As filed with the Securities and Exchange Commission on December 27, 2017
File Nos. 333-120144
811-21664
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. ___ [ ]
Post-Effective Amendment No. 21 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 22 [X]
(Check appropriate box or boxes)
(Check appropriate box or boxes)
PIONEER SERIES TRUST III
(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
Terrence J. Cullen, Amundi Pioneer Asset Management, Inc.
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 December 31, 2017 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.
PIONEER
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DISCIPLINED VALUE FUND
Class A Shares (CVFCX)
Class C Shares (CVCFX)
Class K Shares (---)
Class R Shares (CVRFX)
Class Y Shares (CVFYX)
Prospectus, December 31, 2017
CONTENTS
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Fund summary................................... 1
More on the fund's investment objective
and strategies................................. 13
More on the risks of investing in the fund..... 17
Management..................................... 27
Pricing of shares.............................. 29
Choosing a class of shares..................... 31
Distribution and service arrangements.......... 34
Sales charges.................................. 37
Buying, exchanging and selling shares.......... 45
Account options................................ 57
Shareholder services and policies.............. 61
Dividends, capital gains and taxes............. 68
Financial highlights........................... 71
Intermediary defined sales charge waiver
policies....................................... 76
Neither the Securities and Exchange Commission nor any state securities agency
has approved or disapproved the fund's shares
[GRAPHIC APPEARS HERE]
or determined whether this prospectus is accurate or complete. Any
representation to the contrary is a crime.
An investment in the fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.
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Contact your investment professional to discuss how the fund may fit
into your portfolio.
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Fund summary
INVESTMENT OBJECTIVE
Long-term capital growth.
FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.
You may qualify for sales charge discounts if you or your family invest, or
agree to invest in the future, at least $50,000 in Class A shares of the
Pioneer funds. More information about these and other discounts is available
from your investment professional and in the "Sales charges" section of the
prospectus beginning on page 37, the "Intermediary defined sales charge waiver
policies" section of the prospectus beginning on page 76, and the "Sales
charges" section of the statement of additional information beginning on page
53.
SHAREOWNER FEES
(fees paid directly from your investment) CLASS A CLASS C CLASS K CLASS R CLASS Y
-------------------------------------------------- --------- --------- --------- --------- --------
Maximum sales charge (load) when you buy
shares (as a percentage of offering price) 5.75% None None None None
-------------------------------------------------- ------ --------- --------- --------- --------
Maximum deferred sales charge (load) (as a
percentage of offering price or the amount you
receive when you sell shares, whichever is less) None/1/ 1% None None None
-------------------------------------------------- ------ --------- --------- --------- --------
ANNUAL FUND OPERATING EXPENSES
(expenses that you pay each year
as a percentage of the value of
your investment) CLASS A CLASS C CLASS K CLASS R CLASS Y
----------------------------------------------- --------- --------- --------- --------- --------
Management Fees 0.65% 0.65% 0.65% 0.65% 0.65%
----------------------------------------------- ---- ---- ---- ----- ----
Distribution and Service (12b-1) Fees 0.25% 1.00% 0.00% 0.50% 0.00%
----------------------------------------------- ---- ---- ---- ----- ----
Other Expenses/2/ 0.25% 0.24% 0.09% 0.39% 0.19%
----------------------------------------------- ---- ---- ---- ----- ----
Total Annual Fund Operating Expenses 1.15% 1.89% 0.74% 1.54% 0.84%
----------------------------------------------- ---- ---- ---- ----- ----
Less: Fee Waiver and Expense Reimbursement/3/ 0.00% 0.00% 0.00% -0.14% 0.00%
----------------------------------------------- ---- ---- ---- ----- ----
Net Expenses/3/ 1.15% 1.89% 0.74% 1.40% 0.84%
----------------------------------------------- ---- ---- ---- ----- ----
1 Class A purchases of $500,000 or more that are not subject to an initial
sales charge may be subject to a contingent deferred sales charge of 1%.
See "Sales charges."
2 Other expense for Class K shares are estimated for the current year.
3 The fund's investment adviser has contractually agreed to limit ordinary
operating expenses (ordinary operating expenses means all fund expenses
other than taxes, brokerage commissions, acquired fund fees and expenses,
and extraordinary expenses, such as litigation) to the extent required to
reduce fund expenses
1
Fund summary
to 1.40% of the average daily net assets attributable to Class R shares.
The expense limitation is in effect through January 1, 2019. There can be
no assurance that the adviser will extend the expense limitation beyond
such time. While in effect, the arrangement may be terminated for a class
only by agreement of the adviser and the Board of Trustees.
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds. The example assumes that you
invest $10,000 in the fund for the time periods shown and then, except as
indicated, redeem all of your shares at the end of those periods. It also
assumes that (a) your investment has a 5% return each year and (b) the fund's
total annual operating expenses remain the same except for year one (which
considers the effect of the expense limitation). Although your actual costs may
be higher or lower, based on these assumptions your costs would be:
IF YOU REDEEM YOUR SHARES IF YOU DO NOT REDEEM YOUR SHARES
-------------------------------------- --------------------------------------
NUMBER OF YEARS YOU OWN YOUR SHARES
------------------------------------------------------------------------------
1 3 5 10 1 3 5 10
------- ------- --------- --------- ------- ------- --------- ---------
Class A $685 $919 $1,172 $1,892 $685 $919 $1,172 $1,892
--------- ---- ---- ------ ------ ---- ---- ------ ------
Class C 292 594 1,021 2,212 192 594 1,021 2,212
--------- ---- ---- ------ ------ ---- ---- ------ ------
Class K 76 237 411 918 76 237 411 918
--------- ---- ---- ------ ------ ---- ---- ------ ------
Class R 143 473 826 1,823 143 473 826 1,823
--------- ---- ---- ------ ------ ---- ---- ------ ------
Class Y 86 268 466 1,037 86 268 466 1,037
--------- ---- ---- ------ ------ ---- ---- ------ ------
PORTFOLIO TURNOVER
The fund pays transaction costs, such as commissions, when it buys and sells
securities (or "turns over" its portfolio). A higher portfolio turnover rate
may indicate higher transaction costs and may result in higher taxes when fund
shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the fund's
performance. During the most recent fiscal year, the fund's portfolio turnover
rate was 115% of the average value of its portfolio.
2
PRINCIPAL INVESTMENT STRATEGIES
The fund invests primarily in equity securities of U.S. issuers. For purposes
of the fund's investment policies, equity securities include common stocks and
other equity instruments, such as funds that invest primarily in equity
securities, depositary receipts, warrants, rights, equity interests in real
estate investment trusts (REITs) and preferred stocks.
The fund may invest in issuers of any market capitalization. The fund may
invest in securities in any industry or market sector. The fund may invest in
fewer than 40 securities. The fund may invest in initial public offerings of
equity securities. In addition, the fund may invest up to 20% of its total
assets in securities of non-U.S. issuers, including up to 5% of its total
assets in the securities of emerging market issuers. The fund may invest in
debt securities. Generally, the fund may acquire investment grade debt
securities, but the fund may invest up to 5% of its net assets in below
investment grade debt securities (known as "junk bonds"), including below
investment grade convertible debt securities. The fund also may hold cash or
other short-term investments.
The fund may, but is not required to, use derivatives, such as stock index
futures and options. The fund may use derivatives for a variety of purposes,
including: in an attempt to hedge against adverse changes in the market price
of securities, interest rates or currency exchange rates; as a substitute for
purchasing or selling securities; to attempt to increase the fund's return as a
non-hedging strategy that may be considered speculative; to manage portfolio
characteristics; and as a cash flow management technique. The fund may choose
not to make use of derivatives for a variety of reasons, and any use may be
limited by applicable law and regulations.
The fund's investment adviser uses a valuation-conscious approach to select the
fund's investments based upon the recommendations of the adviser's research
teams. The research teams use a two-step process in selecting securities that
combines fundamental and quantitative research. First, the teams assess whether
a company's fundamentals-financial condition, management, and position in its
industry-indicate strong prospects for growth and attractive valuations.
Second, the teams employ a quantitative, value-oriented approach to construct
the fund's portfolio, emphasizing those securities believed to be selling at
reasonable prices versus the underlying values. A security may be sold if its
ranking by the research team is reduced or the security price reaches a
reasonable valuation.
3
Fund summary
PRINCIPAL RISKS OF INVESTING IN THE FUND
You could lose money on your investment in the fund. As with any mutual fund,
there is no guarantee that the fund will achieve its objective.
MARKET RISK. The value of securities held by the fund may go up or down,
sometimes rapidly or unpredictably, due to general market conditions, such as
real or perceived adverse economic, political, or regulatory conditions,
inflation, changes in interest or currency rates, lack of liquidity in the bond
markets or adverse investor sentiment. In the past decade, financial markets
throughout the world have experienced increased volatility, depressed
valuations, decreased liquidity and heightened uncertainty. Governmental and
non-governmental issuers have defaulted on, or been forced to restructure,
their debts. These conditions may continue, recur, worsen or spread. Events
that have contributed to these market conditions include, but are not limited
to, major cybersecurity events; geopolitical events (including wars and terror
attacks); measures to address budget deficits; downgrading of sovereign debt;
declines in oil and commodity prices; dramatic changes in currency exchange
rates; and public sentiment. The U.S. government and the Federal Reserve, as
well as certain foreign governments and their central banks, have taken steps
to support financial markets, including by keeping interest rates at
historically low levels. This and other government intervention may not work as
intended, particularly if the efforts are perceived by investors as being
unlikely to achieve the desired results. The Federal Reserve has reduced its
market support activities and has begun raising interest rates. Certain foreign
governments and central banks are implementing or discussing so-called negative
interest rates (e.g., charging depositors who keep their cash at a bank) to
spur economic growth. Further Federal Reserve or other U.S. or non-U.S.
governmental or central bank actions, including interest rate increases or
contrary actions by different governments, could negatively affect financial
markets generally, increase market volatility and reduce the value and
liquidity of securities in which the fund invests. Policy and legislative
changes in the U.S. and in other countries are affecting many aspects of
financial regulation, and may in some instances contribute to decreased
liquidity and increased volatility in the financial markets. The impact of
these changes on the markets, and the practical implications for market
participants, may not be fully known for some time. Economies and financial
markets throughout the world are increasingly interconnected. Economic,
financial or political events, trading and tariff arrangements, terrorism,
natural disasters and other circumstances in one country or region could have
profound impacts on global economies or markets. As a result, whether
4
or not the fund invests in securities of issuers located in or with significant
exposure to the countries directly affected, the value and liquidity of the
fund's investments may be negatively affected. The fund may experience a
substantial or complete loss on any individual security or derivative position.
VALUE STYLE RISK. The prices of securities the adviser believes are undervalued
may not appreciate as expected or may go down. Value stocks may fall out of
favor with investors and underperform the overall equity market.
PORTFOLIO SELECTION RISK. The adviser's judgment about a particular security or
issuer, or about the economy or a particular sector, region or market segment,
or about an investment strategy, may prove to be incorrect.
ISSUER FOCUS RISK. The fund may invest in fewer than 40 securities, and as a
result, the fund's performance may be more volatile than the performance of
funds holding more securities.
SMALL AND MID-SIZE COMPANIES RISK. Compared to large companies, small- and
mid-size companies, and the market for their equity securities, may be more
sensitive to changes in earnings results and investor expectations, have more
limited product lines and capital resources, experience sharper swings in
market values, have limited liquidity, be harder to value or to sell at the
times and prices the adviser thinks appropriate, and offer greater potential
for gain and loss.
RISKS OF INVESTMENTS IN REAL ESTATE RELATED SECURITIES. Investments in real
estate securities are affected by economic conditions, interest rates,
governmental actions and other factors. In addition, investing in REITs
involves unique risks. They are significantly affected by the market for real
estate and are dependent upon management skills and cash flow. REITs may have
lower trading volumes and may be subject to more abrupt or erratic price
movements than the overall securities markets. Mortgage REITs are particularly
subject to interest rate and credit risks. 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.
RISKS OF WARRANTS AND RIGHTS. If the price of the underlying stock does not
rise above the exercise price before the warrant expires, the warrant generally
expires without any value and the fund loses any amount it paid for the
warrant. The failure to exercise subscription rights to purchase common shares
would result in the dilution of the fund's interest in the issuing company.
5
Fund summary
PREFERRED STOCKS RISK. Preferred stocks may pay fixed or adjustable rates of
return. Preferred stocks are subject to issuer-specific and market risks
applicable generally to equity securities. In addition, a company's preferred
stocks generally pay dividends only after the company makes required payments
to holders of its bonds and other debt. Thus, the value of preferred stocks
will usually react more strongly than bonds and other debt to actual or
perceived changes in the company's financial condition or prospects. The market
value of preferred stocks generally decreases when interest rates rise.
Preferred stocks of smaller companies may be more vulnerable to adverse
developments than preferred stocks of larger companies.
RISKS OF INITIAL PUBLIC OFFERINGS. Companies involved in initial public
offerings (IPOs) generally have limited operating histories, and prospects for
future profitability are uncertain. The market for IPO issuers has been
volatile, and share prices of newly public companies have fluctuated
significantly over short periods of time. The purchase of IPO shares may
involve high transaction costs.
RISKS OF INVESTMENT IN OTHER FUNDS. Investing in other investment companies,
including exchange-traded funds (ETFs), subjects the fund to the risks of
investing in the underlying securities or assets held by those funds. When
investing in another fund, the fund will bear a pro rata portion of the
underlying fund's expenses, in addition to its own expenses.
DEBT SECURITIES RISK. Factors that could contribute to a decline in the market
value of debt securities in the fund 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. Junk bonds have a higher risk of default or are
already in default and are considered speculative.
RISKS OF NON-U.S. INVESTMENTS. Investing in non-U.S. issuers, or in U.S.
issuers that have significant exposure to foreign markets, may involve unique
risks compared to investing in securities of U.S. issuers. These risks are more
pronounced for issuers in emerging markets or to the extent that the fund
invests significantly in one region or country. These risks may include
different financial reporting practices and regulatory standards, less liquid
trading markets, extreme price volatility, currency risks, changes in economic,
political, regulatory and social conditions, terrorism, sustained economic
downturns, financial instability, tax burdens, and investment and repatriation
restrictions. Lack of information and less market regulation
6
also may affect the value of these securities. Withholding and other non-U.S.
taxes may decrease the fund's return. Non-U.S. issuers may be located in parts
of the world that have historically been prone to natural disasters. Investing
in depositary receipts is subject to many of the same risks as investing
directly in non-U.S. issuers. Depositary receipts may involve higher expenses
and may trade at a discount (or premium) to the underlying security. A number
of countries in the European Union (EU) have experienced, and may continue to
experience, severe economic and financial difficulties. In addition, voters in
the United Kingdom have approved withdrawal from the EU. Other countries may
seek to withdraw from the EU and/or abandon the euro, the common currency of
the EU.
MARKET SEGMENT RISK. 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 that segment, and may experience greater market
fluctuation than a fund without the same focus.
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.
DERIVATIVES RISK. Using stock index futures and options and other derivatives
can increase fund losses and reduce opportunities for gains when market prices,
interest rates or the derivative instruments themselves behave in a way not
anticipated by the fund. Using derivatives may increase the volatility of the
fund's net asset value and may not provide the result intended. Derivatives may
have a leveraging effect on the fund. Some derivatives have the potential for
unlimited loss, regardless of the size of the fund's initial investment.
Changes in a derivative's value may not correlate well with the referenced
asset or metric. The fund also may have to sell assets at inopportune times to
satisfy its obligations. Derivatives may be difficult to sell, unwind or value,
and the counterparty may default on its obligations to the fund. Use of
derivatives may have different tax consequences for the fund than an investment
in the underlying security, and such differences may affect the amount, timing
and character of income distributed to shareholders. The U.S. government and
foreign governments are in the process of adopting and implementing regulations
governing derivatives markets, including mandatory clearing of certain
derivatives, margin and reporting requirements. The ultimate impact of the
regulations remains
7
Fund summary
unclear. Additional regulation of derivatives may make them more costly, limit
their availability or utility, otherwise adversely affect their performance or
disrupt markets.
LEVERAGING RISK. The value of your investment may be more volatile and other
risks tend to be compounded if the fund borrows or uses derivatives or other
investments, such as ETFs, that have embedded leverage. Leverage generally
magnifies the effect of any increase or decrease in the value of the fund's
underlying assets and creates a risk of loss of value on a larger pool of
assets than the fund would otherwise have, potentially resulting in the loss of
all assets. Engaging in such transactions may cause the fund to liquidate
positions when it may not be advantageous to do so to satisfy its obligations
or meet segregation requirements.
PORTFOLIO TURNOVER RISK. If the fund does a lot of trading, it may incur
additional operating expenses, which would reduce performance. A higher level
of portfolio turnover may also cause shareholders to incur a higher level of
taxable income or capital gains.
VALUATION RISK. The sales price the fund could receive for any particular
portfolio investment may differ from the fund's valuation of the investment,
particularly for illiquid securities and securities that trade in thin or
volatile markets or that are valued using a fair value methodology. Investors
who purchase or redeem fund shares on days when the fund is holding fair-valued
securities may receive fewer or more shares or lower or higher redemption
proceeds than they would have received if the fund had not fair-valued the
securities or had used a different valuation methodology. The fund's ability to
value its investments may also be impacted by technological issues and/or
errors by pricing services or other third party service providers.
LIQUIDITY RISK. Some securities and derivatives held by the fund may be
impossible or difficult to purchase, sell or unwind, particularly during times
of market turmoil. Illiquid securities and derivatives also may be difficult to
value. If the fund is forced to sell an illiquid asset or unwind a derivatives
position to meet redemption requests or other cash needs, the fund may be
forced to sell at a loss.
REDEMPTION RISK. The fund may experience heavy redemptions that could cause the
fund to liquidate its assets at inopportune times or at a loss or depressed
value, which could cause the value of your investment to decline.
8
EXPENSE RISK. Your actual costs of investing in the fund may be higher than the
expenses shown in "Annual fund operating expenses" for a variety of reasons.
For example, expense ratios may be higher than those shown if overall net
assets decrease. Net assets are more likely to decrease and fund expense ratios
are more likely to increase when markets are volatile.
Please note that there are many other factors that could adversely affect your
investment and that could prevent the fund from achieving its goals.
An investment in the fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
THE FUND'S PAST PERFORMANCE
The bar chart and table indicate the risks and volatility of an investment in
the fund by showing how the fund has performed in the past. The bar chart shows
changes in the performance of the fund's Class A shares from calendar year to
calendar year. 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 Russell
1000 Value Index, a broad-based measure of market performance that has
characteristics relevant to the fund's investment strategies. You can obtain
updated performance information by visiting
https://us.pioneerinvestments.com/performance or by calling 1-800-225-6292.
The fund acquired the assets and liabilities of Pioneer Disciplined Value Fund
(the predecessor fund) on June 7, 2013. As a result of the reorganization, the
predecessor fund's performance and financial history became the performance and
financial history of the fund. The performance of Class A, Class C and Class Y
shares of the fund includes the performance of the applicable class of shares
of the predecessor fund prior to the reorganization (which reflects applicable
fee waivers or expense reimbursements), and has not been restated to reflect
any differences in expenses.
The predecessor fund did not offer Class R shares. The performance of Class R
shares of the fund is the performance of the predecessor fund's Class A shares
prior to the reorganization (which reflects applicable fee waivers or expense
reimbursements), restated to reflect the higher distribution and service fees
of Class R shares (but not other differences in expenses).
The fund's past performance (before and after taxes) does not necessarily
indicate how it will perform in the future.
9
Fund summary
The bar chart does not reflect any sales charge you may pay when you buy fund
shares. If this amount was reflected, returns would be less than those shown.
ANNUAL RETURN CLASS A SHARES (%)
(Year ended December 31)
[GRAPHIC APPEARS HERE]
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16
4.53 -33.61 23.18 11.82 -1.31 13.60 29.41 9.59 -5.77 13.96
For the period covered by the bar chart:
THE HIGHEST CALENDAR QUARTERLY RETURN WAS 16.14% (07/01/2009 TO 09/30/2009).
THE LOWEST CALENDAR QUARTERLY RETURN WAS -18.76% (10/01/2008 TO 12/31/2008).
At September 30, 2017, the year-to-date return was 15.79%.
No performance information is presented for Class K shares in the table because
Class K shares do not have annual returns for at least one calendar year. The
returns for Class K shares would differ from those of other classes of shares
because they have different expenses.
10
AVERAGE ANNUAL TOTAL RETURN (%)
(for periods ended December 31, 2016)
SINCE INCEPTION
1 YEAR 5 YEARS 10 YEARS INCEPTION DATE
-------- --------- ---------- ----------- ----------
Class A 12/15/05
-------------------------------------- ----- ----- ---- ---- --------
Return before taxes 7.40 10.26 4.41 5.55
-------------------------------------- ------ ------- ---- ---- --------
Return after taxes on distributions 7.16 7.11 2.08 3.34
-------------------------------------- ------ ------- ---- ---- --------
Return after taxes on distributions
and sale of shares 4.39 7.72 2.97 3.96
-------------------------------------- ------ ------- ---- ---- --------
Class C 13.23 10.70 N\A 6.60 7/16/08
-------------------------------------- ------ ------- ---- ---- --------
Class R 13.70 11.41 4.94 6.04 12/15/05
-------------------------------------- ------ ------- ---- ---- --------
Class Y 14.33 11.95 N\A 7.54 7/30/08
-------------------------------------- ------ ------- ---- ---- --------
Russell 1000 Value Index (reflects no
deduction for fees, expenses or
taxes) 17.34 14.80 5.72 6.98 12/15/05
-------------------------------------- ------ ------- ---- ---- --------
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. 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 are shown only for Class A shares. After-tax returns for
Class C, Class K, Class R and Class Y shares will vary.
MANAGEMENT
INVESTMENT ADVISER Amundi Pioneer Asset Management, Inc.
PORTFOLIO MANAGEMENT Craig Sterling, Senior Vice President and Head
of Equity Research, U.S. at Amundi Pioneer
(portfolio manager of the fund since May
2015); and Ashesh Savla, Vice President and
Team Leader of U.S. Equity Quantitative
Research at Amundi Pioneer (portfolio manager
of the fund since 2013 and its predecessor
fund since 2005).
11
Fund summary
PURCHASE AND SALE OF FUND SHARES
You may purchase, exchange or sell (redeem) shares each day the New York Stock
Exchange is open through your financial intermediary or, for accounts held
directly with the fund, by contacting the fund in writing or by telephone:
Pioneer Funds, P.O. Box 55014, Boston, MA 02205-5014, tel. 1-800-225-6292.
Your initial investment for Class A or Class C shares must be at least $1,000.
Additional investments must be at least $100 for Class A shares and $500 for
Class C shares. The initial investment for Class K shares and Class Y shares
must be at least $5 million. This amount may be invested in one or more of the
Pioneer mutual funds that currently offer Class K shares or Class Y shares, as
applicable. There is no minimum additional investment amount for Class K or
Class Y shares. There is no minimum investment amount for Class R shares.
TAX INFORMATION
The fund intends to make distributions that may be taxed as ordinary income,
qualified dividend income, or capital gains.
PAYMENTS TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES
If you purchase the fund through a broker-dealer or other financial
intermediary (such as a bank), the fund and its related companies may pay the
intermediary for the sale of fund shares and related services. These payments
create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson or investment professional to recommend the
fund over another investment. Ask your salesperson or investment professional
or visit your financial intermediary's website for more information.
12
More on the fund's investment objective
and strategies
INVESTMENT OBJECTIVE
Long-term capital growth.
The fund's investment objective may be changed without shareholder approval.
The fund will provide at least 30 days' notice prior to implementing any change
to its investment objective.
PRINCIPAL INVESTMENT STRATEGIES
The fund invests primarily in equity securities of U.S. issuers. For purposes
of the fund's investment policies, equity securities include common stocks and
other equity instruments, such as funds that invest primarily in equity
securities, depositary receipts, warrants, rights, equity interests in real
estate investment trusts (REITs) and preferred stocks.
The fund may invest in issuers of any market capitalization. The fund may
invest in securities in any industry or market sector. The fund may invest in
fewer than 40 securities. The fund may invest in initial public offerings of
equity securities.
In addition, the fund may invest up to 20% of its total assets in securities of
non-U.S. issuers, including up to 5% of its total assets in the securities of
emerging market issuers. The fund invests in non-U.S. securities to diversify
its portfolio when Amundi Pioneer Asset Management, Inc. ("Amundi Pioneer"),
the fund's investment adviser, believes that non-U.S. securities offer similar
or greater potential for capital appreciation compared to U.S. securities. The
fund does not count securities of Canadian issuers against the 20% limit on
investment in securities of non-U.S. issuers.
The fund may invest a portion of its assets not invested in equity securities
in debt securities. Generally the fund may acquire investment grade debt
securities of corporate and government issuers, but the fund may invest up to
5% of its net assets in below investment grade debt securities (known as "junk
bonds"), including below investment grade convertible debt securities. The fund
invests in debt securities when Amundi Pioneer believes they are consistent
with the fund's investment objective of long-term capital growth, to diversify
the portfolio or for greater liquidity.
Amundi Pioneer uses a valuation-conscious approach to select the fund's
investments based upon the recommendations of Amundi Pioneer's research teams.
Amundi Pioneer's research teams support the portfolio management teams that
manage various Amundi Pioneer equity funds and provide
13
More on the fund's investment objective
and strategies
recommendations for a universe of issuers that are publicly traded in the U.S.
and abroad. The fund seeks to benefit from this research effort by selecting
securities that are highly ranked by the teams and selling at attractive
prices.
The research teams use a two-step process in selecting securities that combines
fundamental and quantitative research. First, the teams assess whether a
company's fundamentals - financial condition, management, and position in its
industry - indicate strong prospects for growth and attractive valuations.
Second, the teams employ a quantitative, value-oriented approach to construct
the portfolio, emphasizing those securities believed to be selling at
reasonable prices versus underlying values. A security may be sold if its
ranking by the research team is reduced or the security price reaches a
reasonable valuation.
As part of the initial assessment, Amundi Pioneer's research teams evaluate a
security's potential value based on the company's assets and prospects for
earnings growth. In making that assessment, the teams employ a disciplined
stock valuation approach combined with fundamental research, and an evaluation
of the issuer based on its financial statements and operations. The research
teams focus on the quality and price of individual issuers, not on economic
sector or market-timing strategies. The portfolio includes securities from a
broad range of market sectors that have received favorable rankings from the
research teams. Factors for selecting investments include:
o Favorable expected returns relative to perceived risk
o Above average potential for earnings and revenue growth
o Low market valuations relative to earnings forecast, book value, cash flow
and sales
o A sustainable competitive advantage, such as a brand name, customer base,
proprietary technology or economies of scale
The fund's investment strategies and policies may be changed from time to time
without shareholder approval, unless specifically stated otherwise in this
prospectus or in the statement of additional information.
INVESTMENTS IN REITS
REITs are companies that invest primarily 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, including
"sub-prime" mortgages, secured by real estate and derive their income from
collection of interest.
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NON-U.S. INVESTMENTS
The fund may invest in securities of non-U.S. issuers, including securities of
emerging markets issuers. Non-U.S. issuers are issuers that are organized and
have their principal offices outside of the United States. Non-U.S. securities
may be issued by non-U.S. governments, banks or corporations, or private
issuers, and certain supranational organizations, such as the World Bank and
the European Union. The fund considers emerging market issuers to include
issuers organized under the laws of an emerging market country, issuers with a
principal office in an emerging market country, issuers that derive at least
50% of their gross revenues or profits from goods or services produced in
emerging markets or sales made in emerging markets, and emerging market
governmental issuers. Emerging markets generally will include, but not be
limited to, countries included in the Morgan Stanley Capital International
(MSCI) Emerging and Frontier Markets Index.
DEBT SECURITIES
The fund may invest in debt securities. Generally the fund may acquire debt
securities that are investment grade, but the fund may invest in below
investment grade debt securities (known as "junk bonds"), including below
investment grade convertible debt securities. 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 adviser.
DERIVATIVES
The fund may, but is not required to, use futures and options on securities,
indices and currencies, forward foreign currency exchange contracts, swaps and
other derivatives. A derivative is a security or instrument whose value is
determined by reference to the value or the change in value of one or more
securities, currencies, indices or other financial instruments. The fund may
use derivatives for a variety of purposes, including:
o In an attempt to 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 attempt to increase the fund's return as a non-hedging strategy that may
be considered speculative
o To manage portfolio characteristics (for example, the fund's exposure to
various market segments)
o As a cash flow management technique
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and strategies
The fund may choose not to make use of derivatives for a variety of reasons,
and any use may be limited by applicable law and regulations.
CASH MANAGEMENT AND TEMPORARY INVESTMENTS
Normally, the fund invests substantially all of its assets to meet its
investment objective. 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. The fund may adopt a defensive strategy when the adviser 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. During such periods, it may be more difficult for the fund to
achieve its investment objective.
ADDITIONAL INVESTMENT STRATEGIES
In addition to the principal investment strategies discussed above, the fund
may also use other techniques, including the following non-principal investment
strategies.
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. The fund also may borrow money
from banks or other lenders for temporary purposes. The fund may borrow up to
33 1/3% of its total assets. 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.
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More on the risks of investing in the fund
PRINCIPAL INVESTMENT RISKS
You could lose money on your investment in the fund. As with any mutual fund,
there is no guarantee that the fund will achieve its objective.
MARKET RISK. The value of securities held by the fund may go up or down,
sometimes rapidly or unpredictably, due to general market conditions, such as
real or perceived adverse economic, political, or regulatory conditions,
inflation, changes in interest or currency rates, lack of liquidity in the bond
markets or adverse investor sentiment. Changes in market conditions may not
have the same impact on all types of securities. The value of securities may
also fall due to specific conditions that affect a particular sector of the
securities market or a particular issuer. The stock market may perform poorly
relative to other investments (this risk may be greater in the short term). In
the past decade, financial markets throughout the world have experienced
increased volatility, depressed valuations, decreased liquidity and heightened
uncertainty. Governmental and non-governmental issuers have defaulted on, or
been forced to restructure, their debts. These conditions may continue, recur,
worsen or spread. Events that have contributed to these market conditions
include, but are not limited to, major cybersecurity events; geopolitical
events (including wars and terror attacks); measures to address budget
deficits; downgrading of sovereign debt; declines in oil and commodity prices;
dramatic changes in currency exchange rates; and public sentiment. The U.S.
government and the Federal Reserve, as well as certain foreign governments and
their central banks, have taken steps to support financial markets, including
by keeping interest rates at historically low levels. This and other government
intervention may not work as intended, particularly if the efforts are
perceived by investors as being unlikely to achieve the desired results. The
Federal Reserve has reduced its market support activities and has begun raising
interest rates. Certain foreign governments and central banks are implementing
or discussing so-called negative interest rates (e.g., charging depositors who
keep their cash at a bank) to spur economic growth. Further Federal Reserve or
other U.S. or non-U.S. governmental or central bank actions, including interest
rate increases or contrary actions by different governments, could negatively
affect financial markets generally, increase market volatility and reduce the
value and liquidity of securities in which the fund invests. Policy and
legislative changes in the U.S. and in other countries are affecting many
aspects of financial regulation, and may in some instances contribute to
decreased liquidity and increased volatility in the financial markets. The
impact of these changes on the markets, and the practical implications for
market participants, may
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not be fully known for some time. Economies and financial markets throughout
the world are increasingly interconnected. Economic, financial or political
events, trading and tariff arrangements, terrorism, natural disasters and other
circumstances in one country or region could have profound impacts on global
economies or markets. As a result, whether or not the fund invests in
securities of issuers located in or with significant exposure to the countries
directly affected, the value and liquidity of the fund's investments may be
negatively affected. The fund may experience a substantial or complete loss on
any individual security or derivative position.
VALUE STYLE RISK. The prices of securities the adviser believes are undervalued
may not appreciate as expected or may go down. Value stocks may fall out of
favor with investors and underperform the overall equity market.
PORTFOLIO SELECTION RISK. The adviser's judgment about a particular security or
issuer, or about the economy or a particular sector, region or market segment,
or about an investment strategy, may prove to be incorrect.
ISSUER FOCUS RISK. The fund may invest in fewer than 40 securities, and as a
result, the fund's performance may be more volatile than the performance of
funds holding more securities.
SMALL AND MID-SIZE COMPANIES RISK. Compared to large companies, small- and
mid-size companies, and the market for their equity securities, may be more
sensitive to changes in earnings results and investor expectations, have more
limited product lines and capital resources, experience sharper swings in
market values, have limited liquidity, be harder to value or to sell at the
times and prices the adviser thinks appropriate, and offer greater potential
for gain and loss.
RISKS OF INVESTMENTS IN REAL ESTATE RELATED SECURITIES. Investments in real
estate securities are affected by economic conditions, interest rates,
governmental actions and other factors. In addition, investing in REITs
involves unique risks. They are significantly affected by the market for real
estate and are dependent upon management skills and cash flow. REITs may have
lower trading volumes and may be subject to more abrupt or erratic price
movements than the overall securities markets. Mortgage REITs are particularly
subject to interest rate and credit risks. 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.
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RISKS OF WARRANTS AND RIGHTS. Warrants and rights give the fund the right to
buy stock. A warrant specifies the amount of underlying stock, the purchase (or
"exercise") price, and the date the warrant expires. The fund has no obligation
to exercise the warrant and buy the stock. A warrant has value only if the fund
is able to exercise it or sell it before it expires. If the price of the
underlying stock does not rise above the exercise price before the warrant
expires, the warrant generally expires without any value and the fund loses any
amount it paid for the warrant. Thus, investments in warrants may involve
substantially more risk than investments in common stock. Warrants may trade in
the same markets as their underlying stock; however, the price of the warrant
does not necessarily move with the price of the underlying stock.
The fund may purchase securities pursuant to the exercise of subscription
rights, which allow an issuer's existing shareholders to purchase additional
common stock at a price substantially below the market price of the shares. The
failure to exercise subscription rights to purchase common stock would result
in the dilution of the fund's interest in the issuing company. The market for
such rights is not well developed and, accordingly, the fund may not always
realize full value on the sale of rights.
PREFERRED STOCKS RISK. Preferred stocks may pay fixed or adjustable rates of
return. Preferred stocks are subject to issuer-specific and market risks
applicable generally to equity securities. In addition, a company's preferred
stocks generally pay dividends only after the company makes required payments
to holders of its bonds and other debt. Thus, the value of preferred stocks
will usually react more strongly than bonds and other debt to actual or
perceived changes in the company's financial condition or prospects. The market
value of preferred stocks generally decreases when interest rates rise.
Preferred stocks of smaller companies may be more vulnerable to adverse
developments than preferred stocks of larger companies.
