0000891804-14-000881.txt : 20140908 0000891804-14-000881.hdr.sgml : 20140908 20140905175247 ACCESSION NUMBER: 0000891804-14-000881 CONFORMED SUBMISSION TYPE: N-14 PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 20140908 DATE AS OF CHANGE: 20140905 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PIONEER IBBOTSON ASSET ALLOCATION SERIES CENTRAL INDEX KEY: 0001288255 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: N-14 SEC ACT: 1933 Act SEC FILE NUMBER: 333-198612 FILM NUMBER: 141086824 BUSINESS ADDRESS: STREET 1: 60 STATE ST CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6174224947 MAIL ADDRESS: STREET 1: 60 STATE ST CITY: BOSTON STATE: MA ZIP: 02109 FORMER COMPANY: FORMER CONFORMED NAME: PIONEER ASSET ALLOCATION SERIES DATE OF NAME CHANGE: 20040422 CENTRAL INDEX KEY: 0001288255 S000004006 Pioneer Ibbotson Growth Allocation Fund C000011205 Pioneer Ibbotson Growth Allocation Fund: Class A GRAAX CENTRAL INDEX KEY: 0001288255 S000004005 Pioneer Ibbotson Aggressive Allocation Fund C000011201 Pioneer Ibbotson Aggressive Allocation Fund: Class A PIAAX CENTRAL INDEX KEY: 0001288255 S000004006 Pioneer Ibbotson Growth Allocation Fund C000011206 Pioneer Ibbotson Growth Allocation Fund: Class B GRABX CENTRAL INDEX KEY: 0001288255 S000004005 Pioneer Ibbotson Aggressive Allocation Fund C000011202 Pioneer Ibbotson Aggressive Allocation Fund: Class B IALBX CENTRAL INDEX KEY: 0001288255 S000004006 Pioneer Ibbotson Growth Allocation Fund C000011207 Pioneer Ibbotson Growth Allocation Fund: Class C GRACX CENTRAL INDEX KEY: 0001288255 S000004005 Pioneer Ibbotson Aggressive Allocation Fund C000011203 Pioneer Ibbotson Aggressive Allocation Fund: Class C IALCX CENTRAL INDEX KEY: 0001288255 S000004006 Pioneer Ibbotson Growth Allocation Fund C000011208 Pioneer Ibbotson Growth Allocation Fund: Class Y IBGYX CENTRAL INDEX KEY: 0001288255 S000004005 Pioneer Ibbotson Aggressive Allocation Fund C000011204 Pioneer Ibbotson Aggressive Allocation Fund: Class Y IBAYX N-14 1 pioneer60280-n14.txt PIONEER IBBOTSON As filed with the Securities and Exchange Commission on September 8, 2014 File No. ____ United States Securities and Exchange Commission Washington, D.C. 20549 FORM N-14 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Pre-Effective Amendment No. ___ Post-Effective Amendment No. ___ (Check appropriate box or boxes) PIONEER IBBOTSON ASSET ALLOCATION SERIES (Exact Name of Registrant as Specified in Charter) (617) 742-7825 (Area Code and Telephone Number) 60 State Street, Boston, Massachusetts 02109 (Address of Principal Executive Offices: Number, Street, City, State, Zip Code) Terrence J. Cullen Pioneer Investment Management, Inc. 60 State Street Boston, Massachusetts 02109 (Name and Address of Agent for Service) Copies to: Roger P. Joseph, Esq. Bingham McCutchen LLP One Federal Street Boston, Massachusetts 02110 Approximate Date of Proposed Public Offering: As soon as practicable after the effective date of this Registration Statement. Calculation of Registration Fee under the Securities Act of 1933: No filing fee is due because of reliance on Section 24(f) of the Investment Company Act of 1940, which permits registration of an indefinite number of securities. Title of Securities Being Registered: Shares of beneficial interest of Pioneer Ibbotson Growth Allocation Fund, a series of the Registrant. It is proposed that this filing will become effective on October 8, 2014, pursuant to Rule 488 under the Securities Act of 1933, as amended. COMBINED INFORMATION STATEMENT OF PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND AND PROSPECTUS FOR PIONEER IBBOTSON GROWTH ALLOCATION FUND (to be renamed Pioneer Multi-Asset Allocator Growth Fund) (each, a "Pioneer Fund" and together, the "Pioneer Funds") The address and telephone number of each Pioneer Fund is: 60 State Street Boston, Massachusetts 02109 1-800-225-6292 To the Shareholders of Pioneer Ibbotson Aggressive Allocation Fund: The Board of Trustees of your fund has approved the reorganization of your fund (the "Acquired Fund") with Pioneer Ibbotson Growth Allocation Fund (to be re-named Pioneer Multi-Asset Allocator Growth Fund) (the "Acquiring Fund") after considering the recommendation of Pioneer Investment Management, Inc. ("Pioneer"), the investment manager to your fund and concluding that the reorganization would be in the best interests of your fund. The Board of Trustees considered various factors in approving the reorganization, including, but not limited to: o The similarity in investment objectives and strategies between the Acquired Fund and the Acquiring Fund, each of which is a "fund of funds" that invests primarily in other mutual funds, including mutual funds that are managed by Pioneer. o The assumption by Pioneer of portfolio management responsibilities for the Acquiring Fund in conjunction with the reorganization; o The expectation that there will be no increase in management fees for shareholders of the Acquired Fund as a result of the reorganization; o The potential for economies of scale for the combined fund resulting from the reorganization; o The expectation that the reorganization generally will have no federal income tax consequences for shareholders. The reorganization is expected to occur on or about November 14, 2014. No commission, redemption fee or other transactional fee will be charged as a result of the reorganization. The reorganization does not require shareholder approval, and you are not being asked to vote. We do, however, ask that you review the enclosed information statement/prospectus, which contains information about the Acquiring Fund, outlines the differences between your fund and the Acquiring Fund, and provides details about the terms and conditions of the reorganization. The Board of Trustees of your fund has unanimously approved your fund's reorganization and believes the reorganization is in the best interests of your fund. If you have any questions, please call 1-800-225-6292. Sincerely, Christopher J. Kelley Secretary Boston, Massachusetts ______________, 2014 COMBINED INFORMATION STATEMENT OF PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND AND PROSPECTUS FOR PIONEER IBBOTSON GROWTH ALLOCATION FUND (to be renamed Pioneer Multi-Asset Allocator Growth Fund) (each, a "Pioneer Fund" and together, the "Pioneer Funds") The address and telephone number of the Pioneer Funds is: 60 State Street Boston, Massachusetts 02109 1-800-225-6292 Shares of the Pioneer Funds have not been approved or disapproved by the Securities and Exchange Commission (the "SEC"). The SEC has not passed on upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense. An investment in either Pioneer Fund (each sometimes referred to herein as a "fund") is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. This Information Statement/Prospectus sets forth information that an investor needs to know before investing. Please read this Information Statement/Prospectus carefully before investing and keep it for future reference. TABLE OF CONTENTS
Page ---- INTRODUCTION 3 REORGANIZATION OF PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND WITH PIONEER IBBOTSON GROWTH ALLOCATION FUND (TO BE RENAMED PIONEER MULTI-ASSET ALLOCATOR GROWTH FUND) 6 OTHER IMPORTANT INFORMATION REGARDING THE REORGANIZATION 31 TERMS OF THE AGREEMENT AND PLAN OF REORGANIZATION 33 TAX STATUS OF THE REORGANIZATION 35 ADDITIONAL INFORMATION ABOUT THE PIONEER FUNDS 39 FINANCIAL HIGHLIGHTS 57 OWNERSHIP OF SHARES OF THE PIONEER FUNDS 61 AUDITORS 61 AVAILABLE INFORMATION 61 EXHIBIT A -- FORM OF AGREEMENT AND PLAN OF REORGANIZATION - PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND - PIONEER IBBOTSON GROWTH ALLOCATION FUND A-1
2 INTRODUCTION This combined information statement/prospectus, dated ______________, 2014 (the "Information Statement/Prospectus"), is being furnished to shareholders of Pioneer Ibbotson Aggressive Allocation Fund (the "Acquired Fund") in connection with the reorganization of the fund with Pioneer Ibbotson Growth Allocation Fund (to be renamed Pioneer Multi-Asset Allocator Growth Fund) (the "Acquiring Fund"). Following the completion of the reorganization, you will be a shareholder in a fund that has the same investment manager as your fund, similar investment objectives, strategies and policies, and that has management fees that are no higher than your fund's management fees. However, the combined fund will be substantially larger in size. The reorganization does not require shareholder approval, and you are not being asked to vote. The Information Statement/Prospectus contains information you should know about the reorganization. A copy of the agreement and plan of reorganization that provides for the reorganization of your fund is attached to this Information Statement/Prospectus as Exhibit A. Shareholders should read this entire Information Statement/Prospectus, including Exhibit A, carefully. The date of this Information Statement/Prospectus is ______________, 2014. For more complete information about each Pioneer Fund, please read the fund's prospectus and statement of additional information, as they may be amended and/or supplemented. Each fund's prospectus and statement of additional information has been filed with the SEC (http://www.sec.gov) and is available upon oral or written request and without charge. See "Where to Get More Information" below.
------------------------------------------------------------------------------------------------------ Where to Get More Information ------------------------------------------------------------------------------------------------------ Each Pioneer Fund's current summary On file with the SEC (http://www.sec.gov) and prospectus, prospectus, statement of available at no charge by calling our toll-free additional information, and any applicable number: 1-800-225-6292. See "Available supplements. Information." ------------------------------------------------------------------------------------------------------ Each Pioneer Fund's most recent annual and On file with the SEC (http://www.sec.gov) and semi-annual reports to shareholders. available at no charge by calling our toll-free number: 1-800-225-6292. See "Available Information." ------------------------------------------------------------------------------------------------------ A statement of additional information for On file with the SEC (http://www.sec.gov) and this Information Statement/Prospectus (the available at no charge by calling our toll-free "SAI"), dated ____, 2014. It contains additional number: 1-800-225-6292. This SAI is incorporated by information about the Pioneer Funds. reference into this Information Statement/Prospectus. See "Available Information." ------------------------------------------------------------------------------------------------------ To ask questions about this Information Call our toll-free telephone number: Statement/Prospectus. 1-800-225-6292. ------------------------------------------------------------------------------------------------------
The Acquired Fund's summary prospectus, prospectus and statement of additional information dated December 1, 2013, as supplemented, are incorporated by reference into this Information Statement/Prospectus. Background to the Reorganization Pioneer Investment Management, Inc. ("Pioneer"), your fund's investment adviser, recommended the reorganization of your fund with the Acquiring Fund (the "Reorganization") for a number of reasons, including: o Your fund and the Acquiring Fund have similar investment objectives and strategies. Like your fund, the Acquiring Fund is a "fund of funds" that seeks to achieve its investment objectives by investing primarily in other mutual funds, including mutual funds that are managed by Pioneer. o The Acquiring Fund will be directly managed by Pioneer using a flexible asset allocation to select investments it believes will perform well over time while seeking to maintain a level of volatility corresponding to its risk/return profile. o The combined fund may be better positioned in the market to attract assets than your fund. The combined fund's greater asset size may allow it, relative to your fund, to reduce per share expenses as fixed expenses are shared over a larger asset base. At a meeting held on July 15, 2014, the Board of Trustees of the funds unanimously approved the Reorganization of your fund. The Reorganization of your fund is not subject to approval by the shareholders of your fund. How will the Reorganization work? o The Reorganization is scheduled to occur on or about November 14, 2014, but may occur on such later date as the parties may agree in writing (the "Closing Date"). 3 o Your fund will transfer all of its assets to the Acquiring Fund, and the Acquiring Fund will assume all of the Acquired Fund's liabilities. o The Acquiring Fund will issue Class A, Class C and Class Y shares to your fund in amounts equal to the aggregate net asset value of your fund's Class A, Class C and Class Y shares, respectively. Class B shares of the Acquired Fund will be converted to Class A shares of the Acquired Fund on November 10, 2014, prior to the Closing Date. Accordingly, current Class B shareholders of the Acquired Fund will be Class A shareholders of the Acquired Fund on the Closing Date, and will receive Class A shares of the Acquiring Fund in the Reorganization. o Shares of the Acquiring Fund will be distributed to you in proportion to the relative net asset value of your holdings of shares of each class of the Acquired Fund on the Closing Date. Therefore, on the Closing Date, you will hold shares of the corresponding class of the Acquiring Fund with the same aggregate net asset value as your holdings of shares of each class of the Acquired Fund immediately prior to the Reorganization. The net asset value attributable to a class of shares of each fund will be determined using the Pioneer Funds' valuation policies and procedures. Each fund's valuation policy and procedures are identical. o No sales load, contingent deferred sales charge, commission, redemption fee or other transactional fee will be charged as a result of the Reorganization. After the Reorganization, any contingent deferred sales charge that applied to your Class A or Class C shares of the Acquired Fund at the time of the Reorganization will continue to apply for the remainder of the applicable holding period at the time of the Reorganization. In calculating any applicable contingent deferred sales charge, the period during which you held your shares will be included in the holding period of the shares you receive as a result of the Reorganization. o The Reorganization generally is not expected to result in income, gain or loss being recognized for federal income tax purposes by either fund or by the shareholders of either fund. o In approving the Reorganization, the Board of Trustees of each fund, including all of the Trustees who are not "interested" persons (as defined in the Investment Company Act of 1940, as amended (the "1940 Act")) of the Pioneer Funds, Pioneer, or Pioneer Funds Distributor, Inc., the Pioneer Funds' principal underwriter and distributor ("PFD") (the "Independent Trustees"), has determined that the Reorganization is in the best interest of each fund and will not dilute the interests of shareholders. The Trustees have made this determination based on factors that are discussed below. What was the basis of the Trustees' determination that the Reorganization was in the best interests of your fund? The Board of Trustees believes that reorganizing your fund with the Acquiring Fund offers you a number of potential benefits. These potential benefits and considerations include: o Similar investment objectives. Your fund and the Acquiring Fund have similar investment objectives. Your fund's investment objective is long-term capital growth. The Acquiring Fund's investment objective is long-term capital growth and current income. o Similar investment policies. Like your fund, the Acquiring Fund is a "fund of funds" that allocates its assets primarily among other mutual funds, including mutual funds managed by Pioneer, that invest in asset classes consistent with the fund's objectives. However, the Acquiring Fund generally is expected to allocate a greater percentage of its assets to fixed income and other investments than your fund. In addition, following the completion of the Reorganization, the Acquiring Fund will have the flexibility to invest in a broader range of funds than your fund, including exchange-traded funds and mutual funds that are not managed by Pioneer. Unlike your fund, the Acquiring Fund also will be permitted to invest in derivative instruments for hedging and other purposes. o Direct management by Pioneer. In conjunction with the Reorganization, Pioneer will assume responsibility for making portfolio management decisions for the Acquiring Fund. Currently, Ibbotson Associates, Inc. serves as each fund's sub-adviser. o Allocation approach and risk management. Your fund's assets are allocated among asset classes and funds according to fixed ranges. In contrast, following the completion of the Reorganization, Pioneer intends to manage the Acquiring Fund using a flexible allocation approach that does not rely on fixed ranges for asset classes or funds. Pioneer also intends to employ risk management strategies that seek to keep the Acquiring Fund's annualized volatility (i.e., fluctuations in value) within a targeted range. o No increase in management fees. The pro forma management fees paid by the combined fund will be the same as or lower than the management fees paid by your fund. o Economies of scale. The combined fund may be better positioned to attract assets than your fund. The larger size of the combined fund may result in greater economies of scale that would benefit the combined fund. Each fund incurs substantial operating costs for accounting, legal and custodial services. The combined fund resulting from the Reorganization would spread fixed expenses over a larger asset base, potentially contributing to a lower expense ratio in the long term than your fund would achieve separately. 4 o The transaction is expected to be treated as a reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and you therefore are not expected to recognize any taxable gain or loss on the exchange of your fund shares for shares of the Acquiring Fund. What are the federal income tax consequences of the Reorganization? As a condition to the closing of the Reorganization, the funds must receive an opinion of Bingham McCutchen LLP to the effect that the Reorganization will constitute a "reorganization" within the meaning of Section 368(a) of the Code. Accordingly, subject to the limited exceptions described below under the heading "Tax Status of the Reorganization," it is expected that neither you nor your fund will recognize gain or loss as a direct result of the Reorganization, and that the aggregate tax basis of the shares that you receive in the Reorganization will be the same as the aggregate tax basis of the shares that you surrender in the Reorganization. In addition, the holding period of shares you receive in the Reorganization will include the holding period of the shares that you surrender in the Reorganization, provided that you held those shares as capital assets on the date of the Reorganization. However, in accordance with the Pioneer Funds' policy that each Pioneer Fund distributes its investment company taxable income, net tax-exempt income and net capital gains for each taxable year (in order to qualify for tax treatment as a regulated investment company and avoid federal income tax thereon at the fund level), your fund will declare and pay a distribution of such income and gains to its shareholders, if any, shortly before the Reorganization. Such distribution may affect the amount, timing or character of taxable income that you realize in respect of your fund shares. For more information, see "Tax Status of the Reorganization" on page 35 of the Information Statement/Prospectus. The Acquiring Fund may make a comparable distribution to its shareholders shortly before the Reorganization. Additionally, following the Reorganization, the Acquiring Fund will continue to make distributions according to its regular distribution schedule. You will generally need to pay tax on those distributions even though they may include income and gains that were accrued and/or realized before you became a shareholder of the Acquiring Fund. Who bears the expenses associated with the Reorganization? Each fund will bear approximately 25% of the expenses incurred in connection with the Reorganization, including expenses associated with the preparation, printing and mailing of any shareholder communications (including this Information Statement/Prospectus), any filings with the SEC and other governmental agencies in connection with the Reorganization, audit fees and legal fees ("Reorganization Costs"). Pioneer will bear the remaining 50% of the Reorganization Costs. It is estimated that these expenses in the aggregate will not exceed $100,000, of which each fund will bear approximately $25,000. 5 REORGANIZATION OF PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND WITH PIONEER IBBOTSON GROWTH ALLOCATION FUND (TO BE RENAMED PIONEER MULTI-ASSET ALLOCATOR GROWTH FUND) SUMMARY The following is a summary of more complete information appearing later in this Information Statement/Prospectus or incorporated herein. You should read carefully the entire Information Statement/Prospectus, including the form of Agreement and Plan of Reorganization attached as Exhibit A, because it contains details that are not in the summary. The Board of Trustees of your fund has approved the Reorganization of your fund with the Acquiring Fund. Each fund is managed by Pioneer and has similar investment policies, but there are certain differences between the funds, including: o Your fund is currently sub-advised by Ibbotson Associates, Inc. ("Ibbotson"). As the fund's sub-adviser, Ibbotson is responsible for allocating the fund's assets among the other funds managed by Pioneer in which the fund invests. In contrast, upon completion of the Reorganization, Pioneer will assume portfolio management responsibilities for the Acquiring Fund and, accordingly, will make asset allocation decisions for the combined fund. o The investment objectives of your fund and the Acquiring Fund are similar, but not identical. Your fund's investment objective is long-term capital growth. The Acquiring Fund's investment objective is long-term capital growth and current income. o Like your fund, the Acquiring Fund is a "fund of funds" that allocates it assets primarily among other mutual funds, including mutual funds managed by Pioneer, that invest in asset classes consistent with the fund's objectives. However, the Acquiring Fund generally is expected to allocate a greater percentage of its assets to fixed income and other investments than your fund. Furthermore, in connection with the assumption of portfolio management responsibilities by Pioneer, the Board of Trustees of the Acquiring Fund approved certain changes to the Acquiring Fund's investment strategies that will take effect upon completion of the Reorganization. These changes will permit the Acquiring Fund to invest in a broader range of funds than your fund, including exchange-traded funds and mutual funds that are not managed by Pioneer. Unlike your fund, the Acquiring Fund also will be permitted to invest in derivative instruments for hedging and other purposes. o Your fund's assets are allocated among asset classes and funds according to fixed ranges. In contrast, following the completion of the Reorganization, Pioneer intends to manage the Acquiring Fund using a flexible allocation approach that does not rely on fixed ranges for asset classes or funds. Pioneer also intends to employ risk management strategies that seek to keep the Acquiring Fund's annualized volatility (i.e., fluctuations in value) within a targeted range. The tables below compare certain features of your fund to the features of the Acquiring Fund that will be in effect upon completion of the Reorganization. In the table below, if a row extends across the entire table, the policy disclosed applies to both your fund and the Acquiring Fund. 6 Comparison of Acquired Fund and the Acquiring Fund, Post-Reorganization
-------------------------------------------------------------------------------------------------------------------------------- Pioneer Ibbotson Growth Allocation Fund (to be Pioneer Ibbotson Aggressive Allocation Fund renamed Pioneer Multi-Asset Allocator Growth Fund) (the Acquired Fund) (the Acquiring Fund), Post-Reorganization -------------------------------------------------------------------------------------------------------------------------------- Investment Adviser Pioneer Investment Management, Inc. -------------------------------------------------------------------------------------------------------------------------------- Sub-Adviser Ibbotson Associates, Inc. ("Ibbotson") None. -------------------------------------------------------------------------------------------------------------------------------- Portfolio Scott Wentsel, vice president and senior Day-to-day management of the fund's portfolio will Management portfolio manager at Ibbotson (portfolio be the responsibility of a team of portfolio manager of the fund since 2005); Brian managers, which include members from Pioneer's Huckstep, portfolio manager at Ibbotson affiliate, Pioneer Investment Management Limited. (portfolio manager of the fund since 2005); John O'Toole, Head of Multi-Asset Portfolio Paul Arnold, senior consultant at Ibbotson Management, Paul Weber, Head of Fund Research and (portfolio manager of the fund since 2012). Manager Selection, and Salvatore Buono, Head of Strategy Alignment and Structured Products. -------------------------------------------------------------------------------------------------------------------------------- Investment Long-term capital growth. Long-term capital growth and current income. objective -------------------------------------------------------------------------------------------------------------------------------- Each fund's investment objective may be changed without shareholder approval. Each fund will provide notice prior to implementing any change to its investment objective. -------------------------------------------------------------------------------------------------------------------------------- Principal The fund is a "fund of funds." The fund seeks to achieve its investment objectives by investing in investment other funds ("underlying funds") rather than direct positions in securities. strategies -------------------------------------------------------------------------------------------------------------------------------- Underlying Funds The fund may invest in underlying funds that The fund may invest in underlying funds that are are either managed by Pioneer or managed by an either managed by Pioneer or managed by an adviser adviser not associated with Pioneer. As of the not associated with Pioneer, including date of this Information Statement/Prospectus, exchange-traded funds (ETFs). the fund invests solely in other Pioneer funds. -------------------------------------------------------------------------------------------------------------------------------- It is anticipated that underlying funds managed by Pioneer will at all times represent a significant portion of the fund's investments. -------------------------------------------------------------------------------------------------------------------------------- Asset Allocation Pioneer allocates each fund's assets among the Through investments in underlying funds, the fund Process broad asset classes of equity, fixed income and allocates its assets among the broad asset classes short-term (money market) investments by of equity, fixed income and short-term (money investing in a distinctly weighted combination market) investments. The fund also may invest in of underlying funds. These underlying funds, in underlying funds with exposure to non-traditional turn, invest in a variety of U.S. and foreign -- so-called "alternative" -- asset classes such as equity, fixed income and money market real estate investment trusts (REITs) or securities. The intended benefit of asset commodities, or that use alternative strategies, allocation is that the diversification provided such as market neutral or relative value by allocating assets among asset classes, such strategies. as equity and debt securities, reduces volatility over the long-term. The fund invests mainly in funds managed by Pioneer or one of its affiliates. The fund may Subject to Pioneer's supervision, Ibbotson also invest in securities of unaffiliated mutual allocates each fund's assets among the funds or exchange-traded funds (ETFs) when the underlying funds. Ibbotson uses a two-step desired economic exposure to a particular asset asset allocation process: category or investment strategy is not available through a Pioneer fund. The fund's allocations First, Ibbotson seeks to develop an optimal among underlying funds will vary over time. The model allocation among underlying funds in investment adviser allocates the fund's different asset classes using an analysis that investments in the underlying funds based on an looks at forecast returns, standard deviations evaluation of three components: strategic asset in historical returns and the correlation of allocation, tactical asset allocation and fund the performance of different asset classes. The selection. As part of its overall strategy, the goal of this process is to identify a fund may use derivatives in an effort to limit the combination of investments in different asset effects of volatility (the variability of returns classes that is expected to maximize return for from one period to the next) or severe market a given level of risk or minimize risk for a events, to seek incremental return, and for a given level of return. variety of other hedging and non-hedging purposes. --------------------------------------------------------------------------------------------------------------------------------
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-------------------------------------------------------------------------------------------------------------------------------- Pioneer Ibbotson Growth Allocation Fund (to be Pioneer Ibbotson Aggressive Allocation Fund renamed Pioneer Multi-Asset Allocator Growth Fund) (the Acquired Fund) (the Acquiring Fund), Post-Reorganization -------------------------------------------------------------------------------------------------------------------------------- Having determined the allocation of the fund's The adviser selects investments it believes will assets among the asset classes, Ibbotson then perform well over time while maintaining a level invests the assets in underlying funds that of volatility corresponding to its risk/return invest in those asset classes. Pioneer and profile, targeting an annualized volatility level Ibbotson agree from time to time upon the for the fund of approximately 10%-18%. Due to universe of mutual funds that Ibbotson may market conditions and other factors, the actual or consider when making allocation decisions. realized volatility of the fund for any particular Ibbotson's analysis in selecting and weighting period of time may be materially higher or lower the underlying funds from that universe than the target level. Volatility may result from includes historical returns-based style rapid and dramatic price swings. Higher volatility analysis, asset performance, regression and generally indicates higher risk. attribution analyses, manager interviews, relative and absolute performance, including The adviser allocates the fund's assets among correlations with other underlying funds as underlying funds and other investments based on well as corresponding benchmarks, and strategic positioning and tactical considerations, historical volatility (the variability of taking into account both broad economic and market returns from one period to the next). Ibbotson factors and factors specific to particular seeks a combination of underlying funds that it investments. The adviser considers the relative believes will optimize returns, given each return potential of investments in view of their fund's risk profile. When considering equity expected relative risk, including potential funds, Ibbotson focuses on the underlying volatility and drawdown risk (the risk of funds' foreign and domestic exposure, market significant loss, measured from peak value) among capitalization ranges, and investment style other risks. The goal of this process is to (growth vs. value). When considering bond identify a combination of investments with the funds, Ibbotson's primary focus is the overall potential to provide total return consistent with level of risk in the type of fixed income the fund's overall risk/return profile. securities in which the underlying funds invest Investments typically are sold - and and on maximizing current income and long-term derivatives-based strategies unwound - when the capital growth. adviser's overall assessment of market and economic conditions changes or the assessments of Based on the target allocations, the fund will the attributes of specific investments change. invest the proceeds from the sale of its shares, reinvested dividends from the The adviser's analysis in selecting underlying underlying funds and other income, and redeem funds includes an assessment of a fund's investments in the underlying funds to provide historical relative and absolute performance, the cash necessary to satisfy redemption volatility and other risk characteristics, and requests for fund shares. However, the portion correlation with other funds and benchmarks. The of the fund's net assets represented by an adviser also analyzes the fund's investment underlying fund or asset class could differ strategies, investment process and portfolio substantially over time from the target management team. allocation as the underlying funds' asset values change due to market movements and portfolio management decisions. Periodically, Ibbotson will re-evaluate the fund's target asset allocation and may recommend the rebalancing of the fund's assets among asset classes and underlying funds to reflect changes in the target allocations or to reallocate the fund's holdings to match the target allocation. The fund may change its target allocation to each asset class, the underlying funds in each asset class (including adding or deleting funds) or target allocations to each underlying fund without prior approval from or notice to shareholders. Decisions to sell shares of the underlying funds are made for cash flow purposes, such as redemptions or expenses, as a result of periodic rebalancing of the fund's portfolio holdings, or as an adjustment to an underlying fund's target allocation based on Ibbotson's view of the fund's characteristics and other allocation criteria. --------------------------------------------------------------------------------------------------------------------------------
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-------------------------------------------------------------------------------------------------------------------------------- Pioneer Ibbotson Growth Allocation Fund (to be Pioneer Ibbotson Aggressive Allocation Fund(the renamed Pioneer Multi-Asset Allocator Growth Fund) Acquired Fund) (the Acquiring Fund), Post-Reorganization -------------------------------------------------------------------------------------------------------------------------------- Use of Derivatives The fund does not use derivatives. However, The fund may, but is not required to, use certain underlying funds may use derivatives. derivatives, including futures, options, forward foreign currency exchange contracts and swaps. The adviser may use derivatives strategies designed to isolate sources of return associated with specific investment opportunities that are not generally correlated with directional, market-oriented return. Investment opportunities may relate, for example, to the relative value or credit quality of individual instruments, issuers, industries or sectors, capital or investment structures relating to issuers or sectors, the structure (yield curve) or direction of prevailing interest rates, the movement of global currency exchange rates, and the expected price convergence of different instruments. These strategies often entail two or more simultaneous derivatives positions (one long and one short) structured in an effort to reduce some risks while isolating a potential source of return. The fund also may use derivatives for a variety of other purposes, including: in an attempt to hedge against adverse changes in the market price of securities, interest rates or currency exchange rates; as a substitute for purchasing or selling securities; to attempt to increase the fund's return as a non-hedging strategy that may be considered speculative; and to manage portfolio characteristics. The fund may choose not to make use of derivatives for a variety of reasons, and any use may be limited by applicable law and regulations. In addition, certain underlying funds may use derivatives. -------------------------------------------------------------------------------------------------------------------------------- Asset Class The following is a general guide regarding the The fund does not have target ranges for the Target Ranges anticipated allocation of assets of the fund allocation of assets of the fund among broad asset among broad asset classes. Pioneer may change classes. these allocation ranges from time to time without the approval of or notice to shareholders. The fixed income allocation includes the fund's investments in cash, cash equivalents or money market funds. ----------------------------------------------- Equity Fund Fixed Income Allocation Fund Allocation ----------------------------------------------- 85-100% 0-15% -------------------------------------------------------------------------------------------------------------------------------- Underlying Fund The fund expects to invest its assets in The fund does not have target ranges for the Target Ranges underlying mutual funds within fixed ranges. An investment of assets in underlying funds. investment in an underlying equity fund may represent 0-30% of fund holdings and an investment in an underlying fixed income fund may represent 0-15% of fund holdings. --------------------------------------------------------------------------------------------------------------------------------
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-------------------------------------------------------------------------------------------------------------------------------- Pioneer Ibbotson Growth Allocation Fund (to be Pioneer Ibbotson Aggressive Allocation Fund renamed Pioneer Multi-Asset Allocator Growth Fund) (the Acquired Fund) (the Acquiring Fund), Post-Reorganization -------------------------------------------------------------------------------------------------------------------------------- Portfolio Turnover The fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund's performance. -------------------------------------------------------------------------------------------------------------------------------- During the most recent fiscal year, the fund's During the most recent fiscal year, the fund's portfolio turnover rate was 6% of the average portfolio turnover rate was 6% of the average value of its portfolio. value of its portfolio. -------------------------------------------------------------------------------------------------------------------------------- Fiscal Year End July 31 July 31 -------------------------------------------------------------------------------------------------------------------------------- Business A diversified series of an open-end management investment company organized as a Delaware statutory trust. -------------------------------------------------------------------------------------------------------------------------------- Net assets $122.6 million $227.8 million (as of 1/31/14) --------------------------------------------------------------------------------------------------------------------------------
10 Principal Investments by Underlying Funds
-------------------------------------------------------------------------------------------------------------------------------- The Acquired Fund The Acquiring Fund, Post-Reorganization -------------------------------------------------------------------------------------------------------------------------------- The underlying funds may invest in some or all of the following securities. Certain equity underlying funds may invest a limited portion of their assets in fixed income securities. Fixed income underlying funds primarily invest in debt securities. In addition, the Acquiring Fund may use derivatives. The Acquired Fund does not use derivatives, however, certain underlying funds may use derivatives. For purposes of this section, "the fund" means the Acquired Fund, the Acquiring Fund and, where applicable, an underlying fund. -------------------------------------------------------------------------------------------------------------------------------- Equity Securities The fund may invest in equity securities. Equity securities in which the fund invests include common stocks and securities with common stock characteristics, such as exchange-traded funds (ETFs) that invest primarily in equity securities, depositary receipts, warrants, rights, equity interests in real estate investment trusts (REITs) and preferred stocks. -------------------------------------------------------------------------------------------------------------------------------- Investments in REITs are companies that invest primarily in income producing real estate or real estate related loans REITs or interests. Some REITs invest directly in real estate and derive their income from the collection of rents and capital gains on the sale of properties. Other REITs invest primarily in mortgages, including "sub-prime" mortgages, secured by real estate and derive their income from collection of interest. -------------------------------------------------------------------------------------------------------------------------------- Debt securities The fund may invest in debt securities. Debt securities in which the fund invests include U.S. government securities, debt securities of corporate and other issuers, mortgage-and asset-backed securities and short-term debt securities. The fund may acquire debt securities that are investment grade and may invest in below investment grade debt securities (known as "junk bonds") including below investment grade convertible debt securities. A debt security is investment grade if it is rated in one of the top four categories by a nationally recognized statistical rating organization or determined to be of equivalent credit quality by the adviser. -------------------------------------------------------------------------------------------------------------------------------- U.S. government The fund may invest in U.S. government securities. U.S. government securities include obligations: agency securities directly issued by or supported by the full faith and credit of the U.S. government, like Treasury bills, notes and bonds and Government National Mortgage Association certificates; supported by the right of the issuer to borrow from the U.S. Treasury, like those of the Federal Home Loan Banks; supported by the discretionary authority of the U.S. government to purchase the agency's securities like those of the Federal National Mortgage Association; or supported only by the credit of the issuer itself, like the Tennessee Valley Authority. -------------------------------------------------------------------------------------------------------------------------------- Mortgage-backed The fund may invest in mortgage-backed securities. Mortgage-backed securities may be issued by private securities issuers, by government-sponsored entities such as the Federal National Mortgage Association (Fannie Mae) or Federal Home Loan Mortgage Corporation (Freddie Mac) or by agencies of the U.S. government, such as the Government National Mortgage Association (Ginnie Mae). Mortgage-backed securities represent direct or indirect participation in, or are collateralized by and payable from, mortgage loans secured by real property. The fund's investments in mortgage-related securities may include mortgage derivatives and structured securities. The fund may invest in collateralized mortgage obligations (CMOs). A CMO is a mortgage-backed bond that is issued in multiple classes, each with a specified fixed or floating interest rate and a final scheduled distribution date. The holder of an interest in a CMO is entitled to receive specified cash flows from a pool of underlying mortgages or other mortgage-backed securities. Depending upon the class of CMO purchased, the holder may be entitled to payment before the cash flow from the pool is used to pay holders of other classes of the CMO or, alternatively, the holder may be paid only to the extent that there is cash remaining after the cash flow has been used to pay other classes. A subordinated interest may serve as a credit support for the senior securities purchased by other investors. -------------------------------------------------------------------------------------------------------------------------------- Asset-backed The fund may invest in asset-backed securities. Asset-backed securities represent participations in, securities or are secured by and payable from, assets such as installment sales or loan contracts, leases, credit card receivables and other categories of receivables. The fund's investments in asset-backed securities may include derivative and structured securities. The fund may invest in asset-backed securities issued by special entities, such as trusts, that are backed by a pool of financial assets. The fund may invest in collateralized debt obligations (CDOs), which include collateralized bond obligations (CBOs), collateralized loan obligations (CLOs) and other similarly structured securities. A CDO is a trust backed by a pool of fixed income securities. The trust typically is split into two or more portions, called tranches, which vary in credit quality, yield, credit support and right to repayment of principal and interest. Lower tranches pay higher interest rates but represent lower degrees of credit quality and are more sensitive to the rate of defaults in the pool of obligations. Certain CDOs may use derivatives, such as credit default swaps, to create synthetic exposure to assets rather than holding such assets directly. -------------------------------------------------------------------------------------------------------------------------------- Subordinated The fund may invest in securities that are subordinated or "junior" to more senior securities of the securities issuer. The investor in a subordinated security of an issuer is entitled to payment after other holders of debt in that issuer. --------------------------------------------------------------------------------------------------------------------------------
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-------------------------------------------------------------------------------------------------------------------------------- The Acquired Fund The Acquiring Fund, Post-Reorganization -------------------------------------------------------------------------------------------------------------------------------- Below investment The fund may invest in debt securities rated below investment grade or, if unrated, of equivalent grade securities quality as determined by Pioneer. A debt security is below investment grade if it is rated BB or lower ("Junk bonds") by Standard & Poor's Financial Services LLC or the equivalent rating by another nationally recognized statistical rating organization or determined to be of equivalent credit quality by Pioneer. Debt securities rated below investment grade are commonly referred to as "junk bonds" and are considered speculative. Below investment grade debt securities involve greater risk of loss, are subject to greater price volatility and are less liquid, especially during periods of economic uncertainty or change, than higher quality debt securities. Below investment grade securities also may be more difficult to value. -------------------------------------------------------------------------------------------------------------------------------- Floating Rate Floating rate loans are provided by banks and other financial institutions to large corporate Loans customers. These loans are rated below investment grade, but typically are secured with specific collateral and have a senior position in the capital structure of the borrower. These loans typically have rates of interest that are reset periodically by reference to a base lending rate, such as the London Interbank Offered Rate (LIBOR), plus a premium. -------------------------------------------------------------------------------------------------------------------------------- Inverse floating The fund may invest in inverse floating rate obligations (a type of derivative instrument). The rate obligations interest rate on inverse floating rate obligations will generally decrease as short-term interest rates increase, and increase as short-term rates decrease. Due to their leveraged structure, the sensitivity of the market value of an inverse floating rate obligation to changes in interest rates is generally greater than a comparable long-term bond issued by the same issuer and with similar credit quality, redemption and maturity provisions. Inverse floating rate obligations may be volatile and involve leverage risk. -------------------------------------------------------------------------------------------------------------------------------- Debt rating For purposes of the fund's credit quality policies, if a security receives different ratings from considerations nationally recognized statistical rating organizations, the fund will use the rating chosen by the portfolio manager as most representative of the security's credit quality. The ratings of nationally recognized statistical rating organizations represent their opinions as to the quality of the securities that they undertake to rate and may not accurately describe the risks of the securities. A rating organization may have a conflict of interest with respect to a security for which it assigns a quality rating. In addition, there may be a delay between a change in the credit quality of a security or other asset and a change in the quality rating assigned to the security or other asset by a rating organization. If a rating organization changes the quality rating assigned to one or more of the fund's portfolio securities, Pioneer will consider if any action is appropriate in light of the fund's investment objectives and policies. An investor can still lose significant amounts when investing in investment grade securities. -------------------------------------------------------------------------------------------------------------------------------- Event-linked bonds The fund may invest in "event-linked" bonds, which sometimes are referred to as "insurance-linked" or "catastrophe" bonds. Event-linked bonds are debt obligations for which the return of principal and the payment of interest are contingent on the non-occurrence of a pre-defined "trigger" event, such as a hurricane or an earthquake of a specific magnitude. For some event-linked bonds, the trigger event's magnitude may be based on losses to a company or industry, industry indexes or readings of scientific instruments rather than specified actual losses. The fund is entitled to receive principal and interest payments so long as no trigger event occurs of the description and magnitude specified by the instrument. Event-linked bonds may be issued by government agencies, insurance companies, reinsurers, special purpose corporations or other on-shore or off-shore entities. Event-linked bonds are typically rated by at least one nationally recognized statistical rating agency, but also may be unrated. The rating for an event-linked bond primarily reflects the rating agency's calculated probability that a pre-defined trigger event will occur. This rating also assesses the event-linked bond's credit risk and the model used to calculate the probability of a trigger event. -------------------------------------------------------------------------------------------------------------------------------- Commodity-related Commodities are assets that have tangible properties, such as oil, metals, and agricultural products. investments The fund may gain exposure to commodities through investment in funds, including ETFs, or through commodity-linked notes and other commodity-linked derivatives. The fund also may invest in securities of issuers in commodity-related industries. -------------------------------------------------------------------------------------------------------------------------------- Non-U.S. The fund may invest in securities of non-U.S. issuers, including securities of emerging markets investments issuers. Non-U.S. issuers are issuers that are organized and have their principal offices outside of the United States. Non-U.S. securities may be issued by non-U.S. governments, banks or corporations, or private issuers, and certain supranational organizations, such as the World Bank and the European Union. The fund considers emerging market issuers to include issuers organized under the laws of an emerging market country, issuers with a principal office in an emerging market country, issuers that derive at least 50% of their gross revenues or profits from goods or services produced in emerging markets, and emerging market governmental issuers. --------------------------------------------------------------------------------------------------------------------------------
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-------------------------------------------------------------------------------------------------------------------------------- The Acquired Fund The Acquiring Fund, Post-Reorganization -------------------------------------------------------------------------------------------------------------------------------- Derivatives The fund may, but is not required to, use futures and options on securities, indices and currencies, forward foreign currency exchange contracts, swaps and other derivatives. The fund also may enter into credit default swaps, which can be used to acquire or to transfer the credit risk of a security or index of securities without buying or selling the security or securities comprising the relevant index. A derivative is a security or instrument whose value is determined by reference to the value or the change in value of one or more securities, currencies, indices or other financial instruments. The fund may use derivatives for a variety of purposes, including: o In an attempt to hedge against adverse changes in the market prices of securities, interest rates or currency exchange rates; o As a substitute for purchasing or selling securities; o To attempt to increase the fund's return as a non-hedging strategy that may be considered speculative; o To manage portfolio characteristics (for example, exposure to various market segments). The fund may choose not to make use of derivatives for a variety of reasons, and any use may be limited by applicable law and regulations. -------------------------------------------------------------------------------------------------------------------------------- Cash management Normally, the fund invests substantially all of its assets to meet its investment objectives. The fund and temporary may invest the remainder of its assets in securities with remaining maturities of less than one year investments or cash equivalents, or may hold cash. For temporary defensive purposes, including during periods of unusual cash flows, the fund may depart from its principal investment strategies and invest part or all of its assets in these securities or may hold cash. The fund may adopt a defensive strategy when the adviser believes securities in which the fund normally invests have special or unusual risks or are less attractive due to adverse market, economic, political or other conditions. During such periods, it may be more difficult for the fund to achieve its investment objective. -------------------------------------------------------------------------------------------------------------------------------- Reverse repurchase The fund may enter into reverse repurchase agreements pursuant to which the fund transfers securities agreements and to a counterparty in return for cash, and the fund agrees to repurchase the securities at a later date borrowing and for a higher price. Reverse repurchase agreements are treated as borrowings by the fund, are a form of leverage and may make the value of an investment in the fund more volatile and increase the risks of investing in the fund. The fund also may borrow money from banks or other lenders for temporary purposes. The fund may borrow up to 33 1/3% of its total assets. Entering into reverse repurchase agreements and other borrowing transactions may cause the fund to liquidate positions when it may not be advantageous to do so in order to satisfy its obligations or meet segregation requirements. -------------------------------------------------------------------------------------------------------------------------------- Short-term trading The fund usually does not trade for short-term profits. The fund will sell an investment, however, even if it has only been held for a short time, if it no longer meets the fund's investment criteria. If the fund does a lot of trading, it may incur additional operating expenses, which would reduce performance. A higher level of portfolio turnover may also cause taxable shareowners to incur a higher level of taxable income or capital gains. --------------------------------------------------------------------------------------------------------------------------------
Comparison of Principal Risks The following describe the risks of investing in the Acquired Fund and the Acquiring Fund. For purposes of this section, "the fund" means the Acquired Fund, the Acquiring Fund, or, where applicable, an underlying fund. You could lose money on your investment in the fund. As with any mutual fund, there is no guarantee that the fund will achieve its objectives. Market risk. The values of securities held by the fund may go up or down, sometimes rapidly or unpredictably, due to general market conditions, such as real or perceived adverse economic, political, or regulatory conditions, inflation, changes in interest or currency rates, lack of liquidity in the bond markets or adverse investor sentiment. Adverse market conditions may be prolonged and may not have the same impact on all types of securities. The values of securities may fall due to factors affecting a particular issuer, industry or the securities market as a whole. The equity and debt capital markets around the world have experienced unprecedented volatility in recent periods. The stock market may perform poorly relative to other investments (this risk may be greater in the short term). High public debt in the U.S. and other countries creates ongoing and systemic market risks and policymaking uncertainty. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities; in particular, the values of some sovereign debt and of securities of issuers that invest in sovereign debt and related investments have fallen, credit has become more scarce worldwide and there has been significant uncertainty in the markets. Governmental and non-governmental issuers have defaulted on, or been forced to restructure, their debts; and many other issuers have faced difficulties obtaining credit or refinancing existing obligations. These market conditions may continue, worsen or spread, including in the U.S., Europe and beyond. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets and asset valuations around the world. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets, including by keeping interest rates at historically low levels. More recently, the Federal Reserve has reduced its market support activities. Further reduction or withdrawal of this support, failure of efforts in response to the crisis, or investor perception that such efforts are not succeeding 13 could negatively affect financial markets generally as well as increase market volatility and the value and liquidity of certain securities. This environment could make identifying investment risks and opportunities especially difficult for the adviser, and whether or not the fund invests in securities of issuers located in or with significant exposure to countries experiencing economic and financial difficulties, the value and liquidity of the fund's investments may be negatively affected. In addition, policy and legislative changes in the U.S. and in other countries are affecting many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time. The fund may experience a substantial or complete loss on any individual security or derivative position. Particularly during periods of declining or illiquid markets, the fund may experience periods of heavy redemptions that could cause the fund to liquidate its assets at inopportune times or at a loss or depressed value, and could cause the remaining shareholders in the fund to lose money. This redemption risk is greater to the extent that the fund has investors with large shareholdings, short investment horizons or unpredictable cash flow needs. Fund of funds structure and layering of fees. The fund is structured as a fund of funds. The fund's investments are focused in the underlying funds, so the fund's investment performance is directly related to the performance of the underlying funds. The fund's net asset value will be affected by the performance of the equity and bond markets and the value of the mutual funds in which the fund invests. In addition, the underlying funds may invest in other investment companies, including exchange-traded funds (ETFs). Since the fund mainly invests in the underlying funds, as opposed to other types of securities, the fund does not have the same flexibility in its portfolio holdings as many mutual funds. In addition, the fund indirectly pays a portion of the expenses incurred by the underlying funds. Consequently, an investment in the fund entails more direct and indirect expenses than a direct investment in the underlying funds. For instance, you will pay management fees and operating expenses of both the fund and the underlying funds. The management fees paid by some underlying funds to Pioneer are higher than the management fees paid by other underlying funds. The underlying funds will not necessarily make consistent investment decisions, which may also increase your costs. One underlying fund may buy the same security that another underlying fund is selling. You would indirectly bear the costs of both trades without achieving any investment purpose. These transactions may also generate taxable gains. You may receive taxable distributions consisting of gains from transactions by the underlying funds as well as gains from the fund's transactions in shares of the underlying funds. Currently, Pioneer manages many of the underlying funds. Because the portfolio management teams of each of the underlying Pioneer funds may draw upon the resources of the same equity and fixed income analyst team or may share common investment management styles or approaches, the underlying funds may hold many common portfolio positions, reducing the diversification benefits of an asset allocation style. Allocation Risk. The adviser's or the subadviser's evaluation of asset classes and market sectors in developing an allocation model, and its selection and weighting of underlying funds within the allocation model, may prove to be incorrect. To the extent that the fund invests a significant percentage of its assets in any one underlying fund, the fund will be subject to a greater degree to the risks particular to that underlying fund, and may experience greater volatility as a result. Asset Class Variation Risk. The underlying funds invest principally in the securities constituting their asset class (i.e., equity or fixed income). However, under normal market conditions, an underlying fund may vary the percentage of its assets in these securities (subject to any applicable regulatory requirements). Depending upon the percentage of securities in a particular asset class held by the underlying funds at any given time, and the percentage of the fund's assets invested in various underlying funds, the fund's actual exposure to the securities in a particular asset class may vary substantially from its target asset allocation for that asset class. Expense Risk. Your actual costs of investing in the fund may be higher than the expenses shown in "Annual fund operating expenses" for a variety of reasons. For example, expense ratios may be higher than those shown if overall net assets decrease. Net assets are more likely to decrease and fund expense ratios are more likely to increase when markets are volatile. Principal risks of investing in the underlying funds Risks of equity investments Equity funds invest primarily in equity securities (such as stocks), which are more volatile and carry more risks than some other forms of investment. Risks of investing in underlying equity funds may include: Value style risk. The prices of securities the adviser believes are undervalued may not appreciate as expected or may go down. Value stocks may fall out of favor with investors and underperform the overall equity market. Growth style risk. The fund's investments may not have the growth potential originally expected. Growth stocks may fall out of favor with investors and underperform the overall equity market. Small and mid-size companies risk. Compared to large companies, small- and mid-size companies, and the market for their equity securities, may be more sensitive to changes in earnings results and investor expectations, have more limited product lines and capital resources, experience sharper swings in market values, have limited liquidity, be harder to value or to sell at the times and prices the adviser thinks appropriate, and offer greater potential for gain and loss. 14 Risks of investments in REITs. The fund has risks associated with the real estate industry. Although the fund does not invest directly in real estate, it may invest in REITs and other equity securities of real estate industry issuers. These risks may include: o The U.S. or a local real estate market declines due to adverse economic conditions, foreclosures, overbuilding and high vacancy rates, reduced or regulated rents or other causes o Interest rates go up. Rising interest rates can adversely affect the availability and cost of financing for property acquisitions and other purposes and reduce the value of a REIT's fixed income investments o The values of properties owned by a REIT or the prospects of other real estate industry issuers may be hurt by property tax increases, zoning changes, other governmental actions, environmental liabilities, natural disasters or increased operating expenses o A REIT in the fund's portfolio is, or is perceived by the market to be, poorly managed o If the fund's real estate related investments are concentrated in one geographic area or property type, the fund will be particularly subject to the risks associated with that area or property type REITs can generally be classified as equity REITs, mortgage REITs or hybrid REITs. Equity REITs invest primarily in real property and derive income mainly from the collection of rents. They may also realize gains or losses from the sale of properties. Equity REITs will be affected by conditions in the real estate rental market and by changes in the value of the properties they own. Mortgage REITs invest primarily in mortgages and similar real estate interests and derive income primarily from interest payments. Mortgage REITs will be affected by changes in creditworthiness of borrowers and changes in interest rates. Mortgage REITs are subject to the risks of default of the mortgages or mortgage-related securities in which they invest, and REITs that invest in so-called "sub-prime" mortgages are particularly subject to this risk. Hybrid REITs invest both in real property and in mortgages. Investing in REITs involves certain unique risks. REITs are dependent on management skills, are not diversified and are subject to the risks of financing projects. REITs are typically invested in a limited number of projects or in a particular market segment or geographic region, and therefore are more susceptible to adverse developments affecting a single project, market segment or geographic region than more broadly diversified investments. REITs are subject to heavy cash flow dependency, defaults by mortgagors or other borrowers and tenants, self-liquidation and the possibility of failing to qualify for certain tax and regulatory exemptions. REITs may have limited financial resources and may experience sharper swings in market values and trade less frequently and in a more limited volume than securities of larger issuers. In addition to its own expenses, the fund will indirectly bear its proportionate share of any management and other expenses paid by REITs in which it invests. Such expenses are not shown in "Annual fund operating expenses" above. Many real estate companies, including REITs, utilize leverage (and some may be highly leveraged), which increases investment risk and could adversely affect a real estate company's operations and market value. Mortgage REITs tend to be more leveraged than equity REITs. In addition, many mortgage REITs manage their interest rate and credit risks through the use of derivatives and other hedging techniques. In addition, capital to pay or refinance a REIT's debt may not be available or reasonably priced. Financial covenants related to real estate company leveraging may affect the company's ability to operate effectively. Preferred stocks risk. Preferred stocks may pay fixed or adjustable rates of return. Preferred stocks are subject to issuer-specific and market risks applicable generally to equity securities. In addition, a company's preferred stocks generally pay dividends only after the company makes required payments to holders of its bonds and other debt. Thus, the value of preferred stocks will usually react more strongly than bonds and other debt to actual or perceived changes in the company's financial condition or prospects. The market value of preferred stocks generally decreases when interest rates rise. Preferred stocks of smaller companies may be more vulnerable to adverse developments than preferred stock of larger companies. Risks of initial public offerings. Companies involved in initial public offerings (IPOs) generally have limited operating histories, and prospects for future profitability are uncertain. The market for IPO issuers has been volatile, and share prices of newly public companies have fluctuated significantly over short periods of time. Further, stocks of newly-public companies may decline shortly after the IPO. There is no assurance that the fund will have access to IPOs. The purchase of IPO shares may involve high transaction costs. Because of the price volatility of IPO shares, the fund may choose to hold IPO shares for a very short period of time. This may increase the turnover of the fund's portfolio and may lead to increased expenses to the fund, such as commissions and transaction costs. The market for IPO shares can be speculative and/or inactive for extended periods of time. There may be only a limited number of shares available for trading. The limited number of shares available for trading in some IPOs may also make it more difficult for the fund to buy or sell significant amounts of shares without an unfavorable impact on prevailing prices. Risks of convertible securities. Convertible securities generally offer lower interest or dividend yields than non-convertible securities of similar quality. As with all fixed income securities, the market values of convertible securities tend to decline as interest rates 15 increase and, conversely, to increase as interest rates decline. However, when the market price of the common stock underlying a convertible security exceeds the conversion price, the convertible security tends to reflect the market price of the underlying common stock. As the market price of the underlying common stock declines, the convertible security tends to trade increasingly on a yield basis and thus may not decline in price to the same extent as the underlying common stock. Convertible securities rank senior to common stocks in an issuer's capital structure and consequently entail less risk than the issuer's common stock. Risks of warrants and rights. Warrants and rights give the fund the right to buy stock. A warrant specifies the amount of underlying stock, the purchase (or "exercise") price, and the date the warrant expires. The fund has no obligation to exercise the warrant and buy the stock. A warrant has value only if the fund is able to exercise it or sell it before it expires. If the price of the underlying stock does not rise above the exercise price before the warrant expires, the warrant generally expires without any value and the fund loses any amount it paid for the warrant. Thus, investments in warrants may involve substantially more risk than investments in common stock. Warrants may trade in the same markets as their underlying stock; however, the price of the warrant does not necessarily move with the price of the underlying stock. The fund may purchase securities pursuant to the exercise of subscription rights, which allow an issuer's existing shareholders to purchase additional common stock at a price substantially below the market price of the shares. The failure to exercise subscription rights to purchase common stock would result in the dilution of the fund's interest in the issuing company. The market for such rights is not well developed and, accordingly, the fund may not always realize full value on the sale of rights. Risks of fixed income investments Fixed income funds primarily invest in debt securities, such as government securities, investment grade corporate securities, junk bonds, mortgage-backed securities, asset-backed securities, and money market securities. The value of your investment in the portfolio will change as the value of investments of the underlying funds increases and decreases. Risks of investing in the underlying fixed income funds may include: Interest rate risk. When interest rates rise, the value of fixed income securities generally falls. A change in interest rates will not have the same impact on all fixed income securities. Generally, the longer the maturity or duration of a fixed income security, the greater the impact of a rise in interest rates on the security's value. Calculations of duration and maturity may be based on estimates and may not reliably predict a security's price sensitivity to changes in interest rates. Moreover, securities can change in value in response to other factors, such as credit risk. In addition, different interest rate measures (such as short- and long-term interest rates and U.S. and foreign interest rates), or interest rates on different types of securities or securities of different issuers, may not necessarily change in the same amount or in the same direction. When interest rates go down, the income received by the fund, and the fund's yield, may decline. Interest rates in the U.S. recently have been historically low, and may be expected to go back up. Certain fixed income securities pay interest at variable or floating rates. Variable rate securities tend to reset at specified intervals, while floating rate securities may reset whenever there is a change in a specified index rate. In most cases, these reset provisions reduce the impact of changes in market interest rates on the value of the security. However, some securities do not track the underlying index directly, but reset based on formulas that may produce a leveraging effect; others may also provide for interest payments that vary inversely with market rates. The market prices of these securities may fluctuate significantly when interest rates change. Yield generated by the fund may decline due to a decrease in market interest rates. Credit risk. If an obligor (such as the issuer itself or a party offering credit enhancement) for a security held by the fund fails to pay, otherwise defaults, is perceived to be less creditworthy, becomes insolvent or files for bankruptcy, a security's credit rating is downgraded or the credit quality or value of an underlying asset declines, the value of your investment could decline. In addition, the fund may incur expenses to protect the fund's interest in securities experiencing these events. Credit risk is broadly gauged by the credit ratings of the securities in which the fund invests. However, ratings are only the opinions of the companies issuing them and are not guarantees as to quality. Prepayment or call risk. Many fixed income securities give the issuer the option to prepay or call the security prior to its maturity date. Issuers often exercise this right when interest rates fall. Accordingly, if the fund holds a fixed income security that can be prepaid or called prior to its maturity date, it will not benefit fully from the increase in value that other fixed income securities generally experience when interest rates fall. Upon prepayment of the security, the fund also would be forced to reinvest the proceeds at then current yields, which would be lower than the yield of the security that was prepaid or called. In addition, if the fund purchases a fixed income security at a premium (at a price that exceeds its stated par or principal value), the fund may lose the amount of the premium paid in the event of prepayment. Extension risk. During periods of rising interest rates, the average life of certain types of securities may be extended because of slower than expected principal payments. This may lock in a below market interest rate, increase the security's duration (the estimated period until the security is paid in full) and reduce the value of the security. To the extent the fund invests significantly in mortgage-related and asset-backed securities, its exposure to extension risks may be greater than if it invested in other fixed 16 income securities. U.S. government agency obligations risk. The fund invests in obligations issued by agencies and instrumentalities of the U.S. government. Government-sponsored entities such as Fannie Mae, Freddie Mac and the Federal Home Loan Banks (FHLBs), although chartered or sponsored by Congress, are not funded by congressional appropriations and the debt and mortgage-backed securities issued by them are neither guaranteed nor issued by the U.S. government. Such debt and mortgage-backed securities are subject to the risk of default on the payment of interest and/or principal, similar to debt of private issuers. Although the U.S. government has provided financial support to Fannie Mae and Freddie Mac in the past, there can be no assurance that it will support these or other government-sponsored entities in the future. U.S. government agency obligations risk. The fund invests in obligations issued by agencies and instrumentalities of the U.S. government. Government-sponsored entities such as Fannie Mae, Freddie Mac and the Federal Home Loan Banks (FHLBs), although chartered or sponsored by Congress, are not funded by congressional appropriations and the debt and mortgage-backed securities issued by them are neither guaranteed nor issued by the U.S. government. Such debt and mortgage-backed securities are subject to the risk of default on the payment of interest and/or principal, similar to debt of private issuers. Although the U.S. government has provided financial support to Fannie Mae and Freddie Mac in the past, there can be no assurance that it will support these or other government-sponsored entities in the future. Mortgage-related and asset-backed securities risk. The repayment of certain mortgage-backed and asset-backed securities depends primarily on the cash collections received from the issuer's underlying asset portfolio and, in certain cases, the issuer's ability to issue replacement securities. As a result, there could be losses to the fund in the event of credit or market value deterioration in the issuer's underlying portfolio, mismatches in the timing of the cash flows of the underlying asset interests and the repayment obligations of maturing securities, or the issuer's inability to issue new or replacement securities. Upon the occurrence of certain triggering events or defaults, the fund may become the holder of underlying assets at a time when those assets may be difficult to sell or may be sold only at a loss. In the event of a default, the value of the underlying collateral may be insufficient to pay certain expenses, such as litigation and foreclosure expenses, and inadequate to pay any principal or unpaid interest. Privately issued mortgage-backed and asset-backed securities are not traded on an exchange and may have a limited market. Without an active trading market, these securities may be particularly difficult to value given the complexities in valuing the underlying collateral. Certain mortgage-backed and asset-backed securities may pay principal only at maturity or may represent only the right to receive payments of principal or interest on the underlying obligations, but not both. The value of these types of instruments may change more drastically than debt securities that pay both principal and interest during periods of changing interest rates. Principal only instruments generally increase in value if interest rates decline, but are also subject to the risk of prepayment. Interest only instruments generally increase in value in a rising interest rate environment when fewer of the underlying obligations are prepaid. Interest only instruments could lose their entire value in a declining interest rate environment if the underlying obligations are prepaid. Unlike mortgage-related securities issued or guaranteed by the U.S. government or its agencies and instrumentalities, mortgage-related securities issued by private issuers do not have a government or government-sponsored entity guarantee (but may have other credit enhancement), and may, and frequently do, have less favorable collateral, credit risk or other characteristics. The fund may invest in other mortgage-related securities, including mortgage derivatives and structured securities. These securities typically are not secured by real property. Because these securities have embedded leverage features, small changes in interest or prepayment rates may cause large and sudden price movements. These securities also can become illiquid and difficult to value in volatile or declining markets. Mortgage-backed securities are particularly susceptible to prepayment and extension risk, because prepayments on the underlying mortgages tend to increase when interest rates fall and decrease when interest rates rise. The value of mortgage-backed and asset-backed securities may be affected by changes in credit quality or value of the mortgage loans or other assets that support the securities. In addition, for mortgage-backed securities, when market conditions result in an increase in the default rates on the underlying mortgages and the foreclosure values of the underlying realestate are below the outstanding amount of the underlying mortgages, collection of the full amount of accrued interest and principal on these investments may be less likely. The fund may invest in CMOs. Principal prepayments on the underlying mortgage loans may cause a CMO to be retired substantially earlier than its stated maturity or final distribution date. If there are defaults on the underlying mortgage loans, the fund will be less likely to receive payments of principal and interest, and will be more likely to suffer a loss. This risk may be increased to the extent the underlying mortgages include sub-prime mortgages. As market conditions change, and particularly during periods of rapid or unanticipated changes in market interest rates, the attractiveness of a CMO class and the ability of the structure to provide the anticipated investment characteristics may be significantly reduced. Such changes can result in volatility in the market value, and in some instances reduced liquidity, of a CMO class. 17 The fund may invest in CDOs. The risks of an investment in a CDO depend largely on the type of the underlying obligations (e.g., an underlying obligation may decline in quality or default) and the tranche of the CDO in which the fund invests (e.g., the fund may invest in a tranche of CDO that is subordinate to other tranches). Investments in CDOs may be characterized by the fund as illiquid securities, which may be hard to value and difficult to sell at an advantageous time or price. Although certain CDOs may receive credit enhancement in the form of a senior-subordinate structure, over-collateralization or bond insurance, such enhancement may not always be present, and may fail to protect a fund against the risk of loss on default of the collateral. In response to the financial crisis that began in 2008, the Federal Reserve has attempted to keep mortgage rates low by acting as a buyer of mortgage-backed assets. It is anticipated that this support will end, and mortgage rates may rise and prices of mortgage-backed securities may fall when that happens. To the extent the fund's assets are invested in mortgage-backed securities, returns to fund investors may decline. Asset-backed securities are structured like mortgage-backed securities and are subject to many of the same risks. The ability of an issuer of asset-backed securities to enforce its security interest in the underlying asset or to otherwise recover from the underlying obligor may be limited. Certain asset-backed securities present a heightened level of risk because, in the event of default, the liquidation value of the underlying assets may be inadequate to pay any unpaid principal or interest. Risks of instruments that allow for balloon payments or negative amortization payments. Certain debt instruments allow for balloon payments or negative amortization payments. Such instruments permit the borrower to avoid paying currently a portion of the interest accruing on the instrument. While these features make the debt instrument more affordable to the borrower in the near term, they increase the risk that the borrower will be unable to make the resulting higher payment or payments that become due at the maturity of the loan. Risks of subordinated securities. A holder of securities that are subordinated or "junior" to more senior securities of an issuer is entitled to payment after holders of more senior securities of the issuer. Subordinated securities are more likely to suffer a credit loss than non-subordinated securities of the same issuer, any loss incurred by the subordinated securities is likely to be proportionately greater, and any recovery of interest or principal may take more time. As a result, even a perceived decline in creditworthiness of the issuer is likely to have a greater impact on them. High yield or "junk" bond risk. Debt securities that are below investment grade, called "junk bonds," are speculative, have a higher risk of default or are already in default, tend to be less liquid and are more difficult to value than higher grade securities. Junk bonds tend to be volatile and more susceptible to adverse events and negative sentiments. These risks are more pronounced for securities that are already in default. Risks of investing in event-linked bonds. The return of principal and the payment of interest on "event-linked" bonds are contingent on the non-occurrence of a pre-defined "trigger" event, such as a hurricane or an earthquake of a specific magnitude or other event that leads to physical or economic loss. If a trigger event, as defined within the terms of an event-linked bond, involves losses or other metrics exceeding a specific magnitude in the geographic region and time period specified, the fund may lose a portion or all of its accrued interest and/or principal invested in the event-linked bond. In addition to the specified trigger events, event-linked bonds may expose the fund to other risks, including but not limited to issuer (credit) default, adverse regulatory or jurisdictional interpretations and adverse tax consequences. Event-linked bonds are also subject to the risk that the model used to calculate the probability of a trigger event was not accurate and underestimated the likelihood of a trigger event. Upon the occurrence or possible occurrence of a trigger event, and until the completion of the processing and auditing of applicable loss claims, the fund's investment in an event-linked bond may be priced using fair value methods. Risks of investing in floating rate loans. Floating rate loans and similar investments may be illiquid or less liquid than other investments. The value of collateral, if any, securing a floating rate loan can decline or may be insufficient to meet the issuer's obligations or may be difficult to liquidate. No active trading market may exist for many floating rate loans, and many loans are subject to restrictions on resale. Market quotations for these securities may be volatile and/or subject to large spreads between bid and ask prices. Any secondary market may be subject to irregular trading activity and extended trade settlement periods. Risks of investing in inverse floating rate obligations. The interest rate on inverse floating rate obligations will generally decrease as short-term interest rates increase, and increase as short-term rates decrease. Due to their leveraged structure, the sensitivity of the market value of an inverse floating rate obligation to changes in interest rates is generally greater than a comparable long-term bond issued by the same issuer and with similar credit quality, redemption and maturity provisions. Inverse floating rate obligations may be volatile and involve leverage risk. Inflation-linked security risk. Unlike a conventional bond, whose issuer makes regular fixed interest payments and repays the face value of the bond at maturity, an inflation-indexed security provides principal payments and interest payments, both of which are adjusted over time to reflect a rise (inflation) or a drop (deflation) in the general price level. The inflation index generally used is the 18 non-seasonally adjusted index, which is not statistically smoothed to overcome highs and lows observed at different points each year. The use of the non-seasonally adjusted index can cause the fund's income level to fluctuate. As inflationary expectations increase, inflation-linked securities will become more attractive, because they protect future interest payments against inflation. Conversely, as inflationary concerns decrease, inflation-linked securities will become less attractive and less valuable. The non-seasonally adjusted index used may not accurately measure the real rate of inflation. Inflation-linked securities may lose value or interest payments on such securities may decline in the event that the actual rate of inflation is different than the rate of the non-seasonally adjusted index, and losses may exceed those experienced by other debt securities with similar durations. The value of inflation-linked securities may not be directly correlated to changes in interest rates, for example if interest rates rise for reasons other than inflation. Risks of zero coupon bonds, payment in kind, deferred and contingent payment securities. Zero coupon bonds (which do not pay interest until maturity) and payment in kind securities (which pay interest in the form of additional securities) may be more speculative and may fluctuate more in value than securities which pay income periodically and in cash. These securities are more likely to respond to changes in interest rates than interest-bearing securities having similar maturities and credit quality. These securities are more sensitive to the credit quality of the underlying issuer. Payment in kind securities may be difficult to value because their continuing accruals require judgments about the collectability of the deferred payments and the value of any collateral. Deferred interest securities are obligations that generally provide for a period of delay before the regular payment of interest begins and are issued at a significant discount from face value. The interest rate on contingent payment securities is determined by the outcome of an event, such as the performance of a financial index. If the financial index does not increase by a prescribed amount, the fund may receive no interest. Unlike bonds that pay interest throughout the period to maturity, the fund generally will realize no cash until maturity and, if the issuer defaults, the fund may obtain no return at all on its investment. In addition, although the fund receives no periodic cash payments on such securities, the fund is deemed for tax purposes to receive income from such securities, which applicable tax rules require the fund to distribute to shareholders. Such distributions may be taxable when distributed to shareholders and, in addition, could reduce the fund's reserve position and require the fund to sell securities and incur a gain or loss at a time it may not otherwise want in order to provide the cash necessary for these distributions. Repurchase agreement risk. In the event that the other party to a repurchase agreement defaults on its obligations, the fund may encounter delay and incur costs before being able to sell the security. Such a delay may involve loss of interest or a decline in price of the security. In addition, if the fund is characterized by a court as an unsecured creditor, it would be at risk of losing some or all of the principal and interest involved in the transaction. Risks of equity and fixed income investments Risks of investing in the underlying equity and fixed income funds may include: Portfolio selection risk. The adviser's judgment about the attractiveness, relative value or potential appreciation of an equity security, or about the quality, relative yield or relative value of a fixed income security, or about a particular sector, region or market segment, or about an investment strategy, or about interest rates, may prove to be incorrect. Liquidity risk. Liquidity risk exists when particular investments are impossible or difficult to purchase or sell. Although most of the fund's securities and other investments must be liquid at the time of investment, securities and other investments may become illiquid after purchase by the fund, particularly during periods of market turmoil. Markets may become illiquid when, for instance, there are few, if any, interested buyers and sellers or when dealers are unwilling to make a market for certain securities or when dealer market-making capacity is otherwise reduced, and this is more likely to occur as a result of the reduction of market support activity by the Federal Reserve. A lack of liquidity or other adverse credit market conditions may affect the fund's ability to sell the securities in which it invests or to find and purchase suitable investments. When the fund holds illiquid investments, its portfolio may be harder to value, especially in changing markets. If the fund is forced to sell or unwind these investments to meet redemptions or for other cash needs, the fund may suffer a loss. In addition, when there is illiquidity in the market for certain securities and other investments, the fund, due to limitations on investments in illiquid securities, may be unable to achieve its desired level of exposure to a certain sector. If an auction fails for an auction rate security, there may be no secondary market for the security and the fund may be forced to hold the security until the security is refinanced by the issuer or a secondary market develops. To the extent the fund holds a material percentage of the outstanding debt securities of an issuer, this practice may impact adversely the liquidity and market value of those investments. Market segment risk. To the extent the fund emphasizes, from time to time, investments in a market segment, the fund will be subject to a greater degree to the risks particular to that segment, and may experience greater market fluctuation, than a fund without the same focus. For example, industries in the financial segment, such as banks, insurance companies, broker-dealers and real estate investment trusts (REITs), may be sensitive to changes in interest rates and general economic activity and are generally subject to extensive government regulation. 19 Risks of non-U.S. investments. Investing in non-U.S. issuers, or in U.S. issuers that have significant exposure to foreign markets may involve unique risks compared to investing in securities of U.S. issuers. These risks are more pronounced for issuers in emerging markets or to the extent that the fund invests significantly in one region or country. These risks may include: - Less information about non-U.S. issuers or markets may be available due to less rigorous disclosure or accounting standards or regulatory practices; - Many non-U.S. markets are smaller, less liquid and more volatile. In a changing market, the adviser may not be able to sell the fund's securities at times, in amounts and at prices it considers reasonable; - Adverse effect of currency exchange rates or controls on the value of the fund's investments, or its ability to convert non-U.S. currencies to U.S. dollars; - The economies of non-U.S. countries may grow at slower rates than expected or may experience a downturn or recession; - Economic, political, regulatory and social developments may adversely affect the securities markets; - It may be difficult for the fund to pursue claims or enforce judgments against a foreign bank, depository or issuer of a security, or any of their agents, in the courts of a foreign country; - Withholding and other non-U.S. taxes may decrease the fund's return; - Some markets in which the fund may invest are located in parts of the world that have historically been prone to natural disasters that could result in a significant adverse impact on the economies of those countries and investments made in those countries; - Depositary receipts may involve higher expenses and may trade at a discount (or premium) to the underlying security. In addition, depositary receipts may not pass through voting and other shareholder rights, and may be less liquid than the underlying securities listed on an exchange; - A governmental entity may delay, or refuse or be unable to pay, interest or principal on its sovereign debt due to cash flow problems, insufficient foreign currency reserves, political considerations, the relative size of the governmental entity's debt position in relation to the economy or the failure to put in place economic reforms; - Investing in depositary receipts are subject to many of the same risks as investing directly in non-U.S. issuers. Additional risks of investing in emerging markets include: - The extent of economic development, political stability, market depth, infrastructure, capitalization and regulatory oversight can be less than in more developed markets; - Emerging market countries may experience rising interest rates, or, more significantly, rapid inflation or hyperinflation; - The fund could experience a loss from settlement and custody practices in some emerging markets; - The possibility that a counterparty may not complete a currency or securities transaction; - Low trading volumes may result in a lack of liquidity, and in extreme price volatility. Currency risk. Because the fund may invest in non-U.S. currencies, securities denominated in non-U.S. currencies, and other currency-related investments, the fund is subject to currency risk, meaning that the fund could experience losses based on changes in the exchange rate between non-U.S. currencies and the U.S. dollar, or as a result of currency conversion costs. Currency exchange rates can be volatile, and are affected by factors such as general economic conditions, the actions of the U.S. and foreign governments or central banks, the imposition of currency controls and speculation. Forward foreign currency transactions risk. To the extent that the fund enters into forward foreign currency transactions, it may not fully benefit from or may lose money on the transactions if changes in currency rates do not occur as anticipated or do not correspond accurately to changes in the value of the fund's holdings, or if the counterparty defaults. Such transactions may also prevent the fund from realizing profits on favorable movements in exchange rates. Risk of counterparty default is greater for counterparties located in emerging markets. The fund's ability to use forward foreign currency transactions successfully depends on a number of factors, including the forward foreign currency transactions being available at prices that are not too costly, the availability of liquid markets, and Pioneer's judgment regarding the direction of changes in currency exchange rates. Derivatives risk. Using options, swaps, futures and other derivatives exposes the fund to additional risks, may increase the volatility of the fund's net asset value and may not provide the expected result. Derivatives may have a leveraging effect on the fund, and they can disproportionately increase losses and reduce opportunities for gain when market prices, interest rates or currencies, or the derivative instruments themselves, behave in a way not anticipated by the fund, especially in abnormal market conditions. Some derivatives have the potential for unlimited loss, regardless of the size of the fund's initial investment. If changes in a derivative's value do not correspond to changes in the value of the fund's other investments or do not correlate well with the underlying assets, rate or index, the fund may not fully benefit from, or could lose money on, or could experience unusually high expenses as a result of, the derivative position. Derivatives involve the risk of loss if the counterparty defaults on its obligation or 20 if the clearing firm through which the derivative has been traded becomes insolvent. Certain derivatives may be less liquid, which may reduce the returns of the fund if it cannot sell or terminate the derivative at an advantageous time or price. The fund also may have to sell assets at inopportune times to satisfy its obligations. The fund may be unable to terminate or sell its derivative positions. In fact, many over-the-counter derivative instruments will not have liquidity beyond the counterparty to the instrument. Some derivatives may involve the risk of improper valuation. The fund's use of derivatives may also increase the amount of taxes payable by shareholders. Suitable derivatives may not be available in all circumstances or at reasonable prices and may not be used by the fund for a variety of reasons. Risks associated with the use of derivatives are magnified to the extent that a large portion of the fund's assets are committed to derivatives in general or are invested in just one or a few types of derivatives. New regulations are changing the derivatives markets. The regulations may make using derivatives more costly, may limit their availability, or may otherwise adversely affect their value or performance. For derivatives that are required to be traded through a clearinghouse or exchange, the fund also will be exposed to the credit risk of the clearinghouse and the broker that submits trades for the fund. It is possible that certain derivatives that are required to be cleared, such as certain swap contracts, will not be accepted for clearing. In addition, regulated trading facilities for swap contracts are relatively new; they may not function as intended, which could impair the ability to enter into swap contracts. The extent and impact of the regulations are not yet fully known and may not be for some time. Credit default swap risk. Credit default swap contracts, a type of derivative instrument, involve special risks and may result in losses to the fund. Credit default swaps may in some cases be illiquid, and they increase credit risk since the fund has exposure to both the issuer of the referenced obligation and the counterparty to the credit default swap. Swaps may be difficult to unwind or terminate. Certain index-based credit default swaps are structured in tranches, whereby junior tranches assume greater default risk than senior tranches. The absence of a central exchange or market for swap transactions has led, in some instances, to difficulties in trading and valuation, especially in the event of market disruptions. New regulations require many kinds of swaps to be executed through a regulated exchange or market facility and cleared through a regulated clearinghouse. The establishment of a centralized exchange or market for swap transactions may disrupt or limit the swap market and may not result in swaps being easier to trade or value. Market-traded swaps may become more standardized, and the fund may not be able to enter into swaps that meet its investment needs. The fund also may not be able to find a clearinghouse willing to accept the swaps for clearing. The new regulations may make using swaps more costly, may limit their availability, or may otherwise adversely affect their value or performance. The fund will be required to trade many swaps through a broker who is a member of the clearinghouse. The broker may require the fund to post margin to the broker as a down payment on the fund's obligations and may change the amount of margin required from time to time. The fund may not be able to recover margin amounts if the broker has financial difficulties. Also, the broker may require the fund to terminate a derivatives position under certain circumstances. This may cause the fund to lose money. The clearinghouse will be the fund's counterparty for the derivatives trades. The fund will take the risk that the counterparty defaults. The fund also may be exposed to additional risks as a result of the new regulations. The extent and impact of the new regulations are not yet fully known and may not be for some time. Leveraging risk. The value of your investment may be more volatile and other risks tend to be compounded if the fund borrows or uses derivatives or other investments, such as ETFs, that have embedded leverage. Leverage generally magnifies the effect of any increase or decrease in the value of the fund's underlying assets or creates investment risk with respect to a larger pool of assets than the fund would otherwise have, potentially resulting in the loss of all assets. Engaging in such transactions may cause the fund to liquidate positions when it may not be advantageous to do so to satisfy its obligations or meet segregation requirements. Commodity investments risk. Certain underlying funds may invest directly or indirectly in commodities. Exposure to the commodities markets may subject the fund to greater volatility than investments in other securities. The value of commodity-linked notes and other commodity-linked derivatives may be affected by changes in overall market movements, commodity index volatility, changes in interest rates, or factors affecting a particular industry or commodity, such as drought, floods, weather, livestock disease, embargoes, tariffs and international economic, political and regulatory developments. The prices of energy, industrial metals, precious metals, agriculture and livestock sector commodities may fluctuate widely and rapidly due to factors such as changes in value, supply and demand and governmental regulatory policies. Commodity-related investments may be more volatile and less liquid than the underlying commodities, instruments or measures, which may make it difficult for such investments to be sold at a price acceptable to the adviser or to accurately value them. Commodity-related investments are subject to the credit risks associated with the issuer, and their values may decline substantially if the issuer's creditworthiness deteriorates. As a result, returns of commodity-linked investments may deviate significantly from the return of the underlying commodity, instruments or measures. The fund may receive lower interest payments (or not receive any of the interest due) on an investment in a commodity-linked note if there is a loss of value of the underlying investment. Further, to the extent that the amount of principal to be repaid upon maturity is limited to the value of a particular commodity, commodity index or other economic variable, the fund might not receive a portion (or any) of the principal at maturity of the investment or upon earlier exchange. 21 Non-diversification risk. To the extent an underlying fund is not diversified, the underlying fund can invest a higher percentage of its assets in the securities of any one or more issuers than a diversified fund. Being non-diversified may magnify the fund's losses from adverse events affecting a particular issuer. Valuation risk. The sales price the fund could receive for any particular portfolio investment may differ from the fund's valuation of the investment, particularly for securities that trade in thin or volatile markets. If markets make it difficult to value some investments, the fund may value these investments using more subjective methods, such as fair value methodologies. Investors who purchase or redeem fund shares on days when the fund is holding fair-valued securities may receive fewer or more shares or lower or higher redemption proceeds than they would have received if the fund had not fair-valued the security or had used a different valuation methodology. The value of foreign securities, certain fixed income securities and currencies, as applicable, may be materially affected by events after the close of the market on which they are valued, but before the fund determines its net asset value. Portfolio turnover risk. If the fund does a lot of trading, it may incur additional operating expenses, which would reduce performance. A higher level of portfolio turnover may also cause taxable shareowners to incur a higher level of taxable income or capital gains. Cash management risk. The value of the investments held by the fund for cash management or temporary defensive purposes may be affected by market risks, changing interest rates and by changes in credit ratings of the investments. To the extent that the fund has any uninvested cash, the fund would be subject to credit risk with respect to the depository institution holding the cash. If the fund holds cash uninvested, the fund will not earn income on the cash and the fund's yield will go down. During such periods, it may be more difficult for the fund to achieve its investment objectives. Comparison of Fees and Expenses Shareholders of the Acquiring Fund pay various fees and expenses, either directly or indirectly. The expenses in the tables appearing below are based on for the Acquired Fund, the expenses of the Acquired Fund for the twelve-month period ended January 31, 2014. Future expenses for all share classes may be greater or less. The tables also show the pro forma expenses of the combined fund assuming the Reorganization occurred on January 31, 2014.
Pioneer Pioneer Ibbotson Ibbotson Aggressive Growth Allocation Allocation Combined Fund Fund Fund (Pro Forma (12 months (12 months 12 months ended ended ended January 31, January 31, January 31, 2014) 2014) 2014) ----------------------------------------------------------------------------------------------- Shareholder transaction fees (paid directly from your investment) Class A(4) Class A Class A Maximum sales charge (load) when you buy shares as a percentage of offering price 5.75% 5.75% 5.75% Maximum deferred sales charge (load) as a percentage of offering price or the amount you receive when you sell shares, whichever is less None None None Redemption fee as a percentage of amount redeemed, if applicable None None None Annual Fund operating expenses (deducted from fund assets) as a % of average daily net assets Management Fee 0.13% 0.13% 0.13% Distribution and Service (12b-1) Fee 0.25% 0.25% 0.25% Other Expenses 0.45% 0.32% 0.32% Acquired Fund Fees and Expenses (1) 0.89% 0.85% 0.66% Total Annual Fund Operating Expenses 1.72% 1.55% 1.36% ----------------------------------------------------------------------------------------------- Less: Fee Waiver and Expense Limitations (2) (3) 0.00% 0.00% 0.00% Net Expenses 1.72% 1.55% 1.36% -----------------------------------------------------------------------------------------------
22
Pioneer Pioneer Pioneer Pioneer Ibbotson Ibbotson Ibbotson Ibbotson Aggressive Growth Aggressive Growth Allocation Allocation Combined Fund Allocation Allocation Combined Fund Fund Fund (Pro Forma Fund Fund (Pro Forma (12 months (12 months 12 months (12 months (12 months 12 months ended ended ended ended ended ended January 31, January 31, January 31, January 31, January 31, January 31, 2014) 2014) 2014) 2014) 2014) 2014) ------------------------------------------------------------------------------------------------------------------------------------ Shareholder transaction fees (paid directly from your investment) Class C Class C Class C Class Y Class Y Class Y Maximum sales charge (load) when you buy shares as a percentage of offering price None None None None None None Maximum deferred sales charge (load) as a percentage of offering price or the amount you receive when you sell shares, whichever is less 1.00% 1.00% 1.00% None None None Redemption fee as a percentage of amount redeemed, if applicable None None None None None None Annual Fund operating expenses (deducted from fund assets) as a % of average daily net assets Management Fee 0.13% 0.13% 0.13% 0.13% 0.13% 0.13% Distribution and Service (12b-1) Fee 1.00% 1.00% 1.00% None None None Other Expenses 0.39% 0.26% 0.28% 0.68% 0.30% 0.39% Acquired Fund Fees and Expenses(1) 0.89% 0.85% 0.66% 0.89% 0.85% 0.66% Total Annual Fund Operating Expenses 2.41% 2.24% 2.07% 1.70% 1.28% 1.18% ------------------------------------------------------------------------------------------------------------------------------------ Less: Fee Waiver and Expense Limitations(2) (3) 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Net Expenses 2.41% 2.24% 2.07% 1.70% 1.28% 1.18% ------------------------------------------------------------------------------------------------------------------------------------
------------------- (1) Total annual fund operating expenses in the table, before and after fee waiver and expense reimbursement, may be higher than the corresponding ratio of expenses to average net assets, which do not include acquired fund fees and expenses. (2) Pioneer has contractually agreed to limit ordinary operating expenses (ordinary operating expenses means all fund expenses other than extraordinary expenses, such as litigation, taxes and brokerage commissions) to the extent required to reduce the Acquired Fund's expenses to 0.85% and 1.64% of the average daily net assets attributable to Class A shares and Class C shares, respectively. Acquired Fund Fees and Expenses are not included in the expense limitations. This expense limitation is in effect through December 1, 2015. There can be no assurance that the adviser will extend the expense limitation beyond such time. While in effect, the arrangement may be terminated for a class only by agreement of the fund's investment adviser and the Board of Trustees. The expense limitation does not limit the expenses of the underlying funds indirectly incurred by a shareholder. (3) Pioneer has contractually agreed to limit ordinary operating expenses (ordinary operating expenses means all fund expenses other than extraordinary expenses, such as litigation, taxes and brokerage commissions) to the extent required to reduce the Acquiring Fund's expenses to 0.70% and 1.45% of the average daily net assets attributable to Class A shares and Class C shares, respectively. Acquired Fund Fees and Expenses are not included in the expense limitations. This extension of expense limitation is in effect through December 1, 2015. There can be no assurance that the adviser will extend the expense limitation beyond such time. While in effect, the arrangement may be terminated for a class only by agreement of the fund's investment adviser and the Board of Trustees. The expense limitation does not limit the expenses of the underlying funds indirectly incurred by a shareholder. (4) Class B shares of the Acquired Fund will be converted to Class A shares of the Acquired Fund on November 10, 2014, prior to the Closing Date. Accordingly, current Class B shareholders of the Acquired Fund will be Class A shareholders of the Acquired Fund on the Closing Date, and will receive Class A shares of the Acquiring Fund in the Reorganization. Examples: The examples are intended to help you compare the cost of investing in each fund with the cost of investing in other mutual funds. The examples assume that you invest $10,000 in each fund for the time periods shown, and then, except as indicated, redeem all of your shares at the end of those periods. The examples also assume that (a) your investment has a 5% return each year and (b) each fund's total annual operating expenses remain the same except for year one (which considers the effect of the expense limitation). Pro forma expenses are included assuming consummation of the Reorganization as of January 31, 2014. The examples are for comparison purposes only and are not a representation of any fund's actual expenses or returns, either past or future. Although your actual costs may be higher or lower, based on these assumptions your costs would be: 23
Pioneer Pioneer Ibbotson Ibbotson Aggressive Growth Number of years Allocation Allocation Combined Fund you own your shares Fund Fund (Pro Forma) ----------------------------------------------------------------------------------------------------------- Class A - assuming redemption at end of period Year 1 $ 740 $ 724 $ 706 Year 3 $1,086 $1,036 $ 981 Year 5 $1,455 $1,371 $1,277 Year 10 $2,488 $2,314 $2,116 Class A - assuming no redemption Year 1 $ 740 $ 724 $ 706 Year 3 $1,086 $1,036 $ 981 Year 5 $1,455 $1,371 $1,277 Year 10 $2,488 $2,314 $2,116 Class C - assuming redemption at end of period Year 1 $ 344 $ 327 $ 310 Year 3 $ 751 $ 700 $ 649 Year 5 $1,285 $1,200 $1,114 Year 10 $2,746 $2,575 $2,400 Class C - assuming no redemption Year 1 $ 244 $ 227 $ 210 Year 3 $ 751 $ 700 $ 649 Year 5 $1,285 $1,200 $1,114 Year 10 $2,746 $2,575 $2,400 Class Y - with or without redemption at end of period Year 1 $ 173 $ 130 $ 120 Year 3 $ 536 $ 406 $ 375 Year 5 $ 923 $ 702 $ 649 Year 10 $2,009 $1,545 $1,432
24 Comparison of the Funds' Past Performance The bar charts and tables below indicate the risks and volatility of an investment in the funds by showing how the funds have performed in the past. The bar charts show changes in the performance of each fund's Class A shares from calendar year to calendar year. The tables show average annual total returns for each class of shares of a fund over time and compare these returns to the returns of the Standard and Poor's 500 Index and the Barclays Capital Aggregate Bond Index, each a broad-based measure of market performance that has characteristics relevant to the fund's investment strategies. You can obtain updated performance information by visiting https://us.pioneerinvestments.com/performance or by calling 1-800-225-6292. A fund's past performance (before and after taxes) does not necessarily indicate how it will perform in the future. The bar charts do not reflect any sales charge you may pay when you buy fund shares. If this amount was reflected, returns would be less than those shown. Ibbotson Associates, Inc. served as each fund's sub-adviser for all periods shown. As discussed above, Pioneer will be directly responsible for portfolio management decisions upon completion of the Reorganization. Effective upon completion of the Reorganization, the MSCI World Index will replace the Standard and Poor's 500 Index as the benchmark for the fund's equity component. Pioneer believes that the MSCI World Index will better reflect the investment approach and portfolio composition of the combined fund than the Standard and Poor's 500 Index. In addition, the combined fund will compare its performance to the returns of a blended benchmark (80% MSCI World Index/20% Barclays Capital Aggregate Bond Index). Pioneer Ibbotson Aggressive Allocation Fund's Annual Returns -- Class A Shares (%)* (Years ended December 31) [bar chart] '05 9.64 '06 14.20 '07 5.33 '08 -39.01 '09 31.26 '10 13.92 '11 -4.61 '12 11.43 '13 21.71 At June 30, 2014, the year-to-date return was 20.70%. ------------------- * During the period shown in the bar chart, the Pioneer Ibbotson Aggressive Allocation Fund's highest quarterly return was 20.12% for the quarter ended 6/30/2009, and the lowest quarterly return was -22.11% for the quarter ended 12/31/2008. 25 Pioneer Ibbotson Growth Allocation Fund's Annual Returns -- Class A Shares (%)* (Years ended December 31) [bar chart] '05 8.24 '06 12.49 '07 5.47 '08 -35.25 '09 30.69 '10 13.17 '11 -3.30 '12 11.00 '13 18.94 At June 30, 2014, the year-to-date return was 18.35%. ------------------- * During the period shown in the bar chart, the Pioneer Ibbotson Growth Allocation Fund's highest quarterly return was 18.16% for the quarter ended 6/30/2009, and the lowest quarterly return was -20.04% for the quarter ended 12/31/2008. 26 Average Annual Total Returns (%) (for periods ended December 31, 2013)
Since Inception The Acquired Fund 1 Year 5 Years Inception Date ---------------------------------------------------------------------------------------------------------------------- Class A 8/9/04 Return Before Taxes 14.72 12.77 5.80 Return After Taxes on Distributions 14.24 12.48 5.24 Return After Taxes on Distributions and Sale of Fund Shares 8.33 10.14 4.63 ---------------------------------------------------------------------------------------------------------------------- Class C 20.89 13.30 5.50 8/9/04 ---------------------------------------------------------------------------------------------------------------------- Class Y 21.69 14.23 5.07 9/26/05 ---------------------------------------------------------------------------------------------------------------------- Standard & Poor's 500 Index (reflects no deduction for fees, expenses or taxes) 32.39 17.94 8.28 8/9/04 ---------------------------------------------------------------------------------------------------------------------- Barclays Capital Aggregate Bond Index (reflects no deduction for fees, expenses or taxes) -2.02 4.44 4.60 8/9/04 ---------------------------------------------------------------------------------------------------------------------- MSCI World Index ND IX 26.68 15.02 7.72 8/9/04 ---------------------------------------------------------------------------------------------------------------------- Blended Benchmark (80% MSCI World Index/20% Barclays Capital Aggregate Bond Index) 20.94 12.90 7.10 8/9/04 ----------------------------------------------------------------------------------------------------------------------
Since Inception The Acquiring Fund 1 Year 5 Years Inception Date ---------------------------------------------------------------------------------------------------------------------- Class A 8/9/04 Return Before Taxes 12.12 12.21 5.63 Return After Taxes on Distributions 11.44 11.67 4.94 Return After Taxes on Distributions and Sale of Fund Shares 6.86 9.57 4.40 ---------------------------------------------------------------------------------------------------------------------- Class C 18.10 12.78 5.21 8/9/04 ---------------------------------------------------------------------------------------------------------------------- Class Y 19.28 13.69 5.54 9/26/05 ---------------------------------------------------------------------------------------------------------------------- Standard & Poor's 500 Index (reflects no deduction for fees, expenses or taxes) 32.37 17.94 8.28 8/9/04 ---------------------------------------------------------------------------------------------------------------------- Barclays Capital Aggregate Bond Index (reflects no deduction for fees, expenses or taxes) -2.02 4.44 4.60 8/9/04 ---------------------------------------------------------------------------------------------------------------------- MSCI World Index ND IX 26.68 15.02 7.72 8/9/04 ---------------------------------------------------------------------------------------------------------------------- Blended Benchmark (80% MSCI World Index/20% Barclays Capital Aggregate Bond Index) 20.94 12.90 7.10 8/9/04 ----------------------------------------------------------------------------------------------------------------------
After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold a Pioneer Fund's shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown only for Class A shares. After-tax returns for Class C and Class Y shares of each Pioneer Fund will vary. 27
--------------------------------------------------------------------------------------------------------------------------------- The Acquired Fund The Acquiring Fund, Post-Reorganization --------------------------------------------------------------------------------------------------------------------------------- Management fees The fund pays Pioneer a fee for managing the fund The fund pays Pioneer a fee for managing the fund and to cover the cost of providing certain services to and to cover the cost of providing certain services the fund. to the fund. Pioneer's annual fee is equal to: 0.13% of the fund's Effective upon completion of the Reorganization, average daily net assets on investments in underlying Pioneer's annual fee will be equal to: 0.13% of the funds managed by Pioneer (and cash) and 0.17% of fund's average daily net assets, up to $2.5 billion; the fund's average daily net assets on other 0.11% of the fund's average daily net assets, from investments, up to $2.5 billion; 0.11% of the fund's over $2.5 billion up to $4 billion; 0.10% of the fund's average daily net assets on investments in underlying average daily net assets, from over $4 billion up to funds managed by Pioneer (and cash) and 0.14% of $5.5 billion; 0.08% of the fund's average daily net the fund's average daily net assets on other assets, over $5.5 billion. investments, from over $2.5 billion up to $4 billion; 0.10% of the fund's average daily net assets on For the fiscal year ended July 31, 2013, the fund investments in underlying funds managed by Pioneer paid management fees (excluding waivers and/or (and cash) and 0.12% of the fund's average daily net assumption of expenses) equivalent to 0.13% of the assets on other investments, from over $4 billion up fund's average daily net assets. to $5.5 billion; 0.08% of the fund's average daily net assets on investments in underlying funds managed A discussion regarding the basis for the Board of by Pioneer (and cash) and 0.10% of the fund's Trustees' approval of the management contract and average daily net assets on other investments, over the subadvisory agreement with Ibbotson are $5.5 billion and up to $7 billion; and 0.08% of the available in the fund's semiannual report to fund's average daily net assets on investments in shareholders for the period ended January 31, 2014. underlying funds managed by Pioneer (and cash) and 0.09% of the fund's average daily net assets on other investments, over $7 billion. Since all of the underlying funds are currently managed by Pioneer, the management fee is currently equal to 0.13% of the fund's average daily net assets. The fee is accrued daily and paid monthly. Pioneer, and not the fund, pays a portion of the fee it receives from the fund to Ibbotson as compensation for Ibbotson's services to the fund. For the fiscal year ended July 31, 2013, the fund paid management fees (excluding waivers and/or assumption of expenses) equivalent to 0.13% of the fund's average daily net assets. A discussion regarding the basis for the Board of Trustees' approval of the management contract and the subadvisory agreement with Ibbotson are available in the fund's semiannual report to shareholders for the period ended January 31, 2014. --------------------------------------------------------------------------------------------------------------------------------- For a comparison of the gross and net expenses of each fund, please see the class fee tables in the "Comparison of Fees and Expenses" section starting on page 22. ---------------------------------------------------------------------------------------------------------------------------------
28 Reasons for the Reorganization The Board of Trustees of the Acquired Fund believes that the proposed Reorganization will be advantageous to the shareholders of the Acquired Fund for several reasons. The Trustees considered the following matters, among others, in approving the proposal. First, the Board considered that your fund and the Acquiring Fund have similar investment objectives and investment policies. The Board considered that your fund's investment objective is long-term capital growth and the Acquiring Fund's investment objective is long-term capital growth and current income. The Board considered that like your fund, the Acquiring Fund is a "fund of funds" that allocates its assets primarily among other mutual funds, including mutual funds managed by Pioneer, that invest in asset classes consistent with the fund's objectives. The Board considered that the Acquiring Fund may allocate a greater percentage of its assets to fixed income and other investments than your fund. The Board also considered that, unlike your fund, the Acquiring Fund will have the flexibility to invest in a broader range of funds than your fund, including exchange-traded funds and mutual funds that are not managed by Pioneer, and will be permitted to invest in derivative instruments for hedging and other purposes. Second, the Board considered that Pioneer will assume responsibility for making portfolio management decisions for the Acquiring Fund. The Board considered that while your fund's assets are allocated among asset classes and funds according to fixed ranges, Pioneer intends to manage the Acquiring Fund using a flexible allocation approach that does not rely on fixed ranges for asset classes or funds, and intends to employ management strategies that seek to keep the Acquiring Fund's annualized volatility (i.e., fluctuations of value) within a targeted range. Third, the Board considered that the management fees paid by the combined fund will be the same as or lower than the management fees paid by your fund. Fourth, the Board considered that the combined fund may be better positioned to attract assets than your fund and that the larger size of the combined fund may result in greater economies of scale because the fund may be able to reduce per share expenses as fixed expenses shared over a larger asset base. Fifth, the Board considered that the historical performance of the Acquiring Fund was higher than the historical performance of your fund for the one, three and five-year periods ended January 31, 2014, and slightly lower than your fund's performance since the fund's inception on August 9, 2004. However, in considering the funds' performance, the Board noted that Ibbotson Associates, Inc. served as each fund's sub-adviser during each period under consideration, and the Acquiring Fund's investment strategies would be different from those used in the fund during each period of consideration. Sixth, the Board considered the ability of the combined fund to utilize certain tax capital-loss carryforwards in the future. Seventh, the Board considered that the Acquired Fund would bear approximately 25% of the expenses incurred in connection with the Reorganization, including expenses associated with the preparation, printing and mailing of any shareholder communications (including this Information Statement/ Prospectus), any filings with the SEC and other governmental agencies in connection with the Reorganization, audit fees and legal fees, and the Acquiring Fund would likewise bear approximately 25% of these costs. The Board considered that Pioneer would bear the remaining 50% of the expenses incurred in connection with the Reorganization. In approving the allocation of Reorganization costs, the Board considered information provided by Pioneer with respect to the relative short-term economic benefits and costs to shareholders anticipated to result from the Reorganization. Eighth, the Board recognized that the portfolio managers of the combined fund may conclude that a significant number of holdings of the Acquired Fund are not consistent with the combined fund's long-term investment strategy and may dispose of such positions. The Board considered that the disposition of securities following the Reorganization could result in capital gains to the combined fund. The Board noted that the disposition of securities is not expected to result in brokerage expenses to the combined fund. However, the Board considered that the actual tax consequences of any disposition of portfolio securities will vary depending upon the specific security(ies) being sold. Ninth, the Board considered that the funds' investment adviser and principal distributor would benefit from the Reorganization. For example, Pioneer might achieve cost savings from managing one larger fund compared to managing more than one fund with similar investment strategies. The consolidated portfolio management effort also might result in time and personnel savings and the preparation of fewer reports and regulatory filings, as well as prospectus disclosure, for one fund instead of two. The Board believes that the Reorganization, in the long-term, could result in a decrease in the combined fund's gross expenses. Tenth, the Board also considered that the Reorganization presents an excellent opportunity for the shareholders of each fund to become investors in a combined fund that has a larger asset size than either fund alone without the obligation to pay commissions or other transaction costs that a fund normally incurs when purchasing securities. This opportunity provides an economic benefit to both funds and their shareholders. 29 CAPITALIZATION The following table sets forth the capitalization of each Pioneer Fund as of July 31, 2014, and the pro forma combined capitalization of the combined fund as if the Reorganization occurred on that date. The actual exchange ratios on the Closing Date may vary from the exchange ratios indicated. This is due to changes in the market value of the portfolio securities of the Pioneer Funds between August 15, 2014 and the Closing Date, changes in the amount of undistributed net investment income and net realized capital gains of the Pioneer Funds during that period resulting from income and distributions, and changes in the accrued liabilities of the Pioneer Funds during the same period.
