Registration Statement of an Open-End Investment Company (Business Combination) — Form N-14
Filing Table of Contents
Document/Exhibit Description Pages Size
1: N-14 Pioneer Ibbotson 96 529K
3: EX-99.(11) Opinion of Counsel 3 14K
4: EX-99.(12) Form of Opinion 3 14K
5: EX-99.(14) Consents of Independent Registered Public 1 8K
Accounting Firms
6: EX-99.(16) Powers of Attorney 1 8K
7: EX-99.(17)(B) Combined Prospectus 329 1.27M
8: EX-99.(17)(C) Combined Annual Report 96 457K
9: EX-99.(17)(D) Combined Semi-Annual Report 112 490K
2: EX-99.(6)(B) Form of Expense Limit Agreement 4 12K
As filed with the Securities and Exchange Commission on September 8, 2014
File No. ____
United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. ___
Post-Effective Amendment No. ___
(Check appropriate box or boxes)
PIONEER IBBOTSON ASSET ALLOCATION SERIES
(Exact Name of Registrant as Specified in Charter)
(617) 742-7825
(Area Code and Telephone Number)
60 State Street, Boston, Massachusetts 02109
(Address of Principal Executive Offices: Number, Street, City, State, Zip Code)
Terrence J. Cullen
Pioneer Investment Management, Inc.
60 State Street
Boston, Massachusetts 02109
(Name and Address of Agent for Service)
Copies to: Roger P. Joseph, Esq.
Bingham McCutchen LLP
One Federal Street
Boston, Massachusetts 02110
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this Registration Statement.
Calculation of Registration Fee under the Securities Act of 1933: No filing fee
is due because of reliance on Section 24(f) of the Investment Company Act of
1940, which permits registration of an indefinite number of securities.
Title of Securities Being Registered: Shares of beneficial interest of Pioneer
Ibbotson Growth Allocation Fund, a series of the Registrant.
It is proposed that this filing will become effective on October 8, 2014,
pursuant to Rule 488 under the Securities Act of 1933, as amended.
COMBINED INFORMATION STATEMENT
OF
PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND
AND
PROSPECTUS FOR
PIONEER IBBOTSON GROWTH ALLOCATION FUND
(to be renamed Pioneer Multi-Asset Allocator Growth Fund)
(each, a "Pioneer Fund" and together, the "Pioneer Funds")
The address and telephone number of each Pioneer Fund is:
60 State Street
Boston, Massachusetts 02109
1-800-225-6292
To the Shareholders of Pioneer Ibbotson Aggressive Allocation Fund:
The Board of Trustees of your fund has approved the reorganization of your
fund (the "Acquired Fund") with Pioneer Ibbotson Growth Allocation Fund (to be
re-named Pioneer Multi-Asset Allocator Growth Fund) (the "Acquiring Fund") after
considering the recommendation of Pioneer Investment Management, Inc.
("Pioneer"), the investment manager to your fund and concluding that the
reorganization would be in the best interests of your fund.
The Board of Trustees considered various factors in approving the
reorganization, including, but not limited to:
o The similarity in investment objectives and strategies between the
Acquired Fund and the Acquiring Fund, each of which is a "fund of funds"
that invests primarily in other mutual funds, including mutual funds
that are managed by Pioneer.
o The assumption by Pioneer of portfolio management responsibilities for
the Acquiring Fund in conjunction with the reorganization;
o The expectation that there will be no increase in management fees for
shareholders of the Acquired Fund as a result of the reorganization;
o The potential for economies of scale for the combined fund resulting
from the reorganization;
o The expectation that the reorganization generally will have no federal
income tax consequences for shareholders.
The reorganization is expected to occur on or about November 14, 2014. No
commission, redemption fee or other transactional fee will be charged as a
result of the reorganization.
The reorganization does not require shareholder approval, and you are not
being asked to vote. We do, however, ask that you review the enclosed
information statement/prospectus, which contains information about the Acquiring
Fund, outlines the differences between your fund and the Acquiring Fund, and
provides details about the terms and conditions of the reorganization.
The Board of Trustees of your fund has unanimously approved your fund's
reorganization and believes the reorganization is in the best interests of your
fund.
If you have any questions, please call 1-800-225-6292.
Sincerely,
Christopher J. Kelley
Secretary
Boston, Massachusetts
______________, 2014
COMBINED INFORMATION STATEMENT
OF
PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND
AND
PROSPECTUS FOR
PIONEER IBBOTSON GROWTH ALLOCATION FUND
(to be renamed Pioneer Multi-Asset Allocator Growth Fund)
(each, a "Pioneer Fund" and together, the "Pioneer Funds")
The address and telephone number of the Pioneer Funds is:
60 State Street
Boston, Massachusetts 02109
1-800-225-6292
Shares of the Pioneer Funds have not been approved or disapproved by the
Securities and Exchange Commission (the "SEC"). The SEC has not passed on upon
the adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
An investment in either Pioneer Fund (each sometimes referred to herein as a
"fund") is not a bank deposit and is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency.
This Information Statement/Prospectus sets forth information that an investor
needs to know before investing. Please read this Information
Statement/Prospectus carefully before investing and keep it for future
reference.
TABLE OF CONTENTS
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INTRODUCTION 3
REORGANIZATION OF PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND WITH PIONEER IBBOTSON
GROWTH ALLOCATION FUND (TO BE RENAMED PIONEER MULTI-ASSET ALLOCATOR GROWTH FUND) 6
OTHER IMPORTANT INFORMATION REGARDING THE REORGANIZATION 31
TERMS OF THE AGREEMENT AND PLAN OF REORGANIZATION 33
TAX STATUS OF THE REORGANIZATION 35
ADDITIONAL INFORMATION ABOUT THE PIONEER FUNDS 39
FINANCIAL HIGHLIGHTS 57
OWNERSHIP OF SHARES OF THE PIONEER FUNDS 61
AUDITORS 61
AVAILABLE INFORMATION 61
EXHIBIT A -- FORM OF AGREEMENT AND PLAN OF REORGANIZATION - PIONEER IBBOTSON AGGRESSIVE
ALLOCATION FUND - PIONEER IBBOTSON GROWTH ALLOCATION FUND A-1
2
INTRODUCTION
This combined information statement/prospectus, dated ______________, 2014
(the "Information Statement/Prospectus"), is being furnished to shareholders of
Pioneer Ibbotson Aggressive Allocation Fund (the "Acquired Fund") in connection
with the reorganization of the fund with Pioneer Ibbotson Growth Allocation Fund
(to be renamed Pioneer Multi-Asset Allocator Growth Fund) (the "Acquiring
Fund"). Following the completion of the reorganization, you will be a
shareholder in a fund that has the same investment manager as your fund, similar
investment objectives, strategies and policies, and that has management fees
that are no higher than your fund's management fees. However, the combined fund
will be substantially larger in size. The reorganization does not require
shareholder approval, and you are not being asked to vote.
The Information Statement/Prospectus contains information you should know
about the reorganization.
A copy of the agreement and plan of reorganization that provides for the
reorganization of your fund is attached to this Information Statement/Prospectus
as Exhibit A. Shareholders should read this entire Information
Statement/Prospectus, including Exhibit A, carefully.
The date of this Information
Statement/Prospectus is ______________, 2014.
For more complete information about each Pioneer Fund, please read the
fund's prospectus and statement of additional information, as they may be
amended and/or supplemented. Each fund's prospectus and statement of additional
information has been filed with the SEC (http://www.sec.gov) and is available
upon oral or written request and without charge. See "Where to Get More
Information" below.
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Where to Get More Information
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Each Pioneer Fund's current summary On file with the SEC (http://www.sec.gov) and
prospectus, prospectus, statement of available at no charge by calling our toll-free
additional information, and any applicable number: 1-800-225-6292. See "Available
supplements. Information."
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Each Pioneer Fund's most recent annual and On file with the SEC (http://www.sec.gov) and
semi-annual reports to shareholders. available at no charge by calling our toll-free
number: 1-800-225-6292. See "Available
Information."
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A statement of additional information for On file with the SEC (http://www.sec.gov) and
this Information Statement/Prospectus (the available at no charge by calling our toll-free
"SAI"), dated ____, 2014. It contains additional number: 1-800-225-6292. This SAI is incorporated by
information about the Pioneer Funds. reference into this Information
Statement/Prospectus. See "Available Information."
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To ask questions about this Information Call our toll-free telephone number:
Statement/Prospectus. 1-800-225-6292.
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The Acquired Fund's summary prospectus, prospectus and statement of
additional information dated December 1, 2013, as supplemented, are incorporated
by reference into this Information Statement/Prospectus.
Background to the Reorganization
Pioneer Investment Management, Inc. ("Pioneer"), your fund's investment
adviser, recommended the reorganization of your fund with the Acquiring Fund
(the "Reorganization") for a number of reasons, including:
o Your fund and the Acquiring Fund have similar investment objectives and
strategies. Like your fund, the Acquiring Fund is a "fund of funds" that
seeks to achieve its investment objectives by investing primarily in
other mutual funds, including mutual funds that are managed by Pioneer.
o The Acquiring Fund will be directly managed by Pioneer using a flexible
asset allocation to select investments it believes will perform well
over time while seeking to maintain a level of volatility corresponding
to its risk/return profile.
o The combined fund may be better positioned in the market to attract
assets than your fund. The combined fund's greater asset size may allow
it, relative to your fund, to reduce per share expenses as fixed
expenses are shared over a larger asset base.
At a meeting held on July 15, 2014, the Board of Trustees of the funds
unanimously approved the Reorganization of your fund. The Reorganization of your
fund is not subject to approval by the shareholders of your fund.
How will the Reorganization work?
o The Reorganization is scheduled to occur on or about November 14, 2014,
but may occur on such later date as the parties may agree in writing
(the "Closing Date").
3
o Your fund will transfer all of its assets to the Acquiring Fund, and the
Acquiring Fund will assume all of the Acquired Fund's liabilities.
o The Acquiring Fund will issue Class A, Class C and Class Y shares to
your fund in amounts equal to the aggregate net asset value of your
fund's Class A, Class C and Class Y shares, respectively. Class B shares
of the Acquired Fund will be converted to Class A shares of the Acquired
Fund on November 10, 2014, prior to the Closing Date. Accordingly,
current Class B shareholders of the Acquired Fund will be Class A
shareholders of the Acquired Fund on the Closing Date, and will receive
Class A shares of the Acquiring Fund in the Reorganization.
o Shares of the Acquiring Fund will be distributed to you in proportion to
the relative net asset value of your holdings of shares of each class of
the Acquired Fund on the Closing Date. Therefore, on the Closing Date,
you will hold shares of the corresponding class of the Acquiring Fund
with the same aggregate net asset value as your holdings of shares of
each class of the Acquired Fund immediately prior to the Reorganization.
The net asset value attributable to a class of shares of each fund will
be determined using the Pioneer Funds' valuation policies and
procedures. Each fund's valuation policy and procedures are identical.
o No sales load, contingent deferred sales charge, commission, redemption
fee or other transactional fee will be charged as a result of the
Reorganization. After the Reorganization, any contingent deferred sales
charge that applied to your Class A or Class C shares of the Acquired
Fund at the time of the Reorganization will continue to apply for the
remainder of the applicable holding period at the time of the
Reorganization. In calculating any applicable contingent deferred sales
charge, the period during which you held your shares will be included in
the holding period of the shares you receive as a result of the
Reorganization.
o The Reorganization generally is not expected to result in income, gain
or loss being recognized for federal income tax purposes by either fund
or by the shareholders of either fund.
o In approving the Reorganization, the Board of Trustees of each fund,
including all of the Trustees who are not "interested" persons (as
defined in the Investment Company Act of 1940, as amended (the "1940
Act")) of the Pioneer Funds, Pioneer, or Pioneer Funds Distributor,
Inc., the Pioneer Funds' principal underwriter and distributor ("PFD")
(the "Independent Trustees"), has determined that the Reorganization is
in the best interest of each fund and will not dilute the interests of
shareholders. The Trustees have made this determination based on factors
that are discussed below.
What was the basis of the Trustees' determination that the Reorganization was in
the best interests of your fund?
The Board of Trustees believes that reorganizing your fund with the
Acquiring Fund offers you a number of potential benefits. These potential
benefits and considerations include:
o Similar investment objectives. Your fund and the Acquiring Fund have
similar investment objectives. Your fund's investment objective is
long-term capital growth. The Acquiring Fund's investment objective is
long-term capital growth and current income.
o Similar investment policies. Like your fund, the Acquiring Fund is a
"fund of funds" that allocates its assets primarily among other mutual
funds, including mutual funds managed by Pioneer, that invest in asset
classes consistent with the fund's objectives. However, the Acquiring
Fund generally is expected to allocate a greater percentage of its
assets to fixed income and other investments than your fund. In
addition, following the completion of the Reorganization, the Acquiring
Fund will have the flexibility to invest in a broader range of funds
than your fund, including exchange-traded funds and mutual funds that
are not managed by Pioneer. Unlike your fund, the Acquiring Fund also
will be permitted to invest in derivative instruments for hedging and
other purposes.
o Direct management by Pioneer. In conjunction with the Reorganization,
Pioneer will assume responsibility for making portfolio management
decisions for the Acquiring Fund. Currently, Ibbotson Associates, Inc.
serves as each fund's sub-adviser.
o Allocation approach and risk management. Your fund's assets are
allocated among asset classes and funds according to fixed ranges. In
contrast, following the completion of the Reorganization, Pioneer
intends to manage the Acquiring Fund using a flexible allocation
approach that does not rely on fixed ranges for asset classes or funds.
Pioneer also intends to employ risk management strategies that seek to
keep the Acquiring Fund's annualized volatility (i.e., fluctuations in
value) within a targeted range.
o No increase in management fees. The pro forma management fees paid by
the combined fund will be the same as or lower than the management fees
paid by your fund.
o Economies of scale. The combined fund may be better positioned to
attract assets than your fund. The larger size of the combined fund may
result in greater economies of scale that would benefit the combined
fund. Each fund incurs substantial operating costs for accounting, legal
and custodial services. The combined fund resulting from the
Reorganization would spread fixed expenses over a larger asset base,
potentially contributing to a lower expense ratio in the long term than
your fund would achieve separately.
4
o The transaction is expected to be treated as a reorganization under
Section 368(a) of the Internal Revenue Code of 1986, as amended (the
"Code"), and you therefore are not expected to recognize any taxable
gain or loss on the exchange of your fund shares for shares of the
Acquiring Fund.
What are the federal income tax consequences of the Reorganization?
As a condition to the closing of the Reorganization, the funds must receive
an opinion of Bingham McCutchen LLP to the effect that the Reorganization will
constitute a "reorganization" within the meaning of Section 368(a) of the Code.
Accordingly, subject to the limited exceptions described below under the heading
"Tax Status of the Reorganization," it is expected that neither you nor your
fund will recognize gain or loss as a direct result of the Reorganization, and
that the aggregate tax basis of the shares that you receive in the
Reorganization will be the same as the aggregate tax basis of the shares that
you surrender in the Reorganization. In addition, the holding period of shares
you receive in the Reorganization will include the holding period of the shares
that you surrender in the Reorganization, provided that you held those shares as
capital assets on the date of the Reorganization. However, in accordance with
the Pioneer Funds' policy that each Pioneer Fund distributes its investment
company taxable income, net tax-exempt income and net capital gains for each
taxable year (in order to qualify for tax treatment as a regulated investment
company and avoid federal income tax thereon at the fund level), your fund will
declare and pay a distribution of such income and gains to its shareholders, if
any, shortly before the Reorganization. Such distribution may affect the amount,
timing or character of taxable income that you realize in respect of your fund
shares. For more information, see "Tax Status of the Reorganization" on page 35
of the Information Statement/Prospectus. The Acquiring Fund may make a
comparable distribution to its shareholders shortly before the Reorganization.
Additionally, following the Reorganization, the Acquiring Fund will continue to
make distributions according to its regular distribution schedule. You will
generally need to pay tax on those distributions even though they may include
income and gains that were accrued and/or realized before you became a
shareholder of the Acquiring Fund.
Who bears the expenses associated with the Reorganization?
Each fund will bear approximately 25% of the expenses incurred in connection
with the Reorganization, including expenses associated with the preparation,
printing and mailing of any shareholder communications (including this
Information Statement/Prospectus), any filings with the SEC and other
governmental agencies in connection with the Reorganization, audit fees and
legal fees ("Reorganization Costs"). Pioneer will bear the remaining 50% of the
Reorganization Costs. It is estimated that these expenses in the aggregate will
not exceed $100,000, of which each fund will bear approximately $25,000.
5
REORGANIZATION OF PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND WITH PIONEER
IBBOTSON GROWTH ALLOCATION FUND (TO BE RENAMED PIONEER MULTI-ASSET ALLOCATOR
GROWTH FUND)
SUMMARY
The following is a summary of more complete information appearing later in
this Information Statement/Prospectus or incorporated herein. You should read
carefully the entire Information Statement/Prospectus, including the form of
Agreement and Plan of Reorganization attached as Exhibit A, because it contains
details that are not in the summary.
The Board of Trustees of your fund has approved the Reorganization of your
fund with the Acquiring Fund. Each fund is managed by Pioneer and has similar
investment policies, but there are certain differences between the funds,
including:
o Your fund is currently sub-advised by Ibbotson Associates, Inc.
("Ibbotson"). As the fund's sub-adviser, Ibbotson is responsible for
allocating the fund's assets among the other funds managed by Pioneer
in which the fund invests. In contrast, upon completion of the
Reorganization, Pioneer will assume portfolio management
responsibilities for the Acquiring Fund and, accordingly, will make
asset allocation decisions for the combined fund.
o The investment objectives of your fund and the Acquiring Fund are
similar, but not identical. Your fund's investment objective is
long-term capital growth. The Acquiring Fund's investment objective is
long-term capital growth and current income.
o Like your fund, the Acquiring Fund is a "fund of funds" that allocates
it assets primarily among other mutual funds, including mutual funds
managed by Pioneer, that invest in asset classes consistent with the
fund's objectives. However, the Acquiring Fund generally is expected to
allocate a greater percentage of its assets to fixed income and other
investments than your fund. Furthermore, in connection with the
assumption of portfolio management responsibilities by Pioneer, the
Board of Trustees of the Acquiring Fund approved certain changes to the
Acquiring Fund's investment strategies that will take effect upon
completion of the Reorganization. These changes will permit the
Acquiring Fund to invest in a broader range of funds than your fund,
including exchange-traded funds and mutual funds that are not managed by
Pioneer. Unlike your fund, the Acquiring Fund also will be permitted to
invest in derivative instruments for hedging and other purposes.
o Your fund's assets are allocated among asset classes and funds according
to fixed ranges. In contrast, following the completion of the
Reorganization, Pioneer intends to manage the Acquiring Fund using a
flexible allocation approach that does not rely on fixed ranges for
asset classes or funds. Pioneer also intends to employ risk management
strategies that seek to keep the Acquiring Fund's annualized volatility
(i.e., fluctuations in value) within a targeted range.
The tables below compare certain features of your fund to the features of
the Acquiring Fund that will be in effect upon completion of the Reorganization.
In the table below, if a row extends across the entire table, the policy
disclosed applies to both your fund and the Acquiring Fund.
6
Comparison of Acquired Fund and the Acquiring Fund, Post-Reorganization
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Pioneer Ibbotson Growth Allocation Fund (to be
Pioneer Ibbotson Aggressive Allocation Fund renamed Pioneer Multi-Asset Allocator Growth Fund)
(the Acquired Fund) (the Acquiring Fund), Post-Reorganization
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Investment Adviser Pioneer Investment Management, Inc.
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Sub-Adviser Ibbotson Associates, Inc. ("Ibbotson") None.
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Portfolio Scott Wentsel, vice president and senior Day-to-day management of the fund's portfolio will
Management portfolio manager at Ibbotson (portfolio be the responsibility of a team of portfolio
manager of the fund since 2005); Brian managers, which include members from Pioneer's
Huckstep, portfolio manager at Ibbotson affiliate, Pioneer Investment Management Limited.
(portfolio manager of the fund since 2005); John O'Toole, Head of Multi-Asset Portfolio
Paul Arnold, senior consultant at Ibbotson Management, Paul Weber, Head of Fund Research and
(portfolio manager of the fund since 2012). Manager Selection, and Salvatore Buono, Head of
Strategy Alignment and Structured Products.
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Investment Long-term capital growth. Long-term capital growth and current income.
objective
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Each fund's investment objective may be changed without shareholder approval. Each fund will provide
notice prior to implementing any change to its investment objective.
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Principal The fund is a "fund of funds." The fund seeks to achieve its investment objectives by investing in
investment other funds ("underlying funds") rather than direct positions in securities.
strategies
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Underlying Funds The fund may invest in underlying funds that The fund may invest in underlying funds that are
are either managed by Pioneer or managed by an either managed by Pioneer or managed by an adviser
adviser not associated with Pioneer. As of the not associated with Pioneer, including
date of this Information Statement/Prospectus, exchange-traded funds (ETFs).
the fund invests solely in other Pioneer funds.
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It is anticipated that underlying funds managed by Pioneer will at all times represent a significant
portion of the fund's investments.
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Asset Allocation Pioneer allocates each fund's assets among the Through investments in underlying funds, the fund
Process broad asset classes of equity, fixed income and allocates its assets among the broad asset classes
short-term (money market) investments by of equity, fixed income and short-term (money
investing in a distinctly weighted combination market) investments. The fund also may invest in
of underlying funds. These underlying funds, in underlying funds with exposure to non-traditional
turn, invest in a variety of U.S. and foreign -- so-called "alternative" -- asset classes such as
equity, fixed income and money market real estate investment trusts (REITs) or
securities. The intended benefit of asset commodities, or that use alternative strategies,
allocation is that the diversification provided such as market neutral or relative value
by allocating assets among asset classes, such strategies.
as equity and debt securities, reduces
volatility over the long-term. The fund invests mainly in funds managed by
Pioneer or one of its affiliates. The fund may
Subject to Pioneer's supervision, Ibbotson also invest in securities of unaffiliated mutual
allocates each fund's assets among the funds or exchange-traded funds (ETFs) when the
underlying funds. Ibbotson uses a two-step desired economic exposure to a particular asset
asset allocation process: category or investment strategy is not available
through a Pioneer fund. The fund's allocations
First, Ibbotson seeks to develop an optimal among underlying funds will vary over time. The
model allocation among underlying funds in investment adviser allocates the fund's
different asset classes using an analysis that investments in the underlying funds based on an
looks at forecast returns, standard deviations evaluation of three components: strategic asset
in historical returns and the correlation of allocation, tactical asset allocation and fund
the performance of different asset classes. The selection. As part of its overall strategy, the
goal of this process is to identify a fund may use derivatives in an effort to limit the
combination of investments in different asset effects of volatility (the variability of returns
classes that is expected to maximize return for from one period to the next) or severe market
a given level of risk or minimize risk for a events, to seek incremental return, and for a
given level of return. variety of other hedging and non-hedging purposes.
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Pioneer Ibbotson Growth Allocation Fund (to be
Pioneer Ibbotson Aggressive Allocation Fund renamed Pioneer Multi-Asset Allocator Growth Fund)
(the Acquired Fund) (the Acquiring Fund), Post-Reorganization
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Having determined the allocation of the fund's The adviser selects investments it believes will
assets among the asset classes, Ibbotson then perform well over time while maintaining a level
invests the assets in underlying funds that of volatility corresponding to its risk/return
invest in those asset classes. Pioneer and profile, targeting an annualized volatility level
Ibbotson agree from time to time upon the for the fund of approximately 10%-18%. Due to
universe of mutual funds that Ibbotson may market conditions and other factors, the actual or
consider when making allocation decisions. realized volatility of the fund for any particular
Ibbotson's analysis in selecting and weighting period of time may be materially higher or lower
the underlying funds from that universe than the target level. Volatility may result from
includes historical returns-based style rapid and dramatic price swings. Higher volatility
analysis, asset performance, regression and generally indicates higher risk.
attribution analyses, manager interviews,
relative and absolute performance, including The adviser allocates the fund's assets among
correlations with other underlying funds as underlying funds and other investments based on
well as corresponding benchmarks, and strategic positioning and tactical considerations,
historical volatility (the variability of taking into account both broad economic and market
returns from one period to the next). Ibbotson factors and factors specific to particular
seeks a combination of underlying funds that it investments. The adviser considers the relative
believes will optimize returns, given each return potential of investments in view of their
fund's risk profile. When considering equity expected relative risk, including potential
funds, Ibbotson focuses on the underlying volatility and drawdown risk (the risk of
funds' foreign and domestic exposure, market significant loss, measured from peak value) among
capitalization ranges, and investment style other risks. The goal of this process is to
(growth vs. value). When considering bond identify a combination of investments with the
funds, Ibbotson's primary focus is the overall potential to provide total return consistent with
level of risk in the type of fixed income the fund's overall risk/return profile.
securities in which the underlying funds invest Investments typically are sold - and
and on maximizing current income and long-term derivatives-based strategies unwound - when the
capital growth. adviser's overall assessment of market and
economic conditions changes or the assessments of
Based on the target allocations, the fund will the attributes of specific investments change.
invest the proceeds from the sale of its
shares, reinvested dividends from the The adviser's analysis in selecting underlying
underlying funds and other income, and redeem funds includes an assessment of a fund's
investments in the underlying funds to provide historical relative and absolute performance,
the cash necessary to satisfy redemption volatility and other risk characteristics, and
requests for fund shares. However, the portion correlation with other funds and benchmarks. The
of the fund's net assets represented by an adviser also analyzes the fund's investment
underlying fund or asset class could differ strategies, investment process and portfolio
substantially over time from the target management team.
allocation as the underlying funds' asset
values change due to market movements and
portfolio management decisions.
Periodically, Ibbotson will re-evaluate the
fund's target asset allocation and may
recommend the rebalancing of the fund's assets
among asset classes and underlying funds to
reflect changes in the target allocations or to
reallocate the fund's holdings to match the
target allocation. The fund may change its
target allocation to each asset class, the
underlying funds in each asset class (including
adding or deleting funds) or target allocations
to each underlying fund without prior approval
from or notice to shareholders.
Decisions to sell shares of the underlying
funds are made for cash flow purposes, such as
redemptions or expenses, as a result of
periodic rebalancing of the fund's portfolio
holdings, or as an adjustment to an underlying
fund's target allocation based on Ibbotson's
view of the fund's characteristics and other
allocation criteria.
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Pioneer Ibbotson Growth Allocation Fund (to be
Pioneer Ibbotson Aggressive Allocation Fund(the renamed Pioneer Multi-Asset Allocator Growth Fund)
Acquired Fund) (the Acquiring Fund), Post-Reorganization
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Use of Derivatives The fund does not use derivatives. However, The fund may, but is not required to, use
certain underlying funds may use derivatives. derivatives, including futures, options, forward
foreign currency exchange contracts and swaps.
The adviser may use derivatives strategies
designed to isolate sources of return associated
with specific investment opportunities that are
not generally correlated with directional,
market-oriented return. Investment opportunities
may relate, for example, to the relative value or
credit quality of individual instruments, issuers,
industries or sectors, capital or investment
structures relating to issuers or sectors, the
structure (yield curve) or direction of prevailing
interest rates, the movement of global currency
exchange rates, and the expected price convergence
of different instruments. These strategies often
entail two or more simultaneous derivatives
positions (one long and one short) structured in
an effort to reduce some risks while isolating a
potential source of return.
The fund also may use derivatives for a variety of
other 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; and to manage portfolio
characteristics. 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.
In addition, certain underlying funds may use
derivatives.
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Asset Class The following is a general guide regarding the The fund does not have target ranges for the
Target Ranges anticipated allocation of assets of the fund allocation of assets of the fund among broad asset
among broad asset classes. Pioneer may change classes.
these allocation ranges from time to time
without the approval of or notice to
shareholders.
The fixed income allocation includes the fund's
investments in cash, cash equivalents or money
market funds.
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Equity Fund Fixed Income
Allocation Fund Allocation
-----------------------------------------------
85-100% 0-15%
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Underlying Fund The fund expects to invest its assets in The fund does not have target ranges for the
Target Ranges underlying mutual funds within fixed ranges. An investment of assets in underlying funds.
investment in an underlying equity fund may
represent 0-30% of fund holdings and an
investment in an underlying fixed income fund
may represent 0-15% of fund holdings.
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Pioneer Ibbotson Growth Allocation Fund (to be
Pioneer Ibbotson Aggressive Allocation Fund renamed Pioneer Multi-Asset Allocator Growth Fund)
(the Acquired Fund) (the Acquiring Fund), Post-Reorganization
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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.
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During the most recent fiscal year, the fund's During the most recent fiscal year, the fund's
portfolio turnover rate was 6% of the average portfolio turnover rate was 6% of the average
value of its portfolio. value of its portfolio.
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Fiscal Year End July 31 July 31
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Business A diversified series of an open-end management investment company organized as a Delaware statutory
trust.
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Net assets $122.6 million $227.8 million
(as of 1/31/14)
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10
Principal Investments by Underlying Funds
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The Acquired Fund The Acquiring Fund, Post-Reorganization
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The underlying funds may invest in some or all of the following securities. Certain equity underlying funds may invest a limited
portion of their assets in fixed income securities. Fixed income underlying funds primarily invest in debt securities. In
addition, the Acquiring Fund may use derivatives. The Acquired Fund does not use derivatives, however, certain underlying funds
may use derivatives.
For purposes of this section, "the fund" means the Acquired Fund, the Acquiring Fund and, where applicable, an underlying fund.
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Equity Securities The fund may invest in equity securities. Equity securities in which the fund invests include common
stocks and securities with common stock characteristics, such as exchange-traded funds (ETFs) that
invest primarily in equity securities, depositary receipts, warrants, rights, equity interests in real
estate investment trusts (REITs) and preferred stocks.
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Investments in REITs are companies that invest primarily in income producing real estate or real estate related loans
REITs 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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Debt securities The fund may invest in debt securities. Debt securities in which the fund invests include U.S.
government securities, debt securities of corporate and other issuers, mortgage-and asset-backed
securities and short-term debt securities. The fund may acquire debt securities that are investment
grade and 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.
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U.S. government The fund may invest in U.S. government securities. U.S. government securities include obligations:
agency securities directly issued by or supported by the full faith and credit of the U.S. government, like Treasury
bills, notes and bonds and Government National Mortgage Association certificates; supported by the
right of the issuer to borrow from the U.S. Treasury, like those of the Federal Home Loan Banks;
supported by the discretionary authority of the U.S. government to purchase the agency's securities
like those of the Federal National Mortgage Association; or supported only by the credit of the issuer
itself, like the Tennessee Valley Authority.
