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Pioneer Balanced Fund · PRES14A · For 1/14/97

Filed On 11/1/96 · SEC File 811-01605 · Accession Number 69405-96-19

  As Of               Filer                 Filing     On/For/As Docs:Pgs

11/01/96  Pioneer Balanced Fund             PRES14A     1/14/97    1:38

Preliminary Proxy Solicitation Material -- Special Meeting · Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: PRES14A     Preliminary Proxy Statement                           38    136K

Document Table of Contents

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			Alternative Formats (RTF, XML, et al.) Additional Investment Practices Required Vote Standard of Care
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6	Additional Investment Practices
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                                                                File No. 2-79140
                                                               File No. 811-3564

SCHEDULE 14A
(Rule 14a-101)

 INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

 PROXY STATEMENT PURSUANT TO SECTION 14(A)
 OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the registrant                 [X]                                     

Check the appropriate box:                                                      

[X]  Preliminary proxy statement        [ ]  Confidential, for Use              
                           of the Commission
                            Only (as permitted
                              by Rule 14a-6(e)(2))

[ ]  Definitive proxy statement                                                 

[ ]  Definitive additional materials                                            

[ ]  Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12              

 Pioneer Income Fund

(Name of Registrant as Specified in Its Charter 

 Pioneer Income Fund

(Name of Person(s) Filing Proxy Statement)

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 PIONEER INCOME FUND

 60 State Street
 Boston, Massachusetts 02109

1-[800-225-6292]

 NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD TUESDAY, JANUARY 14, 1997

         A Special  Meeting of  Shareholders  of Pioneer Income Fund, a Delaware
business  trust (the  "Fund")  will be held at the offices of Hale and Dorr,  60
State Street,  26th Floor,  Boston,  Massachusetts  02109, at 2:00 p.m.,  Boston
time,  on  Tuesday,  January 14,  1997 to  consider  and act upon the  following
Proposals:                                                                      

    (1)      To approve amendments to the Fund's investment objective;

         (2)      To  approve a new  Management  Contract  between  the Fund and
                  Pioneering  Management  Corporation,   the  Fund's  investment
                  adviser ("PMC"), increasing the management fee payable to PMC;

         (3)      To elect the eight (8) Trustees  named in the  attached  Proxy
                  Statement  to  serve  on the  Board of  Trustees  until  their
    successors have been duly elected and qualified;

         (4)      To ratify the  selection of Arthur  Andersen LLP as the Fund's
                  independent  public  accountants  for the fiscal  year  ending
December 31, 1997;                          

         (5)      To approve  amendments  to the Fund's  fundamental  investment
      policies, as described in the proxy statement; and

         (6)      To transact  such other  business as may properly  come before
the meeting or any adjournments thereof.    

         Shareholders  of record as of the close of business on November 7, 1996
are  entitled  to vote at the  meeting or any  adjournments  thereof.  The Proxy
Statement and proxy card are being mailed to  shareholders  on or about November
22, 1996.                                                                       

                                               By Order Of The Board of Trustees
                                                      Joseph P. Barri, Secretary
Boston, Massachusetts                                                           
November 22, 1996                                                               
------------------
WHETHER  OR NOT YOU EXPECT TO BE PRESENT AT THE  MEETING,  PLEASE  COMPLETE  AND
RETURN THE ENCLOSED  PROXY CARD.  YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE
MEETING.                                                                        

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 PIONEER INCOME FUND

 60 State Street
 Boston, Massachusetts 02109

1-800-225-6292

 SPECIAL MEETING OF SHAREHOLDERS
JANUARY 14, 1997

 PROXY STATEMENT

         This Proxy  Statement is furnished to  shareholders  of Pioneer  Income
Fund,  a  Delaware   business  trust  (the  "Fund"),   in  connection  with  the
solicitation  of proxies by the Board of Trustees for use at the Special Meeting
of  Shareholders  of the Fund,  to be held at the  offices of Hale and Dorr,  60
State Street,  26th Floor,  Boston,  Massachusetts  02109, at 2:00 p.m.,  Boston
time,  on Tuesday,  January  14,  1997,  and at any  adjournments  thereof  (the
"Meeting").  This  Proxy  Statement  and  enclosed  proxy  are  being  mailed to
shareholders  on or about  November 22, 1996.  The Fund's  annual report for its
fiscal  period  ended  December  31, 1995 and  semiannual  report for its fiscal
period ended June 30, 1996 may be obtained free of charge by writing to the Fund
at its executive offices,  60 State Street,  Boston,  Massachusetts  02109 or by
calling [1-800-225-6292].                                                       

         Shareholders  of record as of the close of business on November 7, 1996
(the  "Record  Date") are entitled to vote on all business of the Meeting or any
adjournments thereof. As of the Record Date, there were outstanding ____________
shares of beneficial interest of the Fund. To the knowledge of the management of
the Fund, no person beneficially owned more than 5% of the outstanding shares of
the Fund as of the Record Date.                                                 

PROPOSAL 1

APPROVAL OF AMENDMENT TO THE FUND'S INVESTMENT OBJECTIVE

         At a  Meeting  held  on  July  16,  1996,  the  Trustees  of  the  Fund
unanimously  approved and voted to recommend that the  shareholders  of the Fund
approve  a  change  in the  Fund's  investment  objective  from  current  income
consistent with the  preservation  and conservation of capital to capital growth
and current income by actively                                                  

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managing investments in a diversified portfolio of equity securities and bonds. 

Current Objective and Related Policies                                          

         In  pursuing  its  objective  of  current  income  consistent  with the
preservation  and  conservation of capital,  the Fund invests in dividend paying
common stocks,  preferred stocks, bonds and debentures,  which may or may not be
convertible into common stocks.  Capital growth is a secondary  consideration in
the management of the Fund's portfolio. At September 30, 1996, 37% of the Fund's
net assets were invested in equity securities, 1% were invested in cash and cash
equivalents and 62% were invested in debt securities.                           

Reasons for Change                                                              

         Pioneering  Management  Corporation,   the  Fund's  investment  adviser
("PMC"), 60 State Street,  Boston,  Massachusetts 02109, is proposing the change
to enable the Fund to invest more  extensively in equity  securities that do not
pay current  income.  At present,  unlike many income  funds,  the Fund  invests
extensively  in income  producing  equity  securities  that also provide  growth
opportunities.                                                                  

         In PMC's view, the Fund is already managed in a style with  significant
similarities to many balanced funds.  PMC believes that the proposed change will
enable PMC more fully to realize this approach. Pioneer Funds Distributor, Inc.,
the Fund's principal underwriter, has also advised the Trustees that it believes
it may be able more effectively to market the Fund as a balanced Fund than as an
income Fund because of the Fund's atypical equity oriented approach to achieving
current  income.  The potential for  significant  expansion of the Fund's assets
through increased investment in the Fund could, over the longer-term,  result in
increased  economies of scale  reducing the costs and expenses of operating  the
Fund.                                                                           

Changes in Related Investment Policies                                          

         Subject to  shareholder  approval of the proposed  change in investment
objectives,  the Fund's name will be changed to "Pioneer  Balanced Fund" and the
Fund's  current  policy of  investing  only in  dividend-paying  common  stocks,
preferred stocks, bonds and debentures (which may or may not be convertible into
common  stocks)  will be  eliminated.  Although  linked to the Fund's  change in
objective,   the  change  in  name  and  the   elimination   of  the   foregoing
"non-fundamental"  policy do not require  shareholder  approval                 

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and hence do not appear as  proposals  in this proxy  statement.  In lieu of the
eliminated  investment  policy,  the Trustees  have  approved a  non-fundamental
investment  policy that would  require the Fund under  normal  circumstances  to
invest  between  35% and 65% of its total  assets in each of (1) common  stocks,
preferred stocks and other securities with common stock  characteristics and (2)
bonds. Such a policy is required under applicable SEC guidelines in order to use
the word "balanced" in the Fund's name.                                         

         The  allocation of the Fund's assets between stocks and bonds will vary
in response to conclusions  drawn from PMC's  continual  assessment of business,
economic and market conditions. The mix of equity securities,  bonds, short-term
investments  and cash may be held in whatever  proportions  PMC  determines  are
necessary for defensive purposes.                                               

         If the proposed changes in objectives and related policies are adopted,
the Fund will have  similar  investment  objectives  and  policies  to  Balanced
Portfolio  of Pioneer  Variable  Contracts  Trust,  which is  available  only to
certain annuity holders, and will be managed in a similar style.                

Other Changes in Investment Policies and Practices                              

         Quality  limitations.  The quality  limitations set forth in the Fund's
prospectus  concerning the Fund's investment in debt securities will change as a
result of the change in the Fund's  objectives  and related  policies.  The Fund
currently  may  invest up to 35% of its total  assets in debt  securities  rated
below  investment  grade. If the proposed  changes in investment  objectives are
approved,  the Fund will adopt  quality  restrictions  that require it to invest
primarily in "investment grade" securities. Investment grade debt securities are
debt securities rated at least BBB by Standard & Poor's Ratings Group ("S&P") or
Moody's Investors Service,  Inc. ("Moody's") or, if unrated determined by PMC to
be of comparable quality and commercial paper of comparable quality.            

         Under the Fund's  revised  quality  limitations,  the Fund's  portfolio
assets allocated to bonds normally will be invested in (1) investment grade debt
securities as rated by S&P or Moody's or, if unrated, determined by PMC to be of
comparable  quality,  (2)  commercial  paper of comparable  quality and (3) U.S.
government  securities,  mortgage participation  certificates  guaranteed by the
Government   National   Mortgage    Association   ("GNMA    Certificates")   and
collateralized  mortgage obligations  ("CMOs")(described  below). The Fund will,
however, be able to invest up to 10% of its total assets in debt securities that
are  rated  below  investment  grade                                            

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or, if unrated,  judged by PMC to be of  comparable  quality,  and in commercial
paper that is of comparable quality.                                            

         Foreign  securities  and covered  call  options.  In  addition,  if the
proposed change in objectives is approved by shareholders, the Fund's limitation
on  investment  in foreign  securities,  will be reduced from 30% to 10% and the
Fund's ability to write covered call options will be eliminated.                