Pioneer Ibbotson Aggressive Pioneer Combined Fund Allocation Ibbotson Growth Pro Forma Pro Forma Fund Allocation Fund Adjustments(1) Combined Fund (August 15, 2014) (August 15, 2014) (August 15, 2014) (August 15, 2014) -------------------------------------------------------------------------------------------------------------- Net Assets Class A(2) $107,847,390 $174,810,445 $ (38,017) $282,619,818 Class C $ 23,494,528 $ 64,190,391 $ (11,793) $ 87,673,126 Class Y $ 368,600 $ 1,043,122 $ (190) $ 1,411,532 Total Net Assets $131,710,518 $240,043,958 $ (50,000) $371,704,476 Net Asset Value Per Share Class A(2) $ 14.09 $ 13.71 $ 13.71 Class C $ 13.35 $ 12.93 $ 12.93 Class Y $ 14.20 $ 13.99 $ 13.99 Shares Outstanding Class A(2) 7,678,635 12,849,404 20,715,734 Class C 1,760,483 4,966,172 6,783,228 Class Y 25,965 74,539 100,886
(1) The pro forma data reflects adjustments to account for the combined expenses of the Reorganization borne by the Acquired Fund and the Acquiring Fund. The expenses of the Reorganization borne by the funds are estimated in the aggregate to be $50,000. Pioneer will bear the remaining expenses of the Reorganization. (2) The data reflects adjustments to reflect that Class B shares of each Fund will be converted to Class A shares of such Fund on November 10, 2014, prior to the Closing Date. It is impossible to predict how many shares of the combined fund will actually be received and distributed by your fund on the Closing Date. The table should not be relied upon to determine the amount of combined fund shares that will actually be received and distributed. BOARDS' EVALUATION OF THE REORGANIZATION For the reasons described above, the Board of Trustees of your fund, including the Independent Trustees, approved the Reorganization. In particular, the Board of Trustees determined that the Reorganization is in the best interests of your fund and that the interests of your fund's shareholders would not be diluted as a result of the Reorganization. Similarly, the Board of Trustees of the Acquiring Fund, including the Independent Trustees, approved the Reorganization. The Trustees also determined that the Reorganization is in the best interests of that fund and that the interests of the shareholders of that fund would not be diluted as a result of the Reorganization. 30 OTHER IMPORTANT INFORMATION CONCERNING THE REORGANIZATION Portfolio Securities After the closing of the Reorganization, management will analyze and evaluate the portfolio securities of the combined fund. Consistent with the combined fund's investment objective and policies, any restrictions imposed by the Code and in the best interests of the shareholders of the combined fund (including former shareholders of your fund), management will influence the extent and duration to which the portfolio securities of your fund and the Acquiring Fund will be maintained by the combined fund. It is possible that, although it is not necessary to dispose of portfolio securities in order to effect the Reorganization, the portfolio manager of the combined fund may conclude that some of the holdings of the combined fund are not consistent with the combined fund's long-term investment strategy, and, accordingly, there may be dispositions of some of the portfolio securities of the combined fund following the Reorganization. Subject to market conditions at the time of any such disposition, the disposition of the portfolio securities by the combined fund may result in a capital gain or loss. The actual tax consequences of any disposition of portfolio securities will vary depending upon the specific security(ies) being sold, other capital gains and losses that may be recognized, and the combined fund's ability to use any available tax loss carryforwards. The disposition of portfolio securities is not expected to result in brokerage expense to the combined fund. Tax Capital Loss Carryforwards Federal income tax law permits a regulated investment company to carry forward net capital losses that arose in tax years that began on or before December 22, 2010 ("Pre-2011 Losses") for a period of up to eight taxable years. Net capital losses that arise in tax years beginning after December 22, 2010 ("Post-2010 Losses") may generally be carried forward without limit, and such carryforwards must be fully utilized before the regulated investment company is permitted to utilize carryforwards of Pre-2011 Losses. Presently, Pioneer Ibbotson Aggressive Allocation Fund and Pioneer Ibbotson Growth Allocation Fund have net capital loss carryforwards from their prior taxable years, as follows:
-------------------------------------------------------------------------------- Fund Capital Loss Carryforward -------------------------------------------------------------------------------- Pioneer Ibbotson Aggressive Allocation Fund $24,127,121 -------------------------------------------------------------------------------- Pioneer Ibbotson Growth Allocation Fund $31,221,769 --------------------------------------------------------------------------------
Neither Fund has Post-2010 Losses. The Funds' Pre-2011 Losses and their expiration dates are as follows:
-------------------------------------------------------------------------------- Fund 2018 2019 -------------------------------------------------------------------------------- Pioneer Ibbotson Aggressive Allocation Fund $22,667,840 $1,459,281 -------------------------------------------------------------------------------- Pioneer Ibbotson Growth Allocation Fund $26,663,894 $4,557,875 --------------------------------------------------------------------------------
For the period ending on the Closing Date, each fund may have net realized capital gains or losses and as of the Closing Date a fund may also have net unrealized capital gains or losses. The Reorganization may result in a number of different limitations on the combined fund's ability to use realized and unrealized losses of the combining funds. The discussion below describes the limitations that would apply based on the funds' tax attributes and relative net asset values as of August 15, 2014. Since the Reorganization is not expected to close until November 14, 2014, the net current-year realized capital losses and net unrealized capital gains and the effect of the limitations described may change significantly between now and the completion of the Reorganization. Further, the ability of each Pioneer Fund to use capital losses to offset gains (even in the absence of the Reorganization) depends on factors other than loss limitations, such as the future realization of capital gains or losses. First, in the tax year of the combined fund in which the Reorganization occurs, the combined fund will be able to use carryforwards of your fund's capital losses (including from your fund's short taxable year ending on the Closing Date), subject to the limitations described in the following paragraphs, to offset only a prorated portion of the combined fund's capital gains for such tax year, based on the number of days remaining in the combined fund's tax year after the Closing Date. Second, the Reorganization is expected to result in a limitation on the combined fund's ability to use your fund's capital loss carryforwards in subsequent tax years. This limitation, imposed by Section 382 of the Code, is expected to apply because your fund has capital loss carryforwards and its shareholders will own less than 50% of the combined fund immediately after the Reorganization. The annual Section 382 limitation for periods following the Reorganization generally will equal the product of the net asset value of your Fund immediately prior to the Reorganization and the "long-term tax-exempt rate," published by the Internal Revenue Service, in effect at the time of the Reorganization (if the Reorganization had closed as of August 15, 2014, the annual limitation would have been $4,135,710.27). This limitation may be prorated in the taxable year of the Acquiring Fund in which the Reorganization occurs based on the number of days 31 remaining after the Closing Date in such taxable year. This limitation may result in some portion of your fund's capital loss carryforwards expiring unused. The combined fund is expected to be able to use the Acquiring Fund's capital loss carryforwards without any limitation imposed under Section 382 by reason of the Reorganization. Third, the Reorganization may result in a limitation on the combined fund's ability to use loss carryforwards of the Acquiring Fund and a portion of losses recognized by the Acquiring Fund in the taxable year in which the Reorganization occurs to offset gains realized after the Reorganization that are attributable to unrealized capital gains of your fund as of the Closing Date. That limitation will apply if your fund's unrealized capital gains as of the Closing Date are at least $10,000,000 or at least 15% of the net asset value of your fund as of the Closing Date, and is currently expected to apply to the Reorganization. As of August 15, 2014, the funds had the following current-year realized capital gains and net unrealized gains:
------------------------------------------------------------------------------------------------------------- Fund Current-Year Realized Capital Gains Net Unrealized Gains ------------------------------------------------------------------------------------------------------------- Pioneer Ibbotson Aggressive Allocation Fund $187,608 $40,762,542 ------------------------------------------------------------------------------------------------------------- Pioneer Ibbotson Growth Allocation Fund $387,394 $63,159,501 -------------------------------------------------------------------------------------------------------------
Fourth, the Reorganization will have the following additional effects on the use of losses. Any capital loss carryforwards from prior years, any net current-year capital losses, and, potentially, any unrealized capital losses will benefit the shareholders of the combined fund, rather than only the shareholders of the combining fund in which the loss originated. If the Reorganization closes on a date other than your fund's regular year end, it will cause your fund's Pre-2011 Losses, to the extent unused from time to time, to expire one year earlier than the time they otherwise would have expired. Some portion of your fund's carryforwards of Pre-2011 Losses could expire unutilized as a result of the Reorganization and/or as a result of Post-2010 Losses of the Acquiring Fund. 32 TERMS OF THE AGREEMENT AND PLAN OF REORGANIZATION The Reorganization o The Reorganization is scheduled to occur as of the close of business on November 14, 2014 but may occur on such later date as the parties may agree to in writing. o The Acquired Fund will transfer all of its assets to the Acquiring Fund. The Acquiring Fund will assume all of your fund's liabilities. The net asset value of both Pioneer Funds will be computed as of the close of regular trading on the New York Stock Exchange on the Closing Date. o The Acquiring Fund will issue Class A, Class C and Class Y shares to the Acquired Fund in amounts equal to the aggregate net asset value of the Acquired Fund's Class A, Class C and Class Y shares, respectively. Class B shares of the Acquired Fund will be converted to Class A shares of the Acquired Fund on November 10, 2014, prior to the Closing Date. Accordingly, current Class B shareholders of the Acquired Fund will be Class A shareholders of the Acquired Fund on the Closing Date, and will receive Class A shares of the Acquiring Fund in the Reorganization. o Shares of the Acquiring Fund will immediately be distributed to you in proportion to the relative net asset value of your holdings of shares of the applicable class or classes of the Acquired Fund on the Closing Date. As a result, the Acquired Fund's Class A shareholders will end up as Class A shareholders of the Acquiring Fund, and the Acquired Fund's Class C and Class Y shareholders will end up as Class C and Class Y shareholders, respectively, of the Acquiring Fund. The net asset value attributable to a class of shares of each fund will be determined using the Pioneer Funds' valuation policies and procedures. Each fund's valuation policies and procedures are identical. o After the shares are issued, the Acquired Fund will be dissolved. o No sales load, contingent deferred sales charge, commission, redemption fee or other transactional fee will be charged as a result of the Reorganization. After the Reorganization, any contingent deferred sales charge that applied to Class A (if applicable) or Class C shares of the Acquired Fund at the time of the Reorganization will continue to apply for the remainder of the applicable holding period at the time of the Reorganization. In calculating any applicable contingent deferred sales charge, the period during which you held your shares will be included in the holding period of the shares of the combined fund you receive as a result of the Reorganization. o The Reorganization generally is not expected to result in income, gain or loss being recognized for federal income tax purposes by shareholders of either Pioneer Fund involved in the Reorganization, or by either Pioneer Fund involved in the Reorganization, except as set forth below under the heading "Tax Status of the Reorganization." The Reorganization will not take place unless both funds involved in the Reorganization receive a tax opinion from Bingham McCutchen LLP, counsel to the funds, as described below under the heading "Tax Status of the Reorganization". Agreement and Plan of Reorganization The Agreement and Plan of Reorganization with respect to the Reorganization is attached as Exhibit A to this Information Statement/Prospectus. Material provisions of the Agreement and Plan of Reorganization are described below, but are qualified in their entirety by the attached copy. Cancellation of Share Certificates. If your shares are represented by one or more share certificates before the Closing Date, on the Closing Date all certificates will be canceled, will no longer evidence ownership of the Acquired Fund's shares and will evidence ownership of shares of the combined fund. The combined fund will not issue share certificates in the Reorganization. Conditions to Closing the Reorganization. The obligation of the Acquired Fund to consummate the Reorganization is subject to the satisfaction of certain conditions, including the performance by the Acquiring Fund of all its obligations under the Agreement and Plan of Reorganization and the receipt of all consents, orders and permits necessary to consummate the Reorganization (see Agreement and Plan of Reorganization, Section 6). The obligation of the Acquiring Fund to consummate the Reorganization is subject to the satisfaction of certain conditions, including the Acquired Fund's performance of all of its obligations under the Agreement and Plan of Reorganization, the receipt of certain documents and financial statements from that fund and the receipt of all consents, orders and permits necessary to consummate the Reorganization (see Agreement and Plan of Reorganization, Section 7). The funds' obligations are subject to the receipt of a favorable opinion of Bingham McCutchen LLP as to the federal income tax consequences of the Reorganization (see Agreement and Plan of Reorganization, Section 8.4). 33 Termination of Agreement and Plan of Reorganization. The Board of Trustees of either fund may terminate the Agreement and Plan of Reorganization at any time before the Closing Date, if the Board believes that proceeding with the Reorganization would no longer be in the best interests of shareholders of the applicable fund. Expenses of the Reorganization. Each fund will bear approximately 25% of the expenses incurred in connection with the Reorganization, including expenses associated with the preparation, printing and mailing of any shareholder communications (including this Information Statement/Prospectus), any filings with the SEC and other governmental agencies in connection with the Reorganization, audit fees and legal fees ("Reorganization Costs"). Pioneer will bear the remaining 50% of the Reorganization Costs. 34 TAX STATUS OF THE REORGANIZATION The Reorganization is conditioned upon the receipt by each fund of an opinion from Bingham McCutchen LLP, counsel to the Pioneer Funds, substantially to the effect that, for federal income tax purposes: o The transfer to the Acquiring Fund of all of your fund's assets in exchange solely for the issuance of the Acquiring Fund's shares to your fund and the assumption of all of your fund's liabilities by the Acquiring Fund, followed by the distribution of the Acquiring Fund's shares in complete liquidation of your fund, will constitute a "reorganization" within the meaning of Section 368(a) of the Code, and each fund will be a "party to a reorganization" within the meaning of Section 368(b) of the Code; o No gain or loss will be recognized by your fund upon (1) the transfer of all of its assets to the Acquiring Fund as described above or (2) the distribution by your fund of the Acquiring Fund's shares to your fund's shareholders in complete liquidation of your fund, except for (A) any gain or loss that may be recognized on the transfer of "section 1256 contracts" as defined in Section 1256(b) of the Code, (B) any gain that may be recognized on the transfer of stock in a "passive foreign investment company" as defined in Section 1297(a) of the Code, and (C) any other gain or loss that may be required to be recognized as a result of the closing of your fund's taxable year or upon the transfer of an asset of your fund regardless of whether such transfer would otherwise be a non-recognition transaction under the Code; o The tax basis in the hands of the Acquiring Fund of the assets of your fund transferred in the Reorganization will be the same as the tax basis of the assets in the hands of your fund immediately before the transfer of the assets, increased by the amount of gain (or decreased by the amount of loss), if any, recognized by your fund on the transfer; o The holding period of each asset of your fund in the hands of the Acquiring Fund, other than assets with respect to which gain or loss is required to be recognized in the Reorganization, will include the period during which that asset was held by your fund (except where investment activities of the Acquiring Fund will have the effect of reducing or eliminating the holding period with respect to an asset); o No gain or loss will be recognized by the Acquiring Fund upon its receipt of your fund's assets solely in exchange for shares of the Acquiring Fund and the assumption of your fund's liabilities; o You will not recognize gain or loss upon the exchange of your shares for shares of the Acquiring Fund as part of the Reorganization; o The aggregate tax basis of Acquiring Fund shares you receive in the Reorganization will be the same as the aggregate tax basis of the shares of your fund you surrender in the exchange; and o The holding period of Acquiring Fund shares you receive in the Reorganization will include the holding period of the shares of your fund that you surrender in the exchange, provided that you hold the shares of your fund as capital assets on the date of the exchange. In rendering such opinion, counsel shall rely upon, among other things, certain facts, assumptions and representations of your fund and the Acquiring Fund. The condition that each fund receives such an opinion may not be waived by either fund. No tax ruling has been or will be received from the Internal Revenue Service ("IRS") in connection with the Reorganization. An opinion of counsel is not binding on the IRS or a court, and no assurance can be given that the IRS would not assert, or a court would not sustain, a contrary position. Immediately prior to the Reorganization, your fund will declare and pay a dividend, which, together with all previous dividends, is intended to have the effect of distributing to your fund's shareholders all of your fund's investment company taxable income (computed without regard to the dividends-paid deduction), all of its net tax-exempt income, and all of its net capital gain (after deduction for any available capital loss carryover) for taxable years ending on or prior to the Closing. The amount of such distribution to the shareholders of your fund is estimated as of July 31, 2014 to be as set forth in the table below. The amount set forth in the table below is an estimate based on your fund's income and capital gains expected to be realized as if its taxable year ended on the Closing Date. Amounts actually distributed to shareholders immediately prior to the Reorganization may be higher or lower than the amounts set forth in the table below.
-------------------------------------------------------------------------------- Fund Distribution Amount (per share) -------------------------------------------------------------------------------- Pioneer Ibbotson Aggressive Allocation Fund $0.089 --------------------------------------------------------------------------------
35 Such distributions will generally result in taxable income to you. The foregoing discussion is very general and does not take into account any considerations that may apply to certain classes of taxpayers who are subject to special circumstances, such as shareholders who are not citizens of or residents of the United States, insurance companies, tax-exempt organizations, financial institutions, dealers in securities or foreign currencies, or persons who hold their shares as part of a straddle or conversion transaction. You should consult your tax adviser for the particular tax consequences to you of the transaction, including the applicability of any state, local or foreign tax laws. 36 CLASSES OF SHARES OF THE FUNDS The table below provides information regarding the characteristics and fee structure of Class A, Class C and Class Y shares of the Pioneer Funds. The policies disclosed below apply to each Pioneer Fund.
------------------------------------------------------------------------------------------------------------- Class A sales The Class A shares of each Pioneer Fund have the same characteristics and fee structure. charges and fees o Class A shares are offered with an initial sales charge up to 5.75% of the offering price, which is reduced or waived for large purchases and certain types of investors. At the time of your purchase, your investment firm may receive a commission from PFD, each Pioneer Fund's distributor, of up to 5%, declining as the size of your investment increases. o There are no contingent deferred sales charges, except in certain circumstances when no initial sales charge is charged. o Class A shares are subject to distribution and service (12b-1) fees of up to 0.25% of average daily net assets. These fees are paid out of a Pioneer Fund's assets on an ongoing basis. Over time these fees will increase the cost of investments and may cost more than other types of sales charges. ------------------------------------------------------------------------------------------------------------- Class C sales The Class C shares of each Pioneer Fund have the same characteristics and fee structure. charges and fees o Class C shares are offered without an initial sales charge. o Class C shares are subject to a contingent deferred sales charge of 1% if you sell your shares within one year of purchase. Your investment firm may receive a commission from PFD, each Pioneer Fund's distributor, at the time of your purchase of up to 1%. o Class C shares are subject to distribution and service (12b-1) fees of up to 1% of average daily net assets. These fees are paid out of a Pioneer Fund's assets on an ongoing basis. Over time these fees will increase the cost of investments and may cost more than other types of sales charges. o Class C shares do not convert to another share class. o The maximum purchase amount (per transaction) for Class C Shares is $499,999. ------------------------------------------------------------------------------------------------------------- Class Y sales The Class Y shares of each Pioneer Fund have the same characteristics and fee structure. charges and fees o Class Y shares are offered without an initial sales charge. o Class Y shares are not subject to a contingent deferred sales charge. o Class Y shares are not subject to distribution and service (12b-1) fees. o Initial investments are subject to a $5 million investment minimum, which may be waived in some circumstances. -------------------------------------------------------------------------------------------------------------
37 BUYING, SELLING AND EXCHANGING SHARES OF THE FUNDS The table below provides information regarding how to buy, sell and exchange shares of the Pioneer Funds. The policies disclosed below apply to each Pioneer Fund.
------------------------------------------------------------------------------------------------------------- Buying, Selling and Exchanging Shares ------------------------------------------------------------------------------------------------------------- Buying shares You may buy shares from any investment firm that has a sales agreement or other arrangement with PFD, the Pioneer Funds' distributor. You can buy shares at net asset value per share plus any applicable sales charge. The distributor may reject any order until it has confirmed the order in writing and received payment. Normally, your financial intermediary will send your purchase request to the fund's transfer agent. Consult your investment professional for more information. Your investment firm receives a commission from the distributor, and may receive additional compensation from Pioneer, for your purchase of fund shares. You may use securities you own to purchase shares of a Pioneer Fund provided that Pioneer, in its sole discretion, determines that the securities are consistent with a Pioneer Fund's objective and policies and their acquisition is in the best interests of a Pioneer Fund. If you have an existing non-retirement account, you may purchase shares of a Pioneer Fund by telephone or online. Certain IRAs also may use the telephone purchase privilege. ------------------------------------------------------------------------------------------------------------- Minimum initial Your initial investment must be at least $1,000 for Class A or Class C shares investment and at least $5 million for Class Y shares. Additional investments must be at least $100 for Class A shares, $500 for Class C shares. You may qualify for lower initial or subsequent investment minimums if you are opening a retirement plan account, establishing an automatic investment plan or placing your trade through your investment firm. There is no minimum additional investment amount for Class Y shares. ------------------------------------------------------------------------------------------------------------- Maximum purchase Purchases of each Pioneer Fund shares are limited to $499,999 for Class C amounts shares. These limits are applied on a per transaction basis. There is no maximum purchase for Class A or Class Y shares. ------------------------------------------------------------------------------------------------------------- Exchanging shares You may, under certain circumstances, exchange your shares for shares of the same class of another Pioneer mutual fund. Your exchange request must be for at least $1,000. Each Pioneer Fund allows you to exchange your shares at net asset value without charging you either an initial or contingent deferred sales charge at the time of the exchange. Shares you acquire as part of an exchange will continue to be subject to any contingent deferred sales charge that applies to the shares you originally purchased. When you ultimately sell your shares, the date of your original purchase will determine your contingent deferred sales charge. You generally will have to pay income taxes on an exchange. After you establish an eligible fund account, you can exchange shares of a Pioneer Fund by telephone or online. ------------------------------------------------------------------------------------------------------------- Selling shares Your shares will be sold at the share price (net asset value less any applicable sales charge) next calculated after the fund or its authorized agent, such as a broker-dealer, receives your request in good order. If a signature guarantee is required, you must submit your request in writing. If the shares you are selling are subject to a deferred sales charge, it will be deducted from the sale proceeds. If you have any eligible non-retirement, account, you may sell up to $100,000 per account per day by telephone or online. You may sell shares of a Pioneer Fund held in a retirement plan account by telephone only if your account is an eligible IRA (tax penalties may apply). ------------------------------------------------------------------------------------------------------------- Net asset value Each Pioneer Fund's net asset value is the value of its portfolio of securities plus any other assets minus its accrued operating expenses and other liabilities. Each Pioneer Fund calculates a net asset value for each class of shares every day the New York Stock Exchange is open when regular trading closes (normally 4:00 p.m. Eastern time). You buy or sell shares at the share price. When you buy Class A shares, you pay an initial sales charge unless you qualify for a waiver or reduced sales charge. When you sell Class A or Class C shares, you may pay a contingent deferred sales charge depending on how long you have owned your shares. -------------------------------------------------------------------------------------------------------------
38 ADDITIONAL INFORMATION ABOUT THE PIONEER FUNDS Investment adviser Pioneer, as each fund's investment adviser, selects the fund's investments and oversees the fund's operations. Pioneer is an indirect, wholly owned subsidiary of UniCredit S.P.A., one of the largest banking groups in Italy. Pioneer is part of the global asset management group providing investment management and financial services to mutual funds, institutional and other clients. As of June 30, 2014, assets under management were approximately $252 billion worldwide, including over $72 billion in assets under management by Pioneer (and its U.S. affiliates). Pioneer's main office is at 60 State Street, Boston, Massachusetts 02109. The firm's U.S. mutual fund investment history includes creating one of the first mutual funds in 1928. Pioneer has received an order from the Securities and Exchange Commission that permits Pioneer, subject to the approval of each Pioneer Fund's Board of Trustees, to hire and terminate a subadviser that is not affiliated with Pioneer (an "unaffiliated subadviser") or to materially modify an existing subadvisory contract with an unaffiliated subadviser for the Pioneer Fund without shareholder approval. Pioneer retains the ultimate responsibility to oversee and recommend the hiring, termination and replacement of any unaffiliated subadviser. Portfolio managers Day-to-day management of the Acquiring Fund's portfolio will be the responsibility of the following members of Pioneer's fund-of-funds team: John O'Toole is the Head of Multi-Asset Fund Solutions at Pioneer. Mr. O'Toole is responsible for the management of asset allocation portfolios and the full range of multi-asset products (fund of funds, segregated accounts and unit-linked). As a member of the Strategy Committee, he formulates top-down, macro asset allocation positioning. In addition, the Multi-Asset Fund Solutions team is responsible for strategy selection across all asset classes, as well as manager appraisal and selection in the construction of multi-asset and multi- manager portfolios. Mr. O'Toole joined Pioneer in 2005. Mr. O'Toole has worked in the investment industry since 1995. Paul Weber leads the Fund Research and Manager Selection team. Prior to joining the team in 2004, Mr. Weber worked on special projects with the Portfolio Analytics team. Mr. Weber's primary areas of coverage include equity strategies in Japan as well as global asset allocation strategies. Mr. Weber has a secondary focus on global bonds, European and Asian equity strategies. Mr. Weber joined Pioneer in 2002. Salvatore Buono is Head of Strategy Alignment and Structured Products within the Multi-Asset Fund Solutions team. In his role, he has oversight of portfolio positioning ensuring alignment of investment strategies across a broad range of products. Mr. Buono also oversees the trade management process, including liquidity and risk assessments for all proposed investment strategies. Mr. Buono joined Pioneer in 2008. The statement of additional information to this Information Statement/Prospectus provides additional information about the portfolio managers' compensation, other accounts managed by the portfolio managers, and the portfolio managers' ownership of shares of the fund. Distributor and transfer agent Pioneer Funds Distributor, Inc. is each Pioneer Fund's distributor. Pioneer Investment Management Shareholder Services, Inc. ("PIMSS") is each Pioneer Fund's transfer agent. Each Pioneer Fund compensates the distributor and the transfer agent for their services. The distributor and the transfer agent are affiliates of Pioneer. Disclosure of portfolio holdings Each Pioneer Fund's policies and procedures with respect to the disclosure of its portfolio securities are described in the fund's statement of additional information. Pricing of shares Net Asset Value Each Pioneer Fund's net asset value is the value of its securities plus any other assets minus its accrued operating expenses and other liabilities. Each Pioneer Fund calculates net asset value for each class of shares every day the New York Stock Exchange open when regular trading closes (normally 4:00 p.m. Eastern time). If the New York Stock Exchange closes at another time, the fund will calculate a net asset value for each class of shares as of the actual closing time. On days when the New York Stock Exchange is closed for trading, including certain holidays listed in the statement of additional information, a net asset value is not calculated. The fund's most recent net asset value is available on the fund's website, us.pioneerinvestments.com. Each Pioneer Fund generally values its equity securities and certain derivative instruments that are traded on an exchange using the last sale price on the principal exchange on which they are traded. Equity securities that are not traded on the date of valuation, or securities for which no last sale prices are available, are valued at the mean between the last bid and asked prices or, if both last bid and asked 39 prices are not available, at the last quoted bid price. Last sale, bid and asked prices are provided by independent third party pricing services. In the case of equity securities not traded on an exchange, prices are typically determined by independent third party pricing services using a variety of techniques and methods. Each Pioneer Fund may use a fair value model developed by an independent pricing service to value non-U.S. equity securities. To the extent that a Pioneer Fund invests in shares of other mutual funds that are not traded on an exchange, such shares of other mutual funds are valued at their net asset values as provided by those funds. The prospectuses for those funds explain the circumstances under which those funds will use fair value pricing methods and the effects of using fair value pricing methods. Each Pioneer Fund generally values debt securities and certain derivative instruments by using the prices supplied by independent third party pricing services. A pricing service may use market prices or quotations from one or more brokers or other sources, or may use a pricing matrix or other fair value methods or techniques to provide an estimated value of the security or instrument. A pricing matrix is a means of valuing a debt security on the basis of current market prices for other debt securities, historical trading patterns in the market for fixed income securities and/or other factors. Non-U.S. debt securities that are listed on an exchange will be valued at the bid price obtained from an independent third party pricing service. Each Pioneer Fund values short-term fixed income securities with remaining maturities of 60 days or less at amortized cost, unless circumstances indicate that using this method would not reflect an investment's value. The valuations of securities traded in non-U.S. markets and certain fixed income securities will generally be determined as of the earlier closing time of the markets on which they primarily trade. When a Pioneer Fund holds securities or other assets that are denominated in a foreign currency, the fund will normally use the currency exchange rates as of 3:00 p.m. (Eastern time). Non-U.S. markets are open for trading on weekends and other days when a Pioneer Fund does not price its shares. Therefore, the value of a Pioneer Fund's shares may change on days when you will not be able to purchase or redeem fund shares. When independent third party pricing services are unable to supply prices for an investment, or when prices or market quotations are considered by Pioneer to be unreliable, the value of that security may be determined using quotations from one or more broker-dealers. When such prices or quotations are not available, or when they are considered by Pioneer to be unreliable, the Pioneer Fund uses fair value methods to value its securities pursuant to procedures adopted by the Board of Trustees. The Pioneer Fund also may use fair value methods if it is determined that a significant event has occurred between the time at which a price is determined and the time at which the fund's net asset value is calculated. Because the fund may invest in securities rated below investment grade -- some of which may be thinly traded and for which prices may not be readily available or may be unreliable -- the Pioneer Fund may use fair value methods more frequently than funds that primarily invest in securities that are more widely traded. Valuing securities using fair value methods may cause the net asset value of the Pioneer Fund's shares to differ from the net asset value that would be calculated only using market prices. The prices used by each Pioneer Fund to value its securities may differ from the amounts that would be realized if these securities were sold and these differences may be significant, particularly for securities that trade in relatively thin markets and/or markets that experience extreme volatility. Distribution and service arrangements Distribution Plan Each Pioneer Fund has adopted a distribution plan for its Class A and Class C shares in accordance with Rule 12b-1 under the 1940 Act. Under each plan, a Pioneer Fund pays distribution and service fees to PFD. Because these fees are an ongoing expense of a Pioneer Fund, over time they increase the cost of your investment and your shares may cost more than shares that are subject to other types of sales charges. Additional Payments to Financial Intermediaries Your financial intermediary may receive compensation from a Pioneer Fund, Pioneer and its affiliates for the sale of a Pioneer Fund's shares and related services. Compensation may include sales commissions and distribution and service (Rule 12b-1) fees, as well as compensation for administrative services and transaction processing. Pioneer and its affiliates may make additional payments to your financial intermediary. These payments may provide your financial intermediary with an incentive to favor the Pioneer funds over other mutual funds or assist the distributor in its efforts to promote the sale of a Pioneer Fund's shares. Financial intermediaries include broker-dealers, banks (including bank trust departments), registered investment advisers, financial planners, retirement plan administrators and other types of intermediaries. Pioneer makes these additional payments (sometimes referred to as "revenue sharing") to financial intermediaries out of its own assets, which may include profits derived from services provided to a Pioneer Fund, or from the retention of a portion of sales charges or 40 distribution and service fees. Pioneer may base these payments on a variety of criteria, including the amount of sales or assets of the Pioneer funds attributable to the financial intermediary or as a per transaction fee. Not all financial intermediaries receive additional compensation and the amount of compensation paid varies for each financial intermediary. In certain cases, these payments may be significant. Pioneer determines which firms to support and the extent of the payments it is willing to make, generally choosing firms that have a strong capability to effectively distribute shares of the Pioneer funds and that are willing to cooperate with Pioneer's promotional efforts. Pioneer also may compensate financial intermediaries (in addition to amounts that may be paid by the fund) for providing certain administrative services and transaction processing services. Pioneer may benefit from revenue sharing if the intermediary features the Pioneer funds in its sales system (such as by placing certain Pioneer funds on its preferred fund list or giving access on a preferential basis to members of the financial intermediary's sales force or management). In addition, the financial intermediary may agree to participate in the distributor's marketing efforts (such as by helping to facilitate or provide financial assistance for conferences, seminars or other programs at which Pioneer personnel may make presentations on the Pioneer funds to the intermediary's sales force). To the extent intermediaries sell more shares of the Pioneer funds or retain shares of the Pioneer funds in their clients' accounts, Pioneer receives greater management and other fees due to the increase in the Pioneer funds' assets. The intermediary may earn a profit on these payments if the amount of the payment to the intermediary exceeds the intermediary's costs. The compensation that Pioneer pays to financial intermediaries is discussed in more detail in the fund's statement of additional information. Your intermediary may charge you additional fees or commissions other than those disclosed in this prospectus. Intermediaries may categorize and disclose these arrangements differently than in the discussion above and in the statement of additional information. You can ask your financial intermediary about any payments it receives from Pioneer or the Pioneer funds, as well as about fees and/or commissions it charges. Pioneer and its affiliates may have other relationships with your financial intermediary relating to the provision of services to the Pioneer funds, such as providing omnibus account services or effecting portfolio transactions for the Pioneer funds. If your intermediary provides these services, Pioneer or the Pioneer funds may compensate the intermediary for these services. In addition, your intermediary may have other relationships with Pioneer or its affiliates that are not related to the Pioneer funds. Initial Sales Charge (Class A Shares Only) You pay the offering price (the net asset value per share plus any initial sales charge) when you buy Class A shares unless you qualify to purchase shares at net asset value. You pay a lower sales charge as the size of your investment increases. You do not pay a sales charge when you reinvest dividends or capital gain distributions paid by a Pioneer Fund.
Sales Charges for Class A Shares ----------------------------------------------------------------------------------------- Sales charge as % of ----------------------------------------------------------------------------------------- Amount of Purchase Offering price Net amount invested ----------------------------------------------------------------------------------------- Less than $50,000 5.75 6.10 ----------------------------------------------------------------------------------------- $50,000 but less than $100,000 4.50 4.71 ----------------------------------------------------------------------------------------- $100,000 but less than $250,000 3.50 3.63 ----------------------------------------------------------------------------------------- $250,000 but less than $500,000 2.50 2.56 ----------------------------------------------------------------------------------------- $500,000 or more -0- -0- -----------------------------------------------------------------------------------------
The dollar amount of the sales charge is the difference between the offering price of the shares purchased (based on the applicable sales charge in the table) and the net asset value of those shares. Since the offering price is calculated to two decimal places using standard rounding methodology, the dollar amount of the sales charge as a percentage of the offering price and of the net amount invested for any particular purchase of Pioneer Fund shares may be higher or lower due to rounding. Reduced sales charges You may qualify for a reduced Class A sales charge if you own or are purchasing shares of Pioneer mutual funds. The investment levels required to obtain a reduced sales charge are commonly referred to as "breakpoints." Pioneer offers two principal means of taking advantage of breakpoints in sales charges for aggregate purchases of Class A shares of the Pioneer funds over time if: o The amount of shares you own of the Pioneer funds plus the amount you are investing now is at least $50,000 (Rights of accumulation) o You plan to invest at least $50,000 over the next 13 months (Letter of intent) 41 Rights of accumulation If you qualify for rights of accumulation, your sales charge will be based on the combined value (at the current offering price) of all your Pioneer mutual fund shares, the shares of your spouse and the shares of any children under the age of 21. Letter of intent You can use a letter of intent to qualify for reduced sales charges in two situations: o If you plan to invest at least $50,000 (excluding any reinvestment of dividends and capital gain distributions) in a Pioneer Fund's Class A shares during the next 13 months o If you include in your letter of intent the value (at the current offering price) of all of your Class A shares of a Pioneer Fund and Class A or Class C shares of all other Pioneer mutual fund shares held of record in the amount used to determine the applicable sales charge for Pioneer Fund shares you plan to buy Completing a letter of intent does not obligate you to purchase additional shares, but if you do not buy enough shares to qualify for the projected level of sales charges by the end of the 13-month period (or when you sell your shares, if earlier), the distributor will recalculate your sales charge. You must pay the additional sales charge within 20 days after you are notified of the recalculation or it will be deducted from your account (or your sale proceeds). Any share class for which no sales charge is paid cannot be included under the letter of intent. For more information regarding letters of intent, please contact your investment professional or obtain and read the statement of additional information. Qualifying for a reduced Class A sales charge In calculating your total account value in order to determine whether you have met sales charge breakpoints, you can include your Pioneer mutual fund shares, those of your spouse and the shares of any children under the age of 21. Pioneer will use each fund's current offering price to calculate your total account value. Certain trustees and fiduciaries may also qualify for a reduced sales charge. To receive a reduced sales charge, you or your investment professional must, at the time of purchase, notify the distributor of your eligibility. In order to verify your eligibility for a discount, you may need to provide your investment professional or the fund with information or records, such as account numbers or statements, regarding shares of the fund or other Pioneer mutual funds held in all accounts by you, your spouse or children under the age of 21 with that investment professional or with any other financial intermediary. Eligible accounts may include joint accounts, retirement plan accounts, such as IRA and 401k accounts, and custodial accounts, such as ESA, UGMA and UTMA accounts. It is your responsibility to confirm that your investment professional has notified the distributor of your eligibility for a reduced sales charge at the time of sale. If you or your investment professional do not notify the distributor of your eligibility, you will risk losing the benefits of a reduced sales charge. For this purpose, Pioneer mutual funds include any fund for which the distributor is principal underwriter and, at the distributor's discretion, may include funds organized outside the U.S. and managed by Pioneer or an affiliate. You can locate information regarding the reduction or waiver of sales charges, in a clear and prominent format and free of charge, on Pioneer's website at www.pioneerinvestments.com. The website includes hyperlinks that facilitate access to this information. Class A purchases at a reduced initial sales charge or net asset value are also available to: Group plans if the sponsoring organization: o recommends purchases of Pioneer mutual funds to, o permits solicitation of, or o facilitates purchases by its employees, members or participants. Class A purchases at net asset value You may purchase Class A shares at net asset value (without a sales charge) as follows. If you believe you qualify for any of the Class A sales charge waivers discussed below, contact your investment professional or the distributor. You are required to provide written confirmation of your eligibility. You may not resell these shares except to or on behalf of the fund. Investments of $500,000 or more and certain retirement plans. You do not pay a sales charge when you purchase Class A shares if you are investing $500,000 or more, are a participant in an employer-sponsored retirement plan with at least $500,000 in total plan assets or are a participant in certain employer-sponsored retirement plans with accounts established with Pioneer on or before March 31, 2004 with 100 or more eligible employees or 42 at least $500,000 in total plan assets. However, you may pay a contingent deferred sales charge if you sell your Class A shares within 12 months of purchase. The sales charge is equal to 1% of your investment or your sale proceeds, whichever is less. Class A purchases at net asset value are available to: o Current or former trustees and officers of a Pioneer Fund; o Partners and employees of legal counsel to the Pioneer Funds (at the time of initial share purchase); o Directors, officers, employees or sales representatives of Pioneer and its affiliates (at the time of initial share purchase); o Directors, officers, employees or sales representatives of any subadviser or a predecessor adviser (or their affiliates) to any investment company for which Pioneer serves as investment adviser (at the time of initial share purchase); o Officers, partners, employees or registered representatives of broker-dealers (at the time of initial share purchase) which have entered into sales agreements with the distributor; o Employees of Regions Financial Corporation and its affiliates (at the time of initial share purchase); o Members of the immediate families of any of the persons above; o Any trust, custodian, pension, profit sharing or other benefit plan of the foregoing persons; o Insurance company separate accounts; o Certain wrap accounts for the benefit of clients of investment professionals or other financial intermediaries adhering to standards established by the distributor; o Other funds and accounts for which Pioneer or any of its affiliates serves as investment adviser or manager; o Investors in connection with certain reorganization, liquidation or acquisition transactions involving other investment companies or personal holding companies; o Certain unit investment trusts; o Participants in employer-sponsored retirement plans with at least $500,000 in total plan assets; o Participants in employer-sponsored retirement plans with accounts established with Pioneer on or before March 31, 2004 with 100 or more eligible employees or at least $500,000 in total plan assets; o Participants in Optional Retirement Programs if (i) your employer has authorized a limited number of mutual funds to participate in the program, (ii) all participating mutual funds sell shares to program participants at net asset value, (iii) your employer has agreed in writing to facilitate investment in Pioneer mutual funds by program participants and (iv) the program provides for a matching contribution for each participant contribution; o Participants in an employer-sponsored 403(b) plan or employer-sponsored 457 plan if (i) your employer has made special arrangements for your plan to operate as a group through a single broker, dealer or financial intermediary and (ii) all participants in the plan who purchase shares of a Pioneer mutual fund do so through a single broker, dealer or other financial intermediary designated by your employer; o Individuals receiving a distribution consisting of Class Y shares of a Pioneer fund from a trust, fiduciary, custodial or other similar account who purchase Class A shares of the same Pioneer fund within 90 days of the date of the distribution; o Investors purchasing shares pursuant to the reinstatement privilege applicable to Class A shares; and o Shareholders of record (i.e., shareholders whose shares are not held in the name of a broker or an omnibus account) on the date of the reorganization of a predecessor Safeco fund into a corresponding Pioneer fund, shareholders who owned shares in the name of an omnibus account provider on that date that agrees with the fund to distinguish beneficial holders in the same manner, and retirement plans with assets invested in the predecessor Safeco fund on that date. In addition, Class A shares may be purchased at net asset value through certain mutual fund programs sponsored by qualified intermediaries, such as broker-dealers and investment advisers. In each case, the intermediary has entered into an agreement with Pioneer to include the Pioneer funds in their program without the imposition of a sales charge. The intermediary provides investors participating in the program with additional services, including advisory, asset allocation, recordkeeping or other services. You should ask your investment firm if it offers and you are eligible to participate in such a mutual fund program and whether participation in the program is consistent with your investment goals. The intermediaries sponsoring or participating in these mutual fund programs also may offer their clients other classes of shares of the funds and investors may receive different levels of services or pay different fees depending upon the 43 class of shares included in the program. Investors should consider carefully any separate transaction and other fees charged by these programs in connection with investing in each available share class before selecting a share class. Such mutual fund programs include certain self-directed brokerage services accounts held through qualified intermediaries that may or may not charge participating investors transaction fees. Contingent deferred sales charges (CDSCs) Class A shares Purchases of Class A shares of $500,000 or more, or by participants in a group plan which were not subject to an initial sales charge, may be subject to a contingent deferred sales charge upon redemption. A contingent deferred sales charge is payable to the distributor in the event of a share redemption within 12 months following the share purchase at the rate of 1% of the lesser of the value of the shares redeemed (exclusive of reinvested dividend and capital gain distributions) or the total cost of such shares. However, the contingent deferred sales charge is waived for redemptions of Class A shares purchased by an employer-sponsored retirement plan that has at least $500,000 in total plan assets (or that has 1,000 or more eligible employees for plans with accounts established with Pioneer on or before March 31, 2004). Class C shares You buy Class C shares at net asset value per share without paying an initial sales charge. However, if you sell your Class C shares within one year of purchase, upon redemption you will pay the distributor a contingent deferred sales charge of 1% of the current market value or the original cost of the shares you are selling, whichever is less. Paying the contingent deferred sales charge (CDSC) Several rules apply for calculating CDSCs so that you pay the lowest possible CDSC. o The CDSC is calculated on the current market value or the original cost of the shares you are selling, whichever is less o You do not pay a CDSC on reinvested dividends or distributions Shares purchased prior to December 1, 2004 remain subject to the contingent deferred sales charges in effect at the time you purchased those shares. Shares purchased as part of an exchange or acquired as a result of the shares you are selling, whichever is less o You do not pay a CDSC on reinvested dividends or distributions o If you sell only some of your shares, the transfer agent will first sell your shares that are not subject to any CDSC and then the shares that you have owned the longest o You may qualify for a waiver of the CDSC normally charged. See "Waiver or reduction of contingent deferred sales charges" Waiver or reduction of contingent deferred sales charges It is your responsibility to confirm that your investment professional has notified the distributor of your eligibility for a reduced sales charge at the time of sale. If you or your investment professional do not notify the distributor of your eligibility, you will risk losing the benefits of a reduced sales charge. The distributor may waive or reduce the CDSC for Class A shares that are subject to a CDSC or for Class C shares if: o The distribution results from the death of all registered account owners or a participant in an employer-sponsored plan. For UGMAs, UTMAs and trust accounts, the waiver applies only upon the death of all beneficial owners; o You become disabled (within the meaning of Section 72 of the Internal Revenue Code) after the purchase of the shares being sold. For UGMAs, UTMAs and trust accounts, the waiver only applies upon the disability of all beneficial owners; o The distribution is made in connection with limited automatic redemptions as described in "Systematic withdrawal plans" (limited in any year to 10% of the value of the account in the fund at the time the withdrawal plan is established); o The distribution is from any type of IRA, 403(b) or employer-sponsored plan described under Section 401(a) or 457 of the Internal Revenue Code and, in connection with the distribution, one of the following applies: - It is part of a series of substantially equal periodic payments made over the life expectancy of the participant or the joint life expectancy of the participant and his or her beneficiary (limited in any year to 10% of the value of the participant's account at the time the distribution amount is established); - It is a required minimum distribution due to the attainment of age 70 1/2, in which case the distribution amount may exceed 10% (based solely on total plan assets held in Pioneer mutual funds); 44 - It is rolled over to or reinvested in another Pioneer mutual fund in the same class of shares, which will be subject to the CDSC of the shares originally held; or - It is in the form of a loan to a participant in a plan that permits loans (each repayment applied to the purchase of shares will be subject to a CDSC as though a new purchase); o The distribution is to a participant in an employer-sponsored retirement plan described under Section 401(a) of the Internal Revenue Code or to a participant in an employer-sponsored 403(b) plan or employer-sponsored 457 plan if (i) your employer has made special arrangements for your plan to operate as a group through a single broker, dealer or financial intermediary and (ii) all participants in the plan who purchase shares of a Pioneer mutual fund do so through a single broker, dealer or other financial intermediary designated by your employer and is or is in connection with: - A return of excess employee deferrals or contributions; - A qualifying hardship distribution as described in the Internal Revenue Code; - Due to retirement or termination of employment; - From a qualified defined contribution plan and represents a participant's directed transfer, provided that this privilege has been preauthorized through a prior agreement with the distributor regarding participant directed transfers; o The distribution is made pursuant to the fund's right to liquidate or involuntarily redeem shares in a shareholder's account; o The distribution is made to pay an account's advisory or custodial fees; or o The distributor does not pay the selling broker a commission normally paid at the time of the sale. Buying, exchanging and selling shares Opening your account You may open an account by completing an account application and sending it to the transfer agent by mail or by fax. Please call the transfer agent to obtain an account application. Certain types of accounts, such as retirement accounts, have separate applications. Use your account application to select options and privileges for your account. You can change your selections at any time by sending a completed account options form to the transfer agent. You may be required to obtain a signature guarantee to make certain changes to an existing account. Call or write to the transfer agent for account applications, account options forms and other account information: Pioneer Investment Management Shareholder Services, Inc. P.O. Box 55014 Boston, Massachusetts 02205-5014 Telephone 1-800-225-6292 Please note that there may be a delay in receipt by the transfer agent of applications submitted by regular mail to a post office address. Each Pioneer Fund is generally available for purchase in the United States, Puerto Rico, Guam, American Samoa and the U.S. Virgin Islands. Except to the extent otherwise permitted by the Pioneer Funds' distributor, the Pioneer Funds will only accept accounts from U.S. citizens with a U.S. address (including an APO or FPO address) or resident aliens with a U.S. address (including an APO or FPO address) and a U.S. tax payer identification number. Identity verification To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account. When you open an account, you will need to supply your name, address, date of birth, and other information that will allow the fund to identify you. A Pioneer Fund may close your account if we cannot adequately verify your identity. The redemption price will be the net asset value on the date of redemption. Investing through financial intermediaries and retirement plans If you invest in a Pioneer Fund through your financial intermediary or through a retirement plan, the options and services available to you may be different from those discussed in this Information Statement / Prospectus. Shareholders investing through financial intermediaries, 45 programs sponsored by financial intermediaries and retirement plans may only purchase funds and classes of shares that are available. When you invest through an account that is not in your name, you generally may buy and sell shares and complete other transactions only through the account. Ask your investment professional or financial intermediary for more information. Additional conditions may apply to your investment in a Pioneer Fund, and the investment professional or intermediary may charge you a transaction-based, administrative or other fee for its services. These conditions and fees are in addition to those imposed by the Pioneer Fund and its affiliates. You should ask your investment professional or financial intermediary about its services and any applicable fees. Share prices for transactions If you place an order to purchase, exchange or sell shares with the transfer agent or an authorized agent by the close of regular trading on the New York Stock Exchange (usually 4:00 p.m. Eastern time), the share price for your transaction will be based on the net asset value determined as of the close of regular trading on the New York Stock Exchange on that day (plus or minus any applicable sales charges). If your order is placed with the transfer agent or an authorized agent after the close of regular trading on the New York Stock Exchange, or your order is not in good order, the share price will be based on the net asset value next determined after your order is received in good order by the fund or authorized agent. The authorized agent is responsible for transmitting your order to the fund in a timely manner. Good order means that: o You have provided adequate instructions o There are no outstanding claims against your account o There are no transaction limitations on your account o If you have any fund share certificates, you submit them and they are signed by each record owner exactly as the shares are registered o Your request includes a signature guarantee if you: - Are selling over $100,000 or exchanging over $500,000 worth of shares - Changed your account registration or address within the last 30 days - Instruct the transfer agent to mail the check to an address different from the one on your account - Want the check paid to someone other than the account's record owner(s) - Are transferring the sale proceeds to a Pioneer mutual fund account with a different registration Transaction limitations Your transactions are subject to certain limitations, including the limitation on the purchase of a Pioneer Fund's shares within 30 calendar days of a redemption. See "Excessive trading." Buying, exchanging and selling shares Buying You may buy a Pioneer Fund's shares from any financial intermediary that has a sales agreement or other arrangement with the distributor. You can buy shares at net asset value per share plus any applicable sales charge. The distributor may reject any order until it has confirmed the order in writing and received payment. Normally, your financial intermediary will send your purchase request to the Pioneer Fund's transfer agent. Consult your investment professional for more information. Your investment firm receives a commission from the distributor, and may receive additional compensation from Pioneer, for your purchase of shares of a Pioneer Fund. Minimum investment amounts Class A and Class C shares Your initial investment must be at least $1,000. Additional investments must be at least $100 for Class A shares and $500 for Class C shares. You may qualify for lower initial or subsequent investment minimums if you are opening a retirement plan account, establishing an automatic investment plan or placing your trade through your investment firm. A Pioneer Fund may waive the initial or subsequent investment minimums. Minimum investment amounts may be waived for, among other things, share purchases made through certain mutual fund programs (e.g., asset based fee program accounts) sponsored by qualified intermediaries, such as broker-dealers and investment advisers, that have entered into an agreement with Pioneer. 46 Class Y shares Your initial investment in Class Y shares must be at least $5 million. This amount may be invested in one or more of the Pioneer mutual funds that currently offer Class Y shares. There is no minimum additional investment amount. A Pioneer Fund may waive the initial investment amount. Waiver of the minimum investment amount for Class Y The fund will accept an initial investment of less than $5 million if: (a) The investment is made by a trust company or bank trust department which is initially investing at least $1 million in any of the Pioneer mutual funds and, at the time of the purchase, such assets are held in a fiduciary, advisory, custodial or similar capacity over which the trust company or bank trust department has full or shared investment discretion; or (b) The investment is at least $1 million in any of the Pioneer mutual funds and the purchaser is an insurance company separate account; or (c) The account is not represented by a broker-dealer and the investment is made by (1) an ERISA-qualified retirement plan that meets the requirements of Section 401 of the Internal Revenue Code, (2) an employer-sponsored retirement plan that meets the requirements of Sections 403 or 457 of the Internal Revenue Code, (3) a private foundation that meets the requirements of Section 501(c)(3) of the Internal Revenue Code or (4) an endowment or other organization that meets the requirements of Section 509(a)(1) of the Internal Revenue Code; or (d) The investment is made by an employer-sponsored retirement plan established for the benefit of (1) employees of Pioneer or its affiliates, or (2) employees or the affiliates of broker-dealers who have a Class Y shares sales agreement with the distributor; or (e) The investment is made through certain mutual fund programs sponsored by qualified intermediaries, such as broker-dealers and investment advisers. In each case, the intermediary has entered into an agreement with Pioneer to include Class Y shares of the Pioneer mutual funds in their program. The intermediary provides investors participating in the program with additional services, including advisory, asset allocation, recordkeeping or other services. You should ask your investment firm if it offers and you are eligible to participate in such a mutual fund program and whether participation in the program is consistent with your investment goals. The intermediaries sponsoring or participating in these mutual fund programs may also offer their clients other classes of shares of the funds and investors may receive different levels of services or pay different fees depending upon the class of shares included in the program. Investors should consider carefully any separate transaction and other fees charged by these programs in connection with investing in each available share class before selecting a share class; or (f) The investment is made by another Pioneer fund The fund reserves the right to waive the initial investment minimum in other circumstances. Maximum purchase amounts Purchases of shares of a Pioneer Fund are limited to $499,999 for Class C shares. This limit is applied on a per transaction basis. Class A and Class Y shares are not subject to a maximum purchase amount. Retirement plan accounts You can purchase shares of a Pioneer Fund through tax-deferred retirement plans for individuals, businesses and tax-exempt organizations. Your initial investment for most types of retirement plan accounts must be at least $250. Additional investments for most types of retirement plans must be at least $100. You may not use the account application accompanying this prospectus to establish a Pioneer retirement plan. You can obtain retirement plan applications from your investment firm or by calling the Retirement Plans Department at 1-800-622-0176. How to buy shares Through your investment firm Normally, your investment firm will send your purchase request to the Pioneer Funds' distributor and/or transfer agent. Consult your investment professional for more information. Your investment firm receives a commission from the distributor, and may receive additional compensation from Pioneer, for your purchase of shares of a Pioneer Fund. 47 By phone or online You can use the telephone or online purchase privilege if you have an existing non-retirement account. Certain IRAs can use the telephone purchase privilege. If your account is eligible, you can purchase additional fund shares by phone or online if: o You established your bank account of record at least 30 days ago o Your bank information has not changed for at least 30 days o You are not purchasing more than $100,000 worth of shares per account per day o You can provide the proper account identification information When you request a telephone or online purchase, the transfer agent will electronically debit the amount of the purchase from your bank account of record. The transfer agent will purchase shares of the Pioneer Fund for the amount of the debit at the offering price determined after the transfer agent receives your telephone or online purchase instruction and good funds. It usually takes three business days for the transfer agent to receive notification from your bank that good funds are available in the amount of your investment. In writing, by mail You can purchase shares of a Pioneer Fund for an existing fund account by mailing a check to the transfer agent. Make your check payable to the Pioneer Fund. Neither initial nor subsequent investments should be made by third party check, travelers check, or credit card check. Your check must be in U.S. dollars and drawn on a U.S. bank. Include in your purchase request the Pioneer Fund's name, the account number and the name or names in the account registration. By wire (Class Y shares only) If you have an existing (Class Y shares only) account, you may wire funds to purchase shares. Note, however, that: o State Street Bank must receive your wire no later than 11:00 a.m. Eastern time on the business day after the Pioneer Fund receives your request to purchase shares o If State Street Bank does not receive your wire by 11:00 a.m. Eastern time on the next business day, your transaction will be canceled at your expense and risk o Wire transfers normally take two or more hours to complete and a fee may be charged by the sending bank o Wire transfers may be restricted on holidays and at certain other times Instruct your bank to wire funds to: Receiving Bank: State Street Bank and Trust Company 225 Franklin Street Boston, MA 02101 ABA Routing No. 011000028 For further credit to: Shareholder Name Existing Pioneer Account No. [Name of Pioneer Fund]
The transfer agent must receive your account application before you send your initial check or federal funds wire. In addition, you must provide a bank wire address of record when you establish your account. Exchanging You may, under certain circumstances, exchange your shares for shares of the same class of another Pioneer mutual fund. Your exchange request must be for at least $1,000. Each Pioneer Fund allows you to exchange your shares at net asset value without charging you either an initial or contingent deferred sales charge at the time of the exchange. Shares you acquire as part of an exchange will continue to be subject to any contingent deferred sales charge that applies to the shares you originally purchased. When you ultimately sell your shares, the date of your original purchase will determine your contingent deferred sales charge. Before you request an exchange, consider each fund's investment objective and policies as described in the fund's prospectus. You generally will have to pay income taxes on an exchange. 48 Same-fund exchange privilege Certain shareholders may be eligible to exchange their shares for the Pioneer Fund's Class Y shares. If eligible, no sales charges or other charges will apply to any such exchange. Generally, shareholders will not recognize a gain or loss for federal income tax purposes upon such an exchange. Investors should contact their financial intermediary to learn more about the details of this privilege. How to exchange shares Through your investment firm Normally, your investment firm will send your exchange request to the Pioneer Fund's transfer agent. Consult your investment professional for more information about exchanging your shares. By phone or online After you establish an eligible fund account, you can exchange shares of a Pioneer Fund by phone or online if: o You are exchanging into an existing account or using the exchange to establish a new account, provided the new account has a registration identical to the original account o The fund into which you are exchanging offers the same class of shares o You are not exchanging more than $500,000 worth of shares per account per day o You can provide the proper account identification information In writing, by mail or by fax You can exchange shares of a Pioneer Fund by mailing or faxing a letter of instruction to the transfer agent. You can exchange shares of a Pioneer Fund directly through the Pioneer Fund only if your account is registered in your name. However, you may not fax an exchange request for more than $500,000. Include in your letter: o The name and signature of all registered owners o A signature guarantee for each registered owner if the amount of the exchange is more than $500,000 o The name of the Pioneer Fund out of which you are exchanging and the name of the fund into which you are exchanging o The class of shares you are exchanging o The dollar amount or number of shares you are exchanging Selling Your shares will be sold at the share price (net asset value less any applicable sales charge) next calculated after the Pioneer Fund or its authorized agent, such as a broker-dealer, receives your request in good order. If a signature guarantee is required, you must submit your request in writing. If the shares you are selling are subject to a deferred sales charge, it will be deducted from the sale proceeds. Each Pioneer Fund generally will send your sale proceeds by check, bank wire or electronic funds transfer. Normally you will be paid within seven days. If you recently sent a check to purchase the shares being sold, the Pioneer Fund may delay payment of the sale proceeds until your check has cleared. This may take up to 10 calendar days from the purchase date. If you are selling shares from a non-retirement account or certain IRAs, you may use any of the methods described below. If you are selling shares from a retirement account other than an IRA, you must make your request in writing. You generally will have to pay income taxes on a sale. If you must use a written request to exchange or sell your shares and your account is registered in the name of a corporation or other fiduciary you must include the name of an authorized person and a certified copy of a current corporate resolution, certificate of incumbency or similar legal document showing that the named individual is authorized to act on behalf of the record owner. How to sell shares Through your investment firm Normally, your investment firm will send your request to sell shares to the Pioneer Funds' transfer agent. Consult your investment professional for more information. Each Pioneer Fund has authorized the distributor to act as its agent in the repurchase of fund shares from qualified investment firms. Each Pioneer Fund reserves the right to terminate this procedure at any time. 49 By phone or online If you have an eligible non-retirement account, you may sell up to $100,000 per account per day by phone or online. You may sell shares of a Pioneer Fund held in a retirement plan account by phone only if your account is an eligible IRA (tax penalties may apply). You may not sell your shares by phone or online if you have changed your address (for checks) or your bank information (for wires and transfers) in the last 30 days. You may receive your sale proceeds: o By check, provided the check is made payable exactly as your account is registered o By bank wire or by electronic funds transfer, provided the sale proceeds are being sent to your bank address of record For Class Y shares, shareholders may sell up to $5 million per account per day if the proceeds are directed to your bank account of record ($100,000 per account per day if the proceeds are not directed to your bank account of record). In writing, by mail or by fax You can sell some or all of your shares of a Pioneer Fund by writing directly to the Pioneer Fund only if your account is registered in your name. Include in your request your name, the name of the Pioneer Fund, your fund account number, the class of shares to be sold, the dollar amount or number of shares to be sold and any other applicable requirements as described below. The transfer agent will send the sale proceeds to your address of record unless you provide other instructions. Your request must be signed by all registered owners and be in good order. The transfer agent will not process your request until it is received in good order. You may sell up to $100,000 per account per day by fax. How to contact Pioneer By phone For information or to request a telephone transaction between 8:00 a.m. and 7:00 p.m. (Eastern time) by speaking with a shareholder services representative call 1-800-225-6292 To request a transaction using FactFone(SM) call 1-800-225-4321 By mail Send your written instructions to: Pioneer Investment Management Shareholder Services, Inc. P.O. Box 55014 Boston, Massachusetts 02205-5014 Pioneer website www.pioneerinvestments.com By fax Fax your exchange and sale requests to: 1-800-225-4240 Account options See the account application form for more details on each of the following services or call the transfer agent for details and availability. Telephone transaction privileges If your account is registered in your name, you can buy, exchange or sell shares of the Pioneer Funds by telephone. If you do not want your account to have telephone transaction privileges, you must indicate that choice on your account application or by writing to the transfer agent. When you request a telephone transaction the transfer agent will try to confirm that the request is genuine. The transfer agent records the call, requires the caller to provide validating information for the account and sends you a written confirmation. Each Pioneer Fund may implement other confirmation procedures from time to time. Different procedures may apply if you have a non-U.S. account or if 50 your account is registered in the name of an institution, broker-dealer or other third party. If a Pioneer Fund's confirmation procedures are followed, neither the fund nor its agents will bear any liability for these transactions. Online transaction privileges If your account is registered in your name, you may be able to buy, exchange or sell fund shares online. Your investment firm may also be able to buy, exchange or sell your fund shares online. To establish online transaction privileges: o For new accounts, complete the online section of the account application o For existing accounts, complete an account options form, write to the transfer agent or complete the online authorization screen at www.pioneerinvestments.com. To use online transactions, you must read and agree to the terms of an online transaction agreement available on the Pioneer website. When you or your investment firm requests an online transaction the transfer agent electronically records the transaction, requires an authorizing password and sends a written confirmation. Each Pioneer Fund may implement other procedures from time to time. Different procedures may apply if you have a non-U.S. account or if your account is registered in the name of an institution, broker-dealer or other third party. You may not be able to use the online transaction privilege for certain types of accounts, including most retirement accounts. Automatic investment plans You can make regular periodic investments in a Pioneer Fund by setting up monthly bank drafts, government allotments, payroll deductions, a Pioneer Investomatic Plan and other similar automatic investment plans. Automatic investments may be made only through U.S. banks. You may use an automatic investment plan to establish a Class A share account with a small initial investment. If you have a Class C share account and your balance is at least $1,000, you may establish an automatic investment plan. Pioneer Investomatic Plan If you establish a Pioneer Investomatic Plan, the transfer agent will make a periodic investment in shares of a Pioneer Fund by means of a preauthorized electronic funds transfer from your bank account. Your plan investments are voluntary. You may discontinue your plan at any time or change the plan's dollar amount, frequency or investment date by calling or writing to the transfer agent. You should allow up to 30 days for the transfer agent to establish your plan. Automatic exchanges You can automatically exchange your shares of a Pioneer Fund for shares of the same class of another Pioneer mutual fund. The automatic exchange will begin on the day you select when you complete the appropriate section of your account application or an account options form. In order to establish automatic exchange: o You must select exchanges on a monthly or quarterly basis o Both the originating and receiving accounts must have identical registrations o The originating account must have a minimum balance of $5,000 You may have to pay income taxes on an exchange. Distribution options Each Pioneer Fund offers three distribution options. Any shares of a Pioneer Fund you buy by reinvesting distributions will be priced at the applicable net asset value per share. (1) Unless you indicate another option on your account application, any dividends and capital gain distributions paid to you by a Pioneer Fund will automatically be invested in additional fund shares. (2) You may elect to have the amount of any dividends paid to you in cash and any capital gain distributions reinvested in additional shares. (3) You may elect to have the full amount of any dividends and/or capital gain distributions paid to you in cash. Options (2) and (3) are not available to retirement plan accounts or accounts with a current value of less than $500. If you are under 59 1/2, taxes and tax penalties may apply. If your distribution check is returned to the transfer agent or you do not cash the check for six months or more, the transfer agent may reinvest the amount of the check in your account and automatically change the distribution option on your account to option (1) until you request a different option in writing. If the amount of a distribution check would be less than $10, the Pioneer Fund may reinvest the 51 amount in additional shares of the fund instead of sending a check. Additional shares of the Pioneer Fund will be purchased at the then-current net asset value. Directed dividends You can invest the dividends paid by one of your Pioneer mutual fund accounts in a second Pioneer mutual fund account. The value of your second account must be at least $1,000. You may direct the investment of any amount of dividends. There are no fees or charges for directed dividends. If you have a retirement plan account, you may only direct dividends to accounts with identical registrations. Systematic withdrawal plans When you establish a systematic withdrawal plan for your account, the transfer agent will sell the number of fund shares you specify on a periodic basis and the proceeds will be paid to you or to any person you select. You must obtain a signature guarantee to direct payments to another person after you have established your systematic withdrawal plan. Payments can be made either by check or by electronic transfer to a U.S. bank account you designate. To establish a systematic withdrawal plan: o Your account must have a total value of at least $10,000 when you establish your plan o You must request a periodic withdrawal of at least $50 o You may not request a periodic withdrawal of more than 10% of the value of any Class C share account (valued at the time the plan is implemented) These requirements do not apply to scheduled (Internal Revenue Code Section 72(t) election) or mandatory (required minimum distribution) withdrawals from IRAs and certain retirement plans. Systematic sales of fund shares may be taxable transactions for you. While you are making systematic withdrawals from your account, you may pay unnecessary initial sales charges on additional purchases of Class A shares or contingent deferred sales charges. Direct deposit If you elect to take dividends or dividends and capital gain distributions in cash, or if you establish a systematic withdrawal plan, you may choose to have those cash payments deposited directly into your savings, checking or NOW bank account. Voluntary tax withholding You may have the transfer agent withhold 28% of the dividends and capital gain distributions paid from your fund account (before any reinvestment) and forward the amount withheld to the Internal Revenue Service as a credit against your federal income taxes. Voluntary tax withholding is not available for retirement plan accounts or for accounts subject to backup withholding. Shareholder services and policies Excessive trading Frequent trading into and out of a Pioneer Fund can disrupt portfolio management strategies, harm the Pioneer Fund's performance by forcing the fund to hold excess cash or to liquidate certain portfolio securities prematurely and increase expenses for all investors, including long-term investors who do not generate these costs. An investor may use short-term trading as a strategy, for example, if the investor believes that the valuation of the Pioneer Fund's portfolio securities for purposes of calculating its net asset value does not fully reflect the then-current fair market value of those holdings. Each Pioneer Fund discourages, and does not take any intentional action to accommodate, excessive and short-term trading practices, such as market timing. Although there is no generally applied standard in the marketplace as to what level of trading activity is excessive, we may consider trading in a Pioneer Fund's shares to be excessive for a variety of reasons, such as if: o You sell shares within a short period of time after the shares were purchased; o You make two or more purchases and redemptions within a short period of time; o You enter into a series of transactions that indicate a timing pattern or strategy; or o We reasonably believe that you have engaged in such practices in connection with other mutual funds. Each Pioneer Fund's Board of Trustees has adopted policies and procedures with respect to frequent purchases and redemptions of fund shares by investors in the Pioneer Fund. Pursuant to these policies and procedures, we monitor selected trades on a daily basis in an effort to detect excessive short-term trading. If we determine that an investor or a client of a broker or other intermediary has engaged in excessive short-term trading that we believe may be harmful to a Pioneer Fund, we will ask the investor, broker or other intermediary to 52 cease such activity and we will refuse to process purchase orders (including purchases by exchange) of such investor, broker, other intermediary or accounts that we believe are under their control. In determining whether to take such actions, we seek to act in a manner that is consistent with the best interests of the shareholders of the Pioneer Fund. While we use our reasonable efforts to detect excessive trading activity, there can be no assurance that our efforts will be successful or that market timers will not employ tactics designed to evade detection. If we are not successful, your return from an investment in a Pioneer Fund may be adversely affected. Frequently, shares of a Pioneer Fund are held through omnibus accounts maintained by financial intermediaries such as brokers and retirement plan administrators, where the holdings of multiple shareholders, such as all the clients of a particular broker or other intermediary, are aggregated. Our ability to monitor trading practices by investors purchasing shares through omnibus accounts may be limited and dependent upon the cooperation of the broker or other intermediary in taking steps to limit this type of activity. Each Pioneer Fund may reject a purchase or exchange order before its acceptance or the issuance of shares. Each Pioneer Fund may also restrict additional purchases or exchanges in an account. Each of these steps may be taken for any transaction, for any reason, without prior notice, including transactions that the Pioneer Fund believes are requested on behalf of market timers. Each Pioneer Fund reserves the right to reject any purchase or exchange request by any investor or financial institution if the Pioneer Fund believes that any combination of trading activity in the account or related accounts is potentially disruptive to the fund. A prospective investor whose purchase or exchange order is rejected will not achieve the investment results, whether gain or loss, that would have been realized if the order had been accepted and an investment made in the fund. A Pioneer Fund and its shareholders do not incur any gain or loss as a result of a rejected order. Each Pioneer Fund may impose further restrictions on trading activities by market timers in the future. To limit the negative effects of excessive trading, each Pioneer Fund has adopted the following restriction on investor transactions. If an investor redeems $5,000 or more (including redemptions that are a part of an exchange transaction) from a Pioneer Fund, that investor shall be prevented (or "blocked") from purchasing shares of the Pioneer Fund (including purchases that are a part of an exchange transaction) for 30 calendar days after the redemption. This policy does not apply to systematic purchase or withdrawal plan transactions, transactions made through employer-sponsored retirement plans described under Section 401(a), 403(b) or 457 of the Internal Revenue Code or employee benefit plans, scheduled (Internal Revenue Code Section 72(t) election) or mandatory (required minimum distribution) withdrawals from IRAs, rebalancing transactions made through certain asset allocation or "wrap" programs, transactions by insurance company separate accounts or transactions by other funds that invest in the Pioneer Fund. This policy does not apply to purchase or redemption transactions of less than $5,000 or to Pioneer Cash Reserves Fund or Pioneer Multi-Asset Ultrashort Income Fund. We rely on financial intermediaries that maintain omnibus accounts to apply to their customers either the Pioneer Funds' policy described above or the intermediaries' own policies or restrictions designed to limit excessive trading of shares of a Pioneer Fund. However, we do not impose this policy at the omnibus account level. Purchases pursuant to the reinstatement privilege (for Class A shares) are subject to this policy. Purchases in kind You may use securities you own to purchase shares of a Pioneer Fund provided that Pioneer, in its sole discretion, determines that the securities are consistent with the Pioneer Fund's objective and policies and their acquisition is in the best interests of the Pioneer Fund. If the fund accepts your securities, they will be valued for purposes of determining the number of shares of the Pioneer Fund to be issued to you in the same way the fund will value the securities for purposes of determining its net asset value. For federal income tax purposes, you may be taxed in the same manner as if you sold the securities that you use to purchase shares of the Pioneer Fund for cash in an amount equal to the value of the shares of the Pioneer Fund that you purchase. Your broker may also impose a fee in connection with processing your purchase of shares of a Pioneer Fund with securities. Reinstatement privilege (Class A shares) If you recently sold all or part of your Class A shares, you may be able to reinvest all or part of your sale proceeds without a sales charge in Class A shares of any Pioneer mutual fund. To qualify for reinstatement: o You must send a written request to the transfer agent no more than 90 days after selling your shares and o The registration of the account in which you reinvest your sale proceeds must be identical to the registration of the account from which you sold your shares. Purchases pursuant to the reinstatement privilege are subject to limitations on investor transactions, including the limitation on the purchase of a Pioneer Fund's shares within 30 calendar days of redemption. See "Excessive trading." When you elect reinstatement, you are subject to the provisions outlined in the selected the Pioneer Fund's prospectus, including the fund's minimum investment requirement. Your sale proceeds will be reinvested in shares of the Pioneer Fund at the Class A net asset value per share determined after the transfer agent receives your written request for reinstatement. You may realize a gain or loss for 53 federal income tax purposes as a result of your sale of shares of a Pioneer Fund, and special tax rules may apply if you elect reinstatement. Consult your tax adviser for more information. Pioneer website www.pioneerinvestments.com The website includes a full selection of information on mutual fund investing. You can also use the website to get: o Your current account information o Prices, returns and yields of all publicly available Pioneer mutual funds o Prospectuses, statements of additional information and shareowner reports for all the Pioneer mutual funds o A copy of Pioneer's privacy notice If you or your investment firm authorized your account for the online transaction privilege, you may buy, exchange and sell shares online. FactFone(SM) 1-800-225-4321 You can use FactFone(SM) to: o Obtain current information on your Pioneer mutual fund accounts o Inquire about the prices and yields of all publicly available Pioneer mutual funds o Make computer-assisted telephone purchases, exchanges and redemptions for your fund accounts o Request account statements If you plan to use FactFone(SM) to make telephone purchases and redemptions, first you must activate your personal identification number and establish your bank account of record. If your account is registered in the name of a broker-dealer or other third party, you may not be able to use FactFone(SM). If your account is registered in the name of a broker-dealer or other third party, you may not be able to use FactFone(SM) to obtain account information. Household delivery of fund documents With your consent, Pioneer may send a single proxy statement, prospectus and shareowner report to your residence for you and any other member of your household who has an account with a Pioneer Fund. If you wish to revoke your consent to this practice, you may do so by notifying Pioneer, by phone or in writing (see "How to contact us"). Pioneer will begin mailing separate proxy statements, prospectuses and shareowner reports to you within 30 days after receiving your notice. Confirmation statements The transfer agent maintains an account for each investment firm or individual shareowner and records all account transactions. You will be sent confirmation statements showing the details of your transactions as they occur, except automatic investment plan transactions, which are confirmed quarterly. If you have more than one Pioneer mutual fund account registered in your name, the Pioneer combined account statement will be mailed to you each quarter. Tax information Early each year, each Pioneer Fund will mail you information about the tax status of the dividends and distributions paid to you by the Pioneer Fund. Tax information for IRA rollovers In January (or by the applicable Internal Revenue Service deadline) following the year in which you take a reportable distribution, the transfer agent will mail you a tax form reflecting the total amount(s) of distribution(s) received by the end of January. Privacy Each Pioneer Fund has a policy designed to protect the privacy of your personal information. A copy of Pioneer's privacy notice was given to you at the time you opened your account. Each Pioneer Fund will send you a copy of the privacy notice each year. You may also obtain the privacy notice by calling the transfer agent or through Pioneer's website. 54 Signature guarantees and other requirements You are required to obtain a signature guarantee when: o Requesting certain types of exchanges or sales of shares of a Pioneer Fund o Redeeming shares for which you hold a share certificate o Requesting certain types of changes for your existing account You can obtain a signature guarantee from most broker-dealers, banks, credit unions (if authorized under state law) and federal savings and loan associations. You cannot obtain a signature guarantee from a notary public. The Pioneer funds generally accept only medallion signature guarantees. A medallion signature guarantee may be obtained from a domestic bank or trust company, broker, dealer, clearing agency, savings association, or other financial institution that is participating in a medallion program recognized by the Securities Transfer Association. Signature guarantees from financial institutions that are not participating in one of these programs are not accepted as medallion signature guarantees. A Pioneer Fund may accept other forms of guarantee from financial intermediaries in limited circumstances. Fiduciaries and corporations are required to submit additional documents to sell shares of a Pioneer Fund. Minimum account size The fund requires that you maintain a minimum account value of $500. If you hold less than $500 in your account, each Pioneer Fund reserves the right to notify you that it intends to sell your shares and close your account. You will be given 60 days from the date of the notice to make additional investments to avoid having your shares sold. This policy does not apply to certain qualified retirement plan accounts. Telephone and website access You may have difficulty contacting a Pioneer Fund by telephone or accessing www.pioneerinvestments.com during times of market volatility or disruption in telephone or Internet service. On New York Stock Exchange holidays or on days when the exchange closes early, Pioneer will adjust the hours for the telephone center and for online transaction processing accordingly. If you are unable to access www.pioneerinvestments.com or reach a Pioneer Fund by telephone, you should communicate with the Pioneer Fund in writing. Share certificates The Pioneer Funds do not offer share certificates. Shares are electronically recorded. Any existing certificated shares can only be sold by returning your certificate to the transfer agent, along with a letter of instruction or a stock power (a separate written authority transferring ownership) and a signature guarantee. Other policies Each Pioneer Fund and the distributor reserve the right to: o reject any purchase or exchange order for any reason, without prior notice o charge a fee for exchanges or to modify, limit or suspend the exchange privilege at any time without notice. Each Pioneer Fund will provide 60 days' notice of material amendments to or termination of the exchange privilege o revise, suspend, limit or terminate the account options or services available to shareowners at any time, except as required by the rules of the Securities and Exchange Commission Each Pioneer Fund reserves the right to: o suspend transactions in shares when trading on the New York Stock Exchange is closed or restricted, or when the Securities and Exchange Commission determines an emergency or other circumstances exist that make it impracticable for the Pioneer Fund to sell or value its portfolio securities, or otherwise as permitted by the rules of or by the order of the Securities and Exchange Commission o redeem in kind by delivering to you portfolio securities owned by the Pioneer Fund rather than cash. Securities you receive this way may increase or decrease in value while you hold them and you may incur brokerage and transaction charges and tax liability when you convert the securities to cash o charge transfer, shareholder servicing or similar agent fees, such as an account maintenance fee for small balance accounts, directly to accounts upon at least 30 days' notice. A Pioneer Fund may do this by deducting the fee from your distribution of dividends and/or by redeeming fund shares to the extent necessary to cover the fee 55 o close your account after a period of inactivity, as determined by state law, and transfer your shares to the appropriate state Dividends, capital gains and taxes Dividends and capital gains Each Pioneer Fund generally pays any distributions of net short- and long-term capital gains in December. Each Pioneer Fund generally pays dividends from any net investment income in December. Each Pioneer Fund may also pay dividends and capital gain distributions at other times if necessary for the Pioneer Fund to avoid U.S. federal income or excise tax. If you invest in a Pioneer Fund shortly before a dividend or other distribution, generally you will pay a higher price per share and, unless you are exempt from tax, you will pay taxes on the amount of the distribution whether you reinvest the distribution in additional shares or receive it as cash. Taxes You will normally have to pay federal income taxes, and any state or local taxes, on the dividends and other distributions you receive from a Pioneer Fund, whether you take the distributions in cash or reinvest them in additional shares. For U.S. federal income tax purposes, distributions from a Pioneer Fund's net capital gains (if any) are considered long-term capital gains and are generally taxable to noncorporate shareholders at rates of up to 20%. Distributions from a Pioneer Fund's net short-term capital gains are generally taxable as ordinary income. Other dividends are taxable either as ordinary income or, in general, if paid from the Pioneer Fund's "qualified dividend income" and if certain conditions, including holding period requirements, are met by the Pioneer Fund and the shareholder, as qualified dividend income taxable to noncorporate shareholders at U.S. federal income tax rates of up to 20%. "Qualified dividend income" generally is income derived from dividends paid by U.S. corporations or certain foreign corporations that are either incorporated in a U.S. possession or eligible for tax benefits under certain U.S. income tax treaties. In addition, dividends that a Pioneer Fund receives in respect of stock of certain foreign corporations may be qualified dividend income if that stock is readily tradable on an established U.S. securities market. A portion of dividends received from a Pioneer Fund (but none of the Pioneer Fund's capital gain distributions) may qualify for the dividends-received deduction for corporations. To the extent that a Pioneer Fund pays dividends attributable to income received by it from underlying fixed income funds, these dividends generally will not qualify for the dividends-received deduction for corporations or for any favorable U.S. federal income tax rate available to noncorporate shareholders on qualified dividend income. Each Pioneer Fund will report to shareholders annually the U.S. federal income tax status of all fund distributions. If a Pioneer Fund declares a dividend in October, November or December, payable to shareholders of record in such a month, and pays it in January of the following year, you will be taxed on the dividend as if you received it in the year in which it was declared. Sales and exchanges generally will be taxable transactions to shareowners. When you sell or exchange shares of a Pioneer Fund you will generally recognize a capital gain or capital loss in an amount equal to the difference between the net amount of sale proceeds (or, in the case of an exchange, the fair market value of the shares) that you receive and your tax basis for the shares that you sell or exchange. A 3.8% Medicare contribution tax generally applies to all or a portion of the net investment income of a shareholder who is an individual and not a nonresident alien for federal income tax purposes and who has adjusted gross income (subject to certain adjustments) that exceeds a threshold amount. This 3.8% tax also applies to all or a portion of the undistributed net investment income of certain shareholders that are estates and trusts. For these purposes, dividends, interest and certain capital gains are generally taken into account in computing a shareholder's net investment income. You must provide your social security number or other taxpayer identification number to the Pioneer Fund along with the certifications required by the Internal Revenue Service when you open an account. If you do not or if it is otherwise legally required to do so, the Pioneer Fund will apply "backup withholding" tax on your dividends and other distributions, sale proceeds and any other payments to you that are subject to backup withholding. The backup withholding rate is 28%. You should ask your tax adviser about any federal, state, local and foreign tax considerations relating to an investment in the fund. You may also consult the Pioneer Fund's statement of additional information for a more detailed discussion of the U.S. federal income tax considerations that may affect the Pioneer Fund and its shareowners. 56 FINANCIAL HIGHLIGHTS The financial highlights table helps you understand the Acquiring Fund's financial performance for the past five years and for any recent semiannual period. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate that you would have earned or lost on an investment in Class A, Class C or Class Y shares of the Acquiring Fund (assuming reinvestment of all dividends and distributions). For financial statement purposes with respect to the Reorganization, the Acquiring Fund will be the accounting survivor of the Reorganization. As the accounting survivor, the Acquiring Fund's operating history will be used for financial reporting purposes after consummation of the Reorganization. The information below, except for the financial highlights for the six months ended January 31, 2014 and indicated below, has been audited by Ernst & Young LLP, whose report is included in the fund's annual report along with the fund's financial statements. The annual report is available upon request. 57 Financial Highlights Pioneer Ibbotson Growth Allocation Fund
Six Months Ended Year Year Year Year Year 1/31/14 Ended Ended Ended Ended Ended (unaudited) 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ------------------------------------------------------------------------------------------------------------------------------------ Class A Net asset value, beginning of period $ 12.32 $ 10.75 $ 11.09 $ 9.77 $ 8.74 $ 11.50 ------------------------------------------------------------------------------------------------------------------------------------ Increase (decrease) from investment operations: Net investment income (a) $ 0.14 $ 0.17 $ 0.14 $ 0.12 $ 0.11 $ 0.19 Net realized and unrealized gain (loss) on investments 0.51 1.57 (0.29) 1.33 1.10 (2.14) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) from investment operations $ 0.65 $ 1.74 $ (0.15) $ 1.45 $ 1.21 $ (1.95) ------------------------------------------------------------------------------------------------------------------------------------ Distributions to shareowners: Net investment income $ (0.19) $ (0.17) $ (0.19) $ (0.13) $ (0.18) $ (0.04) Net realized gain -- -- -- -- -- (0.77) ------------------------------------------------------------------------------------------------------------------------------------ Total distributions to shareowners $ (0.19) $ (0.17) $ (0.19) $ (0.13) $ (0.18) $ (0.81) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net asset value $ 0.46 $ 1.57 $ (0.34) $ 1.32 $ 1.03 $ (2.76) ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $ 12.78 $ 12.32 $ 10.75 $ 11.09 $ 9.77 $ 8.74 ==================================================================================================================================== Total return* 5.21%** 16.40% (1.31)% 14.85% 13.90% (15.49)% Ratio of net expenses to average net assets+ 0.66%*** 0.69% 0.76% 0.76% 0.79% 0.79% Ratio of net investment income to average net assets+ 2.15%*** 1.50% 1.29% 1.11% 1.12% 2.24% Portfolio turnover rate 4%*** 6% 7% 12% 11% 49% Net assets, end of period (in thousands) $154,711 $149,586 $134,988 $140,979 $125,433 $111,447 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 0.66%*** 0.69% 0.76% 0.76% 0.80% 0.89% Net investment income 2.15%*** 1.50% 1.29% 1.11% 1.11% 2.14% ====================================================================================================================================
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. ** Not annualized. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. *** Annualized. 58 Financial Highlights (continued) Pioneer Ibbotson Growth Allocation Fund (continued)
Six Months Ended Year Year Year Year Year 1/31/14 Ended Ended Ended Ended Ended (unaudited) 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ---------------------------------------------------------------------------------------------------------------------------------- Class C Net asset value, beginning of period $ 11.65 $ 10.18 $ 10.50 $ 9.26 $ 8.30 $ 10.99 ---------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income (a) $ 0.09 $ 0.09 $ 0.06 $ 0.04 $ 0.04 $ 0.11 Net realized and unrealized gain (loss) on investments 0.48 1.48 (0.27) 1.26 1.04 (2.03) ---------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 0.57 $ 1.57 $ (0.21) $ 1.30 $ 1.08 $ (1.92) ---------------------------------------------------------------------------------------------------------------------------------- Distributions to shareowners: Net investment income $ (0.12) $ (0.10) $ (0.11) $ (0.06) $ (0.12) $ -- Net realized gain -- -- -- -- -- (0.77) ---------------------------------------------------------------------------------------------------------------------------------- Total distributions to shareowners $ (0.12) $ (0.10) $ (0.11) $ (0.06) $ (0.12) $ (0.77) ---------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 0.45 $ 1.47 $ (0.32) $ 1.24 $ 0.96 $ (2.69) ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 12.10 $ 11.65 $ 10.18 $ 10.50 $ 9.26 $ 8.30 ================================================================================================================================== Total return* 4.85%** 15.58% (1.91)% 14.10% 13.08% (16.08)% Ratio of net expenses to average net assets+ 1.35%*** 1.40% 1.46% 1.46% 1.51% 1.57% Ratio of net investment income to average net assets+ 1.48%*** 0.78% 0.59% 0.40% 0.40% 1.44% Portfolio turnover rate 4%*** 6% 7% 12% 11% 49% Net assets, end of period (in thousands) $58,426 $53,032 $45,570 $48,586 $43,087 $ 36,602 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 1.35%*** 1.40% 1.46% 1.46% 1.51% 1.60% Net investment income 1.48%*** 0.78% 0.59% 0.40% 0.40% 1.40% ==================================================================================================================================
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. ** Not annualized. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. *** Annualized. 59 Financial Highlights (continued) Pioneer Ibbotson Growth Allocation Fund (continued)
Six Months Ended Year Year Year Year Year 1/31/14 Ended Ended Ended Ended Ended (unaudited) 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 --------------------------------------------------------------------------------------------------------------------------------- Class Y Net asset value, beginning of period $ 12.56 $ 10.95 $ 11.45 $ 10.07 $ 9.00 $ 11.64 --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income (a) $ 0.18 $ 0.20 $ 0.17 $ 0.17 $ 0.15 $ 0.20 Net realized and unrealized gain (loss) on investments 0.50 1.61 (0.44) 1.37 1.14 (1.97) --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 0.68 $ 1.81 $ (0.27) $ 1.54 $ 1.29 $ (1.77) --------------------------------------------------------------------------------------------------------------------------------- Distributions to shareowners: Net investment income $ (0.21) $ (0.20) $ (0.23) $ (0.16) $ (0.22) $ (0.10) Net realized gain -- -- -- -- -- (0.77) --------------------------------------------------------------------------------------------------------------------------------- Total distributions to shareowners $ (0.21) $ (0.20) $ (0.23) $ (0.16) $ (0.22) $ (0.87) --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 0.47 $ 1.61 $ (0.50) $ 1.38 $ 1.07 $ (2.64) --------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 13.03 $ 12.56 $ 10.95 $ 11.45 $ 10.07 $ 9.00 ================================================================================================================================= Total return* 5.38%** 16.70% (2.28)% 15.39% 14.33% (13.68)% Ratio of net expenses to average net assets+ 0.34%*** 0.44% 0.50% 0.36% 0.39% 0.39% Ratio of net investment income to average net assets+ 2.71%*** 1.71% 1.60% 1.58% 1.54% 2.44% Portfolio turnover rate 4%*** 6% 7% 12% 11% 49% Net assets, end of period (in thousands) $ 1,232 $ 1,314 $ 2,012 $ 1,947 $ 2,508 $ 1,614 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 0.34%*** 0.44% 0.50% 0.36% 0.39% 0.39% Net investment income 2.71%*** 1.71% 1.60% 1.58% 1.54% 2.44% =================================================================================================================================
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions and the complete redemption of the investment at net asset value at the end of each period. ** Not annualized. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. *** Annualized. 60 OWNERSHIP OF SHARES OF THE PIONEER FUNDS As of [ ], 2014, the Trustees and officers of each Pioneer Fund owned in the aggregate less than 1% of the outstanding shares of a Pioneer Fund. The following is a list of the holders of 5% or more of the outstanding shares of any class of a Pioneer Fund as of [ ], 2014.