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Mortgage-backed The fund may invest in mortgage-backed securities. Mortgage-backed securities may be issued by private
securities issuers, by government-sponsored entities such as the Federal National Mortgage Association (Fannie
Mae) or Federal Home Loan Mortgage Corporation (Freddie Mac) or by agencies of the U.S. government,
such as the Government National Mortgage Association (Ginnie Mae). Mortgage-backed securities
represent direct or indirect participation in, or are collateralized by and payable from, mortgage
loans secured by real property. The fund's investments in mortgage-related securities may include
mortgage derivatives and structured securities. The fund may invest in collateralized mortgage
obligations (CMOs). A CMO is a mortgage-backed bond that is issued in multiple classes, each with a
specified fixed or floating interest rate and a final scheduled distribution date. The holder of an
interest in a CMO is entitled to receive specified cash flows from a pool of underlying mortgages or
other mortgage-backed securities. Depending upon the class of CMO purchased, the holder may be
entitled to payment before the cash flow from the pool is used to pay holders of other classes of the
CMO or, alternatively, the holder may be paid only to the extent that there is cash remaining after
the cash flow has been used to pay other classes. A subordinated interest may serve as a credit
support for the senior securities purchased by other investors.
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Asset-backed The fund may invest in asset-backed securities. Asset-backed securities represent participations in,
securities or are secured by and payable from, assets such as installment sales or loan contracts, leases, credit
card receivables and other categories of receivables. The fund's investments in asset-backed
securities may include derivative and structured securities. The fund may invest in asset-backed
securities issued by special entities, such as trusts, that are backed by a pool of financial assets.
The fund may invest in collateralized debt obligations (CDOs), which include collateralized bond
obligations (CBOs), collateralized loan obligations (CLOs) and other similarly structured securities.
A CDO is a trust backed by a pool of fixed income securities. The trust typically is split into two or
more portions, called tranches, which vary in credit quality, yield, credit support and right to
repayment of principal and interest. Lower tranches pay higher interest rates but represent lower
degrees of credit quality and are more sensitive to the rate of defaults in the pool of obligations.
Certain CDOs may use derivatives, such as credit default swaps, to create synthetic exposure to assets
rather than holding such assets directly.
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Subordinated The fund may invest in securities that are subordinated or "junior" to more senior securities of the
securities issuer. The investor in a subordinated security of an issuer is entitled to payment after other
holders of debt in that issuer.
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The Acquired Fund The Acquiring Fund, Post-Reorganization
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Below investment The fund may invest in debt securities rated below investment grade or, if unrated, of equivalent
grade securities quality as determined by Pioneer. A debt security is below investment grade if it is rated BB or lower
("Junk bonds") by Standard & Poor's Financial Services LLC or the equivalent rating by another nationally recognized
statistical rating organization or determined to be of equivalent credit quality by Pioneer. Debt
securities rated below investment grade are commonly referred to as "junk bonds" and are considered
speculative. Below investment grade debt securities involve greater risk of loss, are subject to
greater price volatility and are less liquid, especially during periods of economic uncertainty or
change, than higher quality debt securities. Below investment grade securities also may be more
difficult to value.
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Floating Rate Floating rate loans are provided by banks and other financial institutions to large corporate
Loans customers. These loans are rated below investment grade, but typically are secured with specific
collateral and have a senior position in the capital structure of the borrower. These loans typically
have rates of interest that are reset periodically by reference to a base lending rate, such as the
London Interbank Offered Rate (LIBOR), plus a premium.
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Inverse floating The fund may invest in inverse floating rate obligations (a type of derivative instrument). The
rate obligations interest rate on inverse floating rate obligations will generally decrease as short-term interest
rates increase, and increase as short-term rates decrease. Due to their leveraged structure, the
sensitivity of the market value of an inverse floating rate obligation to changes in interest rates is
generally greater than a comparable long-term bond issued by the same issuer and with similar credit
quality, redemption and maturity provisions. Inverse floating rate obligations may be volatile and
involve leverage risk.
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Debt rating For purposes of the fund's credit quality policies, if a security receives different ratings from
considerations nationally recognized statistical rating organizations, the fund will use the rating chosen by the
portfolio manager as most representative of the security's credit quality. The ratings of nationally
recognized statistical rating organizations represent their opinions as to the quality of the
securities that they undertake to rate and may not accurately describe the risks of the securities. A
rating organization may have a conflict of interest with respect to a security for which it assigns a
quality rating. In addition, there may be a delay between a change in the credit quality of a security
or other asset and a change in the quality rating assigned to the security or other asset by a rating
organization. If a rating organization changes the quality rating assigned to one or more of the
fund's portfolio securities, Pioneer will consider if any action is appropriate in light of the fund's
investment objectives and policies. An investor can still lose significant amounts when investing in
investment grade securities.
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Event-linked bonds The fund may invest in "event-linked" bonds, which sometimes are referred to as "insurance-linked" or
"catastrophe" bonds. Event-linked bonds are debt obligations for which the return of principal and the
payment of interest are contingent on the non-occurrence of a pre-defined "trigger" event, such as a
hurricane or an earthquake of a specific magnitude. For some event-linked bonds, the trigger event's
magnitude may be based on losses to a company or industry, industry indexes or readings of scientific
instruments rather than specified actual losses. The fund is entitled to receive principal and
interest payments so long as no trigger event occurs of the description and magnitude specified by the
instrument. Event-linked bonds may be issued by government agencies, insurance companies, reinsurers,
special purpose corporations or other on-shore or off-shore entities. Event-linked bonds are typically
rated by at least one nationally recognized statistical rating agency, but also may be unrated. The
rating for an event-linked bond primarily reflects the rating agency's calculated probability that a
pre-defined trigger event will occur. This rating also assesses the event-linked bond's credit risk
and the model used to calculate the probability of a trigger event.
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Commodity-related Commodities are assets that have tangible properties, such as oil, metals, and agricultural products.
investments The fund may gain exposure to commodities through investment in funds, including ETFs, or through
commodity-linked notes and other commodity-linked derivatives. The fund also may invest in securities
of issuers in commodity-related industries.
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Non-U.S. The fund may invest in securities of non-U.S. issuers, including securities of emerging markets
investments 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, and emerging market governmental issuers.
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The Acquired Fund The Acquiring Fund, Post-Reorganization
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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. The fund also may enter into
credit default swaps, which can be used to acquire or to transfer the credit risk of a security or
index of securities without buying or selling the security or securities comprising the relevant
index. 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, exposure to various market segments).
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.
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Cash management Normally, the fund invests substantially all of its assets to meet its investment objectives. The fund
and temporary may invest the remainder of its assets in securities with remaining maturities of less than one year
investments 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.
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Reverse repurchase The fund may enter into reverse repurchase agreements pursuant to which the fund transfers securities
agreements and to a counterparty in return for cash, and the fund agrees to repurchase the securities at a later date
borrowing 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.
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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. A higher level of portfolio turnover may also cause taxable shareowners to incur a higher
level of taxable income or capital gains.
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Comparison of Principal Risks
The following describe the risks of investing in the Acquired Fund and the
Acquiring Fund. For purposes of this section, "the fund" means the Acquired
Fund, the Acquiring Fund, or, where applicable, an underlying 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 objectives.
Market risk. The values 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. Adverse market conditions may be
prolonged and may not have the same impact on all types of securities. The
values of securities may fall due to factors affecting a particular issuer,
industry or the securities market as a whole. The equity and debt capital
markets around the world have experienced unprecedented volatility in recent
periods. The stock market may perform poorly relative to other investments
(this risk may be greater in the short term). High public debt in the U.S.
and other countries creates ongoing and systemic market risks and
policymaking uncertainty. The financial crisis that began in 2008 has caused
a significant decline in the value and liquidity of many securities; in
particular, the values of some sovereign debt and of securities of issuers
that invest in sovereign debt and related investments have fallen, credit
has become more scarce worldwide and there has been significant uncertainty
in the markets. Governmental and non-governmental issuers have defaulted on,
or been forced to restructure, their debts; and many other issuers have
faced difficulties obtaining credit or refinancing existing obligations.
These market conditions may continue, worsen or spread, including in the
U.S., Europe and beyond. 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 response to the
crisis, the U.S. and other governments and the Federal Reserve and certain
foreign central banks have taken steps to support financial markets,
including by keeping interest rates at historically low levels. More
recently, the Federal Reserve has reduced its market support activities.
Further reduction or withdrawal of this support, failure of efforts in
response to the crisis, or investor perception that such efforts are not
succeeding
13
could negatively affect financial markets generally as well as increase
market volatility and the value and liquidity of certain securities. This
environment could make identifying investment risks and opportunities
especially difficult for the adviser, and whether or not the fund invests in
securities of issuers located in or with significant exposure to countries
experiencing economic and financial difficulties, the value and liquidity of
the fund's investments may be negatively affected. In addition, policy and
legislative changes in the U.S. and in other countries are affecting many
aspects of financial regulation. The impact of these changes on the markets,
and the practical implications for market participants, may not be fully
known for some time. The fund may experience a substantial or complete loss
on any individual security or derivative position. Particularly during
periods of declining or illiquid markets, 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, and could cause the
remaining shareholders in the fund to lose money. This redemption risk is
greater to the extent that the fund has investors with large shareholdings,
short investment horizons or unpredictable cash flow needs.
Fund of funds structure and layering of fees. The fund is structured as a
fund of funds. The fund's investments are focused in the underlying funds,
so the fund's investment performance is directly related to the performance
of the underlying funds. The fund's net asset value will be affected by the
performance of the equity and bond markets and the value of the mutual funds
in which the fund invests. In addition, the underlying funds may invest in
other investment companies, including exchange-traded funds (ETFs). Since
the fund mainly invests in the underlying funds, as opposed to other types
of securities, the fund does not have the same flexibility in its portfolio
holdings as many mutual funds. In addition, the fund indirectly pays a
portion of the expenses incurred by the underlying funds. Consequently, an
investment in the fund entails more direct and indirect expenses than a
direct investment in the underlying funds. For instance, you will pay
management fees and operating expenses of both the fund and the underlying
funds. The management fees paid by some underlying funds to Pioneer are
higher than the management fees paid by other underlying funds. The
underlying funds will not necessarily make consistent investment decisions,
which may also increase your costs. One underlying fund may buy the same
security that another underlying fund is selling. You would indirectly bear
the costs of both trades without achieving any investment purpose. These
transactions may also generate taxable gains. You may receive taxable
distributions consisting of gains from transactions by the underlying funds
as well as gains from the fund's transactions in shares of the underlying
funds. Currently, Pioneer manages many of the underlying funds. Because the
portfolio management teams of each of the underlying Pioneer funds may draw
upon the resources of the same equity and fixed income analyst team or may
share common investment management styles or approaches, the underlying
funds may hold many common portfolio positions, reducing the diversification
benefits of an asset allocation style.
Allocation Risk. The adviser's or the subadviser's evaluation of asset
classes and market sectors in developing an allocation model, and its
selection and weighting of underlying funds within the allocation model,
may prove to be incorrect. To the extent that the fund invests a significant
percentage of its assets in any one underlying fund, the fund will be
subject to a greater degree to the risks particular to that underlying fund,
and may experience greater volatility as a result.
Asset Class Variation Risk. The underlying funds invest principally in the
securities constituting their asset class (i.e., equity or fixed income).
However, under normal market conditions, an underlying fund may vary the
percentage of its assets in these securities (subject to any applicable
regulatory requirements). Depending upon the percentage of securities in a
particular asset class held by the underlying funds at any given time, and
the percentage of the fund's assets invested in various underlying funds,
the fund's actual exposure to the securities in a particular asset class may
vary substantially from its target asset allocation for that asset class.
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.
Principal risks of investing in the underlying funds
Risks of equity investments
Equity funds invest primarily in equity securities (such as stocks), which
are more volatile and carry more risks than some other forms of investment.
Risks of investing in underlying equity funds may include:
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.
Growth style risk. The fund's investments may not have the growth
potential originally expected. Growth stocks may fall out of favor with
investors and underperform the overall equity market.
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.
14
Risks of investments in REITs. The fund has risks associated with the
real estate industry. Although the fund does not invest directly in real
estate, it may invest in REITs and other equity securities of real
estate industry issuers. These risks may include:
o The U.S. or a local real estate market declines due to adverse
economic conditions, foreclosures, overbuilding and high vacancy
rates, reduced or regulated rents or other causes
o Interest rates go up. Rising interest rates can adversely affect
the availability and cost of financing for property acquisitions
and other purposes and reduce the value of a REIT's fixed income
investments
o The values of properties owned by a REIT or the prospects of
other real estate industry issuers may be hurt by property tax
increases, zoning changes, other governmental actions,
environmental liabilities, natural disasters or increased
operating expenses
o A REIT in the fund's portfolio is, or is perceived by the market
to be, poorly managed
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
REITs can generally be classified as equity REITs, mortgage REITs or
hybrid REITs. Equity REITs invest primarily in real property and derive
income mainly from the collection of rents. They may also realize gains
or losses from the sale of properties. Equity REITs will be affected by
conditions in the real estate rental market and by changes in the value
of the properties they own. Mortgage REITs invest primarily in mortgages
and similar real estate interests and derive income primarily from
interest payments. Mortgage REITs will be affected by changes in
creditworthiness of borrowers and changes in interest rates. 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. Hybrid REITs invest both in real property and in mortgages.
Investing in REITs involves certain unique risks. REITs are dependent on
management skills, are not diversified and are subject to the risks of
financing projects. REITs are typically invested in a limited number of
projects or in a particular market segment or geographic region, and
therefore are more susceptible to adverse developments affecting a
single project, market segment or geographic region than more broadly
diversified investments. REITs are subject to heavy cash flow
dependency, defaults by mortgagors or other borrowers and tenants,
self-liquidation and the possibility of failing to qualify for certain
tax and regulatory exemptions. REITs may have limited financial
resources and may experience sharper swings in market values and trade
less frequently and in a more limited volume than securities of larger
issuers. In addition to its own expenses, the fund will indirectly bear
its proportionate share of any management and other expenses paid by
REITs in which it invests. Such expenses are not shown in "Annual fund
operating expenses" above.
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.
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 stock 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. 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 fund's 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 convertible securities. Convertible securities generally offer
lower interest or dividend yields than non-convertible securities of
similar quality. As with all fixed income securities, the market values
of convertible securities tend to decline as interest rates
15
increase and, conversely, to increase as interest rates decline.
However, when the market price of the common stock underlying a
convertible security exceeds the conversion price, the convertible
security tends to reflect the market price of the underlying common
stock. As the market price of the underlying common stock declines, the
convertible security tends to trade increasingly on a yield basis and
thus may not decline in price to the same extent as the underlying
common stock. Convertible securities rank senior to common stocks in an
issuer's capital structure and consequently entail less risk than the
issuer's common stock.
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.
Risks of fixed income investments
Fixed income funds primarily invest in debt securities, such as government
securities, investment grade corporate securities, junk bonds,
mortgage-backed securities, asset-backed securities, and money market
securities. The value of your investment in the portfolio will change as the
value of investments of the underlying funds increases and decreases. Risks
of investing in the underlying fixed income funds may include:
Interest rate risk. When interest rates rise, the value of fixed income
securities generally falls. A change in interest rates will not have the
same impact on all fixed income securities. Generally, the longer the
maturity or duration of a fixed income security, the greater the impact
of a rise in interest rates on the security's value. Calculations of
duration and maturity may be based on estimates and may not reliably
predict a security's price sensitivity to changes in interest rates.
Moreover, securities can change in value in response to other factors,
such as credit risk. In addition, different interest rate measures (such
as short- and long-term interest rates and U.S. and foreign interest
rates), or interest rates on different types of securities or securities
of different issuers, may not necessarily change in the same amount or
in the same direction. When interest rates go down, the income received
by the fund, and the fund's yield, may decline. Interest rates in the
U.S. recently have been historically low, and may be expected to go back
up. Certain fixed income securities pay interest at variable or floating
rates. Variable rate securities tend to reset at specified intervals,
while floating rate securities may reset whenever there is a change in a
specified index rate. In most cases, these reset provisions reduce the
impact of changes in market interest rates on the value of the security.
However, some securities do not track the underlying index directly, but
reset based on formulas that may produce a leveraging effect; others may
also provide for interest payments that vary inversely with market
rates. The market prices of these securities may fluctuate significantly
when interest rates change. Yield generated by the fund may decline due
to a decrease in market interest rates.
Credit risk. If an obligor (such as the issuer itself or a party
offering credit enhancement) for a security held by the fund fails to
pay, otherwise defaults, is perceived to be less creditworthy, becomes
insolvent or files for bankruptcy, a security's credit rating is
downgraded or the credit quality or value of an underlying asset
declines, the value of your investment could decline. In addition, the
fund may incur expenses to protect the fund's interest in securities
experiencing these events. Credit risk is broadly gauged by the credit
ratings of the securities in which the fund invests. However, ratings
are only the opinions of the companies issuing them and are not
guarantees as to quality.
Prepayment or call risk. Many fixed income securities give the issuer
the option to prepay or call the security prior to its maturity date.
Issuers often exercise this right when interest rates fall. Accordingly,
if the fund holds a fixed income security that can be prepaid or called
prior to its maturity date, it will not benefit fully from the increase
in value that other fixed income securities generally experience when
interest rates fall. Upon prepayment of the security, the fund also
would be forced to reinvest the proceeds at then current yields, which
would be lower than the yield of the security that was prepaid or
called. In addition, if the fund purchases a fixed income security at a
premium (at a price that exceeds its stated par or principal value), the
fund may lose the amount of the premium paid in the event of prepayment.
Extension risk. During periods of rising interest rates, the average
life of certain types of securities may be extended because of slower
than expected principal payments. This may lock in a below market
interest rate, increase the security's duration (the estimated period
until the security is paid in full) and reduce the value of the
security. To the extent the fund invests significantly in
mortgage-related and asset-backed securities, its exposure to extension
risks may be greater than if it invested in other fixed
16
income securities. U.S. government agency obligations risk. The fund
invests in obligations issued by agencies and instrumentalities of the
U.S. government. Government-sponsored entities such as Fannie Mae,
Freddie Mac and the Federal Home Loan Banks (FHLBs), although chartered
or sponsored by Congress, are not funded by congressional appropriations
and the debt and mortgage-backed securities issued by them are neither
guaranteed nor issued by the U.S. government. Such debt and
mortgage-backed securities are subject to the risk of default on the
payment of interest and/or principal, similar to debt of private
issuers. Although the U.S. government has provided financial support to
Fannie Mae and Freddie Mac in the past, there can be no assurance that
it will support these or other government-sponsored entities in the
future.
U.S. government agency obligations risk. The fund invests in obligations
issued by agencies and instrumentalities of the U.S. government.
Government-sponsored entities such as Fannie Mae, Freddie Mac and the
Federal Home Loan Banks (FHLBs), although chartered or sponsored by
Congress, are not funded by congressional appropriations and the debt
and mortgage-backed securities issued by them are neither guaranteed nor
issued by the U.S. government. Such debt and mortgage-backed securities
are subject to the risk of default on the payment of interest and/or
principal, similar to debt of private issuers. Although the U.S.
government has provided financial support to Fannie Mae and Freddie Mac
in the past, there can be no assurance that it will support these or
other government-sponsored entities in the future.
Mortgage-related and asset-backed securities risk. The repayment of
certain mortgage-backed and asset-backed securities depends primarily on
the cash collections received from the issuer's underlying asset
portfolio and, in certain cases, the issuer's ability to issue
replacement securities. As a result, there could be losses to the fund
in the event of credit or market value deterioration in the issuer's
underlying portfolio, mismatches in the timing of the cash flows of the
underlying asset interests and the repayment obligations of maturing
securities, or the issuer's inability to issue new or replacement
securities. Upon the occurrence of certain triggering events or
defaults, the fund may become the holder of underlying assets at a time
when those assets may be difficult to sell or may be sold only at a
loss. In the event of a default, the value of the underlying collateral
may be insufficient to pay certain expenses, such as litigation and
foreclosure expenses, and inadequate to pay any principal or unpaid
interest. Privately issued mortgage-backed and asset-backed securities
are not traded on an exchange and may have a limited market. Without an
active trading market, these securities may be particularly difficult to
value given the complexities in valuing the underlying collateral.
Certain mortgage-backed and asset-backed securities may pay principal
only at maturity or may represent only the right to receive payments of
principal or interest on the underlying obligations, but not both. The
value of these types of instruments may change more drastically than
debt securities that pay both principal and interest during periods of
changing interest rates. Principal only instruments generally increase
in value if interest rates decline, but are also subject to the risk of
prepayment. Interest only instruments generally increase in value in a
rising interest rate environment when fewer of the underlying
obligations are prepaid. Interest only instruments could lose their
entire value in a declining interest rate environment if the underlying
obligations are prepaid.
Unlike mortgage-related securities issued or guaranteed by the U.S.
government or its agencies and instrumentalities, mortgage-related
securities issued by private issuers do not have a government or
government-sponsored entity guarantee (but may have other credit
enhancement), and may, and frequently do, have less favorable
collateral, credit risk or other characteristics. The fund may invest in
other mortgage-related securities, including mortgage derivatives and
structured securities. These securities typically are not secured by
real property. Because these securities have embedded leverage features,
small changes in interest or prepayment rates may cause large and sudden
price movements. These securities also can become illiquid and difficult
to value in volatile or declining markets.
Mortgage-backed securities are particularly susceptible to prepayment
and extension risk, because prepayments on the underlying mortgages tend
to increase when interest rates fall and decrease when interest rates
rise.
The value of mortgage-backed and asset-backed securities may be affected
by changes in credit quality or value of the mortgage loans or other
assets that support the securities. In addition, for mortgage-backed
securities, when market conditions result in an increase in the default
rates on the underlying mortgages and the foreclosure values of the
underlying realestate are below the outstanding amount of the underlying
mortgages, collection of the full amount of accrued interest and
principal on these investments may be less likely.
The fund may invest in CMOs. Principal prepayments on the underlying
mortgage loans may cause a CMO to be retired substantially earlier than
its stated maturity or final distribution date. If there are defaults on
the underlying mortgage loans, the fund will be less likely to receive
payments of principal and interest, and will be more likely to suffer a
loss. This risk may be increased to the extent the underlying mortgages
include sub-prime mortgages. As market conditions change, and
particularly during periods of rapid or unanticipated changes in market
interest rates, the attractiveness of a CMO class and the ability of the
structure to provide the anticipated investment characteristics may be
significantly reduced. Such changes can result in volatility in the
market value, and in some instances reduced liquidity, of a CMO class.
17
The fund may invest in CDOs. The risks of an investment in a CDO depend
largely on the type of the underlying obligations (e.g., an underlying
obligation may decline in quality or default) and the tranche of the CDO
in which the fund invests (e.g., the fund may invest in a tranche of CDO
that is subordinate to other tranches). Investments in CDOs may be
characterized by the fund as illiquid securities, which may be hard to
value and difficult to sell at an advantageous time or price. Although
certain CDOs may receive credit enhancement in the form of a
senior-subordinate structure, over-collateralization or bond insurance,
such enhancement may not always be present, and may fail to protect a
fund against the risk of loss on default of the collateral.
In response to the financial crisis that began in 2008, the Federal
Reserve has attempted to keep mortgage rates low by acting as a buyer of
mortgage-backed assets. It is anticipated that this support will end,
and mortgage rates may rise and prices of mortgage-backed securities
may fall when that happens. To the extent the fund's assets are invested
in mortgage-backed securities, returns to fund investors may decline.
Asset-backed securities are structured like mortgage-backed securities
and are subject to many of the same risks. The ability of an issuer of
asset-backed securities to enforce its security interest in the
underlying asset or to otherwise recover from the underlying obligor may
be limited. Certain asset-backed securities present a heightened level
of risk because, in the event of default, the liquidation value of the
underlying assets may be inadequate to pay any unpaid principal or
interest.
Risks of instruments that allow for balloon payments or negative
amortization payments. Certain debt instruments allow for balloon
payments or negative amortization payments. Such instruments permit the
borrower to avoid paying currently a portion of the interest accruing on
the instrument. While these features make the debt instrument more
affordable to the borrower in the near term, they increase the risk that
the borrower will be unable to make the resulting higher payment or
payments that become due at the maturity of the loan.
Risks of subordinated securities. A holder of securities that are
subordinated or "junior" to more senior securities of an issuer is
entitled to payment after holders of more senior securities of the
issuer. Subordinated securities are more likely to suffer a credit loss
than non-subordinated securities of the same issuer, any loss incurred
by the subordinated securities is likely to be proportionately greater,
and any recovery of interest or principal may take more time. As a
result, even a perceived decline in creditworthiness of the issuer is
likely to have a greater impact on them.
High yield or "junk" bond risk. Debt securities that are below
investment grade, called "junk bonds," are speculative, have a higher
risk of default or are already in default, tend to be less liquid and
are more difficult to value than higher grade securities. Junk bonds
tend to be volatile and more susceptible to adverse events and negative
sentiments. These risks are more pronounced for securities that are
already in default.
Risks of investing in event-linked bonds. The return of principal and
the payment of interest on "event-linked" bonds are contingent on the
non-occurrence of a pre-defined "trigger" event, such as a hurricane or
an earthquake of a specific magnitude or other event that leads to
physical or economic loss. If a trigger event, as defined within the
terms of an event-linked bond, involves losses or other metrics
exceeding a specific magnitude in the geographic region and time period
specified, the fund may lose a portion or all of its accrued interest
and/or principal invested in the event-linked bond. In addition to the
specified trigger events, event-linked bonds may expose the fund to
other risks, including but not limited to issuer (credit) default,
adverse regulatory or jurisdictional interpretations and adverse tax
consequences. Event-linked bonds are also subject to the risk that the
model used to calculate the probability of a trigger event was not
accurate and underestimated the likelihood of a trigger event. Upon the
occurrence or possible occurrence of a trigger event, and until the
completion of the processing and auditing of applicable loss claims, the
fund's investment in an event-linked bond may be priced using fair value
methods.
Risks of investing in floating rate loans. Floating rate loans and
similar investments may be illiquid or less liquid than other
investments. The value of collateral, if any, securing a floating rate
loan can decline or may be insufficient to meet the issuer's obligations
or may be difficult to liquidate. No active trading market may exist for
many floating rate loans, and many loans are subject to restrictions on
resale. Market quotations for these securities may be volatile and/or
subject to large spreads between bid and ask prices. Any secondary
market may be subject to irregular trading activity and extended trade
settlement periods.
Risks of investing in inverse floating rate obligations. The interest
rate on inverse floating rate obligations will generally decrease as
short-term interest rates increase, and increase as short-term rates
decrease. Due to their leveraged structure, the sensitivity of the
market value of an inverse floating rate obligation to changes in
interest rates is generally greater than a comparable long-term bond
issued by the same issuer and with similar credit quality, redemption
and maturity provisions. Inverse floating rate obligations may be
volatile and involve leverage risk.
Inflation-linked security risk. Unlike a conventional bond, whose issuer
makes regular fixed interest payments and repays the face value of the
bond at maturity, an inflation-indexed security provides principal
payments and interest payments, both of which are adjusted over time to
reflect a rise (inflation) or a drop (deflation) in the general price
level. The inflation index generally used is the
18
non-seasonally adjusted index, which is not statistically smoothed to
overcome highs and lows observed at different points each year. The use
of the non-seasonally adjusted index can cause the fund's income level
to fluctuate. As inflationary expectations increase, inflation-linked
securities will become more attractive, because they protect future
interest payments against inflation. Conversely, as inflationary
concerns decrease, inflation-linked securities will become less
attractive and less valuable. The non-seasonally adjusted index used may
not accurately measure the real rate of inflation. Inflation-linked
securities may lose value or interest payments on such securities may
decline in the event that the actual rate of inflation is different than
the rate of the non-seasonally adjusted index, and losses may exceed
those experienced by other debt securities with similar durations. The
value of inflation-linked securities may not be directly correlated to
changes in interest rates, for example if interest rates rise for
reasons other than inflation.
Risks of zero coupon bonds, payment in kind, deferred and contingent
payment securities. Zero coupon bonds (which do not pay interest until
maturity) and payment in kind securities (which pay interest in the form
of additional securities) may be more speculative and may fluctuate more
in value than securities which pay income periodically and in cash.
These securities are more likely to respond to changes in interest rates
than interest-bearing securities having similar maturities and credit
quality. These securities are more sensitive to the credit quality of
the underlying issuer. Payment in kind securities may be difficult to
value because their continuing accruals require judgments about the
collectability of the deferred payments and the value of any collateral.
Deferred interest securities are obligations that generally provide for
a period of delay before the regular payment of interest begins and are
issued at a significant discount from face value. The interest rate on
contingent payment securities is determined by the outcome of an event,
such as the performance of a financial index. If the financial index
does not increase by a prescribed amount, the fund may receive no
interest. Unlike bonds that pay interest throughout the period to
maturity, the fund generally will realize no cash until maturity and, if
the issuer defaults, the fund may obtain no return at all on its
investment. In addition, although the fund receives no periodic cash
payments on such securities, the fund is deemed for tax purposes to
receive income from such securities, which applicable tax rules require
the fund to distribute to shareholders. Such distributions may be
taxable when distributed to shareholders and, in addition, could reduce
the fund's reserve position and require the fund to sell securities and
incur a gain or loss at a time it may not otherwise want in order to
provide the cash necessary for these distributions.
Repurchase agreement risk. In the event that the other party to a
repurchase agreement defaults on its obligations, 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. In addition, if the fund is characterized by a court as an
unsecured creditor, it would be at risk of losing some or all of the
principal and interest involved in the transaction.
Risks of equity and fixed income investments
Risks of investing in the underlying equity and fixed income funds may
include:
Portfolio selection risk. The adviser's judgment about the
attractiveness, relative value or potential appreciation of an equity
security, or about the quality, relative yield or relative value of a
fixed income security, or about a particular sector, region or market
segment, or about an investment strategy, or about interest rates, may
prove to be incorrect.
Liquidity risk. Liquidity risk exists when particular investments are
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.
Markets may become illiquid when, for instance, there are few, if any,
interested buyers and sellers or when dealers are unwilling to make a
market for certain securities or when dealer market-making capacity is
otherwise reduced, and this is more likely to occur as a result of the
reduction of market support activity by the Federal Reserve. A lack of
liquidity or other adverse credit market conditions may affect the
fund's ability to sell the securities in which it invests or to find and
purchase suitable investments. 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. 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. If an auction fails for an auction rate
security, there may be no secondary market for the security and the fund
may be forced to hold the security until the security is refinanced by
the issuer or a secondary market develops. To the extent the fund holds
a material percentage of the outstanding debt securities of an issuer,
this practice may impact adversely the liquidity and market value of
those investments.
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.