Additional Investment Practices                                                 

         GNMA  Certificates and CMOs. As indicated above, if the proposed change
in objectives is approved, the Fund would adopt policies permitting it to invest
a portion of its assets  allocated to debt securities in GNMA  Certificates  and
CMOs. A GNMA Certificate is a mortgage participation certificate which may be of
varying maturity  guaranteed by the Government  National  Mortgage  Association.
Although the payment when due of interest and principal on GNMA  Certificates is
backed by the full faith and credit of the United  States,  this  guarantee does
not extend to the market value of these  securities.  CMOs may be issued by U.S.
government agencies and  instrumentalities as well as private lenders.  CMOs are
issued in multiple  classes and the principal of and interest on the  underlying
mortgage assets may be allocated among the several classes in various ways. Each
class of CMOs,  often  referred  to as a  "tranche,"  is  issued  at a  specific
adjustable  or fixed  interest  rate and must be fully retired no later than its
final distribution date. Because of principal  prepayments and foreclosures with
respect to mortgages underlying GNMA Certificates and CMOs, such investments may
be less  effective  than other types of  securities  as a means of "locking  in"
attractive long-term interest rates.  Prepayments generally can be invested only
at lower interest rates.                                                        

         Currency  transactions.   If  the  proposed  change  in  objectives  is
approved, the Fund will also adopt policies permitting it to manage its exposure
to foreign  currencies  to take  advantage of different  yield,  risk and return
characteristics  that different  currencies can provide for U.S.  investors.  To
manage exposure to foreign currency fluctuations,  the Fund will be permitted to
enter into forward foreign currency exchange  contracts  (agreements to exchange
one  currency for another at a future date) and buy and sell options and futures
contracts  relating to foreign  currencies.  The Fund will use  forward  foreign
currency  exchange  contracts  in the normal  course of  business  to lock in an
exchange rate in connection  with purchases and sales of securities  denominated
in foreign currencies.  Other currency management strategies will allow         

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the Fund to hedge portfolio  securities,  to shift investment  exposure from one
currency to another,  or to attempt to profit from  anticipated  declines in the
value of a foreign  currency  relative  to the U.S.  dollar.  The Fund will only
invest in  currency  management  strategies  to the  extent  that it  invests in
foreign securities.                                                             

         Although PMC may attempt to manage currency exchange rate risks,  there
is no  assurance  that it will do so at an  appropriate  time or that it will be
able to predict exchange rates accurately.  For example,  to the extent that PMC
increases the Fund's exposure to a foreign  currency,  and that currency's value
subsequently  falls,  PMC's currency  management may have the effect of lowering
the Fund's net asset value.  Similarly,  if PMC hedges the Fund's  exposure to a
foreign  currency,  and the  currency's  value  rises,  the Fund  will  lose the
opportunity to participate in the currency's appreciation.                      

Unaffected Investment Policies and Practices                                    

         The Fund's ability to use the following investment practices and invest
in the following  types of securities as described in the prospectus will remain
substantially unchanged if the change in objectives is approved:  restricted and
illiquid securities,  when issued securities,  loans of portfolio securities and
repurchase agreements.                                                          

Change in Portfolio Manager                                                     

         Following the proposed  change in investment  objectives  and policies,
Mr.  William  Field will be  responsible  for the  implementation  of the Fund's
investment strategy and the day-to-day management of the Fund's portfolio. Since
before 1991, Mr. Field has been employed by PMC as an investment analyst. He has
expertise in investing in both equity and fixed income securities.              

Risks and Other Special Considerations                                          

         Dividend  rate.  As  indicated  above,  under the Fund's  proposed  new
investment  objectives and policies,  capital growth will be a coequal objective
along with current income and not merely a secondary  consideration as under the
existing  investment  objective  and  policies.  Because the Fund will no longer
pursue the sole  objective  of current  income or be  required to invest only in
income producing securities,  it is likely that the Fund's dividend rate will be
reduced over time.  Accordingly,  shareholders  primarily seeking current income
are advised to reevaluate whether the                                           

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Fund  continues  to  be a  suitable  investment  vehicle  for  their  particular
investment  needs.  The  reduction  of the  Fund's  ability  to  invest in below
investment  grade  debt  securities,  which  typically  pay higher  yields  than
investment  grade debt  securities,  may also  contribute  to a reduction in the
Fund's   dividend   rate  over  time.  Of  course,   shareholders   can  achieve
approximately  the same mix of bond and stock  investments as the Fund's current
portfolio by investing in a combination of the Fund's restructured portfolio and
other income producing Pioneer mutual funds.                                    

         Portfolio  turnover.  The  transition  to  the  Fund's  new  investment
objectives  and  related  policies  may involve  higher  than  normal  portfolio
turnover for a period  following the change.  High portfolio  turnover  involves
correspondingly  higher brokerage commissions and other transaction costs, which
will be borne  directly by the Fund,  and could involve  realization  of taxable
gains that would be taxable when distributed to shareholders.                   

         Equity   investments.   To  the  extent  that  the  Fund  invests  more
extensively in certain types of equity securities in pursuing its new investment
objectives it may incur greater  investment risk. There are two primary areas in
which the Fund may incur  greater  risk than  under its  current  objective  and
policies. First, in pursuing capital growth, the Fund may invest in non-dividend
paying  common  stocks.  Although  such stocks  often offer the most  attractive
growth opportunities,  they also at times may represent investments in companies
that are less stable or secure than companies paying regular  dividends on their
common stocks.  Second, the Fund may but need not place an even greater emphasis
on equity securities in pursuing current income than under its current policies.
For instance,  if the Fund attempts to earn income primarily through investments
in dividend paying common stocks,  depending upon interest rate movements it may
incur  greater  investment  risk  than  if it  seeks  income  primarily  through
investments  in preferred  stocks and bonds.  Similarly,  to the extent the Fund
de-emphasizes  bonds in favor of  preferred  stocks it will also  incur  greater
investment risk. Both in terms of protection of capital and continuity of income
payments,  common  stocks are the lowest  ranking  and least  protected  type of
security,  followed  by  preferred  stocks  and then by  bonds  and  other  debt
securities which are afforded the greatest degree of protection.                

Required Vote                                                                   

         Adoption  of  Proposal 1 requires  the  approval  of a majority  of the
outstanding  voting  securities of the Fund, which under the Investment  Company
Act of 1940,  as amended  (the "1940 Act"),  is defined to mean the  affirmative
vote of the lesser of (i) 67% or                                                

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more of the shares of the Fund  represented  at the Meeting,  if at least 50% of
all outstanding  shares of the Fund are represented at the Meeting,  or (ii) 50%
or more of the outstanding shares of the Fund entitled to vote at the Meeting (a
"1940 Act Majority Vote").                                                      

         If this Proposal 1 is not approved by the shareholders of the Fund, the
Fund will  continue to adhere to its current  investment  objective and policies
and will not change its name.                                                   

         FOR THE REASONS SET FORTH  ABOVE,  THE TRUSTEES  UNANIMOUSLY  RECOMMEND
THAT THE  SHAREHOLDERS OF THE FUND VOTE IN FAVOR OF THE APPROVAL OF THE PROPOSAL
TO AMEND THE FUND'S INVESTMENT OBJECTIVES.                                      

PROPOSAL 2

 APPROVAL OF NEW MANAGEMENT CONTRACT

Summary                                                                         

         Pioneering  Management  Corporation has served as the Fund's investment
adviser since  December 1, 1993.  PMC serves as the  investment  adviser for the
Pioneer family of mutual funds,  Pioneer  Interest  Shares and for certain other
institutional   accounts.   PMC,  a  registered  investment  adviser  under  the
Investment  Advisers Act of 1940,  as amended,  is a wholly owned  subsidiary of
PGI, a Delaware  corporation  with publicly traded shares.  PGI is located at 60
State Street, Boston, Massachusetts 02109.                                      

         At the Meeting held on July 16, 1996,  the  Trustees,  including all of
the Trustees who are not  "interested  persons" of the Fund or PMC,  unanimously
approved  and voted to  recommend  that the  shareholders  of the Fund approve a
proposal to terminate the Fund's existing  Management  Contract  between PMC and
the Fund (the "Existing  Contract") and to adopt a new Management  Contract (the
"Proposed  Contract").  The Existing Contract and the Proposed Contract are also
each referred to below as a "Contract." Under the Proposed Contract, the form of
which is  attached  to this  Proxy  Statement  as  Exhibit  A,  there will be an
increase in the rate of management  fees paid by the Fund to PMC. The management
fee rate increase is more fully described below.                                