----------------------------------------------------------------------------------------------------------- Pioneer Ibbotson Aggressive Allocation Fund ----------------------------------------------------------------------------------------------------------- Record Holder Share Class Number of Shares Percent of Class ----------------------------------------------------------------------------------------------------------- Class A ----------------------------------------------------------------------------------------------------------- Class B(1) ----------------------------------------------------------------------------------------------------------- Class C ----------------------------------------------------------------------------------------------------------- Class Y ----------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------- Pioneer Ibbotson Growth Allocation Fund ----------------------------------------------------------------------------------------------------------- Record Holder Share Class Number of Shares Percent of Class ----------------------------------------------------------------------------------------------------------- Class A ----------------------------------------------------------------------------------------------------------- Class B(1) ----------------------------------------------------------------------------------------------------------- Class C ----------------------------------------------------------------------------------------------------------- Class Y -----------------------------------------------------------------------------------------------------------
(1) Class B shares of each Fund will be converted to Class A shares of the Acquired Fund on November 10, 2014, prior to the Closing Date. AUDITORS The financial highlights and financial statements of each Pioneer Fund for the past five fiscal years and any semi-annual period, as applicable, are incorporated by reference into this Information Statement/Prospectus. The Pioneer Funds' financial highlights and financial statements for the previous five years ended July 31, 2013 have been audited by Ernst & Young LLP, independent registered public accounting firm, which are incorporated herein by reference, and have been so incorporated in reliance upon the reports of such firm given their authority as experts in accounting and auditing. Ernst & Young LLP resigned as the independent registered public accounting firm of each Pioneer Fund upon completion of the audit of each Pioneer Fund's financial statements for the fiscal year ended July 31, 2013. Deloitte & Touche LLP has been appointed to serve as each Pioneer Fund's independent registered public accounting firm for the fiscal year ending July 31, 2014. AVAILABLE INFORMATION You can obtain more free information about each Pioneer Fund from your investment firm or by writing to Pioneer Investment Management Shareholder Services, Inc., 60 State Street, Boston, Massachusetts 02109. You may also call 1-800-225-6292 for more information about a Pioneer Fund, to request copies of a Pioneer Fund's statement of additional information and shareowner reports, and to make other inquiries. Visit our website www.pioneerinvestments.com Each Pioneer Fund makes available its statement of additional information and shareholder reports, free of charge, on the Pioneer Funds' website at www.pioneerinvestments.com. You also may find other information and updates about Pioneer and each Pioneer Fund, including Pioneer Fund performance information, on the Pioneer Funds' website. Shareholder reports. Annual and semiannual reports to shareholders, and quarterly reports filed with the SEC, provide information about each Pioneer Fund's investments. The annual report discusses market conditions and investment strategies that significantly affected each Pioneer Fund's performance during its last fiscal year. Statement of additional information. The statement of additional information of each Pioneer Fund provides more detailed information about the fund. You can also review and copy each Pioneer Fund's shareholder reports, prospectus and statement of additional information at the Securities and Exchange Commission's Public Reference Room in Washington, D.C. Call 1-202-551-8090 for information. The Commission charges a fee for copies. You can get the same information free from the Commission's EDGAR database on the Internet (http://www.sec.gov). You may also email requests for these documents to publicinfo@sec.gov or make a request in writing to the Commission's Public Reference Section, Washington, D.C. 20549-1520. 61 27970-00-0814 PRO EXHIBIT A -- FORM OF AGREEMENT AND PLAN OF REORGANIZATION This AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of the [ ] day of [ ], by and between Pioneer Ibbotson Asset Allocation Series, a Delaware statutory trust (the "Trust"), on behalf of its series, Pioneer Ibbotson Growth Allocation Fund (the "Acquiring Fund"), with its principal place of business at 60 State Street, Boston, Massachusetts 02109, and the Trust, on behalf of its series, Pioneer Ibbotson Aggressive Allocation Fund (the "Acquired Fund"), with its principal place of business at 60 State Street, Boston, Massachusetts 02109, and, solely for purposes of paragraph 9.2 hereof, Pioneer Investment Management, Inc. ("Pioneer" or the "Acquiring Fund Adviser"). The Acquiring Fund and the Acquired Fund are sometimes referred to collectively herein as the "Funds" and individually as a "Fund." This Agreement is intended to constitute a plan of a "reorganization" as defined in Section 368(a) of the United States Internal Revenue Code of 1986, as amended (the "Code") and the Treasury Regulations thereunder. The reorganization (the "Reorganization") will consist of (1) the transfer of all of the assets of the Acquired Fund to the Acquiring Fund solely in exchange for (A) the issuance of Class A, Class C and Class Y shares of beneficial interest of the Acquiring Fund (collectively, the "Acquiring Fund Shares" and each, an "Acquiring Fund Share") to the Acquired Fund, and (B) the assumption by the Acquiring Fund of all of the liabilities of the Acquired Fund on the closing date of the Reorganization (the "Closing Date"), and (2) the distribution by the Acquired Fund, on or promptly after the Closing Date as provided herein, of the Acquiring Fund Shares to the shareholders of the Acquired Fund in complete liquidation of the Acquired Fund, all upon the terms and conditions hereinafter set forth in this Agreement. The parties hereby adopt this Agreement as a "plan of reorganization" within the meaning of Treasury Regulations Sections 1.368-2(g) and 1.368-3(a). WHEREAS, the Trust is a registered investment company classified as a management company of the open-end type. WHEREAS, the Acquiring Fund is authorized to issue shares of beneficial interest. WHEREAS, the Board of Trustees of the Trust has determined that the Reorganization is in the best interests of the Acquiring Fund shareholders and the Acquired Fund shareholders, respectively, and is not dilutive of the interests of those shareholders. NOW, THEREFORE, in consideration of the premises of the covenants and agreements hereinafter set forth, the parties hereto covenant and agree as follows: 1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR THE ACQUIRING FUND SHARES AND ASSUMPTION OF THE ASSUMED LIABILITIES; LIQUIDATION AND TERMINATION OF THE ACQUIRED FUND. 1.1 Subject to the terms and conditions herein set forth and on the basis of the representations and warranties contained herein, the Acquired Fund will transfer all of its assets as set forth in Paragraph 1.2 (the "Acquired Assets") to the Acquiring Fund free and clear of all liens and encumbrances (other than those arising under the Securities Act of 1933, as amended (the "Securities Act"), liens for taxes not yet due and contractual restrictions on the transfer of the Acquired Assets) and the Acquiring Fund agrees in exchange therefor: (i) to issue to the Acquired Fund the number of Acquiring Fund Shares, including fractional Acquiring Fund Shares, of each class with an aggregate net asset value ("NAV") equal to the NAV of the Acquired Fund attributable to the corresponding class of the Acquired Fund's shares, as determined in the manner set forth in Paragraphs 2.1 and 2.2; and (ii) to assume all of the liabilities and obligations of the Acquired Fund, whether accrued or contingent, known or unknown, existing at the Closing Date (collectively, the "Assumed Liabilities"). Such transactions shall take place at the Closing (as defined in Paragraph 3.1 below). 1.2 (a) The Acquired Assets shall consist of all of the Acquired Fund's property, including, without limitation, all portfolio securities and instruments, dividends and interest receivables, cash, goodwill, contractual rights and choses in action of the Acquired Fund or the Trust in respect of the Acquired Fund, all other intangible property owned by the Acquired Fund, originals or copies of all books and records of the Acquired Fund, and all other assets of the Acquired Fund on the Closing Date. The Acquiring Fund shall also be entitled to receive copies of all records that the Acquired Fund is required to maintain under the Investment Company Act of 1940, as amended (the "Investment Company Act"), and the rules of the Securities and Exchange Commission (the "Commission") promulgated thereunder to the extent such records pertain to the Acquired Fund. (b) The Acquired Fund has provided the Acquiring Fund with a list of all of the Acquired Fund's securities and other assets as of the date of execution of this Agreement, and the Acquiring Fund has provided the Acquired Fund with a copy of the current fundamental investment policies and restrictions and fair value procedures applicable to the Acquiring Fund. The Acquired Fund reserves the right to sell any of such securities or other assets before the Closing Date (except to the extent sales may be limited by representations of the Acquired Fund contained herein or in the Acquired Fund Tax Representation Certificate (as defined below) and made in connection with the issuance of the tax opinion provided for in Paragraph 8.4 hereof) and agrees not to acquire any portfolio security that is not an eligible investment for, or that would violate an investment policy or restriction of, the Acquiring Fund. A-1 1.3 The Acquired Fund will endeavor to discharge all of its known liabilities and obligations that are or will become due prior to the Closing. 1.4 On or as soon after the Closing Date as is conveniently practicable (the "Liquidation Date"), the Trust shall liquidate the Acquired Fund and distribute pro rata to its shareholders of record, determined as of the close of regular trading on the New York Stock Exchange on the Closing Date (the "Acquired Fund Shareholders"), the Acquiring Fund Shares received by the Acquired Fund pursuant to Paragraph 1.1 hereof. Each Acquired Fund Shareholder shall receive the number of full and fractional Acquiring Fund Shares of the class corresponding to each class of shares of beneficial interest in the Acquired Fund (the "Acquired Fund Shares") held by such Acquired Fund Shareholder that have, in each case, an aggregate NAV equal to the aggregate NAV of the Acquired Fund Shares of the applicable class held of record by such Acquired Fund Shareholder on the Closing Date. Such liquidation and distribution will be accomplished by the Acquired Fund instructing the Acquiring Fund to transfer the Acquiring Fund Shares then credited to the account of the Acquired Fund on the books of the Acquiring Fund to open accounts on the share records of the Acquiring Fund established and maintained by the Acquiring Fund's transfer agent in the names of the Acquired Fund Shareholders and representing the respective pro rata number of the Acquiring Fund Shares due the Acquired Fund Shareholders. The Acquired Fund shall promptly provide the Acquiring Fund with evidence of such liquidation and distribution. All issued and outstanding Acquired Fund Shares will simultaneously be cancelled on the books of the Acquired Fund, and the Acquired Fund will be dissolved. The Acquiring Fund shall not issue certificates representing the Acquiring Fund Shares in connection with such exchange. 1.5 Ownership of Acquiring Fund Shares will be shown on the books of the Acquiring Fund's transfer agent. Any certificates representing ownership of Acquired Fund Shares that remain outstanding on the Closing Date shall be deemed to be cancelled and shall no longer evidence ownership of Acquired Fund Shares. 1.6 Any transfer taxes payable upon issuance of Acquiring Fund Shares in a name other than the registered holder of the Acquired Fund Shares on the books of the Acquired Fund as of that time shall, as a condition of such issuance and transfer, be paid by the person to whom such Acquiring Fund Shares are to be issued and transferred. 1.7 Any reporting responsibility of the Trust with respect to the Acquired Fund for periods ending on or before the Closing Date, including, but not limited to, the responsibility for filing of regulatory reports, or other documents with the Commission, any state securities commissions, and any federal, state or local tax authorities or any other relevant regulatory authority, is and shall remain the responsibility of the Acquired Fund. 2. VALUATION 2.1 The NAV per share of each class of the Acquiring Fund Shares and the NAV per share of each class of the Acquired Fund shall, in each case, be determined as of the close of regular trading on the New York Stock Exchange (generally, 4:00 p.m., Eastern time) on the Closing Date (the "Valuation Time"). The Acquiring Fund Adviser shall compute the NAV per Acquiring Fund Share in the manner set forth in the Trust's Agreement and Declaration of Trust (the "Declaration"), or By-Laws, and the Acquiring Fund's then-current prospectus and statement of additional information. The Acquiring Fund Adviser shall compute the NAV per share of the Acquired Fund in the manner set forth in the Declaration, or By-Laws, and the Acquired Fund's then-current prospectus and statement of additional information. The Acquiring Fund Adviser shall confirm to the Acquiring Fund the NAV of the Acquired Fund. 2.2 The number of shares of each class of Acquiring Fund Shares to be issued (including fractional shares, if any) in exchange for the Acquired Assets and the assumption of the Assumed Liabilities shall be determined by the Acquiring Fund Adviser by dividing the NAV of the Acquired Fund attributable to each class of the Acquired Fund's shares, as determined in accordance with Paragraph 2.1, by the NAV of an Acquiring Fund Share of the corresponding class, as determined in accordance with Paragraph 2.1. 2.3 The Acquiring Fund and the Acquired Fund shall cause the Acquiring Fund Adviser to deliver a copy of its valuation report to the other party at Closing (as defined in Paragraph 3.1). All computations of value shall be made by the Acquiring Fund Adviser or its agents in accordance with its regular practice as pricing agent for the Acquiring Fund and the Acquired Fund. 3. CLOSING AND CLOSING DATE 3.1 The Closing Date shall be [ ], or such other earlier or later date as the parties may agree. All acts necessary to consummate the Reorganization (the "Closing") shall be deemed to take place simultaneously as of 5:00 p.m. (Eastern time) on the Closing Date unless otherwise agreed by the parties. The Closing shall be held at the offices of Bingham McCutchen LLP, One Federal Street, Boston, Massachusetts, or at such other place as the parties may agree. 3.2 Portfolio securities that are held other than in book-entry form in the name of Brown Brothers Harriman & Co. (the "Acquired Fund Custodian") as record holder for the Acquired Fund shall be presented by the Acquired Fund to Brown Brothers A-2 Harriman & Co. (the "Acquiring Fund Custodian") for examination no later than three (3) business days preceding the Closing Date. Such portfolio securities shall be delivered by the Acquired Fund to the Acquiring Fund Custodian for the account of the Acquiring Fund on the Closing Date, duly endorsed in proper form for transfer, in such condition as to constitute good delivery thereof in accordance with the custom of brokers, and shall be accompanied by all necessary federal and state stock transfer stamps or a check for the appropriate purchase price thereof. Portfolio securities held of record by the Acquired Fund Custodian in book-entry form on behalf of the Acquired Fund shall be delivered by the Acquired Fund Custodian through the Depository Trust Company to the Acquiring Fund Custodian and by the Acquiring Fund Custodian recording the beneficial ownership thereof by the Acquiring Fund on the Acquiring Fund Custodian's records. Any cash shall be delivered by the Acquired Fund Custodian transmitting immediately available funds by wire transfer to the Acquiring Fund Custodian the cash balances maintained by the Acquired Fund Custodian and the Acquiring Fund Custodian crediting such amount to the account of the Acquiring Fund. 3.3 The Acquiring Fund Custodian shall deliver within one business day after the Closing a certificate of an authorized officer stating that: (a) the Acquired Assets have been delivered in proper form to the Acquiring Fund on the Closing Date, and (b) all necessary transfer taxes including all applicable federal and state stock transfer stamps, if any, have been paid, or provision for payment has been made in conjunction with the delivery of portfolio securities as part of the Acquired Assets. 3.4 If on the Closing Date (a) the New York Stock Exchange is closed to trading or trading thereon shall be restricted or (b) trading or the reporting of trading on such exchange or elsewhere is disrupted so that accurate appraisal of the NAV of the Acquiring Fund Shares or the Acquired Fund pursuant to Paragraph 2.1 is impracticable (in the judgment of the Board of the Trust with respect to the Acquiring Fund and the Acquired Fund), the Closing Date shall be postponed until the first business day after the day when trading shall have been fully resumed and reporting shall have been restored or such later date as may be mutually agreed in writing by an authorized officer of each party. 3.5 The Acquired Fund shall deliver at the Closing a list of the names, addresses, federal taxpayer identification numbers and U.S. federal tax withholding statuses of the Acquired Fund Shareholders (and any certificates reflecting that information) and the number and percentage ownership of outstanding Acquired Fund Shares owned by each Acquired Fund Shareholder as of the Valuation Time, certified by the President or Vice President or a Secretary or Assistant Secretary of the Trust and its Treasurer, Secretary or other authorized officer (the "Shareholder List") as being an accurate record of the information (a) provided by the Acquired Fund Shareholders, (b) provided by the Acquired Fund Custodian, or (c) derived from the Trust's records by such officers or one of the Trust's service providers. The Acquiring Fund shall issue and deliver to the Acquired Fund a confirmation evidencing the Acquiring Fund Shares to be credited on the Closing Date, or provide evidence satisfactory to the Acquired Fund that such Acquiring Fund Shares have been credited to the Acquired Fund's account on the books of the Acquiring Fund. At the Closing, each party shall deliver to the other such bills of sale, checks, assignments, stock certificates, receipts or other documents as such other party or its counsel may reasonably request. 4. REPRESENTATIONS AND WARRANTIES 4.1 Except as set forth on Schedule 4.1 of this Agreement, the Trust, on behalf of the Acquired Fund, represents, warrants and covenants to the Acquiring Fund as follows: (a) The Acquired Fund is a series of the Trust. The Trust is a statutory trust validly existing and in good standing under the laws of the State of Delaware and has the power to own all of its properties and assets and to perform its obligations under this Agreement. The Acquired Fund is not required to qualify to do business in any jurisdiction in which it is not so qualified or where failure to qualify would subject it to any material liability or disability. The Acquired Fund has all necessary federal, state and local authorizations to own all of its properties and assets and to carry on its business as now being conducted; (b) The Trust is a registered investment company classified as a management company of the open-end type, and its registration with the Commission as an investment company under the Investment Company Act is in full force and effect; (c) The Trust is not in violation of, and the execution and delivery of this Agreement and the performance of its obligations under this Agreement on behalf of the Acquired Fund will not result in a material violation of, any provision of the Trust's Declaration or By-Laws or any material agreement, indenture, instrument, contract, lease or other undertaking with respect to the Acquired Fund to which the Trust, on behalf of the Acquired Fund, is a party or by which the Acquired Fund or any of its assets are bound; (d) No litigation or administrative proceeding or investigation of or before any court or governmental body is currently pending or to its knowledge threatened against the Acquired Fund or any of the Acquired Fund's properties or assets that, if adversely determined, would materially and adversely affect its financial condition or the conduct of the Acquired Fund's business. The Acquired Fund is not a party to or subject to the provisions of any order, decree or judgment of any court or governmental body which materially adversely affects the Acquired Fund's business or its ability to consummate the transactions contemplated herein or would A-3 be binding upon the Acquiring Fund as the successor to the Acquired Fund; (e) All material contracts or other commitments of the Acquired Fund (other than this Agreement or agreements for the purchase and sale of securities entered into in the ordinary course of business and consistent with its obligations under this Agreement) will terminate at or prior to the Closing Date and no such termination will result in liability to the Acquired Fund (or the Acquiring Fund); (f) The Statement of Assets and Liabilities of the Acquired Fund, and the related Statements of Operations and Changes in Net Assets, as of and for the fiscal year ended July 31, 2013, have been audited by Ernst & Young LLP, independent registered public accounting firm, and are in accordance with generally accepted accounting principles ("GAAP") consistently applied and fairly reflect, in all material respects, the financial condition of the Acquired Fund as of such date and the results of its operations for the period then ended, and all known liabilities, whether actual or contingent, of the Acquired Fund as of the date thereof are disclosed therein. The Statement of Assets and Liabilities will be in accordance with GAAP consistently applied and will fairly reflect, in all material respects, the financial condition of the Acquired Fund as of such date and the results of its operations for the period then ended. Except for the Assumed Liabilities, the Acquired Fund will not have any known or contingent liabilities on the Closing Date. No significant deficiency, material weakness, fraud, significant change or other factor that could significantly affect the internal controls of the Acquired Fund has been disclosed or is required to be disclosed in the Acquired Fund's reports on Form N-CSR to enable the chief executive officer and chief financial officer or other officers of the Trust to make the certifications required by the Sarbanes-Oxley Act, and no deficiency, weakness, fraud, change, event or other factor exists with respect to the Acquired Fund that will be required to be disclosed in the Acquiring Fund's Form N-CSR after the Closing Date; (g) Since the most recent fiscal year end, except as specifically disclosed in the Acquired Fund's prospectus or its statement of additional information as in effect on the date of this Agreement, or its semi-annual report for the six-month period ended January 31, 2014, there has not been any material adverse change in the Acquired Fund's financial condition, assets, liabilities, business or prospects, or any incurrence by the Acquired Fund of indebtedness, except for normal contractual obligations incurred in the ordinary course of business or in connection with the settlement of purchases and sales of portfolio securities. For the purposes of this subparagraph (g) (but not for any other purpose of this Agreement), a decline in NAV per Acquired Fund Share arising out of its normal investment operations or a decline in market values of securities in the Acquired Fund's portfolio, a decline in net assets of the Acquired Fund as a result of redemptions or the discharge of Acquired Fund liabilities shall not constitute a material adverse change; (h) The Acquired Fund is a separate series of the Trust treated as a separate corporation from each other series of the Trust under Section 851(g) of the Code. For each taxable year of its existence, including the taxable year ending on the Closing Date, the Acquired Fund has had in effect an election to be treated as a "regulated investment company" under Subchapter M of the Code, has satisfied or will satisfy all of the requirements of Subchapter M of the Code for treatment as a regulated investment company, and has been or will be eligible to compute its federal income tax under Section 852 of the Code. On or before the Closing Date, the Acquired Fund will have declared and paid dividends sufficient to distribute substantially all of (a) the sum of (i) its net tax-exempt interest income, (ii) its investment company taxable income (as defined in the Code, computed without regard to any deduction for dividends paid) and (iii) any net capital gain (as such term is used in Sections 852(b)(3)(A) and (C) of the Code) after reduction by any available capital loss carryforwards, and (b) any other amounts as necessary, in each case for all of its tax periods ending on or before the Closing Date, as dividends qualifying for the dividends-paid deduction under Section 561 of the Code, such that the Acquired Fund will have no unpaid tax liability under Section 852 of the Code for any tax period ending on or before the Closing Date. For each calendar year (including the calendar year that includes the Closing Date), the Acquired Fund will have made such distributions on or before the Closing Date as are necessary so that for all calendar years ending on or before the Closing Date, and for the calendar year that includes the Closing Date, such Acquired Fund will not have any unpaid tax liability under Section 4982 of the Code; (i) All issued and outstanding Acquired Fund Shares are, and at the Closing Date will be, legally issued and outstanding, fully paid and nonassessable by the Acquired Fund. All of the issued and outstanding Acquired Fund Shares will, at the time of Closing, be held of record by the persons and in the amounts set forth in the Shareholder List submitted to the Acquiring Fund pursuant to Paragraph 3.5 hereof. The Acquired Fund does not have outstanding any options, warrants or other rights to subscribe for or purchase any Acquired Fund Shares, nor is there outstanding any security convertible into any Acquired Fund Shares; (j) At the Closing Date, the Acquired Fund will have good and marketable title to the Acquired Assets, and full right, power and authority to sell, assign, transfer and deliver the Acquired Assets to the Acquiring Fund, and, upon delivery and payment for the Acquired Assets, the Acquiring Fund will acquire good and marketable title thereto, subject to no restrictions on the full transfer thereof, except such restrictions as might arise under the Securities Act; (k) The Trust has the trust power and authority, on behalf of the Acquired Fund, to enter into and perform its A-4 obligations under this Agreement. The execution, delivery and performance of this Agreement have been duly authorized by all necessary action on the part of the Trust's Board of Trustees, and, assuming due authorization, execution and delivery by the Trust, on behalf of the Acquiring Fund, this Agreement will constitute a valid and binding obligation of the Trust, on behalf of the Acquired Fund, enforceable in accordance with its terms, subject as to enforcement, to bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights and to general equity principles; (l) The information to be furnished by the Trust, on behalf of the Acquired Fund, to the Acquiring Fund for use in applications for orders, registration statements and other documents which may be necessary in connection with the transactions contemplated hereby and any information necessary to compute the total return of the Acquired Fund shall be accurate and complete in all material respects and shall comply in all material respects with federal securities and other laws and regulations applicable thereto or the requirements of any form for which its use is intended, and shall not contain any untrue statement of a material fact or omit to state a material fact necessary to make the information provided not misleading; (m) No consent, approval, authorization or order of or filing with any court or governmental authority is required for the execution of this Agreement or the consummation of the transactions contemplated by this Agreement by the Trust or the Acquired Fund, except such as may be required under the Securities Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Investment Company Act and the rules and regulations of the Commission thereunder, state securities laws and the Hart-Scott-Rodino Act; (n) The provisions of the Trust's Declaration, the Trust's By-Laws and Delaware law do not require the shareholders of the Acquired Fund to approve this Agreement or the transactions contemplated herein in order for the Trust or the Acquired Fund to consummate the transactions contemplated herein; (o) All of the issued and outstanding Acquired Fund Shares have been offered for sale and sold in compliance in all material respects with all applicable federal and state securities laws, except as may have been previously disclosed in writing to the Acquiring Fund; (p) The current prospectus and statement of additional information of the Acquired Fund and any amendments or supplements thereto did not as of their dates or the dates of their distribution to the public contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which such statements were made, not materially misleading; (q) The Acquired Fund currently complies in all material respects with the requirements of, and the rules and regulations under, the Investment Company Act, the Securities Act, the Exchange Act, state "Blue Sky" laws and all other applicable federal and state laws or regulations. The Acquired Fund currently complies in all material respects with all investment objectives, policies, guidelines and restrictions and any compliance procedures established by the Trust with respect to the Acquired Fund. All advertising and sales material currently used by the Acquired Fund complies in all material respects with the applicable requirements of the Securities Act, the Investment Company Act, the rules and regulations of the Commission promulgated thereunder, and, to the extent applicable, the Conduct Rules of the Financial Industry Regulatory Authority ("FINRA") and any applicable state regulatory authority. All registration statements, prospectuses, reports, proxy materials or other filings required to be made or filed with the Commission, FINRA or any state securities authorities used by the Acquired Fund during the three (3) years prior to the date of this Agreement have been duly filed and have been approved or declared effective, if such approval or declaration of effectiveness is required by law. Such registration statements, prospectuses, reports, proxy materials and other filings under the Securities Act, the Exchange Act and the Investment Company Act (i) are or were in compliance in all material respects with the requirements of all applicable statutes and the rules and regulations thereunder and (ii) do not or did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not false or misleading; (r) Neither the Acquired Fund nor, to the knowledge of the Acquired Fund, any "affiliated person" of the Acquired Fund has been convicted of any felony or misdemeanor, described in Section 9(a)(1) of the Investment Company Act, nor, to the knowledge of the Acquired Fund, has any affiliated person of the Acquired Fund been the subject, or presently is the subject, of any proceeding or investigation with respect to any disqualification that would be a basis for denial, suspension or revocation of registration as an investment adviser under Section 203(e) of the Investment Advisers Act of 1940, as amended (the "Investment Advisers Act"), or Rule 206(4)-4(b) thereunder or of a broker-dealer under Section 15 of the Exchange Act, or for disqualification as an investment adviser, employee, officer or director of an investment company under Section 9 of the Investment Company Act; and A-5 (s) The tax representation certificate to be delivered by the Trust on behalf of the Acquired Fund, to Bingham McCutchen LLP at the Closing pursuant to Paragraph 7.4 (the "Acquired Fund Tax Representation Certificate") will not on the Closing Date contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading. 4.2 Except as set forth on Schedule 4.2 of this Agreement, the Trust, on behalf of the Acquiring Fund, represents, warrants and covenants to the Acquired Fund, as follows: (a) The Acquiring Fund is a series of the Trust. The Trust is a statutory trust validly existing and in good standing under the laws of the State of Delaware. The Trust has the power to own all of its properties and assets and to perform its obligations under this Agreement. The Acquiring Fund is not required to qualify to do business in any jurisdiction in which it is not so qualified or where failure to qualify would subject it to any material liability or disability. The Acquiring Fund has all necessary federal, state and local authorizations to own all of its properties and assets and to carry on its business as now being conducted; (b) The Trust is a registered investment company classified as a management company of the open-end type, and its registration with the Commission as an investment company under the Investment Company Act is in full force and effect; (c) The current prospectus and statement of additional information of the Acquiring Fund and any amendment or supplement thereto, conform or conformed at the time of their distribution to the public in all material respects to the applicable requirements of the Securities Act and the Investment Company Act and the rules and regulations of the Commission promulgated thereunder and do not or did not at the time of their distribution to the public include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not materially misleading; (d) The Trust's registration statement on Form N-1A with respect to the Acquiring Fund that will be in effect on the Closing Date, and the prospectus and statement of additional information of the Acquiring Fund included therein, will conform in all material respects with the applicable requirements of the Securities Act and the Investment Company Act and the rules and regulations of the Commission thereunder, and did not as of the effective date thereof and will not as of the Closing Date contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; (e) The Trust is not in violation of, and the execution and delivery of this Agreement and performance of its obligations under this Agreement on behalf of the Acquiring Fund will not result in a material violation of, any provisions of the Declaration or By-Laws of the Trust or any material agreement, indenture, instrument, contract, lease or other undertaking with respect to the Acquiring Fund to which the Trust, on behalf of the Acquiring Fund, is a party or by which the Acquiring Fund or any of its assets is bound; (f) No litigation or administrative proceeding or investigation of or before any court or governmental body is currently pending or to its knowledge threatened against the Acquiring Fund or any of the Acquiring Fund's properties or assets that, if adversely determined, would materially and adversely affect its financial condition or the conduct of the Acquiring Fund's business. Neither the Trust nor the Acquiring Fund is a party to or subject to the provisions of any order, decree or judgment of any court or governmental body which materially adversely affects the Acquiring Fund's business or its ability to consummate the transactions contemplated herein; (g) The Statement of Assets and Liabilities of the Acquiring Fund, and the related Statements of Operations and Changes in Net Assets, as of and for the fiscal year ended July 31, 2013 have been audited by Ernst & Young LLP, independent registered public accounting firm, and are in accordance with GAAP consistently applied and fairly reflect, in all material respects, the financial condition of the Acquiring Fund as of such date and the results of its operations for the period then ended, and all known liabilities, whether actual or contingent, of the Acquiring Fund as of the date thereof are disclosed therein; (h) Since the most recent fiscal year end, except as specifically disclosed in the Acquiring Fund's prospectus or its statement of additional information as in effect on the date of this Agreement, or its semi-annual report for the period ended January 31, 2014 there has not been any material adverse change in the Acquiring Fund's financial condition, assets, liabilities, business or prospects, or any incurrence by the Acquiring Fund of indebtedness, except for normal contractual obligations incurred in the ordinary course of business or in connection with the settlement of purchases and sales of portfolio securities. For the purposes of this subparagraph (h) (but not for any other purpose of this Agreement), a decline in NAV per Acquiring Fund Share arising out of its normal investment operations or a decline in market values of securities in the Acquiring Fund's portfolio, a decline in net assets of the Acquiring Fund as a result of redemptions or the discharge of Acquiring Fund liabilities shall not constitute a material adverse A-6 change; (i) The Acquiring Fund is a separate series of the Trust treated as a separate corporation from each other series of the Trust under Section 851(g) of the Code. For each taxable year of its existence ending before the Closing Date, the Acquiring Fund has had in effect an election to be treated as a "regulated investment company" under Subchapter M of the Code, has satisfied all of the requirements of Subchapter M of the Code for treatment as a regulated investment company, and has been eligible to compute its federal income tax under Section 852 of the Code. On or before the Closing Date, the Acquiring Fund will have declared and paid dividends sufficient to distribute substantially all of (a) the sum of (i) its net tax-exempt interest income, (ii) its investment company taxable income (as defined in the Code, computed without regard to any deduction for dividends paid) and (iii) any net capital gain (as such term is used in Sections 852(b)(3)(A) and (C) of the Code) after reduction by any available capital loss carryforwards, and (b) any other amounts as necessary, in each case for all of its tax periods ending before the Closing Date, as dividends qualifying for the dividends-paid deduction under Section 561 of the Code, such that the Acquiring Fund will have no unpaid tax liability under Section 852 of the Code for any tax period ending before the Closing Date. For each calendar year ending before the Closing Date, the Acquired Fund will have made such distributions on or before the Closing Date as are necessary so that for all calendar years ending before the Closing Date the Acquiring Fund will not have any unpaid tax liability under Section 4982 of the Code. The Acquiring Fund expects to satisfy the requirements of Subchapter M of the Code for treatment as a regulated investment company and to be eligible for such treatment for its taxable year that includes the Closing Date; (j) The authorized capital of the Acquiring Fund consists of an unlimited number of shares of beneficial interest, no par value per share. As of the Closing Date, the Acquiring Fund will be authorized to issue an unlimited number of shares of beneficial interest, no par value per share. The Acquiring Fund Shares to be issued and delivered to the Acquired Fund for the account of the Acquired Fund Shareholders pursuant to the terms of this Agreement will have been duly authorized on the Closing Date and, when so issued and delivered, will be legally issued and outstanding, fully paid and non-assessable. The Acquiring Fund does not have outstanding any options, warrants or other rights to subscribe for or purchase any Acquiring Fund Shares, nor is there outstanding any security convertible into any Acquiring Fund Shares; (k) All issued and outstanding Acquiring Fund Shares are, and on the Closing Date will be, legally issued, fully paid and non-assessable and have been offered and sold in every state and the District of Columbia in compliance in all material respects with all applicable federal and state securities laws; (l) The Trust has the trust power and authority, on behalf of the Acquiring Fund, to enter into and perform its obligations under this Agreement. The execution, delivery and performance of this Agreement have been duly authorized by all necessary action on the part of the Trust's Board of Trustees, and, assuming due authorization, execution and delivery by the Trust, on behalf of the Acquired Fund, this Agreement will constitute a valid and binding obligation of the Trust, on behalf of the Acquiring Fund, enforceable in accordance with its terms, subject as to enforcement, to bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights and to general equity principles; (m) The information to be furnished in writing by the Trust, on behalf of the Acquiring Fund, for use in applications for orders, registration statements and other documents which may be necessary in connection with the transactions contemplated hereby shall be accurate and complete in all material respects and shall comply in all material respects with federal securities and other laws and regulations applicable thereto or the requirements of any form for which its use is intended, and shall not contain any untrue statement of a material fact or omit to state a material fact necessary to make the information provided not misleading; (n) No consent, approval, authorization or order of or filing with any court or governmental authority is required for the execution of this Agreement or the consummation of the transactions contemplated by this Agreement by the Trust or the Acquiring Fund, except such as may be required under the Securities Act, the Exchange Act, the Investment Company Act and the rules and regulations of the Commission thereunder, state securities laws and the Hart-Scott-Rodino Act; (o) The Acquiring Fund currently complies in all material respects with, the requirements of, and the rules and regulations under, the Investment Company Act, the Securities Act, the Exchange Act, state "Blue Sky" laws and all other applicable federal and state laws or regulations. The Acquiring Fund currently complies in all material respects with all investment objectives, policies, guidelines and restrictions and any compliance procedures established by the Trust with respect to the Acquiring Fund. All advertising and sales material currently used by the Acquiring Fund complies in all material respects with the applicable requirements of the Securities Act, the Investment Company Act, the rules and regulations of the Commission, and, to the extent applicable, the Conduct Rules of FINRA and any applicable state regulatory authority. All registration statements, prospectuses, reports, proxy materials or other filings required to be made or filed with the Commission, FINRA or any state securities authorities used by the Acquiring Fund during the three (3) years prior to the date of this Agreement have been duly filed and have been approved or declared effective, if such approval or declaration of effectiveness is required by law. Such registration statements, prospectuses, reports, proxy A-7 materials and other filings under the Securities Act, the Exchange Act and the Investment Company Act (i) are or were in compliance in all material respects with the requirements of all applicable statutes and the rules and regulations thereunder and (ii) do not or did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not false or misleading; (p) Neither the Acquiring Fund nor, to the knowledge of the Acquiring Fund, any "affiliated person" of the Acquiring Fund has been convicted of any felony or misdemeanor, described in Section 9(a)(1) of the Investment Company Act, nor, to the knowledge of the Acquiring Fund, has any affiliated person of the Acquiring Fund been the subject, or presently is the subject, of any proceeding or investigation with respect to any disqualification that would be a basis for denial, suspension or revocation of registration as an investment adviser under Section 203(e) of the Investment Advisers Act or Rule 206(4)-4(b) thereunder or of a broker-dealer under Section 15 of the Exchange Act, or for disqualification as an investment adviser, employee, officer or director of an investment company under Section 9 of the Investment Company Act; and (q) The tax representation certificate to be delivered by the Trust, on behalf of the Acquiring Fund, to Bingham McCutchen LLP at the Closing pursuant to Paragraph 6.3 (the "Acquiring Fund Tax Representation Certificate") will not on the Closing Date contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading. 5. COVENANTS OF THE FUNDS The Acquired Fund and the Acquiring Fund, respectively, hereby further covenant as follows: 5.1 The Acquired Fund covenants that the Acquiring Fund Shares to be issued hereunder are not being acquired by the Acquired Fund for the purpose of making any distribution thereof other than in accordance with the terms of this Agreement; 5.2 The Acquired Fund will assist the Acquiring Fund in obtaining such information as the Acquiring Fund reasonably requires concerning the beneficial ownership of the Acquired Fund Shares. 5.3 Subject to the provisions of this Agreement, each Fund will take, or cause to be taken, all actions, and do or cause to be done, all things reasonably necessary, proper or advisable to consummate the transactions contemplated by this Agreement; 5.4 The Acquired Fund shall furnish to the Acquiring Fund on the Closing Date a statement of assets and liabilities of the Acquired Fund ("Statement of Assets and Liabilities") as of the Closing Date setting forth the NAV (as computed pursuant to Paragraph 2.1) of the Acquired Fund as of the Valuation Time, which statement shall be prepared in accordance with GAAP consistently applied and certified by the Trust's Treasurer or Assistant Treasurer. As promptly as practicable, but in any case within 30 days after the Closing Date, the Trust, on behalf of the Acquired Fund, shall furnish to the Acquiring Fund, in such form as is reasonably satisfactory to the Acquiring Fund, a statement of the earnings and profits of the Acquired Fund for federal income tax purposes, and of any capital loss carryovers and other items that will be carried over to the Acquiring Fund under the Code, and which statement will be certified by the Treasurer of the Trust; and 5.5 Neither Fund shall take any action that is inconsistent with the representations set forth herein or, with respect to the Acquired Fund or Trust, in the Acquired Fund Tax Representation Certificate and, with respect to the Acquiring Fund or Trust, in the Acquiring Fund Tax Representation Certificate. Unless otherwise required pursuant to a "determination" within the meaning of Section 1313(a) of the Code, the parties hereto shall treat and report the Reorganization as a reorganization within the meaning of Section 368(a) of the Code and shall not take any position inconsistent with such treatment. 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND The obligations of the Acquired Fund to complete the transactions provided for herein shall be, at its election, subject to the performance by the Acquiring Fund of all the obligations to be performed by it hereunder on or before the Closing Date, and, in addition thereto, the following further conditions, unless waived by the Acquired Fund in writing: 6.1 All representations and warranties by the Trust, on behalf of the Acquiring Fund, contained in this Agreement shall be true and correct in all material respects as of the date hereof and, except as they may be affected by the transactions contemplated by this Agreement, as of the Closing Date with the same force and effect as if made on and as of the Closing Date; 6.2 The Acquiring Fund shall have delivered to the Acquired Fund on the Closing Date a certificate of the Trust, on behalf of the Acquiring Fund, executed in its name by its President or Vice President and its Treasurer or Assistant Treasurer, in form and substance satisfactory to the Acquired Fund and dated as of the Closing Date, to the effect that the representations and warranties of A-8 the Trust made in this Agreement on behalf of the Acquiring Fund are true and correct in all material respects at and as of the Closing Date, except as they may be affected by the transactions contemplated by this Agreement, that each of the conditions to Closing in this Article 6 has been met, and as to such other matters as the Acquired Fund shall reasonably request; 6.3 The Trust, on its own behalf and on behalf of the Acquiring Fund, shall have delivered to Bingham McCutchen LLP an Acquiring Fund Tax Representation Certificate, satisfactory to Bingham McCutchen LLP, in a form mutually acceptable to the Acquiring Fund and the Acquired Fund, concerning certain tax-related matters; and 6.4 With respect to the Acquiring Fund, the Board of Trustees of the Trust shall have determined that the Reorganization is in the best interests of the Acquiring Fund and, based upon such determination, shall have approved this Agreement and the transactions contemplated hereby. 7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND The obligations of the Acquiring Fund to complete the transactions provided for herein shall be, at its election, subject to the performance by the Acquired Fund of all the obligations to be performed by it hereunder on or before the Closing Date and, in addition thereto, the following further conditions, unless waived by the Acquiring Fund in writing: 7.1 All representations and warranties of the Trust, on behalf of the Acquired Fund, contained in this Agreement shall be true and correct in all material respects as of the date hereof and, except as they may be affected by the transactions contemplated by this Agreement, as of the Closing Date with the same force and effect as if made on and as of the Closing Date; 7.2 The Acquired Fund shall have delivered to the Acquiring Fund the Statement of Assets and Liabilities of the Acquired Fund pursuant to Paragraph 5.4, together with a list of its portfolio securities showing the federal income tax bases and holding periods of such securities, as of the Closing Date, certified by the Trust's Treasurer or Assistant Treasurer; 7.3 The Acquired Fund shall have delivered to the Acquiring Fund on the Closing Date a certificate of the Trust, on behalf of the Acquired Fund, executed in its name by its President or Vice President and a Treasurer or Assistant Treasurer, in form and substance reasonably satisfactory to the Acquiring Fund and dated as of the Closing Date, to the effect that the representations and warranties of the Trust made in this Agreement on behalf of the Acquired Fund are true and correct in all material respects at and as of the Closing Date, except as they may be affected by the transactions contemplated by this Agreement, that each of the conditions to Closing in this Article 7 has been met, and as to such other matters as the Acquiring Fund shall reasonably request; 7.4 The Trust, on its own behalf and on behalf of the Acquired Fund, shall have delivered to Bingham McCutchen LLP an Acquired Fund Tax Representation Certificate, satisfactory to Bingham McCutchen LLP, in a form mutually acceptable to the Acquiring Fund and the Acquired Fund, concerning certain tax-related matters; and 7.5 With respect to the Acquired Fund, the Board of Trustees of the Trust shall have determined that the Reorganization is in the best interests of the Acquired Fund and, based upon such determination, shall have approved this Agreement and the transactions contemplated hereby. 8. FURTHER CONDITIONS PRECEDENT If any of the conditions set forth below does not exist on or before the Closing Date with respect to either party hereto, the other party to this Agreement shall, at its option, not be required to consummate the transactions contemplated by this Agreement: 8.1 On the Closing Date, no action, suit or other proceeding shall be pending before any court or governmental agency in which it is sought to restrain or prohibit, or obtain damages or other relief in connection with, this Agreement or the transactions contemplated herein; 8.2 All consents of other parties and all other consents, orders and permits of federal, state and local regulatory authorities (including those of the Commission and of state Blue Sky and securities authorities) deemed necessary by either party hereto to permit consummation, in all material respects, of the transactions contemplated hereby shall have been obtained, except where failure to obtain any such consent, order or permit would not involve a risk of a material adverse effect on the assets or properties of either party hereto, provided that either party may waive any such conditions for itself; 8.3 The registration statement on Form N-14 filed in connection with this Agreement shall have become effective under the Securities Act and no stop order suspending the effectiveness of the registration statement shall have been issued and, to the knowledge of the parties hereto, no investigation or proceeding for that purpose shall have been instituted or be pending, threatened or contemplated under the Securities Act; A-9 8.4 The parties shall have received an opinion of Bingham McCutchen LLP, satisfactory to the Acquired Fund and the Acquiring Fund and subject to customary assumptions and qualifications, substantially to the effect that, based upon certain facts, assumptions and representations, and upon certifications contained in the Acquiring Fund Tax Representation Certificate and the Acquired Fund Tax Representation Certificate, for federal income tax purposes (i) the Reorganization will constitute a "reorganization" within the meaning of Section 368(a) of the Code, and each of the Acquired Fund and the Acquiring Fund will be a "party to a reorganization" within the meaning of Section 368(b) of the Code; (ii) no gain or loss will be recognized by the Acquired Fund on the transfer of the Acquired Assets to the Acquiring Fund solely in exchange for the Acquiring Fund Shares and the assumption by the Acquiring Fund of the Assumed Liabilities, or upon the distribution of the Acquiring Fund Shares to the shareholders of the Acquired Fund, except for (A) gain or loss that may be recognized on the transfer of "section 1256 contracts" as defined in Section 1256(b) of the Code, (B) gain that may be recognized on the transfer of stock in a "passive foreign investment company" as defined in Section 1297(a) of the Code, and (C) any other gain or loss that may be required to be recognized as a result of the closing of the Acquired Fund's taxable year or upon the transfer of an asset regardless of whether such transfer would otherwise be a non-recognition transaction under the Code; (iii) the tax basis in the hands of the Acquiring Fund of the Acquired Assets will be the same as the tax basis of such Acquired Assets in the hands of the Acquired Fund immediately prior to the transfer thereof, increased by the amount of gain (or decreased by the amount of loss), if any, recognized by the Acquired Fund on the transfer; (iv) the holding period of each Acquired Asset in the hands of the Acquiring Fund, other than assets with respect to which gain or loss is required to be recognized in the Reorganization, will include the period during which the Acquired Asset was held by the Acquired Fund (except where investment activities of the Acquiring Fund have the effect of reducing or eliminating the holding period with respect to an asset); (v) no gain or loss will be recognized by the Acquiring Fund upon its receipt of the Acquired Assets solely in exchange for Acquiring Fund Shares and the assumption of the Assumed Liabilities; (vi) no gain or loss will be recognized by the Acquired Fund Shareholders upon the exchange of all of their Acquired Fund Shares for Acquiring Fund Shares as part of the Reorganization; (vii) the aggregate tax basis of the Acquiring Fund Shares that each Acquired Fund Shareholder receives in the Reorganization will be the same as the aggregate tax basis of the Acquired Fund Shares exchanged therefor; (viii) each Acquired Fund Shareholder's holding period for the Acquiring Fund Shares received in the Reorganization will include the holding period for the Acquired Fund Shares exchanged therefor, provided that the Acquired Fund Shareholder held such Acquired Fund Shares as capital assets on the date of exchange. Notwithstanding anything in this Agreement to the contrary, neither the Acquired Fund nor the Acquiring Fund may waive the condition set forth in this paragraph 8.4. 8.5 The Trust, on behalf of the Acquired Fund, shall have distributed to the Acquired Fund Shareholders, in a distribution or distributions qualifying for the deduction for dividends paid under Section 561 of the Code, all of the Acquired Fund's investment company taxable income (as defined in Section 852(b)(2) of the Code determined without regard to Section 852(b)(2)(D) of the Code) for its taxable year ending on the Closing Date, all of the excess of (i) its interest income excludable from gross income under Section 103(a) of the Code over (ii) its deductions disallowed under Sections 265 and 171(a)(2) of the Code for its taxable year ending on the Closing Date, and all of its net capital gain (as such term is used in Sections 852(b)(3)(A) and (C) of the Code), after reduction by any available capital loss carryforward, for its taxable year ending on the Closing Date. 9. BROKERAGE FEES AND EXPENSES 9.1 Each party hereto represents and warrants to the other party hereto that there are no brokers or finders entitled to receive any payments in connection with the transactions provided for herein. 9.2 The parties have been informed by Pioneer that it will pay 50% of the expenses incurred in connection with the Reorganization (including, but not limited to, the preparation of the registration statement on Form N-14). Each of the Acquired Fund and the Acquiring Fund agrees to pay 25% of the expenses incurred in connection with the Reorganization (including, but not limited to, the preparation of the registration statement on Form N-14). Notwithstanding any of the foregoing, expenses will in any event be paid by the party directly incurring such expenses if and to the extent that the payment by another person of such expenses would result in a failure by either Fund to qualify for treatment as a "regulated investment company" within the meaning of Section 851 of the Code or would prevent the Reorganization from qualifying as a reorganization within the meaning of Section 368(b) of the Code or otherwise result in the imposition of tax on either Fund or on either Fund's shareholders. 10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES 10.1 The Acquiring Fund and the Acquired Fund each agrees that neither party has made any representation, warranty or covenant not set forth herein or referred to in Paragraphs 4.1 or 4.2 hereof and that this Agreement constitutes the entire agreement between the parties. 10.2 The covenants to be performed after the Closing by both the Acquiring Fund and the Acquired Fund shall survive the Closing. The representations and warranties and all other covenants contained in this Agreement or in any document delivered pursuant hereto or in connection herewith shall not survive the consummation of the transactions contemplated hereunder. A-10 11. TERMINATION 11.1 This Agreement may be terminated by the mutual agreement of the Acquiring Fund and the Acquired Fund. In addition, either party may at its option terminate this Agreement at or prior to the Closing Date: (a) by resolution of the Trust's Board of Trustees if circumstances should develop that, in the good faith opinion of such Board, make proceeding with the Agreement not in the best interests of the Acquiring Fund's shareholders; or (b) by resolution of the Trust's Board of Trustees if circumstances should develop that, in the good faith opinion of such Board, make proceeding with the Agreement not in the best interests of the Acquired Fund's shareholders. 11.2 In the event of any such termination, there shall be no liability for damages on the part of the Trust, the Acquiring Fund or the Acquired Fund, or the trustees or officers of the Trust, but, subject to Paragraph 9.2, each party shall bear the expenses incurred by it incidental to the preparation and carrying out of this Agreement. 12. AMENDMENTS This Agreement may be amended, modified or supplemented in such manner as may be mutually agreed upon in writing by the authorized officers of the Trust; provided that nothing contained in this Section 12 shall be construed to prohibit the parties from amending this Agreement to change the Closing Date. 13. NOTICES Any notice, report, statement or demand required or permitted by any provision of this Agreement shall be in writing and shall be given by prepaid telegraph, telecopy or certified mail addressed to the Trust at 60 State Street, Boston, Massachusetts 02109. 14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT 14.1 The article and paragraph headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 14.2 This Agreement may be executed in any number of counterparts, each of which shall be deemed an original. 14.3 This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware, without giving effect to conflict of laws principles (other than Delaware Code Title 6 ss. 2708); provided that, in the case of any conflict between those laws and the federal securities laws, the latter shall govern. 14.4 This Agreement shall bind and inure to the benefit of the parties hereto and their respective successors and assigns, but no assignment or transfer hereof or of any rights or obligations hereunder shall be made by either party without the prior written consent of the other party hereto. Nothing herein expressed or implied is intended or shall be construed to confer upon or give any person, firm or corporation, or other entity, other than the parties hereto and their respective successors and assigns, any rights or remedies under or by reason of this Agreement. * * * * * A-11 IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed as of the date first set forth above by its President or Vice President and attested by its Secretary or Assistant Secretary.
Attest: Pioneer Ibbotson Asset Allocation Series, on behalf of its series, Pioneer Ibbotson Growth Allocation Fund By: _____________________________________ By: _____________________________________ Name: Name: Title: Title: Attest: Pioneer Ibbotson Asset Allocation Series, on behalf of its series, Pioneer Ibbotson Aggressive Allocation Fund By: _____________________________________ By: _____________________________________ Name: Name: Title: Title: Attest: Solely for purposes of paragraph 9.2 of the Agreement: Pioneer Investment Management, Inc. By:______________________________________ By:__________________________________ Name: Name: Title: Title
A-12 SCHEDULE 4.1 A-13 SCHEDULE 4.2 A-14 This page for your notes. This page for your notes. SUBJECT TO COMPLETION, DATED [ ], 2014 PIONEER IBBOTSON GROWTH ALLOCATION FUND (to be renamed Pioneer Multi-Asset Allocator Growth Fund) 60 State Street Boston, Massachusetts 02109 STATEMENT OF ADDITIONAL INFORMATION ______________, 2014 This Statement of Additional Information is not a prospectus. It should be read in conjunction with the related combined Information Statement and Prospectus (also dated ______________, 2014) which covers Class A, Class C and Class Y shares of Pioneer Ibbotson Growth Allocation Fund to be issued in exchange for corresponding shares of Pioneer Ibbotson Aggressive Allocation Fund. Please retain this Statement of Additional Information for further reference. The Prospectus is available to you from Pioneer Investment Management, Inc. free of charge by calling 1-800-225-6292.
Page ---- INTRODUCTION 2 EXHIBITS AND DOCUMENTS INCORPORATED BY REFERENCE 2 ADDITIONAL INFORMATION ABOUT EACH PIONEER FUND 3 PRO FORMA COMBINED FINANCIAL STATEMENTS 5
1 INTRODUCTION This Statement of Additional Information is intended to supplement the information provided in a Information Statement and Prospectus dated ______________, 2014 (the "Information Statement and Prospectus") relating to the reorganization of Pioneer Ibbotson Aggressive Allocation Fund into Pioneer Ibbotson Growth Allocation Fund. EXHIBITS AND DOCUMENTS INCORPORATED BY REFERENCE The following documents are incorporated herein by reference, unless otherwise indicated. Shareholders will receive a copy of each document that is incorporated by reference upon any request to receive a copy of this Statement of Additional Information. 1. Pioneer Ibbotson Growth Allocation Fund's Statement of Additional Information, dated December 1, 2013 (File Nos. 333-114788; 811-21569), as filed with the Securities and Exchange Commission on November 26, 2013 (Accession No. 0001288255-13-000002) is incorporated herein by reference. 2. The Annual Report of Pioneer Ibbotson Growth Allocation Fund for the fiscal year ended July 31, 2013 (File No. 811-21569), as filed with the Securities and Exchange Commission on September 26, 2013 (Accession No. 0001331854-13-000003) is incorporated herein by reference. 3. The Semi-Annual Report of Pioneer Ibbotson Growth Allocation Fund for the fiscal period ended January 31, 2014 (File No. 811-21569), as filed with the Securities and Exchange Commission on March 31, 2014 (Accession No. 0001288255-14-000001) is incorporated herein by reference. 4. Pioneer Ibbotson Aggressive Allocation Fund's Statement of Additional Information, dated December 1, 2013 (File Nos. 333-114788; 811-21569), as filed with the Securities and Exchange Commission on November 26, 2013 (Accession No. 0001288255-13-000002) is incorporated herein by reference. 5. The Annual Report of Pioneer Ibbotson Aggressive Allocation Fund for the fiscal year ended July 31, 2013 (File No. 811-21569), as filed with the Securities and Exchange Commission on September 26, 2013 (Accession No. 0001331854-13-000003) is incorporated herein by reference. 6. The Semi-Annual Report of Pioneer Ibbotson Aggressive Allocation Fund for the fiscal period ended January 31, 2014 (File No. 811-21569), as filed with the Securities and Exchange Commission on March 31, 2014 (Accession No. 0001288255-14-000001) is incorporated herein by reference. 2 ADDITIONAL INFORMATION ABOUT EACH PIONEER FUND Additional information about each Pioneer Fund can be found in the most recent Statement of Additional Information of each Pioneer Fund, which is incorporated by reference into this registration statement. PORTFOLIO MANAGEMENT ADDITIONAL INFORMATION ABOUT THE PORTFOLIO MANAGERS OTHER ACCOUNTS MANAGED BY THE PORTFOLIO MANAGERS The table below indicates, for the portfolio managers of Pioneer Ibbotson Growth Allocation Fund (to be renamed Pioneer Multi-Asset Allocator Growth Fund), post-reorganization, information about the accounts other than the fund over which the portfolio manager has day-to-day investment responsibility. All information on the number of accounts and total assets in the table is as of June 30, 2014. For purposes of the table, "Other Pooled Investment Vehicles" may include investment partnerships, undertakings for collective investments in transferable securities ("UCITS") and other non-U.S. investment funds and group trusts, and "Other Accounts" may include separate accounts for institutions or individuals, insurance company general or separate accounts, pension funds and other similar institutional accounts but generally do not include the portfolio manager's personal investment accounts or those which the manager may be deemed to own beneficially under the code of ethics. Certain funds and other accounts managed by the portfolio manager may have substantially similar investment strategies. PIONEER IBBOTSON GROWTH ALLOCATION FUND
NUMBER OF ASSETS ACCOUNTS MANAGED MANAGED FOR FOR WHICH WHICH ADVISORY ADVISORY NUMBER OF FEE IS FEE IS NAME OF ACCOUNTS TOTAL ASSETS PERFORMANCE- PERFORMANCE- PORTFOLIO MANAGER TYPE OF ACCOUNT MANAGED MANAGED (`000'S) BASED BASED (`000'S) ------------------- ---------------------------------- ----------- ------------------ ---------------- --------------- John O'Toole Other Registered Investment Companies 2 $ 433,870 N/A N/A Other Pooled Investment Vehicles 19 $ 7,731,892 N/A N/A Other Accounts 0 $ 0 N/A N/A ------------------- ---------------------------------- -- ----------- ---------------- --------------- Paul Weber Other Registered Investment Companies 2 $ 433,870 N/A N/A Other Pooled Investment Vehicles 3 $ 3,400,200 N/A N/A Other Accounts 0 $ 0 N/A N/A ------------------- ---------------------------------- -- ----------- ---------------- --------------- Salvatore Buono Other Registered Investment Companies 2 $ 433,870 N/A N/A Other Pooled Investment Vehicles 39 $13,981,400 N/A N/A Other Accounts 0 $ 0 N/A N/A ------------------- ---------------------------------- -- ----------- ---------------- ---------------
POTENTIAL CONFLICTS OF INTEREST When a portfolio manager is responsible for the management of more than one account, the potential arises for the portfolio manager to favor one account over another. The principal types of potential conflicts of interest that may arise are discussed below. For the reasons outlined below, Pioneer does not believe that any material conflicts are likely to arise out of a portfolio manager's responsibility for the management of the fund as well as one or more other accounts. Although Pioneer has adopted procedures that it believes are reasonably designed to detect and prevent violations of the federal securities laws and to mitigate the potential for conflicts of interest to affect its portfolio management decisions, there can be no assurance that all conflicts will be identified or that all procedures will be effective in mitigating the potential for such risks. Generally, the risks of such conflicts of interest are increased to the extent that a portfolio manager has a financial incentive to favor one account over another. Pioneer has structured its compensation arrangements in a manner that is intended to limit such potential for conflicts of interest. See "Compensation of Portfolio Managers" below. o A portfolio manager could favor one account over another in allocating new investment opportunities that have limited supply, such as initial public offerings and private placements. If, for example, an initial public offering that was expected to appreciate in value significantly shortly after the offering was allocated to a single account, that account may be expected to have better investment performance than other accounts that did not receive an allocation of the initial public offering. Generally, investments 3 for which there is limited availability are allocated based upon a range of factors including available cash and consistency with the accounts' investment objectives and policies. This allocation methodology necessarily involves some subjective elements but is intended over time to treat each client in an equitable and fair manner. Generally, the investment opportunity is allocated among participating accounts on a pro rata basis. Although Pioneer believes that its practices are reasonably designed to treat each client in an equitable and fair manner, there may be instances where a fund may not participate, or may participate to a lesser degree than other clients, in the allocation of an investment opportunity. o A portfolio manager could favor one account over another in the order in which trades for the accounts are placed. If a portfolio manager determines to purchase a security for more than one account in an aggregate amount that may influence the market price of the security, accounts that purchased or sold the security first may receive a more favorable price than accounts that made subsequent transactions. The less liquid the market for the security or the greater the percentage that the proposed aggregate purchases or sales represent of average daily trading volume, the greater the potential for accounts that make subsequent purchases or sales to receive a less favorable price. When a portfolio manager intends to trade the same security on the same day for more than one account, the trades typically are "bunched," which means that the trades for the individual accounts are aggregated and each account receives the same price. There are some types of accounts as to which bunching may not be possible for contractual reasons (such as directed brokerage arrangements). Circumstances may also arise where the trader believes that bunching the orders may not result in the best possible price. Where those accounts or circumstances are involved, Pioneer will place the order in a manner intended to result in as favorable a price as possible for such client. o A portfolio manager could favor an account if the portfolio manager's compensation is tied to the performance of that account to a greater degree than other accounts managed by the portfolio manager. If, for example, the portfolio manager receives a bonus based upon the performance of certain accounts relative to a benchmark while other accounts are disregarded for this purpose, the portfolio manager will have a financial incentive to seek to have the accounts that determine the portfolio manager's bonus achieve the best possible performance to the possible detriment of other accounts. Similarly, if Pioneer receives a performance-based advisory fee, the portfolio manager may favor that account, whether or not the performance of that account directly determines the portfolio manager's compensation. o A portfolio manager could favor an account if the portfolio manager has a beneficial interest in the account, in order to benefit a large client or to compensate a client that had poor returns. For example, if the portfolio manager held an interest in an investment partnership that was one of the accounts managed by the portfolio manager, the portfolio manager would have an economic incentive to favor the account in which the portfolio manager held an interest. o If the different accounts have materially and potentially conflicting investment objectives or strategies, a conflict of interest could arise. For example, if a portfolio manager purchases a security for one account and sells the same security for another account, such trading pattern may disadvantage either the account that is long or short. In making portfolio manager assignments, Pioneer seeks to avoid such potentially conflicting situations. However, where a portfolio manager is responsible for accounts with differing investment objectives and policies, it is possible that the portfolio manager will conclude that it is in the best interest of one account to sell a portfolio security while another account continues to hold or increase the holding in such security. COMPENSATION OF PORTFOLIO MANAGERS Pioneer has adopted a system of compensation for portfolio managers that seeks to align the financial interests of the portfolio managers with those of shareholders of the accounts (including Pioneer funds) the portfolio managers manage, as well as with the financial performance of Pioneer. The compensation program for all Pioneer portfolio managers includes a base salary (determined by the rank and tenure of the employee) and an annual bonus program, as well as customary benefits that are offered generally to all full-time employees. Base compensation is fixed and normally reevaluated on an annual basis. Pioneer seeks to set base compensation at market rates, taking into account the experience and responsibilities of the portfolio manager. The bonus plan is intended to provide a competitive level of annual bonus compensation that is tied to the portfolio manager achieving superior investment performance and align the interests of the investment professional with those of shareholders, as well as with the financial performance of Pioneer. Any bonus under the plan is completely discretionary, with a maximum annual bonus that may be in excess of base salary. The annual bonus is based upon a combination of the following factors: o QUANTITATIVE INVESTMENT PERFORMANCE. The quantitative investment performance calculation is based on pre-tax investment performance of all of the accounts managed by the portfolio manager (which includes the fund and any other accounts managed by the portfolio manager) over a one-year period (20% weighting) and four-year period (80% weighting), measured for periods ending on December 31. The accounts, which include the fund, are ranked against a group of mutual funds with 4 similar investment objectives and investment focus (60%) and a broad-based securities market index measuring the performance of the same type of securities in which the accounts invest (40%), which, in the case of the fund, is the Barclays Capital Aggregate Bond Index. As a result of these two benchmarks, the performance of the portfolio manager for compensation purposes is measured against the criteria that are relevant to the portfolio manager's competitive universe. o QUALITATIVE PERFORMANCE. The qualitative performance component with respect to all of the accounts managed by the portfolio manager includes objectives, such as effectiveness in the areas of teamwork, leadership, communications and marketing, that are mutually established and evaluated by each portfolio manager and management. o PIONEER RESULTS AND BUSINESS LINE RESULTS. Pioneer's financial performance, as well as the investment performance of its investment management group, affect a portfolio manager's actual bonus by a leverage factor of plus or minus (+/-) a predetermined percentage. The quantitative and qualitative performance components comprise 80% and 20%, respectively, of the overall bonus calculation (on a pre-adjustment basis). A portion of the annual bonus is deferred for a specified period and may be invested in one or more Pioneer funds. Certain portfolio managers participate in other programs designed to reward and retain key contributors. Senior executives or other key employees are granted performance units based on the stock price performance of UniCredit and the financial performance of Pioneer Global Asset Management S.p.A., which are affiliates of Pioneer. Portfolio managers also may participate in a deferred compensation program, whereby deferred amounts are invested in one or more Pioneer funds. SHARE OWNERSHIP BY PORTFOLIO MANAGERS The following table indicates as of June 30, 2014 the value, within the indicated range, of shares beneficially owned by the portfolio managers of the fund. PIONEER IBBOTSON GROWTH ALLOCATION FUND
BENEFICIAL OWNERSHIP NAME OF PORTFOLIO MANAGER OF THE FUND* --------------------------- --------------------- John O'Toole A --------------------------- --------------------- Paul Weber A --------------------------- --------------------- Salvatore Buono A --------------------------- ---------------------
* Key to Dollar Ranges A. None B. $1 - $10,000 C. $10,001 - $50,000 D. $50,001 - $100,000 E. $100,001 - $500,000 F. $500,001 - $1,000,000 G. Over $1,000,000
PRO FORMA COMBINED FINANCIAL STATEMENTS The pro forma financial statements for Pioneer Ibbotson Growth Allocation Fund follow below. 5 Pro Forma Schedule of Investments 1/31/14 (unaudited)
Pioneer Pioneer Pioneer Pioneer Ibbotson Ibbotson Ibbotson Ibbotson % of Aggressive Growth Pro Forma Aggressive Growth Pro Forma Pro Forma Allocation Allocation Combined Allocation Allocation Combined Combined Fund Market Fund Market Market Fund Shares Fund Shares Shares Net Assets Value ($) Value ($) Value ($) ----------- ----------- --------- ---------- ------------ ----------- ---------- MUTUAL FUNDS 100.2% PIONEER FUNDS* 100.2% 701,037 2,438,071 3,139,108 Pioneer Bond Fund Class Y 6,750,989 23,478,622 30,229,611 257,540 499,456 756,996 Pioneer Core Equity Fund Class Y 3,953,234 7,666,645 11,619,879 223,844 339,583 563,427 Pioneer Disciplined Growth Fund Class Y 3,597,178 5,457,102 9,054,280 348,972 713,603 1,062,575 Pioneer Disciplined Value Fund Class Y 6,539,729 13,372,917 19,912,646 -- 128,981 128,981 Pioneer Dynamic Credit Fund Class Y -- 1,279,487 1,279,487 447,558 588,759 1,036,317 Pioneer Emerging Markets Fund Class Y 10,736,923 14,124,326 24,861,249 115,763 224,978 340,741 Pioneer Equity Income Fund Class Y 3,873,428 7,527,770 11,401,198 100,885 196,223 297,108 Pioneer Fund Class Y 3,834,622 7,458,431 11,293,053 252,768 527,687 780,455 Pioneer Fundamental Growth Fund Class Y 4,089,782 8,537,974 12,627,756 1,133,594 1,882,304 3,015,898 Pioneer Global Equity Fund Class Y 14,079,242 23,378,219 37,457,461 -- 450,057 450,057 Pioneer Global High Yield Fund Class Y -- 4,401,554 4,401,554 -- 382,938 382,938 Pioneer Global Multisector Income Fund Class Y -- 4,154,876 4,154,876 -- 201,751 201,751 Pioneer High Yield Fund Class Y -- 2,158,739 2,158,739 1,089,091 1,525,574 2,614,665 Pioneer International Value Fund Class Y 23,459,028 32,860,854 56,319,882 439,876 619,063 1,058,939 Pioneer Mid Cap Value Fund Class Y 11,639,123 16,380,405 28,019,528 -- 597 597 Pioneer Oak Ridge Large Cap Growth Fund Class Y -- 10,338 10,338 240,643 325,869 566,512 Pioneer Oak Ridge Small Cap Growth Fund Class Y 9,271,989 12,555,716 21,827,705 233,549 330,328 563,877 Pioneer Real Estate Shares Class Y 5,969,502 8,443,193 14,412,695 184,921 309,712 494,633 Pioneer Select Mid Cap Growth Fund Class Y 7,502,250 12,565,034 20,067,284 364,817 1,636,382 2,001,199 Pioneer Short Term Income Fund Class Y 3,527,778 15,823,818 19,351,596 381,266 716,538 1,097,804 Pioneer Strategic Income Fund Class Y 4,144,361 7,788,772 11,933,133 ------------ ----------- ------------ TOTAL INVESTMENTS IN PIONEER FUNDS 122,969,158 229,424,792 352,393,950 ------------ ----------- ------------ TOTAL MUTUAL FUNDS 100.2% 122,969,158 229,424,792 352,393,950 ------------ ----------- ------------ TOTAL INVESTMENT IN SECURITIES 100.2% $122,969,158 229,424,792 352,393,950 ------------ ----------- ------------ OTHER ASSETS AND LIABILITIES -0.2% $ (192,627) (605,583) (798,210) ------------ ----------- ------------ TOTAL NET ASSETS 100.0% $122,776,531 228,819,209 351,595,740 ------------ ----------- ------------ TOTAL INVESTMENT AT COST $ 90,606,702 179,037,600 269,644,302 ============ =========== ============
------------------- * Affiliated funds managed by Pioneer Investment Management, Inc. 6 Pro Forma Statement of Assets and Liabilities January 31, 2014 (unaudited)
Pioneer Pioneer Ibbotson Ibbotson Aggressive Growth Allocation Allocation Pro Forma Pro Forma Fund Fund Adjustments Combined ------------ ---------- ----------- ------------ ASSETS: Investment in securities of affiliated issuers, at value (at cost $90,606,702 and $179,037,600, respectively) $122,969,158 $229,424,792 $352,393,950 Cash -- -- -- Receivables - Investment funds sold 294,772 370,870 665,642 Capital stock sold 62,856 147,421 210,277 Dividends 41,423 177,068 218,491 Other assets 23,110 33,688 56,798 ------------ ------------ ------------ Total assets $123,391,319 $230,153,839 $353,545,158 ------------ ------------ ------------ LIABILITIES: Payables - Investment funds purchased $ 32,300 $ 46,319 $ 78,619 Capital stock redeemed 97,778 175,730 273,508 Due to affiliates 90,255 168,872 259,127 Due to Pioneer Investment Management, Inc. 2,941 6,879 9,820 Due to custodian 324,876 879,311 1,204,187 Accrued expenses and other liabilities 66,638 57,519 $ 50,000(a) 174,157 ------------ ------------ ------------ Total liabilities $ 614,788 $ 1,334,630 $ 1,999,418 ------------ ------------ ------------ NET ASSETS: Paid-in capital $116,559,044 $211,948,881 $328,507,925 Undistributed net investment income 1,034,842 2,184,734 $ (50,000)(a) 3,169,576 Accumulated net realized loss on investments (27,179,811) (35,701,598) (62,881,409) Net unrealized appreciation on investments 32,362,456 50,387,192 82,749,648 ------------ ------------ ------------ Total net assets $122,776,531 $228,819,209 $351,545,740 ------------ ------------ ------------ NET ASSETS BY CLASS: Class A $ 94,074,263 $154,710,951 $ (36,059)(a) $248,749,155 ------------ ------------ ------------ Class B $ 7,474,266 $ 14,449,956 $ (3,101)(a) $ 21,921,121 ------------ ------------ ------------ Class C $ 20,822,320 $ 58,426,367 $ (10,623)(a) $ 79,238,064 ------------ ------------ ------------ Class Y $ 405,682 $ 1,231,935 $ (217)(a) $ 1,637,400 ------------ ------------ ------------ OUTSTANDING SHARES: (No par value, unlimited number of shares authorized) Class A 7,214,281 12,102,370 146,772(b) 19,463,423 ------------ ------------ ------------ Class B 606,158 1,264,708 47,759(b) 1,918,625 ------------ ------------ ------------ Class C 1,680,091 4,829,763 40,762(b) 6,550,616 ------------ ------------ ------------ Class Y 30,922 94,522 212(b) 125,656 ------------ ------------ ------------ NET ASSET VALUE PER SHARE: Class A $ 13.04 $ 12.78 $ 12.78 ------------ ------------ ------------ Class B $ 12.33 $ 11.43 $ 11.43 ------------ ------------ ------------ Class C $ 12.39 $ 12.10 $ 12.10 ------------ ------------ ------------ Class Y $ 13.12 $ 13.03 $ 13.03 ------------ ------------ ------------ MAXIMUM OFFERING PRICE: Class A $ 13.84 $ 13.56 $ 13.56 ============ ============ ============
------------------- (a) Reflects one-time cost related to the reorganization. (b) Class A, B , C and Y shares of Pioneer Ibbotson Aggressive Allocation Fund are exchanged for Class A, B, C and Y shares of Pioneer Ibbotson Growth Allocation Fund, respectively. See accompanying notes to pro forma financial statements. 7 Pro Forma Statement of Operations For the Year Ended January 31, 2014 (unaudited)
Pioneer Pioneer Ibbotson Ibbotson Aggressive Growth Allocation Allocation Pro Forma Pro Forma Fund Fund Adjustments Combined ---------- ----------- ------------ ----------- INVESTMENT INCOME: Dividend income from underlying affiliated funds $ 2,073,424 $ 4,584,735 $ -- $ 6,658,159 Interest 79 119 -- 198 ----------- ----------- ---------- ----------- Total investment income $ 2,073,503 $ 4,584,854 $ -- $ 6,658,357 ----------- ----------- ---------- ----------- EXPENSES: Management fees $ 156,415 $ 290,395 $ -- $ 446,810 Transfer agent fees -- Class A 157,549 209,702 -- 367,251 Class B 27,951 49,130 -- 77,081 Class C 23,019 42,430 -- 65,449 Class Y 490 497 -- 987 Distribution fees Class A 227,883 375,524 -- 603,407 Class B 88,271 178,586 -- 266,857 Class C 197,832 538,509 -- 736,341 Shareholder communications expense 95,550 156,886 (47,638)(b) 204,798 Administrative fees 56,477 86,565 (5,562)(a) 137,480 Custodian fees 9,947 2,119 -- 12,066 Registration fees 78,541 61,208 (24,749)(b) 115,000 Professional fees 37,305 41,119 (35,221)(b) 43,203 Printing fees 53,286 33,272 (36,558)(b) 50,000 Fees and expenses of nonaffiliated trustees 6,400 6,625 (3,025)(b) 10,000 Insurance expense 1,563 3,477 -- 5,040 Miscellaneous 2,310 2,733 -- 5,043 ----------- ----------- ---------- ----------- Total expenses $ 1,220,789 $ 2,078,777 $ (152,753) $ 3,146,813 Less fees waived and expenses assumed by Pioneer Investment Management, Inc. $ (13,723) $ (10,993) $ (36,687)(a) $ (61,403) ----------- ----------- ---------- ----------- Net expenses $ 1,207,066 $ 2,067,784 $ (189,440) $ 3,085,410 ----------- ----------- ---------- ----------- Net investment income $ 866,437 $ 2,517,070 $ 189,440 $ 3,572,947 ----------- ----------- ---------- ----------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain on underlying affiliated funds $ 3,027,881 $ 4,119,358 $ -- $ 7,147,239 Capital gain distributions from underlying affiliated funds 4,563,667 7,973,923 -- 12,537,590 ----------- ----------- ---------- ----------- $ 7,591,548 $12,093,281 $ -- $19,684,829 ----------- ----------- ---------- ----------- Change in net unrealized appreciation on investments $ 6,240,289 9,940,875 $ -- $16,181,164 ----------- ----------- ---------- ----------- Net gain on investments $13,831,837 $22,034,156 $ -- $35,865,993 ----------- ----------- ---------- ----------- Net increase in net assets resulting from operations $14,698,274 $24,551,226 $ 189,440 $39,438,940 =========== =========== ========== ===========
------------------- (a) Expenses and expense limitations conformed to Pioneer Ibbotson Growth Allocation Fund's contracts with affiliated parties. (b) Reflects reduction in expenses due to elimination of duplicate services. See accompanying notes to pro forma financial statements. 8 Pioneer Multi-Asset Allocator Growth Fund PRO FORMA NOTES TO COMBINING FINANCIAL STATEMENTS 1-31-14 (Unaudited) 1. Description of the Fund Pioneer Multi-Asset Allocator Growth Fund (the Fund) is a series of Pioneer Ibbotson Asset Allocation Series, a Delaware statutory trust. The Fund is registered under the Investment Company Act of 1940 as an open-end management investment company. The investment objective of the Fund is to seek long-term capital growth and current income. The Fund is a "fund of funds," which means that it seeks to achieve its investment objective by investing in other registered investment companies ("underlying funds"). The Funds indirectly pay a portion of the expenses incurred by the underlying funds. Consequently, an investment in the Fund entails more direct and indirect expenses than direct investment in the underlying funds. The Fund will offer three classes of shares designated as Class A shares, Class C shares and Class Y shares. Prior to November 10, 2014, the Fund also offered Class B shares. Effective November 10, 2014, Class B shares will be terminated as a class of shares of the Fund, and existing Class B shares of the Fund on that date will be converted to Class A shares of the Fund. Each class of shares represents an interest in the same portfolio of investments of each Fund and has identical rights (based on relative net asset values) to assets and liquidation proceeds. Share classes can bear different rates of class-specific fees and expenses such as transfer agent and distribution fees. Differences in class specific fees and expenses will result in differences in net investment income and, therefore, the payment of different dividends from net investment income earned by each class. The Amended and Restated Declaration of Trust of each Fund gives the Board the flexibility to specify either per-share voting or dollar-weighted voting when submitting matters for shareholder approval. Under per-share voting, each share of a class of a Fund is entitled to one vote. Under dollar-weighted voting, a shareholder's voting power is determined not by the number of shares owned, but by the dollar value of the shares on the record date. Each share class has exclusive voting rights with respect to matters affecting only that class, including with respect to the distribution plan for that class. There is no distribution plan for Class Y shares. 2. Basis of Combination The accompanying pro forma combining financial statements, and related notes, are presented to show the effect of the proposed Reorganization of Pioneer Ibbotson Aggressive Allocation Fund (Aggressive Fund) with and into Pioneer Ibbotson Growth Allocation Fund (the "Reorganization"), as if such Reorganization had taken place as of January 31, 2014. Pioneer Ibbotson Growth Allocation Fund will be the accounting survivor of the Reorganization and will be renamed Pioneer Multi-Asset Allocator Growth Fund (the Fund). Under the terms of an Agreement and Plan of Reorganization between these two funds, the combination of the Fund and the Aggressive Fund will be treated as a tax-free business combination and accordingly will be accounted for by a method of accounting for tax-free reorganizations of investment companies. The Reorganization will be accomplished by an acquisition of the net assets of the Aggressive Fund in exchange for shares of the Fund at the Funds' net asset values. The accompanying schedule of investments, statement of assets and liabilities and the related statement of operations of the Aggressive Fund and the Fund have been combined as of and for the most recent twelve months ended January 31, 2014. Pioneer Investment Management, Inc. (PIM), the Fund's investment adviser, has agreed to pay 50% of the expenses associated with the Reorganization, and the Aggressive Fund and the Growth Fund will equally bear the remaining costs of the Reorganization. These costs are reflected in the pro forma financial statements. These pro forma financial statements and related notes should be read in conjunction with the financial statements of the Fund and the Aggressive Fund included in their respective semiannual reports to shareowners dated January 31, 2014. The statement of operations reflect adjustments made to expenses for Pioneer affiliate contractual rates and duplicate services that would not have been incurred if the Reorganization took place on February 1, 2013. 3. Security Valuation Security transactions are recorded as of the trade date. The net asset value is computed once daily, on each day the New York Stock Exchange (NYSE) is open, as of the close of regular trading on the NYSE. In computing the net asset value, holdings of mutual fund shares are valued at the net asset value of each fund held. Dividend income and realized capital gain distributions from investment company shares held are recorded on the ex-dividend date. Temporary cash investments are valued at amortized cost, which approximates market value. Gains and losses on sales of investments are calculated on the identified cost method for both financial reporting and federal income tax purposes. 9 Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in the three broad levels below. Highest priority is given to Level 1 inputs and lowest priority is given to Level 3. Level 1 -- quoted prices in active markets for identical securities Level 2 -- other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.) Level 3 -- significant unobservable inputs (including the Fund's own assumptions in determining fair value of investments) Generally, equity securities are categorized as Level 1, fixed income securities and senior loans as Level 2 and securities valued using fair value methods (other than prices supplied by independent pricing services) as Level 3. The following is a summary of the inputs used as of January 31, 2014, in valuing the Fund's assets:
Level 1 Level 2 Level 3 Total ------------------------------------------------------------------------------------ Mutual Funds $352,393,950 $ -- $ -- $352,393,950 Total $352,393,950 $ -- $ -- $352,393,950
During the twelve months ended January 31, 2014, there were no transfers between Levels 1, 2, and 3. 4. Capital Shares The pro forma net asset value per share assumes the issuance of shares of the Fund that would have been issued at January 31, 2014, in connection with the proposed Reorganization. The number of shares assumed to be issued is equal to the net assets of the Aggressive Fund, as of January 31, 2014, divided by the net asset value of the Fund's shares as of January 31, 2014. The pro forma number of shares outstanding, by class, for the combined Fund consists of the following at January 31, 2014:
Shares of Additional Shares Total Outstanding the Fund Assumed Issued Shares Class of Shares Pre-Combination In Reorganization Post-Combination ---------------------------------------------------------------------------------------------------- Class A 12,102,370 7,361,053 19,463,423 Class B 1,264,708 653,917 1,918,625 Class C 4,829,763 1,720,853 6,550,616 Class Y 94,522 31,134 125,656
5. Management Agreement PIM, a wholly owned indirect subsidiary of UniCredit, manages the Funds' portfolios. Management fees are calculated daily at the annual rate of 0.13% of Fund's average daily net assets up to $2.5 billion, 0.11% of next $1.5 billion; 0.10% of the next $1.5 billion and 0.08% on assets over $5.5 billion. PIM has contractually agreed to limit ordinary operating expenses to the extent required to reduce Growth Fund's expenses to 0.70% and 1.45% of the average daily net assets attributable to Class A and Class C shares, respectively. This expense limitation is in effect through December 1, 2015. Fees waived and expenses reimbursed during the twelve months ended January 31, 2014 are reflected on the Statement of Operations. There can be no assurance that PIM will extend the expense limitation agreement for a class of shares beyond the dates referred to above. 6. Federal Income Taxes The Fund has elected to be taxed as a "regulated investment company" under the Internal Revenue Code. After the acquisition, it will continue to be the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income and net realized capital gains, if any, to its shareowners. Therefore, no federal income tax provision is required. The identified cost of investments for the Fund is substantially the same for both financial and federal income tax purposes. The cost of investments will remain unchanged for the combined Fund. 27970-00-0814 SAI 10 PART C OTHER INFORMATION PIONEER IBBOTSON ASSET ALLOCATION SERIES ITEM 15. INDEMNIFICATION No change from the information set forth in Item 30 of the most recently filed Registration Statement of Pioneer Ibbotson Asset Allocation Series (the "Registrant") on Form N-1A under the Securities Act of 1933 and the Investment Company Act of 1940 (File Nos. 333-114788 and 811-21569), as filed with the Securities and Exchange Commission on November 26, 2013 (Accession No. 0001288255-13-000002), which information is incorporated herein by reference. ITEM 16. EXHIBITS (1)(a) Amended and Restated Agreement and Declaration of Trust (7) (1)(b) Amendment to Amended and Restated Agreement and Declaration of Trust (as of May 22, 2010) (8) (1)(c) Certificate of Trust (1) (1)(d) Amendment to Certificate of Trust (2) (2)(a) Amended and Restated By-Laws (7) (3) Not applicable (4) Form of Agreement and Plan of Reorganization (*) (5) Reference is made to Exhibits (1) and (2) hereof (6)(a) Amended and Restated Management Agreement (10) (6)(b) Form of Expense Limit Agreement (**) (7)(a) Underwriting Agreement between the Trust and Pioneer Funds Distributor, Inc. (2) (7)(b) Dealer Sales Agreement (6) (8) Not applicable (9)(a) Custodian Agreement between the Trust and Brown Brothers Harriman & Co. (5) (9)(b) Amended Appendix A to Custodian Agreement (December 1, 2012) (10) (10)(a) Pioneer Funds Distribution Plan (7) (10)(b) Appendix A and Appendix B to Pioneer Funds Distribution Plan (July 2013) (10) (10)(c) Multiclass Plan Pursuant to Rule 18f-3 (2) (11) Opinion of Counsel (legality of securities being offered) (**) (12) Form of opinion as to tax matters and consent (**) (13)(a) Master Investment Company Service Agreement between the Trust and Pioneer Investment Management Shareholder Services, Inc. (5) (13)(b) Amendment No. 6 to Master Investment Company Service Agreement (December 1, 2012) (10) (13)(c) Amended and Restated Administration Agreement (March 5, 2012) (9) (13)(d) Appendix A to Amended and Restated Administration Agreement (December 1, 2012) (10) (13)(e) Administrative Agency Agreement, dated as of March 5, 2012, between Brown Brothers Harriman & Co. and Pioneer Investment Management, Inc. (9) (13)(f) Amendment to Administrative and Fund Accounting Agency Agreement between the Fund and Brown Brothers Harriman & Co. (3) (13)(g) First Amendment to Administrative and Fund Accounting Agency Agreement between the Fund and Brown Brothers Harriman & Co. (4) (13)(h) Asset Allocation Administration Agreement between the Fund and Brown Brothers Harriman & Co. (3) (14) Consents of Independent Registered Public Accounting Firms (**) (15) Not applicable (16) Powers of Attorney (**) (17)(a) Code of Ethics of the Pioneer Funds, Pioneer Funds Distributor, Inc., Pioneer Institutional Asset Management, Inc., and Pioneer Investment Management, Inc. (February 1, 2010) (8) (17)(b) Combined Prospectus of Pioneer Ibbotson Growth Allocation Fund and Pioneer Ibbotson Aggressive Allocation Fund dated December 1, 2013, as supplemented, and Combined Statement of Additional Information of Pioneer Ibbotson Growth Allocation Fund and Pioneer Ibbotson Aggressive Allocation Fund dated December 1, 2013, as supplemented (**) (17)(c) Combined Annual Report of Pioneer Ibbotson Growth Allocation Fund and Pioneer Ibbotson Aggressive Allocation Fund for the fiscal year ended July 31, 2013 (**) (17)(d) Combined Semi-Annual Report of Pioneer Ibbotson Growth Allocation Fund and Pioneer Ibbotson Aggressive Allocation Fund for the fiscal year ended January 31, 2014 (**) (1) Previously filed. Incorporated herein by reference from the exhibits filed in the Registrant's Registration Statement on Form N-1A (File Nos. 333-114788 and 811-21569) as filed with the Securities and Exchange Commission (the "SEC") on April 23, 2004 (Accession No. 0001288255-04-000006). (2) Previously filed. Incorporated herein by reference from the exhibits filed in the Registrant's Pre-effective amendment No. 2 to the Registration Statement on Form N-1A (File Nos. 333-114788 and 811-21569) as filed with the SEC on August 6, 2004 (Accession No. 0001016964-04-000333). (3) Previously filed. Incorporated herein by reference from the exhibits filed in the Registrant's Post-effective amendment No. 4 to the Registration Statement on Form N-1A (File Nos. 333-114788 and 811-21569) as filed with the SEC on July 15, 2005 (Accession No. 0001288255-05-000003). (4) Previously filed. Incorporated herein by reference from the exhibits filed in the Registrant's Post-effective amendment No. 6 to the Registration Statement on Form N-1A (File Nos. 333-114788 and 811-21569) as filed with the SEC on November 23, 2005 (Accession No. 0001288255-05-000021). (5) Previously filed. Incorporated herein by reference from the exhibits filed in the Registrant's Post-effective amendment No. 7 to the Registration Statement on Form N-1A (File Nos. 333-114788 and 811-21569) as filed with the SEC on November 28, 2006 (Accession No. 0001288255-06-000019). (6) Previously filed. Incorporated herein by reference from the exhibits filed in the Registrant's Post-effective amendment No. 8 to the Registration Statement on Form N-1A (File Nos. 333-114788 and 811-21569) as filed with the SEC on November 28, 2007 (Accession No. 0001145443-07-003717). (7) Previously filed. Incorporated herein by reference from the exhibits filed in the Registrant's Post-effective amendment No. 9 to the Registration Statement on Form N-1A (File Nos. 333-114788 and 811-21569) as filed with the SEC on November 26, 2008 (Accession No. 0001288255-08-000008). (8) Previously filed. Incorporated herein by reference from the exhibits filed in the Registrant's Post-effective amendment No. 12 to the Registration Statement on Form N-1A (File Nos. 333-114788 and 811-21569) as filed with the SEC on November 24, 2010 (Accession No. 0001288255-10-000002). (9) Previously filed. Incorporated herein by reference from the exhibits filed in the Registrant's Post-effective amendment No. 15 to the Registration Statement on Form N-1A (File Nos. 333-114788 and 811-21569) as filed with the SEC on November 28, 2012 (Accession No. 0001288255-12-000011). (10) Previously filed. Incorporated herein by reference from the exhibits filed in the Registrant's Post-effective amendment No. 17 to the Registration Statement on Form N-1A (File Nos. 333-114788 and 811-21569) as filed with the SEC on November 26, 2013 (Accession No. 0001288255-13-000002). (*) Attached as Exhibit C to the combined Information Statement/Prospectus (**) Filed herewith. ITEM 17. UNDERTAKINGS. (1) The undersigned Registrant agrees that prior to any public reoffering of the securities registered through the use of a prospectus which is part of this Registration Statement by any person or party which is deemed to be an underwriter within the meaning of Rule 145(c) of the Securities Act of 1933, the reoffering prospectus will contain the information called for by the applicable registration form for the reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. (2) The undersigned Registrant agrees that every prospectus that is filed under paragraph (1) above will be filed as part of an amendment to the Registration Statement and will not be used until the amendment is effective, and that, in determining any liability under the Securities Act of 1933, each post-effective amendment shall be deemed to be a new registration statement for the securities offered therein, and the offering of the securities at that time shall be deemed to be the initial bona fide offering of them. (3) The undersigned Registrant agrees that it shall file a final executed version of the legal and consent opinion as to tax matters as an exhibit to the subsequent post-effective amendment to its registration statement on Form N-14 filed with the SEC upon the closing of the reorganization contemplated by this Registration Statement on Form N-14. (4) Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. SIGNATURES As required by the Securities Act of 1933, this Registration Statement on Form N-14 has been signed on behalf of the Registrant, in the City of Boston and the Commonwealth of Massachusetts, on the 5th day of September, 2014. PIONEER IBBOTSON ASSET ALLOCATION SERIES By: /s/ Mark D. Goodwin -------------------------------- Name: Mark D. Goodwin Title: Executive Vice President Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated. Signature Title Date --------- ----- ---- /s/ Mark D. Goodwin ------------------- Mark D. Goodwin Executive Vice President (Principal Executive Officer) September 5, 2014 /s/ Mark E. Bradley ------------------- Mark E. Bradley Treasurer (Principal Financial and Accounting Officer) September 5, 2014 /s/ David R. Bock* ------------------ David R. Bock Trustee September 5, 2014 /s/ Benjamin M. Friedman* ------------------------- Benjamin M. Friedman Trustee September 5, 2014 /s/ Margaret B.W. Graham* ------------------------- Margaret B.W. Graham Trustee September 5, 2014 /s/ Thomas J. Perna* -------------------- Thomas J. Perna Chairman of the Board and Trustee September 5, 2014 /s/ Marguerite A. Piret* ------------------------ Marguerite A. Piret Trustee September 5, 2014 /s/ Kenneth J. Taubes* ---------------------- Kenneth J. Taubes Trustee September 5, 2014 * By: /s/ Christopher J. Kelley ------------------------- Christopher J. Kelley, Attorney-in-Fact EXHIBIT INDEX The following exhibits are filed as part of this Registration Statement: Exhibit No. Description ----------- ----------- (6)(b) Form of Expense Limit Agreement (11) Opinion of Counsel (legality of securities being offered) (12) Form of opinion as to tax matters and consent (14) Consents of Independent Registered Public Accounting Firms (16) Powers of Attorney (17)(b) Combined Prospectus of Pioneer Ibbotson Growth Allocation Fund and Pioneer Ibbotson Aggressive Allocation Fund dated December 1, 2013, as supplemented, and Combined Statement of Additional Information of Pioneer Ibbotson Growth Allocation Fund and Pioneer Ibbotson Aggressive Allocation Fund dated December 1, 2013, as supplemented (17)(c) Combined Annual Report of Pioneer Ibbotson Growth Allocation Fund and Pioneer Ibbotson Aggressive Allocation Fund for the fiscal year ended July 31, 2013 (17)(d) Combined Semi-Annual Report of Pioneer Ibbotson Growth Allocation Fund and Pioneer Ibbotson Aggressive Allocation Fund for the fiscal year ended January 31, 2014 EX-99.(6)(B) 3 ex996b.txt FORM OF EXPENSE LIMIT AGREEMENT EXPENSE LIMIT AGREEMENT Expense Limit Agreement made as of May 1, 2006 and as revised on September 5, 2014 between Pioneer Investment Management, Inc. ("PIM"), on behalf of itself and its affiliates, Pioneer Investment Management Shareholder Services, Inc. ("PIMSS") and Pioneer Funds Distributor, Inc. ("PFD"), and each of the Pioneer Funds listed on Annex A, as updated from time to time (each a "Fund"). Whereas PIM, PIMSS and PFD wish to reduce the expenses of each Fund; and Whereas each Fund wishes to have PIM enter into such an agreement. Now therefore the parties agree as follows: SECTION 1 Special Class A Limitations. The expenses attributable to each class of shares of the Funds listed on Annex B, as updated from time to time, shall be reduced, if necessary, so that the Ordinary Operating Expenses (as defined below) of each Fund attributable to such class of shares do not exceed the percentage of average daily net assets attributable to the applicable class of shares of such Fund as set forth on Annex B. This expense limitation shall be effected first by PIMSS waiving transfer agency fees and expenses allocated to the applicable class of shares. If waiving transfer agency fees and expenses alone is not sufficient to achieve the expense limitation reflected in Annex B, PFD shall waive Rule 12b-1 fees attributable to the applicable class of shares. In the event that waiving transfer agency fees and expenses and Rule 12b-1 fees attributable to a class of shares is not sufficient to achieve the expense limitation reflected in Annex B, PIM shall reimburse other expenses or waive other fees ("Fund-Wide Expenses") to the extent necessary to further reduce the expenses attributable to that class of shares to the percentage of average daily net assets reflected in Annex B. In the event that PIM waives or reimburses any Fund-Wide Expenses, PIM also agrees to waive or reimburse the Fund-Wide Expenses attributable to any other authorized class of shares to the same extent that such expenses are reduced for the class of shares that required the reduction of Fund-Wide Expenses. SECTION 2 Amendment or Termination of Expense Limits. PIM may terminate or modify these expense limitations only in accordance with this Agreement. PIM agrees that the expense limitations set forth in Annex B shall continue in force until the date set forth with respect to each Fund (and class thereof) in Annex B; provided, that PIM may extend a date reflected in Annex B from time to time. SECTION 3 Termination of Expense Reimbursement Provisions. Notwithstanding anything to the contrary in any predecessor to this Agreement, PIM agrees that it shall not be entitled to be reimbursed for any expenses that PIM, PIMSS or PFD has waived or limited. SECTION 4 Ordinary Operating Expenses. For purposes of this Agreement, Ordinary Operating Expenses means all expenses of the Funds other than extraordinary expenses, such as litigation, taxes and brokerage commissions, and acquired fund fees and expenses. SECTION 5 Governing Law. This Agreement shall be governed by the laws of the State of Delaware. SECTION 6 Existing Agreements Superseded. In the case of each Fund, to the extent that this Agreement provides for expense limit arrangements for the same classes of the Fund to which an existing expense limit agreement relates (each an "Existing Agreement"), this Agreement shall supersede and replace the Existing Agreement. In witness whereof, the parties hereto have caused this Agreement to be signed as of the 5th day of September, 2014. Each of the Funds Listed on Annex A. By: /s/Mark D. Goodwin Name: Mark D. Goodwin Title: Executive Vice President PIONEER INVESTMENT MANAGEMENT, INC. By: /s/Gregg M. Dooling Name: Gregg M. Dooling Title: Chief Financial Officer Annex A Pioneer Ibbotson Growth Allocation Fund Annex B
REGULAR FISCAL PROSPECTUS EXPENSE FUND CLASS YEAR END DATE LIMIT EXPIRATION ------------------------------------------------------------------------------- Pioneer Ibbotson Growth Allocation Fund* A 7/31 12/1 0.70% 12/1/15 ------------------------------------------------------------------------------- C 7/31 12/1 1.45% 12/1/15 -------------------------------------------------------------------------------
* The expense limitation is effective as of the reorganization of Pioneer Ibbotson Aggressive Allocation Fund into Pioneer Ibbotson Growth Allocation Fund. The expense limitation applies to the fund's direct ordinary operating expenses and not the expenses of the underlying funds. EX-99.(11) 4 ex9911.txt OPINION OF COUNSEL BINGHAM MCCUTCHEN LLP ONE FEDERAL STREET BOSTON, MASSACHUSETTS 02110 September 5, 2014 Pioneer Ibbotson Asset Allocation Series 60 State Street Boston, Massachusetts 02109 Ladies and Gentlemen: We have acted as counsel to Pioneer Ibbotson Asset Allocation Series, a Delaware statutory trust, in its individual capacity (the "Trust") and on behalf of its series Pioneer Ibbotson Growth Allocation Fund (the "Acquiring Fund"), in connection with the Trust's Registration Statement on Form N-14 to be filed with the Securities and Exchange Commission on or about September 5, 2014 (the "Registration Statement"), with respect to the Acquiring Fund's Class A, Class C and Class Y shares of beneficial interest (the "Shares") to be issued in exchange for the assets of Pioneer Aggressive Allocation Fund (the "Target Fund"), a series of the Trust, as described in the Registration Statement (the "Reorganization"). You have requested that we deliver this opinion in connection with the Trust's filing of the Registration Statement. In connection with the furnishing of this opinion, we have examined the following documents: (a) A certificate of the Secretary of State of the State of Delaware, dated as of a recent date, as to the existence of the Trust; (b) A copy, certified by the Secretary of State of the State of Delaware, of the Trust's Certificate of Trust filed with the Secretary of State (the "Certificate of Trust"); (c) A certificate executed by the Secretary of the Trust, certifying as to, and attaching copies of, the Trust's Agreement and Declaration of Trust (the "Declaration"), the Trust's By-Laws (the "By-Laws"), and the resolutions adopted by the Trustees of the Trust authorizing the Reorganization and the issuance of the Shares on behalf of the Acquiring Fund (the "Resolutions"); (d) a printer's proof, received on September 5, 2014, of the Registration Statement; and September 5, 2014 Page 2 (e) a copy of the Agreement and Plan of Reorganization to be entered into by the Acquiring Fund and the Target Fund in the form included as Exhibit A to the Registration Statement referred to in paragraph (d) above (the "Agreement and Plan of Reorganization"). In such examination, we have assumed the genuineness of all signatures, the conformity to the originals of all of the documents reviewed by us as copies, including conformed copies, the authenticity and completeness of all original documents reviewed by us in original or copy form and the legal competence of each individual executing any document. We have assumed for the purposes of this opinion that (i) the Registration Statement as filed with the Securities and Exchange Commission will be in substantially the form of the printer's proof referred to in paragraph (d) above; (ii) the Agreement and Plan of Reorganization will be duly completed, executed and delivered by the parties thereto in substantially the form of the copy referred to in paragraph (e) above; and (iii) that the Declaration, the By-Laws, the Certificate of Trust, the Resolutions and the Agreement and Plan of Reorganization will not have been amended, modified or withdrawn and will be in full force and effect on the date of issuance of such Shares. This opinion is based entirely on our review of the documents listed above and such other documents as we have deemed necessary or appropriate for the purposes of this opinion and such investigation of law as we have deemed necessary or appropriate. We have made no other review or investigation of any kind whatsoever, and we have assumed, without independent inquiry, the accuracy of the information set forth in such documents. This opinion is limited solely to the Delaware Statutory Trust Act (which for this purpose includes applicable provisions of the Delaware Constitution and reported judicial decisions interpreting these laws) to the extent that the same may apply to or govern the transactions referred to herein, and we express no opinion with respect to the laws of any other jurisdiction or to any other laws of the State of Delaware. Further, we express no opinion as to any state or federal securities laws, including the securities laws of the State of Delaware. No opinion is given herein as to the choice of law or internal substantive rules of law which any tribunal may apply to such transaction. In addition, to the extent that the Declaration or the By-Laws refer to, incorporate or require compliance with, the Investment Company Act of 1940, as amended, or any other law or regulation applicable to the Trust, except for the Delaware Statutory Trust Act, as aforesaid, we have assumed compliance by the Trust with such Act and such other laws and regulations. We understand that all of the foregoing assumptions and limitations are acceptable to you. September 5, 2014 Page 3 Based upon and subject to the foregoing, please be advised that it is our opinion that the Shares, when issued and sold in accordance with the Declaration, the By-Laws, and the Resolutions and for the consideration described in the Agreement and Plan of Reorganization, will be validly issued, fully paid and nonassessable. This opinion is given as of the date hereof and we assume no obligation to update this opinion to reflect any changes in law or any other facts or circumstances which may hereafter come to our attention. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In rendering this opinion and giving this consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission thereunder. Very truly yours, BINGHAM McCUTCHEN LLP EX-99.(12) 5 ex9912.txt FORM OF OPINION [FORM OF OPINION OF BINGHAM McCUTCHEN LLP] [ ], 2014 Pioneer Ibbotson Asset Allocation Series 60 State Street Boston, Massachusetts 02109 Ladies and Gentlemen: This opinion is furnished to you pursuant to Paragraph 8.4 of the Agreement and Plan of Reorganization (the "Agreement"), dated as of [ ], 2014, by and between Pioneer Ibbotson Asset Allocation Series, a Delaware statutory trust (the "Trust"), on behalf of Pioneer Ibbotson Growth Allocation Fund, a series thereof (the "Acquiring Fund"), and the Trust, on behalf of Pioneer Ibbotson Aggressive Asset Allocation Fund, a series thereof (the "Acquired Fund"). All capitalized terms not otherwise defined herein have the meanings ascribed to them in the Agreement. The Agreement contemplates (1) the transfer of all of the Acquired Assets to the Acquiring Fund in exchange solely for (a) the issuance to the Acquired Fund of a number of Class A, Class C, and Class Y Acquiring Fund Shares, including fractional Acquiring Fund Shares, having an aggregate NAV equal to the NAV of the Acquired Fund attributable to the corresponding classes of Acquired Fund Shares, and (b) the assumption by the Acquiring Fund of all of the Assumed Liabilities, and (2) the distribution by the Acquired Fund of the Acquiring Fund Shares pro rata on a class-by-class basis to the Acquired Fund Shareholders in complete liquidation and dissolution of the Acquired Fund (collectively, the "Transaction"). In connection with this opinion we have examined and relied upon the originals or copies, certified or otherwise identified to us to our satisfaction, of the Agreement, the Combined Information Statement of the Acquired Fund and Prospectus for the Acquiring Fund, dated [ ], 2014, and related documents (collectively, the "Transaction Documents"). In that examination, we have assumed the genuineness of all signatures, the capacity and authority of each party executing a document to so execute the document, the authenticity and completeness of all documents purporting to be originals (whether reviewed by us in original or copy form) and the conformity to the originals of all documents purporting to be copies (including electronic copies). We have also assumed that each agreement and other instrument reviewed by us is valid and binding on the party or parties thereto and is enforceable in accordance with its terms, and that there are no contracts, agreements, arrangements, or understandings, either written or oral, that are inconsistent with or that would materially alter the terms of the Agreement or the other Transaction Documents. As to certain factual matters, we have relied with your consent upon, and our opinion is limited by, the representations of the various parties set forth in the Transaction Documents and in certificates of the Trust, on behalf of the Acquired Fund and the Acquiring Fund, each dated as of the date hereof (the "Certificates"). Our opinion assumes (i) that all representations set forth in the Transaction Documents and in the Pioneer Ibbotson Asset Allocation Series [ ], 2014 Page Two Certificates will be true and correct in all material respects as of the date of the Transaction (and that any such representations made "to the best knowledge of," "to the knowledge of," "in the belief of," or otherwise similarly qualified, are true and correct in all material respects without any such qualification), and (ii) that the Agreement is implemented in accordance with its terms and consistent with the representations set forth in the Transaction Documents and Certificates. Our opinion is limited solely to the provisions of the Internal Revenue Code of 1986, as amended and as presently in effect (the "Code"), existing case law, existing permanent and temporary treasury regulations promulgated under the Code ("Treasury Regulations"), and existing published revenue rulings and procedures of the Internal Revenue Service that are in effect as of the date hereof, all of which are subject to change and new interpretation, both prospectively and retroactively. We assume no obligation to update our opinion to reflect other facts or any changes in law or in the interpretation thereof that may hereafter occur. On the basis of and subject to the foregoing, with respect to the Transaction, we are of the opinion that, for United States federal income tax purposes: 1. The Transaction will constitute a "reorganization" within the meaning of Section 368(a) of the Code, and each of the Acquired Fund and the Acquiring Fund will be a "party to a reorganization" within the meaning of Section 368(b) of the Code. 2. No gain or loss will be recognized by the Acquired Fund on the transfer of the Acquired Assets to the Acquiring Fund solely in exchange for the Acquiring Fund Shares and the assumption by the Acquiring Fund of the Assumed Liabilities, or upon the distribution of the Acquiring Fund Shares to the shareholders of the Acquired Fund, except for (A) gain or loss that may be recognized on the transfer of "section 1256 contracts" as defined in Section 1256(b) of the Code, (B) gain that may be recognized on the transfer of stock in a "passive foreign investment company" as defined in Section 1297(a) of the Code, and (C) any other gain or loss that may be required to be recognized as a result of the closing of the Acquired Fund's taxable year or upon the transfer of an Acquired Asset regardless of whether such transfer would otherwise be a non-recognition transaction under the Code. 3. The tax basis in the hands of the Acquiring Fund of each Acquired Asset will be the same as the tax basis of such Acquired Asset in the hands of the Acquired Fund immediately prior to the transfer thereof, increased by the amount of gain (or decreased by the amount of loss), if any, recognized by the Acquired Fund on the transfer. 4. The holding period of each Acquired Asset in the hands of the Acquiring Fund, other than any Acquired Asset with respect to which gain or loss is required to be recognized in the Transaction, will include the period during which such Acquired Asset was held by the Acquired Fund Pioneer Ibbotson Asset Allocation Series [ ], 2014 Page Three (except where investment activities of the Acquiring Fund have the effect of reducing or eliminating the holding period with respect to an Acquired Asset). 5. No gain or loss will be recognized by the Acquiring Fund upon its receipt of the Acquired Assets solely in exchange for Acquiring Fund Shares and the assumption of the Assumed Liabilities. 6. No gain or loss will be recognized by the Acquired Fund Shareholders upon the exchange of all of their Acquired Fund Shares for Acquiring Fund Shares as part of the Transaction. 7. The aggregate tax basis of the Acquiring Fund Shares that each Acquired Fund Shareholder receives in the Transaction will be the same as the aggregate tax basis of the Acquired Fund Shares exchanged therefor. 8. Each Acquired Fund Shareholder's holding period for the Acquiring Fund Shares received in the Transaction will include the holding period for the Acquired Fund Shares exchanged therefor, provided that the Acquired Fund Shareholder held such Acquired Fund Shares as capital assets on the date of the exchange. This opinion is being delivered solely to you for your use in connection with the Transaction, and may not be relied upon by any other person or used for any other purpose. Very truly yours, BINGHAM McCUTCHEN LLP EX-99.(14) 6 ex9914.txt CONSENTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the references to our firm under the captions "Financial Highlights" and "Auditors" in the Combined Information Statement of Pioneer Ibbotson Aggressive Allocation Fund and Prospectus For Pioneer Ibbotson Growth Allocation Fund (both a series of Pioneer Ibbotson Asset Allocation Series). We further consent to the reference to us under the heading "Representations and Warranties" (paragraphs 4.1(f) and 4.2(g)) in the Agreement and Plan of Reorganization included as Exhibit A to the Combined Information Statement and Prospectus included in this Registration Statement as filed with the Securities and Exchange Commission on Form N-14 of Pioneer Ibbotson Asset Allocation Series. We also consent to the references to our firm under the captions "Independent Registered Public Accounting Firm" and "Financial Statements" in the Statements of Additional Information on Form N-1A for the following funds which are also incorporated by reference into this Registration Statement on Form N-14 of the Pioneer Ibbotson Asset Allocation Series: Pioneer Ibbotson Aggressive Allocation Fund, which was filed with the Securities and Exchange Commission on November 26, 2013 in Post-Effective Amendment No. 18 (File Nos. 333-114788; 811-21569). Pioneer Ibbotson Growth Allocation Fund, which was filed with the Securities and Exchange Commission on November 26, 2013 in Post-Effective Amendment No. 18 (File Nos. 333-114788; 811-21569). We further consent to the incorporation by reference of our reports on each of the financial statements and financial highlights for Pioneer Ibbotson Aggressive Allocation Fund and Pioneer Ibbotson Growth Allocation Fund as of July 31, 2013, dated September 24, 2013, which are also incorporated by reference into this Registration Statement as filed with the Securities and Exchange Commission on Form N-14 of Pioneer Ibbotson Asset Allocation Series. /s/ ERNST & YOUNG LLP Boston, Massachusetts September 5, 2014 EX-99.(16) 7 ex9916.txt POWERS OF ATTORNEY POWER OF ATTORNEY I, the undersigned Trustee of Pioneer Ibbotson Asset Allocation Series (the "Trust"), hereby constitute and appoint Christopher J. Kelley, Daniel K. Kingsbury and Mark E. Bradley, and each of them acting singly, to be my true, sufficient and lawful attorneys, with full power to each of them to sign for me, in my name: (i) the Trust's Registration Statement on Form N-14, and any and all amendments thereto, with respect to the proposed reorganization of Pioneer Ibbotson Aggressive Allocation Fund into Pioneer Ibbotson Growth Allocation Fund, a series of the Trust, and (ii) any and all other documents and papers relating to such reorganization, and generally to do all such things in my name and on behalf of me in the capacities indicated to enable the Trust to comply with the Investment Company Act of 1940, as amended, and the Securities Act of 1933, as amended, and thereunder, hereby ratifying and confirming my signature as it may be signed by said attorneys or each of them to the Registration Statement and amendments to said Registration Statement. IN WITNESS WHEREOF, I have hereunder set my hand on this 15th day of July, 2014. /s/ David R. Bock /s/ Thomas J. Perna ----------------- ------------------- David R. Bock Thomas J. Perna /s/ Benjamin M. Friedman /s/ Marguerite A. Piret ------------------------ ----------------------- Benjamin M. Friedman Marguerite A. Piret /s/ Margaret B.W. Graham /s/ Kenneth J. Taubes ------------------------ --------------------- Margaret B.W. Graham Kenneth J. Taubes /s/ Daniel K. Kingsbury ----------------------- Daniel K. Kingsbury EX-99.(17)(B) 8 ex9917b.txt COMBINED PROSPECTUS JULY 25, 2014 PIONEER FUNDS SUPPLEMENT TO THE PROSPECTUSES AND SUMMARY PROSPECTUSES, AS IN EFFECT AND AS MAY BE AMENDED FROM TIME TO TIME, FOR FUND DATE OF PROSPECTUS Pioneer AMT-Free Municipal Fund May 1, 2014 Pioneer Bond Fund November 1, 2013 Pioneer Classic Balanced Fund December 1, 2013 Pioneer Core Equity Fund May 1, 2014 Pioneer Disciplined Growth Fund December 31, 2013 Pioneer Disciplined Value Fund November 1, 2013 Pioneer Emerging Markets Fund April 1, 2014 Pioneer Equity Income Fund March 1, 2014 (as revised March 12, 2014) Pioneer Fund May 1, 2014 Pioneer Fundamental Growth Fund August 1, 2013 Pioneer Global Equity Fund December 31, 2013 Pioneer Global High Yield Fund March 1, 2014 Pioneer Government Income Fund December 1, 2013 Pioneer High Yield Fund March 1, 2014 Pioneer Ibbotson Aggressive Allocation Fund December 1, 2013 Pioneer Ibbotson Conservative Allocation Fund December 1, 2013 Pioneer Ibbotson Growth Allocation Fund December 1, 2013 Pioneer Ibbotson Moderate Allocation Fund December 1, 2013 Pioneer International Value Fund April 1, 2014 Pioneer Mid Cap Value Fund March 1, 2014 Pioneer Oak Ridge Large Cap Growth Fund April 1, 2014 Pioneer Oak Ridge Small Cap Growth Fund April 1, 2014 Pioneer Real Estate Shares May 1, 2014 Pioneer Select Mid Cap Growth Fund April 1, 2014 Pioneer Short Term Income Fund December 31, 2013 Pioneer Strategic Income Fund February 1, 2014
IMPORTANT NOTICE TO CLASS B SHAREHOLDERS As of the close of business on November 10, 2014 (the "Conversion Date"), all outstanding Class B shares of the Pioneer funds will be converted to Class A shares. Shareholders may continue to hold their Class B shares until the Conversion Date. Prior to the Conversion Date, redemptions of Class B shares are subject to any applicable contingent deferred sales charges (CDSCs). Class A shares acquired through the conversion will not be subject to CDSCs, nor will any sales charges be assessed in connection with the conversion. After the Conversion Date, subsequent purchases of Class A shares will be subject to sales charges as described in each fund's prospectus. As of the Conversion Date, each fund's prospectus is revised by eliminating all references to Class B shares. 27916-00-0714 (Copyright)2014 PIONEER FUNDS DISTRIBUTOR, INC. UNDERWRITER OF PIONEER MUTUAL FUNDS MEMBER SIPC JULY 21, 2014 PIONEER IBBOTSON ASSET ALLOCATION SERIES PIONEER IBBOTSON CONSERVATIVE ALLOCATION FUND PIONEER IBBOTSON MODERATE ALLOCATION FUND PIONEER IBBOTSON GROWTH ALLOCATION FUND PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND SUPPLEMENT TO THE DECEMBER 1, 2013 PROSPECTUS AND SUMMARY PROSPECTUS, AS IN EFFECT AND AS MAY BE AMENDED FROM TIME TO TIME The Board of Trustees (the "Board") of Pioneer Ibbotson Allocation Series (the "Funds") has determined that Pioneer Investment Management, Inc. ("Pioneer") will assume direct responsibility for the day-to-day management of each Fund's portfolio in the fourth quarter of 2014. Each Fund's asset allocation strategies will be modified in connection with Pioneer's assumption of day-to-day management responsibilities for each Fund. Currently, Pioneer, the Funds' investment adviser, oversees the Funds' operations and supervises Ibbotson Associates, Inc. ("Ibbotson") as investment subadviser to each Fund. Ibbotson will continue to serve as the Funds' subadviser until Pioneer assumes day-to-day management responsibilities for the Funds. MODIFIED APPROACH TO ASSET ALLOCATION STRATEGIES The Funds will continue to operate as funds of funds after Pioneer assumes day-to-day management responsibilities for each Fund, and each Fund will continue to seek to achieve its investment objectives mainly by investing in other funds. There will be no changes to the Funds' investment objectives. However, each Fund's asset allocation strategies will change in connection with Pioneer's assumption of day-to-day management responsibilities. Under Pioneer's new approach, Pioneer will consider each Fund's risk profile (as measured by volatility) in selecting investments, without relying on fixed asset class ranges. The Funds will invest in a broader range of funds, including non-Pioneer funds and exchange-traded funds. As part of its overall strategy, each Fund also may use derivatives, including in an attempt to hedge against adverse changes in the market prices of securities, interest rates or currency exchange rates or to increase the Fund's return as a non-hedging strategy. PORTFOLIO MANAGEMENT The following members of Pioneer's fund-of-funds team will serve as the Funds' portfolio managers when Pioneer assumes day-to-day management responsibilities for the Funds: John O'Toole is the Head of Multi-Asset Fund Solutions at Pioneer. Mr. O'Toole is responsible for the management of asset allocation portfolios and the full range of multi-asset products (fund of funds, segregated accounts and unit-linked). As a member of the Strategy Committee, he formulates top-down, macro asset allocation positioning. In addition, the Multi-Asset Fund Solutions team is responsible for strategy selection across all asset classes, as well as manager appraisal and selection in the construction of multi-asset and multi-manager portfolios. Mr. O'Toole joined Pioneer in 2005. Mr. O'Toole has worked in the investment industry since 1995. Paul Weber leads the Fund Research and Manager Selection team. Prior to joining the team in 2004, Mr. Weber worked on special projects with the Portfolio Analytics team. Mr. Weber's primary areas of coverage include equity strategies in Japan as well as global asset allocation strategies. Mr. Weber has a secondary focus on global bonds, European and Asian equity strategies. Mr. Weber joined Pioneer in 2002. Salvatore Buono is Head of Strategy Alignment and Structured Products within the Multi-Asset Fund Solutions team. In his role, he has oversight of portfolio positioning ensuring alignment of investment strategies across a broad range of products. Mr. Buono also oversees the trade management process, including liquidity and risk assessments for all proposed investment strategies. Mr. Buono joined Pioneer in 2008. REORGANIZATION OF PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND The Board has approved the reorganization of Pioneer Ibbotson Aggressive Allocation Fund into Pioneer Ibbotson Growth Allocation Fund (the "Reorganization"). The Reorganization does not require shareholder approval. The Reorganization is expected be completed during the fourth quarter of 2014. At the time of the Reorganization, Pioneer Ibbotson Growth Allocation Fund's asset allocation strategies will change as described above. The Reorganization is expected to qualify as a tax-free reorganization, which generally means that the Reorganization will result in no income, gain or loss being recognized for federal income tax purposes by either fund or its shareholders as a direct result of the Reorganization. Additional information regarding the Reorganization will be sent to the shareholders of Pioneer Ibbotson Aggressive Allocation Fund. 27907-00-0714 (Copyright)2014 PIONEER FUNDS DISTRIBUTOR, INC. UNDERWRITER OF PIONEER MUTUAL FUNDS MEMBER SIPC June 1, 2014 Supplement to the Prospectuses, as in effect and as may be amended, for
Fund Date of Prospectus ---- ------------------ Pioneer Absolute Return Bond Fund...................... January 10, 2014 (as revised January 30, 2014) Pioneer AMT-Free Municipal Fund........................ May 1, 2014 Pioneer Bond Fund...................................... November 1, 2013 Pioneer Cash Reserves Fund............................. May 1, 2014 Pioneer Classic Balanced Fund.......................... December 1, 2013 Pioneer Core Equity Fund............................... May 1, 2014 Pioneer Disciplined Growth Fund........................ December 31, 2013 Pioneer Disciplined Value Fund......................... November 1, 2013 Pioneer Dynamic Credit Fund............................ August 1, 2013 Pioneer Emerging Markets Fund.......................... April 1, 2014 Pioneer Emerging Markets Local Currency Debt Fund...... March 1, 2014 Pioneer Equity Income Fund............................. March 1, 2014 (as revised March 12, 2014) Pioneer Floating Rate Fund............................. March 1, 2014 Pioneer Fund........................................... May 1, 2014 Pioneer Fundamental Growth Fund........................ August 1, 2013 Pioneer Global Equity Fund............................. December 31, 2013 Pioneer Global High Yield Fund......................... March 1, 2014 Pioneer Global Multisector Income Fund................. March 1, 2014 Pioneer Government Income Fund......................... December 1, 2013 Pioneer High Income Municipal Fund..................... December 31, 2013 Pioneer High Yield Fund................................ March 1, 2014 Pioneer Ibbotson Aggressive Allocation Fund............ December 1, 2013 Pioneer Ibbotson Conservative Allocation Fund.......... December 1, 2013 Pioneer Ibbotson Growth Allocation Fund................ December 1, 2013 Pioneer Ibbotson Moderate Allocation Fund.............. December 1, 2013 Pioneer International Value Fund....................... April 1, 2014 Pioneer Long/Short Global Bond Fund.................... December 6, 2013 (as revised January 8, 2014) Pioneer Long/Short Opportunistic Credit Fund........... December 6, 2013 (as revised January 8, 2014) Pioneer Mid Cap Value Fund............................. March 1, 2014 Pioneer Multi-Asset Income Fund........................ December 1, 2013 Pioneer Multi-Asset Real Return Fund................... March 1, 2014 Pioneer Multi-Asset Ultrashort Income Fund............. August 1, 2013 Pioneer Oak Ridge Large Cap Growth Fund................ April 1, 2014 Pioneer Oak Ridge Small Cap Growth Fund................ April 1, 2014 Pioneer Real Estate Shares............................. May 1, 2014 Pioneer Select Mid Cap Growth Fund..................... April 1, 2014 Pioneer Short Term Income Fund......................... December 31, 2013 Pioneer Strategic Income Fund.......................... February 1, 2014
Effective July 1, 2014, the following language supplements the "Buying, exchanging and selling shares" section of the prospectus under the heading "Opening your account." Each fund is generally available for purchase in the United States, Puerto Rico, Guam, American Samoa and the U.S. Virgin Islands. Except to the extent otherwise permitted by the funds' distributor, the funds will only accept accounts from U.S. citizens with a U.S. address (including an APO or FPO address) or resident aliens with a U.S. address (including an APO or FPO address) and a U.S. taxpayer identification number. 27789-00-0614 (C) 2014 Pioneer Funds Distributor, Inc. Underwriter of Pioneer mutual funds Member SIPC PIONEER -------------------------------------------------------------------------------- IBBOTSON ASSET ALLOCATION SERIES
CONSERVATIVE MODERATE GROWTH AGGRESSIVE ALLOCATION ALLOCATION ALLOCATION ALLOCATION CLASS FUND FUND FUND FUND ------- -------------- ------------ ------------ ----------- A PIAVX PIALX GRAAX PIAAX B PIBVX PIBLX GRABX IALBX C PICVX PIDCX GRACX IALCX Y IBBCX IMOYX IBGYX IBAYX
Prospectus, December 1, 2013 CONTENTS -------------------------------------------------------------------------------- Fund Summary Basic information about the funds Conservative Allocation Fund.............. 1 Moderate Allocation Fund.................. 18 Growth Allocation Fund.................... 35 Aggressive Allocation Fund................ 52 More on each fund's investment objectives and strategies............................... 69 More on the risks of investing in a fund........ 79 Management...................................... 96 Pricing of shares............................... 99 Choosing a class of shares...................... 101 Distribution and service arrangements........... 103 Sales charges................................... 105 Buying, exchanging and selling shares........... 114 Account options . 124 Shareholder services and policies............... 128 Dividends, capital gains and taxes.............. 135 Financial highlights............................ 137
Neither the Securities and Exchange Commission nor any state securities agency has approved or disapproved the fund's shares or determined whether this prospectus is [GRAPHIC APPEARS HERE] accurate or complete. Any representation to the contrary is a crime. AN INVESTMENT IN A FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. ------------------------------------------------------------------------------- CONTACT YOUR INVESTMENT PROFESSIONAL TO DISCUSS HOW THE FUND MAY FIT INTO YOUR PORTFOLIO. ------------------------------------------------------------------------------- Fund Summary for Pioneer Ibbotson Conservative Allocation Fund INVESTMENT OBJECTIVES Long-term capital growth and current income. FEES AND EXPENSES OF THE FUND This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. You may qualify for sales charge discounts if you or your family invest, or agree to invest in the future, at least $50,000 in Class A shares of the Pioneer funds. More information about these and other discounts is available from your investment professional and in the "Sales charges" section of the prospectus beginning on page 105 and the "Sales charges" section of the statement of additional information beginning on page 70. 1 Fund Summary for Pioneer Ibbotson Conservative Allocation Fund
SHAREOWNER FEES (fees paid directly from your investment) CLASS A CLASS B CLASS C CLASS Y ---------------------------------------------------------- --------- --------- --------- -------- Maximum sales charge (load) when you buy shares (as a percentage of offering price) 5.75% None None None ---------------------------------------------------------- ---- --------- --------- -------- Maximum deferred sales charge (load) (as a percentage of offering price or the amount you receive when you sell shares, whichever is less) None 4% 1% None ---------------------------------------------------------- ---- --------- --------- --------
ANNUAL FUND OPERATING EXPENSES (expenses that you pay each year as a percentage of the value of your investment) CLASS A CLASS B CLASS C CLASS Y -------------------------------------------------------- --------- --------- --------- -------- Management Fees 0.13% 0.13% 0.13% 0.13% -------------------------------------------------------- ---- ---- ---- ---- Distribution and Service (12b-1) Fees 0.25% 1.00% 1.00% 0.00% -------------------------------------------------------- ---- ---- ---- ---- Other Expenses 0.39% 0.48% 0.38% 1.30% -------------------------------------------------------- ---- ---- ---- ---- Acquired Fund Fees and Expenses/1/ 0.71% 0.71% 0.71% 0.71% -------------------------------------------------------- ---- ---- ---- ---- Total Annual Fund Operating Expenses Plus Acquired Fund Fees and Expenses 1.48% 2.32% 2.22% 2.14% -------------------------------------------------------- ---- ---- ---- ----
1 Total annual fund operating expenses in the table, before and after fee waiver and expense reimbursement, may be higher than the corresponding ratio of expenses to average net assets shown in the "Financial Highlights" section, which does not include acquired fund fees and expenses. EXAMPLE This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the fund for the time periods shown and then, except as indicated, redeem all of your shares at the end of those periods. It also assumes that (a) your investment has a 5% return each year and (b) the fund's total annual operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
IF YOU REDEEM YOUR SHARES IF YOU DO NOT REDEEM YOUR SHARES -------------------------------------- ---------------------------------------- NUMBER OF YEARS YOU OWN YOUR SHARES -------------------------------------------------------------------------------- 1 3 5 10 1 3 5 10 ------- ------- --------- --------- ------- --------- --------- --------- Class A $717 1,016 $1,336 $2,242 $717 $1,016 $1,336 $2,242 --------- ---- ----- ------ ------ ---- ------ ------ ------ Class B 635 1,024 1,340 2,446 235 724 1,240 2,446 --------- ---- ----- ------ ------ ---- ------ ------ ------ Class C 325 694 1,190 2,554 225 694 1,190 2,554 --------- ---- ----- ------ ------ ---- ------ ------ ------ Class Y 217 670 1,149 2,472 217 670 1,149 2,472 --------- ---- ----- ------ ------ ---- ------ ------ ------
PORTFOLIO TURNOVER 2 The fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund's performance. During the most recent fiscal year, the fund's portfolio turnover rate was 17% of the average value of its portfolio. PRINCIPAL INVESTMENT STRATEGIES The fund is a "fund of funds." The fund seeks to achieve its investment objectives by investing in other funds ("underlying funds" or "acquired funds") rather than direct positions in securities. The underlying funds have their own investment objectives and principal investment strategies and invest in a variety of U.S. and foreign equity, debt and money market securities. Equity securities in which underlying funds invest include common stocks, preferred stocks and equity securities with common stock characteristics such as real estate investment trusts, and exchange-traded funds that invest primarily in equity securities. Debt securities in which underlying funds may invest include U.S. government securities, debt securities of corporate and other issuers, mortgage- and asset-backed securities, debt convertible to equity securities and short term debt securities. Underlying funds also may use derivatives, such as credit default swaps. Because this is a conservative allocation fund, the fund's assets will be invested in equity and fixed income funds, although a portion of its assets will be invested in cash, cash equivalents, or in money market funds. Under normal circumstances, the fund expects to invest its assets among asset classes in the following ranges. The fund's investment adviser may change these allocation ranges from time to time without the approval of or notice to shareholders. The fixed income fund allocation includes the fund's investments in cash, cash equivalents, and money market funds. INVESTMENT STRATEGIES/ASSET CLASS TARGETS
EQUITY FUND FIXED INCOME FUND ALLOCATION ALLOCATION ------------- ------------------ Pioneer Ibbotson Conservative Allocation Fund 20-40% 60-80% ----------------------------------------------- ----- -----
The intended benefit of asset allocation is that the diversification provided by allocating assets among asset classes, such as equity and debt securities, reduces volatility over the long-term. The subadviser, subject to the investment adviser's supervision, allocates the fund's assets among the underlying 3 Fund Summary for Pioneer Ibbotson Conservative Allocation Fund funds using a two-step process. First, the subadviser seeks to develop an optimal model allocation among underlying funds in different asset classes using an analysis that looks at forecast returns, standard deviations in historical returns and the correlation of the performance of different asset classes. The subadviser then invests the assets in underlying funds that invest in those asset classes. The subadviser's analysis in selecting and weighting the underlying funds is based on quantitative and qualitative measures. Periodically, the subadviser may recommend the rebalancing of a fund's assets among asset classes and underlying funds. Decisions to sell shares of the underlying funds are made for cash flow purposes, as a result of periodic rebalancing of a fund's portfolio holdings, or as an adjustment to a fund's target allocation. As of the date of this prospectus, the fund invests solely in other Pioneer funds. From time to time the fund's investment adviser may select new or different underlying funds without prior approval or notice to shareholders. PRINCIPAL RISKS OF INVESTING IN THE FUND You could lose money on your investment in the fund. As with any mutual fund, there is no guarantee that the fund will achieve its objectives. For purposes of this section, "the fund" means the fund or, where applicable, an underlying fund. MARKET RISK. The values of securities held by the fund may go up or down, sometimes rapidly or unpredictably, due to general market conditions, such as real or perceived adverse economic, political, or regulatory conditions, inflation, changes in interest or currency rates or adverse investor sentiment. Adverse market conditions may be prolonged and may not have the same impact on all types of securities. The values of securities may fall due to factors affecting a particular issuer, industry or the securities market as a whole. High public debt in the U.S. and other countries creates ongoing and systemic market risks and policymaking uncertainty. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities of issuers worldwide. Governmental and non-governmental issuers have defaulted on, or been forced to restructure, their debts, and many other issuers have faced difficulties obtaining credit. These market conditions may continue, worsen or spread, including in the U.S., Europe and beyond. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets and asset valuations around the world. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign 4 central banks have taken steps to support financial markets. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. Whether or not the fund invests in securities of issuers located in or with significant exposure to countries experiencing economic and financial difficulties, the value and liquidity of the fund's investments may be negatively affected. In addition, policy and legislative changes in the U.S. and in other countries are affecting many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time. The fund may experience a substantial or complete loss on any individual security or derivative position. FUND OF FUNDS STRUCTURE AND LAYERING OF FEES. The fund invests in the underlying funds, which may themselves invest in other investment companies, including exchange-traded funds (ETFs). Each underlying fund has its own investment risks that can affect the value of the underlying funds' shares and therefore the net asset value of the fund. In addition to the fund's operating expenses, the fund indirectly pays a portion of the expenses incurred by the underlying funds. Consequently, an investment in the fund entails more direct and indirect expenses than a direct investment in the underlying funds. Also, one underlying fund may buy the same security that another underlying fund is selling. You would indirectly bear the costs of both trades without achieving any investment purpose. These transactions may also generate taxable gains. You may receive taxable distributions consisting of gains from transactions by the underlying funds as well as gains from the fund's transactions in shares of the underlying funds. ALLOCATION RISK. The subadviser's evaluation of asset classes and market sectors in developing an allocation model, and its selection and weighting of underlying funds within the allocation model, may prove to be incorrect. To the extent that the fund invests a significant percentage of its assets in any one underlying fund, the fund will be subject to a greater degree to the risks particular to that underlying fund, and may experience greater volatility as a result. ASSET CLASS VARIATION RISK. The underlying funds invest principally in the securities constituting their asset class (i.e., equity or fixed income). However, under normal market conditions, an underlying fund may vary the percentage of its assets in these securities (subject to any applicable regulatory requirements). Depending upon the percentage of securities in a particular 5 Fund Summary for Pioneer Ibbotson Conservative Allocation Fund asset class held by the underlying funds at any given time, and the percentage of the fund's assets invested in various underlying funds, the fund's actual exposure to the securities in a particular asset class may vary substantially from its target asset allocation for that asset class. EXPENSE RISK. Your actual costs of investing in the fund may be higher than the expenses shown in "Annual fund operating expenses" for a variety of reasons. For example, expense ratios may be higher than those shown if overall net assets decrease. Net assets are more likely to decrease and fund expense ratios are more likely to increase when markets are volatile. PRINCIPAL RISKS OF INVESTING IN THE UNDERLYING FUNDS RISKS OF EQUITY INVESTMENTS. Equity securities are more volatile and carry more risks than some other forms of investment. Risks of investing in underlying equity funds may include: VALUE STYLE RISK. The prices of securities the adviser believes are undervalued may not appreciate as expected or may go down. Value stocks may fall out of favor with investors and underperform the overall equity market. GROWTH STYLE RISK. The fund's investments may not have the growth potential originally expected. Growth stocks may fall out of favor with investors and underperform the overall equity market. SMALL AND MID-SIZE COMPANIES RISK. Compared to large companies, small- and mid-size companies, and the market for their equity securities, may be more sensitive to changes in earnings results and investor expectations, have more limited product lines and capital resources, experience sharper swings in market values, have limited liquidity, be harder to value or to sell at the times and prices the adviser thinks appropriate, and offer greater potential for gain and loss. RISKS OF INVESTMENTS IN REITS. Investing in REITs involves unique risks. They are significantly affected by the market for real estate and are dependent upon management skills and cash flow. REITs may have lower trading volumes and may be subject to more abrupt or erratic price movements than the overall securities markets. In addition to its own expenses, the fund will indirectly bear its proportionate share of any management and other expenses paid by REITs in which it invests. Many real estate companies, including REITs, utilize leverage. PREFERRED STOCKS RISK. Preferred stocks may pay fixed or adjustable 6 rates of return. Preferred stocks are subject to issuer-specific and market risks applicable generally to equity securities. In addition, a company's preferred stocks generally pay dividends only after the company makes required payments to holders of its bonds and other debt. Thus, the value of preferred stocks will usually react more strongly than bonds and other debt to actual or perceived changes in the company's financial condition or prospects. The market value of preferred stocks generally decreases when interest rates rise. Preferred stocks of smaller companies may be more vulnerable to adverse developments than preferred stock of larger companies. RISKS OF INITIAL PUBLIC OFFERINGS. Companies involved in initial public offerings (IPOs) generally have limited operating histories, and prospects for future profitability are uncertain. The market for IPO issuers has been volatile, and share prices of newly public companies have fluctuated significantly over short periods of time. Further, stocks of newly-public companies may decline shortly after the IPO. There is no assurance that the fund will have access to IPOs. The purchase of IPO shares may involve high transaction costs. RISKS OF CONVERTIBLE SECURITIES. The market values of convertible securities tend to decline as interest rates increase and, conversely, to increase as interest rates decline. A downturn in equity markets may cause the price of convertible securities to decrease relative to other fixed income securities. RISKS OF FIXED INCOME INVESTMENTS. Risks of investing in underlying fixed income funds may include: INTEREST RATE RISK. Interest rates may go up, causing the value of the fund's investments to decline (this risk generally will be greater for securities with longer maturities). Interest rates in the U.S. recently have been historically low and may be expected to go back up. CREDIT RISK. If an issuer or guarantor of a security held by the fund or a counterparty to a financial contract with the fund defaults on its obligation to pay principal and/or interest, has its credit rating downgraded or is perceived to be less creditworthy, or the credit quality or value of any underlying assets declines, the value of your investment will decline. Credit risk is broadly gauged by the credit ratings of the securities in which the fund invests. However, ratings are only the opinions of the companies issuing them and are not guarantees as to quality. 7 Fund Summary for Pioneer Ibbotson Conservative Allocation Fund PREPAYMENT OR CALL RISK. Many issuers have a right to prepay their securities. If interest rates fall, an issuer may exercise this right. If this happens, the fund will be forced to reinvest prepayment proceeds at a time when yields on securities available in the market are lower than the yield on the prepaid security. The fund also may lose any premium it paid on the security. EXTENSION RISK. During periods of rising interest rates, the average life of certain types of securities may be extended because of slower than expected principal payments. This may lock in a below market interest rate, increase the security's duration and reduce the value of the security. U.S. GOVERNMENT AGENCY OBLIGATIONS RISK. The fund invests in obligations issued by agencies and instrumentalities of the U.S. government. Government-sponsored entities such as Federal National Mortgage Association (Fannie Mae), Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal Home Loan Banks (FHLBs), although chartered or sponsored by Congress, are not funded by congressional appropriations and the debt and mortgage-backed securities issued by them are neither guaranteed nor issued by the U.S. government. Such debt and mortgage-backed securities are subject to the risk of default on the payment of interest and/or principal, similar to debt of private issuers. Although the U.S. government has provided financial support to Fannie Mae and Freddie Mac in the past, there can be no assurance that it will support these or other government-sponsored entities in the future. MORTGAGE-RELATED AND ASSET-BACKED SECURITIES RISK. The value of mortgage-related and asset-backed securities will be influenced by factors affecting the housing market and the assets underlying such securities. As a result, during periods of declining asset value, difficult or frozen credit markets, swings in interest rates, or deteriorating economic conditions, mortgage-related and asset-backed securities may decline in value, face valuation difficulties, become more volatile and/or become illiquid. Additionally, during such periods and also under normal conditions, these securities are also subject to prepayment and call risk. Some of these securities may receive little or no collateral protection from the underlying assets and are thus subject to the risk of default. The risk of such defaults is generally higher in the case of mortgage-backed investments that include so-called "sub-prime" mortgages. The structure of some of these securities may be complex and there may be less available information than for other types of debt securities. Upon the occurrence of certain triggering events or defaults, the fund may become the holder of underlying 8 assets at a time when those assets may be difficult to sell or may be sold only at a loss. RISKS OF INSTRUMENTS THAT ALLOW FOR BALLOON PAYMENTS OR NEGATIVE AMORTIZATION PAYMENTS. Certain debt instruments allow for balloon payments or negative amortization payments. Such instruments permit the borrower to avoid paying currently a portion of the interest accruing on the instrument. While these features make the debt instrument more affordable to the borrower in the near term, they increase the risk that the borrower will be unable to make the resulting higher payment or payments that become due at the maturity of the loan. RISKS OF SUBORDINATED SECURITIES. A holder of securities that are subordinated or "junior" to more senior securities of an issuer is entitled to payment after holders of more senior securities of the issuer. Subordinated securities are more likely to suffer a credit loss than non-subordinated securities of the same issuer, any loss incurred by the subordinated securities is likely to be proportionately greater, and any recovery of interest or principal may take more time. As a result, even a perceived decline in creditworthiness of the issuer is likely to have a greater impact on them. HIGH YIELD OR "JUNK" BOND RISK. Debt securities that are below investment grade, called "junk bonds," are speculative, have a higher risk of default or are already in default, tend to be less liquid and are more difficult to value than higher grade securities. Junk bonds tend to be volatile and more susceptible to adverse events and negative sentiments. These risks are more pronounced for securities that are already in default. RISKS OF INVESTING IN EVENT-LINKED BONDS. The return of principal and the payment of interest on "event-linked" bonds are contingent on the non-occurrence of a pre-defined "trigger" event, such as a hurricane or an earthquake of a specific magnitude. If a trigger event, as defined within the terms of an event-linked bond, involves losses or other metrics exceeding a specific magnitude in the geographic region and time period specified therein, the fund may lose a portion or all of its accrued interest and/or principal invested in the event-linked bond. In addition to the specified trigger events, event-linked bonds may expose the fund to other risks, including but not limited to issuer (credit) default, adverse regulatory or jurisdictional interpretations and adverse tax consequences. RISKS OF INVESTING IN FLOATING RATE LOANS. Floating rate loans and similar investments may be illiquid or less liquid than other investments. 9 Fund Summary for Pioneer Ibbotson Conservative Allocation Fund The value of collateral, if any, securing a floating rate loan can decline or may be insufficient to meet the issuer's obligations or may be difficult to liquidate. No active trading market may exist for many floating rate loans, and many loans are subject to restrictions on resale. Market quotations for these securities may be volatile and/or subject to large spreads between bid and ask prices. Any secondary market may be subject to irregular trading activity and extended trade settlement periods. RISKS OF INVESTING IN INVERSE FLOATING RATE OBLIGATIONS. The interest rate on inverse floating rate obligations will generally decrease as short-term interest rates increase, and increase as short-term rates decrease. Due to their leveraged structure, the sensitivity of the market value of an inverse floating rate obligation to changes in interest rates is generally greater than a comparable long-term bond issued by the same issuer and with similar credit quality, redemption and maturity provisions. Inverse floating rate obligations may be volatile and involve leverage risk. INFLATION-LINKED SECURITY RISK. The principal or interest of inflation-linked securities such as TIPS is adjusted periodically to a specified rate of inflation. The inflation index used may not accurately measure the real rate of inflation. Inflation-linked securities may lose value in the event that the actual rate of inflation is different than the rate of the inflation index. RISKS OF ZERO COUPON BONDS, PAYMENT IN KIND, DEFERRED AND CONTINGENT PAYMENT SECURITIES. These securities may be more speculative and may fluctuate more in value than securities which pay income periodically and in cash. In addition, although the fund receives no periodic cash payments on such securities the fund is deemed for tax purposes to receive income from such securities, which applicable tax rules require the fund to distribute to shareholders. Such distributions may be taxable when distributed to shareholders. RISKS OF EQUITY AND FIXED INCOME INVESTMENTS. Risks of investing in underlying equity and fixed income funds may include: PORTFOLIO SELECTION RISK. The adviser's judgment about the attractiveness, relative value or potential appreciation of an equity security, or about the quality, relative yield or relative value of a fixed income security, or about a particular sector, region or market segment, or about an investment strategy, or about interest rates, may prove to be incorrect. LIQUIDITY RISK. Some securities and derivatives held by the fund may be impossible or difficult to sell or unwind particularly during times of market 10 turmoil. Illiquid securities and derivatives also may be difficult to value. If the fund is forced to sell an illiquid asset or unwind a derivative position to meet redemption requests or other cash needs, the fund may be forced to sell at a loss. MARKET SEGMENT RISK. To the extent the fund emphasizes, from time to time, investments in a market segment, the fund will be subject to a greater degree to the risks particular to that segment, and may experience greater market fluctuation than a fund without the same focus. RISKS OF NON-U.S. INVESTMENTS. Investing in non-U.S. issuers, or in U.S. issuers that have significant exposure to foreign markets, may involve unique risks compared to investing in securities of U.S. issuers. These risks are more pronounced for issuers in emerging markets or to the extent that the fund invests significantly in one region or country. These risks may include different financial reporting practices and regulatory standards, less liquid trading markets, extreme price volatility, currency risks, changes in economic, political, regulatory and social conditions, sustained economic downturns, financial instability, tax burdens, and investment and repatriation restrictions. Lack of information and less market regulation also may affect the value of these securities. Withholding and other non-U.S. taxes may decrease the fund's return. Non-U.S. issuers may be located in parts of the world that have historically been prone to natural disasters. Investing in depositary receipts is subject to many of the same risks as investing directly in non-U.S. issuers. DERIVATIVES RISK. Using options, swaps, futures and other derivatives can increase fund losses and reduce opportunities for gains when market prices, interest rates or the derivative instruments themselves behave in a way not anticipated by the fund. Using derivatives may increase the volatility of the fund's net asset value and may not provide the result intended. Derivatives may have a leveraging effect on the fund. Some derivatives have the potential for unlimited loss, regardless of the size of the fund's initial investment. Changes in a derivative's value may not correlate well with the referenced asset or metric. The fund also may have to sell assets at inopportune times to satisfy its obligations. Derivatives may be difficult to sell, unwind or value, and the counterparty may default on its obligations to the fund. New regulations are changing the derivatives markets. The regulations may make using derivatives more costly, may limit their availability, or may otherwise adversely affect their value or performance. For derivatives that are required to be traded through a clearinghouse or exchange, the fund also will be exposed to the credit 11 Fund Summary for Pioneer Ibbotson Conservative Allocation Fund risk of the clearinghouse and the broker that submits trades for the fund. It is possible that certain derivatives that are required to be cleared, such as certain swap contracts, will not be accepted for clearing. In addition, regulated trading facilities for swap contracts are relatively new; they may not function as intended, which could impair the ability to enter into swap contracts. The extent and impact of the new regulations are not yet fully known and may not be for some time. CREDIT DEFAULT SWAP RISK. Credit default swap contracts, a type of derivative instrument, involve special risks and may result in losses to the fund. Credit default swaps may in some cases be illiquid, and they increase credit risk since the fund has exposure to the issuer of the referenced obligation and either the counterparty to the credit default swap or, if it is a cleared transaction, the brokerage firm through which the trade was cleared and the clearing organization that is the counterparty to that trade. In addition, for cleared trades, the brokerage firm would impose margin requirements and would be able to require termination of those trades in certain circumstances. Certain credit default swaps will be required to be traded on a regulated execution facility or contract market that makes them available for trading. The transition to trading these swaps on such a facility or contract market may not result in swaps being easier to trade or value and may present certain execution risks if such a facility or contract market does not operate properly. Swaps may be difficult to unwind or terminate. Certain index-based credit default swaps are structured in tranches, whereby junior tranches assume greater default risk than senior tranches. Once fully implemented, new regulations may make swaps more costly, may limit their availability, or may otherwise adversely affect the value or performance of these instruments. The extent and impact of these regulations are not yet fully known and may not be for some time. LEVERAGING RISK. The value of your investment may be more volatile and other risks tend to be compounded if the fund borrows or uses derivatives or other investments, such as ETFs, that have embedded leverage. Leverage generally magnifies the effect of any increase or decrease in the value of the fund's underlying assets or creates investment risk with respect to a larger pool of assets than the fund would otherwise have, potentially resulting in the loss of all assets. Engaging in such transactions may cause the fund to liquidate positions when it may not be advantageous to do so to satisfy its obligations or meet segregation requirements. FORWARD FOREIGN CURRENCY TRANSACTION RISK. To the extent that the fund 12 enters into forward foreign currency transactions, it may not fully benefit from or may lose money on the transactions if changes in currency rates do not occur as anticipated or do not correspond accurately to changes in the value of the fund's holdings, or if the counterparty defaults. Such transactions may also prevent the fund from realizing profits on favorable movements in exchange rates. Risk of counterparty default is greater for counterparties located in emerging markets. The fund's ability to use forward foreign currency transactions successfully depends on a number of factors, including the forward foreign currency transactions being available at prices that are not too costly, the availability of liquid markets, and the adviser's judgment regarding the direction of changes in currency exchange rates. PORTFOLIO TURNOVER RISK. If the fund does a lot of trading, it may incur additional operating expenses, which would reduce performance. A higher level of portfolio turnover may also cause taxable shareowners to incur a higher level of taxable income or capital gains. Please note that there are many other factors that could adversely affect your investment and that could prevent the fund from achieving its goals. An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. THE FUND'S PAST PERFORMANCE The bar chart and table indicate the risks and volatility of an investment in the fund by showing how the fund has performed in the past. The bar chart shows changes in the performance of the fund's Class A shares from calendar year to calendar year. The table shows the average annual total returns for each class of the fund over time and compares these returns to the returns of the Standard and Poor's 500 Index and the Barclays Capital Aggregate Bond Index, each a broad-based measure of market performance that has characteristics relevant to the fund's investment strategies. You can obtain updated performance information by visiting https://us.pioneerinvestments.com/performance or by calling 1-800-225-6292. The fund's past performance (before and after taxes) does not necessarily indicate how it will perform in the future. The bar chart does not reflect any sales charge you may pay when you buy fund shares. If this amount was reflected, returns would be less than 13 Fund Summary for Pioneer Ibbotson Conservative Allocation Fund those shown. ANNUAL RETURN CLASS A SHARES (%) (Year ended December 31) [GRAPHIC APPEARS HERE]
'06 '07 '08 '09 '10 '11 '12 7.24 5.50 -21.11 24.58 9.69 .06 8.93
For the period covered by the bar chart: THE HIGHEST CALENDAR QUARTERLY RETURN WAS 12.36% (04/01/2009 TO 06/30/2009). THE LOWEST CALENDAR QUARTERLY RETURN WAS -12.54% (10/1/2008 TO 12/31/2008). At September 30, 2013, the year-to-date return was 5.21%. 14 AVERAGE ANNUAL TOTAL RETURN (%) (for periods ended December 31, 2012)
SINCE INCEPTION 1 YEAR 5 YEAR INCEPTION DATE -------- -------- ----------- ---------- Class A 5/12/05 ----------------------------------------------------- ----- ---- ---- ------- Return before taxes 2.72 2.07 3.59 ----------------------------------------------------- ------ ---- ---- ------- Return after taxes on distributions 2.06 1.03 2.64 ----------------------------------------------------- ------ ---- ---- ------- Return after taxes on distributions and sale of shares 1.86 1.17 2.56 ----------------------------------------------------- ------ ---- ---- ------- Class B 4.00 2.37 3.49 5/12/05 ----------------------------------------------------- ------ ---- ---- ------- Class C 8.10 2.39 3.50 5/12/05 ----------------------------------------------------- ------ ---- ---- ------- Class Y 7.52 1.50 2.99 10/5/05 ----------------------------------------------------- ------ ---- ---- ------- Standard & Poor's 500 Stock Index (reflects no deduction for fees, expenses or taxes) 16.00 1.66 4.94 5/12/05 ----------------------------------------------------- ------ ---- ---- ------- Barclays Capital Aggregate Bond Index (reflects no deduction for fees, expenses or taxes) 4.22 5.95 5.55 5/12/05 ----------------------------------------------------- ------ ---- ---- -------
After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown only for Class A shares. After-tax returns for Class B, Class C and Class Y shares will vary. 15 Fund Summary for Pioneer Ibbotson Conservative Allocation Fund MANAGEMENT INVESTMENT ADVISER Pioneer Investment Management, Inc. INVESTMENT SUBADVISER Ibbotson Associates, Inc. PORTFOLIO MANAGEMENT Scott Wentsel, vice president and senior portfolio manager at Ibbotson (portfolio manager of the fund since 2005); Brian Huckstep, portfolio manager at Ibbotson (portfolio manager of the fund since 2005) and Paul Arnold, senior consultant at Ibbotson (portfolio manager of the fund since 2012)
PURCHASE AND SALE OF FUND SHARES You may purchase, exchange or sell (redeem) shares each day the New York Stock Exchange is open through your financial intermediary or, for accounts held directly with the fund, by contacting the fund's transfer agent in writing or by telephone (Pioneer Investment Management Shareholder Services, Inc., P.O. Box 55014, Boston, MA 02205-5014, tel. 1-800-225-6292). Your initial investment for Class A or Class C shares must be at least $1,000. Additional investments must be at least $100 for Class A shares and $500 for Class C shares. The initial investment for Class Y shares must be at least $5 million. This amount may be invested in one or more of the Pioneer mutual funds that currently offer Class Y shares. There is no minimum additional investment amount for Class Y shares. Effective December 31, 2009, Class B shares are no longer offered to new or existing shareholders, except for reinvestment of dividends and/or capital gains distributions and exchanges for Class B shares of other Pioneer funds. TAX INFORMATION The fund intends to make distributions that may be taxed as ordinary income, qualified dividend income, or capital gains. PAYMENTS TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES If you purchase the fund through a broker-dealer or other financial intermediary (such as a bank), the fund and its related companies may pay the intermediary for the sale of fund shares and related services. These payments create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson or investment professional to recommend the fund 16 over another investment. Ask your salesperson or investment professional or visit your financial intermediary's website for more information. 17 Fund Summary for Pioneer Ibbotson Moderate Allocation Fund INVESTMENT OBJECTIVES Long-term capital growth and current income. FEES AND EXPENSES OF THE FUND This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. You may qualify for sales charge discounts if you or your family invest, or agree to invest in the future, at least $50,000 in Class A shares of the Pioneer funds. More information about these and other discounts is available from your investment professional and in the "Sales charges" section of the prospectus beginning on page 105 and the "Sales charges" section of the statement of additional information beginning on page 70.