19
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:
- Less information about non-U.S. issuers or markets may be available
due to less rigorous disclosure or accounting standards or
regulatory practices;
- 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;
- 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;
- The economies of non-U.S. countries may grow at slower rates than
expected or may experience a downturn or recession;
- Economic, political, regulatory and social developments may
adversely affect the securities markets;
- 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;
- Withholding and other non-U.S. taxes may decrease the fund's return;
- 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;
- 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;
- 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;
- Investing in depositary receipts are subject to many of the same
risks as investing directly in non-U.S. issuers.
Additional risks of investing in emerging markets include:
- The extent of economic development, political stability, market
depth, infrastructure, capitalization and regulatory oversight can
be less than in more developed markets;
- Emerging market countries may experience rising interest rates, or,
more significantly, rapid inflation or hyperinflation;
- The fund could experience a loss from settlement and custody
practices in some emerging markets;
- The possibility that a counterparty may not complete a currency or
securities transaction;
- Low trading volumes may result in a lack of liquidity, and in
extreme price volatility.
Currency risk. Because the fund may invest in non-U.S. currencies,
securities denominated in non-U.S. currencies, and other
currency-related investments, the fund is subject to currency risk,
meaning that the fund could experience losses based on changes in the
exchange rate between non-U.S. currencies and the U.S. dollar, or as a
result of currency conversion costs. Currency exchange rates can be
volatile, and are affected by factors such as general economic
conditions, the actions of the U.S. and foreign governments or central
banks, the imposition of currency controls and speculation.
Forward foreign currency transactions risk. To the extent that the fund
enters into forward foreign currency transactions, it may not fully
benefit from or may lose money on the transactions if changes in
currency rates do not occur as anticipated or do not correspond
accurately to changes in the value of the fund's holdings, or if the
counterparty defaults. Such transactions may also prevent the fund from
realizing profits on favorable movements in exchange rates. Risk of
counterparty default is greater for counterparties located in emerging
markets. The fund's ability to use forward foreign currency transactions
successfully depends on a number of factors, including the forward
foreign currency transactions being available at prices that are not too
costly, the availability of liquid markets, and Pioneer's judgment
regarding the direction of changes in currency exchange rates.
Derivatives risk. Using options, swaps, futures and other derivatives
exposes the fund to additional risks, 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 fund, and they can
disproportionately 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. Some 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
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 or
20
if the clearing firm through which the derivative has been traded
becomes insolvent. 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 be unable to terminate or sell its derivative positions. In fact,
many over-the-counter derivative instruments will not have liquidity
beyond the counterparty to the instrument. Some derivatives may involve
the risk of improper valuation. The fund's use of derivatives may also
increase the amount of taxes payable by shareholders. 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. 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. New
regulations are changing the derivatives markets. The regulations may
make using derivatives more costly, may limit their availability, or may
otherwise adversely affect their value or performance. For derivatives
that are required to be traded through a clearinghouse or exchange, the
fund also will be exposed to the credit risk of the clearinghouse and
the broker that submits trades for the fund. It is possible that certain
derivatives that are required to be cleared, such as certain swap
contracts, will not be accepted for clearing. In addition, regulated
trading facilities for swap contracts are relatively new; they may not
function as intended, which could impair the ability to enter into swap
contracts. The extent and impact of the regulations are not yet fully
known and may not be for some time.
Credit default swap risk. Credit default swap contracts, a type of
derivative instrument, involve special risks and may result in losses to
the fund. Credit default swaps may in some cases be illiquid, and they
increase credit risk since the fund has exposure to both the issuer of
the referenced obligation and the counterparty to the credit default
swap. Swaps may be difficult to unwind or terminate. Certain index-based
credit default swaps are structured in tranches, whereby junior tranches
assume greater default risk than senior tranches. The absence of a
central exchange or market for swap transactions has led, in some
instances, to difficulties in trading and valuation, especially in the
event of market disruptions. New regulations require many kinds of swaps
to be executed through a regulated exchange or market facility and
cleared through a regulated clearinghouse. 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. The fund will be required to trade many
swaps through a broker who is a member of the clearinghouse. The broker
may require the fund to post margin to the broker as a down payment on
the fund's obligations and may change the amount of margin required from
time to time. 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 clearinghouse will be the fund's
counterparty for the derivatives trades. The fund will take the risk
that the counterparty defaults. The fund also may be exposed to
additional risks as a result of the new regulations. The extent and
impact of the new regulations are not yet fully known and may not be for
some time.
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 or creates
investment risk with respect to 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.
Commodity investments risk. Certain underlying funds may invest directly
or indirectly in commodities. Exposure to the commodities markets may
subject the fund to greater volatility than investments in other
securities. The value of commodity-linked notes and other
commodity-linked derivatives may be affected by changes in overall
market movements, commodity index volatility, changes in interest rates,
or factors affecting a particular industry or commodity, such as
drought, floods, weather, livestock disease, embargoes, tariffs and
international economic, political and regulatory developments. The
prices of energy, industrial metals, precious metals, agriculture and
livestock sector commodities may fluctuate widely and rapidly due to
factors such as changes in value, supply and demand and governmental
regulatory policies. Commodity-related investments may be more volatile
and less liquid than the underlying commodities, instruments or
measures, which may make it difficult for such investments to be sold at
a price acceptable to the adviser or to accurately value them.
Commodity-related investments are subject to the credit risks associated
with the issuer, and their values may decline substantially if the
issuer's creditworthiness deteriorates. As a result, returns of
commodity-linked investments may deviate significantly from the return
of the underlying commodity, instruments or measures. The fund may
receive lower interest payments (or not receive any of the interest due)
on an investment in a commodity-linked note if there is a loss of value
of the underlying investment. Further, to the extent that the amount of
principal to be repaid upon maturity is limited to the value of a
particular commodity, commodity index or other economic variable, the
fund might not receive a portion (or any) of the principal at maturity
of the investment or upon earlier exchange.
21
Non-diversification risk. To the extent an underlying fund is not
diversified, the underlying fund can invest a higher percentage of its
assets in the securities of any one or more issuers than a diversified
fund. Being non-diversified may magnify the fund's losses from adverse
events affecting a particular issuer.
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 securities that trade in thin or
volatile markets. If markets make it difficult to value some
investments, the fund may value these investments using more subjective
methods, such as 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 security 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.
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 taxable shareowners to incur
a higher level of taxable income or capital gains.
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 objectives.
Comparison of Fees and Expenses
Shareholders of the Acquiring Fund pay various fees and expenses, either
directly or indirectly. The expenses in the tables appearing below are based on
for the Acquired Fund, the expenses of the Acquired Fund for the twelve-month
period ended January 31, 2014. Future expenses for all share classes may be
greater or less. The tables also show the pro forma expenses of the combined
fund assuming the Reorganization occurred on January 31, 2014.
[Enlarge/Download Table]
Pioneer Pioneer
Ibbotson Ibbotson
Aggressive Growth
Allocation Allocation Combined Fund
Fund Fund (Pro Forma
(12 months (12 months 12 months
ended ended ended
January 31, January 31, January 31,
2014) 2014) 2014)
-----------------------------------------------------------------------------------------------
Shareholder transaction fees
(paid directly from your investment) Class A(4) Class A Class A
Maximum sales charge (load) when you buy
shares as a percentage of offering price 5.75% 5.75% 5.75%
Maximum deferred sales charge (load) as a percentage
of offering price or the amount you receive when
you sell shares, whichever is less None None None
Redemption fee as a percentage of amount
redeemed, if applicable None None None
Annual Fund operating expenses (deducted from
fund assets) as a % of average daily net assets
Management Fee 0.13% 0.13% 0.13%
Distribution and Service (12b-1) Fee 0.25% 0.25% 0.25%
Other Expenses 0.45% 0.32% 0.32%
Acquired Fund Fees and Expenses (1) 0.89% 0.85% 0.66%
Total Annual Fund Operating Expenses 1.72% 1.55% 1.36%
-----------------------------------------------------------------------------------------------
Less: Fee Waiver and Expense Limitations (2) (3) 0.00% 0.00% 0.00%
Net Expenses 1.72% 1.55% 1.36%
-----------------------------------------------------------------------------------------------
22
[Enlarge/Download Table]
Pioneer Pioneer Pioneer Pioneer
Ibbotson Ibbotson Ibbotson Ibbotson
Aggressive Growth Aggressive Growth
Allocation Allocation Combined Fund Allocation Allocation Combined Fund
Fund Fund (Pro Forma Fund Fund (Pro Forma
(12 months (12 months 12 months (12 months (12 months 12 months
ended ended ended ended ended ended
January 31, January 31, January 31, January 31, January 31, January 31,
2014) 2014) 2014) 2014) 2014) 2014)
------------------------------------------------------------------------------------------------------------------------------------
Shareholder transaction fees
(paid directly from your investment) Class C Class C Class C Class Y Class Y Class Y
Maximum sales charge (load) when you buy
shares as a percentage of offering price None None None None None None
Maximum deferred sales charge (load) as a percentage
of offering price or the amount you receive when
you sell shares, whichever is less 1.00% 1.00% 1.00% None None None
Redemption fee as a percentage of amount
redeemed, if applicable None None None None None None
Annual Fund operating expenses (deducted from
fund assets) as a % of average daily net assets
Management Fee 0.13% 0.13% 0.13% 0.13% 0.13% 0.13%
Distribution and Service (12b-1) Fee 1.00% 1.00% 1.00% None None None
Other Expenses 0.39% 0.26% 0.28% 0.68% 0.30% 0.39%
Acquired Fund Fees and Expenses(1) 0.89% 0.85% 0.66% 0.89% 0.85% 0.66%
Total Annual Fund Operating Expenses 2.41% 2.24% 2.07% 1.70% 1.28% 1.18%
------------------------------------------------------------------------------------------------------------------------------------
Less: Fee Waiver and Expense Limitations(2) (3) 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Net Expenses 2.41% 2.24% 2.07% 1.70% 1.28% 1.18%
------------------------------------------------------------------------------------------------------------------------------------
-------------------
(1) Total annual fund operating expenses in the table, before and after fee
waiver and expense reimbursement, may be higher than the corresponding ratio
of expenses to average net assets, which do not include acquired fund fees
and expenses.
(2) Pioneer has contractually agreed to limit ordinary operating expenses
(ordinary operating expenses means all fund expenses other than
extraordinary expenses, such as litigation, taxes and brokerage commissions)
to the extent required to reduce the Acquired Fund's expenses to 0.85% and
1.64% of the average daily net assets attributable to Class A shares and
Class C shares, respectively. Acquired Fund Fees and Expenses are not
included in the expense limitations. This expense limitation is in effect
through December 1, 2015. 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 fund's
investment adviser and the Board of Trustees. The expense limitation does
not limit the expenses of the underlying funds indirectly incurred by a
shareholder.
(3) Pioneer has contractually agreed to limit ordinary operating expenses
(ordinary operating expenses means all fund expenses other than
extraordinary expenses, such as litigation, taxes and brokerage commissions)
to the extent required to reduce the Acquiring Fund's expenses to 0.70% and
1.45% of the average daily net assets attributable to Class A shares and
Class C shares, respectively. Acquired Fund Fees and Expenses are not
included in the expense limitations. This extension of expense limitation is
in effect through December 1, 2015. 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 fund's investment adviser and the Board of Trustees. The expense
limitation does not limit the expenses of the underlying funds indirectly
incurred by a shareholder.
(4) Class B shares of the Acquired Fund will be converted to Class A shares of
the Acquired Fund on November 10, 2014, prior to the Closing Date.
Accordingly, current Class B shareholders of the Acquired Fund will be Class
A shareholders of the Acquired Fund on the Closing Date, and will receive
Class A shares of the Acquiring Fund in the Reorganization.
Examples:
The examples are intended to help you compare the cost of investing in each fund
with the cost of investing in other mutual funds. The examples assume that you
invest $10,000 in each fund for the time periods shown, and then, except as
indicated, redeem all of your shares at the end of those periods. The examples
also assume that (a) your investment has a 5% return each year and (b) each
fund's total annual operating expenses remain the same except for year one
(which considers the effect of the expense limitation). Pro forma expenses are
included assuming consummation of the Reorganization as of January 31, 2014. The
examples are for comparison purposes only and are not a representation of any
fund's actual expenses or returns, either past or future. Although your actual
costs may be higher or lower, based on these assumptions your costs would be:
23
[Enlarge/Download Table]
Pioneer Pioneer
Ibbotson Ibbotson
Aggressive Growth
Number of years Allocation Allocation Combined Fund
you own your shares Fund Fund (Pro Forma)
-----------------------------------------------------------------------------------------------------------
Class A - assuming redemption at end of period
Year 1 $ 740 $ 724 $ 706
Year 3 $1,086 $1,036 $ 981
Year 5 $1,455 $1,371 $1,277
Year 10 $2,488 $2,314 $2,116
Class A - assuming no redemption
Year 1 $ 740 $ 724 $ 706
Year 3 $1,086 $1,036 $ 981
Year 5 $1,455 $1,371 $1,277
Year 10 $2,488 $2,314 $2,116
Class C - assuming redemption at end of period
Year 1 $ 344 $ 327 $ 310
Year 3 $ 751 $ 700 $ 649
Year 5 $1,285 $1,200 $1,114
Year 10 $2,746 $2,575 $2,400
Class C - assuming no redemption
Year 1 $ 244 $ 227 $ 210
Year 3 $ 751 $ 700 $ 649
Year 5 $1,285 $1,200 $1,114
Year 10 $2,746 $2,575 $2,400
Class Y - with or without redemption at end of period
Year 1 $ 173 $ 130 $ 120
Year 3 $ 536 $ 406 $ 375
Year 5 $ 923 $ 702 $ 649
Year 10 $2,009 $1,545 $1,432
24
Comparison of the Funds' Past Performance
The bar charts and tables below indicate the risks and volatility of an
investment in the funds by showing how the funds have performed in the past. The
bar charts show changes in the performance of each fund's Class A shares from
calendar year to calendar year. The tables show average annual total returns for
each class of shares of a fund over time and compare these returns to the
returns of the Standard and Poor's 500 Index and the Barclays Capital Aggregate
Bond Index, each 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. A
fund's past performance (before and after taxes) does not necessarily indicate
how it will perform in the future. The bar charts do 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.
Ibbotson Associates, Inc. served as each fund's sub-adviser for all periods
shown. As discussed above, Pioneer will be directly responsible for portfolio
management decisions upon completion of the Reorganization.
Effective upon completion of the Reorganization, the MSCI World Index will
replace the Standard and Poor's 500 Index as the benchmark for the fund's equity
component. Pioneer believes that the MSCI World Index will better reflect the
investment approach and portfolio composition of the combined fund than the
Standard and Poor's 500 Index. In addition, the combined fund will compare its
performance to the returns of a blended benchmark (80% MSCI World Index/20%
Barclays Capital Aggregate Bond Index).
Pioneer Ibbotson Aggressive Allocation Fund's
Annual Returns -- Class A Shares (%)*
(Years ended December 31)
[bar chart]
'05 9.64
'06 14.20
'07 5.33
'08 -39.01
'09 31.26
'10 13.92
'11 -4.61
'12 11.43
'13 21.71
At June 30, 2014, the year-to-date return was 20.70%.
-------------------
* During the period shown in the bar chart, the Pioneer Ibbotson Aggressive
Allocation Fund's highest quarterly return was 20.12% for the quarter ended
6/30/2009, and the lowest quarterly return was -22.11% for the quarter ended
12/31/2008.
25
Pioneer Ibbotson Growth Allocation Fund's
Annual Returns -- Class A Shares (%)*
(Years ended December 31)
[bar chart]
'05 8.24
'06 12.49
'07 5.47
'08 -35.25
'09 30.69
'10 13.17
'11 -3.30
'12 11.00
'13 18.94
At June 30, 2014, the year-to-date return was 18.35%.
-------------------
* During the period shown in the bar chart, the Pioneer Ibbotson Growth
Allocation Fund's highest quarterly return was 18.16% for the quarter ended
6/30/2009, and the lowest quarterly return was -20.04% for the quarter ended
12/31/2008.
26
Average Annual Total Returns (%)
(for periods ended December 31, 2013)
[Enlarge/Download Table]
Since Inception
The Acquired Fund 1 Year 5 Years Inception Date
----------------------------------------------------------------------------------------------------------------------
Class A 8/9/04
Return Before Taxes 14.72 12.77 5.80
Return After Taxes on Distributions 14.24 12.48 5.24
Return After Taxes on Distributions and
Sale of Fund Shares 8.33 10.14 4.63
----------------------------------------------------------------------------------------------------------------------
Class C 20.89 13.30 5.50 8/9/04
----------------------------------------------------------------------------------------------------------------------
Class Y 21.69 14.23 5.07 9/26/05
----------------------------------------------------------------------------------------------------------------------
Standard & Poor's 500 Index (reflects no
deduction for fees, expenses or taxes) 32.39 17.94 8.28 8/9/04
----------------------------------------------------------------------------------------------------------------------
Barclays Capital Aggregate Bond Index (reflects no
deduction for fees, expenses or taxes) -2.02 4.44 4.60 8/9/04
----------------------------------------------------------------------------------------------------------------------
MSCI World Index ND IX 26.68 15.02 7.72 8/9/04
----------------------------------------------------------------------------------------------------------------------
Blended Benchmark (80% MSCI World Index/20%
Barclays Capital Aggregate Bond Index) 20.94 12.90 7.10 8/9/04
----------------------------------------------------------------------------------------------------------------------
[Enlarge/Download Table]
Since Inception
The Acquiring Fund 1 Year 5 Years Inception Date
----------------------------------------------------------------------------------------------------------------------
Class A 8/9/04
Return Before Taxes 12.12 12.21 5.63
Return After Taxes on Distributions 11.44 11.67 4.94
Return After Taxes on Distributions and
Sale of Fund Shares 6.86 9.57 4.40
----------------------------------------------------------------------------------------------------------------------
Class C 18.10 12.78 5.21 8/9/04
----------------------------------------------------------------------------------------------------------------------
Class Y 19.28 13.69 5.54 9/26/05
----------------------------------------------------------------------------------------------------------------------
Standard & Poor's 500 Index (reflects no
deduction for fees, expenses or taxes) 32.37 17.94 8.28 8/9/04
----------------------------------------------------------------------------------------------------------------------
Barclays Capital Aggregate Bond Index (reflects no
deduction for fees, expenses or taxes) -2.02 4.44 4.60 8/9/04
----------------------------------------------------------------------------------------------------------------------
MSCI World Index ND IX 26.68 15.02 7.72 8/9/04
----------------------------------------------------------------------------------------------------------------------
Blended Benchmark (80% MSCI World Index/20%
Barclays Capital Aggregate Bond Index) 20.94 12.90 7.10 8/9/04
----------------------------------------------------------------------------------------------------------------------
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 a Pioneer Fund's 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 and Class Y shares of each Pioneer Fund will vary.
27
[Enlarge/Download Table]
---------------------------------------------------------------------------------------------------------------------------------
The Acquired Fund The Acquiring Fund, Post-Reorganization
---------------------------------------------------------------------------------------------------------------------------------
Management fees The fund pays Pioneer a fee for managing the fund The fund pays Pioneer a fee for managing the fund
and to cover the cost of providing certain services to and to cover the cost of providing certain services
the fund. to the fund.
Pioneer's annual fee is equal to: 0.13% of the fund's Effective upon completion of the Reorganization,
average daily net assets on investments in underlying Pioneer's annual fee will be equal to: 0.13% of the
funds managed by Pioneer (and cash) and 0.17% of fund's average daily net assets, up to $2.5 billion;
the fund's average daily net assets on other 0.11% of the fund's average daily net assets, from
investments, up to $2.5 billion; 0.11% of the fund's over $2.5 billion up to $4 billion; 0.10% of the fund's
average daily net assets on investments in underlying average daily net assets, from over $4 billion up to
funds managed by Pioneer (and cash) and 0.14% of $5.5 billion; 0.08% of the fund's average daily net
the fund's average daily net assets on other assets, over $5.5 billion.
investments, from over $2.5 billion up to $4 billion;
0.10% of the fund's average daily net assets on For the fiscal year ended July 31, 2013, the fund
investments in underlying funds managed by Pioneer paid management fees (excluding waivers and/or
(and cash) and 0.12% of the fund's average daily net assumption of expenses) equivalent to 0.13% of the
assets on other investments, from over $4 billion up fund's average daily net assets.
to $5.5 billion; 0.08% of the fund's average daily net
assets on investments in underlying funds managed A discussion regarding the basis for the Board of
by Pioneer (and cash) and 0.10% of the fund's Trustees' approval of the management contract and
average daily net assets on other investments, over the subadvisory agreement with Ibbotson are
$5.5 billion and up to $7 billion; and 0.08% of the available in the fund's semiannual report to
fund's average daily net assets on investments in shareholders for the period ended January 31, 2014.
underlying funds managed by Pioneer (and cash)
and 0.09% of the fund's average daily net assets on
other investments, over $7 billion.
Since all of the underlying funds are currently
managed by Pioneer, the management fee is currently
equal to 0.13% of the fund's average daily net assets.
The fee is accrued daily and paid monthly. Pioneer,
and not the fund, pays a portion of the fee it receives
from the fund to Ibbotson as compensation for
Ibbotson's services to the fund.
For the fiscal year ended July 31, 2013, the fund paid
management fees (excluding waivers and/or
assumption of expenses) equivalent to 0.13% of the
fund's average daily net assets.
A discussion regarding the basis for the Board of
Trustees' approval of the management contract and
the subadvisory agreement with Ibbotson are available
in the fund's semiannual report to shareholders for
the period ended January 31, 2014.
---------------------------------------------------------------------------------------------------------------------------------
For a comparison of the gross and net expenses of each fund, please see the class fee tables in the "Comparison
of Fees and Expenses" section starting on page 22.
---------------------------------------------------------------------------------------------------------------------------------
28
Reasons for the Reorganization
The Board of Trustees of the Acquired Fund believes that the proposed
Reorganization will be advantageous to the shareholders of the Acquired Fund for
several reasons. The Trustees considered the following matters, among others, in
approving the proposal.
First, the Board considered that your fund and the Acquiring Fund have
similar investment objectives and investment policies. The Board considered that
your fund's investment objective is long-term capital growth and the Acquiring
Fund's investment objective is long-term capital growth and current income. The
Board considered that like your fund, the Acquiring Fund is a "fund of funds"
that allocates its assets primarily among other mutual funds, including mutual
funds managed by Pioneer, that invest in asset classes consistent with the
fund's objectives. The Board considered that the Acquiring Fund may allocate a
greater percentage of its assets to fixed income and other investments than your
fund. The Board also considered that, unlike your fund, the Acquiring Fund will
have the flexibility to invest in a broader range of funds than your fund,
including exchange-traded funds and mutual funds that are not managed by
Pioneer, and will be permitted to invest in derivative instruments for hedging
and other purposes.
Second, the Board considered that Pioneer will assume responsibility for
making portfolio management decisions for the Acquiring Fund. The Board
considered that while your fund's assets are allocated among asset classes and
funds according to fixed ranges, Pioneer intends to manage the Acquiring Fund
using a flexible allocation approach that does not rely on fixed ranges for
asset classes or funds, and intends to employ management strategies that seek to
keep the Acquiring Fund's annualized volatility (i.e., fluctuations of value)
within a targeted range.
Third, the Board considered that the management fees paid by the combined
fund will be the same as or lower than the management fees paid by your fund.
Fourth, the Board considered that the combined fund may be better positioned
to attract assets than your fund and that the larger size of the combined fund
may result in greater economies of scale because the fund may be able to reduce
per share expenses as fixed expenses shared over a larger asset base.
Fifth, the Board considered that the historical performance of the Acquiring
Fund was higher than the historical performance of your fund for the one, three
and five-year periods ended January 31, 2014, and slightly lower than your
fund's performance since the fund's inception on August 9, 2004. However, in
considering the funds' performance, the Board noted that Ibbotson Associates,
Inc. served as each fund's sub-adviser during each period under consideration,
and the Acquiring Fund's investment strategies would be different from those
used in the fund during each period of consideration.
Sixth, the Board considered the ability of the combined fund to utilize
certain tax capital-loss carryforwards in the future.
Seventh, the Board considered that the Acquired Fund would bear
approximately 25% of the expenses incurred in connection with the
Reorganization, including expenses associated with the preparation, printing and
mailing of any shareholder communications (including this Information Statement/
Prospectus), any filings with the SEC and other governmental agencies in
connection with the Reorganization, audit fees and legal fees, and the Acquiring
Fund would likewise bear approximately 25% of these costs. The Board considered
that Pioneer would bear the remaining 50% of the expenses incurred in connection
with the Reorganization. In approving the allocation of Reorganization costs,
the Board considered information provided by Pioneer with respect to the
relative short-term economic benefits and costs to shareholders anticipated to
result from the Reorganization.
Eighth, the Board recognized that the portfolio managers of the combined
fund may conclude that a significant number of holdings of the Acquired Fund are
not consistent with the combined fund's long-term investment strategy and may
dispose of such positions. The Board considered that the disposition of
securities following the Reorganization could result in capital gains to the
combined fund. The Board noted that the disposition of securities is not
expected to result in brokerage expenses to the combined fund. However, the
Board considered that the actual tax consequences of any disposition of
portfolio securities will vary depending upon the specific security(ies) being
sold.
Ninth, the Board considered that the funds' investment adviser and principal
distributor would benefit from the Reorganization. For example, Pioneer might
achieve cost savings from managing one larger fund compared to managing more
than one fund with similar investment strategies. The consolidated portfolio
management effort also might result in time and personnel savings and the
preparation of fewer reports and regulatory filings, as well as prospectus
disclosure, for one fund instead of two. The Board believes that the
Reorganization, in the long-term, could result in a decrease in the combined
fund's gross expenses.
Tenth, the Board also considered that the Reorganization presents an
excellent opportunity for the shareholders of each fund to become investors in a
combined fund that has a larger asset size than either fund alone without the
obligation to pay commissions or other transaction costs that a fund normally
incurs when purchasing securities. This opportunity provides an economic benefit
to both funds and their shareholders.
29
CAPITALIZATION
The following table sets forth the capitalization of each Pioneer Fund as
of July 31, 2014, and the pro forma combined capitalization of the combined fund
as if the Reorganization occurred on that date. The actual exchange ratios on
the Closing Date may vary from the exchange ratios indicated. This is due to
changes in the market value of the portfolio securities of the Pioneer Funds
between August 15, 2014 and the Closing Date, changes in the amount of
undistributed net investment income and net realized capital gains of the
Pioneer Funds during that period resulting from income and distributions, and
changes in the accrued liabilities of the Pioneer Funds during the same period.
[Enlarge/Download Table]
Pioneer
Ibbotson Aggressive Pioneer Combined Fund
Allocation Ibbotson Growth Pro Forma Pro Forma
Fund Allocation Fund Adjustments(1) Combined Fund
(August 15, 2014) (August 15, 2014) (August 15, 2014) (August 15, 2014)
--------------------------------------------------------------------------------------------------------------
Net Assets
Class A(2) $107,847,390 $174,810,445 $ (38,017) $282,619,818
Class C $ 23,494,528 $ 64,190,391 $ (11,793) $ 87,673,126
Class Y $ 368,600 $ 1,043,122 $ (190) $ 1,411,532
Total Net Assets $131,710,518 $240,043,958 $ (50,000) $371,704,476
Net Asset Value Per Share
Class A(2) $ 14.09 $ 13.71 $ 13.71
Class C $ 13.35 $ 12.93 $ 12.93
Class Y $ 14.20 $ 13.99 $ 13.99
Shares Outstanding
Class A(2) 7,678,635 12,849,404 20,715,734
Class C 1,760,483 4,966,172 6,783,228
Class Y 25,965 74,539 100,886
(1) The pro forma data reflects adjustments to account for the combined expenses
of the Reorganization borne by the Acquired Fund and the Acquiring Fund. The
expenses of the Reorganization borne by the funds are estimated in the
aggregate to be $50,000. Pioneer will bear the remaining expenses of the
Reorganization.
(2) The data reflects adjustments to reflect that Class B shares of each Fund
will be converted to Class A shares of such Fund on November 10, 2014, prior
to the Closing Date.
It is impossible to predict how many shares of the combined fund will
actually be received and distributed by your fund on the Closing Date. The table
should not be relied upon to determine the amount of combined fund shares that
will actually be received and distributed.
BOARDS' EVALUATION OF THE REORGANIZATION
For the reasons described above, the Board of Trustees of your fund,
including the Independent Trustees, approved the Reorganization. In particular,
the Board of Trustees determined that the Reorganization is in the best
interests of your fund and that the interests of your fund's shareholders would
not be diluted as a result of the Reorganization. Similarly, the Board of
Trustees of the Acquiring Fund, including the Independent Trustees, approved the
Reorganization. The Trustees also determined that the Reorganization is in the
best interests of that fund and that the interests of the shareholders of that
fund would not be diluted as a result of the Reorganization.
30
OTHER IMPORTANT INFORMATION CONCERNING THE REORGANIZATION
Portfolio Securities
After the closing of the Reorganization, management will analyze and
evaluate the portfolio securities of the combined fund. Consistent with the
combined fund's investment objective and policies, any restrictions imposed by
the Code and in the best interests of the shareholders of the combined fund
(including former shareholders of your fund), management will influence the
extent and duration to which the portfolio securities of your fund and the
Acquiring Fund will be maintained by the combined fund. It is possible that,
although it is not necessary to dispose of portfolio securities in order to
effect the Reorganization, the portfolio manager of the combined fund may
conclude that some of the holdings of the combined fund are not consistent with
the combined fund's long-term investment strategy, and, accordingly, there may
be dispositions of some of the portfolio securities of the combined fund
following the Reorganization. Subject to market conditions at the time of any
such disposition, the disposition of the portfolio securities by the combined
fund may result in a capital gain or loss. The actual tax consequences of any
disposition of portfolio securities will vary depending upon the specific
security(ies) being sold, other capital gains and losses that may be recognized,
and the combined fund's ability to use any available tax loss carryforwards. The
disposition of portfolio securities is not expected to result in brokerage
expense to the combined fund.
Tax Capital Loss Carryforwards
Federal income tax law permits a regulated investment company to carry
forward net capital losses that arose in tax years that began on or before
December 22, 2010 ("Pre-2011 Losses") for a period of up to eight taxable years.
