trust or any Series or Class thereof into beneficial interests in any such newly created trust or trusts or any series or classes thereof.
Section 10.5. Combination of Classes. The authority of the Trustees under this Article X with respect to the merger, consolidation, sale of assets or reorganization of any Series of the Trust or any Class thereof is in addition to the authority of the Trustees under Section 4.9 hereof to combine two or more Classes of a Series into a single Class.
ARTICLE XI
AMENDMENTS; FILINGS; MISCELLANEOUS
Section 11.1. Amendments to Declaration and Certificate of Trust. (a) The Trustees may by vote of a majority of the Trustees then in office amend or otherwise supplement the Declaration by making an amendment, a Declaration supplemental hereto or an amended and restated Declaration, provided, however, that an amendment to any provision of Article V hereof shall require the vote of two-thirds (2/3) of the Trustees then in office.
(b) Notwithstanding anything else herein, any amendment to Section 6.6 which reduces the right of Trustees to receive reasonable compensation or to Article IX which would have the effect of reducing the indemnification or limitation of liability provided thereby to Trustees, officers, employees, and agents of the Trust or to Shareholders or former Shareholders, and any repeal or amendment of this sentence shall each require the affirmative vote of the holders of two-thirds of the Outstanding Shares of the Trust entitled to vote thereon and no such amendment shall affect the right to indemnification of any person who is no longer a Trustee, officer or employee or agent at the time of such amendment.
(c) The Trust's Certificate of Trust may be amended at any time for any purpose as the Trustees may determine and such amendment shall be signed by one or more of the Trustees or by an officer of the Trust as duly authorized by vote of a majority of the Trustees then in office.
Section 11.2. Filing of Certificate; Copies of Declaration; Counterparts; Headings. Any amendment to the Certificate of Trust shall be filed with the Secretary of State of the State of Delaware. The original or a copy of this instrument and of each amendment and/or restatement hereto shall be kept in the office of the Trust where it may be inspected by any Shareholder. Anyone dealing with the Trust may rely on a certificate by an officer or Trustee of the Trust as to whether or not any such amendments or restatements have been made and as to any matters in connection with the Trust hereunder, and with the same effect as if it were the original, may rely on a copy certified by an officer or Trustee of the Trust to be a copy of this instrument or of any such amendments or restatements. This instrument may be executed in any number of counterparts, each of which shall be deemed an original. Headings are placed herein for convenience of reference only, and in case of any conflict, the text of this instrument, rather than the headings, shall control.
Section 11.3. Trustees May Resolve Ambiguities. The Trustees may construe any of the provisions of this Declaration insofar as the same may appear to be ambiguous or inconsistent with any other provisions hereof, and any such construction hereof by the Trustees in good faith shall be conclusive as to the meaning to be given to such provisions.
Section 11.4. Applicable Law; Forum Selection; Jury Waiver. (a) The Trust set forth in this instrument is created under and is to be governed by and construed and administered according to the laws of the State of Delaware, without reference to its conflicts of law rules, as a Delaware statutory trust under the Delaware Act, and without limiting the provisions hereof, the Trust specifically reserves the right to exercise any of the powers and privileges afforded to statutory trusts or actions that may be engaged in by statutory trusts under the Delaware Act, and the absence of a specific reference herein to any such power, privilege, or action shall not imply that the Trust may not exercise such power or privilege or take such actions.
(b) Notwithstanding the first sentence of Section 11.4(a) hereof, there shall not be applicable to the Trust, the Trustees, or this Declaration any provisions of the laws (statutory or common) of the State of Delaware (other than the Delaware Act) or any other state pertaining to trusts, including by way of illustration and without limitation, laws that relate to or regulate: (i) the filing with any court or governmental body or agency of trustee accounts or schedules of trustee fees and charges; (ii) affirmative requirements to post bonds for trustees, officers, agents, or employees of a trust; (iii) the necessity for obtaining a court or other governmental approval concerning the acquisition, holding, or disposition of real or personal property; (iv) fees or other sums applicable to trustees, officers, agents or employees of a trust; (v) the allocation of receipts and expenditures to income or principal; (vi) restrictions or limitations on the permissible nature, amount, or concentration of trust investments or requirements relating to the titling, storage, or other manner of holding of trust assets; (vii) the establishment of fiduciary or other standards or responsibilities or limitations on the acts or powers or liabilities or authorities and powers of trustees if such laws are inconsistent with the authorities and powers or the limitation on liability of the Trustees set forth or referenced in this Declaration; or (viii) any requirements that a trust have any initial beneficiary or any initial corpus. Section 3540 of Title 12 of the Delaware Code shall not apply to the Trust.
(c) No provision of this Declaration shall be effective to require a waiver of compliance with any provision of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended or the 1940 Act, or of any valid rule, regulation or order of the Commission thereunder.
(d) Subject to the Delaware Act, any action commenced by a Shareholder, directly or derivatively, against or on behalf of the Trust or a Series or Class thereof, its Trustees, officers, or employees, shall be brought only in the U.S. District Court for the District of Massachusetts, or if such action may not be brought in that court, then such action shall be brought in Massachusetts Superior Court, in Boston, Massachusetts (each, a "Chosen Court"). The Trust, its Trustees, officers, employees and Shareholders (a) waive any objection to venue in either Chosen Court and (b) waive any objection that either Chosen Court is an inconvenient forum.
(e) In any action commenced by a Shareholder against the Trust or any Series or Class thereof, its Trustees or officers, or as a derivative action on behalf of the Trust, or any Series or Class thereof there shall be no right to a jury trial. THE RIGHT TO A TRIAL BY JURY IS EXPRESSLY WAIVED TO THE FULLEST EXTENT PERMITTED BY LAW.
Section 11.5. Statutory Trust Only. The Trust is not intended to be, shall not be deemed to be, and shall not be treated as, a general or a limited partnership, joint venture, corporation or joint stock company, nor shall the Trustees or Shareholders or any of them for any purpose be deemed to be, or be treated in any way whatsoever as though they were, liable or responsible hereunder as partners or joint venturers.
Section 11.6. Provisions in Conflict with Law or Regulations. (a) The provisions of this Declaration are severable, and if the Trustees shall determine, with the advice of counsel, that any such provision, in whole or in part, conflicts with the 1940 Act, the regulated investment company provisions of the Code, and the regulations thereunder, the Delaware Act or with other applicable laws and regulations, the conflicting provision, or the conflicting part or parts thereof, shall be deemed not to constitute a part of this Declaration; provided, however, that such determination shall not affect any of the remaining provisions of this Declaration or render invalid or improper any action taken or omitted prior to such determination.
(b) If any provision of this Declaration shall be held invalid or unenforceable, in whole or in part, in any jurisdiction, such invalidity or unenforceability shall attach only to such provision, or such part or parts thereof, in such jurisdiction and shall not in any manner affect such provision in any other jurisdiction or any other provision of this Declaration in any jurisdiction.
Section 11.7. Writings. To the fullest extent permitted by applicable law, except as the Trustees may otherwise determine:
(a) any requirements in this Declaration or in the Bylaws that any action be taken by means of any writing, including, without limitation, any written instrument, any written consent or any written agreement, shall be deemed to be satisfied by means of any electronic record in such form that is acceptable to the Trustees provided such form is capable of conversion into a written form within a reasonable time; and
(b) any requirements in this Declaration or in the Bylaws that any writing be signed shall be deemed to be satisfied by any electronic signature in such form that is acceptable to the Trustees.
IN WITNESS WHEREOF, the undersigned, being the Trustees of the Trust, have executed this instrument as of the date first written above.
.................. /s/ David R. Bock
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.................. David R. Bock, as Trustee
.................. 60 State Street, Boston, Massachusetts 02109
.................. /s/ Mary K. Bush
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.................. Mary K. Bush, as Trustee
.................. 60 State Street, Boston, Massachusetts 02109
.................. /s/ John F. Cogan, Jr.
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.................. John F. Cogan, Jr., as Trustee
.................. 60 State Street, Boston, Massachusetts 02109
.................. /s/ Benjamin M. Friedman
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.................. Benjamin M. Friedman, as Trustee
.................. 60 State Street, Boston, Massachusetts 02109
.................. /s/ Margaret B.W. Graham
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.................. Margaret B.W. Graham, as Trustee
.................. 60 State Street, Boston, Massachusetts 02109
.................. /s/ Daniel K. Kingsbury
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.................. Daniel K. Kingsbury, as Trustee
.................. 60 State Street, Boston, Massachusetts 02109
.................. /s/ Thomas J. Perna
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.................. Thomas J. Perna, as Trustee
.................. 60 State Street, Boston, Massachusetts 02109
.................. /s/ Marguerite A. Piret
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.................. Marguerite A. Piret, as Trustee
.................. 60 State Street, Boston, Massachusetts 02109
.................. /s/ Stephen K. West
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.................. Stephen K. West, as Trustee
-
.................. 60 State Street, Boston, Massachusetts 02109
.................. /s/ John Winthrop
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.................. John Winthrop, as Trustee
.................. 60 State Street, Boston, Massachusetts 02109
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SCHEDULE A
Series of Shares of Beneficial Interests
(Effective as of July 1, 2008)
WHEREAS, the Trustees of the Trust, acting pursuant to the Trust's agreement and declaration of trust as then in effect, have previously established and designated one or more series of shares of beneficial interest in the Trust (each, a "Series") pursuant to one or more designations of series (the "Prior Designations");
WHEREAS, in connection with the adoption of an Amended and Restated Agreement and Declaration of Trust dated as of July 1, 2008 (the "Declaration"), pursuant to Section 4.9(a) of the Declaration, the previously established and designated Series are hereby included on this Schedule A, which Schedule A shall be deemed an amendment and restatement of the Prior Designations.
NOW THEREFORE, the following Series of the Trust are established with such relative rights, preferences, privileges, limitations, restrictions and other relative terms as are set forth below:
Pioneer Real Estate Shares
1. Each Share of each Series is entitled to all the rights and preferences accorded to Shares under the Declaration.
2. The number of authorized Shares of each Series is unlimited.
3. Each Series shall be authorized to hold cash, invest in securities, instruments and other property, use investment techniques, and have such goals or objectives as from time to time described in the prospectus and statement of additional information contained in the Trust's then currently effective registration statement under the Securities Act of 1933 to the extent pertaining to the offering of Shares of the Series, as the same may be amended and supplemented from time to time ("Prospectus"). Each Share of a Series shall represent a beneficial interest in the net assets allocated or belonging to such Series only, and such interest shall not extend to the assets of the Trust generally (except to the extent that General Assets (as defined in the Declaration) are allocated to such Series), and shall be entitled to receive its pro rata share of the net assets of the Series upon liquidation of the Series, all as set forth in Section 4.9 of the Declaration.
4. With respect to each Series, (a) the purchase price of the Shares, (b) fees and expenses, (c) qualifications for ownership, if any, (d) the method of determination of the net asset value of the Shares, (e) minimum purchase amounts, if any, (f) minimum account size, if any, (g) the price, terms and manner of redemption of the Shares, (h) any conversion or exchange feature or privilege, (i) the relative dividend rights, and (j) any other relative rights, preferences, privileges, limitations, restrictions and other relative terms have been established by the Trustees in accordance with the Declaration and are set forth in the Prospectus with respect to such Series.
5. The Trustees may from time to time modify any of the relative rights, preferences, privileges, limitations, restrictions and other relative terms of a Series that have been established by the Trustees or redesignate any of the Series without any action or consent of the Shareholders.
6. The designation of any Series hereby shall not impair the power of the Trustees from time to time to designate additional Series of Shares of the Trust.
7. Capitalized terms not defined herein have the meanings given to such terms in the Declaration.
SCHEDULE B
Designation of Classes of Shares
(Effective as of July 1, 2008)
WHEREAS, the Trustees of the Trust, acting pursuant to the Trust's agreement and declaration of trust as then in effect, have previously established and designated one or more series of shares of beneficial interest in the Trust (each, a "Series") and have previously established and designated one or more classes of Shares (each, a "Class") for some or all of the Series pursuant to one or more designations of Classes (the "Prior Designations");
WHEREAS, in connection with the adoption of an Amended and Restated Agreement and Declaration of Trust dated as of July 1, 2008 (the "Declaration"), pursuant to Section 4.9(b) of the Declaration, the previously established and designated Classes are hereby included on this Schedule B, which Schedule B shall be deemed an amendment and restatement of the Prior Designations.
NOW THEREFORE, the following Classes as listed below with respect to the identified Series of the Trust are established with such relative rights, preferences, privileges, limitations, restrictions and other relative terms as are set forth below:
Series Classes
Pioneer Real Estate Shares Class A
Class B
Class C
Class Y
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1. Each Share of each Class is entitled to all the rights and preferences accorded to Shares under the Declaration.
2. The number of authorized Shares of each Class is unlimited.
3. All Shares of a Class of a Series shall be identical with each other and with the Shares of each other Class of the same Series except for such variations between Classes as may be authorized by the Trustees from time to time and set forth in the Trust's then currently effective registration statement under the Securities Act of 1933 to the extent pertaining to the offering of Shares of the Class of such Series, as the same may be amended and supplemented from time to time ("Prospectus"). The Trustees may change the name or other designation of a Class; and take such other action with respect to the Classes as the Trustees may deem desirable.
4. With respect to the Shares of a Class of a Series, (a) the time and method of
determining the purchase price, (b) the fees and expenses, (c) the
qualifications for ownership, if any, (d) minimum purchase amounts, if any, (e)
minimum account size, if any, (f) the price, terms and manner of redemption of,
(g) any conversion or exchange feature or privilege , (h) the relative dividend
rights, and (i) any other relative rights, preferences, privileges, limitations,
restrictions and other relative terms have been established by the Trustees in
accordance with the Declaration and are set forth in the Prospectus with respect
to such Class of such Series.
5. The Trustees may from time to time modify any of the relative rights, preferences, privileges, limitations, restrictions and other relative terms of a Class of a Series that have been established by the Trustees, divide or combine the issued or unissued Shares of any Class of a Series into a greater or lesser number; classify or reclassify any issued or unissued Shares of any Class of a Series into one or more Classes of such Series; combine two or more Classes of a Series into a single Class of such Series; in each case without any action or consent of the Shareholders.
6. The designation of any Class hereby shall not impair the power of the Trustees from time to time to designate additional Classes of Shares of a Series or terminate any one or more Classes of a Series hereby designated.
7. Capitalized terms not defined herein have the meanings given to such terms in the Declaration.
AMENDED AND RESTATED BY-LAWS
OF
PIONEER REAL ESTATE SHARES
Dated: July 1, 2008
ARTICLE 1
Declaration of Trust and Principal Office
1.1 Declaration of Trust. These By-laws are adopted pursuant to Section 6.8 of the Amended and Restated Declaration of Trust, as from time to time in effect (the "Declaration"), of Pioneer Real Estate Shares, a Delaware statutory trust (the "Trust") and shall be subject to the terms of the Declaration. Any capitalized term not otherwise defined herein shall have the same meaning given to such term in the Declaration. In the event of any inconsistency between the terms of these By-Laws and the terms of the Declaration or of any applicable laws, the terms of the Declaration or of such applicable laws shall control.
1.2 Principal Office of the Trust. The principal office of the Trust is located at 60 State Street, Boston, MA 02109, or such other place as shall be determined by the Trustees from time to time. The Trust may have offices in such other places within or outside the State of Massachusetts or the State of Delaware as the Trustees may from time to time determine.