RISKS OF INITIAL PUBLIC OFFERINGS. Companies involved in initial public
offerings (IPOs) generally have limited operating histories, and prospects for
future profitability are uncertain. Information about the companies may be
available for very limited periods. The market for IPO issuers has been
volatile, and share prices of newly public companies have fluctuated
significantly over short periods of time. Further, stocks of newly-public
companies may decline shortly after the IPO. There is no assurance that the
fund will have access to IPOs. The purchase of IPO shares may involve high
transaction costs. Because of the price volatility of IPO shares, the fund may
choose to
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hold IPO shares for a very short period of time. This may increase the turnover
of the portfolio and may lead to increased expenses to the fund, such as
commissions and transaction costs. The market for IPO shares can be speculative
and/or inactive for extended periods of time. There may be only a limited
number of shares available for trading. The limited number of shares available
for trading in some IPOs may also make it more difficult for the fund to buy or
sell significant amounts of shares without an unfavorable impact on prevailing
prices.
RISKS OF INVESTMENT IN OTHER FUNDS. Investing in other investment companies,
including exchange-traded funds (ETFs), subjects the fund to the risks of
investing in the underlying securities or assets held by those funds. When
investing in another fund, the fund will bear a pro rata portion of the
underlying fund's expenses, in addition to its own expenses. ETFs are bought
and sold based on market prices and can trade at a premium or a discount to the
ETF's net asset value.
DEBT SECURITIES RISK. Factors that could contribute to a decline in the market
value of debt securities in the fund 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. Junk bonds 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;
they may also be more difficult to value. Junk bonds have a higher risk of
default or are already in default and are considered speculative.
RISKS OF NON-U.S. INVESTMENTS. Investing in non-U.S. issuers, or in U.S.
issuers that have significant exposure to foreign markets, may involve unique
risks compared to investing in securities of U.S. issuers. These risks are more
pronounced for issuers in emerging markets or to the extent that the fund
invests significantly in one region or country. These risks may include:
o Less information about non-U.S. issuers or markets may be available due to
less rigorous disclosure or accounting standards or regulatory practices
o Many non-U.S. markets are smaller, less liquid and more volatile. In a
changing market, the adviser may not be able to sell the fund's 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
20
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 may adversely affect
the securities markets
o It may be difficult for the fund to pursue claims or enforce judgments
against a foreign bank, depository or issuer of a security, or any of their
agents, in the courts of a foreign country
o Withholding and other non-U.S. taxes may decrease the fund's return. The
value of the fund's foreign investments also may be affected by U.S. tax
considerations and restrictions in receiving investment proceeds from a
foreign country
o Some markets in which the fund may invest are located in parts of the world
that have historically been prone to natural disasters that could result in
a significant adverse impact on the economies of those countries and
investments made in those countries
o It is often more expensive for the fund to buy, sell and hold securities in
certain foreign markets than in the United States
o A governmental entity may delay, or refuse or be unable to pay, interest or
principal on its sovereign debt due to cash flow problems, insufficient
foreign currency reserves, political considerations, the relative size of
the governmental entity's debt position in relation to the economy or the
failure to put in place economic reforms
o Investing in depositary receipts is subject to many of the same risks as
investing directly in non-U.S. issuers. Depositary receipts may involve
higher expenses and may trade at a discount (or premium) to the underlying
security. In addition, depositary receipts may not pass through voting and
other shareholder rights, and may be less liquid than the underlying
securities listed on an exchange
o A number of countries in the European Union (EU) have experienced, and may
continue to experience, severe economic and financial difficulties.
Additional EU member countries may also fall subject to such difficulties. A
number of countries in Europe have suffered terror attacks, and additional
attacks may occur in the future. In addition, voters in the United Kingdom
have approved withdrawal from the EU. Other countries may seek to withdraw
from the EU and/or abandon the euro, the common currency of the EU. These
events could negatively affect the value and liquidity of the fund's
investments, particularly in euro-denominated securities and derivative
contracts, securities of issuers located in the EU or with significant
exposure to EU issuers or countries
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MARKET SEGMENT RISK. 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 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.
Industries in the technology segment, such as information technology,
communications equipment, computer hardware and software, and office and
scientific equipment, are generally subject to risks of rapidly evolving
technology, short product lives, rates of corporate expenditures, falling
prices and profits, competition from new market entrants, and general economic
conditions.
Industries in the health care segment, such as health care supplies, health
care services, biotechnology and pharmaceuticals, may be significantly affected
by government regulation and reimbursement rates, approval of products by
government agencies, and patent expirations and litigation.
Industries in the energy segment, such as those engaged in the development,
production and distribution of energy resources, can be significantly affected
by supply and demand both for their specific product or service and for energy
products in general. The price of oil, gas and other consumable fuels,
exploration and production spending, government regulation, world events and
economic conditions likewise will affect the performance of companies in these
industries.
DERIVATIVES RISK. Using stock index futures and options and other derivatives
exposes the fund to special risks and costs and may result in losses to the
fund, even when used for hedging purposes. Using derivatives can increase
losses and reduce opportunities for gain when market prices, interest rates or
currencies, or the derivative instruments themselves, behave in a way not
anticipated by the fund, especially in abnormal market conditions. Using
derivatives can have a leveraging effect (which may increase investment losses)
and increase the fund's volatility, which is the degree to which the fund's
share price may fluctuate within a short time period. Certain derivatives have
the potential for unlimited loss, regardless of the size of the fund's initial
investment. 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
22
not fully benefit from, or could lose money on, or could experience unusually
high expenses as a result of, the derivative position. The other parties to
certain derivative transactions present the same types of credit risk as
issuers of fixed income securities. Derivatives also tend to involve greater
liquidity risk and they may be difficult to value. The fund may be unable to
terminate or sell its derivative positions. In fact, many over-the-counter
derivatives will not have liquidity beyond the counterparty to the instrument.
Use of derivatives or similar instruments may have different tax consequences
for the fund than an investment in the underlying security, and those
differences may affect the amount, timing and character of income distributed
to shareholders. The fund's use of derivatives may also increase the amount of
taxes payable by shareholders. Risks associated with the use of derivatives are
magnified to the extent that an increased portion of the fund's assets are
committed to derivatives in general or are invested in just one or a few types
of derivatives.
The U.S. government and foreign governments are in the process of adopting and
implementing regulations governing derivative markets, including mandatory
clearing of certain derivatives, margin and reporting requirements. The
ultimate impact of the regulations remains unclear. Additional regulation of
derivatives may make derivatives more costly, limit their availability or
utility, otherwise adversely affect their performance or disrupt markets. The
fund may be exposed to additional risks as a result of the additional
regulations. The extent and impact of the regulations are not yet fully known
and may not be for some time.
The fund will be required to maintain its positions with a clearing
organization through one or more clearing brokers. The clearing organization
will require the fund to post margin and the broker may require the fund to
post additional margin to secure the fund's obligations. The amount of margin
required may change from time to time. In addition, cleared transactions may be
more expensive to maintain than over-the-counter transactions and may require
the fund to deposit larger amounts of margin. The fund may not be able to
recover margin amounts if the broker has financial difficulties. Also, the
broker may require the fund to terminate a derivatives position under certain
circumstances. This may cause the fund to lose money. The fund's ability to use
certain derivative instruments currently is limited by Commodity Futures
Trading Commission rules.
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More on the risks of investing in the fund
LEVERAGING RISK. The value of your investment may be more volatile and other
risks tend to be compounded if the fund borrows or uses derivatives or other
investments, such as ETFs, that have embedded leverage. Leverage generally
magnifies the effect of any increase or decrease in the value of the fund's
underlying assets and creates a risk of loss of value on a larger pool of
assets than the fund would otherwise have, potentially resulting in the loss of
all assets. Engaging in such transactions may cause the fund to liquidate
positions when it may not be advantageous to do so to satisfy its obligations
or meet segregation requirements.
PORTFOLIO TURNOVER RISK. 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.
VALUATION RISK. Many factors may influence the price at which the fund could
sell any particular portfolio investment. The sales price may well differ -
higher or lower - from the fund's valuation of the investment, and such
differences could be significant, particularly for illiquid securities and
securities that trade in thin markets and/or markets that experience extreme
volatility. The fund may value investments using fair value methodologies.
Investors who purchase or redeem fund shares on days when the fund is holding
fair-valued securities may receive fewer or more shares, or lower or higher
redemption proceeds, than they would have received if the fund had not
fair-valued the securities or had used a different valuation methodology. The
value of foreign securities, certain fixed income securities and currencies, as
applicable, may be materially affected by events after the close of the market
on which they are valued, but before the fund determines its net asset value.
The fund's ability to value its investments may also be impacted by
technological issues and/or errors by pricing services or other third party
service providers.
LIQUIDITY RISK. Liquidity risk is the risk that particular investments, or
investments generally, may be impossible or difficult to purchase or sell.
Although most of the fund's securities and other investments must be liquid at
the time of investment, securities and other investments may become illiquid
after purchase by the fund, particularly during periods of market turmoil.
Liquidity and value of investments can deteriorate rapidly. When the fund holds
illiquid investments, its portfolio may be harder to value, especially in
changing markets. If the fund is forced to sell or unwind these investments to
meet redemptions or for other cash needs, the fund may suffer a loss. The fund
may experience heavy redemptions that could
24
cause the fund to liquidate its assets at inopportune times or at a loss or
depressed value, which could cause the value of your investment to decline. In
addition, when there is illiquidity in the market for certain securities and
other investments, the fund, due to limitations on investments in illiquid
securities, may be unable to achieve its desired level of exposure to a certain
sector.
REDEMPTION RISK. The fund may experience periods of heavy redemptions that
could cause the fund to liquidate its assets at inopportune times or at a loss
or depressed value, particularly during periods of declining or illiquid
markets. Redemption risk is greater to the extent that the fund has investors
with large shareholdings, short investment horizons, or unpredictable cash flow
needs. In addition, redemption risk is heightened during periods of overall
market turmoil. The redemption by one or more large shareholders of their
holdings in the fund could hurt performance and/or cause the remaining
shareholders in the fund to lose money. If one decision maker has control of
fund shares owned by separate fund shareholders, including clients or
affiliates of the fund's adviser, redemptions by these shareholders may further
increase the fund's redemption risk. If the fund is forced to liquidate its
assets under unfavorable conditions or at inopportune times, the value of your
investment could decline.
CASH MANAGEMENT RISK. The value of the investments held by the fund for cash
management or temporary defensive purposes may be affected by market risks,
changing interest rates and by changes in credit ratings of the investments. To
the extent that the fund has any uninvested cash, the fund would be subject to
credit risk with respect to the depository institution holding the cash. If the
fund holds cash uninvested, the fund will not earn income on the cash and the
fund's yield will go down. During such periods, it may be more difficult for
the fund to achieve its investment objective.
EXPENSE RISK. Your actual costs of investing in the fund may be higher than the
expenses shown in "Annual fund operating expenses" for a variety of reasons.
For example, expense ratios may be higher than those shown if overall net
assets decrease. Net assets are more likely to decrease and fund expense ratios
are more likely to increase when markets are volatile.
To learn more about the fund's investments and risks, you should obtain and
read the statement of additional information. Please note that there are many
other factors that could adversely affect your investment and that could
prevent the fund from achieving its goals.
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More on the risks of investing in the fund
DISCLOSURE OF PORTFOLIO HOLDINGS
The fund's policies and procedures with respect to disclosure of the fund's
securities are described in the statement of additional information.
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Management
INVESTMENT ADVISER
Amundi Pioneer, the fund's investment adviser, selects the fund's investments
and oversees the fund's operations.
Amundi Pioneer is an indirect, wholly owned subsidiary of Amundi and Amundi's
wholly owned subsidiary, Amundi USA, Inc. Amundi, one of the world's largest
asset managers, is headquartered in Paris, France. As of September 30, 2017,
Amundi had more than $1.6 trillion in assets under management worldwide. As of
September 30, 2017, Amundi Pioneer (and its U.S. affiliates) had over $88
billion in assets under management.
Amundi 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.
On July 3, 2017, Amundi acquired Pioneer Investments, a group of asset
management companies located throughout the world, including the fund's
investment adviser. Prior to July 3, 2017, Pioneer Investments was owned by
Pioneer Global Asset Management S.p.A., a wholly owned subsidiary of UniCredit
S.p.A. Prior to July 3, 2017, the fund's investment adviser was named Pioneer
Investment Management, Inc. A new investment management contract between the
fund and the investment adviser became effective on July 3, 2017.
Amundi Pioneer has received an order from the Securities and Exchange
Commission that permits Amundi Pioneer, subject to the approval of the fund's
Board of Trustees, to hire and terminate a subadviser that is not affiliated
with Amundi Pioneer (an "unaffiliated subadviser") or to materially modify an
existing subadvisory contract with an unaffiliated subadviser for the fund
without shareholder approval. Amundi Pioneer retains the ultimate
responsibility to oversee and recommend the hiring, termination and replacement
of any unaffiliated subadviser.
PORTFOLIO MANAGEMENT
Day-to-day management of the fund's portfolio is the responsibility of Craig
Sterling and Ashesh Savla. The portfolio managers draw upon the research and
investment management expertise of the firm's global research teams, which
provide fundamental and quantitative research and include members from one or
more of Amundi Pioneer's affiliates.
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Management
Craig Sterling is a Senior Vice President and Head of Equity Research, U.S. at
Amundi Pioneer. He joined Amundi Pioneer in May 2015 and has served as
portfolio manager of the fund since May 2015. Prior to joining Amundi Pioneer,
he was Managing Director and Global Head of Equity Research at EVA Dimensions
LLC in New York, an independent equity research firm. Prior to June 2011, he
served as a Director in the HOLT Group at Credit Suisse.
Ashesh Savla is a Vice President and Team Leader of U.S. Equity Quantitative
Research at Amundi Pioneer. He joined Amundi Pioneer in 2003 and has served as
portfolio manager of the fund since 2013 and its predecessor fund since 2005.
The fund's statement of additional information provides additional information
about the portfolio managers' compensation, other accounts managed by the
portfolio managers, and the portfolio managers' ownership of shares of the
fund.
MANAGEMENT FEE
The fund pays Amundi Pioneer a fee for managing the fund and to cover the cost
of providing certain services to the fund. Amundi Pioneer's annual fee is equal
to 0.65% of the fund's average daily net assets up to $1 billion, 0.60% of the
next $2 billion of the fund's average daily net assets, 0.55% of the next $4.5
billion of the fund's average daily net assets, and 0.525% of the fund's
average daily net assets over $7.5 billion. The fee is accrued daily and paid
monthly.
For the fiscal year ended August 31, 2017, the fund paid management fees
(excluding waivers and/or assumption of expenses) equivalent to 0.65% 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 annual report to shareholders
for the period ended August 31, 2017.
DISTRIBUTOR
Amundi Pioneer Distributor, Inc. is the fund's distributor. The fund
compensates the distributor for its services. The distributor is an affiliate
of Amundi Pioneer. Prior to July 3, 2017, the fund's distributor was named
Pioneer Funds Distributor, Inc.
28
Pricing of 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 as of the scheduled close of regular trading (normally 4:00
p.m. Eastern time). If the New York Stock Exchange closes at another time, the
fund will calculate a net asset value for each class of shares as of the
scheduled closing time. On days when the New York Stock Exchange is closed for
trading, including certain holidays listed in the statement of additional
information, a net asset value is not calculated. The fund's most recent net
asset value is available on the fund's website, us.pioneerinvestments.com.
The fund generally values its equity securities and certain derivative
instruments that are traded on an exchange using the last sale price on the
principal exchange on which they are traded. Equity securities that are not
traded on the date of valuation, or securities for which no last sale prices
are available, are valued at the mean between the last bid and asked prices or,
if both last bid and asked prices are not available, at the last quoted bid
price. Last sale, bid and asked prices are provided by independent third party
pricing services. In the case of equity securities not traded on an exchange,
prices are typically determined by independent third party pricing services
using a variety of techniques and methods. The fund may use a fair value model
developed by an independent pricing service to value non-U.S. equity
securities.
The fund generally values debt securities and certain derivative instruments by
using the prices supplied by independent third party pricing services. A
pricing service may use market prices or quotations from one or more brokers or
other sources, or may use a pricing matrix or other fair value methods or
techniques to provide an estimated value of the security or instrument. A
pricing matrix is a means of valuing a debt security on the basis of current
market prices for other debt securities, historical trading patterns in the
market for fixed income securities and/or other factors. Non-U.S. debt
securities that are listed on an exchange will be valued at the bid price
obtained from an independent third party pricing service.
29
Pricing of shares
To the extent that the fund invests in shares of other mutual funds that are
not traded on an exchange, such shares of other mutual funds are valued at
their net asset values as provided by those funds. The prospectuses for those
funds explain the circumstances under which those funds will use fair value
pricing methods and the effects of using fair value pricing methods.
The valuations of securities traded in non-U.S. markets and certain fixed
income securities will generally be determined as of the earlier closing time
of the markets on which they primarily trade. When the fund holds securities or
other assets that are denominated in a foreign currency, the fund will normally
use the currency exchange rates as of 3:00 p.m. (Eastern time). Non-U.S.
markets are open for trading on weekends and other days when the fund does not
price its shares. Therefore, the value of the fund's shares may change on days
when you will not be able to purchase or redeem fund shares.
When independent third party pricing services are unable to supply prices for
an investment, or when prices or market quotations are considered by Amundi
Pioneer to be unreliable, the value of that security may be determined using
quotations from one or more broker-dealers. When such prices or quotations are
not available, or when they are considered by Amundi Pioneer to be unreliable,
the fund uses fair value methods to value its securities pursuant to procedures
adopted by the Board of Trustees. The fund also may use fair value methods if
it is determined that a significant event has occurred between the time at
which a price is determined and the time at which the fund's net asset value is
calculated. Because the fund may invest in securities rated below investment
grade - some of which may be thinly traded and for which prices may not be
readily available or may be unreliable - the fund may use fair value methods
more frequently than funds that primarily invest in securities that are more
widely traded. 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.
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 may
be significant, particularly for securities that trade in relatively thin
markets and/or markets that experience extreme volatility.
30
Choosing a class of shares
The fund offers four classes of shares through this prospectus. Each class has
different eligibility requirements, sales charges and expenses, allowing you to
choose the class that best meets your needs.
Factors you should consider include:
o The eligibility requirements that apply to purchases of a particular share
class
o The expenses paid by each class
o The initial sales charges and contingent deferred sales charges (CDSCs), if
any, applicable to each class
o Whether you qualify for any reduction or waiver of sales charges
o How long you expect to own the shares
o Any services you may receive from a financial intermediary
Your investment professional can help you determine which class meets your
goals. Your investment professional or financial intermediary may receive
different compensation depending upon which class you choose.
For information on the fund's expenses, please see "Fund Summary."
The availability of certain sales charge waivers and discounts may depend on
whether you purchase your shares directly from the fund or through a financial
intermediary. Specific intermediaries may have different policies and
procedures regarding the availability of front-end sales charge waivers or
contingent deferred (back-end) sales charge (CDSC) waivers, which are discussed
under "Intermediary defined sales charge waiver policies." In all instances, it
is the purchaser's responsibility to notify the fund or the purchaser's
financial intermediary at the time of purchase of any relationship or other
facts qualifying the purchaser for sales charge waivers or discounts. For
waivers and discounts not available through a particular intermediary,
shareholders will have to purchase fund shares directly from the fund or
through another intermediary to receive these waivers or discounts. Please see
the "Intermediary defined sales charge waiver policies" section to determine
any sales charge discounts and waivers that may be available to you through
your financial intermediary.
CLASS A SHARES
o You pay a sales charge of up to 5.75% of the offering price, which is reduced
or waived for large purchases and certain types of investors. At the time of
your purchase, your investment firm may receive a commission from the
distributor of up to 5%, declining as the size of your investment increases.
31
Choosing a class of shares
o There is no contingent deferred sales charge, except in certain circumstances
when no initial sales charge is charged.
o Distribution and service fees of 0.25% of average daily net assets.
CLASS C SHARES
o A 1% contingent deferred sales charge is assessed if you sell your shares
within one year of purchase. Your investment firm may receive a commission
from the distributor at the time of your purchase of up to 1%.
o Distribution and service fees of 1.00% of average daily net assets.
o Does not convert to another share class.
o Maximum purchase amount (per transaction) of $499,999.
CLASS K SHARES
o No initial or contingent deferred sales charge.
o Initial investments by discretionary accounts and direct investors are
subject to a $5 million investment minimum, which may be waived in some
circumstances.
o There is no investment minimum for other eligible investors.
CLASS R SHARES
o No initial or contingent deferred sales charge.
o Distribution fees of 0.50% of average daily net assets. Separate service plan
provides for payment to financial intermediaries of up to 0.25% of average
daily net assets.
o Generally, available only through certain tax-deferred retirement plans and
related accounts.
CLASS Y SHARES
o No initial or contingent deferred sales charge.
o Initial investments are subject to a $5 million investment minimum, which may
be waived in some circumstances.
SHARE CLASS ELIGIBILITY
CLASS K SHARES
Class K shares are available to certain discretionary accounts at Amundi
Pioneer or its affiliates, certain direct investors, other Pioneer funds, and
certain tax-deferred retirement plans (including 401(k) plans,
employer-sponsored 403(b) plans, 457 plans, health savings accounts,
32
profit sharing and money purchase pension plans, defined benefit plans and
non-qualified deferred compensation plans) held in plan level or omnibus
accounts.
Direct investors may be individuals, institutions, trusts, foundations and
other institutional investors.
CLASS R SHARES
Class R shares are available to certain tax-deferred retirement plans
(including 401(k) plans, employer-sponsored 403(b) plans, 457 plans, profit
sharing and money purchase pension plans, defined benefit plans and
non-qualified deferred compensation plans) held in plan level or omnibus
accounts. Class R shares also are available to IRAs that are rollovers from
eligible retirement plans that offered one or more Class R share Pioneer funds
as investment options and to individual 401(k) plans. Class R shares are not
available to non-retirement accounts, traditional or Roth IRAs, Coverdell
Education Savings Accounts, SEPs, SAR-SEPs, SIMPLE IRAs, individual 403(b)s and
most individual retirement accounts or retirement plans that are not subject to
the Employee Retirement Income Security Act of 1974 (ERISA).
33
Distribution and service arrangements
DISTRIBUTION PLAN
The fund has adopted a distribution plan for Class A, Class C and Class R
shares 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.
CLASS R SHARES SERVICE PLAN
The fund has adopted a separate service plan for Class R shares. Under the
service plan, the fund may pay securities dealers, plan administrators or other
financial intermediaries who agree to provide certain services to plans or plan
participants holding shares of the fund a service fee of up to 0.25% of average
daily net assets attributable to Class R shares held by such plan participants.
The services provided under the service plan include acting as a shareholder of
record, processing purchase and redemption orders, maintaining participant
account records and answering participant questions regarding the fund.
ADDITIONAL PAYMENTS TO FINANCIAL INTERMEDIARIES
Your financial intermediary may receive compensation from the fund, Amundi
Pioneer or its affiliates for the sale of fund shares and related services.
Compensation may include sales commissions and distribution and service (Rule
12b-1) fees, as well as compensation for administrative services and
transaction processing.
Amundi Pioneer or its affiliates may make additional payments to your financial
intermediary. These payments 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.
Amundi Pioneer or its affiliates make 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,
or from the retention of a portion of sales charges or distribution and
34
service fees. Amundi 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. Amundi 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 Amundi Pioneer's
promotional efforts. Amundi 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.
Amundi 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 Amundi 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, Amundi 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 Amundi 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 Amundi Pioneer or the Pioneer funds, as
well as about fees and/or commissions it charges.
Amundi 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
35
Distribution and service arrangements
services, Amundi Pioneer or the Pioneer funds may compensate the intermediary
for these services. In addition, your intermediary may have other relationships
with Amundi Pioneer or its affiliates that are not related to the Pioneer
funds.
36
Sales charges
INITIAL SALES CHARGES (CLASS A SHARES ONLY)
You pay the offering price (the net asset value per share plus any initial
sales charge) 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.
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- -0-
--------------------------------- ---- ----
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 - CLASS A SHARES
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." Amundi 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)
The availability of certain sales charge waivers and discounts may depend on
whether you purchase your shares directly from the fund or through a financial
intermediary. Please see the "Intermediary defined sales charge waiver
policies" section for more information.
37
Sales charges
RIGHTS OF ACCUMULATION - CLASS A SHARES ONLY
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 - CLASS A SHARES ONLY
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 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. 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
met 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. Amundi
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
38
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 401(k) 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 Amundi Pioneer or an
affiliate.
You can locate information regarding the reduction or waiver of sales charges
free of charge on Amundi Pioneer's website at us.pioneerinvestments.com. The
website includes hyperlinks that facilitate access to this information.
The availability of certain sales charge waivers and discounts may depend on
whether you purchase your shares directly from the fund or through a financial
intermediary. Please see the "Intermediary defined sales charge waiver
policies" section for more information.
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.
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 Amundi 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 Amundi Pioneer serves as investment adviser (at the time of initial
share purchase);
39
Sales charges
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 Amundi Pioneer or any of its affiliates
serves 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 Group employer-sponsored retirement plans with at least $500,000 in total
plan assets. Waivers for group employer-sponsored retirement plans do not
apply to traditional IRAs, Roth IRAs, SEPs, SARSEPs, SIMPLE IRAs, KEOGHs,
individual 401(k) or individual 403(b) plans, or to brokerage relationships
in which sales charges are customarily imposed;
o Group employer-sponsored retirement plans with accounts established with
Amundi 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 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 Investors purchasing shares pursuant to the reinstatement privilege
applicable to Class A shares; and
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
40
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 Amundi 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. Such mutual fund programs
include certain self-directed brokerage services accounts held through
qualified intermediaries that may or may not charge participating investors
transaction fees.
CONTINGENT DEFERRED SALES CHARGES (CDSCS)
CLASS A SHARES
Purchases of Class A shares of $500,000 or more 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 Amundi Pioneer on or before March 31, 2004).
41
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, upon redemption 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.
PAYING THE CONTINGENT DEFERRED SALES CHARGE (CDSC)
Several rules apply for calculating CDSCs so that you pay the lowest possible
CDSC.
o The CDSC is calculated on the current market value or the original cost of
the shares you are selling, whichever is less
o You do not pay a CDSC on reinvested dividends or distributions
o If you sell only some of your shares, the transfer agent will first sell your
shares that are not subject to any CDSC and then the shares that you have
owned the longest
o You may qualify for a waiver of the CDSC normally charged. See "Waiver or
reduction of contingent deferred sales charges"
WAIVER OR REDUCTION OF CONTINGENT DEFERRED SALES CHARGES
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.
The distributor may waive or reduce the CDSC for Class A shares that are
subject to a CDSC or for 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);
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:
42
- 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 70 1/2,
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;
- Due to retirement or termination of employment;
- 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;
o The distribution is made pursuant to the fund's right to liquidate or
involuntarily redeem shares in a shareholder's account;
o The distribution is made to pay an account's advisory or custodial fees; or
o The distributor does not pay the selling broker a 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.
43
Sales charges
The availability of certain sales charge waivers and discounts may depend on
whether you purchase your shares directly from the fund or through a financial
intermediary. Please see the "Intermediary defined sales charge waiver
policies" section for more information.
44
Buying, exchanging and selling shares
OPENING YOUR ACCOUNT
You may open an account by completing an account application and sending it to
the fund by mail or by fax. Please call the fund to obtain an account
application. Certain types of accounts, such as retirement accounts, have
separate applications.
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 fund. You may be required to obtain a signature guarantee
to make certain changes to an existing account.
Call or write to the fund for account applications, account options forms and
other account information:
PIONEER FUNDS
P.O. Box 55014
Boston, Massachusetts 02205-5014
Telephone 1-800-225-6292
Please note that there may be a delay in receipt by the fund's transfer agent
of applications submitted by regular mail to a post office address.
Each fund is generally available for purchase in the United States, Puerto
Rico, Guam, American Samoa and the U.S. Virgin Islands. Except to the extent
otherwise permitted by the funds' distributor, the funds will only accept
accounts from U.S. citizens with a U.S. address (including an APO or FPO
address) or resident aliens with a U.S. address (including an APO or FPO
address) and a U.S. taxpayer identification number.
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.
INVESTING THROUGH FINANCIAL INTERMEDIARIES AND RETIREMENT PLANS
If you invest in the fund through your financial intermediary or through a
retirement plan, the options and services available to you may be different
from those discussed in this prospectus. Shareholders investing through
45
Buying, exchanging and selling shares
financial intermediaries, programs sponsored by financial intermediaries and
retirement plans may only purchase funds and classes of shares that are
available. When you invest through an account that is not in your name, you
generally may buy and sell shares and complete other transactions only through
the account. Ask your investment professional or financial intermediary for
more information.
Additional conditions may apply to your investment in the fund, and the
investment professional or intermediary may charge you a transaction-based,
administrative 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.
SHARE PRICES FOR TRANSACTIONS
If you place an order to purchase, exchange or sell shares that is received in
good order by the fund's 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), the share price for your transaction will be based on the net asset
value determined as of the scheduled close of regular trading on the New York
Stock Exchange on that day (plus or minus any applicable sales charges). If
your order is received by the fund's transfer agent or an authorized agent
after the scheduled close of regular trading on the New York Stock Exchange, or
your order is not in good order, the share price will be based on the net asset
value next determined after your order is received in good order by the fund or
authorized agent. The authorized agent is responsible for transmitting your
order to the fund in a timely manner.
GOOD ORDER MEANS THAT:
o You have provided adequate instructions
o There are no outstanding claims against your account
o There are no transaction limitations on your account
o Your request includes a signature guarantee if you:
- Are selling over $100,000 or exchanging over $500,000 worth of shares
- Changed your account registration or address within the last 30 days
- Instruct the transfer agent to mail the check to an address different from
the one on your account
- Want the check paid to someone other than the account's record owner(s)
- Are transferring the sale proceeds to a Pioneer mutual fund account with a
different registration
46
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 financial intermediary that has a sales
agreement or other arrangement with the distributor.
You can buy shares at net asset value per share plus any applicable sales
charge. The distributor may reject any order until it has confirmed the order
in writing and received payment. Normally, your financial intermediary will
send your purchase request to the fund's transfer agent. CONSULT YOUR
INVESTMENT PROFESSIONAL FOR MORE INFORMATION. Your investment firm receives a
commission from the distributor, and may receive additional compensation from
Amundi Pioneer, for your purchase of fund shares.
MINIMUM INVESTMENT AMOUNTS
CLASS A AND CLASS C SHARES
Your initial investment must be at least $1,000. Additional investments must be
at least $100 for Class A shares and $500 for 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 Amundi Pioneer.
CLASS K SHARES
Initial investments by discretionary accounts and direct investors in Class K
shares must be at least $5 million. There is no investment minimum for other
eligible investors. This amount may be invested in one or more of the Pioneer
mutual funds that currently offer Class K shares. There is no minimum
additional investment amount. The fund may waive the initial investment amount,
if applicable.
47
Buying, exchanging and selling shares
WAIVERS OF THE MINIMUM INVESTMENT AMOUNT FOR CLASS K
The fund will accept an initial investment of less than $5 million if:
(a) The investment is made by a retirement plan that is an eligible
investor in Class K shares; or
(b) The investment is made by another Pioneer fund.
The fund reserves the right to waive the initial investment minimum in other
circumstances.
CLASS R SHARES
There is no minimum investment amount for Class R shares, although investments
are subject to the fund's policies regarding small accounts.
CLASS Y SHARES
Your initial investment in Class Y shares 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.
WAIVERS OF THE MINIMUM INVESTMENT AMOUNT FOR CLASS Y
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
48
(d) The investment is made by an employer-sponsored retirement plan
established for the benefit of (1) employees of Amundi 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 Amundi 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.
MAXIMUM PURCHASE AMOUNTS
Purchases of fund shares are limited to $499,999 for Class C shares. This limit
is applied on a per transaction basis. Class A, Class K, Class R and Class Y
shares are not subject to a maximum purchase amount.
RETIREMENT PLAN ACCOUNTS
You can purchase fund shares through tax-deferred retirement plans for
individuals, businesses and tax-exempt organizations.
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.
49
Buying, exchanging and selling shares
You may not use the account application accompanying this prospectus to
establish an Amundi Pioneer retirement plan. You can obtain retirement plan
applications from your investment firm or by calling the Retirement Plans
Department at 1-800-622-0176.
HOW TO BUY 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 Amundi 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 fund's transfer agent will
electronically debit the amount of the purchase from your bank account of
record. The fund's transfer agent will purchase fund shares for the amount of
the debit at the offering price determined after the fund's transfer agent
receives your telephone or online purchase instruction and good funds. It
usually takes three business days for the fund's 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 FUND. 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
50
account number and the name or names in the account registration. Please note
that there may be a delay in receipt by the fund's transfer agent of purchase
orders submitted by regular mail to a post office address.
BY WIRE (CLASS K OR CLASS Y SHARES ONLY)
If you have an existing (Class K or Class Y shares only) account, you may wire
funds to purchase 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.
Disciplined Value Fund
The fund's 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.
EXCHANGING
You may, under certain circumstances, 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.
51
Buying, exchanging and selling shares
Before you request an exchange, consider each fund's investment objective and
policies as described in the fund's prospectus. You generally will have to pay
income taxes on an exchange.
SAME-FUND EXCHANGE PRIVILEGE
Certain shareholders may be eligible to exchange their shares for shares of
another class. If eligible, no sales charges or other charges will apply to any
such exchange. Generally, shareholders will not recognize a gain or loss for
federal income tax purposes upon such an exchange. Investors should contact
their financial intermediary to learn more about the details of this privilege.
HOW TO EXCHANGE 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 FUND. 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 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
52
o The class of shares you are exchanging
o The dollar amount or number of shares you are exchanging
Please note that there may be a delay in receipt by the fund's transfer agent
of exchange requests submitted by regular mail to a post office address.
SELLING
Your shares will be sold at the share price (net asset value less any
applicable sales charge) 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.
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. Your redemption
proceeds normally will be sent within 1 business day after your request is
received in good order, but in any event within 7 days, regardless of the
method the fund uses to make such payment. 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.
Your redemption proceeds may be delayed, or your right to receive redemption
proceeds suspended, if the New York Stock Exchange is closed (other than on
weekends or holidays) or trading is restricted, if 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, or
otherwise as permitted by the rules of or by the order of the Securities and
Exchange Commission.
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.
If you must use a written request to exchange or sell your shares and your
account is registered in the name of a corporation or other fiduciary you must
include the name of an authorized person and a certified copy of a current
corporate resolution, certificate of incumbency or similar legal document
showing that the named individual is authorized to act on behalf of the record
owner.
53
Buying, exchanging and selling shares
Under normal circumstances, the fund expects to meet redemption requests by
using cash or cash equivalents in its portfolio and/or selling portfolio assets
to generate cash. The fund also may pay redemption proceeds using cash obtained
through a committed, unsecured revolving credit facility, an interfund lending
facility, and other borrowing arrangements that may be available from time to
time.
The fund reserves the right to redeem in kind, that is, to pay all or a portion
of your redemption proceeds by giving you securities. 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. The fund may redeem in kind at a shareholder's request or
if, for example, the fund reasonably believes that a cash redemption may have a
substantial impact on the fund and its remaining shareholders. During periods
of stressed market conditions, the fund may be more likely to pay redemption
proceeds by giving you securities.
HOW TO SELL SHARES
THROUGH YOUR INVESTMENT FIRM
Normally, your investment firm will send your request to sell shares to the
fund's transfer agent. Please note that your investment firm may have its own
earlier deadlines for the receipt of a request to sell shares. 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
54
For Class Y shares, shareholders may sell up to $5 million per account per day
if the proceeds are directed to your bank account of record ($100,000 per
account per day if the proceeds are not directed to your bank account 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, 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 fund's 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 fund's 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.