Net capital losses that arise in tax years beginning after December 22, 2010
("Post-2010 Losses") may generally be carried forward without limit, and such
carryforwards must be fully utilized before the regulated investment company is
permitted to utilize carryforwards of Pre-2011 Losses. Presently, Pioneer
Ibbotson Aggressive Allocation Fund and Pioneer Ibbotson Growth Allocation Fund
have net capital loss carryforwards from their prior taxable years, as follows:
[Download Table]
--------------------------------------------------------------------------------
Fund Capital Loss Carryforward
--------------------------------------------------------------------------------
Pioneer Ibbotson Aggressive Allocation Fund $24,127,121
--------------------------------------------------------------------------------
Pioneer Ibbotson Growth Allocation Fund $31,221,769
--------------------------------------------------------------------------------
Neither Fund has Post-2010 Losses. The Funds' Pre-2011 Losses and their
expiration dates are as follows:
[Download Table]
--------------------------------------------------------------------------------
Fund 2018 2019
--------------------------------------------------------------------------------
Pioneer Ibbotson Aggressive Allocation Fund $22,667,840 $1,459,281
--------------------------------------------------------------------------------
Pioneer Ibbotson Growth Allocation Fund $26,663,894 $4,557,875
--------------------------------------------------------------------------------
For the period ending on the Closing Date, each fund may have net realized
capital gains or losses and as of the Closing Date a fund may also have net
unrealized capital gains or losses.
The Reorganization may result in a number of different limitations on the
combined fund's ability to use realized and unrealized losses of the combining
funds. The discussion below describes the limitations that would apply based on
the funds' tax attributes and relative net asset values as of August 15, 2014.
Since the Reorganization is not expected to close until November 14, 2014, the
net current-year realized capital losses and net unrealized capital gains and
the effect of the limitations described may change significantly between now and
the completion of the Reorganization. Further, the ability of each Pioneer Fund
to use capital losses to offset gains (even in the absence of the
Reorganization) depends on factors other than loss limitations, such as the
future realization of capital gains or losses.
First, in the tax year of the combined fund in which the Reorganization
occurs, the combined fund will be able to use carryforwards of your fund's
capital losses (including from your fund's short taxable year ending on the
Closing Date), subject to the limitations described in the following paragraphs,
to offset only a prorated portion of the combined fund's capital gains for such
tax year, based on the number of days remaining in the combined fund's tax year
after the Closing Date.
Second, the Reorganization is expected to result in a limitation on the
combined fund's ability to use your fund's capital loss carryforwards in
subsequent tax years. This limitation, imposed by Section 382 of the Code, is
expected to apply because your fund has capital loss carryforwards and its
shareholders will own less than 50% of the combined fund immediately after the
Reorganization. The annual Section 382 limitation for periods following the
Reorganization generally will equal the product of the net asset value of your
Fund immediately prior to the Reorganization and the "long-term tax-exempt
rate," published by the Internal Revenue Service, in effect at the time of the
Reorganization (if the Reorganization had closed as of August 15, 2014, the
annual limitation would have been $4,135,710.27). This limitation may be
prorated in the taxable year of the Acquiring Fund in which the Reorganization
occurs based on the number of days
31
remaining after the Closing Date in such taxable year. This limitation may
result in some portion of your fund's capital loss carryforwards expiring
unused. The combined fund is expected to be able to use the Acquiring Fund's
capital loss carryforwards without any limitation imposed under Section 382 by
reason of the Reorganization.
Third, the Reorganization may result in a limitation on the combined fund's
ability to use loss carryforwards of the Acquiring Fund and a portion of losses
recognized by the Acquiring Fund in the taxable year in which the Reorganization
occurs to offset gains realized after the Reorganization that are attributable
to unrealized capital gains of your fund as of the Closing Date. That limitation
will apply if your fund's unrealized capital gains as of the Closing Date are at
least $10,000,000 or at least 15% of the net asset value of your fund as of the
Closing Date, and is currently expected to apply to the Reorganization.
As of August 15, 2014, the funds had the following current-year realized
capital gains and net unrealized gains:
[Enlarge/Download Table]
-------------------------------------------------------------------------------------------------------------
Fund Current-Year Realized Capital Gains Net Unrealized Gains
-------------------------------------------------------------------------------------------------------------
Pioneer Ibbotson Aggressive Allocation Fund $187,608 $40,762,542
-------------------------------------------------------------------------------------------------------------
Pioneer Ibbotson Growth Allocation Fund $387,394 $63,159,501
-------------------------------------------------------------------------------------------------------------
Fourth, the Reorganization will have the following additional effects on the
use of losses. Any capital loss carryforwards from prior years, any net
current-year capital losses, and, potentially, any unrealized capital losses
will benefit the shareholders of the combined fund, rather than only the
shareholders of the combining fund in which the loss originated. If the
Reorganization closes on a date other than your fund's regular year end, it will
cause your fund's Pre-2011 Losses, to the extent unused from time to time, to
expire one year earlier than the time they otherwise would have expired. Some
portion of your fund's carryforwards of Pre-2011 Losses could expire unutilized
as a result of the Reorganization and/or as a result of Post-2010 Losses of the
Acquiring Fund.
32
TERMS OF THE AGREEMENT AND PLAN OF REORGANIZATION
The Reorganization
o The Reorganization is scheduled to occur as of the close of business on
November 14, 2014 but may occur on such later date as the parties may
agree to in writing.
o The Acquired Fund will transfer all of its assets to the Acquiring Fund.
The Acquiring Fund will assume all of your fund's liabilities. The net
asset value of both Pioneer Funds will be computed as of the close of
regular trading on the New York Stock Exchange on the Closing Date.
o The Acquiring Fund will issue Class A, Class C and Class Y shares to the
Acquired Fund in amounts equal to the aggregate net asset value of the
Acquired Fund's Class A, Class C and Class Y shares, respectively. Class
B shares of the Acquired Fund will be converted to Class A shares of the
Acquired Fund on November 10, 2014, prior to the Closing Date.
Accordingly, current Class B shareholders of the Acquired Fund will be
Class A shareholders of the Acquired Fund on the Closing Date, and will
receive Class A shares of the Acquiring Fund in the Reorganization.
o Shares of the Acquiring Fund will immediately be distributed to you in
proportion to the relative net asset value of your holdings of shares of
the applicable class or classes of the Acquired Fund on the Closing
Date. As a result, the Acquired Fund's Class A shareholders will end up
as Class A shareholders of the Acquiring Fund, and the Acquired Fund's
Class C and Class Y shareholders will end up as Class C and Class Y
shareholders, respectively, of the Acquiring Fund. The net asset value
attributable to a class of shares of each fund will be determined using
the Pioneer Funds' valuation policies and procedures. Each fund's
valuation policies and procedures are identical.
o After the shares are issued, the Acquired Fund will be dissolved.
o No sales load, contingent deferred sales charge, commission, redemption
fee or other transactional fee will be charged as a result of the
Reorganization. After the Reorganization, any contingent deferred sales
charge that applied to Class A (if applicable) or Class C shares of the
Acquired Fund at the time of the Reorganization will continue to apply
for the remainder of the applicable holding period at the time of the
Reorganization. In calculating any applicable contingent deferred sales
charge, the period during which you held your shares will be included in
the holding period of the shares of the combined fund you receive as a
result of the Reorganization.
o The Reorganization generally is not expected to result in income, gain
or loss being recognized for federal income tax purposes by shareholders
of either Pioneer Fund involved in the Reorganization, or by either
Pioneer Fund involved in the Reorganization, except as set forth below
under the heading "Tax Status of the Reorganization." The Reorganization
will not take place unless both funds involved in the Reorganization
receive a tax opinion from Bingham McCutchen LLP, counsel to the funds,
as described below under the heading "Tax Status of the Reorganization".
Agreement and Plan of Reorganization
The Agreement and Plan of Reorganization with respect to the
Reorganization is attached as Exhibit A to this Information
Statement/Prospectus. Material provisions of the Agreement and Plan of
Reorganization are described below, but are qualified in their entirety by
the attached copy.
Cancellation of Share Certificates. If your shares are represented by
one or more share certificates before the Closing Date, on the Closing Date
all certificates will be canceled, will no longer evidence ownership of the
Acquired Fund's shares and will evidence ownership of shares of the combined
fund. The combined fund will not issue share certificates in the
Reorganization.
Conditions to Closing the Reorganization. The obligation of the Acquired
Fund to consummate the Reorganization is subject to the satisfaction of
certain conditions, including the performance by the Acquiring Fund of all
its obligations under the Agreement and Plan of Reorganization and the
receipt of all consents, orders and permits necessary to consummate the
Reorganization (see Agreement and Plan of Reorganization, Section 6).
The obligation of the Acquiring Fund to consummate the Reorganization is
subject to the satisfaction of certain conditions, including the Acquired
Fund's performance of all of its obligations under the Agreement and Plan of
Reorganization, the receipt of certain documents and financial statements
from that fund and the receipt of all consents, orders and permits necessary
to consummate the Reorganization (see Agreement and Plan of Reorganization,
Section 7).
The funds' obligations are subject to the receipt of a favorable opinion
of Bingham McCutchen LLP as to the federal income tax consequences of the
Reorganization (see Agreement and Plan of Reorganization, Section 8.4).
33
Termination of Agreement and Plan of Reorganization. The Board of
Trustees of either fund may terminate the Agreement and Plan of
Reorganization at any time before the Closing Date, if the Board believes
that proceeding with the Reorganization would no longer be in the best
interests of shareholders of the applicable fund.
Expenses of the Reorganization. Each fund will bear approximately 25% of
the expenses incurred in connection with the Reorganization, including
expenses associated with the preparation, printing and mailing of any
shareholder communications (including this Information
Statement/Prospectus), any filings with the SEC and other governmental
agencies in connection with the Reorganization, audit fees and legal fees
("Reorganization Costs"). Pioneer will bear the remaining 50% of the
Reorganization Costs.
34
TAX STATUS OF THE REORGANIZATION
The Reorganization is conditioned upon the receipt by each fund of an
opinion from Bingham McCutchen LLP, counsel to the Pioneer Funds,
substantially to the effect that, for federal income tax purposes:
o The transfer to the Acquiring Fund of all of your fund's assets in
exchange solely for the issuance of the Acquiring Fund's shares to your
fund and the assumption of all of your fund's liabilities by the
Acquiring Fund, followed by the distribution of the Acquiring Fund's
shares in complete liquidation of your fund, will constitute a
"reorganization" within the meaning of Section 368(a) of the Code, and
each fund will be a "party to a reorganization" within the meaning of
Section 368(b) of the Code;
o No gain or loss will be recognized by your fund upon (1) the transfer of
all of its assets to the Acquiring Fund as described above or (2) the
distribution by your fund of the Acquiring Fund's shares to your fund's
shareholders in complete liquidation of your fund, except for (A) any
gain or loss that may be recognized on the transfer of "section 1256
contracts" as defined in Section 1256(b) of the Code, (B) any gain that
may be recognized on the transfer of stock in a "passive foreign
investment company" as defined in Section 1297(a) of the Code, and (C)
any other gain or loss that may be required to be recognized as a result
of the closing of your fund's taxable year or upon the transfer of an
asset of your fund regardless of whether such transfer would otherwise
be a non-recognition transaction under the Code;
o The tax basis in the hands of the Acquiring Fund of the assets of your
fund transferred in the Reorganization will be the same as the tax basis
of the assets in the hands of your fund immediately before the transfer
of the assets, increased by the amount of gain (or decreased by the
amount of loss), if any, recognized by your fund on the transfer;
o The holding period of each asset of your fund in the hands of the
Acquiring Fund, other than assets with respect to which gain or loss is
required to be recognized in the Reorganization, will include the period
during which that asset was held by your fund (except where investment
activities of the Acquiring Fund will have the effect of reducing or
eliminating the holding period with respect to an asset);
o No gain or loss will be recognized by the Acquiring Fund upon its
receipt of your fund's assets solely in exchange for shares of the
Acquiring Fund and the assumption of your fund's liabilities;
o You will not recognize gain or loss upon the exchange of your shares for
shares of the Acquiring Fund as part of the Reorganization;
o The aggregate tax basis of Acquiring Fund shares you receive in the
Reorganization will be the same as the aggregate tax basis of the shares
of your fund you surrender in the exchange; and
o The holding period of Acquiring Fund shares you receive in the
Reorganization will include the holding period of the shares of your
fund that you surrender in the exchange, provided that you hold the
shares of your fund as capital assets on the date of the exchange.
In rendering such opinion, counsel shall rely upon, among other things,
certain facts, assumptions and representations of your fund and the Acquiring
Fund. The condition that each fund receives such an opinion may not be waived by
either fund.
No tax ruling has been or will be received from the Internal Revenue Service
("IRS") in connection with the Reorganization. An opinion of counsel is not
binding on the IRS or a court, and no assurance can be given that the IRS would
not assert, or a court would not sustain, a contrary position.
Immediately prior to the Reorganization, your fund will declare and pay a
dividend, which, together with all previous dividends, is intended to have the
effect of distributing to your fund's shareholders all of your fund's investment
company taxable income (computed without regard to the dividends-paid
deduction), all of its net tax-exempt income, and all of its net capital gain
(after deduction for any available capital loss carryover) for taxable years
ending on or prior to the Closing. The amount of such distribution to the
shareholders of your fund is estimated as of July 31, 2014 to be as set forth in
the table below. The amount set forth in the table below is an estimate based on
your fund's income and capital gains expected to be realized as if its taxable
year ended on the Closing Date. Amounts actually distributed to shareholders
immediately prior to the Reorganization may be higher or lower than the amounts
set forth in the table below.
[Download Table]
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Fund Distribution Amount (per share)
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Pioneer Ibbotson Aggressive Allocation Fund $0.089
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35
Such distributions will generally result in taxable income to you.
The foregoing discussion is very general and does not take into account any
considerations that may apply to certain classes of taxpayers who are subject to
special circumstances, such as shareholders who are not citizens of or residents
of the United States, insurance companies, tax-exempt organizations, financial
institutions, dealers in securities or foreign currencies, or persons who hold
their shares as part of a straddle or conversion transaction. You should consult
your tax adviser for the particular tax consequences to you of the transaction,
including the applicability of any state, local or foreign tax laws.
36
CLASSES OF SHARES OF THE FUNDS
The table below provides information regarding the characteristics and fee
structure of Class A, Class C and Class Y shares of the Pioneer Funds. The
policies disclosed below apply to each Pioneer Fund.
[Enlarge/Download Table]
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Class A sales The Class A shares of each Pioneer Fund have the same characteristics and fee structure.
charges and fees
o Class A shares are offered with an initial sales charge 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 PFD, each Pioneer Fund's distributor, of up to 5%, declining as
the size of your investment increases.
o There are no contingent deferred sales charges, except in certain circumstances
when no initial sales charge is charged.
o Class A shares are subject to distribution and service (12b-1) fees of up to
0.25% of average daily net assets. These fees are paid out of a Pioneer Fund's
assets on an ongoing basis. Over time these fees will increase the cost of
investments and may cost more than other types of sales charges.
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Class C sales The Class C shares of each Pioneer Fund have the same characteristics and fee structure.
charges and fees
o Class C shares are offered without an initial sales charge.
o Class C shares are subject to a contingent deferred sales charge of 1% if you
sell your shares within one year of purchase. Your investment firm may receive a
commission from PFD, each Pioneer Fund's distributor, at the time of your
purchase of up to 1%.
o Class C shares are subject to distribution and service (12b-1) fees of up to 1%
of average daily net assets. These fees are paid out of a Pioneer Fund's assets
on an ongoing basis. Over time these fees will increase the cost of investments
and may cost more than other types of sales charges.
o Class C shares do not convert to another share class.
o The maximum purchase amount (per transaction) for Class C Shares is $499,999.
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Class Y sales The Class Y shares of each Pioneer Fund have the same characteristics and fee structure.
charges and fees
o Class Y shares are offered without an initial sales charge.
o Class Y shares are not subject to a contingent deferred sales charge.
o Class Y shares are not subject to distribution and service (12b-1) fees.
o Initial investments are subject to a $5 million investment minimum, which may be
waived in some circumstances.
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37
BUYING, SELLING AND EXCHANGING SHARES OF THE FUNDS
The table below provides information regarding how to buy, sell and
exchange shares of the Pioneer Funds. The policies disclosed below apply to
each Pioneer Fund.
[Enlarge/Download Table]
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Buying, Selling and Exchanging Shares
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Buying shares You may buy shares from any investment firm that has a sales agreement or other
arrangement with PFD, the Pioneer Funds' 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 Pioneer, for your purchase of fund shares.
You may use securities you own to purchase shares of a Pioneer Fund provided that
Pioneer, in its sole discretion, determines that the securities are consistent with
a Pioneer Fund's objective and policies and their acquisition is in the best
interests of a Pioneer Fund.
If you have an existing non-retirement account, you may purchase shares of a Pioneer
Fund by telephone or online. Certain IRAs also may use the telephone purchase
privilege.
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Minimum initial Your initial investment must be at least $1,000 for Class A or Class C shares
investment and at least $5 million for Class Y shares. Additional investments must be at
least $100 for Class A shares, $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. There is no minimum additional investment amount
for Class Y shares.
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Maximum purchase Purchases of each Pioneer Fund shares are limited to $499,999 for Class C
amounts shares. These limits are applied on a per transaction basis. There is no maximum
purchase for Class A or Class Y shares.
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Exchanging shares 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. Each Pioneer Fund allows you to
exchange your shares at net asset value without charging you either an initial or
contingent deferred sales charge at the time of the exchange. 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.
You generally will have to pay income taxes on an exchange.
After you establish an eligible fund account, you can exchange shares of a Pioneer
Fund by telephone or online.
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Selling shares 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.
If you have any eligible non-retirement, account, you may sell up to
$100,000 per account per day by telephone or online. You may sell shares of a
Pioneer Fund held in a retirement plan account by telephone only if your account
is an eligible IRA (tax penalties may apply).
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Net asset value Each Pioneer Fund's net asset value is the value of its portfolio of securities
plus any other assets minus its accrued operating expenses and other
liabilities. Each Pioneer Fund calculates a net asset value for each class of
shares every day the New York Stock Exchange is open when regular trading closes
(normally 4:00 p.m. Eastern time).
You buy or sell shares at the share price. When you buy Class A shares, you pay an
initial sales charge unless you qualify for a waiver or reduced sales charge. When
you sell Class A or Class C shares, you may pay a contingent deferred sales charge
depending on how long you have owned your shares.
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38
ADDITIONAL INFORMATION ABOUT THE PIONEER FUNDS
Investment adviser
Pioneer, as each fund's investment adviser, selects the fund's investments and
oversees the fund's operations.
Pioneer is an indirect, wholly owned subsidiary of UniCredit S.P.A., one of the
largest banking groups in Italy. Pioneer is part of the global asset management
group providing investment management and financial services to mutual funds,
institutional and other clients. As of June 30, 2014, assets under management
were approximately $252 billion worldwide, including over $72 billion in
assets under management by Pioneer (and its U.S. affiliates).
Pioneer's main office is at 60 State Street, Boston, Massachusetts 02109.
The firm's U.S. mutual fund investment history includes creating one of the
first mutual funds in 1928.
Pioneer has received an order from the Securities and Exchange Commission that
permits Pioneer, subject to the approval of each Pioneer Fund's Board of
Trustees, to hire and terminate a subadviser that is not affiliated with Pioneer
(an "unaffiliated subadviser") or to materially modify an existing subadvisory
contract with an unaffiliated subadviser for the Pioneer Fund without
shareholder approval. Pioneer retains the ultimate responsibility to oversee and
recommend the hiring, termination and replacement of any unaffiliated
subadviser.
Portfolio managers
Day-to-day management of the Acquiring Fund's portfolio will be the
responsibility of the following members of Pioneer's fund-of-funds team:
John O'Toole is the Head of Multi-Asset Fund Solutions at Pioneer. Mr. O'Toole
is responsible for the management of asset allocation portfolios and the full
range of multi-asset products (fund of funds, segregated accounts and
unit-linked). As a member of the Strategy Committee, he formulates top-down,
macro asset allocation positioning. In addition, the Multi-Asset Fund Solutions
team is responsible for strategy selection across all asset classes, as well as
manager appraisal and selection in the construction of multi-asset and multi-
manager portfolios. Mr. O'Toole joined Pioneer in 2005. Mr. O'Toole has worked
in the investment industry since 1995.
Paul Weber leads the Fund Research and Manager Selection team. Prior to joining
the team in 2004, Mr. Weber worked on special projects with the Portfolio
Analytics team. Mr. Weber's primary areas of coverage include equity strategies
in Japan as well as global asset allocation strategies. Mr. Weber has a
secondary focus on global bonds, European and Asian equity strategies. Mr. Weber
joined Pioneer in 2002.
Salvatore Buono is Head of Strategy Alignment and Structured Products within the
Multi-Asset Fund Solutions team. In his role, he has oversight of portfolio
positioning ensuring alignment of investment strategies across a broad range of
products. Mr. Buono also oversees the trade management process, including
liquidity and risk assessments for all proposed investment strategies. Mr. Buono
joined Pioneer in 2008.
The statement of additional information to this Information Statement/Prospectus
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.
Distributor and transfer agent
Pioneer Funds Distributor, Inc. is each Pioneer Fund's distributor. Pioneer
Investment Management Shareholder Services, Inc. ("PIMSS") is each Pioneer
Fund's transfer agent. Each Pioneer Fund compensates the distributor and the
transfer agent for their services. The distributor and the transfer agent are
affiliates of Pioneer.
Disclosure of portfolio holdings
Each Pioneer Fund's policies and procedures with respect to the disclosure of
its portfolio securities are described in the fund's statement of additional
information.
Pricing of shares
Net Asset Value
Each Pioneer Fund's net asset value is the value of its securities plus any
other assets minus its accrued operating expenses and other liabilities. Each
Pioneer Fund calculates net asset value for each class of shares every day the
New York Stock Exchange open when regular trading closes (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 actual
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.
Each Pioneer 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
39
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.
Each Pioneer Fund may use a fair value model developed by an independent pricing
service to value non-U.S. equity securities.
To the extent that a Pioneer 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.
Each Pioneer 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.
Each Pioneer Fund values short-term fixed income securities with remaining
maturities of 60 days or less at amortized cost, unless circumstances indicate
that using this method would not reflect an investment's value.
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 a Pioneer 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 a Pioneer Fund does not
price its shares. Therefore, the value of a Pioneer 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 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 Pioneer to be unreliable, the Pioneer Fund uses fair
value methods to value its securities pursuant to procedures adopted by the
Board of Trustees. The Pioneer 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 Pioneer 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 Pioneer Fund's shares to differ from the net asset value
that would be calculated only using market prices.
The prices used by each Pioneer 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.
Distribution and service arrangements
Distribution Plan
Each Pioneer Fund has adopted a distribution plan for its Class A and Class C
shares in accordance with Rule 12b-1 under the 1940 Act. Under each plan, a
Pioneer Fund pays distribution and service fees to PFD. Because these fees are
an ongoing expense of a Pioneer Fund, over time they increase the cost of your
investment and your shares may cost more than shares that are subject to other
types of sales charges.
Additional Payments to Financial Intermediaries
Your financial intermediary may receive compensation from a Pioneer Fund,
Pioneer and its affiliates for the sale of a Pioneer Fund's 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.
Pioneer and 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 a Pioneer Fund's shares.
Financial intermediaries include broker-dealers, banks (including bank trust
departments), registered investment advisers, financial planners, retirement
plan administrators and other types of intermediaries.
Pioneer makes these additional payments (sometimes referred to as "revenue
sharing") to financial intermediaries out of its own assets, which may include
profits derived from services provided to a Pioneer Fund, or from the retention
of a portion of sales charges or
40
distribution and service fees. Pioneer may base these payments on a variety of
criteria, including the amount of sales or assets of the Pioneer funds
attributable to the financial intermediary or as a per transaction fee.
Not all financial intermediaries receive additional compensation and the amount
of compensation paid varies for each financial intermediary. In certain cases,
these payments may be significant. Pioneer determines which firms to support and
the extent of the payments it is willing to make, generally choosing firms that
have a strong capability to effectively distribute shares of the Pioneer funds
and that are willing to cooperate with Pioneer's promotional efforts. Pioneer
also may compensate financial intermediaries (in addition to amounts that may be
paid by the fund) for providing certain administrative services and transaction
processing services.
Pioneer may benefit from revenue sharing if the intermediary features the
Pioneer funds in its sales system (such as by placing certain Pioneer funds on
its preferred fund list or giving access on a preferential basis to members of
the financial intermediary's sales force or management). In addition, the
financial intermediary may agree to participate in the distributor's marketing
efforts (such as by helping to facilitate or provide financial assistance for
conferences, seminars or other programs at which Pioneer personnel may make
presentations on the Pioneer funds to the intermediary's sales force). To the
extent intermediaries sell more shares of the Pioneer funds or retain shares of
the Pioneer funds in their clients' accounts, Pioneer receives greater
management and other fees due to the increase in the Pioneer funds' assets. The
intermediary may earn a profit on these payments if the amount of the payment to
the intermediary exceeds the intermediary's costs.
The compensation that Pioneer pays to financial intermediaries is discussed in
more detail in the fund's statement of additional information. Your intermediary
may charge you additional fees or commissions other than those disclosed in this
prospectus. Intermediaries may categorize and disclose these arrangements
differently than in the discussion above and in the statement of additional
information. You can ask your financial intermediary about any payments it
receives from Pioneer or the Pioneer funds, as well as about fees and/or
commissions it charges.
Pioneer and its affiliates may have other relationships with your financial
intermediary relating to the provision of services to the Pioneer funds, such as
providing omnibus account services or effecting portfolio transactions for the
Pioneer funds. If your intermediary provides these services, Pioneer or the
Pioneer funds may compensate the intermediary for these services. In addition,
your intermediary may have other relationships with Pioneer or its affiliates
that are not related to the Pioneer funds.
Initial Sales Charge (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 a Pioneer Fund.
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Sales Charges for Class A Shares
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Sales charge as % of
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Amount of Purchase Offering price Net amount invested
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Less than $50,000 5.75 6.10
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$50,000 but less than $100,000 4.50 4.71
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$100,000 but less than $250,000 3.50 3.63
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$250,000 but less than $500,000 2.50 2.56
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$500,000 or more -0- -0-
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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 Pioneer Fund shares may be higher
or lower due to rounding.
Reduced sales charges
You may qualify for a reduced Class A sales charge if you own or are purchasing
shares of Pioneer mutual funds. The investment levels required to obtain a
reduced sales charge are commonly referred to as "breakpoints." Pioneer offers
two principal means of taking advantage of breakpoints in sales charges for
aggregate purchases of Class A shares of the Pioneer funds over time if:
o The amount of shares you own of the Pioneer funds plus the amount you
are investing now is at least $50,000 (Rights of accumulation)
o You plan to invest at least $50,000 over the next 13 months (Letter of
intent)
41
Rights of accumulation
If you qualify for rights of accumulation, your sales charge will be based on
the combined value (at the current offering price) of all your Pioneer mutual
fund shares, the shares of your spouse and the shares of any children under the
age of 21.
Letter of intent
You can use a letter of intent to qualify for reduced sales charges in two
situations:
o If you plan to invest at least $50,000 (excluding any reinvestment of
dividends and capital gain distributions) in a Pioneer 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 a Pioneer 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 Pioneer Fund shares you plan to buy
Completing a letter of intent does not obligate you to purchase additional
shares, but if you do not buy enough shares to qualify for the projected level
of sales charges by the end of the 13-month period (or when you sell your
shares, if earlier), the distributor will recalculate your sales charge. You
must pay the additional sales charge within 20 days after you are notified of
the recalculation or it will be deducted from your account (or your sale
proceeds). Any share class for which no sales charge is paid cannot be included
under the letter of intent. For more information regarding letters of intent,
please contact your investment professional or obtain and read the statement of
additional information.
Qualifying for a reduced Class A sales charge
In calculating your total account value in order to determine whether you have
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. Pioneer
will use each fund's current offering price to calculate your total account
value. Certain trustees and fiduciaries may also qualify for a reduced sales
charge.
To receive a reduced sales charge, you or your investment professional must, at
the time of purchase, notify the distributor of your eligibility. In order to
verify your eligibility for a discount, you may need to provide your investment
professional or the fund with information or records, such as account numbers or
statements, regarding shares of the fund or other Pioneer mutual funds held in
all accounts by you, your spouse or children under the age of 21 with that
investment professional or with any other financial intermediary. Eligible
accounts may include joint accounts, retirement plan accounts, such as IRA and
401k accounts, and custodial accounts, such as ESA, UGMA and UTMA accounts.
It is your responsibility to confirm that your investment professional has
notified the distributor of your eligibility for a reduced sales charge at the
time of sale. If you or your investment professional do not notify the
distributor of your eligibility, you will risk losing the benefits of a reduced
sales charge.
For this purpose, Pioneer mutual funds include any fund for which the
distributor is principal underwriter and, at the distributor's discretion, may
include funds organized outside the U.S. and managed by Pioneer or an affiliate.
You can locate information regarding the reduction or waiver of sales charges,
in a clear and prominent format and free of charge, on Pioneer's website at
www.pioneerinvestments.com. The website includes hyperlinks that facilitate
access to this information.
Class A purchases at a reduced initial sales charge or net asset value are also
available to:
Group plans if the sponsoring organization:
o recommends purchases of Pioneer mutual funds to,
o permits solicitation of, or
o facilitates purchases by its employees, members or participants.
Class A purchases at net asset value
You may purchase Class A shares at net asset value (without a sales charge) as
follows. If you believe you qualify for any of the Class A sales charge waivers
discussed below, contact your investment professional or the distributor. You
are required to provide written confirmation of your eligibility. You may not
resell these shares except to or on behalf of the fund. Investments of $500,000
or more and certain retirement plans. You do not pay a sales charge when you
purchase Class A shares if you are investing $500,000 or more, are a participant
in an employer-sponsored retirement plan with at least $500,000 in total plan
assets or are a participant in certain employer-sponsored retirement plans with
accounts established with Pioneer on or before March 31, 2004 with 100 or more
eligible employees or
42
at least $500,000 in total plan assets. However, you may pay a contingent
deferred sales charge if you sell your Class A shares within 12 months of
purchase. The sales charge is equal to 1% of your investment or your sale
proceeds, whichever is less.