ARTICLE 2
Trustees
2.1 Chair. The Trustees may elect from their own number a Chair to hold office
until his or her successor shall have been duly elected and qualified or until
his or her earlier death, resignation, removal or disqualification. The Chair
(or, if the Chair is unable to attend any such meeting, the Chair's designee)
shall preside at all meetings of the Trustees and the Shareholders. The Chair
shall have such other duties and powers as the Trustees may from time to time
determine.
2.2 Regular Meetings. Regular meetings of the Trustees may be held without call or notice at such places (including for these purposes, by means of conference telephone circuit, video conferencing or similar communications equipment by means of which all persons participating in the meeting can hear each other as provided for in the Declaration) as the Trustees may from time to time determine.
2.3 Special Meetings. Special meetings of the Trustees may be held at any time and at any place (including for these purposes, by means of conference telephone circuit, video conferencing or similar communications equipment by means of which all persons participating in the meeting can hear each other as provided for in the Declaration) designated in the call of the meeting when called by the Chair, the President or the Secretary or by two or more Trustees, sufficient notice thereof as described in Section 2.4 below being given to each Trustee by the Secretary or an Assistant Secretary or by the person calling the meeting.
2.4 Notice of Special Meetings. It shall be sufficient notice to a Trustee of a special meeting to send notice by overnight mail at least two days or by email or facsimile at least one day before the meeting addressed to the Trustee at his or her usual or last known business or residence address, email address or facsimile number as applicable, or to give notice in person or by telephone one day before the meeting. Notice may be sent on the day of the special meeting by email, facsimile or other electronic means, or given by telephone or in person, if under the circumstances the party calling the meeting deems more immediate action to be necessary or appropriate. Notice of a special meeting need not be given to any Trustee if a written waiver of notice, executed by him or her before or after the meeting, is filed with the records of the meeting, or to any Trustee who attends the meeting without protesting prior thereto or at its commencement the lack of notice to him or her. Neither notice of a meeting nor a waiver of a notice need specify the purposes of the meeting.
2.5 Quorum and Manner of Acting. At any meeting of the Trustees a majority of the Trustees then in office shall constitute a quorum. Any meeting may be adjourned from time to time by a majority of the votes cast upon the question, whether or not a quorum is present, and the meeting may be held as adjourned without further notice. A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal from the meeting of one or more Trustees if any action taken is approved by at least a majority of the required quorum for that meeting. The Declaration contains further provisions relating to the manner of acting by the Trustees.
2.6 Actions by Consent. If in accordance with the provisions of the Declaration any action is taken by the Trustees by a written consent, such written consents may be executed and delivered in counterparts and by electronic means. The Declaration contains further provisions relating to action by consent of the Trustees.
2.7. Counsel and Experts. The Trustees who are not Interested Persons may, by vote of a majority of such Trustees, at the Trust's expense, hire such employees and retain such counsel, accountants, appraisers or other experts or consultants whose services such Trustees may, in their discretion, determine to be necessary or desirable from time to time, including services to one or more committees established by the Trustees, and may execute any agreements, contracts, instruments or other documents in connection therewith.
ARTICLE 3
Committees
3.1 Establishment and Authority. The Declaration contains provisions relating to the establishment of committees by the Trustees. Each committee shall have such powers and authority as shall be authorized by the Trustees, and may fix its own rules and procedures, and adopt its own charter, in each case subject to approval by the Trustees. The Trustees may abolish any such committee at any time in their sole discretion. Any committee to which the Trustees delegate any of their powers shall maintain records of its meetings and shall report its actions to the Trustees. The Trustees shall have the power to rescind any action of any committee, but no such rescission shall have retroactive effect. The Trustees shall have the power at any time to fill vacancies in the committees. The Trustees may designate one or more Trustees as alternate members of any committee who may replace any absent member at any meeting of the committee.
3.2 Quorum; Voting. Unless the specific rules and procedures adopted by a committee in accordance with Section 3.1 provide otherwise, a majority of the members of any committee of the Trustees shall constitute a quorum for the transaction of business, and any action of such a committee may be taken at a meeting by a vote of a majority of the members present (a quorum being present) or evidenced by one or more writings signed by such a majority (which writings may be executed and/or delivered by electronic means). Members of a committee may participate in a meeting of such committee by means of a conference telephone circuit, video conferencing or similar communications equipment by means of which all persons participating in the meeting can hear each other at the same time and participation by such means shall constitute presence in person at a meeting.
3.3 Compensation of Members. The chair, if any, and members of any duly appointed committee shall receive such compensation and/or fees and reimbursement for expenses as from time to time may be determined by the Trustees.
ARTICLE 4
Officers
4.1 Enumeration; Qualification. The officers of the Trust shall be a President, a Treasurer, a Secretary, a Chief Compliance Officer and such other officers as the Trustees from time to time may in their discretion elect, appoint or authorize in accordance with Section 4.2 below. Any officer of the Trust may but need not be a Trustee or a Shareholder. Any two or more offices, except those of President and Vice-President, may be held by the same person.
4.2 Election. The President, the Treasurer, the Secretary and the Chief Compliance Officer shall be elected or appointed by the Trustees upon the occurrence of a vacancy in any such office. The Chief Compliance Officer shall be elected or appointed by a majority of the Trustees, including a majority of the Trustees who are not interested persons of the Trust within the meaning of the 1940 Act, or otherwise in accordance with Rule 38a-1 (or any successor rule) under the 1940 Act as in effect from time to time ("Rule 38a-1"). Other officers, if any, may be elected or appointed by the Trustees at any time, or the Trustees may delegate to the President the power to appoint such other officers as the Trustees shall at any time or from time to time deem advisable. Vacancies in any such other office may be filled at any time. Each officer shall hold office at the pleasure of the Trustees, provided that any removal of the Chief Compliance Officer shall be in accordance with Rule 38a-1.
4.3 Powers. Subject to the other provisions of these By-Laws, each officer shall have, in addition to the duties and powers herein and in the Declaration set forth, such duties and powers as are commonly incident to the office occupied by him or her as if the Trust were organized as a Delaware corporation and such other duties and powers as the Trustees may from time to time designate.
4.4 President. Unless the Trustees otherwise provide, the President shall be the chief executive officer of the Trust.
4.5 Treasurer. Unless the Trustees provide otherwise, the Treasurer shall be the chief financial and accounting officer of the Trust, and shall, subject to the provisions of the Declaration and to any arrangement made by the Trustees with a custodian, investment adviser or manager, or transfer, shareholder servicing or similar agent, be in charge of the valuable papers, books of account and accounting records of the Trust, and shall have such other duties and powers as may be designated from time to time by the Trustees or by the President.
4.6 Secretary. The Secretary shall record all proceedings of the Shareholders and the Trustees in books to be kept therefor. In the absence of the Secretary from any meeting of the shareholders or Trustees, an Assistant Secretary, or if there be none or if he or she is absent, a temporary Secretary chosen at such meeting shall record the proceedings thereof in the aforesaid books.
4.7 Chief Compliance Officer. The Chief Compliance Officer shall perform the duties and shall have the responsibilities of the chief compliance officer of the Trust, including any such duties and responsibilities imposed by Rule 38a-1, and shall have such other duties and powers as may be designated from time to time by the Trustees.
4.8 Resignations and Removals. Any officer may resign at any time by written instrument signed by him or her and delivered to the Chair, the President or the Secretary or to a meeting of the Trustees. Such resignation shall be effective upon receipt unless specified to be effective at some other time. The Trustees may remove any officer with or without cause. Except to the extent expressly provided in a written agreement with the Trust, no officer resigning and no officer removed shall have any right to any compensation for any period following his or her resignation or removal, or any right to damages on account of such removal.
ARTICLE 5
Shareholders
5.1 Meetings. There shall be no annual meetings of Shareholders except as required by law. A meeting of the Shareholders of the Trust or of any Series or Class shall be called by the Secretary whenever ordered by (i) a majority of Trustees then in office, (ii) the Chair or (iii) the President. Meetings of the Shareholders of the Trust or of any Series or Class shall also be called by the Secretary upon the order of the Trustees upon the written request ("Request for Meeting") of the Shareholders holding Shares representing in the aggregate not less than one-third of the voting power of all of the Outstanding Shares entitled to vote on the matters specified in such written request (calculated by assuming that the Shareholders holding all of the Outstanding Shares entitled to vote on such matter were present and voting at a meeting to consider such matter), provided that (1) such Request for Meeting shall include the information described below and (2) the Shareholders requesting such meeting shall have paid to the Trust the reasonably estimated cost of preparing and mailing the notice thereof, which the Secretary shall determine and specify to such Shareholders. No special meeting need be called to consider any matter specified in such Request for Meeting if such matter is substantially the same as a matter voted on at any meeting of the Shareholders during the twelve months preceding the date of such Request for Meeting unless such Request for Meeting is of Shareholders representing in the aggregate at least a majority of the voting power of all of the Outstanding Shares entitled to vote on such matter (calculated by assuming that the Shareholders holding all of the Outstanding Shares entitled to vote on such matter were present and voting at a meeting to consider such matter). If the Secretary fails for more than 30 days to call a special meeting of the Shareholders of the Trust or of any Series or Class, the Trustees, the Chair or the President may, in the name of the Secretary, call the meeting by giving the required notice. If the meeting is a meeting of Shareholders of any Series or Class, but not a meeting of all Shareholders of the Trust, then only a special meeting of Shareholders of such Series or Class need be called and, in such case, only Shareholders of such Series or Class shall be entitled to notice of and to vote at such meeting.
The Trustees may determine, or may authorize the officers of the Trust to determine, the date, time and place for any meeting of Shareholders, which place may be within or outside the State of Delaware.
Any meeting so called may be postponed or cancelled prior to the meeting (with respect to one or more or all Series or Classes entitled to vote at the meeting) provided that notice of such postponement or cancellation is given to the extent time permits to the Shareholders entitled to vote at the meeting, but only if notice of such meeting had been previously given to such Shareholders.
For matters to be properly brought by a Shareholder before a meeting of the Shareholders (including the nomination of Trustees by a Shareholder), the Shareholder must first have given timely written notice of the matters to be brought by the Shareholder before such meeting (an "Advance Notice") to the Secretary. To be timely, an Advance Notice must be delivered to the Secretary not more than 90 days prior to such meeting and not later than the later of (i) 60 days prior to such meeting or (ii) 10 days following the date on which public announcement of the date of such meeting is first made by the Trust.
Each Advance Notice or Request for Meeting must contain (1) the name and address of the Shareholder(s) delivering such Advance Notice or Request for Meeting, (2) a statement with respect to the number of Shares of the applicable Series beneficially and/or legally owned by such Shareholder(s), the nature of any such beneficial ownership of such Shares, the beneficial ownership of any such Shares legally held by such Shareholder(s) but beneficially owned by one or more others, and the length of time for which all such Shares have been beneficially and/or legally owned by such Shareholder(s), and (3) a description of the matters to be brought by the Shareholder(s) before such meeting, including, if applicable, information about each nominee for election as a Trustee substantially equivalent to that which would be required in a proxy statement pursuant to the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated by the Securities and Exchange Commission thereunder, if such matters were to be included in a proxy statement.
Whenever a matter is required to be voted by Shareholders of the Trust in the aggregate under the Declaration, the Trust may either hold a meeting of Shareholders of all Series and Classes to vote on such matter, or hold separate meetings of Shareholders of one or more of the individual Series and or Classes to vote on such matter, provided that (i) such separate meetings shall be held within one year of each other and (ii) a quorum of the individual Series and or Classes shall be present at each such separate meeting, and the votes of Shareholders at all such separate meetings shall be aggregated in order to determine if sufficient votes have been cast for such matter to be voted.
5.2 Record Dates. For the purpose of determining the Shareholders of the Trust or any Series or Class of Shares of the Trust who are entitled to vote or act at any meeting or any adjournment or postponement thereof, or who are entitled to receive payment of any dividend or of any other distribution, the Trustees may from time to time fix a time, or may authorize the officers to fix a time, which shall be not more than 120 days before the date set for any meeting of Shareholders (without regard to any adjournments or postponements thereof) or more than 60 days before the date of payment of any dividend or of any other distribution, as the case may be, as the record date for determining the Shareholders of the Trust or such Series or Class having the right to notice of and to vote at such meeting and any adjournment or postponements thereof or the right to receive such dividend or distribution, and in such case only Shareholders on such record date shall have such right notwithstanding any transfer of shares on the books of the Trust after the record date; or without fixing such record date the Trustees may for any such purposes close the register or transfer books for all or part of such period.
5.3 Notice of Meetings. Notice of all meetings of Shareholders and any postponements thereof, stating the time, place and purposes of the meeting, shall be given by the Secretary or the Trustees in accordance with Section 5.9 hereof at least seven days and not more than 120 days before the date for the meeting set forth in such notice, to each Shareholder of record of the applicable Series or Class on the date set in accordance with Section 5.2 hereof. Any adjourned meeting may be held as adjourned without further notice if the date, time and place of the adjourned meeting were announced at the time of the adjournment, even if the date of such adjourned meeting is more than 120 days after the date set for the original meeting. Where separate meetings are held for Shareholders of the individual Series or Class to vote on a matter required to be voted on by Shareholders of the Trust in the aggregate, notice of each such separate meeting shall be provided in the manner described above in this Section.
5.4 Quorum. The holders of Outstanding Shares entitled to vote and present in person or by proxy representing thirty percent (30%) of the voting power of the Trust shall constitute a quorum at any meeting of the Shareholders, except that where pursuant to any provision of law, the Declaration or these By-Laws a vote shall be taken by individual Series or Class then Outstanding Shares entitled to vote and present in person or by proxy representing thirty percent (30%) of the voting power of that Series or Class shall be necessary to constitute a quorum for the transaction of business by that Series or Class. For the purposes of establishing whether a quorum is present, all Shares present and entitled to vote, including abstentions and broker non-votes, shall be counted.
5.5 Adjournments. Any meeting of Shareholders may, by action of the person presiding thereat, be adjourned with respect to one or more matters to be considered at such meeting, if a quorum is not present with respect to such matter; any meeting of Shareholders may, by motion of the person presiding thereat, be adjourned with respect to one or more matters to be considered at such meeting, even if a quorum is present with respect to such matters, when such adjournment is approved by the vote of holders of Shares representing a majority of the voting power of the Shares present and entitled to vote with respect to the matter or matters adjourned. Unless a proxy is otherwise limited in this regard, any Shares present and entitled to vote at a meeting that are represented by broker non-votes, may, at the discretion of the proxies named therein, be voted in favor of such an adjournment.