Please note that there may be a delay in receipt by the fund's transfer agent
of redemption requests submitted by regular mail to a post office address.
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
BY MAIL
Send your written instructions to:
PIONEER FUNDS
P.O. Box 55014
Boston, Massachusetts 02205-5014
AMUNDI PIONEER WEBSITE
us.pioneerinvestments.com
55
Buying, exchanging and selling shares
BY FAX
Fax your exchange and sale requests to:
1-800-225-4240
56
Account options
See the account application form for more details on each of the following
services or call the fund for details and availability.
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 fund.
When you request a telephone transaction the fund's 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. If the fund's confirmation
procedures are followed, neither the fund nor its agents will bear any
liability for these transactions.
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
fund or complete the online authorization screen at
us.pioneerinvestments.com
To use online transactions, you must read and agree to the terms of an online
transaction agreement available on the Amundi Pioneer website. When you or your
investment firm requests an online transaction, the fund's 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.
57
Account options
PERIODIC INVESTMENTS
You can make periodic investments in the fund by setting up monthly bank
drafts, government allotments, payroll deductions, or an Automatic Investment
Plan. Periodic investments may be made only through U.S. banks. You may use a
periodic investment plan to establish a Class A share account with a small
initial investment. If you have a Class C or Class R share account and your
balance is at least $1,000, you may establish an periodic investment plan.
AUTOMATIC INVESTMENT PLAN (AIP)
If you establish an Automatic Investment Plan with Amundi Pioneer, the fund's
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 fund's transfer agent. You should allow up to 30 days for the fund's
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.
58
(3) You may elect to have the full amount of any dividends and/or capital
gain distributions paid to you in cash.
Options (2) and (3) are not available to retirement plan accounts or accounts
with a current value of less than $500.
If you are under 59 1/2, taxes and tax penalties may apply.
If your distribution check is returned to the fund's transfer agent or you do
not cash the check for six months or more, the fund's 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
$25, 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 U.S. 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 may not request a periodic withdrawal of more than 10% of the value of
any Class C or Class R share account (valued at the time the plan is
implemented)
59
Account options
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 fund's 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.
60
Shareholder services and policies
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.
Frequently, fund shares are held through omnibus accounts maintained by
financial intermediaries such as brokers and retirement plan administrators,
61
Shareholder services and policies
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 had been accepted and an investment made in the fund. A
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 Pioneer U.S. Government Money Market Fund or Pioneer
Multi-Asset Ultrashort Income Fund.
62
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 shares) are
subject to this policy.
PURCHASES IN KIND
You may use securities you own to purchase shares of the fund provided that
Amundi 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.
REINSTATEMENT PRIVILEGE (CLASS A SHARES)
If you recently sold all or part of your Class A 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 fund 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.
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 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 fund receives your
written request for reinstatement. You may realize a gain or loss for
63
Shareholder services and policies
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.
AMUNDI PIONEER WEBSITE
US.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 Amundi 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 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 FactFone/SM/.
If your account is registered in the name of a broker-dealer or other third
party, you may not be able to use FactFone/SM/ to obtain account information.
HOUSEHOLD DELIVERY OF FUND DOCUMENTS
With your consent, Amundi 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 Amundi Pioneer, by phone or in
writing (see "How to contact us"). Amundi Pioneer will begin mailing separate
proxy statements, prospectuses and shareowner reports to you within 30 days
after receiving your notice.
64
CONFIRMATION STATEMENTS
The fund's 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.
TAX INFORMATION FOR IRA ROLLOVERS
In January (or by the applicable Internal Revenue Service deadline) following
the year in which you take a reportable distribution, the fund's transfer agent
will mail you a tax form reflecting the total amount(s) of distribution(s)
received by the end of January.
PRIVACY
The fund has a policy designed to protect the privacy of your personal
information. A copy of Amundi 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 fund or
through Amundi Pioneer's website.
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
65
Shareholder services and policies
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
us.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, Amundi Pioneer will adjust the hours for the
telephone center and for online transaction processing accordingly. If you are
unable to access us.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 charge transfer, shareholder servicing or similar agent fees, such as an
account maintenance fee for small balance accounts, directly to accounts
66
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
o close your account after a period of inactivity, as determined by state law,
and transfer your shares to the appropriate state
67
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 in 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 dividend or other distribution, generally
you will pay a higher price per share and, unless you are exempt from tax, you
will pay taxes on the amount of the distribution whether you reinvest the
distribution in additional shares or receive it as cash.
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 are generally
taxable to noncorporate shareholders at rates of up to 20%. Distributions from
the fund's net short-term capital gains are generally taxable as ordinary
income. Other dividends are taxable either as ordinary income or, in general,
if paid from the fund's "qualified dividend income" and if certain conditions,
including holding period requirements, are met by the fund and the shareholder,
as qualified dividend income taxable to noncorporate shareholders at U.S.
federal income tax rates of up to 20%.
"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.
The fund will report to shareholders annually the U.S. federal income tax
status of all fund distributions.
68
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.
Sales and exchanges generally will be taxable transactions to shareowners. 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.
A 3.8% Medicare contribution tax generally applies to all or a portion of the
net investment income of a shareholder who is an individual and not a
nonresident alien for federal income tax purposes and who has adjusted gross
income (subject to certain adjustments) that exceeds a threshold amount. This
3.8% tax also applies to all or a portion of the undistributed net investment
income of certain shareholders that are estates and trusts. For these purposes,
dividends, interest and certain capital gains are generally taken into account
in computing a shareholder's net investment income.
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 apply "backup withholding" tax on your
dividends and other distributions, sale proceeds and any other payments to you
that are subject to backup withholding. The backup withholding rate is 28%.
Shareholders that are exempt from U.S. federal income tax, such as retirement
plans that are qualified under Section 401 of the Internal Revenue Code,
generally are not subject to U.S. federal income tax on fund dividends or other
distributions or on sales or exchanges of fund shares. However, in the case of
fund shares held through a nonqualified deferred compensation plan, fund
dividends and other distributions received by the plan and sales and exchanges
of fund shares by the plan generally will be taxable to the employer sponsoring
such plan in accordance with U.S. federal income tax laws that are generally
applicable to shareholders receiving such dividends and other distributions
from regulated investment companies such as the fund or effecting such sales or
exchanges.
69
Dividends, capital gains and taxes
Plan participants whose retirement plan invests in the fund generally are not
subject to federal income tax on fund dividends or other distributions received
by the plan or on sales or exchanges of fund shares by the plan. However,
distributions to plan participants from a retirement plan generally are taxable
to plan participants as ordinary income.
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.
70
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 C, Class R and Class Y shares of the
fund (assuming reinvestment of all dividends and distributions).
No financial information is presented for Class K shares because no Class K
shares were outstanding during the periods shown.
The fund acquired the assets and liabilities of Pioneer Disciplined Value Fund
(the predecessor fund) on June 7, 2013. As a result of the reorganization, the
predecessor fund's performance and financial history became the performance and
financial history of the fund. For the periods prior to June 7, 2013 shown
below, the information is the financial performance of the predecessor fund.
The information shown for periods after June 7, 2013 is the financial
performance of the fund.
No financial information is presented for Class R shares for periods prior to
June 7, 2013 because no Class R shares of the predecessor fund were outstanding
during such periods.
The information below for the fiscal years ended August 31, 2017 and August 31,
2013 has been audited by Ernst & Young LLP, independent registered public
accounting firm, whose report is included in the fund's annual report along
with the fund's financial statements. The information below for each of the
periods ended on August 31, 2014 through August 31, 2016 was audited by another
independent registered public accounting firm. The fund's annual report is
incorporated by reference in the statement of additional information and is
available upon request.
71
PIONEER DISCIPLINED VALUE FUND
CLASS A SHARES
72
YEAR ENDED YEAR ENDED
8/31/2017 8/31/2016**
-------------- -------------
Net asset value, beginning of period $ 14.18 $ 16.42
-------- --------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.19(b) $ 0.16(b)
Net realized and unrealized gain (loss) on investments 2.61 0.96
-------- --------
Net increase (decrease) from investment operations $ 2.80 $ 1.12
Distribution to shareowners:
Net investment income $ (0.14) $ (0.16)
Net realized gain - (3.20)
-------- --------
Total distributions $ (0.14) $ (3.36)
-------- --------
Net increase (decrease) in net asset value $ 2.66 $ (2.24)
-------- --------
Net asset value, end of period $ 16.84 $ 14.18
-------- --------
Total return* 19.88% 7.35%
Ratio of net expenses to average net assets 1.15% 1.18%
Ratio of net investment income (loss) to average net assets 1.23% 1.11%
Portfolio turnover rate 115% 129%
Net assets, end of period (in thousands) $307,799 $316,382
Ratios with no waiver of fees and assumption of expenses by the Adviser
and no reduction for fees paid indirectly:
Total expenses to average net assets 1.15% 1.18%
Net investment income (loss) to average net assets 1.23% 1.11%
YEAR ENDED YEAR ENDED YEAR ENDED
8/31/2015** 8/31/2014** 8/31/13(A)
------------- ------------- -----------
Net asset value, beginning of period $ 21.00 $ 19.80 $ 18.10
-------- -------- --------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.15 $ 0.16 $ 0.33
Net realized and unrealized gain (loss) on investments (1.00) 3.85 2.56
-------- -------- --------
Net increase (decrease) from investment operations $ (0.85) $ 4.01 $ 2.89
Distribution to shareowners:
Net investment income $ (0.11) $ (0.10) $ (0.32)
Net realized gain (3.62) (2.71) (0.87)
-------- -------- --------
Total distributions $ (3.73) $ (2.81) $ (1.19)
-------- -------- --------
Net increase (decrease) in net asset value $ (4.58) $ 1.20 $ 1.70
-------- -------- --------
Net asset value, end of period $ 16.42 $ 21.00 $ 19.80
-------- -------- --------
Total return* (5.16)% 21.57% 16.22%
Ratio of net expenses to average net assets 1.17% 1.19% 1.24%
Ratio of net investment income (loss) to average net assets 0.82% 0.74% 0.81%
Portfolio turnover rate 122% 66% 70%
Net assets, end of period (in thousands) $392,989 $564,898 $677,504
Ratios with no waiver of fees and assumption of expenses by the Adviser
and no reduction for fees paid indirectly:
Total expenses to average net assets 1.17% 1.19% 1.34%
Net investment income (loss) to average net assets 0.82% 0.74% 0.71%
(a) The Fund acquired the assets and liabilities of Pioneer Disciplined
Value Fund (the "predecessor fund") on June 7, 2013 (the
"reorganization"). As a result of the reorganization, the
predecessor fund's performance and financial history became the
performance and financial history of the Fund. Historical per-share
amounts prior to June 7, 2013 have been adjusted to reflect the
conversion ratio used to align the net asset values of the
predecessor fund with those of the Fund.
(b) The per-share data presented above is based on the average shares
outstanding for the period presented.
* 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.
** The Fund was audited by another independent registered public accounting
firm other than Ernst & Young LLP.
Financial highlights
PIONEER DISCIPLINED VALUE FUND
CLASS C SHARES
YEAR ENDED YEAR ENDED
8/31/2017 8/31/2016**
-------------- -------------
Net asset value, beginning of period $ 13.91 $ 16.14
-------- --------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.07(b) $ 0.05(b)
Net realized and unrealized gain (loss) on investments 2.57 0.95
-------- --------
Net increase (decrease) from investment operations $ 2.64 $ 1.00
Distribution to shareowners:
Net investment income $ (0.03) $ (0.03)
Net realized gain - (3.20)
-------- --------
Total distributions $ (0.03) $ (3.23)
-------- --------
Net increase (decrease) in net asset value $ 2.61 $ (2.23)
-------- --------
Net asset value, end of period $ 16.52 $ 13.91
-------- --------
Total return* 18.98% 6.62%
Ratio of net expenses to average net assets 1.89% 1.90%
Ratio of net investment income (loss) to average net assets 0.48% 0.38%
Portfolio turnover rate 115% 129%
Net assets, end of period (in thousands) $103,022 $120,404
Ratios with no waiver of fees and assumption of expenses by the Adviser
and no reduction for fees paid indirectly:
Total expenses to average net assets 1.89% 1.90%
Net investment income (loss) to average net assets 0.48% 0.38%
YEAR ENDED YEAR ENDED YEAR ENDED
8/31/2015** 8/31/2014** 8/31/13(A)
----------------- ------------- -----------
Net asset value, beginning of period $ 20.73 $ 19.64 $ 17.91
-------- -------- --------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.02 $ 0.01 $ 0.08
Net realized and unrealized gain (loss) on investments (0.99) 3.82 2.62
-------- -------- --------
Net increase (decrease) from investment operations $ (0.97) $ 3.83 $ 2.70
Distribution to shareowners:
Net investment income $ (0.00)(c) $ (0.03) $ (0.11)
Net realized gain (3.62) (2.71) (0.86)
-------- -------- --------
Total distributions $ (3.62) $ (2.74) $ (0.97)
-------- -------- --------
Net increase (decrease) in net asset value $ (4.59) $ 1.09 $ 1.73
-------- -------- --------
Net asset value, end of period $ 16.14 $ 20.73 $ 19.64
-------- -------- --------
Total return* (5.86)% 20.70% 15.32%
Ratio of net expenses to average net assets 1.91% 1.88% 2.02%
Ratio of net investment income (loss) to average net assets 0.08% 0.04% 0.04%
Portfolio turnover rate 122% 66% 70%
Net assets, end of period (in thousands) $162,238 $211,148 $214,331
Ratios with no waiver of fees and assumption of expenses by the Adviser
and no reduction for fees paid indirectly:
Total expenses to average net assets 1.91% 1.88% 2.02%
Net investment income (loss) to average net assets 0.08% 0.04% 0.04%
(a) The Fund acquired the assets and liabilities of Pioneer Disciplined
Value Fund (the "predecessor fund") on June 7, 2013 (the
"reorganization"). As a result of the reorganization, the
predecessor fund's performance and financial history became the
performance and financial history of the Fund. Historical per-share
amounts prior to June 7, 2013 have been adjusted to reflect the
conversion ratio used to align the net asset values of the
predecessor fund with those of the Fund.
(b) The per-share data presented above is based on the average shares
outstanding for the period presented.
(c) Amount rounds to less than $0.01 or $(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.
** The Fund was audited by another independent registered accounting firm
other than Ernst & Young LLP.
73
PIONEER DISCIPLINED VALUE FUND
CLASS R SHARES
74
YEAR ENDED YEAR ENDED
8/31/2017 8/31/2016***
-------------- --------------
Net asset value, beginning of period $ 13.77 $ 16.03
------- -------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.15(b) $ 0.12(b)
Net realized and unrealized gain (loss) on investments 2.53 0.94
------- -------
Net increase (decrease) from investment operations $ 2.68 $ 1.06
Distribution to shareowners:
Net investment income $ (0.12) $ (0.12)
Net realized gain - (3.20)
------- -------
Total distributions $ (0.12) $ (3.32)
------- -------
Net increase (decrease) in net asset value $ 2.56 $ (2.26)
------- -------
Net asset value, end of period $ 16.33 $ 13.77
------- -------
Total return* 19.53% 7.13%
Ratio of net expenses to average net assets 1.40% 1.40%
Ratio of net investment income (loss) to average net assets 0.97% 0.89%
Portfolio turnover rate 115% 129%
Net assets, end of period (in thousands) $11,860 $12,888
Ratios with no waiver of fees and assumption of expenses by the
Adviser and no reduction for fees paid indirectly:
Total expenses to average net assets 1.54% 1.58%
Net investment income (loss) to average net assets 0.84% 0.71%
YEAR ENDED YEAR ENDED 6/7/13(A)
8/31/2015*** 8/31/2014*** TO 8/31/2013
-------------- -------------- -------------
Net asset value, beginning of period $ 20.60 $ 19.49 $ 19.83
------- ------- -------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.10 $ 0.11 $ 0.03
Net realized and unrealized gain (loss) on investments (0.96) 3.78 (0.37)
------- ------- -------
Net increase (decrease) from investment operations $ (0.86) $ 3.89 $ (0.34)
Distribution to shareowners:
Net investment income $ (0.09) $ (0.07) $ -
Net realized gain (3.62) (2.71) -
------- ------- -------
Total distributions $ (3.71) $ (2.78) $ -
------- ------- -------
Net increase (decrease) in net asset value $ (4.57) $ 1.11 $ (0.34)
------- ------- -------
Net asset value, end of period $ 16.03 $ 20.60 $ 19.49
------- ------- -------
Total return* (5.32)% 21.25% (1.72)%
Ratio of net expenses to average net assets 1.40% 1.40% 1.40%**
Ratio of net investment income (loss) to average net assets 0.59% 0.52% 0.57%**
Portfolio turnover rate 122% 66% 70%**
Net assets, end of period (in thousands) $15,505 $21,012 $23,718
Ratios with no waiver of fees and assumption of expenses by the
Adviser and no reduction for fees paid indirectly:
Total expenses to average net assets 1.53% 1.58% 1.51%**
Net investment income (loss) to average net assets 0.46% 0.34% 0.46%**
(a) Financial reporting for Class R shares commenced on June 7, 2013.
(b) The per-share data presented above is based on the average shares
outstanding for the period presented.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions and the complete redemption of
the investment at net asset value at the end of each period.
** Annualized.
*** The Fund was audited by another independent registered public accounting
firm other than Ernst & Young LLP.
Financial highlights
PIONEER DISCIPLINED VALUE FUND
CLASS Y SHARES
YEAR ENDED YEAR ENDED
8/31/2017 8/31/2016**
-------------- -------------
Net asset value, beginning of period $ 14.27 $ 16.49
-------- --------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.24(b) $ 0.21(b)
Net realized and unrealized gain (loss) on investments 2.62 0.98
-------- --------
Net increase (decrease) from investment operations $ 2.86 $ 1.19
Distribution to shareowners:
Net investment income $ (0.20) $ (0.21)
Net realized gain - (3.20)
-------- --------
Total distributions $ (0.20) $ (3.41)
-------- --------
Net increase (decrease) in net asset value $ 2.66 $ (2.22)
-------- --------
Net asset value, end of period $ 16.93 $ 14.27
-------- --------
Total return* 20.20% 7.80%
Ratio of net expenses to average net assets 0.84% 0.84%
Ratio of net investment income (loss) to average net assets 1.54% 1.45%
Portfolio turnover rate 115% 129%
Net assets, end of period (in thousands) $148,541 $109,037
Ratios with no waiver of fees and assumption of expenses by the Adviser
and no reduction for fees paid indirectly:
Total expenses to average net assets 0.84% 0.84%
Net investment income (loss) to average net assets 1.54% 1.45%
YEAR ENDED YEAR ENDED YEAR ENDED
8/31/2015** 8/31/2014** 8/31/13(A)
------------- ------------- -----------
Net asset value, beginning of period $ 21.09 $ 19.85 $ 18.18
-------- -------- --------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.24 $ 0.23 $ 0.41
Net realized and unrealized gain (loss) on investments (1.03) 3.86 2.51
-------- -------- --------
Net increase (decrease) from investment operations $ (0.79) $ 4.09 $ 2.92
Distribution to shareowners:
Net investment income $ (0.19) $ (0.14) $ (0.40)
Net realized gain (3.62) (2.71) (0.85)
-------- -------- --------
Total distributions $ (3.81) $ (2.85) $ (1.25)
-------- -------- --------
Net increase (decrease) in net asset value $ (4.60) $ 1.24 $ 1.67
-------- -------- --------
Net asset value, end of period $ 16.49 $ 21.09 $ 19.85
-------- -------- --------
Total return* (4.85)% 21.97% 16.63%
Ratio of net expenses to average net assets 0.85% 0.82% 0.85%
Ratio of net investment income (loss) to average net assets 1.12% 1.11% 1.29%
Portfolio turnover rate 122% 66% 70%
Net assets, end of period (in thousands) $161,238 $276,563 $347,635
Ratios with no waiver of fees and assumption of expenses by the Adviser
and no reduction for fees paid indirectly:
Total expenses to average net assets 0.85% 0.82% 0.97%
Net investment income (loss) to average net assets 1.12% 1.11% 1.16%
(a) The Fund acquired the assets and liabilities of Pioneer Disciplined
Value Fund (the "predecessor fund") on June 7, 2013 (the
"reorganization"). As a result of the reorganization, the
predecessor fund's performance and financial history became the
performance and financial history of the Fund. Historical per-share
amounts prior to June 7, 2013 have been adjusted to reflect the
conversion ratio used to align the net asset values of the
predecessor fund with those of the Fund.
(b) The per-share data presented above is based on the average shares
outstanding for the period presented.
* 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.
** The Fund was audited by another independent registered public accounting
firm other than Ernst & Young LLP.
75
Intermediary defined sales charge waiver policies
MERRILL LYNCH
Effective April 10, 2017, shareholders purchasing fund shares through a Merrill
Lynch platform or account will be eligible only for the following sales charge
waivers (front-end sales charge waivers and CDSC waivers) and discounts, which
may differ from those disclosed elsewhere in this prospectus or the fund's
statement of additional information.
FRONT-END SALES CHARGE WAIVERS FOR CLASS A SHARES AVAILABLE AT MERRILL LYNCH
o Employer-sponsored retirement, deferred compensation and employee benefit
plans (including health savings accounts) and trusts used to fund those
plans, provided that the plan is a group plan (more than one participant),
the shares are not held in a commission-based brokerage account and shares
are held in the name of the plan through an omnibus account
o Shares purchased by or through a 529 Plan
o Shares purchased through a Merrill Lynch affiliated investment advisory
program
o Shares purchased by third party investment advisors on behalf of their
advisory clients through Merrill Lynch's platform
o Shares of funds purchased through the Merrill Edge Self-Directed platform (if
applicable)
o Shares purchased through reinvestment of capital gains distributions and
dividend reinvestment when purchasing shares of the same fund (but not any
other fund within the fund family)
o Shares exchanged from Class C (i.e. level-load) shares of the same fund in
the month of or following the 10-year anniversary of the purchase date
o Employees and registered representatives of Merrill Lynch or its affiliates
and their family members
o Trustees of the fund, and employees of the fund's investment adviser or any
of its affiliates, as described in this prospectus
o Shares purchased from the proceeds of redemptions within the Pioneer fund
family, provided (1) the repurchase occurs within 90 days following the
redemption, (2) the redemption and purchase occur in the same account, and
(3) redeemed shares were subject to a front-end or deferred sales load
(known as Rights of Reinstatement)
CDSC WAIVERS ON CLASS A AND C SHARES AVAILABLE AT MERRILL LYNCH
o Death or disability of the shareholder
o Shares sold as part of a systematic withdrawal plan as described in the
fund's prospectus
76
o Return of excess contributions from an IRA Account
o Shares sold as part of a required minimum distribution for IRA and retirement
accounts due to the shareholder reaching age 70 1/2
o Shares sold to pay Merrill Lynch fees but only if the transaction is
initiated by Merrill Lynch
o Shares acquired through a right of reinstatement
o Shares held in retirement brokerage accounts, that are exchanged for a lower
cost share class due to transfer to certain fee based accounts or platforms
(applicable to Class A and C shares only)
FRONT-END SALES CHARGE DISCOUNTS FOR CLASS A SHARES AVAILABLE AT MERRILL LYNCH:
BREAKPOINTS, RIGHTS OF ACCUMULATION AND LETTERS OF INTENT
o Breakpoints as described in this prospectus.
o Rights of Accumulation (ROA), which entitle shareholders to breakpoint
discounts, will be automatically calculated based on the aggregated holding
of Pioneer fund family assets held by accounts within the purchaser's
household at Merrill Lynch. Eligible Pioneer fund family assets not held at
Merrill Lynch may be included in the ROA calculation only if the shareholder
notifies his or her financial advisor about such assets
o Letters of Intent (LOI) which allow for breakpoint discounts based on
anticipated purchases within the Pioneer fund family, through Merrill Lynch,
over a 13-month period of time (if applicable)
77
Notes
Notes
Notes
Pioneer
Disciplined Value Fund
YOU CAN OBTAIN MORE FREE INFORMATION about the fund from your investment firm
or by writing to Pioneer Funds, 60 State Street, Boston, Massachusetts 02109.
You may also call 1-800-225-6292 for more information about the fund, to
request copies of the fund's statement of additional information and shareowner
reports, and to make other inquiries.
VISIT OUR WEBSITE
us.pioneerinvestments.com
The fund makes available the statement of additional information and shareowner
reports, free of charge, on the fund's website at us.pioneerinvestments.com.
You also may find other information and updates about Amundi Pioneer and the
fund, including fund performance information and the fund's most recent net
asset value, 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.
The statement of additional information, dated December 31, 2017, as may be
amended from time to time, and filed with the Securities and Exchange
Commission, 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 [email protected] or make a
request in writing to the Commission's Public Reference Section, Washington,
D.C. 20549-1520.
(Investment Company Act file no. 811-21664)
[GRAPHIC APPEARS HERE]
AMUNDI PIONEER DISTRIBUTOR, INC.
60 STATE STREET 20180-13-1217
BOSTON, MA 02109 (Copyright)2017 Amundi Pioneer Distributor, Inc.
US.PIONEERINVESTMENTS.COM Member SIPC
[GRAPHIC APPEARS HERE]
Amundi Pioneer Asset Management, Inc.
60 State Street
Boston, MA 02109
us.pioneerinvestments.com
This is not part of the prospectus.
20180-13-1217
(Copyright)2017 Amundi Pioneer Distributor, Inc.
Underwriter of Pioneer mutual funds
Member SIPC
PIONEER DISCIPLINED VALUE FUND
(PIONEER SERIES TRUST III)
--------------------------------------------------------------------------------
60 State Street
Boston, Massachusetts 02109
CLASS A SHARES (CVFCX)
CLASS C SHARES (CVCFX)
CLASS K SHARES (---)
CLASS R SHARES (CVRFX)
CLASS Y SHARES (CVFYX)
Statement of Additional Information
December 31, 2017
This statement of additional information is not a prospectus. It should be read
in conjunction with the fund's Class A, Class C, Class K, Class R and Class Y
shares prospectus dated December 31, 2017, as supplemented or revised from time
to time. A copy of the prospectus can be obtained free of charge by calling the
fund 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 the prospectus from
our website at: us.pioneerinvestments.com. The fund's financial statements for
the fiscal year ended August 31, 2017, including the independent registered
public accounting firm's report thereon, are incorporated into this statement
of additional information by reference.
CONTENTS
---------------------------------------------------
PAGE
1. Fund history............................................... 1
2. Investment policies, risks and restrictions................ 1
3. Trustees and officers...................................... 31
4. Investment adviser......................................... 39
5. Principal underwriter and distribution plan................ 42
6. Shareholder servicing/transfer agent....................... 45
7. Custodian and sub-administrator............................ 45
8. Independent registered public accounting firm.............. 45
9. Portfolio management....................................... 45
10. Portfolio transactions..................................... 49
11. Description of shares...................................... 50
12. Sales charges.............................................. 53
13. Redeeming shares........................................... 59
14. Telephone and online transactions.......................... 60
15. Pricing of shares.......................................... 61
16. Tax status................................................. 63
17. Financial statements....................................... 70
18. Annual fee, expense and other information.................. 70
19. Appendix A - Description of short-term debt, corporate bond
and preferred stock ratings//.............................. 75
20. Appendix B - Proxy voting policies and procedures.......... 79
[GRAPHIC APPEARS HERE]
1. FUND HISTORY
The fund is a diversified series of Pioneer Series Trust III (the "Trust"), an
open-end management investment company. The Trust was created as a Delaware
statutory trust on September 23, 2004. The fund originally was established as
Cullen Value Fund, a series of Cullen Funds Trust, a Delaware statutory trust,
on March 25, 2000. Pursuant to an agreement and plan of reorganization, Cullen
Value Fund was reorganized as a series of the Trust on February 25, 2005. Prior
to August 1, 2012, the fund was sub-advised by Cullen Capital Management, LLC
("Cullen"). Prior to June 30, 2012, the fund was named Pioneer Cullen Value
Fund. The fund was renamed Pioneer Fundamental Value Fund on June 30, 2012. On
June 7, 2013, the fund acquired the assets and liabilities of Pioneer
Disciplined Value Fund (the "predecessor fund"). As a result of the
reorganization, the predecessor fund's performance and financial history became
the fund's performance and financial history. As part of the reorganization,
the fund was renamed Pioneer Disciplined Value Fund. Amundi Pioneer Asset
Management, Inc. ("Amundi Pioneer") is the fund's investment adviser.
2. INVESTMENT POLICIES, RISKS AND RESTRICTIONS
The prospectus presents the investment objective and the principal investment
strategies and risks of the fund. This section supplements the disclosure in
the fund's prospectus 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.
1
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
Companies involved in initial public offering (IPOs) generally have limited
operating histories, and prospects for future profitability are uncertain. The
market for IPO issuers has been volatile, and share prices of newly public
companies have fluctuated significantly over short periods of time. Further,
stocks of newly-public companies may decline shortly after the IPO. There is no
assurance that the fund will have access to IPOs. The purchase of IPO shares
may involve high transaction costs. Because of the price volatility of IPO
shares, the fund may choose to hold IPO shares for a very short period of time.
This may increase the turnover of the portfolio and may lead to increased
expenses to the fund, such as commissions and transaction costs. The market for
IPO shares can be speculative and/or inactive for extended periods of time.
There may be only a limited number of shares available for trading. The limited
number of shares available for trading in some IPOs may also make it more
difficult for the fund to buy or sell significant amounts of shares without an
unfavorable impact on prevailing prices.
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 all types of 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. As a sovereign entity, the
issuing government may be immune from lawsuits in the event of its failure or
refusal to pay the obligations when due. During periods of economic uncertainty
(such as the financial crisis that began in 2008), the values of sovereign debt
and of securities of issuers that purchase 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, declared moratoria on the payment
of principal and interest on their sovereign debt, or restructured their debt
to effectively eliminate portions of it, and similar occurrences may happen in
the future. There is no bankruptcy proceeding by which sovereign debt on which
governmental entities have defaulted may be collected in whole or in part.
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
2
policy toward its principal international lenders and local political
constraints. Sovereign debtors may also be dependent on disbursements or
assistance from non-U.S. governments, multinational agencies and other entities
to reduce principal and interest arrearages on their debt. Assistance may be
dependent on a country's implementation of austerity measures and reforms,
which measures may limit or be perceived to limit economic growth and recovery.
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. The fund considers
emerging market issuers to include issuers organized under the laws of an
emerging market country, issuers with a principal officer in an emerging market
country, issuers that derive at least 50% of their gross revenues or profits
from goods or services produced in emerging markets or sales made in emerging
markets, and emerging market governmental issuers. Emerging economies or
securities markets will generally include, but not be limited to, countries
included in the Morgan Stanley Capital International (MSCI) Emerging & Frontier
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 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.
3
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 Amundi Pioneer 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. In addition, it may be difficult for the fund to pursue claims
against a foreign issuer in the courts of a foreign country. 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.
Investments that have exposure to Russian or Ukrainian issuers or markets may
be significantly affected by events involving Ukraine and the Russian
Federation and economic sanctions against Russia and other responses to these
events by the United States and other nations.
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 and significantly by economic conditions in
the countries with which they trade.
A number of countries in Europe have experienced severe economic and financial
difficulties. Many non-governmental issuers, and even certain governments, have
defaulted on, or been forced to restructure, their debts; many other issuers
have faced difficulties obtaining credit or refinancing existing obligations;
financial institutions
4
have in many cases required government or central bank support, have needed to
raise capital, and/or have been impaired in their ability to extend credit; and
financial markets in Europe and elsewhere have experienced extreme volatility
and declines in asset values and liquidity. These difficulties may continue,
worsen or spread within and beyond Europe. Responses to the financial problems
by European governments, central banks and others, including austerity measures
and reforms, may not work, may result in social unrest and may limit future
growth and economic recovery or have other unintended consequences. Further
defaults or restructurings by governments and others of their debt could have
additional adverse effects on economies, financial markets and asset valuations
around the world. In addition, on June 23, 2016, voters in the United Kingdom
approved withdrawal from the European Union. On March 29, 2017, the United
Kingdom formally notified the European Council of its intention to leave the
European Union; as a result, the United Kingdom will remain a member state,
subject to European Union law with privileges to provide services under the
single market directives, for at least two years from that date. Given the size
and importance of the United Kingdom's economy, uncertainty about its legal,
political, and economic relationship with the remaining member states of the
European Union may continue to be a source of instability. Moreover, other
countries may seek to withdraw from the European Union and/or abandon the euro,
the common currency of the European Union. A number of countries in Europe have
suffered terror attacks, and additional attacks may occur in the future. The
Ukraine has experienced ongoing military conflict; this conflict may expand and
military conflicts could potentially occur elsewhere in Europe. Europe has also
been struggling with mass migration from the Middle East and Africa. The
ultimate effects of these events and other socio-political or geopolitical
issues are not known but could profoundly affect global economies and markets.
Whether or not the fund invests in securities of issuers located in Europe or
with significant exposure to European issuers or countries, these events could
negatively affect the value and liquidity of the fund's investments due to the
interconnected nature of the global economy and capital markets.
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 may 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 may 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.
5
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 may enter into forward foreign currency
exchange contracts, which are contractual agreements to purchase or sell a
specified currency at a specified future date and price set at the time of the
contract.
The fund may 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. 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 Amundi
Pioneer.
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 Amundi Pioneer 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.
6
The fund may use forward currency exchange contracts to reduce or gain exposure
to a currency. To the extent the fund gains exposure to a currency through
these instruments, the resulting exposure may exceed the value of securities
denominated in that currency held by the fund. For example, where the fund's
security selection has resulted in an overweight or underweight exposure to a
particular currency relative to the fund's benchmark, the fund may seek to
adjust currency exposure using forward currency exchange contracts.
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 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 may benefit from foreign currency 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 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 Amundi Pioneer will segregate liquid assets. See "Asset
Segregation."
OPTIONS ON FOREIGN CURRENCIES
The fund may purchase 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
7
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 Amundi Pioneer 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. 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.
8
NATURAL DISASTERS
Certain areas of the world, including areas within the United States,
historically have been prone to natural disasters, such as hurricanes,
earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes,
wildfires or droughts. Such disasters, and the resulting damage, could have a
significant adverse impact on the economies of those areas and on the ability
of issuers in which the fund invests to conduct their businesses, and thus on
the investments made by the fund in such geographic areas and/or issuers.
Adverse weather conditions could have a significant adverse impact on issuers
in the agricultural sector and on insurance companies that insure against the
impact of natural disasters.