Terms of Existing and Proposed Management Contracts                             

         Except for the different fee rates,  effective dates and renewal dates,
the terms of the Existing and Proposed  Management  Contracts are  substantially
identical.  Pursuant  to the terms of each  Contract,  PMC serves as  investment
adviser to the Fund and is                                                      

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responsible for the overall  management of the Fund's  business  affairs subject
only to the  authority of the Board of Trustees.  PMC is  authorized  to buy and
sell  securities  for the account of the Fund and to designate  brokers to carry
out such  transactions,  subject to the right of the Trustees to disapprove  any
such  purchase or sale.  PMC may not make any purchase the cost of which exceeds
funds currently available for the Fund and may not make any purchase which would
violate any  fundamental  policy or restriction  with respect to the Fund in the
Fund's Prospectus or Statement of Additional  Information as in effect from time
to time.                                                                        

         Under  each  Contract,  PMC  pays  all  expenses,  including  executive
salaries  and the rental of office  space,  related to its services for the Fund
with the exception of the following  which are paid by the Fund: (i) charges and
expenses  for  determining  from time to time the value of the net assets of the
Fund and the keeping of its books and records,  (ii) the charges and expenses of
auditors, (iii) the charges and expenses of any custodian,  transfer agent, plan
agent, dividend disbursing agent and registrar appointed by the Fund, (iv) issue
and  transfer  taxes,  chargeable  to the  Fund in  connection  with  securities
transactions  to which the Fund is a party,  (v)  insurance  premiums,  interest
charges,  dues and fees for membership in trade  associations  and all taxes and
corporate  fees  payable  by the Fund to  federal,  state or other  governmental
agencies,  (vi)  fees and  expenses  involved  in  registering  and  maintaining
registrations  of the Fund and of its  shares  with  the SEC,  state  securities
agencies and foreign  jurisdictions,  including the  preparation of prospectuses
and statements of additional  information  for filing with such agencies,  (vii)
all expenses of shareholders' and Trustees' meetings and of preparing,  printing
and  distributing  prospectuses,  notices,  proxy  statements and all reports to
shareholders and to governmental agencies,  (viii) charges and expenses of legal
counsel  to the Fund,  (ix) if  applicable,  distribution  expenses  of the Fund
pursuant to a Plan of Distribution in accordance with Rule 12b-1  promulgated by
the SEC pursuant to the 1940 Act, and (x)  compensation of those Trustees of the
Fund who are not affiliated  with or interested  persons of PMC, the Fund (other
than as Trustees), PGI, or PFD.                                                 

         The  Existing  Contract was  approved by the  shareholders  of the Fund
November 23, 1993 in connection with acquisition of the Fund from another mutual
fund group.  The Existing  Contract was intitially  approved by the Fund's Board
shortly  thereafter and its renewal was most recently approved by the Board at a
meeting held in April,  1996. Each Contract is renewable annually by the vote of
PMC's Board and by vote of a majority of the Fund's Board,  including a majority
of the Trustees who are not  "interested  persons" of the Fund, PMC or PFD, cast
in person at a meeting  called                                                  

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for the purpose of voting on such renewal.  Each Contract terminates if assigned
(as  defined in the 1940 Act) and may be  terminated  without  penalty by either
party by vote of its Board or a majority of its  outstanding  voting  securities
and upon 60 days' written notice.                                               

Proposed Management Fee Increase                                                

         As compensation for its management  services and certain expenses which
PMC  incurs on behalf of the Fund,  the Fund pays PMC an annual  management  fee
under the  Existing  Contract  equal to 0.50% of the  Fund's  average  daily net
assets  up to $250  million,  0.48% of the next $50  million,  and  0.45% of the
excess over $300 million. This fee is computed daily and paid monthly.          

         As compensation for its management  services and certain expenses which
PMC incurs on behalf of the Fund,  the Fund  would pay PMC an annual  management
fee under the  Proposed  Contract  (the  "Proposed  Fee")  equal to 0.65% of the
Fund's  average daily net assets up to $1 billion,  0.60% of the next $4 billion
and 0.55% of the excess  over $5  billion.  The  Proposed  Fee would be computed
daily and paid monthly.                                                         

         The  Proposed Fee  represents  an increase in the  management  fee rate
payable to PMC over the rates under the Existing Contract.  The Board determined
that the Proposed Fee is fair and reasonable. The effective date of the Proposed
Contract is expected to be February 1, 1997. Accordingly,  the Proposed Fee will
take  effect on  February  1, 1997 if the  Proposed  Contract  is adopted at the
Meeting.                                                                        

Effect of the New Management Fee Structure                                      

         Under  the  Existing  Contract,  the Fund  pays  management  fees at an
effective annual rate of 0.498% based on net assets of $274 million at September
30, 1996. Under the Proposed Contract,  the Fund would pay management fees at an
effective annual rate of 0.65% at such net asset level.                         

         Set forth below is a chart showing the dollar amount of management fees
paid  during the Fund's past fiscal  year under the  Existing  Contract  and the
amount of fees that  would  have been paid under the  Proposed  Contract  at the
Proposed Fee rate. The chart also shows the percentage differences these amounts
that would have been paid under the Proposed Contract  represent from the amount
paid under the  Existing  Contract.  Also set forth  below are  comparative  fee
tables  showing the amount of fees and expenses                                 

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paid by each  class of  shares  of the Fund  under the  Existing  Contract  as a
percentage  of average net assets and the amount of fees and expenses each class
of shareholders  would have paid if the Proposed Fee under the Proposed Contract
had been in effect.  The information in the table is an estimate based on actual
assets and  expenses for the fiscal year ended  December  31, 1995.  For Class C
shares,  operating  expenses are based on estimated amounts that would have been
incurred  if Class C shares  had been  outstanding  for the  fiscal  year  ended
December 31, 1995. Class C shares were first offered on January 31, 1996.       

 DOLLAR AMOUNT OF MANAGEMENT FEES PAID
 (fiscal year ended December 31, 1995)

                          Existing          Proposed
                          Contract          Contract
                          --------          --------
Amount of Fees Paid                    $1,306,546        $1,751,441             
or that Would Have Been Paid                                                  

Percentage Difference                     N/A                +0.17%             
from Amount Paid                                                              
under Existing                                                                
Contract                                                                      

 COMPARATIVE FEE TABLE

CLASS A SHARES                                                                  

Annual Fund Operating Expenses                                                  
(as a percentage of average net assets)                                         

            Existing              Proposed
           Fee                   Fee
           ---                   ---
Management Fee ......           0.48%                  0.65%                    
12b-1 Fees ..........           0.25%                  0.25%                    
Other Expenses ......           0.38%                  0.38%                    
Total Fund Operating Expenses   1.11%                  1.28%                    

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CLASS B AND CLASS C SHARES                                                      

Annual Fund Operating Expenses                                                  
(as a percentage of average net assets)                                         

            Existing              Proposed
           Fee                   Fee
           ---                   ---

Management Fee ......           0.48%                  0.65%                    
12b-1 Fees ..........           1.00%                  1.00%                    
Other Expenses ......           0.30%                  0.38%                    
Total Fund Operating Expenses   1.78%                  2.03%                    

Examples                                                                        

         The following illustrates the expenses on a $1,000 investment under the
existing  fee and the Proposed Fee stated  above,  assuming a 5% annual  return,
constant expenses, and redemption at the end of each time period:               

                                 1 year   3 years   5 years   10 years
                                    --------------------------------------

Class A Shares                                                                  
Existing Fee                            $56      $79     $103       $174        
Proposed Fee                            $57      $84     $112       $193        

Class B Shares                                                                  
--Assuming complete redemption at end of period                                 
Existing Fee                            $58      $86     $116       $192*       
Proposed Fee                            $61      $94     $129       $217*       
--Assuming no redemption                                                        
Existing Fee                            $18      $56      $96       $192*       
Proposed Fee                            $21      $64     $109       $217*       

Class C Shares**                                                                
--Assuming complete redemption at end of period                                 
Existing Fee                            $28      $56     $96        $209        
Proposed Fee                            $31      $64    $109        $236        
--Assuming no redemption                                                        
Existing Fee                            $18      $56     $96        $209        
Proposed Fee                            $21      $64    $109        $236        

         * Class B shares convert to Class A shares eight years after  purchase;
therefore, Class A expenses are used after year eight.                          
         ** Class C shares  redeemed  during the first year after  purchase  are
subject to a 1% contingent deferred sales charge.                               

         The  purpose of these  examples  and tables is to assist  investors  in
understanding the various costs and expenses of investing in shares of the Fund.
The examples above should not be considered a  representation  of past or future
expenses of the Fund.  Actual  expenses  may be higher or lower than those shown
above.                                                                          

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Other Provisions under the Existing and Proposed Contracts                      

         Standard of Care. Under each Contract,  PMC "will not be liable for any
error of judgment or mistake of law or for any loss  sustained  by reason of the
adoption of any  investment  policy or the  purchase,  sale or  retention of any
security  on the  recommendation  of  [PMC] . . ." PMC,  however,  shall  not be
protected  against  liability by reason of its ". . . willful  misfeasance,  bad
faith or gross  negligence in the  performance of its duties or by reason of its
reckless  disregard of its  obligations and duties under this  Agreement."  This
"standard of care" is consistent with the 1940 Act, PMC's most recent management
contracts and common practice in the mutual fund industry.                      

         PMC's  Authority.  Each  Contract  provides  that PMC  shall  have full
discretion to act for the Fund in connection with purchase and sale transactions
subject  only  to  the  Declaration  of  Trust,   Bylaws,   currently  effective
registrations under the 1940 Act and the Securities Act of 1933, as amended (the
"1933 Act"),  investment  objectives,  policies and  restrictions of the Fund in
effect from time to time,  and specific  policies and  instructions  established
from time to time by the Trustees.                                              

         Portfolio  Trading.  Consistent with common practice in the mutual fund
industry  and  with  PMC's  most  recent  management  contracts,  each  Contract
expressly  permits  PMC  to  engage  in  such  activity.  For  a  more  detailed
description  of the  Fund's  current  portfolio  brokerage  practices,  see  the
Appendix.                                                                       

         Expense  Limitation.  Each  Contract  provides  that  if the  operating
expenses  of the  Fund  exceed  the  limits  established  by  state  "blue  sky"
administrators,  PMC's fee will be  reduced  (but not  below  $0) to the  extent
required by such limits.  Each  Contract also provides that PMC may from time to
time agree not to impose all or a portion of its fee or otherwise take action to
reduce  expenses of the Fund.  Any such fee  limitation or expense  reduction is
voluntary and may be discontinued or modified by PMC at any time.               