5.6 Proxies. At any meeting of Shareholders, any holder of Shares entitled to vote thereat may vote by proxy, provided that no proxy shall be voted at any meeting unless it shall have been placed on file with the Secretary, or with such other officer or agent of the Trust as the Trustees or officers may direct, for verification prior to the time at which such vote shall be taken. In connection with the solicitation of proxies by the Trustees, a Shareholder may give instructions through telephonic or electronic methods of communication or via the Internet for another person to execute his or her proxy, if in each case such method has been authorized by the Trust by its officers, and pursuant in each case to procedures established or approved by the officers of the Trust or agents employed by the Trust for such purpose as reasonably designed to verify that such instructions have been authorized by such Shareholder; and the placing of a Shareholder's name on a proxy pursuant to such instructions shall constitute execution of such proxy by or on behalf of such Shareholder. Proxies may also be submitted via facsimile if such method has been authorized by the Trust by its officers, and pursuant to procedures established or approved by the officers of the Trust or agents employed by the Trust for such purpose. Pursuant to a vote of the Trustees, proxies may be solicited in the name of one or more Trustees and/or one or more of the officers of the Trust. When any Share is held jointly by several persons, any one of them may vote at any meeting in person or by proxy in respect of such Share, but if more than one of them shall be present at such meeting in person or by proxy and such joint owners or their proxies so present disagree as to any vote to be cast, such vote shall not be received in respect of such Share, but shall be counted as present at the meeting for all other purposes. A proxy purporting to be executed by or on behalf of a Shareholder shall be deemed valid unless challenged at or prior to its exercise, and the burden of proving invalidity shall rest on the challenger. If the holder of any such Share is a minor or a person of unsound mind, and subject to guardianship or to the legal control of any other person as regards the charge or management of such Share, such Share may be voted by such guardian or such other person appointed or having such control, and such vote may be given in person or by proxy. Unless otherwise specifically limited by their terms, proxies shall entitle the holder thereof to vote at any postponement or adjournment of a meeting, and no proxy shall be valid after eleven months from its date. A Shareholder who has submitted a proxy may revoke or withdraw the proxy with respect to any matter to be considered at a meeting or any adjournment or postponement thereof if such revocation or withdrawal is properly received prior to the vote on that matter, by delivering a duly executed proxy bearing a later date or by attending the meeting or the adjournment or postponement thereof and voting in person on the matter or matters.
5.7 Conduct of Meetings. Meetings of the Shareholders shall be presided over by the Chair, or, if the Chair is not present at the meeting, by another Trustee or officer designated by the Chair, or is there is no such designee present at the meeting, then by the most senior officer of the Trust present at the meeting and such person shall be deemed for all purposes the chairman of the meeting. The chairman of the meeting shall determine the order of business of the meeting and may prescribe such rules, regulations and procedures and take such actions as, in the discretion of such chairman, are appropriate for the proper conduct of the meeting. For any matter to be properly before any meeting of Shareholders, the matter must be either specified in the notice of meeting given by or at the direction of a majority of the Trustees then in office or otherwise brought before the meeting by or at the direction of the chairman of the meeting. With the exception of Shareholder proposals submitted in accordance with the requirements of Rule 14a-8 under the Securities Exchange Act of 1934, as amended, or any successor provisions, only matters proposed by the Trustees may be included in the Trust's proxy materials. The Trustees may from time to time in their discretion provide for procedures by which Shareholders may, prior to any meeting at which Trustees are to be elected, submit the names of potential candidates for Trustee, to be considered by the Trustees, or any proper committee thereof. At all meetings of Shareholders, unless voting is conducted by inspectors, all questions relating to the qualification of voters and the validity of proxies and the acceptance or rejection of votes shall be decided by the chairman of the meeting.
5.8 Inspectors of Election. In advance of any meeting of Shareholders the Trustees, or at any such meeting the Trustees or the chairman of the meeting, may appoint Inspectors of Election to act at the meeting or any adjournment thereof. If any person appointed as inspector fails to appear or fails or refuses to act, the chairman of the meeting may appoint a person to fill the vacancy. Unless otherwise instructed by the Trustees, or by the chairman of the meeting, the Inspectors of Election shall determine the number of Shares outstanding, the Shares represented at the meeting, the existence of a quorum, the authenticity, validity and effect of proxies, shall receive votes, ballots or consents, shall hear and determine all challenges and questions in any way arising in connection with the right to vote, shall count and tabulate all votes and consents, determine the results, and do such other acts as may be proper to conduct the election or vote.
5.9 Communications with Shareholders. Any notices, reports, statements or other communications with Shareholders of any kind required under the Declaration, these By-Laws or applicable law may be sent, delivered or made available by mail or other carrier, in person, by email or other electronic communication or by posting on a website or publication or in any other reasonable manner as may be determined by the Trustees if not otherwise prohibited by applicable law, and such communications may be sent, delivered or otherwise made available to Shareholders in accordance with householding or other similar rules under which a single copy of such notice or report may be sent to Shareholders who reside at the same address. No communication need be given to any Shareholder who shall have failed to inform the Trust of the Shareholder's current address and the Trustees may from time to time adopt, or may authorize the officers or agents of the Trust to adopt, procedures or policies with respect to communications to Shareholders that are returned to the Trust or its agents as undeliverable and similar matters. Any Shareholder may waive receipt of any notice or other communication. Communications shall be deemed to have been given at the time when delivered personally or deposited in the mail or with another carrier or sent by any means of written or electronic communication or, where notice is given by posting on a website or by publication, on the date of posting or publication. An affidavit of the mailing or other means of giving any notice of any meeting of Shareholders shall be filed and maintained with the records of the Trust.
The foregoing provisions shall apply mutatis mutandis to any communications given to a Shareholder's counsel under Section 9.8 of the Declaration, provided however that communications provided to either a Shareholder or Shareholder's counsel under Section 9.8 may not by made by means of posting on a website or by publication.
ARTICLE 6
Shares and Share Certificates
6.1 Share Certificates. Unless the issuance of certificates is authorized by the Trustees, Shares shall be held on the books of the Trust by one or more transfer agents appointed in accordance with Section 7.2 of the Declaration (each, a "Transfer Agent") in uncertificated form, and the record holders of such shares shall be treated for all purposes as Shareholders under the Declaration.
The Trustees may at any time authorize the issuance of share certificates for Shares of any Series or Class in such form as the Trustees may prescribe from time to time. Each such certificate shall bear a distinguishing number, shall exhibit the holder's name and the number of whole shares owned by such holder, and shall be signed by the President or a Vice President and by the Treasurer or an Assistant Treasurer. Such signatures may be facsimile, printed or engraved if the certificate is signed by the Transfer Agent with respect to such Shares or by a registrar. In case any officer who has signed or whose facsimile signature has been placed on such certificate shall cease to be such officer before such certificate is issued, it may be issued by the Trust with the same effect as if he were such officer at the time of its issue.
6.2 Share Transfers. Transfers of Shares of the Trust shall be made only on the books of the Trust, as maintained by the Transfer Agent with respect to such Shares, by the registered holder thereof, or by his attorney thereunto authorized by power of attorney duly executed and filed with the Transfer Agent for such Shares and upon surrender of any certificate or certificates representing such Shares, if any, properly endorsed and the payment of all taxes thereon. Except as may be otherwise provided by law or these By-Laws, the person in whose name Shares stand on the books of the Trust shall be deemed the owner thereof for all purposes as regards the Trust; provided that properly documented pledges of Shares as collateral security may be accounted for by the Transfer Agent in accordance with its standard procedures with respect thereto.
6.3 Loss of Certificates. The Transfer Agent for any Series or Class of Shares is authorized to issue and countersign replacement certificates for Shares which have been lost, stolen or destroyed upon receipt of (i) satisfactory proof of such loss, and (ii) surety sufficient to protect the Series or Class from any loss.
6.4. Regulations. The Trustees may make such additional rules and regulations, not inconsistent with these By-Laws, as they may deem expedient concerning the issue, certification, transfer and registration of Shares.
ARTICLE 7
Miscellaneous
7.1 Books and Records. The books and records of the Trust and any Series or Classes thereof, including the share ledger or ledgers, may be kept in or outside the State of Delaware at such office or offices of the Trust and/or its agents as may from time to time be determined by the officers of the Trust.
7.2 Access to Book and Records. The Shareholders shall only have such right to inspect the records, documents, accounts and books of the Trust or any Series or Class thereof as may be granted from time to time by the Trustees in their sole discretion.
7.3 Seal. The Trustees may adopt a seal of the Trust which shall be in such form and shall have such inscription thereon as the Trustees may from time to time prescribe, but unless otherwise required by the Trustees, the seal shall not be necessary to be placed on, and its absence shall not impair the validity of, any document, instrument or other paper executed and delivered by or on behalf of the Trust.
7.4 Execution of Papers. All deeds, leases, contracts, notes and other obligations made by the Trustees shall be signed by the President, any Vice President elected by the Trustees, the Treasurer, the Secretary or any other officer elected by the Trustees, except as the Trustees may generally or in particular cases authorize the execution thereof in some other manner, or as otherwise provided in these By-Laws.
7.5 Severability. The provisions of these By-Laws are severable. If the Trustees determine, with the advice of counsel, that any provision hereof conflicts with the 1940 Act, the regulated investment company or other provisions of the Code or with other applicable laws and regulations, the conflicting provision shall be deemed never to have constituted a part of these By-Laws; provided, however, that such determination shall not affect any of the remaining provisions of these By-Laws or render invalid or improper any action taken or omitted prior to such determination. If any provision hereof shall be held invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall attach only to such provision only in such jurisdiction and shall not affect any other provision of these By-Laws.
7.6 Headings. Headings are placed in these By-Laws for convenience of reference only and in case of any conflict, the text of these By-Laws rather than the headings shall control.
ARTICLE 8
Amendments to the Bylaws
8.1 General. These By-Laws may be amended, supplemented, amended and restated, or repealed, in whole or in part, by a majority of the Trustees then in office at any meeting of the Trustees, or by one or more writings signed by such a majority.
AMENDED AND RESTATED
MANAGEMENT AGREEMENT
This AMENDED AND RESTATED MANAGEMENT AGREEMENT ("Agreement") is made as of this 1st day of July, 2008, by and between PIONEER REAL ESTATE SHARES (the "Trust"), a Delaware statutory trust, and Pioneer Investment Management, Inc., a Delaware corporation (the "Manager").
WHEREAS, the Trust is registered as a management investment company under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Manager is engaged primarily in rendering investment advisory and management services and is registered as an investment adviser under the Investment Advisers Act of 1940, as amended;
WHEREAS, the Trust wishes to retain the Manager to provide investment advisory and management services to the Trust with respect to the series of the Trust designated in Appendix A annexed hereto (the "Funds"); and
WHEREAS, the Manager is willing to furnish such services on the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the promises and mutual covenants herein contained, it is agreed as follows:
1. The Trust hereby appoints the Manager to act as investment adviser of each Fund for the period and on the terms set forth in this Agreement. The Manager accepts such appointment and agrees to render the services herein set forth, for the compensation herein provided.
2. (a) Subject to the supervision of the Trust's Board of Trustees (the "Board"), the Manager shall regularly provide each Fund with investment research, advice, management and supervision and shall furnish a continuous investment program for the Fund's portfolio of securities and other investments consistent with the Fund's investment objectives, policies and restrictions, as stated in the Fund's current Prospectus and Statement of Additional Information. The Manager shall determine from time to time what securities and other investments (including, without limitation, repurchase agreements, swap agreements, options, futures and other instruments) will be purchased, retained, sold or exchanged by each Fund and what portion of the assets of the Fund's portfolio will be held in the various securities and other investments in which the Fund invests, and what portion will be held uninvested in cash, and shall implement those decisions (including the execution of investment documentation), all subject to the provisions of the Trust's Declaration of Trust and By-Laws (collectively, the "Governing Documents") and the 1940 Act, as well as the investment objectives, policies and restrictions of the Fund referred to above, and any other specific policies adopted by the Board and disclosed to the Manager. The Manager is authorized as the agent of the Trust to give instructions to the custodian of each Fund as to deliveries of securities and other investments and payments of cash for the account of the Fund. Subject to applicable provisions of the 1940 Act and direction from the Board, the investment program to be provided hereunder may entail the investment of all or substantially all of the assets of any Fund in one or more investment companies. The Manager will place orders pursuant to its investment determinations for each Fund either directly with the issuer or with any broker or dealer, foreign currency dealer, futures commission merchant or others selected by it. Except as described herein, the Manager shall seek overall the best execution available in the selection of brokers or dealers and the placing of orders for each Fund. In assessing the best execution available for any transaction, the Manager may consider factors it deems relevant, including the size and type of the transaction, the nature and character of the markets for the security to be purchased or sold, the execution capabilities and financial condition of the broker or dealer, and the reasonableness of the commission or dealer spread, if any (whether for a specific transaction or on a continuing basis). In connection with the selection of such brokers or dealers and the placing of such orders, subject to applicable law, brokers or dealers may be selected who also provide brokerage and research services (as those terms are defined in Section 28(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) to the Fund and/or the other accounts over which the Manager or its affiliates exercise investment discretion. The Manager is authorized to pay a broker or dealer who provides such brokerage and research services a commission for executing a portfolio transaction for a Fund which is in excess of the amount of commission another broker or dealer would have charged for effecting that transaction if the Manager determines in good faith that such amount of commission is reasonable in relation to the value of the brokerage and research services provided by such broker or dealer, viewed in terms of either that particular transaction or in terms of all of the accounts over which the Manager or its affiliates exercise investment discretion. The Manager shall also provide advice and recommendations with respect to other aspects of the business and affairs of each Fund, shall exercise voting rights, rights to consent to corporate action and any other rights pertaining to the Fund's portfolio securities subject to such direction as the Board may provide, and shall perform such other functions of investment management and supervision as may be directed by the Board. Notwithstanding the foregoing, the Manager shall not be deemed to have assumed any duties with respect to, and shall not be responsible for, the distribution of the shares of any Fund, nor shall the Manager be deemed to have assumed or have any responsibility with respect to functions specifically assumed by any administrator, transfer agent, fund accounting agent, custodian, shareholder servicing agent or other agent, in each case employed by the Trust or a Fund to perform such functions. The Manager may execute on behalf of each Fund certain agreements, instruments and documents in connection with the services performed by it under this Agreement. These may include, without limitation, brokerage agreements, clearing agreements, account documentation, futures and options agreements, swap agreements, other investment related agreements, and any other agreements, documents or instruments the Manager believes are appropriate or desirable in performing its duties under this Agreement.
(b) Each Fund hereby authorizes any entity or person associated with the Manager which is a member of a national securities exchange to effect any transaction on the exchange for the account of the Fund which is permitted by Section 11(a) of the Exchange Act and Rule 11a2-2(T) thereunder, and each Fund hereby consents to the retention of compensation for such transactions in accordance with Rule 11a2-2(T)(a)(2)(iv).
3. Subject to the Board's approval, the Manager or any Fund may enter into contracts with one or more investment subadvisers, including without limitation, affiliates of the Manager, in which the Manager delegates to such investment subadvisers any or all its duties specified hereunder, on such terms as the Manager determines to be necessary, desirable or appropriate, provided that in each case such contracts are entered into in accordance with and meet all applicable requirements of the 1940 Act. The Trust agrees that the Manager shall not be accountable to the Trust or any Fund or any Fund's shareholders for any loss or other liability relating to specific investments selected by any such subadviser.
4. The Trust shall at all times keep the Manager fully informed with regard to the securities and other investments owned by each Fund, its funds available, or to become available, for investment, and generally as to the condition of its affairs. The Trust shall furnish the Manager with such other documents and information with regard to its affairs as the Manager may from time to time reasonably request. The Manager shall supply the Board and officers of the Trust with such information and reports reasonably required by them and reasonably available to the Manager.
5. (a) Unless maintained by another party on the Fund's behalf, the Manager shall maintain the books and records with respect to each Fund's securities and other transactions and keep the Fund's books of account in accordance with all applicable federal and state laws and regulations. In compliance with the requirements of Rule 31a-3 under the 1940 Act, the Manager hereby agrees that any records that it maintains for each Fund are the property of the Fund, and further agrees to surrender promptly to the Fund any of such records upon the Fund's request. The Manager further agrees to arrange for the preservation of the records required to be maintained by Rule 31a-1 under the 1940 Act for the periods prescribed by Rule 31a-2 under the 1940 Act.