CYBERSECURITY ISSUES
With the increased use of technologies such as the Internet to conduct
business, the fund is susceptible to operational, information security and
related risks. In general, cyber incidents can result from deliberate attacks
or unintentional events. Cyber attacks include, but are not limited to, gaining
unauthorized access to digital systems (e.g., through "hacking" or malicious
software coding) for purposes of misappropriating assets or sensitive
information, corrupting data, or causing operational disruption. Cyber attacks
may also be carried out in a manner that does not require gaining unauthorized
access, such as causing denial-of-service attacks on websites (i.e., efforts to
make network services unavailable to intended users). Cybersecurity failures or
breaches by the fund's adviser, transfer agent, distributor and other service
providers (including, but not limited to, the fund's custodian and financial
intermediaries), and the issuers of securities in which the fund invests, have
the ability to cause disruptions and impact business operations potentially
resulting in financial losses, interference with the fund's ability to
calculate its NAV, impediments to trading, the inability of fund shareholders
to transact business, violations of applicable privacy and other laws,
regulatory fines, penalties, reputational damage, reimbursement or other
compensation costs, or additional compliance costs. In addition, substantial
costs may be incurred in order to prevent any cyber incidents in the future.
While the fund or its adviser has established business continuity plans in the
event of, and risk management systems to prevent, such cyber attacks, there are
inherent limitations in such plans and systems including the possibility that
certain risks have not been identified. Furthermore, the fund cannot control
the cyber security plans and systems put in place by service providers to the
fund and issuers in which the fund invests. The fund and its shareholders could
be negatively impacted as a result.
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") and the rules thereunder. 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
Standard & Poor's 500 Stock Index (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.
9
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. Some ETFs
are not structured as investment companies and thus are not regulated under the
1940 Act.
Certain ETFs, including leveraged ETFs and inverse ETFs, may have embedded
leverage. Leveraged ETFs seek to multiply the return of the tracked index
(e.g., twice the return) by using various forms of derivative transactions.
Inverse ETFs seek to negatively correlate with the performance of a particular
index by using various forms of derivative transactions, including by
short-selling the underlying index. An investment in an inverse ETF will
decrease in value when the value of the underlying index rises. By investing in
leveraged ETFs or inverse ETFs, the fund can commit fewer assets to the
investment in the securities represented on the index than would otherwise be
required.
Leveraged ETFs and inverse ETFs present all of the risks that regular ETFs
present. In addition, leveraged ETFs and inverse ETFs determine their return
over a specific, pre-set time period, typically daily, and, as a result, there
is no guarantee that the ETF's actual long term returns will be equal to the
daily return that the fund seeks to achieve. For example, on a long-term basis
(e.g., a period of 6 months or a year), the return of a leveraged ETF may in
fact be considerably less than two times the long-term return of the tracked
index. Furthermore, because leveraged ETFs and inverse ETFs achieve their
results by using derivative instruments, they are subject to the risks
associated with derivative transactions, including the risk that the value of
the derivatives may rise or fall more rapidly than other investments, thereby
causing the ETF to lose money and, consequently, the value of the fund's
investment to decrease. Investing in derivative instruments also involves the
risk that other parties to the derivative contract may fail to meet their
obligations, which could cause losses to the ETF. Short sales in particular are
subject to the risk that, if the price of the security sold short increases,
the inverse ETF may have to cover its short position at a higher price than the
short sale price, resulting in a loss to the inverse ETF and, indirectly, to
the fund. An ETF's use of these techniques will make the fund's investment in
the ETF more volatile than if the fund were to invest directly in the
securities underlying the tracked index, or in an ETF that does not use
leverage or derivative instruments. However, by investing in a leveraged ETF or
an inverse ETF rather than directly purchasing and/or selling derivative
instruments, the fund will limit its potential loss solely to the amount
actually invested in the ETF (that is, the fund will not lose more than the
principal amount invested in the ETF).
REAL ESTATE INVESTMENT TRUSTS ("REITS")
The fund may invest in REITs. REITs are companies that invest primarily in
income producing real estate or real estate-related loans or interests. Risks
associated with investments in REITs and other equity securities of real estate
industry issuers 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
o If the fund's real estate related investments are concentrated in one
geographic area or property type, the fund will be particularly subject to
the risks associated with that area or property type
10
REITs are generally classified as equity REITs, mortgage REITs or a combination
of equity and mortgage REITs (known as hybrid 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 similar real estate
interests and derive income primarily from the collection of interest payments.
REITs are not taxed on income distributed to shareholders provided they comply
with the applicable requirements of 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. Such indirect expenses
are not reflected in the fee table or expense example in the fund's prospectus.
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. Mortgage REITs are subject to the risks of default of the
mortgages or mortgage-related securities in which they invest, and REITs that
invest in so-called "sub-prime" mortgages are particularly subject to this
risk. 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 are typically invested in a
limited number of projects or in a particular market segment or geographic
region. REITs whose underlying assets are concentrated in properties in one
geographic area or used by a particular industry, such as health care, will be
particularly subject to risks associated with such area or 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 the S&P 500.
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. Mortgage REITs tend to be
more leveraged than equity REITs. In addition, many mortgage REITs manage their
interest rate and credit risks through the use of derivatives and other hedging
techniques. 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.
DERIVATIVE INSTRUMENTS
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. The fund may use
derivatives for a variety of purposes, including: in an attempt to hedge
against adverse changes in the market prices of securities, interest rates or
currency exchange rates; as a substitute for purchasing or selling securities;
to attempt to increase the fund's return
11
as a non-hedging strategy that may be considered speculative; to manage
portfolio characteristics (for example, for funds investing in securities
denominated in non-U.S. currencies, a portfolio's currency exposure, or, for
funds investing in fixed income securities, a portfolio's duration or credit
quality); and as a cash flow management technique. The fund may choose not to
make use of derivatives for a variety of reasons, and any use may be limited by
applicable law and regulations.
Using derivatives exposes the fund to additional risks and may increase the
volatility of the fund's net asset value and may not provide the expected
result. Derivatives may have a leveraging effect on the portfolio. Leverage
generally magnifies the effect of a change in the value of an asset and creates
a risk of loss of value in a larger pool of assets than the fund would
otherwise have had. 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, or could experience
unusually high expenses as a result of, the derivative position. Derivatives
involve the risk of loss if the counterparty 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. The fund also may have to sell assets at inopportune times to satisfy
its obligations. The fund may not be able to purchase or sell a portfolio
security at a time that would otherwise be favorable for it to do so, or may
have to sell a portfolio security at a disadvantageous time or price to
maintain cover or to segregate securities in connection with its use of
derivatives. Some derivatives may involve the risk of improper valuation.
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.
Financial reform laws enacted after the financial crisis of 2008-2009, such as
the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank"),
are changing many aspects of financial regulation applicable to derivatives.
For instance, Dodd-Frank calls for the comprehensive regulation of swaps by the
Commodity Futures Trading Commission (the "CFTC") and the Securities and
Exchange Commission (the "SEC"). The CFTC and the SEC are in the process of
adopting and implementing new regulations applicable to these instruments,
including rules with respect to recordkeeping, reporting, business conduct,
relationship documentation, margin, collateral, clearing, and trade execution
requirements. In addition, Dodd-Frank requires the registration of certain
parties that deal or engage in substantial trading, execution or advisory
activities in the markets for swaps. The extent and impact of these regulations
are not yet fully known and may not be known for some time.
The fund's use of derivatives may be affected by other applicable laws and
regulations and may be subject to review by the SEC, the CFTC, exchange and
market authorities and other regulators in the United States and abroad. The
fund's ability to use derivatives may be limited by tax considerations.
Certain derivatives transactions, including certain options, swaps, forward
contracts, and certain options on foreign currencies, are entered into directly
by the counterparties or through financial institutions acting as market makers
(OTC derivatives), rather than being traded on exchanges or in markets
registered with the CFTC or the SEC. Many of the protections afforded to
exchange participants will not be available to participants in OTC derivatives
transactions. For example, OTC derivatives transactions are not subject to the
guarantee of an exchange, and only OTC derivatives that are either required to
be cleared or submitted voluntarily for clearing to a clearinghouse will enjoy
all of the protections that central clearing provides against default by the
original counterparty to the trade. In an OTC derivatives transaction that is
not cleared, the fund bears the risk of default by its counterparty. In a
cleared derivatives transaction, the fund is instead exposed to the risk of
default of the clearinghouse and, to the extent the fund has posted any margin,
the risk of default of the broker through which it has entered into the
transaction. Information available on counterparty creditworthiness may be
incomplete or outdated, thus reducing the ability to anticipate counterparty
defaults.
12
Derivatives involve operational risk. There may be incomplete or erroneous
documentation or inadequate collateral or margin, or transactions may fail to
settle. For derivatives not guaranteed by an exchange or clearinghouse, the
fund may have only contractual remedies in the event of a counterparty default,
and there may be delays, costs, or disagreements as to the meaning of
contractual terms and litigation in enforcing those remedies.
Swap contracts that are required to be cleared must be traded on a regulated
execution facility or contract market that makes them available for trading.
The establishment of a centralized exchange or market for swap transactions may
disrupt or limit the swap market and may not result in swaps being easier to
trade or value. Market-traded swaps may become more standardized, and the fund
may not be able to enter into swaps that meet its investment needs. The fund
also may not be able to find a clearinghouse willing to accept the swaps for
clearing. The new regulations may make using swaps more costly, may limit their
availability, or may otherwise adversely affect their value or performance.
Risks associated with the use of derivatives are magnified to the extent that a
large portion of the fund's assets are committed to derivatives in general or
are invested in just one or a few types of derivatives.
OPTIONS ON SECURITIES AND SECURITIES INDICES
The fund may purchase and write 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. The exercise price may differ from the market price of an underlying
security. The fund has the risk of loss that the price of an underlying
security may decline during the call period. The risk may be offset to some
extent by the premium the fund receives. If the value of the investment does
not rise above the call price, it's likely that the call will lapse without
being exercised. In that case, the fund would keep the cash premium and the
investment. 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. The fund has no control over
when it may be required to purchase the underlying securities. 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.
13
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."
OPTIONS SPREADS AND STRADDLES. Option spread and straddle transactions require
a fund to purchase and/or write more than one option simultaneously. A fund may
engage in option spread transactions in which it purchases and writes put or
call options on the same underlying instrument, with the options having
different exercise prices and/or expiration dates.
A fund also may engage in option straddles, in which it purchases or sells
combinations of put and call options on the same instrument. A long straddle is
a combination of a call and a put option purchased on the same security where
the exercise price of the put is less than or equal to the exercise price of
the call. A short straddle is a combination of a call and a put written on the
same security where the exercise price of the put is less than or equal to the
exercise price of the call and where the same issue of security or currency is
considered cover for both the put and the call.
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.
14
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 Amundi Pioneer. 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 Amundi Pioneer 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 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
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 enter into closing purchase and sale transactions with respect to any
futures contracts and options on futures contracts. 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 may invest in futures contracts based on the Chicago Board of
15
Exchange Volatility Index ("VIX Futures"). The VIX is an index of market
sentiment derived from the S&P 500 option prices, and is designed to reflect
investors' consensus view of expected stock market volatility over future
periods. 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 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 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
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 Amundi Pioneer, there is a
sufficient degree of correlation between price trends for the fund's 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 portfolio may be more or less volatile than prices of such
futures contracts, Amundi Pioneer 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 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 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.
16
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 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. When futures
contracts and options are used for hedging purposes, perfect correlation
between the fund's futures positions and portfolio positions may be impossible
to achieve, particularly where futures contracts based on individual securities
are currently not available. 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
17
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 Amundi Pioneer 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
Amundi Pioneer has claimed an exclusion from registration as a "commodity pool
operator" with respect to the fund under the Commodity Exchange Act (the
"CEA"), and, therefore, Amundi Pioneer will not, with respect to its management
of the fund, be subject to registration or regulation as a commodity pool
operator.
Under this exemption, the fund will remain limited in its ability to trade
instruments subject to the jurisdiction of the CFTC, including commodity
futures (which include futures on broad-based securities indexes and interest
rate futures), options on commodity futures and swaps. This limitation also
applies with respect to any indirect exposure that the fund may have to these
instruments through investments in other funds. Amundi Pioneer may have to rely
on representations from the underlying fund's manager about the amount (or
maximum permitted amount) of investment exposure that the underlying fund has
to instruments such as commodity futures, options on commodity futures and
swaps.
Under this exemption, the fund must satisfy one of the following two trading
limitations at all times: (1) the aggregate initial margin and premiums
required to establish the fund's positions in commodity futures, options on
commodity futures, swaps and other CFTC-regulated instruments may not exceed 5%
of the liquidation value of the fund's portfolio (after accounting for
unrealized profits and unrealized losses on any such investments); or (2) the
aggregate net notional value of such instruments, determined at the time the
most recent position was established, may not exceed 100% of the liquidation
value of the fund's portfolio (after accounting for unrealized profits and
unrealized losses on any such positions). The fund would not be required to
consider its exposure to such instruments if they were held for "bona fide
hedging" purposes, as such term is defined in the rules of the CFTC. In
addition to meeting one of the foregoing trading limitations, the fund may not
market itself as a commodity pool or otherwise as a vehicle for trading in the
markets for CFTC-regulated instruments.
DEBT SECURITIES AND RELATED INVESTMENTS
DEBT SECURITIES SELECTION
In selecting debt securities for the fund, Amundi Pioneer gives primary
consideration to the fund's investment objective, the attractiveness of the
market for debt securities given the outlook of Amundi Pioneer for the equity
markets and the fund's liquidity requirements. Once Amundi Pioneer determines
to allocate a portion of the fund's assets to debt securities, Amundi Pioneer
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. Amundi Pioneer 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.
18
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 "D" or better, or
comparable unrated securities as determined by Amundi Pioneer.
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 issuers of high yield
securities also may be more adversely affected than issuers of higher rated
securities by specific corporate or governmental developments or the issuers'
inability to meet specific projected business forecasts. The amount of high
yield securities outstanding has proliferated as an increasing number of
issuers have used high yield securities for corporate financing. The recent
economic downturn has severely affected 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 recently 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.
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
19
may not accurately describe the risk of the security. If a rating organization
changes the quality rating assigned to one or more of the fund's portfolio
securities, Amundi Pioneer will consider if any action is appropriate in light
of the fund's investment objective and policies.
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, Farm Service Agency,
Export-Import Bank of the U.S., Small Business Administration, Government
National Mortgage Association ("GNMA"), General Services Administration,
National 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 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. Such debt
securities are subject to the risk of default on the payment of interest and/or
principal, similar to debt of private issuers. The maximum potential liability
of some U.S. government securities may greatly exceed their current resources,
including any legal right to support from the U.S. government. Although the
U.S. government provided financial support to FNMA and FHLMC in the past, 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; and (ii) participations in loans
made to non-U.S. governments or other entities that are so guaranteed. 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
20
increase when interest rates decline and, conversely, tend to decline when
interest rates increase. Depending on the relationship of the conversion price
to the market value of the underlying securities, convertible securities may
trade more like equity securities than debt securities.
A convertible security entitles the holder to receive interest that is
generally paid or accrued until the convertible security matures, or is
redeemed, converted, or exchanged. Convertible securities have unique
investment characteristics, in that they generally (i) have higher yields than
common stocks, but lower yields than comparable non-convertible securities,
(ii) are less subject to fluctuation in value than the underlying common stock
due to their fixed-income characteristics and (iii) provide the potential for
capital appreciation if the market price of the underlying common stock
increases. A convertible security may be subject to redemption at the option of
the issuer at a price established in the convertible security's governing
instruments. If a convertible security held by the fund is called for
redemption, the fund will be required to permit the issuer to redeem the
security, convert it into the underlying common stock or sell it to a third
party. Any of these actions could result in losses to the fund.
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 Amundi Pioneer 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
Amundi Pioneer. Amundi Pioneer 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, Amundi 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, Amundi Pioneer reviews and
monitors the creditworthiness of any institution which enters into a repurchase
agreement with the fund. The counterparty's obligations
21
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. There is no specific limit on the fund's
ability to enter into repurchase agreements. The SEC frequently treats
repurchase agreements as loans for purposes of the 1940 Act.
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. The fund
may engage in short sales of securities only against the box.
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
22
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 Amundi 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 portfolio. If
the fund enters into a transaction requiring segregation, such as a forward
commitment or a reverse repurchase agreement, the custodian or Amundi 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. In some
instances a fund may "cover" its obligation using other methods to the extent
permitted under the 1940 Act, orders or releases issued by the SEC thereunder,
or no-action letters or other guidance of the SEC staff.
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 Amundi 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 and will bear the entire amount of
any loss in connection with investment of such 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. Fees and expenses paid by the fund in connection with loans of
securities are not reflected in the fee table or expense example in the fund's
prospectus. If the income earned on the investment of the cash collateral is
insufficient to pay these amounts or if the value of the securities purchased
with such cash collateral declines, the fund may take a loss on the loan.
23
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 reserves the
right to recall loaned securities so that it may exercise voting rights on
loaned securities 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. In addition, as noted
above, the fund continues to have market risk and other risks associated with
owning the securities on loan. 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
Amundi 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.
24
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 Amundi 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 Amundi Pioneer
have access to their portfolio holdings, and prospective clients have access to
representative holdings.
Generally, Amundi Pioneer will make a fund's full portfolio information
available to the public on a monthly basis with an appropriate delay based upon
the nature of the information disclosed. Amundi 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 (us.pioneerinvestments.com) and may be
sent to rating agencies, reporting/news services and financial intermediaries,
upon request. In addition, Amundi 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.
Amundi 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
25
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. Amundi 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, Amundi 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, as needed to
evaluate Pioneer funds); 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); Beacon Pointe Advisors (as needed for quarterly review of
certain Pioneer funds); Commonwealth Financial Network (within 30 days after
month end for risk analysis on funds on behalf of their clients); Hartford
Retirement Services, LLC (as needed for risk analysis on funds on behalf of
their clients); Transamerica Life Insurance Company (as needed for performance
and risk analysis on funds on behalf of their clients); TIBCO Software
Inc./Spotfire Division (as needed to evaluate and develop portfolio reporting
software); Curcio Webb, LLC (as needed for evaluation and research purposes);
Fidelity Investments (as needed to evaluate Pioneer funds); Egan Jones Ratings
Company (as needed in order to evaluate and select Nationally Recognized
Statistical Rating Organizations (NRSROs)); DBRS Limited (as needed in order to
evaluate and select NRSROs); Wells Fargo Advisors (as needed for risk analysis
on funds on behalf of their clients and product review); and Capital Market
Consultants (as needed to complete quarterly due diligence research).
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 Amundi 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' full 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 Amundi 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 and duties not to trade on
non-public information arising under law or contract that provide an adequate
safeguard for such information. None of Amundi Pioneer, the funds, or any other
party receive any compensation or other consideration from any arrangement
pertaining to the release of a fund's full 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. Form N-Q is filed with the SEC within sixty (60) days after
the end of a fund's first and third fiscal quarters. Form N-CSR is filed with
the SEC within ten (10) days after the transmission to shareholders of a fund's
annual or semi-annual report, as applicable.
26
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 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 (the fund's total assets include the amounts being borrowed). 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
(including amounts borrowed), 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
27
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
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.
A fund may pledge its assets and guarantee the securities of another company
without limitation, subject to the fund's investment policies (including the
fund's fundamental policy regarding borrowing) and applicable laws and
interpretations. Pledges of assets and guarantees of obligations of others are
subject to many of the same risks associated with borrowings and, in addition,
are subject to the credit risk of the obligor for the underlying obligations.
To the extent that pledging or guaranteeing assets may be considered the
issuance of senior securities, the issuance of senior securities is governed by
the fund's policies on senior securities. If the fund were to pledge its
assets, the fund would take into account any then-applicable legal guidance,
including any applicable SEC staff position, would be guided by the judgment of
the fund's Board and Amundi Pioneer regarding the terms of any credit facility
or arrangement, including any collateral required, and would not pledge more
collateral than, in their judgment, is necessary for the fund to obtain the
credit sought. Shareholders should note that in 1973, the SEC staff took the
position in a no-action letter that a mutual fund could not pledge 100% of its
assets without a compelling business reason. In more recent no-action letters,
including letters that address the same statutory provision of the 1940 Act
(Section 17) addressed in the 1973 letter, the SEC staff has not mentioned any
limitation on the amount of collateral that may be pledged to support credit
obtained. This does not mean that the staff's position on this issue has
changed.
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
28
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 short-term loans to other Pioneer funds through a credit
facility in order to satisfy redemption requests or to cover unanticipated cash
shortfalls; as discussed in this Statement of Additional Information under
"Interfund Lending". The conditions of the SEC exemptive order permitting
interfund lending are designed to minimize the risks associated with interfund
lending, however no lending activity is without risk. A delay in repayment to a
lending fund could result in a lost opportunity or additional lending costs.
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
29
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; 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 for purposes of its concentration
policy, the fund may rely upon available industry classifications. As of the
date of the SAI, the fund relies primarily on the MSCI Global Industry
Classification Standard (GICS) classifications, and, with respect to securities
for which no industry classification under GICS is available or for which the
GICS classification is determined not to be appropriate, the fund may use
industry classifications published by another source, which, as of the date of
the SAI, is Bloomberg L.P. As of the date of the SAI, the fund's adviser may
assign an industry classification for an exchange-traded fund in which the fund
invests based on the constituents of the index on which the exchange-traded
fund is based. The fund may change any source used for determining industry
classifications without shareholder approval.
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, SEC staff or other
authority of competent jurisdiction 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 POLICY
The following policy is non-fundamental and may be changed by a vote of the
Board of Trustees without approval of shareholders.
The fund may not 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). The fund has adopted this non-fundamental
policy in order that the fund may be a permitted investment of the series of
Pioneer Asset Allocation Trust. If the series of Pioneer Asset Allocation Trust
do not invest in the fund, then this non-fundamental restriction will not
apply.
In addition, the fund's investment objective is non-fundamental and it and the
fund's non-fundamental investment policies may be changed by a vote of the
Board of Trustees without approval of shareholders at any time.
DIVERSIFICATION
The fund is currently classified as a diversified fund under the 1940 Act. A
diversified fund may not purchase securities of an issuer (other than
obligations issued or guaranteed by the U.S. government, its agencies or
instrumentalities) if, with respect to 75% of the fund's total assets, (a) more
than 5% of the fund's total
30
assets would be invested in securities of that issuer, or (b) the fund would
hold more than 10% of the outstanding voting securities of that issuer. Under
the 1940 Act, the fund cannot change its classification from diversified to
non-diversified without shareholder approval.
3. TRUSTEES AND OFFICERS
The fund's Trustees and officers are listed below, together with their
principal occupations and other directorships they have held during at least
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 44 U.S. registered
investment portfolios for which Amundi 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.
NAME, AGE AND TERM OF OFFICE AND OTHER DIRECTORSHIPS
POSITION HELD WITH THE FUND LENGTH OF SERVICE PRINCIPAL OCCUPATION HELD BY TRUSTEE
----------------------------- -------------------------- ------------------------------------------- -------------------------
INDEPENDENT TRUSTEES:
----------------------------- -------------------------- ------------------------------------------- ----
THOMAS J. PERNA (67) Trustee since 2006. Private investor (2004 - 2008 and Director, Broadridge
Chairman of the Board and Serves until a successor 2013 - present); Chairman (2008 - Financial Solutions,
Trustee trustee is elected or 2013) and Chief Executive Officer Inc. (investor
-----------------------------
earlier retirement or (2008 - 2012), Quadriserv, Inc. communications and
removal. (technology products for securities securities processing
--------------------------
lending industry); and Senior provider for financial
Executive Vice President, The Bank services industry)
of New York (financial and securities (2009 - present);
services) (1986 - 2004) Director, Quadriserv,
-------------------------------------------
Inc. (2005 - 2013);
and Commissioner,
New Jersey State
Civil Service
Commission (2011 -
2015)
----
DAVID R. BOCK (74) Trustee since 2005. Managing Partner, Federal City Director of New York
Trustee Serves until a successor Capital Advisors (corporate advisory Mortgage Trust
-----------------------------
trustee is elected or services company) (1997 - 2004 (publicly-traded
earlier retirement or and 2008 - present); Interim Chief mortgage REIT)
removal. Executive Officer, Oxford Analytica, (2004 - 2009, 2012
--------------------------
Inc. (privately held research and - present); Director of
consulting company) (2010); The Swiss Helvetia
Executive Vice President and Chief Fund, Inc.
Financial Officer, I-trax, Inc. (publicly (closed-end fund)
traded health care services (2010 - present);
company) (2004 - 2007); and Director of Oxford
Executive Vice President and Chief Analytica, Inc. (2008
Financial Officer, Pedestal Inc. - present); and
(internet-based mortgage trading Director of Enterprise
company) (2000 - 2002); Private Community
Consultant (1995 - 1997); Investment, Inc.
Managing Director, Lehman (privately-held
Brothers (1992 - 1995); Executive, affordable housing
The World Bank (1979 - 1992) finance company)
-------------------------------------------
(1985 - 2010)
-----------------------
31
NAME, AGE AND TERM OF OFFICE AND OTHER DIRECTORSHIPS
POSITION HELD WITH THE FUND LENGTH OF SERVICE PRINCIPAL OCCUPATION HELD BY TRUSTEE
----------------------------- --------------------------- ------------------------------------- ------------------------
BENJAMIN M. FRIEDMAN Trustee since 2008. William Joseph Maier Professor of Trustee, Mellon
(73) Serves until a successor Political Economy, Harvard Institutional Funds
Trustee trustee is elected or University (1972 - present) Investment Trust and
--- -------------------------------------
earlier retirement or Mellon Institutional
removal. Funds Master
---------------------------
Portfolio (oversaw
17 portfolios in fund
complex) (1989 -
2008)
----
MARGARET B.W. GRAHAM Trustee since 2004. Founding Director, Vice-President None
----
(70) Serves until a successor and Corporate Secretary, The
Trustee trustee is elected or Winthrop Group, Inc. (consulting
---
earlier retirement or firm) (1982 - present); Desautels
removal. Faculty of Management, McGill
---------------------------
University (1999 - present); and
Manager of Research Operations
and Organizational Learning, Xerox
PARC, Xerox's advance research
center (1990-1994)
-------------------------------------
LORRAINE H. MONCHAK (61) Trustee since 2017. Chief Investment Officer, 1199 SEIU None
----
Trustee (Advisory Trustee from Funds (healthcare workers union
---
2014 - 2017) Serves pension funds) (2001 - present);
until a successor trustee Vice President - International
is elected or earlier Investments Group, American
retirement or removal. International Group, Inc. (insurance
---------------------------
company) (1993 - 2001); Vice
President Corporate Finance and
Treasury Group, Citibank, N.A.(1980
- 1986 and 1990 - 1993); Vice
President - Asset/Liability
Management Group, Federal Farm
Funding Corporation
(government-sponsored issuer of
debt securities) (1988 - 1990);
Mortgage Strategies Group,
Shearson Lehman Hutton, Inc.
(investment bank) (1987 - 1988);
Mortgage Strategies Group, Drexel
Burnham Lambert, Ltd. (investment
bank) (1986 - 1987)
-------------------------------------
MARGUERITE A. PIRET (69) Trustee since 2004. President and Chief Executive Director of New
Trustee Serves until a successor Officer, Newbury Piret Company America High Income
---
trustee is elected or (investment banking firm) (1981 - Fund, Inc.
earlier retirement or present) (closed-end
-------------------------------------
removal. investment company)
---------------------------
(2004 - present);
and Member, Board
of Governors,
Investment Company
Institute (2000 -
2006)
----
32
NAME, AGE AND TERM OF OFFICE AND OTHER DIRECTORSHIPS
POSITION HELD WITH THE FUND LENGTH OF SERVICE PRINCIPAL OCCUPATION HELD BY TRUSTEE
----------------------------- -------------------------- ------------------------------------- ---------------------
FRED J. RICCIARDI (70) Trustee since 2014. Consultant (investment company None
---------------------
Trustee Serves until a successor services) (2012 - present);
-----------------------------
trustee is elected or Executive Vice President, BNY
earlier retirement or Mellon (financial and investment
removal. company services) (1969 - 2012);
--------------------------
Director, BNY International
Financing Corp. (financial services)
(2002 - 2012); Director, Mellon
Overseas Investment Corp.
(financial services) (2009 - 2012)
-------------------------------------
INTERESTED TRUSTEES:
----------------------------- -------------------------- ------------------------------------- ---------------------
LISA M. JONES (55)* Trustee since 2017. Chair, Director, CEO and President None
---------------------
Trustee, President and Serves until a successor of Amundi Pioneer Asset
Chief Executive Officer trustee is elected or Management USA, Inc. (since
-----------------------------
earlier retirement or September 2014); Chair, Director
removal and CEO of Amundi Pioneer Asset
--------------------------
Management, Inc. (since September
2014); Chair, Director and CEO of
Amundi Pioneer Distributor, Inc.
(since September 2014); Chair,
Director, CEO and President of
Amundi Pioneer Institutional Asset
Management, Inc. (since September
2014); Managing Director, Morgan
Stanley Investment Management
(2010 - 2013); Director of
Institutional Business, CEO of
International, Eaton Vance
Management (2005 - 2010)
-------------------------------------
KENNETH J. TAUBES (59)* Trustee since 2014. Director and Executive Vice None
---------------------
Trustee Serves until a successor President (since 2008) and Chief
-----------------------------
trustee is elected or Investment Officer, U.S. (since
earlier retirement or 2010) of Amundi Pioneer Asset
removal Management USA, Inc.; Executive
--------------------------
Vice President and Chief Investment
Officer, U.S. of Amundi Pioneer
(since 2008); Executive Vice
President of Amundi Pioneer
Institutional Asset Management,
Inc. (since 2009); Portfolio Manager
of Amundi Pioneer (since 1999)
-------------------------------------
FUND OFFICERS:
----------------------------- -------------------------- ------------------------------------- ---------------------
CHRISTOPHER J. KELLEY (53) Since 2004. Serves at Vice President and Associate None
---------------------
Secretary and Chief Legal the discretion of the General Counsel of Amundi Pioneer
Officer Board since January 2008; Secretary and
----------------------------- --------------------------
Chief Legal Officer of all of the
Pioneer Funds since June 2010;
Assistant Secretary of all of the
Pioneer Funds from September
2003 to May 2010; Vice President
and Senior Counsel of Amundi
Pioneer from July 2002 to
December 2007
-------------------------------------
33
NAME, AGE AND TERM OF OFFICE AND OTHER DIRECTORSHIPS
POSITION HELD WITH THE FUND LENGTH OF SERVICE PRINCIPAL OCCUPATION HELD BY TRUSTEE
----------------------------- ----------------------- -------------------------------------- ---------------------
CAROL B. HANNIGAN (56) Since 2010. Serves at Fund Governance Director of Amundi None
---------------------
Assistant Secretary the discretion of the Pioneer since December 2006 and
-----------------------------
Board Assistant Secretary of all the
-----------------------
Pioneer Funds since June 2010;
Manager - Fund Governance of
Amundi Pioneer from December
2003 to November 2006; and
Senior Paralegal of Amundi Pioneer
from January 2000 to November
2003
----
THOMAS REYES (55) Since 2010. Serves at Senior Counsel of Amundi Pioneer None
---------------------
Assistant Secretary the discretion of the since May 2013 and Assistant
-----------------------------
Board Secretary of all the Pioneer Funds
-----------------------
since June 2010; Counsel of
Amundi Pioneer from June 2007 to
May 2013
--------------------------------------
MARK E. BRADLEY (58) Since 2008. Serves at Vice President - Fund Treasury of None
---------------------
Treasurer and Chief the discretion of the Amundi Pioneer; Treasurer of all of
Financial and Accounting Board the Pioneer Funds since March
-----------------------
Officer 2008; Deputy Treasurer of Amundi
-----------------------------
Pioneer from March 2004 to
February 2008; and Assistant
Treasurer of all of the Pioneer Funds
from March 2004 to February 2008
--------------------------------------
LUIS I. PRESUTTI (52) Since 2004. Serves at Director - Fund Treasury of Amundi None
---------------------
Assistant Treasurer the discretion of the Pioneer; and Assistant Treasurer of
-----------------------------
Board all of the Pioneer Funds
----------------------- --------------------------------------
GARY SULLIVAN (59) Since 2004. Serves at Fund Accounting Manager - Fund None
---------------------
Assistant Treasurer the discretion of the Treasury of Amundi Pioneer; and
-----------------------------
Board Assistant Treasurer of all of the
-----------------------
Pioneer Funds
--------------------------------------
DAVID F. JOHNSON (38) Since 2009. Serves at Fund Administration Manager - Fund None
---------------------
Assistant Treasurer the discretion of the Treasury of Amundi Pioneer since
-----------------------------
Board November 2008; 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
--------------------------------------
JEAN M. BRADLEY (65) Since 2010. Serves at Chief Compliance Officer of Amundi None
---------------------
Chief Compliance Officer the discretion of the Pioneer and of all the Pioneer Funds
-----------------------------
Board since March 2010; Chief
-----------------------
Compliance Officer of Amundi
Pioneer Institutional Asset
Management, Inc. since January
2012; Chief Compliance Officer of
Vanderbilt Capital Advisors, LLC
since July 2012: Director of Adviser
and Portfolio Compliance at Amundi
Pioneer since October 2005; Senior
Compliance Officer for Columbia
Management Advisers, Inc. from
October 2003 to October 2005
--------------------------------------
34
NAME, AGE AND TERM OF OFFICE AND OTHER DIRECTORSHIPS
POSITION HELD WITH THE FUND LENGTH OF SERVICE PRINCIPAL OCCUPATION HELD BY TRUSTEE
----------------------------- ----------------------- ------------------------------------- ---------------------
KELLY O'DONNELL (46) Since 2006. Serves at Director - Transfer Agency None
---------------------
Anti-Money Laundering the discretion of the Compliance of Amundi Pioneer and
Officer Board Anti-Money Laundering Officer of all
----------------------------- -----------------------
the Pioneer Funds since 2006
-------------------------------------
* Ms. Jones and Mr. Taubes are Interested Trustees because they are
officers or directors of the fund's investment adviser and certain of its
affiliates.
BOARD COMMITTEES
The Board of Trustees is responsible for overseeing the fund's management and
operations. The Chairman of the Board is an Independent Trustee. Independent
Trustees constitute more than 75% of the Board. During the most recent fiscal
year, the Board of Trustees held 7 meetings. Each Trustee attended at least 75%
of such meetings.
The Trustees were selected to join the Board based upon the following as to
each Board member: such person's character and integrity; such person's
willingness and ability to commit the time necessary to perform the duties of a
Trustee; as to each Independent Trustee, his or her status as not being an
"interested person" as defined under the 1940 Act; and, as to Ms. Jones and Mr.
Taubes, their association with Amundi Pioneer. Each of the Independent Trustees
also was selected to join the Board based on the criteria and principles set
forth in the Nominating Committee Charter. In evaluating a Trustee's
prospective service on the Board, the Trustee's experience in, and ongoing
contributions toward, overseeing the fund's business as a Trustee also are
considered. In addition, the following specific experience, qualifications,
attributes and/or skills apply as to each Trustee: Mr. Bock, accounting,
financial, business and public company experience as a chief financial officer
and an executive officer and experience as a board member of other
organizations; Mr. Friedman, academic leadership, economic and finance
experience and investment company board experience; Ms. Graham, academic
leadership, experience in business, finance and management consulting; Ms.