SHAREOWNER FEES (fees paid directly from your investment) CLASS A CLASS B CLASS C CLASS Y ---------------------------------------------------------- --------- --------- --------- -------- Maximum sales charge (load) when you buy shares (as a percentage of offering price) 5.75% None None None ---------------------------------------------------------- ---- --------- --------- -------- Maximum deferred sales charge (load) (as a percentage of offering price or the amount you receive when you sell shares, whichever is less) None 4% 1% None ---------------------------------------------------------- ---- --------- --------- --------
ANNUAL FUND OPERATING EXPENSES (expenses that you pay each year as a percentage of the value of your investment) CLASS A CLASS B CLASS C CLASS Y -------------------------------------------------------- --------- --------- --------- -------- Management Fees 0.13% 0.13% 0.13% 0.13% -------------------------------------------------------- ---- ----- ---- ---- Distribution and Service (12b-1) Fees 0.25% 1.00% 1.00% 0.00% -------------------------------------------------------- ---- ----- ---- ---- Other Expenses 0.28% 0.45% 0.21% 0.23% -------------------------------------------------------- ---- ----- ---- ---- Acquired Fund Fees and Expenses/1/ 0.79% 0.79% 0.79% 0.79% -------------------------------------------------------- ---- ----- ---- ---- Total Annual Fund Operating Expenses Plus Acquired Fund Fees and Expenses 1.45% 2.37% 2.13% 1.15% -------------------------------------------------------- ---- ----- ---- ---- Less: Fee Waiver and Expense Reimbursement/2/ 0.00% -0.06% 0.00% 0.00% -------------------------------------------------------- ---- ----- ---- ---- Net Expenses Plus Acquired Fund Fees and Expenses/2/ 1.45% 2.31% 2.13% 1.15% -------------------------------------------------------- ---- ----- ---- ----
1 Total annual fund operating expenses in the table, before and after fee waiver and expense reimbursement, may be higher than the corresponding ratio of expenses to average net assets shown in the "Financial Highlights" section, which does not include acquired fund fees and expenses. 2 The fund's investment adviser has contractually agreed to limit ordinary operating expenses to the extent required to reduce fund 1.52% of the average daily net assets attributable to Class B shares. Acquired fund fees and expenses are not included in the expense limitation noted above. This expense limitation is 18 in effect through December 1, 2014. There can be no assurance that the adviser will extend the expense limitations beyond such time. While in effect, the arrangement may be terminated for a class only by agreement of the fund's investment adviser and the Board of Trustees. The expense limitation does not limit the expenses of the underlying funds indirectly incurred by a shareholder. EXAMPLE This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the fund for the time periods shown and then, except as indicated, redeem all of your shares at the end of those periods. It also assumes that (a) your investment has a 5% return each year and (b) the fund's total annual operating expenses remain the same except for year one (which considers the effect of the expense limitation). Although your actual costs may be higher or lower, based on these assumptions your costs would be:
IF YOU REDEEM YOUR SHARES IF YOU DO NOT REDEEM YOUR SHARES ---------------------------------------- ---------------------------------------- NUMBER OF YEARS YOU OWN YOUR SHARES ---------------------------------------------------------------------------------- 1 3 5 10 1 3 5 10 ------- --------- --------- --------- ------- --------- --------- --------- Class A $714 $1,007 $1,322 $2,210 $714 $1,007 $1,322 $2,210 --------- ---- ------ ------ ------ ---- ------ ------ ------ Class B 634 1,034 1,360 2,472 234 734 1,260 2,472 --------- ---- ------ ------ ------ ---- ------ ------ ------ Class C 316 667 1,144 2,462 216 667 1,144 2,462 --------- ---- ------ ------ ------ ---- ------ ------ ------ Class Y 117 365 633 1,398 117 365 633 1,398 --------- ---- ------ ------ ------ ---- ------ ------ ------ --------- ---- ------ ------ ------ ---- ------ ------ ------
PORTFOLIO TURNOVER The fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund's performance. During the most recent fiscal year, the fund's portfolio turnover rate was 9% of the average value of its portfolio. PRINCIPAL INVESTMENT STRATEGIES The fund is a "fund of funds." The fund seeks to achieve its investment objectives by investing in other funds ("underlying funds" or "acquired funds") rather than direct positions in securities. The underlying funds have their own investment objectives and principal investment strategies and invest 19 Fund Summary for Pioneer Ibbotson Moderate Allocation Fund in a variety of U.S. and foreign equity, debt and money market securities. Equity securities in which underlying funds invest include common stocks, preferred stocks and equity securities with common stock characteristics such as real estate investment trusts, and exchange-traded funds that invest primarily in equity securities. Debt securities in which underlying funds may invest include U.S. government securities, debt securities of corporate and other issuers, mortgage- and asset-backed securities, debt convertible to equity securities and short term debt securities. Underlying funds also may use derivatives, such as credit default swaps. Because this is a moderate allocation fund, the fund's assets will be invested in equity and fixed income funds, although a portion of its assets will be invested in cash, cash equivalents, or in money market funds. Under normal circumstances, the fund expects to invest its assets among asset classes in the following ranges. The fund's investment adviser may change these allocation ranges from time to time without the approval of or notice to shareholders. The fixed income fund allocation includes the fund's investments in cash, cash equivalents, and money market funds. INVESTMENT STRATEGIES/ASSET CLASS TARGETS
EQUITY FUND FIXED INCOME FUND ALLOCATION ALLOCATION ------------- ------------------ Pioneer Ibbotson Moderate Allocation Fund 50-70% 30-50% ------------------------------------------- ----- -----
The intended benefit of asset allocation is that the diversification provided by allocating assets among asset classes, such as equity and debt securities, reduces volatility over the long-term. The subadviser, subject to the investment adviser's supervision, allocates the fund's assets among the underlying funds using a two-step process. First, the subadviser seeks to develop an optimal model allocation among underlying funds in different asset classes using an analysis that looks at forecast returns, standard deviations in historical returns and the correlation of the performance of different asset classes. The subadviser then invests the assets in underlying funds that invest in those asset classes. The subadviser's analysis in selecting and weighting the underlying funds is based on quantitative and qualitative measures. Periodically, the subadviser may recommend the rebalancing of a fund's assets among asset classes and underlying funds. Decisions to sell shares of the underlying funds are made for cash flow purposes, as a result of periodic rebalancing of a fund's portfolio holdings, or as an adjustment to a fund's target allocation. 20 As of the date of this prospectus, the fund invests solely in other Pioneer funds. From time to time the fund's investment adviser may select new or different underlying funds without prior approval or notice to shareholders. PRINCIPAL RISKS OF INVESTING IN THE FUND You could lose money on your investment in the fund. As with any mutual fund, there is no guarantee that the fund will achieve its objectives. For purposes of this section, "the fund" means the fund or, where applicable, an underlying fund. MARKET RISK. The values of securities held by the fund may go up or down, sometimes rapidly or unpredictably, due to general market conditions, such as real or perceived adverse economic, political, or regulatory conditions, inflation, changes in interest or currency rates or adverse investor sentiment. Adverse market conditions may be prolonged and may not have the same impact on all types of securities. The values of securities may fall due to factors affecting a particular issuer, industry or the securities market as a whole. High public debt in the U.S. and other countries creates ongoing and systemic market risks and policymaking uncertainty. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities of issuers worldwide. Governmental and non-governmental issuers have defaulted on, or been forced to restructure, their debts, and many other issuers have faced difficulties obtaining credit. These market conditions may continue, worsen or spread, including in the U.S., Europe and beyond. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets and asset valuations around the world. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. Whether or not the fund invests in securities of issuers located in or with significant exposure to countries experiencing economic and financial difficulties, the value and liquidity of the fund's investments may be negatively affected. In addition, policy and legislative changes in the U.S. and in other countries are affecting many aspects of financial regulation. The impact of these changes on the markets, and the practical implications 21 Fund Summary for Pioneer Ibbotson Moderate Allocation Fund for market participants, may not be fully known for some time. The fund may experience a substantial or complete loss on any individual security or derivative position. FUND OF FUNDS STRUCTURE AND LAYERING OF FEES. The fund invests in the underlying funds, which may themselves invest in other investment companies, including exchange-traded funds (ETFs). Each underlying fund has its own investment risks that can affect the value of the underlying funds' shares and therefore the net asset value of the fund. In addition to the fund's operating expenses, the fund indirectly pays a portion of the expenses incurred by the underlying funds. Consequently, an investment in the fund entails more direct and indirect expenses than a direct investment in the underlying funds. Also, one underlying fund may buy the same security that another underlying fund is selling. You would indirectly bear the costs of both trades without achieving any investment purpose. These transactions may also generate taxable gains. You may receive taxable distributions consisting of gains from transactions by the underlying funds as well as gains from the fund's transactions in shares of the underlying funds. ALLOCATION RISK. The subadviser's evaluation of asset classes and market sectors in developing an allocation model, and its selection and weighting of underlying funds within the allocation model, may prove to be incorrect. To the extent that the fund invests a significant percentage of its assets in any one underlying fund, the fund will be subject to a greater degree to the risks particular to that underlying fund, and may experience greater volatility as a result. ASSET CLASS VARIATION RISK. The underlying funds invest principally in the securities constituting their asset class (i.e., equity or fixed income). However, under normal market conditions, an underlying fund may vary the percentage of its assets in these securities (subject to any applicable regulatory requirements). Depending upon the percentage of securities in a particular asset class held by the underlying funds at any given time, and the percentage of the fund's assets invested in various underlying funds, the fund's actual exposure to the securities in a particular asset class may vary substantially from its target asset allocation for that asset class. EXPENSE RISK. Your actual costs of investing in the fund may be higher than the expenses shown in "Annual fund operating expenses" for a variety of reasons. For example, expense ratios may be higher than those shown if overall net assets decrease. Net assets are more likely to decrease and fund expense ratios are more likely to increase when markets are volatile. 22 PRINCIPAL RISKS OF INVESTING IN THE UNDERLYING FUNDS RISKS OF EQUITY INVESTMENTS. Equity securities are more volatile and carry more risks than some other forms of investment. Risks of investing in underlying equity funds may include: VALUE STYLE RISK. The prices of securities the adviser believes are undervalued may not appreciate as expected or may go down. Value stocks may fall out of favor with investors and underperform the overall equity market. GROWTH STYLE RISK. The fund's investments may not have the growth potential originally expected. Growth stocks may fall out of favor with investors and underperform the overall equity market. SMALL AND MID-SIZE COMPANIES RISK. Compared to large companies, small- and mid-size companies, and the market for their equity securities, may be more sensitive to changes in earnings results and investor expectations, have more limited product lines and capital resources, experience sharper swings in market values, have limited liquidity, be harder to value or to sell at the times and prices the adviser thinks appropriate, and offer greater potential for gain and loss. RISKS OF INVESTMENTS IN REITS. Investing in REITs involves unique risks. They are significantly affected by the market for real estate and are dependent upon management skills and cash flow. REITs may have lower trading volumes and may be subject to more abrupt or erratic price movements than the overall securities markets. In addition to its own expenses, the fund will indirectly bear its proportionate share of any management and other expenses paid by REITs in which it invests. Many real estate companies, including REITs, utilize leverage. PREFERRED STOCKS RISK. Preferred stocks may pay fixed or adjustable rates of return. Preferred stocks are subject to issuer-specific and market risks applicable generally to equity securities. In addition, a company's preferred stocks generally pay dividends only after the company makes required payments to holders of its bonds and other debt. Thus, the value of preferred stocks will usually react more strongly than bonds and other debt to actual or perceived changes in the company's financial condition or prospects. The market value of preferred stocks generally decreases when interest rates rise. Preferred stocks of smaller companies may be more vulnerable to adverse developments than preferred stock of larger companies. 23 Fund Summary for Pioneer Ibbotson Moderate Allocation Fund RISKS OF INITIAL PUBLIC OFFERINGS. Companies involved in initial public offerings (IPOs) generally have limited operating histories, and prospects for future profitability are uncertain. The market for IPO issuers has been volatile, and share prices of newly public companies have fluctuated significantly over short periods of time. Further, stocks of newly-public companies may decline shortly after the IPO. There is no assurance that the fund will have access to IPOs. The purchase of IPO shares may involve high transaction costs. RISKS OF CONVERTIBLE SECURITIES. The market values of convertible securities tend to decline as interest rates increase and, conversely, to increase as interest rates decline. A downturn in equity markets may cause the price of convertible securities to decrease relative to other fixed income securities. RISKS OF FIXED INCOME INVESTMENTS. Risks of investing in underlying fixed income funds may include: INTEREST RATE RISK. Interest rates may go up, causing the value of the fund's investments to decline (this risk generally will be greater for securities with longer maturities). Interest rates in the U.S. recently have been historically low and may be expected to go back up. CREDIT RISK. If an issuer or guarantor of a security held by the fund or a counterparty to a financial contract with the fund defaults on its obligation to pay principal and/or interest, has its credit rating downgraded or is perceived to be less creditworthy, or the credit quality or value of any underlying assets declines, the value of your investment will decline. Credit risk is broadly gauged by the credit ratings of the securities in which the fund invests. However, ratings are only the opinions of the companies issuing them and are not guarantees as to quality. PREPAYMENT OR CALL RISK. Many issuers have a right to prepay their securities. If interest rates fall, an issuer may exercise this right. If this happens, the fund will be forced to reinvest prepayment proceeds at a time when yields on securities available in the market are lower than the yield on the prepaid security. The fund also may lose any premium it paid on the security. EXTENSION RISK. During periods of rising interest rates, the average life of certain types of securities may be extended because of slower than expected principal payments. This may lock in a below market interest rate, increase the security's duration and reduce the value of the security. 24 U.S. GOVERNMENT AGENCY OBLIGATIONS RISK. The fund invests in obligations issued by agencies and instrumentalities of the U.S. government. Government-sponsored entities such as Federal National Mortgage Association (Fannie Mae), Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal Home Loan Banks (FHLBs), although chartered or sponsored by Congress, are not funded by congressional appropriations and the debt and mortgage-backed securities issued by them are neither guaranteed nor issued by the U.S. government. Such debt and mortgage-backed securities are subject to the risk of default on the payment of interest and/or principal, similar to debt of private issuers. Although the U.S. government has provided financial support to Fannie Mae and Freddie Mac in the past, there can be no assurance that it will support these or other government-sponsored entities in the future. MORTGAGE-RELATED AND ASSET-BACKED SECURITIES RISK. The value of mortgage-related and asset-backed securities will be influenced by factors affecting the housing market and the assets underlying such securities. As a result, during periods of declining asset value, difficult or frozen credit markets, swings in interest rates, or deteriorating economic conditions, mortgage-related and asset-backed securities may decline in value, face valuation difficulties, become more volatile and/or become illiquid. Additionally, during such periods and also under normal conditions, these securities are also subject to prepayment and call risk. Some of these securities may receive little or no collateral protection from the underlying assets and are thus subject to the risk of default. The risk of such defaults is generally higher in the case of mortgage-backed investments that include so-called "sub-prime" mortgages. The structure of some of these securities may be complex and there may be less available information than for other types of debt securities. Upon the occurrence of certain triggering events or defaults, the fund may become the holder of underlying assets at a time when those assets may be difficult to sell or may be sold only at a loss. RISKS OF INSTRUMENTS THAT ALLOW FOR BALLOON PAYMENTS OR NEGATIVE AMORTIZATION PAYMENTS. Certain debt instruments allow for balloon payments or negative amortization payments. Such instruments permit the borrower to avoid paying currently a portion of the interest accruing on the instrument. While these features make the debt instrument more affordable to the borrower in the near term, they increase the risk that the borrower will be unable to make the resulting higher payment or payments that become due at the maturity of the loan. 25 Fund Summary for Pioneer Ibbotson Moderate Allocation Fund RISKS OF SUBORDINATED SECURITIES. A holder of securities that are subordinated or "junior" to more senior securities of an issuer is entitled to payment after holders of more senior securities of the issuer. Subordinated securities are more likely to suffer a credit loss than non-subordinated securities of the same issuer, any loss incurred by the subordinated securities is likely to be proportionately greater, and any recovery of interest or principal may take more time. As a result, even a perceived decline in creditworthiness of the issuer is likely to have a greater impact on them. HIGH YIELD OR "JUNK" BOND RISK. Debt securities that are below investment grade, called "junk bonds," are speculative, have a higher risk of default or are already in default, tend to be less liquid and are more difficult to value than higher grade securities. Junk bonds tend to be volatile and more susceptible to adverse events and negative sentiments. These risks are more pronounced for securities that are already in default. RISKS OF INVESTING IN EVENT-LINKED BONDS. The return of principal and the payment of interest on "event-linked" bonds are contingent on the non-occurrence of a pre-defined "trigger" event, such as a hurricane or an earthquake of a specific magnitude. If a trigger event, as defined within the terms of an event-linked bond, involves losses or other metrics exceeding a specific magnitude in the geographic region and time period specified therein, the fund may lose a portion or all of its accrued interest and/or principal invested in the event-linked bond. In addition to the specified trigger events, event-linked bonds may expose the fund to other risks, including but not limited to issuer (credit) default, adverse regulatory or jurisdictional interpretations and adverse tax consequences. RISKS OF INVESTING IN FLOATING RATE LOANS. Floating rate loans and similar investments may be illiquid or less liquid than other investments. The value of collateral, if any, securing a floating rate loan can decline or may be insufficient to meet the issuer's obligations or may be difficult to liquidate. No active trading market may exist for many floating rate loans, and many loans are subject to restrictions on resale. Market quotations for these securities may be volatile and/or subject to large spreads between bid and ask prices. Any secondary market may be subject to irregular trading activity and extended trade settlement periods. RISKS OF INVESTING IN INVERSE FLOATING RATE OBLIGATIONS. The interest rate on inverse floating rate obligations will generally decrease as short-term interest rates increase, and increase as short-term rates decrease. Due 26 to their leveraged structure, the sensitivity of the market value of an inverse floating rate obligation to changes in interest rates is generally greater than a comparable long-term bond issued by the same issuer and with similar credit quality, redemption and maturity provisions. Inverse floating rate obligations may be volatile and involve leverage risk. INFLATION-LINKED SECURITY RISK. The principal or interest of inflation-linked securities such as TIPS is adjusted periodically to a specified rate of inflation. The inflation index used may not accurately measure the real rate of inflation. Inflation-linked securities may lose value in the event that the actual rate of inflation is different than the rate of the inflation index. RISKS OF ZERO COUPON BONDS, PAYMENT IN KIND, DEFERRED AND CONTINGENT PAYMENT SECURITIES. These securities may be more speculative and may fluctuate more in value than securities which pay income periodically and in cash. In addition, although the fund receives no periodic cash payments on such securities the fund is deemed for tax purposes to receive income from such securities, which applicable tax rules require the fund to distribute to shareholders. Such distributions may be taxable when distributed to shareholders. RISKS OF EQUITY AND FIXED INCOME INVESTMENTS. Risks of investing in underlying equity and fixed income funds may include: PORTFOLIO SELECTION RISK. The adviser's judgment about the attractiveness, relative value or potential appreciation of an equity security, or about the quality, relative yield or relative value of a fixed income security, or about a particular sector, region or market segment, or about an investment strategy, or about interest rates, may prove to be incorrect. LIQUIDITY RISK. Some securities and derivatives held by the fund may be impossible or difficult to sell or unwind particularly during times of market turmoil. Illiquid securities and derivatives also may be difficult to value. If the fund is forced to sell an illiquid asset or unwind a derivative position to meet redemption requests or other cash needs, the fund may be forced to sell at a loss. MARKET SEGMENT RISK. To the extent the fund emphasizes, from time to time, investments in a market segment, the fund will be subject to a greater degree to the risks particular to that segment, and may experience greater market fluctuation than a fund without the same focus. 27 Fund Summary for Pioneer Ibbotson Moderate Allocation Fund RISKS OF NON-U.S. INVESTMENTS. Investing in non-U.S. issuers, or in U.S. issuers that have significant exposure to foreign markets, may involve unique risks compared to investing in securities of U.S. issuers. These risks are more pronounced for issuers in emerging markets or to the extent that the fund invests significantly in one region or country. These risks may include different financial reporting practices and regulatory standards, less liquid trading markets, extreme price volatility, currency risks, changes in economic, political, regulatory and social conditions, sustained economic downturns, financial instability, tax burdens, and investment and repatriation restrictions. Lack of information and less market regulation also may affect the value of these securities. Withholding and other non-U.S. taxes may decrease the fund's return. Non-U.S. issuers may be located in parts of the world that have historically been prone to natural disasters. Investing in depositary receipts is subject to many of the same risks as investing directly in non-U.S. issuers. DERIVATIVES RISK. Using options, swaps, futures and other derivatives can increase fund losses and reduce opportunities for gains when market prices, interest rates or the derivative instruments themselves behave in a way not anticipated by the fund. Using derivatives may increase the volatility of the fund's net asset value and may not provide the result intended. Derivatives may have a leveraging effect on the fund. Some derivatives have the potential for unlimited loss, regardless of the size of the fund's initial investment. Changes in a derivative's value may not correlate well with the referenced asset or metric. The fund also may have to sell assets at inopportune times to satisfy its obligations. Derivatives may be difficult to sell, unwind or value, and the counterparty may default on its obligations to the fund. New regulations are changing the derivatives markets. The regulations may make using derivatives more costly, may limit their availability, or may otherwise adversely affect their value or performance. For derivatives that are required to be traded through a clearinghouse or exchange, the fund also will be exposed to the credit risk of the clearinghouse and the broker that submits trades for the fund. It is possible that certain derivatives that are required to be cleared, such as certain swap contracts, will not be accepted for clearing. In addition, regulated trading facilities for swap contracts are relatively new; they may not function as intended, which could impair the ability to enter into swap contracts. The extent and impact of the new regulations are not yet fully known and may not be for some time. 28 CREDIT DEFAULT SWAP RISK. Credit default swap contracts, a type of derivative instrument, involve special risks and may result in losses to the fund. Credit default swaps may in some cases be illiquid, and they increase credit risk since the fund has exposure to the issuer of the referenced obligation and either the counterparty to the credit default swap or, if it is a cleared transaction, the brokerage firm through which the trade was cleared and the clearing organization that is the counterparty to that trade. In addition, for cleared trades, the brokerage firm would impose margin requirements and would be able to require termination of those trades in certain circumstances. Certain credit default swaps will be required to be traded on a regulated execution facility or contract market that makes them available for trading. The transition to trading these swaps on such a facility or contract market may not result in swaps being easier to trade or value and may present certain execution risks if such a facility or contract market does not operate properly. Swaps may be difficult to unwind or terminate. Certain index-based credit default swaps are structured in tranches, whereby junior tranches assume greater default risk than senior tranches. Once fully implemented, new regulations may make swaps more costly, may limit their availability, or may otherwise adversely affect the value or performance of these instruments. The extent and impact of these regulations are not yet fully known and may not be for some time. LEVERAGING RISK. The value of your investment may be more volatile and other risks tend to be compounded if the fund borrows or uses derivatives or other investments, such as ETFs, that have embedded leverage. Leverage generally magnifies the effect of any increase or decrease in the value of the fund's underlying assets or creates investment risk with respect to a larger pool of assets than the fund would otherwise have, potentially resulting in the loss of all assets. Engaging in such transactions may cause the fund to liquidate positions when it may not be advantageous to do so to satisfy its obligations or meet segregation requirements. FORWARD FOREIGN CURRENCY TRANSACTION RISK. To the extent that the fund enters into forward foreign currency transactions, it may not fully benefit from or may lose money on the transactions if changes in currency rates do not occur as anticipated or do not correspond accurately to changes in the value of the fund's holdings, or if the counterparty defaults. Such transactions may also prevent the fund from realizing profits on favorable movements in exchange rates. Risk of counterparty default is greater for counterparties located in emerging markets. The fund's ability to use 29 Fund Summary for Pioneer Ibbotson Moderate Allocation Fund forward foreign currency transactions successfully depends on a number of factors, including the forward foreign currency transactions being available at prices that are not too costly, the availability of liquid markets, and the adviser's judgment regarding the direction of changes in currency exchange rates. PORTFOLIO TURNOVER RISK. If the fund does a lot of trading, it may incur additional operating expenses, which would reduce performance. A higher level of portfolio turnover may also cause taxable shareowners to incur a higher level of taxable income or capital gains. Please note that there are many other factors that could adversely affect your investment and that could prevent the fund from achieving its goals. An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. THE FUND'S PAST PERFORMANCE The bar chart and table indicate the risks and volatility of an investment in the fund by showing how the fund has performed in the past. The bar chart shows changes in the performance of the fund's Class A shares from calendar year to calendar year. The table shows the average annual total returns for each class of the fund over time and compares these returns to the returns of the Standard and Poor's 500 Index and the Barclays Capital Aggregate Bond Index, each a broad-based measure of market performance that has characteristics relevant to the fund's investment strategies. You can obtain updated performance information by visiting https://us.pioneerinvestments.com/performance or by calling 1-800-225-6292. The fund's past performance (before and after taxes) does not necessarily indicate how it will perform in the future. The bar chart does not reflect any sales charge you may pay when you buy fund shares. If this amount was reflected, returns would be less than those shown. 30 ANNUAL RETURN CLASS A SHARES (%) (Year ended December 31) [GRAPHIC APPEARS HERE]
'05 '06 '07 '08 '09 '10 '11 '12 6.48 10.49 5.24 -30.22 28.96 11.96 -2.12 10.21
For the period covered by the bar chart: THE HIGHEST CALENDAR QUARTERLY RETURN WAS 16.41% (04/01/2009 TO 06/30/2009). THE LOWEST CALENDAR QUARTERLY RETURN WAS -17.24% (10/01/2008 TO 12/31/2008). At September 30, 2013, the year-to-date return was 10.49%. 31 Fund Summary for Pioneer Ibbotson Moderate Allocation Fund AVERAGE ANNUAL TOTAL RETURN (%) (for periods ended December 31, 2012)
SINCE INCEPTION 1 YEAR 5 YEAR INCEPTION DATE -------- -------- ----------- ---------- Class A 8/9/04 ----------------------------------------------------- ----- ----- ---- ------ Return before taxes 3.86 0.48 4.11 ----------------------------------------------------- ------ ------ ---- ------ Return after taxes on distributions 3.33 -0.40 3.22 ----------------------------------------------------- ------ ------ ---- ------ Return after taxes on distributions and sale of shares 2.69 -0.03 3.16 ----------------------------------------------------- ------ ------ ---- ------ Class B 5.50 0.89 3.62 8/9/04 ----------------------------------------------------- ------ ------ ---- ------ Class C 9.43 0.93 3.59 8/9/04 ----------------------------------------------------- ------ ------ ---- ------ Class Y 10.54 2.23 4.16 9/26/05 ----------------------------------------------------- ------ ------ ---- ------- Standard & Poor's 500 Index (reflects no deduction for fees, expenses or taxes) 16.00 1.66 5.72 8/9/04 ----------------------------------------------------- ------ ------ ---- ------- Barclays Capital Aggregate Bond Index (reflects no deduction for fees, expenses or taxes) 4.22 5.95 5.42 8/9/04 ----------------------------------------------------- ------ ------ ---- -------
After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown only for Class A shares. After-tax returns for Class B, Class C and Class Y shares will vary. 32 MANAGEMENT INVESTMENT ADVISER Pioneer Investment Management, Inc. INVESTMENT SUBADVISER Ibbotson Associates, Inc. PORTFOLIO MANAGEMENT Scott Wentsel, vice president and senior portfolio manager at Ibbotson (portfolio manager of the fund since 2005); Brian Huckstep, portfolio manager at Ibbotson (portfolio manager of the fund since 2005); Paul Arnold, senior consultant at Ibbotson (portfolio manager of the fund since 2012)
PURCHASE AND SALE OF FUND SHARES You may purchase, exchange or sell (redeem) shares each day the New York Stock Exchange is open through your financial intermediary or, for accounts held directly with the fund, by contacting the fund's transfer agent in writing or by telephone (Pioneer Investment Management Shareholder Services, Inc., P.O. Box 55014, Boston, MA 02205-5014, tel. 1-800-225-6292). Your initial investment for Class A or Class C shares must be at least $1,000. Additional investments must be at least $100 for Class A shares and $500 for Class C shares. The initial investment for Class Y shares must be at least $5 million. This amount may be invested in one or more of the Pioneer mutual funds that currently offer Class Y shares. There is no minimum additional investment amount for Class Y shares. Effective December 31, 2009, Class B shares are no longer offered to new or existing shareholders, except for reinvestment of dividends and/or capital gains distributions and exchanges for Class B shares of other Pioneer funds. TAX INFORMATION The fund intends to make distributions that may be taxed as ordinary income, qualified dividend income, or capital gains. PAYMENTS TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES If you purchase the fund through a broker-dealer or other financial intermediary (such as a bank), the fund and its related companies may pay the intermediary for the sale of fund shares and related services. These payments create a conflict of interest by influencing the broker-dealer or other intermediary 33 Fund Summary for Pioneer Ibbotson Moderate Allocation Fund and your salesperson or investment professional to recommend the fund over another investment. Ask your salesperson or investment professional or visit your financial intermediary's website for more information. 34 Fund Summary for Pioneer Ibbotson Growth Allocation Fund INVESTMENT OBJECTIVES Long-term capital growth and current income. FEES AND EXPENSES OF THE FUND This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. You may qualify for sales charge discounts if you or your family invest, or agree to invest in the future, at least $50,000 in Class A shares of the Pioneer funds. More information about these and other discounts is available from your investment professional and in the "Sales charges" section of the prospectus beginning on page 105 and the "Sales charges" section of the statement of additional information beginning on page 70.
SHAREOWNER FEES (fees paid directly from your investment) CLASS A CLASS B CLASS C CLASS Y ---------------------------------------------------------- --------- --------- --------- -------- Maximum sales charge (load) when you buy shares (as a percentage of offering price) 5.75% None None None ---------------------------------------------------------- ---- --------- --------- -------- Maximum deferred sales charge (load) (as a percentage of offering price or the amount you receive when you sell shares, whichever is less) None 4% 1% None ---------------------------------------------------------- ---- --------- --------- --------
ANNUAL FUND OPERATING EXPENSES (expenses that you pay each year as a percentage of the value of your investment) CLASS A CLASS B CLASS C CLASS Y -------------------------------------------------------- --------- --------- --------- -------- Management Fees 0.13% 0.13% 0.13% 0.13% -------------------------------------------------------- ---- ----- ---- ---- Distribution and Service (12b-1) Fees 0.25% 1.00% 1.00% 0.00% -------------------------------------------------------- ---- ----- ---- ---- Other Expenses 0.31% 0.47% 0.27% 0.31% -------------------------------------------------------- ---- ----- ---- ---- Acquired Fund Fees and Expenses/1/ 0.84% 0.84% 0.84% 0.84% -------------------------------------------------------- ---- ----- ---- ---- Total Annual Fund Operating Expenses Plus Acquired Fund Fees and Expenses 1.53% 2.44% 2.24% 1.28% -------------------------------------------------------- ---- ----- ---- ---- Less: Fee Waiver and Expense Reimbursement/2/ 0.00% -0.03% 0.00% 0.00% -------------------------------------------------------- ---- ----- ---- ---- Net Expenses Plus Acquired Fund Fees and Expenses/2/ 1.53% 2.41% 2.24% 1.28% -------------------------------------------------------- ---- ----- ---- ----
1 Total annual fund operating expenses in the table, before and after fee waiver and expense reimbursement, may be higher than the corresponding ratio of expenses to average net assets shown in the "Financial Highlights" section, which does not include acquired fund fees and expenses. 2 The fund's investment adviser has contractually agreed to limit ordinary operating expenses to the extent required to reduce fund expenses to 1.57% of the average daily net assets attributable to Class B shares. Acquired fund fees and expenses are not included in the expense limitations noted above. This 35 Fund Summary for Pioneer Ibbotson Growth Allocation Fund expense limitation is in effect through December 1, 2014. There can be no assurance that the adviser will extend the expense limitations beyond such time. While in effect, the arrangement may be terminated for a class only by agreement of the fund's investment adviser and the Board of Trustees. The expense limitation does not limit the expenses of the underlying funds indirectly incurred by a shareholder. EXAMPLE This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the fund for the time periods shown and then, except as indicated, redeem all of your shares at the end of those periods. It also assumes that (a) your investment has a 5% return each year and (b) the fund's total annual operating expenses remain the same except for year one (which considers the effect of the expense limitation). Although your actual costs may be higher or lower, based on these assumptions your costs would be:
IF YOU REDEEM YOUR SHARES IF YOU DO NOT REDEEM YOUR SHARES ---------------------------------------- ---------------------------------------- NUMBER OF YEARS YOU OWN YOUR SHARES ---------------------------------------------------------------------------------- 1 3 5 10 1 3 5 10 ------- --------- --------- --------- ------- --------- --------- --------- Class A $722 $1,031 $1,361 $2,294 $722 $1,031 $1,361 $2,294 --------- ---- ------ ------ ------ ---- ------ ------ ------ Class B 644 1,058 1,398 2,549 244 758 1,298 2,549 --------- ---- ------ ------ ------ ---- ------ ------ ------ Class C 327 700 1,200 2,575 227 700 1,200 2,575 --------- ---- ------ ------ ------ ---- ------ ------ ------ Class Y 130 406 702 1,545 130 406 702 1,545 --------- ---- ------ ------ ------ ---- ------ ------ ------
PORTFOLIO TURNOVER The fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund's performance. During the most recent fiscal year, the fund's portfolio turnover rate was 6% of the average value of its portfolio. PRINCIPAL INVESTMENT STRATEGIES The fund is a "fund of funds." The fund seeks to achieve its investment objectives by investing in other funds ("underlying funds" or "acquired funds") rather than direct positions in securities. The underlying funds have their own investment objectives and principal investment strategies and invest 36 in a variety of U.S. and foreign equity, debt and money market securities. Equity securities in which underlying funds invest include common stocks, preferred stocks and equity securities with common stock characteristics such as real estate investment trusts, and exchange-traded funds that invest primarily in equity securities. Debt securities in which underlying funds may invest include U.S. government securities, debt securities of corporate and other issuers, mortgage- and asset-backed securities, debt convertible to equity securities and short term debt securities. Underlying funds also may use derivatives, such as credit default swaps. Because this is a growth allocation fund, the fund's assets will be invested in equity and fixed income funds, although a small portion of its assets will be invested in cash, cash equivalents, or in money market funds. Under normal circumstances, the fund expects to invest its assets among asset classes in the following ranges. The fund's investment adviser may change these allocation ranges from time to time without the approval of or notice to shareholders. The fixed income fund allocation includes the fund's investments in cash, cash equivalents, and money market funds. INVESTMENT STRATEGIES/ASSET CLASS TARGETS
EQUITY FUND FIXED INCOME FUND ALLOCATION ALLOCATION ------------- ------------------ Pioneer Ibbotson Growth Allocation Fund 70-100% 0-30% ----------------------------------------- ------ ----
The intended benefit of asset allocation is that the diversification provided by allocating assets among asset classes, such as equity and debt securities, reduces volatility over the long-term. The subadviser, subject to the investment adviser's supervision, allocates the fund's assets among the underlying funds using a two-step process. First, the subadviser seeks to develop an optimal model allocation among underlying funds in different asset classes using an analysis that looks at forecast returns, standard deviations in historical returns and the correlation of the performance of different asset classes. The subadviser then invests the assets in underlying funds that invest in those asset classes. The subadviser's analysis in selecting and weighting the underlying funds is based on quantitative and qualitative measures. Periodically, the subadviser may recommend the rebalancing of a fund's assets among asset classes and underlying funds. Decisions to sell shares of the underlying funds are made for cash flow purposes, as a result of periodic rebalancing of a fund's portfolio holdings, or as an adjustment to a fund's target allocation. 37 Fund Summary for Pioneer Ibbotson Growth Allocation Fund As of the date of this prospectus, the fund invests solely in other Pioneer funds. From time to time the fund's investment adviser may select new or different underlying funds without prior approval or notice to shareholders. PRINCIPAL RISKS OF INVESTING IN THE FUND You could lose money on your investment in the fund. As with any mutual fund, there is no guarantee that the fund will achieve its objectives. For purposes of this section, "the fund" means the fund or, where applicable, an underlying fund. MARKET RISK. The values of securities held by the fund may go up or down, sometimes rapidly or unpredictably, due to general market conditions, such as real or perceived adverse economic, political, or regulatory conditions, inflation, changes in interest or currency rates or adverse investor sentiment. Adverse market conditions may be prolonged and may not have the same impact on all types of securities. The values of securities may fall due to factors affecting a particular issuer, industry or the securities market as a whole. High public debt in the U.S. and other countries creates ongoing and systemic market risks and policymaking uncertainty. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities of issuers worldwide. Governmental and non-governmental issuers have defaulted on, or been forced to restructure, their debts, and many other issuers have faced difficulties obtaining credit. These market conditions may continue, worsen or spread, including in the U.S., Europe and beyond. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets and asset valuations around the world. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. Whether or not the fund invests in securities of issuers located in or with significant exposure to countries experiencing economic and financial difficulties, the value and liquidity of the fund's investments may be negatively affected. In addition, policy and legislative changes in the U.S. and in other countries are affecting many aspects of financial regulation. The impact of these changes on the markets, and the practical implications 38 for market participants, may not be fully known for some time. The fund may experience a substantial or complete loss on any individual security or derivative position. FUND OF FUNDS STRUCTURE AND LAYERING OF FEES. The fund invests in the underlying funds, which may themselves invest in other investment companies, including exchange-traded funds (ETFs). Each underlying fund has its own investment risks that can affect the value of the underlying funds' shares and therefore the net asset value of the fund. In addition to the fund's operating expenses, the fund indirectly pays a portion of the expenses incurred by the underlying funds. Consequently, an investment in the fund entails more direct and indirect expenses than a direct investment in the underlying funds. Also, one underlying fund may buy the same security that another underlying fund is selling. You would indirectly bear the costs of both trades without achieving any investment purpose. These transactions may also generate taxable gains. You may receive taxable distributions consisting of gains from transactions by the underlying funds as well as gains from the fund's transactions in shares of the underlying funds. ALLOCATION RISK. The subadviser's evaluation of asset classes and market sectors in developing an allocation model, and its selection and weighting of underlying funds within the allocation model, may prove to be incorrect. To the extent that the fund invests a significant percentage of its assets in any one underlying fund, the fund will be subject to a greater degree to the risks particular to that underlying fund, and may experience greater volatility as a result. ASSET CLASS VARIATION RISK. The underlying funds invest principally in the securities constituting their asset class (i.e., equity or fixed income). However, under normal market conditions, an underlying fund may vary the percentage of its assets in these securities (subject to any applicable regulatory requirements). Depending upon the percentage of securities in a particular asset class held by the underlying funds at any given time, and the percentage of the fund's assets invested in various underlying funds, the fund's actual exposure to the securities in a particular asset class may vary substantially from its target asset allocation for that asset class. EXPENSE RISK. Your actual costs of investing in the fund may be higher than the expenses shown in "Annual fund operating expenses" for a variety of reasons. For example, expense ratios may be higher than those shown if overall net assets decrease. Net assets are more likely to decrease and fund expense ratios are more likely to increase when markets are volatile. 39 Fund Summary for Pioneer Ibbotson Growth Allocation Fund PRINCIPAL RISKS OF INVESTING IN THE UNDERLYING FUNDS RISKS OF EQUITY INVESTMENTS. Equity securities are more volatile and carry more risks than some other forms of investment. Risks of investing in underlying equity funds may include: VALUE STYLE RISK. The prices of securities the adviser believes are undervalued may not appreciate as expected or may go down. Value stocks may fall out of favor with investors and underperform the overall equity market. GROWTH STYLE RISK. The fund's investments may not have the growth potential originally expected. Growth stocks may fall out of favor with investors and underperform the overall equity market. SMALL AND MID-SIZE COMPANIES RISK. Compared to large companies, small- and mid-size companies, and the market for their equity securities, may be more sensitive to changes in earnings results and investor expectations, have more limited product lines and capital resources, experience sharper swings in market values, have limited liquidity, be harder to value or to sell at the times and prices the adviser thinks appropriate, and offer greater potential for gain and loss. RISKS OF INVESTMENTS IN REITS. Investing in REITs involves unique risks. They are significantly affected by the market for real estate and are dependent upon management skills and cash flow. REITs may have lower trading volumes and may be subject to more abrupt or erratic price movements than the overall securities markets. In addition to its own expenses, the fund will indirectly bear its proportionate share of any management and other expenses paid by REITs in which it invests. Many real estate companies, including REITs, utilize leverage. PREFERRED STOCKS RISK. Preferred stocks may pay fixed or adjustable rates of return. Preferred stocks are subject to issuer-specific and market risks applicable generally to equity securities. In addition, a company's preferred stocks generally pay dividends only after the company makes required payments to holders of its bonds and other debt. Thus, the value of preferred stocks will usually react more strongly than bonds and other debt to actual or perceived changes in the company's financial condition or prospects. The market value of preferred stocks generally decreases when interest rates rise. Preferred stocks of smaller companies may be more vulnerable to adverse developments than preferred stock of larger companies. 40 RISKS OF INITIAL PUBLIC OFFERINGS. Companies involved in initial public offerings (IPOs) generally have limited operating histories, and prospects for future profitability are uncertain. The market for IPO issuers has been volatile, and share prices of newly public companies have fluctuated significantly over short periods of time. Further, stocks of newly-public companies may decline shortly after the IPO. There is no assurance that the fund will have access to IPOs. The purchase of IPO shares may involve high transaction costs. RISKS OF CONVERTIBLE SECURITIES. The market values of convertible securities tend to decline as interest rates increase and, conversely, to increase as interest rates decline. A downturn in equity markets may cause the price of convertible securities to decrease relative to other fixed income securities. RISKS OF FIXED INCOME INVESTMENTS. Risks of investing in underlying fixed income funds may include: INTEREST RATE RISK. Interest rates may go up, causing the value of the fund's investments to decline (this risk generally will be greater for securities with longer maturities). Interest rates in the U.S. recently have been historically low and may be expected to go back up. CREDIT RISK. If an issuer or guarantor of a security held by the fund or a counterparty to a financial contract with the fund defaults on its obligation to pay principal and/or interest, has its credit rating downgraded or is perceived to be less creditworthy, or the credit quality or value of any underlying assets declines, the value of your investment will decline. Credit risk is broadly gauged by the credit ratings of the securities in which the fund invests. However, ratings are only the opinions of the companies issuing them and are not guarantees as to quality. PREPAYMENT OR CALL RISK. Many issuers have a right to prepay their securities. If interest rates fall, an issuer may exercise this right. If this happens, the fund will be forced to reinvest prepayment proceeds at a time when yields on securities available in the market are lower than the yield on the prepaid security. The fund also may lose any premium it paid on the security. EXTENSION RISK. During periods of rising interest rates, the average life of certain types of securities may be extended because of slower than expected principal payments. This may lock in a below market interest rate, increase the security's duration and reduce the value of the security. 41 Fund Summary for Pioneer Ibbotson Growth Allocation Fund U.S. GOVERNMENT AGENCY OBLIGATIONS RISK. The fund invests in obligations issued by agencies and instrumentalities of the U.S. government. Government-sponsored entities such as Federal National Mortgage Association (Fannie Mae), Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal Home Loan Banks (FHLBs), although chartered or sponsored by Congress, are not funded by congressional appropriations and the debt and mortgage-backed securities issued by them are neither guaranteed nor issued by the U.S. government. Such debt and mortgage-backed securities are subject to the risk of default on the payment of interest and/or principal, similar to debt of private issuers. Although the U.S. government has provided financial support to Fannie Mae and Freddie Mac in the past, there can be no assurance that it will support these or other government-sponsored entities in the future. MORTGAGE-RELATED AND ASSET-BACKED SECURITIES RISK. The value of mortgage-related and asset-backed securities will be influenced by factors affecting the housing market and the assets underlying such securities. As a result, during periods of declining asset value, difficult or frozen credit markets, swings in interest rates, or deteriorating economic conditions, mortgage-related and asset-backed securities may decline in value, face valuation difficulties, become more volatile and/or become illiquid. Additionally, during such periods and also under normal conditions, these securities are also subject to prepayment and call risk. Some of these securities may receive little or no collateral protection from the underlying assets and are thus subject to the risk of default. The risk of such defaults is generally higher in the case of mortgage-backed investments that include so-called "sub-prime" mortgages. The structure of some of these securities may be complex and there may be less available information than for other types of debt securities. Upon the occurrence of certain triggering events or defaults, the fund may become the holder of underlying assets at a time when those assets may be difficult to sell or may be sold only at a loss. RISKS OF INSTRUMENTS THAT ALLOW FOR BALLOON PAYMENTS OR NEGATIVE AMORTIZATION PAYMENTS. Certain debt instruments allow for balloon payments or negative amortization payments. Such instruments permit the borrower to avoid paying currently a portion of the interest accruing on the instrument. While these features make the debt instrument more affordable to the borrower in the near term, they increase the risk that the borrower will be unable to make the resulting higher payment or payments that become due at the maturity of the loan. 42 RISKS OF SUBORDINATED SECURITIES. A holder of securities that are subordinated or "junior" to more senior securities of an issuer is entitled to payment after holders of more senior securities of the issuer. Subordinated securities are more likely to suffer a credit loss than non-subordinated securities of the same issuer, any loss incurred by the subordinated securities is likely to be proportionately greater, and any recovery of interest or principal may take more time. As a result, even a perceived decline in creditworthiness of the issuer is likely to have a greater impact on them. HIGH YIELD OR "JUNK" BOND RISK. Debt securities that are below investment grade, called "junk bonds," are speculative, have a higher risk of default or are already in default, tend to be less liquid and are more difficult to value than higher grade securities. Junk bonds tend to be volatile and more susceptible to adverse events and negative sentiments. These risks are more pronounced for securities that are already in default. RISKS OF INVESTING IN EVENT-LINKED BONDS. The return of principal and the payment of interest on "event-linked" bonds are contingent on the non-occurrence of a pre-defined "trigger" event, such as a hurricane or an earthquake of a specific magnitude. If a trigger event, as defined within the terms of an event-linked bond, involves losses or other metrics exceeding a specific magnitude in the geographic region and time period specified therein, the fund may lose a portion or all of its accrued interest and/or principal invested in the event-linked bond. In addition to the specified trigger events, event-linked bonds may expose the fund to other risks, including but not limited to issuer (credit) default, adverse regulatory or jurisdictional interpretations and adverse tax consequences. RISKS OF INVESTING IN FLOATING RATE LOANS. Floating rate loans and similar investments may be illiquid or less liquid than other investments. The value of collateral, if any, securing a floating rate loan can decline or may be insufficient to meet the issuer's obligations or may be difficult to liquidate. No active trading market may exist for many floating rate loans, and many loans are subject to restrictions on resale. Market quotations for these securities may be volatile and/or subject to large spreads between bid and ask prices. Any secondary market may be subject to irregular trading activity and extended trade settlement periods. RISKS OF INVESTING IN INVERSE FLOATING RATE OBLIGATIONS. The interest rate on inverse floating rate obligations will generally decrease as short-term interest rates increase, and increase as short-term rates decrease. Due 43 Fund Summary for Pioneer Ibbotson Growth Allocation Fund to their leveraged structure, the sensitivity of the market value of an inverse floating rate obligation to changes in interest rates is generally greater than a comparable long-term bond issued by the same issuer and with similar credit quality, redemption and maturity provisions. Inverse floating rate obligations may be volatile and involve leverage risk. INFLATION-LINKED SECURITY RISK. The principal or interest of inflation-linked securities such as TIPS is adjusted periodically to a specified rate of inflation. The inflation index used may not accurately measure the real rate of inflation. Inflation-linked securities may lose value in the event that the actual rate of inflation is different than the rate of the inflation index. RISKS OF ZERO COUPON BONDS, PAYMENT IN KIND, DEFERRED AND CONTINGENT PAYMENT SECURITIES. These securities may be more speculative and may fluctuate more in value than securities which pay income periodically and in cash. In addition, although the fund receives no periodic cash payments on such securities the fund is deemed for tax purposes to receive income from such securities, which applicable tax rules require the fund to distribute to shareholders. Such distributions may be taxable when distributed to shareholders. RISKS OF EQUITY AND FIXED INCOME INVESTMENTS. Risks of investing in underlying equity and fixed income funds may include: PORTFOLIO SELECTION RISK. The adviser's judgment about the attractiveness, relative value or potential appreciation of an equity security, or about the quality, relative yield or relative value of a fixed income security, or about a particular sector, region or market segment, or about an investment strategy, or about interest rates, may prove to be incorrect. LIQUIDITY RISK. Some securities and derivatives held by the fund may be impossible or difficult to sell or unwind particularly during times of market turmoil. Illiquid securities and derivatives also may be difficult to value. If the fund is forced to sell an illiquid asset or unwind a derivative position to meet redemption requests or other cash needs, the fund may be forced to sell at a loss. MARKET SEGMENT RISK. To the extent the fund emphasizes, from time to time, investments in a market segment, the fund will be subject to a greater degree to the risks particular to that segment, and may experience greater market fluctuation than a fund without the same focus. 44 RISKS OF NON-U.S. INVESTMENTS. Investing in non-U.S. issuers, or in U.S. issuers that have significant exposure to foreign markets, may involve unique risks compared to investing in securities of U.S. issuers. These risks are more pronounced for issuers in emerging markets or to the extent that the fund invests significantly in one region or country. These risks may include different financial reporting practices and regulatory standards, less liquid trading markets, extreme price volatility, currency risks, changes in economic, political, regulatory and social conditions, sustained economic downturns, financial instability, tax burdens, and investment and repatriation restrictions. Lack of information and less market regulation also may affect the value of these securities. Withholding and other non-U.S. taxes may decrease the fund's return. Non-U.S. issuers may be located in parts of the world that have historically been prone to natural disasters. Investing in depositary receipts is subject to many of the same risks as investing directly in non-U.S. issuers. DERIVATIVES RISK. Using options, swaps, futures and other derivatives can increase fund losses and reduce opportunities for gains when market prices, interest rates or the derivative instruments themselves behave in a way not anticipated by the fund. Using derivatives may increase the volatility of the fund's net asset value and may not provide the result intended. Derivatives may have a leveraging effect on the fund. Some derivatives have the potential for unlimited loss, regardless of the size of the fund's initial investment. Changes in a derivative's value may not correlate well with the referenced asset or metric. The fund also may have to sell assets at inopportune times to satisfy its obligations. Derivatives may be difficult to sell, unwind or value, and the counterparty may default on its obligations to the fund. New regulations are changing the derivatives markets. The regulations may make using derivatives more costly, may limit their availability, or may otherwise adversely affect their value or performance. For derivatives that are required to be traded through a clearinghouse or exchange, the fund also will be exposed to the credit risk of the clearinghouse and the broker that submits trades for the fund. It is possible that certain derivatives that are required to be cleared, such as certain swap contracts, will not be accepted for clearing. In addition, regulated trading facilities for swap contracts are relatively new; they may not function as intended, which could impair the ability to enter into swap contracts. The extent and impact of the new regulations are not yet fully known and may not be for some time. 45 Fund Summary for Pioneer Ibbotson Growth Allocation Fund CREDIT DEFAULT SWAP RISK. Credit default swap contracts, a type of derivative instrument, involve special risks and may result in losses to the fund. Credit default swaps may in some cases be illiquid, and they increase credit risk since the fund has exposure to the issuer of the referenced obligation and either the counterparty to the credit default swap or, if it is a cleared transaction, the brokerage firm through which the trade was cleared and the clearing organization that is the counterparty to that trade. In addition, for cleared trades, the brokerage firm would impose margin requirements and would be able to require termination of those trades in certain circumstances. Certain credit default swaps will be required to be traded on a regulated execution facility or contract market that makes them available for trading. The transition to trading these swaps on such a facility or contract market may not result in swaps being easier to trade or value and may present certain execution risks if such a facility or contract market does not operate properly. Swaps may be difficult to unwind or terminate. Certain index-based credit default swaps are structured in tranches, whereby junior tranches assume greater default risk than senior tranches. Once fully implemented, new regulations may make swaps more costly, may limit their availability, or may otherwise adversely affect the value or performance of these instruments. The extent and impact of these regulations are not yet fully known and may not be for some time. LEVERAGING RISK. The value of your investment may be more volatile and other risks tend to be compounded if the fund borrows or uses derivatives or other investments, such as ETFs, that have embedded leverage. Leverage generally magnifies the effect of any increase or decrease in the value of the fund's underlying assets or creates investment risk with respect to a larger pool of assets than the fund would otherwise have, potentially resulting in the loss of all assets. Engaging in such transactions may cause the fund to liquidate positions when it may not be advantageous to do so to satisfy its obligations or meet segregation requirements. FORWARD FOREIGN CURRENCY TRANSACTION RISK. To the extent that the fund enters into forward foreign currency transactions, it may not fully benefit from or may lose money on the transactions if changes in currency rates do not occur as anticipated or do not correspond accurately to changes in the value of the fund's holdings, or if the counterparty defaults. Such transactions may also prevent the fund from realizing profits on favorable movements in exchange rates. Risk of counterparty default is greater for counterparties located in emerging markets. The fund's ability to use 46 forward foreign currency transactions successfully depends on a number of factors, including the forward foreign currency transactions being available at prices that are not too costly, the availability of liquid markets, and the adviser's judgment regarding the direction of changes in currency exchange rates. PORTFOLIO TURNOVER RISK. If the fund does a lot of trading, it may incur additional operating expenses, which would reduce performance. A higher level of portfolio turnover may also cause taxable shareowners to incur a higher level of taxable income or capital gains. Please note that there are many other factors that could adversely affect your investment and that could prevent the fund from achieving its goals. An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. THE FUND'S PAST PERFORMANCE The bar chart and table indicate the risks and volatility of an investment in the fund by showing how the fund has performed in the past. The bar chart shows changes in the performance of the fund's Class A shares from calendar year to calendar year. The table shows the average annual total returns for each class of the fund over time and compares these returns to the returns of the Standard and Poor's 500 Index and the Barclays Capital Aggregate Bond Index, each a broad-based measure of market performance that has characteristics relevant to the fund's investment strategies. You can obtain updated performance information by visiting https://us.pioneerinvestments.com/performance or by calling 1-800-225-6292. The fund's past performance (before and after taxes) does not necessarily indicate how it will perform in the future. The bar chart does not reflect any sales charge you may pay when you buy fund shares. If this amount was reflected, returns would be less than those shown. 47 Fund Summary for Pioneer Ibbotson Growth Allocation Fund ANNUAL RETURN CLASS A SHARES (%) (Year ended December 31) [GRAPHIC APPEARS HERE]
'05 '06 '07 '08 '09 '10 '11 '12 8.24 12.49 5.47 -35.25 30.69 13.17 -3.30 11.00
For the period covered by the bar chart: THE HIGHEST CALENDAR QUARTERLY RETURN WAS 18.16% (04/01/2009 TO 06/30/2009). THE LOWEST CALENDAR QUARTERLY RETURN WAS -20.04% (10/01/2008 TO 12/31/2008). At September 30, 2013, the year-to-date return was 12.18%. 48 AVERAGE ANNUAL TOTAL RETURN (%) (for periods ended December 31, 2012)
SINCE INCEPTION 1 YEAR 5 YEAR INCEPTION DATE -------- -------- ----------- ---------- Class A 8/9/04 ----------------------------------------------------- ----- ----- ---- ------ Return before taxes 4.56 -0.64 4.15 ----------------------------------------------------- ------ ------ ---- ------ Return after taxes on distributions 4.24 -1.31 3.46 ----------------------------------------------------- ------ ------ ---- ------ Return after taxes on distributions and sale of shares 3.20 -0.83 3.34 ----------------------------------------------------- ------ ------ ---- ------ Class B 6.19 -0.20 3.03 8/9/04 ----------------------------------------------------- ------ ------ ---- ------ Class C 10.14 -0.12 3.77 8/9/04 ----------------------------------------------------- ------ ------ ---- ------ Class Y 11.02 1.03 3.77 9/26/05 ----------------------------------------------------- ------ ------ ---- ------- Standard & Poor's 500 Index (reflects no deduction for fees, expenses or taxes) 16.00 1.66 5.72 8/9/04 ----------------------------------------------------- ------ ------ ---- ------- Barclays Capital Aggregate Bond Index (reflects no deduction for fees, expenses or taxes) 4.22 5.95 5.42 8/9/04 ----------------------------------------------------- ------ ------ ---- -------
After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown only for Class A shares. After-tax returns for Class B, Class C and Class Y shares will vary. 49 Fund Summary for Pioneer Ibbotson Growth Allocation Fund MANAGEMENT INVESTMENT ADVISER Pioneer Investment Management, Inc. INVESTMENT SUBADVISER Ibbotson Associates, Inc. PORTFOLIO MANAGEMENT Scott Wentsel, vice president and senior portfolio manager at Ibbotson (portfolio manager of the fund since 2005); Brian Huckstep, portfolio manager at Ibbotson (portfolio manager of the fund since 2005); Paul Arnold, senior consultant at Ibbotson (portfolio manager of the fund since 2012)
PURCHASE AND SALE OF FUND SHARES You may purchase, exchange or sell (redeem) shares each day the New York Stock Exchange is open through your financial intermediary or, for accounts held directly with the fund, by contacting the fund's transfer agent in writing or by telephone (Pioneer Investment Management Shareholder Services, Inc., P.O. Box 55014, Boston, MA 02205-5014, tel. 1-800-225-6292). Your initial investment for Class A or Class C shares must be at least $1,000. Additional investments must be at least $100 for Class A shares and $500 for Class C shares. The initial investment for Class Y shares must be at least $5 million. This amount may be invested in one or more of the Pioneer mutual funds that currently offer Class Y shares. There is no minimum additional investment amount for Class Y shares. Effective December 31, 2009, Class B shares are no longer offered to new or existing shareholders, except for reinvestment of dividends and/or capital gains distributions and exchanges for Class B shares of other Pioneer funds. TAX INFORMATION The fund intends to make distributions that may be taxed as ordinary income, qualified dividend income, or capital gains. PAYMENTS TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES If you purchase the fund through a broker-dealer or other financial intermediary (such as a bank), the fund and its related companies may pay the intermediary for the sale of fund shares and related services. These payments create a conflict of interest by influencing the broker-dealer or other intermediary 50 and your salesperson or investment professional to recommend the fund over another investment. Ask your salesperson or investment professional or visit your financial intermediary's website for more information. 51 Fund Summary for Pioneer Ibbotson Aggressive Allocation Fund INVESTMENT OBJECTIVES Long-term capital growth. FEES AND EXPENSES OF THE FUND This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. You may qualify for sales charge discounts if you or your family invest, or agree to invest in the future, at least $50,000 in Class A shares of the Pioneer funds. More information about these and other discounts is available from your investment professional and in the "Sales charges" section of the prospectus beginning on page 105 and the "Sales charges" section of the statement of additional information beginning on page 70.