Class A purchases at net asset value are available to:
o Current or former trustees and officers of a Pioneer Fund;
o Partners and employees of legal counsel to the Pioneer Funds (at the
time of initial share purchase);
o Directors, officers, employees or sales representatives of Pioneer and
its affiliates (at the time of initial share purchase);
o Directors, officers, employees or sales representatives of any
subadviser or a predecessor adviser (or their affiliates) to any
investment company for which Pioneer serves as investment adviser (at
the time of initial share purchase);
o Officers, partners, employees or registered representatives of
broker-dealers (at the time of initial share purchase) which have
entered into sales agreements with the distributor;
o Employees of Regions Financial Corporation and its affiliates (at the
time of initial share purchase);
o Members of the immediate families of any of the persons above;
o Any trust, custodian, pension, profit sharing or other benefit plan of
the foregoing persons;
o Insurance company separate accounts;
o Certain wrap accounts for the benefit of clients of investment
professionals or other financial intermediaries adhering to standards
established by the distributor;
o Other funds and accounts for which Pioneer or any of its affiliates
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 Participants in employer-sponsored retirement plans with at least
$500,000 in total plan assets;
o Participants in employer-sponsored retirement plans with accounts
established with Pioneer on or before March 31, 2004 with 100 or more
eligible employees or at least $500,000 in total plan assets;
o Participants in Optional Retirement Programs if (i) your employer has
authorized a limited number of mutual funds to participate in the
program, (ii) all participating mutual funds sell shares to program
participants at net asset value, (iii) your employer has agreed in
writing to facilitate investment in Pioneer mutual funds by program
participants and (iv) the program provides for a matching contribution
for each participant contribution;
o Participants in an employer-sponsored 403(b) plan or employer-sponsored
457 plan if (i) your employer has made special arrangements for your
plan to operate as a group through a single broker, dealer or financial
intermediary and (ii) all participants in the plan who purchase shares
of a Pioneer mutual fund do so through a single broker, dealer or other
financial intermediary designated by your employer;
o Individuals receiving a distribution consisting of Class Y shares of a
Pioneer fund from a trust, fiduciary, custodial or other similar account
who purchase Class A shares of the same Pioneer fund within 90 days of
the date of the distribution;
o 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 date that agrees with the fund to distinguish
beneficial holders in the same manner, and retirement plans with assets
invested in the predecessor Safeco fund on that date.
In addition, Class A shares may be purchased at net asset value through certain
mutual fund programs sponsored by qualified intermediaries, such as
broker-dealers and investment advisers. In each case, the intermediary has
entered into an agreement with Pioneer to include the Pioneer funds in their
program without the imposition of a sales charge. The intermediary provides
investors participating in the program with additional services, including
advisory, asset allocation, recordkeeping or other services. You should ask your
investment firm if it offers and you are eligible to participate in such a
mutual fund program and whether participation in the program is consistent with
your investment goals. The intermediaries sponsoring or participating in these
mutual fund programs also may offer their clients other classes of shares of the
funds and investors may receive different levels of services or pay different
fees depending upon the
43
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, or by participants in a group
plan which were not subject to an initial sales charge, may be subject to a
contingent deferred sales charge upon redemption. A contingent deferred sales
charge is payable to the distributor in the event of a share redemption within
12 months following the share purchase at the rate of 1% of the lesser of the
value of the shares redeemed (exclusive of reinvested dividend and capital gain
distributions) or the total cost of such shares. However, the contingent
deferred sales charge is waived for redemptions of Class A shares purchased by
an employer-sponsored retirement plan that has at least $500,000 in total plan
assets (or that has 1,000 or more eligible employees for plans with accounts
established with Pioneer on or before March 31, 2004).
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 Shares
purchased prior to December 1, 2004 remain subject to the contingent
deferred sales charges in effect at the time you purchased those shares.
Shares purchased as part of an exchange or acquired as a result of 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:
- 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);
44
- 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.
Buying, exchanging and selling shares
Opening your account
You may open an account by completing an account application and sending it to
the transfer agent by mail or by fax. Please call the transfer agent 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 transfer agent. You may be required to obtain a signature
guarantee to make certain changes to an existing account.
Call or write to the transfer agent for account applications, account options
forms and other account information:
Pioneer Investment Management
Shareholder Services, Inc.
P.O. Box 55014
Boston, Massachusetts 02205-5014
Telephone 1-800-225-6292
Please note that there may be a delay in receipt by the transfer agent of
applications submitted by regular mail to a post office address.
Each Pioneer 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 Pioneer Funds' distributor, the Pioneer 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. tax payer 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.
A Pioneer 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 a Pioneer 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 Information Statement / Prospectus. Shareholders
investing through financial intermediaries,
45
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 a Pioneer 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 Pioneer 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 with the transfer
agent or an authorized agent by the close of regular trading on the New York
Stock Exchange (usually 4:00 p.m. Eastern time), the share price for your
transaction will be based on the net asset value determined as of the close of
regular trading on the New York Stock Exchange on that day (plus or minus any
applicable sales charges). If your order is placed with the transfer agent or an
authorized agent after the close of regular trading on the New York Stock
Exchange, or your order is not in good order, 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 If you have any fund share certificates, you submit them and they are
signed by each record owner exactly as the shares are registered
o Your request includes a signature guarantee if you:
- Are selling over $100,000 or exchanging over $500,000 worth of
shares
- Changed your account registration or address within the last 30 days
- Instruct the transfer agent to mail the check to an address
different from the one on your account
- Want the check paid to someone other than the account's record
owner(s)
- Are transferring the sale proceeds to a Pioneer mutual fund account
with a different registration
Transaction limitations
Your transactions are subject to certain limitations, including the limitation
on the purchase of a Pioneer Fund's shares within 30 calendar days of a
redemption. See "Excessive trading."
Buying, exchanging and selling shares
Buying
You may buy a Pioneer Fund's 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 Pioneer 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
Pioneer, for your purchase of shares of a Pioneer Fund.
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. A Pioneer Fund may waive the
initial or subsequent investment minimums. Minimum investment amounts may be
waived for, among other things, share purchases made through certain mutual fund
programs (e.g., asset based fee program accounts) sponsored by qualified
intermediaries, such as broker-dealers and investment advisers, that have
entered into an agreement with Pioneer.
46
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. A
Pioneer Fund may waive the initial investment amount.
Waiver 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
(d) The investment is made by an employer-sponsored retirement plan established
for the benefit of (1) employees of Pioneer or its affiliates, or (2) employees
or the affiliates of broker-dealers who have a Class Y shares sales agreement
with the distributor; or
(e) The investment is made through certain mutual fund programs sponsored by
qualified intermediaries, such as broker-dealers and investment advisers. In
each case, the intermediary has entered into an agreement with Pioneer to
include Class Y shares of the Pioneer mutual funds in their program. The
intermediary provides investors participating in the program with additional
services, including advisory, asset allocation, recordkeeping or other services.
You should ask your investment firm if it offers and you are eligible to
participate in such a mutual fund program and whether participation in the
program is consistent with your investment goals. The intermediaries sponsoring
or participating in these mutual fund programs may also offer their clients
other classes of shares of the funds and investors may receive different levels
of services or pay different fees depending upon the class of shares included in
the program. Investors should consider carefully any separate transaction and
other fees charged by these programs in connection with investing in each
available share class before selecting a share class; or
(f) The investment is made by another Pioneer fund
The fund reserves the right to waive the initial investment minimum in other
circumstances.
Maximum purchase amounts
Purchases of shares of a Pioneer Fund are limited to $499,999 for Class C
shares. This limit is applied on a per transaction basis. Class A and Class Y
shares are not subject to a maximum purchase amount.
Retirement plan accounts
You can purchase shares of a Pioneer Fund 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.
You may not use the account application accompanying this prospectus to
establish a 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 Pioneer
Funds' distributor and/or transfer agent. Consult your investment professional
for more information. Your investment firm receives a commission from the
distributor, and may receive additional compensation from Pioneer, for your
purchase of shares of a Pioneer Fund.
47
By phone or online
You can use the telephone or online purchase privilege if you have an existing
non-retirement account. Certain IRAs can use the telephone purchase privilege.
If your account is eligible, you can purchase additional fund shares by phone or
online if:
o You established your bank account of record at least 30 days ago
o Your bank information has not changed for at least 30 days
o You are not purchasing more than $100,000 worth of shares per account
per day
o You can provide the proper account identification information
When you request a telephone or online purchase, the transfer agent will
electronically debit the amount of the purchase from your bank account of
record. The transfer agent will purchase shares of the Pioneer Fund for the
amount of the debit at the offering price determined after the transfer agent
receives your telephone or online purchase instruction and good funds. It
usually takes three business days for the transfer agent to receive notification
from your bank that good funds are available in the amount of your investment.
In writing, by mail
You can purchase shares of a Pioneer Fund for an existing fund account by
mailing a check to the transfer agent. Make your check payable to the Pioneer
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 Pioneer Fund's
name, the account number and the name or names in the account registration.
By wire (Class Y shares only)
If you have an existing (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 Pioneer 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
[Download Table]
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.
[Name of Pioneer Fund]
The transfer agent must receive your account application before you send your
initial check or federal funds wire. In addition, you must provide a bank wire
address of record when you establish your account.
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. Each Pioneer Fund allows you
to exchange your shares at net asset value without charging you either an
initial or contingent deferred sales charge at the time of the exchange. Shares
you acquire as part of an exchange will continue to be subject to any contingent
deferred sales charge that applies to the shares you originally purchased. When
you ultimately sell your shares, the date of your original purchase will
determine your contingent deferred sales charge.
Before you request an exchange, consider each fund's investment objective and
policies as described in the fund's prospectus. You generally will have to pay
income taxes on an exchange.
48
Same-fund exchange privilege
Certain shareholders may be eligible to exchange their shares for the Pioneer
Fund's Class Y shares. 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 Pioneer
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 shares of a
Pioneer Fund 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 shares of a Pioneer Fund by mailing or faxing a letter of
instruction to the transfer agent. You can exchange shares of a Pioneer Fund
directly through the Pioneer 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 Pioneer Fund out of which you are exchanging and the
name of the fund into which you are exchanging
o The class of shares you are exchanging
o The dollar amount or number of shares you are exchanging
Selling
Your shares will be sold at the share price (net asset value less any applicable
sales charge) next calculated after the Pioneer 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. Each Pioneer Fund generally will send your sale
proceeds by check, bank wire or electronic funds transfer. Normally you will be
paid within seven days. If you recently sent a check to purchase the shares
being sold, the Pioneer Fund may delay payment of the sale proceeds until your
check has cleared. This may take up to 10 calendar days from the purchase date.
If you are selling shares from a non-retirement account or certain IRAs, you may
use any of the methods described below. If you are selling shares from a
retirement account other than an IRA, you must make your request in writing.
You generally will have to pay income taxes on a sale.
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.
How to sell shares
Through your investment firm
Normally, your investment firm will send your request to sell shares to the
Pioneer Funds' transfer agent. Consult your investment professional for more
information. Each Pioneer Fund has authorized the distributor to act as its
agent in the repurchase of fund shares from qualified investment firms. Each
Pioneer Fund reserves the right to terminate this procedure at any time.
49
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 shares of a Pioneer Fund 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
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 shares of a Pioneer Fund by writing directly to
the Pioneer Fund only if your account is registered in your name. Include in
your request your name, the name of the Pioneer Fund, your fund account number,
the class of shares to be sold, the dollar amount or number of shares to be sold
and any other applicable requirements as described below. The transfer agent
will send the sale proceeds to your address of record unless you provide other
instructions. Your request must be signed by all registered owners and be in
good order.
The transfer agent will not process your request until it is received in good
order.
You may sell up to $100,000 per account per day by fax.
How to contact Pioneer
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 Investment Management
Shareholder Services, Inc.
P.O. Box 55014
Boston, Massachusetts 02205-5014
Pioneer website
www.pioneerinvestments.com
By fax
Fax your exchange and sale requests to:
1-800-225-4240
Account options
See the account application form for more details on each of the following
services or call the transfer agent for details and availability.
Telephone transaction privileges
If your account is registered in your name, you can buy, exchange or sell shares
of the Pioneer Funds by telephone. If you do not want your account to have
telephone transaction privileges, you must indicate that choice on your account
application or by writing to the transfer agent.
When you request a telephone transaction the transfer agent will try to confirm
that the request is genuine. The transfer agent records the call, requires the
caller to provide validating information for the account and sends you a written
confirmation. Each Pioneer Fund may implement other confirmation procedures from
time to time. Different procedures may apply if you have a non-U.S. account or
if
50
your account is registered in the name of an institution, broker-dealer or other
third party. If a Pioneer 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
transfer agent or complete the online authorization screen
at www.pioneerinvestments.com.
To use online transactions, you must read and agree to the terms of an online
transaction agreement available on the Pioneer website. When you or your
investment firm requests an online transaction the transfer agent electronically
records the transaction, requires an authorizing password and sends a written
confirmation. Each Pioneer Fund may implement other procedures from time to
time. Different procedures may apply if you have a non-U.S. account or if your
account is registered in the name of an institution, broker-dealer or other
third party. You may not be able to use the online transaction privilege for
certain types of accounts, including most retirement accounts.
Automatic investment plans
You can make regular periodic investments in a Pioneer Fund by setting up
monthly bank drafts, government allotments, payroll deductions, a Pioneer
Investomatic Plan and other similar automatic investment plans. Automatic
investments may be made only through U.S. banks. You may use an automatic
investment plan to establish a Class A share account with a small initial
investment. If you have a Class C share account and your balance is at least
$1,000, you may establish an automatic investment plan.
Pioneer Investomatic Plan
If you establish a Pioneer Investomatic Plan, the transfer agent will make a
periodic investment in shares of a Pioneer Fund by means of a preauthorized
electronic funds transfer from your bank account. Your plan investments are
voluntary. You may discontinue your plan at any time or change the plan's dollar
amount, frequency or investment date by calling or writing to the transfer
agent. You should allow up to 30 days for the transfer agent to establish your
plan.
Automatic exchanges
You can automatically exchange your shares of a Pioneer Fund 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
Each Pioneer Fund offers three distribution options. Any shares of a Pioneer
Fund 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 a Pioneer Fund
will automatically be invested in additional fund shares.
(2) You may elect to have the amount of any dividends paid to you in cash
and any capital gain distributions reinvested in additional shares.
(3) You may elect to have the full amount of any dividends and/or capital
gain distributions paid to you in cash.
Options (2) 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 transfer agent or you do not cash
the check for six months or more, the transfer agent may reinvest the amount of
the check in your account and automatically change the distribution option on
your account to option (1) until you request a different option in writing. If
the amount of a distribution check would be less than $10, the Pioneer Fund may
reinvest the
51
amount in additional shares of the fund instead of sending a check. Additional
shares of the Pioneer 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 must request a periodic withdrawal of at least $50
o You may not request a periodic withdrawal of more than 10% of the value
of any Class C share account (valued at the time the plan is
implemented)
These requirements do not apply to scheduled (Internal Revenue Code Section
72(t) election) or mandatory (required minimum distribution) withdrawals from
IRAs and certain retirement plans.
Systematic sales of fund shares may be taxable transactions for you. While you
are making systematic withdrawals from your account, you may pay unnecessary
initial sales charges on additional purchases of Class A shares or contingent
deferred sales charges.
Direct deposit
If you elect to take dividends or dividends and capital gain distributions in
cash, or if you establish a systematic withdrawal plan, you may choose to have
those cash payments deposited directly into your savings, checking or NOW bank
account.
Voluntary tax withholding
You may have the transfer agent withhold 28% of the dividends and capital gain
distributions paid from your fund account (before any reinvestment) and forward
the amount withheld to the Internal Revenue Service as a credit against your
federal income taxes. Voluntary tax withholding is not available for retirement
plan accounts or for accounts subject to backup withholding.
Shareholder services and policies
Excessive trading
Frequent trading into and out of a Pioneer Fund can disrupt portfolio management
strategies, harm the Pioneer Fund's 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 Pioneer 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. Each Pioneer
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 a Pioneer 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.
Each Pioneer Fund's Board of Trustees has adopted policies and procedures with
respect to frequent purchases and redemptions of fund shares by investors in the
Pioneer Fund. 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 a
Pioneer Fund, we will ask the investor, broker or other intermediary to
52
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 shareholders of the Pioneer Fund.
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 a Pioneer Fund may be adversely affected.
Frequently, shares of a Pioneer Fund are held through omnibus accounts
maintained by financial intermediaries such as brokers and retirement plan
administrators, where the holdings of multiple shareholders, such as all the
clients of a particular broker or other intermediary, are aggregated. Our
ability to monitor trading practices by investors purchasing shares through
omnibus accounts may be limited and dependent upon the cooperation of the broker
or other intermediary in taking steps to limit this type of activity.
Each Pioneer Fund may reject a purchase or exchange order before its acceptance
or the issuance of shares. Each Pioneer 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 Pioneer Fund believes are requested on behalf of market timers. Each Pioneer
Fund reserves the right to reject any purchase or exchange request by any
investor or financial institution if the Pioneer 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 Pioneer Fund and its shareholders do not incur
any gain or loss as a result of a rejected order. Each Pioneer Fund may impose
further restrictions on trading activities by market timers in the future.
To limit the negative effects of excessive trading, each Pioneer 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 a Pioneer Fund, that investor shall be prevented (or
"blocked") from purchasing shares of the Pioneer 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 Pioneer Fund. This policy does not apply to purchase or
redemption transactions of less than $5,000 or to Pioneer Cash Reserves Fund or
Pioneer Multi-Asset Ultrashort Income Fund.
We rely on financial intermediaries that maintain omnibus accounts to apply to
their customers either the Pioneer Funds' policy described above or the
intermediaries' own policies or restrictions designed to limit excessive trading
of shares of a Pioneer Fund. 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 a Pioneer Fund provided
that Pioneer, in its sole discretion, determines that the securities are
consistent with the Pioneer Fund's objective and policies and their acquisition
is in the best interests of the Pioneer Fund. If the fund accepts your
securities, they will be valued for purposes of determining the number of shares
of the Pioneer Fund 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 shares of the Pioneer Fund for cash in an amount equal
to the value of the shares of the Pioneer Fund that you purchase. Your broker
may also impose a fee in connection with processing your purchase of shares of a
Pioneer Fund 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 transfer agent no more than 90
days after selling your shares and
o The registration of the account in which you reinvest your sale proceeds
must be identical to the registration of the account from which you sold
your shares.
Purchases pursuant to the reinstatement privilege are subject to limitations on
investor transactions, including the limitation on the purchase of a Pioneer
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 the Pioneer Fund's prospectus, including the fund's minimum investment
requirement. Your sale proceeds will be reinvested in shares of the Pioneer Fund
at the Class A net asset value per share determined after the transfer agent
receives your written request for reinstatement. You may realize a gain or loss
for
53
federal income tax purposes as a result of your sale of shares of a Pioneer
Fund, and special tax rules may apply if you elect reinstatement. Consult your
tax adviser for more information.
Pioneer website
www.pioneerinvestments.com
The website includes a full selection of information on mutual fund investing.
You can also use the website to get:
o Your current account information
o Prices, returns and yields of all publicly available Pioneer mutual funds
o Prospectuses, statements of additional information and shareowner
reports for all the Pioneer mutual funds
o A copy of Pioneer's privacy notice
If you or your investment firm authorized your account for the online
transaction privilege, you may buy, exchange and sell shares online.
FactFone(SM) 1-800-225-4321
You can use FactFone(SM) to:
o Obtain current information on your Pioneer mutual fund accounts
o Inquire about the prices and yields of all publicly available Pioneer
mutual funds
o Make computer-assisted telephone purchases, exchanges and redemptions
for your fund accounts
o Request account statements
If you plan to use FactFone(SM) to make telephone purchases and redemptions,
first you must activate your personal identification number and establish your
bank account of record. If your account is registered in the name of a
broker-dealer or other third party, you may not be able to use 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, 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 a Pioneer Fund. If you wish to revoke your
consent to this practice, you may do so by notifying Pioneer, by phone or in
writing (see "How to contact us"). Pioneer will begin mailing separate proxy
statements, prospectuses and shareowner reports to you within 30 days after
receiving your notice.
Confirmation statements
The transfer agent maintains an account for each investment firm or individual
shareowner and records all account transactions. You will be sent confirmation
statements showing the details of your transactions as they occur, except
automatic investment plan transactions, which are confirmed quarterly. If you
have more than one Pioneer mutual fund account registered in your name, the
Pioneer combined account statement will be mailed to you each quarter.
Tax information
Early each year, each Pioneer Fund will mail you information about the tax
status of the dividends and distributions paid to you by the Pioneer 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 transfer agent will
mail you a tax form reflecting the total amount(s) of distribution(s) received
by the end of January.
Privacy
Each Pioneer Fund has a policy designed to protect the privacy of your personal
information. A copy of Pioneer's privacy notice was given to you at the time you
opened your account. Each Pioneer Fund will send you a copy of the privacy
notice each year. You may also obtain the privacy notice by calling the transfer
agent or through Pioneer's website.
54
Signature guarantees and other requirements
You are required to obtain a signature guarantee when:
o Requesting certain types of exchanges or sales of shares of a Pioneer
Fund
o Redeeming shares for which you hold a share certificate
o Requesting certain types of changes for your existing account
You can obtain a signature guarantee from most broker-dealers, banks, credit
unions (if authorized under state law) and federal savings and loan
associations. You cannot obtain a signature guarantee from a notary public.
The Pioneer funds generally accept only medallion signature guarantees. A
medallion signature guarantee may be obtained from a domestic bank or trust
company, broker, dealer, clearing agency, savings association, or other
financial institution that is participating in a medallion program recognized by
the Securities Transfer Association. Signature guarantees from financial
institutions that are not participating in one of these programs are not
accepted as medallion signature guarantees. A Pioneer Fund may accept other
forms of guarantee from financial intermediaries in limited circumstances.
Fiduciaries and corporations are required to submit additional documents to sell
shares of a Pioneer Fund.
Minimum account size
The fund requires that you maintain a minimum account value of $500. If you hold
less than $500 in your account, each Pioneer 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 a Pioneer Fund by telephone or accessing
www.pioneerinvestments.com during times of market volatility or disruption in
telephone or Internet service. On New York Stock Exchange holidays or on days
when the exchange closes early, Pioneer will adjust the hours for the telephone
center and for online transaction processing accordingly. If you are unable to
access www.pioneerinvestments.com or reach a Pioneer Fund by telephone, you
should communicate with the Pioneer Fund in writing.
Share certificates
The Pioneer Funds do not offer share certificates. Shares are electronically
recorded. Any existing certificated shares can only be sold by returning your
certificate to the transfer agent, along with a letter of instruction or a stock
power (a separate written authority transferring ownership) and a signature
guarantee.
Other policies
Each Pioneer 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. Each Pioneer 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
Each Pioneer Fund reserves the right to:
o suspend transactions in shares when trading on the New York Stock
Exchange is closed or restricted, or when the Securities and Exchange
Commission determines an emergency or other circumstances exist that
make it impracticable for the Pioneer 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
o redeem in kind by delivering to you portfolio securities owned by the
Pioneer Fund rather than cash. Securities you receive this way may
increase or decrease in value while you hold them and you may incur
brokerage and transaction charges and tax liability when you convert the
securities to cash
o charge transfer, shareholder servicing or similar agent fees, such as an
account maintenance fee for small balance accounts, directly to accounts
upon at least 30 days' notice. A Pioneer 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
55
o close your account after a period of inactivity, as determined by state
law, and transfer your shares to the appropriate state
Dividends, capital gains and taxes
Dividends and capital gains
Each Pioneer Fund generally pays any distributions of net short- and long-term
capital gains in December.
Each Pioneer Fund generally pays dividends from any net investment income in
December.
Each Pioneer Fund may also pay dividends and capital gain distributions at other
times if necessary for the Pioneer Fund to avoid U.S. federal income or excise
tax. If you invest in a Pioneer 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 a Pioneer Fund,
whether you take the distributions in cash or reinvest them in additional
shares. For U.S. federal income tax purposes, distributions from a Pioneer
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 a Pioneer 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 Pioneer Fund's "qualified dividend
income" and if certain conditions, including holding period requirements, are
met by the Pioneer 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 a Pioneer 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 a Pioneer Fund (but none of the Pioneer
Fund's capital gain distributions) may qualify for the dividends-received
deduction for corporations. To the extent that a Pioneer Fund pays dividends
attributable to income received by it from underlying fixed income funds, these
dividends generally will not qualify for the dividends-received deduction for
corporations or for any favorable U.S. federal income tax rate available to
noncorporate shareholders on qualified dividend income.
Each Pioneer Fund will report to shareholders annually the U.S. federal income
tax status of all fund distributions.
If a Pioneer 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 shares of a Pioneer Fund 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 Pioneer 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 Pioneer 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%.
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
Pioneer Fund's statement of additional information for a more detailed
discussion of the U.S. federal income tax considerations that may affect the
Pioneer Fund and its shareowners.
56
FINANCIAL HIGHLIGHTS
The financial highlights table helps you understand the Acquiring Fund's
financial performance for the past five years and for any recent semiannual
period.
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 or Class Y shares of the Acquiring Fund
(assuming reinvestment of all dividends and distributions).
For financial statement purposes with respect to the Reorganization, the
Acquiring Fund will be the accounting survivor of the Reorganization. As the
accounting survivor, the Acquiring Fund's operating history will be used for
financial reporting purposes after consummation of the Reorganization.
The information below, except for the financial highlights for the six
months ended January 31, 2014 and indicated below, has been audited by
Ernst & Young LLP, whose report is included in the fund's annual report along
with the fund's financial statements. The annual report is available
upon request.
57
Financial Highlights
Pioneer Ibbotson Growth Allocation Fund
[Enlarge/Download Table]
Six Months
Ended Year Year Year Year Year
1/31/14 Ended Ended Ended Ended Ended
(unaudited) 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09
------------------------------------------------------------------------------------------------------------------------------------
Class A
Net asset value, beginning of period $ 12.32 $ 10.75 $ 11.09 $ 9.77 $ 8.74 $ 11.50
------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations:
Net investment income (a) $ 0.14 $ 0.17 $ 0.14 $ 0.12 $ 0.11 $ 0.19
Net realized and unrealized gain (loss) on investments 0.51 1.57 (0.29) 1.33 1.10 (2.14)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations $ 0.65 $ 1.74 $ (0.15) $ 1.45 $ 1.21 $ (1.95)
------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareowners:
Net investment income $ (0.19) $ (0.17) $ (0.19) $ (0.13) $ (0.18) $ (0.04)
Net realized gain -- -- -- -- -- (0.77)
------------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareowners $ (0.19) $ (0.17) $ (0.19) $ (0.13) $ (0.18) $ (0.81)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ 0.46 $ 1.57 $ (0.34) $ 1.32 $ 1.03 $ (2.76)
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 12.78 $ 12.32 $ 10.75 $ 11.09 $ 9.77 $ 8.74
====================================================================================================================================
Total return* 5.21%** 16.40% (1.31)% 14.85% 13.90% (15.49)%
Ratio of net expenses to average net assets+ 0.66%*** 0.69% 0.76% 0.76% 0.79% 0.79%
Ratio of net investment income to average net assets+ 2.15%*** 1.50% 1.29% 1.11% 1.12% 2.24%
Portfolio turnover rate 4%*** 6% 7% 12% 11% 49%
Net assets, end of period (in thousands) $154,711 $149,586 $134,988 $140,979 $125,433 $111,447
Ratios with no waivers of fees and assumption of expenses by
the Adviser and no reduction for fees paid indirectly:
Total expenses 0.66%*** 0.69% 0.76% 0.76% 0.80% 0.89%
Net investment income 2.15%*** 1.50% 1.29% 1.11% 1.11% 2.14%
====================================================================================================================================
(a) Calculated using average shares outstanding for the period.
* 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.
** Not annualized.
+ In addition to the expenses which the Fund bears directly, the Fund
indirectly bears pro rata shares of the expenses of the funds in which the
Fund invests. Because each of the underlying funds bears its own varying
expense levels and because the Fund may own differing proportions of each
fund at different times, the amount of expenses incurred indirectly by the
Fund will vary from time to time.
*** Annualized.
58
Financial Highlights (continued)
Pioneer Ibbotson Growth Allocation Fund (continued)
[Enlarge/Download Table]
Six Months
Ended Year Year Year Year Year
1/31/14 Ended Ended Ended Ended Ended
(unaudited) 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09
----------------------------------------------------------------------------------------------------------------------------------
Class C
Net asset value, beginning of period $ 11.65 $ 10.18 $ 10.50 $ 9.26 $ 8.30 $ 10.99
----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations:
Net investment income (a) $ 0.09 $ 0.09 $ 0.06 $ 0.04 $ 0.04 $ 0.11
Net realized and unrealized gain (loss) on investments 0.48 1.48 (0.27) 1.26 1.04 (2.03)
----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations $ 0.57 $ 1.57 $ (0.21) $ 1.30 $ 1.08 $ (1.92)
----------------------------------------------------------------------------------------------------------------------------------
Distributions to shareowners:
Net investment income $ (0.12) $ (0.10) $ (0.11) $ (0.06) $ (0.12) $ --
Net realized gain -- -- -- -- -- (0.77)
----------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareowners $ (0.12) $ (0.10) $ (0.11) $ (0.06) $ (0.12) $ (0.77)
----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ 0.45 $ 1.47 $ (0.32) $ 1.24 $ 0.96 $ (2.69)
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 12.10 $ 11.65 $ 10.18 $ 10.50 $ 9.26 $ 8.30
==================================================================================================================================
Total return* 4.85%** 15.58% (1.91)% 14.10% 13.08% (16.08)%
Ratio of net expenses to average net assets+ 1.35%*** 1.40% 1.46% 1.46% 1.51% 1.57%
Ratio of net investment income to average net assets+ 1.48%*** 0.78% 0.59% 0.40% 0.40% 1.44%
Portfolio turnover rate 4%*** 6% 7% 12% 11% 49%
Net assets, end of period (in thousands) $58,426 $53,032 $45,570 $48,586 $43,087 $ 36,602
Ratios with no waivers of fees and assumption of expenses by the
Adviser and no reduction for fees paid indirectly:
Total expenses 1.35%*** 1.40% 1.46% 1.46% 1.51% 1.60%
Net investment income 1.48%*** 0.78% 0.59% 0.40% 0.40% 1.40%
==================================================================================================================================
(a) Calculated using average shares outstanding for the period.
* 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.
** Not annualized.
+ In addition to the expenses which the Fund bears directly, the Fund
indirectly bears pro rata shares of the expenses of the funds in which the
Fund invests. Because each of the underlying funds bears its own varying
expense levels and because the Fund may own differing proportions of each
fund at different times, the amount of expenses incurred indirectly by the
Fund will vary from time to time.