         Expenses. Each Contract provides that the Fund shall pay ". . . charges
and expenses for fund  accounting,  pricing and  appraisal  services and related
overhead,  including,  to the extent such services are performed by personnel of
[PMC] or its affiliates, office space and facilities and personnel compensation,
training and benefits . . .." PMC has estimated  that,  at current  direct labor
costs,  aggregate  annualized fund accounting  overhead charges allocated to the
Fund will be approximately $6,500.                                              

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    Other Provisions.  Each Contract includes  provisions that provide that: (i)
the law of The Commonwealth of  Massachusetts  shall be the governing law of the
contract; (ii) PMC is an independent contractor and not an employee of the Fund;
(iii) the contract is the entire  agreement  between the parties with respect to
the  matters  described  therein;  (iv)  the  contract  may  be  executed  using
counterpart  signature  pages;  (v) invalid or  unenforceable  provisions of the
contract  are  severable  and do not  render  the  entire  agreement  invalid or
unenforceable;  (vi) the Fund may pay for charges and expenses of counsel to the
"non-interested"  Trustees as well as counsel to the Fund;  and (vii) subject to
obtaining best  execution,  PMC may consider sales of other funds in the Pioneer
Family of Mutual Funds when selecting  brokers and dealers to execute the Fund's
securities transactions.                                                        

Miscellaneous                                                                   

         If approved, the Proposed Contract will become effective on February 1,
1997 (or on the date of approval if approved  after that date) and will continue
in effect until May 31, 1998,  and  thereafter  will  continue from year to year
subject to annual  approval  by the Board of  Trustees in the same manner as the
Existing Contract.  The Proposed Contract  terminates if assigned (as defined in
the 1940 Act) and may terminate  without penalty,  upon sixty (60) days' written
notice,  by either  party by vote of its Board or by a vote of a majority of the
outstanding  voting  securities  of the Fund.  The  description  of the Existing
Contract  and the Proposed  Contract  set forth above and the other  information
with  respect to the  Proposed  Contract  are  qualified  in their  entirety  by
reference to the form of Proposed Contract, attached hereto as Exhibit A.       

Additional Information Pertaining to PMC                                        

         For  additional  information   concerning  the  management,   ownership
structure, affiliations, brokerage policies and certain other matters pertaining
to PMC, see the Appendix.                                                       

Factors Considered by the Trustees                                              

         The Trustees  determined  that the terms of the  Proposed  Contract are
fair and reasonable and that approval of the Proposed  Contract on behalf of the
Fund is in the best interests of the Fund.  The Trustees  considered a number of
factors in deciding to recommend an increase in the management fee. At all times
during the  Trustees'  deliberations,  they were advised by the Fund counsel and
their  own  independent  counsel.  When the  Trustees  were  presented  with the
Proposed Fee, they requested and were furnished                                 

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with  substantial  information  to assist in their  evaluation.  In  considering
whether to adopt the Proposed Fee, the Trustees considered,  among other things,
PMC's  intended use of a significant  portion of the fee increase to benefit the
Fund,  as well as  information  relating  to the overall  reasonableness  of the
Proposed Fee.                                                                   

         The Trustees  considered and placed heavy emphasis on PMC's indications
that it would use a  significant  portion of the  increased  fee to enhance  its
management and accounting systems and research  capabilities with respect to the
Fund's portfolio, including significant additional investment in human resources
and technology,  with the purpose of helping to make the Fund more  competitive.
Among other matters,  PMC has appointed William Field to serve as the Fund's new
portfolio  manager.  Mr. Field joined PMC in 1991 as a research  analyst and has
served as an  assistant  portfolio  manager for certain  institutional  accounts
since January 1996. The Trustees also  considered  that the management fees paid
by the Fund to PMC under the  Existing  Contract  are below  those  paid by many
other equity  oriented income funds and balanced funds and that the Proposed Fee
is consistent with management fees paid by many other such similar funds.       

         Based upon all of the above  considerations,  the  Trustees  determined
that the  Proposed Fee would be equitable  and fair to the  shareholders  of the
Fund.                                                                           

Trustees' Recommendation                                                        

         Based on its evaluation of the materials  presented and assisted by the
advice of  independent  counsel,  the Board of  Trustees,  including  all of the
Trustees who are not "interested persons" of the Fund or PMC, concluded that the
Proposed  Contract  was fair and  reasonable  and in the best  interests  of the
Fund's  shareholders  and by a vote  cast at a  meeting  held on July 16,  1996,
unanimously approved and voted to recommend to the shareholders of the Fund that
they approve the Proposal to  terminate  the Existing  Contract and to adopt the
Proposed Contract.                                                              

Required Vote                                                                   

         Adoption of  Proposal 2 requires  the  approval of a 1940 Act  Majority
Vote. If the Proposed  Contract is not approved by the shareholders of the Fund,
the Existing Contract will continue in effect.                                  

         FOR THE REASONS SET FORTH  ABOVE,  THE TRUSTEES  UNANIMOUSLY  RECOMMEND
THAT THE  SHAREHOLDERS OF THE FUND VOTE IN FAVOR OF THE APPROVAL OF THE PROPOSED
MANAGEMENT CONTRACT.                                                            

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PROPOSAL 3

ELECTION OF TRUSTEES

         The persons named on the accompanying  proxy card intend to vote at the
Meeting (unless  otherwise  directed) FOR the election of the eight (8) nominees
named below as  Trustees of the Fund.  All of the  nominees  currently  serve as
Trustees and have been  recommended by the Nominating  Committee of the Trustees
which consists solely of Trustees who are not "interested  persons" of the Fund,
PMC or PFD within the meaning of the 1940 Act.                                  

         Each  Trustee  will be elected to hold office until the next meeting of
shareholders  or until his or her  successor  is  elected  and  qualified.  Each
nominee has consented to being named herein and indicated his or her willingness
to serve if elected. If any such nominee should be unable to serve, an event not
now anticipated,  the persons named as proxies may vote for such other person as
shall be designated by the Board of Trustees.                                   

         The  following  table sets forth each  nominee's  position(s)  with the
Fund,  age,  address,  principal  occupation or employment  during the past five
years and directorships,  and indicates the date on which he or she first became
a Trustee of the Fund.  The table also shows the number of shares of  beneficial
interest of the Fund beneficially owned by each nominee, directly or indirectly,
on September 30, 1996.                                                          

                                                        · Enlarge/Download Table


                                                                                    Shares of Beneficial    
                                                                                    Interest of the Fund    
    Name, Age,                                                                       Beneficially Owned     
Position(s) with        Principal Occupation                              First    and Percentage of Total  
    the Fund               or Employment                                 Became a    Shares Outstanding     
  and Address           and Trusteeships(1)                              Trustee   on September 30, 1996(2) 
----------------        -------------------                             ---------  -------------------------

                                                                                                            
John F. Cogan, Jr.*     President, Chief                                  1993               -0-            
(70)                    Executive Officer and a                                                             
                        Chairman of the Board,                                                              
                        Director of Pioneer Group,                                                          
President and           Inc. ("PGI"); Chairman and a Director                                               
Trustee                 of PMC, PFD, Pioneer Goldfields Limited                                             
60 State Street         ("PGL") and Teberebie Goldfields                                                    
Boston, MA  02109       Limited; Director of Pioneer Services                                               
                        Corporation ("PSC") and Pioneer Capital                                             
                        Corporation ("PCC"); President and Director of                                      
                        Pioneer Plans Corporation ("PPC"), Pioneer                                          
                        Investment Corporation ("PIC"), Pioneer Metals                                      
                        and Technology, Inc. ("PMT") and Pioneer                                            
                        International Corporation ("P.Intl.");                                              
                        Chairman of the Supervisory Board of Pioneer                                        
                        Fonds Marketing GmbH ("Pioneer GmbH"); Member                                       
                        of the Supervisory Board of Pioneer First                                           
                        Polish Trust Fund Joint Stock Company                                               
                        ("PFPT"); and Partner, Hale and Dorr (Counsel                                       
                        to the Fund)                                                                        

                            -15-                                                                            

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Richard H. Egdahl, M.D. Alexander Graham Bell                             1993               -0-            
(69)                    Professor of Health Care                                                            
                        Entrepreneurship, Boston                                                            
Health Policy           University; Professor of                                                            
Institute               Management, Public Health                                                           
53 Bay State Road       and Surgery, Boston University;                                                     
Boston, MA 02115        University Professor, Boston                                                        
                        University; Director, Boston University Health                                      
                        Policy Institute; Director, Essex Investment                                        
                        Management Company, Inc., an investment                                             
                        adviser; Vice Chair of the Board of Directors,                                      
                        HPR, Inc., a health cost containment software                                       
                        firm; Director, CORE, a worker's compensation                                       
                        management firm                                                                     

Margaret B.W. Graham    Founding Director, Winthrop                       1993               -0-            
(49)                    Group, Inc., a consulting firm, since                                               
Trustee                 1982; Manager of Research                                                           
The Keep                Operations Xerox Palo Alto                                                          
P.O. Box 110,           Research Center, between 1991                                                       
Little Deer Isle,       and 1994; and Professor of                                                          
ME 04650                Operations Management and                                                           
                        Management of Technology,                                                           
                        Boston University School of                                                         
                        Management, between 1989 and 1993                                                   

John W. Kendrick,       Professor Emeritus of                             1993               -0-            
(79)                    Economics, George Washington                                                        
Trustee                 University; and Economic                                                            
6363 Waterway Dr.,      Consultant and Director,                                                            
Falls Church,           American Productivity and                                                           
VA 22044                Quality Center                                                                      

Marguerite A. Piret     President, Newbury, Piret &                       1993               100.406        
(48)                    Company, Inc., a merchant                                                           
Trustee                 banking firm                                                                        
One Boston Place                                                                                            
Suite 2635                                                                                                  
Boston, MA 02108                                                                                            

David D. Tripple,*      Director and Executive Vice                       1993               -0-            
(52)                    President of PGI; President Chief                                                   
Executive Vice          Investment Officer and a director                                                   
President and           of PMC; Director of PFD, PCC,                                                       
Trustee                 Pioneer SBIC Corp., P. Intl. and                                                    
60 State Street         PIC; and Member of the Supervisory                                                  
Boston, MA 02109        Board of PFPT                                                                       

                            -16-                                                                            

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Stephen K. West         Partner, Sullivan & Cromwell, a                   1993               -0-            
(68)                    law firm                                                                            
Trustee                                                                                                     
125 Broad Street                                                                                            
New York, NY 10004                                                                                          

John Winthrop           President, John Winthrop & Co.,                   1993               -0-            
(60)                    a private investment firm;                                                          
Trustee                 Director of NUI Corp.                                                               
One North Adgers Wharf                                                                                      
Charleston, SC 29401                                                                                        


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

*        Messrs. Cogan and Tripple are "interested persons" of the Fund, PMC and
PFD within the meaning of the 1940 Act.                       