SHAREOWNER FEES (fees paid directly from your investment) CLASS A CLASS B CLASS C CLASS Y ---------------------------------------------------------- --------- --------- --------- -------- Maximum sales charge (load) when you buy shares (as a percentage of offering price) 5.75% None None None ---------------------------------------------------------- ---- --------- --------- -------- Maximum deferred sales charge (load) (as a percentage of offering price or the amount you receive when you sell shares, whichever is less) None 4% 1% None ---------------------------------------------------------- ---- --------- --------- --------
ANNUAL FUND OPERATING EXPENSES (expenses that you pay each year as a percentage of the value of your investment) CLASS A CLASS B CLASS C CLASS Y -------------------------------------------------------- --------- --------- --------- -------- Management Fees 0.13% 0.13% 0.13% 0.13% -------------------------------------------------------- ---- ----- ---- ---- Distribution and Service (12b-1) Fees 0.25% 1.00% 1.00% 0.00% -------------------------------------------------------- ---- ----- ---- ---- Other Expenses 0.44% 0.60% 0.38% 0.54% -------------------------------------------------------- ---- ----- ---- ---- Acquired Fund Fees and Expenses/1/ 0.88% 0.88% 0.88% 0.88% -------------------------------------------------------- ---- ----- ---- ---- Total Annual Fund Operating Expenses Plus Acquired Fund Fees and Expenses 1.70% 2.61% 2.39% 1.55% -------------------------------------------------------- ---- ----- ---- ---- Less: Fee Waiver and Expense Reimbursement/2/ 0.00% -0.09% 0.00% 0.00% -------------------------------------------------------- ---- ----- ---- ---- Net Expenses Plus Acquired Fund Fees and Expenses/2/ 1.70% 2.52% 2.39% 1.55% -------------------------------------------------------- ---- ----- ---- ----
1 Total annual fund operating expenses in the table, before and after fee waiver and expense reimbursement, may be higher than the corresponding ratio of expenses to average net assets shown in the "Financial Highlights" section, which does not include acquired fund fees and expenses. 2 The fund's investment adviser has contractually agreed to limit ordinary operating expenses to the extent required to reduce fund expenses to 1.64% of the average daily net assets attributable to Class B shares. Acquired Fund Fees and Expenses are not included in the expense limitations noted above. This 52 expense limitation is in effect through December 1, 2014. There can be no assurance that the adviser will extend the expense limitation beyond such time. While in effect, the arrangement may be terminated for a class only by agreement of the fund's investment adviser and the Board of Trustees. The expense limitation does not limit the expenses of the underlying funds indirectly incurred by a shareholder. EXAMPLE This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the fund for the time periods shown and then, except as indicated, redeem all of your shares at the end of those periods. It also assumes that (a) your investment has a 5% return each year and (b) the fund's total annual operating expenses remain the same except for year one (which considers the effect of the expense limitation). Although your actual costs may be higher or lower, based on these assumptions your costs would be:
IF YOU REDEEM YOUR SHARES IF YOU DO NOT REDEEM YOUR SHARES ---------------------------------------- -------------------------------------- NUMBER OF YEARS YOU OWN YOUR SHARES -------------------------------------------------------------------------------- 1 3 5 10 1 3 5 10 ------- --------- --------- --------- ------- ------- --------- --------- Class A $738 $1,080 $1,445 $2,468 $738 1,080 $1,445 $2,468 --------- ---- ------ ------ ------ ---- ----- ------ ------ Class B 655 1,103 1,477 2,716 255 803 1,377 2,716 --------- ---- ------ ------ ------ ---- ----- ------ ------ Class C 342 745 1,275 2,726 242 745 1,275 2,726 --------- ---- ------ ------ ------ ---- ----- ------ ------ Class Y 158 490 845 1,845 158 490 845 1,845 --------- ---- ------ ------ ------ ---- ----- ------ ------
PORTFOLIO TURNOVER The fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund's performance. During the most recent fiscal year, the fund's portfolio turnover rate was 6% of the average value of its portfolio. PRINCIPAL INVESTMENT STRATEGIES The fund is a "fund of funds." The fund seeks to achieve its investment objectives by investing in other funds ("underlying funds" or "acquired funds") rather than direct positions in securities. The underlying funds have their own investment objectives and principal investment strategies and invest 53 Fund Summary for Pioneer Ibbotson Aggressive Allocation Fund in a variety of U.S. and foreign equity, debt and money market securities. Equity securities in which underlying funds invest include common stocks, preferred stocks and equity securities with common stock characteristics such as real estate investment trusts, and exchange-traded funds that invest primarily in equity securities. Debt securities in which underlying funds may invest include U.S. government securities, debt securities of corporate and other issuers, mortgage- and asset-backed securities, debt convertible to equity securities and short term debt securities. Underlying funds also may use derivatives, such as credit default swaps. Because this is an aggressive allocation fund, the majority of the fund's assets will be invested in equity funds, although a portion of its assets will be invested in fixed income funds, cash, cash equivalents, or in money market funds. Under normal circumstances, the fund expects to invest its assets among asset classes in the following ranges. The fund's investment adviser may change these allocation ranges from time to time without the approval of or notice to shareholders. The fixed income fund allocation includes the fund's investments in cash, cash equivalents, and money market funds. INVESTMENT STRATEGIES/ASSET CLASS TARGETS
EQUITY FUND FIXED INCOME FUND ALLOCATION ALLOCATION ------------- ------------------ Pioneer Ibbotson Aggressive Allocation Fund 85-100% 0-15% --------------------------------------------- ------ ----
The intended benefit of asset allocation is that the diversification provided by allocating assets among asset classes, such as equity and debt securities, reduces volatility over the long-term. The subadviser, subject to the investment adviser's supervision, allocates the fund's assets among the underlying funds using a two-step process. First, the subadviser seeks to develop an optimal model allocation among underlying funds in different asset classes using an analysis that looks at forecast returns, standard deviations in historical returns and the correlation of the performance of different asset classes. The subadviser then invests the assets in underlying funds that invest in those asset classes. The subadviser's analysis in selecting and weighting the underlying funds is based on quantitative and qualitative measures. Periodically, the subadviser may recommend the rebalancing of a fund's assets among asset classes and underlying funds. Decisions to sell shares of the underlying funds are made for cash flow purposes, as a result of periodic rebalancing of a fund's portfolio holdings, or as an adjustment to a fund's target allocation. 54 As of the date of this prospectus, the fund invests solely in other Pioneer funds. From time to time the fund's investment adviser may select new or different underlying funds without prior approval or notice to shareholders. PRINCIPAL RISKS OF INVESTING IN THE FUND You could lose money on your investment in the fund. As with any mutual fund, there is no guarantee that the fund will achieve its objectives. For purposes of this section, "the fund" means the fund or, where applicable, an underlying fund. MARKET RISK. The values of securities held by the fund may go up or down, sometimes rapidly or unpredictably, due to general market conditions, such as real or perceived adverse economic, political, or regulatory conditions, inflation, changes in interest or currency rates or adverse investor sentiment. Adverse market conditions may be prolonged and may not have the same impact on all types of securities. The values of securities may fall due to factors affecting a particular issuer, industry or the securities market as a whole. High public debt in the U.S. and other countries creates ongoing and systemic market risks and policymaking uncertainty. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities of issuers worldwide. Governmental and non-governmental issuers have defaulted on, or been forced to restructure, their debts, and many other issuers have faced difficulties obtaining credit. These market conditions may continue, worsen or spread, including in the U.S., Europe and beyond. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets and asset valuations around the world. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. Whether or not the fund invests in securities of issuers located in or with significant exposure to countries experiencing economic and financial difficulties, the value and liquidity of the fund's investments may be negatively affected. In addition, policy and legislative changes in the U.S. and in other countries are affecting many aspects of financial regulation. The impact of these changes on the markets, and the practical implications 55 Fund Summary for Pioneer Ibbotson Aggressive Allocation Fund for market participants, may not be fully known for some time. The fund may experience a substantial or complete loss on any individual security or derivative position. FUND OF FUNDS STRUCTURE AND LAYERING OF FEES. The fund invests in the underlying funds, which may themselves invest in other investment companies, including exchange-traded funds (ETFs). Each underlying fund has its own investment risks that can affect the value of the underlying funds' shares and therefore the net asset value of the fund. In addition to the fund's operating expenses, the fund indirectly pays a portion of the expenses incurred by the underlying funds. Consequently, an investment in the fund entails more direct and indirect expenses than a direct investment in the underlying funds. Also, one underlying fund may buy the same security that another underlying fund is selling. You would indirectly bear the costs of both trades without achieving any investment purpose. These transactions may also generate taxable gains. You may receive taxable distributions consisting of gains from transactions by the underlying funds as well as gains from the fund's transactions in shares of the underlying funds. ALLOCATION RISK. The subadviser's evaluation of asset classes and market sectors in developing an allocation model, and its selection and weighting of underlying funds within the allocation model, may prove to be incorrect. To the extent that the fund invests a significant percentage of its assets in any one underlying fund, the fund will be subject to a greater degree to the risks particular to that underlying fund, and may experience greater volatility as a result. ASSET CLASS VARIATION RISK. The underlying funds invest principally in the securities constituting their asset class (i.e., equity or fixed income). However, under normal market conditions, an underlying fund may vary the percentage of its assets in these securities (subject to any applicable regulatory requirements). Depending upon the percentage of securities in a particular asset class held by the underlying funds at any given time, and the percentage of the fund's assets invested in various underlying funds, the fund's actual exposure to the securities in a particular asset class may vary substantially from its target asset allocation for that asset class. EXPENSE RISK. Your actual costs of investing in the fund may be higher than the expenses shown in "Annual fund operating expenses" for a variety of reasons. For example, expense ratios may be higher than those shown if overall net assets decrease. Net assets are more likely to decrease and fund expense ratios are more likely to increase when markets are volatile. 56 PRINCIPAL RISKS OF INVESTING IN THE UNDERLYING FUNDS RISKS OF EQUITY INVESTMENTS. Equity securities are more volatile and carry more risks than some other forms of investment. Risks of investing in underlying equity funds may include: VALUE STYLE RISK. The prices of securities the adviser believes are undervalued may not appreciate as expected or may go down. Value stocks may fall out of favor with investors and underperform the overall equity market. GROWTH STYLE RISK. The fund's investments may not have the growth potential originally expected. Growth stocks may fall out of favor with investors and underperform the overall equity market. SMALL AND MID-SIZE COMPANIES RISK. Compared to large companies, small- and mid-size companies, and the market for their equity securities, may be more sensitive to changes in earnings results and investor expectations, have more limited product lines and capital resources, experience sharper swings in market values, have limited liquidity, be harder to value or to sell at the times and prices the adviser thinks appropriate, and offer greater potential for gain and loss. RISKS OF INVESTMENTS IN REITS. Investing in REITs involves unique risks. They are significantly affected by the market for real estate and are dependent upon management skills and cash flow. REITs may have lower trading volumes and may be subject to more abrupt or erratic price movements than the overall securities markets. In addition to its own expenses, the fund will indirectly bear its proportionate share of any management and other expenses paid by REITs in which it invests. Many real estate companies, including REITs, utilize leverage. PREFERRED STOCKS RISK. Preferred stocks may pay fixed or adjustable rates of return. Preferred stocks are subject to issuer-specific and market risks applicable generally to equity securities. In addition, a company's preferred stocks generally pay dividends only after the company makes required payments to holders of its bonds and other debt. Thus, the value of preferred stocks will usually react more strongly than bonds and other debt to actual or perceived changes in the company's financial condition or prospects. The market value of preferred stocks generally decreases when interest rates rise. Preferred stocks of smaller companies may be more vulnerable to adverse developments than preferred stock of larger companies. 57 Fund Summary for Pioneer Ibbotson Aggressive Allocation Fund RISKS OF INITIAL PUBLIC OFFERINGS. Companies involved in initial public offerings (IPOs) generally have limited operating histories, and prospects for future profitability are uncertain. The market for IPO issuers has been volatile, and share prices of newly public companies have fluctuated significantly over short periods of time. Further, stocks of newly-public companies may decline shortly after the IPO. There is no assurance that the fund will have access to IPOs. The purchase of IPO shares may involve high transaction costs. RISKS OF CONVERTIBLE SECURITIES. The market values of convertible securities tend to decline as interest rates increase and, conversely, to increase as interest rates decline. A downturn in equity markets may cause the price of convertible securities to decrease relative to other fixed income securities. RISKS OF FIXED INCOME INVESTMENTS. Risks of investing in underlying fixed income funds may include: INTEREST RATE RISK. Interest rates may go up, causing the value of the fund's investments to decline (this risk generally will be greater for securities with longer maturities). Interest rates in the U.S. recently have been historically low and may be expected to go back up. CREDIT RISK. If an issuer or guarantor of a security held by the fund or a counterparty to a financial contract with the fund defaults on its obligation to pay principal and/or interest, has its credit rating downgraded or is perceived to be less creditworthy, or the credit quality or value of any underlying assets declines, the value of your investment will decline. Credit risk is broadly gauged by the credit ratings of the securities in which the fund invests. However, ratings are only the opinions of the companies issuing them and are not guarantees as to quality. PREPAYMENT OR CALL RISK. Many issuers have a right to prepay their securities. If interest rates fall, an issuer may exercise this right. If this happens, the fund will be forced to reinvest prepayment proceeds at a time when yields on securities available in the market are lower than the yield on the prepaid security. The fund also may lose any premium it paid on the security. EXTENSION RISK. During periods of rising interest rates, the average life of certain types of securities may be extended because of slower than expected principal payments. This may lock in a below market interest rate, increase the security's duration and reduce the value of the security. 58 U.S. GOVERNMENT AGENCY OBLIGATIONS RISK. The fund invests in obligations issued by agencies and instrumentalities of the U.S. government. Government-sponsored entities such as Federal National Mortgage Association (Fannie Mae), Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal Home Loan Banks (FHLBs), although chartered or sponsored by Congress, are not funded by congressional appropriations and the debt and mortgage-backed securities issued by them are neither guaranteed nor issued by the U.S. government. Such debt and mortgage-backed securities are subject to the risk of default on the payment of interest and/or principal, similar to debt of private issuers. Although the U.S. government has provided financial support to Fannie Mae and Freddie Mac in the past, there can be no assurance that it will support these or other government-sponsored entities in the future. MORTGAGE-RELATED AND ASSET-BACKED SECURITIES RISK. The value of mortgage-related and asset-backed securities will be influenced by factors affecting the housing market and the assets underlying such securities. As a result, during periods of declining asset value, difficult or frozen credit markets, swings in interest rates, or deteriorating economic conditions, mortgage-related and asset-backed securities may decline in value, face valuation difficulties, become more volatile and/or become illiquid. Additionally, during such periods and also under normal conditions, these securities are also subject to prepayment and call risk. Some of these securities may receive little or no collateral protection from the underlying assets and are thus subject to the risk of default. The risk of such defaults is generally higher in the case of mortgage-backed investments that include so-called "sub-prime" mortgages. The structure of some of these securities may be complex and there may be less available information than for other types of debt securities. Upon the occurrence of certain triggering events or defaults, the fund may become the holder of underlying assets at a time when those assets may be difficult to sell or may be sold only at a loss. RISKS OF INSTRUMENTS THAT ALLOW FOR BALLOON PAYMENTS OR NEGATIVE AMORTIZATION PAYMENTS. Certain debt instruments allow for balloon payments or negative amortization payments. Such instruments permit the borrower to avoid paying currently a portion of the interest accruing on the instrument. While these features make the debt instrument more affordable to the borrower in the near term, they increase the risk that the borrower will be unable to make the resulting higher payment or payments that become due at the maturity of the loan. 59 Fund Summary for Pioneer Ibbotson Aggressive Allocation Fund RISKS OF SUBORDINATED SECURITIES. A holder of securities that are subordinated or "junior" to more senior securities of an issuer is entitled to payment after holders of more senior securities of the issuer. Subordinated securities are more likely to suffer a credit loss than non-subordinated securities of the same issuer, any loss incurred by the subordinated securities is likely to be proportionately greater, and any recovery of interest or principal may take more time. As a result, even a perceived decline in creditworthiness of the issuer is likely to have a greater impact on them. HIGH YIELD OR "JUNK" BOND RISK. Debt securities that are below investment grade, called "junk bonds," are speculative, have a higher risk of default or are already in default, tend to be less liquid and are more difficult to value than higher grade securities. Junk bonds tend to be volatile and more susceptible to adverse events and negative sentiments. These risks are more pronounced for securities that are already in default. RISKS OF INVESTING IN EVENT-LINKED BONDS. The return of principal and the payment of interest on "event-linked" bonds are contingent on the non-occurrence of a pre-defined "trigger" event, such as a hurricane or an earthquake of a specific magnitude. If a trigger event, as defined within the terms of an event-linked bond, involves losses or other metrics exceeding a specific magnitude in the geographic region and time period specified therein, the fund may lose a portion or all of its accrued interest and/or principal invested in the event-linked bond. In addition to the specified trigger events, event-linked bonds may expose the fund to other risks, including but not limited to issuer (credit) default, adverse regulatory or jurisdictional interpretations and adverse tax consequences. RISKS OF INVESTING IN FLOATING RATE LOANS. Floating rate loans and similar investments may be illiquid or less liquid than other investments. The value of collateral, if any, securing a floating rate loan can decline or may be insufficient to meet the issuer's obligations or may be difficult to liquidate. No active trading market may exist for many floating rate loans, and many loans are subject to restrictions on resale. Market quotations for these securities may be volatile and/or subject to large spreads between bid and ask prices. Any secondary market may be subject to irregular trading activity and extended trade settlement periods. RISKS OF INVESTING IN INVERSE FLOATING RATE OBLIGATIONS. The interest rate on inverse floating rate obligations will generally decrease as short-term interest rates increase, and increase as short-term rates decrease. Due 60 to their leveraged structure, the sensitivity of the market value of an inverse floating rate obligation to changes in interest rates is generally greater than a comparable long-term bond issued by the same issuer and with similar credit quality, redemption and maturity provisions. Inverse floating rate obligations may be volatile and involve leverage risk. INFLATION-LINKED SECURITY RISK. The principal or interest of inflation-linked securities such as TIPS is adjusted periodically to a specified rate of inflation. The inflation index used may not accurately measure the real rate of inflation. Inflation-linked securities may lose value in the event that the actual rate of inflation is different than the rate of the inflation index. RISKS OF ZERO COUPON BONDS, PAYMENT IN KIND, DEFERRED AND CONTINGENT PAYMENT SECURITIES. These securities may be more speculative and may fluctuate more in value than securities which pay income periodically and in cash. In addition, although the fund receives no periodic cash payments on such securities the fund is deemed for tax purposes to receive income from such securities, which applicable tax rules require the fund to distribute to shareholders. Such distributions may be taxable when distributed to shareholders. RISKS OF EQUITY AND FIXED INCOME INVESTMENTS. Risks of investing in underlying equity and fixed income funds may include: PORTFOLIO SELECTION RISK. The adviser's judgment about the attractiveness, relative value or potential appreciation of an equity security, or about the quality, relative yield or relative value of a fixed income security, or about a particular sector, region or market segment, or about an investment strategy, or about interest rates, may prove to be incorrect. LIQUIDITY RISK. Some securities and derivatives held by the fund may be impossible or difficult to sell or unwind particularly during times of market turmoil. Illiquid securities and derivatives also may be difficult to value. If the fund is forced to sell an illiquid asset or unwind a derivative position to meet redemption requests or other cash needs, the fund may be forced to sell at a loss. MARKET SEGMENT RISK. To the extent the fund emphasizes, from time to time, investments in a market segment, the fund will be subject to a greater degree to the risks particular to that segment, and may experience greater market fluctuation than a fund without the same focus. 61 Fund Summary for Pioneer Ibbotson Aggressive Allocation Fund RISKS OF NON-U.S. INVESTMENTS. Investing in non-U.S. issuers, or in U.S. issuers that have significant exposure to foreign markets, may involve unique risks compared to investing in securities of U.S. issuers. These risks are more pronounced for issuers in emerging markets or to the extent that the fund invests significantly in one region or country. These risks may include different financial reporting practices and regulatory standards, less liquid trading markets, extreme price volatility, currency risks, changes in economic, political, regulatory and social conditions, sustained economic downturns, financial instability, tax burdens, and investment and repatriation restrictions. Lack of information and less market regulation also may affect the value of these securities. Withholding and other non-U.S. taxes may decrease the fund's return. Non-U.S. issuers may be located in parts of the world that have historically been prone to natural disasters. Investing in depositary receipts is subject to many of the same risks as investing directly in non-U.S. issuers. DERIVATIVES RISK. Using options, swaps, futures and other derivatives can increase fund losses and reduce opportunities for gains when market prices, interest rates or the derivative instruments themselves behave in a way not anticipated by the fund. Using derivatives may increase the volatility of the fund's net asset value and may not provide the result intended. Derivatives may have a leveraging effect on the fund. Some derivatives have the potential for unlimited loss, regardless of the size of the fund's initial investment. Changes in a derivative's value may not correlate well with the referenced asset or metric. The fund also may have to sell assets at inopportune times to satisfy its obligations. Derivatives may be difficult to sell, unwind or value, and the counterparty may default on its obligations to the fund. New regulations are changing the derivatives markets. The regulations may make using derivatives more costly, may limit their availability, or may otherwise adversely affect their value or performance. For derivatives that are required to be traded through a clearinghouse or exchange, the fund also will be exposed to the credit risk of the clearinghouse and the broker that submits trades for the fund. It is possible that certain derivatives that are required to be cleared, such as certain swap contracts, will not be accepted for clearing. In addition, regulated trading facilities for swap contracts are relatively new; they may not function as intended, which could impair the ability to enter into swap contracts. The extent and impact of the new regulations are not yet fully known and may not be for some time. 62 CREDIT DEFAULT SWAP RISK. Credit default swap contracts, a type of derivative instrument, involve special risks and may result in losses to the fund. Credit default swaps may in some cases be illiquid, and they increase credit risk since the fund has exposure to the issuer of the referenced obligation and either the counterparty to the credit default swap or, if it is a cleared transaction, the brokerage firm through which the trade was cleared and the clearing organization that is the counterparty to that trade. In addition, for cleared trades, the brokerage firm would impose margin requirements and would be able to require termination of those trades in certain circumstances. Certain credit default swaps will be required to be traded on a regulated execution facility or contract market that makes them available for trading. The transition to trading these swaps on such a facility or contract market may not result in swaps being easier to trade or value and may present certain execution risks if such a facility or contract market does not operate properly. Swaps may be difficult to unwind or terminate. Certain index-based credit default swaps are structured in tranches, whereby junior tranches assume greater default risk than senior tranches. Once fully implemented, new regulations may make swaps more costly, may limit their availability, or may otherwise adversely affect the value or performance of these instruments. The extent and impact of these regulations are not yet fully known and may not be for some time. LEVERAGING RISK. The value of your investment may be more volatile and other risks tend to be compounded if the fund borrows or uses derivatives or other investments, such as ETFs, that have embedded leverage. Leverage generally magnifies the effect of any increase or decrease in the value of the fund's underlying assets or creates investment risk with respect to a larger pool of assets than the fund would otherwise have, potentially resulting in the loss of all assets. Engaging in such transactions may cause the fund to liquidate positions when it may not be advantageous to do so to satisfy its obligations or meet segregation requirements. FORWARD FOREIGN CURRENCY TRANSACTION RISK. To the extent that the fund enters into forward foreign currency transactions, it may not fully benefit from or may lose money on the transactions if changes in currency rates do not occur as anticipated or do not correspond accurately to changes in the value of the fund's holdings, or if the counterparty defaults. Such transactions may also prevent the fund from realizing profits on favorable movements in exchange rates. Risk of counterparty default is greater for counterparties located in emerging markets. The fund's ability to use 63 Fund Summary for Pioneer Ibbotson Aggressive Allocation Fund forward foreign currency transactions successfully depends on a number of factors, including the forward foreign currency transactions being available at prices that are not too costly, the availability of liquid markets, and the adviser's judgment regarding the direction of changes in currency exchange rates. PORTFOLIO TURNOVER RISK. If the fund does a lot of trading, it may incur additional operating expenses, which would reduce performance. A higher level of portfolio turnover may also cause taxable shareowners to incur a higher level of taxable income or capital gains. Please note that there are many other factors that could adversely affect your investment and that could prevent the fund from achieving its goals. An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. THE FUND'S PAST PERFORMANCE The bar chart and table indicate the risks and volatility of an investment in the fund by showing how the fund has performed in the past. The bar chart shows changes in the performance of the fund's Class A shares from calendar year to calendar year. The table shows the average annual total returns for each class of the fund over time and compares these returns to the returns of the Standard and Poor's 500 Index and the Barclays Capital Aggregate Bond Index, each a broad-based measure of market performance that has characteristics relevant to the fund's investment strategies. You can obtain updated performance information by visiting https://us.pioneerinvestments.com/performance or by calling 1-800-225-6292. The fund's past performance (before and after taxes) does not necessarily indicate how it will perform in the future. The bar chart does not reflect any sales charge you may pay when you buy fund shares. If this amount was reflected, returns would be less than those shown. 64 ANNUAL RETURN CLASS A SHARES (%) (Year ended December 31) [GRAPHIC APPEARS HERE]
'05 '06 '07 '08 '09 '10 '11 '12 9.64 14.20 5.33 -39.01 31.26 13.92 -4.61 11.43
For the period covered by the bar chart: THE HIGHEST CALENDAR QUARTERLY RETURN WAS 20.12% (04/01/2009 TO 06/30/2009). THE LOWEST CALENDAR QUARTERLY RETURN WAS -22.11% (10/1/2008 TO 12/31/2008). At September 30, 2013, the year-to-date return was 14.17%. 65 Fund Summary for Pioneer Ibbotson Aggressive Allocation Fund AVERAGE ANNUAL TOTAL RETURN (%) (for periods ended December 31, 2012)
SINCE INCEPTION 1 YEAR 5 YEAR INCEPTION DATE -------- -------- ----------- ---------- Class A 8/9/04 ----------------------------------------------------- ----- ----- ---- ------ Return before taxes 4.99 -1.80 4.05 ----------------------------------------------------- ------ ------ ---- ------ Return after taxes on distributions 4.83 -2.33 3.48 ----------------------------------------------------- ------ ------ ---- ------ Return after taxes on distributions and sale of shares 3.45 -1.71 3.36 ----------------------------------------------------- ------ ------ ---- ------ Class B 6.60 -1.39 3.58 8/9/04 ----------------------------------------------------- ------ ------ ---- ------ Class C 10.63 -1.35 3.80 8/9/04 ----------------------------------------------------- ------ ------ ---- ------ Class Y 11.65 -0.50 2.97 9/26/05 ----------------------------------------------------- ------ ------ ---- ------- Standard & Poor's 500 Stock Index (reflects no deduction for fees, expenses or taxes) 16.00 1.66 5.72 8/9/04 ----------------------------------------------------- ------ ------ ---- ------- Barclays Capital Aggregate Bond Index (reflects no deduction for fees, expenses or taxes) 4.22 5.95 5.42 8/9/04 ----------------------------------------------------- ------ ------ ---- -------
After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown only for Class A shares. After-tax returns for Class B, Class C and Class Y shares will vary. 66 MANAGEMENT INVESTMENT ADVISER Pioneer Investment Management, Inc. INVESTMENT SUBADVISER Ibbotson Associates, Inc. PORTFOLIO MANAGEMENT Scott Wentsel, vice president and senior portfolio manager at Ibbotson (portfolio manager of the fund since 2005); Brian Huckstep, portfolio manager at Ibbotson (portfolio manager of the fund since 2005); Paul Arnold, senior consultant at Ibbotson (portfolio manager of the fund since 2012)
PURCHASE AND SALE OF FUND SHARES You may purchase, exchange or sell (redeem) shares each day the New York Stock Exchange is open through your financial intermediary or, for accounts held directly with the fund, by contacting the fund's transfer agent in writing or by telephone (Pioneer Investment Management Shareholder Services, Inc., P.O. Box 55014, Boston, MA 02205-5014, tel. 1-800-225-6292). Your initial investment for Class A or Class C shares must be at least $1,000. Additional investments must be at least $100 for Class A shares and $500 for Class C shares. The initial investment for Class Y shares must be at least $5 million. This amount may be invested in one or more of the Pioneer mutual funds that currently offer Class Y shares. There is no minimum additional investment amount for Class Y shares. Effective December 31, 2009, Class B shares are no longer offered to new or existing shareholders, except for reinvestment of dividends and/or capital gains distributions and exchanges for Class B shares of other Pioneer funds. TAX INFORMATION The fund intends to make distributions that may be taxed as ordinary income, qualified dividend income, or capital gains. PAYMENTS TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES If you purchase the fund through a broker-dealer or other financial intermediary (such as a bank), the fund and its related companies may pay the intermediary for the sale of fund shares and related services. These payments create a conflict of interest by influencing the broker-dealer or other intermediary 67 Fund Summary for Pioneer Ibbotson Aggressive Allocation Fund and your salesperson or investment professional to recommend the fund over another investment. Ask your salesperson or investment professional or visit your financial intermediary's website for more information. 68 More on each fund's investment objectives and strategies INVESTMENT OBJECTIVES The investment objective of each of Pioneer Ibbotson Conservative Allocation Fund, Pioneer Ibbotson Moderate Allocation Fund, and Pioneer Ibbotson Growth Allocation Fund is to seek long-term capital growth and current income. The investment objective of Pioneer Ibbotson Aggressive Allocation Fund is to seek long-term capital growth. Each fund's investment objective may be changed without shareholder approval. A fund will provide notice prior to implementing any change to its investment objective. PRINCIPAL INVESTMENT STRATEGIES Each fund seeks to achieve its investment objectives by investing in other funds ("underlying funds") and using asset allocation strategies to allocate its assets among the underlying funds rather than direct positions in securities. ASSET ALLOCATION PROCESS Pioneer, the funds' investment adviser, allocates each fund's assets among the broad asset classes of equity, fixed income and short-term (money market) investments by investing in a distinctly weighted combination of underlying funds. These underlying funds, in turn, invest in a variety of U.S. and foreign equity, fixed income and money market securities. The intended benefit of asset allocation is that the diversification provided by allocating assets among asset classes, such as equity and debt securities, reduces volatility over the long-term. Pioneer has engaged Ibbotson to act as subadviser to each fund and allocate, subject to Pioneer's supervision, each fund's assets among the underlying funds. Ibbotson uses a two-step asset allocation process: First, Ibbotson seeks to develop an optimal model allocation among underlying funds in different asset classes using an analysis that looks at forecast returns, standard deviations in historical returns and the correlation of the performance of different asset classes. The goal of this process is to identify a combination of investments in different asset classes that is expected to maximize return for a given level of risk or minimize risk for a given level of return. Having determined the allocation of the fund's assets among the asset classes, Ibbotson then invests the assets in underlying funds that invest in those asset classes. Pioneer and Ibbotson agree from time to time upon the universe of mutual funds that Ibbotson may consider when making 69 More on each fund's investment objectives and strategies allocation decisions. Ibbotson's analysis in selecting and weighting the underlying funds from that universe includes historical returns-based style analysis, asset performance, regression and attribution analyses, manager interviews, relative and absolute performance, including correlations with other underlying funds as well as corresponding benchmarks, and historical volatility (the variability of returns from one period to the next). Ibbotson seeks a combination of underlying funds that it believes will optimize returns, given each fund's risk profile. When considering equity funds, Ibbotson focuses on the underlying funds' foreign and domestic exposure, market capitalization ranges, and investment style (growth vs. value). When considering bond funds, Ibbotson's primary focus is the overall level of risk in the type of fixed income securities in which the underlying funds invest and on maximizing current income and long-term capital growth. Based on the target allocations, a fund will invest the proceeds from the sale of its shares, reinvested dividends from the underlying funds and other income, and redeem investments in the underlying funds to provide the cash necessary to satisfy redemption requests for fund shares. However, the portion of each fund's net assets represented by an underlying fund or asset class could differ substantially over time from the target allocation as the underlying funds' asset values change due to market movements and portfolio management decisions. Periodically, Ibbotson will re-evaluate each fund's target asset allocation and may recommend the rebalancing of a fund's assets among asset classes and underlying funds to reflect changes in the target allocations or to reallocate the fund's holdings to match the target allocation. Each fund may change its target allocation to each asset class, the underlying funds in each asset class (including adding or deleting funds) or target allocations to each underlying fund without prior approval from or notice to shareholders. Decisions to sell shares of the underlying funds are made for cash flow purposes, such as redemptions or expenses, as a result of periodic rebalancing of a fund's portfolio holdings, or as an adjustment to an underlying fund's target allocation based on Ibbotson's view of the fund's characteristics and other allocation criteria. The following is a general guide regarding the anticipated allocation of assets of each of the funds among broad asset classes. Pioneer may change these allocation ranges from time to time without the approval of or notice to shareholders. 70 The fixed income allocation includes each fund's investments in cash, cash equivalents, or money market funds. INVESTMENT STRATEGIES/ASSET CLASS TARGETS
EQUITY FIXED INCOME INVESTMENT FUND FUND FUND OBJECTIVE(S) ALLOCATION ALLOCATION ------------------------------- ------------------------------ ------------ ------------- Pioneer Ibbotson Conservative Long-term capital growth and 20-40% 60-80% ------ ----- Allocation Fund current income. ------------------------------- ------------------------------ Pioneer Ibbotson Moderate Long-term capital growth and 50-70% 30-50% ------ ----- Allocation Fund current income. ------------------------------- ------------------------------ Pioneer Ibbotson Growth Long-term capital growth and 70-100% 0-30% ------ ----- Allocation Fund current income. ------------------------------- ------------------------------ Pioneer Ibbotson Aggressive Long-term capital growth. 85-100% 0-15% ------------------------------ ------ ----- Allocation Fund -------------------------------
Based upon the analysis described above under "Asset allocation process," each fund expects to invest its assets in underlying mutual funds within the ranges set forth below. The underlying funds in which the funds intend to invest may change from time to time and the funds may invest in underlying funds in addition to those described in this prospectus at the discretion of Pioneer without prior notice to or approval of shareholders. The investment policies of the various underlying funds are described in the section called "Information about the underlying funds," which is attached as Appendix A at the end of, and is considered part of, this prospectus. As of the date of this prospectus, the funds invest solely in other Pioneer funds. Under an exemptive order issued to Pioneer by the Securities and Exchange Commission and recently adopted rules, the funds may invest in underlying funds that are either managed by Pioneer or managed by an adviser not associated with Pioneer. Accordingly, Pioneer and Ibbotson may add funds that are not managed by Pioneer to the list of potential underlying funds in the future, although there is no current intent to do so. It is anticipated that underlying funds managed by Pioneer will at all times represent a significant portion of a fund's investments. 71 More on each fund's investment objectives and strategies
PIONEER PIONEER PIONEER PIONEER IBBOTSON IBBOTSON IBBOTSON IBBOTSON CONSERVATIVE MODERATE GROWTH AGGRESSIVE ALLOCATION ALLOCATION ALLOCATION ALLOCATION FUND FUND FUND FUND -------------- ------------ ------------ ----------- UNDERLYING FUND NAME PERCENTAGE OF UNDERLYING FUND HOLDINGS ----------------------------------------- ---------------------------------------------------- Pioneer Fund 0-30% 0-30% 0-30% 0-30% Pioneer Oak Ridge Large Cap Growth Fund 0-30% 0-30% 0-30% 0-30% Pioneer Fundamental Growth Fund 0-30% 0-30% 0-30% 0-30% Pioneer Disciplined Growth Fund 0-30% 0-30% 0-30% 0-30% Pioneer Disciplined Value Fund 0-30% 0-30% 0-30% 0-30% Pioneer Core Equity Fund 0-30% 0-30% 0-30% 0-30% Pioneer Select Mid Cap Growth Fund 0-30% 0-30% 0-30% 0-30% Pioneer Mid Cap Value Fund 0-30% 0-30% 0-30% 0-30% Pioneer Oak Ridge Small Cap Growth Fund 0-30% 0-30% 0-30% 0-30% Pioneer Global Equity Fund 0-30% 0-30% 0-30% 0-30% Pioneer International Value Fund 0-30% 0-30% 0-30% 0-30% Pioneer Emerging Markets Fund 0-30% 0-30% 0-30% 0-30% Pioneer Real Estate Shares 0-30% 0-30% 0-30% 0-30% Pioneer Equity Income Fund 0-30% 0-30% 0-30% 0-30% Pioneer Government Income Fund 0-30% 0-30% 0-30% 0-15% Pioneer High Yield Fund 0-30% 0-30% 0-30% 0-15% Pioneer Global Multisector Income Fund 0-30% 0-30% 0-30% 0-15% Pioneer Global High Yield Fund 0-30% 0-30% 0-30% 0-15% Pioneer Bond Fund 0-30% 0-30% 0-30% 0-15% Pioneer Strategic Income Fund 0-30% 0-30% 0-30% 0-15% Pioneer Dynamic Credit Fund 0-30% 0-30% 0-30% 0-15% Pioneer Multi-Asset Ultrashort Income Fund 0-30% 0-30% 0-30% 0-15% Pioneer Floating Rate Fund 0-30% 0-30% 0-30% 0-15% Pioneer Short Term Income Fund 0-30% 0-30% 0-30% 0-15% Pioneer Cash Reserves Fund 0-30% 0-30% 0-30% 0-15%
-------------------------------------------------------------------------------- PRINCIPAL INVESTMENTS BY UNDERLYING FUNDS The underlying funds may invest in some or all of the following securities. Certain equity underlying funds may invest a limited portion of their assets in fixed income securities. Fixed income underlying funds primarily invest in debt securities. For purposes of this section, "the fund" means a fund and, where applicable, an underlying fund. 72 INVESTMENTS IN EQUITY SECURITIES EQUITY SECURITIES The fund may invest in equity securities. Equity securities in which the fund invests include common stocks and securities with common stock characteristics, such as exchange-traded funds (ETFs) that invest primarily in equity securities, depositary receipts, warrants, rights, equity interests in real estate investment trusts (REITs) and preferred stocks. INVESTMENTS IN REITS REITs are companies that invest primarily in income producing real estate or real estate related loans or interests. Some REITs invest directly in real estate and derive their income from the collection of rents and capital gains on the sale of properties. Other REITs invest primarily in mortgages, including "sub-prime" mortgages, secured by real estate and derive their income from collection of interest. INVESTMENTS IN FIXED INCOME SECURITIES DEBT SECURITIES The fund may invest in debt securities. Debt securities in which the fund invests include U.S. government securities, debt securities of corporate and other issuers, mortgage- and asset-backed securities and short-term debt securities. The fund may acquire debt securities that are investment grade and may invest in below investment grade debt securities (known as "junk bonds") including below investment grade convertible debt securities. A debt security is investment grade if it is rated in one of the top four categories by a nationally recognized statistical rating organization or determined to be of equivalent credit quality by the adviser. U.S. GOVERNMENT AGENCY SECURITIES The fund may invest in U.S. government securities. U.S. government securities include obligations: directly issued by or supported by the full faith and credit of the U.S. government, like Treasury bills, notes and bonds and Government National Mortgage Association certificates; supported by the right of the issuer to borrow from the U.S. Treasury, like those of the Federal Home Loan Banks; supported by the discretionary authority of the U.S. government to purchase the agency's securities like those of the Federal National Mortgage Association; or supported only by the credit of the issuer itself, like the Tennessee Valley Authority. 73 More on each fund's investment objectives and strategies MORTGAGE-BACKED SECURITIES The fund may invest in mortgage-backed securities. Mortgage-backed securities may be issued by private issuers, by government-sponsored entities such as the Federal National Mortgage Association (Fannie Mae) or Federal Home Loan Mortgage Corporation (Freddie Mac) or by agencies of the U.S. government, such as the Government National Mortgage Association (Ginnie Mae). Mortgage-backed securities represent direct or indirect participation in, or are collateralized by and payable from, mortgage loans secured by real property. The fund's investments in mortgage-related securities may include mortgage derivatives and structured securities. The fund may invest in collateralized mortgage obligations (CMOs). A CMO is a mortgage-backed bond that is issued in multiple classes, each with a specified fixed or floating interest rate and a final scheduled distribution date. The holder of an interest in a CMO is entitled to receive specified cash flows from a pool of underlying mortgages or other mortgage-backed securities. Depending upon the class of CMO purchased, the holder may be entitled to payment before the cash flow from the pool is used to pay holders of other classes of the CMO or, alternatively, the holder may be paid only to the extent that there is cash remaining after the cash flow has been used to pay other classes. A subordinated interest may serve as a credit support for the senior securities purchased by other investors. ASSET-BACKED SECURITIES The fund may invest in asset-backed securities. Asset-backed securities represent participations in, or are secured by and payable from, assets such as installment sales or loan contracts, leases, credit card receivables and other categories of receivables. The fund's investments in asset-backed securities may include derivative and structured securities. The fund may invest in asset-backed securities issued by special entities, such as trusts, that are backed by a pool of financial assets. The fund may invest in collateralized debt obligations (CDOs), which include collateralized bond obligations (CBOs), collateralized loan obligations (CLOs) and other similarly structured securities. A CDO is a trust backed by a pool of fixed income securities. The trust typically is split into two or more portions, called tranches, which vary in credit quality, yield, credit support and right to repayment of principal and interest. Lower tranches pay higher interest rates but represent lower degrees of credit quality 74 and are more sensitive to the rate of defaults in the pool of obligations. Certain CDOs may use derivatives, such as credit default swaps, to create synthetic exposure to assets rather than holding such assets directly. SUBORDINATED SECURITIES The fund may invest in securities that are subordinated or "junior" to more senior securities of the issuer. The investor in a subordinated security of an issuer is entitled to payment after other holders of debt in that issuer. BELOW INVESTMENT GRADE SECURITIES ("JUNK BONDS") The fund may invest in debt securities rated below investment grade or, if unrated, of equivalent quality as determined by Pioneer. A debt security is below investment grade if it is rated BB or lower by Standard & Poor's Financial Services LLC or the equivalent rating by another nationally recognized statistical rating organization or determined to be of equivalent credit quality by Pioneer. Debt securities rated below investment grade are commonly referred to as "junk bonds" and are considered speculative. Below investment grade debt securities involve greater risk of loss, are subject to greater price volatility and are less liquid, especially during periods of economic uncertainty or change, than higher quality debt securities. Below investment grade securities also may be more difficult to value. FLOATING RATE LOANS Floating rate loans are provided by banks and other financial institutions to large corporate customers. These loans are rated below investment grade, but typically are secured with specific collateral and have a senior position in the capital structure of the borrower. These loans typically have rates of interest that are reset periodically by reference to a base lending rate, such as the London Interbank Offered Rate (LIBOR), plus a premium. INVERSE FLOATING RATE OBLIGATIONS The fund may invest in inverse floating rate obligations (a type of derivative instrument). The interest rate on inverse floating rate obligations will generally decrease as short-term interest rates increase, and increase as short-term rates decrease. Due to their leveraged structure, the sensitivity of the market value of an inverse floating rate obligation to changes in interest rates is generally greater than a comparable long-term bond issued by the same issuer and with similar credit quality, redemption and maturity provisions. Inverse floating rate obligations may be volatile and involve leverage risk. 75 More on each fund's investment objectives and strategies DEBT RATING CONSIDERATIONS For purposes of the fund's credit quality policies, if a security receives different ratings from nationally recognized statistical rating organizations, the fund will use the rating chosen by the portfolio manager as most representative of the security's credit quality. The ratings of nationally recognized statistical rating organizations represent their opinions as to the quality of the securities that they undertake to rate and may not accurately describe the risks of the securities. A rating organization may have a conflict of interest with respect to a security for which it assigns a quality rating. In addition, there may be a delay between a change in the credit quality of a security or other asset and a change in the quality rating assigned to the security or other asset by a rating organization. If a rating organization changes the quality rating assigned to one or more of the fund's portfolio securities, Pioneer will consider if any action is appropriate in light of the fund's investment objectives and policies. An investor can still lose significant amounts when investing in investment grade securities. EVENT-LINKED BONDS The fund may invest in "event-linked" bonds, which sometimes are referred to as "insurance-linked" or "catastrophe" bonds. Event-linked bonds are debt obligations for which the return of principal and the payment of interest are contingent on the non-occurrence of a pre-defined "trigger" event, such as a hurricane or an earthquake of a specific magnitude. For some event-linked bonds, the trigger event's magnitude may be based on losses to a company or industry, industry indexes or readings of scientific instruments rather than specified actual losses. The fund is entitled to receive principal and interest payments so long as no trigger event occurs of the description and magnitude specified by the instrument. Event-linked bonds may be issued by government agencies, insurance companies, reinsurers, special purpose corporations or other on-shore or off-shore entities. Event-linked bonds are typically rated by at least one nationally recognized statistical rating agency, but also may be unrated. The rating for an event-linked bond primarily reflects the rating agency's calculated probability that a pre-defined trigger event will occur. This rating also assesses the event-linked bond's credit risk and the model used to calculate the probability of a trigger event. 76 EQUITY AND FIXED INCOME INVESTMENTS NON-U.S. INVESTMENTS The fund may invest in securities of non-U.S. issuers, including securities of emerging markets issuers. Non-U.S. issuers are issuers that are organized and have their principal offices outside of the United States. Non-U.S. securities may be issued by non-U.S. governments, banks or corporations, or private issuers, and certain supranational organizations, such as the World Bank and the European Union. The fund considers emerging market issuers to include issuers organized under the laws of an emerging market country, issuers with a principal office in an emerging market country, issuers that derive at least 50% of their gross revenues or profits from goods or services produced in emerging markets, and emerging market governmental issuers. DERIVATIVES The fund may, but is not required to, use futures and options on securities, indices and currencies, forward foreign currency exchange contracts, swaps and other derivatives. The fund also may enter into credit default swaps, which can be used to acquire or to transfer the credit risk of a security or index of securities without buying or selling the security or securities comprising the relevant index. A derivative is a security or instrument whose value is determined by reference to the value or the change in value of one or more securities, currencies, indices or other financial instruments. The fund may use derivatives for a variety of purposes, including: - In an attempt to hedge against adverse changes in the market prices of securities, interest rates or currency exchange rates - As a substitute for purchasing or selling securities - To attempt to increase the fund's return as a non-hedging strategy that may be considered speculative - To manage portfolio characteristics (for example, exposure to various market segments) The fund may choose not to make use of derivatives for a variety of reasons, and any use may be limited by applicable law and regulations. CASH MANAGEMENT AND TEMPORARY INVESTMENTS Normally, the fund invests substantially all of its assets to meet its investment objectives. The fund may invest the remainder of its assets in securities with remaining maturities of less than one year or cash equivalents, or may hold cash. For temporary defensive purposes, including during periods of 77 More on each fund's investment objectives and strategies unusual cash flows, the fund may depart from its principal investment strategies and invest part or all of its assets in these securities or may hold cash. The fund may adopt a defensive strategy when the adviser believes securities in which the fund normally invests have special or unusual risks or are less attractive due to adverse market, economic, political or other conditions. During such periods, it may be more difficult for the fund to achieve its investment objective. ADDITIONAL INVESTMENT STRATEGIES In addition to the principal investment strategies discussed above, the fund and each underlying fund may also use other techniques, including the following non-principal investment strategies. REVERSE REPURCHASE AGREEMENTS AND BORROWING The fund may enter into reverse repurchase agreements pursuant to which the fund transfers securities to a counterparty in return for cash, and the fund agrees to repurchase the securities at a later date and for a higher price. Reverse repurchase agreements are treated as borrowings by the fund, are a form of leverage and may make the value of an investment in the fund more volatile and increase the risks of investing in the fund. The fund also may borrow money from banks or other lenders for temporary purposes. The fund may borrow up to 33 1/3% of its total assets. Entering into reverse repurchase agreements and other borrowing transactions may cause the fund to liquidate positions when it may not be advantageous to do so in order to satisfy its obligations or meet segregation requirements. SHORT-TERM TRADING The fund usually does not trade for short-term profits. The fund will sell an investment, however, even if it has only been held for a short time, if it no longer meets the fund's investment criteria. If the fund does a lot of trading, it may incur additional operating expenses, which would reduce performance. A higher level of portfolio turnover may also cause taxable shareowners to incur a higher level of taxable income or capital gains. 78 More on the risks of investing in a fund PRINCIPAL INVESTMENT RISKS You could lose money on your investment in a fund. As with any mutual fund, there is no guarantee that a fund will achieve its objectives. Following is a description of principal risks of investing in a fund. For purposes of this section, "the fund" means the fund or, where applicable, an underlying fund. MARKET RISK. The values of securities held by the fund may go up or down, sometimes rapidly or unpredictably, due to general market conditions, such as real or perceived adverse economic, political, or regulatory conditions, inflation, changes in interest or currency rates or adverse investor sentiment. Adverse market conditions may be prolonged and may not have the same impact on all types of securities. The values of securities may fall due to factors affecting a particular issuer, industry or the securities market as a whole. The equity and debt capital markets in the United States and internationally have experienced unprecedented volatility in recent years. The stock market may perform poorly relative to other investments (this risk may be greater in the short term). High public debt in the U.S. and other countries creates ongoing systemic and market risks and policymaking uncertainty. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities; in particular, the values of some sovereign debt and of securities of issuers that invest in sovereign debt and related investments have fallen, credit has become more scarce worldwide and there has been significant uncertainty in the markets. Some governmental and non-governmental issuers (notably in Europe) have defaulted on, or been forced to restructure, their debts; and many other issuers have faced difficulties refinancing existing obligations. These market conditions may continue, worsen or spread, including in the U.S., Europe and beyond. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets and asset valuations around the world. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that such efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. This environment could make identifying investment risks and opportunities especially difficult for the adviser, and whether or not the fund invests in securities of issuers located in or with significant exposure to countries experiencing economic and financial difficulties, the value and liquidity of the fund's investments 79 More on the risks of investing in a fund may be negatively affected. In addition, policy and legislative changes in the U.S. and in other countries are affecting many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time. The fund may experience a substantial or complete loss on any individual security. FUND OF FUNDS STRUCTURE AND LAYERING OF FEES. The fund is structured as a fund of funds. The fund's investments are focused in the underlying funds, so the fund's investment performance is directly related to the performance of the underlying funds. The fund's net asset value will be affected by the performance of the equity and bond markets and the value of the mutual funds in which the fund invests. In addition, the underlying funds may invest in other investment companies, including exchange-traded funds (ETFs). Since the fund mainly invests in the underlying funds, as opposed to other types of securities, the fund does not have the same flexibility in its portfolio holdings as many mutual funds. In addition, the fund indirectly pays a portion of the expenses incurred by the underlying funds. Consequently, an investment in the fund entails more direct and indirect expenses than a direct investment in the underlying funds. For instance, you will pay management fees and operating expenses of both the fund and the underlying funds. The management fees paid by some underlying funds to Pioneer are higher than the management fees paid by other underlying funds. The underlying funds will not necessarily make consistent investment decisions, which may also increase your costs. One underlying fund may buy the same security that another underlying fund is selling. You would indirectly bear the costs of both trades without achieving any investment purpose. These transactions may also generate taxable gains. You may receive taxable distributions consisting of gains from transactions by the underlying funds as well as gains from the fund's transactions in shares of the underlying funds. Currently, Pioneer manages many of the underlying funds. Because the portfolio management teams of each of the underlying Pioneer funds may draw upon the resources of the same equity and fixed income analyst team or may share common investment management styles or approaches, the underlying funds may hold many common portfolio positions, reducing the diversification benefits of an asset allocation style. 80 ALLOCATION RISK. The subadviser's evaluation of asset classes and market sectors in developing an allocation model, and its selection and weighting of underlying funds within the allocation model, may prove to be incorrect. To the extent that the fund invests a significant percentage of its assets in any one underlying fund, the fund will be subject to a greater degree to the risks particular to that underlying fund, and may experience greater volatility as a result. ASSET CLASS VARIATION RISK. The underlying funds invest principally in the securities constituting their asset class (i.e., equity or fixed income). However, under normal market conditions, an underlying fund may vary the percentage of its assets in these securities (subject to any applicable regulatory requirements). Depending upon the percentage of securities in a particular asset class held by the underlying funds at any given time, and the percentage of the fund's assets invested in various underlying funds, the fund's actual exposure to the securities in a particular asset class may vary substantially from its target asset allocation for that asset class. EXPENSE RISK. Your actual costs of investing in the fund may be higher than the expenses shown in "Annual fund operating expenses" for a variety of reasons. For example, expense ratios may be higher than those shown if overall net assets decrease. Net assets are more likely to decrease and fund expense ratios are more likely to increase when markets are volatile. PRINCIPAL RISKS OF INVESTING IN THE UNDERLYING FUNDS RISKS OF EQUITY INVESTMENTS Equity funds invest primarily in equity securities (such as stocks), which are more volatile and carry more risks than some other forms of investment. Risks of investing in underlying equity funds may include: VALUE STYLE RISK. The prices of securities the adviser believes are undervalued may not appreciate as expected or may go down. Value stocks may fall out of favor with investors and underperform the overall equity market. GROWTH STYLE RISK. The fund's investments may not have the growth potential originally expected. Growth stocks may fall out of favor with investors and underperform the overall equity market. SMALL AND MID-SIZE COMPANIES RISK. Compared to large companies, small- and mid-size companies, and the market for their equity securities, may be more sensitive to changes in earnings results and investor 81 More on the risks of investing in a fund expectations, have more limited product lines and capital resources, experience sharper swings in market values, have limited liquidity, be harder to value or to sell at the times and prices the adviser thinks appropriate, and offer greater potential for gain and loss. RISKS OF INVESTMENTS IN REITS. The fund has risks associated with the real estate industry. Although the fund does not invest directly in real estate, it may invest in REITs and other equity securities of real estate industry issuers. These risks may include: - The U.S. or a local real estate market declines due to adverse economic conditions, foreclosures, overbuilding and high vacancy rates, reduced or regulated rents or other causes - Interest rates go up. Rising interest rates can adversely affect the availability and cost of financing for property acquisitions and other purposes and reduce the value of a REIT's fixed income investments - The values of properties owned by a REIT or the prospects of other real estate industry issuers may be hurt by property tax increases, zoning changes, other governmental actions, environmental liabilities, natural disasters or increased operating expenses - A REIT in the fund's portfolio is, or is perceived by the market to be, poorly managed Investing in REITs involves certain unique risks. REITs are dependent on management skills, are not diversified and are subject to the risks of financing projects. REITs are typically invested in a limited number of projects or in a particular market segment or geographic region, and therefore are more susceptible to adverse developments affecting a single project, market segment or geographic region than more broadly diversified investments. REITs are subject to heavy cash flow dependency, defaults by mortgagors or other borrowers and tenants, self-liquidation and the possibility of failing to qualify for certain tax and regulatory exemptions. REITs may have limited financial resources and may experience sharper swings in market values and trade less frequently and in a more limited volume than securities of larger issuers. In addition to its own expenses, the fund will indirectly bear its proportionate share of any management and other expenses paid by REITs in which it invests. Many real estate companies, including REITs, utilize leverage (and some may be highly leveraged), which increases investment risk and could adversely affect a real estate company's operations and market value. In 82 addition, capital to pay or refinance a REIT's debt may not be available or reasonably priced. Financial covenants related to real estate company leveraging may affect the company's ability to operate effectively. PREFERRED STOCKS RISK. Preferred stocks may pay fixed or adjustable rates of return. Preferred stocks are subject to issuer-specific and market risks applicable generally to equity securities. In addition, a company's preferred stocks generally pay dividends only after the company makes required payments to holders of its bonds and other debt. Thus, the value of preferred stocks will usually react more strongly than bonds and other debt to actual or perceived changes in the company's financial condition or prospects. The market value of preferred stocks generally decreases when interest rates rise. Preferred stocks of smaller companies may be more vulnerable to adverse developments than preferred stock of larger companies. RISKS OF INITIAL PUBLIC OFFERINGS. Companies involved in initial public offerings (IPOs) generally have limited operating histories, and prospects for future profitability are uncertain. The market for IPO issuers has been volatile, and share prices of newly public companies have fluctuated significantly over short periods of time. Further, stocks of newly-public companies may decline shortly after the IPO. There is no assurance that the fund will have access to IPOs. The purchase of IPO shares may involve high transaction costs. Because of the price volatility of IPO shares, the fund may choose to hold IPO shares for a very short period of time. This may increase the turnover of the fund's portfolio and may lead to increased expenses to the fund, such as commissions and transaction costs. The market for IPO shares can be speculative and/or inactive for extended periods of time. There may be only a limited number of shares available for trading. The limited number of shares available for trading in some IPOs may also make it more difficult for the fund to buy or sell significant amounts of shares without an unfavorable impact on prevailing prices. RISKS OF CONVERTIBLE SECURITIES. Convertible securities generally offer lower interest or dividend yields than non-convertible securities of similar quality. As with all fixed income securities, the market values of convertible securities tend to decline as interest rates increase and, conversely, to increase as interest rates decline. However, when the market price of the common stock underlying a convertible security exceeds the conversion price, the convertible security tends to reflect the market price of the underlying common stock. As the market price of the underlying common 83 More on the risks of investing in a fund stock declines, the convertible security tends to trade increasingly on a yield basis and thus may not decline in price to the same extent as the underlying common stock. Convertible securities rank senior to common stocks in an issuer's capital structure and consequently entail less risk than the issuer's common stock. RISKS OF FIXED INCOME INVESTMENTS Fixed income funds primarily invest in debt securities, such as government securities, investment grade corporate securities, junk bonds, mortgage-backed securities, asset-backed securities, and money market securities. The value of your investment in the fund will change as the value of investments of the underlying funds increases and decreases. Risks of investing in underlying fixed income funds may include: INTEREST RATE RISK. When interest rates rise, the value of fixed income securities generally falls. A change in interest rates will not have the same impact on all fixed income securities. Generally, the longer the maturity or duration of a fixed income security, the greater the impact of a rise in interest rates on the security's value. Calculations of duration and maturity may be based on estimates and may not reliably predict a security's price sensitivity to changes in interest rates. Moreover, securities can change in value in response to other factors, such as credit risk. In addition, different interest rate measures (such as short- and long-term interest rates and U.S. and foreign interest rates), or interest rates on different types of securities or securities of different issuers, may not necessarily change in the same amount or in the same direction. When interest rates go down, the income received by the fund, and the fund's yield, may decline. Interest rates in the U.S. recently have been historically low, and may be expected to go back up. Certain fixed income securities pay interest at variable or floating rates. Variable rate securities tend to reset at specified intervals, while floating rate securities may reset whenever there is a change in a specified index rate. In most cases, these reset provisions reduce the impact of changes in market interest rates on the value of the security. However, some securities do not track the underlying index directly, but reset based on formulas that may produce a leveraging effect; others may also provide for interest payments that vary inversely with market rates. The market prices of these securities may fluctuate significantly when interest rates change. Yield generated by the fund may decline due to a decrease in market interest rates. 84 CREDIT RISK. If an obligor (such as the issuer itself or a party offering credit enhancement) for a security held by the fund fails to pay, otherwise defaults, is perceived to be less creditworthy, becomes insolvent or files for bankruptcy, a security's credit rating is downgraded or the credit quality or value of an underlying asset declines, the value of your investment could decline. In addition, the fund may incur expenses to protect the fund's interest in securities experiencing these events. Credit risk is broadly gauged by the credit ratings of the securities in which the fund invests. However, ratings are only the opinions of the companies issuing them and are not guarantees as to quality. PREPAYMENT OR CALL RISK. Many fixed income securities give the issuer the option to prepay or call the security prior to its maturity date. Issuers often exercise this right when interest rates fall. Accordingly, if the fund holds a fixed income security that can be prepaid or called prior to its maturity date, it will not benefit fully from the increase in value that other fixed income securities generally experience when interest rates fall. Upon prepayment of the security, the fund also would be forced to reinvest the proceeds at then current yields, which would be lower than the yield of the security that was prepaid or called. In addition, if the fund purchases a fixed income security at a premium (at a price that exceeds its stated par or principal value), the fund may lose the amount of the premium paid in the event of prepayment. EXTENSION RISK. During periods of rising interest rates, the average life of certain types of securities may be extended because of slower than expected principal payments. This may lock in a below market interest rate, increase the security's duration (the estimated period until the security is paid in full) and reduce the value of the security. To the extent the fund invests significantly in mortgage-related and asset-backed securities, its exposure to extension risks may be greater than if it invested in other fixed income securities. U.S. GOVERNMENT AGENCY OBLIGATIONS RISK. The fund invests in obligations issued by agencies and instrumentalities of the U.S. government. Government-sponsored entities such as Fannie Mae, Freddie Mac and the Federal Home Loan Banks (FHLBs), although chartered or sponsored by Congress, are not funded by congressional appropriations and the debt and mortgage-backed securities issued by them are neither guaranteed nor issued by the U.S. government. Such debt and mortgage-backed securities are subject to the risk of default on the payment of interest 85 More on the risks of investing in a fund and/or principal, similar to debt of private issuers. Although the U.S. government has provided financial support to Fannie Mae and Freddie Mac in the past, there can be no assurance that it will support these or other government-sponsored entities in the future. MORTGAGE-RELATED AND ASSET-BACKED SECURITIES RISK. The repayment of certain mortgage-backed and asset-backed securities depends primarily on the cash collections received from the issuer's underlying asset portfolio and, in certain cases, the issuer's ability to issue replacement securities. As a result, there could be losses to the fund in the event of credit or market value deterioration in the issuer's underlying portfolio, mismatches in the timing of the cash flows of the underlying asset interests and the repayment obligations of maturing securities, or the issuer's inability to issue new or replacement securities. Upon the occurrence of certain triggering events or defaults, the fund may become the holder of underlying assets at a time when those assets may be difficult to sell or may be sold only at a loss. In the event of a default, the value of the underlying collateral may be insufficient to pay certain expenses, such as litigation and foreclosure expenses, and inadequate to pay any principal or unpaid interest. Privately issued mortgage-backed and asset-backed securities are not traded on an exchange and may have a limited market. Without an active trading market, these securities may be particularly difficult to value given the complexities in valuing the underlying collateral. Certain mortgage-backed and asset-backed securities may pay principal only at maturity or may represent only the right to receive payments of principal or interest on the underlying obligations, but not both. The value of these types of instruments may change more drastically than debt securities that pay both principal and interest during periods of changing interest rates. Principal only instruments generally increase in value if interest rates decline, but are also subject to the risk of prepayment. Interest only instruments generally increase in value in a rising interest rate environment when fewer of the underlying obligations are prepaid. Interest only instruments could lose their entire value in a declining interest rate environment if the underlying obligations are prepaid. Unlike mortgage-related securities issued or guaranteed by the U.S. government or its agencies and instrumentalities, mortgage-related securities issued by private issuers do not have a government or government-sponsored entity guarantee (but may have other credit enhancement), and may, and frequently do, have less favorable collateral, credit risk or other characteristics. 86 The fund may invest in other mortgage-related securities, including mortgage derivatives and structured securities. These securities typically are not secured by real property. Because these securities have embedded leverage features, small changes in interest or prepayment rates may cause large and sudden price movements. These securities also can become illiquid and difficult to value in volatile or declining markets. Mortgage-backed securities are particularly susceptible to prepayment and extension risk, because prepayments on the underlying mortgages tend to increase when interest rates fall and decrease when interest rates rise. The value of mortgage-backed and asset-backed securities may be affected by changes in credit quality or value of the mortgage loans or other assets that support the securities. In addition, for mortgage-backed securities, when market conditions result in an increase in the default rates on the underlying mortgages and the foreclosure values of the underlying real estate are below the outstanding amount of the underlying mortgages, collection of the full amount of accrued interest and principal on these investments may be less likely. The fund may invest in CMOs. Principal prepayments on the underlying mortgage loans may cause a CMO to be retired substantially earlier than its stated maturity or final distribution date. If there are defaults on the underlying mortgage loans, the fund will be less likely to receive payments of principal and interest, and will be more likely to suffer a loss. This risk may be increased to the extent the underlying mortgages include sub-prime mortgages. As market conditions change, and particularly during periods of rapid or unanticipated changes in market interest rates, the attractiveness of a CMO class and the ability of the structure to provide the anticipated investment characteristics may be significantly reduced. Such changes can result in volatility in the market value, and in some instances reduced liquidity, of a CMO class. The fund may invest in CDOs. The risks of an investment in a CDO depend largely on the type of the underlying obligations (e.g., an underlying obligation may decline in quality or default) and the tranche of the CDO in which the fund invests (e.g., the fund may invest in a tranche of CDO that is subordinate to other tranches). Investments in CDOs may be characterized by the fund as illiquid securities, which may be hard to value and difficult to sell at an advantageous time or price. Although certain CDOs may receive credit enhancement in the form of a senior-subordinate structure, 87 More on the risks of investing in a fund over-collateralization or bond insurance, such enhancement may not always be present, and may fail to protect a fund against the risk of loss on default of the collateral. RISKS OF INSTRUMENTS THAT ALLOW FOR BALLOON PAYMENTS OR NEGATIVE AMORTIZATION PAYMENTS. Certain debt instruments allow for balloon payments or negative amortization payments. Such instruments permit the borrower to avoid paying currently a portion of the interest accruing on the instrument. While these features make the debt instrument more affordable to the borrower in the near term, they increase the risk that the borrower will be unable to make the resulting higher payment or payments that become due at the maturity of the loan. RISKS OF SUBORDINATED SECURITIES. A holder of securities that are subordinated or "junior" to more senior securities of an issuer is entitled to payment after holders of more senior securities of the issuer. Subordinated securities are more likely to suffer a credit loss than non-subordinated securities of the same issuer, any loss incurred by the subordinated securities is likely to be proportionately greater, and any recovery of interest or principal may take more time. As a result, even a perceived decline in creditworthiness of the issuer is likely to have a greater impact on them. HIGH YIELD OR "JUNK" BOND RISK. Debt securities that are below investment grade, called "junk bonds," are speculative, have a higher risk of default or are already in default, tend to be less liquid and are more difficult to value than higher grade securities. Junk bonds tend to be volatile and more susceptible to adverse events and negative sentiments. These risks are more pronounced for securities that are already in default. RISKS OF INVESTING IN EVENT-LINKED BONDS. The return of principal and the payment of interest on "event-linked" bonds are contingent on the non-occurrence of a pre-defined "trigger" event, such as a hurricane or an earthquake of a specific magnitude. If a trigger event, as defined within the terms of an event-linked bond, involves losses or other metrics exceeding a specific magnitude in the geographic region and time period specified, the fund may lose a portion or all of its accrued interest and/or principal invested in the event-linked bond. In addition to the specified trigger events, event-linked bonds may expose the fund to other risks, including but not limited to issuer (credit) default, adverse regulatory or jurisdictional interpretations and adverse tax consequences. Event-linked bonds are also subject to the risk that the model used to calculate the 88 probability of a trigger event was not accurate and underestimated the likelihood of a trigger event. Upon the occurrence or possible occurrence of a trigger event, and until the completion of the processing and auditing of applicable loss claims, the fund's investment in an event-linked bond may be priced using fair value methods. As a relatively new type of financial instrument, there is limited trading history for these securities, and there can be no assurance that a liquid market in these instruments will develop. RISKS OF INVESTING IN FLOATING RATE LOANS. Floating rate loans and similar investments may be illiquid or less liquid than other investments. The value of collateral, if any, securing a floating rate loan can decline or may be insufficient to meet the issuer's obligations or may be difficult to liquidate. No active trading market may exist for many floating rate loans, and many loans are subject to restrictions on resale. Market quotations for these securities may be volatile and/or subject to large spreads between bid and ask prices. Any secondary market may be subject to irregular trading activity and extended trade settlement periods. RISKS OF INVESTING IN INVERSE FLOATING RATE OBLIGATIONS. The interest rate on inverse floating rate obligations will generally decrease as short-term interest rates increase, and increase as short-term rates decrease. Due to their leveraged structure, the sensitivity of the market value of an inverse floating rate obligation to changes in interest rates is generally greater than a comparable long-term bond issued by the same issuer and with similar credit quality, redemption and maturity provisions. Inverse floating rate obligations may be volatile and involve leverage risk. INFLATION-LINKED SECURITY RISK. Unlike a conventional bond, whose issuer makes regular fixed interest payments and repays the face value of the bond at maturity, an inflation-indexed security provides principal payments and interest payments, both of which are adjusted over time to reflect a rise (inflation) or a drop (deflation) in the general price level. The inflation index generally used is the non-seasonally adjusted index, which is not statistically smoothed to overcome highs and lows observed at different points each year. The use of the non-seasonally adjusted index can cause the fund's income level to fluctuate. As inflationary expectations increase, inflation-linked securities will become more attractive, because they protect future interest payments against inflation. Conversely, as inflationary concerns decrease, inflation-linked securities will become less attractive and less valuable. The non-seasonally adjusted index used may not accurately measure the real rate of inflation. Inflation-linked securities 89 More on the risks of investing in a fund may lose value or interest payments on such securities may decline in the event that the actual rate of inflation is different than the rate of the non-seasonally adjusted index. RISKS OF ZERO COUPON BONDS, PAYMENT IN KIND, DEFERRED AND CONTINGENT PAYMENT SECURITIES. Zero coupon bonds (which do not pay interest until maturity) and payment in kind securities (which pay interest in the form of additional securities) may be more speculative and may fluctuate more in value than securities which pay income periodically and in cash. These securities are more likely to respond to changes in interest rates than interest-bearing securities having similar maturities and credit quality. These securities are more sensitive to the credit quality of the underlying issuer. Deferred interest securities are obligations that generally provide for a period of delay before the regular payment of interest begins and are issued at a significant discount from face value. The interest rate on contingent payment securities is determined by the outcome of an event, such as the performance of a financial index. If the financial index does not increase by a prescribed amount, the fund may receive no interest. Unlike bonds that pay interest throughout the period to maturity, the fund generally will realize no cash until maturity and, if the issuer defaults, the fund may obtain no return at all on its investment. In addition, although the fund receives no periodic cash payments on such securities, the fund is deemed for tax purposes to receive income from such securities, which applicable tax rules require the fund to distribute to shareholders. Such distributions may be taxable when distributed to shareholders and, in addition, could reduce the fund's reserve position and require the fund to sell securities and incur a gain or loss at a time it may not otherwise want in order to provide the cash necessary for these distributions. RISKS OF EQUITY AND FIXED INCOME INVESTMENTS Risks of investing in underlying equity and fixed income funds may include: PORTFOLIO SELECTION RISK. The adviser's judgment about the attractiveness, relative value or potential appreciation of an equity security, or about the quality, relative yield or relative value of a fixed income security, or about a particular sector, region or market segment, or about an investment strategy, or about interest rates, may prove to be incorrect. LIQUIDITY RISK. Liquidity risk exists when particular investments are impossible or difficult to sell. Although most of the fund's securities and other investments must be liquid at the time of investment, securities 90 and other investments may become illiquid after purchase by the fund, particularly during periods of market turmoil. When the fund holds illiquid investments, its portfolio may be harder to value, especially in changing markets. If the fund is forced to sell or unwind these investments to meet redemptions or for other cash needs, the fund may suffer a loss. In addition, when there is illiquidity in the market for certain securities or other investments, the fund, due to limitations on investments in illiquid securities, may be unable to achieve its desired level of exposure to a certain sector. If an auction fails for an auction rate security, there may be no secondary market for the security and the fund may be forced to hold the security until the security is refinanced by the issuer or a secondary market develops. To the extent the fund holds a material percentage of the outstanding debt securities of an issuer, this practice may impact adversely the liquidity and market value of those investments. MARKET SEGMENT RISK. To the extent the fund emphasizes, from time to time, investments in a market segment, the fund will be subject to a greater degree to the risks particular to that segment, and may experience greater market fluctuation, than a fund without the same focus. For example, industries in the financial segment, such as banks, insurance companies, broker-dealers and real estate investment trusts (REITs), may be sensitive to changes in interest rates and general economic activity and are generally subject to extensive government regulation. RISKS OF NON-U.S. INVESTMENTS. Investing in non-U.S. issuers, or in U.S. issuers that have significant exposure to foreign markets may involve unique risks compared to investing in securities of U.S. issuers. These risks are more pronounced for issuers in emerging markets or to the extent that the fund invests significantly in one region or country. These risks may include: - Less information about non-U.S. issuers or markets may be available due to less rigorous disclosure or accounting standards or regulatory practices - Many non-U.S. markets are smaller, less liquid and more volatile. In a changing market, the adviser may not be able to sell the fund's securities at times, in amounts and at prices it considers reasonable - Adverse effect of currency exchange rates or controls on the value of the fund's investments, or its ability to convert non-U.S. currencies to U.S. dollars - The economies of non-U.S. countries may grow at slower rates than expected or may experience a downturn or recession 91 More on the risks of investing in a fund - Economic, political, regulatory and social developments may adversely affect the securities markets - It may be difficult for the fund to pursue claims against a foreign issuer in the courts of a foreign country - Withholding and other non-U.S. taxes may decrease the fund's return - Some markets in which the fund may invest are located in parts of the world that have historically been prone to natural disasters that could result in a significant adverse impact on the economies of those countries and investments made in those countries - A governmental entity may delay, or refuse or be unable to pay, interest or principal on its sovereign debt due to cash flow problems, insufficient foreign currency reserves, political considerations, the relative size of the governmental entity's debt position in relation to the economy or the failure to put in place economic reforms - Investing in depository receipts is subject to many of the same risks as investing directly in non-U.S. issuers Additional risks of investing in emerging markets include: - The extent of economic development, political stability, market depth, infrastructure, capitalization and regulatory oversight can be less than in more developed markets - Emerging market countries may experience rising interest rates, or, more significantly, rapid inflation or hyperinflation - The fund could experience a loss from settlement and custody practices in some emerging markets - The possibility that a counterparty may not complete a currency or securities transaction - Low trading volumes may result in a lack of liquidity, and in extreme price volatility DERIVATIVES RISK. Using options, swaps, futures and other derivatives exposes the fund to additional risks, may increase the volatility of the fund's net asset value and may not provide the expected result. Derivatives may have a leveraging effect on the fund, and they can disproportionately increase losses and reduce opportunities for gain when market prices, interest rates or currencies, or the derivative instruments themselves, behave in a way not anticipated by the fund, especially in abnormal market conditions. Some derivatives have the potential for unlimited loss, regardless of the size of the fund's initial investment. If changes in a derivative's value do not correspond to changes in the value of the fund's other investments or do not correlate well with the underlying assets, rate or 92 index, the fund may not fully benefit from, or could lose money on, or could experience unusually high expenses as a result of, the derivative position. Derivatives involve the risk of loss if the counterparty defaults on its obligation or if the clearing firm through which the derivative has been traded becomes insolvent. Certain derivatives may be less liquid, which may reduce the returns of the fund if it cannot sell or terminate the derivative at an advantageous time or price. The fund also may have to sell assets at inopportune times to satisfy its obligations. The fund may be unable to terminate or sell its derivative positions. In fact, many over-the-counter derivative instruments will not have liquidity beyond the counterparty to the instrument. Some derivatives may involve the risk of improper valuation. The fund's use of derivatives may also increase the amount of taxes payable by shareholders. Suitable derivatives may not be available in all circumstances or at reasonable prices and may not be used by the fund for a variety of reasons. Risks associated with the use of derivatives are magnified to the extent that a large portion of the fund's assets are committed to derivatives in general or are invested in just one or a few types of derivatives. New regulations are changing the derivatives markets. The regulations may make using derivatives more costly, may limit their availability, or may otherwise adversely affect their value or performance. For derivatives that are required to be traded through a clearinghouse or exchange, the fund also will be exposed to the credit risk of the clearinghouse and the broker that submits trades for the fund. It is possible that certain derivatives that are required to be cleared, such as certain swap contracts, will not be accepted for clearing. In addition, regulated trading facilities for swap contracts are relatively new; they may not function as intended, which could impair the ability to enter into swap contracts. The extent and impact of the regulations are not yet fully known and may not be for some time. CREDIT DEFAULT SWAP RISK. Credit default swap contracts, a type of derivative instrument, involve special risks and may result in losses to the fund. Credit default swaps may in some cases be illiquid, and they increase credit risk since the fund has exposure to both the issuer of the referenced obligation and the counterparty to the credit default swap. Swaps may be difficult to unwind or terminate. Certain index-based credit default swaps are structured in tranches, whereby junior tranches assume greater default risk than senior tranches. The absence of a central exchange or market for swap transactions has led, in some instances, to difficulties in trading and valuation, especially in the event of market disruptions. 93 More on the risks of investing in a fund New regulations require many kinds of swaps to be executed through a regulated exchange or market facility and cleared through a regulated clearinghouse. The establishment of a centralized exchange or market for swap transactions may disrupt or limit the swap market and may not result in swaps being easier to trade or value. Market-traded swaps may become more standardized, and the fund may not be able to enter into swaps that meet its investment needs. The fund also may not be able to find a clearinghouse willing to accept the swaps for clearing. The new regulations may make using swaps more costly, may limit their availability, or may otherwise adversely affect their value or performance. The fund will be required to trade many swaps through a broker who is a member of the clearinghouse. The broker may require the fund to post margin to the broker as a down payment on the fund's obligations and may change the amount of margin required from time to time. The fund may not be able to recover margin amounts if the broker has financial difficulties. Also, the broker may require the fund to terminate a derivatives position under certain circumstances. This may cause the fund to lose money. The clearinghouse will be the fund's counterparty for the derivatives trades. The fund will take the risk that the counterparty defaults. The fund also may be exposed to additional risks as a result of the new regulations. The extent and impact of the new regulations are not yet fully known and may not be for some time. VALUATION RISK. The sales price the fund could receive for any particular portfolio investment may differ from the fund's valuation of the investment, particularly for securities that trade in thin or volatile markets. If markets make it difficult to value some investments, the fund may value these investments using more subjective methods, such as fair value methodologies. Investors who purchase or redeem fund shares on days when the fund is holding fair-valued securities may receive fewer or more shares or lower or higher redemption proceeds than they would have received if the fund had not fair-valued the security or had used a different valuation methodology. The value of foreign securities, certain fixed income securities and currencies, as applicable, may be materially affected by events after the close of the market on which they are valued, but before the fund determines its net asset value. LEVERAGING RISK. The value of your investment may be more volatile and other risks tend to be compounded if the fund borrows or uses derivatives or other investments, such as ETFs, that have embedded leverage. Leverage generally magnifies the effect of any increase or decrease in the value of 94 the fund's underlying assets or creates investment risk with respect to a larger pool of assets than the fund would otherwise have, potentially resulting in the loss of all assets. Engaging in such transactions may cause the fund to liquidate positions when it may not be advantageous to do so to satisfy its obligations or meet segregation requirements. CASH MANAGEMENT RISK. The value of the investments held by the fund for cash management or temporary defensive purposes may be affected by market risks, changing interest rates and by changes in credit ratings of the investments. To the extent that the fund has any uninvested cash, the fund would be subject to credit risk with respect to the depository institution holding the cash. If the fund holds cash uninvested, the fund will not earn income on the cash and the fund's yield will go down. During such periods, it may be more difficult for the fund to achieve its investment objectives. FORWARD FOREIGN CURRENCY TRANSACTIONS RISK. To the extent that the fund enters into forward foreign currency transactions, it may not fully benefit from or may lose money on the transactions if changes in currency rates do not occur as anticipated or do not correspond accurately to changes in the value of the fund's holdings, or if the counterparty defaults. Such transactions may also prevent the fund from realizing profits on favorable movements in exchange rates. Risk of counterparty default is greater for counterparties located in emerging markets. The fund's ability to use forward foreign currency transactions successfully depends on a number of factors, including the forward foreign currency transactions being available at prices that are not too costly, the availability of liquid markets, and Pioneer's judgment regarding the direction of changes in currency exchange rates. PORTFOLIO TURNOVER RISK. If the fund does a lot of trading, it may incur additional operating expenses, which would reduce performance. A higher level of portfolio turnover may also cause taxable shareowners to incur a higher level of taxable income or capital gains. To learn more about the fund's investments and risks, you should obtain and read the statement of additional information. Please note that there are many other factors that could adversely affect your investment and that could prevent the fund from achieving its goals. 95 Management INVESTMENT ADVISER Pioneer, the fund's investment adviser, oversees the fund's operations and supervises the fund's subadviser, which is responsible for the day-to-day management of the fund's portfolio. Pioneer is an indirect, wholly owned subsidiary of UniCredit S.p.A., one of the largest banking groups in Italy. Pioneer is part of the global asset management group providing investment management and financial services to mutual funds, institutional and other clients. As of September 30, 2013, assets under management were approximately $225 billion worldwide, including over $67 billion in assets under management by Pioneer (and its U.S. affiliates). Pioneer's main office is at 60 State Street, Boston, Massachusetts 02109. The firm's U.S. mutual fund investment history includes creating in 1928 one of the first mutual funds. Pioneer has received an order from the Securities and Exchange Commission that permits Pioneer, subject to the approval of the fund's Board of Trustees, to hire and terminate a subadviser that is not affiliated with Pioneer (an "unaffiliated subadviser") or to materially modify an existing subadvisory contract with an unaffiliated subadviser for the fund without shareholder approval. Pioneer retains the ultimate responsibility to oversee and recommend the hiring, termination and replacement of any unaffiliated subadviser. INVESTMENT SUBADVISER Ibbotson Associates, Inc. is the subadviser to each fund and allocates, subject to Pioneer's supervision, each fund's assets among asset classes and among the underlying funds. Ibbotson Associates, Inc., is a registered investment adviser and wholly owned subsidiary of Morningstar, Inc. As of September 30, 2013, Ibbotson Associates, Inc. had approximately $29.68 billion in assets under management. Ibbotson is located at 22 West Washington Street, Chicago, Illinois 60602. PORTFOLIO MANAGEMENT Day-to-day management of each fund is the responsibility of a team of portfolio managers. Scott Wentsel, vice president and senior portfolio manager, manages the investment management team and has served as a portfolio manager of each fund since 2005. Mr. Wentsel is also responsible for directing the firm's investment management services which includes 96 oversight of its consulting, fund-of-funds, and plan sponsor consulting business lines. Prior to joining Ibbotson in 2005, Mr. Wentsel was an executive director with Morgan Stanley where he worked primarily on Van Kampen Investments' asset management business. Mr. Wentsel has over 20 years of investment industry experience. Brian Huckstep, portfolio manager, is responsible for managing the delivery of fund-of-funds programs for institutional and retail clients, which includes asset allocation modeling, portfolio construction, fund classification, and manager due diligence. Prior to joining Ibbotson in 2005, Mr. Huckstep was Director of Data Acquisition at Morningstar for two years. Mr. Huckstep also spent nine years at Northern Trust in product manager and analyst roles for institutional custody clients. Mr. Huckstep has served as a portfolio manager of each fund since 2005. Paul Arnold, senior consultant, is responsible for developing and implementing asset class models in addition to fund-of-funds portfolio construction, manager due diligence and fund classification. Prior to joining Ibbotson in 2007, Mr. Arnold worked for two years at Bank of America in its Principal Investing Group. Mr. Arnold has served as a portfolio manager of each fund since 2012. MANAGEMENT FEE Each fund pays Pioneer a fee for managing the fund and to cover the cost of providing certain services to the fund. Pioneer's annual fee is equal to
ANNUAL FEE NET ASSETS ---------------------------------------------------------------- ---------------------- 0.13% of the fund's average daily net assets on investments in Up to $2.5 billion ---------------------- underlying funds managed by Pioneer (and cash); and 0.17% of the fund's average daily net assets on other investments ---------------------------------------------------------------- 0.11% of the fund's average daily net assets on investments in Over $2.5 billion and underlying funds managed by Pioneer up to $4 billion ---------------------- (and cash); and 0.14% of the fund's average daily net assets on other investments ---------------------------------------------------------------- 0.10% of the fund's average daily net assets on investments in Over $4 billion and underlying funds managed by Pioneer up to $5.5 billion ---------------------- (and cash); and 0.12% of the fund's average daily net assets on other investments ---------------------------------------------------------------- 0.08% of the fund's average daily net assets on investments in Over $5.5 billion and underlying funds managed by Pioneer up to $7 billion ---------------------- (and cash); and 0.10% of the fund's average daily net assets on other investments ----------------------------------------------------------------
97 Management
ANNUAL FEE NET ASSETS ---------------------------------------------------------------- ---------------- 0.08% of the fund's average daily net assets on investments in Over $7 billion ---------------- underlying funds managed by Pioneer (and cash); and 0.09% of the fund's average daily net assets on other investments ----------------------------------------------------------------
Since all of the underlying funds are currently managed by Pioneer, the management fee is currently equal to 0.13% of the fund's average daily net assets. The fee is accrued daily and paid monthly. Pioneer, and not the funds, pays a portion of the fee it receives from the funds to Ibbotson as compensation for Ibbotson's services to the funds. For the fiscal year ended July 31, 2013, each fund paid management fees equal to 0.13% of the fund's average daily net assets, after fee waivers and/or reimbursements. Discussions regarding the basis for the Board of Trustees' approval of each of the management contract and the subadvisory agreement with Ibbotson are available in the funds' semiannual report to shareholders for the period ended January 31, 2013. DISTRIBUTOR AND TRANSFER AGENT Pioneer Funds Distributor, Inc. is the fund's distributor. Pioneer Investment Management Shareholder Services, Inc. is the fund's transfer agent. The fund compensates the distributor and transfer agent for their services. The distributor and the transfer agent are affiliates of Pioneer. 98 Pricing of shares NET ASSET VALUE Each fund's net asset value is the value of its securities plus any other assets minus its accrued operating expenses and other liabilities. Each fund calculates a net asset value for each class of shares every day the New York Stock Exchange is open when regular trading closes (normally 4:00 p.m. Eastern time). If the New York Stock Exchange closes at another time, each fund will calculate a net asset value for each class of shares as of the actual closing time. On days when the New York Stock Exchange is closed for trading, including certain holidays listed in the statement of additional information, a net asset value is not calculated. Each fund generally values its equity securities and certain derivative instruments that are traded on an exchange using the last sale price on the principal exchange on which they are traded. Equity securities that are not traded on the date of valuation, or securities for which no last sale prices are available, are valued at the mean between the last bid and asked prices or, if both last bid and asked prices are not available, at the last quoted bid price. Last sale, bid and asked prices are provided by independent third party pricing services. In the case of equity securities not traded on an exchange, prices are typically determined by independent third party pricing services using a variety of techniques and methods. Each fund may use a fair value model developed by an independent pricing service to value non-U.S. equity securities. To the extent that each fund invests in shares of other mutual funds that are not traded on an exchange, such shares of other mutual funds are valued at their net asset values as provided by those funds. The prospectuses for those funds explain the circumstances under which those funds will use fair value pricing methods and the effects of using fair value pricing methods. Each fund generally values debt securities and certain derivative instruments by using the prices supplied by independent third party pricing services. A pricing service may use market prices or quotations from one or more brokers or other sources, or may use a pricing matrix or other fair value methods or techniques to provide an estimated value of the security or instrument. A pricing matrix is a means of valuing a debt security on the basis of current market prices for other debt securities, historical trading patterns in the market for fixed income securities and/or other factors. Non-U.S. debt securities that are listed on an exchange will be valued at the bid price obtained from an independent third party pricing service. 99 Pricing of shares Each fund values short-term fixed income securities with remaining maturities of 60 days or less at amortized cost, unless circumstances indicate that using this method would not reflect an investment's value. The valuations of securities traded in non-U.S. markets and certain fixed income securities will generally be determined as of the earlier closing time of the markets on which they primarily trade. When a fund holds securities or other assets that are denominated in a foreign currency, the fund will normally use the currency exchange rates as of 3:00 p.m. (Eastern time). Non-U.S. markets are open for trading on weekends and other days when the fund does not price its shares. Therefore, the value of each fund's shares may change on days when you will not be able to purchase or redeem fund shares. When independent third party pricing services are unable to supply prices for an investment, or when prices or market quotations are considered by Pioneer to be unreliable, the value of that security may be determined using quotations from one or more broker-dealers. When such prices or quotations are not available, or when they are considered by Pioneer to be unreliable, each fund uses fair value methods to value its securities pursuant to procedures adopted by the Board of Trustees. Each fund also may use fair value methods if it is determined that a significant event has occurred between the time at which a price is determined and the time at which each fund's net asset value is calculated. Because each fund may invest in securities rated below investment grade - some of which may be thinly traded and for which prices may not be readily available or may be unreliable - each fund may use fair value methods more frequently than funds that primarily invest in securities that are more widely traded. Valuing securities using fair value methods may cause the net asset value of the fund's shares to differ from the net asset value that would be calculated only using market prices. The prices used by each fund to value its securities may differ from the amounts that would be realized if these securities were sold and these differences may be significant, particularly for securities that trade in relatively thin markets and/or markets that experience extreme volatility. 100 Choosing a class of shares Each fund offers four classes of shares through this prospectus. Each class has different eligibility requirements, sales charges and expenses, allowing you to choose the class that best meets your needs. Factors you should consider include: o The eligibility requirements that apply to purchases of a particular share class o The expenses paid by each class o The initial sales charges and contingent deferred sales charges (CDSCs), if any, applicable to each class o Whether you qualify for any reduction or waiver of sales charges o How long you expect to own the shares o Any services you may receive from a financial intermediary Your investment professional can help you determine which class meets your goals. Your investment professional or financial intermediary may receive different compensation depending upon which class you choose. If you are not a U.S. citizen and are purchasing shares outside the U.S., you may pay different sales charges under local laws and business practices. For information on the fund's expenses, please see "Fund Summary." CLASS A SHARES o You pay a sales charge of up to 5.75% of the offering price, which is reduced or waived for large purchases and certain types of investors. At time of your purchase, your investment firm may receive a commission from the distributor of up to 5%, declining as the size of your investment increases. o There is no contingent deferred sales charge, except in certain circumstances when no initial sales charge is charged. o Distribution and service fees of 0.25% of average daily net assets. CLASS B SHARES o A contingent deferred sales charge of up to 4% is assessed if you sell your shares. The charge is reduced over time and not charged after five years. Your investment firm may receive a commission from the distributor at the time of your purchase of up to 4%. o Distribution and service fees of 1.00% of average daily net assets. o Converts to Class A shares after eight years. o Effective December 31, 2009, Class B shares are no longer offered to new or existing shareholders, except that dividends and/or capital gains distributions may continue to be reinvested in Class B shares according 101 Choosing a class of shares to a shareholder's election, and shareholders may exchange their Class B shares for Class B shares of other Pioneer funds, as permitted by existing exchange privileges. Shareholders who owned Class B shares as of December 31, 2009 may continue to hold such shares until they convert to Class A shares eight years after the date of purchase. CLASS C SHARES o A 1% contingent deferred sales charge is assessed if you sell your shares within one year of purchase. Your investment firm may receive a commission from the distributor at the time of your purchase of up to 1%. o Distribution and service fees of 1.00% of average daily net assets. o Does not convert to another share class. o Maximum purchase amount (per transaction) of $499,999. CLASS Y SHARES o No initial or contingent deferred sales charge. o Initial investments are subject to a $5 million investment minimum, which may be waived in some circumstances. 102 Distribution and service arrangements DISTRIBUTION PLAN Each fund has adopted a distribution plan for Class A, Class B and Class C shares in accordance with Rule 12b-1 under the Investment Company Act of 1940. Under the plan, each fund pays distribution and service fees to the distributor. Because these fees are an ongoing expense of the fund, over time they increase the cost of your investment and your shares may cost more than shares that are subject to other types of sales charges. ADDITIONAL PAYMENTS TO FINANCIAL INTERMEDIARIES Your financial intermediary may receive compensation from a fund, Pioneer and its affiliates for the sale of fund shares and related services. Compensation may include sales commissions and distribution and service (Rule 12b-1) fees, as well as compensation for administrative services and transaction processing. Pioneer and its affiliates may make additional payments to your financial intermediary. These payments may provide your financial intermediary with an incentive to favor the Pioneer funds over other mutual funds or assist the distributor in its efforts to promote the sale of a fund's shares. Financial intermediaries include broker-dealers, banks (including bank trust departments), registered investment advisers, financial planners, retirement plan administrators and other types of intermediaries. Pioneer makes these additional payments (sometimes referred to as "revenue sharing") to financial intermediaries out of its own assets, which may include profits derived from services provided to a fund, or from the retention of a portion of sales charges or distribution and service fees. Pioneer may base these payments on a variety of criteria, including the amount of sales or assets of the Pioneer funds attributable to the financial intermediary or as a per transaction fee. Not all financial intermediaries receive additional compensation and the amount of compensation paid varies for each financial intermediary. In certain cases, these payments may be significant. Pioneer determines which firms to support and the extent of the payments it is willing to make, generally choosing firms that have a strong capability to effectively distribute shares of the Pioneer funds and that are willing to cooperate with Pioneer's promotional efforts. Pioneer also may compensate financial intermediaries (in addition to amounts that may be paid by a fund) for providing certain administrative services and transaction processing services. 103 Distribution and service arrangements Pioneer may benefit from revenue sharing if the intermediary features the Pioneer funds in its sales system (such as by placing certain Pioneer funds on its preferred fund list or giving access on a preferential basis to members of the financial intermediary's sales force or management). In addition, the financial intermediary may agree to participate in the distributor's marketing efforts (such as by helping to facilitate or provide financial assistance for conferences, seminars or other programs at which Pioneer personnel may make presentations on the Pioneer funds to the intermediary's sales force). To the extent intermediaries sell more shares of the Pioneer funds or retain shares of the Pioneer funds in their clients' accounts, Pioneer receives greater management and other fees due to the increase in the Pioneer funds' assets. The intermediary may earn a profit on these payments if the amount of the payment to the intermediary exceeds the intermediary's costs. The compensation that Pioneer pays to financial intermediaries is discussed in more detail in the fund's statement of additional information. Your intermediary may charge you additional fees or commissions other than those disclosed in this prospectus. Intermediaries may categorize and disclose these arrangements differently than in the discussion above and in the statement of additional information. You can ask your financial intermediary about any payments it receives from Pioneer or the Pioneer funds, as well as about fees and/or commissions it charges. Pioneer and its affiliates may have other relationships with your financial intermediary relating to the provision of services to the Pioneer funds, such as providing omnibus account services or effecting portfolio transactions for the Pioneer funds. If your intermediary provides these services, Pioneer or the Pioneer funds may compensate the intermediary for these services. In addition, your intermediary may have other relationships with Pioneer or its affiliates that are not related to the Pioneer funds. 104 Sales charges INITIAL SALES CHARGES (CLASS A SHARES ONLY) You pay the offering price (the net asset value per share plus any initial sales charge) when you buy Class A shares unless you qualify to purchase shares at net asset value. You pay a lower sales charge as the size of your investment increases. You do not pay a sales charge when you reinvest dividends or capital gain distributions paid by the fund. SALES CHARGES FOR CLASS A SHARES
SALES CHARGE AS % OF ---------------------- OFFERING NET AMOUNT AMOUNT OF PURCHASE PRICE INVESTED --------------------------------- ---------- ----------- Less than $50,000 5.75 6.10 --------------------------------- ---- ---- $50,000 but less than $100,000 4.50 4.71 --------------------------------- ---- ---- $100,000 but less than $250,000 3.50 3.63 --------------------------------- ---- ---- $250,000 but less than $500,000 2.50 2.56 --------------------------------- ---- ---- $500,000 or more -0- -0- --------------------------------- ---- ----
The dollar amount of the sales charge is the difference between the offering price of the shares purchased (based on the applicable sales charge in the table) and the net asset value of those shares. Since the offering price is calculated to two decimal places using standard rounding methodology, the dollar amount of the sales charge as a percentage of the offering price and of the net amount invested for any particular purchase of fund shares may be higher or lower due to rounding. REDUCED SALES CHARGES You may qualify for a reduced Class A sales charge if you own or are purchasing shares of Pioneer mutual funds. The investment levels required to obtain a reduced sales charge are commonly referred to as "breakpoints." Pioneer offers two principal means of taking advantage of breakpoints in sales charges for aggregate purchases of Class A shares of the Pioneer funds over time if: o The amount of shares you own of the Pioneer funds plus the amount you are investing now is at least $50,000 (Rights of accumulation) o You plan to invest at least $50,000 over the next 13 months (Letter of intent) 105 Sales charges RIGHTS OF ACCUMULATION If you qualify for rights of accumulation, your sales charge will be based on the combined value (at the current offering price) of all your Pioneer mutual fund shares, the shares of your spouse and the shares of any children under the age of 21. LETTER OF INTENT You can use a letter of intent to qualify for reduced sales charges in two situations: o If you plan to invest at least $50,000 (excluding any reinvestment of dividends and capital gain distributions) in the fund's Class A shares during the next 13 months o If you include in your letter of intent the value (at the current offering price) of all of your Class A shares of the fund and Class A, Class B or Class C shares of all other Pioneer mutual fund shares held of record in the amount used to determine the applicable sales charge for the fund shares you plan to buy Completing a letter of intent does not obligate you to purchase additional shares, but if you do not buy enough shares to qualify for the projected level of sales charges by the end of the 13-month period (or when you sell your shares, if earlier), the distributor will recalculate your sales charge. You must pay the additional sales charge within 20 days after you are notified of the recalculation or it will be deducted from your account (or your sale proceeds). Any share class for which no sales charge is paid cannot be included under the letter of intent. For more information regarding letters of intent, please contact your investment professional or obtain and read the statement of additional information. QUALIFYING FOR A REDUCED CLASS A SALES CHARGE In calculating your total account value in order to determine whether you have met sales charge breakpoints, you can include your Pioneer mutual fund shares, those of your spouse and the shares of any children under the age of 21. Pioneer will use each fund's current offering price to calculate your total account value. Certain trustees and fiduciaries may also qualify for a reduced sales charge. To receive a reduced sales charge, you or your investment professional must, at the time of purchase, notify the distributor of your eligibility. In order to verify your eligibility for a discount, you may need to provide your investment professional or the fund with information or records, such as 106 account numbers or statements, regarding shares of the fund or other Pioneer mutual funds held in all accounts by you, your spouse or children under the age of 21 with that investment professional or with any other financial intermediary. Eligible accounts may include joint accounts, retirement plan accounts, such as IRA and 401k accounts, and custodial accounts, such as ESA, UGMA and UTMA accounts. It is your responsibility to confirm that your investment professional has notified the distributor of your eligibility for a reduced sales charge at the time of sale. If you or your investment professional do not notify the distributor of your eligibility, you will risk losing the benefits of a reduced sales charge. For this purpose, Pioneer mutual funds include any fund for which the distributor is principal underwriter and, at the distributor's discretion, may include funds organized outside the U.S. and managed by Pioneer or an affiliate. You can locate information regarding the reduction or waiver of sales charges, in a clear and prominent format and free of charge, on Pioneer's website at www.pioneerinvestments.com. The website includes hyperlinks that facilitate access to this information. CLASS A PURCHASES AT A REDUCED INITIAL SALES CHARGE OR NET ASSET VALUE ARE ALSO AVAILABLE TO: Group plans if the sponsoring organization: o recommends purchases of Pioneer mutual funds to, o permits solicitation of, or o facilitates purchases by its employees, members or participants. CLASS A PURCHASES AT NET ASSET VALUE You may purchase Class A shares at net asset value (without a sales charge) as follows. If you believe you qualify for any of the Class A sales charge waivers discussed below, contact your investment professional or the distributor. You are required to provide written confirmation of your eligibility. You may not resell these shares except to or on behalf of the fund. INVESTMENTS OF $500,000 OR MORE AND CERTAIN RETIREMENT PLANS You do not pay a sales charge when you purchase Class A shares if you are investing $500,000 or more, are a participant in an employer-sponsored retirement plan with at least $500,000 in total plan assets or are a participant in certain employer-sponsored retirement plans with accounts established with Pioneer on or before March 31, 2004 with 100 or more eligible employees or at least $500,000 in total plan assets. However, you may pay a contingent 107 Sales charges deferred sales charge if you sell your Class A shares within 12 months of purchase. The sales charge is equal to 1% of your investment or your sale proceeds, whichever is less. CLASS A PURCHASES AT NET ASSET VALUE ARE AVAILABLE TO: o Current or former trustees and officers of the fund; o Partners and employees of legal counsel to the fund (at the time of initial share purchase); o Directors, officers, employees or sales representatives of Pioneer and its affiliates (at the time of initial share purchase); o Directors, officers, employees or sales representatives of any subadviser or a predecessor adviser (or their affiliates) to any investment company for which Pioneer serves as investment adviser (at the time of initial share purchase); o Officers, partners, employees or registered representatives of broker-dealers (at the time of initial share purchase) which have entered into sales agreements with the distributor; o Employees of Regions Financial Corporation and its affiliates (at the time of initial share purchase); o Members of the immediate families of any of the persons above; o Any trust, custodian, pension, profit sharing or other benefit plan of the foregoing persons; o Insurance company separate accounts; o Certain wrap accounts for the benefit of clients of investment professionals or other financial intermediaries adhering to standards established by the distributor; o Other funds and accounts for which Pioneer or any of its affiliates serves as investment adviser or manager; o Investors in connection with certain reorganization, liquidation or acquisition transactions involving other investment companies or personal holding companies; o Certain unit investment trusts; o Participants in employer-sponsored retirement plans with at least $500,000 in total plan assets; o Participants in employer-sponsored retirement plans with accounts established with Pioneer on or before March 31, 2004 with 100 or more eligible employees or at least $500,000 in total plan assets; o Participants in Optional Retirement Programs if (i) your employer has authorized a limited number of mutual funds to participate in the program, (ii) all participating mutual funds sell shares to program participants at 108 net asset value, (iii) your employer has agreed in writing to facilitate investment in Pioneer mutual funds by program participants and (iv) the program provides for a matching contribution for each participant contribution; o Participants in an employer-sponsored 403(b) plan or employer-sponsored 457 plan if (i) your employer has made special arrangements for your plan to operate as a group through a single broker, dealer or financial intermediary and (ii) all participants in the plan who purchase shares of a Pioneer mutual fund do so through a single broker, dealer or other financial intermediary designated by your employer; o Individuals receiving a distribution consisting of Class Y shares of a Pioneer fund from a trust, fiduciary, custodial or other similar account who purchase Class A shares of the same Pioneer fund within 90 days of the date of the distribution; o Investors purchasing shares pursuant to the reinstatement privilege applicable to Class A and Class B shares; and o Shareholders of record (i.e., shareholders whose shares are not held in the name of a broker or an omnibus account) on the date of the reorganization of a predecessor Safeco fund into a corresponding Pioneer fund, shareholders who owned shares in the name of an omnibus account provider on that date that agrees with the fund to distinguish beneficial holders in the same manner, and retirement plans with assets invested in the predecessor Safeco fund on that date. In addition, Class A shares may be purchased at net asset value through certain mutual fund programs sponsored by qualified intermediaries, such as broker-dealers and investment advisers. In each case, the intermediary has entered into an agreement with Pioneer to include the Pioneer funds in their program without the imposition of a sales charge. The intermediary provides investors participating in the program with additional services, including advisory, asset allocation, recordkeeping or other services. You should ask your investment firm if it offers and you are eligible to participate in such a mutual fund program and whether participation in the program is consistent with your investment goals. The intermediaries sponsoring or participating in these mutual fund programs also may offer their clients other classes of shares of the funds and investors may receive different levels of services or pay different fees depending upon the class of shares included in the program. Investors should consider carefully any separate transaction and other fees charged by these programs in connection with investing in each available share class before selecting a share class. Such 109 Sales charges mutual fund programs include certain self-directed brokerage services accounts held through qualified intermediaries that may or may not charge participating investors transaction fees. CONTINGENT DEFERRED SALES CHARGES (CDSCS) CLASS A SHARES Purchases of Class A shares of $500,000 or more, or by participants in a group plan which were not subject to an initial sales charge, may be subject to a contingent deferred sales charge upon redemption. A contingent deferred sales charge is payable to the distributor in the event of a share redemption within 12 months following the share purchase at the rate of 1% of the lesser of the value of the shares redeemed (exclusive of reinvested dividend and capital gain distributions) or the total cost of such shares. However, the contingent deferred sales charge is waived for redemptions of Class A shares purchased by an employer-sponsored retirement plan that has at least $500,000 in total plan assets (or that has 1,000 or more eligible employees for plans with accounts established with Pioneer on or before March 31, 2004). CLASS B SHARES You buy Class B shares at net asset value per share without paying an initial sales charge. However, if you sell your Class B shares within five years of purchase, you will pay the distributor a contingent deferred sales charge upon redemption. The contingent deferred sales charge decreases as the number of years since your purchase increases. Effective December 31, 2009, Class B shares are no longer offered to new or existing shareholders, except for reinvestment of dividends and/or capital gains distributions and exchanges for Class B shares of other Pioneer funds.