*** Annualized.
59
Financial Highlights (continued)
Pioneer Ibbotson Growth Allocation Fund (continued)
[Enlarge/Download Table]
Six Months
Ended Year Year Year Year Year
1/31/14 Ended Ended Ended Ended Ended
(unaudited) 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09
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Class Y
Net asset value, beginning of period $ 12.56 $ 10.95 $ 11.45 $ 10.07 $ 9.00 $ 11.64
---------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations:
Net investment income (a) $ 0.18 $ 0.20 $ 0.17 $ 0.17 $ 0.15 $ 0.20
Net realized and unrealized gain (loss) on investments 0.50 1.61 (0.44) 1.37 1.14 (1.97)
---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations $ 0.68 $ 1.81 $ (0.27) $ 1.54 $ 1.29 $ (1.77)
---------------------------------------------------------------------------------------------------------------------------------
Distributions to shareowners:
Net investment income $ (0.21) $ (0.20) $ (0.23) $ (0.16) $ (0.22) $ (0.10)
Net realized gain -- -- -- -- -- (0.77)
---------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareowners $ (0.21) $ (0.20) $ (0.23) $ (0.16) $ (0.22) $ (0.87)
---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ 0.47 $ 1.61 $ (0.50) $ 1.38 $ 1.07 $ (2.64)
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 13.03 $ 12.56 $ 10.95 $ 11.45 $ 10.07 $ 9.00
=================================================================================================================================
Total return* 5.38%** 16.70% (2.28)% 15.39% 14.33% (13.68)%
Ratio of net expenses to average net assets+ 0.34%*** 0.44% 0.50% 0.36% 0.39% 0.39%
Ratio of net investment income to average net assets+ 2.71%*** 1.71% 1.60% 1.58% 1.54% 2.44%
Portfolio turnover rate 4%*** 6% 7% 12% 11% 49%
Net assets, end of period (in thousands) $ 1,232 $ 1,314 $ 2,012 $ 1,947 $ 2,508 $ 1,614
Ratios with no waivers of fees and assumption of expenses by the
Adviser and no reduction for fees paid indirectly:
Total expenses 0.34%*** 0.44% 0.50% 0.36% 0.39% 0.39%
Net investment income 2.71%*** 1.71% 1.60% 1.58% 1.54% 2.44%
=================================================================================================================================
(a) Calculated using average shares outstanding for the period.
* 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.
** Not annualized.
+ In addition to the expenses which the Fund bears directly, the Fund
indirectly bears pro rata shares of the expenses of the funds in which the
Fund invests. Because each of the underlying funds bears its own varying
expense levels and because the Fund may own differing proportions of each
fund at different times, the amount of expenses incurred indirectly by the
Fund will vary from time to time.
*** Annualized.
60
OWNERSHIP OF SHARES OF THE PIONEER FUNDS
As of [ ], 2014, the Trustees and officers of each Pioneer Fund owned in the
aggregate less than 1% of the outstanding shares of a Pioneer Fund. The
following is a list of the holders of 5% or more of the outstanding shares of
any class of a Pioneer Fund as of [ ], 2014.
[Enlarge/Download Table]
-----------------------------------------------------------------------------------------------------------
Pioneer Ibbotson Aggressive Allocation Fund
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Record Holder Share Class Number of Shares Percent of Class
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Class A
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Class B(1)
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Class C
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Class Y
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Pioneer Ibbotson Growth Allocation Fund
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Record Holder Share Class Number of Shares Percent of Class
-----------------------------------------------------------------------------------------------------------
Class A
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Class B(1)
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Class C
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Class Y
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(1) Class B shares of each Fund will be converted to Class A shares of the
Acquired Fund on November 10, 2014, prior to the Closing Date.
AUDITORS
The financial highlights and financial statements of each Pioneer Fund for
the past five fiscal years and any semi-annual period, as applicable, are
incorporated by reference into this Information Statement/Prospectus. The
Pioneer Funds' financial highlights and financial statements for the previous
five years ended July 31, 2013 have been audited by Ernst & Young LLP,
independent registered public accounting firm, which are incorporated herein by
reference, and have been so incorporated in reliance upon the reports of such
firm given their authority as experts in accounting and auditing. Ernst & Young
LLP resigned as the independent registered public accounting firm of each
Pioneer Fund upon completion of the audit of each Pioneer Fund's financial
statements for the fiscal year ended July 31, 2013. Deloitte & Touche LLP has
been appointed to serve as each Pioneer Fund's independent registered public
accounting firm for the fiscal year ending July 31, 2014.
AVAILABLE INFORMATION
You can obtain more free information about each Pioneer Fund from your
investment firm or by writing to Pioneer Investment Management Shareholder
Services, Inc., 60 State Street, Boston, Massachusetts 02109. You may also call
1-800-225-6292 for more information about a Pioneer Fund, to request copies of a
Pioneer Fund's statement of additional information and shareowner reports, and
to make other inquiries.
Visit our website www.pioneerinvestments.com
Each Pioneer Fund makes available its statement of additional information
and shareholder reports, free of charge, on the Pioneer Funds' website at
www.pioneerinvestments.com. You also may find other information and updates
about Pioneer and each Pioneer Fund, including Pioneer Fund performance
information, on the Pioneer Funds' website.
Shareholder reports. Annual and semiannual reports to shareholders, and
quarterly reports filed with the SEC, provide information about each Pioneer
Fund's investments. The annual report discusses market conditions and investment
strategies that significantly affected each Pioneer Fund's performance during
its last fiscal year.
Statement of additional information. The statement of additional information
of each Pioneer Fund provides more detailed information about the fund.
You can also review and copy each Pioneer Fund's shareholder 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 email requests for these documents
to publicinfo@sec.gov or make a request in writing to the Commission's Public
Reference Section, Washington, D.C. 20549-1520.
61
27970-00-0814 PRO
EXHIBIT A -- FORM OF AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of
the [ ] day of [ ], by and between Pioneer Ibbotson Asset Allocation Series, a
Delaware statutory trust (the "Trust"), on behalf of its series, Pioneer
Ibbotson Growth Allocation Fund (the "Acquiring Fund"), with its principal place
of business at 60 State Street, Boston, Massachusetts 02109, and the Trust, on
behalf of its series, Pioneer Ibbotson Aggressive Allocation Fund (the "Acquired
Fund"), with its principal place of business at 60 State Street, Boston,
Massachusetts 02109, and, solely for purposes of paragraph 9.2 hereof, Pioneer
Investment Management, Inc. ("Pioneer" or the "Acquiring Fund Adviser"). The
Acquiring Fund and the Acquired Fund are sometimes referred to collectively
herein as the "Funds" and individually as a "Fund."
This Agreement is intended to constitute a plan of a "reorganization" as
defined in Section 368(a) of the United States Internal Revenue Code of 1986, as
amended (the "Code") and the Treasury Regulations thereunder. The reorganization
(the "Reorganization") will consist of (1) the transfer of all of the assets of
the Acquired Fund to the Acquiring Fund solely in exchange for (A) the issuance
of Class A, Class C and Class Y shares of beneficial interest of the Acquiring
Fund (collectively, the "Acquiring Fund Shares" and each, an "Acquiring Fund
Share") to the Acquired Fund, and (B) the assumption by the Acquiring Fund of
all of the liabilities of the Acquired Fund on the closing date of the
Reorganization (the "Closing Date"), and (2) the distribution by the Acquired
Fund, on or promptly after the Closing Date as provided herein, of the Acquiring
Fund Shares to the shareholders of the Acquired Fund in complete liquidation of
the Acquired Fund, all upon the terms and conditions hereinafter set forth in
this Agreement. The parties hereby adopt this Agreement as a "plan of
reorganization" within the meaning of Treasury Regulations Sections 1.368-2(g)
and 1.368-3(a).
WHEREAS, the Trust is a registered investment company classified as a
management company of the open-end type.
WHEREAS, the Acquiring Fund is authorized to issue shares of beneficial
interest.
WHEREAS, the Board of Trustees of the Trust has determined that the
Reorganization is in the best interests of the Acquiring Fund shareholders and
the Acquired Fund shareholders, respectively, and is not dilutive of the
interests of those shareholders.
NOW, THEREFORE, in consideration of the premises of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR THE ACQUIRING FUND
SHARES AND ASSUMPTION OF THE ASSUMED LIABILITIES; LIQUIDATION AND
TERMINATION OF THE ACQUIRED FUND.
1.1 Subject to the terms and conditions herein set forth and on the basis of
the representations and warranties contained herein, the Acquired Fund will
transfer all of its assets as set forth in Paragraph 1.2 (the "Acquired Assets")
to the Acquiring Fund free and clear of all liens and encumbrances (other than
those arising under the Securities Act of 1933, as amended (the "Securities
Act"), liens for taxes not yet due and contractual restrictions on the transfer
of the Acquired Assets) and the Acquiring Fund agrees in exchange therefor: (i)
to issue to the Acquired Fund the number of Acquiring Fund Shares, including
fractional Acquiring Fund Shares, of each class with an aggregate net asset
value ("NAV") equal to the NAV of the Acquired Fund attributable to the
corresponding class of the Acquired Fund's shares, as determined in the manner
set forth in Paragraphs 2.1 and 2.2; and (ii) to assume all of the liabilities
and obligations of the Acquired Fund, whether accrued or contingent, known or
unknown, existing at the Closing Date (collectively, the "Assumed Liabilities").
Such transactions shall take place at the Closing (as defined in Paragraph 3.1
below).
1.2 (a) The Acquired Assets shall consist of all of the Acquired Fund's
property, including, without limitation, all portfolio securities and
instruments, dividends and interest receivables, cash, goodwill, contractual
rights and choses in action of the Acquired Fund or the Trust in respect of the
Acquired Fund, all other intangible property owned by the Acquired Fund,
originals or copies of all books and records of the Acquired Fund, and all other
assets of the Acquired Fund on the Closing Date. The Acquiring Fund shall also
be entitled to receive copies of all records that the Acquired Fund is required
to maintain under the Investment Company Act of 1940, as amended (the
"Investment Company Act"), and the rules of the Securities and Exchange
Commission (the "Commission") promulgated thereunder to the extent such records
pertain to the Acquired Fund.
(b) The Acquired Fund has provided the Acquiring Fund with a list of all of
the Acquired Fund's securities and other assets as of the date of execution of
this Agreement, and the Acquiring Fund has provided the Acquired Fund with a
copy of the current fundamental investment policies and restrictions and fair
value procedures applicable to the Acquiring Fund. The Acquired Fund reserves
the right to sell any of such securities or other assets before the Closing Date
(except to the extent sales may be limited by representations of the Acquired
Fund contained herein or in the Acquired Fund Tax Representation Certificate (as
defined below) and made in connection with the issuance of the tax opinion
provided for in Paragraph 8.4 hereof) and agrees not to acquire any portfolio
security that is not an eligible investment for, or that would violate an
investment policy or restriction of, the Acquiring Fund.
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1.3 The Acquired Fund will endeavor to discharge all of its known
liabilities and obligations that are or will become due prior to the Closing.
1.4 On or as soon after the Closing Date as is conveniently practicable (the
"Liquidation Date"), the Trust shall liquidate the Acquired Fund and distribute
pro rata to its shareholders of record, determined as of the close of regular
trading on the New York Stock Exchange on the Closing Date (the "Acquired Fund
Shareholders"), the Acquiring Fund Shares received by the Acquired Fund pursuant
to Paragraph 1.1 hereof. Each Acquired Fund Shareholder shall receive the number
of full and fractional Acquiring Fund Shares of the class corresponding to each
class of shares of beneficial interest in the Acquired Fund (the "Acquired Fund
Shares") held by such Acquired Fund Shareholder that have, in each case, an
aggregate NAV equal to the aggregate NAV of the Acquired Fund Shares of the
applicable class held of record by such Acquired Fund Shareholder on the Closing
Date. Such liquidation and distribution will be accomplished by the Acquired
Fund instructing the Acquiring Fund to transfer the Acquiring Fund Shares then
credited to the account of the Acquired Fund on the books of the Acquiring Fund
to open accounts on the share records of the Acquiring Fund established and
maintained by the Acquiring Fund's transfer agent in the names of the Acquired
Fund Shareholders and representing the respective pro rata number of the
Acquiring Fund Shares due the Acquired Fund Shareholders. The Acquired Fund
shall promptly provide the Acquiring Fund with evidence of such liquidation and
distribution. All issued and outstanding Acquired Fund Shares will
simultaneously be cancelled on the books of the Acquired Fund, and the Acquired
Fund will be dissolved. The Acquiring Fund shall not issue certificates
representing the Acquiring Fund Shares in connection with such exchange.
1.5 Ownership of Acquiring Fund Shares will be shown on the books of the
Acquiring Fund's transfer agent. Any certificates representing ownership of
Acquired Fund Shares that remain outstanding on the Closing Date shall be deemed
to be cancelled and shall no longer evidence ownership of Acquired Fund Shares.
1.6 Any transfer taxes payable upon issuance of Acquiring Fund Shares in a
name other than the registered holder of the Acquired Fund Shares on the books
of the Acquired Fund as of that time shall, as a condition of such issuance and
transfer, be paid by the person to whom such Acquiring Fund Shares are to be
issued and transferred.
1.7 Any reporting responsibility of the Trust with respect to the Acquired
Fund for periods ending on or before the Closing Date, including, but not
limited to, the responsibility for filing of regulatory reports, or other
documents with the Commission, any state securities commissions, and any
federal, state or local tax authorities or any other relevant regulatory
authority, is and shall remain the responsibility of the Acquired Fund.
2. VALUATION
2.1 The NAV per share of each class of the Acquiring Fund Shares and the NAV
per share of each class of the Acquired Fund shall, in each case, be determined
as of the close of regular trading on the New York Stock Exchange (generally,
4:00 p.m., Eastern time) on the Closing Date (the "Valuation Time"). The
Acquiring Fund Adviser shall compute the NAV per Acquiring Fund Share in the
manner set forth in the Trust's Agreement and Declaration of Trust (the
"Declaration"), or By-Laws, and the Acquiring Fund's then-current prospectus and
statement of additional information. The Acquiring Fund Adviser shall compute
the NAV per share of the Acquired Fund in the manner set forth in the
Declaration, or By-Laws, and the Acquired Fund's then-current prospectus and
statement of additional information. The Acquiring Fund Adviser shall confirm to
the Acquiring Fund the NAV of the Acquired Fund.
2.2 The number of shares of each class of Acquiring Fund Shares to be issued
(including fractional shares, if any) in exchange for the Acquired Assets and
the assumption of the Assumed Liabilities shall be determined by the Acquiring
Fund Adviser by dividing the NAV of the Acquired Fund attributable to each class
of the Acquired Fund's shares, as determined in accordance with Paragraph 2.1,
by the NAV of an Acquiring Fund Share of the corresponding class, as determined
in accordance with Paragraph 2.1.
2.3 The Acquiring Fund and the Acquired Fund shall cause the Acquiring Fund
Adviser to deliver a copy of its valuation report to the other party at Closing
(as defined in Paragraph 3.1). All computations of value shall be made by the
Acquiring Fund Adviser or its agents in accordance with its regular practice as
pricing agent for the Acquiring Fund and the Acquired Fund.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be [ ], or such other earlier or later date as
the parties may agree. All acts necessary to consummate the Reorganization (the
"Closing") shall be deemed to take place simultaneously as of 5:00 p.m. (Eastern
time) on the Closing Date unless otherwise agreed by the parties. The Closing
shall be held at the offices of Bingham McCutchen LLP, One Federal Street,
Boston, Massachusetts, or at such other place as the parties may agree.
3.2 Portfolio securities that are held other than in book-entry form in the
name of Brown Brothers Harriman & Co. (the "Acquired Fund Custodian") as record
holder for the Acquired Fund shall be presented by the Acquired Fund to Brown
Brothers
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Harriman & Co. (the "Acquiring Fund Custodian") for examination no later than
three (3) business days preceding the Closing Date. Such portfolio securities
shall be delivered by the Acquired Fund to the Acquiring Fund Custodian for the
account of the Acquiring Fund on the Closing Date, duly endorsed in proper form
for transfer, in such condition as to constitute good delivery thereof in
accordance with the custom of brokers, and shall be accompanied by all necessary
federal and state stock transfer stamps or a check for the appropriate purchase
price thereof. Portfolio securities held of record by the Acquired Fund
Custodian in book-entry form on behalf of the Acquired Fund shall be delivered
by the Acquired Fund Custodian through the Depository Trust Company to the
Acquiring Fund Custodian and by the Acquiring Fund Custodian recording the
beneficial ownership thereof by the Acquiring Fund on the Acquiring Fund
Custodian's records. Any cash shall be delivered by the Acquired Fund Custodian
transmitting immediately available funds by wire transfer to the Acquiring Fund
Custodian the cash balances maintained by the Acquired Fund Custodian and the
Acquiring Fund Custodian crediting such amount to the account of the Acquiring
Fund.
3.3 The Acquiring Fund Custodian shall deliver within one business day after
the Closing a certificate of an authorized officer stating that: (a) the
Acquired Assets have been delivered in proper form to the Acquiring Fund on the
Closing Date, and (b) all necessary transfer taxes including all applicable
federal and state stock transfer stamps, if any, have been paid, or provision
for payment has been made in conjunction with the delivery of portfolio
securities as part of the Acquired Assets.
3.4 If on the Closing Date (a) the New York Stock Exchange is closed to
trading or trading thereon shall be restricted or (b) trading or the reporting
of trading on such exchange or elsewhere is disrupted so that accurate appraisal
of the NAV of the Acquiring Fund Shares or the Acquired Fund pursuant to
Paragraph 2.1 is impracticable (in the judgment of the Board of the Trust with
respect to the Acquiring Fund and the Acquired Fund), the Closing Date shall be
postponed until the first business day after the day when trading shall have
been fully resumed and reporting shall have been restored or such later date as
may be mutually agreed in writing by an authorized officer of each party.
3.5 The Acquired Fund shall deliver at the Closing a list of the names,
addresses, federal taxpayer identification numbers and U.S. federal tax
withholding statuses of the Acquired Fund Shareholders (and any certificates
reflecting that information) and the number and percentage ownership of
outstanding Acquired Fund Shares owned by each Acquired Fund Shareholder as of
the Valuation Time, certified by the President or Vice President or a Secretary
or Assistant Secretary of the Trust and its Treasurer, Secretary or other
authorized officer (the "Shareholder List") as being an accurate record of the
information (a) provided by the Acquired Fund Shareholders, (b) provided by the
Acquired Fund Custodian, or (c) derived from the Trust's records by such
officers or one of the Trust's service providers. The Acquiring Fund shall issue
and deliver to the Acquired Fund a confirmation evidencing the Acquiring Fund
Shares to be credited on the Closing Date, or provide evidence satisfactory to
the Acquired Fund that such Acquiring Fund Shares have been credited to the
Acquired Fund's account on the books of the Acquiring Fund. At the Closing, each
party shall deliver to the other such bills of sale, checks, assignments, stock
certificates, receipts or other documents as such other party or its counsel may
reasonably request.
4. REPRESENTATIONS AND WARRANTIES
4.1 Except as set forth on Schedule 4.1 of this Agreement, the Trust, on
behalf of the Acquired Fund, represents, warrants and covenants to the Acquiring
Fund as follows:
(a) The Acquired Fund is a series of the Trust. The Trust is a statutory
trust validly existing and in good standing under the laws of the State of
Delaware and has the power to own all of its properties and assets and to
perform its obligations under this Agreement. The Acquired Fund is not required
to qualify to do business in any jurisdiction in which it is not so qualified or
where failure to qualify would subject it to any material liability or
disability. The Acquired Fund has all necessary federal, state and local
authorizations to own all of its properties and assets and to carry on its
business as now being conducted;
(b) The Trust is a registered investment company classified as a
management company of the open-end type, and its registration with the
Commission as an investment company under the Investment Company Act is in full
force and effect;
(c) The Trust is not in violation of, and the execution and delivery of
this Agreement and the performance of its obligations under this Agreement on
behalf of the Acquired Fund will not result in a material violation of, any
provision of the Trust's Declaration or By-Laws or any material agreement,
indenture, instrument, contract, lease or other undertaking with respect to the
Acquired Fund to which the Trust, on behalf of the Acquired Fund, is a party or
by which the Acquired Fund or any of its assets are bound;
(d) No litigation or administrative proceeding or investigation of or
before any court or governmental body is currently pending or to its knowledge
threatened against the Acquired Fund or any of the Acquired Fund's properties or
assets that, if adversely determined, would materially and adversely affect its
financial condition or the conduct of the Acquired Fund's business. The Acquired
Fund is not a party to or subject to the provisions of any order, decree or
judgment of any court or governmental body which materially adversely affects
the Acquired Fund's business or its ability to consummate the transactions
contemplated herein or would
A-3
be binding upon the Acquiring Fund as the successor to the Acquired Fund;
(e) All material contracts or other commitments of the Acquired Fund
(other than this Agreement or agreements for the purchase and sale of securities
entered into in the ordinary course of business and consistent with its
obligations under this Agreement) will terminate at or prior to the Closing Date
and no such termination will result in liability to the Acquired Fund (or the
Acquiring Fund);
(f) The Statement of Assets and Liabilities of the Acquired Fund, and
the related Statements of Operations and Changes in Net Assets, as of and for
the fiscal year ended July 31, 2013, have been audited by Ernst & Young LLP,
independent registered public accounting firm, and are in accordance with
generally accepted accounting principles ("GAAP") consistently applied and
fairly reflect, in all material respects, the financial condition of the
Acquired Fund as of such date and the results of its operations for the period
then ended, and all known liabilities, whether actual or contingent, of the
Acquired Fund as of the date thereof are disclosed therein. The Statement of
Assets and Liabilities will be in accordance with GAAP consistently applied and
will fairly reflect, in all material respects, the financial condition of the
Acquired Fund as of such date and the results of its operations for the period
then ended. Except for the Assumed Liabilities, the Acquired Fund will not have
any known or contingent liabilities on the Closing Date. No significant
deficiency, material weakness, fraud, significant change or other factor that
could significantly affect the internal controls of the Acquired Fund has been
disclosed or is required to be disclosed in the Acquired Fund's reports on Form
N-CSR to enable the chief executive officer and chief financial officer or other
officers of the Trust to make the certifications required by the Sarbanes-Oxley
Act, and no deficiency, weakness, fraud, change, event or other factor exists
with respect to the Acquired Fund that will be required to be disclosed in the
Acquiring Fund's Form N-CSR after the Closing Date;
(g) Since the most recent fiscal year end, except as specifically
disclosed in the Acquired Fund's prospectus or its statement of additional
information as in effect on the date of this Agreement, or its semi-annual
report for the six-month period ended January 31, 2014, there has not been any
material adverse change in the Acquired Fund's financial condition, assets,
liabilities, business or prospects, or any incurrence by the Acquired Fund of
indebtedness, except for normal contractual obligations incurred in the ordinary
course of business or in connection with the settlement of purchases and sales
of portfolio securities. For the purposes of this subparagraph (g) (but not for
any other purpose of this Agreement), a decline in NAV per Acquired Fund Share
arising out of its normal investment operations or a decline in market values of
securities in the Acquired Fund's portfolio, a decline in net assets of the
Acquired Fund as a result of redemptions or the discharge of Acquired Fund
liabilities shall not constitute a material adverse change;
(h) The Acquired Fund is a separate series of the Trust treated as a
separate corporation from each other series of the Trust under Section 851(g) of
the Code. For each taxable year of its existence, including the taxable year
ending on the Closing Date, the Acquired Fund has had in effect an election to
be treated as a "regulated investment company" under Subchapter M of the Code,
has satisfied or will satisfy all of the requirements of Subchapter M of the
Code for treatment as a regulated investment company, and has been or will be
eligible to compute its federal income tax under Section 852 of the Code. On or
before the Closing Date, the Acquired Fund will have declared and paid dividends
sufficient to distribute substantially all of (a) the sum of (i) its net
tax-exempt interest income, (ii) its investment company taxable income (as
defined in the Code, computed without regard to any deduction for dividends
paid) and (iii) any net capital gain (as such term is used in Sections
852(b)(3)(A) and (C) of the Code) after reduction by any available capital loss
carryforwards, and (b) any other amounts as necessary, in each case for all of
its tax periods ending on or before the Closing Date, as dividends qualifying
for the dividends-paid deduction under Section 561 of the Code, such that the
Acquired Fund will have no unpaid tax liability under Section 852 of the Code
for any tax period ending on or before the Closing Date. For each calendar year
(including the calendar year that includes the Closing Date), the Acquired Fund
will have made such distributions on or before the Closing Date as are necessary
so that for all calendar years ending on or before the Closing Date, and for the
calendar year that includes the Closing Date, such Acquired Fund will not have
any unpaid tax liability under Section 4982 of the Code;
(i) All issued and outstanding Acquired Fund Shares are, and at the
Closing Date will be, legally issued and outstanding, fully paid and
nonassessable by the Acquired Fund. All of the issued and outstanding Acquired
Fund Shares will, at the time of Closing, be held of record by the persons and
in the amounts set forth in the Shareholder List submitted to the Acquiring Fund
pursuant to Paragraph 3.5 hereof. The Acquired Fund does not have outstanding
any options, warrants or other rights to subscribe for or purchase any Acquired
Fund Shares, nor is there outstanding any security convertible into any Acquired
Fund Shares;
(j) At the Closing Date, the Acquired Fund will have good and marketable
title to the Acquired Assets, and full right, power and authority to sell,
assign, transfer and deliver the Acquired Assets to the Acquiring Fund, and,
upon delivery and payment for the Acquired Assets, the Acquiring Fund will
acquire good and marketable title thereto, subject to no restrictions on the
full transfer thereof, except such restrictions as might arise under the
Securities Act;
(k) The Trust has the trust power and authority, on behalf of the
Acquired Fund, to enter into and perform its
A-4
obligations under this Agreement. The execution, delivery and performance of
this Agreement have been duly authorized by all necessary action on the part of
the Trust's Board of Trustees, and, assuming due authorization, execution and
delivery by the Trust, on behalf of the Acquiring Fund, this Agreement will
constitute a valid and binding obligation of the Trust, on behalf of the
Acquired Fund, enforceable in accordance with its terms, subject as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights and to general equity
principles;
(l) The information to be furnished by the Trust, on behalf of the
Acquired Fund, to the Acquiring Fund for use in applications for orders,
registration statements and other documents which may be necessary in connection
with the transactions contemplated hereby and any information necessary to
compute the total return of the Acquired Fund shall be accurate and complete in
all material respects and shall comply in all material respects with federal
securities and other laws and regulations applicable thereto or the requirements
of any form for which its use is intended, and shall not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the information provided not misleading;
(m) No consent, approval, authorization or order of or filing with any
court or governmental authority is required for the execution of this Agreement
or the consummation of the transactions contemplated by this Agreement by the
Trust or the Acquired Fund, except such as may be required under the Securities
Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
Investment Company Act and the rules and regulations of the Commission
thereunder, state securities laws and the Hart-Scott-Rodino Act;
(n) The provisions of the Trust's Declaration, the Trust's By-Laws and
Delaware law do not require the shareholders of the Acquired Fund to approve
this Agreement or the transactions contemplated herein in order for the Trust or
the Acquired Fund to consummate the transactions contemplated herein;
(o) All of the issued and outstanding Acquired Fund Shares have been
offered for sale and sold in compliance in all material respects with all
applicable federal and state securities laws, except as may have been previously
disclosed in writing to the Acquiring Fund;
(p) The current prospectus and statement of additional information of
the Acquired Fund and any amendments or supplements thereto did not as of their
dates or the dates of their distribution to the public contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which such statements were made, not materially misleading;
(q) The Acquired Fund currently complies in all material respects with
the requirements of, and the rules and regulations under, the Investment Company
Act, the Securities Act, the Exchange Act, state "Blue Sky" laws and all other
applicable federal and state laws or regulations. The Acquired Fund currently
complies in all material respects with all investment objectives, policies,
guidelines and restrictions and any compliance procedures established by the
Trust with respect to the Acquired Fund. All advertising and sales material
currently used by the Acquired Fund complies in all material respects with the
applicable requirements of the Securities Act, the Investment Company Act, the
rules and regulations of the Commission promulgated thereunder, and, to the
extent applicable, the Conduct Rules of the Financial Industry Regulatory
Authority ("FINRA") and any applicable state regulatory authority. All
registration statements, prospectuses, reports, proxy materials or other filings
required to be made or filed with the Commission, FINRA or any state securities
authorities used by the Acquired Fund during the three (3) years prior to the
date of this Agreement have been duly filed and have been approved or declared
effective, if such approval or declaration of effectiveness is required by law.
Such registration statements, prospectuses, reports, proxy materials and other
filings under the Securities Act, the Exchange Act and the Investment Company
Act (i) are or were in compliance in all material respects with the requirements
of all applicable statutes and the rules and regulations thereunder and (ii) do
not or did not contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
false or misleading;
(r) Neither the Acquired Fund nor, to the knowledge of the Acquired
Fund, any "affiliated person" of the Acquired Fund has been convicted of any
felony or misdemeanor, described in Section 9(a)(1) of the Investment Company
Act, nor, to the knowledge of the Acquired Fund, has any affiliated person of
the Acquired Fund been the subject, or presently is the subject, of any
proceeding or investigation with respect to any disqualification that would be a
basis for denial, suspension or revocation of registration as an investment
adviser under Section 203(e) of the Investment Advisers Act of 1940, as amended
(the "Investment Advisers Act"), or Rule 206(4)-4(b) thereunder or of a
broker-dealer under Section 15 of the Exchange Act, or for disqualification as
an investment adviser, employee, officer or director of an investment company
under Section 9 of the Investment Company Act; and
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(s) The tax representation certificate to be delivered by the Trust on
behalf of the Acquired Fund, to Bingham McCutchen LLP at the Closing pursuant to
Paragraph 7.4 (the "Acquired Fund Tax Representation Certificate") will not on
the Closing Date contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein not misleading.