Monchak, investment, financial and business experience, including as the chief
investment officer of a pension fund; Mr. Perna, accounting, financial, and
business experience as an executive officer and experience as a board member of
other organizations; Ms. Piret, accounting, financial and entrepreneurial
experience as an executive, valuation experience and investment company board
experience; Mr. Ricciardi, financial, business and investment company
experience as an executive officer of a financial and investment company
services organization, and experience as a board member of offshore investment
companies and other organizations; Ms. Jones, investment management experience
as an executive and leadership roles with Amundi Pioneer and its affiliates;
and Mr. Taubes, portfolio management experience and leadership roles with
Amundi Pioneer. However, in its periodic assessment of the effectiveness of the
Board, the Board considers the complementary skills and experience of
individual Trustees primarily in the broader context of the Board's overall
composition so that the Board, as a body, possesses the appropriate (and
appropriately diverse) skills and experience to oversee the business of the
fund.
The Trust's Amended and Restated Agreement and Declaration of Trust provides
that the appointment, designation (including in any proxy or registration
statement or other document) of a Trustee as an expert on any topic or in any
area, or as having experience, attributes or skills in any area, or any other
appointment, designation or identification, shall not impose on that person any
standard of care or liability that is greater than that imposed on that person
as a Trustee in the absence of the appointment, designation or identification,
and no Trustee who has special attributes, skills, experience or expertise, or
is appointed, designated, or identified as aforesaid, shall be held to a higher
standard of care by virtue thereof.
The Board of Trustees has five standing committees: the Independent Trustees
Committee, the Audit Committee, the Governance and Nominating Committee, the
Policy Administration Committee and the Valuation Committee. Each committee is
chaired by an Independent Trustee and all members of each committee are
Independent Trustees.
35
The Chairs of the committees work with the Chairman of the Board and fund
management in setting the agendas for Board meetings. The Chairs of the
committees set the agendas for committee meetings with input from fund
management. As noted below, through the committees, the Independent Trustees
consider and address important matters involving the fund, including those
presenting conflicts or potential conflicts of interest for management. The
Independent Trustees also regularly meet without the presence of management and
are advised by independent legal counsel. The Board believes that the committee
structure, and delegation to the committees of specified oversight
responsibilities, help the Board more effectively to provide governance and
oversight of the fund's affairs. Mr. Perna, Chairman of the Board, is a member
of each committee except the Audit Committee and the Valuation Committee, of
each of which he is a non-voting, ex-officio member.
During the most recent fiscal year, the Independent Trustees, Audit, Governance
and Nominating, Policy Administration, and Valuation Committees held 11, 7, 4,
4 and 5 meetings, respectively.
INDEPENDENT TRUSTEES COMMITTEE
David R. Bock, Benjamin M. Friedman, Margaret B.W. Graham, Lorraine H. Monchak,
Thomas J. Perna (Chair), Marguerite A. Piret and Fred J. Ricciardi.
The Independent Trustees Committee is comprised of all of the Independent
Trustees. The Independent Trustees Committee serves as the forum for
consideration of a number of issues required to be considered separately by the
Independent Trustees under the 1940 Act, including the assessment and review of
the fund's advisory agreement and other related party contracts. The
Independent Trustees Committee also considers issues that the Independent
Trustees believe it is advisable for them to consider separately from the
Interested Trustees.
AUDIT COMMITTEE
David R. Bock (Chair), Benjamin M. Friedman, Lorraine H. Monchak and Marguerite
A. Piret.
The Audit Committee, among other things, oversees the accounting and financial
reporting policies and practices of the fund, oversees the quality and
integrity of the fund's financial statements, approves, and recommends to the
Independent Trustees for their ratification, the engagement of the fund's
independent registered public accounting firm, reviews and evaluates the
accounting firm's qualifications, independence and performance, and approves
the compensation of the accounting firm. The Audit Committee also approves all
audit and permissible non-audit services provided to the fund by the fund's
accounting firm and all permissible non-audit services provided by the fund's
accounting firm to Amundi Pioneer and any affiliated service providers of the
fund if the engagement relates directly to the fund's operations and financial
reporting.
GOVERNANCE AND NOMINATING COMMITTEE
Margaret B.W. Graham (Chair), Thomas J. Perna and Fred J. Ricciardi.
The Governance and Nominating Committee considers governance matters affecting
the Board and the fund. Among other responsibilities, the Governance and
Nominating Committee reviews the performance of the Independent Trustees as a
whole, and reviews and recommends to the Independent Trustees Committee any
appropriate changes concerning, among other things, the size and composition of
the Board, the Board's committee structure and the Independent Trustees'
compensation. The Governance and Nominating Committee also makes
recommendations to the Independent Trustees Committee or the Board on matters
delegated to it.
In addition, the Governance and Nominating Committee screens potential
candidates for Independent Trustees. Among other responsibilities, the
Governance and Nominating Committee reviews periodically the criteria for
Independent Trustees and the spectrum of desirable experience and expertise for
Independent Trustees as a whole, and reviews periodically the qualifications
and requisite skills of persons currently serving as Independent Trustees and
being considered for re-nomination. The Governance and Nominating Committee
also reviews the qualifications of any person nominated to serve on the Board
by a shareholder
36
or recommended by any Trustee, management or another person and makes a
recommendation as to the qualifications of such nominated or recommended person
to the Independent Trustees and the Board, and reviews periodically the
Committee's procedure, if any, regarding candidates submitted by shareholders.
The Governance and Nominating Committee does not have specific, minimum
qualifications for nominees, nor has it established specific qualities or
skills that it regards as necessary for one or more of the Independent Trustees
to possess (other than qualities or skills that may be required by applicable
law or regulation). However, in evaluating a person as a potential nominee to
serve as an Independent Trustee, the Governance and Nominating Committee will
consider the following general criteria and principles, among any others that
it may deem relevant:
o whether the person has a reputation for integrity, honesty and adherence to
high ethical standards;
o whether the person has demonstrated business acumen and ability to exercise
sound judgment in matters that relate to the objectives of the fund and
whether the person is willing and able to contribute positively to the
decision-making process of the fund;
o whether the person has a commitment and ability to devote the necessary time
and energy to be an effective Independent Trustee, to understand the fund
and the responsibilities of a trustee of an investment company;
o whether the person has the ability to understand the sometimes conflicting
interests of the various constituencies of the fund and to act in the
interests of all shareholders;
o whether the person has a conflict of interest that would impair his or her
ability to represent the interests of all shareholders and to fulfill the
responsibilities of a trustee; and
o the value of diversity on the Board. The Governance and Nominating Committee
Charter provides that nominees shall not be discriminated against on the
basis of race, religion, national origin, sex, sexual orientation,
disability or any other basis proscribed by law.
The Governance and Nominating Committee also will consider whether the nominee
has the experience or skills that the Governance and Nominating Committee
believes would maintain or enhance the effectiveness of the Independent
Trustees' oversight of the fund's affairs, based on the then current
composition and skills of the Independent Trustees and experience or skills
that may be appropriate in light of changing business conditions and regulatory
or other developments. The Governance and Nominating Committee does not
necessarily place the same emphasis on each criterion.
The Governance and Nominating Committee does not have a formal policy for
considering trustee nominees submitted by the fund's shareholders. Nonetheless,
the Nominating Committee may, on an informal basis, consider any shareholder
recommendations of nominees that it receives. Shareholders who wish to
recommend a nominee should send recommendations to the fund's Secretary that
include all information relating to such persons that is required to be
included in solicitations of proxies for the election of trustees.
POLICY ADMINISTRATION COMMITTEE
Thomas J. Perna (Chair), Margaret B.W. Graham, and Fred J. Ricciardi.
The Policy Administration Committee, among other things, oversees and monitors
the fund's compliance with legal and regulatory requirements that are not
directly related to financial reporting, internal financial controls,
independent audits or the performance of the fund's internal audit function.
The Policy Administration Committee also oversees the adoption and
implementation of certain of the fund's policies and procedures.
VALUATION COMMITTEE
David R. Bock, Benjamin M. Friedman, Lorraine H. Monchak and Marguerite A.
Piret (Chair).
The Valuation Committee, among other things, determines with Amundi Pioneer the
value of securities under certain circumstances and considers other matters
with respect to the valuation of securities, in each case in accordance with
the fund's valuation procedures.
37
OVERSIGHT OF RISK MANAGEMENT
Consistent with its responsibility for oversight of the fund in the interests
of shareholders, the Board of Trustees oversees risk management of the fund's
investment management and business operations. In performing this oversight
function, the Board considers various risks and risk management practices
relating to the fund. The Board has delegated certain aspects of its risk
oversight responsibilities to the committees.
The fund faces a number of risks, such as investment risk, counterparty risk,
valuation risk, enterprise risk, reputational risk, cybersecurity risk, risk of
operational failure or lack of business continuity, and legal, compliance and
regulatory risk. The goal of risk management is to identify and address risks,
i.e., events or circumstances that could have material adverse effects on the
business, operations, shareholder services, investment performance or
reputation of the fund.
Most of the fund's investment management and business operations are carried
out by or through Amundi Pioneer, its affiliates, and other service providers,
each of which has an independent interest in risk management but whose policies
and the methods by which one or more risk management functions are carried out
may differ from the fund's and each other's in the setting of priorities, the
resources available or the effectiveness of relevant controls.
Under the overall supervision of the Board or the applicable committee of the
Board, the fund, or Amundi Pioneer and the affiliates of Amundi Pioneer or
other service providers to the fund employ a variety of processes, procedures
and controls in an effort to identify, address and mitigate risks. Different
processes, procedures and controls are employed with respect to different types
of risks. Various personnel, including the fund's and Amundi Pioneer's chief
compliance officer and Amundi Pioneer's chief risk officer and director of
internal audit, as well as various personnel of Amundi Pioneer and of other
service providers, make periodic reports to the applicable committee or to the
Board with respect to various aspects of risk management, and the applicable
committee of the Board reviews Financial Intermediary Controls and Compliance
Assessment (FICCA) reports, if available. The reports received by the Trustees
related to risks typically are summaries of relevant information.
The Trustees recognize that not all risks that may affect the fund can be
identified, that it may not be practical or cost-effective to eliminate or
mitigate certain risks, that it may be necessary to bear certain risks (such as
investment-related risks) to achieve the fund's goals, that the processes,
procedures and controls employed to address certain risks may be limited in
their effectiveness, and that some risks are simply beyond the control of the
fund or Amundi Pioneer and its affiliates or other service providers. As a
result of the foregoing and other factors, the fund's ability to manage risk is
subject to substantial limitations.
In addition, it is important to note that the fund is designed for investors
that are prepared to accept investment risk, including the possibility that as
yet unforeseen risks may emerge in the future.
COMPENSATION OF OFFICERS AND TRUSTEES
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. Amundi Pioneer reimburses these
funds for the fees paid to the Interested Trustees.
38
Except for the chief compliance officer, the fund does not pay any salary or
other compensation to its officers. The fund pays a portion of the chief
compliance officer's compensation for her services as the fund's chief
compliance officer. Amundi Pioneer pays the remaining portion of the chief
compliance officer's compensation.
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 Amundi 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
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.
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 available to
shareowners without charge at http://us.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 a management agreement (hereinafter, the "management
contract") with Amundi Pioneer pursuant to which Amundi Pioneer acts as the
fund's investment adviser. Amundi Pioneer is an indirect, wholly owned
subsidiary of Amundi and Amundi's wholly owned subsidiary, Amundi USA, Inc.
Amundi is controlled by Credit Agricole S.A., a French credit institution.
Credit Agricole S.A. holds approximately 70% of Amundi's share capital. The
remaining shares of Amundi are held by institutional and retail investors.
On July 3, 2017, Amundi acquired Pioneer Investments, a group of asset
management companies located throughout the world, including the fund's
investment adviser. Prior to July 3, 2017, Pioneer Investments was owned by
Pioneer Global Asset Management S.p.A., a wholly owned subsidiary of UniCredit
S.p.A. Prior to July 3, 2017, the fund's investment adviser was named Pioneer
Investment Management, Inc. A new investment management contract between the
fund and the investment adviser became effective on July 3, 2017.
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Certain Trustees or officers of the fund are also directors and/or officers of
certain of Amundi's subsidiaries (see management biographies above). Amundi
Pioneer has entered into an agreement with its affiliate, Pioneer Investment
Management Limited ("PIML"), pursuant to which PIML provides certain services
to Amundi Pioneer.
As the fund's investment adviser, Amundi Pioneer provides the fund with
investment research, advice and supervision and furnishes an investment program
for the fund consistent with the fund's investment objective and policies,
subject to the supervision of the fund's Trustees. Amundi Pioneer determines
what portfolio securities will be purchased or sold, arranges for the placing
of orders for the purchase or sale of portfolio securities, selects brokers or
dealers to place those orders, 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 management contract will continue in effect from year to year provided such
continuance is specifically approved at least annually (i) by the Trustees of
the fund or by a majority of the outstanding voting securities of the fund (as
defined in the 1940 Act), and (ii) in either event, by a majority of the
Independent Trustees of the fund, with such Independent Trustees casting votes
in person at a meeting called for such purpose.
The management contract may be terminated without penalty by the Trustees of
the fund or by vote of a majority of the outstanding voting securities of the
fund on not more than 60 days' nor less than 30 days' written notice to Amundi
Pioneer, or by Amundi Pioneer on not less than 90 days' written notice to the
fund, and will automatically terminate in the event of its assignment (as
defined in the 1940 Act) by Amundi Pioneer. The management contract is not
assignable by the fund except with the consent of Amundi Pioneer.
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, Amundi Pioneer assumes no responsibility other than to render the
services called for under the management contract, in good faith, and Amundi
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. Amundi 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 Amundi 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, Amundi 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 Amundi Pioneer a fee at the annual rate of 0.65% of the fund's average
daily net assets up to $1 billion, 0.60% of the next $2 billion of the fund's
average daily net assets, 0.55% of the next $4.5 billion of the fund's average
daily net assets and 0.525% of the fund's average daily net assets over $7.5
billion. The fee is computed and accrued daily and paid monthly.
See the table in "Annual Fee, Expense and Other Information" for management
fees paid to Amundi Pioneer during recently completed fiscal years.
EXPENSE LIMIT
Amundi Pioneer has contractually agreed to limit ordinary operating expenses
(ordinary operating expenses means all fund expenses other than taxes,
brokerage commissions, acquired fund fees and expenses, and extraordinary
expenses, such as litigation) to the extent required to reduce fund expenses to
1.20%, 2.10%, 1.40% and 0.85% of the average daily net assets attributable to
Class A, Class C, Class R and Class Y shares, respectively. These expense
limitations are in effect through January 1, 2019. There can
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be no assurance that Amundi Pioneer will extend the contractual expense
limitation beyond the aforementioned dates. While in effect, the arrangement
may be terminated for a class only by agreement of Amundi Pioneer and the Board
of Trustees.
ADMINISTRATION AGREEMENT
The fund has entered into an amended and restated administration agreement with
Amundi Pioneer pursuant to which Amundi Pioneer acts as the fund's
administrator, performing certain accounting, administration and legal services
for the fund. Amundi 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 Amundi Pioneer for
administration and related services. In addition, Brown Brothers Harriman & Co.
performs certain sub-administration services to the fund pursuant to an
agreement with Amundi Pioneer and the fund.
Under the terms of the amended and restated administration agreement with the
fund, Amundi 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 Amundi 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 Amundi Pioneer, the fund (other than as Trustees),
Amundi Pioneer Asset Management USA, Inc. or the distributor; (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 other expense that the fund, Amundi Pioneer or any other
agent of the fund may incur not listed above that is approved by the Board of
Trustees (including a majority of the Independent Trustees) as being an
appropriate expense of the fund. The fund shall pay all fees and expenses to be
paid by the fund under the sub-administration agreement with Brown Brothers
Harriman & Co. 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 Amundi Pioneer, which also serves as investment adviser
to other Pioneer mutual funds and other accounts (including separate accounts
and unregistered products) with investment objectives identical or similar to
those of the fund. Securities frequently meet the investment objectives of the
fund, the other Pioneer mutual funds and such 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.
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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
Pioneer mutual funds or a private account managed by Amundi Pioneer 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 Amundi Pioneer 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 Pioneer mutual funds 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, Amundi Pioneer, and Amundi Pioneer Distributor, Inc. have adopted a
code of ethics under Rule 17j-1 under the 1940 Act which is applicable to
officers, trustees/directors and designated employees of Amundi Pioneer and
certain of Amundi Pioneer's affiliates. The 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. The code is on
public file with and available from the SEC.
5. PRINCIPAL UNDERWRITER AND DISTRIBUTION PLAN
PRINCIPAL UNDERWRITER
Amundi Pioneer Distributor, Inc., 60 State Street, Boston, Massachusetts 02109,
is the principal underwriter for the fund in connection with the continuous
offering of its shares. Amundi Pioneer Distributor, Inc. is an indirect wholly
owned subsidiary of Amundi and a wholly owned subsidiary of Amundi Pioneer
Asset Management, Inc. Prior to July 3, 2017, the fund's distributor was named
Pioneer Funds Distributor, Inc.
The fund entered into an underwriting agreement with Amundi Pioneer
Distributor, Inc. which provides that Amundi Pioneer Distributor, Inc. will
bear expenses for the distribution of the fund's shares, except for expenses
incurred by Amundi Pioneer Distributor, Inc. for which it is reimbursed or
compensated by the fund under the distribution plan (discussed below). Amundi
Pioneer Distributor, Inc. 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. Amundi Pioneer
Distributor, Inc. 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, Amundi Pioneer Distributor, Inc. 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 Amundi Pioneer Distributor, Inc. and reallowed to
dealers in connection with Amundi Pioneer Distributor, Inc.'s offering of the
fund's Class A and Class C shares during recently completed fiscal years.
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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 Amundi 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 12b-1 under the 1940 Act with respect to its Class A, Class C and Class R
shares. The fund has not adopted a distribution plan with respect to its Class
K or 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:
APPLICABLE PERCENTAGE
CLASS PER ANNUM
--------- ----------------------
Class A 0.25%
--------- ----
Class C 1.00%
--------- ----
Class R 0.50%
--------- ----
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 2341 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,
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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 Amundi Pioneer, Amundi Pioneer
Distributor, Inc. 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 Amundi Pioneer Distributor, Inc. for the most
recently completed fiscal year.
CLASS C SHARES
Amundi Pioneer Distributor, Inc. will advance to dealers the first-year service
fee at a rate equal to 0.25% of the amount invested. As compensation therefor,
Amundi Pioneer Distributor, Inc. 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.
SERVICE PLAN FOR CLASS R SHARES
The fund has adopted a service plan (the "Service Plan") with respect to its
Class R shares under which the fund is authorized to pay securities dealers,
plan administrators or other service organizations who agree to provide certain
services to plans or plan participants holding shares of the fund a service fee
of up to 0.25% of the fund's average daily net assets attributable to Class R
shares held by such plan participants. These services may include (a) acting,
directly or through an agent, as the shareholder of record and nominee for all
plan participants, (b) maintaining account records for each plan participant
that beneficially owns Class R shares, (c) processing orders to purchase,
redeem and exchange Class R shares on behalf of plan participants, and handling
the transmission of funds representing the purchase price or redemption
proceeds, and (d) addressing plan participant questions regarding their
accounts and the fund.
44
6. SHAREHOLDER SERVICING/TRANSFER AGENT
The fund has contracted with DST Asset Manager Solutions, Inc., 2000 Crown
Colony Drive, Quincy, Massachusetts, 02169, to act as shareholder servicing and
transfer agent for the fund.
Under the terms of its contract with the fund, DST Asset Manager Solutions,
Inc. 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.
7. CUSTODIAN AND SUB-ADMINISTRATOR
Brown Brothers Harriman & Co. ("BBH"), 50 Post Office Square, Boston,
Massachusetts 02110, 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.
BBH also performs certain fund accounting and fund administration services for
the Pioneer Fund complex, including the fund. For performing such services, BBH
receives fees based on complex-wide assets.
8. INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Ernst & Young LLP, 200 Clarendon Street, Boston, Massachusetts 02116-5072,
independent registered public accounting firm, provided audit services, tax
return review services, and assistance and consultation with respect to filings
with the SEC for the fiscal year ended August 31, 2017.
9. PORTFOLIO MANAGEMENT
ADDITIONAL INFORMATION ABOUT THE PORTFOLIO MANAGERS
OTHER ACCOUNTS MANAGED BY THE PORTFOLIO MANAGERS
The table below indicates, for the portfolio managers 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 August 31, 2017. 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.
NUMBER OF ASSETS
ACCOUNTS MANAGED
MANAGED FOR FOR WHICH
WHICH ADVISORY ADVISORY
NUMBER OF FEE IS FEE IS
NAME OF ACCOUNTS TOTAL ASSETS PERFORMANCE- PERFORMANCE-
PORTFOLIO MANAGER TYPE OF ACCOUNT MANAGED MANAGED (000'S) BASED BASED (000'S)
------------------- ---------------------------------- ----------- ----------------- ---------------- --------------
Craig Sterling Other Registered Investment
Companies 2 $2,777,056 N/A N/A
Other Pooled Investment Vehicles 0 $ 0 N/A N/A
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NUMBER OF ASSETS
ACCOUNTS MANAGED
MANAGED FOR FOR WHICH
WHICH ADVISORY ADVISORY
NUMBER OF FEE IS FEE IS
NAME OF ACCOUNTS TOTAL ASSETS PERFORMANCE- PERFORMANCE-
PORTFOLIO MANAGER TYPE OF ACCOUNT MANAGED MANAGED (000'S) BASED BASED (000'S)
------------------- ---------------------------------- ----------- ----------------- ---------------- --------------
Other Accounts 0 $ 0 N/A N/A
------------------- ---------------------------------- ----------- ---------- ---------------- --------
Ashesh Savla Other Registered
Investment Companies 1 $1,177,980 N/A N/A
Other Pooled Investment Vehicles 2 $2,996,610 1 $225,150
Other Accounts 0 $ 0 N/A N/A
------------------- ---------------------------------- ----------- ---------- ---------------- --------
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, Amundi 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 Amundi 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. Amundi Pioneer has
structured its compensation arrangements in a manner that is intended to limit
such potential for conflicts of interest. 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 Amundi 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
46
where the trader believes that bunching the orders may not result in the best
possible price. Where those accounts or circumstances are involved, Amundi
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 Amundi 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, Amundi 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 MANAGERS
Amundi Pioneer has adopted a system of compensation for portfolio managers that
seeks to align the financial interests of the portfolio managers with those of
shareholders of the accounts (including Pioneer funds) the portfolio managers
manage, as well as with the financial performance of Amundi Pioneer. The
compensation program for all Amundi Pioneer portfolio managers includes a base
salary (determined by the rank and tenure of the employee) and an annual bonus
program, as well as customary benefits that are offered generally to all
full-time employees. Base compensation is fixed and normally reevaluated on an
annual basis. Amundi Pioneer seeks to set base compensation at market rates,
taking into account the experience and responsibilities of the portfolio
manager. The bonus plan is intended to provide a competitive level of annual
bonus compensation that is tied to the portfolio manager achieving superior
investment performance and align the interests of the investment professional
with those of shareholders, as well as with the financial performance of Amundi
Pioneer. Any bonus under the plan is completely discretionary, with a maximum
annual bonus that may be in excess of base salary. The annual bonus is based
upon a combination of the following factors:
o QUANTITATIVE INVESTMENT PERFORMANCE. The quantitative investment performance
calculation is based on pre-tax investment performance of all of the
accounts managed by the portfolio manager (which includes the fund and any
other accounts managed by the portfolio manager) over a one-year period (20%
weighting) and four-year period (80% weighting), measured for periods ending
on December 31. The accounts, which include the fund, are ranked against a
group of mutual funds with similar investment objectives and investment
focus (60%) and a broad-based securities market index measuring the
performance of the same type of securities in which the accounts invest
(40%), which, in the case of the fund, is the Russell 1000 Value Index. As a
result of these two benchmarks, the performance of the portfolio manager for
compensation purposes is measured against the criteria that are relevant to
the portfolio manager's competitive universe.
47
o QUALITATIVE PERFORMANCE. The qualitative performance component with respect
to all of the accounts managed by the portfolio manager includes objectives,
such as effectiveness in the areas of teamwork, leadership, communications
and marketing, that are mutually established and evaluated by each portfolio
manager and management.
o AMUNDI PIONEER RESULTS AND BUSINESS LINE RESULTS. Amundi Pioneer's financial
performance, as well as the investment performance of its investment
management group, affect a portfolio manager's actual bonus by a leverage
factor of plus or minus (+/-) a predetermined percentage.
The quantitative and qualitative performance components comprise 80% and 20%,
respectively, of the overall bonus calculation (on a pre-adjustment basis). A
portion of the annual bonus is deferred for a specified period and may be
invested in one or more Pioneer funds.
Certain portfolio managers participate in other programs designed to reward and
retain key contributors. Portfolio managers also may participate in a deferred
compensation program, whereby deferred amounts are invested in one or more
Pioneer funds.
SHARE OWNERSHIP BY PORTFOLIO MANAGERS
The following table indicates as of August 31, 2017 the value, within the
indicated range, of shares beneficially owned by the portfolio managers of the
fund.
BENEFICIAL OWNERSHIP
NAME OF PORTFOLIO MANAGER OF THE FUND*
--------------------------- ---------------------
Craig Sterling D
--------------------------- ---------------------
Ashesh Savla E
--------------------------- ---------------------
* 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
48
10. PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of the fund by Amundi Pioneer pursuant to authority contained in the
fund's management contract. Amundi Pioneer seeks to obtain overall best
execution on portfolio trades. The price of securities and any commission rate
paid are always factors, but frequently not the only factors, in judging best
execution. In selecting brokers or dealers, Amundi Pioneer considers various
relevant factors, including, but not limited to, the size and type of the
transaction; the nature and character of the markets for the security to be
purchased or sold; the execution efficiency, settlement capability and
financial condition of the dealer; the dealer's execution services rendered on
a continuing basis; and the reasonableness of any dealer spreads. Transactions
in non-U.S. equity securities are executed by broker-dealers in non-U.S.
countries in which commission rates may not be negotiable (as such rates are in
the U.S.).
Amundi Pioneer may select broker-dealers that provide brokerage and/or research
services to the fund and/or other investment companies or other accounts
managed by Amundi Pioneer over which it or its affiliates exercise investment
discretion. In addition, consistent with Section 28(e) of the Securities
Exchange Act of 1934, as amended, if Amundi Pioneer determines in good faith
that the amount of commissions charged by a broker-dealer is reasonable in
relation to the value of the brokerage and research services provided by such
broker, the fund may pay commissions to such broker-dealer in an amount greater
than the amount another firm may charge. Such services may include advice
concerning the value of securities; the advisability of investing in,
purchasing or selling securities; the availability of securities or the
purchasers or sellers of securities; providing stock quotation services, credit
rating service information and comparative fund statistics; furnishing
analyses, electronic information services, manuals and reports concerning
issuers, industries, securities, economic factors and trends, portfolio
strategy, and performance of accounts and particular investment decisions; and
effecting securities transactions and performing functions incidental thereto
(such as clearance and settlement). Amundi Pioneer 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 Amundi Pioneer are placed with broker-dealers (including
broker-dealers on the listing) without regard to the furnishing of such
services, it is not possible to estimate the proportion of such transactions
directed to such dealers solely because such services were provided. Amundi
Pioneer believes that no exact dollar value can be calculated for such
services.
The research received from broker-dealers may be useful to Amundi Pioneer in
rendering investment management services to the fund as well as other
investment companies or other accounts managed by Amundi Pioneer, 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 Amundi Pioneer in carrying out its
obligations to the fund. The receipt of such research enables Amundi Pioneer 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 Amundi 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.
49
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 Amundi Pioneer's performance of its
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 contingent deferred sales charge ("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 Series Trust III, a Delaware statutory trust.
The Trustees have authorized the issuance of the following classes of shares of
the fund, designated as Class A, Class C, Class K, Class R, Class T and Class Y
shares. Class K and Class T shares have not been issued as of the date of this
statement of additional information. Until November 10, 2014, the fund offered
Class B shares. All outstanding Class B shares were converted to Class A shares
on November 10, 2014. 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 January 12, 2016 (referred to in this section
as the declaration). A copy of the Trust's Certificate of Trust dated as of
August 3, 2004, 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.
50
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
51
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 also provides that no Trustee, officer or employee of the Trust
owes any duty to any person (including without limitation any shareholder),
other than the Trust or any series. 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, designation or identification of
a trustee as chairperson, a member of a committee, an expert, lead independent
trustee, or any other special appointment, designation or identification shall
not impose any heightened standard of care or liability on such trustee.
DERIVATIVE AND DIRECT ACTIONS
The declaration provides a detailed process for the bringing of derivative or
direct 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 a court determines that 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, if a court
determines that the action was brought without reasonable cause or for an
improper purpose.
52
The declaration provides that no shareholder may bring a direct action claiming
injury as a shareholder of the Trust, or any series or class thereof, where the
matters alleged (if true) would give rise to a claim by the Trust or by the
Trust on behalf of a series or class, unless the shareholder has suffered an
injury distinct from that suffered by the shareholders of the Trust, or the
series or class, generally. Under the declaration, a shareholder bringing a
direct claim must be a shareholder of the series or class with respect to which
the direct action is brought at the time of the injury complained of, or have
acquired the shares afterwards by operation of law from a person who was a
shareholder at that time.
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.
The declaration also provides that shareholders have no rights, privileges,
claims or remedies under any contract or agreement entered into by the Trust
with any service provider or other agent or contract with the Trust, including,
without limitation, any third party beneficiary rights, except as may be
expressly provided in any service contract or agreement.
12. SALES CHARGES
The fund continuously offers the following classes of shares: Class A, Class C,
Class K, Class R and Class Y shares, as described in the 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. The availability of
certain sales charge waivers and discounts may depend on whether you purchase
your shares directly from the fund or through a financial intermediary. Please
see the prospectus to determine any sales charge discounts and waivers that may
be available to you through your financial intermediary.
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
--------------------------------- ---- ---- ------------
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;
however, pension, profit-sharing and other employee benefit trusts qualified
under Sections 401 or 408 of the Code which are eligible to purchase Class R
shares may aggregate purchases by beneficiaries of such plans only if the
pension, profit-sharing or other employee benefit trust has determined that it
does not require the services provided under the Class R Service Plan. 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
53
owned, provided Amundi Pioneer Distributor, Inc. 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 Amundi Pioneer
Distributor, Inc. serves as principal underwriter. At the sole discretion of
Amundi Pioneer Distributor, Inc., holdings of funds domiciled outside the U.S.,
but which are managed by affiliates of Amundi 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. Amundi Pioneer
Distributor, Inc. may, in its discretion, pay a commission to broker-dealers
who initiate and are responsible for such purchases as follows:
1.00% Up to $4 million
---- ---------------------------------
Greater than $4 million and less
0.50% than or equal to $50 million
---- ---------------------------------
0.25% Over $50 million
---- ---------------------------------
Commissions are based on cumulative investments in Class A shares of the
Pioneer funds. 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 Amundi 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.
If an investor eligible to purchase Class R shares is otherwise qualified to
purchase Class A shares at net asset value or at a reduced sales charge, Class
A shares may be selected where the investor does not require the distribution
and account services needs typically required by Class R share investors and/or
the broker-dealer has elected to forgo the level of compensation that Class R
shares provides.
LETTER OF INTENT ("LOI")
Reduced sales charges are available for purchases of $50,000 or more of Class A
shares (excluding any reinvestments of dividends and capital gain
distributions) made within a 13-month period pursuant to an LOI which may be
established by completing the Letter of Intent section of the Account
Application. The reduced sales charge will be the charge that would be
applicable to the purchase of the specified amount of Class A shares as if the
shares had all been purchased at the same time. A purchase not made pursuant to
an LOI may be included if the LOI is submitted to the fund's transfer agent
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 the fund's transfer agent,
registered in your name, until the terms of the LOI are fulfilled. When you
sign the Account Application, you agree to irrevocably appoint the fund's
transfer agent 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 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
54
signing the Account Application, agrees to return to Amundi Pioneer
Distributor, Inc., 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 are less than the amount specified under the LOI, Amundi
Pioneer Distributor, Inc. will recalculate your sales charge and the fund's
transfer agent will redeem the appropriate number of shares held in escrow to
realize the difference and release any excess.
If sufficient shares are not purchased to complete the LOI because all
registered account owners died within the 13-month period, Amundi Pioneer
Distributor, Inc. will consider the LOI complete and will not adjust past
transactions for purposes of the sales charges paid. Commissions to dealers
will not be adjusted or paid on the difference between the LOI amount and the
amount actually invested before the shareholders' deaths.
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 Amundi Pioneer Distributor, Inc. and are
used in whole or in part to defray Amundi Pioneer Distributor, Inc.'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 K SHARES
No front-end, deferred or asset-based sales charges are applicable to Class K
shares.
CLASS R SHARES
You may buy Class R shares at the net asset value per share next computed after
receipt of a purchase order without the imposition of an initial sales charge
or CDSC.
Class R shares are available to certain tax-deferred retirement plans
(including 401(k) plans, employer-sponsored 403(b) plans, 457 plans, profit
sharing and money purchase pension plans, defined benefit plans and
non-qualified deferred compensation plans) held in plan level or omnibus
accounts. Class R shares also are available to individual retirement account
rollovers from eligible retirement plans that offered one or more Pioneer funds
as investment options. Class R shares generally are not available to
non-retirement accounts, traditional and Roth IRA's, Coverdell Education
Savings Accounts, SEP's, SAR-SEP's, Simple IRA's, individual 403(b)'s or
retirement plans that are not subject to the Employee Retirement Income
Security Act of 1974.
Investors that are eligible to purchase Class R shares may also be eligible to
purchase other share classes. Your investment professional can help you
determine which class is appropriate. You should ask your investment
professional if you qualify for a waiver of sales charges on another class and
take that into consideration when selecting a class of shares. Your investment
firm may receive different compensation depending upon which class is chosen.
55
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, Amundi Pioneer or one or more of its affiliates
(collectively, "Amundi Pioneer Affiliates") may make additional payments to
financial intermediaries in connection with the promotion and sale of shares of
Pioneer funds. Amundi 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. Amundi 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. Amundi Pioneer Affiliates do not
make an independent assessment of the cost of providing such services. While
the financial intermediaries may request additional compensation from Amundi
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 an Amundi 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 Amundi 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.
Amundi 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 Amundi Pioneer Affiliates do. To
the extent financial intermediaries sell more shares of the funds or retain
shares of the funds in their clients' accounts, Amundi Pioneer Affiliates
benefit from the incremental management and other fees paid to Amundi Pioneer
Affiliates by the funds with respect to those assets.
REVENUE SHARING PAYMENTS
Amundi Pioneer Affiliates make revenue sharing payments as incentives to
certain financial intermediaries to promote and sell shares of Pioneer funds.
The benefits Amundi 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
Amundi 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
56
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"). Amundi Pioneer Affiliates also may pay financial
intermediaries "finders'" or "referral" fees for directing investors to the
Pioneer funds. Amundi 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 Amundi 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 0.16% 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. Amundi Pioneer Affiliates may pay a
financial intermediary either or both Sales-Based Payments and Asset-Based
Payments.