(b) The Manager shall furnish, at its expense, all necessary services, facilities, equipment and personnel for performing the Manager's services under this Agreement. Other than as herein specifically indicated, the Manager shall not be responsible for the Trust's or any Fund's ordinary and extraordinary expenses, and the Trust or a Fund shall pay the Trust's or the Fund's ordinary and extraordinary expenses. The Manager may agree to provide to the Funds services other than the services that are provided under this Agreement, on such terms as the Manager and the Trust may agree from time to time, and nothing herein shall preclude payment by the Trust or a Fund of compensation to the Manager for any such services rendered pursuant to a written agreement or agreements approved by the Board.
6. From time to time, the Manager shall authorize and permit certain of its directors, officers and employees, who may be elected as Board members or officers of the Trust, to serve in the capacities in which they are elected. The Manager will pay directly or reimburse the Trust for the compensation (if any) of the Trustees who are affiliated persons of the Manager and all officers of the Trust as such, except as the Board may decide.
7. As compensation for the services performed and the facilities furnished and expenses assumed by the Manager, each Fund shall pay the Manager, as promptly as possible after the last day of each month, a fee, computed daily at an annual rate set forth opposite the Fund's name on Appendix A annexed hereto, based on the Fund's average daily net assets or otherwise as set forth on Appendix A. If this Agreement is terminated with respect to any Fund as of any date not the last day of a month, the fee payable by the Fund shall be paid as promptly as possible after such date of termination and shall be computed on the basis of the period ending on the last business day on which this Agreement is in effect with respect to the Fund subject to a pro rata adjustment based on the number of days elapsed in the current month as a percentage of the total number of days in the month.
8. The Manager assumes no responsibility under this Agreement other than to render the services called for hereunder, in good faith, and shall not be liable for any error of judgment or mistake of law, or for any loss arising out of any investment or for any act or omission in the execution of securities or other transactions for any Fund, provided that nothing in this Agreement shall protect the Manager against any liability to a Fund to which the Manager would otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence in the performance of its duties or by reason of its reckless disregard of its obligations and duties hereunder. As used in this paragraph 8, the term "Manager" shall include any affiliates of the Manager performing services for the Trust or any Fund pursuant to this Agreement and the partners, shareholders, directors, officers and employees of the Manager and such affiliates.
9. Nothing in this Agreement shall limit or restrict the right of any director, officer, or employee of the Manager who may also be a Trustee, officer, or employee of the Trust or any Fund, to engage in any other business or to devote his time and attention in part to the management or other aspects of any other business, whether of a similar nature or a dissimilar nature, nor to limit or restrict the right of the Manager to engage in any other business or to render services of any kind, including investment advisory and management services, to any other fund, firm, individual or association. If the purchase or sale of securities or other investments consistent with the investment policies of any Fund or one or more other accounts of the Manager is considered at or about the same time, transactions in such securities or other investments will be allocated among the accounts in a manner deemed equitable by the Manager. Such transactions may be combined, in accordance with applicable laws and regulations, and consistent with the Manager's policies and procedures as presented to the Board from time to time.
10. For the purposes of this Agreement, a Fund's "net assets" shall be determined as provided in the Fund's then-current Prospectus and Statement of Additional Information and the terms "assignment," "interested person," and "majority of the outstanding voting securities" shall have the meanings given to them by Section 2(a) of the 1940 Act, and references to the "1940 Act" shall include any rule, regulation or applicable exemptive order of the Securities and Exchange Commission (the "Commission") thereunder and interpretive guidance with respect to the 1940 Act by the Commission or its staff.
11. This Agreement will become effective with respect to each Fund on the date first above written or such later date set forth opposite the Fund's name on Appendix A annexed hereto, provided that it shall have been approved by the Trust's Board and by the shareholders of the Fund in accordance with the requirements of the 1940 Act and, unless sooner terminated as provided herein, will continue in effect for each Fund designated on Appendix A on the date hereof until December 31, 2009, and for each Fund added to Appendix A hereafter, until the date specified in Appendix A. Thereafter, if not terminated, this Agreement shall continue in effect with respect to each Fund, so long as such continuance is specifically approved at least annually (i) by the Board or (ii) by a vote of a majority of the outstanding voting securities of the Fund, provided that in either event the continuance is also approved by a majority of the Trustees who are not interested persons of any party to this Agreement, by vote cast in person at a meeting called for the purpose of voting on such approval.
12. This Agreement is terminable with respect to any Fund without penalty by the Board or by vote of a majority of the outstanding voting securities of the Fund, in each case on not more than 60 days' nor less than 30 days' written notice to the Manager, or by the Manager upon not less than 60 days' written notice to the Trust, and will be terminated upon the mutual written consent of the Manager and the Trust. This Agreement shall terminate automatically in the event of its assignment. This Agreement may be terminated with respect to one or more Funds without affecting the validity of this Agreement with respect to any other Fund designated on Appendix A.
13. The Manager agrees that for services rendered to each Fund, or for any claim by it in connection with services rendered to the Fund, it shall look only to assets of the Fund for satisfaction and that it shall have no claim against the assets of any other portfolios of the Trust. The undersigned officer of the Trust has executed this Agreement not individually, but as an officer under the Trust's Declaration of Trust and the obligations of this Agreement are not binding upon any of the Trustees, officers or shareholders of the Trust individually.
14. The Trust agrees that in the event that none of the Manager or any of its affiliates acts as an investment adviser to a Fund, the name of the Fund will be changed to one that does not contain the name "Pioneer" or otherwise suggest an affiliation with the Manager.
15. No provision of this Agreement may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought, and no material amendment of the Agreement with respect to any Fund shall be effective until approved, if so required by the 1940 Act, by vote of the holders of a majority of that Fund's outstanding voting securities.
16. This Agreement embodies the entire agreement and understanding between the parties hereto and supersedes all prior agreements and understandings relating to the subject matter hereof. Should any part of this Agreement be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. This Agreement shall be binding on and shall inure to the benefit of the parties hereto and their respective successors.
17. This Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of The Commonwealth of Massachusetts.
18. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
19. This Agreement amends and restates in its entirety the prior management agreement in effect for the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their officers thereunto duly authorized.
PIONEER REAL ESTATE SHARES
By: /s/ Daniel K. Kingsbury Name: Daniel K. Kingsbury Title: Trustee and Executive Vice President |
PIONEER INVESTMENT MANAGEMENT, INC.
By: /s/ Mark D. Goodwin
Name: Mark D. Goodwin
Title: Executive Vice President and Chief
Operating Officer
|
Appendix A
Fund Effective Date/Initial Term Date Fee
(calculated as a percent
per annum of the Fund's
average daily net assets)
Pioneer Real Estate Shares Effective Date: July 1, 2008 0.80%
Initial Term: July 1, 2008-December 31, 2009
|
Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm
We consent to the references to our firm under the captions "Financial
Highlights" in the Class A, Class B, Class C, and Class Y shares' Prospectuses
and "Disclosure of Portfolio Holdings," "Independent Registered Public
Accounting Firm," and "Financial Statements" in the Class A, Class B, Class C,
and Class Y shares' Statement of Additional Information and to the incorporation
by reference of our report, dated February 18, 2009, on the financial statements
and financial highlights of Pioneer Real Estate Shares included in the Annual
Report to the Shareowners for the year ended December 31, 2008, as filed with
the Securities and Exchange Commission in Post-Effective Amendment Number 27 to
the Registration Statement (Form N-1A, No. 033-65822) of Pioneer Real Estate
Shares.
/s/ ERNST & YOUNG LLP
Boston, Massachusetts
April 27, 2009
|
PIONEER FAMILY OF FUNDS
AMENDMENT NO. 2
TO
MASTER INVESTMENT COMPANY SERVICE AGREEMENT
January 16, 2009
WHEREAS, each Customer listed on Exhibit A hereto, as amended from time to time (each a "Customer"), and Pioneer Investment Management Shareholder Services, Inc., a Massachusetts corporation with its principal place of business at 60 State Street, Boston, Massachusetts 02109 ("PIMSS"), have entered into a Master Investment Company Service Agreement, dated Mach 4, 2003, and amended May 5, 2007 (as amended, the "Agreement"); and
WHEREAS, each Customer and PIMSS desires to further amend the Agreement.
NOW THEREFORE, the Agreement is amended as follows:
1. Exhibit A (List of Customers) to the Agreement is amended by deleting it in its entirety and replacing it with Exhibit A (List of Customers) attached hereto.
2. Exhibit B (Account Fees) to the Agreement is amended by deleting it in its entirety and replacing it with Exhibit B (Account Fees) attached hereto.
3. The effective date of this amendment shall be January 1, 2009.
IN WITNESS WHEREOF, the undersigned have caused this Amendment to be duly executed as of the 16th day of January, 2009.
EACH CUSTOMER LISTED ON EXHIBIT A PIONEER INVESTMENT
ATTACHED HERETO (SEVERALLY AND MANAGEMENT SHAREHOLDER
NOT JOINTLY) SERVICES, INC.
By: /s/ Mark E. Bradley By: /s/ Mark D. Goodwin
-------------------- -------------------
Name: Mark E. Bradley Name: Mark D. Goodwin
Title: Treasurer Title: President
|
EXHIBIT A
MASTER INVESTMENT COMPANY SERVICE AGREEMENT
January 16, 2009
EXHIBIT B - MASTER INVESTMENT COMPANY SERVICE AGREEMENT
ACCOUNT FEES
A. OPEN EQUITY FUND ACCOUNTS
$24.75 per account
B. OPEN FIXED INCOME FUND ACCOUNTS
$ 28.75 per account
C. OPEN MONEY MARKET FUND ACCOUNTS (EXCLUSIVE OF PIONEER INSTITUTIONAL MONEY MARKET FUND)
$25.00 per account
D. OPEN VARIABLE ANNUITY FUND ACCOUNTS and PIONEER INSTITUTIONAL MONEY MARKET FUND
$1,500.00 per CUSIP
E. ALL FUNDS-CLOSED ACCOUNTS
$8.00 per account
Effective as of January 1, 2009
AMENDED AND RESTATED
ADMINISTRATION AGREEMENT
This AMENDED AND RESTATED ADMINISTRATION AGREEMENT ("Agreement") is made as of this 1st day of July, 2008, by and between each Trust listed on Appendix A annexed hereto (each, a "Trust"), each a Delaware statutory trust, and Pioneer Investment Management, Inc., a Delaware corporation (the "Administrator").
WHEREAS, each Trust is a registered management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust wishes to engage the Administrator to provide certain administrative services to each Trust with respect to the series of the Trust designated in Appendix A annexed hereto from time to time (the "Funds"); and
WHEREAS, the Administrator is willing to furnish such services on the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the promises and mutual covenants herein contained, it is agreed as follows:
1. Each Trust hereby engages the Administrator to perform the administrative services listed on Appendix B annexed hereto (as such Appendix may be revised from time to time by agreement of the parties) with respect to each Fund, except as otherwise provided in Appendix B with respect to accounting services to be provided by third parties to certain Funds, for the period and on the terms set forth in this Agreement. The Administrator accepts such engagement and agrees to render the services herein set forth, for the compensation herein provided.
2. Subject to the direction and control of the Board of Trustees (the Board), the Administrator shall perform the administrative services listed on Appendix B. In no event shall the Administrator be deemed to have assumed any duties with respect to, or be responsible for, the distribution of the shares of any Fund, nor shall the Administrator be deemed to have assumed, or have any responsibility with respect to, functions specifically assumed by any investment adviser, transfer agent, fund accounting agent, custodian, shareholder servicing agent or other agent, in each case employed by a Trust or a Fund to perform such functions. With respect to the legal services listed in Appendix B, it is recognized that such legal services are provided for the benefit of the Funds in conjunction with legal services separately provided to the Funds by their counsel, and nothing in this Agreement shall cause the Administrator to be responsible for the fees and disbursements of counsel to the Funds.
3. Subject to the Board's approval, the Administrator may employ one or more service providers, including affiliates of the Administrator, to provide certain of the services to be provided by the Administrator under this Agreement, by entering into a written agreement with each such entity on such terms as the Administrator determines to be necessary, desirable or appropriate, provided that in each case such contracts are entered into in accordance with all applicable requirements of the 1940 Act. Except as otherwise provided in paragraph 9, each Trust agrees that the Administrator shall not be accountable to the Trust or any Fund or any Fund's shareholders for any loss or other liability arising out of any error or omission by any such service provider.
4. Each Trust shall furnish to the Administrator such documents and information as may be necessary or appropriate to enable the Administrator to perform its duties hereunder and with such other documents and information with regard to each Fund's affairs as the Administrator may from time to time reasonably request.
5. In compliance with the requirements of Rule 31a-3 under the 1940 Act, the Administrator hereby agrees that any records that it maintains hereunder for any Fund are the property of the Fund, and further agrees to surrender promptly to the Fund any of such records upon the Fund's request. The Administrator further agrees to arrange for the preservation of any of such records required to be maintained by Rule 31a-1 under the 1940 Act for the periods prescribed by Rule 31a-2 under the 1940 Act.
6. The Administrator shall supply the Board and the officers of each Trust with all information and reports reasonably required by them and reasonably available to the Administrator relating to the services provided by the Administrator hereunder.
7. (a) As compensation for the services performed by the Administrator, each Fund shall pay the Administrator as promptly as possible after the last day of each month, a fee, computed daily at an annual rate set forth opposite the Fund's name on Appendix A annexed hereto, based on the Fund's average daily net assets (or, as indicated on Appendix A, the Fund's average daily managed assets). The Administrator and the Funds agree that the fees payable under this Agreement will be reviewed from time to time. They also will be reviewed should the scope of the Administrator's services provided hereunder be amended by agreement of the parties. In connection with each such review, the Administrator will provide such information as the Trustees reasonably request to evaluate the benefits of this Agreement to the Funds and the fees hereunder, including an analysis of the costs to the Administrator of providing its services. If this Agreement is terminated with respect to any Fund as of any date not the last day of a month, the fee payable by such Fund shall be paid as promptly as possible after such date of termination, and shall be computed on the basis of the period ending on the last business day on which this Agreement is in effect subject to a pro rata adjustment based on the number of days elapsed in the current month as a percentage of the total number of days in the month.