4.2 Except as set forth on Schedule 4.2 of this Agreement, the Trust, on
behalf of the Acquiring Fund, represents, warrants and covenants to the Acquired
Fund, as follows:
(a) The Acquiring Fund is a series of the Trust. The Trust is a
statutory trust validly existing and in good standing under the laws of the
State of Delaware. The Trust has the power to own all of its properties and
assets and to perform its obligations under this Agreement. The Acquiring Fund
is not required to qualify to do business in any jurisdiction in which it is not
so qualified or where failure to qualify would subject it to any material
liability or disability. The Acquiring Fund has all necessary federal, state and
local authorizations to own all of its properties and assets and to carry on its
business as now being conducted;
(b) The Trust is a registered investment company classified as a
management company of the open-end type, and its registration with the
Commission as an investment company under the Investment Company Act is in full
force and effect;
(c) The current prospectus and statement of additional information of
the Acquiring Fund and any amendment or supplement thereto, conform or conformed
at the time of their distribution to the public in all material respects to the
applicable requirements of the Securities Act and the Investment Company Act and
the rules and regulations of the Commission promulgated thereunder and do not or
did not at the time of their distribution to the public include any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not materially misleading;
(d) The Trust's registration statement on Form N-1A with respect to the
Acquiring Fund that will be in effect on the Closing Date, and the prospectus
and statement of additional information of the Acquiring Fund included therein,
will conform in all material respects with the applicable requirements of the
Securities Act and the Investment Company Act and the rules and regulations of
the Commission thereunder, and did not as of the effective date thereof and will
not as of the Closing Date contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in which they were
made, not misleading;
(e) The Trust is not in violation of, and the execution and delivery of
this Agreement and performance of its obligations under this Agreement on behalf
of the Acquiring Fund will not result in a material violation of, any provisions
of the Declaration or By-Laws of the Trust or any material agreement, indenture,
instrument, contract, lease or other undertaking with respect to the Acquiring
Fund to which the Trust, on behalf of the Acquiring Fund, is a party or by which
the Acquiring Fund or any of its assets is bound;
(f) No litigation or administrative proceeding or investigation of or
before any court or governmental body is currently pending or to its knowledge
threatened against the Acquiring Fund or any of the Acquiring Fund's properties
or assets that, if adversely determined, would materially and adversely affect
its financial condition or the conduct of the Acquiring Fund's business. Neither
the Trust nor the Acquiring Fund is a party to or subject to the provisions of
any order, decree or judgment of any court or governmental body which materially
adversely affects the Acquiring Fund's business or its ability to consummate the
transactions contemplated herein;
(g) The Statement of Assets and Liabilities of the Acquiring Fund, and
the related Statements of Operations and Changes in Net Assets, as of and for
the fiscal year ended July 31, 2013 have been audited by Ernst & Young LLP,
independent registered public accounting firm, and are in accordance with GAAP
consistently applied and fairly reflect, in all material respects, the financial
condition of the Acquiring Fund as of such date and the results of its
operations for the period then ended, and all known liabilities, whether actual
or contingent, of the Acquiring Fund as of the date thereof are disclosed
therein;
(h) Since the most recent fiscal year end, except as specifically
disclosed in the Acquiring Fund's prospectus or its statement of additional
information as in effect on the date of this Agreement, or its semi-annual
report for the period ended January 31, 2014 there has not been any material
adverse change in the Acquiring Fund's financial condition, assets, liabilities,
business or prospects, or any incurrence by the Acquiring Fund of indebtedness,
except for normal contractual obligations incurred in the ordinary course of
business or in connection with the settlement of purchases and sales of
portfolio securities. For the purposes of this subparagraph (h) (but not for any
other purpose of this Agreement), a decline in NAV per Acquiring Fund Share
arising out of its normal investment operations or a decline in market values of
securities in the Acquiring Fund's portfolio, a decline in net assets of the
Acquiring Fund as a result of redemptions or the discharge of Acquiring Fund
liabilities shall not constitute a material adverse
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change;
(i) The Acquiring Fund is a separate series of the Trust treated as a
separate corporation from each other series of the Trust under Section 851(g) of
the Code. For each taxable year of its existence ending before the Closing Date,
the Acquiring Fund has had in effect an election to be treated as a "regulated
investment company" under Subchapter M of the Code, has satisfied all of the
requirements of Subchapter M of the Code for treatment as a regulated investment
company, and has been eligible to compute its federal income tax under Section
852 of the Code. On or before the Closing Date, the Acquiring Fund will have
declared and paid dividends sufficient to distribute substantially all of (a)
the sum of (i) its net tax-exempt interest income, (ii) its investment company
taxable income (as defined in the Code, computed without regard to any deduction
for dividends paid) and (iii) any net capital gain (as such term is used in
Sections 852(b)(3)(A) and (C) of the Code) after reduction by any available
capital loss carryforwards, and (b) any other amounts as necessary, in each case
for all of its tax periods ending before the Closing Date, as dividends
qualifying for the dividends-paid deduction under Section 561 of the Code, such
that the Acquiring Fund will have no unpaid tax liability under Section 852 of
the Code for any tax period ending before the Closing Date. For each calendar
year ending before the Closing Date, the Acquired Fund will have made such
distributions on or before the Closing Date as are necessary so that for all
calendar years ending before the Closing Date the Acquiring Fund will not have
any unpaid tax liability under Section 4982 of the Code. The Acquiring Fund
expects to satisfy the requirements of Subchapter M of the Code for treatment as
a regulated investment company and to be eligible for such treatment for its
taxable year that includes the Closing Date;
(j) The authorized capital of the Acquiring Fund consists of an
unlimited number of shares of beneficial interest, no par value per share. As of
the Closing Date, the Acquiring Fund will be authorized to issue an unlimited
number of shares of beneficial interest, no par value per share. The Acquiring
Fund Shares to be issued and delivered to the Acquired Fund for the account of
the Acquired Fund Shareholders pursuant to the terms of this Agreement will have
been duly authorized on the Closing Date and, when so issued and delivered, will
be legally issued and outstanding, fully paid and non-assessable. The Acquiring
Fund does not have outstanding any options, warrants or other rights to
subscribe for or purchase any Acquiring Fund Shares, nor is there outstanding
any security convertible into any Acquiring Fund Shares;
(k) All issued and outstanding Acquiring Fund Shares are, and on the
Closing Date will be, legally issued, fully paid and non-assessable and have
been offered and sold in every state and the District of Columbia in compliance
in all material respects with all applicable federal and state securities laws;
(l) The Trust has the trust power and authority, on behalf of the
Acquiring Fund, to enter into and perform its obligations under this Agreement.
The execution, delivery and performance of this Agreement have been duly
authorized by all necessary action on the part of the Trust's Board of Trustees,
and, assuming due authorization, execution and delivery by the Trust, on behalf
of the Acquired Fund, this Agreement will constitute a valid and binding
obligation of the Trust, on behalf of the Acquiring Fund, enforceable in
accordance with its terms, subject as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting creditors'
rights and to general equity principles;
(m) The information to be furnished in writing by the Trust, on behalf
of the Acquiring Fund, for use in applications for orders, registration
statements and other documents which may be necessary in connection with the
transactions contemplated hereby shall be accurate and complete in all material
respects and shall comply in all material respects with federal securities and
other laws and regulations applicable thereto or the requirements of any form
for which its use is intended, and shall not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the information
provided not misleading;
(n) No consent, approval, authorization or order of or filing with any
court or governmental authority is required for the execution of this Agreement
or the consummation of the transactions contemplated by this Agreement by the
Trust or the Acquiring Fund, except such as may be required under the Securities
Act, the Exchange Act, the Investment Company Act and the rules and regulations
of the Commission thereunder, state securities laws and the Hart-Scott-Rodino
Act;
(o) The Acquiring Fund currently complies in all material respects with,
the requirements of, and the rules and regulations under, the Investment Company
Act, the Securities Act, the Exchange Act, state "Blue Sky" laws and all other
applicable federal and state laws or regulations. The Acquiring Fund currently
complies in all material respects with all investment objectives, policies,
guidelines and restrictions and any compliance procedures established by the
Trust with respect to the Acquiring Fund. All advertising and sales material
currently used by the Acquiring Fund complies in all material respects with the
applicable requirements of the Securities Act, the Investment Company Act, the
rules and regulations of the Commission, and, to the extent applicable, the
Conduct Rules of FINRA and any applicable state regulatory authority. All
registration statements, prospectuses, reports, proxy materials or other filings
required to be made or filed with the Commission, FINRA or any state securities
authorities used by the Acquiring Fund during the three (3) years prior to the
date of this Agreement have been duly filed and have been approved or declared
effective, if such approval or declaration of effectiveness is required by law.
Such registration statements, prospectuses, reports, proxy
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materials and other filings under the Securities Act, the Exchange Act and the
Investment Company Act (i) are or were in compliance in all material respects
with the requirements of all applicable statutes and the rules and regulations
thereunder and (ii) do not or did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances in which they were
made, not false or misleading;
(p) Neither the Acquiring Fund nor, to the knowledge of the Acquiring
Fund, any "affiliated person" of the Acquiring Fund has been convicted of any
felony or misdemeanor, described in Section 9(a)(1) of the Investment Company
Act, nor, to the knowledge of the Acquiring Fund, has any affiliated person of
the Acquiring Fund been the subject, or presently is the subject, of any
proceeding or investigation with respect to any disqualification that would be a
basis for denial, suspension or revocation of registration as an investment
adviser under Section 203(e) of the Investment Advisers Act or Rule 206(4)-4(b)
thereunder or of a broker-dealer under Section 15 of the Exchange Act, or for
disqualification as an investment adviser, employee, officer or director of an
investment company under Section 9 of the Investment Company Act; and
(q) The tax representation certificate to be delivered by the Trust, on
behalf of the Acquiring Fund, to Bingham McCutchen LLP at the Closing pursuant
to Paragraph 6.3 (the "Acquiring Fund Tax Representation Certificate") will not
on the Closing Date contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein not misleading.
5. COVENANTS OF THE FUNDS
The Acquired Fund and the Acquiring Fund, respectively, hereby further
covenant as follows:
5.1 The Acquired Fund covenants that the Acquiring Fund Shares to be issued
hereunder are not being acquired by the Acquired Fund for the purpose of making
any distribution thereof other than in accordance with the terms of this
Agreement;
5.2 The Acquired Fund will assist the Acquiring Fund in obtaining such
information as the Acquiring Fund reasonably requires concerning the beneficial
ownership of the Acquired Fund Shares.
5.3 Subject to the provisions of this Agreement, each Fund will take, or
cause to be taken, all actions, and do or cause to be done, all things
reasonably necessary, proper or advisable to consummate the transactions
contemplated by this Agreement;
5.4 The Acquired Fund shall furnish to the Acquiring Fund on the Closing
Date a statement of assets and liabilities of the Acquired Fund ("Statement of
Assets and Liabilities") as of the Closing Date setting forth the NAV (as
computed pursuant to Paragraph 2.1) of the Acquired Fund as of the Valuation
Time, which statement shall be prepared in accordance with GAAP consistently
applied and certified by the Trust's Treasurer or Assistant Treasurer. As
promptly as practicable, but in any case within 30 days after the Closing Date,
the Trust, on behalf of the Acquired Fund, shall furnish to the Acquiring Fund,
in such form as is reasonably satisfactory to the Acquiring Fund, a statement of
the earnings and profits of the Acquired Fund for federal income tax purposes,
and of any capital loss carryovers and other items that will be carried over to
the Acquiring Fund under the Code, and which statement will be certified by the
Treasurer of the Trust; and
5.5 Neither Fund shall take any action that is inconsistent with the
representations set forth herein or, with respect to the Acquired Fund or Trust,
in the Acquired Fund Tax Representation Certificate and, with respect to the
Acquiring Fund or Trust, in the Acquiring Fund Tax Representation Certificate.
Unless otherwise required pursuant to a "determination" within the meaning of
Section 1313(a) of the Code, the parties hereto shall treat and report the
Reorganization as a reorganization within the meaning of Section 368(a) of the
Code and shall not take any position inconsistent with such treatment.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Acquired Fund to complete the transactions provided
for herein shall be, at its election, subject to the performance by the
Acquiring Fund of all the obligations to be performed by it hereunder on or
before the Closing Date, and, in addition thereto, the following further
conditions, unless waived by the Acquired Fund in writing:
6.1 All representations and warranties by the Trust, on behalf of the
Acquiring Fund, contained in this Agreement shall be true and correct in all
material respects as of the date hereof and, except as they may be affected by
the transactions contemplated by this Agreement, as of the Closing Date with the
same force and effect as if made on and as of the Closing Date;
6.2 The Acquiring Fund shall have delivered to the Acquired Fund on the
Closing Date a certificate of the Trust, on behalf of the Acquiring Fund,
executed in its name by its President or Vice President and its Treasurer or
Assistant Treasurer, in form and substance satisfactory to the Acquired Fund and
dated as of the Closing Date, to the effect that the representations and
warranties of
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the Trust made in this Agreement on behalf of the Acquiring Fund are true and
correct in all material respects at and as of the Closing Date, except as they
may be affected by the transactions contemplated by this Agreement, that each of
the conditions to Closing in this Article 6 has been met, and as to such other
matters as the Acquired Fund shall reasonably request;
6.3 The Trust, on its own behalf and on behalf of the Acquiring Fund, shall
have delivered to Bingham McCutchen LLP an Acquiring Fund Tax Representation
Certificate, satisfactory to Bingham McCutchen LLP, in a form mutually
acceptable to the Acquiring Fund and the Acquired Fund, concerning certain
tax-related matters; and
6.4 With respect to the Acquiring Fund, the Board of Trustees of the Trust
shall have determined that the Reorganization is in the best interests of the
Acquiring Fund and, based upon such determination, shall have approved this
Agreement and the transactions contemplated hereby.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Fund to complete the transactions provided
for herein shall be, at its election, subject to the performance by the Acquired
Fund of all the obligations to be performed by it hereunder on or before the
Closing Date and, in addition thereto, the following further conditions, unless
waived by the Acquiring Fund in writing:
7.1 All representations and warranties of the Trust, on behalf of the
Acquired Fund, contained in this Agreement shall be true and correct in all
material respects as of the date hereof and, except as they may be affected by
the transactions contemplated by this Agreement, as of the Closing Date with the
same force and effect as if made on and as of the Closing Date;
7.2 The Acquired Fund shall have delivered to the Acquiring Fund the
Statement of Assets and Liabilities of the Acquired Fund pursuant to Paragraph
5.4, together with a list of its portfolio securities showing the federal income
tax bases and holding periods of such securities, as of the Closing Date,
certified by the Trust's Treasurer or Assistant Treasurer;
7.3 The Acquired Fund shall have delivered to the Acquiring Fund on the
Closing Date a certificate of the Trust, on behalf of the Acquired Fund,
executed in its name by its President or Vice President and a Treasurer or
Assistant Treasurer, in form and substance reasonably satisfactory to the
Acquiring Fund and dated as of the Closing Date, to the effect that the
representations and warranties of the Trust made in this Agreement on behalf of
the Acquired Fund are true and correct in all material respects at and as of the
Closing Date, except as they may be affected by the transactions contemplated by
this Agreement, that each of the conditions to Closing in this Article 7 has
been met, and as to such other matters as the Acquiring Fund shall reasonably
request;
7.4 The Trust, on its own behalf and on behalf of the Acquired Fund, shall
have delivered to Bingham McCutchen LLP an Acquired Fund Tax Representation
Certificate, satisfactory to Bingham McCutchen LLP, in a form mutually
acceptable to the Acquiring Fund and the Acquired Fund, concerning certain
tax-related matters; and
7.5 With respect to the Acquired Fund, the Board of Trustees of the Trust
shall have determined that the Reorganization is in the best interests of the
Acquired Fund and, based upon such determination, shall have approved this
Agreement and the transactions contemplated hereby.
8. FURTHER CONDITIONS PRECEDENT
If any of the conditions set forth below does not exist on or before the
Closing Date with respect to either party hereto, the other party to this
Agreement shall, at its option, not be required to consummate the transactions
contemplated by this Agreement:
8.1 On the Closing Date, no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein;
8.2 All consents of other parties and all other consents, orders and permits
of federal, state and local regulatory authorities (including those of the
Commission and of state Blue Sky and securities authorities) deemed necessary by
either party hereto to permit consummation, in all material respects, of the
transactions contemplated hereby shall have been obtained, except where failure
to obtain any such consent, order or permit would not involve a risk of a
material adverse effect on the assets or properties of either party hereto,
provided that either party may waive any such conditions for itself;
8.3 The registration statement on Form N-14 filed in connection with this
Agreement shall have become effective under the Securities Act and no stop order
suspending the effectiveness of the registration statement shall have been
issued and, to the knowledge of the parties hereto, no investigation or
proceeding for that purpose shall have been instituted or be pending, threatened
or contemplated under the Securities Act;
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8.4 The parties shall have received an opinion of Bingham McCutchen LLP,
satisfactory to the Acquired Fund and the Acquiring Fund and subject to
customary assumptions and qualifications, substantially to the effect that,
based upon certain facts, assumptions and representations, and upon
certifications contained in the Acquiring Fund Tax Representation Certificate
and the Acquired Fund Tax Representation Certificate, for federal income tax
purposes (i) the Reorganization will constitute a "reorganization" within the
meaning of Section 368(a) of the Code, and each of the Acquired Fund and the
Acquiring Fund will be a "party to a reorganization" within the meaning of
Section 368(b) of the Code; (ii) no gain or loss will be recognized by the
Acquired Fund on the transfer of the Acquired Assets to the Acquiring Fund
solely in exchange for the Acquiring Fund Shares and the assumption by the
Acquiring Fund of the Assumed Liabilities, or upon the distribution of the
Acquiring Fund Shares to the shareholders of the Acquired Fund, except for (A)
gain or loss that may be recognized on the transfer of "section 1256 contracts"
as defined in Section 1256(b) of the Code, (B) gain that may be recognized on
the transfer of stock in a "passive foreign investment company" as defined in
Section 1297(a) of the Code, and (C) any other gain or loss that may be required
to be recognized as a result of the closing of the Acquired Fund's taxable year
or upon the transfer of an asset regardless of whether such transfer would
otherwise be a non-recognition transaction under the Code; (iii) the tax basis
in the hands of the Acquiring Fund of the Acquired Assets will be the same as
the tax basis of such Acquired Assets in the hands of the Acquired Fund
immediately prior to the transfer thereof, increased by the amount of gain (or
decreased by the amount of loss), if any, recognized by the Acquired Fund on the
transfer; (iv) the holding period of each Acquired Asset in the hands of the
Acquiring Fund, other than assets with respect to which gain or loss is required
to be recognized in the Reorganization, will include the period during which the
Acquired Asset was held by the Acquired Fund (except where investment activities
of the Acquiring Fund have the effect of reducing or eliminating the holding
period with respect to an asset); (v) no gain or loss will be recognized by the
Acquiring Fund upon its receipt of the Acquired Assets solely in exchange for
Acquiring Fund Shares and the assumption of the Assumed Liabilities; (vi) no
gain or loss will be recognized by the Acquired Fund Shareholders upon the
exchange of all of their Acquired Fund Shares for Acquiring Fund Shares as part
of the Reorganization; (vii) the aggregate tax basis of the Acquiring Fund
Shares that each Acquired Fund Shareholder receives in the Reorganization will
be the same as the aggregate tax basis of the Acquired Fund Shares exchanged
therefor; (viii) each Acquired Fund Shareholder's holding period for the
Acquiring Fund Shares received in the Reorganization will include the holding
period for the Acquired Fund Shares exchanged therefor, provided that the
Acquired Fund Shareholder held such Acquired Fund Shares as capital assets on
the date of exchange. Notwithstanding anything in this Agreement to the
contrary, neither the Acquired Fund nor the Acquiring Fund may waive the
condition set forth in this paragraph 8.4.
8.5 The Trust, on behalf of the Acquired Fund, shall have distributed to the
Acquired Fund Shareholders, in a distribution or distributions qualifying for
the deduction for dividends paid under Section 561 of the Code, all of the
Acquired Fund's investment company taxable income (as defined in Section
852(b)(2) of the Code determined without regard to Section 852(b)(2)(D) of the
Code) for its taxable year ending on the Closing Date, all of the excess of (i)
its interest income excludable from gross income under Section 103(a) of the
Code over (ii) its deductions disallowed under Sections 265 and 171(a)(2) of the
Code for its taxable year ending on the Closing Date, and all of its net capital
gain (as such term is used in Sections 852(b)(3)(A) and (C) of the Code), after
reduction by any available capital loss carryforward, for its taxable year
ending on the Closing Date.
9. BROKERAGE FEES AND EXPENSES
9.1 Each party hereto represents and warrants to the other party hereto that
there are no brokers or finders entitled to receive any payments in connection
with the transactions provided for herein.
9.2 The parties have been informed by Pioneer that it will pay 50% of the
expenses incurred in connection with the Reorganization (including, but not
limited to, the preparation of the registration statement on Form N-14). Each of
the Acquired Fund and the Acquiring Fund agrees to pay 25% of the expenses
incurred in connection with the Reorganization (including, but not limited to,
the preparation of the registration statement on Form N-14). Notwithstanding any
of the foregoing, expenses will in any event be paid by the party directly
incurring such expenses if and to the extent that the payment by another person
of such expenses would result in a failure by either Fund to qualify for
treatment as a "regulated investment company" within the meaning of Section 851
of the Code or would prevent the Reorganization from qualifying as a
reorganization within the meaning of Section 368(b) of the Code or otherwise
result in the imposition of tax on either Fund or on either Fund's shareholders.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Acquiring Fund and the Acquired Fund each agrees that neither party
has made any representation, warranty or covenant not set forth herein or
referred to in Paragraphs 4.1 or 4.2 hereof and that this Agreement constitutes
the entire agreement between the parties.
10.2 The covenants to be performed after the Closing by both the Acquiring
Fund and the Acquired Fund shall survive the Closing. The representations and
warranties and all other covenants contained in this Agreement or in any
document delivered pursuant hereto or in connection herewith shall not survive
the consummation of the transactions contemplated hereunder.
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11. TERMINATION
11.1 This Agreement may be terminated by the mutual agreement of the
Acquiring Fund and the Acquired Fund. In addition, either party may at its
option terminate this Agreement at or prior to the Closing Date:
(a) by resolution of the Trust's Board of Trustees if circumstances
should develop that, in the good faith opinion of such Board, make proceeding
with the Agreement not in the best interests of the Acquiring Fund's
shareholders; or
(b) by resolution of the Trust's Board of Trustees if circumstances
should develop that, in the good faith opinion of such Board, make proceeding
with the Agreement not in the best interests of the Acquired Fund's
shareholders.
11.2 In the event of any such termination, there shall be no liability for
damages on the part of the Trust, the Acquiring Fund or the Acquired Fund, or
the trustees or officers of the Trust, but, subject to Paragraph 9.2, each party
shall bear the expenses incurred by it incidental to the preparation and
carrying out of this Agreement.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner as
may be mutually agreed upon in writing by the authorized officers of the Trust;
provided that nothing contained in this Section 12 shall be construed to
prohibit the parties from amending this Agreement to change the Closing Date.
13. NOTICES
Any notice, report, statement or demand required or permitted by any
provision of this Agreement shall be in writing and shall be given by prepaid
telegraph, telecopy or certified mail addressed to the Trust at 60 State Street,
Boston, Massachusetts 02109.
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
14.1 The article and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
14.3 This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Delaware, without giving effect to conflict of
laws principles (other than Delaware Code Title 6 ss. 2708); provided that,
in the case of any conflict between those laws and the federal securities laws,
the latter shall govern.
14.4 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by
either party without the prior written consent of the other party hereto.
Nothing herein expressed or implied is intended or shall be construed to confer
upon or give any person, firm or corporation, or other entity, other than the
parties hereto and their respective successors and assigns, any rights or
remedies under or by reason of this Agreement.
* * * * *
A-11
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed as of the date first set forth above by its President or Vice
President and attested by its Secretary or Assistant Secretary.
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Attest: Pioneer Ibbotson Asset Allocation Series,
on behalf of its series,
Pioneer Ibbotson Growth Allocation Fund
By: _____________________________________ By: _____________________________________
Name: Name:
Title: Title:
Attest: Pioneer Ibbotson Asset Allocation Series,
on behalf of its series,
Pioneer Ibbotson Aggressive Allocation Fund
By: _____________________________________ By: _____________________________________
Name: Name:
Title: Title:
Attest: Solely for purposes of paragraph 9.2 of the Agreement:
Pioneer Investment Management, Inc.
By:______________________________________ By:__________________________________
Name: Name:
Title: Title
A-12
SCHEDULE 4.1
A-13
SCHEDULE 4.2
A-14
This page for your notes.
This page for your notes.
SUBJECT TO COMPLETION, DATED [ ], 2014
PIONEER IBBOTSON GROWTH ALLOCATION FUND
(to be renamed Pioneer Multi-Asset Allocator Growth Fund)
60 State Street
Boston, Massachusetts 02109
STATEMENT OF ADDITIONAL INFORMATION
______________, 2014
This Statement of Additional Information is not a prospectus. It should be
read in conjunction with the related combined Information Statement and
Prospectus (also dated ______________, 2014) which covers Class A, Class C and
Class Y shares of Pioneer Ibbotson Growth Allocation Fund to be issued in
exchange for corresponding shares of Pioneer Ibbotson Aggressive Allocation
Fund. Please retain this Statement of Additional Information for further
reference. The Prospectus is available to you from Pioneer Investment
Management, Inc. free of charge by calling 1-800-225-6292.
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Page
----
INTRODUCTION 2
EXHIBITS AND DOCUMENTS INCORPORATED BY REFERENCE 2
ADDITIONAL INFORMATION ABOUT EACH PIONEER FUND 3
PRO FORMA COMBINED FINANCIAL STATEMENTS 5
1
INTRODUCTION
This Statement of Additional Information is intended to supplement the
information provided in a Information Statement and Prospectus dated
______________, 2014 (the "Information Statement and Prospectus") relating to
the reorganization of Pioneer Ibbotson Aggressive Allocation Fund into Pioneer
Ibbotson Growth Allocation Fund.
EXHIBITS AND DOCUMENTS INCORPORATED BY REFERENCE
The following documents are incorporated herein by reference, unless
otherwise indicated. Shareholders will receive a copy of each document that is
incorporated by reference upon any request to receive a copy of this Statement
of Additional Information.
1. Pioneer Ibbotson Growth Allocation Fund's Statement of Additional
Information, dated December 1, 2013 (File Nos. 333-114788; 811-21569), as
filed with the Securities and Exchange Commission on November 26, 2013
(Accession No. 0001288255-13-000002) is incorporated herein by reference.
2. The Annual Report of Pioneer Ibbotson Growth Allocation Fund for the fiscal
year ended July 31, 2013 (File No. 811-21569), as filed with the Securities
and Exchange Commission on September 26, 2013 (Accession No.
0001331854-13-000003) is incorporated herein by reference.
3. The Semi-Annual Report of Pioneer Ibbotson Growth Allocation Fund for the
fiscal period ended January 31, 2014 (File No. 811-21569), as filed with the
Securities and Exchange Commission on March 31, 2014 (Accession No.
0001288255-14-000001) is incorporated herein by reference.
4. Pioneer Ibbotson Aggressive Allocation Fund's Statement of Additional
Information, dated December 1, 2013 (File Nos. 333-114788; 811-21569), as
filed with the Securities and Exchange Commission on November 26, 2013
(Accession No. 0001288255-13-000002) is incorporated herein by reference.
5. The Annual Report of Pioneer Ibbotson Aggressive Allocation Fund for the
fiscal year ended July 31, 2013 (File No. 811-21569), as filed with the
Securities and Exchange Commission on September 26, 2013 (Accession No.
0001331854-13-000003) is incorporated herein by reference.
6. The Semi-Annual Report of Pioneer Ibbotson Aggressive Allocation Fund for
the fiscal period ended January 31, 2014 (File No. 811-21569), as filed with
the Securities and Exchange Commission on March 31, 2014 (Accession No.
0001288255-14-000001) is incorporated herein by reference.
2
ADDITIONAL INFORMATION ABOUT
EACH PIONEER FUND
Additional information about each Pioneer Fund can be found in the most
recent Statement of Additional Information of each Pioneer Fund, which is
incorporated by reference into this registration statement.
PORTFOLIO MANAGEMENT
ADDITIONAL INFORMATION ABOUT THE PORTFOLIO MANAGERS
OTHER ACCOUNTS MANAGED BY THE PORTFOLIO MANAGERS
The table below indicates, for the portfolio managers of Pioneer Ibbotson
Growth Allocation Fund (to be renamed Pioneer Multi-Asset Allocator Growth
Fund), post-reorganization, 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 June 30, 2014. 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.
PIONEER IBBOTSON GROWTH ALLOCATION FUND
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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)
------------------- ---------------------------------- ----------- ------------------ ---------------- ---------------
John O'Toole Other Registered Investment
Companies 2 $ 433,870 N/A N/A
Other Pooled Investment Vehicles 19 $ 7,731,892 N/A N/A
Other Accounts 0 $ 0 N/A N/A
------------------- ---------------------------------- -- ----------- ---------------- ---------------
Paul Weber Other Registered Investment
Companies 2 $ 433,870 N/A N/A
Other Pooled Investment Vehicles 3 $ 3,400,200 N/A N/A
Other Accounts 0 $ 0 N/A N/A
------------------- ---------------------------------- -- ----------- ---------------- ---------------
Salvatore Buono Other Registered Investment
Companies 2 $ 433,870 N/A N/A
Other Pooled Investment Vehicles 39 $13,981,400 N/A N/A
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, Pioneer does not
believe that any material conflicts are likely to arise out of a portfolio
manager's responsibility for the management of the fund as well as one or more
other accounts. Although Pioneer has adopted procedures that it believes are
reasonably designed to detect and prevent violations of the federal securities
laws and to mitigate the potential for conflicts of interest to affect its
portfolio management decisions, there can be no assurance that all conflicts
will be identified or that all procedures will be effective in mitigating the
potential for such risks. Generally, the risks of such conflicts of interest
are increased to the extent that a portfolio manager has a financial incentive
to favor one account over another. Pioneer has structured its compensation
arrangements in a manner that is intended to limit such potential for conflicts
of interest. 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
3
for which there is limited availability are allocated based upon
a range of factors including available cash and consistency with the
accounts' investment objectives and policies. This allocation methodology
necessarily involves some subjective elements but is intended over time to
treat each client in an equitable and fair manner. Generally, the investment
opportunity is allocated among participating accounts on a pro rata basis.
Although Pioneer believes that its practices are reasonably designed to
treat each client in an equitable and fair manner, there may be instances
where a fund may not participate, or may participate to a lesser degree than
other clients, in the allocation of an investment opportunity.
o A portfolio manager could favor one account over another in the order in
which trades for the accounts are placed. If a portfolio manager determines
to purchase a security for more than one account in an aggregate amount that
may influence the market price of the security, accounts that purchased or
sold the security first may receive a more favorable price than accounts
that made subsequent transactions. The less liquid the market for the
security or the greater the percentage that the proposed aggregate purchases
or sales represent of average daily trading volume, the greater the
potential for accounts that make subsequent purchases or sales to receive a
less favorable price. When a portfolio manager intends to trade the same
security on the same day for more than one account, the trades typically are
"bunched," which means that the trades for the individual accounts are
aggregated and each account receives the same price. There are some types of
accounts as to which bunching may not be possible for contractual reasons
(such as directed brokerage arrangements). Circumstances may also arise
where the trader believes that bunching the orders may not result in the best
possible price. Where those accounts or circumstances are involved, Pioneer
will place the order in a manner intended to result in as favorable a price as
possible for such client.
o A portfolio manager could favor an account if the portfolio manager's
compensation is tied to the performance of that account to a greater degree
than other accounts managed by the portfolio manager. If, for example, the
portfolio manager receives a bonus based upon the performance of certain
accounts relative to a benchmark while other accounts are disregarded for
this purpose, the portfolio manager will have a financial incentive to seek
to have the accounts that determine the portfolio manager's bonus achieve
the best possible performance to the possible detriment of other accounts.