ADMINISTRATIVE AND PROCESSING SUPPORT PAYMENTS
Amundi 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. Amundi 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
Amundi 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, Amundi 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 Amundi
Pioneer Affiliates may include financial assistance to financial intermediaries
that enable Amundi 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. Amundi Pioneer Affiliates
make payments for entertainment events they deem appropriate, subject to Amundi
Pioneer Affiliates' guidelines and applicable law. These payments may vary
depending upon the nature of the event or the relationship. Amundi Pioneer
Affiliates also may make payments to financial intermediaries for detailed
information about the intermediaries' activities relating to the Pioneer funds.
As of January 1, 2017, Amundi Pioneer anticipates that the following
broker-dealers or their affiliates will receive additional payments as
described in the fund's prospectus and statement of additional information:
AIG VALIC
ADP Retirement Services
Ameriprise Financial Services, Inc.
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Ascensus Broker Dealer Services, Inc.
Cetera Advisors Networks LLC
Charles Schwab & Co., Inc.
Citigroup Global Markets Inc.
Commonwealth Financial Network
Fidelity Brokerage Services LLC
First Clearing, LLC
First Command Financial Planning, Inc.
FSC Securities Corporation
Guardian Investor Services LLC
GWFS Equities, Inc.
H.D. Investment Services
Hartford Securities Distribution Company, Inc.
J.P. Morgan Securities LLC
Jefferson National Securities Corporation
Legend Equities Corporation
Lincoln Financial
LPL Financial Corp.
Merrill Lynch & Co., Inc.
MetLife Securities Inc.
Mid Atlantic Capital Corporation
MML Investors Services
Morgan Stanley & Co., Inc.
MSCS Financial Services, LLC
Mutual of Omaha Investor Services, Inc.
N.I.S. Financial Services, Inc.
National Financial Services LLC
Nationwide Securities, Inc.
Northwestern Investment Services, LLC
NYLife Securities, LLC
OneAmerica Securities, Inc.
Pershing LLC
PFS Investments Inc.
PNC Investments
Prudential Financial
Raymond James Financial Services, Inc.
RBC Dain Rauscher Inc.
Robert W. Baird & Co., Inc.
Royal Alliance Associates, Inc.
SagePoint Financial
Sammons Financial Network, LLC
Securities America, Inc.
Symetra Investment Services, Inc.
TD Ameritrade, Inc.
TIAA-CREF Individual & Institutional Services, LLC
T. Rowe Price Investment Services, Inc.
Transamerica Financial Advisors, Inc.
UBS Financial Services Inc.
U.S. Bancorp Investments, Inc.
Vanguard Marketing Corporation
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Voya Financial Partners, LLC
Wells Fargo Investments, LLC
Woodbury Financial Services
Please contact your financial intermediary for details about any payments it
receives from Amundi 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 otherwise as
permitted by the rules of or by the order of the SEC.
Redemptions and repurchases are taxable transactions for shareholders that are
subject to U.S. federal income tax. The net asset value per share received upon
redemption or repurchase may be more or less than the cost of shares to an
investor, depending on the market value of the portfolio at the time of
redemption or repurchase.
SYSTEMATIC WITHDRAWAL PLAN(S) ("SWP") (CLASS A, CLASS C AND CLASS R SHARES)
A SWP is designed to provide a convenient method of receiving fixed payments at
regular intervals from fund share accounts having a total value of not less
than $10,000. You must also be reinvesting all dividends and capital gain
distributions to use the SWP option.
Periodic payments 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 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 the fund or from
the fund to the shareholder; (2) upon receipt by the fund 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 the fund at 1-800-225-6292.
REINSTATEMENT PRIVILEGE (CLASS A SHARES)
Subject to the provisions outlined in the prospectus, you may reinvest all or
part of your sale proceeds from Class A 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.
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14. TELEPHONE AND ONLINE TRANSACTIONS
You may purchase, exchange or sell shares by telephone or online. See the
prospectus for more information. For personal assistance, call 1-800-225-6292
between 8:00 a.m. and 7:00 p.m. Eastern time on weekdays. Computer-assisted
telephone transactions may be available to shareholders who have prerecorded
certain bank information (see "FactFone/SM/"). YOU ARE STRONGLY URGED TO
CONSULT WITH YOUR INVESTMENT PROFESSIONAL PRIOR TO REQUESTING ANY TELEPHONE OR
ONLINE TRANSACTION.
TELEPHONE TRANSACTION PRIVILEGES
To confirm that each transaction instruction received by telephone is genuine,
the fund will record each telephone transaction, require the caller to provide
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, the fund's transfer agent nor Amundi Pioneer Distributor,
Inc. 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 fund or
complete the online authorization screen on us.pioneerinvestments.com
To use online transactions, you must read and agree to the terms of an online
transaction agreement available on the Amundi 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
us.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, Amundi Pioneer will adjust the hours for the telephone
center and for online transaction processing accordingly. If you are unable to
access us.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 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
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the establishment of a bank account of record. YOU ARE STRONGLY URGED TO
CONSULT WITH YOUR INVESTMENT PROFESSIONAL PRIOR TO REQUESTING ANY TELEPHONE
TRANSACTION. Shareholders whose accounts are registered in the name of a
broker-dealer or other third party may not be able to use FactFone/SM/. Call
the fund at 1-800-225-6292 for assistance.
FactFone/SM/ allows shareholders to hear the following recorded fund
information:
o net asset value prices for all Pioneer mutual funds;
o dividends and capital gain distributions on all Pioneer mutual funds.
The value of each class of shares (except for Pioneer U.S. Government Money
Market Fund, which seeks to maintain a stable $1.00 share price) will also
vary, and such shares may be worth more or less at redemption than their
original cost.
15. PRICING OF SHARES
The net asset value per share of each class of the fund is determined as of the
scheduled 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. If the exchange
closes at another time, the fund will calculate a net asset value for each
class of shares as of the scheduled closing time. 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 Amundi 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 Amundi 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.
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
61
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 C, Class K, Class
R and Class Y shares are offered at net asset value without the imposition of
an initial sales charge (Class C shares may be subject to a CDSC).
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16. TAX STATUS
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 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
63
further tax at the shareholder level when such income is distributed. Under
certain circumstances, the fund may be able to cure a failure to qualify as a
regulated investment company, but in order to do so, the fund may incur
significant fund-level taxes and may be forced to dispose of certain assets.
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 in
December. Dividends from income and/or capital gains may also be paid at such
other times as may be necessary for the fund to avoid U.S. federal income or
excise tax.
Unless 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
certain conditions are met, as "qualified dividend income," taxable to
individual and certain other noncorporate shareholders at U.S. federal income
tax rates of up to 20%.
In general, dividends may be reported by the fund as qualified dividend income
if they are attributable to qualified dividend income received by the fund.
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. 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 report 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. Dividends received by
the fund from REITs generally are not expected to qualify for treatment as
qualified dividend income.
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 (1) if 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) if 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.
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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 appropriately so reported by the fund may be eligible for the
70% dividends-received deduction generally available to corporations under the
Code. 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. 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 reported 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 will be taxed as
long-term capital gains, which are generally taxable to noncorporate taxpayers
at U.S. federal income tax rates of up to 20%. A shareholder should also be
aware that the benefits of the favorable tax rates applicable to long-term
capital gains and qualified dividend income may be affected by the application
of the alternative minimum tax to individual shareholders.
The U.S. federal income tax status of all distributions will be reported to
shareholders annually.
A 3.8% Medicare contribution tax generally applies to all or a portion of the
net investment income of a shareholder who is an individual and not a
nonresident alien for federal income tax purposes and who has adjusted gross
income (subject to certain adjustments) that exceeds a threshold amount
($250,000 if married filing jointly or if considered a "surviving spouse" for
federal income tax purposes, $125,000 if married filing separately, and
$200,000 in other cases). This 3.8% tax also applies to all or a portion of the
undistributed net investment income of certain shareholders that are estates
and trusts. For these purposes, dividends, interest and certain capital gains
(among other categories of income) are generally taken into account in
computing a shareholder's net investment income.
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 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
65
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
indefinitely a net capital loss from any taxable year to offset its capital
gains, if any, in years following the year of the loss. To the extent
subsequent capital gains are offset by such losses, they will not result in
U.S. federal income tax liability to the fund and may not be distributed as
capital gains to shareholders. See "Annual Fee, Expense and Other Information"
for the fund's available capital loss carryforwards. Generally, the fund may
not carry forward any losses other than net capital losses. Under certain
circumstances, the fund may elect to treat certain losses as though they were
incurred on the first day of the taxable year immediately following the taxable
year in which they were actually incurred.
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 to ascertain 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).
The fund will report to the Internal Revenue Service (the "IRS") the amount of
sale proceeds that a shareholder receives from a sale or exchange of fund
shares. For sales or exchanges of shares acquired on or after January 1, 2012,
the fund will also report the shareholder's basis in those shares and whether
any gain or loss that the shareholder realizes on the sale or exchange is
short-term or long-term gain or loss. For purposes of calculating and reporting
basis, shares acquired prior to January 1, 2012 and shares acquired on or after
January 1, 2012 will generally be treated as held in separate accounts. If a
shareholder has a different basis for different shares of the fund, acquired on
or after January 1, 2012, in the same account (e.g., if a shareholder purchased
fund shares in the same account at different times for different prices), the
fund will calculate the basis of the shares sold using its default method
unless the shareholder has properly elected to use a different method. The
fund's default method for calculating basis will be the average basis method,
under which the basis per share is reported as the average of the bases of all
of the shareholder's fund shares in the account. A shareholder may elect, on an
account-by-account basis, to use a method other than average basis by following
procedures established by the fund. If such an election is made on or prior to
the date of the first exchange or redemption of shares in the account and on or
prior to the date that is one year after the shareholder receives notice of the
fund's default method, the new election will generally apply as if the average
basis method had never been in effect for such account. If such an election is
not made on or prior to such dates, the shares in the account at the time of
the election will retain their averaged bases. Shareholders should consult
their tax advisers concerning the tax consequences of applying the average
basis method or electing another method of basis calculation.
66
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) before February 1 of the calendar year following the calendar year in
which the original Class A shares were redeemed. 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 IRS 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 gains from 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 gains from 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
67
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 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. Gains from the sale of stock of passive foreign investment companies
may also be treated 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. Under proposed Treasury regulations, certain income derived by the
fund for a taxable year from a passive foreign investment company with respect
to which the fund has made a qualified electing fund election would generally
constitute qualifying income only to the extent the passive foreign investment
company makes distributions in respect of that income to the fund for that
taxable year. 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.
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.
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 are 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.
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
68
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") a portion 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. The backup
withholding rate is 28%. In order to avoid this withholding requirement,
shareholders, other than certain exempt entities, must generally certify 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 certain dividends reported 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 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
69
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.
Unless certain non-U.S. entities that hold fund shares comply with IRS
requirements that will generally require them to report information regarding
U.S. persons investing in, or holding accounts with, such entities, a 30%
withholding tax may apply to fund distributions payable to such entities and,
after December 31, 2018, to redemptions and certain capital gain dividends
payable to such entities. A non-U.S. shareholder may be exempt from the
withholding described in this paragraph under an applicable intergovernmental
agreement between the U.S. and a foreign government, provided that the
shareholder and the applicable foreign government comply with the terms of such
agreement.
The fund does not expect to be a "United States real property holding
corporation" as defined in Section 897(c)(2) of the Code. If the fund were to
be classified as a United States real property holding corporation (or if it
would be so classified, were it not for certain exceptions), then distributions
made by the fund to non-U.S. shareholders might be subject to U.S. federal
withholding tax, and non-U.S. shareholders might be required to file U.S.
federal income tax returns to report 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 August 31, 2017 appearing in the fund's annual report, filed with the SEC
on October 30, 2017 (Accession No. 0001306349-17-000018), 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 the fund at 1-800-225-6292.
18. ANNUAL FEE, EXPENSE AND OTHER INFORMATION
PORTFOLIO TURNOVER
The fund's annual portfolio turnover rate for the fiscal years ended August 31
2017 2016
------ -----
115% 129%
--- ---
SHARE OWNERSHIP
As of December 1, 2017, 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 December 1, 2017:
70
NUMBER OF
RECORD HOLDER SHARE CLASS SHARES % OF CLASS
----------------------------------------- ------------- --------------- -----------
National Financial Services LLC. Class A 2,170,170.557 10.79
Attn: Mutual Funds Dept., 4th Floor Class C 643,257.680 9.46
------------- ------------- -----
499 Washington Blvd.
Jersey City, NJ 07310-2010
-----------------------------------------
Pershing LLC Class A 1,327,886.223 6.60
1 Pershing Plaza Class C 588,576.020 8.66
------------- ------------- -----
Jersey City, NJ 07399-0001
-----------------------------------------
Wells Fargo Clearing Services LLC Class C 576,302.174 8.48
------------- ------------- -----
Special Custody Acct FBO Customer
2801 Market St.
St. Louis, MO 63103-2523
-----------------------------------------
Morgan Stanley Smith Barney Class C 921,874.846 13.56
Harborside Financial Center Class Y 557,017.943 5.96
------------- ------------- -----
Plaza 2, 3rd Floor
Jersey City, NJ 07311
-----------------------------------------
MLPF&S Class C 782,168.536 11.50
FBO Customers Class Y 498,954.222 5.34
------------- ------------- -----
Mutual Funds Administration
4800 Deer Lake Dr.East, 2nd Floor
Jacksonville, FL 32246-6484
-----------------------------------------
LPL Financial Class C 397,340.978 5.84
------------- ------------- -----
FBO Customer Accounts
Attn: Mutual Funds Operations
P.O. Box 509046
San Diego, CA 92150-9046
-----------------------------------------
UBS WM USA Class C 399,824.581 5.88
Attn: Department Manager Class Y 533,414.586 5.71
------------- ------------- -----
499 Washington Blvd, 9th Floor
Jersey City, NJ 07310-2055
-----------------------------------------
Raymond James Class C 573,290.260 8.43
------------- ------------- -----
Omnibus for Mutual Funds
Attn: Courtney Waller
880 Carillon Parkway
St. Petersburg, FL 33716
-----------------------------------------
Hartford Life Insurance Company Class R 226,752.924 28.98
------------- ------------- -----
Attn: UIT Operations
P.O. Box 2999
Harford, CT 06104-2999
-----------------------------------------
Matrix Trust Company Class R 43,521.231 5.56
------------- ------------- -----
FBO Customer
717 17th St Suite 1300
Denver, CO 80202-3304
-----------------------------------------
State Street Bank & Trust Co. Class R 45,539.752 5.82
------------- ------------- -----
FBO Customer
Morgan Stanley Smith Barney
1 Lincoln St.
Boston, MA 02111-2901
-----------------------------------------
Brown Brothers Harriman & Co Class Y 1,405,248.000 15.04
As Custodian For Customers Class Y 481,564.000 5.16
------------- ------------- -----
140 Broadway
New York NY 10005-1108
-----------------------------------------
Massachusetts Mutual Life Insurance Co. Class Y 667,792.883 7.15
------------- ------------- -----
1295 State St.
Springfield, MA 01111-0001
-----------------------------------------
71
TRUSTEE OWNERSHIP OF SHARES OF THE FUND AND OTHER PIONEER FUNDS
The following table indicates the value of shares that each Trustee
beneficially owned in the fund and Pioneer Funds in the aggregate as of
December 31, 2016. Beneficial ownership is determined in accordance with SEC
rules. The share value of any closed-end fund is based on its closing market
price on December 31, 2016. The share value of any open-end Pioneer Fund is
based on the net asset value of the class of shares on December 31, 2016. The
dollar ranges in this table are in accordance with SEC requirements.
AGGREGATE DOLLAR RANGE OF EQUITY
DOLLAR RANGE OF SECURITIES IN ALL REGISTERED
EQUITY SECURITIES INVESTMENT COMPANIES OVERSEEN BY
NAME OF TRUSTEE IN THE FUND TRUSTEE IN THE PIONEER FAMILY OF FUNDS
----------------------- ------------------- ---------------------------------------
INTERESTED TRUSTEES:
----------------------- ------------------- ---------------------------------------
Lisa M. Jones None Over $100,000
----------------------- ------------------- ---------------------------------------
Kenneth J. Taubes None Over $100,000
----------------------- ------------------- ---------------------------------------
INDEPENDENT TRUSTEES:
----------------------- ------------------- ---------------------------------------
David R. Bock None Over $100,000
----------------------- ------------------- ---------------------------------------
Benjamin M. Friedman Over $100,000 Over $100,000
----------------------- ------------------- ---------------------------------------
Margaret B.W. Graham None Over $100,000
----------------------- ------------------- ---------------------------------------
Lorraine H. Monchak None Over $100,000
----------------------- ------------------- ---------------------------------------
Thomas J. Perna None Over $100,000
----------------------- ------------------- ---------------------------------------
Marguerite A. Piret None Over $100,000
----------------------- ------------------- ---------------------------------------
Fred J. Ricciardi None 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
AGGREGATE BENEFITS ACCRUED TOTAL COMPENSATION
COMPENSATION AS PART OF FUND FROM THE FUND AND
NAME OF TRUSTEE FROM FUND** EXPENSES OTHER PIONEER FUNDS**
----------------------- -------------- ------------------ ----------------------
INTERESTED TRUSTEES:
----------------------- ---------- ----- -------------
Lisa M. Jones* $ 0.00 $0.00 $ 0.00
----------------------- ---------- ----- -------------
Kenneth J. Taubes* $ 0.00 $0.00 $ 0.00
----------------------- ---------- ----- -------------
INDEPENDENT TRUSTEES:
----------------------- ---------- ----- -------------
David R. Bock $ 3,284.30 $0.00 $ 277,881.00
----------------------- ---------- ----- -------------
Benjamin M. Friedman $ 3,319.86 $0.00 $ 281,250.00
----------------------- ---------- ----- -------------
Margaret B.W. Graham $ 3,010.11 $0.00 $ 249,500.00
----------------------- ---------- ----- -------------
Lorraine H. Monchak+ $ 3,028.77 $0.00 $ 251,619.00
----------------------- ---------- ----- -------------
Thomas J. Perna $ 3,860.19 $0.00 $ 336,125.00
----------------------- ---------- ----- -------------
Marguerite A. Piret $ 3,222.83 $0.00 $ 271,375.00
----------------------- ---------- ----- -------------
Fred J. Ricciardi $ 2,830.04 $0.00 $ 231,250.00
----------------------- ---------- ----- -------------
TOTAL $22,556.10 $0.00 $1,899,000.00
----------------------- ---------- ----- -------------
* Under the management contract, Amundi Pioneer reimburses the fund for any
Interested Trustee fees paid by the fund.
** For the fiscal year ended August 31, 2017. As of August 31, 2017, there
were 45 U.S. registered investment portfolios in the Pioneer Family of
Funds.
+ Ms. Lorraine H. Monchak was a non-voting Advisory Trustee of the fund
from 2014 - July 2, 2017.
72
APPROXIMATE MANAGEMENT FEES THE FUND PAID OR OWED AMUNDI 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 AUGUST 31 2017 2016 2015
-------------------------------------- ------------- ------------- -------------
Gross Fee Incurred $3,742,063 $4,058,686 $5,957,644
-------------------------------------- ---------- ---------- ----------
Net Fee Paid $3,742,063 $4,058,686 $5,957,644
-------------------------------------- ---------- ---------- ----------
FEES THE FUND PAID TO AMUNDI PIONEER UNDER THE ADMINISTRATION AGREEMENT
FOR THE FISCAL YEARS ENDED AUGUST 31
----------------------------------------------
2017 2016 2015
-------------------- ----------- -----------
$227,521 $240,945 $272,224
---------- -------- --------
UNDERWRITING EXPENSES AND COMMISSIONS
FOR THE FISCAL YEARS ENDED AUGUST 31 2017 2016 2015
----------------------------------------------------------------- ---------- ------------- -------------
Approximate Net Underwriting Expenses Retained by Amundi Pioneer
Distributor, Inc. $ 19,328 $ 19,495 $ 25,656
----------------------------------------------------------------- -------- ---------- ----------
Approximate Commissions Reallowed to Dealers (Class A shares) $101,559 $ 110,240 $ 144,320
----------------------------------------------------------------- -------- ---------- ----------
Approximate Commissions Reallowed to Dealers (Class C shares) $ 0 $ 0 $ 0
----------------------------------------------------------------- -------- ---------- ----------
Approximate Brokerage and Underwriting Commissions (Portfolio
Transactions) $609,025 $1,058,435 $1,417,241
----------------------------------------------------------------- -------- ---------- ----------
FUND EXPENSES UNDER THE DISTRIBUTION PLAN
FOR THE FISCAL YEAR ENDED AUGUST 31, 2017
----------------------------------------------------------------------
COMBINED PLAN CLASS A PLAN CLASS C PLAN CLASS R PLAN
------------------ -------------- -------------- --------------
$1,982,933 $781,199 $1,137,663 $64,071
------------ -------- ---------- ------- --
ALLOCATION OF FUND EXPENSES UNDER THE DISTRIBUTION PLAN
An estimate by category of the allocation of fees paid by each class of shares
of the fund during the period ended September 30, 2017 is set forth in the
following table:
PAYMENTS
TO SERVICING SALES PRINTING
PARTIES/1/ ADVERTISING MEETINGS AND MAILING TOTAL
-------------- ------------- ---------- ------------- -------------
Class A $ 770,733 $9,606 $27,036 $8,640 $ 816,015
--------- ---------- ------ ------- ------ ----------
Class C $1,122,107 $1,486 $ 4,013 $1,348 $1,128,954
--------- ---------- ------ ------- ------ ----------
Class R $ 62,762 $ 693 $ 1,841 $ 627 $ 65,923
--------- ---------- ------ ------- ------ ----------
1 Payments to Servicing Parties include Amundi Pioneer 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 September 30, 2017).
SECURITIES OF REGULAR BROKER-DEALERS
As of August 31, 2017, the fund held the following securities of its regular
broker-dealers (or affiliates of such broker-dealers):
73
(000's)
----------------------- -------- -------
JP Morgan Chase & Co. Equity $33,308
----------------------- -------- -------
----------------------- -------- -------
CDSCS
During the fiscal year ended August 31, 2017, the following CDSCs were paid to
Amundi Pioneer Distributor, Inc.:
$3,916
CAPITAL LOSS CARRYFORWARDS AS OF AUGUST 31, 2017
At August 31, 2017, the fund had the following net capital loss carryforward:
$0
74
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
RATINGS:
Moody's short-term ratings are forward-looking 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 of thirteen months or less and
reflect the likelihood of a default on contractually promised payments.
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 LONG-TERM CORPORATE RATINGS:
Moody's long-term obligation ratings are forward-looking opinions of the
relative credit risk of fixed-income obligations with an original maturity of
one year or more. They address the possibility that a financial obligation will
not be honored as promised. Such ratings use Moody's Global Long-Term Rating
Scale and reflect both on the likelihood of default on contractually promised
payments and the expected financial loss suffered in the event of default.
AAA: Obligations rated Aaa are judged to be of the highest quality, subject to
the lowest level of 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 judged to be medium-grade and subject to
moderate credit risk, and as such may possess certain speculative
characteristics.
BA: Obligations rated Ba are judged to be speculative 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 speculative and of poor standing
and are subject to very high credit risk.
------------------------
/1/ The ratings indicated herein are believed to be the most recent ratings
available at the date of this statement of additional information for the
securities listed. Ratings are generally given to securities at the time of
issuance. While the rating agencies may from time to time revise such
ratings, they undertake no obligation to do so, and the ratings indicated
do not necessarily represent ratings which will be given to these
securities on the date of the fund's fiscal year-end.
75
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. Additionally, a
"(hyb)" indicator is appended to all ratings of hybrid securities issued by
banks, finance companies and securities firms.
STANDARD & POOR'S RATINGS GROUP'S LONG-TERM ISSUE CREDIT RATINGS:
Issue credit ratings are based, in varying degrees, on Standard & Poor's
analysis of 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.
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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 nonpayment, 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, the "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 or when preferred stock is the subject of a distressed
exchange offer, whereby some or all of the issue is either repurchased for an
amount of cash or replaced by other instruments having a total value that is
less than par.
D: An obligation rated "D" is in payment default. The "D" rating category is
used when payments on an obligation, including a regulatory capital instrument,
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. An obligation's rating is lowered to "D" upon
completion of a distressed exchange offer, whereby some or all of the issue is
either repurchased for an amount of cash or replaced by other instruments
having a total value that is less than par.
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:
Short-term ratings are generally assigned to those obligations considered
short-term in the relevant market. In the U.S., for example, that means
obligations with an original maturity date of no more than 365 days - including
commercial paper. Short-term ratings are also used to indicate the
creditworthiness of an obligor with respect to put features on long-term
obligations. The result is a dual rating, in which the short-term rating
addresses the put feature, in addition to the usual long-term rating.
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.
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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, including a regulatory capital
instrument, 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.
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20. APPENDIX B - PROXY VOTING POLICIES AND PROCEDURES
POLICY
Each of Amundi Pioneer Asset Management, Inc. and Amundi Pioneer Institutional
Asset Management, Inc. (collectively, "Amundi Pioneer") is a fiduciary that
owes each of its clients the duties of care and loyalty with respect to all
services undertaken on the client's behalf, including voting proxies for
securities held by the client. When Amundi Pioneer has been delegated
proxy-voting authority for a client, the duty of care requires Amundi Pioneer
to monitor corporate events and to vote the proxies. To satisfy its duty of
loyalty, Amundi Pioneer must place the client's interests ahead of its own and
must cast proxy votes in a manner consistent with the best interest of the
client. It is Amundi Pioneer's policy to vote proxies presented to Amundi
Pioneer in a timely manner in accordance with these principles.
Amundi 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, Amundi 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. Amundi Pioneer monitors developments in the
proxy-voting arena and will revise this policy as needed.
Amundi Pioneer's clients may request copies of their proxy voting records and
of Amundi Pioneer's proxy voting policies and procedures by either sending a
written request to Amundi Pioneer's Proxy Coordinator, or clients may review
Amundi Pioneer's proxy voting policies and procedures online at
Pioneerinvestments.com. Amundi Pioneer may describe to clients its proxy voting
policies and procedures by delivering a copy of Amundi Pioneer's Form ADV (Part
II), by separate notice to the client or by other means.
APPLICABILITY
This Proxy Voting policy and the procedures set forth below are designed to
complement Amundi 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 Amundi
Pioneer. This policy sets forth Amundi Pioneer's position on a number of issues
for which proxies may be solicited, but it does not include all potential
voting scenarios or proxy events. Furthermore, because of the special issues
associated with proxy solicitations by closed-end Funds, Amundi Pioneer will
vote shares of closed-end Funds on a case-by-case basis.
PURPOSE
The purpose of this policy is to ensure that proxies for United States ("US")
and non-US companies that are received in a timely manner will be voted in
accordance with the principles stated above. Unless the Proxy Voting Oversight
Group (as described below) specifically determines otherwise, all shares in a
company held by Amundi Pioneer-managed accounts for which Amundi Pioneer has
proxy-voting authority will be voted alike, unless a client has given specific
voting instructions on an issue.
Amundi Pioneer does not delegate the authority to vote proxies relating to
securities held by its clients to any of its affiliates, which include other
subsidiaries of Amundi.
Any questions about this policy should be directed to Amundi Pioneer's Director
of Investment Operations (the "Proxy Coordinator").
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PROCEDURES
PROXY VOTING SERVICE
Amundi 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 Amundi
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. Amundi 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 Amundi 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 Group 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 General Counsel or his
or her designee whether Amundi 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 Amundi Pioneer's proxy voting
guidelines as to be voted on a case-by-case basis, that are not covered by
Amundi Pioneer's guidelines or where Amundi 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 Chief Investment
Officer, 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 Amundi
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 Amundi Pioneer's lending program
or a client's managed security lending program. However, Amundi Pioneer will
reserve the right to recall lent securities so that they may be voted according
to Amundi 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, Amundi 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.
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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).
Amundi 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.
PROXY VOTING OVERSIGHT GROUP
The members of the Proxy Voting Oversight Group include Amundi Pioneer's Chief
Investment Officer, 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 Amundi 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) Amundi Pioneer's proxy voting policies and
procedures. The group meets at least annually to evaluate and review this
policy 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
Amundi Pioneer may not amend this policy without the prior approval of the
Proxy Voting Oversight Group.
FILING FORM N-PX
The Proxy Coordinator and the Director of Regulatory Reporting are responsible
for ensuring that Form N-PX 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 Amundi 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 Amundi 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.
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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.
Amundi Pioneer will vote on a case-by-case basis on other routine
administrative items; however, Amundi Pioneer will oppose any routine proposal
if insufficient information is presented in advance to allow Amundi Pioneer to
judge the merit of the proposal. Amundi Pioneer has also instructed its proxy
voting service to inform Amundi Pioneer of its analysis of any administrative
items that may be inconsistent, in its view, with Amundi Pioneer's goal of
supporting the value of its clients' portfolio holdings so that Amundi 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
for 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, Amundi 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
Amundi 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.
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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 Election of a greater number of independent directors (in order to move
closer to 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 changes 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.
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TAKEOVER-RELATED MEASURES
Amundi 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.
Amundi Pioneer will vote for:
o Cumulative voting.
o Increasing the ability for shareholders to call special meetings.
o Increasing the 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.
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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 Amundi Pioneer normally supports managements'
proposals in this area. We will, however, reject proposals that impose high
barriers to potential takeovers.
Amundi 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% of 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
Amundi 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.
Amundi Pioneer will vote for:
o 401(k) benefit plans.
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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, or a plan that grants 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.
86
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
Amundi Pioneer will vote for:
o Confidential voting.
o Equal access provisions, which allow shareholders to contribute their
opinions 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.
87
MERGERS AND RESTRUCTURINGS
Amundi 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.
Amundi Pioneer will vote for:
o Establishment of new classes or series of shares.
o Establishment of a master-feeder structure.
Amundi 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 Election of a greater number of independent directors (in order to move
closer to a majority of independent directors) in cases of poor performance.
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
Amundi 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.
Amundi 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.
88
AVOIDING CONFLICTS OF INTEREST
Amundi Pioneer recognizes that in certain circumstances a conflict of interest
may arise when Amundi Pioneer votes a proxy.
A conflict of interest occurs when Amundi Pioneer's interests interfere, or
appear to interfere with the interests of Amundi Pioneer's clients.
A conflict may be actual or perceived and may exist, for example, when the
matter to be voted on concerns:
o An affiliate of Amundi Pioneer, such as another company belonging to the
Credit Agricole banking group (a "Credit Agricole Affiliate");
o An issuer of a security for which Amundi Pioneer acts as a sponsor, advisor,
manager, custodian, distributor, underwriter, broker, or other similar
capacity (including those securities specifically declared by Amundi Asset
Management to present a conflict of interest for Amundi Pioneer);
o An issuer of a security for which Amundi Asset Management has informed Amundi
Pioneer that a Credit Agricole Affiliate acts as a sponsor, advisor,
manager, custodian, distributor, underwriter, broker, or other similar
capacity; or
o A person with whom Amundi Pioneer (or any of its affiliates) has an existing,
material contract or business relationship.
Any member of the Proxy Voting Oversight Group and any other 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 Amundi Pioneer and the Funds. If any associate is lobbied
or pressured with respect to any voting decision, whether within or outside of
Amundi Pioneer, he or she should contact a member of the Proxy Voting Oversight
Group or Amundi Pioneer's Chief Compliance Officer.
The Proxy Voting Oversight Group will review each item referred to Amundi
Pioneer by the proxy voting service to determine whether an actual or potential
conflict of interest 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. The Proxy Voting Oversight Group may cause any of
the following actions to be taken when a conflict of interest is present:
o Vote the proxy in accordance with the vote indicated under "Voting
Guidelines," If a vote is indicated;
o Direct the independent proxy voting service to vote the proxy in accordance
with its independent assessment; or
o As determined by the Proxy Voting Oversight Group in its discretion
consistent with its fiduciary duty.
If the Proxy Voting Oversight Group perceives a material conflict of interest,
the group may also choose to disclose the conflict to the affected clients and
solicit their consent to proceed with the vote, or may take such other action
in good faith (in consultation with counsel) that would protect the interest of
clients.
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.
The Proxy Voting Oversight Group will review periodically the independence of
the proxy voting service. This may include a review of the service's conflict
management procedures and other documentation, and an evaluation as to whether
the service continues to have the competency and capacity to vote proxies.
89
DECISION NOT TO VOTE PROXIES
Although it is Amundi Pioneer's general policy to vote all proxies in
accordance with the principles set forth in this policy, there may be
situations in which the Proxy Voting Oversight Group does not vote a proxy
referred to it. For example, because of the potential conflict of interest
inherent in voting shares of a Credit Agricole affiliate, Amundi Pioneer will
abstain from voting the shares unless otherwise directed by a client. In such a
case, the Proxy Coordinator will inform Amundi Asset Management Compliance and
the Amundi Independent Directors before exercising voting rights.
There exist other situations in which the Proxy Voting Oversight Group may
refrain from voting a proxy. For example, if the cost of voting a foreign
security outweighs the benefit of voting, the Group may not vote the proxy. The
Group may not be given enough time to process a vote, perhaps because it
receives a meeting notice too late or it cannot obtain a translation of the
agenda in the time available. If Amundi Pioneer has outstanding "sell" orders,
the proxies for shares subject to the order may not be voted to facilitate the
sale. Although Amundi Pioneer may hold shares on a company's record date, if
the shares are sold prior to the meeting date, the Group may decide not to vote
those shares.
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 Amundi
Pioneer's Chief Compliance Officer if he or she becomes aware of any possible
noncompliance with this policy.
TRAINING
Amundi Pioneer will conduct periodic training regarding proxy voting and this
policy. 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
Amundi Pioneer Asset Management, Inc.'s Books and Records Policy and the Books
and Records of the Pioneer Funds' Policy.
RECORD KEEPING
The Proxy Coordinator shall ensure that Amundi Pioneer's proxy voting service:
o Retains a copy of each 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 Amundi 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 Amundi Pioneer that was material in making
the decision on how to vote the subject proxy;
o A copy of any recommendation of the proxy voting service; 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, Amundi Pioneer.
90
Amundi 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 31a1-3, 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:
September 2009
ANNUAL UPDATES:
December 2015 and August 2017
22130-10-1217
91
PART C - OTHER INFORMATION
Item 28. Exhibits
(a)(1) Amended and Restated Agreement and Declaration of Trust
(January 12, 2016) (8)
(a)(2) Certificate of Trust (1)
(b) Amended and Restated By-Laws (5)
(c) Amended and Restated Agreement and Declaration of Trust and
Amended and Restated By-Laws cited under Items 23(a) and 23(b)
(d) Management Agreement with Amundi Pioneer Asset Management, Inc.
(July 3, 2017) (9)
(e)(1) Underwriting Agreement with Amundi Pioneer Distributor, Inc.