(1)      Each  nominee  also  serves  as a  trustee  for  each  of the  open-end
         investment  companies  (mutual  funds) in the Pioneer  family of mutual
         funds  and for each  portfolio  of  Pioneer  Variable  Contracts  Trust
         (except for Messrs.  Kendrick and  Winthrop  and Ms.  Graham who do not
         serve as  trustees  for  Pioneer  Variable  Contracts  Trust)  and as a
         Director of Pioneer Interest Shares,  a closed-end  investment  company
         ("Interest  Shares").  Each Trustee was elected by the  shareholders of
the Fund in 1994.                                             

(2)      As of  September  30,  1996,  the  Trustees  and  officers  of the Fund
         beneficially owned, directly or indirectly,  in the aggregate less than
1% of the Fund's outstanding shares.                          

         Ms. Piret,  Mr. West and Mr.  Winthrop serve on the Audit  Committee of
the Board of Trustees. The functions of the Audit Committee include recommending
independent  auditors to the  Trustees,  monitoring  the  independent  auditors'
performance,  reviewing  the results of audits and  responding  to certain other
matters  deemed  appropriate  by the  Trustees.  Ms.  Graham,  Ms. Piret and Mr.
Winthrop serve on the Nominating Committee of the Board of Trustees. The primary
responsibility  of the  Nominating  Committee is the selection and nomination of
candidates to serve as independent directors. The Nominating Committee will also
consider nominees recommended by shareholders to serve as Trustees provided that
shareholders submitting such recommendations comply with all relevant provisions
of Rule  14a- 8 under the  Securities  Exchange  Act of 1934,  as  amended  (the
"Exchange Act").                                                                

         During the fiscal year ended  December 31, 1995,  the Board of Trustees
held twelve meetings, the Audit Committee held eight meetings and the Nominating
Committee did not meet. All of the current  Trustees and Committee  Members then

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serving  attended  at least  75% of the  meetings  of the Board of  Trustees  or
applicable  committee,  if any,  held during the fiscal year ended  December 31,
1995.                                                                           

Other Executive Officers                                                        

         In  addition  to  Messrs.  Cogan and  Tripple,  who serve as  executive
officers of the Fund, the following table provides  information  with respect to
the other executive  officers of the Fund. Each executive  officer is elected by
the Board of Trustees and serves until his  successor is chosen and qualified or
until his  resignation  or  removal by the Board.  The  business  address of all
officers of the Fund is 60 State Street, Boston, Massachusetts 02109.           

Name, Age and Position with The Fund              Principal Occupation(s)       

William H. Keough, 59,                            Treasurer Senior Vice         
                                              President, Chief Financial
                                                Officer and Treasurer of PGI
                                              and Treasurer of PFD, PMC,
                                                 PSC, PPC, Pioneer SBIC Corp.,
                                                  PIC, PMT, P. Intl. and of each
                                                 fund in the Pioneer family of
                                 mutual funds.

Joseph P. Barri,  50,                             Secretary Secretary of PGI,   
                                                 PMC and PCC, and of each fund
                                            in the Pioneer family of
                                                  mutual funds; Clerk of PFD and
                                                  PSC and Partner, Hale and Dorr
                                          (counsel to the Fund).

Remuneration of Trustees and Officers                                           

         The following  table provides  information  regarding the  compensation
paid by the Fund and the other  investment  companies  in the Pioneer  family of
mutual  funds to the Trustees  for their  services for the Fund's most  recently
completed  fiscal  year.  The Fund pays no salary or other  compensation  to its
officers.                                                                       

                                                                · Download Table


                                                           Total Compensa- 
                                                            tion from the  
                                              Pension or   Fund and other  
                                Aggregate     Retirement    funds in the   
                              Compensation     Benefits    Pioneer Family  
Director                      From the Fund*   Accrued    of Mutual Funds**
--------                      --------------   -------    -----------------

                                                                           
John F. Cogan, Jr.                   $500         $0            $11,000    
Richard H. Egdahl, M.D.3,674                       0             63,315    
Margaret B.W. Graham                3,674          0             62,398    
John W. Kendrick                    3,674          0             62,398    
Marguerite A. Piret                 4,038          0             76,704    
David D. Tripple                      500          0             11,000    
Stephen K. West                     3,666          0             68,180    
John Winthrop                       3,964          0             71,199    


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--------                                                                        

+        PMC fully reimbursed the Fund and the other funds in the Pioneer family
     of mutual funds for compensation paid to Messrs. Cogan and Tripple.

*        For the fiscal year ended December 31, 1995.                           

**       For the calendar year ended December 31, 1995.                         

Required Vote                                                                   

         In  accordance  with the  Fund's  Declaration  of Trust,  the vote of a
plurality of all of the shares of the Fund voted at the Meeting is sufficient to
elect the nominees.                                                             

PROPOSAL 4

RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS   

         The firm of Arthur  Andersen  LLP has served as the Fund's  independent
public  accountant  since the Fund's 1994 fiscal year. Audit services during the
fiscal year ended  December  31, 1995  consisted of  examinations  of the Fund's
financial  statements for this period and reviews of the Fund's filings with the
SEC.                                                                            

         The  Trustees  who  were  present  at the  November  4,  1996  meeting,
including a majority of the  Trustees  who are not  "interested  persons" of the
Fund or PMC,  unanimously selected Arthur Andersen LLP as the Fund's independent
public  accountants  for the fiscal year ending  December 31,  1997,  subject to
shareholder ratification at the Meeting. A representative of Arthur Andersen LLP
is expected  to be  available  at the  Meeting to make a statement  if he or she
desires to do so and to respond to appropriate questions.                       

Required Vote                                                                   

         The  ratification of the selection of Arthur Andersen LLP as the Fund's
independent  public  accountants  for the fiscal year ending  December  31, 1997
requires the  affirmative  vote of a majority of the shares present and entitled
to vote at the meeting.                                                         

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         THE TRUSTEES  RECOMMEND THAT THE SHAREHOLDERS OF THE FUND VOTE IN FAVOR
OF THE  RATIFICATION  OF ARTHUR  ANDERSEN LLP AS THE FUND'S  INDEPENDENT  PUBLIC
ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1997.                       

 PROPOSALS 5(a) THROUGH 5(g)

ELIMINATION, AMENDMENT OR ADDITION
OF VARIOUS INVESTMENT RESTRICTIONS

General                                                                         

         The  Trustees  of the Fund  recommend  that  shareholders  approve  the
elimination of, amendment to or addition of various investment restrictions,  as
described  in detail  below.  All of the  current  restrictions  proposed  to be
eliminated  or  amended  are set forth in the  Fund's  Statement  of  Additional
Information.                                                                    

         Each Proposal requires the separate approval of the shareholders of the
Fund. Each of these  restrictions is a "fundamental"  investment policy that may
only be changed by an affirmative  1940 Act Majority  Vote. See "Required  Vote"
below.                                                                          

5(a).  Amendment to Fundamental Investment Policy Regarding Underwriting        

         The Fund's current investment policy regarding underwriting states that
the Fund may not:                                                               

       ACT AS A SECURITIES UNDERWRITER

         If amended  as  proposed,  the new policy  will state that the Fund may
not:                                                                            

               ACT AS AN UNDERWRITER, EXCEPT AS IT MAY
               BE  DEEMED  TO BE AN  UNDERWRITER  IN A
               SALE OF RESTRICTED  SECURITIES  HELD IN
ITS PORTFOLIO.          

         The 1940 Act  requires  that a fund state a formal  fundamental  policy
regarding underwriting. The amendment is being proposed to clarify that the sale
by the Fund of  portfolio  securities  restricted  as to transfer by the federal
securities  laws will not be subject to this  restriction  to the extent  such a
sale  may  be  deemed  to be  underwriting  activity.  PMC  believes  it  may be
advantageous for a fund with investment  policies such as the Fund's to         

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have the flexibility to invest in restricted securities.  The proposed amendment
would eliminate any doubt created by the current underwriting  restriction as to
the Fund's ability to dispose of any restricted securities it may acquire.      

5(b).  Amendment of Fundamental Investment Restriction Regarding Commodities    

         The  Fund's  existing  fundamental   investment  restriction  regarding
commodities states that the Fund may not:                                       

           INVEST IN REAL ESTATE,  COMMODITIES  OR
COMMODITY CONTRACTS.        

         If amended as proposed, the restriction would provide that the Fund may
not:                                                                            

            INVEST  IN  REAL  ESTATE,  COMMODITIES  OR
       COMMODITY  CONTRACTS,  EXCEPT THAT THE FUND MAY
       INVEST  IN  FINANCIAL   FUTURES  CONTRACTS  AND
       RELATED  OPTIONS  AND  IN ANY  OTHER  FINANCIAL
       INSTRUMENTS   WHICH   MAY  BE   DEEMED   TO  BE
       COMMODITIES OR COMMODITY CONTRACTS IN WHICH THE
       FUND IS NOT  PROHIBITED  FROM  INVESTING BY THE
       COMMODITY   EXCHANGE  ACT  AND  THE  RULES  AND
REGULATIONS THEREUNDER.                 