(b) The Administrator shall furnish all facilities and personnel necessary for performing the Administrator's services hereunder and shall furnish to each Trust office space in the offices of the Administrator or in such other place as may be agreed upon from time to time. The Administrator shall pay directly or reimburse each Trust for all expenses not hereinafter specifically assumed by the Trust where such expenses are incurred by the Administrator or by the Trust in connection with the management of the affairs of, and the investment and reinvestment of the assets of, the Trust. Each Trust, on behalf of each Fund that is a series of the Trust, shall assume and shall pay (i) charges and expenses for fund accounting, pricing and appraisal services and related overhead, including, to the extent such services are performed by personnel of a Fund's investment adviser (the "Manager") or its affiliates, office space and facilities, and personnel compensation, training and benefits; (ii) the charges and expenses of auditors; (iii) the charges and expenses of any investment adviser, administrator, custodian, transfer agent, plan agent, dividend disbursing agent, registrar or any other agent appointed by the Trust; (iv) issue and transfer taxes chargeable to the Trust in connection with securities transactions to which the Trust is a party; (v) insurance premiums, interest charges, any expenses in connection with any preferred shares, dues and fees for membership in trade associations and all taxes and corporate fees payable by the Trust to federal, state or other governmental agencies; (vi) fees and expenses involved in registering and maintaining registrations of the Trust and/or its shares with federal regulatory agencies, state or blue sky securities agencies and foreign jurisdictions, including the preparation of prospectuses and statements of additional information for filing with such regulatory authorities; (vii) all expenses of shareholders' and Board of Trustees' (the "Board", and each Board member, a "Trustee") meetings and of preparing, printing and distributing prospectuses, notices, proxy statements and all reports to shareholders and to governmental agencies; (viii) charges and expenses of legal counsel to the Trust and the Trustees; (ix) any fees paid by the Trust in accordance with Rule 12b-1 promulgated by the Securities and Exchange Commission (the "Commission") pursuant to the 1940 Act; (x) compensation of those Trustees of the Trust who are not affiliated with, or "interested persons" (as defined in the 1940 Act) of, the Manager, the Trust (other than as Trustees), Pioneer Investment Management USA Inc. or Pioneer Funds Distributor, Inc.; (xi) the cost of preparing and printing share certificates; (xii) any fees and other expenses of listing the Trust's shares on the New York Stock Exchange, American Stock Exchange or any other national stock exchange, (xiii) interest on borrowed money, if any; (xiv) fees payable by the Trust under management agreements and under this Agreement; and (xv) extraordinary expenses. Each Trust shall also assume and pay any other expense that the Trust, the Manager or any other agent of the Trust may incur not listed above that is approved by the Board (including a majority of the independent Trustees) as being an appropriate expense of the Trust. In addition, each Trust, on behalf of each Fund that is a series of the Trust, agrees to pay all brokers' and underwriting commissions chargeable to the Trust in connection with securities transactions to which the Fund is a party.
8. The Administrator assumes no responsibility under this Agreement other than to render the services called for hereunder, in good faith, and shall not be liable for any error of judgment or mistake of law, or for any act or omission in the performance of the services, provided that nothing in this Agreement shall protect the Administrator against any liability to a Fund to which the Administrator otherwise would be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of its reckless disregard of its obligations and duties hereunder. As used in paragraph 9 and paragraph 10, the term "Administrator" shall include any affiliates of the Administrator performing services for a Trust or any Fund pursuant to this Agreement and the partners, shareholders, directors, officers and employees of the Administrator and such affiliates.
9. Each Fund separately shall indemnify and hold the Administrator harmless from all loss, cost, damage and expense, including reasonable fees and expenses for counsel, incurred by the Administrator resulting from or arising out of the provision of the Administrator's services, provided that this indemnification shall not apply to actions or omissions of the Administrator, its officers or employees resulting from or arising out of its or their own willful misfeasance, bad faith or gross negligence. The Administrator shall indemnify and hold each Fund harmless from all loss, cost, damage and expense, including reasonable fees and expenses for counsel, incurred by a Fund resulting from or arising out of the Administrator's, or its officers' or employees' own willful misfeasance, bad faith or gross negligence.
10. Nothing in this Agreement shall limit or restrict the right of any director, officer, or employee of the Administrator who may also be a Trustee, officer, or employee of a Trust or any Fund to engage in any other business or to devote his time and attention in part to the management or other aspects of any other business, whether of a similar nature or a dissimilar nature, nor to limit or restrict the right of the Administrator to engage in any other business or to render services of any kind, including investment advisory and management services, to any other fund, firm, individual or association.
11. For purposes of this Agreement, a Fund's "net assets" shall be determined as provided in the Fund's then-current Prospectus and Statement of Additional Information, and references to the "1940 Act" shall include any rule, regulation or applicable exemptive order of the Securities and Exchange Commission (the "SEC") thereunder and the interpretive guidance with respect to the 1940 Act by the SEC or its staff. "Managed assets" means the total assets of a Trust, including any form of investment leverage, minus all accrued expenses incurred in the normal course of operations, but not excluding any liabilities or obligations attributable to investment leverage obtained through (i) indebtedness of any type (including, without limitation, borrowing through a credit facility or the issuance of debt securities), (ii) the issuance of preferred stock or other similar preference securities, (iii) the reinvestment of collateral received for securities loaned in accordance with the Fund's investment objectives and policies, and/or (iv) any other means. The liquidation preference on any preferred shares is not a liability.
12. This Agreement will become effective with respect to each Fund on the date first above written or such later date set forth opposite the Fund's name on Appendix A annexed hereto, provided that it shall have been approved by the applicable Trust's Board, and, unless sooner terminated as provided herein, will continue in effect for each Fund designated on Appendix A on the date hereof until December 31, 2009, and for each Fund added to Appendix A hereafter, until the date specified in Appendix A. Thereafter, if not terminated, this Agreement shall continue in effect with respect to each Fund for successive one-year terms, so long as each such term is approved by the Board.
13. This Agreement is terminable with respect to any Fund (i) without penalty, by the Board or (ii) by the Administrator upon not less than 90 days' written notice to the applicable Trust. This Agreement may be terminated with respect to one or more Funds without affecting the validity of this Agreement with respect to any other Fund designated on Appendix A.
14. The Administrator agrees that for services rendered to each Fund, or for any claim by it in connection with the services rendered to the Fund under this Agreement, it shall look only to assets of the Fund for satisfaction and that it shall have no claim against the assets of any other portfolios of any Trust. The undersigned officer of the Trusts has executed this Agreement not individually, but as an officer under each Trust's Declaration of Trust and the obligations of this Agreement are not binding upon any of the Trustees, officers or shareholders of the Trusts individually.
15. No provision of this Agreement may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought.
16. This Agreement embodies the entire agreement and understanding between the parties hereto and supersedes all prior agreements and understandings relating to the subject matter hereof. Should any part of this Agreement be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. This Agreement shall be binding on and shall inure to the benefit of the parties hereto and their respective successors.
17. This Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of The Commonwealth of Massachusetts.
18. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
19. This Agreement amends and restates in its entirety the prior administration agreement in effect for each Trust and Fund.
[signature page to follow]
IN WITNESS WHEREOF, the parties thereto have caused this Agreement to be executed by their officers thereunto duly authorized.
THE PIONEER TRUSTS LISTED ON APPENDIX A
On behalf of the Funds named therein
By: /s/ Mark E. Bradley ------------------------ Name: Mark E. Bradley Title: Treasurer |
PIONEER INVESTMENT MANAGEMENT, INC.
By: /s/ Mark D. Goodwin
-------------------------
Name: Mark D. Goodwin
Title: Executive Vice President and
Chief Operating Officer
|
Appendix A
-------------------------- --------------------------- ------------------------------------ ---------------------
Trust Fund Effective Date/Initial Term Date Fees (calculated as
a percent per annum
of the Fund's
average daily net
assets)
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Bond Fund Pioneer Bond Fund Effective Date: July 1, 2008 0.0225%
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Emerging Markets Pioneer Emerging Markets Effective Date: July 1, 2008 0.0225%
Fund Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Equity Income Pioneer Equity Income Fund Effective Date: July 1, 2008 0.0225%
Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Equity Pioneer Equity Effective Date: July 1, 2008 0.0225%
Opportunity Fund Opportunity Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Fund Pioneer Fund Effective Date: July 1, 2008 0.0225%
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Fundamental Pioneer Fundamental Effective Date: July 1, 2008 0.0225%
Growth Fund Growth Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer High Yield Fund Pioneer High Yield Fund 0.0225%
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------------------------------------------------------------------
Pioneer Ibbotson Asset
Allocation Series
-------------------------- --------------------------------------------------------------------------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Ibbotson Effective Date: July 1, 2008 0.0175%
Aggressive Allocation Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Ibbotson Effective Date: July 1, 2008 0.0175%
Conservative Allocation
Fund Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Ibbotson Growth Effective Date: July 1, 2008 0.0175%
Allocation Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Ibbotson Moderate Effective Date: July 1, 2008 0.0175%
Allocation Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Independence Fund Pioneer Independence Fund Effective Date: July 1, 2008 0.0225%
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer International Pioneer International Effective Date: July 1, 2008 0.0225%
Equity Fund Equity Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Mid Cap Growth Pioneer Mid Cap Growth Effective Date: July 1, 2008 0.0225%
Fund Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Mid Cap Value Pioneer Mid Cap Value Fund Effective Date: July 1, 2008 0.0225%
Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Money Market Pioneer Cash Reserves Fund Effective Date: July 1, 2008 0.0225%
Trust
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------------------------------------------------------------------
Pioneer Protected
Principal Trust
-------------------------- --------------------------------------------------------------------------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Protected Effective Date: July 1, 2008 0.0225%
Principal Plus Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Protected Effective Date: July 1, 2008 0.0225%
Principal Plus Fund II
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Real Estate Pioneer Real Estate Effective Date: July 1, 2008 0.0225%
Shares Shares
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Research Fund Pioneer Research Fund Effective Date: July 1, 2008 0.0225%
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Select Growth Pioneer Select Growth Effective Date: July 1, 2008 0.0225%
Fund Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------------------------------------------------------------------
Pioneer Series Trust I
-------------------------- --------------------------------------------------------------------------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Oak Ridge Large Effective Date: July 1, 2008 0.0225%
Cap Growth Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Oak Ridge Small Effective Date: July 1, 2008 0.0225%
Cap Growth Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------------------------------------------------------------------
Pioneer Series Trust II
-------------------------- --------------------------------------------------------------------------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer AmPac Growth Fund Effective Date: July 1, 2008 0.0225%
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer AMT-Free CA Effective Date: July 1, 2008 0.0225%
Municipal Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer AMT-Free Effective Date: July 1, 2008 0.0225%
Municipal Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Growth Leaders Effective Date: July 1, 2008 0.0225%
Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Growth Effective Date: July 1, 2008 0.0225%
Opportunities Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Small and Mid Cap Effective Date: July 1, 2008 0.0225%
Growth Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Tax Free Money Effective Date: July 1, 2008 0.0225%
Market Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Series Trust III Pioneer Cullen Value Fund Effective Date: July 1, 2008 0.0225%
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------------------------------------------------------------------
Pioneer Series Trust IV
-------------------------- --------------------------------------------------------------------------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Classic Balanced Effective Date: July 1, 2008 0.0225%
Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Government Income Effective Date: July 1, 2008 0.0225%
Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Institutional Effective Date: July 1, 2008 0.0225%
Money Market Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Treasury Reserves Effective Date: July 1, 2008 0.0225%
Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------------------------------------------------------------------
Pioneer Series Trust V
-------------------------- --------------------------------------------------------------------------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Global Select Effective Date: July 1, 2008 0.0225%
Equity Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer High Income Effective Date: July 1, 2008 0.0225%
Municipal Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Oak Ridge All Cap Effective Date: July 1, 2008 0.0225%
Growth Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Select Research Effective Date: July 1, 2008 0.0225%
Growth Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Select Research Effective Date: July 1, 2008 0.0225%
Value Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Series Trust VI Pioneer Floating Rate Effective Date: July 1, 2008 0.0225%
Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Series Trust VII
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Global High Yield Effective Date: July 1, 2008 0.0225%
Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Global Effective Date: July 1, 2008 0.0225%
Diversified Equity Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Global Aggregate Effective Date: July 1, 2008 0.0225%
Bond Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Series Trust VIII Pioneer International Effective Date: July 1, 2008 0.0225%
Value Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Series Trust IX Pioneer Europe Select Effective Date: July 1, 2008 0.0225%
Equity Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Short Term Pioneer Short Term Income Effective Date: July 1, 2008 0.0225%
Income Fund Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Small Cap Value Pioneer Small Cap Value Effective Date: July 1, 2008 0.0225%
Fund Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Strategic Income Pioneer Strategic Income Effective Date: July 1, 2008 0.0225%
Fund Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Tax Free Income Pioneer Tax Free Income Effective Date: July 1, 2008 0.0225%
Fund Fund
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Value Fund Pioneer Value Fund Effective Date: July 1, 2008 0.0225%
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------------------------------------------------------------------
Pioneer Variable
Contracts Trust
-------------------------- --------------------------------------------------------------------------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Bond VCT Effective Date: July 1, 2008 0.0225%
Portfolio
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Cullen Value VCT Effective Date: July 1, 2008 0.0225%
Portfolio
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Emerging Markets Effective Date: July 1, 2008 0.0225%
VCT Portfolio
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Equity Income VCT Effective Date: July 1, 2008 0.0225%
Portfolio
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Fund VCT Effective Date: July 1, 2008 0.0225%
Portfolio
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Global High Yield Effective Date: July 1, 2008 0.0225%
VCT Portfolio
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Growth Effective Date: July 1, 2008 0.0225%
Opportunities VCT
Portfolio Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Independence VCT Effective Date: July 1, 2008 0.0225%
Portfolio
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer High Yield VCT Effective Date: July 1, 2008 0.0225%
Portfolio
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Ibbotson Effective Date: July 1, 2008 0.0175%
Aggressive Allocation VCT
Portfolio Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Ibbotson Growth Effective Date: July 1, 2008 0.0175%
Allocation VCT Portfolio
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Ibbotson Moderate Effective Date: July 1, 2008 0.0175%
Allocation VCT Portfolio
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer International Effective Date: July 1, 2008 0.0225%
Value VCT Portfolio
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Mid Cap Value VCT Effective Date: July 1, 2008 0.0225%
Portfolio
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Money Market VCT Effective Date: July 1, 2008 0.0225%
Portfolio
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Oak Ridge Large Effective Date: July 1, 2008 0.0225%
Cap Growth VCT Portfolio
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Real Estate Effective Date: July 1, 2008 0.0225%
Shares VCT Portfolio
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Small Cap Value Effective Date: July 1, 2008 0.0225%
VCT Portfolio
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
-------------------------- --------------------------- ------------------------------------ ---------------------
Pioneer Strategic Income Effective Date: July 1, 2008 0.0225%
VCT Portfolio
Initial Term: July 1,
2008-December 31, 2009
-------------------------- --------------------------- ------------------------------------ ---------------------
|
Appendix B
ADMINISTRATION AGREEMENT
Accounting Services
Fund Accounting
Maintain all accounting records for Funds
o Calculate and report daily net asset values per share and yields o Recommend income and capital gains distribution rates o Prepare Funds' financial statements and assist in Fund audits
Shareholder Reporting and Audit Liaison
o Prepare and file (via EDGAR) shareholder reports required by Rule 30e-1
under the 1940 Act and reports on Forms N-CSR, N-Q and N-SAR as required by
Rules 30d-1 and 30b-1 under the 1940 Act
o Manage the Funds' audit processes to ensure timely completion of financial
statements and shareholder reports
o Prepare reports related to advisory contract renewals for the Trustees'
review, as well as other materials that any Board may request from time to
time
o Provide financial information for prospectus updates and other regulatory
filings
o Prepare and furnish the Funds with performance information (including yield
and total return information) calculated in accordance with applicable U.S.