(July 3, 2017) (9)
(e)(2) Dealer Sales Agreement (4)
(f) None
(g)(1) Custodian Agreement (3)
(g)(2) Appendix A to Custodian Agreement (December 27, 2016) (9)
(g)(3) Amendment to Custodian Agreement (May 31, 2016) (8)
(h)(1) Transfer Agency Agreement (November 2, 2015) (8)
(h)(2) Amended and Restated Administration Agreement
(February 1, 2017) (9)
(h)(3) Administrative Agency Agreement, dated as of March 5, 2012,
between Brown Brothers Harriman & Co. and Pioneer Investment
Management, Inc. (6)
(h)(4) Appendix A to Administrative Agency Agreement
(December 27, 2016) (9)
(h)(5) Expense Limit Agreement (8)
(i) Opinion of Counsel (2)
(j) Consent of Independent Registered Public Accounting Firm (9)
(k) None
(l) None
(m)(1) Pioneer Funds Distribution Plan (January 10, 2017) (9)
(m)(2) Class R Service Plan (3)
(n) Multiple Class Plan Pursuant to Rule 18f-3 (9)
(o) N/A
(p) Code of Ethics of the Pioneer Funds, Pioneer Funds
Distributor, Inc., Pioneer Institutional Asset Management, Inc.,
and Pioneer Investment Management, Inc. (September 20, 2013) (7)
N/A Power of Attorney (November 17, 2014) (7)
N/A Power of Attorney for Lisa Jones (July 18, 2017) (9)
N/A Power of Attorney for Lorraine H. Monchak (July 18, 2017) (9)
------------------
(1) Previously filed. Incorporated herein by reference from the exhibits filed
with the Registration Statement (File Nos. 333-120144 and 811-21664) as filed
with the Securities and Exchange Commission (SEC) on November 1, 2004
(Accession No. 0001016964-04-000435).
(2) Previously filed. Incorporated herein by reference from the exhibits filed
with the Registrant's initial Registration Statement on Form N-14 (File No.
333-120226) as filed with the SEC on November 4, 2004 (Accession No.
0001145443-04-001724).
(3) Previously filed. Incorporated herein by reference from the exhibits filed
with the Registrant's amendment to the Registration Statement on Form N-1A
(File Nos. 333-120144 and 811-21664) as filed with the SEC on October 27, 2006
(Accession No. 0001306349-06-000013).
(4) Previously filed. Incorporated herein by reference from the exhibits filed
with the Registrant's amendment to the Registration Statement on Form N-1A
(File Nos. 333-120144 and 811-21664) as filed with the SEC on October 26, 2007
(Accession No. 0001145443-07-003334).
(5) Previously filed. Incorporated herein by reference from the exhibits filed
with the Registrant's amendment to the Registration Statement on Form N-1A
(File Nos. 333-120144 and 811-21664) as filed with the SEC on October 27, 2008
(Accession No. 0001306349-08-000008).
(6) Previously filed. Incorporated herein by reference from the exhibits filed
with the Registrant's amendment to the Registration Statement on Form N-1A
(File Nos. 333-120144 and 811-21664) as filed with the SEC on October 26, 2012
(Accession No. 0001306349-12-000012).
(7) Previously filed. Incorporated herein by reference from the exhibits filed
with the Registrant's Post Effective Amendment No. 15 to the Registration
Statement on Form N-1A (File Nos. 333-120144 and 811-21664) as filed with the
SEC on December 22, 2014 (Accession No. 0001306349-14-000023).
(8) Previously filed. Incorporated herein by reference from the exhibits filed
with the Registrant's Post Effective Amendment No. 19 to the Registration
Statement on Form N-1A (File Nos. 333-120144 and 811-21664) as filed with the
SEC on December 23, 2016 (Accession No. 0001306349-16-000041).
(9) Filed herewith.
Item 29. Persons Controlled by or Under Common Control with the Fund
None.
Item 30. Indemnification
Except for the Amended and Restated Agreement and Declaration of Trust (the
"Declaration"), establishing the Trust 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 Trust is insured or indemnified. The
Declaration provides that every person who is, or has been, a Trustee or an
officer, employee or agent of theTrust shall be indemnified by the Trust or the
appropriate Trust 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 Trust pursuant to the foregoing provisions, or
otherwise, the Trust 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 Trust 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
Trust 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 31. Business and Other Connections of Investment Adviser
Amundi Pioneer Asset Management, Inc. ("Amundi Pioneer") is a registered
investment adviser under the Investment Advisers Act of 1940, as amended, and is
an indirect, wholly owned subsidiary of Amundi and Amundi's wholly owned
subsidiary, Amundi, USA, Inc. Amundi Pioneer manages investment companies,
pension and profit sharing plans, trusts, estates or charitable organizations
and other corporations or business entities.
To the knowledge of the Trust, none of Amundi Pioneer's directors or
executive officers is or has been during their employment with Amundi Pioneer
engaged in any other business, profession, vocation or employment of a
substantial nature for the past two fiscal years. 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 Amundi
manages and/or other Amundi subsidiaries.
Item 32. Principal Underwriters
(a) Amundi Pioneer Distributor, Inc. acts as principal underwriter
for the following investment companies:
Pioneer Asset Allocation Trust
Pioneer Bond Fund
Pioneer Equity Income Fund
Pioneer Fund
Pioneer High Yield Fund
Pioneer ILS Interval Fund
Pioneer Mid Cap Value Fund
Pioneer Money Market Trust
Pioneer Real Estate Shares
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 X
Pioneer Series Trust XI
Pioneer Series Trust XII
Pioneer Short Term Income Fund
Pioneer Strategic Income Fund
Pioneer Variable Contracts Trust
(b) Directors and executive officers of Amundi Pioneer Distributor,
Inc.:
POSITIONS AND OFFICES POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH FUND
Patrice Blanc Director None
Lisa M. Jones Director, Chairman, President President and Trustee
and Chief Executive Officer
Laura J. Palmer Director, Senior Vice None
President, Head of U.S.
Intermediary Distribution and
Head of Sales - Cross Channel
Erik D. Gosule Senior Vice President and None
Head of Marketing and Product
Development
Tracy L. Connelly Senior Vice President and None
Chief Operations Officer
Gregg M. Dooling Chief Financial Officer None
Terrence J. Cullen Senior Vice President and None
General Counsel
John M. Malone Senior Vice President and None
Chief Compliance Officer
Patrick D. Grecco Vice President and Controller None
The principal business address of each of these individuals is 60 State Street,
Boston, Massachusetts 02109-1820.
(c) Not applicable.
Item 33. Location of Accounts and Records
The accounts, books, and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940, as amended, and the rules
promulgated thereunder are maintained at the following offices:
(a) Registrant:
60 State Street
Boston, Massachusetts 02109
(b) Investment adviser and administrator:
Amundi Pioneer Asset Management, Inc.
60 State Street
Boston, Massachusetts 02109
(c) Principal underwriter:
Amundi Pioneer Distributor, Inc.
60 State Street
Boston, Massachusetts 02109
(d) Custodian and sub-administrator:
Brown Brothers Harriman & Co.
50 Post Office Square
Boston, Massachusetts 02110
(e) Shareholder servicing and transfer agent:
DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, MA 02169
Item 34. Management Services
Not applicable.
Item 35. 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 Trust certifies that it
meets all of the requirements for effectiveness of this Registration Statement
pursuant to Rule 485(b) of the Securities Act of 1933. The Trust has duly
caused this Post-Effective Amendment No. 21 to its 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 December, 2017.
PIONEER SERIES TRUST III
By: /s/ Lisa M. Jones
------------------------
Lisa M. Jones
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated below on December 27, 2017:
Signature Title
/s/ Lisa M. Jones President (Principal Executive Officer)
------------------- and Trustee
Lisa M. Jones
Mark E. Bradley* Treasurer (Principal Financial and
Mark E. Bradley Accounting Officer)
David R. Bock* Trustee
David R. Bock
Benjamin M. Friedman* Trustee
Benjamin M. Friedman
Margaret B. W. Graham* Trustee
Margaret B. W. Graham
Lorraine H. Monchak* Trustee
Lorraine H. Monchak
Thomas J. Perna* Chairman of the Board and
Thomas J. Perna Trustee
Marguerite A. Piret* Trustee
Marguerite A. Piret
Fred J. Ricciardi* Trustee
Fred J. Ricciardi
Kenneth J. Taubes* Trustee
Kenneth J. Taubes
*By: /s/ Lisa M. Jones Dated: December 27, 2017
-------------------
Lisa M. Jones
Attorney-in-fact
EXHIBIT INDEX
Exhibit
Number Document Title
(d) Management Agreement with Amundi Pioneer Asset
Management, Inc. (July 3, 2017)
(e)(1) Underwriting Agreement with Amundi Pioneer
Distributor, Inc. (July 3, 2017)
(g)(2) Appendix A to Custodian Agreement (December 27, 2016)
(h)(2) Amended and Restated Administration Agreement
(February 1, 2017)
(h)(4) Appendix A to Administrative Agency Agreement (December 27, 2016)
(j) Consent of Independent Registered Public Accounting Firm
(m) Pioneer Funds Distribution Plan (January 10, 2017)
(n) Multiple Class Plan Pursuant to Rule 18f-3
N/A Power of Attorney for Lisa Jones (July 18, 2017)
N/A Power of Attorney for Lorraine H. Monchak (July 18, 2017)
MANAGEMENT AGREEMENT
This MANAGEMENT AGREEMENT ("Agreement") is made as of this 3rd day of July,
2017, by and between Pioneer Series Trust III (the "Trust"), a Delaware
statutory trust, and Amundi Pioneer Asset 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
- 2 -
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
- 3 -
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" equal the
value of the Fund's securities plus any other assets minus its accrued
operating expenses and other liabilities, 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 for an initial
two year period. 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.
- 4 -
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.
[signature page to follow]
- 5 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized.
PIONEER SERIES TRUST III
By:
------------------------------
Name: Lisa M. Jones
Title: President
AMUNDI PIONEER ASSET MANAGEMENT, INC.
By:
------------------------------
Name: Gregg M. Dooling
Title: Chief Financial Officer
6
Appendix A
Fund Effective Date Fee
---- -------------- ---
Pioneer Disciplined Value Fund July 3, 2017 0.65% of the Fund's
average daily net assets up
to $1 Billion; 0.60% of the
Fund's average daily net
assets on the next $2
Billion; 0.55% of the
Fund's average daily net
assets on the next $4.5
Billion; and 0.525% of the
Fund's average daily net
assets on assets over $7.5
Billion
7
UNDERWRITING AGREEMENT
THIS UNDERWRITING AGREEMENT, dated this 3rd day of July, 2017, by and
between Pioneer Series Trust III, a Delaware statutory trust ("Trust"), on
behalf of its series Pioneer Disciplined Value Fund and Amundi Pioneer
Distributor, Inc., a Massachusetts corporation (the "Underwriter").
WITNESSETH
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and has filed a registration statement (the "Registration Statement") with the
Securities and Exchange Commission (the "Commission") for the purpose of
registering shares of beneficial interest for public offering under the
Securities Act of 1933, as amended;
WHEREAS, the Underwriter engages in the purchase and sale of securities both
as a broker and a dealer and is registered as a broker-dealer with the
Commission and is a member in good standing of the Financial Industry
Regulatory Authority ("FINRA");
WHEREAS, the parties hereto deem it mutually advantageous that the
Underwriter should act as Principal Underwriter, as defined in the 1940 Act,
for the sale to the public of the shares of beneficial interest of the
securities portfolio of each series of the Trust which the Trustees may
establish from time to time (individually, a "Portfolio" and collectively, the
"Portfolios"); and
NOW, THEREFORE, in consideration of the mutual covenants and benefits set
forth herein, the Trust and the Underwriter do hereby agree as follows:
1. The Trust hereby grants to the Underwriter the right and option to
purchase shares of beneficial interest of each class of each Portfolio of the
Trust (the "Shares") for sale to investors either directly or indirectly
through other broker-dealers. The Underwriter is not required to purchase any
specified number of Shares, but will purchase from the Trust only a sufficient
number of Shares as may be necessary to fill unconditional orders received from
time to time by the Underwriter from investors and dealers.
2. The Underwriter shall offer Shares to the public at an offering price
based upon the net asset value of the Shares, to be calculated for each class
of Shares as described in the Registration Statement, including the
Prospectus(es), filed with the Commission and in effect at the time of the
offering, plus sales charges as approved by the Underwriter and the Trustees of
the Trust and as further outlined in the Trust's Prospectus(es). The offering
price shall be subject to any provisions set forth in the Prospectus(es) from
time to time with respect thereto, including, without limitation, rights of
accumulation, letters of intention, exchangeability of Shares, reinstatement
privileges, net asset value purchases by certain persons and reinvestments of
dividends and capital gain distributions.
3. In the case of all Shares sold to investors through other
broker-dealers, a portion of applicable sales charges will be reallowed to such
broker-dealers who are members of FINRA or, in the case of certain sales by
banks or certain sales to foreign nationals, to brokers or dealers exempt from
registration with the Commission. The concession reallowed to broker-dealers
shall be set forth in a written sales agreement and shall be generally the same
for broker-dealers providing comparable levels of sales and service.
4. This Agreement shall terminate on any anniversary hereof if its terms
and renewal have not been approved by a majority vote of the Trustees of the
Trust voting in person, including a majority of its Trustees who are not
"interested persons" of the Trust and who have no direct or indirect financial
interest in the operation of the Underwriting Agreement (the "Qualified
Trustees"), at a meeting of Trustees called for the purpose of voting on such
approval. This Agreement may also be terminated at any time, without payment of
any penalty, by the Trust on 60 days' written notice to the Underwriter, or by
the Underwriter upon similar notice to the Trust. This Agreement may also be
terminated by a party upon five (5) days' written notice to the other party in
the event that the Commission has issued an order or obtained an injunction or
other court order suspending effectiveness of the Registration Statement
covering the Shares. Finally, this Agreement may also be terminated by the
Trust upon five (5) days' written notice to the Underwriter provided either of
the following events has occurred: (i) FINRA has expelled the Underwriter or
suspended its membership in that organization; or (ii) the qualification,
registration, license or right of the Underwriter to sell Shares in a
particular state has been suspended or cancelled in a state in which sales of
Shares during the most recent 12-month period exceeded 10% of all Shares sold
by the Underwriter during such period.
5. The compensation for the services of the Underwriter as a principal
underwriter under this Agreement shall be:
With respect to Class A Shares (i) that part of the sales charge which is
retained by the Underwriter after allowance of discounts to dealers as set
forth, if required, in the Registration Statement, including the Prospectus,
filed with the Commission and in effect at the time of the offering, as
amended, and (ii) those amounts payable to the Underwriter as reimbursement
of expenses pursuant to any distribution plan for the Trust which may be in
effect.
With respect to Class C Shares (i) that part of the front-end sales charge
which is retained by the Underwriter after allowance of discounts to dealers
as set forth, if required, in the Registration Statement, including the
Prospectus, filed with the Commission and in effect at the time of the
offering, as amended, (ii) the Distribution Fee, if any, payable from time
to time to the Underwriter under the Trust's Class C Distribution Plan and
(iii) the contingent deferred sales charge payable with respect to Class C
Shares sold through the Underwriter as set forth in the Registration
Statement, including the Prospectus, filed with the Commission and in effect
at the time of the sale of such Class C Shares.
2
With respect to Class R Shares (i) the Distribution Fee, if any, payable
from time to time to the Underwriter under the Trust's Class R Distribution
Plan and (ii) the sales charge payable, if any, with respect to Class R
Shares sold through the Underwriter as set forth in the Registration
Statement, including the Prospectus, filed with the Commission and in effect
at the time of the sale of such Class R Shares.
With respect to Class K Shares and Class Y Shares, the Underwriter shall not
be entitled to any compensation.
With respect to any future class of Shares, the Underwriter shall be
entitled to such consideration as the Trust and the Underwriter shall agree
at the time such class of Shares is established.
6. Nothing contained herein shall relieve the Trust of any obligation under
its management contract or any other contract with any affiliate of the
Underwriter.
7. The parties to this Agreement acknowledge and agree that all liabilities
arising hereunder, whether direct or indirect, of any nature whatsoever,
including without limitation, liabilities arising in connection with any
agreement of the Trust or its Trustees as set forth herein to indemnify any
party to this Agreement or any other person, if any, shall be satisfied out of
the assets of the Trust and that no Trustee, officer or holder of Shares shall
be personally liable for any of the foregoing liabilities. The Trust's
Agreement and Declaration of Trust describes in detail the respective
responsibilities and limitations on liability of the Trustees, officers and
holders of Shares.
8. This Agreement shall automatically terminate in the event of its
assignment (as that term is defined in the 1940 Act).
9. In the event of any dispute between the parties, this Agreement shall be
construed according to the laws of The Commonwealth of Massachusetts.
3
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized officers and their seals to be hereto affixed
as of the day and year first above written.
ATTEST: PIONEER SERIES TRUST III
On behalf of its series,
Pioneer Disciplined Value Fund
By:
----------------------- -------------------------
Christopher J. Kelley Lisa M. Jones
Secretary President
ATTEST: AMUNDI PIONEER DISTRIBUTOR, INC.
By:
----------------------- -------------------------
Margaret C. Begley Gregg M. Dooling
Secretary Chief Financial Officer
4
APPENDIX A
TO
CUSTODIAN AGREEMENT
BETWEEN
BROWN BROTHERS HARRIMAN & CO.
AND
EACH OF THE MANAGEMENT INVESTMENT COMPANIES
LISTED ON APPENDIX "A" THERETO
Dated as of December 27, 2016
The following is a list of Funds for which the Custodian shall serve under the
Custodian Agreement dated as of July 1, 2001 (the "Agreement"):
PIONEER BOND FUND
PIONEER DIVERSIFIED HIGH INCOME TRUST
PIONEER EMERGING MARKETS FUND
PIONEER EQUITY INCOME FUND
PIONEER FLOATING RATE TRUST
PIONEER FUND
PIONEER HIGH INCOME TRUST
PIONEER HIGH YIELD FUND
PIONEER ASSET ALLOCATION SERIES, a series trust consisting of:
PIONEER SOLUTIONS - CONSERVATIVE ALLOCATION FUND
PIONEER SOLUTIONS - GROWTH ALLOCATION FUND
PIONEER SOLUTIONS - BALANCED ALLOCATION FUND
PIONEER ILS INTERVAL FUND
PIONEER MID CAP VALUE FUND
PIONEER MONEY MARKET TRUST, a series trust consisting of:
PIONEER US GOVERNMENT MONEY MARKET FUND
PIONEER MUNICIPAL HIGH INCOME TRUST
PIONEER MUNICIPAL HIGH INCOME ADVANTAGE TRUST
PIONEER REAL ESTATE SHARES
PIONEER SERIES TRUST II, a series trust consisting of:
PIONEER AMT-FREE MUNICIPAL FUND
PIONEER SELECT MID CAP GROWTH
PIONEER SERIES TRUST III, a series trust consisting of:
PIONEER SERIES TRUST IV, a series trust consisting of:
PIONEER CLASSIC BALANCED FUND
PIONEER MULTI-ASSET INCOME FUND
PIONEER SERIES TRUST V, a series trust consisting of:
PIONEER GLOBAL EQUITY FUND
PIONEER HIGH INCOME MUNICIPAL FUND
PIONEER U.S. CORPORATE HIGH YIELD FUND
PIONEER SERIES TRUST VI, a series trust consisting of:
PIONEER FLOATING RATE FUND
PIONEER FLEXIBLE OPPORTUNITIES FUND
PIONEER CAYMAN COMMODITY FUND LTD
(a wholly-owned subsidiary of Pioneer Flexible Opportunities Fund)
PIONEER SERIES TRUST VII, a series trust consisting of:
PIONEER GLOBAL HIGH YIELD FUND
PIONEER GLOBAL MULTISECTOR INCOME FUND
PIONEER SERIES TRUST VIII, a series consisting of:
PIONEER INTERNATIONAL VALUE FUND
PIONEER SERIES TRUST X, a series trust consisting of:
PIONEER DYNAMIC CREDIT FUND
PIONEER FUNDAMENTAL GROWTH FUND
PIONEER MULTI-ASSET ULTRASHORT INCOMEFUND
PIONEER SERIES TRUST XI, a series trust consisting of:
PIONEER CORE EQUITY FUND
PIONEER SERIES TRUST XII, a series trust consisting of:
PIONEER DISCIPLINED GROWTH FUND
PIONEER SHORT TERM INCOME FUND
PIONEER STRATEGIC INCOME FUND
PIONEER VARIABLE CONTRACTS TRUST, a series trust consisting of:
PIONEER BOND VCT PORTFOLIO
PIONEER DISCIPLINED VALUE VCT PORTFOLIO
PIONEER EMERGING MARKETS VCT PORTFOLIO
PIONEER EQUITY INCOME VCT PORTFOLIO
PIONEER FUND VCT PORTFOLIO
PIONEER HIGH YIELD VCT PORTFOLIO
PIONEER MID CAP VALUE VCT PORTFOLIO
PIONEER REAL ESTATE SHARES VCT PORTFOLIO
PIONEER SELECT MID CAP GROWTH VCT PORTFOLIO
PIONEER STRATEGIC INCOME VCT PORTFOLIO
IN WITNESS WHEREOF, each of the parties hereto has caused this Appendix to be
executed in its name and on its behalf.
Each of the open-end management BROWN BROTHERS HARRIMAN & CO.
investment companies listed on this
Appendix "A"
By: /s/ Christopher J. Kelley By: /s/ Elizabeth E. Prickett
--------------------------- --------------------------
Name: Christopher J. Kelley Name: Elizabeth E. Prickett
Title: Secretary Title: Managing Director
AMENDED AND RESTATED
ADMINISTRATION AGREEMENT
This AMENDED AND RESTATED ADMINISTRATION AGREEMENT ("Agreement") is made as
of July 1, 2008, amended and restated as of November 1, 2009, and further
amended and restated as of August 1, 2014, November 9, 2015 and February 1,
2017, 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");
WHEREAS, the Trust wishes to engage the Administrator to provide certain
administrative services listed in Appendix B annexed hereto to each Trust with
respect to the series of the Trust designated in Appendix A annexed hereto from
time to time (the "Funds"); and the Administrator is willing to furnish such
services on the terms and conditions hereinafter set forth; and
WHEREAS, the Administrator has entered into an agreement with Brown Brothers
Harriman & Co. ("BBH") pursuant to which BBH will act as a sub-administrator to
the Administrator (as amended from time to time, the "BBH Agreement") and to
which each Trust has joined as a party solely for the purposes specified
therein;
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 provide and 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 that it is understood that the Administrator has entered into
the BBH Agreement, with the approval of the Trusts' Boards of Trustees (the
"Board"), to perform certain accounting an other services listed in Appendix B
and, for the closed-end Funds, certain additional services specified in the BBH
Agreement, 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, the Administrator
shall perform the administrative services listed on Appendix B, except as
otherwise provided in the BBH Agreement with respect to the performance of
accounting and other services to be provided by BBH. 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 directly 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 bearing the fees and disbursements of
counsel to the Funds.
3. With the Board's approval, BBH has been employed by the Administrator to
provide sub-administrative services to the Trust as provided in the BBH
Agreement. Subject to the Board's approval, the Administrator may employ one or
more other 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 BBH or
any such other service provider. The Administrator will cooperate with any Fund
or Funds in the event that such Fund or Funds seek to assert against BBH claims
arising from the performance by BBH of its services under the BBH Agreement,
and acknowledges the Funds' status as named beneficiaries under the BBH
Agreement. Similarly, the Administrator will cooperate with any Fund or Funds
in the event that such Fund or Funds seek to assert against a transfer agent
claims arising from the performance by such transfer agent of its services.
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 3la-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 3la-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)(i) As compensation for the services performed by the Administrator
under this Agreement, each Fund shall reimburse the Administrator its pro rata
share, based on the Fund's average daily net assets (or the Fund's average
daily managed assets if so set forth on Appendix A hereto), of the
Administrator's costs of providing the services hereunder (or such alternative
allocation methodology based on the nature of the services), provided that the
costs attributed to services being provided by BBH or any other third party
shall be reduced accordingly. In determining the Administrator's costs of
providing services hereunder, personnel-related costs associated with the
Administrator's legal, compliance, fund treasury ("Fund Treasury") and
investor-related services shall be allocated in accordance with prescribed
allocation percentages reviewed by the Board from time to time. On a quarterly
basis, the Administrator will provide the
2
Board with information comparing the Administrator's actual costs of providing
services hereunder and the budgeted amount of such costs to the Funds.
(ii) The Administrator and each Fund agree that the Administrator and the
Board will review at least annually a budget as to the costs relating to the
provision of services by the Administrator hereunder, which budget shall
include the allocation percentages applicable to personnel-related costs
associated with the Administrator's legal, compliance, Fund Treasury and
investor-related services. Such budgeted costs and/or such allocation
percentages also will be reviewed at other times should the budgeted costs or
the circumstances affecting the allocation percentages, as the case may be,
change materially. In connection with each review, the Administrator will
provide the Board with such information as the Board may reasonably request.
(iii) Each Fund shall pay amounts due from it hereunder as promptly as
possible after the last day of each month. If this Agreement is terminated with
respect to any Fund as of any date not the last day of the month, such Fund
shall pay amounts due from it hereunder as promptly as possible after such date
of termination.
(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 or other
form of leverage, 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-l 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,
3
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. Each Trust shall pay all fees and expenses to
be paid by the Trust under the BBH Agreement. 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 (a) the total
assets of a Trust, including any form of investment leverage, minus (b) all
accrued liabilities incurred in the normal course of operations, which shall
not include any liabilities or obligations attributable to investment leverage
obtained through (i) indebtedness of any type (including, without
4
limitation, borrowing through a credit facility or the issuance of debt
securities), (ii) the issuance of preferred stock or other similar preference
securities, and/or (iii) 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, 2012, 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.
5
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/ Gregg M. Dooling
---------------------------------
Name: Gregg M. Dooling
Title: Chief Financial Officer
6
Appendix A
(Updated as of February 1, 2017)
Open-End Funds
Trust Fund Effective Date/Initial Term Date
Pioneer Bond Fund Pioneer Bond Fund Effective Date: July 1, 2008
Initial Term: July 1,
2008-December 31, 2009
Pioneer Emerging Pioneer Emerging Effective Date: July 1, 2008
Markets Fund Markets Fund
Initial Term: July 1,
2008-December 31, 2009
Pioneer Equity Pioneer Equity Income Effective Date: July 1, 2008
Income Fund Fund
Initial Term: July 1,
2008-December 31, 2009
Pioneer Fund Pioneer Fund Effective Date: July 1, 2008
Initial Term: July 1,
2008-December 31, 2009
Pioneer High Yield Pioneer High Yield Effective Date: July 1, 2008
Fund Fund
Initial Term: July 1,
2008-December 31, 2009
Pioneer Asset Pioneer Solutions - Effective Date: July 1, 2008
Allocation Trust Conservative Fund
Initial Term: July 1,
2008-December 31, 2009
Pioneer Solutions - Effective Date: July 1, 2008
Growth Fund
Initial Term: July 1,
2008-December 31,2009
Pioneer Solutions - Effective Date: July 1, 2008
Balanced Fund
Initial Term: July 1,
2008-December 31, 2009
Pioneer Mid Cap Pioneer Mid Cap Value Effective Date: July 1, 2008
Value Fund Fund
Initial Term: July 1,
2008-December 31,2009
Pioneer Money Pioneer U.S. Effective Date: July 1, 2008
Market Trust Governemnt Money
Market Fund Initial Term: July 1,
2008-December 31, 2009
Pioneer Real Estate Pioneer Real Estate Effective Date: July 1, 2008
Shares Shares
Initial Term: July 1,
2008-December 31, 2009
Pioneer Series Pioneer AMT-Free Effective Date: July 1, 2008
Trust II Municipal Fund
Initial Term: July 1,
2008-December 31,2009
Pioneer Select Mid Effective Date: July 1, 2008
Cap Growth Fund
Initial Term: July 1,
2008-December 31,2009
Pioneer Series Pioneer Disciplined Effective Date: July 1, 2008
Trust III Value Fund
Initial Term: July 1,
2008-December 31,2009
Pioneer Series Pioneer Classic Effective Date: July 1, 2008
Trust IV Balanced Fund
Initial Term: July 1,
2008-December 31, 2009
Pioneer Multi-Asset Effective Date: December 1, 2011
Income Fund
Initial Term: December 1,
2011-December 31, 2012
Pioneer Series Pioneer Global Equity Effective Date: July 1, 2008
Trust V Fund
Initial Term: July 1,
2008-December 31, 2009
Pioneer High Income Effective Date: July 1, 2008
Municipal Fund
Initial Term: July 1,
2008-December 31, 2009
Pioneer U.S. Effective Date: July 12, 2016
Corporate High Yield
Fund Initial Term: July 12,
2016-December 31, 2017
Pioneer Series Pioneer Floating Rate Effective Date: July 1, 2008
Trust VI Fund
Initial Term: July 1,
2008-December 31, 2009
Pioneer Flexible Effective Date: March 5, 2010
Opportunities Fund
Initial Term: March 5,
2010-December 31, 2011
Pioneer Series Pioneer Global High Effective Date: July 1, 2008
Trust VII Yield Fund
Initial Term: July 1,
2008-December 31, 2009
Pioneer Global Effective Date: July 1, 2008
Multisector Income
Fund Initial Term: July 1,
2008-December 31, 2009
Pioneer Series Pioneer International Effective Date: July 1, 2008
Trust VIII Equity Fund
Initial Term: July 1,
2008-December 31, 2009
Pioneer Series Pioneer Dynamic Effective Date: March 8, 2011
Trust X Credit Fund
Initial Term: March 8,
2011-December 31, 2012
Pioneer Fundamental Effective Date: July 1, 2008
Growth Fund
Initial Term: July 1,
2008-December 31, 2009
Pioneer Multi-Asset Effective Date: March 8, 2011
Ultrashort Income Fund
Initial Term: March 8,
2011-December 31, 2012
Pioneer Series Pioneer Core Equity Effective Date: July 1, 2008
Trust XI Fund
Initial Term: July 1,
2008-December 31, 2009
Pioneer Series Pioneer Disciplined Effective Date: July 1, 2008
Trust XII Growth Fund
Initial Term: July 1,
2008-December 31, 2009
Pioneer Short Term Pioneer Short Term Effective Date: July 1, 2008
Income Fund Income Fund
Initial Term: July 1,
2008-December 31, 2009
Pioneer Strategic Pioneer Strategic Effective Date: July 1, 2008
Income Fund Income Fund
Initial Term: July 1,
2008-December 31, 2009
Pioneer Variable Pioneer Bond VCT Effective Date: July 1, 2008
Contracts Trust Portfolio
Initial Term: July 1,
2008-December 31, 2009
Pioneer Emerging Effective Date: July 1, 2008
Markets VCT Portfolio
Initial Term: July 1,
2008-December 31, 2009
Pioneer Equity Income Effective Date: July 1, 2008
VCT Portfolio
Initial Term: July 1,
2008-December 31, 2009
Pioneer Fund VCT Effective Date: July 1, 2008
Portfolio
Initial Term: July 1,
2008-December 31, 2009
Pioneer High Yield Effective Date: July 1, 2008
VCT Portfolio
Initial Term: July 1,
2008-December 31, 2009
Pioneer Mid Cap Value Effective Date: July 1, 2008
VCT Portfolio
Initial Term: July 1,
2008-December 31, 2009
Pioneer Real Estate Effective Date: July 1, 2008
Shares VCT Portfolio
Initial Term: July 1,
2008-December 31, 2009
Pioneer Select Mid Effective Date: July 1, 2008
Cap Growth VCT
Portfolio Initial Term: July 1,
2008-December 31, 2009
Pioneer Strategic Effective Date: July 1, 2008
Income VCT Portfolio
Initial Term: July 1,
2008-December 31, 2009
Closed-End Funds
Trust Effective Date/Initial Term Date
Pioneer Diversified High Income Trust Effective Date: November 1, 2009
Initial Term: November 1,
2009-December 31, 2009
Pioneer Floating Rate Trust Effective Date: November 1, 2009
Initial Term: November 1,
2009-December 31, 2009
Pioneer High Income Trust Effective Date: November 1, 2009
Initial Term: November 1,
2009-December 31, 2009
Pioneer ILS Interval Fund Effective Date: December 10, 2014
Initial Term: December 10,
2014-November 30, 2015
Pioneer Multi-Asset Credit Trust Effective Date: February 13, 2013
Initial Term: February 13,
2013-December 31, 2013
Pioneer Municipal High Income Trust Effective Date: November 1, 2009
Initial Term: November 1,
2009-December 31, 2009
Pioneer Municipal High Income Effective Date: November 1, 2009
Advantage Trust
Initial Term: November 1,
2009-December 31, 2009
Appendix B
ADMINISTRATION AGREEMENT
Accounting Services
Fund Accounting
Maintain all accounting records for Funds
. Calculate and report daily net asset values per share and yields
. Recommend income and capital gains distribution rates
. Prepare Funds' financial statements and assist in Fund audits
. Provide bank loan administration services, including reconciling and
validating positions, cash, paydowns and interest accruals, supporting
other accounting processes, and managing related systems
Shareholder Reporting and Audit Liaison
. Prepare and file (via EDGAR) shareholder reports required by Rule 30e-l
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
. Manage the Funds' audit processes to ensure timely completion of
financial statements and shareholder reports
. 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
. Provide financial information for prospectus updates and other
regulatory filings
. 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
. Ensure accuracy and timeliness of prices supplied by external sources to
be used in daily valuations of all security positions held by each Fund
. Support corporate actions and bankruptcy proof of claim analyses
. Validate and communicate class action and bankruptcy proof of claim
information
. Present periodic valuation reports to Funds' Boards
Systems and Administration
. Provide direction, supervision and administrative support to all Fund
Treasury teams providing Accounting Services hereunder
. Provide systems support to users of fund accounting and portfolio
pricing software, and manage relationships with applicable software and
hardware vendors
. Develop and maintain applications and systems interfaces for Fund
Treasury teams
Controllership Services
. Manage Fund expense payment cycles (e.g., timeliness and accuracy of
payments, allocation of costs among Funds)
. Coordinate and standardize Fund expense accruals and budgeting
. Provide expense reports as required
. Compile daily reports of shareholder transactions from all sources for
entry into Fund books
. Provide daily reconciliation of receivable, payable and share accounts
between Funds' records and sources of shareholder transactions
. Manage the daily process to minimize "as of" gains and losses to Funds
. Communicate daily Fund prices
. 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
. Manage the Funds' federal, state and applicable local tax preparation
and reporting
. Prepare fiscal and excise tax distribution calculations
. Prepare and file federal, state and any local income tax returns,
including tax return extension requests
. Prepare shareholder year-end reporting statements
. Provide the appropriate amounts and characterization of distributions
declared during the calendar year for Forms 1099 and similar reporting
. Periodically review and determine distributions to be paid to
shareholders pursuant to Sub Chapter M requirements
. 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
. Maintain SEC filing calendar for the Funds' Registration Statement
filings
. Prepare and file (via EDGAR) amendments to the Funds' Registration
Statements, including preparing prospectuses and statements of
additional information (SAIs)
. Prepare and file (via EDGAR) supplements to the Funds' prospectuses and
registration statements
. 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.)