CONTINGENT DEFERRED SALES CHARGE ---------------------------------- ON SHARES SOLD AS A % OF DOLLAR BEFORE THE AMOUNT SUBJECT END OF YEAR TO THE SALES CHARGE ---------------------------------- -------------------- 1 4 ---------------------------------- -------------------- 2 4 ---------------------------------- -------------------- 3 3 ---------------------------------- -------------------- 4 2 ---------------------------------- -------------------- 5 1 ---------------------------------- -------------------- 6+ 0 ---------------------------------- --------------------
110 Shares purchased prior to December 1, 2004 remain subject to the contingent deferred sales charges in effect at the time you purchased those shares. Shares purchased as part of an exchange or acquired as a result of a reorganization of another fund into the fund remain subject to any contingent deferred sales charge that applied to the shares you originally purchased. CONVERSION TO CLASS A SHARES Class B shares automatically convert into Class A shares. This helps you because Class A shares pay lower expenses. Your Class B shares will convert to Class A shares eight years after the date of purchase except that: o Shares purchased by reinvesting dividends and capital gain distributions will convert to Class A shares over time in the same proportion as other shares held in the account o Shares purchased by exchanging shares from another fund will convert on the date that the shares originally acquired would have converted into Class A shares Currently, the Internal Revenue Service permits the conversion of shares to take place without imposing a federal income tax. Conversion may not occur if the Internal Revenue Service deems it a taxable event for federal tax purposes. CLASS C SHARES You buy Class C shares at net asset value per share without paying an initial sales charge. However, if you sell your Class C shares within one year of purchase, upon redemption you will pay the distributor a contingent deferred sales charge of 1% of the current market value or the original cost of the shares you are selling, whichever is less. PAYING THE CONTINGENT DEFERRED SALES CHARGE (CDSC) Several rules apply for calculating CDSCs so that you pay the lowest possible CDSC. o The CDSC is calculated on the current market value or the original cost of the shares you are selling, whichever is less o You do not pay a CDSC on reinvested dividends or distributions o If you sell only some of your shares, the transfer agent will first sell your shares that are not subject to any CDSC and then the shares that you have owned the longest o You may qualify for a waiver of the CDSC normally charged. See "Waiver or reduction of contingent deferred sales charges" 111 Sales charges WAIVER OR REDUCTION OF CONTINGENT DEFERRED SALES CHARGES It is your responsibility to confirm that your investment professional has notified the distributor of your eligibility for a reduced sales charge at the time of sale. If you or your investment professional do not notify the distributor of your eligibility, you will risk losing the benefits of a reduced sales charge. The distributor may waive or reduce the CDSC for Class A shares that are subject to a CDSC or for Class B or Class C shares if: o The distribution results from the death of all registered account owners or a participant in an employer-sponsored plan. For UGMAs, UTMAs and trust accounts, the waiver applies only upon the death of all beneficial owners; o You become disabled (within the meaning of Section 72 of the Internal Revenue Code) after the purchase of the shares being sold. For UGMAs, UTMAs and trust accounts, the waiver only applies upon the disability of all beneficial owners; o The distribution is made in connection with limited automatic redemptions as described in "Systematic withdrawal plans" (limited in any year to 10% of the value of the account in the fund at the time the withdrawal plan is established); o The distribution is from any type of IRA, 403(b) or employer-sponsored plan described under Section 401(a) or 457 of the Internal Revenue Code and, in connection with the distribution, one of the following applies: - It is part of a series of substantially equal periodic payments made over the life expectancy of the participant or the joint life expectancy of the participant and his or her beneficiary (limited in any year to 10% of the value of the participant's account at the time the distribution amount is established); - It is a required minimum distribution due to the attainment of age 70 1/2, in which case the distribution amount may exceed 10% (based solely on total plan assets held in Pioneer mutual funds); - It is rolled over to or reinvested in another Pioneer mutual fund in the same class of shares, which will be subject to the CDSC of the shares originally held; or - It is in the form of a loan to a participant in a plan that permits loans (each repayment applied to the purchase of shares will be subject to a CDSC as though a new purchase); o The distribution is to a participant in an employer-sponsored retirement plan described under Section 401(a) of the Internal Revenue Code or to a participant in an employer-sponsored 403(b) plan or employer-sponsored 457 plan if (i) your employer has made special arrangements for your 112 plan to operate as a group through a single broker, dealer or financial intermediary and (ii) all participants in the plan who purchase shares of a Pioneer mutual fund do so through a single broker, dealer or other financial intermediary designated by your employer and is or is in connection with: - A return of excess employee deferrals or contributions; - A qualifying hardship distribution as described in the Internal Revenue Code; For Class B shares, waiver is granted only on payments of up to 10% of total plan assets held by Pioneer for all participants, reduced by the total of any prior distributions made in that calendar year; - Due to retirement or termination of employment; For Class B shares, waiver is granted only on payments of up to 10% of total plan assets held in a Pioneer mutual fund for all participants, reduced by the total of any prior distributions made in that calendar year; - From a qualified defined contribution plan and represents a participant's directed transfer, provided that this privilege has been preauthorized through a prior agreement with the distributor regarding participant directed transfers (not available to Class B shares); o The distribution is made pursuant to the fund's right to liquidate or involuntarily redeem shares in a shareholder's account; o The distribution is made to pay an account's advisory or custodial fees; or o The distributor does not pay the selling broker a commission normally paid at the time of the sale. Please see the fund's statement of additional information for more information regarding reduced sales charges and breakpoints. 113 Buying, exchanging and selling shares OPENING YOUR ACCOUNT You may open an account by completing an account application and sending it to the transfer agent by mail or by fax. Please call the transfer agent to obtain an account application. Certain types of accounts, such as retirement accounts, have separate applications. Use your account application to select options and privileges for your account. You can change your selections at any time by sending a completed account options form to the transfer agent. You may be required to obtain a signature guarantee to make certain changes to an existing account. Call or write to the transfer agent for account applications, account options forms and other account information: PIONEER INVESTMENT MANAGEMENT SHAREHOLDER SERVICES, INC. P.O. Box 55014 Boston, Massachusetts 02205-5014 Telephone 1-800-225-6292 Please note that there may be a delay in receipt by the transfer agent of applications submitted by regular mail to a post office address. IDENTITY VERIFICATION To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account. When you open an account, you will need to supply your name, address, date of birth, and other information that will allow the fund to identify you. The fund may close your account if we cannot adequately verify your identity. The redemption price will be the net asset value on the date of redemption. INVESTING THROUGH FINANCIAL INTERMEDIARIES AND RETIREMENT PLANS If you invest in the fund through your financial intermediary or through a retirement plan, the options and services available to you may be different from those discussed in this prospectus. Shareholders investing through financial intermediaries, programs sponsored by financial intermediaries and retirement plans may only purchase funds and classes of shares that are available. When you invest through an account that is not in your name, you generally may buy and sell shares and complete other transactions only through the account. Ask your investment professional or financial intermediary for more information. 114 Additional conditions may apply to your investment in the fund, and the investment professional or intermediary may charge you a transaction-based, administrative or other fee for its services. These conditions and fees are in addition to those imposed by the fund and its affiliates. You should ask your investment professional or financial intermediary about its services and any applicable fees. SHARE PRICES FOR TRANSACTIONS If you place an order to purchase, exchange or sell shares that is received in good order by the transfer agent or an authorized agent by the close of regular trading on the New York Stock Exchange (usually 4:00 p.m. Eastern time), the share price for your transaction will be based on the net asset value determined as of the close of regular trading on the New York Stock Exchange on that day (plus or minus any applicable sales charges). If your order is received by the transfer agent or an authorized agent after the close of regular trading on the New York Stock Exchange, or your order is not in good order, the share price will be based on the net asset value next determined after your order is received in good order by the fund or authorized agent. The authorized agent is responsible for transmitting your order to the fund in a timely manner. GOOD ORDER MEANS THAT: o You have provided adequate instructions o There are no outstanding claims against your account o There are no transaction limitations on your account o If you have any fund share certificates, you submit them and they are signed by each record owner exactly as the shares are registered o Your request includes a signature guarantee if you: - Are selling over $100,000 or exchanging over $500,000 worth of shares - Changed your account registration or address within the last 30 days - Instruct the transfer agent to mail the check to an address different from the one on your account - Want the check paid to someone other than the account's record owner(s) - Are transferring the sale proceeds to a Pioneer mutual fund account with a different registration TRANSACTION LIMITATIONS Your transactions are subject to certain limitations, including the limitation on the purchase of the fund's shares within 30 calendar days of a redemption. See "Excessive trading." 115 Buying, exchanging and selling shares BUYING You may buy fund shares from any financial intermediary that has a sales agreement or other arrangement with the distributor. You can buy shares at net asset value per share plus any applicable sales charge. The distributor may reject any order until it has confirmed the order in writing and received payment. Normally, your financial intermediary will send your purchase request to the fund's transfer agent. CONSULT YOUR INVESTMENT PROFESSIONAL FOR MORE INFORMATION. Your investment firm receives a commission from the distributor, and may receive additional compensation from Pioneer, for your purchase of fund shares. MINIMUM INVESTMENT AMOUNTS CLASS A, CLASS B AND CLASS C SHARES Your initial investment must be at least $1,000. Additional investments must be at least $100 for Class A shares and $500 for Class C shares. You may qualify for lower initial or subsequent investment minimums if you are opening a retirement plan account, establishing an automatic investment plan or placing your trade through your investment firm. Each fund may waive the initial or subsequent investment minimums. Minimum investment amounts may be waived for, among other things, share purchases made through certain mutual fund programs (e.g., asset based fee program accounts) sponsored by qualified intermediaries, such as broker-dealers and investment advisers, that have entered into an agreement with Pioneer. CLASS Y SHARES Your initial investment in Class Y shares must be at least $5 million. This amount may be invested in one or more of the Pioneer mutual funds that currently offer Class Y shares. There is no minimum additional investment amount. Each fund may waive the initial investment amount. WAIVERS OF THE MINIMUM INVESTMENT AMOUNT FOR CLASS Y Each fund will accept an initial investment of less than $5 million if: (a) The investment is made by a trust company or bank trust department which is initially investing at least $1 million in any of the Pioneer mutual funds and, at the time of the purchase, such assets are held in a fiduciary, advisory, custodial or similar capacity over which the trust company or bank trust department has full or shared investment discretion; or 116 (b) The investment is at least $1 million in any of the Pioneer mutual funds and the purchaser is an insurance company separate account; or (c) The account is not represented by a broker-dealer and the investment is made by (1) an ERISA-qualified retirement plan that meets the requirements of Section 401 of the Internal Revenue Code, (2) an employer-sponsored retirement plan that meets the requirements of Sections 403 or 457 of the Internal Revenue Code, (3) a private foundation that meets the requirements of Section 501(c)(3) of the Internal Revenue Code or (4) an endowment or other organization that meets the requirements of Section 509(a)(1) of the Internal Revenue Code; or (d) The investment is made by an employer-sponsored retirement plan established for the benefit of (1) employees of Pioneer or its affiliates, or (2) employees or the affiliates of broker-dealers who have a Class Y shares sales agreement with the distributor; or (e) The investment is made through certain mutual fund programs sponsored by qualified intermediaries, such as broker-dealers and investment advisers. In each case, the intermediary has entered into an agreement with Pioneer to include Class Y shares of the Pioneer mutual funds in their program. The intermediary provides investors participating in the program with additional services, including advisory, asset allocation, recordkeeping or other services. You should ask your investment firm if it offers and you are eligible to participate in such a mutual fund program and whether participation in the program is consistent with your investment goals. The intermediaries sponsoring or participating in these mutual fund programs may also offer their clients other classes of shares of the funds and investors may receive different levels of services or pay different fees depending upon the class of shares included in the program. Investors should consider carefully any separate transaction and other fees charged by these programs in connection with investing in each available share class before selecting a share class; or (f) The investment is made by another Pioneer fund Each fund reserves the right to waive the initial investment minimum in other circumstances. 117 Buying, exchanging and selling shares MAXIMUM PURCHASE AMOUNTS Purchases of fund shares are limited to $499,999 for Class C shares. This limit is applied on a per transaction basis. Class A and Class Y shares are not subject to a maximum purchase amount. RETIREMENT PLAN ACCOUNTS You can purchase fund shares through tax-deferred retirement plans for individuals, businesses and tax-exempt organizations. Your initial investment for most types of retirement plan accounts must be at least $250. Additional investments for most types of retirement plans must be at least $100. You may not use the account application accompanying this prospectus to establish a Pioneer retirement plan. You can obtain retirement plan applications from your investment firm or by calling the Retirement Plans Department at 1-800-622-0176. HOW TO BUY SHARES THROUGH YOUR INVESTMENT FIRM Normally, your investment firm will send your purchase request to the fund's distributor and/or transfer agent. CONSULT YOUR INVESTMENT PROFESSIONAL FOR MORE INFORMATION. Your investment firm receives a commission from the distributor, and may receive additional compensation from Pioneer, for your purchase of fund shares. BY PHONE OR ONLINE YOU CAN USE THE TELEPHONE OR ONLINE PURCHASE PRIVILEGE IF you have an existing non-retirement account. Certain IRAs can use the telephone purchase privilege. If your account is eligible, you can purchase additional fund shares by phone or online if: o You established your bank account of record at least 30 days ago o Your bank information has not changed for at least 30 days o You are not purchasing more than $100,000 worth of shares per account per day o You can provide the proper account identification information When you request a telephone or online purchase, the transfer agent will electronically debit the amount of the purchase from your bank account of record. The transfer agent will purchase fund shares for the amount of the 118 debit at the offering price determined after the transfer agent receives your telephone or online purchase instruction and good funds. It usually takes three business days for the transfer agent to receive notification from your bank that good funds are available in the amount of your investment. IN WRITING, BY MAIL You can purchase fund shares for an existing fund account by MAILING A CHECK TO THE TRANSFER AGENT. Make your check payable to the fund. Neither initial nor subsequent investments should be made by third party check, travelers check, or credit card check. Your check must be in U.S. dollars and drawn on a U.S. bank. Include in your purchase request the fund's name, the account number and the name or names in the account registration. Please note that there may be a delay in receipt by the transfer agent of purchase orders submitted by regular mail to a post office address. BY WIRE (CLASS Y SHARES ONLY) If you have an existing (Class Y shares only) account, you may wire funds to purchase shares. Note, however, that: o State Street Bank must receive your wire no later than 11:00 a.m. Eastern time on the business day after the fund receives your request to purchase shares o If State Street Bank does not receive your wire by 11:00 a.m. Eastern time on the next business day, your transaction will be canceled at your expense and risk o Wire transfers normally take two or more hours to complete and a fee may be charged by the sending bank o Wire transfers may be restricted on holidays and at certain other times INSTRUCT YOUR BANK TO WIRE FUNDS TO: Receiving Bank: State Street Bank and Trust Company 225 Franklin Street Boston, MA 02101 ABA Routing No. 011000028 For further credit to: Shareholder Name Existing Pioneer Account No. Ibbotson Asset Allocation Series
The transfer agent must receive your account application before you send your initial check or federal funds wire. In addition, you must provide a bank wire address of record when you establish your account. 119 Buying, exchanging and selling shares EXCHANGING You may, under certain circumstances, exchange your shares for shares of the same class of another Pioneer mutual fund. Your exchange request must be for at least $1,000. Each fund allows you to exchange your shares at net asset value without charging you either an initial or contingent deferred sales charge at the time of the exchange. Shares you acquire as part of an exchange will continue to be subject to any contingent deferred sales charge that applies to the shares you originally purchased. When you ultimately sell your shares, the date of your original purchase will determine your contingent deferred sales charge. Before you request an exchange, consider each fund's investment objective and policies as described in the fund's prospectus. You generally will have to pay income taxes on an exchange. SAME-FUND EXCHANGE PRIVILEGE Certain shareholders may be eligible to exchange their shares for a fund's Class Y shares. If eligible, no sales charges or other charges will apply to any such exchange. Generally, shareholders will not recognize a gain or loss for federal income tax purposes upon such an exchange. Investors should contact their financial intermediary to learn more about the details of this privilege. HOW TO EXCHANGE SHARES THROUGH YOUR INVESTMENT FIRM Normally, your investment firm will send your exchange request to the fund's transfer agent. CONSULT YOUR INVESTMENT PROFESSIONAL FOR MORE INFORMATION ABOUT EXCHANGING YOUR SHARES. BY PHONE OR ONLINE After you establish an eligible fund account, YOU CAN EXCHANGE FUND SHARES BY PHONE OR ONLINE IF: o You are exchanging into an existing account or using the exchange to establish a new account, provided the new account has a registration identical to the original account o The fund into which you are exchanging offers the same class of shares o You are not exchanging more than $500,000 worth of shares per account per day o You can provide the proper account identification information 120 IN WRITING, BY MAIL OR BY FAX You can exchange fund shares by MAILING OR FAXING A LETTER OF INSTRUCTION TO THE TRANSFER AGENT. You can exchange fund shares directly through the fund only if your account is registered in your name. However, you may not fax an exchange request for more than $500,000. Include in your letter: o The name and signature of all registered owners o A signature guarantee for each registered owner if the amount of the exchange is more than $500,000 o The name of the fund out of which you are exchanging and the name of the fund into which you are exchanging o The class of shares you are exchanging o The dollar amount or number of shares you are exchanging Please note that there may be a delay in receipt by the transfer agent of exchange requests submitted by regular mail to a post office address. SELLING Your shares will be sold at the share price (net asset value less any applicable sales charge) next calculated after the fund or its authorized agent, such as a broker-dealer, receives your request in good order. If a signature guarantee is required, you must submit your request in writing. If the shares you are selling are subject to a deferred sales charge, it will be deducted from the sale proceeds. The fund generally will send your sale proceeds by check, bank wire or electronic funds transfer. Normally you will be paid within seven days. If you recently sent a check to purchase the shares being sold, the fund may delay payment of the sale proceeds until your check has cleared. This may take up to 10 calendar days from the purchase date. If you are selling shares from a non-retirement account or certain IRAs, you may use any of the methods described below. If you are selling shares from a retirement account other than an IRA, you must make your request in writing. You generally will have to pay income taxes on a sale. If you must use a written request to exchange or sell your shares and your account is registered in the name of a corporation or other fiduciary you must include the name of an authorized person and a certified copy of a current corporate resolution, certificate of incumbency or similar legal document showing that the named individual is authorized to act on behalf of the record owner. 121 Buying, exchanging and selling shares HOW TO SELL SHARES THROUGH YOUR INVESTMENT FIRM Normally, your investment firm will send your request to sell shares to the fund's transfer agent. CONSULT YOUR INVESTMENT PROFESSIONAL FOR MORE INFORMATION. Each fund has authorized the distributor to act as its agent in the repurchase of fund shares from qualified investment firms. The fund reserves the right to terminate this procedure at any time. BY PHONE OR ONLINE IF YOU HAVE AN ELIGIBLE NON-RETIREMENT ACCOUNT, YOU MAY SELL UP TO $100,000 PER ACCOUNT PER DAY BY PHONE OR ONLINE. You may sell fund shares held in a retirement plan account by phone only if your account is an eligible IRA (tax penalties may apply). You may not sell your shares by phone or online if you have changed your address (for checks) or your bank information (for wires and transfers) in the last 30 days. You may receive your sale proceeds: o By check, provided the check is made payable exactly as your account is registered o By bank wire or by electronic funds transfer, provided the sale proceeds are being sent to your bank address of record For Class Y shares, shareholders may sell up to $5 million per account per day if the proceeds are directed to your bank account of record ($100,000 per account per day if the proceeds are not directed to your bank account of record). IN WRITING, BY MAIL OR BY FAX You can sell some or all of your fund shares by WRITING DIRECTLY TO THE FUND only if your account is registered in your name. Include in your request your name, the fund's name, your fund account number, the class of shares to be sold, the dollar amount or number of shares to be sold and any other applicable requirements as described below. The transfer agent will send the sale proceeds to your address of record unless you provide other instructions. Your request must be signed by all registered owners and be in good order. The transfer agent will not process your request until it is received in good order. You may sell up to $100,000 per account per day by fax. 122 Please note that there may be a delay in receipt by the transfer agent of redemption requests submitted by regular mail to a post office address. HOW TO CONTACT US BY PHONE For information or to request a telephone transaction between 8:00 a.m. and 7:00 p.m. (Eastern time) by speaking with a shareholder services representative call 1-800-225-6292 To request a transaction using FactFone/SM/ call 1-800-225-4321 BY MAIL Send your written instructions to: PIONEER INVESTMENT MANAGEMENT SHAREHOLDER SERVICES, INC. P.O. Box 55014 Boston, Massachusetts 02205-5014 PIONEER WEBSITE www.pioneerinvestments.com BY FAX Fax your exchange and sale requests to: 1-800-225-4240 123 Account options See the account application form for more details on each of the following services or call the transfer agent for details and availability. TELEPHONE TRANSACTION PRIVILEGES If your account is registered in your name, you can buy, exchange or sell fund shares by telephone. If you do not want your account to have telephone transaction privileges, you must indicate that choice on your account application or by writing to the transfer agent. When you request a telephone transaction the transfer agent will try to confirm that the request is genuine. The transfer agent records the call, requires the caller to provide validating information for the account and sends you a written confirmation. The fund may implement other confirmation procedures from time to time. Different procedures may apply if you have a non-U.S. account or if your account is registered in the name of an institution, broker-dealer or other third party. If the fund's confirmation procedures are followed, neither the fund nor its agents will bear any liability for these transactions. ONLINE TRANSACTION PRIVILEGES If your account is registered in your name, you may be able to buy, exchange or sell fund shares online. Your investment firm may also be able to buy, exchange or sell your fund shares online. To establish online transaction privileges: o For new accounts, complete the online section of the account application o For existing accounts, complete an account options form, write to the transfer agent or complete the online authorization screen at www.pioneerinvestments.com To use online transactions, you must read and agree to the terms of an online transaction agreement available on the Pioneer website. When you or your investment firm requests an online transaction the transfer agent electronically records the transaction, requires an authorizing password and sends a written confirmation. The fund may implement other procedures from time to time. Different procedures may apply if you have a non-U.S. account or if your account is registered in the name of an institution, broker-dealer or other third party. You may not be able to use the online transaction privilege for certain types of accounts, including most retirement accounts. 124 AUTOMATIC INVESTMENT PLANS You can make regular periodic investments in the fund by setting up monthly bank drafts, government allotments, payroll deductions, a Pioneer Investomatic Plan and other similar automatic investment plans. Automatic investments may be made only through U.S. banks. You may use an automatic investment plan to establish a Class A share account with a small initial investment. If you have a Class C share account and your balance is at least $1,000, you may establish an automatic investment plan. PIONEER INVESTOMATIC PLAN If you establish a Pioneer Investomatic Plan, the transfer agent will make a periodic investment in fund shares by means of a preauthorized electronic funds transfer from your bank account. Your plan investments are voluntary. You may discontinue your plan at any time or change the plan's dollar amount, frequency or investment date by calling or writing to the transfer agent. You should allow up to 30 days for the transfer agent to establish your plan. AUTOMATIC EXCHANGES You can automatically exchange your fund shares for shares of the same class of another Pioneer mutual fund. The automatic exchange will begin on the day you select when you complete the appropriate section of your account application or an account options form. In order to establish automatic exchange: o You must select exchanges on a monthly or quarterly basis o Both the originating and receiving accounts must have identical registrations o The originating account must have a minimum balance of $5,000 You may have to pay income taxes on an exchange. DISTRIBUTION OPTIONS Each fund offers three distribution options. Any fund shares you buy by reinvesting distributions will be priced at the applicable net asset value per share. (1) Unless you indicate another option on your account application, any dividends and capital gain distributions paid to you by the fund will automatically be invested in additional fund shares. (2) You may elect to have the amount of any dividends paid to you in cash and any capital gain distributions reinvested in additional shares. 125 Account options (3) You may elect to have the full amount of any dividends and/or capital gain distributions paid to you in cash. Options (2) and (3) are not available to retirement plan accounts or accounts with a current value of less than $500. If you are under 59 1/2, taxes and tax penalties may apply. If your distribution check is returned to the transfer agent or you do not cash the check for six months or more, the transfer agent may reinvest the amount of the check in your account and automatically change the distribution option on your account to option (1) until you request a different option in writing. If the amount of a distribution check would be less than $10, the fund may reinvest the amount in additional shares of the fund instead of sending a check. Additional shares of the fund will be purchased at the then-current net asset value. DIRECTED DIVIDENDS You can invest the dividends paid by one of your Pioneer mutual fund accounts in a second Pioneer mutual fund account. The value of your second account must be at least $1,000. You may direct the investment of any amount of dividends. There are no fees or charges for directed dividends. If you have a retirement plan account, you may only direct dividends to accounts with identical registrations. SYSTEMATIC WITHDRAWAL PLANS When you establish a systematic withdrawal plan for your account, the transfer agent will sell the number of fund shares you specify on a periodic basis and the proceeds will be paid to you or to any person you select. You must obtain a signature guarantee to direct payments to another person after you have established your systematic withdrawal plan. Payments can be made either by check or by electronic transfer to a U.S. bank account you designate. To establish a systematic withdrawal plan: o Your account must have a total value of at least $10,000 when you establish your plan o You must request a periodic withdrawal of at least $50 o You may not request a periodic withdrawal of more than 10% of the value of any Class B or Class C share account (valued at the time the plan is implemented) 126 These requirements do not apply to scheduled (Internal Revenue Code Section 72(t) election) or mandatory (required minimum distribution) withdrawals from IRAs and certain retirement plans. Systematic sales of fund shares may be taxable transactions for you. While you are making systematic withdrawals from your account, you may pay unnecessary initial sales charges on additional purchases of Class A shares or contingent deferred sales charges. DIRECT DEPOSIT If you elect to take dividends or dividends and capital gain distributions in cash, or if you establish a systematic withdrawal plan, you may choose to have those cash payments deposited directly into your savings, checking or NOW bank account. VOLUNTARY TAX WITHHOLDING You may have the transfer agent withhold 28% of the dividends and capital gain distributions paid from your fund account (before any reinvestment) and forward the amount withheld to the Internal Revenue Service as a credit against your federal income taxes. Voluntary tax withholding is not available for retirement plan accounts or for accounts subject to backup withholding. 127 Shareholder services and policies EXCESSIVE TRADING Frequent trading into and out of a fund can disrupt portfolio management strategies, harm fund performance by forcing the fund to hold excess cash or to liquidate certain portfolio securities prematurely and increase expenses for all investors, including long-term investors who do not generate these costs. An investor may use short-term trading as a strategy, for example, if the investor believes that the valuation of the fund's portfolio securities for purposes of calculating its net asset value does not fully reflect the then-current fair market value of those holdings. Each fund discourages, and does not take any intentional action to accommodate, excessive and short-term trading practices, such as market timing. Although there is no generally applied standard in the marketplace as to what level of trading activity is excessive, we may consider trading in the fund's shares to be excessive for a variety of reasons, such as if: o You sell shares within a short period of time after the shares were purchased; o You make two or more purchases and redemptions within a short period of time; o You enter into a series of transactions that indicate a timing pattern or strategy; or o We reasonably believe that you have engaged in such practices in connection with other mutual funds. Each fund's Board of Trustees has adopted policies and procedures with respect to frequent purchases and redemptions of fund shares by fund investors. Pursuant to these policies and procedures, we monitor selected trades on a daily basis in an effort to detect excessive short-term trading. If we determine that an investor or a client of a broker or other intermediary has engaged in excessive short-term trading that we believe may be harmful to the fund, we will ask the investor, broker or other intermediary to cease such activity and we will refuse to process purchase orders (including purchases by exchange) of such investor, broker, other intermediary or accounts that we believe are under their control. In determining whether to take such actions, we seek to act in a manner that is consistent with the best interests of the fund's shareholders. While we use our reasonable efforts to detect excessive trading activity, there can be no assurance that our efforts will be successful or that market timers will not employ tactics designed to evade detection. If we are not successful, your return from an investment in the fund may be adversely affected. Frequently, fund shares are held through omnibus accounts maintained by financial intermediaries such as brokers and retirement plan administrators, 128 where the holdings of multiple shareholders, such as all the clients of a particular broker or other intermediary, are aggregated. Our ability to monitor trading practices by investors purchasing shares through omnibus accounts may be limited and dependent upon the cooperation of the broker or other intermediary in taking steps to limit this type of activity. Each fund may reject a purchase or exchange order before its acceptance or the issuance of shares. Each fund may also restrict additional purchases or exchanges in an account. Each of these steps may be taken for any transaction, for any reason, without prior notice, including transactions that a fund believes are requested on behalf of market timers. Each fund reserves the right to reject any purchase or exchange request by any investor or financial institution if the fund believes that any combination of trading activity in the account or related accounts is potentially disruptive to the fund. A prospective investor whose purchase or exchange order is rejected will not achieve the investment results, whether gain or loss, that would have been realized if the order had been accepted and an investment made in the fund. A fund and its shareholders do not incur any gain or loss as a result of a rejected order. Each fund may impose further restrictions on trading activities by market timers in the future. To limit the negative effects of excessive trading on a fund, each fund has adopted the following restriction on investor transactions. If an investor redeems $5,000 or more (including redemptions that are a part of an exchange transaction) from a fund, that investor shall be prevented (or "blocked") from purchasing shares of the fund (including purchases that are a part of an exchange transaction) for 30 calendar days after the redemption. This policy does not apply to systematic purchase or withdrawal plan transactions, transactions made through employer-sponsored retirement plans described under Section 401(a), 403(b) or 457 of the Internal Revenue Code or employee benefit plans, scheduled (Internal Revenue Code Section 72(t) election) or mandatory (required minimum distribution) withdrawals from IRAs, rebalancing transactions made through certain asset allocation or "wrap" programs, transactions by insurance company separate accounts or transactions by other funds that invest in a fund. This policy does not apply to purchase or redemption transactions of less than $5,000 or to a Pioneer money market fund. 129 Shareholder services and policies We rely on financial intermediaries that maintain omnibus accounts to apply to their customers either the fund's policy described above or their own policies or restrictions designed to limit excessive trading of fund shares. However, we do not impose this policy at the omnibus account level. Purchases pursuant to the reinstatement privilege (for Class A and Class B shares) are subject to this policy. PURCHASES IN KIND You may use securities you own to purchase shares of a fund provided that Pioneer, in its sole discretion, determines that the securities are consistent with the fund's objectives and policies and their acquisition is in the best interests of the fund. If the fund accepts your securities, they will be valued for purposes of determining the number of fund shares to be issued to you in the same way the fund will value the securities for purposes of determining its net asset value. For federal income tax purposes, you may be taxed in the same manner as if you sold the securities that you use to purchase fund shares for cash in an amount equal to the value of the fund shares that you purchase. Your broker may also impose a fee in connection with processing your purchase of fund shares with securities. REINSTATEMENT PRIVILEGE (CLASS A AND CLASS B SHARES) If you recently sold all or part of your Class A or Class B shares, you may be able to reinvest all or part of your sale proceeds without a sales charge in Class A shares of any Pioneer mutual fund. To qualify for reinstatement: o You must send a written request to the transfer agent no more than 90 days after selling your shares and o The registration of the account in which you reinvest your sale proceeds must be identical to the registration of the account from which you sold your shares. Purchases pursuant to the reinstatement privilege are subject to limitations on investor transactions, including the limitation on the purchase of the fund's shares within 30 calendar days of redemption. See "Excessive trading." When you elect reinstatement, you are subject to the provisions outlined in the selected fund's prospectus, including the fund's minimum investment requirement. Your sale proceeds will be reinvested in shares of the fund at the Class A net asset value per share determined after the transfer agent receives your written request for reinstatement. You may realize a gain or 130 loss for federal income tax purposes as a result of your sale of fund shares, and special tax rules may apply if you elect reinstatement. Consult your tax adviser for more information. PIONEER WEBSITE WWW.PIONEERINVESTMENTS.COM The website includes a full selection of information on mutual fund investing. You can also use the website to get: o Your current account information o Prices, returns and yields of all publicly available Pioneer mutual funds o Prospectuses, statements of additional information and shareowner reports for all the Pioneer mutual funds o A copy of Pioneer's privacy notice If you or your investment firm authorized your account for the online transaction privilege, you may buy, exchange and sell shares online. FACTFONE/SM/ 1-800-225-4321 You can use FactFone/SM/ to: o Obtain current information on your Pioneer mutual fund accounts o Inquire about the prices and yields of all publicly available Pioneer mutual funds o Make computer-assisted telephone purchases, exchanges and redemptions for your fund accounts o Request account statements If you plan to use FactFone/SM/ to make telephone purchases and redemptions, first you must activate your personal identification number and establish your bank account of record. If your account is registered in the name of a broker-dealer or other third party, you may not be able to use FactFone/SM/. If your account is registered in the name of a broker-dealer or other third party, you may not be able to use FactFone/SM/ to obtain account information. HOUSEHOLD DELIVERY OF FUND DOCUMENTS With your consent, Pioneer may send a single proxy statement, prospectus and shareowner report to your residence for you and any other member of your household who has an account with the fund. If you wish to revoke your consent to this practice, you may do so by notifying Pioneer, by phone 131 Shareholder services and policies or in writing (see "How to contact us"). Pioneer will begin mailing separate proxy statements, prospectuses and shareowner reports to you within 30 days after receiving your notice. CONFIRMATION STATEMENTS The transfer agent maintains an account for each investment firm or individual shareowner and records all account transactions. You will be sent confirmation statements showing the details of your transactions as they occur, except automatic investment plan transactions, which are confirmed quarterly. If you have more than one Pioneer mutual fund account registered in your name, the Pioneer combined account statement will be mailed to you each quarter. TAX INFORMATION Early each year, the fund will mail you information about the tax status of the dividends and distributions paid to you by the fund. TAX INFORMATION FOR IRA ROLLOVERS In January (or by the applicable Internal Revenue Service deadline) following the year in which you take a reportable distribution, the transfer agent will mail you a tax form reflecting the total amount(s) of distribution(s) received by the end of January. PRIVACY Each fund has a policy designed to protect the privacy of your personal information. A copy of Pioneer's privacy notice was given to you at the time you opened your account. The fund will send you a copy of the privacy notice each year. You may also obtain the privacy notice by calling the transfer agent or through Pioneer's website. SIGNATURE GUARANTEES AND OTHER REQUIREMENTS You are required to obtain a signature guarantee when: o Requesting certain types of exchanges or sales of fund shares o Redeeming shares for which you hold a share certificate o Requesting certain types of changes for your existing account You can obtain a signature guarantee from most broker-dealers, banks, credit unions (if authorized under state law) and federal savings and loan associations. You cannot obtain a signature guarantee from a notary public. 132 The Pioneer funds generally accept only medallion signature guarantees. A medallion signature guarantee may be obtained from a domestic bank or trust company, broker, dealer, clearing agency, savings association, or other financial institution that is participating in a medallion program recognized by the Securities Transfer Association. Signature guarantees from financial institutions that are not participating in one of these programs are not accepted as medallion signature guarantees. The fund may accept other forms of guarantee from financial intermediaries in limited circumstances. Fiduciaries and corporations are required to submit additional documents to sell fund shares. MINIMUM ACCOUNT SIZE Each fund requires that you maintain a minimum account value of $500. If you hold less than $500 in your account, each fund reserves the right to notify you that it intends to sell your shares and close your account. You will be given 60 days from the date of the notice to make additional investments to avoid having your shares sold. This policy does not apply to certain qualified retirement plan accounts. TELEPHONE AND WEBSITE ACCESS You may have difficulty contacting the fund by telephone or accessing www.pioneerinvestments.com during times of market volatility or disruption in telephone or Internet service. On New York Stock Exchange holidays or on days when the exchange closes early, Pioneer will adjust the hours for the telephone center and for online transaction processing accordingly. If you are unable to access www.pioneerinvestments.com or reach the fund by telephone, you should communicate with the fund in writing. SHARE CERTIFICATES The fund does not offer share certificates. Shares are electronically recorded. Any existing certificated shares can only be sold by returning your certificate to the transfer agent, along with a letter of instruction or a stock power (a separate written authority transferring ownership) and a signature guarantee. OTHER POLICIES Each fund and the distributor reserve the right to: o reject any purchase or exchange order for any reason, without prior notice 133 Shareholder services and policies o charge a fee for exchanges or to modify, limit or suspend the exchange privilege at any time without notice. The fund will provide 60 days' notice of material amendments to or termination of the exchange privilege o revise, suspend, limit or terminate the account options or services available to shareowners at any time, except as required by the rules of the Securities and Exchange Commission Each fund reserves the right to: o suspend transactions in shares when trading on the New York Stock Exchange is closed or restricted, or when the Securities and Exchange Commission determines an emergency or other circumstances exist that make it impracticable for the fund to sell or value its portfolio securities, or otherwise as permitted by the rules of or by the order of the Securities and Exchange Commission o redeem in kind by delivering to you portfolio securities owned by the fund rather than cash. Securities you receive this way may increase or decrease in value while you hold them and you may incur brokerage and transaction charges and tax liability when you convert the securities to cash o charge transfer, shareholder servicing or similar agent fees, such as an account maintenance fee for small balance accounts, directly to accounts upon at least 30 days' notice. The fund may do this by deducting the fee from your distribution of dividends and/or by redeeming fund shares to the extent necessary to cover the fee o close your account after a period of inactivity, as determined by state law, and transfer your shares to the appropriate state 134 Dividends, capital gains and taxes DIVIDENDS AND CAPITAL GAINS Each fund generally pays any distributions of net short- and long-term capital gains in December. Each fund generally pays dividends from any net investment income in December. Each fund may also pay dividends and capital gain distributions at other times if necessary for the fund to avoid U.S. federal income or excise tax. If you invest in a fund shortly before a dividend or other distribution, generally you will pay a higher price per share and, unless you are exempt from tax, you will pay taxes on the amount of the distribution whether you reinvest the distribution in additional shares or receive it as cash. TAXES You will normally have to pay federal income taxes, and any state or local taxes, on the dividends and other distributions you receive from each fund, whether you take the distributions in cash or reinvest them in additional shares. For U.S. federal income tax purposes, distributions from each fund's net capital gains (if any) are considered long-term capital gains and may be taxable to noncorporate shareholders at rates of up to 20%. Distributions from the fund's net short-term capital gains are taxable as ordinary income. Other dividends are taxable either as ordinary income or, in general, if paid from the fund's "qualified dividend income" and if certain conditions, including holding period requirements, are met by the fund and the shareholder, as qualified dividend income taxable to noncorporate shareholders at U.S. federal income tax rates of up to 20%. "Qualified dividend income" generally is income derived from dividends paid to underlying funds by U.S. corporations or certain foreign corporations that are either incorporated in a U.S. possession or eligible for tax benefits under certain U.S. income tax treaties. In addition, dividends that an underlying fund receives in respect of stock of certain foreign corporations may be qualified dividend income if that stock is readily tradable on an established U.S. securities market. A portion of dividends received from the funds (but none of the funds' capital gain distributions) may qualify for the dividends-received deduction for corporations. To the extent that a fund pays dividends attributable to income received by it from underlying fixed income funds, these dividends 135 Dividends, capital gains and taxes generally will not qualify for the dividends-received deduction for corporations or for any favorable U.S. federal income tax rate available to noncorporate shareholders on qualified dividend income. The fund will report to shareholders annually the U.S. federal income tax status of all fund distributions. If the fund declares a dividend in October, November or December, payable to shareholders of record in such a month, and pays it in January of the following year, you will be taxed on the dividend as if you received it in the year in which it was declared. Sales and exchanges generally will be taxable transactions to shareowners. When you sell or exchange fund shares you will generally recognize a capital gain or capital loss in an amount equal to the difference between the net amount of sale proceeds (or, in the case of an exchange, the fair market value of the shares) that you receive and your tax basis for the shares that you sell or exchange. A 3.8% Medicare contribution tax generally applies to all or a portion of the net investment income of a shareholder who is an individual and not a nonresident alien for federal income tax purposes and who has adjusted gross income (subject to certain adjustments) that exceeds a threshold amount. This 3.8% tax also applies to all or a portion of the undistributed net investment income of certain shareholders that are estates and trusts. For these purposes, dividends, interest and certain capital gains are generally taken into account in computing a shareholder's net investment income. You must provide your social security number or other taxpayer identification number to the fund along with the certifications required by the Internal Revenue Service when you open an account. If you do not or if it is otherwise legally required to do so, the fund will apply "backup withholding" tax on your dividends and other distributions, sale proceeds and any other payments to you that are subject to backup withholding. The backup withholding rate is 28%. You should ask your tax adviser about any federal, state, local and foreign tax considerations relating to an investment in the fund. You may also consult the fund's statement of additional information for a more detailed discussion of the U.S. federal income tax considerations that may affect the fund and its shareowners. 136 Financial highlights The financial highlights table helps you understand each fund's financial performance for the past five years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate that you would have earned or lost on an investment in Class A, Class B, Class C and Class Y shares of each fund (assuming reinvestment of all dividends and distributions). The information below has been audited by Ernst & Young LLP, the funds' independent registered public accounting firm, whose report is included in the funds' annual report along with the funds' financial statements. The annual report is available upon request. 137 Financial highlights PIONEER CONSERVATIVE ALLOCATION FUND CLASS A SHARES
YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ----------- ----------- ----------- ----------- ------------ Net asset value, beginning of period $ 10.73 $ 10.85 $ 10.19 $ 9.40 $ 10.48 ------- ------- ------- ------- ------- Increase (decrease) from investment operations: Net investment income (a) $ 0.28 $ 0.28 $ 0.26 $ 0.25 $ 0.39 Net realized and unrealized gain (loss) on investments 0.64 (0.09) 0.65 0.86 (0.94) ------- ------- ------- ------- ------- Net increase (decrease) from investment operations $ 0.92 $ 0.19 $ 0.91 $ 1.11 $ (0.55) Distributions to shareowners: Net investment income $ (0.23) $ (0.31) $ (0.25) $ (0.32) $ (0.31) Net realized gain - - - - (0.22) ------- ------- ------- ------- ------- Total distributions to shareowners $ (0.23) $ (0.31) $ (0.25) $ (0.32) $ (0.53) ------- ------- ------- ------- ------- Net increase (decrease) in net asset value $ 0.69 $ (0.12) $ 0.66 $ 0.79 $ (1.08) ------- ------- ------- ------- ------- Net asset value, end of period $ 11.42 $ 10.73 $ 10.85 $ 10.19 $ 9.40 ------- ------- ------- ------- ------- Total return* 8.72% 1.85% 9.04% 11.88% (4.44)% Ratio of net expenses to average net assets+# 0.77% 0.78% 0.78% 0.78% 0.78% Ratio of net investment income to average net assets+# 2.51% 2.69% 2.47% 2.55% 4.43% Portfolio turnover rate 17% 20% 15% 13% 53% Net assets, end of period (in thousands) $44,239 $42,613 $42,882 $35,986 $25,992 Ratios with no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 0.77% 0.82% 0.80% 0.84% 1.09% Net investment income 2.51% 2.65% 2.45% 2.49% 4.12% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 0.77% 0.78% 0.78% 0.78% 0.78% Net investment income 2.51% 2.69% 2.47% 2.55% 4.43%
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. # Ratios with no reduction for fees paid indirectly. 138 PIONEER CONSERVATIVE ALLOCATION FUND CLASS B SHARES
YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ----------- ----------- ----------- ----------- ------------ Net asset value, beginning of period $10.51 $10.61 $ 9.99 $ 9.24 $ 10.31 ------ ------ ------ ------ ------- Increase (decrease) from investment operations: Net investment income (a) $ 0.18 $ 0.19 $ 0.17 $ 0.16 $ 0.31 Net realized and unrealized gain (loss) on investments 0.62 (0.09) 0.64 0.83 (0.93) ------ ------ ------ ------ ------- Net increase (decrease) from investment operations $ 0.80 $ 0.10 $ 0.81 $ 0.99 $ (0.62) Distributions to shareowners: Net investment income $(0.13) $(0.20) $(0.19) $(0.24) $ (0.23) Net realized gain - - - - (0.22) ------ ------ ------ ------ ------- Total distributions to shareowners $(0.13) $(0.20) $(0.19) $(0.24) $ (0.45) ------ ------ ------ ------ ------- Net increase (decrease) in net asset value $ 0.67 $(0.10) $ 0.62 $ 0.75 $ (1.07) ------ ------ ------ ------ ------- Net asset value, end of period $11.18 $10.51 $10.61 $ 9.99 $ 9.24 ------ ------ ------ ------ ------- Total return* 7.63% 1.04% 8.15% 10.80% (5.31)% Ratio of net expenses to average net assets+# 1.61% 1.68% 1.64% 1.68% 1.68% Ratio of net investment income to average net assets+# 1.67% 1.82% 1.62% 1.67% 3.58% Portfolio turnover rate 17% 20% 15% 13% 53% Net assets, end of period (in thousands) $3,340 $4,429 $5,285 $6,214 $ 5,957 Ratios with no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 1.61% 1.71% 1.64% 1.70% 1.90% Net investment income 1.67% 1.79% 1.62% 1.64% 3.36% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 1.61% 1.68% 1.64% 1.68% 1.68% Net investment income 1.67% 1.82% 1.62% 1.67% 3.58%
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. # Ratios with no reduction for fees paid indirectly. 139 Financial highlights PIONEER CONSERVATIVE ALLOCATION FUND CLASS C SHARES
YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ----------- ----------- ----------- ----------- ------------ Net asset value, beginning of period $ 10.44 $ 10.56 $ 9.96 $ 9.21 $ 10.30 ------- ------- ------- ------- ------- Increase (decrease) from investment operations: Net investment income (a) $ 0.18 $ 0.20 $ 0.18 $ 0.17 $ 0.31 Net realized and unrealized gain (loss) on investments 0.63 (0.09) 0.63 0.83 (0.95) ------- ------- ------- ------- ------- Net increase (decrease) from investment operations $ 0.81 $ 0.11 $ 0.81 $ 1.00 $ (0.64) Distributions to shareowners: Net investment income $ (0.16) $ (0.23) $ (0.21) $ (0.25) $ (0.23) Net realized gain - - - - (0.22) ------- ------- ------- ------- ------- Total distributions to shareowners $ (0.16) $ (0.23) $ (0.21) $ (0.25) $ (0.45) ------- ------- ------- ------- ------- Net increase (decrease) in net asset value $ 0.65 $ (0.12) $ 0.60 $ 0.75 $ (1.09) ------- ------- ------- ------- ------- Net asset value, end of period $ 11.09 $ 10.44 $ 10.56 $ 9.96 $ 9.21 ------- ------- ------- ------- ------- Total return* 7.83% 1.16% 8.18% 10.91% (5.53)% Ratio of net expenses to average net assets+# 1.51% 1.56% 1.55% 1.59% 1.68% Ratio of net investment income to average net assets+# 1.70% 1.91% 1.71% 1.73% 3.54% Portfolio turnover rate 17% 20% 15% 13% 53% Net assets, end of period (in thousands) $20,542 $16,257 $15,068 $14,063 $11,184 Ratios with no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 1.51% 1.56% 1.55% 1.59% 1.80% Net investment income 1.70% 1.91% 1.71% 1.73% 3.43% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 1.51% 1.56% 1.55% 1.59% 1.68% Net investment income 1.70% 1.91% 1.71% 1.73% 3.54%
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. # Ratios with no reduction for fees paid indirectly. 140 PIONEER CONSERVATIVE ALLOCATION FUND CLASS Y SHARES
YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ----------- ----------- ----------- ----------- ------------- Net asset value, beginning of period $10.21 $10.41 $ 9.79 $ 9.02 $ 10.50 ------ ------ ------ ------ -------- Increase (decrease) from investment operations: Net investment income (a) $ 0.20 $ 0.13 $ 0.24 $ 0.28 $ (0.18) Net realized and unrealized gain (loss) on investments 0.61 (0.10) 0.65 0.78 (0.97) ------ ------ ------ ------ -------- Net increase (decrease) from investment operations $ 0.81 $ 0.03 $ 0.89 $ 1.06 $ (1.15) Distributions to shareowners: Net investment income $(0.16) $(0.23) $(0.27) $(0.29) $ (0.11) Net realized gain - - - - (0.22) ------ ------ ------ ------ -------- Total distributions to shareowners $(0.16) $(0.23) $(0.27) $(0.29) $ (0.33) ------ ------ ------ ------ -------- Net increase (decrease) in net asset value $ 0.65 $(0.20) $ 0.62 $ 0.77 $ (1.48) ------ ------ ------ ------ -------- Net asset value, end of period $10.86 $10.21 $10.41 $ 9.79 $ 9.02 ------ ------ ------ ------ -------- Total return* 8.00% 0.34% 9.18% 11.89% (10.66)% Ratio of net expenses to average net assets+# 1.43% 2.26% 0.82% 0.63% 7.26% Ratio of net investment income to average net assets+# 1.88% 1.28% 2.36% 2.94% (2.03)% Portfolio turnover rate 17% 20% 15% 13% 53% Net assets, end of period (in thousands) $ 141 $ 65 $ 72 $ 119 $ 9 Ratios with no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 1.43% 2.26% 0.82% 0.63% 7.26% Net investment income (loss) 1.88% 1.28% 2.36% 2.94% (2.03)% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 1.43% 2.26% 0.82% 0.63% 7.26% Net investment income (loss) 1.88% 1.28% 2.36% 2.94% (2.03)%
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions and the complete redemption of the investment at net asset value at the end of each period. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. # Ratios with no reduction for fees paid indirectly. 141 Financial highlights PIONEER MODERATE ALLOCATION FUND CLASS A SHARES
YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ------------ ------------- ------------ ------------ ------------- Net asset value, beginning of period $ 10.46 $ 10.74 $ 9.68 $ 8.79 $ 10.89 -------- -------- -------- -------- -------- Increase (decrease) from investment operations: Net investment income (a) $ 0.21 $ 0.18 $ 0.17 $ 0.16 $ 0.27 Net realized and unrealized gain (loss) on investments 1.27 (0.22) 1.07 1.00 (1.63) -------- -------- -------- -------- -------- Net increase (decrease) from investment operations $ 1.48 $ (0.04) $ 1.24 $ 1.16 $ (1.36) Distributions to shareowners: Net investment income $ (0.22) $ (0.24) $ (0.18) $ (0.27) $ (0.13) Net realized gain - - - - (0.61) -------- -------- -------- -------- -------- Total distributions to shareowners $ (0.22) $ (0.24) $ (0.18) $ (0.27) $ (0.74) -------- -------- -------- -------- -------- Net increase (decrease) in net asset value $ 1.26 $ (0.28) $ 1.06 $ 0.89 $ (2.10) -------- -------- -------- -------- -------- Net asset value, end of period $ 11.72 $ 10.46 $ 10.74 $ 9.68 $ 8.79 -------- -------- -------- -------- -------- Total return* 14.32% (0.27)% 12.91% 13.26% (11.20)% Ratio of net expenses to average net assets+# 0.66% 0.72% 0.71% 0.73% 0.74% Ratio of net investment income to average net assets+# 1.85% 1.75% 1.59% 1.70% 3.20% Portfolio turnover rate 9% 9% 14% 10% 44% Net assets, end of period (in thousands) $128,425 $118,833 $132,166 $125,354 $120,786 Ratios with no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 0.66% 0.72% 0.71% 0.73% 0.76% Net investment income 1.85% 1.75% 1.59% 1.70% 3.18% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 0.66% 0.72% 0.71% 0.73% 0.74% Net investment income 1.85% 1.75% 1.59% 1.70% 3.20%
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. # Ratios with no reduction for fees paid indirectly. 142 PIONEER MODERATE ALLOCATION FUND CLASS B SHARES
YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ----------- ----------- ----------- ----------- ------------- Net asset value, beginning of period $ 10.04 $ 10.26 $ 9.25 $ 8.41 $ 10.39 ------- ------- ------- ------- -------- Increase (decrease) from investment operations: Net investment income (a) $ 0.11 $ 0.11 $ 0.08 $ 0.08 $ 0.19 Net realized and unrealized gain (loss) on investments 1.22 (0.22) 1.02 0.96 (1.53) ------- ------- ------- ------- -------- Net increase (decrease) from investment operations $ 1.33 $ (0.11) $ 1.10 $ 1.04 $ (1.34) Distributions to shareowners: Net investment income $ (0.06) $ (0.11) $ (0.09) $ (0.20) $ (0.03) Net realized gain - - - - (0.61) ------- ------- ------- ------- -------- Total distributions to shareowners $ (0.06) $ (0.11) $ (0.09) $ (0.20) $ (0.64) ------- ------- ------- ------- -------- Net increase (decrease) in net asset value $ 1.27 $ (0.22) $ 1.01 $ 0.84 $ (1.98) ------- ------- ------- ------- -------- Net asset value, end of period $ 11.31 $ 10.04 $ 10.26 $ 9.25 $ 8.41 ------- ------- ------- ------- -------- Total return* 13.31% (0.99)% 11.89% 12.39% (11.81)% Ratio of net expenses to average net assets+# 1.52% 1.52% 1.52% 1.52% 1.52% Ratio of net investment income to average net assets+# 1.06% 1.11% 0.83% 0.92% 2.44% Portfolio turnover rate 9% 9% 14% 10% 44% Net assets, end of period (in thousands) $10,068 $16,072 $26,166 $33,115 $35,197 Ratios with no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 1.58% 1.60% 1.53% 1.56% 1.63% Net investment income 0.99% 1.03% 0.82% 0.88% 2.33% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 1.52% 1.52% 1.52% 1.52% 1.52% Net investment income 1.06% 1.11% 0.83% 0.92% 2.44%
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. # Ratios with no reduction for fees paid indirectly. 143 Financial highlights PIONEER MODERATE ALLOCATION FUND CLASS C SHARES
YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ----------- ----------- ----------- ----------- ------------- Net asset value, beginning of period $ 9.77 $ 10.07 $ 9.10 $ 8.29 $ 10.30 ------- ------- ------- ------- -------- Increase (decrease) from investment operations: Net investment income (a) $ 0.12 $ 0.10 $ 0.09 $ 0.09 $ 0.19 Net realized and unrealized gain (loss) on investments 1.19 (0.22) 1.01 0.94 (1.53) ------- ------- ------- ------- -------- Net increase (decrease) from investment operations $ 1.31 $ (0.12) $ 1.10 $ 1.03 $ (1.34) Distributions to shareowners: Net investment income $ (0.16) $ (0.18) $ (0.13) $ (0.22) $ (0.06) Net realized gain - - - - (0.61) ------- ------- ------- ------- -------- Total distributions to shareowners $ (0.16) $ (0.18) $ (0.13) $ (0.22) $ (0.67) ------- ------- ------- ------- -------- Net increase (decrease) in net asset value $ 1.15 $ (0.30) $ 0.97 $ 0.81 $ (2.01) ------- ------- ------- ------- -------- Net asset value, end of period $ 10.92 $ 9.77 $ 10.07 $ 9.10 $ 8.29 ------- ------- ------- ------- -------- Total return* 13.56% (1.08)% 12.12% 12.43% (11.85)% Ratio of net expenses to average net assets+# 1.34% 1.41% 1.40% 1.44% 1.52% Ratio of net investment income to average net assets+# 1.15% 1.06% 0.89% 0.98% 2.44% Portfolio turnover rate 9% 9% 14% 10% 44% Net assets, end of period (in thousands) $64,989 $53,594 $52,059 $43,725 $37,513 Ratios with no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 1.34% 1.41% 1.40% 1.44% 1.52% Net investment income 1.15% 1.06% 0.89% 0.98% 2.44% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 1.34% 1.41% 1.40% 1.44% 1.52% Net investment income 1.15% 1.06% 0.89% 0.98% 2.44%
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. # Ratios with no reduction for fees paid indirectly. 144 PIONEER MODERATE ALLOCATION FUND CLASS Y SHARES
YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ----------- --------------- ----------- ----------- ------------- Net asset value, beginning of period $10.58 $ 10.88 $ 9.80 $ 8.89 $ 10.94 ------ ------- ------ ------ -------- Increase (decrease) from investment operations: Net investment income (a) $ 0.25 $ 0.22 $ 0.21 $ 0.20 $ 0.29 Net realized and unrealized gain (loss) on investments 1.28 (0.23) 1.09 1.02 (1.55) ------ ------- ------ ------ -------- Net increase (decrease) from investment operations $ 1.53 $ (0.01) $ 1.30 $ 1.22 $ (1.26) Distributions to shareowners: Net investment income $(0.25) $ (0.29) $(0.22) $(0.31) $ (0.18) Net realized gain - - - - (0.61) ------ ------- ------ ------ -------- Total distributions to shareowners $(0.25) $ (0.29) $(0.22) $(0.31) $ (0.79) ------ ------- ------ ------ -------- Net increase (decrease) in net asset value $ 1.28 $ (0.30) $ 1.08 $ 0.91 $ (2.05) ------ ------- ------ ------ -------- Net asset value, end of period $11.86 $ 10.58 $10.88 $ 9.80 $ 8.89 ------ ------- ------ ------ -------- Total return* 14.68% 0.00%(b) 13.37% 13.75% (10.09)% Ratio of net expenses to average net assets+# 0.36% 0.38% 0.32% 0.33% 0.33% Ratio of net investment income to average net assets+# 2.26% 2.14% 2.00% 2.10% 3.59% Portfolio turnover rate 9% 9% 14% 10% 44% Net assets, end of period (in thousands) $4,134 $ 5,208 $8,069 $8,120 $ 8,015 Ratios with no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 0.36% 0.38% 0.32% 0.33% 0.33% Net investment income 2.26% 2.14% 2.00% 2.10% 3.59% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 0.36% 0.38% 0.32% 0.33% 0.33% Net investment income 2.26% 2.14% 2.00% 2.10% 3.59%
(a) Calculated using average shares outstanding for the period. (b) Amount rounds to less than 0.01%. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions and the complete redemption of the investment at net asset value at the end of each period. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. # Ratios with no reduction for fees paid indirectly. 145 Financial highlights PIONEER GROWTH ALLOCATION FUND CLASS A SHARES
YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ------------ ------------- ------------ ------------ ------------- Net asset value, beginning of period $ 10.75 $ 11.09 $ 9.77 $ 8.74 $ 11.50 -------- -------- -------- -------- -------- Increase (decrease) from investment operations: Net investment income (a) $ 0.17 $ 0.14 $ 0.12 $ 0.11 $ 0.19 Net realized and unrealized gain (loss) on investments 1.57 (0.29) 1.33 1.10 (2.14) -------- -------- -------- -------- -------- Net increase (decrease) from investment operations $ 1.74 $ (0.15) $ 1.45 $ 1.21 $ (1.95) Distributions to shareowners: Net investment income $ (0.17) $ (0.19) $ (0.13) $ (0.18) $ (0.04) Net realized gain - - - - (0.77) -------- -------- -------- -------- -------- Total distributions to shareowners $ (0.17) $ (0.19) $ (0.13) $ (0.18) $ (0.81) -------- -------- -------- -------- -------- Net increase (decrease) in net asset value $ 1.57 $ (0.34) $ 1.32 $ 1.03 $ (2.76) -------- -------- -------- -------- -------- Net asset value, end of period $ 12.32 $ 10.75 $ 11.09 $ 9.77 $ 8.74 -------- -------- -------- -------- -------- Total return* 16.40% (1.31)% 14.85% 13.90% (15.49)% Ratio of net expenses to average net assets+# 0.69% 0.76% 0.76% 0.79% 0.79% Ratio of net investment income to average net assets+# 1.50% 1.29% 1.11% 1.12% 2.24% Portfolio turnover rate 6% 7% 12% 11% 49% Net assets, end of period (in thousands) $149,586 $134,988 $140,979 $125,433 $111,447 Ratios with no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 0.69% 0.76% 0.76% 0.80% 0.89% Net investment income 1.50% 1.29% 1.11% 1.11% 2.14% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 0.69% 0.76% 0.76% 0.79% 0.79% Net investment income 1.50% 1.29% 1.11% 1.12% 2.24%
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. # Ratios with no reduction for fees paid indirectly. 146 PIONEER GROWTH ALLOCATION FUND CLASS B SHARES
YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ----------- ----------- ----------- ----------- ------------- Net asset value, beginning of period $ 9.52 $ 9.80 $ 8.64 $ 7.75 $ 10.33 ------- ------- ------- ------- -------- Increase (decrease) from investment operations: Net investment income (a) $ 0.07 $ 0.06 $ 0.03 $ 0.03 $ 0.11 Net realized and unrealized gain (loss) on investments 1.40 (0.26) 1.17 0.98 (1.92) ------- ------- ------- ------- -------- Net increase (decrease) from investment operations $ 1.47 $ (0.20) $ 1.20 $ 1.01 $ (1.81) Distributions to shareowners: Net investment income $ (0.06) $ (0.08) $ (0.04) $ (0.12) $ - Net realized gain - - - - (0.77) ------- ------- ------- ------- -------- Total distributions to shareowners $ (0.06) $ (0.08) $ (0.04) $ (0.12) $ (0.77) ------- ------- ------- ------- -------- Net increase (decrease) in net asset value $ 1.41 $ (0.28) $ 1.16 $ 0.89 $ (2.58) ------- ------- ------- ------- -------- Net asset value, end of period $ 10.93 $ 9.52 $ 9.80 $ 8.64 $ 7.75 ------- ------- ------- ------- -------- Total return* 15.46% (2.01)% 13.90% 13.03% (16.05)% Ratio of net expenses to average net assets+# 1.57% 1.57% 1.57% 1.57% 1.57% Ratio of net investment income to average net assets+# 0.68% 0.59% 0.35% 0.36% 1.47% Portfolio turnover rate 6% 7% 12% 11% 49% Net assets, end of period (in thousands) $17,441 $24,941 $35,567 $39,902 $43,390 Ratios with no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 1.60% 1.66% 1.61% 1.66% 1.77% Net investment income 0.64% 0.50% 0.31% 0.27% 1.27% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 1.57% 1.57% 1.57% 1.57% 1.57% Net investment income 0.68% 0.59% 0.35% 0.36% 1.47%
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. # Ratios with no reduction for fees paid indirectly. 147 Financial highlights PIONEER GROWTH ALLOCATION FUND CLASS C SHARES
YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ----------- ----------- ----------- ----------- ------------- Net asset value, beginning of period $ 10.18 $ 10.50 $ 9.26 $ 8.30 $ 10.99 ------- ------- ------- ------- -------- Increase (decrease) from investment operations: Net investment income (a) $ 0.09 $ 0.06 $ 0.04 $ 0.04 $ 0.11 Net realized and unrealized gain (loss) on investments 1.48 (0.27) 1.26 1.04 (2.03) ------- ------- ------- ------- -------- Net increase (decrease) from investment operations $ 1.57 $ (0.21) $ 1.30 $ 1.08 $ (1.92) Distributions to shareowners: Net investment income $ (0.10) $ (0.11) $ (0.06) $ (0.12) $ - Net realized gain - - - - (0.77) ------- ------- ------- ------- -------- Total distributions to shareowners $ (0.10) $ (0.11) $ (0.06) $ (0.12) $ (0.77) ------- ------- ------- ------- -------- Net increase (decrease) in net asset value $ 1.47 $ (0.32) $ 1.24 $ 0.96 $ (2.69) ------- ------- ------- ------- -------- Net asset value, end of period $ 11.65 $ 10.18 $ 10.50 $ 9.26 $ 8.30 ------- ------- ------- ------- -------- Total return* 15.58% (1.91)% 14.10% 13.08% (16.08)% Ratio of net expenses to average net assets+# 1.40% 1.46% 1.46% 1.51% 1.57% Ratio of net investment income to average net assets+# 0.78% 0.59% 0.40% 0.40% 1.44% Portfolio turnover rate 6% 7% 12% 11% 49% Net assets, end of period (in thousands) $53,032 $45,570 $48,586 $43,087 $36,602 Ratios with no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 1.40% 1.46% 1.46% 1.51% 1.60% Net investment income 0.78% 0.59% 0.40% 0.40% 1.40% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 1.40% 1.46% 1.46% 1.51% 1.57% Net investment income 0.78% 0.59% 0.40% 0.40% 1.44%
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. # Ratios with no reduction for fees paid indirectly. 148 PIONEER GROWTH ALLOCATION FUND CLASS Y SHARES
YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ----------- ----------- ----------- ----------- ------------- Net asset value, beginning of period $10.95 $11.45 $10.07 $ 9.00 $ 11.64 ------ ------- ------ ------ -------- Increase (decrease) from investment operations: Net investment income (a) $ 0.20 $ 0.17 $ 0.17 $ 0.15 $ 0.20 Net realized and unrealized gain (loss) on investments 1.61 (0.44) 1.37 1.14 (1.97) ------ ------- ------ ------ -------- Net increase (decrease) from investment operations $ 1.81 $(0.27) $ 1.54 $ 1.29 $ (1.77) Distributions to shareowners: Net investment income $(0.20) $(0.23) $(0.16) $(0.22) $ (0.10) Net realized gain - - - - (0.77) ------ ------- ------ ------ -------- Total distributions to shareowners $(0.20) $(0.23) $(0.16) $(0.22) $ (0.87) ------ ------- ------ ------ -------- Net increase (decrease) in net asset value $ 1.61 $(0.50) $ 1.38 $ 1.07 $ (2.64) ------ ------- ------ ------ -------- Net asset value, end of period $12.56 $10.95 $11.45 $10.07 $ 9.00 ------ ------- ------ ------ -------- Total return* 16.70% (2.28)% 15.39% 14.33% (13.68)% Ratio of net expenses to average net assets+# 0.44% 0.50% 0.36% 0.39% 0.39% Ratio of net investment income to average net assets+# 1.71% 1.60% 1.58% 1.54% 2.44% Portfolio turnover rate 6% 7% 12% 11% 49% Net assets, end of period (in thousands) $1,314 $2,012 $1,947 $2,508 $ 1,614 Ratios with no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 0.44% 0.50% 0.36% 0.39% 0.39% Net investment income 1.71% 1.60% 1.58% 1.54% 2.44% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 0.44% 0.50% 0.36% 0.39% 0.39% Net investment income 1.71% 1.60% 1.58% 1.54% 2.44%
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions and the complete redemption of the investment at net asset value at the end of each period. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. # Ratios with no reduction for fees paid indirectly. 149 Financial highlights PIONEER AGGRESSIVE ALLOCATION FUND CLASS A SHARES
YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ----------- ----------- ----------- ----------- ------------- Net asset value, beginning of period $ 10.60 $ 11.07 $ 9.56 $ 8.45 $ 11.85 ------- ------- ------- ------- -------- Increase (decrease) from investment operations: Net investment income (a) $ 0.11 $ 0.08 $ 0.06 $ 0.04 $ 0.09 Net realized and unrealized gain (loss) on investments 1.87 (0.42) 1.51 1.16 (2.54) ------- ------- ------- ------- -------- Net increase (decrease) from investment operations $ 1.98 $ (0.34) $ 1.57 $ 1.20 $ (2.45) Distributions to shareowners: Net investment income $ (0.11) $ (0.13) $ (0.06) $ (0.09) $ - Net realized gain - - - - (0.95) ------- ------- ------- ------- -------- Total distributions to shareowners $ (0.11) $ (0.13) $ (0.06) $ (0.09) $ (0.95) ------- ------- ------- ------- -------- Net increase (decrease) in net asset value $ 1.87 $ (0.47) $ 1.51 $ 1.11 $ (3.40) ------- ------- ------- ------- -------- Net asset value, end of period $ 12.47 $ 10.60 $ 11.07 $ 9.56 $ 8.45 ------- ------- ------- ------- -------- Total return* 18.86% (3.06)% 16.42% 14.16% (19.05)% Ratio of net expenses to average net assets+# 0.82% 0.85% 0.85% 0.85% 0.85% Ratio of net investment income to average net assets+# 0.99% 0.76% 0.52% 0.44% 1.07% Portfolio turnover rate 6% 7% 11% 12% 55% Net assets, end of period (in thousands) $90,921 $82,940 $92,878 $85,488 $79,480 Ratios with no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 0.82% 0.87% 0.85% 0.88% 1.01% Net investment income 0.99% 0.74% 0.52% 0.41% 0.91% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 0.82% 0.85% 0.85% 0.85% 0.85% Net investment income 0.99% 0.76% 0.52% 0.44% 1.07%
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. # Ratios with no reduction for fees paid indirectly. 150 PIONEER AGGRESSIVE ALLOCATION FUND CLASS B SHARES
YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ----------- ------------ ------------ ------------ ------------- Net asset value, beginning of period $ 9.95 $ 10.35 $ 8.96 $ 7.93 $ 11.29 ------ ------- ------- ------- -------- Increase (decrease) from investment operations: Net investment income (a) $ 0.03 $ 0.01 $ (0.02) $ (0.03) $ 0.02 Net realized and unrealized gain (loss) on investments 1.74 (0.40) 1.41 1.08 (2.43) ------ ------- ------- ------- -------- Net increase (decrease) from investment operations $ 1.77 $ (0.39) $ 1.39 $ 1.05 $ (2.41) Distributions to shareowners: Net investment income $ - $ (0.01) $ - $ (0.02) $ - Net realized gain - - - - (0.95) ------ ------- ------- ------- -------- Total distributions to shareowners $ - $ (0.01) $ - $ (0.02) $ (0.95) ------ ------- ------- ------- -------- Net increase (decrease) in net asset value $ 1.77 $ (0.40) $ 1.39 $ 1.03 $ (3.36) ------ ------- ------- ------- -------- Net asset value, end of period $11.72 $ 9.95 $ 10.35 $ 8.96 $ 7.93 ------ ------- ------- ------- -------- Total return* 17.79% (3.72)% 15.51% 13.22% (19.69)% Ratio of net expenses to average net assets+# 1.64% 1.64% 1.64% 1.64% 1.64% Ratio of net investment income to average net assets+# 0.25% 0.05% (0.21)% (0.33)% 0.28% Portfolio turnover rate 6% 7% 11% 12% 55% Net assets, end of period (in thousands) $8,495 $12,074 $17,642 $19,256 $20,884 Ratios with no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 1.73% 1.77% 1.71% 1.76% 1.89% Net investment income (loss) 0.16% (0.08)% (0.28)% (0.45)% 0.04% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 1.64% 1.64% 1.64% 1.64% 1.64% Net investment income (loss) 0.25% 0.05% (0.21)% (0.33)% 0.28%
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. # Ratios with no reduction for fees paid indirectly. 151 Financial highlights PIONEER AGGRESSIVE ALLOCATION FUND CLASS C SHARES
YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ----------- ------------- ------------ ------------ ------------- Net asset value, beginning of period $ 10.07 $ 10.50 $ 9.08 $ 8.04 $ 11.43 ------- ------- ------- ------- -------- Increase (decrease) from investment operations: Net investment income (a) $ 0.03 0.00(b) $ (0.01) $ (0.03) $ 0.02 Net realized and unrealized gain (loss) on investments 1.77 (0.38) 1.43 1.10 (2.46) ------- ------- ------- ------- -------- Net increase (decrease) from investment operations $ 1.80 $ (0.38) $ 1.42 $ 1.07 $ (2.44) Distributions to shareowners: Net investment income $ (0.04) $ (0.05) $ - $ (0.03) $ - Net realized gain - - - - (0.95) ------- ------- ------- ------- -------- Total distributions to shareowners $ (0.04) $ (0.05) $ - $ (0.03) $ (0.95) ------- ------- ------- ------- -------- Net increase (decrease) in net asset value $ 1.76 $ (0.43) $ 1.42 $ 1.04 $ (3.39) ------- ------- ------- ------- -------- Net asset value, end of period $ 11.83 $ 10.07 $ 10.50 $ 9.08 $ 8.04 ------- ------- ------- ------- -------- Total return* 17.97% (3.61)% 15.64% 13.25% (19.71)% Ratio of net expenses to average net assets+# 1.51% 1.56% 1.55% 1.58% 1.64% Ratio of net investment income to average net assets+# 0.31% 0.01% (0.14)% (0.31)% 0.27% Portfolio turnover rate 6% 7% 11% 12% 55% Net assets, end of period (in thousands) $19,582 $17,317 $18,899 $18,161 $17,171 Ratios with no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 1.51% 1.56% 1.55% 1.58% 1.70% Net investment income 0.31% 0.01% (0.14)% (0.31)% 0.21% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 1.51% 1.56% 1.55% 1.58% 1.64% Net investment income 0.31% 0.01% (0.14)% (0.31)% 0.27%
(a) Calculated using average shares outstanding for the period. (b) Amount rounds to less than $0.01. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. # Ratios with no reduction for fees paid indirectly. 152 PIONEER AGGRESSIVE ALLOCATION FUND CLASS Y SHARES
YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ----------- ----------- ----------- ----------- ------------- Net asset value, beginning of period $10.65 $11.24 $ 9.67 $ 8.55 $ 12.02 ------ ------- ------ ------ -------- Increase (decrease) from investment operations: Net investment income (a) $ 0.22 $ 0.12 $ 0.11 $ 0.08 $ 0.13 Net realized and unrealized gain (loss) on investments 1.77 (0.55) 1.56 1.16 (2.65) ------ ------- ------ ------ -------- Net increase (decrease) from investment operations $ 1.99 $(0.43) $ 1.67 $ 1.24 $ (2.52) Distributions to shareowners: Net investment income $(0.15) $(0.16) $(0.10) $(0.12) $ - Net realized gain - - - - (0.95) ------ ------- ------ ------ -------- Total distributions to shareowners $(0.15) $(0.16) $(0.10) $(0.12) $ (0.95) ------ ------- ------ ------ -------- Net increase (decrease) in net asset value $ 1.84 $(0.59) $ 1.57 $ 1.12 $ (3.47) ------ ------- ------ ------ -------- Net asset value, end of period $12.49 $10.65 $11.24 $ 9.67 $ 8.55 ------ ------- ------ ------ -------- Total return* 18.87% (3.76)% 17.32% 14.49% (19.35)% Ratio of net expenses to average net assets+# 0.67% 0.55% 0.46% 0.42% 0.43% Ratio of net investment income to average net assets+# 1.89% 1.11% 0.99% 0.88% 1.58% Portfolio turnover rate 6% 7% 11% 12% 55% Net assets, end of period (in thousands) $ 489 $1,189 $1,311 $1,868 $ 1,627 Ratios with no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 0.67% 0.55% 0.46% 0.42% 0.43% Net investment income 1.89% 1.11% 0.99% 0.88% 1.58% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 0.67% 0.55% 0.46% 0.42% 0.43% Net investment income 1.89% 1.11% 0.99% 0.88% 1.58%
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions and the complete redemption of the investment at net asset value at the end of each period. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. # Ratios with no reduction for fees paid indirectly. 153 Appendix A INFORMATION ABOUT THE UNDERLYING FUNDS The following is intended to summarize the investment objectives and primary strategies of, and to provide you with certain other information about, the underlying funds. These summaries do not reflect all of the investment policies and strategies that are disclosed in each underlying fund's prospectus, and are not an offer of the underlying funds' shares. The underlying funds in which the fund intends to invest may change from time to time and the fund may invest in underlying funds in addition to those described below at the discretion of Pioneer without prior notice to or approval of shareholders. The prospectus and statement of additional information for each underlying fund is available on the Securities and Exchange Commission's website. The prospectus and statement of additional information for each Pioneer underlying fund is available as well on our website at www.pioneerinvestments.com. Each underlying fund normally will be invested according to its investment strategy. However, an underlying fund also may have the ability to invest without limitation in money market instruments or other investments for temporary, defensive purposes. The underlying funds that invest primarily in equity securities are: 154 PIONEER FUND INVESTMENT OBJECTIVES Reasonable income and capital growth. PRINCIPAL INVESTMENT STRATEGIES The fund invests in a broad group of carefully selected securities that the fund's adviser believes are reasonably priced, rather than in securities whose prices reflect a premium resulting from their current market popularity. The fund invests predominantly in equity securities. For purposes of the fund's investment policies, equity securities include common stocks and other equity instruments, such as exchange-traded funds (ETFs) that invest primarily in equity securities, equity interests in real estate investment trusts (REITs), depositary receipts, warrants, rights and preferred stocks. The fund primarily invests in securities of U.S. issuers. The fund may invest up to 15% of its total assets in equity and debt securities of non-U.S. issuers. The fund will not invest more than 5% of its total assets in the securities of emerging markets issuers. The fund may invest up to 15% of its net assets in REITs. The fund may invest in initial public offerings of equity securities. The fund may also invest in investment grade and below investment grade debt securities (known as "junk bonds"). The fund may, but is not required to, use derivatives. The fund may use derivatives, such as options and futures, for a variety of purposes, including: as a hedge against adverse changes in the market price of securities, interest rates or currency exchange rates; as a substitute for purchasing or selling securities; and to increase the fund's return as a non-hedging strategy that may be considered speculative. The fund may choose not to make use of derivatives for a variety of reasons, and any use may be limited by applicable law and regulations. The fund may also hold cash or other short-term investments. The fund's investment adviser uses a value approach to select the fund's investments to buy and sell. The adviser seeks securities selling at reasonable prices or substantial discounts to their underlying values and then holds these securities until the market values reflect their intrinsic values. The adviser evaluates a security's potential value, including the attractiveness of its market valuation, based on the company's assets and prospects for earnings growth. In making that assessment, the adviser employs fundamental 155 research and an evaluation of the issuer based on its financial statements and operations. In selecting securities, the adviser considers a security's potential to provide a reasonable amount of income. The adviser focuses on the quality and price of individual issuers. INVESTMENT ADVISER Pioneer^ 156 PIONEER CORE EQUITY FUND (FORMERLY, PIONEER VALUE FUND) INVESTMENT OBJECTIVE Long-term capital growth. PRINCIPAL INVESTMENT STRATEGIES Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, from investment purposes) in equity securities, primarily of U.S. issuers. For purposes of the fund's investment policies, equity securities include common stocks and other equity instruments, such as exchange-traded funds (ETFs) that invest primarily in equity securities, equity interests in real estate investment trusts (REITs), preferred stocks, depositary receipts, rights and warrants. The fund may invest in initial public offerings of equity securities. The fund may invest up to 10% of its total assets in equity and debt securities of non-U.S. issuers, including up to 5% of its total assets in the securities of emerging markets issuers. The fund may invest in debt securities of U.S. and non-U.S. issuers. Generally, the fund acquires investment grade debt securities, but the fund may invest up to 5% of its net assets in below investment grade debt securities (known as "junk bonds"), including below investment grade convertible debt securities. The fund may, but is not required to, use derivatives. The fund may use derivatives, such as options and futures, for a variety of purposes, including as a hedge against adverse changes in the market price of securities, interest rates or currency exchange rates; as a substitute for purchasing or selling securities; and to increase the fund's return as a non-hedging strategy that may be considered speculative. The fund may choose not to make use of derivatives for a variety of reasons, and any use may be limited by applicable law and regulations. The fund may also hold cash and other short-term investments. The fund's investment adviser uses a valuation-conscious approach to select the fund's investments based upon the recommendations of the adviser's research team. The adviser selects securities that are highly ranked by the research team and selling at reasonable prices or substantial discounts to their underlying values. From the universe of highly ranked securities, the research team constructs a portfolio that is reflective of 157 overall sector weightings in the fund's benchmark index. A security will not be included in the portfolio simply because it is highly ranked by the research team. A security may be sold if its ranking by the research team is reduced or the security price reaches a reasonable valuation. The adviser's research team evaluates a security's potential value based on the company's assets and prospects for earning growth. In making that assessment, the adviser employs fundamental research and an evaluation of the issuer based on its financial statements and operations. The research team focuses on the quality and price of individual issuers. The fund's portfolio includes securities from a broad range of market sectors that have received favorable rankings from the research team. INVESTMENT ADVISER Pioneer 158 PIONEER OAK RIDGE LARGE CAP GROWTH FUND INVESTMENT OBJECTIVE Capital appreciation. PRINCIPAL INVESTMENT STRATEGIES Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of large capitalization companies. Large capitalization companies have market capitalizations at the time of acquisition of $3 billion or more. The fund anticipates that the average weighted market capitalization of the companies in the fund's portfolio will be significantly higher than $3 billion. The equity securities in which the fund principally invests are common stocks, preferred stocks and depositary receipts, but the fund may invest in other types of equity securities to a lesser extent, such as exchange-traded funds (ETFs) that invest primarily in equity securities, equity interests in real estate investment trusts (REITs), warrants and rights. The fund may invest up to 20% of its total assets in equity and debt securities of non-U.S. issuers. The fund will not invest more than 10% of its total assets in the securities of emerging markets issuers. The fund may invest in debt securities. The fund may invest up to 5% of its net assets in below investment grade debt securities (known as "junk bonds"), including below investment grade convertible debt securities. The fund may, but is not required to, use derivatives. The fund may use derivatives for a variety of purposes, including as a hedge against adverse changes in the market prices of securities, interest rates or currency exchange rates; as a substitute for purchasing or selling securities; and to increase the fund's return as a non-hedging strategy that may be considered speculative. The fund may choose not to make use of derivatives for a variety of reasons, and any use may be limited by applicable law and regulations. The fund may also hold cash or other short-term instruments. The fund uses a "growth" style of management and seeks to invest in issuers with above average potential for earnings growth. When making purchase decisions for the fund, the subadviser uses a disciplined approach that involves three primary components: 159 o Research - The subadviser analyzes research on potential investments from a wide variety of sources, including internally generated analysis and research provided by institutions and the brokerage community. o Fundamentals - Once a potential investment is identified, the subadviser considers whether the issuer possesses certain attributes that the subadviser believes a "buy" candidate should possess. o Valuation - Finally, the subadviser values companies by considering price-to sales ratios and price-to-earnings ratios within a peer group. From this process, the subadviser constructs a list of securities for the fund to purchase. The subadviser makes sell decisions for the fund based on a number of factors, including deterioration in a company's underlying fundamentals and better relative value in other securities. INVESTMENT ADVISER Pioneer (adviser); Oak Ridge Investments, LLC (subadviser) 160 PIONEER FUNDAMENTAL GROWTH FUND INVESTMENT OBJECTIVE Long-term capital growth. PRINCIPAL INVESTMENT STRATEGIES Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of large companies, that is, companies similar in size to issuers included in the Russell 1000 Growth Index. The Russell 1000 Growth Index (the "index") is a large capitalization index that measures the performance of those companies in the Russell 1000 Index with higher price-to-book ratios and higher forecasted growth values. On June 30, 2013, securities in the index had market capitalizations of approximately $0.52 billion or greater. The size of the companies in the index changes constantly as a result of market conditions and the composition of the index. The fund's investments will not be confined to securities issued by companies included in the index. For purposes of the fund's investment policies, equity securities include common stocks and other equity instruments, such as exchange-traded funds (ETFs) that invest primarily in equity securities, depositary receipts, warrants, rights, equity interests in real estate investment trusts (REITs) and preferred stocks. The fund primarily invests in securities of U.S. issuers. The fund may invest in securities of issuers in any industry or market sector. The fund may invest in initial public offerings of equity securities. The fund may invest up to 20% of its total assets in equity and debt securities of non-U.S. issuers. The fund will not invest more than 10% of its total assets in the securities of emerging markets issuers. The fund may also invest in investment grade and below investment grade debt securities (known as "junk bonds"), including below investment grade convertible debt securities and securities of issuers that are in default. The fund may, but is not required to, use derivatives. The fund may use derivatives for a variety of purposes, including: in an attempt to hedge against adverse changes in the market price of securities, interest rates or currency exchange rates; as a substitute for purchasing or selling securities; and to attempt to increase the fund's return as a non-hedging strategy that may be considered speculative. The fund may choose not to make use of 161 derivatives for a variety of reasons, and any use may be limited by applicable law and regulations. The fund may also hold cash or other short-term investments. The fund's investment adviser uses a "growth" style of management and seeks to invest in securities of issuers with above average potential for earnings and revenue growth. To select growth stocks, the adviser employs quantitative analysis, fundamental research, and an evaluation of the issuer based on its financial statements and operations, utilizing a bottom-up analytic style. The adviser relies on the knowledge, experience and judgment of its staff and the staff of its affiliates who have access to a wide variety of research. The adviser focuses on the quality and price of individual issuers, not on economic sector or market-timing strategies. The adviser generally sells a portfolio security when it believes that the issuer no longer offers the potential for above average earnings and revenue growth. The adviser makes that determination based upon the same criteria it uses to select portfolio securities. INVESTMENT ADVISER Pioneer 162 PIONEER DISCIPLINED GROWTH FUND (FORMERLY, PIONEER INDEPENDENCE FUND) INVESTMENT OBJECTIVE Long-term capital growth. PRINCIPAL INVESTMENT STRATEGIES The fund invests primarily in equity securities of U.S. issuers. For purposes of the fund's investment policies, equity securities include common stocks and other equity instruments, such as exchange-traded funds (ETFs) that invest primarily in equity securities, depositary receipts, warrants, rights, equity interests in real estate investment trusts (REITs) and preferred stocks. The fund may invest in issuers of any market capitalization. The fund may invest in securities in any industry or market sector. The fund may invest in fewer than 40 securities. The fund may invest in initial public offerings of equity securities. In addition, the fund may invest up to 10% of its total assets in securities of non-U.S. issuers. The fund will not invest more than 5% of its total assets in the securities of emerging market issuers. The fund may invest in debt securities. Generally, the fund may acquire investment grade debt securities, but the fund may invest up to 5% of its net assets in below investment grade debt securities (known as "junk bonds"), including below investment grade convertible debt securities. The fund also may hold cash or other short-term investments. The fund may, but is not required to, use derivatives. The fund may use derivatives for a variety of purposes, including: in an attempt to hedge against adverse changes in the market price of securities, interest rates or currency exchange rates; as a substitute for purchasing or selling securities; and to attempt to increase the fund's return as a non-hedging strategy that may be considered speculative. The fund may choose not to make use of derivatives for a variety of reasons, and any use may be limited by applicable law and regulations. The fund's investment adviser uses a valuation-conscious approach to select the fund's investments based upon the recommendations of the adviser's research teams. The research teams use a two-step process in selecting securities that combines fundamental and quantitative research. First, the teams assess whether a company's fundamentals - financial 163 condition, management, and position in its industry - indicate strong prospects for growth and attractive valuations. Second, the teams employ a quantitative, growth-oriented approach to construct the portfolio, emphasizing those securities believed to have attractive prospects for earnings and revenue growth. A security may be sold if its ranking by the research team is reduced or the security price reaches a reasonable valuation. INVESTMENT ADVISER Pioneer 164 PIONEER DISCIPLINED VALUE FUND (FORMERLY, PIONEER FUNDAMENTAL VALUE FUND) INVESTMENT OBJECTIVE Long-term capital growth. PRINCIPAL INVESTMENT STRATEGIES The fund invests primarily in equity securities of U.S. issuers. For purposes of the fund's investment policies, equity securities include common stocks and other equity instruments, such as exchange-traded funds (ETFs) that invest primarily in equity securities, depositary receipts, warrants, rights, equity interests in real estate investment trusts (REITs) and preferred stocks. The fund may invest in issuers of any market capitalization. The fund may invest in securities in any industry or market sector. The fund may invest in fewer than 40 securities. The fund may invest in initial public offerings of equity securities. In addition, the fund may invest up to 10% of its total assets in securities of non-U.S. issuers. The fund will not invest more than 5% of its total assets in the securities of emerging market issuers. The fund may invest in debt securities. Generally, the fund may acquire investment grade debt securities, but the fund may invest up to 5% of its net assets in below investment grade debt securities (known as "junk bonds"), including below investment grade convertible debt securities. The fund also may hold cash or other short-term investments. The fund may, but is not required to, use derivatives. The fund may use derivatives for a variety of purposes, including: in an attempt to hedge against adverse changes in the market price of securities, interest rates or currency exchange rates; as a substitute for purchasing or selling securities; and to attempt to increase the fund's return as a non-hedging strategy that may be considered speculative. The fund may choose not to make use of derivatives for a variety of reasons, and any use may be limited by applicable law and regulations. The fund's investment adviser uses a valuation-conscious approach to select the fund's investments based upon the recommendations of the adviser's research teams. The research teams use a two-step process in selecting securities that combines fundamental and quantitative research. First, the teams assess whether a company's fundamentals - financial 165 condition, management, and position in its industry - indicate strong prospects for growth and attractive valuations. Second, the teams employ a quantitative, growth-oriented approach to construct the portfolio, emphasizing those securities believed to have attractive prospects for earnings and revenue growth. A security may be sold if its ranking by the research team is reduced or the security price reaches a reasonable valuation. INVESTMENT ADVISER Pioneer^^ 166 PIONEER SELECT MID CAP GROWTH FUND (FORMERLY, PIONEER GROWTH OPPORTUNITIES FUND) INVESTMENT OBJECTIVES Long-term capital growth. PRINCIPAL INVESTMENT STRATEGIES Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of mid-size companies. Mid-size companies are those with market values, at the time of investment, that do not exceed the greater of the market capitalization of the largest company within the Russell Midcap Growth Index ($24.98 billion as of December 31, 2012) or the 3-year rolling average of the market capitalization of the largest company within the Russell Midcap Growth Index ($19.85 billion as of December 31, 2012) as measured at the end of the preceding month, and are not less than the smallest company within the index. The Russell Midcap Growth Index measures the performance of U.S. mid-cap growth stocks. The size of the companies in the index changes constantly as a result of market conditions and the composition of the index. The fund's investments will not be confined to securities issued by companies included in the index. For purposes of the fund's investment policies, equity securities include common stocks and other equity instruments, such as exchange-traded funds (ETFs) that invest primarily in equity securities, depositary receipts, warrants, rights, equity interests in real estate investment trusts (REITs) and preferred stocks. To the extent consistent with its investment objective, the fund may invest in initial public offerings of equity securities. The fund may invest up to 20% of its total assets in debt securities. The fund may invest up to 5% of its net assets in below investment grade debt securities (known as "junk bonds"), including below investment grade convertible debt securities, issued by both U.S. and non-U.S. issuers, and securities in default. The fund may invest up to 20% of its net assets in REITs. The fund may invest up to 20% of its total assets in equity and debt securities of non-U.S. issuers. The fund will not invest more than 5% of its total assets in the securities of emerging markets issuers. 167 The fund may, but is not required to, use derivatives. The fund may use derivatives for a variety of purposes, including as a hedge against adverse changes in the market prices of securities, interest rates or currency exchange rates; as a substitute for purchasing or selling securities; and to increase the fund's return as a non-hedging strategy that may be considered speculative. The fund may choose not to make use of derivatives for a variety of reasons, and any use may be limited by applicable law and regulations. The fund also may hold cash or other short-term instruments. The fund uses a "growth" style of management and seeks to invest in companies with above average potential for earnings and revenue growth that are also trading at attractive market valuations. To select growth stocks the fund's investment adviser employs quantitative analysis, fundamental research and an evaluation of the issuer based on its financial statements and operations. The adviser relies on the knowledge, experience and judgment of its staff and the staff of its affiliates who have access to a wide variety of research. The adviser focuses on the quality and price of individual issuers and economic sector analysis, not on market-timing strategies. The adviser generally sells a portfolio security when it believes that the issuer no longer offers the potential for above average earnings and revenue growth. The adviser makes that determination based upon the same criteria it uses to select portfolio securities. INVESTMENT ADVISER Pioneer 168 PIONEER MID CAP VALUE FUND INVESTMENT OBJECTIVE Capital appreciation by investing in a diversified portfolio of securities consisting primarily of common stocks. PRINCIPAL INVESTMENT STRATEGIES Normally, the fund invests at least 80% of its total assets in equity securities of mid-size companies. Mid-size companies are those with market values, at the time of investment, that do not exceed the greater of the market capitalization of the largest company within the Russell Midcap Value Index ($24.98 billion as of December 31, 2012) or the 3-year rolling average of the market capitalization of the largest company within the Russell Midcap Value Index ($22.60 billion as of December 31, 2012), as measured at the end of the preceding month, and are not less than the smallest company within the index. The Russell Midcap Value Index measures the performance of U.S. mid-cap value stocks. The size of the companies in the index changes constantly with market conditions and the composition of the index. The equity securities in which the fund principally invests are common stocks, preferred stocks and depositary receipts, but the fund may invest in other types of equity securities to a lesser extent, such as exchange-traded funds (ETFs), that invest primarily in equity securities, equity interests in real estate investment trusts (REITs), warrants and rights. The fund may invest in initial public offerings of equity securities. The fund may invest up to 25% of its total assets in equity and debt securities of non-U.S. issuers. The fund will not invest more than 5% of its total assets in the securities of emerging markets issuers. The fund may invest up to 20% of its net assets in REITs. The fund may invest up to 20% of its total assets in debt securities of U.S. and non-U.S. issuers. The fund may invest up to 5% of its net assets in below investment grade debt securities (known as "junk bonds"), including below investment grade convertible debt securities. The fund may, but is not required to, use derivatives. The fund may use derivatives for a variety of purposes, including as a hedge against adverse changes in the market price of securities, interest rates or currency exchange rates; as a substitute for purchasing or selling securities; and to increase the fund's return as a non-hedging strategy that may be considered speculative. 169 The fund may choose not to make use of derivatives for a variety of reasons, and any use may be limited by applicable law and regulations. The fund may also hold cash or other short-term investments. The fund uses a "value" style of management. The adviser seeks to identify securities that are selling at reasonable prices or at substantial discounts to their underlying values and then holds these securities until the market values reflect their intrinsic values. The adviser evaluates a security's potential value, including the attractiveness of its market valuation, based on the company's assets and prospects for earnings growth. In making that assessment, the adviser employs fundamental research and an evaluation of the issuer based on its financial statements and operations, employing a bottom-up analytic style, which focuses on specific securities rather than on industries. The adviser focuses on the quality and price of individual issuers and securities. The adviser generally sells a portfolio security when it believes that the security's market value reflects its underlying value. INVESTMENT ADVISER Pioneer 170 PIONEER OAK RIDGE SMALL CAP GROWTH FUND INVESTMENT OBJECTIVES Capital appreciation. PRINCIPAL INVESTMENT STRATEGIES Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of small capitalization companies. Small capitalization companies are those with market values, at the time of investment, that do not exceed the greater of the market capitalization of the largest company within the Russell 2000 Index ($4.66 billion as of December 31, 2012) or the 3-year rolling average of the market capitalization of the largest company within the Russell 2000 Index ($4.23 billion as of December 31, 2012) as measured at the end of the preceding month. The Russell 2000 Index is comprised of the 2,000 smallest U.S. domiciled, publicly traded stocks that are included in the Russell 3000 Index. The size of the companies in the Index changes constantly as a result of market conditions and the composition of the Index. The fund's investments will not be confined to securities issued by companies included in the Index. For purposes of the fund's investment policies, equity securities include common stocks and other equity instruments, such as exchange-traded funds (ETFs) that invest primarily in equity securities, depositary receipts, warrants, rights, equity investments in real estate investment trusts (REITs) and preferred stocks. The fund may invest up to 20% of its total assets in equity and debt securities of non-U.S. issuers. The fund will not invest more than 10% of its total assets in the securities of emerging markets issuers. The fund may invest in debt securities. The fund may invest up to 5% of its net assets in below investment grade debt securities (known as "junk bonds"), including below investment grade convertible debt securities. The fund may, but is not required to, use derivatives. The fund may use derivatives for a variety of purposes, including as a hedge against adverse changes in the market prices of securities, interest rates or currency exchange rates; as a substitute for purchasing or selling securities; and to increase the fund's return as a non-hedging strategy that may be considered speculative. The fund may choose not to make use of derivatives for a variety of reasons, and any use may be limited by applicable law and regulations. The fund may also hold cash or other short-term instruments. 171 The fund uses a "growth" style of management and seeks to invest in issuers with above average potential for earnings growth. When making purchase decisions for the fund, the subadviser uses a disciplined approach that involves three primary components: o Research - The subadviser analyzes research on potential investments from a wide variety of sources, including internally generated analysis and research provided by institutions and the brokerage community. o Fundamentals - Once a potential investment is identified, the subadviser considers whether the issuer possesses certain attributes that the subadviser believes a "buy" candidate should possess. o Valuation - Finally, the subadviser values companies by considering price-to sales ratios and price-to-earnings ratios within a peer group. From this process, the subadviser constructs a list of securities for the fund to purchase. The subadviser makes sell decisions for the fund based on a number of factors, including deterioration in a company's underlying fundamentals and better relative value in other securities. INVESTMENT ADVISER Pioneer (adviser); Oak Ridge Investments, LLC (subadviser) 172 PIONEER GLOBAL EQUITY FUND INVESTMENT OBJECTIVES Long-term capital growth. PRINCIPAL INVESTMENT STRATEGIES Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of issuers located throughout the world. The fund's principal focus is on companies that exhibit solid fundamental characteristics and are underappreciated by the market. The fund may invest in securities of any market capitalization, and in securities in any industry or market sector. The fund may invest in both developed and emerging markets without limit. Normally, the fund invests at least 40% of its net assets in issuers located outside of the United States. The fund may invest up to 20% of its total assets in debt securities of corporate and government issuers, including up to 5% of its net assets in below investment grade debt securities (known as "junk bonds"), and cash and cash equivalents. The fund may, but is not required to, use derivatives, including forward foreign currency exchange contracts and futures on equity based volatility indices. The fund may use derivatives for a variety of purposes, including: in an attempt to hedge against adverse changes in the market price of securities, interest rates or currency exchange rates; as a substitute for purchasing or selling securities; and to attempt to increase the fund's return as a non-hedging strategy that may be considered speculative. The fund may choose not to make use of derivatives for a variety of reasons, and any use may be limited by applicable law and regulations. The fund uses a "growth at a reasonable price" style of management. The fund seeks to invest in issuers with above average potential for earnings and revenue growth that are also trading at attractive market valuations. To select stocks, the fund's investment adviser employs fundamental research and an evaluation of the issuer based on its financial statements and operations. The adviser relies on the knowledge, experience and judgment of its staff and the staff of its affiliates who have access to a wide variety of research. The adviser focuses on the quality and price of individual issuers and securities, not on economic sector or market-timing strategies. The adviser generally sells a portfolio security when it believes that the issuer 173 no longer offers the potential for above average earnings and revenue growth. The adviser makes that determination based upon the same criteria it uses to select portfolio securities. INVESTMENT ADVISER Pioneer 174 PIONEER INTERNATIONAL VALUE FUND INVESTMENT OBJECTIVES Long-term capital growth. PRINCIPAL INVESTMENT STRATEGIES Normally, the fund invests at least 80% of its total assets in equity securities of non-U.S. issuers. These issuers may be located in both developed and emerging markets. Under normal circumstances, the fund's assets will be invested in securities of companies domiciled in at least three different foreign countries. Generally, the fund's investments in any country are limited to 25% or less of its total assets. However, from time to time, the fund may invest more than 25% of its assets in issuers organized in Japan or the United Kingdom or in securities quoted or denominated in the Japanese yen, the British pound and the euro. The fund may invest without limitation in securities of issuers located in countries with emerging economies or securities markets, but will not invest more than 25% of its total assets in securities of issuers located in any one such country. Emerging economies or securities markets generally will include, but not be limited to, countries included in the Morgan Stanley Capital International (MSCI) Emerging & Frontier Markets Index. For purposes of the fund's investment policies, equity securities include common stocks and other equity instruments, such as exchange-traded funds (ETFs) that invest primarily in equity securities, depositary receipts, equity interests in real estate investment trusts (REITs), warrants, rights and preferred shares. The fund may also purchase and sell forward foreign currency exchange contracts in non-U.S. currencies in connection with its investments, including as a means of managing relative currency exposure. The fund may invest up to 20% of its total assets in debt securities of U.S. and non-U.S. issuers. The fund may invest up to 5% of its net assets in below investment grade debt securities (known as "junk bonds"), including below investment grade convertible debt securities. The fund may, but is not required to, use derivatives. The fund may use derivatives, including forward foreign currency exchange contracts, for a variety of purposes, including as a hedge against adverse changes in the market prices of securities, interest rates or currency exchange rates; as a substitute for purchasing or selling securities; and to increase the fund's 175 return as a non-hedging strategy that may be considered speculative. The fund may choose not to make use of derivatives for a variety of reasons, and any use may be limited by applicable law and regulations. The fund also may hold cash or other short-term instruments. The fund's investment adviser uses a value approach to select the fund's investments. The adviser seeks to identify securities that are selling at reasonable prices or substantial discounts to their underlying values. The adviser evaluates a security's potential value, including the attractiveness of its market valuation, based on the company's assets and prospects for earnings and revenue growth, employing a bottom-up analytical style. In making that assessment, the adviser employs fundamental research and an evaluation of the issuer based on its financial statements and operations. The adviser focuses on the quality and price of individual issuers and securities. The adviser generally sells a portfolio security when it believes that the security's market value reflects its intrinsic value. The adviser makes that determination based upon the same criteria it uses to select portfolio securities. INVESTMENT ADVISER Pioneer 176 PIONEER EMERGING MARKETS FUND INVESTMENT OBJECTIVE Long-term growth of capital. PRINCIPAL INVESTMENT STRATEGIES The fund invests primarily in securities of emerging market issuers. Although the fund invests in both equity and debt securities, it normally emphasizes equity securities in its portfolio. Normally, the fund invests at least 80% of its total assets in the securities of emerging market corporate and government issuers. The fund considers emerging market issuers to include: issuers organized under the laws of an emerging market country, issuers with a principal office in an emerging market country, issuers that derive at least 50% of their gross revenues or profits from goods or services produced in emerging markets or sales made in emerging markets, and emerging market governmental issuers. The fund invests in at least six emerging markets. The fund considers any market that is not developed to be an emerging market. Emerging markets generally will include, but not be limited to, countries included in the Morgan Stanley Capital International (MSCI) Emerging & Frontier Markets Index. The fund's investments will not be confined to securities issued by companies included in the index. At the investment adviser's discretion, the fund may invest in other emerging markets. The fund does not allocate more than 25% of its total assets to any one country but can invest more than 25% of its total assets in a particular region. The fund may invest up to 20% of its total assets in securities of issuers in any developed country (other than the U.S.). For purposes of the fund's investment policies, equity securities include common stocks and securities with common stock characteristics, such as exchange-traded funds (ETFs) that invest primarily in equity securities, equity interests in real estate investment trusts (REITs), preferred stocks, depositary receipts, warrants and rights. The fund may invest in initial public offerings of equity securities. The fund may also purchase and sell forward foreign currency exchange contracts in non-U.S. currencies in connection with its investments, including as a means of managing relative currency exposure. 177 The fund may invest in debt securities of any quality or maturity. The fund may not invest more than 10% of its net assets in debt securities rated below investment grade (known as "junk bonds") or in unrated securities of comparable quality. The fund may invest in Brady bonds, which are restructured debt of governmental issuers of emerging market countries. The fund may, but is not required to, use derivatives. The fund may use derivatives, including forward foreign currency exchange contracts and stock index futures, for a variety of purposes, including as a hedge against adverse changes in the market prices of securities, interest rates or currency exchange rates; as a substitute for purchasing or selling securities; and to increase the fund's return as a non-hedging strategy that may be considered speculative. The fund may choose not to make use of derivatives for a variety of reasons, and any use may be limited by applicable law and regulations. The fund also may hold cash or other short-term instruments. The fund's investment adviser uses a value approach to select the fund's investments. The adviser seeks to identify securities that are selling at reasonable prices or substantial discounts to their underlying values. The adviser evaluates a security's potential value, including the attractiveness of its market valuation, based on the company's assets and prospects for long-term revenue, earnings and cash flow growth. In making that assessment, the adviser employs qualitative analysis, quantitative techniques, fundamental research and an evaluation of the issuer based on its financial statements and operations. In addition to analyzing specific securities, the adviser determines the relative attractiveness of investing in different emerging markets. In assessing the investment potential of each country, the adviser considers economic growth prospects, monetary conditions, political risks, currency risk, capital flows and other factors. The adviser generally sells a portfolio security when it believes that the security's market value reflects its intrinsic value. The adviser makes that determination based upon the same criteria it uses to select portfolio securities. INVESTMENT ADVISER Pioneer 178 PIONEER REAL ESTATE SHARES INVESTMENT OBJECTIVES Long-term growth of capital. Current income is a secondary objective. PRINCIPAL INVESTMENT STRATEGIES Normally, the fund invests at least 80% of its total assets in equity securities of real estate investment trusts (REITs) and other real estate industry issuers. The fund may at times emphasize particular sub-sectors of the real estate industry. For purposes of the fund's investment policies, equity securities include common stocks and other equity instruments, such as exchange-traded funds (ETFs) that invest primarily in equity securities, warrants, rights, and preferred stocks. The fund may invest up to 20% of its total assets in debt securities of real estate industry issuers, mortgage-backed securities and short-term investments. The fund may invest up to 5% of its net assets in below investment grade debt securities (known as "junk bonds"), including below investment grade convertible debt securities. The fund may invest up to 10% of its total assets in securities of non-U.S. issuers. Up to 5% of the fund's total assets may be invested in the securities of emerging markets issuers. The fund may, but is not required to, use derivatives. The fund may use derivatives, such as options and futures, for a variety of purposes, including as a hedge against adverse changes in the market price of securities, interest rates or currency exchange rates; as a substitute for purchasing or selling securities; and to increase the fund's return as a non-hedging strategy that may be considered speculative. The fund may choose not to make use of derivatives for a variety of reasons, and any use may be limited by applicable law and regulations. The fund also may hold cash or other short-term investments. The fund may invest in fewer than 40 securities. The fund may invest in initial public offerings of equity securities. The fund uses a "growth at a reasonable price" style of management. The subadviser seeks to invest in companies with above average potential for earnings and revenue growth that are also trading at attractive market valuations. To select stocks, the subadviser employs fundamental and qualitative research and an evaluation of the issuer based on its financial 179 statements and operations. The subadviser focuses on the quality and price of individual issuers and securities. The subadviser generally sells a portfolio security when it believes that the issuer no longer offers the potential for above average earnings and revenue growth. INVESTMENT ADVISER Pioneer (adviser); AEW Capital Management, L.P. (subadviser)^ 180 PIONEER EQUITY INCOME FUND INVESTMENT OBJECTIVE Current income and long-term growth of capital from a portfolio consisting primarily of income producing equity securities of U.S. corporations. PRINCIPAL INVESTMENT STRATEGIES Normally, the fund invests at least 80% of its total assets in income producing equity securities of U.S. issuers. The income producing equity securities in which the fund may invest include common stocks, preferred stocks, exchange-traded funds (ETFs) that invest primarily in equity securities and equity interests in real estate investment trusts (REITs). The remainder of the fund may be invested in debt securities, most of which are expected to be convertible into common stocks. The fund may invest in initial public offerings of equity securities. The fund may invest up to 20% of its total assets in equity and debt securities of non-U.S. issuers. The fund will not invest more than 5% of its total assets in the securities of emerging markets issuers. The fund may invest up to 20% of its net assets in REITs. The fund also may invest in investment grade and below investment grade debt securities (known as "junk bonds"). Most of the debt securities the fund acquires are expected to be securities convertible into common stocks. The fund may, but is not required to, use derivatives. The fund may use derivatives for a variety of purposes, including as a hedge against adverse changes in the market price of securities, interest rates or currency exchange rates; as a substitute for purchasing or selling securities; and to increase the fund's return as a non-hedging strategy that may be considered speculative. The fund may choose not to make use of derivatives for a variety of reasons, and any use may be limited by applicable law and regulations. The fund may also hold cash or other short-term investments. The fund's investment adviser uses a value approach to select the fund's investments to buy and sell. The adviser seeks securities that are selling at substantial discounts to their underlying values and then holds these securities until the market values reflect their intrinsic values. The adviser evaluates a security's potential value, including the attractiveness of its market valuation, based on the company's assets and prospects for earnings growth. The adviser also considers a security's potential to provide a reasonable amount 181 of income. In making these assessments, the adviser employs fundamental research and an evaluation of the issuer based on its financial statements and operations, employing a bottom-up analytic style, which focuses on specific securities rather than on industries. The adviser generally sells a portfolio security when it believes that the security's market value reflects its underlying value. INVESTMENT ADVISER Pioneer 182 The underlying funds that invest primarily in debt securities are: PIONEER GOVERNMENT INCOME FUND INVESTMENT OBJECTIVE Current income. PRINCIPAL INVESTMENT STRATEGIES Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in U.S. government securities, and repurchase agreements and "when-issued" commitments with respect to these securities. For purposes of satisfying the 80% requirement, the fund also may invest in derivative instruments that provide exposure to U.S. government securities or have similar economic characteristics. U.S. government securities include U.S. Treasury obligations, such as bills, bonds and notes; obligations issued or guaranteed as to principal and interest by the U.S. Treasury and certain U.S. government agencies or instrumentalities, such as Government National Mortgage Association (Ginnie Mae); obligations of issuers that are supported by the ability of the issuer to borrow from the U.S. Treasury; and obligations of U.S. government-sponsored entities that are neither issued nor guaranteed by the U.S. government, such as the Federal Home Loan Mortgage Corporation (Freddie Mac) and Federal National Mortgage Association (Fannie Mae). The fund may invest in mortgage-backed securities issued by agencies or instrumentalities of the U.S. government. The fund also may invest in asset-backed securities and subordinated debt securities, and enter into mortgage dollar roll transactions. The fund may invest in securities with a broad range of maturities, and maintains an average portfolio maturity which varies based upon the judgment of the fund's investment adviser. The fund's investments may have fixed or variable principal payments and all types of interest rate payment and reset terms, including fixed rate, floating rate, inverse floating rate, zero coupon, contingent, deferred and payment in kind and auction rate features. The fund may, but is not required to, use derivatives, such as futures. The fund may use derivatives for a variety of purposes, including: in an attempt to hedge against adverse changes in the market price of securities, interest rates or currency exchange rates; as a substitute for purchasing or selling securities; and to attempt to increase the fund's return as a non-hedging 183 strategy that may be considered speculative. The fund may choose not to make use of derivatives for a variety of reasons, and any use may be limited by applicable law and regulations. The adviser considers both broad economic and issuer specific factors in selecting investments. In assessing the appropriate maturity and sector weighting of the fund's portfolio, the adviser considers a variety of factors that are expected to influence economic activity and interest rates. The adviser selects individual securities to buy and sell based upon such factors as a security's yield and sector diversification. INVESTMENT ADVISER Pioneer 184 PIONEER HIGH YIELD FUND INVESTMENT OBJECTIVE Maximize total return through a combination of income and capital appreciation. PRINCIPAL INVESTMENT STRATEGIES Normally, the fund invests at least 80% of its total assets in below investment grade (high yield) debt securities and preferred stocks. For purposes of satisfying the 80% requirement, the fund also may invest in derivative instruments that have economic characteristics similar to such high yield debt securities and preferred stocks. Debt securities rated below investment grade are commonly referred to as "junk bonds" and are considered speculative. The fund may invest in high yield securities of any rating, including securities where the issuer is in default or bankruptcy at the time of purchase. The fund invests in securities with a broad range of maturities. The fund's investments may have fixed or variable principal payments and all types of interest rate and dividend payment and reset terms, including fixed rate, adjustable rate, floating rate, zero coupon, contingent, deferred, payment in kind and auction rate features. The fund's investments may include instruments that allow for balloon payments or negative amortization payments. The fund may invest in investment grade and below investment grade convertible bonds and preferred stocks that are convertible into the equity securities of the issuer. The fund may invest up to 20% of its net assets in inverse floating rate obligations (a type of derivative instrument). The fund may invest up to 20% of its net assets in common stock issued by both U.S. and non-U.S. issuers and other equity investments, such as exchange-traded funds (ETFs) that invest primarily in equity securities, depositary receipts, warrants, rights and equity interests in real estate investment trusts (REITs). The fund may invest up to 15% of its total assets in equity and debt securities of non-U.S. issuers. The fund may invest a portion of its assets in mortgage-related securities, including "sub-prime" mortgages, and asset-backed securities. The fund also may invest a portion of its assets in subordinated debt securities and event-linked bonds. 185 The fund may, but is not required to, use derivatives. The fund may use derivatives, such as credit default swaps and bond and interest rate futures, for a variety of purposes, including: as a hedge against adverse changes in the market price of securities, interest rates or currency exchange rates; as a substitute for purchasing or selling securities; and to increase the fund's return as a non-hedging strategy that may be considered speculative. The fund may choose not to make use of derivatives for a variety of reasons, and any use may be limited by applicable law and regulations. The fund may hold cash or other short-term investments. The fund's investment adviser uses a value approach to select investments to buy and sell. The adviser seeks to identify securities that are selling at reasonable prices or substantial discounts to their underlying values and then holds these securities for their incremental yields or until the market values reflect their intrinsic values. The adviser evaluates a security's potential value, including the attractiveness of its market valuation, based on the company's assets and prospects for earnings growth. In making that assessment, the adviser employs fundamental research and an evaluation of the issuer based on its financial statements and operations. The adviser also considers a security's potential to provide income. INVESTMENT ADVISER Pioneer 186 PIONEER GLOBAL MULTISECTOR INCOME FUND (FORMERLY, PIONEER GLOBAL AGGREGATE BOND FUND) INVESTMENT OBJECTIVE A high level of current income. PRINCIPAL INVESTMENT STRATEGIES Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in debt securities of issuers located throughout the world, including corporate and government issuers. For purposes of satisfying the 80% requirement, the fund also may invest in derivative instruments that have economic characteristics similar to such debt securities. The fund will allocate its assets among various regions and countries, including the United States (but in no less than three different countries). Normally, the fund invests at least 40% of its net assets in issuers located outside of the United States, including emerging market issuers. The fund has the flexibility to invest in a broad range of issuers and segments of the debt securities markets, including: Below investment grade (high yield or "junk bond") securities of U.S. and o non-U.S. issuers Investment grade securities of U.S. and non-U.S. issuers o The adviser's allocations among the segments of the debt markets depend upon its outlook for economic, interest rate and political trends. At any given time, the fund may have a substantial amount of its assets in any one of such segments. The fund may invest up to 70% of its net assets in debt securities rated below investment grade or, if unrated, of equivalent credit quality as determined by the adviser. Up to 20% of the fund's net assets may be invested in debt securities rated below CCC by Standard & Poor's Financial Services LLC or the equivalent by another nationally recognized statistical rating organization or determined to be of equivalent credit quality by the adviser. The fund's investment in debt securities rated below investment grade may include debt securities rated "D" or better, or comparable unrated securities. Debt securities rated "D" are in default. The fund may invest a portion of its assets in mortgage-related securities, including "sub-prime" mortgages, and asset-backed securities. Mortgage-backed securities represent interests in pools of mortgage loans assembled for sale to investors by various U.S. governmental agencies, 187 government-related organizations and private issuers. The fund also may invest a portion of its assets in subordinated debt securities and event-linked bonds. The fund may invest in securities with a broad range of maturities and maintains an average portfolio maturity which varies based upon the judgment of the adviser. The fund's investments may have fixed or variable principal payments and all types of interest rate payment and reset terms, including fixed rate, floating rate, inverse floating rate, zero coupon, contingent, deferred and payment in kind and auction rate features. The fund's investments may include instruments that allow for balloon payments or negative amortization payments. In addition to investing in securities denominated in non-U.S. currencies, the fund may hold non-U.S. currencies and may take long or short positions with respect to a particular currency through a derivative position, such as a forward currency exchange contract in a non-U.S. security. The fund may purchase and sell forward currency exchange contracts in non-U.S. currencies. The fund's currency and currency-related investments may be used to adjust overall currency exposures, including as a means of seeking incremental return, which may be considered a speculative technique. The adviser considers both broad economic and issuer specific factors in selecting a portfolio designed to achieve the fund's investment objective. In assessing the appropriate maturity, rating, sector and country weighting of the fund's portfolio, the adviser considers a variety of factors that are expected to influence economic activity and interest rates. These factors include fundamental economic indicators, such as the rates of economic growth and inflation, global monetary policy and the relative value of global currencies. Once the adviser determines the preferable portfolio characteristics, the adviser selects individual securities based upon the terms of the securities (such as yields compared to U.S. Treasuries or comparable issues), liquidity and rating, country, sector and issuer diversification. The adviser also employs fundamental research and due diligence to assess an issuer's credit quality, taking into account financial condition and profitability, future capital needs, potential for change in rating, industry outlook, the competitive environment and management capabilities. The adviser actively manages the fund's currency exposures based on its analysis of the relative value of currencies, considering such factors as the global macroeconomic environment, 188 global monetary policy and geopolitical factors. In making these portfolio decisions, the adviser relies on the knowledge, experience and judgment of its staff and the staff of its affiliates who have access to a wide variety of research. The fund may, but is not required to, use derivatives. The fund may enter into credit default swaps, which can be used to acquire or to transfer the credit risk of a security without buying or selling the security. The fund also may use other derivatives, such as futures and options on securities, indices and currencies, forward foreign currency exchange contracts, swaps, and bond and interest rate futures. The fund may use derivatives for a variety of purposes, including: in an attempt to hedge against adverse changes in the market prices of securities, interest rates or currency exchange rates; as a substitute for purchasing or selling securities; and to attempt to increase the fund's return as a non-hedging strategy that may be considered speculative. The fund may choose not to make use of derivatives for a variety of reasons, and any use may be limited by applicable law and regulations. The fund also may hold cash or other short-term investments. INVESTMENT ADVISER Pioneer 189 PIONEER GLOBAL HIGH YIELD FUND INVESTMENT OBJECTIVE Maximize total return through a combination of income and capital appreciation. PRINCIPAL INVESTMENT STRATEGIES Normally, the fund invests at least 80% of its total assets in below investment grade (high yield) debt securities and preferred stocks of U.S. and non-U.S. issuers, including governmental and corporate issuers in emerging markets. For purposes of satisfying the 80% requirement, the fund also may invest in derivative instruments that have economic characteristics similar to such high yield debt securities and preferred stocks. Debt securities rated below investment grade are commonly referred to as "junk bonds" and are considered speculative. The fund may invest in high yield securities of any rating, including securities that are in default at the time of purchase. The fund's portfolio consists of securities of corporate or government issuers located in at least three countries, one of which may be the United States. The fund may purchase and sell forward foreign currency exchange contracts in non-U.S. currencies in connection with its investments. The fund may invest in securities with a broad range of maturities. The fund's investments may have fixed or variable principal payments and all types of interest rate and dividend payment and reset terms, including fixed rate, adjustable rate, floating rate, zero coupon, contingent, deferred, payment in kind and auction rate features. The fund's investments may include instruments that allow for balloon payments or negative amortization payments. The fund may invest in investment grade and below investment grade convertible bonds and preferred stocks that are convertible into the equity securities of the issuer. The fund may invest up to 20% of its net assets in inverse floating rate obligations (a type of derivative instrument). The fund may invest up to 10% of its total assets in equity securities, including common stocks, exchange-traded funds (ETFs) that invest primarily in equity securities, depositary receipts, warrants, rights and equity interests in real estate investment trusts (REITs). 