securities laws and report to external entities such information
Pricing and Corporate Actions
o Ensure accuracy and timeliness of prices supplied by external sources to be
used in daily valuations of all security positions held by each Fund
o Support corporate actions and bankruptcy proof of claim analyses
o Validate and communicate class action and bankruptcy proof of claim
information
o Present periodic valuation reports to Funds' Boards
Systems and Administration
o Provide direction, supervision and administrative support to all Fund
Accounting, Administration and Controllership (FAACS) teams providing
Accounting Services hereunder
o Provide systems support to users of Fund accounting and portfolio pricing
software, and manage relationships with applicable software and hardware
vendors
o Develop and maintain applications and systems interfaces for FAACS teams
Controllership Services
o Manage Fund expense payment cycles (e.g., timeliness and accuracy of
payments, allocation of costs among Funds)
o Coordinate and standardize Fund expense accruals and budgeting
o Provide expense reports as required
o Compile daily reports of shareholder transactions from all sources for
entry into Fund books
o Provide daily reconciliation of receivable, payable and share accounts
between Funds' records and sources of shareholder transactions
o Manage the daily process to minimize "as of" gains and losses to Funds
o Communicate daily Fund prices
o Provide information and consultation on financial matters relating to the
Funds including, without limitation, dividend distributions, expense pro
formas, expense accruals and other matters
Tax Services
o Manage the Funds' federal, state and applicable local tax preparation and
reporting
o Prepare fiscal and excise tax distribution calculations
o Prepare and file federal, state and any local income tax returns, including
tax return extension requests
o Prepare shareholder year-end reporting statements
o Provide the appropriate amounts and characterization of distributions
declared during the calendar year for Forms 1099 and similar reporting
o Periodically review and determine distributions to be paid to shareholders
pursuant to Sub Chapter M requirements
o Consult with the Funds' Treasurer on various tax issues as they arise and
with the Funds' auditors when appropriate
ADMINISTRATION AGREEMENT
Legal Services
Registration Statements, Proxy Statements and Related Securities and Exchange Commission ("SEC") Filings
o Maintain SEC filing calendar for the Funds' Registration Statement filings
o Prepare and file (via EDGAR) amendments to the Funds' Registration Statements, including preparing prospectuses and statements of additional information (placeCitySAIs)
o Prepare and file (via EDGAR) supplements to the Funds' prospectuses and registration statements
o Prepare and file (via EDGAR) Fund proxy statements; provide consultation on proxy solicitation matters (i.e., with regard to the solicitation and tabulation of proxies in connection with shareholder meetings; the coordination of the printing and distribution of proxy materials, etc.)
o Review comments from the SEC on Fund registration statements and proxy statement filings and contribute to the preparation of responses to such comments
o Conduct and manage use of software utilized to aid in maintaining content of disclosure in Fund prospectuses and placeCitySAIs, including related language database
o Prepare and file (via EDGAR) Rule 24f-2 Notices
o SEC Electronic Filing (EDGAR) Responsibilities
o Maintain and develop enhancements to Pioneer's EDGAR-related systems and procedures, including contingency planning
o Maintain EDGAR related databases and document archives
o Liaise with third party EDGAR agents when necessary
Blue Sky Administration (State Registration)
o Principal liaison with Blue Sky vendor (the fees and expenses of which are
charged separately to the applicable Funds)
o Coordinate SEC filing schedule and Fund documentation with Blue Sky vendor
o Monitor status of state filings with Blue Sky vendor
o Transfer Agent coordination
o Review Blue Sky vendor statements and invoices
o Conduct Blue Sky vendor due diligence, as appropriate
- Hiring oversight
- In-person meetings
- Independent audit of services
Shareholder Report Review and Support
o Review annual and semi-annual shareholder reports, including review of text
of footnotes, as well as management's discussion of Fund performance,
Trustee and officer background information and other non-financial
statement aspects of reports
o Provide consulting to FAACS in meeting regulatory requirements applicable
to financial statements
o With Fund counsel and FAACS, review comments from the SEC on Fund financial
statement filings and assist in the preparation of responses to such
comments
Corporate Secretarial and Governance Matters
o Maintain general calendar for Trustee meetings (including meetings of
committees of Boards); track items that require annual or other periodic
review and/or approval by Trustees; coordinate meeting presentations
o Maintain awareness of regulatory changes and track compliance dates with
respect thereto
o Prepare agenda and background materials for Trustee and Board committee
meetings (i.e., memoranda, proposed resolutions), attend meetings, prepare
minutes and follow up on matters raised at meetings
o Review draft materials and coordinate review by Trustees and external
personnel (i.e., Fund counsel and auditors)
o Produce and distribute materials to Trustees and other meeting attendees
o Oversee vendors and technology that facilitate assembly, production and
distribution of Trustee materials
o Attend and assist in coordination of shareholder meetings
o Monitor fidelity bond and directors' and officers' errors and omissions
policies and make required filings with the SEC; act as principal liaison
with Funds' insurance carriers and agents; coordinate amendments to and
annual renewals of policies and coverage, including completion of materials
for Board consideration
o Maintain Fund records required by Section 31 of the 1940 Act and the rules
thereunder, except those records that are either the responsibility of the
Fund's Manager under the management agreements with the Funds or otherwise
are maintained by the Funds' other service providers (e.g., subadviser,
custodian, transfer agent)
o Maintain corporate records on behalf of the Funds, including, but not
limited to, copies of minutes, contracts and Trustee meeting materials
Miscellaneous Services
o Preparation and filing of the Funds' Form N-SAR, Form N-CSR, Form N-Q and
Form N-PX filings
o Prepare and make Section 16 filings on behalf of the officers and Trustees
of the closed-end Funds
ADMINISTRATION AGREEMENT
Compliance Services
o Assist the Funds in responding to routine and non-routine regulatory inquiries, examinations and investigations
o Provide consultation on regulatory matters relating to Fund operations and any potential changes in the Funds' investment policies, operations or structure
o Develop or assist in developing guidelines and procedures to improve overall compliance by the Funds and their various agents
o Oversee implementation and testing of the Funds' compliance-related policies and procedures
CODE OF ETHICS
POLICY
Each of Pioneer Investment Management, Inc. and Pioneer Institutional
Asset Management, Inc. (collectively, "Pioneer") is committed to
maintaining the highest ethical standards in connection with the
management of its clients' assets. An important element of Pioneer's
commitment is Pioneer's philosophy of always putting Pioneer clients'
interests ahead of its own. Accordingly, as a person subject to this Code
of Ethics for Pioneer (the "Code"), you must conduct yourself in such a
manner as to avoid any actual or potential conflict of interest with a
client of Pioneer. The knowledge and/or opportunities you gain as a result
of your position at Pioneer must be used in a manner that is consistent
with Pioneer's fiduciary obligations to clients. In addition, Pioneer
expects you to comply at all times with the federal securities laws of the
United States applicable to Pioneer's business.
When making personal investment decisions, you must exercise extreme care to ensure that the prohibitions of this Code are not violated. Furthermore, you should conduct your personal investing in such a manner that will eliminate the possibility that your time and attention are devoted to your personal investments at the expense of time and attention that should be devoted to your duties at Pioneer.
It also bears emphasizing that technical compliance with the procedures, prohibitions and limitations of the Code will not insulate you automatically from scrutiny of, or sanctions for, your securities transactions. It is not intended that this policy specifically will address every situation regarding personal trading so you must contact the Compliance Department if you have any questions about the Code.
APPLICABILITY
This Code applies to supervised persons of Pioneer. Supervised persons of
Pioneer are:
o All associates, officers and directors of Pioneer; and
o Individuals who provide investment advice on behalf of Pioneer and are subject to the supervision and control of Pioneer.
The procedures and restrictions outlined in the Code apply differently based on your position within Pioneer. To assist you in determining which provisions of the Code apply to you, the Code is divided into three parts:
o Part I, which contains provisions relating to certification and the standards of conduct expected of supervised persons and is applicable to all supervised persons;
o Part II, which relates to personal investing and is applicable only to access persons; and
o Part III, which relates to administration and enforcement and is applicable to all supervised persons.
It is your responsibility to familiarize yourself with this Code initially and again if you change positions in the future.
Underlined terms contained in the Code have special meanings. You may review a definition of a term's meaning by referring to "Important Terms" or by simply clicking on the term.
PURPOSE
Pioneer has adopted this Code to establish standards of conduct expected
of its associates and to address conflicts that arise from personal
trading by associates. This Code has been adopted pursuant to the
requirements of Rule 204A-1 under the Investment Advisers Act of 1940 and
Rule 17j-1 under the Investment Company Act of 1940.
I. PROVISIONS APPLICABLE TO ALL SUPERVISED PERSONS
CERTIFICATIONS OF RECEIPT AND COMPLIANCE
INITIAL CERTIFICATION
You will be required to certify within 10 calendar days of commencement of employment, or the date on which you become an access person or supervised person, that you have read and understand the Code and recognize that you are subject to the Code. In addition, you may be required to certify that you have read and understand the provisions of the Code if your position within Pioneer changes and when the Code is amended. Certifications must be submitted to the Compliance Department using the form or system provided.
ANNUAL CERTIFICATION
On an annual basis, you will be expected to certify that:
o You have received a copy of the then current Code;
o You have read and understand the Code and recognize that you are subject to the Code's requirements;
o You have complied with all applicable requirements of the Code.
Generally, this certification must be completed by February 15th of each year or any other date that is determined by the Chief Compliance Officer.
CODE OF BUSINESS CONDUCT
All supervised persons of Pioneer are subject to Pioneer's Code of Business Conduct. The Code of Business Conduct sets out standards for associates dealing with potentially complex ethical decisions. The Code of Business Conduct also provides basic information to associates regarding Pioneer's procedures for reporting conflicts of interest and raising other issues of concern. You should be aware that violations of the Code of Business Conduct that result in a violation of the federal securities laws of the United States or conflict with Pioneer's fiduciary obligations to its clients shall be deemed to be a violation of this Code.
Associates that are employed by Pioneer Investment Management Limited ("PIML") are subject to PIML's Conflict of Interest Policy.
INSIDER TRADING
In addition to the requirements of this Code, all associates of Pioneer are subject to Pioneer's policies and procedures regarding Insider Trading. Pioneer's Insider Trading policies and procedures prohibit associates from buying or selling any security while in possession of material nonpublic information about the issuer of the security. The policy also prohibits associates from communicating to third parties any material nonpublic information about any security or issuer of securities. Any violation of Pioneer's policies and procedures on Insider Trading that adversely affect a client shall be deemed to be a violation of this Code.
Associates that are employed by Pioneer Investment Management Limited ("PIML") are subject to PIML's Insider Dealing Policy.
II. PERSONAL INVESTING PROVISIONS APPLICABLE TO ACCESS PERSONS
REPORTING REQUIREMENTS
You must report the information set forth below to the Compliance Department. Any report provided under this section may contain a statement that the report shall not be construed as an admission by the person making the report that he or she has any direct or indirect beneficial ownership in the security to which it relates. The Code applies to any reportable security in which an access person has any direct or indirect beneficial ownership.
HOLDINGS REPORTS
Initial holdings report
Within 10 calendar days of becoming an access person, you must disclose to
the Compliance Department all of your employee-related accounts and all
reportable securities holdings, including the holdings of any investment
company that is registered under the Investment Company Act of 1940 that
is advised or sub advised by Pioneer (reportable funds), that are
beneficially owned by you whether or not they are held in an
employee-related account. If the 10th day falls on a weekend or a holiday,
the report is due on the business day immediately preceding this deadline.
Initial holdings reports must be submitted to the Compliance Department using the form or system provided and must contain information that is current as of a date no more than 45 calendar days prior to becoming an access person.
If you become the beneficial owner of another person's securities (e.g., by marriage to the owner of the securities), then transactions in those securities also become subject to the reporting and pre-clearance requirements of the Code. You must report your beneficial ownership of these securities within 10 calendar days of your knowledge of their existence. Additionally, any changes to the registration of a security (i.e., transfers from one account into another) must be reported to the Compliance Department within 10 calendar days of your knowledge of the change.
Annual holdings report
On an annual basis, you are required to report to the Compliance
Department all of your employee-related accounts and all reportable
securities including reportable funds beneficially owned by you other than
through a Pioneer Account, whether or not they are held in an
employee-related account, using the form or system provided. The annual
holdings report must be submitted to the Compliance Department by February
15 of each year and must contain information that is current as of
December 31 of the prior year.
TRANSACTION REPORTS
U.S. access persons
U.S. access persons employed by Pioneer must direct their brokers to
provide duplicate copies of confirmations of transactions in reportable
securities including reportable funds other than those held through
Pioneer Accounts, and duplicate copies of all periodic statements related
to their employee-related account(s) to the following address:
Pioneer Investment Management, Inc. Compliance Department 60 State Street Boston, Massachusetts 02109
Such instructions must be made promptly upon becoming an access person and as new accounts are established, but no later than 10 calendar days after the end of a calendar quarter in which such account was established. You may arrange for a request to be sent directly to your brokerage firm from the Compliance Department.
If you are unable to arrange for duplicate copies of confirmations and periodic account statements to be sent to Pioneer in a timely manner, you must immediately notify Compliance.
Non-U.S. access persons
Access persons employed by a non-U.S. based affiliate of Pioneer must
report their personal securities transactions to Pioneer's Compliance
Department within 30 calendar days after the close of each calendar
quarter using the form or system provided by the Compliance Department.
Quarterly transaction reports must list all brokerage accounts opened or
closed and all reportable securities transactions executed during the
quarter. Quarterly transaction reports must be submitted even if you did
not enter into any transactions or open any accounts during the quarter.
EXCEPTIONS TO REPORTING REQUIREMENTS
You do not need to report:
o Transactions and holdings in securities or instruments that are not reportable securities;
o Purchase transactions effected pursuant to an automatic investment plan. Holdings in automatic investment plans are reportable;
o Securities held in accounts over which the access person or investment person has no direct or indirect influence or control, which includes securities held in an account managed for an access person or investment person on a discretionary basis by someone else. All such accounts must be approved by the Compliance Department. In addition, to rely on this exception you must arrange for your broker or adviser to submit a discretionary authorization letter or equivalent to the Compliance Department;
o Transactions and holdings in a 529 Plan (accounts in 529 Plan accounts are required to be reported);
o Interests in variable annuity or life insurance products.
o UCITS and other equivalent non-U.S. funds which are similar in structure to open-end U.S. mutual funds that are not advised by Pioneer or its affiliates. Please contact the Compliance department if you need guidance on which non-U.S. funds this exception applies to;
o Futures on direct obligations of the government of the United States;
o Transactions and holdings in currency;
o Transactions and holdings in commodities.
PRE-CLEARANCE REQUIREMENTS
One of the most important objectives of this Code is to prevent you from making personal trades on the basis of information about securities transactions made for Pioneer's clients. Trading on such information for personal benefit constitutes a violation of this Code. To reduce the possibility of a conflict with a client transaction, except as otherwise permitted by this Code, access persons must pre-clear all personal transactions in reportable securities (excluding reportable funds).
By seeking pre-clearance, you will be deemed to be certifying to Pioneer that you:
o Do not possess any material nonpublic information relating to the security;
o Are not using knowledge of any proposed trade or investment program relating to Pioneer's clients for personal benefit;
o Believe the proposed trade is available to any market participant on the same terms; and
o Will provide any other relevant information requested by the Compliance Department.
As part of the pre-clearance process, you will be deemed to be certifying that all accounts opened and all transactions executed during the calendar quarter have been reported and you are required to review your account(s) holdings information in the Personal Trading Assistant (PTA) system prior to submitting any pre-clearance request. You must notify the Compliance Department immediately if the information recorded therein is in any way inaccurate.
Pre-clearance approvals may be considered invalid if it is discovered that the information provided at the time the transaction was approved is no longer accurate. You may not seek to pre-clear any transaction which, if approved and executed, would violate this Code.