. Review comments from the SEC on Fund registration statements and proxy
statement filings and contribute to the preparation of responses to such
comments
. Conduct and manage use of software utilized to aid in maintaining
content of disclosure in Fund prospectuses and SAIs, including related
language database
. Prepare and file (via EDGAR) Rule 24f-2 Notices
. SEC Electronic Filing (EDGAR) Responsibilities
. Maintain and develop enhancements to Pioneer's EDGAR-related systems
and procedures, including contingency planning
. Maintain EDGAR related databases and document archives
. Liaise with third party EDGAR agents when necessary
Shareholder Report Review and Support
. 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
. Provide consulting to Fund Treasury in meeting regulatory requirements
applicable to financial statements
. With Fund counsel and Fund Treasury, 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
. 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
. Maintain awareness of regulatory changes and track compliance dates with
respect thereto
. 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
. Review draft materials and coordinate review by Trustees and external
personnel (i.e., Fund counsel and auditors)
. Produce and distribute materials to Trustees and other meeting attendees
. Oversee vendors and technology that facilitate assembly, production and
distribution of Trustee materials
. Attend and assist in coordination of shareholder meetings
. 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
. 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)
. Maintain corporate records on behalf of the Funds, including, but not
limited to, copies of minutes, contracts and Trustee meeting materials
. Review and administer the payment of invoices from legal counsel to the
Trusts and counsel to the independent Trustees
Miscellaneous Services
. Preparation and filing of the Funds' Form N-SAR, Form N-CSR, Form N-Q
and Form N-PX filings
. Prepare and make Section 16 filings on behalf of the officers and
Trustees of the closed-end Funds
. Meet regulatory requirements applicable to the status of certain Funds
as exempt from treatment as commodity pools under Commodity Futures
Trading Commission (CFTC) Rule 4.5, including related regulatory filings
ADMINISTRATION AGREEMENT
Compliance Services
. Assist the Funds in responding to routine and non-routine regulatory
inquiries, examinations and investigations
. Provide consultation on regulatory matters relating to Fund operations
and any potential changes in the Funds' investment policies, operations
or structure
. Develop or assist in developing guidelines and procedures to improve
overall compliance by the Funds and their various agents
. Oversee implementation and testing of the Funds' compliance-related
policies and procedures
ADMINISTRATION AGREEMENT
Investor Services Group (ISG) Services
. Coordinate and monitor services of the Funds' transfer agents, including
with regard to:
. Service level quality
. Compliance with applicable regulations and Fund procedures
. Training as to Fund policies, strategies and initiatives
. Shareholder mailings and other communications
. Planning and implementing Fund initiatives and projects
. Coordination of systems upgrades and other significant projects of
transfer agents that relate to Fund policies
. Coordinate shareholder proxy solicitation activities, including planning
of proxy-related projects and the use of proxy tabulation and
solicitation firms
. Provide analysis and historical information to assist with shareholder
inquiries and reports, as well as inquiries from other Fund service
providers
. Provide oversight of the Funds' anti-money laundering program, including
monitoring related activities delegated by the Funds to transfer agents
or other entities
. Coordinate program designed to limit frequent and/or excessive trading
in Fund shares, including implementation of shareholder information
agreements under Rule 22c-2 under the 1940 Act and associated monitoring
systems and procedures
. Perform activities and and provide reporting in support of the Funds'
compliance program
. Enter into investor servicing relationships on behalf of the Funds with
omnibus account administrators, retirement plan administrators and other
investor service organizations
. Provide oversight of investor service organizations under a vendor
management program, including service and compensation review
Blue Sky Administration (State Registration)
. Principal liaison with Blue Sky vendor (the fees and expenses of which
are charged separately to the applicable Funds)
. Coordinate SEC filing schedule and Fund documentation with Blue Sky
vendor
. Monitor status of state filings with Blue Sky vendor
. Transfer agent coordination
. Review Blue Sky vendor statements and invoices
. Conduct Blue Sky vendor due diligence, as appropriate
. Hiring oversight
. In-person meetings
. Independent audit of services
APPENDIX A
TO
ADMINISTRATIVE AGENCY AGREEMENT
Dated as of December 27, 2016
The following is a list of Trusts and Funds for which the Administrator shall
provide services (as those services are described in Appendix B). This Appendix
A may be amended to include or delete Trusts, Funds or services provided an
executed copy of such revised Appendix is provided to the Administrator:
Open-End Funds
Fund
Accounting /
Conversion Treasurer SEC Yield Compliance Expense
Trust Fund Date Support Calculation SOI Monitoring Tax Administration
----- ---- ---------- ------------ ----------- --- ---------- --- --------------
Pioneer Bond Pioneer Bond March 5, [X] [X] [X]
Fund Fund 2012
Pioneer Pioneer March 5, [X] [X]
Emerging Emerging 2012
Markets Fund Markets Fund
Pioneer Equity Pioneer Equity March 5, [X] [X] [X]
Income Fund Income Fund 2012
Pioneer Fund Pioneer Fund March 5, [X] [X] [X]
2012
Pioneer High Pioneer High March 5, [X] [X] [X]
Yield Fund Yield Fund 2012
Pioneer Asset Pioneer n/a [X] [X] [X] [X] [X]
Allocation Trust Solutions -
Conservative
Fund
Pioneer n/a [X] [X] [X] [X] [X]
Solutions
Growth Fund
Pioneer n/a [X] [X] [X] [X] [X]
Solutions -
Balanced Fund
Pioneer Mid Cap Pioneer Mid March 5, [X] [X]
Value Fund Cap Value Fund 2012
Pioneer Money Pioneer U.S. March 5, [X] [X] [X] [X] [X]
Market Trust Government 2012
Money Market
Fund
Pioneer Real Pioneer Real March 5, [X] [X] [X]
Estate Shares Estate Shares 2012
Fund
Accounting /
Conversion Treasurer SEC Yield Compliance Expense
Trust Fund Date Support Calculation SOI Monitoring Tax Administration
----- ---- ---------- ------------ ----------- --- ---------- --- --------------
Pioneer Series Pioneer March 5, [X] [X] [X]
Trust II AMT-Free 2012
Municipal Fund
Pioneer Select March 5, [X] [X]
Mid Cap Growth 2012
Fund
Pioneer Series Pioneer March 5, [X] [X]
Trust III Disciplined 2012
Value Fund
Pioneer Series Pioneer March 5, [X] [X] [X]
Trust IV Classic 2012
Balanced Fund
Pioneer March 5, [X] [X] [X]
Multi-Asset 2012
Income Fund
Pioneer Series Pioneer Global March 5, [X] [X]
Trust V Equity Fund 2012
Pioneer High March 5, [X] [X] [X]
Income 2012
Municipal Fund
Pioneer U.S. n/a [X] [X] [X]
Corporate High
Yield Fund
Pioneer Series Pioneer March 5, [X] [X] [X]
Trust VI Floating Rate 2012
Fund
Pioneer March 5, [X] [X]
Flexible 2012
Opportunities
Fund
Pioneer Cayman March 5, [X] [X]
Commodity Fund 2012
LTD
Pioneer Series Pioneer Global March 5, [X] [X] [X]
Trust VII High Yield Fund 2012
Pioneer Global March 5, [X] [X] [X]
Multisector 2012
Income Fund
Fund
Accounting /
Conversion Treasurer SEC Yield Compliance Expense
Trust Fund Date Support Calculation SOI Monitoring Tax Administration
----- ---- ---------- ------------ ----------- --- ---------- --- --------------
Pioneer Series Pioneer March 5, [X] [X]
Trust VIII International 2012
Equity Fund
Pioneer Series Pioneer March 5, [X] [X] [X]
Trust X Dynamic Credit 2012
Fund
Pioneer March 5, [X] [X]
Fundamental 2012
Growth Fund
Pioneer March 5, [X] [X] [X]
Multi-Asset 2012
Ultra Short
Income Fund
Pioneer Series Pioneer Core March 5, [X] [X]
Trust XI Equity Fund 2012
Pioneer Series Pioneer March 5, [X] [X]
Trust XII Disciplined 2012
Growth Fund
Pioneer Short Pioneer Short March 5, [X] [X] [X]
Term Income Fund Term Income 2012
Fund
Pioneer Pioneer March 5, [X] [X] [X]
Strategic Strategic 2012
Income Fund Income Fund
Pioneer Pioneer Bond March 5, [X] [X] [X]
Variable VCT Portfolio 2012
Contracts Trust
Pioneer March 5, [X] [X]
Emerging 2012
Markets VCT
Portfolio
Pioneer Equity March 5, [X] [X]
Income VCT 2012
Portfolio
Pioneer Fund March 5, [X] [X]
VCT Portfolio 2012
Pioneer Select March 5, [X] [X]
Mid Cap Growth 2012
VCT Portfolio
Pioneer High March 5, [X] [X] [X]
Yield VCT 2012
Portfolio
Pioneer Mid March 5, [X] [X]
Cap Value VCT 2012
Portfolio
Pioneer Real March 5, [X] [X]
Estate Shares 2012
VCT Portfolio
Pioneer March 5, [X] [X] [X]
Strategic 2012
Income VCT
Portfolio
Closed-End Funds
Fund
Accounting /
Conversion Treasurer SEC Yield Compliance Expense
Trust Fund Date Support Calculation SOI Monitoring Tax Administration
----- ---- ---------- ------------ ----------- --- ---------- --- --------------
Pioneer Pioneer May 2, [X] [X] [X] [X] [X] [X]
Diversified Diversified 2012
High Income High Income
Trust Trust
Pioneer Pioneer April 2, [X] [X] [X] [X] [X] [X]
Floating Rate Floating Rate 2012
Trust Trust
Pioneer High Pioneer High April 2, [X] [X] [X] [X] [X] [X]
Income Trust Income Trust 2012
Pioneer ILS Pioneer ILS n/a [X] [X] [X]
Interval Fund Interval Fund
Pioneer Pioneer May 2, [X] [X] [X] [X] [X] [X]
Municipal High Municipal High 2012
Income Trust Income Trust
Pioneer Pioneer April 2, [X] [X] [X] [X] [X] [X]
Municipal High Municipal High 2012
Income Income
Advantage Trust Advantage Trust
BROWN BROTHERS HARRIMAN & CO.
By: /s/ Elizabeth E. Prickett
-----------------------------
Name: Elizabeth E. Prickett
Title: Managing Director
Date: 1/19/17
PIONEER INVESTMENT MANAGEMENT, INC. Each TRUST listed above,
on behalf of the above-named Funds
By: /s/ Gregg Dooling By: /s/ Mark E. Bradley
----------------------------- ----------------------------
Name: Gregg Dooling Name: Mark E. Bradley
Title: CFO Title: Treasurer and CFO
Date: 1/12/17 Date: 1/04/17
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the references to our firm under the captions "Financial
Highlights" in the Prospectus and "Independent Registered Public Accounting
Firm" and "Financial Statements" in the Statement of Additional Information in
Post-Effective Amendment Number 21 to the Registration Statement (Form N-1A,
No. 811-21664) of Pioneer Series Trust III, and to the incorporation by
reference of our report, dated October 27, 2017, on Pioneer Disciplined
Value Fund (one of the portfolios comprising the Pioneer Series Trust III)
included in the Annual Reports to Shareholders for the fiscal year ended
August 31, 2017.
/s/ Ernst & Young LLP
Boston, Massachusetts
December 22, 2017
PIONEER FUNDS
DISTRIBUTION PLAN
February 1, 2008
(as amended January 10, 2017)
WHEREAS, the Board of Trustees (the "Board") of certain of the open-end
investment companies listed on Appendix B hereto have adopted separate
distribution plans pursuant to Rule 12b-1 (the "Rule") under the Investment
Company Act of 1940, as amended (the "1940 Act"), for certain classes of shares
(each a "Class") of each series of each such investment company; and
WHEREAS, the Board desires to combine, amend and restate in their entirety
all such distribution plans into this Distribution Plan (this "Plan"); and
WHEREAS, the Board of each of the other open-end investment companies listed
on Appendix B hereto desires to adopt this Plan with respect to certain of the
Classes offered by certain of its series;
NOW, THEREFORE, this Plan is amended and restated or adopted, as the case
may be, in accordance with the Rule with respect to those Classes listed on
Appendix A offered by the series (each a "Fund") of the investment companies
(each a "Trust) listed on Appendix B hereto, as each such Appendix may be
amended from time to time, to be effective as of the date set forth above or,
if later, the date indicated on Appendix B, subject to the following terms and
conditions:
Section 1. Annual Fee.
For each Class, a Fund may pay to one or more principal underwriters,
broker-dealers, financial intermediaries (which may include banks) and other
parties that enter into a distribution, underwriting, selling or service
agreement with respect to shares of such Class (each of the foregoing, a
"Servicing Party") distribution and/or service fees. The Fund, its principal
underwriter (together with any co-underwriters and successors, "Underwriters")
or other parties also may incur expenses in connection with the distribution or
marketing and sale of the Fund's shares that may be paid or reimbursed by the
Fund. The aggregate amount in respect of such fees and expenses to be paid by a
Fund pursuant to this Section 1 with respect to any Class shall be the amount
calculated at the percentage per annum of the average daily net assets
attributable to such Class as set forth in Appendix A hereto. The fees
described above will be calculated daily and paid monthly or at such other
intervals as the Board of each Trust may determine.
Payments under this Plan are not tied exclusively to actual distribution
and/or service fees and expenses incurred, and the payments under this Plan may
exceed (or be less than) actual fees and expenses incurred. A Servicing Party
may retain any fees hereunder that are in excess of its expenses incurred.
Section 2. Other Payments by Manager, Fund, Etc.
It is recognized that a Fund's investment manager ("Manager") or
Underwriters, a Servicing Party or an affiliate of any of them may use its
management or advisory fee revenues, past profits or its resources from other
sources to make payments to a Servicing Party or any other entity with respect
to expenses incurred in connection with the distribution or marketing and
sales of the Fund's shares, including the activities referred to above.
Notwithstanding any language to the contrary contained herein, to the extent
that any payments made by the Fund to its Manager or any affiliate thereof,
including payments made from such Manager's or affiliate's management or
advisory fee or administrative fee or payments made for shareholder services,
should be deemed to be indirect financing of any activity primarily intended to
result in the sale of Fund shares within the context of the Rule, then such
payments shall be deemed to be authorized by this Plan but shall not be subject
to the limitations set forth in Section 1.
It is further recognized that each Fund will enter into normal and customary
custodial, transfer agency, shareholder servicing, recordkeeping and dividend
disbursing agency and other service provider arrangements, and make separate
payments under the terms and conditions of those arrangements. These
arrangements shall not ordinarily be deemed pursuant to this Plan.
Section 3. Sales Charges.
It is understood that, as disclosed in each Fund's prospectus, an initial
sales charge may be paid by investors who purchase Fund shares, and the Fund
may pay to one or more Servicing Parties, or the Fund may permit such persons
to retain, as the case may be, such sales charge as full or partial
compensation for their services in connection with the sale of Fund shares. It
is also understood that, as disclosed in each Fund's prospectus, the Fund or a
Servicing Party may impose certain deferred sales charges in connection with
the repurchase of Fund shares, and the Fund may pay to a Servicing Party, or
the Fund may permit such persons to retain, as the case may be, all or any
portion of such deferred sales charges.
Section 4. Approval by Shareholders.
Except as otherwise permitted by applicable law, and other than with respect
to Classes of a Fund in existence as of the date first written above (as to
which this Plan amends and restates the existing distribution plans), this Plan
will not take effect, and no fee will be payable in accordance with Section 1
of this Plan, with respect to a Class of a Fund (other than a Class of a Fund
in existence as of the date first written above) until this Plan has been
approved by a vote of at least a majority of the outstanding voting securities
of that Class. This Plan will be deemed to have been approved with respect to a
Class of a Fund so long as a majority of the outstanding voting securities of
that Class votes for the approval of this Plan, notwithstanding that (a) this
Plan has not been approved by a majority of the outstanding voting securities
of any other Class, or (b) this Plan has not been approved by a majority of the
outstanding voting securities of the Fund.
Section 5. Approval by Trustees.
Neither this Plan nor any related agreements will take effect, with respect
to a Class of a Fund, until approved by a majority vote of both (a) the Board
and (b) those Trustees who are not interested persons of the Trust and who have
no direct or indirect financial interest in the operation of this Plan or in
any agreements related to this Plan (the "Qualified Trustees"), cast in person
at a meeting called for the purpose of voting on this Plan and the related
agreements.
Section 6. Continuance of this Plan.
The Plan will continue in effect with respect to each Class, provided that
such continuance is specifically approved at least annually by the Board and by
a majority of the Qualified Trustees in accordance with Section 5.
2
Section 7. Termination.
The Plan may be terminated at any time with respect to a Class of a Fund
(i) by the Fund without the payment of any penalty, by the vote of a majority
of the outstanding voting securities of such Class or (ii) by a majority vote
of the Qualified Trustees. The Plan may remain in effect with respect to a
Class even if this Plan has been terminated in accordance with this Section 7
with respect to any other Class of the same Fund.
Section 8. Amendments.
The Plan may not be amended with respect to a Class of a Fund to increase
materially the amount of the fees described in Section 1, unless the amendment
is approved by a vote of holders of at least a majority of the outstanding
voting securities of that Class. No material amendment to this Plan may be made
unless approved by the Board and the Qualified Trustees in the manner described
in Section 5.
Section 9. Selection of Certain Board Members.
While this Plan is in effect, the Trust will comply with paragraph (c) of
the Rule.
Section 10. Written Reports.
In each year during which this Plan remains in effect with respect to any
Class of a Fund, the proper officers of the Fund will prepare and furnish to
the Board and the Board will review, at least quarterly, written reports
complying with the requirements of the Rule, which set out the amounts expended
under this Plan and the purposes for which those expenditures were made.
Section 11. Preservation of Materials.
The Trust will preserve copies of this Plan, any agreement relating to this
Plan and any report made pursuant to Section 10 for a period of not less than
six years (the first two years in an easily accessible place).
Section 12. Meanings of Certain Terms.
As used in this Plan, the terms "interested person" and "majority of the
outstanding voting securities" will be deemed to have the meanings given to
those terms under the 1940 Act, and references to the "1940 Act" shall include
any rule, regulation or 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.
Section 13. Limitation of Liability.
Notice is hereby given that this Plan has been adopted on behalf of each
Fund by the Trustees in their capacity as Trustees of the Trust and not
individually and that the obligations of or arising out of this instrument are
not binding upon any of the Trustees, officers or shareholders individually but
are binding only upon the assets and property of the Fund.
3
Section 14. Severability.
The provisions of this Plan are severable for each Fund and each
Class covered by this Plan, and actions taken with respect to this Plan in
conformity with the Rule may be taken separately for each Fund and Class.
Section 15. Governing Law.
This Plan shall be governed by, and construed in accordance with, the laws
of The Commonwealth of Massachusetts, except to the extent required to be
governed by the 1940 Act and the Rule.
Section 16. Pledge by Underwriter.
Notwithstanding anything to the contrary in this Plan or any underwriting
agreement, each Underwriter may assign, sell or pledge (collectively,
"Transfer") its rights to its portion of any fees payable to it hereunder. Upon
receipt of notice of a Transfer, the Trust will pay to the assignee, purchaser
or pledgee (each, a "Transferee"), as third party beneficiaries, such fees
payable to the principal underwriter as provided in written instructions from
the principal underwriter and the Transferee to the Trust. In the absence of
any such written instructions, the Trust shall have no obligations to a
Transferee.
4
APPENDIX A
DISTRIBUTION PLAN
Applicable Percentage
Class of each Fund Per Annum
------------------ ---------------------
Class A (other than Class A of Pioneer U.S. Government Money Market Fund, Pioneer Multi-Asset 0.25%
Ultrashort Income Fund and Pioneer Short Term Income Fund)
Class A of Pioneer U.S. Government Money Market Fund 0.15%
Class A of Pioneer Multi-Asset Ultrashort Income Fund and Pioneer Short Term Income Fund 0.20%
Class C (other than Pioneer Multi-Asset Ultrashort Income Fund and Pioneer Short Term Income 1.00%
Fund)
Class C of Pioneer Multi-Asset Ultrashort Income Fund and Pioneer Short Term Income Fund 0.50%
Class C2 of Pioneer Multi-Asset Ultrashort Income Fund and Pioneer Short Term Income Fund 0.50%
Class R 0.50%
Class T 0.25%
January 10, 2017
APPENDIX B
DISTRIBUTION PLAN
Trust Fund
----- ----
Pioneer Asset Allocation Trust Pioneer Solutions - Conservative Fund
Pioneer Solutions - Growth Fund
Pioneer Solutions - Balanced Fund
Pioneer Bond Fund Pioneer Bond Fund
Pioneer Emerging Markets Fund Pioneer Emerging Markets Fund
Pioneer Equity Income Fund Pioneer Equity Income Fund
Pioneer Fund Pioneer Fund
Pioneer High Yield Fund Pioneer High Yield Fund
Pioneer Mid Cap Value Fund Pioneer Mid Cap Value Fund
Pioneer Money Market Trust Pioneer U.S. Government Money Market
Fund
Pioneer Real Estate Shares Pioneer Real Estate Shares
Pioneer Series Trust II Pioneer AMT-Free Municipal Fund
Pioneer Select Mid Cap Growth Fund
Pioneer Series Trust III Pioneer Disciplined Value Fund
Pioneer Series Trust IV Pioneer Classic Balanced Fund
Pioneer Multi-Asset Income Fund
Pioneer Series Trust V Pioneer Global Equity Fund
Pioneer High Income Municipal Fund
Pioneer U.S. Corporate High Yield Fund
Pioneer Series Trust VI Pioneer Floating Rate Fund
Pioneer Flexible Opportunities Fund
Pioneer Series Trust VII Pioneer Global High Yield Fund
Pioneer Global Multisector Income Fund
Pioneer Series Trust VIII Pioneer International Equity Fund
Pioneer Series Trust X Pioneer Dynamic Credit Fund
Pioneer Fundamental Growth Fund
Pioneer Multi-Asset Ultrashort Income
Fund
Pioneer Series Trust XI Pioneer Core Equity Fund
Pioneer Series Trust XII Pioneer Disciplined Growth Fund
Pioneer Short Term Income Fund Pioneer Short Term Income Fund
Pioneer Strategic Income Fund Pioneer Strategic Income Fund
January 10, 2017
6
PIONEER DISCIPLINED VALUE FUND
(a series of Pioneer Series Trust III)
Multiple Class Plan Pursuant to Rule 18f-3
Class A Shares, Class C Shares, Class K Shares, Class R Shares
and Class Y Shares
November 14, 2017
Each class of shares of Pioneer Disciplined Value Fund (the "Fund") will
have the same relative rights and privileges and be subject to the same sales
charges, fees and expenses, except as set forth below. The Board of Trustees
may determine in the future that other distribution arrangements, allocations
of expenses (whether ordinary or extraordinary) or services to be provided to a
class of shares are appropriate and amend this Multiple Class Plan accordingly
without the approval of shareholders of any class. Except as set forth in the
Fund's prospectus(es), shares may be exchanged only for shares of the same
class of another Pioneer mutual fund.
Article I. Class A Shares
Class A Shares are sold at net asset value per share and subject to the
initial sales charge schedule or contingent deferred sales charge ("CDSC") and
minimum purchase requirements as set forth in the Fund's prospectus. Class A
Shares shall be entitled to the shareholder services set forth from time to
time in the Fund's prospectus with respect to Class A Shares. Class A Shares
are subject to fees calculated as a stated percentage of the net assets
attributable to Class A Shares under the Fund's Class A Rule 12b-1 Distribution
Plan as set forth in such Distribution Plan. The Class A Shareholders have
exclusive voting rights, if any, with respect to the Fund's Class A Rule 12b-1
Distribution Plan. Transfer agency fees are allocated to Class A Shares on a
per account basis except to the extent, if any, such an allocation would cause
the Fund to fail to satisfy any requirement necessary to obtain or rely on a
private letter ruling from the Internal Revenue Service ("IRS") relating to the
issuance of multiple classes of shares. Class A Shares shall bear the costs and
expenses associated with conducting a shareholder meeting for matters relating
to Class A Shares.
The initial purchase date for Class A Shares acquired through
(i) reinvestment of dividends on Class A Shares or (ii) exchange from another
Pioneer mutual fund will be deemed to be the date on which the original Class A
Shares were purchased.
Article II. Class C Shares
Class C Shares are sold at net asset value per share without the imposition
of an initial sales charge. Class C Shares redeemed within one (1) year of
purchase will be subject to a CDSC as set forth in the Fund's prospectus.
Class C Shares are sold subject to the minimum purchase requirements set forth
in the Fund's prospectus. Class C Shares shall be entitled to the shareholder
services set forth from time to time in the Fund's prospectus with respect to
Class C Shares. Class C Shares are subject to fees calculated as a stated
percentage of the net assets
attributable to Class C Shares under the Class C Rule 12b-1 Distribution Plan
as set forth in such Distribution Plan. The Class C Shareholders of the Fund
have exclusive voting rights, if any, with respect to the Fund's Class C Rule
12b-1 Distribution Plan. Transfer agency fees are allocated to Class C Shares
on a per account basis except to the extent, if any, such an allocation would
cause the Fund to fail to satisfy any requirement necessary to obtain or rely
on a private letter ruling from the IRS relating to the issuance of multiple
classes of shares. Class C Shares shall bear the costs and expenses associated
with conducting a shareholder meeting for matters relating to Class C Shares.
The initial purchase date for Class C Shares acquired through
(i) reinvestment of dividends on Class C Shares or (ii) exchange from another
Pioneer mutual fund will be deemed to be the date on which the original Class C
Shares were purchased.
Article III. Class K Shares
Class K Shares are sold at net asset value per share without the imposition
of an initial sales charge. Class K Shares are not subject to a CDSC upon
redemption regardless of the length of the period of time such shares are held.
Class K Shares are sold subject to the minimum purchase requirements set forth
in the Fund's prospectus. Class K Shares shall be entitled to the shareholder
services set forth from time to time in the Fund's prospectus with respect to
Class K Shares.
Class K Shares are not subject to fees payable under a distribution or other
plan adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940,
as amended (the "Act"). The Class K Shareholders of the Fund have exclusive
voting rights, if any, with respect to the Fund's possible future adoption of a
Class K Rule 12b-1 Distribution Plan. Transfer agency fees are allocated to
Class K Shares on a per account basis except to the extent, if any, such an
allocation would cause the Fund to fail to satisfy any requirement necessary to
obtain or rely on a private letter ruling from the IRS relating to the issuance
of multiple classes of shares. Class K Shares shall bear the costs and expenses
associated with conducting a shareholder meeting for matters relating to
Class K Shares.
The initial purchase date for Class K Shares acquired through
(i) reinvestment of dividends on Class K Shares or (ii) exchange from another
Pioneer mutual fund will be deemed to be the date on which the original Class K
Shares were purchased.
Article IV. Class R Shares
Class R Shares are sold at net asset value per share without an initial
sales charge. Class R Shares are not subject to a CSDC upon redemption
regardless of the length of period of time such Shares are held. Class R Shares
are sold to retirement plans that meet the eligibility requirements for Class R
Shares set forth in the Fund's prospectus. Class R Shares shall be entitled to
the shareholder services set forth from time to time in the Fund's prospectus
with respect to Class R Shares. Class R Shares are subject to fees calculated
as a stated percentage of the net assets attributable to Class R Shares under
the Class R Rule 12b-1 Distribution Plan as set forth in such Distribution
Plan. The Class R Shareholders of the Fund have exclusive voting rights, if
any, with respect to the Fund's Class R Rule 12b-1 Distribution Plan. Transfer
agency
2
fees are allocated to Class R Shares on a per account basis except to the
extent, if any, such an allocation would cause the Fund to fail to satisfy any
requirement necessary to obtain or rely on a private letter ruling from the IRS
relating to the issuance of multiple classes of shares. Class R Shares shall
bear the costs and expenses associated with conducting a shareholder meeting
for matters relating to Class R Shares.
The initial purchase date for Class R Shares acquired through
(i) reinvestment of dividends on Class R Shares or (ii) exchange from another
Pioneer mutual fund will be deemed to be the date on which the original Class R
Shares were purchased.
Article V. Class Y Shares
Class Y Shares are sold at net asset value per share without the imposition
of an initial sales charge. Class Y Shares are not subject to a CDSC upon
redemption regardless of the length of the period of time such shares are held.
Class Y Shares are sold subject to the minimum purchase requirements set forth
in the Fund's prospectus. Class Y Shares shall be entitled to the shareholder
services set forth from time to time in the Fund's prospectus with respect to
Class Y Shares.
Class Y Shares are not subject to fees payable under a distribution or other
plan adopted pursuant to Rule 12b-1 under the Act. The Class Y Shareholders of
the Fund have exclusive voting rights, if any, with respect to the Fund's
possible future adoption of a Class Y Rule 12b-1 Distribution Plan. Transfer
agency fees are allocated to Class Y Shares on a per account basis except to
the extent, if any, such an allocation would cause the Fund to fail to satisfy
any
3
requirement necessary to obtain or rely on a private letter ruling from the IRS
relating to the issuance of multiple classes of shares. Class Y Shares shall
bear the costs and expenses associated with conducting a shareholder meeting
for matters relating to Class Y Shares.
The initial purchase date for Class Y Shares acquired through
(i) reinvestment of dividends on Class Y Shares or (ii) exchange from another
Pioneer mutual fund will be deemed to be the date on which the original Class Y
Shares were purchased.
Article VI. Approval by Board of Trustees
This Multiple Class Plan shall not take effect until it has been approved by
the vote of a majority (or whatever greater percentage may, from time to time,
be required under Rule 18f-3 under the Act) of (a) all of the Trustees of the
Fund and (b) those of the Trustees who are not "interested persons" (as such
term may be from time to time defined under the Act) of the Fund.
Article VII. Amendments
No material amendment to this Multiple Class Plan shall be effective unless
it is approved by the Board of Trustees of the Fund in the same manner as is
provided for approval of this Multiple Class Plan in Article VI.
4
POWER OF ATTORNEY
I, the undersigned Trustee and officer of the investment companies listed on
Annex A for which Amundi Pioneer Asset Management, Inc. or one of its
affiliates acts as investment adviser (each, a "Trust" and collectively, the
"Trusts"), hereby constitute and appoint Christopher J. Kelley 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 18th day of July,
2017.
/s/ Lisa M. Jones
------------------------------
Lisa M. Jones
POWER OF ATTORNEY
ANNEX A
Pioneer Asset Allocation Trust: Pioneer Series Trust VI:
Pioneer Solutions - Balanced Fund Pioneer Floating Rate Fund
Pioneer Solutions - Conservative Fund Pioneer Flexible Opportunities Fund
Pioneer Solutions - Growth Fund Pioneer Series Trust VII:
Pioneer Bond Fund Pioneer Global High Yield Fund
Pioneer Diversified High Income Trust Pioneer Global Multisector Income Fund
Pioneer Emerging Markets Fund Pioneer Series Trust VIII:
Pioneer Equity Income Fund Pioneer International Equity Fund
Pioneer Floating Rate Trust Pioneer Series Trust X:
Pioneer Fund Pioneer Dynamic Credit Fund
Pioneer High Income Trust Pioneer Fundamental Growth Fund
Pioneer High Yield Fund Pioneer Multi-Asset Ultrashort Income Fund
Pioneer ILS Interval Fund Pioneer Series Trust XI:
Pioneer Mid Cap Value Fund Pioneer Core Equity Fund
Pioneer Money Market Trust: Pioneer Series Trust XII:
Pioneer U.S. Government Money Market Fund Pioneer Disciplined Growth Fund
Pioneer Municipal High Income Trust Pioneer Short Term Income Fund
Pioneer Municipal High Income Advantage Trust Pioneer Strategic Income Fund
Pioneer Real Estate Shares Pioneer Variable Contracts Trust:
Pioneer Series Trust II: Pioneer Bond VCT Portfolio
Pioneer AMT-Free Municipal Fund Pioneer Emerging Markets VCT Portfolio
Pioneer Select Mid Cap Growth Fund Pioneer Equity Income VCT Portfolio
Pioneer Series Trust III: Pioneer Fund VCT Portfolio
Pioneer Disciplined Value Fund Pioneer High Yield VCT Portfolio
Pioneer Series Trust IV: Pioneer Mid Cap Value VCT Portfolio
Pioneer Classic Balanced Fund Pioneer Real Estate Shares VCT Portfolio
Pioneer Multi-Asset Income Fund Pioneer Select Mid Cap Growth VCT Portfolio
Pioneer Series Trust V: Pioneer Strategic Income VCT Portfolio
Pioneer Global Equity Fund
Pioneer High Income Municipal Fund
Pioneer U.S. Corporate High Yield Fund
POWER OF ATTORNEY
I, the undersigned Trustee of the investment companies listed on Annex A for
which Amundi Pioneer Asset Management, Inc. or one of its affiliates acts as
investment adviser (each, a "Trust" and collectively, the "Trusts"), hereby
constitute and appoint Lisa M. Jones, Christopher J. Kelley, 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 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 18th day of July,
2017.
/s/ Lorraine H. Monchak
------------------------------
Lorraine H. Monchak
POWER OF ATTORNEY
ANNEX A
Pioneer Asset Allocation Trust: Pioneer Series Trust VI:
Pioneer Solutions - Balanced Fund Pioneer Floating Rate Fund
Pioneer Solutions - Conservative Fund Pioneer Flexible Opportunities Fund
Pioneer Solutions - Growth Fund Pioneer Series Trust VII:
Pioneer Bond Fund Pioneer Global High Yield Fund
Pioneer Diversified High Income Trust Pioneer Global Multisector Income Fund
Pioneer Emerging Markets Fund Pioneer Series Trust VIII:
Pioneer Equity Income Fund Pioneer International Equity Fund
Pioneer Floating Rate Trust Pioneer Series Trust X:
Pioneer Fund Pioneer Dynamic Credit Fund
Pioneer High Income Trust Pioneer Fundamental Growth Fund
Pioneer High Yield Fund Pioneer Multi-Asset Ultrashort Income Fund
Pioneer ILS Interval Fund Pioneer Series Trust XI:
Pioneer Mid Cap Value Fund Pioneer Core Equity Fund
Pioneer Money Market Trust: Pioneer Series Trust XII:
Pioneer U.S. Government Money Market Fund Pioneer Disciplined Growth Fund
Pioneer Municipal High Income Trust Pioneer Short Term Income Fund
Pioneer Municipal High Income Advantage Trust Pioneer Strategic Income Fund
Pioneer Real Estate Shares Pioneer Variable Contracts Trust:
Pioneer Series Trust II: Pioneer Bond VCT Portfolio
Pioneer AMT-Free Municipal Fund Pioneer Emerging Markets VCT Portfolio
Pioneer Select Mid Cap Growth Fund Pioneer Equity Income VCT Portfolio
Pioneer Series Trust III: Pioneer Fund VCT Portfolio
Pioneer Disciplined Value Fund Pioneer High Yield VCT Portfolio
Pioneer Series Trust IV: Pioneer Mid Cap Value VCT Portfolio
Pioneer Classic Balanced Fund Pioneer Real Estate Shares VCT Portfolio
Pioneer Multi-Asset Income Fund Pioneer Select Mid Cap Growth VCT Portfolio
Pioneer Series Trust V: Pioneer Strategic Income VCT Portfolio
Pioneer Global Equity Fund
Pioneer High Income Municipal Fund
Pioneer U.S. Corporate High Yield Fund