         The 1940 Act requires that a fund state a formal fundamental investment
policy regarding  investment in commodities.  Any financial  futures contract or
related  option  is  considered  to be a  commodity.  Other  types of  financial
instruments such as when- issued securities and swaps might also be deemed to be
commodities.  The  amendment  is being  proposed to enable the Fund to invest in
financial   futures   contracts  and  related  options  for  hedging  and  other
permissible  purposes and to clarify  that  certain  practices in which the Fund
engages (such as when-issued  securities) or might in the future engage (such as
foreign currency futures  contracts and related options) are not subject to this
restriction.                                                                    

         A  financial  futures  contract is a contract to buy or sell units of a
particular  securities  index  or  foreign  currency  at an  agreed  price  on a
specified future date. Depending on the change in value of the index or currency
between  the time when a fund  enters into and  terminates  a financial  futures
transaction,  the fund realizes a gain or loss. Financial futures and options on
financial  futures are typically used for hedging  purposes and involve  certain
risks,  including  imperfect  correlations  between                             

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movements  in the prices of financial  futures and options and  movements in the
price of the underlying securities index or currency or the portfolio securities
that are the  subject  of a hedge,  potentially  illiquid  secondary  markets at
certain  times and  inability  of the  adviser to  correctly  predict  market or
currency movements.                                                             

         Except for the proposed use of foreign currency  futures  contracts and
related  options  as  described  in  Proposal  1  under  "Additional  Investment
Practices,"  the Fund does not currently  intend to engage in financial  futures
and  related  options  transactions  in the coming  year.  In the event that the
Trustees decide in the future it is desirable for the Fund to engage in any such
additional  practices,  the  Fund's  Prospectus  will  be  revised  accordingly,
including the addition of appropriate risk disclosure.                          

5(c).  Elimination of Fundamental  Investment  Restriction  Regarding Investment
Companies                                                                       

         The  Fund's  existing  fundamental   investment  restriction  regarding
investment companies states that the Fund may not:                              

            PURCHASE  THE   SECURITIES  OF  ANY  OTHER
       INVESTMENT  COMPANY,  EXCEPT IT MAY MAKE SUCH A
       PURCHASE  AS A PART OF A MERGER,  CONSOLIDATION
OR ACQUISITION OF ASSETS.               

         If   eliminated   as  proposed,   the   Trustees   would  adopt  a  new
non-fundamental restriction that would provide that the Fund may not:           

INVEST IN SECURITIES OF OTHER 

                  registered  investment  companies,  except by purchases in the
                  open market including only customary brokers' commissions, and
                  except  as  they  may be  acquired  as  part  of a  merger,  a
consolidation or an acquisition of assets.  

         This  change is being  proposed  to  provide  the Fund with  additional
investment  flexibility.  The  change  would  permit  investment  in  investment
vehicles  (except other mutual funds) that would be attractive  investments  for
the Fund but may  technically be (or be deemed to be ) investment  companies (as
defined  in the 1940 Act) and  therefore  prohibited  by the  Fund's  investment
restriction.  Even though securities of such issuers may involve the duplication
of some  fees and  expenses,  PMC  believes  that  they can                     

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provide  attractive  investment  opportunities  that, except for the restriction
stated above,  would be consistent  with the Fund's  investment  objectives  and
policies.  PMC does not  currently  expect to  significantly  invest  the Fund's
assets in such  vehicles but would like the  flexibility  to do so to the extent
permitted by the 1940 Act should appropriate opportunities arise.               

5(d).  Elimination of Fundamental Investment Restriction Regarding Affiliates of
Affiliates                                                                      

         The  Fund's  existing  fundamental   investment  restriction  regarding
securities of affiliates of affiliates of the Fund states that the Fund may not:

            PURCHASE OR RETAIN THE  SECURITIES  OF ANY
       ISSUER IF THE OFFICERS AND TRUSTEES OF THE FUND
       OF ITS INVESTMENT  ADVISER WHO OWN INDIVIDUALLY
       OR BENEFICIALLY MORE THAN ONE-HALF OF 1% OF THE
       SECURITIES  OF SUCH  ISSUER  TOGETHER  OWN MORE
 THAN 5% OF THE SECURITIES OF SUCH ISSUER.

         If the elimination of this restriction is approved by shareholders, the
Trustees will adopt the identical  restriction as a non-fundamental  policy. The
restriction  is required by the blue sky laws of states in which the Fund offers
its shares but is not required to be stated as a matter of fundamental policy.  

         The change is being  proposed to give the Trustees the  flexibility  to
amend the restriction if desired  without the need for  shareholder  approval in
the event of a change in the  applicable  blue sky laws or if the Fund ceases to
offer  shares in such  states.  There is no current  expectation  that either of
these  developments is likely to occur. In the event of such an occurrence,  PMC
will advise the Trustees whether it might be desirable to consider  changing the
restriction.                                                                    

5(e). Elimination of Fundamental Investment  Restrictions regarding "Unseasoned"
Issuers                                                                         

          The  Fund's  existing  fundamental  investment  restriction  regarding
securities of "unseasoned" issuers states that the Fund may not:                

            PURCHASE  SECURITIES OF ANY COMPANY WITH A
       RECORD  OF LESS  THAN  THREE  YEARS  CONTINUOUS
       OPERATION  (INCLUDING THAT OF  PREDECESSORS) IF
       SUCH   PURCHASE    WOULD   CAUSE   THE   FUND'S
       INVESTMENTS IN SUCH COMPANIES  TAKEN AT COST TO
       EXCEED  5% OF THE VALUE OF THE  FUND'S  ASSETS,
       EXCEPT HOLDING COMPANIES OR COMPANIES FORMED BY
       MERGER,  WHERE THE OPERATING COMPANIES HAVE HAD
     AT LEAST THREE YEARS OF CONTINUOUS OPERATION.

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         The  1940 Act  does  not  impose  any  limitation  upon  investment  in
securities  of issuers  with a limited  operating  history.  The change is being
proposed to permit the Fund to invest in such  securities to the extent that PMC
believes  that such  investment  would be  beneficial  to the Fund and would not
involve undue risk. In general,  PMC believes that it would be  advantageous  in
connection  with the expansion of the Fund's  ability to invest in  non-dividend
paying stocks to have the  flexibility  to invest in recently  formed  companies
which often offer significant potential for growth of capital. Although the Fund
will not formally adopt a percentage  limitation on such investments,  it is not
expected  that  PMC  will  invest  more  than 5% of the  Fund's  assets  in such
securities.                                                                     

         Certain state blue sky laws may limit the ability of the Fund to invest
in securities of unseasoned  issuers either alone or in combination with certain
other types of securities such as restricted securities.  To the extent required
by a state  securities  administrator,  the Fund  may  undertake  to  limit  its
investment to a specified percentage.                                           

5(f).  Amendment of Fundamental Investment Restriction Regarding Borrowing      

         The  Fund's  existing  fundamental   investment  restriction  regarding
borrowing states that the Fund may not:                                         

            BORROW  MONEY  EXCEPT  FOR   TEMPORARY  OR
       EMERGENCY PURPOSES IN AN AMOUNT UP TO 5% OF THE
VALUE OF THE FUND'S ASSETS.             

         If amended as proposed,  the restriction will provide that the Fund may
not:                                                                            

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            BORROW  MONEY,  EXCEPT  FROM  BANKS  AS  A
       TEMPORARY  MEASURE TO FACILITATE THE MEETING OF
       REDEMPTION  REQUESTS  OR FOR  EXTRAORDINARY  OR
       EMERGENCY   PURPOSES  AND  EXCEPT  PURSUANT  TO
       REVERSE REPURCHASE  AGREEMENTS OR DOLLAR ROLLS,
       IN ALL CASES IN AMOUNTS  NOT  EXCEEDING  10% OF
       THE FUND'S TOTAL ASSETS  (INCLUDING  THE AMOUNT
BORROWED) TAKEN AT MARKET VALUE.        

         The 1940 Act requires that a fund state a fundamental  policy regarding
borrowing.  The  amendment  is being  proposed  (1) to clarify that the Fund may
borrow  from banks both for  extraordinary  or  emergency  purposes  and to meet
redemptions, (2) to increase the permitted percentage of permitted borrowings to
10% of the Fund's  total  assets and (3) to give the Fund the future  ability to
engage in reverse  repurchase  agreements  and dollar rolls without the need for
shareholder approval.                                                           

         Reverse  repurchase  agreements  involve  sales by a fund of  portfolio
assets  concurrently with an agreement by the fund to repurchase the same assets
at a later  date at a fixed  price.  During  the  reverse  repurchase  agreement
period, the fund continues to receive principal and interest on these securities
and also has the opportunity to earn a return on the collateral furnished by the
counterparty to secure its obligation to redeliver the securities.  Dollar rolls
are  transactions  in which a fund sells  securities for delivery in the current
month  and  simultaneously  contracts  to  repurchase  similar  securities  on a
specified future date.  During the roll period,  the fund forgoes  principal and
interest  paid on the  securities.  The fund is  compensated  by the  difference
between the current  sales price and the forward  price for the future  purchase
(often  referred to as the "drop") as well as by the interest earned on the cash
proceeds of the initial sale.                                                   

         In regard to the permitted uses of bank  borrowings,  clarification  is
necessary  because the current  restriction  is not explicit with respect to the
Fund's ability to borrow to meet  redemptions.  In regard to reverse  repurchase
agreements  and dollar rolls,  the Fund does not  currently  engage or desire to
engage in either of these  investment  practices  in the coming  year.  However,
because  these common  practices  may be deemed to  constitute  borrowings,  the
Trustees  believe  it is  best to  create  the  flexibility  to  introduce  such
practices at some future time without the need for shareholder  approval if this
becomes  desirable.  In such event,  the  Prospectus and Statement of Additional
Information would be                                                            