DE MINIMIS EXCEPTION
Transactions by U.S access persons in reportable securities with a value of US$10,000 or less (or its non-U.S. equivalent) of an issuer with a market capitalization of US$3 billion or greater will be approved ("De Minimis Exception") provided the access person is deemed to have no prior knowledge of activity in such security by any client. For non-U.S. access persons the De Minimis Exception transaction limit is (euro)8,000 (this amount may be adjusted periodically due to exchange rate changes) or less provided the security is listed on a regulated exchange.
Multiple transactions in a single day of a single security will be aggregated for purposes of this exemption.
De Minimis transactions in reportable securities must be entered as a pre-clearance request on trade date for monitoring and record keeping purposes. Failure to submit a pre-clearance request for De Minimis Exception transactions for reporting purposes is a violation of the Code.
EXCEPTIONS TO PRE-CLEARANCE REQUIREMENTS
The following transactions do not require pre-clearance:
o Transactions in reportable funds held in Pioneer Savings and Investment Plan, Pioneer Retirement Benefit Plan, Pioneer Investment Management Bonus Deferral Plan, Pioneer Voluntary Bonus Deferral Plan, Pioneer Performance and Retention Incentive Compensation Plan and the Pioneer Intermediate Deferred Compensation Award Plan;
o Transactions in sovereign debt of foreign governments;
o Transactions in non-U.S. funds or UCITS or equivalent funds that are similar in structure to open-end U.S. mutual funds;
o Transactions in pre-approved non-discretionary accounts;
o Involuntary purchases or sales of securities (e.g., stock splits and other similar corporate actions, an in-the-money option that is exercised automatically by a broker or the issuer of the shares; a security that is called away as a result of an exercise of an option; or a security that is sold by a broker, without your consultation, to meet a margin call not met by you);
o Transactions effected pursuant to an automatic investment plan;
o Rights offerings (i.e., purchases of securities effected upon the exercise of rights issued by an issuer proportionately to all holders of a class of its securities, to the extent such rights were acquired by associates from the issuer, and sales of such rights so acquired);
o Tender offers that are involuntary (i.e., tenders of securities pursuant to tender offers that are expressly conditioned on the tender offeror's acquisition of all of the securities of the same class). This exemption does not apply to tenders of securities pursuant to any other tender offer;
o Transactions in securities that are not reportable securities;
o Transactions in a 529 Plan;
o Futures on broad based indices;
o Acquisition of securities through inheritance; and
o The giving or receipt of a security as a gift.
HOW DO I PRE-CLEAR TRANSACTIONS?
Procedures for obtaining pre-clearance for all securities transactions other than private placements
Requests for pre-clearance of securities transactions other than private placements and initial and secondary public offerings must be made using PTA pre-clearance system, which is available on Navigator US. Private placements and initial and secondary public offerings must be pre-cleared manually by the Compliance Department.
If PTA is not available, pre-clearance requests may be made in writing, or by electronic mail. All pre-clearance requests must include the name of the security, a definitive security identifier (e.g., CUSIP, ticker, or SEDOL), the number of shares or amount of bonds involved, and the nature of the transaction, i.e., whether the transaction is a purchase or sale. Responses to all requests will be made either through PTA or the Compliance Department will document the request and confirm whether or not pre-clearance has been granted. The Compliance Department maintains a record of all approval and denials.
Requests normally will be processed on the same day however, additional time may be required to pre-clear certain securities transactions.
Pre-clearance requests can only be submitted through PTA and/or to the Compliance Department within the designated pre-clearance timeframe. For U.S. access persons all approved transactions must be executed by 4:00 p.m. Eastern time on the day the approval is granted. Non-U.S. access persons must execute all approved transactions by either the end of the business day in which the approval was granted, or no later than the end of the next business day after approval is granted in their time zone. If you decide not to execute the transaction during the pre-clearance period, or the entire trade is not executed, you must request pre-clearance again at such time as you decide to execute or complete the trade.
You may not place any "good until canceled" or "limit" or equivalent order with any broker other than a limit order that is good for that day only.
For pre-clearance purposes, derivative transactions are treated as transactions in the underlying security.
Procedures for obtaining pre-clearance for private placements
You must obtain prior written approval from the Compliance Department and the Head of Portfolio Management US before purchasing or selling, directly or indirectly, a security in a private placement. In considering whether to approve a transaction in a private placement, the Compliance Department and the Head of Portfolio Management US, or his or her designee, will take into account whether the investment opportunity should be reserved for a client and whether the opportunity is being offered to you by virtue of your position with or relationship to a client. If you are an investment person and have been authorized to acquire securities in a private placement, you should be aware that this information will be disclosed to the Head of Portfolio Management US. In such circumstances, a client's decision to purchase securities of the issuer will be subject to an independent review by appropriate personnel with no personal interest in the issuer.
Procedures for obtaining pre-clearance for initial and secondary public offerings
You may not purchase any security in an initial public offering or in a secondary public offering or without first obtaining written approval from the Compliance Department and the Head of Portfolio Management US. Any approval will take into account whether the investment opportunity should be reserved for a client and whether the opportunity is being offered to you by virtue of your position with or relationship to a client. If you are an investment person and have been authorized to acquire securities in an initial public offering or a secondary public offering you should be aware that this information will be disclosed to the Head of Portfolio Management US or his or her designee.
PERMITTED BROKERAGE ACCOUNTS
U.S. access persons who begin their employment or otherwise became an access person with Pioneer after March 1, 2005, will be required to hold their reportable securities in an account with one of the following brokerage firms:
o Charles Schwab
o A.G. Edwards /Wachovia Securities
o Merrill Lynch
o Fidelity Brokerage
o TD Ameritrade
o E*Trade Financial
o Smith Barney Citigroup
o UBS Financial
o Morgan Stanley
o Scottrade
Access persons who began their employment or otherwise became access persons before March 1, 2005 will be required to open new brokerage accounts with one of the above listed brokerage firms.
New access persons will have 90 days from their date of hire or date they become an access person to transfer the existing accounts to a broker at one of the above brokerage firms. If your employment with Pioneer began before March 1, 2005, or you otherwise became an access person before March 1, 2005, you will be allowed to continue to hold your accounts with brokerage firms other than one of those named above. However, if you hold an account with a firm other than the above firm, and seek to move your account(s) to another firm, then you must use one of the above firms.
The restriction on brokerage accounts does not apply to non-discretionary accounts or accounts that are not capable of holding reportable securities.
Upon opening an account, you are required to disclose the account to the Compliance Department immediately after the account is opened. You must also agree to allow the broker-dealer to provide the Compliance Department with reports of employee-related accounts and transactions executed therein and to allow the Compliance Department to access all account information.
You are required to receive approval from the Compliance Department to maintain an employee-related account with broker-dealers other than those on the list. Permission to open or maintain employee-related accounts with a broker-dealer other than those on the list of approved brokers may not be granted or may be revoked if transactions are not reported as described above.
RESTRICTIONS ON PERSONAL INVESTMENTS
The restrictions in the Code apply equally to the covered transactions and to instruments related to the covered transaction. A related instrument is any security or instrument issued by the same entity as the issuer of the covered transaction, including options, rights, warrants, preferred stock, bonds and other obligations of that issuer or instruments otherwise convertible into securities of that issuer.
The restrictions and blackout periods listed below are designed to avoid conflict with our clients' interests. However, patterns of trading that meet the letter of the Code but are intended to circumvent the restrictions are prohibited. It is expected that you will comply with the restrictions below in good faith and conduct your personal securities transactions in keeping with the intended purpose of this Code.
ENGAGE IN ACTIVITIES FOR PERSONAL BENEFIT
You may not induce or cause a client to take action, or to fail to take action, when you intend for such action to benefit you personally rather than primarily the client. For example, you would violate this Code by causing a client to purchase or refrain from selling a security you owned for the purpose of supporting or increasing the price of that security.
PROFIT FROM KNOWLEDGE OF CLIENT TRANSACTIONS
You may not use your knowledge of client transactions to profit by the market effect of such transactions. This means that you may not purchase or sell a security when you knew, or should have known, that the security was being considered for any client. For example:
o You may not front-run any trade of a client (i.e., you may not knowingly
trade before a contemplated transaction for a client). You could be deemed
to be front-running if you:
o Purchase a security while knowing that Pioneer intended to purchase that
security for a client; or
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o Sell a security while knowing that Pioneer intended to sell that security for a client.
o You cannot purchase a security (or its economic equivalent) with the intention of recommending that the security be purchased for a client, or sell short a security (or its economic equivalent) with the intention of recommending that the security be sold for a client.
o You cannot:
o Buy a security if you know that Pioneer is buying the same or a related security for a client at the same time;
o Sell a security if you know that Pioneer is selling the same or a related security for a client at the same time; or
o Transact in securities of any issuer for which you possess material nonpublic information for yourself or any Pioneer client.
INTENTIONALLY EVADE THE PROSPECTUS REQUIREMENTS OF PIONEER FUNDS
All transactions in shares of a Pioneer fund must be consistent with the prospectus requirements applicable to the fund.
TRADING RESTRICTIONS
Access persons may not:
o Transact in reportable securities without pre-clearance, with the exception of reportable funds.
o Perform intraday trading, that is buying and selling the same security (even for a different quantity) in the same day.
o Fail to disclose personal interests in recommended securities. You may not recommend any securities transaction for a client without disclosing in advance any interest that you or any member of your immediate family has in such security or the issuer thereof to the Head of Portfolio Management US or the person expected to act on such recommendation. You may not participate in the decision to purchase and sell securities of such issuer for a client. Factors that should be disclosed include, but are not limited to:
o Your beneficial ownership of any securities of such issuer;
o Any contemplated transaction by you in such securities;
o Any position with such issuer or its affiliates held by you or any member of your immediate family; and
o Any present or proposed business relationship (including employment) between such issuer or its affiliates and you or any member of your immediate family or any party in which you or any member of your immediate family have a significant interest.
o Participate in investment clubs.
ACCOUNTS OF OTHER PEOPLE
Investment persons may not manage discretionary accounts of persons outside of your immediate family. You may not exercise investment discretion over accounts in which you have no beneficial interest. If you wish to apply for a waiver, you must contact the Compliance Department.
BLACKOUT DATES FOR TRADING
Investment persons may not buy or sell a security within seven calendar days before or after a client trades in the same security. You will not be deemed to have violated this restriction if your trade occurs within the seven-day period prior to the client trade, you did not know and had no reason to believe that a trade for a client in such security was being considered, and your transaction was pre-cleared.
Access persons may not buy or sell a security on the same day a client trades in that security except for pre-cleared transactions.
DERIVATIVES
Access persons cannot use derivatives including futures, options on futures, or options or warrants on a reportable security to evade the restrictions of the Code. Trading in listed and unlisted options (including naked options), other than listed option transactions in broad based indices, and speculative strategies such as spreads and straddles in reportable securities are not permitted.
EXCESSIVE TRADING
You are discouraged from trading excessively. Pioneer strongly discourages high levels of personal trading activity and monitors such activity. If it is determined that you have engaged in a pattern of excessive trading, Pioneer may place restrictions on your personal trading or take other disciplinary action.
SHORT SALES
No access person may sell a reportable security short.
HOLDING PERIOD
No access person may profit from the purchase and sale, or sale and purchase, of the same (or equivalent) reportable security excluding reportable funds, within 60 calendar days from the date of the purchase or sale. Transactions in reportable fund transactions must be consistent with the prospectus requirements applicable to each fund and monitored by each fund's transfer agent.
This provision does not apply to transactions in reportable securities that are exempt from pre-clearance described above.
EXCEPTIONS PERTAINING TO NON-U.S. PERSONS
The following exceptions have been approved for non-U.S. access persons that are employed by Pioneer Investment Management Limited ("PIML"):
o Requests for pre-clearance of securities transactions are pre-cleared manually by the Compliance Department using the forms and procedures provided by PIML's Compliance Department.
o Initial Certifications are completed using the forms or system provided by PIML's Compliance Department;
o The De Minimis Exception transaction limit is (euro)8,000 (this amount may be adjusted periodically due to exchange rate changes) or less, provided the security is listed on a regulated exchange.
o All approved transactions must be executed by either the end of the business day in which the approval was granted, or no later than the end of the next business day after approval is granted in the access person's time zone.
o The Code's trading prohibitions relating to blackout and derivative trading will not apply to the PIML access persons provided it is determined by PIML's Compliance Department during the pre-clearance approval process that there is no conflict or potential conflict with the U.S. clients' interests. This analysis will include a review and a written determination that there is no conflict with U.S. clients' transactions and holdings in covered transactions and to instruments related to the covered transaction.
III. ADMINISTRATION AND ENFORCEMENT The Compliance Department is charged with oversight and interpretation of the Code in a manner considered fair and equitable, in all cases placing Pioneer's clients' interests first.
The Compliance Department will inform you if you are considered an access person under the Code. Pioneer shall use reasonable diligence and institute procedures reasonably necessary to prevent violations of the Code.
A copy of the Code is available on Navigator US. Likewise, any amendments to the Code will be posted on Navigator US promptly after they become available. Associates will be given notice of all changes to, or restatements of, the Code.
Acknowledgement of, and compliance with, the Code is a condition of employment with Pioneer. The Code does not create any obligations to any person or entity other than Pioneer. The Code is not a promise or contract, and it may be modified at any time. Pioneer retains the discretion to decide whether the Code applies to a specific situation, and how it should be interpreted.
REVIEW
The Compliance Department will review on a regular basis the reports filed pursuant to the Code. In this regard, special attention will be given to evidence, if any, of potential violations of the antifraud provisions of the federal securities laws or the procedural requirements or ethical standards set forth in the Code.
REPORTING VIOLATIONS OF THE CODE
Pioneer relies upon you to report promptly any conduct you believe to be a violation of the Code. You must report violations or suspected violations of the Code to the Compliance Department or a Pioneer lawyer. All such reports or inquiries will be subject to investigation.
Pioneer will not tolerate any form of retaliation against an associate who lodges a good faith report of a violation or suspected violation or cooperates in an investigation. Where retaliation is found to have occurred, the offending party will be subject to disciplinary action, up to and including termination of employment. Pioneer also reserves the right to take corrective action against an associate if, upon investigation, it determines that the associate was dishonest or malicious in making the report or providing information to investigators.
In conducting an investigation, Pioneer will attempt to keep the identities of the associate reporting the suspected violation and of witnesses confidential. Where this is not possible, information will be disclosed only as necessary to conduct the investigation and to permit members of management to ensure the efficiency and security of Pioneer's business activities. Where a report involves a violation of a law or regulation, Pioneer may also be obligated to make certain information available to clients or former clients, the Securities and Exchange Commission or to other authorities.
VIOLATIONS AND SANCTIONS
Compliance with the Code is expected and violations of its provisions are taken seriously. You must recognize that the Code is a condition of employment with Pioneer, and a serious violation of the Code or related policies may result in termination of your employment. Since many provisions of the Code also reflect provisions of the U.S. Securities laws, you should be aware that violations could also lead to regulatory enforcement action resulting in suspension or expulsion from the securities business, fines and penalties, and imprisonment.
Federal law requires that the Code must not only be adopted, but must be enforced with reasonable diligence. The Compliance Department will keep records of any violation of the Code and of the actions taken as a result of such violations.
Sanctions
Violations of this Code may result in the imposition of the sanctions as
published by the Compliance Department from time to time. These sanctions
may include, but are not limited to: terminating or suspending your
employment; suspending your personal trading privileges; issuing a letter
of censure or warning; requiring you to pay a fine; requiring you to
compensate the affected client for an amount equal to the advantage you
gained by reason of such violation; and requiring you to reverse the
trade(s) at issue and forfeit any profit or absorb any loss from the
trade.