190 The fund may invest a portion of its assets in mortgage-related securities, including "sub-prime" mortgages, and asset-backed securities. The fund also may invest a portion of its assets in subordinated debt securities and event-linked bonds. The fund may, but is not required to, use derivatives. The fund may use derivatives, such as credit default swaps, forward foreign currency exchange contracts and bond and interest rate futures, for a variety of purposes, including: as a hedge against adverse changes in the market price of securities, interest rates or currency exchange rates; as a substitute for purchasing or selling securities; and to increase the fund's return as a non-hedging strategy that may be considered speculative. The fund may choose not to make use of derivatives for a variety of reasons, and any use may be limited by applicable law and regulations. The fund also may hold cash or other short-term investments. The fund's investment adviser uses a value approach to select investments to buy and sell. The adviser seeks to identify securities that are selling at reasonable prices or substantial discounts to their underlying values and then holds these securities for their incremental yields or until the market values reflect their intrinsic values. The adviser evaluates a security's potential value, including the attractiveness of its market valuation, based on the company's assets and prospects for earnings growth or the government's fiscal policies and outlook for economic growth, inflation, unemployment and other macroeconomic indicators. In making that assessment, the adviser employs fundamental research and an evaluation of the issuer based on its financial statements and operations, in the case of a corporate issuer, and the factors referred to above in the case of a governmental issuer. The adviser also considers a security's potential to provide income. INVESTMENT ADVISER Pioneer 191 PIONEER BOND FUND INVESTMENT OBJECTIVE To provide current income from an investment grade portfolio with due regard to preservation of capital and prudent investment risk. The fund also seeks a relatively stable level of dividends; however, the level of dividends will be maintained only if consistent with preserving the investment grade quality of the portfolio. PRINCIPAL INVESTMENT STRATEGIES Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in debt securities issued or guaranteed by the U.S. government, its agencies and instrumentalities, investment grade debt securities (including convertible debt) of corporate or other issuers and cash, cash equivalents and other short-term holdings. For purposes of satisfying the 80% requirement, the fund also may invest in derivative instruments that provide exposure to such securities or have similar economic characteristics. The fund may invest a substantial portion of its assets in mortgage-related securities, including "sub-prime" mortgages, and asset-backed securities. The fund also may invest a portion of its assets in subordinated debt securities, below investment grade debt securities (known as "junk bonds"), securities that are in default, securities of non-U.S. issuers, and event-linked bonds. The fund may invest up to 20% of its net assets in debt securities rated below investment grade or, if unrated, of equivalent credit quality as determined by the adviser. The fund may invest up to 15% of its total assets in securities of non-U.S. issuers, including up to 5% of its total assets in securities of emerging market issuers. The fund may invest in securities with a broad range of maturities, and maintains an average portfolio maturity which varies based upon the judgment of the fund's investment adviser. The fund's investments may have fixed or variable principal payments and all types of interest rate payment and reset terms, including fixed rate, floating rate, inverse floating rate, zero coupon, contingent, deferred and payment in kind and auction rate features. The fund's investments may include instruments that allow for balloon payments or negative amortization payments. 192 The fund may, but is not required to, use derivatives, such as credit default swaps,. The fund may use derivatives for a variety of purposes, including: in an attempt to hedge against adverse changes in the market price of securities, interest rates or currency exchange rates; as a substitute for purchasing or selling securities; and to attempt to increase the fund's return as a non-hedging strategy that may be considered speculative. The fund may choose not to make use of derivatives for a variety of reasons, and any use may be limited by applicable law and regulations. The fund may also hold cash or other short-term investments. The adviser considers both broad economic and issuer specific factors in selecting investments. In assessing the appropriate maturity, credit quality and sector weighting of the fund's portfolio, the adviser considers a variety of factors that are expected to influence economic activity and interest rates. The adviser selects individual securities to buy and sell based upon such factors as a security's yield, liquidity and rating, an assessment of credit quality, and sector and issuer diversification. INVESTMENT ADVISER Pioneer 193 PIONEER STRATEGIC INCOME FUND INVESTMENT OBJECTIVE A high level of current income. PRINCIPAL INVESTMENT STRATEGIES Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in debt securities. For purposes of satisfying the 80% requirement, the fund also may invest in derivative instruments that have economic characteristics similar to such debt securities. The fund has the flexibility to invest in a broad range of issuers and segments of the debt securities markets. The fund's investment adviser allocates the fund's investments among the following three segments of the debt markets: o Below investment grade (high yield or "junk bond") securities of U.S. and non-U.S. issuers o Investment grade securities of U.S. issuers o Investment grade securities of non-U.S. issuers The adviser's allocations among the segments of the debt markets depend upon its outlook for economic, interest rate and political trends. At any given time, the fund may have a substantial amount of its assets in any one of such segments. The fund invests primarily in debt securities issued or guaranteed by the U.S. government, its agencies or instrumentalities or non-U.S. governmental entities; debt securities of U.S. and non-U.S. corporate issuers (including convertible debt); and mortgage-related securities, including "sub-prime" mortgages, and asset-backed securities. The fund invests in securities with a broad range of maturities and maintains an average portfolio maturity which varies based upon the judgment of the fund's investment adviser. The fund's investments may have fixed or variable principal payments and all types of interest rate payment and reset terms, including fixed rate, adjustable rate, floating rate, zero coupon, contingent, deferred, payment in kind and auction rate features. Depending upon the adviser's allocation among market segments, up to 70% of the fund's total assets may be in debt securities rated below investment grade at the time of purchase or determined to be of equivalent quality by the adviser. Up to 20% of the fund's total assets may be invested in debt securities rated below CCC by Standard & Poor's Financial Services LLC or 194 the equivalent by another nationally recognized statistical rating organization or determined to be of equivalent credit quality by the adviser. The fund may also invest in securities that are in default, subordinated debt securities, event-linked bonds and Treasury Inflation Protected Securities ("TIPS") and other inflation-linked debt securities. Up to 85% of the fund's total assets may be in debt securities of non-U.S. corporate and governmental issuers, including debt securities of corporate and governmental issuers in emerging markets. The fund may invest up to 20% of its total assets in equity securities, including common stocks, preferred stocks, rights, warrants, depositary receipts, exchange-traded funds (ETFs) that invest primarily in equity securities and equity interests in real estate trusts (REITs). The fund may, but is not required to, use derivatives, such as credit default swaps, forward foreign currency exchange contracts, and bond and interest rate futures. The fund may use derivatives for a variety of purposes, including: as a hedge against adverse changes in the market price of securities, interest rates or currency exchange rates; as a substitute for purchasing or selling securities; and to increase the fund's return as a non-hedging strategy that may be considered speculative. The fund may choose not to make use of derivatives for a variety of reasons, and any use may be limited by applicable law and regulations. The fund also may hold cash or other short-term investments. The adviser considers both broad economic and issuer specific factors in selecting investments. In assessing the appropriate maturity, rating, sector and country weightings of the portfolio, the adviser considers a variety of factors that are expected to influence economic activity and interest rates. The adviser selects individual securities to buy and sell based upon such factors as a security's yield, liquidity and rating, an assessment of credit quality, and sector and issuer diversification. INVESTMENT ADVISER Pioneer 195 PIONEER DYNAMIC CREDIT FUND (FORMERLY, PIONEER ABSOLUTE RETURN CREDIT FUND) INVESTMENT OBJECTIVES A high level of current income. Capital appreciation is a secondary objective. PRINCIPAL INVESTMENT STRATEGIES The fund selects investments from a broad spectrum of debt securities. The fund is managed using a benchmark unconstrained approach, which means that it is not managed relative to an index. Accordingly, the fund does not seek to generate returns consistent with broader financial market movements, instead seeking to generate positive total returns over the course of different market environments. Total return is a combination of current income and capital appreciation. As part of its overall strategy, the fund uses derivatives in an effort to limit the effect of market volatility on its portfolio of securities. The fund also may use derivatives for a variety of other hedging and non-hedging purposes. Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in debt securities. For purposes of satisfying the 80% requirement, the fund may invest in derivative instruments that have economic characteristics similar to such debt securities. The fund has the flexibility to invest in a broad range of issuers and segments of the debt securities markets. The adviser allocates the fund's debt securities among different instruments and segments of the debt markets, based on its outlook for economic, interest rate and political trends. Debt securities may include instruments and obligations of U.S. and non-U.S. corporate and other non-governmental entities, those of U.S. and non-U.S. governmental entities, mortgage-related or mortgage-backed securities (including "sub-prime" mortgages), asset-backed securities, floating rate loans, convertible securities, preferred securities, Treasury Inflation Protected Securities ("TIPS") and other inflation-linked debt securities, subordinated debt securities, event-linked bonds, and funds that invest primarily in debt securities. The fund may invest without limit in debt securities of any credit quality, including those rated below investment grade (known as "junk bonds") or, if unrated, of equivalent credit quality as determined by the fund's investment adviser. The fund's investments in debt securities rated below investment grade may include securities that are in default. The fund may invest in securities of issuers located in emerging markets. 196 The fund invests in securities with a broad range of maturities and maintains an average portfolio maturity that varies based upon the judgment of the adviser. The fund's investments may have fixed or variable principal payments and all types of interest rate payment and reset terms, including fixed rate, adjustable rate, floating rate, zero coupon, contingent, deferred, payment in kind and auction rate features. The fund may invest in equity securities, including common stocks, rights, warrants, depositary receipts, exchange-traded funds (ETFs) that invest primarily in equity securities and equity interests in real estate trusts (REITs). The fund may invest in equity securities as a consequence of holding debt of the same issuer or when the adviser believes the securities offer the potential for capital gains or other portfolio management purposes, although equity securities may not pay dividends or contribute to achieving the fund's investment objective of a high level of current income. The adviser considers both broad economic and issuer specific factors in selecting a portfolio designed to achieve the fund's investment objectives. In assessing the appropriate maturity, rating, sector and country weightings of the fund's portfolio, the adviser considers a variety of factors that are expected to influence economic activity and interest rates. These factors include fundamental economic indicators, such as the rates of economic growth and inflation, Federal Reserve and other global monetary policies and the relative value of the U.S. dollar compared to other currencies. Once the adviser determines the preferable portfolio characteristics, the adviser selects individual securities based upon the terms of the securities (such as yields compared to U.S. Treasuries or comparable issuers), liquidity and rating, country, sector and issuer diversification. The adviser also employs fundamental quantitative and qualitative research to assess an issuer's credit quality, taking into account financial condition and profitability, future capital needs, potential for change in rating, industry outlook, the competitive environment and management capabilities. In selecting among market segments and instruments, the adviser considers the relative value of particular investments. The adviser may sell a portfolio security when it believes the security no longer will contribute to meeting the fund's investment objectives. The adviser makes that determination based on the same criteria it uses to select portfolio securities. In making these portfolio decisions, the adviser relies on the knowledge, experience and judgment of its staff and the staff of its affiliates who have access to a wide variety of research. 197 In addition to seeking to manage portfolio risk through conventional means, including through in-depth credit analysis and diversification, the adviser employs a disciplined, two-fold derivatives strategy designed to limit the effects of near-term volatility and severe market events. This strategy, which relies on proprietary, quantitative techniques, incorporates the adviser's macroeconomic views as well as its view of quantitative market indicators of financial disruption, such as the volatility of the S&P 500 Index and credit spreads. Credit spreads measure the difference in the yield of higher yielding bond sectors relative to U.S. Treasury bonds. Widening credit spreads can indicate higher levels of uncertainty or distress in financial markets. Over time, the adviser uses derivatives to seek to maintain a "dynamic" hedge against near-term market volatility through exposure to market-, volatility- and/or credit-oriented derivatives, which it may adjust as credit spreads widen and narrow or as other indicators of market volatility change. As a second measure, when indicators signal severe market distress, the investment adviser may employ derivatives techniques designed to help limit the effects of that distress. Derivatives in which the fund may invest for these purposes include equity index futures, futures or swaps based on the Chicago Board of Exchange Volatility Index (VIX), credit default swaps and Treasury futures. The VIX is an index of market sentiment derived from S&P 500 Index option prices that is designed to reflect investors' consensus view of expected stock market volatility over future periods. In combination, the two elements of this strategy are intended to help limit the effect of market volatility on the fund's returns and generate positive returns over time. However, there can be no guarantee that such results will be achieved. The fund also may use derivatives for a variety of other purposes, including: in an attempt to hedge against adverse changes in the market price of securities, interest rates or currency exchange rates; as a substitute for purchasing or selling securities; and to attempt to increase the fund's return as a non-hedging strategy that may be considered speculative. The fund may establish, through derivatives, net short positions for individual sectors, markets, currencies or securities, or as a means of adjusting the fund's portfolio duration or other portfolio characteristics. The fund may invest without limit in derivative instruments. The fund may choose not to make use of derivatives for a variety of reasons, and any use may be limited by applicable law and regulations. The fund also may hold cash or other short-term investments. 198 INVESTMENT ADVISER Pioneer 199 PIONEER MULTI-ASSET ULTRASHORT INCOME FUND INVESTMENT OBJECTIVES A high level of current income to the extent consistent with a relatively high level of stability of principal. PRINCIPAL INVESTMENT STRATEGIES Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in floating rate instruments of U.S. and non-U.S. issuers, including: senior secured loans ("senior loans") and second lien or other subordinated or unsecured loans; debt issued by banks and other corporate, governmental and non-governmental entities; corporate bonds; mortgage-backed and asset-backed securities; event-linked bonds (also known as "catastrophe bonds"); and preferred stock. The fund may invest in floating rate instruments of issuers in any industry or market sector. The fund also considers as floating rate instruments, and the fund may invest without limit in, adjustable rate securities, fixed rate securities with durations of less than or equal to one year, funds that invest primarily in floating rate instruments, and fixed rate securities with respect to which the fund has entered into derivative instruments to effectively convert the fixed rate interest payments into floating rate interest payments. The fund considers these investments as economic equivalents of floating rate instruments. The fund also may invest in other derivative instruments that have economic characteristics similar to floating rate instruments for purposes of satisfying the 80% requirement. Under normal circumstances, the fund's average portfolio duration will be less than two years. Duration seeks to measure the price sensitivity of a fixed income security to changes in interest rates. If the fund's average portfolio duration exceeds two years, the fund will take action to bring it within its expected range within a reasonable period of time. The assumptions that are made about a security's features and options when calculating duration may prove to be incorrect. Duration is calculated by the adviser, is not an exact measurement and may not reliably predict the fund's or a particular security's price sensitivity to changes in yield or interest rates. The fund does not have a targeted maturity range for its portfolio. The fund may invest in securities with a broad range of maturities. The maturity of a fixed income security is a measure of the time remaining until final payment on the security is due. 200 The fund may invest up to 20% of its net assets in debt securities that are rated below investment grade (debt securities rated below investment grade are commonly referred to as "junk bonds") or are unrated but determined by the fund's investment adviser to be of equivalent credit quality, and those that are in default or in bankruptcy. The fund does not have a policy of maintaining a specific average credit quality of its portfolio. The fund may invest up to 35% of its total assets in debt securities of non-U.S. issuers, including emerging market issuers. The fund does not currently intend to invest more than 25% of its total assets in any one non-U.S. country. In addition to its investments in floating rate instruments, the fund also may invest in other securities, including debt of U.S. and non-U.S. governmental, corporate and other non-governmental issuers; mortgage-backed and asset-backed securities; convertible securities; bonds not paying current income; bonds that do not make regular interest payments; zero coupon securities; money market instruments; and other short-term investments, including cash and cash equivalents, certificates of deposit, repurchase agreements maturing in one week or less and bankers' acceptances. The fund may receive debt securities or equity securities as a result of the general restructuring of the debt of an issuer, the restructuring of a floating rate loan, or as part of a package of securities acquired with a loan. The fund may, but is not required to, use derivatives, such as credit default swaps. The fund may use derivatives for a variety of purposes, including: in an attempt to hedge against adverse changes in the market price of securities, interest rates or currency exchange rates; as a substitute for purchasing or selling securities; and to attempt to increase the fund's return as a non-hedging strategy that may be considered speculative. The fund may invest without limit in derivative instruments. However, the fund may choose not to make use of derivatives for a variety of reasons, and any use may be limited by applicable law and regulations. The fund may hold cash or other short-term investments. The fund's investments may have fixed or variable principal payments and all types of interest rate and dividend payment and reset terms, including fixed rate, adjustable rate, floating rate, contingent, deferred, payment in kind and auction rate features. The fund's investments may include instruments that allow for balloon payments or negative amortization payments. 201 The fund may invest in equity securities, including common stocks, rights, warrants, depositary receipts, exchange-traded funds (ETFs) that invest primarily in equity securities and equity interests in real estate investment trusts (REITs). The fund may invest in equity securities as a consequence of holding debt of the same issuer, when the adviser believes they offer the potential for capital gains or for other portfolio management purposes, although equity securities may not pay dividends or contribute to achieving the fund's investment objective of a high level of current income. The adviser considers both broad economic and issuer specific factors in selecting a portfolio designed to achieve the fund's investment objectives. In assessing the appropriate duration, rating, sector and country weightings of the fund's portfolio, the adviser considers a variety of factors that are expected to influence economic activity and interest rates. These factors include fundamental economic indicators, such as the rates of economic growth and inflation, Federal Reserve monetary policy, and the relative value of the U.S. dollar compared to other currencies. Once the adviser determines the preferable portfolio characteristics, the adviser selects individual securities based upon the terms of the securities (such as yields compared to U.S. Treasuries or comparable issues), liquidity, credit quality, and sector and issuer diversification. The adviser also employs fundamental quantitative and qualitative research to assess an issuer's credit quality, taking into account financial condition and profitability, future capital needs, potential for change in rating, industry outlook, the competitive environment and management capabilities. The adviser may sell a portfolio security when it believes the security no longer will contribute to meeting the fund's investment objectives. The adviser makes that determination based on the same criteria it uses to select portfolio securities. INVESTMENT ADVISER Pioneer 202 PIONEER FLOATING RATE FUND INVESTMENT OBJECTIVE A high level of current income. PRINCIPAL INVESTMENT STRATEGIES Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in floating rate loans and other floating rate investments. For purposes of satisfying the 80% requirement, the fund also may invest in derivative instruments that have economic characteristics similar to such floating rate securities. Floating rate investments are securities and other instruments with interest rates that adjust or "float" periodically based on a specified interest rate or other reference and include floating rate loans, repurchase agreements, money market securities and shares of money market and short term bond funds. Floating rate loans typically are rated below investment grade (debt securities rated below investment grade are commonly referred to as "junk bonds"). The fund's investments in floating rate loans typically hold a senior position in the borrower's capital structure. The fund also may invest in other securities, including unsecured or subordinated loans, revolving credit facility loans, high yield corporate bonds, investment grade fixed income debt securities, preferred stocks and convertible securities. The fund may receive debt securities or equity securities as a result of the general restructuring of the debt of an issuer, the restructuring of a floating rate loan, or as part of a package of securities acquired with a loan. The fund may invest up to 35% of its total assets in debt securities of non-U.S. issuers, including emerging market issuers. The fund does not currently intend to invest more than 25% of its total assets in any one non-U.S. country. The fund may invest without limit in securities of any rating, including those that are in default. The fund does not have a targeted maturity range for its portfolio. The fund invests in securities with a broad range of maturities. The fund's investments may have fixed or variable principal payments and all types of interest rate and dividend payment and reset terms, including fixed rate, adjustable rate, floating rate, contingent, deferred, payment in kind and auction rate features. The fund's investments may include instruments that allow for balloon payments or negative amortization payments. 203 The fund may invest in mortgage-related securities, including "sub-prime" mortgages and asset-backed securities. The fund also may invest in U.S. government securities, zero coupon securities, subordinated debt securities and event-linked bonds. The fund may, but is not required to, use derivatives. The fund may use derivatives, such as credit default swaps, forward foreign currency exchange contracts and bond and interest rate futures, for a variety of purposes, including: as a hedge against adverse changes in the market price of securities, interest rates or currency exchange rates; as a substitute for purchasing or selling securities; and to increase the fund's return as a non-hedging strategy that may be considered speculative. The fund may choose not to make use of derivatives for a variety of reasons, and any use may be limited by applicable law and regulations. The fund also may hold cash and other short-term investments. The investment adviser considers both broad economic and issuer specific factors in selecting a portfolio designed to achieve the fund's investment objective. The adviser selects individual securities based upon the terms of the securities (such as yields compared to U.S. Treasuries or comparable issues), liquidity and rating, sector and exposure to particular issuers and sectors. The adviser also employs fundamental research to assess an issuer's credit quality, taking into account financial condition and profitability, future capital needs, potential for change in rating, industry outlook, the competitive environment and management ability. The adviser may sell a portfolio security when it believes the security no longer will contribute to meeting the fund's investment objective. The adviser makes that determination based on the same criteria it uses to select portfolio securities. INVESTMENT ADVISER Pioneer 204 PIONEER SHORT TERM INCOME FUND INVESTMENT OBJECTIVE A high level of current income to the extent consistent with a relatively high level of stability of principal. PRINCIPAL INVESTMENT STRATEGIES Normally, the fund invests primarily in debt securities issued or guaranteed by the U.S. government, its agencies or instrumentalities, investment grade debt securities (including convertible debt) of U.S. and non-U.S. corporate and other issuers, mortgage-related securities, including "sub-prime" mortgages, and asset-backed securities of U.S. and non-U.S. issuers and short-term money market instruments of U.S. and non-U.S. issuers. Normally, at least 80% of the fund's net assets (plus the amount of borrowings, if any, for investment purposes) are invested in debt securities that are rated investment grade at the time of purchase or cash and cash equivalents. The fund may invest in debt securities of issuers in any industry or market sector. For purposes of satisfying the 80% requirement, the fund also may invest in derivative instruments that have economic characteristics similar to investment grade debt securities. As of the date of this prospectus, the fund may invest up to 10% of its net assets in below investment grade debt securities (known as "junk bonds") and securities that are in default. The fund may invest in subordinated debt securities and event-linked bonds. Effective September 1, 2013, the fund may invest up to 20% of its net assets in below investment grade debt securities and securities that are in default. The fund will normally maintain a dollar-weighted average portfolio maturity of no more than 3 years. The fund's investments may have fixed or variable principal payments and all types of interest rate payment and reset terms, including fixed rate, adjustable rate, floating rate, inverse floating rate, zero coupon, contingent, deferred, payment in kind and auction rate features. The fund may invest up to 20% of its total assets in securities of non-U.S. issuers, including up to 5% of its total assets in debt securities of emerging market issuers. The fund may invest a substantial portion of its assets in mortgage-related securities, including mortgage-related securities issued by private issuers. 205 The fund may, but is not required to, use derivatives, such as credit default swaps,. The fund may use derivatives for a variety of purposes, including: in an attempt to hedge against adverse changes in the market price of securities, interest rates or currency exchange rates; as a substitute for purchasing or selling securities; and to attempt to increase the fund's return as a non-hedging strategy that may be considered speculative. The fund may choose not to make use of derivatives for a variety of reasons, and any use may be limited by applicable law and regulations. The adviser considers both broad economic and issuer specific factors in selecting investments. In assessing the appropriate maturity, credit quality and sector weighting of the fund's portfolio, the adviser considers a variety of factors that are expected to influence economic activity and interest rates. The adviser selects individual securities to buy and sell based upon such factors as a security's yield, liquidity and rating, an assessment of credit quality, and sector and issuer diversification. INVESTMENT ADVISER Pioneer 206 PIONEER CASH RESERVES FUND INVESTMENT OBJECTIVES High current income, preservation of capital and liquidity through investments in high-quality short-term securities. PRINCIPAL INVESTMENT STRATEGIES The fund is a money market fund. The fund seeks to maintain a constant net asset value of $1.00 per share by investing in high-quality, U.S. dollar denominated money market securities of U.S. and non-U.S. issuers, including those issued by: o U.S. and non-U.S. banks o U.S. and non-U.S. corporate or private issuers o The U.S. government and its agencies and instrumentalities o Non-U.S. governments o Multinational organizations such as the World Bank The fund may invest more than 25% of its total assets in U.S. government securities and obligations of U.S. banks. The fund may invest in any money market instrument that is a permissible investment for a money market fund under the rules of the Securities and Exchange Commission, including commercial paper, certificates of deposit, time deposits, banker's acceptances, mortgage-backed and asset-backed securities, repurchase agreements, municipal obligations and other short-term debt securities. These investments may include instruments specifically structured so that they are eligible for purchase by money market funds, including securities that have demand, tender or put features, auction features or interest rate reset features. The fund's investments also may include U.S. dollar denominated securities issued by non-U.S. governments and multinational issuers, such as the World Bank. These securities may pay interest at fixed, floating or adjustable rates, or may be purchased at a discount. The fund invests in accordance with the credit quality, maturity, liquidity and diversification requirements applicable to money market funds. Within these standards, the adviser's assessment of broad economic factors that are expected to affect economic activity and interest rates influences securities selection. The adviser also employs fundamental research and an evaluation of the issuer based on its financial statements and operations, to assess an issuer's credit quality. 207 The fund invests in U.S. government obligations and money market securities that at the time of purchase are rated in one of the two highest rating categories for short-term debt by a nationally recognized statistical rating organization or, if unrated, determined to be of equivalent credit quality by the fund's investment adviser. If rating organizations differ in the rating assigned to a security, the fund will only treat the security as having the higher rating if at least two rating organizations assigned that rating. If, after purchase, the quality rating assigned to one or more of the fund's securities is downgraded, or the credit quality deteriorates, or if the maturity on a security is extended, the adviser or the Board (where required by applicable regulations) will decide whether the security should be held or sold. The fund invests exclusively in securities with a maximum remaining maturity of 397 days and maintains a dollar-weighted average portfolio maturity of 60 days or less. INVESTMENT ADVISER Pioneer 208 Pioneer Ibbotson Asset Allocation Series YOU CAN OBTAIN MORE FREE INFORMATION about the fund from your investment firm or by writing to Pioneer Investment Management Shareholder Services, Inc., 60 State Street, Boston, Massachusetts 02109. You may also call 1-800-225-6292 for more information about the fund, to request copies of the fund's statement of additional information and shareowner reports, and to make other inquiries. VISIT OUR WEBSITE www.pioneerinvestments.com The fund makes available the statement of additional information and shareowner reports, free of charge, on the fund's website at www.pioneerinvestments.com. You also may find other information and updates about Pioneer and the fund, including fund performance information, on the fund's website. SHAREOWNER REPORTS Annual and semiannual reports to shareowners, and quarterly reports filed with the Securities and Exchange Commission, provide additional information about the fund's investments. The annual report discusses market conditions and investment strategies that significantly affected the fund's performance during its last fiscal year. STATEMENT OF ADDITIONAL INFORMATION The statement of additional information provides more detailed information about the fund. The statement of additional information, and the independent registered public accounting firm's report and financial statements in the fund's annual report to shareowners, are incorporated by reference into this prospectus. You can also review and copy the fund's shareowner reports, prospectus and statement of additional information at the Securities and Exchange Commission's Public Reference Room in Washington, D.C. Call 1-202-551-8090 for information. The Commission charges a fee for copies. You can get the same information free from the Commission's EDGAR database on the Internet (http://www.sec.gov). You may also e-mail requests for these documents to publicinfo@sec.gov or make a request in writing to the Commission's Public Reference Section, Washington, D.C. 20549-1520. (Investment Company Act file no. 811-21569) [GRAPHIC APPEARS HERE] PIONEER FUNDS DISTRIBUTOR, INC. 60 STATE STREET 20162-08-1213 BOSTON, MA 02109 (Copyright)2013 Pioneer Funds Distributor, Inc. WWW.PIONEERINVESTMENTS.COM Member SIPC
[GRAPHIC APPEARS HERE] Pioneer Investment Management, Inc. 60 State Street Boston, MA 02109 www.pioneerinvestments.com This is not part of the prospectus. 20162-08-1213 (Copyright)2013 Pioneer Funds Distributor, Inc. Underwriter of Pioneer mutual funds Member SIPC PIONEER IBBOTSON ASSET ALLOCATION SERIES -------------------------------------------------------------------------------- 60 State Street Boston, Massachusetts 02109 CLASS A, CLASS B, CLASS C AND CLASS Y SHARES OF PIONEER IBBOTSON CONSERVATIVE ALLOCATION FUND, PIONEER IBBOTSON MODERATE ALLOCATION FUND, PIONEER IBBOTSON GROWTH ALLOCATION FUND AND PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND (EACH, A "FUND" AND COLLECTIVELY, THE "FUNDS")
Conservative Moderate Growth Aggressive Allocation Allocation Allocation Allocation Class Fund Fund Fund Fund ------- -------------- ------------ ------------ ----------- A PIAVX PIALX GRAAX PIAAX B PIBVX PIBLX GRABX IALBX C PICVX PIDCX GRACX IALCX Y IBBCX IMOYX IBGYX IBAYX
Statement of Additional Information December 1, 2013 This statement of additional information is not a prospectus. It should be read in conjunction with the funds' Class A, Class B, Class C and Class Y shares prospectus dated December 1, 2013, as supplemented or revised from time to time. A copy of the prospectus can be obtained free of charge by calling Shareholder Services at 1-800-225-6292 or by written request to the funds at 60 State Street, Boston, Massachusetts 02109. You can also obtain a copy of the prospectus from our website at: www.pioneerinvestments.com. The funds' financial statements for the fiscal year ended July 31, 2013, including the independent registered public accounting firm's report thereon, are incorporated into this statement of additional information by reference. CONTENTS --------------------------------------------------------------------------------
PAGE 1. Trust history.............................................. 1 2. Investment policies, risks and restrictions................ 1 3. Trustees and officers...................................... 44 4. Investment adviser......................................... 53 5. Principal underwriter and distribution plan................ 56 6. Shareholder servicing/transfer agent....................... 60 7. Custodian and sub-administrator............................ 60 8. Independent registered public accounting firm.............. 60 9. Portfolio management....................................... 61 10. Portfolio transactions..................................... 66 11. Description of shares...................................... 67 12. Sales charges.............................................. 70 13. Redeeming shares........................................... 76 14. Telephone and online transactions.......................... 76 15. Pricing of shares.......................................... 78 16. Tax status................................................. 78 17. Financial statements....................................... 87 18. Annual fee, expense and other information.................. 88 19. Appendix A - Description of short-term debt, corporate bond [GRAPHIC APPEARS HERE] and preferred stock ratings//.............................. 95 20. Appendix B - Proxy voting policies and procedures.......... 99
1. TRUST HISTORY Each fund is a diversified open-end management investment company. Each fund is a series of Pioneer Ibbotson Asset Allocation Series (the "Trust"). The Trust was organized as a Delaware statutory trust on April 22, 2004. 2. INVESTMENT POLICIES, RISKS AND RESTRICTIONS The trust consists of the following four funds, each of which seeks to achieve its investment objective by investing in other funds ("underlying funds") and uses asset allocation strategies to allocate its assets among the underlying funds: Pioneer Ibbotson Conservative Allocation Fund, Pioneer Ibbotson Moderate Allocation Fund, Pioneer Ibbotson Growth Allocation Fund and Pioneer Ibbotson Aggressive Allocation Fund (each, a "fund" and collectively, the "funds"). The prospectus presents the investment objective and the principal investment strategies and risks of each fund. Each fund has adopted fundamental and non-fundamental investment restrictions as set forth in this statement of additional information. However, in general, references in Section 2 of this statement of additional information to "the fund" mean a fund or, where applicable, an underlying fund, and references to a fund's investment techniques and associated risks also refer to the investment techniques and associated risks of the underlying funds and vice versa. Accordingly, a reference to an adviser in Section 2 of this statement of additional information means Pioneer Investment Management, Inc. ("Pioneer") as the investment adviser for a fund, Ibbotson (as defined herein) as a fund's subadviser or the adviser or any subadviser for the underlying funds, or all of them, as the context indicates. This section supplements the disclosure in the funds' prospectus and provides additional information on the investment policies of the funds and the underlying funds and each fund's fundamental investment restrictions. Restrictions or policies stated as a maximum percentage of a fund's assets are only applied immediately after a portfolio investment to which the policy or restriction is applicable (other than the limitations on borrowing and illiquid securities). Accordingly, any later increase or decrease in a percentage resulting from a change in values, net assets or other circumstances will not be considered in determining whether the investment complies with a fund's restrictions and policies. MONEY MARKET FUND MATTERS The fund invests in accordance with the credit quality, diversification, liquidity and maturity requirements of Rule 2a-7 under the Investment Company Act of 1940, as amended (the "1940 Act"). Under the applicable quality requirements of Rule 2a-7, the fund may purchase only U.S. dollar-denominated instruments that are determined to present minimal credit risks and that are at the time of acquisition "eligible securities" as defined in Rule 2a-7. The fund invests in eligible securities that at the time of purchase are rated in the highest short-term rating category (or with respect to not more than 3% of its total assets, in the second highest category). Eligible securities are divided into "first tier" and "second tier" securities. The fund primarily invests in first tier securities. These include U.S. government securities, a security that has received the highest short-term rating (e.g., Standard & Poor's A-1 rating) by at least two rating agencies (or if rated by only one rating agency, by that rating agency) or, a security that is unrated but is determined to be of equivalent credit quality by Pioneer. However, the fund may invest up to 3% of its total assets in second tier securities, which are eligible securities that received ratings within the two highest categories (e.g., Standard & Poor's A-1 or A-2) from at least two rating services (or one, if only one has rated the security), but do not qualify as first tier securities. If a security has been assigned different ratings by different rating services, at least two rating services must have assigned the higher rating in order for Pioneer to determine eligibility on the basis of that higher rating. Based on procedures adopted by the fund's Board of Trustees, Pioneer may determine that an unrated security is of equivalent quality to a rated first tier or second tier security. 1 The fund may not invest more than 5% of its total assets in securities issued by any one issuer (except U.S. government securities and securities subject to a guarantee by a person that does not control the issuer of the security); provided that the fund may invest up to 25% of its total assets in first tier securities of a single issuer for a period of up to three business days. The fund may not invest more than 1/2 of 1% of its total assets in the second tier securities of any single issuer. With respect to 75% of its total assets, the fund may not invest more than 10% of its total assets in securities issued by or subject to demand features from any one issuer (except U.S. government securities and securities subject to a guarantee by a person that does not control the issuer of the security), and not more than 2.5% of its total assets in second tier securities issued by or subject to demand features from any one issuer. The fund will maintain a dollar-weighted average portfolio maturity of 60 days or less and will limit its investments to securities that have remaining maturities of 397 calendar days or less or other features that shorten maturities in a manner consistent with the requirements of Rule 2a-7, such as interest rate reset and demand features. DEBT SECURITIES AND RELATED INVESTMENTS DEBT SECURITIES RATING INFORMATION Investment grade debt securities are those rated "BBB" or higher by Standard & Poor's Ratings Group ("Standard & Poor's") or the equivalent rating of other nationally recognized statistical rating organizations. Debt securities rated BBB are considered medium grade obligations with speculative characteristics, and adverse economic conditions or changing circumstances may weaken the issuer's ability to pay interest and repay principal. Below investment grade debt securities are those rated "BB" and below by Standard & Poor's or the equivalent rating of other nationally recognized statistical rating organizations. See "Appendix A" for a description of rating categories. The fund may invest in debt securities rated "D" or better, or comparable unrated securities as determined by Pioneer. Below investment grade debt securities or comparable unrated securities are commonly referred to as "junk bonds" and are considered predominantly speculative and may be questionable as to principal and interest payments. Changes in economic conditions are more likely to lead to a weakened capacity to make principal payments and interest payments. The issuers of high yield securities also may be more adversely affected than issuers of higher rated securities by specific corporate or governmental developments or the issuers' inability to meet specific projected business forecasts. The amount of high yield securities outstanding has proliferated as an increasing number of issuers have used high yield securities for corporate financing. The recent economic downturn has severely affected the ability of many highly leveraged issuers to service their debt obligations or to repay their obligations upon maturity. Factors having an adverse impact on the market value of lower quality securities will have an adverse effect on the fund's net asset value to the extent that it invests in such securities. In addition, the fund may incur additional expenses to the extent it is required to seek recovery upon a default in payment of principal or interest on its portfolio holdings or to take other steps to protect its investment in an issuer. The secondary market for high yield securities is not usually as liquid as the secondary market for more highly rated securities, a factor which may have an adverse effect on the fund's ability to dispose of a particular security when necessary to meet its liquidity needs. Under adverse market or economic conditions, such as those recently prevailing, the secondary market for high yield securities could contract further, independent of any specific adverse changes in the condition of a particular issuer. As a result, the fund 2 could find it more difficult to sell these securities or may be able to sell the securities only at prices lower than if such securities were widely traded. Prices realized upon the sale of such lower rated or unrated securities, under these and other circumstances, may be less than the prices used in calculating the fund's net asset value. Since investors generally perceive that there are greater risks associated with lower quality debt securities of the type in which the fund may invest, the yields and prices of such securities may tend to fluctuate more than those for higher rated securities. In the lower quality segments of the debt securities market, changes in perceptions of issuers' creditworthiness tend to occur more frequently and in a more pronounced manner than do changes in higher quality segments of the debt securities market, resulting in greater yield and price volatility. Lower rated and comparable unrated debt securities tend to offer higher yields than higher rated securities with the same maturities because the historical financial condition of the issuers of such securities may not have been as strong as that of other issuers. However, lower rated securities generally involve greater risks of loss of income and principal than higher rated securities. For purposes of the fund's credit quality policies, if a security receives different ratings from nationally recognized statistical rating organizations, the fund will use the rating chosen by the portfolio manager as most representative of the security's credit quality. The ratings of nationally recognized statistical rating organizations represent their opinions as to the quality of the securities that they undertake to rate and may not accurately describe the risk of the security. If a rating organization downgrades the quality rating assigned to one or more of the fund's portfolio securities, Pioneer will consider what actions, if any, are appropriate in light of the fund's investment objectives and policies including selling the downgraded security or purchasing additional investment grade securities of the appropriate credit quality as soon as it is prudent to do so. U.S. GOVERNMENT SECURITIES U.S. government securities in which the fund invests include debt obligations of varying maturities issued by the U.S. Treasury or issued or guaranteed by an agency, authority or instrumentality of the U.S. government, including the Federal Housing Administration, Federal Financing Bank, Farm Service Agency, Export-Import Bank of the U.S., Small Business Administration, Government National Mortgage Association ("GNMA"), General Services Administration, National Bank for Cooperatives, Federal Farm Credit Banks, Federal Home Loan Banks ("FHLBs"), Federal Home Loan Mortgage Corporation ("FHLMC"), Federal National Mortgage Association ("FNMA"), Maritime Administration, Tennessee Valley Authority and various institutions that previously were or currently are part of the Farm Credit System (which has been undergoing reorganization since 1987). Some U.S. government securities, such as U.S. Treasury bills, Treasury notes and Treasury bonds, which differ only in their interest rates, maturities and times of issuance, are supported by the full faith and credit of the United States. Others are supported by: (i) the right of the issuer to borrow from the U.S. Treasury, such as securities of the FHLBs; (ii) the discretionary authority of the U.S. government to purchase the agency's obligations, such as securities of FNMA; or (iii) only the credit of the issuer. Although the U.S. government provided financial support to FNMA and FHLMC in the past, no assurance can be given that the U.S. government will provide financial support in the future to these or other U.S. government agencies, authorities or instrumentalities that are not supported by the full faith and credit of the United States. Securities guaranteed as to principal and interest by the U.S. government, its agencies, authorities or instrumentalities include: (i) securities for which the payment of principal and interest is backed by an irrevocable letter of credit issued by the U.S. government or any of its agencies, authorities or instrumentalities; (ii) participations in loans made to non-U.S. governments or other entities that are so guaranteed; and (iii) as a result of initiatives introduced in response to the recent financial market difficulties, securities of commercial issuers or financial institutions that qualify for guarantees by U.S. government agencies like the Federal Deposit Insurance Corporation. The secondary market for certain loan participations described above is limited and, therefore, the participations may be regarded as illiquid. 3 U.S. government securities may include zero coupon securities that may be purchased when yields are attractive and/or to enhance portfolio liquidity. Zero coupon U.S. government securities are debt obligations that are issued or purchased at a significant discount from face value. The discount approximates the total amount of interest the security will accrue and compound over the period until maturity or the particular interest payment date at a rate of interest reflecting the market rate of the security at the time of issuance. Zero coupon U.S. government securities do not require the periodic payment of interest. These investments may experience greater volatility in market value than U.S. government securities that make regular payments of interest. The fund accrues income on these investments for tax and accounting purposes, which is distributable to shareholders and which, because no cash is received at the time of accrual, may require the liquidation of other portfolio securities to satisfy the fund's distribution obligations, in which case the fund will forgo the purchase of additional income producing assets with these funds. Zero coupon U.S. government securities include STRIPS and CUBES, which are issued by the U.S. Treasury as component parts of U.S. Treasury bonds and represent scheduled interest and principal payments on the bonds. CONVERTIBLE DEBT SECURITIES The fund may invest in convertible debt securities which are debt obligations convertible at a stated exchange rate or formula into common stock or other equity securities. Convertible securities rank senior to common stocks in an issuer's capital structure and consequently may be of higher quality and entail less risk than the issuer's common stock. As with all debt securities, the market values of convertible securities tend to increase when interest rates decline and, conversely, tend to decline when interest rates increase. Depending on the relationship of the conversion price to the market value of the underlying securities, convertible securities may trade more like equity securities than debt securities. A convertible security entitles the holder to receive interest that is generally paid or accrued until the convertible security matures, or is redeemed, converted, or exchanged. Convertible securities have unique investment characteristics, in that they generally (i) have higher yields than common stocks, but lower yields than comparable non-convertible securities, (ii) are less subject to fluctuation in value than the underlying common stock due to their fixed-income characteristics and (iii) provide the potential for capital appreciation if the market price of the underlying common stock increases. A convertible security may be subject to redemption at the option of the issuer at a price established in the convertible security's governing instruments. If a convertible security held by the fund is called for redemption, the fund will be required to permit the issuer to redeem the security, convert it into the underlying common stock or sell it to a third party. Any of these actions could result in losses to the fund. MUNICIPAL OBLIGATIONS The fund may purchase municipal obligations. The term "municipal obligations" generally is understood to include debt obligations issued by municipalities to obtain funds for various public purposes, the income from which is, in the opinion of bond counsel to the issuer, excluded from gross income for U.S. federal income tax purposes. In addition, if the proceeds from private activity bonds are used for the construction, repair or improvement of privately operated industrial or commercial facilities, the interest paid on such bonds may be excluded from gross income for U.S. federal income tax purposes, although current federal tax laws place substantial limitations on the size of these issues. The fund's distributions of any interest it earns on municipal obligations will be taxable as ordinary income to shareholders that are otherwise subject to tax. The two principal classifications of municipal obligations are "general obligation" and "revenue" bonds. General obligation bonds are secured by the issuer's pledge of its faith, credit, and taxing power for the payment of principal and interest. Revenue bonds are payable from the revenues derived from a particular facility or class of facilities or, in some cases, from the proceeds of a special excise or other specific revenue source, but not from the general taxing power. Sizable investments in these obligations could involve an increased risk to the fund should any of the related facilities experience financial difficulties. 4 Private activity bonds are in most cases revenue bonds and do not generally carry the pledge of the credit of the issuing municipality. There are, of course, variations in the security of municipal obligations, both within a particular classification and between classifications. MORTGAGE-BACKED SECURITIES The fund may invest in mortgage pass-through certificates and multiple-class pass-through securities, such as real estate mortgage investment conduits ("REMIC") pass-through certificates, collateralized mortgage obligations ("CMOs") and stripped mortgage-backed securities ("SMBS"), and other types of mortgage-backed securities ("MBS") that may be available in the future. A mortgage-backed security is an obligation of the issuer backed by a mortgage or pool of mortgages or a direct interest in an underlying pool of mortgages. Some mortgage-backed securities, such as CMOs, make payments of both principal and interest at a variety of intervals; others make semiannual interest payments at a predetermined rate and repay principal at maturity (like a typical bond). Mortgage-backed securities are based on different types of mortgages including those on commercial real estate or residential properties. Mortgage-backed securities often have stated maturities of up to thirty years when they are issued, depending upon the length of the mortgages underlying the securities. In practice, however, unscheduled or early payments of principal and interest on the underlying mortgages may make the securities' effective maturity shorter than this, and the prevailing interest rates may be higher or lower than the current yield of the portfolio at the time the fund receives the payments for reinvestment. Mortgage-backed securities may have less potential for capital appreciation than comparable fixed income securities, due to the likelihood of increased prepayments of mortgages as interest rates decline. If the fund buys mortgage-backed securities at a premium, mortgage foreclosures and prepayments of principal by mortgagors (which may be made at any time without penalty) may result in some loss of the fund's principal investment to the extent of the premium paid. The value of mortgage-backed securities may also change due to shifts in the market's perception of issuers. In addition, regulatory or tax changes may adversely affect the mortgage securities markets as a whole. Non-governmental mortgage-backed securities may offer higher yields than those issued by government entities, but also may be subject to greater price changes than governmental issues. Through its investments in mortgage-backed securities, including those that are issued by private issuers, the fund may have exposure to subprime loans as well as to the mortgage and credit markets generally. Private issuers include commercial banks, savings associations, mortgage companies, investment banking firms, finance companies and special purpose finance entities (called special purpose vehicles or "SPVs") and other entities that acquire and package mortgage loans for resale as MBS. Unlike mortgage-backed securities issued or guaranteed by the U. S. government or one of its sponsored entities, mortgage-backed securities issued by private issuers do not have a government or government-sponsored entity guarantee, but may have credit enhancement provided by external entities such as banks or financial institutions or achieved through the structuring of the transaction itself. Examples of such credit support arising out of the structure of the transaction include the issue of senior and subordinated securities (e.g., the issuance of securities by an SPV in multiple classes or "tranches", with one or more classes being senior to other subordinated classes as to the payment of principal and interest, with the result that defaults on the underlying mortgage loans are borne first by the holders of the subordinated class); creation of "reserve funds" (in which case cash or investments, sometimes funded from a portion of the payments on the underlying mortgage loans, are held in reserve against future losses); and "overcollateralization" (in which case the scheduled payments on, or the principal amount of, the underlying mortgage loans exceeds that required to make payment of the securities and pay any servicing or other fees). However, there can be no guarantee that credit enhancements, if any, will be sufficient to prevent losses in the event of defaults on the underlying mortgage loans. In addition, mortgage-backed securities that are issued by private issuers are not subject to the underwriting requirements for the underlying mortgages that are applicable to those mortgage-backed securities that have a government or government-sponsored entity guarantee. As a result, the mortgage loans underlying 5 private mortgage-backed securities may, and frequently do, have less favorable collateral, credit risk or other underwriting characteristics than government or government-sponsored mortgage-backed securities and have wider variances in a number of terms including interest rate, term, size, purpose and borrower characteristics. Privately issued pools more frequently include second mortgages, high loan-to-value mortgages and manufactured housing loans. The coupon rates and maturities of the underlying mortgage loans in a private mortgage-backed securities pool may vary to a greater extent than those included in a government guaranteed pool, and the pool may include subprime mortgage loans. Subprime loans refer to loans made to borrowers with weakened credit histories or with a lower capacity to make timely payments on their loans. For these reasons, the loans underlying these securities have had in many cases higher default rates than those loans that meet government underwriting requirements. The risk of non-payment is greater for mortgage-backed securities that are backed by mortgage pools that contain subprime loans, but a level of risk exists for all loans. Market factors adversely affecting mortgage loan repayments may include a general economic turndown, high unemployment, a general slowdown in the real estate market, a drop in the market prices of real estate, or an increase in interest rates resulting in higher mortgage payments by holders of adjustable rate mortgages. If the fund purchases subordinated mortgage-backed securities, the subordinated mortgage-backed securities may serve as a credit support for the senior securities purchased by other investors. In addition, the payments of principal and interest on these subordinated securities generally will be made only after payments are made to the holders of securities senior to the fund's securities. Therefore, if there are defaults on the underlying mortgage loans, the fund will be less likely to receive payments of principal and interest, and will be more likely to suffer a loss. Privately issued mortgage-backed securities are not traded on an exchange and there may be a limited market for the securities, especially when there is a perceived weakness in the mortgage and real estate market sectors. Without an active trading market, mortgage-backed securities held in the portfolio may be particularly difficult to value because of the complexities involved in assessing the value of the underlying mortgage loans. In the case of private issue mortgage-related securities whose underlying assets are neither U.S. government securities nor U.S. government-insured mortgages, to the extent that real properties securing such assets may be located in the same geographical region, the security may be subject to a greater risk of default than other comparable securities in the event of adverse economic, political or business developments that may affect such region and, ultimately, the ability of residential homeowners to make payments of principal and interest on the underlying mortgages. GUARANTEED MORTGAGE PASS-THROUGH SECURITIES. Guaranteed mortgage pass-through securities represent participation interests in pools of residential mortgage loans and are issued by U.S. governmental or private lenders and guaranteed by the U.S. government or one of its agencies or instrumentalities, including but not limited to GNMA, FNMA and FHLMC. GNMA certificates are guaranteed by the full faith and credit of the U.S. government for timely payment of principal and interest on the certificates. FNMA certificates are guaranteed by FNMA, a federally chartered and privately owned corporation, for full and timely payment of principal and interest on the certificates. FHLMC certificates are guaranteed by FHLMC, a corporate instrumentality of the U.S. government, for timely payment of interest and the ultimate collection of all principal of the related mortgage loans. Commercial banks, savings and loan institutions, private mortgage insurance companies, mortgage bankers and other secondary market issuers also create pass-through pools of conventional residential mortgage loans. Such issuers may, in addition, be the originators and/or servicers of the underlying mortgage loans as well as the guarantors of the mortgage-related securities. Because there are no direct or indirect government or agency guarantees of payments in pools created by such non-governmental issuers, they generally offer a higher rate of interest than government and government-related pools. Timely payment of interest and principal of these pools may be supported by insurance or guarantees, including individual loan, title, pool 6 and hazard insurance and letters of credit. The insurance and guarantees are issued by governmental entities, private insurers and the mortgage poolers. There can be no assurance that the private insurers or guarantors can meet their obligations under the insurance policies or guarantee arrangements. Mortgage-related securities without insurance or guarantees may be purchased if Pioneer determines that the securities meet the fund's quality standards. Mortgage-related securities issued by certain private organizations may not be readily marketable. MULTIPLE-CLASS PASS-THROUGH SECURITIES AND COLLATERALIZED MORTGAGE OBLIGATIONS ("CMOS"). CMOs and REMIC pass-through or participation certificates may be issued by, among others, U.S. government agencies and instrumentalities as well as private issuers. REMICs are CMO vehicles that qualify for special tax treatment under the Internal Revenue Code of 1986, as amended (the "Code") and invest in mortgages principally secured by interests in real property and other investments permitted by the Code. CMOs and REMIC certificates are issued in multiple classes and the principal of and interest on the mortgage assets may be allocated among the several classes of CMOs or REMIC certificates in various ways. Each class of CMO or REMIC certificate, often referred to as a "tranche," is issued at a specific adjustable or fixed interest rate and must be fully retired no later than its final distribution date. Generally, interest is paid or accrues on all classes of CMOs or REMIC certificates on a monthly basis. Typically, CMOs are collateralized by GNMA, FNMA or FHLMC certificates but also may be collateralized by other mortgage assets such as whole loans or private mortgage pass-through securities. Debt service on CMOs is provided from payments of principal and interest on collateral of mortgaged assets and any reinvestment income thereon. STRIPPED MORTGAGE-BACKED SECURITIES ("SMBS"). SMBS are multiple-class mortgage-backed securities that are created when a U.S. government agency or a financial institution separates the interest and principal components of a mortgage-backed security and sells them as individual securities. The fund may invest in SMBS that are usually structured with two classes that receive different proportions of interest and principal distributions on a pool of mortgage assets. A typical SMBS will have one class receiving some of the interest and most of the principal, while the other class will receive most of the interest and the remaining principal. The holder of the "principal-only" security ("PO") receives the principal payments made by the underlying mortgage-backed security, while the holder of the "interest-only" security ("IO") receives interest payments from the same underlying security. The prices of stripped mortgage-backed securities may be particularly affected by changes in interest rates. As interest rates fall, prepayment rates tend to increase, which tends to reduce prices of IOs and increase prices of POs. Rising interest rates can have the opposite effect. Pioneer may determine that certain stripped mortgage-backed securities issued by the U.S. government, its agencies or instrumentalities are not readily marketable. If so, these securities, together with privately-issued stripped mortgage-backed securities, will be considered illiquid for purposes of the fund's limitation on investments in illiquid securities. The yields and market risk of interest-only and principal-only SMBS, respectively, may be more volatile than those of other fixed income securities. The fund also may invest in planned amortization class ("PAC") and target amortization class ("TAC") CMO bonds which involve less exposure to prepayment, extension and interest rate risks than other mortgage-backed securities, provided that prepayment rates remain within expected prepayment ranges or "collars." To the extent that the prepayment rates remain within these prepayment ranges, the residual or support tranches of PAC and TAC CMOs assume the extra prepayment, extension and interest rate risks associated with the underlying mortgage assets. OTHER RISK FACTORS ASSOCIATED WITH MORTGAGE-BACKED SECURITIES. Investing in mortgage-backed securities involves certain risks, including the failure of a counterparty to meet its commitments, adverse interest rate changes and the effects of prepayments on mortgage cash flows. In addition, investing in the lowest tranche of CMOs and REMIC certificates involves risks similar to those associated with investing in equity securities. However, due to adverse tax consequences under current tax laws, the fund does not intend to acquire "residual" interests in REMICs. Further, the yield characteristics of mortgage-backed securities 7 differ from those of traditional fixed income securities. The major differences typically include more frequent interest and principal payments (usually monthly), the adjustability of interest rates of the underlying instrument, and the possibility that prepayments of principal may be made substantially earlier than their final distribution dates. Prepayment rates are influenced by changes in current interest rates and a variety of economic, geographic, social and other factors and cannot be predicted with certainty. Both adjustable rate mortgage loans and fixed rate mortgage loans may be subject to a greater rate of principal prepayments in a declining interest rate environment and to a lesser rate of principal prepayments in an increasing interest rate environment. Under certain interest rate and prepayment rate scenarios, the fund may fail to recoup fully its investment in mortgage-backed securities notwithstanding any direct or indirect governmental, agency or other guarantee. When the fund reinvests amounts representing payments and unscheduled prepayments of principal, it may obtain a rate of interest that is lower than the rate on existing adjustable rate mortgage pass-through securities. Thus, mortgage-backed securities, and adjustable rate mortgage pass-through securities in particular, may be less effective than other types of U.S. government securities as a means of "locking in" interest rates. ASSET-BACKED SECURITIES The fund may invest in asset-backed securities, which are securities that represent a participation in, or are secured by and payable from, a stream of payments generated by particular assets, most often a pool or pools of similar assets (e.g., trade receivables). The credit quality of these securities depends primarily upon the quality of the underlying assets and the level of credit support and/or enhancement provided. The underlying assets (e.g., loans) are subject to prepayments which shorten the securities' weighted average maturity and may lower their return. If the credit support or enhancement is exhausted, losses or delays in payment may result if the required payments of principal and interest are not made. The value of these securities also may change because of changes in the market's perception of the creditworthiness of the servicing agent for the pool, the originator of the pool, or the financial institution or trust providing the credit support or enhancement. There may be no perfected security interest in the collateral that relates to the financial assets that support asset-backed securities. Asset backed securities have many of the same characteristics and risks as mortgage-backed securities. The fund may purchase commercial paper, including asset-backed commercial paper ("ABCP") that is issued by structured investment vehicles or other conduits. These conduits may be sponsored by mortgage companies, investment banking firms, finance companies, hedge funds, private equity firms and special purpose finance entities. ABCP typically refers to a debt security with an original term to maturity of up to 270 days, the payment of which is supported by cash flows from underlying assets, or one or more liquidity or credit support providers, or both. Assets backing ABCP include credit card, car loan and other consumer receivables and home or commercial mortgages, including subprime mortgages. The repayment of ABCP issued by a conduit depends primarily on the cash collections received from the conduit's underlying asset portfolio and the conduit's ability to issue new ABCP. Therefore, there could be losses to a fund investing in ABCP in the event of credit or market value deterioration in the conduit's underlying portfolio, mismatches in the timing of the cash flows of the underlying asset interests and the repayment obligations of maturing ABCP, or the conduit's inability to issue new ABCP. To protect investors from these risks, ABCP programs may be structured with various protections, such as credit enhancement, liquidity support, and commercial paper stop-issuance and wind-down triggers. However there can be no guarantee that these protections will be sufficient to prevent losses to investors in ABCP. Some ABCP programs provide for an extension of the maturity date of the ABCP if, on the related maturity date, the conduit is unable to access sufficient liquidity through the issue of additional ABCP. This may delay the sale of the underlying collateral and a fund may incur a loss if the value of the collateral deteriorates during the extension period. Alternatively, if collateral for ABCP deteriorates in value, the collateral may be required to be sold at inopportune times or at prices insufficient to repay the principal and interest on the 8 ABCP. ABCP programs may provide for the issuance of subordinated notes as an additional form of credit enhancement. The subordinated notes are typically of a lower credit quality and have a higher risk of default. A fund purchasing these subordinated notes will therefore have a higher likelihood of loss than investors in the senior notes. Asset-backed securities include collateralized debt obligations ("CDOs"), such as collateralized bond obligations ("CBOs"), collateralized loan obligations ("CLOs") and other similarly structured securities. A CBO is a trust backed by a pool of fixed income securities. A CLO is a trust typically collateralized by a pool of loans, which may include, among others, domestic and foreign senior secured loans, senior unsecured loans, and subordinate corporate loans, including loans that may be rated below investment grade or equivalent unrated loans. CDOs may charge management fees and administrative expenses. Certain CDOs may use derivatives, such as credit default swaps, to create synthetic exposure to assets rather than holding such assets directly. The trust is typically split into two or more portions, called tranches, varying in credit quality and yield. The riskiest portion is the "equity" tranche which bears the bulk of defaults from the bonds or loans in the trust and helps protect the other, more senior tranches from default. Since it is partially protected from defaults, a senior tranche from a CBO trust or CLO trust typically has higher ratings and lower yields than its underlying securities, and can be rated investment grade. Despite the protection from the equity tranche, CBO or CLO tranches can experience substantial losses due to actual defaults, increased sensitivity to defaults due to collateral default and the disappearance of protecting tranches, market anticipation of defaults, as well as aversion to CBO or CLO securities as a class. The risks of an investment in a CDO depend largely on the type of the collateral securities and the class of the CDO in which the fund invests. Normally, CBOs, CLOs and other CDOs are privately offered and sold, and thus are not registered under the securities laws. As a result, investments in CDOs may be characterized by the fund as illiquid securities. However, an active dealer market may exist under some market conditions for some CDOs. In addition to the normal risks associated with fixed income securities (e.g., interest rate risk and default risk), CDOs carry additional risks including, but not limited to: (i) the possibility that distributions from collateral securities will not be adequate to make interest or other payments; (ii) the quality of the collateral may decline in value or default; (iii) the fund may invest in CDOs that are subordinate to other classes; and (iv) the complex structure of the security may not be fully understood at the time of investment and may produce disputes with the issuer or unexpected investment results. SUBORDINATED SECURITIES The fund may also invest in other types of fixed income securities which are subordinated or "junior" to more senior securities of the issuer, or which represent interests in pools of such subordinated or junior securities. Such securities may include so-called "high yield" or "junk" bonds (i.e., bonds that are rated below investment grade by a rating agency or that are of equivalent quality) and preferred stock. Under the terms of subordinated securities, payments that would otherwise be made to their holders may be required to be made to the holders of more senior securities, and/or the subordinated or junior securities may have junior liens, if they have any rights at all, in any collateral (meaning proceeds of the collateral are required to be paid first to the holders of more senior securities). As a result, subordinated or junior securities will be disproportionately adversely affected by a default or even a perceived decline in creditworthiness of the issuer. STRUCTURED SECURITIES The fund may invest in structured securities. The value of the principal and/or interest on such securities is determined by reference to changes in the value of specific currencies, interest rates, commodities, indices or other financial indicators (the "Reference") or the relative change in two or more References. The interest rate or the principal amount payable upon maturity or redemption may be increased or decreased depending upon changes in the Reference. The terms of the structured securities may provide in certain circumstances that no principal is due at maturity and therefore may result in a loss of the fund's investment. 9 Changes in the interest rate or principal payable at maturity may be a multiple of the changes in the value of the Reference. Structured securities are a type of derivative instrument and the payment and credit qualities from these securities derive from the assets embedded in the structure from which they are issued. Structured securities may entail a greater degree of risk than other types of fixed income securities. FLOATING RATE LOANS A floating rate loan is typically originated, negotiated and structured by a U.S. or foreign commercial bank, insurance company, finance company or other financial institution for a group of investors. The financial institution typically acts as an agent for the investors, administering and enforcing the loan on their behalf. In addition, an institution, typically but not always the agent, holds any collateral on behalf of the investors. The interest rates are adjusted based on a base rate plus a premium or spread or minus a discount. The base rate usually is the London Interbank Offered Rate ("LIBOR"), the Federal Reserve federal funds rate, the prime rate or other base lending rates used by commercial lenders. LIBOR usually is an average of the interest rates quoted by several designated banks as the rates at which they pay interest to major depositors in the London interbank market on U.S. dollar-denominated deposits. Floating rate loans include loans to corporations and institutionally traded floating rate debt obligations issued by an asset-backed pool, and interests therein. The fund may invest in loans in different ways. The fund may: (i) make a direct investment in a loan by participating as one of the lenders; (ii) purchase an assignment of a loan; or (iii) purchase a participation interest in a loan. DIRECT INVESTMENT IN LOANS. It can be advantageous to the fund to make a direct investment in a loan as one of the lenders. When a new issue is purchased, such an investment is typically made at par. This means that the fund receives a return at the full interest rate for the loan. Secondary purchases of loans may be made at par, at a premium from par or at a discount from par. When the fund invests in an assignment of, or a participation interest in, a loan, the fund may pay a fee or forgo a portion of the interest payment. Consequently, the fund's return on such an investment may be lower than it would have been if the fund had made a direct investment in the underlying corporate loan. The fund may be able, however, to invest in corporate loans only through assignments or participation interests at certain times when reduced direct investment opportunities in corporate loans may exist. At other times, however, such as recently, assignments or participation interests may trade at significant discounts from par. ASSIGNMENTS. An assignment represents a portion of a loan previously attributable to a different lender. The purchaser of an assignment typically succeeds to all the rights and obligations under the loan agreement of the assigning investor and becomes an investor under the loan agreement with the same rights and obligations as the assigning investor. Assignments may, however, be arranged through private negotiations between potential assignees and potential assignors, and the rights and obligations acquired by the purchaser of an assignment may differ from, and be more limited than, those held by the assigning investor. PARTICIPATION INTERESTS. Participation interests are interests issued by a lender or other financial institution, which represent a fractional interest in a corporate loan. The fund may acquire participation interests from the financial institution or from another investor. The fund typically will have a contractual relationship only with the financial institution that issued the participation interest. As a result, the fund may have the right to receive payments of principal, interest and any fees to which it is entitled only from the financial institution and only upon receipt by such entity of such payments from the borrower. In connection with purchasing a participation interest, the fund generally will have no right to enforce compliance by the borrower with the terms of the loan agreement, nor any rights with respect to any funds acquired by other investors through set-off against the borrower and the fund may not directly benefit from the collateral supporting the loan in which it has purchased the participation interest. As a result, the fund may assume the credit risk of both the borrower and the financial institution issuing the participation interest. In the event of the insolvency of the financial institution issuing a participation interest, the fund may be treated as a general creditor of such entity. 10 OTHER INFORMATION ABOUT FLOATING RATE LOANS. Loans typically have a senior position in a borrower's capital structure. The capital structure of a borrower may include loans, senior unsecured loans, senior and junior subordinated debt, preferred stock and common stock, typically in descending order of seniority with respect to claims on the borrower's assets. Although loans typically have the most senior position in a borrower's capital structure, they remain subject to the risk of non-payment of scheduled interest or principal. Such non-payment would result in a reduction of income to the fund, a reduction in the value of the investment and a potential decrease in the net asset value of the fund. There can be no assurance that the liquidation of any collateral securing a loan would satisfy a borrower's obligation in the event of non-payment of scheduled interest or principal payments, or that such collateral could be readily liquidated. In the event of bankruptcy of a borrower, the fund could experience delays or limitations with respect to its ability to realize the benefits of the collateral securing a loan. Although a loan may be senior to equity and other debt securities in an issuer's capital structure, such obligations may be structurally subordinated to obligations of the issuer's subsidiaries. For example, if a holding company were to issue a loan, even if that issuer pledges the capital stock of its subsidiaries to secure the obligations under the loan, the assets of the operating companies are available to the direct creditors of an operating company before they would be available to the holders of the loan issued by the holding company. In order to borrow money pursuant to a loan, a borrower will frequently, for the term of the loan, pledge collateral, including but not limited to, (i) working capital assets, such as accounts receivable and inventory; (ii) tangible fixed assets, such as real property, buildings and equipment; (iii) intangible assets, such as trademarks and patent rights (but excluding goodwill); and (iv) security interests in shares of stock of subsidiaries or affiliates. In the case of loans made to non-public companies, the company's shareholders or owners may provide collateral in the form of secured guarantees and/or security interests in assets that they own. In many instances, a loan may be secured only by stock in the borrower or its subsidiaries. Collateral may consist of assets that may not be readily liquidated, and there is no assurance that the liquidation of such assets would satisfy fully a borrower's obligations under a loan. In the process of buying, selling and holding loans, the fund may receive and/or pay certain fees. Any fees received are in addition to interest payments received and may include facility fees, commitment fees, commissions and prepayment penalty fees. When the fund buys a loan it may receive a facility fee and when it sells a loan it may pay a facility fee. On an ongoing basis, the fund may receive a commitment fee based on the undrawn portion of the underlying line of credit portion of a loan. In certain circumstances, the fund may receive a prepayment penalty fee upon the prepayment of a loan by a borrower. Other fees received by the fund may include covenant waiver fees and covenant modification fees. A borrower must comply with various restrictive covenants contained in a loan agreement or note purchase agreement between the borrower and the holders of the loan. Such covenants, in addition to requiring the scheduled payment of interest and principal, may include restrictions on dividend payments and other distributions to stockholders, provisions requiring the borrower to maintain specific minimum financial ratios, and limits on total debt. In a typical loan, the agent administers the terms of the loan agreement. In such cases, the agent is normally responsible for the collection of principal and interest payments from the borrower and the apportionment of these payments to the credit of all institutions that are parties to the loan agreement. The fund will generally rely upon the agent or an intermediate participant to receive and forward to the fund its portion of the principal and interest payments on the loan. Furthermore, unless the fund has direct recourse against the borrower, the fund will rely on the agent and the other investors to use appropriate credit remedies against the borrower. For some loans, such as revolving credit facility loans ("revolvers"), an investor may have certain obligations pursuant to the loan agreement that may include the obligation to make additional loans in certain circumstances. The fund generally will reserve against these contingent obligations by segregating or otherwise designating a sufficient amount of permissible liquid assets. Delayed draw term loans are similar to revolvers, except 11 that once drawn upon by the borrower during the commitment period, they remain permanently drawn and become term loans. A prefunded L/C term loan is a facility created by the borrower in conjunction with an agent, with the loan proceeds acting as collateral for the borrower's obligations in respect of the letters of credit. Each participant in a prefunded L/C term loan fully funds its commitment amount to the agent for the facility. The fund may acquire interests in loans that are designed to provide temporary or "bridge" financing to a borrower pending the sale of identified assets or the arrangement of longer-term loans or the issuance and sale of debt obligations. Bridge loans often are unrated. The fund may also invest in loans of borrowers that have obtained bridge loans from other parties. A borrower's use of bridge loans involves a risk that the borrower may be unable to locate permanent financing to replace the bridge loan, which may impair the borrower's perceived creditworthiness. From time to time, Pioneer and its affiliates may borrow money from various banks in connection with their business activities. Such banks may also sell interests in loans to or acquire them from the fund or may be intermediate participants with respect to loans in which the fund owns interests. Such banks may also act as agents for loans held by the fund. INVERSE FLOATING RATE SECURITIES The fund may invest in inverse floating rate obligations. The interest on an inverse floater resets in the opposite direction from the market rate of interest to which the inverse floater is indexed. An inverse floater may be considered to be leveraged to the extent that its interest rate varies by a magnitude that exceeds the magnitude of the change in the index rate of interest. The higher degree of leverage inherent in inverse floaters is associated with greater volatility in their market values. AUCTION RATE SECURITIES The fund may invest in auction rate securities. Auction rate securities consist of auction rate debt securities and auction rate preferred securities issued by closed-end investment companies. Provided that the auction mechanism is successful, auction rate securities usually permit the holder to sell the securities in an auction at par value at specified intervals. The dividend is reset by "Dutch" auction in which bids are made by broker-dealers and other institutions for a certain amount of securities at a specified minimum yield. The dividend rate set by the auction is the lowest interest or dividend rate that covers all securities offered for sale. While this process is designed to permit auction rate securities to be traded at par value, there is the risk that an auction will fail due to insufficient demand for the securities. With respect to auction rate securities issued by a closed-end fund, the fund will indirectly bear its proportionate share of any management fees paid by the closed-end fund in addition to the advisory fee payable directly by the fund. Since February 2008, nearly all such auctions have failed, effectively locking in below-market interest rates. EVENT-LINKED BONDS The fund may invest in "event-linked" bonds, which sometimes are referred to as "insurance-linked" or "catastrophe" bonds. Event-linked bonds are debt obligations for which the return of principal and the payment of interest are contingent on the non-occurrence of a pre-defined "trigger" event, such as a hurricane or an earthquake of a specific magnitude. For some event-linked bonds, the trigger event's magnitude may be based on losses to a company or industry, index-portfolio losses, industry indexes or readings of scientific instruments rather than specified actual losses. If a trigger event, as defined within the terms of an event-linked bond, involves losses or other metrics exceeding a specific magnitude in the geographic region and time period specified therein, the fund may lose a portion or all of its accrued interest and/or principal invested in such event-linked bond. The fund is entitled to receive principal and interest payments so long as no trigger event occurs of the description and magnitude specified by the instrument. Event-linked bonds may be issued by government agencies, insurance companies, reinsurers, special purpose corporations or other on-shore or off-shore entities. Event-linked bonds may include special purpose vehicles or similar instruments structured to comprise a portion of a reinsurer's catastrophe-oriented 12 business, known as sidecars, or to provide reinsurance to insurance companies, known as collateralized reinsurance. In addition to the specified trigger events, event-linked bonds may also expose the fund to other risks, including but not limited to issuer (credit) default, adverse regulatory or jurisdictional interpretations and adverse tax consequences. Event-linked bonds are subject to the risk that the model used to calculate the probability of a trigger event was not accurate and underestimated the likelihood of a trigger event. This may result in more frequent and greater than expected loss of principal and/or interest, which would adversely impact the fund's total returns. Further, to the extent there are events that involve losses or other metrics, as applicable, that are at, or near, the threshold for a trigger event, there may be some delay in the return of principal and/or interest until it is determined whether a trigger event has occurred. Finally, to the extent there is a dispute concerning the definition of the trigger event relative to the specific manifestation of a catastrophe, there may be losses or delays in the payment of principal and/or interest on the event-linked bond. As a relatively new type of financial instrument, there is limited trading history for these securities, and there can be no assurance that a liquid market in these instruments will develop. Lack of a liquid market may impose the risk of higher transactions costs and the possibility that the fund may be forced to liquidate positions when it would not be advantageous to do so. Event-linked bonds are typically rated by at least one nationally recognized rating agency, but also may be unrated. Although each rating agency utilizes its own general guidelines and methodology to evaluate the risks of an event-linked bond, the average rating in the current market for event-linked bonds is "BB" by Standard &Poor's Rating Group (or the equivalent rating for another rating agency). However, there are event-linked bonds rated higher or lower than "BB." The fund's investments in event-linked bonds generally will be rated B, BB or BBB at the time of purchase, although the fund may invest in event-linked bonds rated higher or lower than these ratings, as well as event-linked bonds that are unrated. The rating for an event-linked bond primarily reflects the rating agency's calculated probability that a pre-defined trigger event will occur. This rating also assesses the bond's credit risk and model used to calculate the probability of the trigger event. Event-linked bonds typically are restricted to qualified institutional buyers and, therefore, are not subject to registration with the Securities and Exchange Commission or any state securities commission and are not listed on any national securities exchange. The amount of public information available with respect to event-linked bonds is generally less extensive than that available for issuers of registered or exchange listed securities. Event-linked bonds may be subject to the risks of adverse regulatory or jurisdictional determinations. There can be no assurance that future regulatory determinations will not adversely affect the overall market for event-linked bonds. EVENT-LINKED SWAPS The fund may obtain event-linked exposure by investing in event-linked swaps, which typically are contingent, or formulaically related to defined trigger events, or by pursuing similar event-linked derivative strategies. Trigger events include hurricanes, earthquakes and weather-related phenomena. If a trigger event occurs, the fund may lose the swap's notional amount. As derivative instruments, event-linked swaps are subject to risks in addition to the risks of investing in event-linked bonds, including counterparty risk and leverage risk. ZERO COUPON, PAY-IN-KIND, DEFERRED AND CONTINGENT PAYMENT SECURITIES The fund may invest in zero coupon securities, which are securities that are sold at a discount to par value and on which interest payments are not made during the life of the security. Upon maturity, the holder is entitled to receive the par value of the security. Pay-in-kind securities are securities that have interest payable by delivery of additional securities. Upon maturity, the holder is entitled to receive the aggregate par value of the securities. A fund accrues income with respect to zero coupon and pay-in-kind securities prior to the receipt of cash payments. Deferred payment securities are securities that remain zero coupon securities until a predetermined date, at which time the stated coupon rate becomes effective and interest 13 becomes payable at regular intervals. The interest rate on contingent payment securities is determined by the outcome of an event, such as the performance of a financial index. If the financial index does not increase by a prescribed amount, the fund may receive no interest. INFLATION-PROTECTED FIXED INCOME SECURITIES The fund may invest in inflation-linked fixed income securities, including Treasury Inflation Protected Securities ("TIPS") issued by the U.S. government, which are fixed income securities whose principal value is periodically adjusted according to the rate of inflation. The interest rate on TIPS is fixed at issuance, but over the life of the bond this interest may be paid on an increasing or decreasing principal value that has been adjusted for inflation. Although repayment of the original bond principal upon maturity is guaranteed, the market value of TIPS is not guaranteed, and will fluctuate. The values of TIPS generally fluctuate in response to changes in real interest rates, which are in turn tied to the relationship between nominal interest rates and the rate of inflation. If inflation were to rise at a faster rate than nominal interest rates, real interest rates might decline, leading to an increase in the value of TIPS. In contrast, if nominal interest rates were to increase at a faster rate than inflation, real interest rates might rise, leading to a decrease in the value of TIPS. If inflation is lower than expected during the period the fund holds TIPS, the fund may earn less on the TIPS than on a conventional bond. If interest rates rise due to reasons other than inflation (for example, due to changes in the currency exchange rates), investors in TIPS may not be protected to the extent that the increase is not reflected in the bonds' inflation measure. There can be no assurance that the inflation index for TIPS will accurately measure the real rate of inflation in the prices of goods and services. Any increase in principal value of TIPS caused by an increase in the consumer price index is taxable in the year the increase occurs, even though the fund holding TIPS will not receive cash representing the increase at that time. As a result, the fund could be required at times to liquidate other investments, including when it is not advantageous to do so, in order to satisfy the distribution requirements applicable to regulated investment companies under the Code. If the fund invests in TIPS, it will be required to treat as original issue discount any increase in the principal amount of the securities that occurs during the course of its taxable year. If the fund purchases such inflation protected securities that are issued in stripped form either as stripped bonds or coupons, it will be treated as if it had purchased a newly issued debt instrument having original issue discount. Because the fund is required to distribute substantially all of its net investment income (including accrued original issue discount), the fund's investment in either zero coupon bonds or TIPS may require it to distribute to shareholders an amount greater than the total cash income it actually receives. Accordingly, in order to make the required distributions, the fund may be required to borrow or liquidate securities. EQUITY SECURITIES AND RELATED INVESTMENTS INVESTMENTS IN EQUITY SECURITIES Equity securities, such as common stock, generally represent an ownership interest in a company. While equity securities have historically generated higher average returns than fixed income securities, equity securities have also experienced significantly more volatility in those returns. An adverse event, such as an unfavorable earnings report, may depress the value of a particular equity security held by the fund. Also, the prices of equity securities, particularly common stocks, are sensitive to general movements in the stock market. A drop in the stock market may depress the price of equity securities held by the fund. WARRANTS AND STOCK PURCHASE RIGHTS The fund may invest in warrants, which are securities permitting, but not obligating, their holder to subscribe for other securities. Warrants do not carry with them the right to dividends or voting rights with respect to the securities that they entitle their holders to purchase, and they do not represent any rights in the assets of the issuer. 14 The fund may also invest in stock purchase rights. Stock purchase rights are instruments, frequently distributed to an issuer's shareholders as a dividend, that entitle the holder to purchase a specific number of shares of common stock on a specific date or during a specific period of time. The exercise price on the rights is normally at a discount from market value of the common stock at the time of distribution. The rights do not carry with them the right to dividends or to vote and may or may not be transferable. Stock purchase rights are frequently used outside of the United States as a means of raising additional capital from an issuer's current shareholders. As a result, an investment in warrants or stock purchase rights may be considered more speculative than certain other types of investments. In addition, the value of a warrant or a stock purchase right does not necessarily change with the value of the underlying securities, and warrants and stock purchase rights expire worthless if they are not exercised on or prior to their expiration date. PREFERRED SHARES The fund may invest in preferred shares. Preferred shares are equity securities, but they have many characteristics of fixed income securities, such as a fixed dividend payment rate and/or a liquidity preference over the issuer's common shares. However, because preferred shares are equity securities, they may be more susceptible to risks traditionally associated with equity investments than the fund's fixed income securities. Preferred stocks may differ in many of their provisions. Among the features that differentiate preferred stocks from one another are the dividend rights, which may be cumulative or noncumulative and participating or non-participating, redemption provisions, and voting rights. Such features will establish the income return and may affect the prospects for capital appreciation or risks of capital loss. The market prices of preferred stocks are subject to changes in interest rates and are more sensitive to changes in an issuer's creditworthiness than are the prices of debt securities. Shareholders of preferred stock may suffer a loss of value if dividends are not paid. Under ordinary circumstances, preferred stock does not carry voting rights. INVESTMENTS IN INITIAL PUBLIC OFFERINGS Companies involved in initial public offering (IPOs) generally have limited operating histories, and prospects for future profitability are uncertain. The market for IPO issuers has been volatile, and share prices of newly public companies have fluctuated significantly over short periods of time. Further, stocks of newly-public companies may decline shortly after the IPO. There is no assurance that the fund will have access to IPOs. The purchase of IPO shares may involve high transaction costs. Because of the price volatility of IPO shares, the fund may choose to hold IPO shares for a very short period of time. This may increase the turnover of the portfolio and may lead to increased expenses to the fund, such as commissions and transaction costs. The market for IPO shares can be speculative and/or inactive for extended periods of time. There may be only a limited number of shares available for trading. The limited number of shares available for trading in some IPOs may also make it more difficult for the fund to buy or sell significant amounts of shares without an unfavorable impact on prevailing prices. NON-U.S. INVESTMENTS EQUITY SECURITIES OF NON-U.S. ISSUERS The fund may invest in equity securities of non-U.S. issuers, including American Depositary Receipts ("ADRs"), European Depositary Receipts ("EDRs"), Global Depositary Receipts ("GDRs") and other similar instruments. DEBT OBLIGATIONS OF NON-U.S. GOVERNMENTS The fund may invest in all types of debt obligations of non-U.S. governments. An investment in debt obligations of non-U.S. governments and their political subdivisions (sovereign debt) involves special risks that are not present in corporate debt obligations. The non-U.S. issuer of the sovereign debt or the non-U.S. governmental authorities that control the repayment of the debt may be unable or unwilling to repay principal or interest 15 when due, and the fund may have limited recourse in the event of a default. As a sovereign entity, the issuing government may be immune from lawsuits in the event of its failure or refusal to pay the obligations when due. During periods of economic uncertainty (such as the financial crisis that began in 2008), the values of sovereign debt and of securities of issuers that purchase sovereign debt may be more volatile than prices of debt obligations of U.S. issuers. In the past, certain non-U.S. countries have encountered difficulties in servicing their debt obligations, withheld payments of principal and interest, declared moratoria on the payment of principal and interest on their sovereign debt, or restructured their debt to effectively eliminate portions of it, and similar occurrences may happen in the future. There is no bankruptcy proceeding by which sovereign debt on which governmental entities have defaulted may be collected in whole or in part. A sovereign debtor's willingness or ability to repay principal and pay interest in a timely manner may be affected by, among other factors, its cash flow situation, the extent of its foreign currency reserves, the availability of sufficient foreign exchange, the relative size of the debt service burden, the sovereign debtor's policy toward its principal international lenders and local political constraints. Sovereign debtors may also be dependent on disbursements or assistance from non-U.S. governments, multinational agencies and other entities to reduce principal and interest arrearages on their debt. Assistance may be dependent on a country's implementation of austerity measures and reforms, which measures may limit or be perceived to limit economic growth and recovery. The failure of a sovereign debtor to implement economic reforms, achieve specified levels of economic performance or repay principal or interest when due may result in the cancellation of third-party commitments to lend funds to the sovereign debtor, which may further impair such debtor's ability or willingness to service its debts. EURODOLLAR INSTRUMENTS AND SAMURAI AND YANKEE BONDS. The fund may invest in Eurodollar instruments and Samurai and Yankee bonds. Eurodollar instruments are bonds of corporate and government issuers that pay interest and principal in U.S. dollars but are issued in markets outside the United States, primarily in Europe. Samurai bonds are yen-denominated bonds sold in Japan by non-Japanese issuers. Yankee bonds are U.S. dollar denominated bonds typically issued in the U.S. by non-U.S. governments and their agencies and non-U.S. banks and corporations. The fund may also invest in Eurodollar Certificates of Deposit ("ECDs"), Eurodollar Time Deposits ("ETDs") and Yankee Certificates of Deposit ("Yankee CDs"). ECDs are U.S. dollar-denominated certificates of deposit issued by non-U.S. branches of domestic banks; ETDs are U.S. dollar-denominated deposits in a non-U.S. branch of a U.S. bank or in a non-U.S. bank; and Yankee CDs are U.S. dollar-denominated certificates of deposit issued by a U.S. branch of a non-U.S. bank and held in the U.S. These investments involve risks that are different from investments in securities issued by U.S. issuers, including potential unfavorable political and economic developments, non-U.S. withholding or other taxes, seizure of non-U.S. deposits, currency controls, interest limitations or other governmental restrictions which might affect payment of principal or interest. INVESTMENTS IN EMERGING MARKETS. The fund may invest in securities of issuers in countries with emerging economies or securities markets. Emerging economies or securities markets will generally include, but not be limited to, countries included in the Morgan Stanley Capital International (MSCI) Emerging & Frontier Markets Index. The fund will generally focus on emerging markets that do not impose unusual trading requirements which tend to restrict the flow of investments. In addition, the fund may invest in unquoted securities of emerging market issuers. RISKS OF NON-U.S. INVESTMENTS. Investing in securities of non-U.S. issuers involves considerations and risks not typically associated with investing in the securities of issuers in the U.S. These risks are heightened with respect to investments in countries with emerging markets and economies. The risks of investing in securities of non-U.S. issuers generally, or in issuers with significant exposure to non-U.S. markets, may be related, among other things, to (i) differences in size, liquidity and volatility of, and the degree and manner of regulation of, the securities markets of certain non-U.S. markets compared to the securities markets in the U.S.; (ii) economic, political and social factors; and (iii) foreign exchange matters, such as restrictions on the repatriation of capital, fluctuations in exchange rates between the U.S. dollar and the currencies in which the portfolio securities are quoted or denominated, exchange control regulations and costs associated 16 with currency exchange. The political and economic structures in certain countries, particularly emerging markets, may undergo significant evolution and rapid development, and such countries may lack the social, political and economic stability characteristic of more developed countries. NON-U.S. SECURITIES MARKETS AND REGULATIONS. There may be less publicly available information about non-U.S. markets and issuers than is available with respect to U.S. securities and issuers. Non-U.S. companies generally are not subject to accounting, auditing and financial reporting standards, practices and requirements comparable to those applicable to U.S. companies. The trading markets for most non-U.S. securities are generally less liquid and subject to greater price volatility than the markets for comparable securities in the U.S. The markets for securities in certain emerging markets are in the earliest stages of their development. Even the markets for relatively widely traded securities in certain non-U.S. markets, including emerging market countries, may not be able to absorb, without price disruptions, a significant increase in trading volume or trades of a size customarily undertaken by institutional investors in the U.S. Additionally, market making and arbitrage activities are generally less extensive in such markets, which may contribute to increased volatility and reduced liquidity. The less liquid a market, the more difficult it may be for the fund to accurately price its portfolio securities or to dispose of such securities at the times determined by Pioneer to be appropriate. The risks associated with reduced liquidity may be particularly acute in situations in which the fund's operations require cash, such as in order to meet redemptions and to pay its expenses. ECONOMIC, POLITICAL AND SOCIAL FACTORS. Certain countries, including emerging markets, may be subject to a greater degree of economic, political and social instability than in the U.S. and Western European countries. Such instability may result from, among other things: (i) authoritarian governments or military involvement in political and economic decision making; (ii) popular unrest associated with demands for improved economic, political and social conditions; (iii) internal insurgencies; (iv) hostile relations with neighboring countries; and (v) ethnic, religious and racial conflict. Such economic, political and social instability could significantly disrupt the financial markets in such countries and the ability of the issuers in such countries to repay their obligations. In addition, it may be difficult for the fund to pursue claims against a foreign issuer in the courts of a foreign country. Investing in emerging market countries also involves the risk of expropriation, nationalization, confiscation of assets and property or the imposition of restrictions on foreign investments and on repatriation of capital invested. In the event of such expropriation, nationalization or other confiscation in any emerging country, the fund could lose its entire investment in that country. Certain emerging market countries restrict or control foreign investment in their securities markets to varying degrees. These restrictions may limit the fund's investment in those markets and may increase the expenses of the fund. In addition, the repatriation of both investment income and capital from certain markets is subject to restrictions such as the need for certain governmental consents. Even where there is no outright restriction on repatriation of capital, the mechanics of repatriation may affect certain aspects of the fund's operation. Economies in individual countries may differ favorably or unfavorably from the U.S. economy in such respects as growth of gross domestic product, rates of inflation, currency valuation, capital reinvestment, resource self-sufficiency and balance of payments positions. Many countries have experienced substantial, and in some cases extremely high, rates of inflation for many years. Inflation and rapid fluctuations in inflation rates have had, and may continue to have, very negative effects on the economies and securities markets of certain emerging countries. Unanticipated political or social developments may affect the values of the fund's investments and the availability to the fund of additional investments in such countries. In the past, the economies, securities and currency markets of many emerging markets have experienced significant disruption and declines. There can be no assurance that these economic and market disruptions might not occur again. 17 Economies in emerging market countries generally are dependent heavily upon international trade and, accordingly, have been and may continue to be affected adversely by trade barriers, exchange controls, managed adjustments in relative currency values and other protectionist measures imposed or negotiated by the countries with which they trade. These economies also have been, and may continue to be, affected adversely and significantly by economic conditions in the countries with which they trade. CURRENCY RISKS. The value of the securities quoted or denominated in foreign currencies may be adversely affected by fluctuations in the relative currency exchange rates and by exchange control regulations. The fund 's investment performance may be negatively affected by a devaluation of a currency in which the fund's investments are quoted or denominated. Further, the fund's investment performance may be significantly affected, either positively or negatively, by currency exchange rates because the U.S. dollar value of securities quoted or denominated in another currency will increase or decrease in response to changes in the value of such currency in relation to the U.S. dollar. CUSTODIAN SERVICES AND RELATED INVESTMENT COSTS. Custodial services and other costs relating to investment in international securities markets generally are more expensive than in the U.S. Such markets have settlement and clearance procedures that differ from those in the U.S. In certain markets there have been times when settlements have been unable to keep pace with the volume of securities transactions, making it difficult to conduct such transactions. The inability of the fund to make intended securities purchases due to settlement problems could cause the fund to miss attractive investment opportunities. Inability to dispose of a portfolio security caused by settlement problems could result either in losses to the fund due to a subsequent decline in value of the portfolio security or could result in possible liability to the fund. In addition, security settlement and clearance procedures in some emerging countries may not fully protect the fund against loss or theft of its assets. WITHHOLDING AND OTHER TAXES. The fund may be subject to taxes, including withholding taxes, on income (possibly including, in some cases, capital gains) that are or may be imposed by certain countries with respect to the fund's investments in such countries. These taxes may reduce the return achieved by the fund. Treaties between the U.S. and such countries may not be available to reduce the otherwise applicable tax rates. EUROPE - RECENT EVENTS. Some countries in Europe have experienced severe economic and financial difficulties. Many non-governmental issuers, and even certain governments, have defaulted on, or been forced to restructure, their debts; many other issuers have faced difficulties obtaining credit or refinancing existing obligations; financial institutions have in many cases required government or central bank support, have needed to raise capital, and/or have been impaired in their ability to extend credit; and financial markets in Europe and elsewhere have experienced extreme volatility and declines in asset values and liquidity. These difficulties may continue, worsen or spread within and beyond Europe. Responses to the financial problems by European governments, central banks and others, including austerity measures and reforms, may not work, may result in social unrest and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets and asset valuations around the world. In addition, one or more countries may abandon the euro, the common currency of the European Union, and/or withdraw from the European Union. The impact of these actions, especially if they occur in a disorderly fashion, is not clear but could be significant and far-reaching. Whether or not the fund invests in securities of issuers located in Europe or with significant exposure to European issuers or countries, these events could negatively affect the value and liquidity of the fund's investments due to the interconnected nature of the global economy and capital markets. INVESTMENTS IN DEPOSITARY RECEIPTS The fund may hold securities of non-U.S. issuers in the form of ADRs, EDRs, GDRs and other similar instruments. Generally, ADRs in registered form are designed for use in U.S. securities markets, and EDRs and GDRs and other similar global instruments in bearer form are designed for use in non-U.S. securities markets. 18 ADRs are denominated in U.S. dollars and represent an interest in the right to receive securities of non-U.S. issuers deposited in a U.S. bank or correspondent bank. ADRs do not eliminate all the risk inherent in investing in the securities of non-U.S. issuers. However, by investing in ADRs rather than directly in equity securities of non-U.S. issuers, the fund will avoid currency risks during the settlement period for either purchases or sales. EDRs and GDRs are not necessarily denominated in the same currency as the underlying securities which they represent. For purposes of the fund's investment policies, investments in ADRs, EDRs, GDRs and similar instruments will be deemed to be investments in the underlying equity securities of non-U.S. issuers. The fund may acquire depositary receipts from banks that do not have a contractual relationship with the issuer of the security underlying the depositary receipt to issue and secure such depositary receipt. To the extent the fund invests in such unsponsored depositary receipts there may be an increased possibility that the fund may not become aware of events affecting the underlying security and thus the value of the related depositary receipt. In addition, certain benefits (i.e., rights offerings) which may be associated with the security underlying the depositary receipt may not inure to the benefit of the holder of such depositary receipt. FOREIGN CURRENCY TRANSACTIONS The fund may engage in foreign currency transactions. These transactions may be conducted at the prevailing spot rate for purchasing or selling currency in the foreign exchange market. The fund also may enter into forward foreign currency exchange contracts, which are contractual agreements to purchase or sell a specified currency at a specified future date and price set at the time of the contract. The fund may enter into forward foreign currency exchange contracts involving currencies of the different countries in which the fund invests as a hedge against possible variations in the foreign exchange rates between these currencies and the U.S. dollar. Transaction hedging is the purchase or sale of forward foreign currency contracts with respect to specific receivables or payables of the fund, accrued in connection with the purchase and sale of its portfolio securities quoted in foreign currencies. Portfolio hedging is the use of forward foreign currency contracts to offset portfolio security positions denominated or quoted in such foreign currencies. There is no guarantee that the fund will be engaged in hedging activities when adverse exchange rate movements occur or that its hedging activities will be successful. The fund will not attempt to hedge all of its foreign portfolio positions and will enter into such transactions only to the extent, if any, deemed appropriate by Pioneer. Hedging against a decline in the value of a currency does not eliminate fluctuations in the prices of portfolio securities or prevent losses if the prices of such securities decline. Such transactions also limit the opportunity for gain if the value of the hedged currency should rise. Moreover, it may not be possible for the fund to hedge against a devaluation that is so generally anticipated that the fund is not able to contract to sell the currency at a price above the devaluation level it anticipates. The fund may also engage in cross-hedging by using forward contracts in one currency to hedge against fluctuations in the value of securities denominated in a different currency, if Pioneer determines that there is a pattern of correlation between the two currencies. Cross-hedging may also include entering into a forward transaction involving two foreign currencies, using one foreign currency as a proxy for the U.S. dollar to hedge against variations in the other foreign currency. The fund may use forward currency exchange contracts to reduce or gain exposure to a currency. To the extent the fund gains exposure to a currency through these instruments, the resulting exposure may exceed the value of securities denominated in that currency held by the fund. For example, where the fund's security selection has resulted in an overweight or underweight exposure to a particular currency relative to the fund's benchmark, the fund may seek to adjust currency exposure using forward currency exchange contracts. The cost to the fund of engaging in foreign currency transactions varies with such factors as the currency involved, the size of the contract, the length of the contract period, differences in interest rates between the two currencies and the market conditions then prevailing. Since transactions in foreign currency and 19 forward contracts are usually conducted on a principal basis, no fees or commissions are involved. The fund may close out a forward position in a currency by selling the forward contract or by entering into an offsetting forward contract. The precise matching of the forward contract amounts and the value of the securities involved will not generally be possible because the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the date on which the contract is entered into and the date it matures. Using forward contracts to protect the value of the portfolio securities against a decline in the value of a currency does not eliminate fluctuations in the underlying prices of the securities. It simply establishes a rate of exchange which the fund can achieve at some future point in time. The precise projection of currency market movements is not possible, and short-term hedging provides a means of fixing the U.S. dollar value of only a portion of the fund's foreign assets. While the fund may benefit from foreign currency transactions, unanticipated changes in currency prices may result in a poorer overall performance for the fund than if it had not engaged in any such transactions. Moreover, there may be imperfect correlation between the portfolio holdings of securities quoted or denominated in a particular currency and forward contracts entered into by the fund. Such imperfect correlation may cause the fund to sustain losses which will prevent the fund from achieving a complete hedge or expose the fund to risk of foreign exchange loss. Over-the-counter markets for trading foreign forward currency contracts offer less protection against defaults than is available when trading in currency instruments on an exchange. Since a forward foreign currency exchange contract is not guaranteed by an exchange or clearinghouse, a default on the contract would deprive the fund of unrealized profits or force the fund to cover its commitments for purchase or resale, if any, at the current market price. If the fund enters into a forward contract to purchase foreign currency, the custodian or Pioneer will segregate liquid assets. See "Asset Segregation." OPTIONS ON FOREIGN CURRENCIES The fund may purchase options on foreign currencies for hedging purposes in a manner similar to that of transactions in forward contracts. For example, a decline in the dollar value of a foreign currency in which portfolio securities are quoted or denominated will reduce the dollar value of such securities, even if their value in the foreign currency remains constant. In an attempt to protect against such decreases in the value of portfolio securities, the fund may purchase put options on the foreign currency. If the value of the currency declines, the fund will have the right to sell such currency for a fixed amount of dollars which exceeds the market value of such currency. This would result in a gain that may offset, in whole or in part, the negative effect of currency depreciation on the value of the fund's securities quoted or denominated in that currency. Conversely, if a rise in the dollar value of a currency is projected for those securities to be acquired, thereby increasing the cost of such securities, the fund may purchase call options on such currency. If the value of such currency increases, the purchase of such call options would enable the fund to purchase currency for a fixed amount of dollars which is less than the market value of such currency. Such a purchase would result in a gain that may offset, at least partially, the effect of any currency-related increase in the price of securities the fund intends to acquire. As in the case of other types of options transactions, however, the benefit the fund derives from purchasing foreign currency options will be reduced by the amount of the premium and related transaction costs. In addition, if currency exchange rates do not move in the direction or to the extent anticipated, the fund could sustain losses on transactions in foreign currency options which would deprive it of a portion or all of the benefits of advantageous changes in such rates. 20 The fund may also write options on foreign currencies for hedging purposes. For example, if the fund anticipated a decline in the dollar value of securities quoted or denominated in a foreign currency because of declining exchange rates, it could, instead of purchasing a put option, write a covered call option on the relevant currency. If the expected decline occurs, the option will most likely not be exercised, and the decrease in value of portfolio securities will be partially offset by the amount of the premium received by the fund. Similarly, the fund could write a put option on the relevant currency, instead of purchasing a call option, to hedge against an anticipated increase in the dollar cost of securities to be acquired. If exchange rates move in the manner projected, the put option will expire unexercised and allow the fund to offset such increased cost up to the amount of the premium. However, as in the case of other types of options transactions, the writing of a foreign currency option will constitute only a partial hedge up to the amount of the premium, and only if rates move in the expected direction. If unanticipated exchange rate fluctuations occur, the option may be exercised and the fund would be required to purchase or sell the underlying currency at a loss, which may not be fully offset by the amount of the premium. As a result of writing options on foreign currencies, the fund also may be required to forgo all or a portion of the benefits which might otherwise have been obtained from favorable movements in currency exchange rates. A call option written on foreign currency by the fund is "covered" if the fund owns the underlying foreign currency subject to the call, or if it has an absolute and immediate right to acquire that foreign currency without additional cash consideration. A call option is also covered if the fund holds a call on the same foreign currency for the same principal amount as the call written where the exercise price of the call held is (a) equal to or less than the exercise price of the call written or (b) greater than the exercise price of the call written if the amount of the difference is maintained by the fund in cash or liquid securities. See "Asset Segregation." The fund may close out its position in a currency option by either selling the option it has purchased or entering into an offsetting option. An exchange-traded options position may be closed out only on an options exchange which provides a secondary market for an option of the same series. Although the fund will generally purchase or write only those options for which there appears to be an active secondary market, there is no assurance that a liquid secondary market on an exchange will exist for any particular option, or at any particular time. For some options no secondary market on an exchange may exist. In such event, it might not be possible to effect closing transactions in particular options, with the result that the fund would have to exercise its options in order to realize any profit and would incur transaction costs upon the sale of underlying currencies pursuant to the exercise of put options. If the fund as a covered call option writer is unable to effect a closing purchase transaction in a secondary market, it will not be able to sell the underlying currency (or security quoted or denominated in that currency) until the option expires or it delivers the underlying currency upon exercise. The fund may also use options on currencies to cross-hedge, which involves writing or purchasing options on one currency to hedge against changes in exchange rates of a different currency with a pattern of correlation. Cross-hedging may also include using a foreign currency as a proxy for the U.S. dollar, if Pioneer determines that there is a pattern of correlation between that currency and the U.S. dollar. The fund may purchase and write over-the-counter options to the extent consistent with its limitation on investments in illiquid securities. Trading in over-the-counter options is subject to the risk that the other party will be unable or unwilling to close out options purchased or written by the fund. NATURAL DISASTERS Certain areas of the world, including areas within the United States, historically have been prone to natural disasters, such as hurricanes, earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes, wildfires or droughts. Such disasters, and the resulting damage, could have a significant adverse impact on the economies of those areas and on the ability of issuers in which the fund invests to conduct their 21 businesses, and thus on the investments made by the fund in such geographic areas and/or issuers. Adverse weather conditions could have a significant adverse impact on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters. INVESTMENT COMPANY SECURITIES AND REAL ESTATE INVESTMENT TRUSTS OTHER INVESTMENT COMPANIES The fund may invest in the securities of other investment companies to the extent that such investments are consistent with the fund's investment objectives and policies and permissible under the Investment Company Act of 1940, as amended (the "1940 Act"). Under one provision of the 1940 Act, a fund may not acquire the securities of another investment company if such purchase would result in (i) 3% or more of the total outstanding voting securities of any one investment company being held by the fund, (ii) 5% or more of the fund's total assets being invested in any one investment company, or (iii) 10% or more of the fund's total assets being invested in securities of other investment companies. However, there are several provisions of the 1940 Act and rules thereunder that allow more expansive investment in investment companies. In addition, these limitations do not apply to the purchase of shares of any investment company in connection with a merger, consolidation, reorganization or acquisition of substantially all the assets of another investment company. The fund may also invest without limit in money market funds. Investing in other investment companies subjects the fund to the risks of investing in the underlying securities held by those investment companies. The fund, as a holder of the securities of other investment companies, will bear its pro rata portion of the other investment companies' expenses, including advisory fees. These expenses are in addition to the direct expenses of the fund's own operations. EXCHANGE TRADED FUNDS The fund may invest in exchange traded funds ("ETFs"). ETFs, such as SPDRs, iShares and various country index funds, are funds whose shares are traded on a national exchange or the National Association of Securities Dealers' Automated Quotation System ("NASDAQ"). ETFs may be based on underlying equity or fixed income securities. SPDRs, for example, seek to provide investment results that generally correspond to the performance of the component common stocks of the S&P 500. ETFs do not sell individual shares directly to investors and only issue their shares in large blocks known as "creation units." The investor purchasing a creation unit then sells the individual shares on a secondary market. Therefore, the liquidity of ETFs depends on the adequacy of the secondary market. There can be no assurance that an ETF's investment objective will be achieved. ETFs based on an index may not replicate and maintain exactly the composition and relative weightings of securities in the index. ETFs are subject to the risks of investing in the underlying securities. The fund, as a holder of the securities of the ETF, will bear its pro rata portion of the ETF's expenses, including advisory fees. These expenses are in addition to the direct expenses of the fund's own operations. Many ETFs have received exemptive orders issued by the Securities and Exchange Commission that would permit the fund to invest in those ETFs beyond the limitations applicable to other investment companies, subject to certain terms and conditions. Some ETFs are not structured as investment companies and thus are not regulated under the 1940 Act. Certain ETFs, including leveraged ETFs and inverse ETFs, may have embedded leverage. Leveraged ETFs seek to multiply the return of the tracked index (e.g., twice the return) by using various forms of derivative transactions. Inverse ETFs seek to negatively correlate with the performance of a particular index by using various forms of derivative transactions, including by short-selling the underlying index. An investment in an inverse ETF will decrease in value when the value of the underlying index rises. By investing in leveraged ETFs or inverse ETFs, the fund can commit fewer assets to the investment in the securities represented on the index than would otherwise be required. Leveraged ETFs and inverse ETFs present all of the risks that regular ETFs present. In addition, leveraged ETFs and inverse ETFs determine their return over a specific, pre-set time period, typically daily, and, as a result, there is no guarantee that the ETF's actual long term returns will be equal to the daily return that 22 the fund seeks to achieve. For example, on a long-term basis (e.g., a period of 6 months or a year), the return of a leveraged ETF may in fact be considerably less than two times the long-term return of the tracked index. Furthermore, because leveraged ETFs and inverse ETFs achieve their results by using derivative instruments, they are subject to the risks associated with derivative transactions, including the risk that the value of the derivatives may rise or fall more rapidly than other investments, thereby causing the ETF to lose money and, consequently, the value of the fund's investment to decrease. Investing in derivative instruments also involves the risk that other parties to the derivative contract may fail to meet their obligations, which could cause losses to the ETF. Short sales in particular are subject to the risk that, if the price of the security sold short increases, the inverse ETF may have to cover its short position at a higher price than the short sale price, resulting in a loss to the inverse ETF and, indirectly, to the fund. An ETF's use of these techniques will make the fund's investment in the ETF more volatile than if the fund were to invest directly in the securities underlying the tracked index, or in an ETF that does not use leverage or derivative instruments. However, by investing in a leveraged ETF or an inverse ETF rather than directly purchasing and/or selling derivative instruments, the fund will limit its potential loss solely to the amount actually invested in the ETF (that is, the fund will not lose more than the principal amount invested in the ETF). REAL ESTATE INVESTMENT TRUSTS ("REITS") The fund may invest in REITs. REITs are companies that invest primarily in income producing real estate or real estate-related loans or interests. REITs are generally classified as equity REITs, mortgage REITs or a combination of equity and mortgage REITs. Equity REITs invest the majority of their assets directly in real property and derive income primarily from the collection of rents. Equity REITs can also realize capital gains by selling properties that have appreciated in value. Mortgage REITs invest the majority of their assets in real estate mortgages and derive income from the collection of interest payments. REITs are not taxed on income distributed to shareholders provided they comply with the applicable requirements of the Internal Revenue Code of 1986, as amended (the "Code"). The fund will indirectly bear its proportionate share of any management and other expenses paid by REITs in which it invests in addition to the expenses paid by the fund. Such indirect expenses are not reflected in the fee table or expense example in the fund's prospectus. Debt securities issued by REITs are, for the most part, general and unsecured obligations and are subject to risks associated with REITs. Investing in REITs involves certain unique risks in addition to those risks associated with investing in the real estate industry in general. An equity REIT may be affected by changes in the value of the underlying properties owned by the REIT. A mortgage REIT may be affected by changes in interest rates and the ability of the issuers of its portfolio mortgages to repay their obligations. REITs are dependent upon the skills of their managers and are not diversified. REITs are generally dependent upon maintaining cash flows to repay borrowings and to make distributions to shareholders and are subject to the risk of default by lessees or borrowers. REITs whose underlying assets are concentrated in properties used by a particular industry, such as health care, are also subject to risks associated with such industry. REITs (especially mortgage REITs) are also subject to interest rate risks. When interest rates decline, the value of a REIT's investment in fixed rate obligations can be expected to rise. Conversely, when interest rates rise, the value of a REIT's investment in fixed rate obligations can be expected to decline. If the REIT invests in adjustable rate mortgage loans, the interest rates on which are reset periodically, yields on a REIT's investments in such loans will gradually align themselves to reflect changes in market interest rates. This causes the value of such investments to fluctuate less dramatically in response to interest rate fluctuations than would investments in fixed rate obligations. REITs may have limited financial resources, may trade less frequently and in a limited volume and may be subject to more abrupt or erratic price movements than larger company securities. Historically REITs have been more volatile in price than the larger capitalization stocks included in Standard & Poor's 500 Stock Index (the "S&P 500"). 