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amended  accordingly,  including the addition of  appropriate  risk             
disclosure.                                                                     

5(g).  Addition  of  Fundamental   Investment   Restriction   Regarding  "Senior
Securities"                                                                     

         The Trustees  propose  adopting a  fundamental  investment  restriction
regarding the issuance of "senior securities" such that the Fund may not:       

       ISSUE SENIOR SECURITIES, EXCEPT AS PERMITTED BY
  THE  FUND'S   BORROWING,   LENDING   AND   COMMODITY
  RESTRICTIONS,  AND FOR PURPOSES OF THIS RESTRICTION,
  THE  ISSUANCE  OF SHARES OF  BENEFICIAL  INTEREST IN
  MULTIPLE CLASSES OR SERIES,  THE PURCHASE OR SALE OF
  OPTIONS,  FUTURES  CONTRACTS,   OPTIONS  ON  FUTURES
  CONTRACTS,  FORWARD  COMMITMENTS,   FORWARD  FOREIGN
  EXCHANGE CONTRACTS,  REPURCHASE AGREEMENTS,  REVERSE
  REPURCHASE  AGREEMENTS,  DOLLAR ROLLS, SWAPS AND ANY
  OTHER FINANCIAL TRANSACTION ENTERED INTO PURSUANT TO
  THE FUND'S  INVESTMENT  POLICIES AS DESCRIBED IN THE
  PROSPECTUS   AND  THIS   STATEMENT   OF   ADDITIONAL
  INFORMATION  AND IN ACCORDANCE  WITH  APPLICABLE SEC
  PRONOUNCEMENTS,  AS WELL AS THE PLEDGE,  MORTGAGE OR
  HYPOTHECATION   OF  THE  FUND'S  ASSETS  WITHIN  THE
  MEANING   OF  THE  FUND'S   FUNDAMENTAL   INVESTMENT
  RESTRICTION REGARDING PLEDGING, ARE NOT DEEMED TO BE
SENIOR SECURITIES.                                

         The 1940 Act requires that a fund state a fundamental  policy regarding
the  issuance  of  "senior  securities"  which  are  any  securities  that  have
preferential  rights compared to the Fund's shares of beneficial  interest.  The
above  restriction  is being  proposed  for the purpose of  complying  with this
technical  requirement  and to clarify that the issuance of multiple  classes or
series  of  shares  by the Fund  would  be  permitted  and that the  investments
specified therein are not considered to be senior securities.                   

         Except for forward  commitments and repurchase  agreements in which the
Fund already engages and forward foreign currency contracts and currency futures
and related  options in which the Fund                                          

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will  engage if the  proposed  change in the  Fund's  investment  objectives  is
approved,  the Fund has no current  intention  of engaging  in the other  listed
investment  practices in the coming year.  However,  the Trustees  believe it is
appropriate to provide clarification at this time that such practices (and other
unspecified  investment practices) are not covered by the restriction in case it
becomes  desirable  to engage in one or more of these  practices  at some future
time.  In the event that a new  practice  is  implemented,  the  Prospectus  and
Statement of Additional  Information will be revised accordingly,  including the
addition of appropriate risk disclosure.                                        

Trustees' Recommendations                                                       

         At a  meeting  of the  Trustees  held on July 16,  1996,  the  Trustees
present unanimously approved,  and voted to recommend to the shareholders of the
Fund that they approve the proposed  elimination  or amendment of certain of the
Fund's  investment   restrictions.   In  taking  such  action  and  making  such
recommendations, the Trustees considered the fact that the proposed changes will
provide   clarification   relating  to  certain   investment   restrictions  and
flexibility  to adjust to changing  regulations  and markets and new  investment
techniques  without  continually  incurring the significant  expense involved in
soliciting proxies and holding shareholder  meetings.  The Trustees believe that
this  increased   clarity  and   flexibility   will  be  beneficial  to  present
shareholders as well as potential investors.                                    

         Except as described in this Proxy  Statement,  approval of the proposed
changes  to the  investment  restrictions  will not  result  in  changes  in the
Trustees, officers,  investment programs and services or any operations that are
described  in  the  Fund's  current   Prospectus  and  Statement  of  Additional
Information.                                                                    

Required Vote                                                                   

         Adoption  of  each  of  Proposals   5(a)  through  5(g)   requires  the
affirmative 1940 Act Majority Vote of the Fund.                                 

         If all or some of the Proposals are not approved by the shareholders of
the  Fund,  the  Fund  will  continue  to  adhere  to  the  current   investment
restriction(s) as to which no change has been approved.                         

         FOR THE  REASONS  SET FORTH  ABOVE,  THE  TRUSTEES  RECOMMEND  THAT THE
SHAREHOLDERS  OF THE FUND  VOTE IN FAVOR OF THE  APPROVAL  OF THE  PROPOSALS  TO
ELIMINATE, AMEND OR ADD CERTAIN INVESTMENT RESTRICTIONS.                        

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OTHER MATTERS             

Shareholder Proposals                                                           

         The Fund is not required to hold annual  meetings of  shareholders  and
does not currently intend to hold such a meeting of shareholders in 1997.       

Shares Held in Retirement Plans                                                 

         PGI is permitted to vote any shares held in  Retirement  Plans and will
do so if necessary to obtain a quorum.                                          

Proxies, Quorum and Voting at the Meeting                                       

         Any person  giving a proxy has the power to revoke it at any time prior
to its exercise by executing a  superseding  proxy or by  submitting a notice of
revocation to the Secretary of the Fund. In addition,  although mere  attendance
at the Meeting will not revoke a proxy, a shareholder present at the Meeting may
withdraw  his or her  proxy  and  vote in  person.  All  properly  executed  and
unrevoked  proxies  received in time for the Meeting will be voted in accordance
with the instructions  contained in the proxies. If no instruction is given, the
persons  named as proxies will vote the shares  represented  thereby in favor of
the  Proposals  described  above and will use their best  judgment in connection
with the  transaction  of such other  business as may  properly  come before the
Meeting or any adjournment thereof.                                             

         A  majority  of the  shares  entitled  to vote --  present in person or
represented  by proxy --  constitutes a quorum for the  transaction  of business
with respect to any proposal (unless otherwise noted in the Proxy Statement). In
the  event  that at the time any  session  of the  Meeting  is called to order a
quorum is not present in person or by proxy,  the  persons  named as proxies may
vote those  proxies  which have been  received to adjourn the Meeting to a later
date. In the event that a quorum is present but sufficient votes in favor of any
of the  Proposals,  including  the  election  of the  nominees  to the  Board of
Trustees,  have not been received,  the persons named as proxies may propose one
or more  adjournments  of the Meeting to permit further  solicitation of proxies
with respect to such Proposal. Any such adjournment will require the affirmative
vote of more  than one half of the  shares of the Fund  present  in person or by
proxy at the  session  of the  Meeting to be  adjourned.  The  persons  named as
proxies will vote those  proxies which they are entitled to vote in favor of any
such  Proposal  in favor of such an  adjournment  and will  vote  those  proxies
required                                                                        

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to  be  voted  against  any  such  Proposal  against  any  such  adjournment.  A
shareholder  vote  may be  taken on one or more of the  Proposals  in the  proxy
statement  prior to such  adjournment if sufficient  votes for its approval have
been  received and it is  otherwise  appropriate.  Such vote will be  considered
final  regardless  of whether  the  Meeting is  adjourned  to permit  additional
solicitation with respect to any other Proposal.                                

         Shares of the Fund represented at the Meeting (including,  shares which
abstain  or do not vote with  respect to one or more of the  Proposals)  will be
counted for purposes of determining  whether a quorum is present at the Meeting.
Abstentions  will be treated as shares that are present and entitled to vote for
purposes of  determining  the number of shares that are present and  entitled to
vote with respect to any particular Proposal,  but will not be counted as a vote
in favor of such Proposal.  Accordingly, an abstention from voting on a Proposal
has the same legal effect as a vote against the Proposal.                       

         Adoption by the  shareholders of any of Proposals 1, 2 and 5(a) through
5(g)  requires  the  affirmative  vote of the  lesser  of (i) 67% or more of the
voting  securities  of the Fund present at the  Meeting,  if the holders of more
than 50% of the shares of the Fund are  present or  represented  by proxy at the
Meeting,  or (ii) 50% or more of the outstanding shares of the Fund. If a broker
or nominee  holding shares in "street name"  indicates on the proxy that it does
not have discretionary  authority to vote as to any Proposal,  those shares will
not be  considered  as  present  and  entitled  to  vote  as to  that  Proposal.
Accordingly,  a "broker  non-vote"  has no effect on the  voting in  determining
whether a Proposal has been adopted  pursuant to item (i) above,  provided  that
the holders of more than 50% of the  outstanding  shares  (excluding the "broker
non-votes")  of the Fund are  present or  represented  by proxy.  However,  with
respect to determining whether a Proposal has been adopted pursuant to item (ii)
above,  because  shares  represented  by  a  "broker  non-vote"  are  considered
outstanding  shares,  a "broker  non-vote"  has the same legal  effect as a vote
against such Proposal.                                                          

Other Business                                                                  

         While the Meeting has been called to  transact  any  business  that may
properly  come before it, the only matters  that the Trustees  intend to present
are  those  matters  stated  in  the  attached  Notice  of  Special  Meeting  of
Shareholders.  However,  if any  additional  matters  properly  come  before the
Meeting,  and on all matters incidental to the conduct of the Meeting, it is the
intention  of the  persons  named in the  enclosed  proxy  to vote the  proxy in

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accordance  with  their  judgment  on  such  matters  unless  instructed  to the
contrary.                                                                       

Methods of Solicitation and Expenses                                            

         The cost of preparing,  assembling and mailing this proxy statement and
the attached  Notice of Special  Meeting of  Shareholders  and the  accompanying
proxy card will be borne by PMC. In addition to soliciting  proxies by mail, PMC
may,  at PMC's  expense,  have one or more  Fund  officers,  representatives  or
compensated  third-party  agents,  including  PMC,  PSC  and  PFD,  aid  in  the
solicitation of proxies by personal interview or telephone and telegraph and may
request  brokerage  houses and other  custodians,  nominees and  fiduciaries  to
forward proxy soliciting material to the beneficial owners of the shares held of
record by such persons.                                                         

         The Fund may also  arrange to have votes  recorded  by  telephone.  The
telephone voting procedure is designed to authenticate shareholders' identities,
to allow shareholders to authorize the voting of their shares in accordance with
their  instructions  and to confirm that their  instructions  have been properly
recorded.  The Fund has been  advised  by  counsel  that  these  procedures  are
consistent with the  requirements  of applicable  law. If these  procedures were
subject to a successful legal challenge,  such votes would not be counted at the
Meeting.  The Fund is unaware of any such  challenge at this time.  Shareholders
would be called at the phone  number PSC has in its records for their  accounts,
and  would be asked  for  their  Social  Security  number  or other  identifying
information.  The  shareholders  would then be given an opportunity to authorize
proxies  to  vote  their  shares  at  the  Meeting  in  accordance   with  their
instructions.  To ensure that the shareholders'  instructions have been recorded
correctly,  they will also receive a confirmation  of their  instructions in the
mail.  A special  toll-free  number will be  available  in case the  information
contained in the confirmation is incorrect.                                     