Similarly, if Pioneer receives a performance-based advisory fee, the
portfolio manager may favor that account, whether or not the performance of
that account directly determines the portfolio manager's compensation.
o A portfolio manager could favor an account if the portfolio manager has a
beneficial interest in the account, in order to benefit a large client or to
compensate a client that had poor returns. For example, if the portfolio
manager held an interest in an investment partnership that was one of the
accounts managed by the portfolio manager, the portfolio manager would have
an economic incentive to favor the account in which the portfolio manager
held an interest.
o If the different accounts have materially and potentially conflicting
investment objectives or strategies, a conflict of interest could arise. For
example, if a portfolio manager purchases a security for one account and
sells the same security for another account, such trading pattern may
disadvantage either the account that is long or short. In making portfolio
manager assignments, Pioneer seeks to avoid such potentially conflicting
situations. However, where a portfolio manager is responsible for accounts
with differing investment objectives and policies, it is possible that the
portfolio manager will conclude that it is in the best interest of one
account to sell a portfolio security while another account continues to hold
or increase the holding in such security.
COMPENSATION OF PORTFOLIO MANAGERS
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 Pioneer. The compensation
program for all 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. 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 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
4
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 Barclays Capital Aggregate Bond 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.
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 PIONEER RESULTS AND BUSINESS LINE RESULTS. 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. Senior executives or other key employees are
granted performance units based on the stock price performance of UniCredit and
the financial performance of Pioneer Global Asset Management S.p.A., which are
affiliates of Pioneer. 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 June 30, 2014 the value, within the
indicated range, of shares beneficially owned by the portfolio managers of the
fund.
PIONEER IBBOTSON GROWTH ALLOCATION FUND
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BENEFICIAL OWNERSHIP
NAME OF PORTFOLIO MANAGER OF THE FUND*
--------------------------- ---------------------
John O'Toole A
--------------------------- ---------------------
Paul Weber A
--------------------------- ---------------------
Salvatore Buono A
--------------------------- ---------------------
* Key to Dollar Ranges
[Download Table]
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 $1,000,000
PRO FORMA COMBINED FINANCIAL STATEMENTS
The pro forma financial statements for Pioneer Ibbotson Growth Allocation
Fund follow below.
5
Pro Forma
Schedule of Investments
1/31/14
(unaudited)
[Enlarge/Download Table]
Pioneer Pioneer
Pioneer Pioneer Ibbotson Ibbotson
Ibbotson Ibbotson % of Aggressive Growth Pro Forma
Aggressive Growth Pro Forma Pro Forma Allocation Allocation Combined
Allocation Allocation Combined Combined Fund Market Fund Market Market
Fund Shares Fund Shares Shares Net Assets Value ($) Value ($) Value ($)
----------- ----------- --------- ---------- ------------ ----------- ----------
MUTUAL FUNDS 100.2%
PIONEER FUNDS* 100.2%
701,037 2,438,071 3,139,108 Pioneer Bond Fund Class Y 6,750,989 23,478,622 30,229,611
257,540 499,456 756,996 Pioneer Core Equity Fund Class Y 3,953,234 7,666,645 11,619,879
223,844 339,583 563,427 Pioneer Disciplined Growth Fund Class Y 3,597,178 5,457,102 9,054,280
348,972 713,603 1,062,575 Pioneer Disciplined Value Fund Class Y 6,539,729 13,372,917 19,912,646
-- 128,981 128,981 Pioneer Dynamic Credit Fund Class Y -- 1,279,487 1,279,487
447,558 588,759 1,036,317 Pioneer Emerging Markets Fund Class Y 10,736,923 14,124,326 24,861,249
115,763 224,978 340,741 Pioneer Equity Income Fund Class Y 3,873,428 7,527,770 11,401,198
100,885 196,223 297,108 Pioneer Fund Class Y 3,834,622 7,458,431 11,293,053
252,768 527,687 780,455 Pioneer Fundamental Growth Fund Class Y 4,089,782 8,537,974 12,627,756
1,133,594 1,882,304 3,015,898 Pioneer Global Equity Fund Class Y 14,079,242 23,378,219 37,457,461
-- 450,057 450,057 Pioneer Global High Yield Fund Class Y -- 4,401,554 4,401,554
-- 382,938 382,938 Pioneer Global Multisector Income Fund Class Y -- 4,154,876 4,154,876
-- 201,751 201,751 Pioneer High Yield Fund Class Y -- 2,158,739 2,158,739
1,089,091 1,525,574 2,614,665 Pioneer International Value Fund Class Y 23,459,028 32,860,854 56,319,882
439,876 619,063 1,058,939 Pioneer Mid Cap Value Fund Class Y 11,639,123 16,380,405 28,019,528
-- 597 597 Pioneer Oak Ridge Large Cap Growth Fund Class Y -- 10,338 10,338
240,643 325,869 566,512 Pioneer Oak Ridge Small Cap Growth Fund Class Y 9,271,989 12,555,716 21,827,705
233,549 330,328 563,877 Pioneer Real Estate Shares Class Y 5,969,502 8,443,193 14,412,695
184,921 309,712 494,633 Pioneer Select Mid Cap Growth Fund Class Y 7,502,250 12,565,034 20,067,284
364,817 1,636,382 2,001,199 Pioneer Short Term Income Fund Class Y 3,527,778 15,823,818 19,351,596
381,266 716,538 1,097,804 Pioneer Strategic Income Fund Class Y 4,144,361 7,788,772 11,933,133
------------ ----------- ------------
TOTAL INVESTMENTS IN PIONEER FUNDS 122,969,158 229,424,792 352,393,950
------------ ----------- ------------
TOTAL MUTUAL FUNDS 100.2% 122,969,158 229,424,792 352,393,950
------------ ----------- ------------
TOTAL INVESTMENT IN SECURITIES 100.2% $122,969,158 229,424,792 352,393,950
------------ ----------- ------------
OTHER ASSETS AND LIABILITIES -0.2% $ (192,627) (605,583) (798,210)
------------ ----------- ------------
TOTAL NET ASSETS 100.0% $122,776,531 228,819,209 351,595,740
------------ ----------- ------------
TOTAL INVESTMENT AT COST $ 90,606,702 179,037,600 269,644,302
============ =========== ============
-------------------
* Affiliated funds managed by Pioneer Investment Management, Inc.
6
Pro Forma Statement of Assets and Liabilities
January 31, 2014
(unaudited)
[Enlarge/Download Table]
Pioneer Pioneer
Ibbotson Ibbotson
Aggressive Growth
Allocation Allocation Pro Forma Pro Forma
Fund Fund Adjustments Combined
------------ ---------- ----------- ------------
ASSETS:
Investment in securities of affiliated issuers, at value
(at cost $90,606,702 and $179,037,600, respectively) $122,969,158 $229,424,792 $352,393,950
Cash -- -- --
Receivables -
Investment funds sold 294,772 370,870 665,642
Capital stock sold 62,856 147,421 210,277
Dividends 41,423 177,068 218,491
Other assets 23,110 33,688 56,798
------------ ------------ ------------
Total assets $123,391,319 $230,153,839 $353,545,158
------------ ------------ ------------
LIABILITIES:
Payables -
Investment funds purchased $ 32,300 $ 46,319 $ 78,619
Capital stock redeemed 97,778 175,730 273,508
Due to affiliates 90,255 168,872 259,127
Due to Pioneer Investment Management, Inc. 2,941 6,879 9,820
Due to custodian 324,876 879,311 1,204,187
Accrued expenses and other liabilities 66,638 57,519 $ 50,000(a) 174,157
------------ ------------ ------------
Total liabilities $ 614,788 $ 1,334,630 $ 1,999,418
------------ ------------ ------------
NET ASSETS:
Paid-in capital $116,559,044 $211,948,881 $328,507,925
Undistributed net investment income 1,034,842 2,184,734 $ (50,000)(a) 3,169,576
Accumulated net realized loss on investments (27,179,811) (35,701,598) (62,881,409)
Net unrealized appreciation on investments 32,362,456 50,387,192 82,749,648
------------ ------------ ------------
Total net assets $122,776,531 $228,819,209 $351,545,740
------------ ------------ ------------
NET ASSETS BY CLASS:
Class A $ 94,074,263 $154,710,951 $ (36,059)(a) $248,749,155
------------ ------------ ------------
Class B $ 7,474,266 $ 14,449,956 $ (3,101)(a) $ 21,921,121
------------ ------------ ------------
Class C $ 20,822,320 $ 58,426,367 $ (10,623)(a) $ 79,238,064
------------ ------------ ------------
Class Y $ 405,682 $ 1,231,935 $ (217)(a) $ 1,637,400
------------ ------------ ------------
OUTSTANDING SHARES:
(No par value, unlimited number of shares authorized)
Class A 7,214,281 12,102,370 146,772(b) 19,463,423
------------ ------------ ------------
Class B 606,158 1,264,708 47,759(b) 1,918,625
------------ ------------ ------------
Class C 1,680,091 4,829,763 40,762(b) 6,550,616
------------ ------------ ------------
Class Y 30,922 94,522 212(b) 125,656
------------ ------------ ------------
NET ASSET VALUE PER SHARE:
Class A $ 13.04 $ 12.78 $ 12.78
------------ ------------ ------------
Class B $ 12.33 $ 11.43 $ 11.43
------------ ------------ ------------
Class C $ 12.39 $ 12.10 $ 12.10
------------ ------------ ------------
Class Y $ 13.12 $ 13.03 $ 13.03
------------ ------------ ------------
MAXIMUM OFFERING PRICE:
Class A $ 13.84 $ 13.56 $ 13.56
============ ============ ============
-------------------
(a) Reflects one-time cost related to the reorganization.
(b) Class A, B , C and Y shares of Pioneer Ibbotson Aggressive Allocation Fund
are exchanged for Class A, B, C and Y shares of Pioneer Ibbotson Growth
Allocation Fund, respectively.
See accompanying notes to pro forma financial statements.
7
Pro Forma Statement of Operations
For the Year Ended January 31, 2014
(unaudited)
[Enlarge/Download Table]
Pioneer Pioneer
Ibbotson Ibbotson
Aggressive Growth
Allocation Allocation Pro Forma Pro Forma
Fund Fund Adjustments Combined
---------- ----------- ------------ -----------
INVESTMENT INCOME:
Dividend income from underlying affiliated funds $ 2,073,424 $ 4,584,735 $ -- $ 6,658,159
Interest 79 119 -- 198
----------- ----------- ---------- -----------
Total investment income $ 2,073,503 $ 4,584,854 $ -- $ 6,658,357
----------- ----------- ---------- -----------
EXPENSES:
Management fees $ 156,415 $ 290,395 $ -- $ 446,810
Transfer agent fees --
Class A 157,549 209,702 -- 367,251
Class B 27,951 49,130 -- 77,081
Class C 23,019 42,430 -- 65,449
Class Y 490 497 -- 987
Distribution fees
Class A 227,883 375,524 -- 603,407
Class B 88,271 178,586 -- 266,857
Class C 197,832 538,509 -- 736,341
Shareholder communications expense 95,550 156,886 (47,638)(b) 204,798
Administrative fees 56,477 86,565 (5,562)(a) 137,480
Custodian fees 9,947 2,119 -- 12,066
Registration fees 78,541 61,208 (24,749)(b) 115,000
Professional fees 37,305 41,119 (35,221)(b) 43,203
Printing fees 53,286 33,272 (36,558)(b) 50,000
Fees and expenses of nonaffiliated trustees 6,400 6,625 (3,025)(b) 10,000
Insurance expense 1,563 3,477 -- 5,040
Miscellaneous 2,310 2,733 -- 5,043
----------- ----------- ---------- -----------
Total expenses $ 1,220,789 $ 2,078,777 $ (152,753) $ 3,146,813
Less fees waived and expenses assumed by
Pioneer Investment Management, Inc. $ (13,723) $ (10,993) $ (36,687)(a) $ (61,403)
----------- ----------- ---------- -----------
Net expenses $ 1,207,066 $ 2,067,784 $ (189,440) $ 3,085,410
----------- ----------- ---------- -----------
Net investment income $ 866,437 $ 2,517,070 $ 189,440 $ 3,572,947
----------- ----------- ---------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on underlying affiliated funds $ 3,027,881 $ 4,119,358 $ -- $ 7,147,239
Capital gain distributions from underlying affiliated funds 4,563,667 7,973,923 -- 12,537,590
----------- ----------- ---------- -----------
$ 7,591,548 $12,093,281 $ -- $19,684,829
----------- ----------- ---------- -----------
Change in net unrealized appreciation on investments $ 6,240,289 9,940,875 $ -- $16,181,164
----------- ----------- ---------- -----------
Net gain on investments $13,831,837 $22,034,156 $ -- $35,865,993
----------- ----------- ---------- -----------
Net increase in net assets resulting from operations $14,698,274 $24,551,226 $ 189,440 $39,438,940
=========== =========== ========== ===========
-------------------
(a) Expenses and expense limitations conformed to Pioneer Ibbotson Growth
Allocation Fund's contracts with affiliated parties.
(b) Reflects reduction in expenses due to elimination of duplicate services.
See accompanying notes to pro forma financial statements.
8
Pioneer Multi-Asset Allocator Growth Fund
PRO FORMA NOTES TO COMBINING FINANCIAL STATEMENTS
1-31-14
(Unaudited)
1. Description of the Fund
Pioneer Multi-Asset Allocator Growth Fund (the Fund) is a series of Pioneer
Ibbotson Asset Allocation Series, a Delaware statutory trust. The Fund is
registered under the Investment Company Act of 1940 as an open-end management
investment company. The investment objective of the Fund is to seek long-term
capital growth and current income.
The Fund is a "fund of funds," which means that it seeks to achieve its
investment objective by investing in other registered investment companies
("underlying funds"). The Funds indirectly pay a portion of the expenses
incurred by the underlying funds. Consequently, an investment in the Fund
entails more direct and indirect expenses than direct investment in the
underlying funds.
The Fund will offer three classes of shares designated as Class A shares, Class
C shares and Class Y shares. Prior to November 10, 2014, the Fund also offered
Class B shares. Effective November 10, 2014, Class B shares will be terminated
as a class of shares of the Fund, and existing Class B shares of the Fund on
that date will be converted to Class A shares of the Fund.
Each class of shares represents an interest in the same portfolio of investments
of each Fund and has identical rights (based on relative net asset values) to
assets and liquidation proceeds. Share classes can bear different rates of
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 from
net investment income earned by each class. The Amended and Restated Declaration
of Trust of each Fund gives the Board the flexibility to specify either
per-share voting or dollar-weighted voting when submitting matters for
shareholder approval. Under per-share voting, each share of a class of a Fund is
entitled to one vote. Under dollar-weighted voting, a shareholder's voting power
is determined not by the number of shares owned, but by the dollar value of the
shares on the record date. Each share class has exclusive voting rights with
respect to matters affecting only that class, including with respect to the
distribution plan for that class. There is no distribution plan for Class Y
shares.
2. Basis of Combination
The accompanying pro forma combining financial statements, and related notes,
are presented to show the effect of the proposed Reorganization of Pioneer
Ibbotson Aggressive Allocation Fund (Aggressive Fund) with and into Pioneer
Ibbotson Growth Allocation Fund (the "Reorganization"), as if such
Reorganization had taken place as of January 31, 2014. Pioneer Ibbotson Growth
Allocation Fund will be the accounting survivor of the Reorganization and will
be renamed Pioneer Multi-Asset Allocator Growth Fund (the Fund).
Under the terms of an Agreement and Plan of Reorganization between these two
funds, the combination of the Fund and the Aggressive Fund will be treated as a
tax-free business combination and accordingly will be accounted for by a method
of accounting for tax-free reorganizations of investment companies. The
Reorganization will be accomplished by an acquisition of the net assets of the
Aggressive Fund in exchange for shares of the Fund at the Funds' net asset
values. The accompanying schedule of investments, statement of assets and
liabilities and the related statement of operations of the Aggressive Fund and
the Fund have been combined as of and for the most recent twelve months ended
January 31, 2014. Pioneer Investment Management, Inc. (PIM), the Fund's
investment adviser, has agreed to pay 50% of the expenses associated with the
Reorganization, and the Aggressive Fund and the Growth Fund will equally bear
the remaining costs of the Reorganization. These costs are reflected in the pro
forma financial statements.
These pro forma financial statements and related notes should be read in
conjunction with the financial statements of the Fund and the Aggressive Fund
included in their respective semiannual reports to shareowners dated January 31,
2014. The statement of operations reflect adjustments made to expenses for
Pioneer affiliate contractual rates and duplicate services that would not have
been incurred if the Reorganization took place on February 1, 2013.
3. Security Valuation
Security transactions are recorded as of the trade date. The net asset value is
computed once daily, on each day the New York Stock Exchange (NYSE) is open, as
of the close of regular trading on the NYSE. In computing the net asset value,
holdings of mutual fund shares are valued at the net asset value of each fund
held. Dividend income and realized capital gain distributions from investment
company shares held are recorded on the ex-dividend date. Temporary cash
investments are valued at amortized cost, which approximates market value.
Gains and losses on sales of investments are calculated on the identified cost
method for both financial reporting and federal income tax purposes.
9
Various inputs are used in determining the value of the Fund's investments.
These inputs are summarized in the three broad levels below.
Highest priority is given to Level 1 inputs and lowest priority is given to
Level 3.
Level 1 -- quoted prices in active markets for identical securities
Level 2 -- other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit risks, etc.)
Level 3 -- significant unobservable inputs (including the Fund's own assumptions
in determining fair value of investments)
Generally, equity securities are categorized as Level 1, fixed income securities
and senior loans as Level 2 and securities valued using fair value methods
(other than prices supplied by independent pricing services) as Level 3.
The following is a summary of the inputs used as of January 31, 2014, in valuing
the Fund's assets:
[Download Table]
Level 1 Level 2 Level 3 Total
------------------------------------------------------------------------------------
Mutual Funds $352,393,950 $ -- $ -- $352,393,950
Total $352,393,950 $ -- $ -- $352,393,950
During the twelve months ended January 31, 2014, there were no transfers between
Levels 1, 2, and 3.
4. Capital Shares
The pro forma net asset value per share assumes the issuance of shares of the
Fund that would have been issued at January 31, 2014, in connection with the
proposed Reorganization. The number of shares assumed to be issued is equal to
the net assets of the Aggressive Fund, as of January 31, 2014, divided by the
net asset value of the Fund's shares as of January 31, 2014. The pro forma
number of shares outstanding, by class, for the combined Fund consists of the
following at January 31, 2014:
[Enlarge/Download Table]
Shares of Additional Shares Total Outstanding
the Fund Assumed Issued Shares
Class of Shares Pre-Combination In Reorganization Post-Combination
----------------------------------------------------------------------------------------------------
Class A 12,102,370 7,361,053 19,463,423
Class B 1,264,708 653,917 1,918,625
Class C 4,829,763 1,720,853 6,550,616
Class Y 94,522 31,134 125,656
5. Management Agreement
PIM, a wholly owned indirect subsidiary of UniCredit, manages the Funds'
portfolios. Management fees are calculated daily at the annual rate of 0.13% of
Fund's average daily net assets up to $2.5 billion, 0.11% of next $1.5 billion;
0.10% of the next $1.5 billion and 0.08% on assets over $5.5 billion.
PIM has contractually agreed to limit ordinary operating expenses to the extent
required to reduce Growth Fund's expenses to 0.70% and 1.45% of the average
daily net assets attributable to Class A and Class C shares, respectively. This
expense limitation is in effect through December 1, 2015. Fees waived and
expenses reimbursed during the twelve months ended January 31, 2014 are
reflected on the Statement of Operations. There can be no assurance that PIM
will extend the expense limitation agreement for a class of shares beyond the
dates referred to above.
6. Federal Income Taxes
The Fund has elected to be taxed as a "regulated investment company" under the
Internal Revenue Code. After the acquisition, it will continue to be the Fund's
policy to comply with the requirements of the Internal Revenue Code applicable
to regulated investment companies and to distribute all of its taxable income
and net realized capital gains, if any, to its shareowners. Therefore, no
federal income tax provision is required.
The identified cost of investments for the Fund is substantially the same for
both financial and federal income tax purposes. The cost of investments will
remain unchanged for the combined Fund.
27970-00-0814 SAI
10
PART C
OTHER INFORMATION
PIONEER IBBOTSON ASSET ALLOCATION SERIES
ITEM 15. INDEMNIFICATION
No change from the information set forth in Item 30 of the most recently filed
Registration Statement of Pioneer Ibbotson Asset Allocation Series (the
"Registrant") on Form N-1A under the Securities Act of 1933 and the Investment
Company Act of 1940 (File Nos. 333-114788 and 811-21569), as filed with the
Securities and Exchange Commission on November 26, 2013 (Accession No.
0001288255-13-000002), which information is incorporated herein by reference.
ITEM 16. EXHIBITS
(1)(a) Amended and Restated Agreement and Declaration of Trust (7)
(1)(b) Amendment to Amended and Restated Agreement and Declaration of
Trust (as of May 22, 2010) (8)
(1)(c) Certificate of Trust (1)
(1)(d) Amendment to Certificate of Trust (2)
(2)(a) Amended and Restated By-Laws (7)
(3) Not applicable
(4) Form of Agreement and Plan of Reorganization (*)
(5) Reference is made to Exhibits (1) and (2) hereof
(6)(a) Amended and Restated Management Agreement (10)
(6)(b) Form of Expense Limit Agreement (**)
(7)(a) Underwriting Agreement between the Trust and Pioneer Funds
Distributor, Inc. (2)
(7)(b) Dealer Sales Agreement (6)
(8) Not applicable
(9)(a) Custodian Agreement between the Trust and Brown Brothers
Harriman & Co. (5)
(9)(b) Amended Appendix A to Custodian Agreement (December 1, 2012) (10)
(10)(a) Pioneer Funds Distribution Plan (7)
(10)(b) Appendix A and Appendix B to Pioneer Funds Distribution Plan
(July 2013) (10)
(10)(c) Multiclass Plan Pursuant to Rule 18f-3 (2)
(11) Opinion of Counsel (legality of securities being offered) (**)
(12) Form of opinion as to tax matters and consent (**)
(13)(a) Master Investment Company Service Agreement between the Trust
and Pioneer Investment Management Shareholder Services, Inc. (5)
(13)(b) Amendment No. 6 to Master Investment Company Service Agreement
(December 1, 2012) (10)
(13)(c) Amended and Restated Administration Agreement (March 5, 2012) (9)
(13)(d) Appendix A to Amended and Restated Administration Agreement
(December 1, 2012) (10)
(13)(e) Administrative Agency Agreement, dated as of March 5, 2012,
between Brown Brothers Harriman & Co. and Pioneer Investment
Management, Inc. (9)
(13)(f) Amendment to Administrative and Fund Accounting Agency Agreement
between the Fund and Brown Brothers Harriman & Co. (3)
(13)(g) First Amendment to Administrative and Fund Accounting Agency
Agreement between the Fund and Brown Brothers Harriman & Co. (4)
(13)(h) Asset Allocation Administration Agreement between the Fund
and Brown Brothers Harriman & Co. (3)
(14) Consents of Independent Registered Public Accounting Firms (**)
(15) Not applicable
(16) Powers of Attorney (**)
(17)(a) Code of Ethics of the Pioneer Funds, Pioneer Funds Distributor,
Inc., Pioneer Institutional Asset Management, Inc., and Pioneer
Investment Management, Inc. (February 1, 2010) (8)
(17)(b) Combined Prospectus of Pioneer Ibbotson Growth Allocation Fund
and Pioneer Ibbotson Aggressive Allocation Fund dated
December 1, 2013, as supplemented, and Combined Statement of
Additional Information of Pioneer Ibbotson Growth Allocation
Fund and Pioneer Ibbotson Aggressive Allocation Fund dated
December 1, 2013, as supplemented (**)
(17)(c) Combined Annual Report of Pioneer Ibbotson Growth Allocation
Fund and Pioneer Ibbotson Aggressive Allocation Fund for the
fiscal year ended July 31, 2013 (**)
(17)(d) Combined Semi-Annual Report of Pioneer Ibbotson Growth
Allocation Fund and Pioneer Ibbotson Aggressive Allocation
Fund for the fiscal year ended January 31, 2014 (**)
(1) Previously filed. Incorporated herein by reference from the exhibits filed
in the Registrant's Registration Statement on Form N-1A (File Nos. 333-114788
and 811-21569) as filed with the Securities and Exchange Commission (the "SEC")
on April 23, 2004 (Accession No. 0001288255-04-000006).
(2) Previously filed. Incorporated herein by reference from the exhibits filed
in the Registrant's Pre-effective amendment No. 2 to the Registration Statement
on Form N-1A (File Nos. 333-114788 and 811-21569) as filed with the SEC on
August 6, 2004 (Accession No. 0001016964-04-000333).
(3) Previously filed. Incorporated herein by reference from the exhibits filed
in the Registrant's Post-effective amendment No. 4 to the Registration Statement
on Form N-1A (File Nos. 333-114788 and 811-21569) as filed with the SEC on July
15, 2005 (Accession No. 0001288255-05-000003).
(4) Previously filed. Incorporated herein by reference from the exhibits filed
in the Registrant's Post-effective amendment No. 6 to the Registration Statement
on Form N-1A (File Nos. 333-114788 and 811-21569) as filed with the SEC on
November 23, 2005 (Accession No. 0001288255-05-000021).
(5) Previously filed. Incorporated herein by reference from the exhibits filed
in the Registrant's Post-effective amendment No. 7 to the Registration Statement
on Form N-1A (File Nos. 333-114788 and 811-21569) as filed with the SEC on
November 28, 2006 (Accession No. 0001288255-06-000019).
(6) Previously filed. Incorporated herein by reference from the exhibits filed
in the Registrant's Post-effective amendment No. 8 to the Registration Statement
on Form N-1A (File Nos. 333-114788 and 811-21569) as filed with the SEC on
November 28, 2007 (Accession No. 0001145443-07-003717).
(7) Previously filed. Incorporated herein by reference from the exhibits filed
in the Registrant's Post-effective amendment No. 9 to the Registration Statement
on Form N-1A (File Nos. 333-114788 and 811-21569) as filed with the SEC on
November 26, 2008 (Accession No. 0001288255-08-000008).
(8) Previously filed. Incorporated herein by reference from the exhibits filed
in the Registrant's Post-effective amendment No. 12 to the Registration
Statement on Form N-1A (File Nos. 333-114788 and 811-21569) as filed with the
SEC on November 24, 2010 (Accession No. 0001288255-10-000002).
(9) Previously filed. Incorporated herein by reference from the exhibits filed
in the Registrant's Post-effective amendment No. 15 to the Registration
Statement on Form N-1A (File Nos. 333-114788 and 811-21569) as filed with the
SEC on November 28, 2012 (Accession No. 0001288255-12-000011).
(10) Previously filed. Incorporated herein by reference from the exhibits filed
in the Registrant's Post-effective amendment No. 17 to the Registration
Statement on Form N-1A (File Nos. 333-114788 and 811-21569) as filed with the
SEC on November 26, 2013 (Accession No. 0001288255-13-000002).
(*) Attached as Exhibit C to the combined Information Statement/Prospectus
(**) Filed herewith.
ITEM 17. UNDERTAKINGS.
(1) The undersigned Registrant agrees that prior to any public reoffering of the
securities registered through the use of a prospectus which is part of this
Registration Statement by any person or party which is deemed to be an
underwriter within the meaning of Rule 145(c) of the Securities Act of 1933, the
reoffering prospectus will contain the information called for by the applicable
registration form for the reofferings by persons who may be deemed underwriters,
in addition to the information called for by the other items of the applicable
form.
(2) The undersigned Registrant agrees that every prospectus that is filed under
paragraph (1) above will be filed as part of an amendment to the Registration
Statement and will not be used until the amendment is effective, and that, in
determining any liability under the Securities Act of 1933, each post-effective
amendment shall be deemed to be a new registration statement for the securities
offered therein, and the offering of the securities at that time shall be deemed
to be the initial bona fide offering of them.
(3) The undersigned Registrant agrees that it shall file a final executed
version of the legal and consent opinion as to tax matters as an exhibit to the
subsequent post-effective amendment to its registration statement on Form N-14
filed with the SEC upon the closing of the reorganization contemplated by this
Registration Statement on Form N-14.
(4) Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
SIGNATURES
As required by the Securities Act of 1933, this Registration Statement on
Form N-14 has been signed on behalf of the Registrant, in the City of Boston and
the Commonwealth of Massachusetts, on the 5th day of September, 2014.
PIONEER IBBOTSON ASSET ALLOCATION SERIES
By: /s/ Mark D. Goodwin
--------------------------------
Name: Mark D. Goodwin
Title: Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Mark D. Goodwin
-------------------
Mark D. Goodwin Executive Vice President
(Principal Executive Officer) September 5, 2014
/s/ Mark E. Bradley
-------------------
Mark E. Bradley Treasurer (Principal Financial
and Accounting Officer) September 5, 2014
/s/ David R. Bock*
------------------
David R. Bock Trustee September 5, 2014
/s/ Benjamin M. Friedman*
-------------------------
Benjamin M. Friedman Trustee September 5, 2014
/s/ Margaret B.W. Graham*
-------------------------
Margaret B.W. Graham Trustee September 5, 2014
/s/ Thomas J. Perna*
--------------------
Thomas J. Perna Chairman of the Board and Trustee September 5, 2014
/s/ Marguerite A. Piret*
------------------------
Marguerite A. Piret Trustee September 5, 2014
/s/ Kenneth J. Taubes*
----------------------
Kenneth J. Taubes Trustee September 5, 2014
* By: /s/ Christopher J. Kelley
-------------------------
Christopher J. Kelley, Attorney-in-Fact
EXHIBIT INDEX
The following exhibits are filed as part of this Registration Statement:
Exhibit No. Description
----------- -----------
(6)(b) Form of Expense Limit Agreement
(11) Opinion of Counsel (legality of securities being offered)
(12) Form of opinion as to tax matters and consent
(14) Consents of Independent Registered Public Accounting Firms
(16) Powers of Attorney
(17)(b) Combined Prospectus of Pioneer Ibbotson Growth Allocation Fund
and Pioneer Ibbotson Aggressive Allocation Fund dated
December 1, 2013, as supplemented, and Combined Statement of
Additional Information of Pioneer Ibbotson Growth Allocation
Fund and Pioneer Ibbotson Aggressive Allocation Fund dated
December 1, 2013, as supplemented
(17)(c) Combined Annual Report of Pioneer Ibbotson Growth Allocation
Fund and Pioneer Ibbotson Aggressive Allocation Fund for the
fiscal year ended July 31, 2013
(17)(d) Combined Semi-Annual Report of Pioneer Ibbotson Growth
Allocation Fund and Pioneer Ibbotson Aggressive Allocation Fund
for the fiscal year ended January 31, 2014
Dates Referenced Herein and Documents Incorporated by Reference
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