In deciding whether to impose sanctions, Pioneer may take into account any factors that it determines to be appropriate in imposing sanctions, which may include, but are not limited to, your history of compliance, the nature of the violation, whether the violation was intentional or inadvertent and any harm suffered by a client. Violations of this Code also may result in criminal prosecution or civil action. Violations will be removed from your personnel record after a period of five years from the date of the violation.
HARDSHIP EXEMPTIONS
In cases of hardship, the CCO or their designee can grant exemptions from the restrictions in the Code. The decision will be based on a determination that a hardship exists and that the transaction for which an exemption is requested would not result in a conflict with Pioneer's clients' interests or violate any other policy embodied in this Code. Other factors that may be considered include: the size and holding period of your position in the security, the market capitalization of the issuer, the liquidity of the security, the amount and timing of client trading in the same or a related security, and other relevant factors.
If you are seeking an exemption you should submit a written request to the CCO, setting forth the nature of the hardship along with any pertinent facts and reasons why you believe the exemption should be granted. You are cautioned that exemptions are intended to be exceptions, and repetitive requests for exemptions are not likely to be granted.
Records of the approval of exemptions and the reasons for granting exemptions will be maintained by the Compliance Department.
APPEALS
If you believe you have been treated unfairly by any action rendered with respect to a violation of the Code or a waiver request, you may appeal the determination by providing the Compliance Department with a written explanation within 30 calendar days of being informed of such determination. If appropriate, the Compliance Department will arrange for a review by senior management of Pioneer will advise you whether the action will be imposed, modified or withdrawn.
REPORTING TO THE MANAGEMENT COMMITTEE
Once a year, the CCO will prepare a report for the Management Committee of Pioneer Investment Management USA Inc. that will:
o Summarize current procedures under the Code and changes to those procedures since the prior report;
o Describe any issues arising under the Code since the last report to the Board or the Management Committee, including, but not limited to, information about material violations of the Code and sanctions imposed in response to the material violations; and
o Discuss any recommended changes to the Code.
CONFIDENTIALITY
Normally, Pioneer will keep all information obtained under this Code in
strict confidence. However, violations will be reported to senior
management and Pioneer may report information to third parties under
certain circumstances. For example, Pioneer may make reports of securities
transactions and violations of this Code available to clients or former
clients, the Securities and Exchange Commission or any other regulatory or
self-regulatory organization to the extent required by law or regulation,
or to other civil or criminal authorities if Pioneer considers it to be
necessary or advisable.
INTERPRETATION
Pioneer may, from time to time, adopt such interpretations of this Code as
Pioneer deems appropriate.
QUESTIONS AND EDUCATIONAL MATERIALS
You are encouraged to bring to the Compliance Department any questions you
may have about interpreting or complying with this Code about securities,
accounts or personal trading activities of associates or your family or
household members, about your legal or ethical responsibilities, or about
similar matters that may involve this Code. U.S associates of Pioneer
should contact Geraldine Leahy or Leah Rumbaua with any questions.
Associates of Pioneer Investment Management Limited should contact
Veronica Brennan and associates of Pioneer Global Asset Management S.p.A.
should contact Cristina Costigliolo.
Compliance may from time to time circulate educational materials or bulletins designed to assist you in understanding and carrying out your duties under this Code.
IMPORTANT TERMS
Term Definition
Access person Access person is defined as any person
included in the definition of "access person"
under Rule 17j-1(a) under the Investment Company
Act of 1940 or Rule 204A-1 under the Investment
Advisers Act of 1940. Generally, you are an
"access person" if you are a "supervised person"
of Pioneer and:
o Are an officer, or director or employee of
Pioneer;
o Have access to information regarding the
purchase or sale of a security by
Pioneer for its clients;
o Have access to information regarding
recommendations of securities to
client or whose function relates to the making
of such recommendations;
o Have access to nonpublic information regarding
any clients' purchase or
sale of securities or regarding the holdings
of any fund advised or sub-advised by Pioneer;
or
o Are an investment person.
Generally, examples of "access to information"
would include having access to trading systems
(e.g., CRD or PMA), portfolio accounting systems
(e.g., MFact), research databases, or settlement
information. Access persons typically include
associates in the following departments:
o Fund accounting;
o Investment operations;
o Information services & technology;
o Product management;
o Legal and compliance; and
o Risk.
The Compliance Department will determine who is
an access person under the Code of Ethics.
Associate Associate means an employee, including a
temporary employee, and an independent
contractor.
Automatic investment Automatic investment plan means a program in
plan which regular periodic purchases (or withdrawals)
are made automatically in (or from)
investment accounts in accordance with a
predetermined schedule and allocation. An
automatic investment plan includes a dividend
reinvestment plan.
Beneficial ownership Beneficial ownership is interpreted in
the same manner as it would be under Rule
16a-1(a)(2) of The Securities Exchange Act of
1934 (the "Exchange Act") determining whether a
person is the beneficial owner of a security for
purposes of section 16 of the Exchange Act and
the rules and regulations thereunder.
Generally, you have beneficial ownership in a
security if you have the opportunity directly or
indirectly to receive or share in any profit
derived from a transaction in the security,
whether or not the security or the relevant
account is in your name or is held in an ordinary
brokerage or retirement plan account. The
ultimate determination of whether you have
beneficial ownership in a security or an account
depends on the facts of your particular case. Key
factors you should consider are your ability to
benefit from the proceeds of the security, and
the degree to which you exercise control over the
security.
You are generally presumed to be the beneficial
owner of:
o Securities held by you, your
spouse/domestic partner or members of
your immediate family sharing your
household;
o Securities held by a trust, in which
you have a direct or
indirect pecuniary interest;
o Your proportionate interest in
securities held by a partnership,
corporation or similar entity under
your control;
o Securities held by an unmarried
person with whom you share your
household and combine your
financial resources in a manner
similar to that of married persons;
and
o Securities you have a right to
acquire through the exercise or
conversion of a "derivative
security."
CCO Chief Compliance Officer of Pioneer Investment
Management, Inc ("PIM") and /or the Chief
Compliance Officer of Pioneer Institutional Asset
Management, Inc ("PIAM").
Derivative A financial security, such as an option or
future, whose characteristics and value depend on
the characteristics and value of an underlying
security. A convertible bond is not a derivative
for the purposes of this Code of Ethics.
Employee-related An employee-related account is an account in
account which securities are held account for your
benefit. It includes, but is not limited to:
o Your own accounts and accounts "beneficially
owned" by you;
o Your spouse's/domestic partner's accounts and
the accounts of any members of your immediate
family sharing your household; and
o Accounts in which you, your
spouse/domestic partner, or members
of your immediate family sharing
your household have a beneficial
interest.
Immediate family Any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, sibling,
mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships.
Initial public This means any offering of securities registered
offerings under the Securities Act of 1933 the issuer of
which immediately before the offering, was not
subject to the reporting requirements of
Section 13 or 15(d) of the
Securities Act of 1934.
Investment This encompasses any influence
discretion (whether it is sole or shared, direct or
indirect) that you exercise over an account or
reportable security. It includes the power to
manage, trade or give instructions concerning the
investment disposition of assets in an account or
to approve or disapprove transactions in an
account.
Investment persons You are an "investment person" if you:
o Are involved in making securities
recommendations to clients; or
o Are a portfolio management, research or trading
associate.
Pioneer Account Each of Pioneer Savings and Investment
Plan, Pioneer Retirement Benefit Plan, Pioneer
Investment Management Bonus Deferral Plan,
Pioneer Voluntary Bonus Deferral Plan, Pioneer
Performance and Retention Incentive Compensation
Plan and the Pioneer Intermediate Deferred
Compensation Award Plan or any other account held
directly through Pioneer.
Private placement An offering of securities that is
exempt from registration pursuant to Section 4(2)
or Section 4(6) or pursuant to Rules 504, 505 or
506 under the Securities Act of 1933 and other
similar non-U.S. securities. Private placements
include, but are not limited to, private equity
partnerships, hedge funds, limited partnerships
and venture capital funds.
Reportable fund A reportable fund is any open-end
US mutual fund advised or
sub-advised by PIM or distributed by Pioneer
Funds Distributor ("PFD") (e.g., the Pioneer
Funds). Such funds generally include the Pioneer
Funds, Pioneer's VCT Portfolios, and any funds
for which Pioneer serves as subadviser. A
complete list of reportable funds is available on
Navigator US under Business Units / Legal &
Compliance / [name]/ [name].
Reportable security Reportable security means a security as
defined by section 2(a)(36) of the Investment
Company Act of 1940. The term "reportable
security" is very broad and includes stocks,
bonds, including convertible and preferred
securities, ADRs and GDRs, warrants and rights
and other instruments you might not ordinarily
think of as securities, such as:
o All kinds of limited partnerships;
o Limited Liability Company Interests;
o Private investment funds, hedge funds and
investment clubs;
o Futures on securities;
o Options on securities;
o Closed-end funds;
o Exchange-traded funds; and
o 529 plans (legally known as
"qualified tuition plans" sponsored
by states, state agencies or
educational institutions and
authorized by Section 529 of the
Internal Revenue Code).
Reportable securities do not include:
o Direct obligations of the government of the
United States (note that securities issued
by agencies or instrumentalities of the
U.S. government (e.g., GNMA obligations),
municipal obligations and obligations of
other governments are reportable securities);
o Bankers' acceptances;
o Bank certificates of deposit;
o Commercial paper;
o High quality short-term debt instruments,
including repurchase agreements; and
o Shares of open-end investment
companies registered under the
Investment Company Act of 1940, as
amended that is not advised or
subadvised by PIM.
Secondary Public Is a registered offering of a block of a
Offering reportable security which had been previously
issued to the public.
Supervised Person "Supervised person" means any partner,
officer, director (or any other person occupying
a similar status or performing similar
functions), or employee of Pioneer, or other
person who provides investment advice on behalf
of the investment adviser and is subject to the
supervision and control of the investment
adviser.
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POWER OF ATTORNEY
I, the undersigned trustee or officer of the investment companies listed on Annex A for which Pioneer Investment Management, Inc. or one of its affiliates acts as investment adviser (each, a "Trust" and collectively, the "Trusts"), hereby constitute and appoint Dorothy E. Bourassa, John F. Cogan, Jr., Daniel K. Kingsbury and Mark E. Bradley, and each of them acting singly, to be my true, sufficient and lawful attorneys, with full power to each of them to sign for me, in my name, (i) any Registration Statement on Form N-1A, N-2 or any other applicable registration form under the Investment Company Act of 1940, as amended, and/or under the Securities Act of 1933, as amended, and any and all amendments thereto filed by each Trust, of which I am now, or am on the date of such filing, a Trustee or officer of the Trust, (ii) any application, notice or other filings with the Securities and Exchange Commission, and (iii) any and all other documents and papers relating thereto, and generally to do all such things in my name and on behalf of me to enable each Trust to comply with the Investment Company Act of 1940, as amended, and the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, hereby ratifying and confirming my signature as it may be signed by said attorneys, or each of them, to any and all Registration Statements and amendments to said Registration Statements, including any amendments to establish a new series of a Trust, and any other filings with the Securities and Exchange Commission on behalf of each Trust.
IN WITNESS WHEREOF, I have hereunder set my hand as of this 30th day of May, 2008.
/s/ Benjamin M. Friedman --------------------------- Benjamin M. Friedman |
POWER OF ATTORNEY
ANNEX A
Pioneer Bond Fund * Pioneer Series Trust IV: *, +, ++
Pioneer Diversified High Income Trust + Pioneer Classic Balanced Fund
Pioneer Emerging Markets Fund Pioneer Government Income Fund
Pioneer Equity Income Fund Pioneer Institutional Money Market Fund
Pioneer Equity Opportunity Fund Pioneer Treasury Reserves Fund
Pioneer Floating Rate Trust + Pioneer Series Trust V:
Pioneer Fund * Pioneer Global Select Equity Fund
Pioneer Fundamental Growth Fund Pioneer High Income Municipal Fund
Pioneer Growth Shares Pioneer Oak Ridge All Cap Growth Fund
Pioneer High Income Trust + Pioneer Select Research Growth Fund
Pioneer High Yield Fund Pioneer Select Research Value Fund
Pioneer Ibbotson Allocation Series: * Pioneer Series Trust VI:
Pioneer Ibbotson Aggressive Allocation Fund Pioneer Floating Rate Fund
Pioneer Ibbotson Conservative Allocation Fund Pioneer Series Trust VII:
Pioneer Ibbotson Growth Allocation Fund Pioneer Global High Yield Fund
Pioneer Ibbotson Moderate Allocation Fund Pioneer Global Aggregate Bond Fund
Pioneer CityplaceIndependence Fund Pioneer Global Diversified Equity Fund
Pioneer Interest Shares Pioneer Series Trust VIII:
Pioneer International Equity Fund Pioneer International Value Fund
Pioneer Mid Cap Growth Fund Pioneer Series Trust IX:
Pioneer Mid Cap Value Fund * Pioneer Europe Select Equity Fund
Pioneer Money Market Trust: * Pioneer Short Term Income Fund *
Pioneer Cash Reserves Fund Pioneer Small Cap Value Fund
Pioneer Municipal and Equity Income Trust + Pioneer Strategic Income Fund
Pioneer Municipal High Income Trust + Pioneer Tax Free Income Fund *
Pioneer Municipal High Income Advantage Trust + Pioneer Value Fund *
Pioneer Protected Principal Trust: Pioneer Variable Contracts Trust: *
Pioneer Protected Principal Plus Fund Pioneer Bond VCT Portfolio
Pioneer Protected Principal Plus Fund II Pioneer Cullen Value VCT Portfolio
Pioneer Real Estate Shares Pioneer Emerging Markets VCT Portfolio
Pioneer Research Fund Pioneer Equity Income VCT Portfolio
Pioneer Select Growth Fund Pioneer Fund VCT Portfolio
Pioneer Select Value Fund Pioneer Global High Yield VCT Portfolio
Pioneer Series Trust I: * Pioneer Growth Opportunities VCT Portfolio
Pioneer Oak Ridge Large Cap Growth Fund Pioneer Growth Shares VCT Portfolio
Pioneer Oak Ridge Small Cap Growth Fund Pioneer High Yield VCT Portfolio
Pioneer Series Trust II: * Pioneer Ibbotson Aggressive Allocation VCT Portfolio
Pioneer AmPac Growth Fund Pioneer Ibbotson Growth Allocation VCT Portfolio
Pioneer AMT-Free CA Municipal Fund Pioneer Ibbotson Moderate Allocation VCT Portfolio
Pioneer AMT-Free Municipal Fund Pioneer International Value VCT Portfolio
Pioneer Growth Leaders Fund Pioneer Mid Cap Value VCT Portfolio
Pioneer Growth Opportunities Fund Pioneer Money Market VCT Portfolio
Pioneer Small and Mid Cap Growth Fund Pioneer Oak Ridge Large Cap Growth VCT Portfolio
Pioneer Tax Free Money Market Fund Pioneer Real Estate Shares VCT Portfolio
Pioneer Series Trust III: Pioneer Small Cap Value VCT Portfolio
Pioneer Cullen Value Fund Pioneer Strategic Income VCT Portfolio
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+ Mr. Friedman is not a Trustee of this Trust.
++ Mr. Kingsbury is not a Trustee of this Trust.
* Mr. West is not a Trustee of this Trust.