         Persons  holding  shares as nominees  will be  reimbursed  by PMC, upon
request,  for the  reasonable  expenses of mailing  soliciting  materials to the
principals of the accounts.                                                     

November 22, 1996                                                               

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APPENDIX            

Additional Information Pertaining to PMC                                        

         Directors.   Information  regarding  the  affiliations  of  Mr.  Cogan,
Chairman of PMC, and Mr. Tripple,  a Director of PMC, is contained in Proposal 2
of this Proxy Statement.  The following table provides  information with respect
to the other Director of PMC:                                                   

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Name, Age and Address               Principal Occupation(s)                     
---------------------               -----------------------                     

Robert L. Butler, 55                Executive Vice President and a              
60 State Street                     Director of PGI; President and              
Boston, MA 02109                    a Director of PFD;  Director of             
                       PSC,  PIC,  and P. Intl.;  Vice
                       Chairman of Pioneer GmbH; and a
                       Member of the Supervisory Board
of PFPT.

         Ownership  of PMC.  PMC is a  wholly-owned  subsidiary  of  PGI.  As of
September 30, 1996, Mr. Cogan  beneficially  owned 3,578,901  shares (14.16%) of
the outstanding  Common Stock of PGI. Mr. Cogan's  beneficial  holdings included
696,391  shares held in trusts with  respect to which Mr. Cogan may be deemed to
be a beneficial owner by reason of his interest as a beneficiary and/or position
as a  trustee  and  shares  which  Mr.  Cogan  has the  right to  acquire  under
outstanding  options  within  sixty days of September  30,  1995.  At such date,
Messrs. Butler and Tripple, PMC's other directors,  each owned beneficially less
than 2% of the  outstanding  Common  Stock of PGI.  As of  September  30,  1996,
officers and directors of PMC and Trustees and officers of the Fund beneficially
owned an  aggregate of  4,073,396  shares of Common Stock of PGI,  approximately
15.75]% of the  outstanding  Common Stock of PGI. During PGI's fiscal year ended
December 31, 1995 there were no transactions in PGI Common Stock by any officer,
Trustee of the Fund or Director of PMC in an amount  equal to or exceeding 1% of
the outstanding Common Stock of PGI.                                            

         Services  Provided to the Fund By  Affiliates of PMC. PSC serves as the
Fund's transfer agent and shareholder  servicing  agent.  Under the terms of its
contract with the Fund, PSC's duties include: (i) processing sales,  redemptions
and  exchanges of shares of the Fund;  (ii)  distributing  dividends and capital
gains to shareholder accounts; and (iii) maintaining certain account records and
responding to routine shareholder  inquires.  For the                           

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fiscal year ended December 31, 1995 the Fund paid PSC approximately  $773,246 in
fees for these services.                                                        

         PFD, an indirect  wholly owned  subsidiary of PGI, serves as the Fund's
principal  underwriter.  For the fiscal year ended  December 31, 1995,  the Fund
paid PFD  approximately  $674,000 in  distribution  fees  pursuant to the Fund's
Class A  Distribution  Plan and  $15,000 in  distribution  fees  pursuant to the
Fund's Class B Distribution  Plan. Such fees are paid to PFD in reimbursement of
expenses   related  to  servicing  of  shareholder   accounts  and  compensating
broker/dealers  and  sales  personnel.  For the  same  period,  PFD  earned  net
underwriting  commissions in connection  with its offering of shares of the Fund
in the amount of  approximately  $665,332 of which  approximately  $581,628  was
reallowed to dealers.                                                           

         Similar Funds Managed By PMC. PMC serves as the  investment  manager to
the following funds with investment objectives similar to the Fund's current and
proposed revised objectives:                                                    

                                              Name of Fund
 Annual                                            (Net Assets as of
Management Fee Rate                                      as of 9/30/96)         
-------------------                                      --------------         

0.60% on average net assets                              Pioneer II             
(subject to an                                          ($5,432,875,000)      
adjustment of up +/-.20                                 Pioneer Fund          
to reflect each Fund's                                  ($2,711,796,000)      
performance)                                                                  
                                                      Pioneer Mid-Cap Fund
From July 1, 1996 to                                     ($1,013,495,000)       
January 30, 1997:                                                             
0.625% on average net assets                                                  
(subject to a negative                                                          
adjustment of up to 0.20%);                                                     
From February 1, 1997:                                                          
0.625% on average net assets,                                                   
adjusted by up to +/-.20%                                                     
to reflect Pioneer Mid-Cap                                                    
Fund's performance                                                            

0.65% on average                                         Pioneer Variable       
net assets                                              Contracts Trust --    

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                                                    Balanced Portfolio
                                                ($112,125,000)
0.65% on the first $300 miles                                                   
of average net asset;                                                         
0.60% on the next 1200 miles                                                    
in average net assets;                                                        
0.50% on the next $500 million                           Pioneer Equity-Income  
in average net assets;                                  Fund                  
0.45% on net average assets                              ($459,802,000)         
exceeding $1 billion                                                          

    Portfolio  Transactions.  All orders for the  purchase or sale of  portfolio
securities  are  placed  on  behalf  of the Fund by PMC  pursuant  to  authority
contained in the Current and Proposed Management Contracts. In selecting brokers
or dealers,  PMC  considers  factors  relating to  execution on the best overall
terms  available,  including,  but not  limited  to,  the  size  and type of the
transaction;  the nature and  character  of the  markets of the  security  to be
purchased or sold; the execution efficiency, settlement capability and financial
condition  of  the  dealer;  the  dealer's  execution  services  rendered  on  a
continuing basis; and the reasonableness of any dealer spreads.                 

    PMC may  select  broker-dealers  which  provide  brokerage  and/or  research
services to the Fund and/or other  investment  companies or accounts  managed by
PMC. Such research services must be lawful and appropriate  assistance to PMC in
the  performance of its investment  decision making  responsibilities  and could
include advice concerning the value of securities; the advisability of investing
in,  purchasing or selling  securities;  the  availability  of securities or the
purchasers or sellers of securities;  furnishing analysis and reports concerning
issuers, industries, securities, economic factors and trends, portfolio strategy
and  performance  of  accounts;   and  effecting  securities   transactions  and
performing functions incidental thereto (such as clearance and settlement).     

    In circumstances  where two or more  broker-dealers  offer comparable prices
and executions, preference may be given to a broker-dealer which has sold shares
of the Fund as well as shares of other investment  companies or accounts managed
by PMC.  This  policy  does not imply a  commitment  to  execute  all  portfolio
transactions  through  all  broker-dealers  that sell  shares  of the  Fund.  In
addition, if PMC determines in good faith that the amount of commissions charged
by a broker is reasonable in relation to the value of the brokerage and research
services provided by such broker, the Fund may pay commissions to such broker in
an amount  greater  than the amount                                             

-32-

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another firm may charge.  This  information  might be useful to PMC in providing
services  to the  Fund as well as to  other  investment  companies  or  accounts
managed by PMC,  although  not all of such  research  may be useful to the Fund.
Conversely, such information provided to PMC by brokers and dealers through whom
other clients of PMC effect  securities  transactions  might be useful to PMC in
providing  services to the Fund. The receipt of such research is not expected to
reduce PMC's normal independent research activities;  however, it enables PMC to
avoid the  additional  expense  which might  otherwise be incurred if it were to
attempt to develop comparable information through its own staff.                

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

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Dates Referenced Herein and Documents Incorporated By Reference

		Referenced-On Page
This PRES14A Filing	Date	First	Last	Other Filings

	11/23/93	10
	12/1/93	9
	9/30/95	35
	12/31/95	3	36	24F-2NT, N-30D, NSAR-B
	1/31/96	12		497
	6/30/96	3		N-30D, NSAR-A
	7/1/96	36
	7/16/96	3	30
	9/30/96	4	35
Filed On / Filed As Of	11/1/96
	11/4/96	22
	11/7/96	2	3
	11/22/96	2	33	DEFS14A
For The Period Ended	1/14/97	2	3	DEFS14A
	1/30/97	36
	2/1/97	11	36
	12/31/97	2	23	24F-2NT, N-30D, NSAR-B
	5/31/98	15

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Pioneer Balanced Fund · PRES14A · For 1/14/97

Filed On 11/1/96 · SEC File 811-01605 · Accession Number 69405-96-19

Preliminary Proxy Solicitation Material -- Special Meeting · Schedule 14AFiling Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated By Reference

Preliminary Proxy Solicitation Material -- Special Meeting · Schedule 14A
Filing Table of Contents