23 DERIVATIVE INSTRUMENTS DERIVATIVES The fund may, but is not required to, use futures and options on securities, indices and currencies, forward foreign currency exchange contracts and other derivatives. A derivative is a security or instrument whose value is determined by reference to the value or the change in value of one or more securities, currencies, indices or other financial instruments. The fund may use derivatives for a variety of purposes, including: in an attempt to hedge against adverse changes in the market prices of securities, interest rates or currency exchange rates; as a substitute for purchasing or selling securities; to attempt to increase the fund's return as a non-hedging strategy that may be considered speculative; and to manage portfolio characteristics (for example, for funds investing in securities denominated in non-U.S. currencies, a portfolio's currency exposure, or, for funds investing in fixed income securities, a portfolio's duration or credit quality). The fund may choose not to make use of derivatives for a variety of reasons, and any use may be limited by applicable law and regulations. Using derivatives exposes the fund to additional risks and may increase the volatility of the fund's net asset value and may not provide the expected result. Derivatives may have a leveraging effect on the portfolio. Leverage generally magnifies the effect of a change in the value of an asset and creates a risk of loss of value in a larger pool of assets than the fund would otherwise have had. Therefore, using derivatives can disproportionately increase losses and reduce opportunities for gain. If changes in a derivative's value do not correspond to changes in the value of the fund's other investments or do not correlate well with the underlying assets, rate or index, the fund may not fully benefit from, or could lose money on, or could experience unusually high expenses as a result of, the derivative position. Derivatives involve the risk of loss if the counterparty defaults on its obligation. Certain derivatives may be less liquid, which may reduce the returns of the fund if it cannot sell or terminate the derivative at an advantageous time or price. The fund also may have to sell assets at inopportune times to satisfy its obligations. The fund may not be able to purchase or sell a portfolio security at a time that would otherwise be favorable for it to do so, or may have to sell a portfolio security at a disadvantageous time or price to maintain cover or to segregate securities in connection with its use of derivatives. Some derivatives may involve the risk of improper valuation. Suitable derivatives may not be available in all circumstances or at reasonable prices and may not be used by the fund for a variety of reasons. Financial reform laws enacted after the financial crisis of 2008-2009, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank"), are changing many aspects of financial regulation applicable to derivatives. For instance, Dodd-Frank calls for the comprehensive regulation of swaps by the Commodity Futures Trading Commission (the "CFTC") and the Securities and Exchange Commission (the "SEC"). The CFTC and the SEC are in the process of adopting and implementing new regulations applicable to these instruments, including rules with respect to recordkeeping, reporting, business conduct, relationship documentation, margin, clearing, and trade execution requirements. In addition, Dodd-Frank requires the registration of certain parties that deal or engage in substantial trading, execution or advisory activities in the markets for swaps. The extent and impact of these regulations are not yet fully known and may not be known for some time. The fund's use of derivatives may be affected by other applicable laws and regulations and may be subject to review by the SEC, the CFTC, exchange and market authorities and other regulators in the United States and abroad. The fund's ability to use derivatives may be limited by tax considerations. Certain derivatives transactions, including certain options, swaps, forward contracts, and certain options on foreign currencies, are entered into directly by the counterparties or through financial institutions acting as market makers (OTC derivatives), rather than being traded on exchanges or in markets registered with the CFTC or the SEC. Many of the protections afforded to exchange participants will not be available to participants in OTC derivatives transactions. For example, OTC derivatives transactions are not subject to the guarantee of an exchange, and only OTC derivatives that are either required to be cleared or submitted 24 voluntarily for clearing to a clearinghouse will enjoy the protections that central clearing provides against default by the original counterparty to the trade. In an OTC derivatives transaction that is not cleared, the fund bears the risk of default by its counterparty. In a cleared derivatives transaction, the fund is instead exposed to the risk of default of the clearinghouse and, to the extent the fund has posted any margin, the risk of default of the broker through which it has entered into the transaction. Information available on counterparty creditworthiness may be incomplete or outdated, thus reducing the ability to anticipate counterparty defaults. Derivatives involve operational risk. There may be incomplete or erroneous documentation or inadequate collateral or margin, or transactions may fail to settle. For derivatives not guaranteed by an exchange or clearinghouse, the fund may have only contractual remedies in the event of a counterparty default, and there may be delays, costs, disagreements as to the meaning of contractual terms and litigation in enforcing those remedies. Swap contracts that are required to be cleared must be traded on a regulated execution facility or contract market that makes them available for trading. The establishment of a centralized exchange or market for swap transactions may disrupt or limit the swap market and may not result in swaps being easier to trade or value. Market-traded swaps may become more standardized, and the fund may not be able to enter into swaps that meet its investment needs. The fund also may not be able to find a clearinghouse willing to accept the swaps for clearing. The new regulations may make using swaps more costly, may limit their availability, or may otherwise adversely affect their value or performance. Risks associated with the use of derivatives are magnified to the extent that a large portion of the fund's assets are committed to derivatives in general or are invested in just one or a few types of derivatives. OPTIONS ON SECURITIES AND SECURITIES INDICES The fund may purchase and write put and call options on any security in which it may invest or options on any securities index based on securities in which it may invest. The fund may also be able to enter into closing sale transactions in order to realize gains or minimize losses on options it has purchased. WRITING CALL AND PUT OPTIONS ON SECURITIES. A call option written by the fund obligates the fund to sell specified securities to the holder of the option at a specified price if the option is exercised at any time before the expiration date. The exercise price may differ from the market price of an underlying security. The fund has the risk of loss that the price of an underlying security may decline during the call period. The risk may be offset to some extent by the premium the fund receives. If the value of the investment does not rise above the call price, it's likely that the call will lapse without being exercised. In that case, the fund would keep the cash premium and the investment. All call options written by the fund are covered, which means that the fund will own the securities subject to the options as long as the options are outstanding, or the fund will use the other methods described below. The fund's purpose in writing covered call options is to realize greater income than would be realized on portfolio securities transactions alone. However, the fund may forgo the opportunity to profit from an increase in the market price of the underlying security. A put option written by the fund would obligate the fund to purchase specified securities from the option holder at a specified price if the option is exercised at any time before the expiration date. The fund has no control over when it may be required to purchase the underlying securities. All put options written by the fund would be covered, which means that the fund would have segregated assets with a value at least equal to the exercise price of the put option. The purpose of writing such options is to generate additional income for the fund. However, in return for the option premium, the fund accepts the risk that it may be required to purchase the underlying security at a price in excess of its market value at the time of purchase. Call and put options written by the fund will also be considered to be covered to the extent that the fund's liabilities under such options are wholly or partially offset by its rights under call and put options purchased by the fund. In addition, a written call option or put may be covered by entering into an offsetting forward contract and/or by purchasing an offsetting option or any other option which, by virtue of its exercise price or otherwise, reduces the fund's net exposure on its written option position. 25 WRITING CALL AND PUT OPTIONS ON SECURITIES INDICES. The fund may also write (sell) covered call and put options on any securities index composed of securities in which it may invest. Options on securities indices are similar to options on securities, except that the exercise of securities index options requires cash payments and does not involve the actual purchase or sale of securities. In addition, securities index options are designed to reflect price fluctuations in a group of securities or segments of the securities market rather than price fluctuations in a single security. The fund may cover call options on a securities index by owning securities whose price changes are expected to be similar to those of the underlying index, or by having an absolute and immediate right to acquire such securities without additional cash consideration (or for additional consideration if cash in such amount is segregated) upon conversion or exchange of other securities in its portfolio. The fund may cover call and put options on a securities index by segregating assets with a value equal to the exercise price. Index options are subject to the timing risk inherent in writing index options. When an index option is exercised, the amount of cash that the holder is entitled to receive is determined by the difference between the exercise price and the closing index level on the date when the option is exercised. If a fund has purchased an index option and exercises it before the closing index value for that day is available, it runs the risk that the level of the underlying index may subsequently change. If such a change causes the exercised option to fall "out-of-the-money", the fund will be required to pay cash in an amount of the difference between the closing index value and the exercise price of the option. PURCHASING CALL AND PUT OPTIONS. The fund would normally purchase call options in anticipation of an increase in the market value of securities of the type in which it may invest. The purchase of a call option would entitle the fund, in return for the premium paid, to purchase specified securities at a specified price during the option period. The fund would ordinarily realize a gain if, during the option period, the value of such securities exceeded the sum of the exercise price, the premium paid and transaction costs; otherwise the fund would realize either no gain or a loss on the purchase of the call option. The fund would normally purchase put options in anticipation of a decline in the market value of securities in its portfolio ("protective puts") or in securities in which it may invest. The purchase of a put option would entitle the fund, in exchange for the premium paid, to sell specified securities at a specified price during the option period. The purchase of protective puts is designed to offset or hedge against a decline in the market value of the fund's securities. Put options may also be purchased by the fund for the purpose of affirmatively benefiting from a decline in the price of securities which it does not own. The fund would ordinarily realize a gain if, during the option period, the value of the underlying securities decreased below the exercise price sufficiently to more than cover the premium and transaction costs; otherwise the fund would realize either no gain or a loss on the purchase of the put option. Gains and losses on the purchase of protective put options would tend to be offset by countervailing changes in the value of the underlying portfolio securities. The fund may terminate its obligations under an exchange-traded call or put option by purchasing an option identical to the one it has written. Obligations under over-the-counter options may be terminated only by entering into an offsetting transaction with the counterparty to such option. Such purchases are referred to as "closing purchase transactions." OPTIONS SPREADS AND STRADDLES. Option spread and straddle transactions require a fund to purchase and/or write more than one option simultaneously. A fund may engage in option spread transactions in which it purchases and writes put or call options on the same underlying instrument, with the options having different exercise prices and/or expiration dates. A fund also may engage in option straddles, in which it purchases or sells combinations of put and call options on the same instrument. A long straddle is a combination of a call and a put option purchased on the same security where the exercise price of the put is less than or equal to the exercise price of the call. 26 A short straddle is a combination of a call and a put written on the same security where the exercise price of the put is less than or equal to the exercise price of the call and where the same issue of security or currency is considered cover for both the put and the call. RISKS OF TRADING OPTIONS. There is no assurance that a liquid secondary market on an options exchange will exist for any particular exchange-traded option, or at any particular time. If the fund is unable to effect a closing purchase transaction with respect to covered options it has written, the fund will not be able to sell the underlying securities or dispose of its segregated assets until the options expire or are exercised. Similarly, if the fund is unable to effect a closing sale transaction with respect to options it has purchased, it will have to exercise the options in order to realize any profit and will incur transaction costs upon the purchase or sale of underlying securities. Reasons for the absence of a liquid secondary market on an exchange include the following: (i) there may be insufficient trading interest in certain options; (ii) restrictions may be imposed by an exchange on opening or closing transactions or both; (iii) trading halts, suspensions or other restrictions may be imposed with respect to particular classes or series of options; (iv) unusual or unforeseen circumstances may interrupt normal operations on an exchange; (v) the facilities of an exchange or the Options Clearing Corporation (the "OCC") may not at all times be adequate to handle current trading volume; or (vi) one or more exchanges could, for economic or other reasons, decide or be compelled at some future date to discontinue the trading of options (or a particular class or series of options), in which event the secondary market on that exchange (or in that class or series of options) would cease to exist, although it is expected that outstanding options on that exchange, if any, that had been issued by the OCC as a result of trades on that exchange would continue to be exercisable in accordance with their terms. The fund may purchase and sell both options that are traded on U.S. and non-U.S. exchanges and options traded over-the-counter with broker-dealers who make markets in these options. The ability to terminate over-the-counter options is more limited than with exchange-traded options and may involve the risk that broker-dealers participating in such transactions will not fulfill their obligations. Until such time as the staff of the SEC changes its position, the fund will treat purchased over-the-counter options and all assets used to cover written over-the-counter options as illiquid securities, except that with respect to options written with primary dealers in U.S. government securities pursuant to an agreement requiring a closing purchase transaction at a formula price, the amount of illiquid securities may be calculated with reference to the formula. Transactions by the fund in options on securities and indices will be subject to limitations established by each of the exchanges, boards of trade or other trading facilities governing the maximum number of options in each class which may be written or purchased by a single investor or group of investors acting in concert. Thus, the number of options which the fund may write or purchase may be affected by options written or purchased by other investment advisory clients of Pioneer. An exchange, board of trade or other trading facility may order the liquidations of positions found to be in excess of these limits, and it may impose certain other sanctions. The writing and purchase of options is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. The successful use of protective puts for hedging purposes depends in part on the ability of Pioneer to predict future price fluctuations and the degree of correlation between the options and securities markets. The hours of trading for options may not conform to the hours during which the underlying securities are traded. To the extent that the options markets close before the markets for the underlying securities, significant price movements can take place in the underlying markets that cannot be reflected in the options markets. 27 In addition to the risks of imperfect correlation between the portfolio and the index underlying the option, the purchase of securities index options involves the risk that the premium and transaction costs paid by the fund in purchasing an option will be lost. This could occur as a result of unanticipated movements in the price of the securities comprising the securities index on which the option is based. FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS The fund may purchase and sell various kinds of futures contracts, and purchase and write (sell) call and put options on any of such futures contracts. The fund may enter into closing purchase and sale transactions with respect to any futures contracts and options on futures contracts. The futures contracts may be based on various securities (such as U.S. government securities), securities indices, foreign currencies and other financial instruments and indices. The fund may invest in futures contracts based on the Chicago Board of Exchange Volatility Index ("VIX Futures"). The VIX is an index of market sentiment derived from S&P 500 Index option prices, and is designed to reflect investors' consensus view of expected stock market volatility over future periods. The fund may invest in futures and options based on credit derivative contracts on baskets of indicies of securities, such as CDX. An interest rate futures contract provides for the future sale by one party and the purchase by the other party of a specified amount of a particular financial instrument (debt security) at a specified price, date, time and place. The fund will engage in futures and related options transactions for bona fide hedging and non-hedging purposes as described below. All futures contracts entered into by the fund are traded on U.S. exchanges or boards of trade that are licensed and regulated by the Commodity Futures Trading Commission (the "CFTC") or on non-U.S. exchanges. FUTURES CONTRACTS. A futures contract may generally be described as an agreement between two parties to buy and sell particular financial instruments for an agreed price during a designated month (or to deliver the final cash settlement price, in the case of a contract relating to an index or otherwise not calling for physical delivery at the end of trading in the contract). When interest rates are rising or securities prices are falling, the fund can seek to offset a decline in the value of its current portfolio securities through the sale of futures contracts. When interest rates are falling or securities prices are rising, the fund, through the purchase of futures contracts, can attempt to secure better rates or prices than might later be available in the market when it effects anticipated purchases. Similarly, the fund can sell futures contracts on a specified currency to protect against a decline in the value of such currency and a decline in the value of its portfolio securities which are denominated in such currency. The fund can purchase futures contracts on a foreign currency to establish the price in U.S. dollars of a security denominated in such currency that the fund has acquired or expects to acquire. Positions taken in the futures markets are not normally held to maturity but are instead liquidated through offsetting transactions which may result in a profit or a loss. While futures contracts on securities or currency will usually be liquidated in this manner, the fund may instead make, or take, delivery of the underlying securities or currency whenever it appears economically advantageous to do so. A clearing corporation associated with the exchange on which futures on securities or currency are traded guarantees that, if still open, the sale or purchase will be performed on the settlement date. HEDGING STRATEGIES. Hedging, by use of futures contracts, seeks to establish with more certainty the effective price, rate of return and currency exchange rate on portfolio securities and securities that the fund owns or proposes to acquire. The fund may, for example, take a "short" position in the futures market by selling futures contracts in order to hedge against an anticipated rise in interest rates or a decline in market prices or foreign currency rates that would adversely affect the value of the fund's securities. Such futures contracts may include contracts for the future delivery of securities held by the fund or securities with characteristics similar to those of the fund's securities. Similarly, the fund may sell futures contracts in a foreign currency in which its portfolio securities are denominated or in one currency to hedge against fluctuations in the value of securities denominated in a different currency if there is an established historical pattern of correlation between the two currencies. If, in the opinion of Pioneer, there is a sufficient degree of correlation between price trends for the fund's securities and futures contracts based on other financial 28 instruments, securities indices or other indices, the fund may also enter into such futures contracts as part of its hedging strategies. Although under some circumstances prices of securities in the portfolio may be more or less volatile than prices of such futures contracts, Pioneer will attempt to estimate the extent of this volatility difference based on historical patterns and compensate for any such differential by having the fund enter into a greater or lesser number of futures contracts or by attempting to achieve only a partial hedge against price changes affecting the fund's securities. When hedging of this character is successful, any depreciation in the value of portfolio securities will be substantially offset by appreciation in the value of the futures position. On the other hand, any unanticipated appreciation in the value of the portfolio securities would be substantially offset by a decline in the value of the futures position. On other occasions, the fund may take a "long" position by purchasing futures contracts. This may be done, for example, when the fund anticipates the subsequent purchase of particular securities when it has the necessary cash, but expects the prices or currency exchange rates then available in the applicable market to be less favorable than prices or rates that are currently available. OPTIONS ON FUTURES CONTRACTS. The acquisition of put and call options on futures contracts will give the fund the right (but not the obligation) for a specified price to sell or to purchase, respectively, the underlying futures contract at any time during the option period. As the purchaser of an option on a futures contract, the fund obtains the benefit of the futures position if prices move in a favorable direction, but limits its risk of loss in the event of an unfavorable price movement to the loss of the premium and transaction costs. The writing of a call option on a futures contract generates a premium which may partially offset a decline in the value of the fund's assets. By writing a call option, the fund becomes obligated, in exchange for the premium, to sell a futures contract (if the option is exercised), which may have a value higher than the exercise price. Conversely, the writing of a put option on a futures contract generates a premium which may partially offset an increase in the price of securities that the fund intends to purchase. However, the fund becomes obligated to purchase a futures contract (if the option is exercised) which may have a value lower than the exercise price. Thus, the loss incurred by the fund in writing options on futures is potentially unlimited and may exceed the amount of the premium received. The fund will incur transaction costs in connection with the writing of options on futures. The holder or writer of an option on a futures contract may terminate its position by selling or purchasing an offsetting option on the same series. There is no guarantee that such closing transactions can be effected. The fund's ability to establish and close out positions on such options will be subject to the development and maintenance of a liquid market. OTHER CONSIDERATIONS REGARDING FUTURES CONTRACTS. The fund will engage in transactions in futures contracts and related options only to the extent such transactions are consistent with the requirements of the Code for maintaining its qualification as a regulated investment company for U.S. federal income tax purposes. Futures contracts and related options involve brokerage costs, require margin deposits and, in the case of contracts and options obligating the fund to purchase securities or currencies, require the fund to segregate assets to cover such contracts and options. While transactions in futures contracts and options on futures may reduce certain risks, such transactions themselves entail certain other risks. Thus, while the fund may benefit from the use of futures and options on futures, unanticipated changes in interest rates, securities prices or currency exchange rates may result in a poorer overall performance for the fund than if it had not entered into any futures contracts or options transactions. When futures contracts and options are used for hedging purposes, perfect correlation between the fund's futures positions and portfolio positions may be impossible to achieve, particularly where futures contracts based on individual securities are currently not available. In the event of an imperfect correlation between a futures position and a portfolio position which is intended to be protected, the desired protection 29 may not be obtained and the fund may be exposed to risk of loss. It is not possible to hedge fully or perfectly against the effect of currency fluctuations on the value of non-U.S. securities because currency movements impact the value of different securities in differing degrees. If the fund were unable to liquidate a futures contract or an option on a futures position due to the absence of a liquid secondary market, the imposition of price limits or otherwise, it could incur substantial losses. The fund would continue to be subject to market risk with respect to the position. In addition, except in the case of purchased options, the fund would continue to be required to make daily variation margin payments and might be required to maintain the position being hedged by the future or option or to maintain cash or securities in a segregated account. INTEREST RATE SWAPS, COLLARS, CAPS AND FLOORS In order to hedge the value of the portfolio against interest rate fluctuations or to enhance the fund's income, the fund may, but is not required to, enter into various interest rate transactions such as interest rate swaps and the purchase or sale of interest rate caps and floors. To the extent that the fund enters into these transactions, the fund expects to do so primarily to preserve a return or spread on a particular investment or portion of its portfolio or to protect against any increase in the price of securities the fund anticipates purchasing at a later date. The fund intends to use these transactions primarily as a hedge and not as a speculative investment. However, the fund also may invest in interest rate swaps to enhance income or to increase the fund's yield, for example, during periods of steep interest rate yield curves (i.e., wide differences between short-term and long-term interest rates). The fund is not required to hedge its portfolio and may choose not to do so. The fund cannot guarantee that any hedging strategies it uses will work. In an interest rate swap, the fund exchanges with another party their respective commitments to pay or receive interest (e.g., an exchange of fixed rate payments for floating rate payments). For example, if the fund holds a debt instrument with an interest rate that is reset only once each year, it may swap the right to receive interest at this fixed rate for the right to receive interest at a rate that is reset every week. This would enable the fund to offset a decline in the value of the debt instrument due to rising interest rates but would also limit its ability to benefit from falling interest rates. Conversely, if the fund holds a debt instrument with an interest rate that is reset every week and it would like to lock in what it believes to be a high interest rate for one year, it may swap the right to receive interest at this variable weekly rate for the right to receive interest at a rate that is fixed for one year. Such a swap would protect the fund from a reduction in yield due to falling interest rates and may permit the fund to enhance its income through the positive differential between one week and one year interest rates, but would preclude it from taking full advantage of rising interest rates. The fund usually will enter into interest rate swaps on a net basis (i.e., the two payment streams are netted out with the fund receiving or paying, as the case may be, only the net amount of the two payments). The net amount of the excess, if any, of the fund's obligations over its entitlements with respect to each interest rate swap will be accrued on a daily basis, and an amount of cash or liquid instruments having an aggregate net asset value at least equal to the accrued excess will be maintained in a segregated account by the fund's custodian. If the interest rate swap transaction is entered into on other than a net basis, the full amount of the fund's obligations will be accrued on a daily basis, and the full amount of the fund's obligations will be maintained in a segregated account by the fund's custodian. The fund also may engage in interest rate transactions in the form of purchasing or selling interest rate caps or floors. The fund will not sell interest rate caps or floors that it does not own. The purchase of an interest rate cap entitles the purchaser, to the extent that a specified index exceeds a predetermined interest rate, to receive payments of interest equal to the difference of the index and the predetermined rate on a notional principal amount (i.e., the reference amount with respect to which interest obligations are determined although no actual exchange of principal occurs) from the party selling such interest rate cap. The purchase of an interest rate floor entitles the purchaser, to the extent that a specified index falls 30 below a predetermined interest rate, to receive payments of interest at the difference of the index and the predetermined rate on a notional principal amount from the party selling such interest rate floor. The fund will not enter into caps or floors if, on a net basis, the aggregate notional principal amount with respect to such agreements exceeds the net assets of the fund. Typically, the parties with which the fund will enter into interest rate transactions will be broker-dealers and other financial institutions. The fund will not enter into any interest rate swap, cap or floor transaction unless the unsecured senior debt or the claims-paying ability of the other party thereto is rated investment grade quality by at least one nationally recognized statistical rating organization at the time of entering into such transaction or whose creditworthiness is believed by the fund's adviser to be equivalent to such rating. If there is a default by the other party to such a transaction, the fund will have contractual remedies pursuant to the agreements related to the transaction. The swap market has grown substantially in recent years with a large number of banks and investment banking firms acting both as principals and as agents utilizing standardized swap documentation. Caps and floors are less liquid than swaps. Certain federal income tax requirements may limit the fund's ability to engage in interest rate swaps. EQUITY SWAPS, CAPS, FLOORS AND COLLARS The fund may enter into equity swaps, caps, floors and collars to hedge assets or liabilities or to seek to increase total return. Equity swaps involve the exchange by a fund with another party of their respective commitments to make or receive payments based on notional equity securities. The purchase of an equity cap entitles the purchaser, to the extent that the market value of a specified equity security or benchmark exceeds a predetermined level, to receive payments of a contractually based amount from the party selling the cap. The purchase of an equity floor entitles the purchaser, to the extent that the market value of a specified equity security or benchmark falls below a predetermined level, to receive payments of a contractually based amount from the party selling the floor. A collar is a combination of a cap and a floor that preserves a certain return within a predetermined range of values. Investments in swaps, caps, floors and collars are highly specialized activities which involve investment techniques and risks different from those associated with ordinary portfolio transactions. Investments in equity swaps, caps, floors and collars may be considered speculative because they involve significant risk of loss. If Pioneer is incorrect in its forecast of market values, these investments could negatively impact the fund's performance. These investments also are subject to default risk of the counterparty and may be less liquid than other portfolio securities. Moreover, investments in swaps, caps, floors and collars may involve greater transaction costs than investments in other equity securities. TOTAL RETURN SWAPS, CAPS, FLOORS AND COLLARS The fund may enter into total return swaps, caps, floors and collars to hedge assets or liabilities or to seek to increase total return. Total return swaps involve the exchange by a fund with another party of their respective commitments to make or receive payments based on the change in market value of a specified security, basket of securities or benchmark. The fund may invest in swaps based on VIX futures contracts. The VIX is an index of market sentiment derived from S&P 500 Index option prices, and is designed to reflect investors' consensus view of expected stock market volatility over future periods. Total return swaps may be used to obtain exposure to a security or market without owning or taking physical custody of such security or market. The purchase of a cap entitles the purchaser, to the extent that the market value of a specified security or benchmark exceeds a predetermined level, to receive payments of a contractually-based amount from the party selling the cap. The purchase of a floor entitles the purchaser, to the extent that the market value of a specified security or benchmark falls below a predetermined level, to receive payments of a contractually-based amount from the party selling the floor. A collar is a combination of a cap and a floor that preserves a certain return within a predetermined range of values. Investments in swaps, caps, floors and collars are highly specialized activities which involve investment techniques and risks different from those associated with ordinary portfolio transactions. Investments in total return swaps, caps, floors and collars may be considered speculative because they involve significant risk of loss. If Pioneer is incorrect in its forecast of market values, these investments could negatively impact the fund's performance. These 31 investments also are subject to default risk of the counterparty and may be less liquid than other portfolio securities. Moreover, investments in swaps, caps, floors and collars may involve greater transaction costs than investments in other securities. CREDIT DEFAULT SWAP AGREEMENTS The fund may enter into credit default swap agreements. The "buyer" in a credit default contract is obligated to pay the "seller" a periodic stream of payments over the term of the contract provided that no specified events of default, or "credit events", on an underlying reference obligation have occurred. If such a credit event occurs, the seller must pay the buyer the "par value" (full notional value) of the reference obligation in exchange for the reference obligation, or must make a cash settlement payment. The fund may be either the buyer or seller in the transaction. If the fund is a buyer and no credit event occurs, the fund will receive no return on the stream of payments made to the seller. However, if a credit event occurs, the fund, as the buyer, receives the full notional value for a reference obligation that may have little or no value. As a seller, the fund receives a fixed rate of income throughout the term of the contract, which typically is between six months and three years, provided that there is no credit event. If a credit event occurs, the fund, as the seller, must pay the buyer the full notional value of the reference obligation. The fund, as the seller, would be entitled to receive the reference obligation. Alternatively, the fund may be required to make a cash settlement payment, where the reference obligation is received by the fund as seller. The value of the reference obligation, coupled with the periodic payments previously received, would likely be less than the full notional value the fund pays to the buyer, resulting in a loss of value to the fund as seller. When the fund acts as a seller of a credit default swap agreement it is exposed to the risks of a leveraged transaction. Credit default swaps may involve greater risks than if the fund had invested in the reference obligation directly. In addition to general market risks, credit default swaps are subject to illiquidity risk, counterparty risk and credit risk. The fund will enter into swap agreements only with counterparties who are rated investment grade quality by at least one nationally recognized statistical rating organization at the time of entering into such transaction or whose creditworthiness is believed to be equivalent to such rating. Recent legislation will require most swaps to be executed through a centralized exchange or regulated facility and be cleared through a regulated clearinghouse. The swap market could be disrupted or limited as a result of this legislation, which could adversely affect the fund. Moreover, the establishment of a centralized exchange or market for swap transactions may not result in swaps being easier to trade or value. The fund may also invest in credit derivative contracts on baskets or indices of securities, such as CDX. A CDX can be used to hedge credit risk or to take a position on a basket of credit entities or indices. The individual credits underlying credit default swap indices may be rated investment grade or non-investment grade. These instruments are designed to track representative segments of the credit default swap market such as investment grade, below investment grade and emerging markets. A CDX index tranche provides access to customized risk, exposing each investor to losses at different levels of subordination. The lowest part of the capital structure is called the "equity tranche" as it has exposure to the first losses experienced in the basket. The mezzanine and senior tranches are higher in the capital structure but can also be exposed to loss in value. Investments are subject to liquidity risks as well as other risks associated with investments in credit default swaps. CREDIT-LINKED NOTES The fund may invest in credit-linked notes ("CLNs"), which are derivative instruments. A CLN is a synthetic obligation between two or more parties where the payment of principal and/or interest is based on the performance of some obligation (a reference obligation). In addition to credit risk of the reference obligations and interest rate risk, the buyer/seller of the CLN is subject to counterparty risk. EXCHANGE TRADED NOTES The fund may invest in exchange traded notes ("ETNs"). An ETN is a type of senior, unsecured, unsubordinated debt security issued by financial institutions that combines both aspects of bonds and ETFs. An ETN's returns are based on the performance of a market index or other reference asset minus fees and expenses. 32 Similar to ETFs, ETNs are listed on an exchange and traded in the secondary market. However, unlike an ETF, an ETN can be held until the ETN's maturity, at which time the issuer will pay a return linked to the performance of the market index or other reference asset to which the ETN is linked minus certain fees. Unlike regular bonds, ETNs do not make periodic interest payments and principal is not protected. An ETN that is tied to a specific index may not be able to replicate and maintain exactly the composition and relative weighting of securities, commodities or other components in the applicable index. ETNs also incur certain expenses not incurred by their applicable index. Additionally, certain components comprising the index tracked by an ETN may, at times, be temporarily unavailable, which may impede an ETN's ability to track its index. Some ETNs that use leverage can, at times, be relatively illiquid and, thus, they may be difficult to purchase or sell at a fair price. Leveraged ETNs are subject to the same risk as other instruments that use leverage in any form. While leverage allows for greater potential return, the potential for loss is also greater. However, the fund's potential loss is limited to the amount actually invested in the ETN. The market value of an ETN is influenced by supply and demand for the ETN, the current performance of the index or other reference asset, the credit rating of the ETN issuer, volatility and lack of liquidity in the reference asset, changes in the applicable interest rates, and economic, legal, political or geographic events that affect the reference asset. The market value of ETN shares may differ from their net asset value. This difference in price may be due to the fact that the supply and demand in the market for ETN shares at any point in time is not always identical to the supply and demand in the market for the securities underlying the index (or other reference asset) that the ETN seeks to track. The value of an ETN may also change due to a change in the issuer's credit rating. As a result, there may be times when an ETN share trades at a premium or discount to its net asset value. The fund will bear its pro rata portion of any fees and expenses borne by the ETN. These fees and expenses generally reduce the return realized at maturity or upon redemption from an investment in an ETN. FOREIGN CURRENCY SWAPS Foreign currency swaps involve the exchange by the lenders, including the Fund, with another party (the "counterparty") of the right to receive the currency in which the loans are denominated for the right to receive U.S. dollars. The Fund will enter into a foreign currency swap only if the outstanding debt obligations of the counterparty are rated investment grade quality by at least one nationally recognized statistical rating organization at the time of entering into such transaction or whose creditworthiness is believed by the fund's adviser to be equivalent to such rating. The amounts of U.S. dollar payments to be received by the fund and the foreign currency payments to be received by the counterparty are fixed at the time the swap arrangement is entered into. Accordingly, the swap protects the fund from the fluctuations in exchange rates and locks in the right to receive payments under the loan in a predetermined amount of U.S. dollars. If there is a default by the counterparty, the fund will have contractual remedies pursuant to the swap agreement; however, the U.S. dollar value of the fund's right to receive foreign currency payments under the obligation will be subject to fluctuations in the applicable exchange rate to the extent that a replacement swap arrangement is unavailable or the fund is unable to recover damages from the defaulting counterparty. CROSS CURRENCY INTEREST RATE SWAP AGREEMENTS Cross currency interest rate swap agreements combine features of currency swap agreements and interest rate swap agreements. The cross currency interest rate swaps in which the fund may enter generally will involve both the exchange of currency and the payment of interest streams with reference to one currency based on a specified index in exchange for receiving interest streams with reference to the other currency. Such swaps may involve initial and final exchanges that correspond to the agreed upon transaction amount. For example, the payment stream on a specified amount of euro based on a European market floating rate might be exchanged for a U.S. oriented floating rate on the same principal amount converted into U.S. dollars. FINANCIAL FUTURES AND OPTIONS TRANSACTIONS The fund has claimed an exclusion from registration as a "commodity pool operator" under the Commodity Exchange Act (the "CEA"), and, therefore, is not subject to registration or regulation as a commodity pool operator. 33 As a result, while the fund continues to rely on this exemption, it will remain limited in its ability to trade instruments subject to the jurisdiction of the Commodity Futures Trading Commission ("CFTC"), including commodity futures (which include futures on broad-based securities indexes and interest rate futures), options on commodity futures and swaps. This limitation also applies with respect to any indirect exposure that the fund may have to these instruments through investments in other funds. The fund's investment adviser may have to rely on representations from the underlying fund's manager about the amount (or maximum permitted amount) of investment exposure that the underlying fund has to instruments such as commodity futures, options on commodity futures and swaps. Under this exemption, the fund must satisfy one of the following two trading limitations at all times: (1) the aggregate initial margin and premiums required to establish the fund's positions in commodity futures, options on commodity futures, swaps and other CFTC-regulated instruments may not exceed 5% of the liquidation value of the fund's portfolio (after accounting for unrealized profits and unrealized losses on any such investments); or (2) the aggregate net notional value of such instruments, determined at the time the most recent position was established, may not exceed 100% of the liquidation value of the fund's portfolio (after accounting for unrealized profits and unrealized losses on any such positions). The fund would not be required to consider its exposure to such instruments if they were held for "bona fide hedging" purposes, as such term is defined in the rules of the CFTC. In addition to meeting one of the foregoing trading limitations, the fund may not market itself as a commodity pool or otherwise as a vehicle for trading in the markets for CFTC-regulated instruments. OTHER INVESTMENTS AND INVESTMENT TECHNIQUES SHORT-TERM INVESTMENTS For temporary defensive or cash management purposes, the fund may invest in all types of short-term investments including, but not limited to, (a) commercial paper and other short-term commercial obligations; (b) obligations (including certificates of deposit and bankers' acceptances) of banks; (c) obligations issued or guaranteed by a governmental issuer, including governmental agencies or instrumentalities; (d) fixed income securities of non-governmental issuers; and (e) other cash equivalents or cash. Subject to the fund's restrictions regarding investment in non-U.S. securities, these securities may be denominated in any currency. Although these investments generally are rated investment grade or are determined by Pioneer to be of equivalent credit quality, the fund may also invest in these instruments if they are rated below investment grade in accordance with its investment objectives, policies and restrictions. ILLIQUID SECURITIES The fund may invest up to 15% of its net assets in illiquid and other securities that are not readily marketable. If due to subsequent fluctuations in value or any other reasons, the value of the fund's illiquid securities exceeds this percentage limitation, the fund will consider what actions, if any, are necessary to maintain adequate liquidity. Repurchase agreements maturing in more than seven days will be included for purposes of the foregoing limit. Securities subject to restrictions on resale under the Securities Act of 1933, as amended (the "1933 Act"), are considered illiquid unless they are eligible for resale pursuant to Rule 144A or another exemption from the registration requirements of the 1933 Act and are determined to be liquid by Pioneer. Pioneer determines the liquidity of Rule 144A and other restricted securities according to procedures adopted by the Board of Trustees. Under the direction of the Board of Trustees, Pioneer monitors the application of these guidelines and procedures. The inability of the fund to dispose of illiquid investments readily or at reasonable prices could impair the fund's ability to raise cash for redemptions or other purposes. If the fund sold restricted securities other than pursuant to an exception from registration under the 1933 Act such as Rule 144A, it may be deemed to be acting as an underwriter and subject to liability under the 1933 Act. 34 REPURCHASE AGREEMENTS The fund may enter into repurchase agreements with broker-dealers, member banks of the Federal Reserve System and other financial institutions. Repurchase agreements are arrangements under which the fund purchases securities and the seller agrees to repurchase the securities within a specific time and at a specific price. The repurchase price is generally higher than the fund's purchase price, with the difference being income to the fund. A repurchase agreement may be considered a loan by the fund collateralized by securities. Under the direction of the Board of Trustees, Pioneer reviews and monitors the creditworthiness of any institution which enters into a repurchase agreement with the fund. The counterparty's obligations under the repurchase agreement are collateralized with U.S. Treasury and/or agency obligations with a market value of not less than 100% of the obligations, valued daily. Collateral is held by the fund's custodian in a segregated, safekeeping account for the benefit of the fund. Repurchase agreements afford the fund an opportunity to earn income on temporarily available cash. In the event of commencement of bankruptcy or insolvency proceedings with respect to the seller of the security before repurchase of the security under a repurchase agreement, the fund may encounter delay and incur costs before being able to sell the security. Such a delay may involve loss of interest or a decline in price of the security. If the court characterizes the transaction as a loan and the fund has not perfected a security interest in the security, the fund may be required to return the security to the seller's estate and be treated as an unsecured creditor of the seller. As an unsecured creditor, the fund would be at risk of losing some or all of the principal and interest involved in the transaction. There is no specific limit on the fund's ability to enter into repurchase agreements. The SEC frequently treats repurchase agreements as loans for purposes of the 1940 Act. REVERSE REPURCHASE AGREEMENTS Reverse repurchase agreements involve the sale of securities to a bank or other institution with an agreement that the fund will buy back the securities at a fixed future date at a fixed price plus an agreed amount of "interest" which may be reflected in the repurchase price. Reverse repurchase agreements involve the risk that the market value of securities purchased by the fund with proceeds of the transaction may decline below the repurchase price of the securities sold by the fund that it is obligated to repurchase. The fund will also continue to be subject to the risk of a decline in the market value of the securities sold under the agreements because it will reacquire those securities upon effecting their repurchase. Reverse repurchase agreements may be considered to be a type of borrowing. The 1940 Act permits a fund to borrow money in amounts of up to one-third of the fund's total assets from banks for any purpose and up to 5% of the fund's total assets from banks and other lenders for temporary purposes. The fund will segregate assets in an amount at least equal to the repurchase price of the securities. SHORT SALES AGAINST THE BOX The fund may sell securities "short against the box." A short sale involves the fund borrowing securities from a broker and selling the borrowed securities. The fund has an obligation to return securities identical to the borrowed securities to the broker. In a short sale against the box, the fund at all times owns an equal amount of the security sold short or securities convertible into or exchangeable for, with or without payment of additional consideration, an equal amount of the security sold short. The fund intends to use short sales against the box to hedge. For example when the fund believes that the price of a current portfolio security may decline, the fund may use a short sale against the box to lock in a sale price for a security rather than selling the security immediately. In such a case, any future losses in the fund's long position should be offset by a gain in the short position and, conversely, any gain in the long position should be reduced by a loss in the short position. The fund may engage in short sales of securities only against the box. If the fund effects a short sale against the box at a time when it has an unrealized gain on the security, it may be required to recognize that gain as if it had actually sold the security (a "constructive sale") on the date it effects the short sale. However, such constructive sale treatment may not apply if the fund closes 35 out the short sale with securities other than the appreciated securities held at the time of the short sale provided that certain other conditions are satisfied. Uncertainty regarding the tax consequences of effecting short sales may limit the extent to which the fund may make short sales against the box. DOLLAR ROLLS The fund may enter into mortgage "dollar rolls" in which the fund sells securities for delivery in the current month and simultaneously contracts with the same counterparty to repurchase similar (same type, coupon and maturity), but not identical securities on a specified future date. During the roll period, the fund loses the right to receive principal and interest paid on the securities sold. However, the fund would benefit to the extent of any difference between the price received for the securities sold and the lower forward price for the future purchase (often referred to as the "drop") or fee income plus the interest earned on the cash proceeds of the securities sold until the settlement date of the forward purchase. Unless such benefits exceed the income, capital appreciation and gain or loss due to mortgage prepayments that would have been realized on the securities sold as part of the mortgage dollar roll, the use of this technique will diminish the investment performance of the fund compared with what such performance would have been without the use of mortgage dollar rolls. All cash proceeds will be invested in instruments that are permissible investments for the fund. The fund will hold and maintain in a segregated account until the settlement date cash or liquid securities in an amount equal to its forward purchase price. For financial reporting and tax purposes, the fund treats mortgage dollar rolls as two separate transactions; one involving the purchase of a security and a separate transaction involving a sale. Dollar rolls involve certain risks including the following: if the broker-dealer to whom the fund sells the security becomes insolvent, the fund's right to purchase or repurchase the securities subject to the dollar roll may be restricted and the instrument which the fund is required to repurchase may be worth less than an instrument which the fund originally held. Successful use of dollar rolls will depend upon Pioneer's ability to manage its interest rate and prepayment exposure. There is no assurance that dollar rolls can be successfully employed. ASSET SEGREGATION The 1940 Act requires that the fund segregate assets in connection with certain types of transactions that may have the effect of leveraging the portfolio. If the fund enters into a transaction requiring segregation, such as a forward commitment or a reverse repurchase agreement, the custodian or Pioneer will segregate liquid assets in an amount required to comply with the 1940 Act. Such segregated assets will be valued at market daily. If the aggregate value of such segregated assets declines below the aggregate value required to satisfy the 1940 Act, additional liquid assets will be segregated. In some instances a fund may "cover" its obligation using other methods to the extent permitted under the 1940 Act, orders or releases issued by the SEC thereunder, or no-action letters or other guidance of the SEC staff. PORTFOLIO TURNOVER It is the policy of the fund not to engage in trading for short-term profits, although portfolio turnover rate is not considered a limiting factor in the execution of investment decisions for the fund. A high rate of portfolio turnover (100% or more) involves correspondingly greater transaction costs which must be borne by the fund and its shareholders. See "Annual Fee, Expense and Other Information" for the fund's annual portfolio turnover rate. LENDING OF PORTFOLIO SECURITIES The fund may lend portfolio securities to registered broker-dealers or other institutional investors deemed by Pioneer to be of good standing under agreements which require that the loans be secured continuously by collateral in the form of cash, cash equivalents, U.S. Government securities or irrevocable letters of credit issued by banks approved by the fund. The value of the collateral is monitored on a daily basis and the borrower is required to maintain the collateral at an amount at least equal to the market value of the securities loaned. The fund continues to receive the equivalent of the interest or dividends paid by the 36 issuer on the securities loaned and continues to have all of the other risks associated with owning the securities. Where the collateral received is cash, the cash will be invested and the fund will be entitled to a share of the income earned on the investment, but will also be subject to investment risk on the collateral and will bear the entire amount of any loss in connection with investment of such collateral. The fund may pay administrative and custodial fees in connection with loans of securities and, where the collateral received is cash, the fund may pay a portion of the income earned on the investment of collateral to the borrower, lending agent or other intermediary. Fees and expenses paid by the fund in connection with loans of securities are not reflected in the fee table or expense example in the fund's prospectus. If the income earned on the investment of the cash collateral is insufficient to pay these amounts or if the value of the securities purchased with such cash collateral declines, the fund may take a loss on the loan. Where the fund receives securities as collateral, the fund will earn no income on the collateral, but will earn a fee from the borrower. The fund reserves the right to recall loaned securities so that it may exercise voting rights on loaned securities according to the fund's Proxy Voting Policies and Procedures. The risk in lending portfolio securities, as with other extensions of credit, consists of the possibility of loss to the fund due to (i) the inability of the borrower to return the securities, (ii) a delay in receiving additional collateral to adequately cover any fluctuations in the value of securities on loan, (iii) a delay in recovery of the securities, or (iv) the loss of rights in the collateral should the borrower fail financially. In addition, as noted above, the fund continues to have market risk and other risks associated with owning the securities on loan. Where the collateral delivered by the borrower is cash, the fund will also have the risk of loss of principal and interest in connection with its investment of collateral. If a borrower defaults, the value of the collateral may decline before the fund can dispose of it. The fund will lend portfolio securities only to firms that have been approved in advance by Pioneer, which will monitor the creditworthiness of any such firms. However, this monitoring may not protect the fund from loss. At no time would the value of the securities loaned exceed 33 1/3% of the value of the fund's total assets. INTERFUND LENDING To satisfy redemption requests or to cover unanticipated cash shortfalls, a fund may enter into lending agreements ("Interfund Lending Agreements") under which the fund would lend money and borrow money for temporary purposes directly to and from another Pioneer fund through a credit facility ("Interfund Loan"), subject to meeting the conditions of an SEC exemptive order granted to the funds permitting such interfund lending. All Interfund Loans will consist only of uninvested cash reserves that the fund otherwise would invest in short-term repurchase agreements or other short-term instruments. If a fund has outstanding borrowings, any Interfund Loans to the fund (a) will be at an interest rate equal to or lower than any outstanding bank loan, (b) will be secured at least on an equal priority basis with at least an equivalent percentage of collateral to loan value as any outstanding bank loan that requires collateral, (c) will have a maturity no longer than any outstanding bank loan (and in any event not over seven days) and (d) will provide that, if an event of default occurs under any agreement evidencing an outstanding bank loan to the fund, the event of default will automatically (without need for action or notice by the lending fund) constitute an immediate event of default under the Interfund Lending Agreement entitling the lending fund to call the Interfund Loan (and exercise all rights with respect to any collateral) and that such call will be made if the lending bank exercises its right to call its loan under its agreement with the borrowing fund. A fund may make an unsecured borrowing through the credit facility if its outstanding borrowings from all sources immediately after the interfund borrowing total 10% or less of its total assets; provided, that if the fund has a secured loan outstanding from any other lender, including but not limited to another Pioneer fund, the fund's interfund borrowing will be secured on at least an equal priority basis with at least an equivalent percentage of collateral to loan value as any outstanding loan that requires collateral. If a fund's total outstanding borrowings immediately after an interfund borrowing would be greater than 10% of its total assets, the fund may borrow through the credit facility on a secured basis only. A fund may not borrow through the credit facility nor from any other source if its total outstanding borrowings immediately after the interfund borrowing would be more than 33 1/3% of its total assets. 37 No fund may lend to another fund through the interfund lending credit facility if the loan would cause its aggregate outstanding loans through the credit facility to exceed 15% of the lending fund's net assets at the time of the loan. A fund's Interfund Loans to any one fund shall not exceed 5% of the lending fund's net assets. The duration of Interfund Loans is limited to the time required to receive payment for securities sold, but in no event more than seven days. Loans effected within seven days of each other will be treated as separate loan transactions for purposes of this condition. Each Interfund Loan may be called on one business day's notice by a lending fund and may be repaid on any day by a borrowing fund. The limitations detailed above and the other conditions of the SEC exemptive order permitting interfund lending are designed to minimize the risks associated with interfund lending for both the lending fund and the borrowing fund. However, no borrowing or lending activity is without risk. When a fund borrows money from another fund, there is a risk that the loan could be called on one day's notice or not renewed, in which case the fund may have to borrow from a bank at higher rates if an Interfund Loan were not available from another fund. A delay in repayment to a lending fund could result in a lost opportunity or additional lending costs. WHEN-ISSUED AND DELAYED DELIVERY SECURITIES The fund may purchase securities, including U.S. government securities, on a when-issued basis or may purchase or sell securities for delayed delivery. In such transactions, delivery of the securities occurs beyond the normal settlement period, but no payment or delivery is made by the fund prior to the actual delivery or payment by the other party to the transaction. The fund will not earn income on these securities until delivered. The purchase of securities on a when-issued or delayed delivery basis involves the risk that the value of the securities purchased will decline prior to the settlement date. The sale of securities for delayed delivery involves the risk that the prices available in the market on the delivery date may be greater than those obtained in the sale transaction. When the fund enters into when-issued or delayed delivery transactions it will segregate liquid assets with a value equal to the fund's obligations. See "Asset Segregation." DISCLOSURE OF PORTFOLIO HOLDINGS The Board of Trustees has adopted policies and procedures relating to disclosure of the Pioneer funds' portfolio securities. These policies and procedures are designed to provide a framework for disclosing information regarding portfolio holdings, portfolio composition or other portfolio characteristics consistent with applicable federal securities laws and regulations and general principles of fiduciary duty relating to fund shareholders. While Pioneer may manage other separate accounts and unregistered products that have substantially similar investment strategies to those of another Pioneer fund, and therefore portfolio holdings that may be substantially similar, and in some cases nearly identical, to such fund, these policies and procedures only relate to the disclosure of portfolio information of the Pioneer funds that are registered management companies. Separate account and unregistered product clients are not subject to these policies and procedures. Separate account and unregistered product clients of Pioneer have access to their portfolio holdings, and prospective clients have access to representative holdings. Generally, Pioneer will make a fund's portfolio information available to the public on a monthly basis with an appropriate delay based upon the nature of the information disclosed. Pioneer normally will publish a fund's full portfolio holdings thirty (30) days after the end of each month (this time period may be different for certain funds). Such information shall be made available on the funds' website (www.pioneerinvestments.com) and may be sent to rating agencies, reporting/news services and financial intermediaries, upon request. In addition, Pioneer generally makes publicly available information regarding a fund's top ten holdings (including the percentage of a fund's assets represented by each security), the percentage breakdown of a fund's investments by country, sector and industry, various volatility measures (such as beta, standard deviation, etc.), market capitalization ranges and other portfolio characteristics (such as alpha, average P/E ratio, etc.) three (3) business days after the end of each month. Pioneer may provide a fund's full portfolio holdings or other information to certain entities prior to the date such information is made public, provided that certain conditions are met. The entities to which such disclosure may be made as of the date of this statement of additional information are rating agencies, 38 plan sponsors, prospective separate account clients and other financial intermediaries (i.e., organizations evaluating a fund for purposes of investment by their clients, such as broker-dealers, investment advisers, banks, insurance companies, financial planning firms, plan sponsors, plan administrators, shareholder servicing organizations and pension consultants). The third party must agree to a limited use of that information which does not conflict with the interests of the fund's shareholders, to use the information only for that authorized purpose, to keep such information confidential, and not to trade on such information. The Board of Trustees considered the disclosure of portfolio holdings information to these categories of entities to be consistent with the best interests of shareholders in light of the agreement to maintain the confidentiality of such information and only to use such information for the limited and approved purposes. Pioneer's compliance department, the local head of investment management and the global chief investment officer may, but only acting jointly, grant exemptions to this policy. Exemptions may be granted only if these persons determine that providing such information is consistent with the interests of shareholders and the third party agrees to limit the use of such information only for the authorized purpose, to keep such information confidential, and not to trade on such information. Although the Board of Trustees will periodically be informed of exemptions granted, granting exemptions entails the risk that portfolio holdings information may be provided to entities that use the information in a manner inconsistent with their obligations and the best interests of a fund. Currently, Pioneer, on behalf of the Pioneer funds, has ongoing arrangements whereby the following entities may receive a fund's full portfolio holdings or other information prior to the date such information is made public: Metropolitan Life Insurance Company (within 30 days after month end for board materials and advance preparation of marketing materials, as needed to evaluate Pioneer funds); Roszel Advisors (within 30 days after month end for due diligence and review of certain Pioneer funds included in fund programs); Oppenheimer & Co. (within 30 days after month end for due diligence and review of certain Pioneer funds included in fund programs); UBS (within 15 days after month end for due diligence and review of certain Pioneer funds included in fund programs); Ibbotson Associates, Inc. (as needed to select Pioneer funds for the Pioneer-Ibbotson fund of funds products); Beacon Pointe Advisors (as needed for quarterly review of certain Pioneer funds); Commonwealth Financial Network (within 30 days after month end for risk analysis on funds on behalf of their clients); Hartford Retirement Services, LLC (as needed for risk analysis on funds on behalf of their clients); Transamerica Life Insurance Company (as needed for performance and risk analysis on funds on behalf of their clients); TIBCO Software Inc./Spotfire Division (as needed to evaluate and develop portfolio reporting software); Curcio Webb, LLC (as needed for evaluation and research purposes); Fidelity Investments (as needed to evaluate Pioneer funds); Egan Jones Ratings Company (as needed in order to evaluate and select Nationally Recognized Statistical Rating Organizations (NRSROs)); DBRS Limited (as needed in order to evaluate and select NRSROs); Wells Fargo Advisors (as needed for risk analysis on funds on behalf of their clients and product review); and Capital Market Consultants (as needed to complete quarterly due diligence research). Compliance with the funds' portfolio holdings disclosure policy is subject to periodic review by the Board of Trustees, including a review of any potential conflicts of interest in the disclosures made by Pioneer in accordance with the policy or the exceptions permitted under the policy. Any change to the policy to expand the categories of entities to which portfolio holdings may be disclosed or an increase in the purposes for which such disclosure may be made would be subject to approval by the Board of Trustees and, reflected, if material, in a supplement to the fund's statement of additional information. The funds' portfolio holdings disclosure policy is not intended to prevent the disclosure of any and all portfolio information to the funds' service providers who generally need access to such information in the performance of their contractual duties and responsibilities, such as Pioneer, the funds' custodian, fund accounting agent, principal underwriter, investment sub-adviser, if any, independent registered public accounting firm or counsel. In approving the policy, the Board of Trustees considered that the service providers are subject to duties of confidentiality and duties not to trade on non-public information arising under law or 39 contract that provide an adequate safeguard for such information. None of Pioneer, the funds, or any other party receive any compensation or other consideration from any arrangement pertaining to the release of a fund's portfolio holdings information. In addition, the funds make their portfolio holdings available semi-annually in shareholder reports filed on Form N-CSR and after the first and third fiscal quarters in regulatory filings on Form N-Q. These shareholder reports and regulatory filings are filed with the SEC, as required by the federal securities laws. Form N-Q is filed with the SEC within sixty (60) days after the end of a fund's first and third fiscal quarters. Form N-CSR is filed with the SEC within ten (10) days after the transmission to shareholders of a fund's annual or semi-annual report, as applicable. INVESTMENT RESTRICTIONS FUNDAMENTAL INVESTMENT POLICIES Each fund has adopted certain fundamental investment policies which may not be changed without the affirmative vote of the holders of a "majority of the outstanding voting securities" (as defined in the 1940 Act) of the fund. For this purpose, a majority of the outstanding shares of the fund means the vote of the lesser of: (1) 67% or more of the shares represented at a meeting, if the holders of more than 50% of the outstanding shares are present in person or by proxy; or (2) more than 50% of the outstanding shares of the fund. Each fund's fundamental policies are as follows: (1) The fund may not borrow money except as permitted by (i) the 1940 Act, or interpretations or modifications by the SEC, SEC staff or other authority of competent jurisdiction, or (ii) exemptive or other relief or permission from the SEC, SEC staff or other authority of competent jurisdiction. (2) The fund may not engage in the business of underwriting the securities of other issuers except as permitted by (i) the 1940 Act, or interpretations or modifications by the SEC, SEC staff or other authority of competent jurisdiction, or (ii) exemptive or other relief or permission from the SEC, SEC staff or other authority of competent jurisdiction. (3) The fund may lend money or other assets to the extent permitted by (i) the 1940 Act, or interpretations or modifications by the SEC, SEC staff or other authority of competent jurisdiction or (ii) exemptive or other relief or permission from the SEC, SEC staff or other authority of competent jurisdiction. (4) The fund may not issue senior securities except as permitted by (i) the 1940 Act, or interpretations or modifications by the SEC, SEC staff or other authority of competent jurisdiction, or (ii) exemptive or other relief or permission from the SEC, SEC staff or other authority of competent jurisdiction. (5) The fund may not purchase or sell real estate except as permitted by (i) the 1940 Act, or interpretations or modifications by the SEC, SEC staff or other authority of competent jurisdiction, or (ii) exemptive or other relief or permission from the SEC, SEC staff or other authority of competent jurisdiction. (6) The fund may purchase or sell commodities or contracts related to commodities to the extent permitted by (i) the 1940 Act, or interpretations or modifications by the SEC, SEC staff or other authority of competent jurisdiction, or (ii) exemptive or other relief or permission from the SEC, SEC staff or other authority of competent jurisdiction. (7) Except as permitted by exemptive or other relief or permission from the SEC, SEC staff or other authority of competent jurisdiction, the fund may not make any investment if, as a result, the fund's investments will be concentrated in any one industry. 40 With respect to the fundamental policy relating to borrowing money set forth in (1) above, the 1940 Act permits a fund to borrow money in amounts of up to one-third of the fund's total assets from banks for any purpose, and to borrow up to 5% of the fund's total assets from banks or other lenders for temporary purposes (the fund's total assets include the amounts being borrowed). To limit the risks attendant to borrowing, the 1940 Act requires the fund to maintain at all times an "asset coverage" of at least 300% of the amount of its borrowings. Asset coverage means the ratio that the value of the fund's total assets (including amounts borrowed), minus liabilities other than borrowings, bears to the aggregate amount of all borrowings. Borrowing money to increase a fund's investment portfolio is known as "leveraging." Borrowing, especially when used for leverage, may cause the value of a fund's shares to be more volatile than if the fund did not borrow. This is because borrowing tends to magnify the effect of any increase or decrease in the value of the fund's portfolio holdings. Borrowed money thus creates an opportunity for greater gains, but also greater losses. To repay borrowings, the fund may have to sell securities at a time and at a price that is unfavorable to the fund. There also are costs associated with borrowing money, and these costs would offset and could eliminate a fund's net investment income in any given period. Currently, the fund does not contemplate borrowing for leverage, but if the fund does so, it will not likely do so to a substantial degree. The policy in (1) above will be interpreted to permit the fund to engage in trading practices and investments that may be considered to be borrowing to the extent permitted by the 1940 Act. Reverse repurchase agreements may be considered to be a type of borrowing. Short-term credits necessary for the settlement of securities transactions and arrangements with respect to securities lending will not be considered to be borrowings under the policy. Practices and investments that may involve leverage but are not considered to be borrowings are not subject to the policy. Such trading practices may include futures, options on futures, forward contracts and other derivative investments. A fund may pledge its assets and guarantee the securities of another company without limitation, subject to the fund's investment policies (including the fund's fundamental policy regarding borrowing) and applicable laws and interpretations. Pledges of assets and guarantees of obligations of others are subject to many of the same risks associated with borrowings and, in addition, are subject to the credit risk of the obligor for the underlying obligations. To the extent that pledging or guaranteeing assets may be considered the issuance of senior securities, the issuance of senior securities is governed by the fund's policies on senior securities. If the fund were to pledge its assets, the fund would take into account any then-applicable legal guidance, including any applicable SEC staff position, would be guided by the judgment of the fund's Board and Pioneer regarding the terms of any credit facility or arrangement, including any collateral required, and would not pledge more collateral than, in their judgment, is necessary for the fund to obtain the credit sought. Shareholders should note that in 1973, the SEC staff took the position in a no-action letter that a mutual fund could not pledge 100% of its assets without a compelling business reason. In more recent no-action letters, including letters that address the same statutory provision of the 1940 Act (Section 17) addressed in the 1973 letter, the SEC staff has not mentioned any limitation on the amount of collateral that may be pledged to support credit obtained. This does not mean that the staff's position on this issue has changed. With respect to the fundamental policy relating to underwriting set forth in (2) above, the 1940 Act does not prohibit a fund from engaging in the underwriting business or from underwriting the securities of other issuers; in fact, the 1940 Act permits a fund to have underwriting commitments of up to 25% of its assets under certain circumstances. Those circumstances currently are that the amount of the fund's underwriting commitments, when added to the value of the fund's investments in issuers where the fund owns more than 10% of the outstanding voting securities of those issuers, cannot exceed the 25% cap. A fund engaging in transactions involving the acquisition or disposition of portfolio securities may be considered to be an underwriter under the Securities Act of 1933, as amended (the "1933 Act"). Under the 1933 Act, an underwriter may be liable for material omissions or misstatements in an issuer's registration statement or prospectus. Securities purchased from an issuer and not registered for sale under the 1933 Act are considered restricted securities. There may be a limited market for these securities. If these securities are registered under the 1933 Act, they may then be eligible for sale but participating in the sale may subject the seller to underwriter liability. These risks could apply to a fund investing in restricted securities. Although it is not 41 believed that the application of the 1933 Act provisions described above would cause a fund to be engaged in the business of underwriting, the policy in (2) above will be interpreted not to prevent the fund from engaging in transactions involving the acquisition or disposition of portfolio securities, regardless of whether the fund may be considered to be an underwriter under the 1933 Act. With respect to the fundamental policy relating to lending set forth in (3) above, the 1940 Act does not prohibit a fund from making loans; however, SEC staff interpretations currently prohibit funds from lending more than one-third of their total assets, except through the purchase of debt obligations or the use of repurchase agreements. (A repurchase agreement is an agreement to purchase a security, coupled with an agreement to sell that security back to the original seller on an agreed-upon date at a price that reflects current interest rates. The SEC frequently treats repurchase agreements as loans.) While lending securities may be a source of income to a fund, as with other extensions of credit, there are risks of delay in recovery or even loss of rights in the underlying securities should the borrower fail financially. However, loans would be made only when the fund's manager or a subadviser believes the income justifies the attendant risks. The fund also will be permitted by this policy to make loans of money, including to other funds. The fund has obtained exemptive relief from the SEC to make short-term loans to other Pioneer funds through a credit facility in order to satisfy redemption requests or to cover unanticipated cash shortfalls; as discussed in this Statement of Additional Information under "Interfund Lending". The conditions of the SEC exemptive order permitting interfund lending are designed to minimize the risks associated with interfund lending, however no lending activity is without risk. A delay in repayment to a lending fund could result in a lost opportunity or additional lending costs. The policy in (3) above will be interpreted not to prevent the fund from purchasing or investing in debt obligations and loans. In addition, collateral arrangements with respect to options, forward currency and futures transactions and other derivative instruments, as well as delays in the settlement of securities transactions, will not be considered loans. With respect to the fundamental policy relating to issuing senior securities set forth in (4) above, "senior securities" are defined as fund obligations that have a priority over the fund's shares with respect to the payment of dividends or the distribution of fund assets. The 1940 Act prohibits a fund from issuing senior securities except that the fund may borrow money in amounts of up to one-third of the fund's total assets from banks for any purpose. A fund also may borrow up to 5% of the fund's total assets from banks or other lenders for temporary purposes, and these borrowings are not considered senior securities. The issuance of senior securities by a fund can increase the speculative character of the fund's outstanding shares through leveraging. Leveraging of a fund's portfolio through the issuance of senior securities magnifies the potential for gain or loss on monies, because even though the fund's net assets remain the same, the total risk to investors is increased. Certain widely used investment practices that involve a commitment by a fund to deliver money or securities in the future are not considered by the SEC to be senior securities, provided that a fund segregates cash or liquid securities in an amount necessary to pay the obligation or the fund holds an offsetting commitment from another party. These investment practices include repurchase and reverse repurchase agreements, swaps, dollar rolls, options, futures and forward contracts. The policy in (4) above will be interpreted not to prevent collateral arrangements with respect to swaps, options, forward or futures contracts or other derivatives, or the posting of initial or variation margin. With respect to the fundamental policy relating to real estate set forth in (5) above, the 1940 Act does not prohibit a fund from owning real estate; however, a fund is limited in the amount of illiquid assets it may purchase. Investing in real estate may involve risks, including that real estate is generally considered illiquid and may be difficult to value and sell. Owners of real estate may be subject to various liabilities, including environmental liabilities. To the extent that investments in real estate are considered illiquid, the current SEC staff position generally limits a fund's purchases of illiquid securities to 15% of net assets. The policy in (5) above will be interpreted not to prevent the fund from investing in real estate-related companies, companies whose businesses consist in whole or in part of investing in real estate, instruments (like mortgages) that are secured by real estate or interests therein, or real estate investment trust securities. 42 With respect to the fundamental policy relating to commodities set forth in (6) above, the 1940 Act does not prohibit a fund from owning commodities, whether physical commodities and contracts related to physical commodities (such as oil or grains and related futures contracts), or financial commodities and contracts related to financial commodities (such as currencies and, possibly, currency futures). However, a fund is limited in the amount of illiquid assets it may purchase. To the extent that investments in commodities are considered illiquid, the current SEC staff position generally limits a fund's purchases of illiquid securities to 15% of net assets. If a fund were to invest in a physical commodity or a physical commodity-related instrument, the fund would be subject to the additional risks of the particular physical commodity and its related market. The value of commodities and commodity-related instruments may be extremely volatile and may be affected either directly or indirectly by a variety of factors. There also may be storage charges and risks of loss associated with physical commodities. The policy in (6) above will be interpreted to permit investments in exchange traded funds that invest in physical and/or financial commodities. With respect to the fundamental policy relating to concentration set forth in (7) above, the 1940 Act does not define what constitutes "concentration" in an industry. The SEC staff has taken the position that investment of 25% or more of a fund's total assets in one or more issuers conducting their principal activities in the same industry or group of industries constitutes concentration. It is possible that interpretations of concentration could change in the future. A fund that invests a significant percentage of its total assets in a single industry may be particularly susceptible to adverse events affecting that industry and may be more risky than a fund that does not concentrate in an industry. The policy in (7) above will be interpreted to refer to concentration as that term may be interpreted from time to time. The policy also will be interpreted to permit investment without limit in the following: securities of the U.S. government and its agencies or instrumentalities; with respect to tax-exempt funds that invest 80% of their assets in tax-exempt securities, securities of state, territory, possession or municipal governments and their authorities, agencies, instrumentalities or political subdivisions; and repurchase agreements collateralized by any such obligations. Accordingly, issuers of the foregoing securities will not be considered to be members of any industry. Tax-exempt funds that invest 80% of their assets in tax-exempt securities characterize investments in securities the interest upon which is paid from revenues of similar type projects by the type or types of projects. The policy also will be interpreted to give broad authority to the fund as to how to classify issuers within or among industries. When identifying industries for purposes of its concentration policy, the fund may rely upon available industry classifications. As of the date of the SAI, the fund relies primarily on the MSCI Global Industry Classification Standard (GICS) classifications, and, with respect to securities for which no industry classification under GICS is available or for which the GICS classification is determined not to be appropriate, the fund may use industry classifications published by another source, which, as of the date of the SAI, is Bloomberg L.P. As of the date of the SAI, the fund's adviser may assign an industry classification for an exchange-traded fund in which the fund invests based on the constituents of the index on which the exchange-traded fund is based. The fund may change any source used for determining industry classifications without shareholder approval. In accordance with the investment programs of each fund as set forth in the prospectus, each fund may invest more than 25% of its assets in any one underlying fund. No fund invests in an underlying fund with the intention of directly or indirectly concentrating its investments in a particular industry. However, subsequent to investing in an underlying fund, it is possible that a fund may become indirectly concentrated in a particular industry as a result of changes in one or more underlying fund's holdings. Each of the underlying funds (other than Pioneer Cash Reserves Fund and Pioneer Real Estate Shares) will not concentrate more than 25% of its total assets in any one industry. Pioneer Cash Reserves Fund may invest without limit in obligations issued by banks. Pioneer Real Estate Shares may invest without limit in real estate industry issuers. Each fund's fundamental policies are written and will be interpreted broadly. For example, the policies will be interpreted to refer to the 1940 Act and the related rules as they are in effect from time to time, and to interpretations and modifications of or relating to the 1940 Act by the SEC, SEC staff or other authority of 43 competent jurisdiction as they are given from time to time. When a policy provides that an investment practice may be conducted as permitted by the 1940 Act, the policy will be interpreted to mean either that the 1940 Act expressly permits the practice or that the 1940 Act does not prohibit the practice. DIVERSIFICATION Each fund is currently classified as a diversified fund under the 1940 Act. A diversified fund may not purchase securities of an issuer (other than obligations issued or guaranteed by the U.S. government, its agencies or instrumentalities) if, with respect to 75% of the fund's total assets, (a) more than 5% of the fund's total assets would be invested in securities of that issuer, or (b) the fund would hold more than 10% of the outstanding voting securities of that issuer. Under the 1940 Act, the fund cannot change its classification from diversified to non-diversified without shareholder approval. 3. TRUSTEES AND OFFICERS The fund's Trustees and officers are listed below, together with their principal occupations during at least the past five years. Trustees who are interested persons of the fund within the meaning of the 1940 Act are referred to as Interested Trustees. Trustees who are not interested persons of the fund are referred to as Independent Trustees. Each of the Trustees, except Mr. West, serves as a Trustee of each of the 54 U.S. registered investment portfolios for which Pioneer serves as investment adviser (the "Pioneer Funds"). Mr. West serves as Trustee of 49 U.S. registered investment portfolios for which Pioneer serves as investment adviser. The address for all Trustees and all officers of the fund is 60 State Street, Boston, Massachusetts 02109.
NAME, AGE AND TERM OF OFFICE AND OTHER DIRECTORSHIPS POSITION HELD WITH THE FUND LENGTH OF SERVICE PRINCIPAL OCCUPATION HELD BY TRUSTEE ----------------------------- -------------------------- --------------------------------------- ----------------------- INDEPENDENT TRUSTEES: ----------------------------- -------------------------- --------------------------------------- ----------------------- THOMAS J. PERNA (63) Trustee since 2006. Chairman and Chief Executive Director, Broadridge Chairman of the Board and Serves until a successor Officer, Quadriserv, Inc. (technology Financial Solutions, Trustee trustee is elected or products for securities lending Inc. (investor ----------------------------- earlier retirement or industry) (2008 - present); Private communications and removal. investor (2004 - 2008); and Senior securities processing -------------------------- Executive Vice President, The Bank provider for financial of New York (financial and securities services industry) services) (1986 - 2004) (2009 - present); --------------------------------------- Director, Quadriserv, Inc. (2005 - present); Commissioner, New Jersey State Civil Service Commission (2011 - present) -----------------------
44
NAME, AGE AND TERM OF OFFICE AND OTHER DIRECTORSHIPS POSITION HELD WITH THE FUND LENGTH OF SERVICE PRINCIPAL OCCUPATION HELD BY TRUSTEE ----------------------------- -------------------------- ------------------------------------------- -------------------------- DAVID R. BOCK (69) Trustee since 2005. Managing Partner, Federal City Director of Enterprise Trustee Serves until a successor Capital Advisors (corporate advisory Community --- trustee is elected or services company) (1997 - 2004 Investment, Inc. earlier retirement or and 2008 - present); Interim Chief (privately-held removal. Executive Officer, Oxford Analytica, affordable housing -------------------------- Inc. (privately held research and finance company) consulting company) (2010); (1985 - 2010); Executive Vice President and Chief Director of Oxford Financial Officer, I-trax, Inc. (publicly Analytica, Inc. (2008 traded health care services - present); Director company) (2004 - 2007); and of The Swiss Executive Vice President and Chief Helvetia Fund, Inc. Financial Officer, Pedestal Inc. (closed-end fund) (internet-based mortgage trading (2010 - present); company) (2000 - 2002) Director of New York ------------------------------------------- Mortgage Trust (publicly-traded mortgage REIT) (2004 - 2009, 2012 - present) ----------------------- BENJAMIN M. FRIEDMAN Trustee since 2008. William Joseph Maier Professor of Trustee, Mellon (69) Serves until a successor Political Economy, Harvard Institutional Funds Trustee trustee is elected or University (1972 - present) Investment Trust and --- ------------------------------------------- earlier retirement or Mellon Institutional removal. Funds Master -------------------------- Portfolio (oversaw 17 portfolios in fund complex) (1989-2008) ------------ MARGARET B.W. GRAHAM Trustee since 2004. Founding Director, Vice-President None ------------ (66) Serves until a successor and Corporate Secretary, The Trustee trustee is elected or Winthrop Group, Inc. (consulting --- earlier retirement or firm) (1982 - present); and removal. Desautels Faculty of Management, -------------------------- McGill University (1999 - present); and Manager of Research Operations and Organizational Learning, Xerox PARC, Xerox's advance research center (1990-1994) ---------- MARGUERITE A. PIRET (65) Trustee since 2004. President and Chief Executive Director of New Trustee Serves until a successor Officer, Newbury, Piret & Company, America High Income --- trustee is elected or Inc. (investment banking firm) Fund, Inc. earlier retirement or (1981 - present) (closed-end ----------------------------------------- removal. investment company) -------------------------- (2004 - present); Member, Board of Governors, Investment Company Institute (2000 - 2006) ------------
45
NAME, AGE AND TERM OF OFFICE AND OTHER DIRECTORSHIPS POSITION HELD WITH THE FUND LENGTH OF SERVICE PRINCIPAL OCCUPATION HELD BY TRUSTEE ----------------------------- -------------------------- ------------------------------------- --------------------- STEPHEN K. WEST (85) Trustee since 2004. Senior Counsel, Sullivan & Cromwell Director, The Swiss Trustee Serves until a successor LLP (law firm) (1998 - present); Helvetia Fund, Inc. ----------------------------- trustee is elected or Partner, Sullivan & Cromwell LLP (closed-end earlier retirement or (prior to 1998) investment ------------------------------------- removal. company); Director, -------------------------- Invesco, Ltd. (formerly AMVESCAP, PLC) (investment manager) (1997-2005) ---------- INTERESTED TRUSTEE: ----------------------------- -------------------------- ------------------------------------- ---------- DANIEL K. KINGSBURY (55)* Trustee since 2007. Director, CEO and President of None ---------- Trustee and Executive Vice Serves until a successor PIM-USA (since February 2007); President trustee is elected or Director and President of Pioneer ----------------------------- earlier retirement or and Pioneer Institutional Asset removal. Management, Inc. (since February -------------------------- 2007); Executive Vice President of all of the Pioneer Funds (since March 2007); Director of PGAM (2007 - 2010); Head of New Europe Division, PGAM (2000 - 2005); Head of New Markets Division, PGAM (2005 - 2007) ------------------------------------- FUND OFFICERS: ----------------------------- -------------------------- ------------------------------------- ---------- JOHN F. COGAN, JR. (87)* Since 2004. Serves at President of all of the Pioneer None ---------- President and Chief the discretion of the Funds; Non-Executive Chairman and Executive Officer Board. a Director of Pioneer Investment ----------------------------- -------------------------- Management USA Inc. ("PIM-USA") (until November 2013); Chairman and a Director of Pioneer (until November 2013); Chairman and Director of Pioneer Institutional Asset Management, Inc. (until November 2013); Director of Pioneer Alternative Investment Management Limited (Dublin) (until October 2011); President and a Director of Pioneer Alternative Investment Management (Bermuda) Limited and affiliated funds (until November 2013); Deputy Chairman and a Director of Pioneer Global Asset Management S.p.A. ("PGAM") (until April 2010); Director of Nano-C, Inc. (since 2003); Director of Cole Management Inc. (2004 - 2011); Director of Fiduciary Counseling, Inc. (until December 2011); Trustee of all of the Pioneer Funds (until November 2013); and Retired Partner, Wilmer Cutler Pickering Hale and Dorr LLP ------------------------------------- ----------------------------- -------------------------- ------------------------------------- ----------
46
NAME, AGE AND TERM OF OFFICE AND OTHER DIRECTORSHIPS POSITION HELD WITH THE FUND LENGTH OF SERVICE PRINCIPAL OCCUPATION HELD BY TRUSTEE ----------------------------- ----------------------- -------------------------------------- --------------------- CHRISTOPHER J. KELLEY (48) Since 2010. Serves at Vice President and Associate None --------------------- Secretary and Chief Legal the discretion of the General Counsel of Pioneer since Officer Board January 2008; Secretary and Chief ----------------------------- ----------------------- Legal Officer of all of the Pioneer Funds since June 2010; Assistant Secretary of all of the Pioneer Funds from September 2003 to May 2010; Vice President and Senior Counsel of Pioneer from July 2002 to December 2007 -------------------------------------- CAROL B. HANNIGAN (52) Since 2010. Serves at Fund Governance Director of None --------------------- Assistant Secretary the discretion of the Pioneer since December 2006 and ----------------------------- Board Assistant Secretary of all the ----------------------- Pioneer Funds since June 2010; Manager - Fund Governance of Pioneer from December 2003 to November 2006; Senior Paralegal of Pioneer from January 2000 to November 2003. -------------------------------------- THOMAS REYES (51) Since 2010. Serves at Counsel of Pioneer since June 2007 None --------------------- Assistant Secretary the discretion of the and Assistant Secretary of all the ----------------------------- Board Pioneer Funds since June 2010; ----------------------- Vice President and Counsel at State Street Bank from October 2004 to June 2007 -------------------------------------- MARK E. BRADLEY (54) Since 2008. Serves at Vice President - Fund Treasury of None --------------------- Treasurer and Chief the discretion of the Pioneer; and Treasurer of all of the Financial and Accounting Board Pioneer Funds since March 2008; ----------------------- Officer Deputy Treasurer of Pioneer from ----------------------------- March 2004 to February 2008; and Assistant Treasurer of all of the Pioneer Funds from March 2004 to February 2008 -------------------------------------- LUIS I. PRESUTTI (48) Since 2004. Serves at Assistant Vice President - Fund None --------------------- Assistant Treasurer the discretion of the Treasury of Pioneer; and Assistant ----------------------------- Board Treasurer of all of the Pioneer Funds ----------------------- -------------------------------------- GARY SULLIVAN (55) Since 2004. Serves at Fund Accounting Manager - Fund None --------------------- Assistant Treasurer the discretion of the Treasury of Pioneer; and Assistant ----------------------------- Board Treasurer of all of the Pioneer Funds ----------------------- -------------------------------------- DAVID F. JOHNSON (34) Since 2009. Serves at Fund Administration Manager - Fund None --------------------- Assistant Treasurer the discretion of the Treasury of Pioneer since November ----------------------------- Board 2008 and Assistant Treasurer of all ----------------------- of the Pioneer Funds since January 2009; Client Service Manager - Institutional Investor Services at State Street Bank from March 2003 to March 2007 --------------------------------------
47
NAME, AGE AND TERM OF OFFICE AND OTHER DIRECTORSHIPS POSITION HELD WITH THE FUND LENGTH OF SERVICE PRINCIPAL OCCUPATION HELD BY TRUSTEE ----------------------------- ----------------------- ------------------------------------- --------------------- JEAN M. BRADLEY (61) Since 2010. Serves at Chief Compliance Officer of Pioneer None --------------------- Chief Compliance Officer the discretion of the and of all the Pioneer Funds since ----------------------------- Board March 2010; Director of Adviser and ----------------------- Portfolio Compliance at Pioneer since October 2005; Senior Compliance Officer for Columbia Management Advisers, Inc. from October 2003 to October 2005 ------------------------------------- KELLY O'DONNELL (42) Since 2006. Serves at Director - Transfer Agency None --------------------- Anti-Money Laundering the discretion of the Compliance of Pioneer and Officer Board Anti-Money Laundering Officer of all ----------------------------- ----------------------- the Pioneer funds since 2006 -------------------------------------
* Mr. Kingsbury is an Interested Trustee because he is an officer or director of the fund's investment adviser and certain of its affiliates. BOARD COMMITTEES The Board of Trustees is responsible for overseeing the fund's management and operations. The Chairman of the Board is an Independent Trustee. Independent Trustees constitute more than 75% of the Board. During the most recent fiscal year, the Board of Trustees held 7 meetings. Each Trustee attended at least 75% of such meetings. The Trustees were selected to join the Board based upon the following as to each Board member: such person's character and integrity; such person's willingness and ability to commit the time necessary to perform the duties of a Trustee; as to each Independent Trustee, his or her status as not being an "interested person" as defined under the 1940 Act; and, as to Mr. Kingsbury, his association with Pioneer. Each of the Independent Trustees also was selected to join the Board based on the criteria and principles set forth in the Nominating Committee Charter. In evaluating a Trustee's prospective service on the Board, the Trustee's experience in, and ongoing contributions toward, overseeing the fund's business as a Trustee also are considered. In addition, the following specific experience, qualifications, attributes and/or skills apply as to each Trustee: Mr. Bock, accounting, financial, business and public company experience as a chief financial officer and an executive officer and experience as a board member of other organizations; Mr. Friedman, academic leadership, economic and finance experience and investment company board experience; Ms. Graham, academic leadership, experience in business, finance and management consulting; Mr. Perna, accounting, financial, and business experience as an executive officer and experience as a board member of other organizations; Ms. Piret, accounting, financial and entrepreneurial experience as an executive, valuation experience and investment company board experience; Mr. West, legal experience and securities and board experience; and Mr. Kingsbury, investment management experience as an executive and leadership roles with Pioneer and its affiliates. However, in its periodic assessment of the effectiveness of the Board, the Board considers the complementary skills and experience of individual Trustees primarily in the broader context of the Board's overall composition so that the Board, as a body, possesses the appropriate (and appropriately diverse) skills and experience to oversee the business of the fund. The Trust's Amended and Restated Agreement and Declaration of Trust provides that the appointment, designation (including in any proxy or registration statement or other document) of a Trustee as an expert on any topic or in any area, or as having experience, attributes or skills in any area, or any other appointment, designation or identification, shall not impose on that person any standard of care or liability that is greater than that imposed on that person as a Trustee in the absence of the appointment, designation or identification, and no Trustee who has special attributes, skills, experience or expertise, or is appointed, designated, or identified as aforesaid, shall be held to a higher standard of care by virtue thereof. 48 The Board of Trustees has five standing committees: the Independent Trustees Committee, the Audit Committee, the Governance and Nominating Committee, the Policy Administration Committee and the Valuation Committee. Each committee is chaired by an Independent Trustee and all members of each committee are Independent Trustees. The Chairs of the committees work with the Chairman of the Board and fund management in setting the agendas for Board meetings. The Chairs of the committees set the agendas for committee meetings with input from fund management. As noted below, through the committees, the Independent Trustees consider and address important matters involving the fund, including those presenting conflicts or potential conflicts of interest for management. The Independent Trustees also regularly meet without the presence of management and are advised by independent legal counsel. The Board has determined that delegation to the committees of specified oversight responsibilities helps ensure that the fund has effective and independent governance and oversight. Notwithstanding the fact that the Chairman of the Board is an Independent Trustee, the Board continues to believe that the committee structure enables the Board more effectively to provide governance and oversight of the fund's affairs. Mr. Perna, Chairman of the Board, is a non-voting, ex-officio member of each committee, except the Independent Trustees Committee, of which he is Chair. During the most recent fiscal year, the Independent Trustees, Audit, Governance and Nominating, Policy Administration, and Valuation Committees held 7, 7, 2, 4 and 7 meetings, respectively. INDEPENDENT TRUSTEES COMMITTEE David R. Bock, Benjamin M. Friedman, Margaret B.W. Graham, Thomas J. Perna (Chair), Marguerite A. Piret and Stephen K. West. The Independent Trustees Committee is comprised of all of the Independent Trustees. The Independent Trustees Committee serves as the forum for consideration of a number of issues required to be considered separately by the Independent Trustees under the 1940 Act, including the assessment and review of the fund's advisory agreement and other related party contracts. The Independent Trustees Committee also considers issues that the Independent Trustees believe it is advisable for them to consider separately from the Interested Trustees. AUDIT COMMITTEE David R. Bock (Chair), Benjamin M. Friedman and Marguerite A. Piret. The Audit Committee, among other things, oversees the accounting and financial reporting policies and practices of the fund, oversees the quality and integrity of the fund's financial statements, approves, and recommends to the Independent Trustees for their ratification, the engagement of the fund's independent registered public accounting firm, reviews and evaluates the accounting firm's qualifications, independence and performance, and approves the compensation of the accounting firm. The Audit Committee also approves all audit and permissible non-audit services provided to the fund by the fund's accounting firm and all permissible non-audit services provided by the fund's accounting firm to Pioneer and any affiliated service providers of the fund if the engagement relates directly to the fund's operations and financial reporting. GOVERNANCE AND NOMINATING COMMITTEE Margaret B.W. Graham (Chair), Thomas J. Perna and Stephen K. West. The Governance and Nominating Committee considers governance matters affecting the Board and the fund. Among other responsibilities, the Governance and Nominating Committee reviews the performance of the Independent Trustees as a whole, and reviews and recommends to the Independent Trustees Committee any appropriate changes concerning, among other things, the size and composition of the Board, the Board's committee structure and the Independent Trustees' compensation. The Governance and Nominating Committee also makes recommendations to the Independent Trustees Committee or the Board on matters delegated to it. 49 In addition, the Governance and Nominating Committee screens potential candidates for Independent Trustees. Among other responsibilities, the Governance and Nominating Committee reviews periodically the criteria for Independent Trustees and the spectrum of desirable experience and expertise for Independent Trustees as a whole, and reviews periodically the qualifications and requisite skills of persons currently serving as Independent Trustees and being considered for re-nomination. The Governance and Nominating Committee also reviews the qualifications of any person nominated to serve on the Board by a shareholder or recommended by any Trustee, management or another person and makes a recommendation as to the qualifications of such nominated or recommended person to the Independent Trustees and the Board, and reviews periodically the Committee's procedure, if any, regarding candidates submitted by shareholders. The Governance and Nominating Committee does not have specific, minimum qualifications for nominees, nor has it established specific qualities or skills that it regards as necessary for one or more of the Independent Trustees to possess (other than qualities or skills that may be required by applicable law or regulation). However, in evaluating a person as a potential nominee to serve as an Independent Trustee, the Governance and Nominating Committee will consider the following general criteria and principles, among any others that it may deem relevant: o whether the person has a reputation for integrity, honesty and adherence to high ethical standards; o whether the person has demonstrated business acumen and ability to exercise sound judgment in matters that relate to the objectives of the fund and whether the person is willing and able to contribute positively to the decision-making process of the fund; o whether the person has a commitment and ability to devote the necessary time and energy to be an effective Independent Trustee, to understand the fund and the responsibilities of a trustee of an investment company; o whether the person has the ability to understand the sometimes conflicting interests of the various constituencies of the fund and to act in the interests of all shareholders; o whether the person has a conflict of interest that would impair his or her ability to represent the interests of all shareholders and to fulfill the responsibilities of a trustee; and o the value of diversity on the Board. The Governance and Nominating Committee Charter provides that nominees shall not be discriminated against on the basis of race, religion, national origin, sex, sexual orientation, disability or any other basis proscribed by law. The Governance and Nominating Committee also will consider whether the nominee has the experience or skills that the Governance and Nominating Committee believes would maintain or enhance the effectiveness of the Independent Trustees' oversight of the fund's affairs, based on the then current composition and skills of the Independent Trustees and experience or skills that may be appropriate in light of changing business conditions and regulatory or other developments. The Governance and Nominating Committee does not necessarily place the same emphasis on each criterion. Prior to the establishment of the Governance and Nominating Committee, the fund's Nominating Committee screened potential candidates for Independent Trustee using the same general criteria and principles described above. The Governance and Nominating Committee does not have a formal policy for considering trustee nominees submitted by the fund's shareholders. Nonetheless, the Nominating Committee may, on an informal basis, consider any shareholder recommendations of nominees that it receives. POLICY ADMINISTRATION COMMITTEE Margaret B.W. Graham, Thomas J. Perna and Stephen K. West (Chair). The Policy Administration Committee, among other things, oversees and monitors the fund's compliance with legal and regulatory requirements that are not directly related to financial reporting, internal financial controls, independent audits or the performance of the fund's internal audit function. The Policy Administration Committee also oversees the adoption and implementation of certain of the fund's policies and procedures. 50 VALUATION COMMITTEE David R. Bock, Benjamin M. Friedman and Marguerite A. Piret (Chair). The Valuation Committee, among other things, determines with Pioneer the value of securities under certain circumstances and considers other matters with respect to the valuation of securities, in each case in accordance with the fund's valuation procedures. OVERSIGHT OF RISK MANAGEMENT Consistent with its responsibility for oversight of the fund in the interests of shareholders, the Board of Trustees oversees risk management of the fund's investment management and business operations. In performing this oversight function, the Board considers various risks and risk management practices relating to the fund. The Board has delegated certain aspects of its risk oversight responsibilities to the committees. The fund faces a number of risks, such as investment risk, counterparty risk, valuation risk, enterprise risk, reputational risk, risk of operational failure or lack of business continuity, and legal, compliance and regulatory risk. The goal of risk management is to identify and address risks, i.e., events or circumstances that could have material adverse effects on the business, operations, shareholder services, investment performance or reputation of the fund. Most of the fund's investment management and business operations are carried out by or through Pioneer, its affiliates, the fund's sub-adviser and other service providers, each of which has an independent interest in risk management but whose policies and the methods by which one or more risk management functions are carried out may differ from the fund's and each other's in the setting of priorities, the resources available or the effectiveness of relevant controls. Under the overall supervision of the Board or the applicable committee of the Board, the fund, or Pioneer and the affiliates of Pioneer or other service providers to the fund employ a variety of processes, procedures and controls in an effort to identify, address and mitigate risks. Different processes, procedures and controls are employed with respect to different types of risks. Various personnel, including the fund's and Pioneer's chief compliance officer and Pioneer's chief risk officer and director of internal audit, as well as various personnel of Pioneer and of other service providers, make periodic reports to the applicable committee or to the Board with respect to various aspects of risk management. The reports received by the Trustees related to risks typically are summaries of relevant information. During the course of the most recent fiscal year, the Trustees increased the number of presentations from the directors of Internal Audit and Risk Management at Pioneer, as well as the Chief Operating Officer to whom they report, concerning the results and process of their responsibilities. The Trustees recognize that not all risks that may affect the fund can be identified, that it may not be practical or cost-effective to eliminate or mitigate certain risks, that it may be necessary to bear certain risks (such as investment-related risks) to achieve the fund's goals, that the processes, procedures and controls employed to address certain risks may be limited in their effectiveness, and that some risks are simply beyond the control of the fund or Pioneer and its affiliates or other service providers. As a result of the foregoing and other factors, the fund's ability to manage risk is subject to substantial limitations. In addition, it is important to note that the fund is designed for investors that are prepared to accept investment risk, including the possibility that as yet unforeseen risks may emerge in the future. COMPENSATION OF OFFICERS AND TRUSTEES The Pioneer Funds, including the fund, compensate their Trustees. The Independent Trustees review and set their compensation annually, taking into consideration the committee and other responsibilities assigned to specific Trustees. The table under "Annual Fees, Expense and Other Information - Compensation of Officers and Trustees" sets forth the compensation paid to each of the Trustees. The compensation paid to the Trustees is then allocated among the funds as follows: 51 o each fund with assets less than $250 million pays each Independent Trustee an annual fee of $1,000. o the remaining compensation of the Independent Trustees is allocated to each fund with assets greater than $250 million based on the fund's net assets. o the Interested Trustees receive an annual fee of $500 from each fund, except in the case of funds with net assets of $50 million or less, which pay each Interested Trustee an annual fee of $200. Pioneer reimburses these funds for the fees paid to the Interested Trustees. Except for the chief compliance officer, each fund does not pay any salary or other compensation to its officers. Each fund pays a portion of the chief compliance officer's compensation for her services as the fund's chief compliance officer. Pioneer pays the remaining portion of the chief compliance officer's compensation. See "Compensation of Officers and Trustees" in "Annual Fee, Expense and Other Information." SALES LOADS Each fund offers its shares to Trustees and officers of the fund and employees of Pioneer and its affiliates without a sales charge in order to encourage investment in the fund by individuals who are responsible for its management and because the sales to such persons do not entail any sales effort by the fund, brokers or other intermediaries. OTHER INFORMATION The Amended and Restated Agreement and Declaration of Trust provides that no Trustee, officer or employee of a fund shall be liable to a fund or any shareholder for any action, failure to act, error or mistake except in cases of bad faith, willful misfeasance, gross negligence or reckless disregard of duty. The Amended and Restated Agreement and Declaration of Trust requires each fund to indemnify each Trustee, director, officer, employee and authorized agent to the fullest extent permitted by law against liability and against all expenses reasonably incurred or paid by him in connection with any claim, action, suit or proceeding in which he becomes involved as a party or otherwise by virtue of his being or having been such a Trustee, director, officer, employee, or agent and against amounts paid or incurred by him in settlement thereof. The 1940 Act currently provides that no officer or director shall be protected from liability to a fund or shareholders for willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties of office. The Amended and Restated Agreement and Declaration of Trust extends to Trustees, officers and employees of each fund the full protection from liability that the law allows. MATERIAL RELATIONSHIPS OF THE INDEPENDENT TRUSTEES Mr. West, an Independent Trustee, is Senior Counsel to Sullivan & Cromwell, which acts as counsel to the Independent Trustees and the Independent Trustees of the other Pioneer Funds. The aggregate compensation paid to Sullivan & Cromwell by the fund and the other Pioneer Funds was approximately $447,665 and $540,568 in each of 2011 and 2012. SHARE OWNERSHIP See "Annual Fee, Expense and Other Information" for information on the ownership of fund shares by the Trustees, each fund's officers and owners in excess of 5% of any class of shares of a fund and a table indicating the value of shares that each Trustee beneficially owns in each fund and in all the Pioneer Funds. PROXY VOTING POLICIES Information regarding how each fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is publicly available to shareowners without charge at http://www.pioneerinvestments.com and on the SEC's website at http://www.sec.gov. Each fund's proxy voting policies and procedures are attached as "Appendix B". 52 4. INVESTMENT ADVISER Each fund has entered into an amended and restated management agreement (hereinafter, the "management contract") with Pioneer pursuant to which Pioneer acts as the fund's investment adviser. Pioneer is an indirect, wholly owned subsidiary of UniCredit. Certain Trustees or officers of each fund are also directors and/or officers of certain of UniCredit's subsidiaries (see management biographies above). Pioneer has entered into an agreement with its affiliate, Pioneer Investment Management Limited ("PIML"), pursuant to which PIML provides certain services to Pioneer. As each fund's investment adviser, Pioneer provides each fund with investment research, advice and supervision and furnishes an investment program for the fund consistent with the fund's investment objective and policies, subject to the supervision of the fund's Trustees. Pioneer determines what portfolio securities will be purchased or sold, arranges for the placing of orders for the purchase or sale of portfolio securities, selects brokers or dealers to place those orders, maintains books and records with respect to the fund's securities transactions, and reports to the Trustees on the fund's investments and performance. The management contract will continue in effect from year to year provided such continuance is specifically approved at least annually (i) by the Trustees of the fund or by a majority of the outstanding voting securities of the fund (as defined in the 1940 Act), and (ii) in either event, by a majority of the Independent Trustees of the fund, with such Independent Trustees casting votes in person at a meeting called for such purpose. The management contract may be terminated without penalty by the Trustees of the fund or by vote of a majority of the outstanding voting securities of the fund on not more than 60 days' nor less than 30 days' written notice to Pioneer, or by Pioneer on not less than 90 days' written notice to the fund, and will automatically terminate in the event of its assignment (as defined in the 1940 Act) by Pioneer. The management contract is not assignable by the fund except with the consent of Pioneer. CONTINUANCE OF MANAGEMENT CONTRACT AND SUBADVISORY AGREEMENT The Trustees' approval of and the terms, continuance and termination of the management contract and subadvisory agreement are governed by the 1940 Act. Pursuant to the management contract, Pioneer assumes no responsibility other than to render the services called for under the management contract, in good faith, and Pioneer will not be liable for any error of judgment or mistake of law or for any loss arising out of any investment or for any act or omission in the execution of securities or other transactions for the fund. Pioneer, however, is not protected against liability by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of its reckless disregard of its obligations and duties under the management contract. The management contract requires Pioneer to furnish all necessary services, facilities and personnel in connection with the performance of its services under the management contract, and except as specifically stated therein, Pioneer is not responsible for any of the fund's ordinary and extraordinary expenses. Pursuant to the subadvisory agreement, the subadviser will not be liable for any error of judgment or mistake of law or for any loss sustained by reason of the adoption of any investment policy or the purchase, sale or retention of any securities on the recommendation of the subadviser. The subadviser, however, is not protected against liability by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of its reckless disregard of its obligations and duties under the subadvisory agreement. The subadvisory agreement terminates if assigned and may be terminated without penalty upon not more than 60 days' nor less than 30 days' written notice to the other party or by vote of a majority of a fund's outstanding voting securities. 53 ADVISORY FEE As compensation for the management services each fund pays Pioneer a fee at the annual rate of the applicable fund's average daily net assets set forth below.
NET ASSETS ANNUAL FEE ---------------------------------------- --------------------------------------------------------------------------------------- Up to $2.5 billion 0.13% on investments in underlying funds managed by Pioneer (and cash); and 0.17% on ---------------------------------------- other investments --------------------------------------------------------------------------------------- Over $2.5 billion and up to $4 billion 0.11% on investments in underlying funds managed by Pioneer (and cash); and 0.14% on ---------------------------------------- other investments --------------------------------------------------------------------------------------- Over $4 billion and up to $5.5 billion 0.10% on investments in underlying funds managed by Pioneer (and cash); and 0.12% on ---------------------------------------- other investments --------------------------------------------------------------------------------------- Over $5.5 billion and up to $7 billion 0.08% on investments in underlying funds managed by Pioneer (and cash); and 0.10% on ---------------------------------------- other investments --------------------------------------------------------------------------------------- Over $7 billion 0.08% on investments in underlying funds managed by Pioneer (and cash); and 0.09% on ---------------------------------------- other investments ---------------------------------------------------------------------------------------
For purposes of calculating Pioneer's fee, the asset allocation between underlying funds managed by Pioneer and other investments are determined monthly based upon the average week end allocation of each fund's assets during such calendar month and such allocation is applied in determining the fee in the subsequent calendar month. INVESTMENT SUBADVISER Pioneer has engaged Ibbotson Associates, Inc. ("Ibbotson" or the "subadviser") to act as the subadviser to each of the funds. Ibbotson is a wholly owned subsidiary of Morningstar, Inc. Pioneer oversees the funds' operations and supervises Ibbotson, which is responsible for the day-to-day management of the funds. Ibbotson will, among other things, continuously review and analyze the investments in the funds and, subject to the supervision of Pioneer, manage the investment and reinvestment of the funds' assets. Ibbotson is registered as an investment adviser under the Advisers Act. Pioneer and Ibbotson have entered into a subadvisory agreement, pursuant to which Ibbotson has agreed, among other things, to: o comply with the provisions of the trust's Declaration of Trust and By-laws, the 1940 Act, the Advisers Act and the investment objectives, policies and restrictions of the respective fund; o cause the respective fund to comply with the requirements of Subchapter M of the Code for qualification as a regulated investment company; o comply with any policies, guidelines, procedures and instructions as Pioneer may from time to time establish; o maintain separate books and detailed records of all matters pertaining to the portion of the fund's assets advised by Ibbotson required by Rule 31a-1 under the 1940 Act relating to its responsibilities provided with respect to the fund; o ensure that its "access persons" comply in all respects with Ibbotson's Code of Ethics, as in effect from time to time; and o furnish reports to the Trustees and Pioneer. For its services, Ibbotson is entitled to a subadvisory fee from Pioneer at an annual rate of 0.10% of the each fund's average daily net assets up to $2.5 billion, 0.08% from $2.5 billion to $4 billion, 0.07% from $4 billion to $5.5 billion, 0.06% from $5.5 billion to $7 billion and 0.05% above $7 billion. The fee is paid monthly in arrears. The funds do not pay a fee to the subadviser. Pioneer has received an order from the SEC that permits Pioneer, subject to the approval of the trust's Board of Trustees, to hire and terminate a subadviser or to materially modify an existing subadvisory contract for the funds without shareholder approval. Pioneer retains the ultimate responsibility to oversee and recommend the hiring, termination and replacement of any subadviser. To the extent that the SEC adopts 54 a rule that would supersede the order or would provide greater flexibility than the order, Pioneer and the funds intend to rely on such rule to permit Pioneer, subject to the approval of the trust's Board of Trustees and any other applicable conditions of the rule, to hire and terminate a subadviser or to materially modify an existing subadvisory contract for the funds without shareholder approval. EXPENSE LIMIT Pioneer has contractually agreed to limit ordinary operating expenses (ordinary operating expenses means all fund expenses other than extraordinary expenses, such as litigation, taxes, and brokerage commissions) to the extent required to reduce each fund's expenses, other than the underlying fund fees and expenses, to the amounts listed below of the average daily net assets attributable to Class A, Class B and Class C shares, respectively. These expense limitations are in effect through December 1, 2014. There can be no assurance that Pioneer will extend the contractual expense limitation beyond the aforementioned date. While in effect, the arrangement may be terminated for a class only by agreement of Pioneer and the Board of Trustees.
CLASS A CLASS B CLASS C FUND EXPENSE LIMIT EXPENSE LIMIT EXPENSE LIMIT ------------------------- --------------- --------------- -------------- Conservative Allocation 0.78% 1.68% 1.68% ------------------------- ---- ---- ---- Moderate Allocation 0.74% 1.52% 1.52% ------------------------- ---- ---- ---- Growth Allocation 0.79% 1.57% 1.57% ------------------------- ---- ---- ---- Aggressive Allocation 0.85% 1.64% 1.64% ------------------------- ---- ---- ----
ADMINISTRATION AGREEMENT Each fund has entered into an amended and restated administration agreement with Pioneer pursuant to which Pioneer acts as each fund's administrator, performing certain accounting, administration and legal services for each fund. Pioneer is reimbursed for its cost of providing such services. The cost of providing these services is based on direct costs and costs of overhead, subject to review by the Board of Trustees. See "Annual Fee, Expense and Other Information" for fees each fund paid to Pioneer for administration and related services. In addition, Brown Brothers Harriman & Co. performs certain sub-administration services to the fund pursuant to an agreement with Pioneer and the fund. Under the terms of the amended and restated administration agreement with each fund, Pioneer pays or reimburses each fund for expenses relating to its services for the fund, with the exception of the following, which are to be paid by the fund: (a) charges and expenses for fund accounting, pricing and appraisal services and related overhead, including, to the extent such services are performed by personnel of Pioneer, or its affiliates, office space and facilities and personnel compensation, training and benefits; (b) the charges and expenses of auditors; (c) the charges and expenses of any custodian, transfer agent, plan agent, dividend disbursing agent and registrar appointed by the fund; (d) issue and transfer taxes, chargeable to the fund in connection with securities transactions to which the fund is a party; (e) insurance premiums, interest charges, dues and fees for membership in trade associations and all taxes and corporate fees payable by the fund to federal, state or other governmental agencies; (f) fees and expenses involved in registering and maintaining registrations of the fund and/or its shares with federal regulatory agencies, state or blue sky securities agencies and foreign jurisdictions, including the preparation of prospectuses and statements of additional information for filing with such regulatory authorities; (g) all expenses of shareholders' and Trustees' meetings and of preparing, printing and distributing prospectuses, notices, proxy statements and all reports to shareholders and to governmental agencies; (h) charges and expenses of legal counsel to the fund and the Trustees; (i) any distribution fees paid by the fund in accordance with Rule 12b-1 promulgated by the SEC pursuant to the 1940 Act; (j) compensation of those Trustees of the fund who are not affiliated with or interested persons of Pioneer, the fund (other than as Trustees), PIM-USA or PFD; (k) the cost of preparing and printing share certificates; (l) interest on borrowed money, if any; (m) fees payable by the fund under management agreements and the administration agreement; and (n) extraordinary expenses. Each fund shall also assume and pay any 55 other expense that the fund, Pioneer or any other agent of the fund may incur not listed above that is approved by the Board of Trustees (including a majority of the Independent Trustees) as being an appropriate expense of the fund. The fund shall pay all fees and expenses to be paid by the fund under the sub-administration agreement with Brown Brothers Harriman & Co. In addition, each fund shall pay all brokers' and underwriting commissions chargeable to the fund in connection with securities transactions to which the fund is a party. POTENTIAL CONFLICTS OF INTEREST Each fund is managed by Pioneer, which also serves as investment adviser to other Pioneer mutual funds and other accounts (including separate accounts and unregistered products) with investment objectives identical or similar to those of the fund. Securities frequently meet the investment objectives of a fund, the other Pioneer mutual funds and such other accounts. In such cases, the decision to recommend a purchase to one fund or account rather than another is based on a number of factors. The determining factors in most cases are the amount of securities of the issuer then outstanding, the value of those securities and the market for them. Other factors considered in the investment recommendations include other investments which each fund or account presently has in a particular industry and the availability of investment funds in each fund or account. It is possible that at times identical securities will be held by more than one fund and/or account. However, positions in the same issue may vary and the length of time that any fund or account may choose to hold its investment in the same issue may likewise vary. To the extent that more than one of the Pioneer mutual funds or a private account managed by Pioneer seeks to acquire the same security at about the same time, a fund may not be able to acquire as large a position in such security as it desires or it may have to pay a higher price for the security. Similarly, a fund may not be able to obtain as large an execution of an order to sell or as high a price for any particular portfolio security if Pioneer decides to sell on behalf of another account the same portfolio security at the same time. On the other hand, if the same securities are bought or sold at the same time by more than one fund or account, the resulting participation in volume transactions could produce better executions for a fund. In the event more than one account purchases or sells the same security on a given date, the purchases and sales will normally be made as nearly as practicable on a pro rata basis in proportion to the amounts desired to be purchased or sold by each account. Although the other Pioneer mutual funds may have the same or similar investment objectives and policies as a fund, their portfolios do not generally consist of the same investments as the fund or each other, and their performance results are likely to differ from those of the fund. PERSONAL SECURITIES TRANSACTIONS Each fund, Pioneer, and PFD have adopted a code of ethics under Rule 17j-1 under the 1940 Act which is applicable to officers, trustees/directors and designated employees of Pioneer and certain of Pioneer's affiliates. The code permits such persons to engage in personal securities transactions for their own accounts, including securities that may be purchased or held by the fund, and is designed to prescribe means reasonably necessary to prevent conflicts of interest from arising in connection with personal securities transactions. The code is on public file with and available from the SEC. 5. PRINCIPAL UNDERWRITER AND DISTRIBUTION PLAN PRINCIPAL UNDERWRITER PFD, 60 State Street, Boston, Massachusetts 02109, is the principal underwriter for each fund in connection with the continuous offering of its shares. PFD is an indirect wholly owned subsidiary of PIM-USA. 56 Each fund entered into an underwriting agreement with PFD which provides that PFD will bear expenses for the distribution of the fund's shares, except for expenses incurred by PFD for which it is reimbursed or compensated by the fund under the distribution plan (discussed below). PFD bears all expenses it incurs in providing services under the underwriting agreement. Such expenses include compensation to its employees and representatives and to securities dealers for distribution-related services performed for the fund. PFD also pays certain expenses in connection with the distribution of each fund's shares, including the cost of preparing, printing and distributing advertising or promotional materials, and the cost of printing and distributing prospectuses and supplements to prospective shareholders. Each fund bears the cost of registering its shares under federal and state securities law and the laws of certain non-U.S. countries. Under the underwriting agreement, PFD will use its best efforts in rendering services to the fund. See "Sales Charges" for the schedule of initial sales charge reallowed to dealers as a percentage of the offering price of each fund's Class A shares. See the tables under "Annual Fee, Expense and Other Information" for commissions retained by PFD and reallowed to dealers in connection with PFD's offering of each fund's Class A and Class C shares during recently completed fiscal years. Each fund will not generally issue fund shares for consideration other than cash. At a fund's sole discretion, however, it may issue fund shares for consideration other than cash in connection with a bona fide reorganization, statutory merger or other acquisition of portfolio securities. It is each fund's general practice to repurchase its shares of beneficial interest for cash consideration in any amount; however, the redemption price of shares of the fund may, at Pioneer's discretion, be paid in portfolio securities. Each fund has elected to be governed by Rule 18f-1 under the 1940 Act pursuant to which the fund is obligated to redeem shares solely in cash up to the lesser of $250,000 or 1% of the fund's net asset value during any 90-day period for any one shareholder. Should the amount of redemptions by any shareholder exceed such limitation, the fund will have the option of redeeming the excess in cash or portfolio securities. In the latter case, the securities are taken at their value employed in determining the fund's net asset value. You may incur additional costs, such as brokerage fees and taxes, and risks, including a decline in the value of the securities you receive, if the fund makes an in-kind distribution. DISTRIBUTION PLAN The trust has adopted a distribution plan (the "Distribution Plan") pursuant to Rule l2b-1 under the 1940 Act with respect to each fund's Class A, Class B and Class C shares. The trust has not adopted a distribution plan with respect to each fund's Class Y shares. For each Class that has adopted a Distribution Plan, fees under the Distribution Plan may be used to make payments to one or more principal underwriters, broker-dealers, financial intermediaries (which may include banks) and other parties that enter into a distribution, selling or service agreement with respect to the shares of such Class (each of the foregoing, a "Service Party"). Each fund, its principal underwriter or other parties also may incur expenses in connection with the distribution or marketing and sales of the fund's shares that may be paid or reimbursed by the fund. The aggregate amount in respect of such fees and expenses with respect to each Class shall be the amount calculated at a percentage per annum of the average daily net assets attributable to such Class as set forth below:
CLASS APPLICABLE PERCENTAGE PER ANNUM --------- -------------------------------- Class A 0.25% --------- ---- Class B 1.00% --------- ---- Class C 1.00% --------- ----
57 Payments are made under the Distribution Plan for distribution services and other activities in respect of the sale of shares of the fund and to make payments for advertising, marketing or other promotional activity, and for preparation, printing, and distribution of prospectuses, statements of additional information and reports for recipients other than regulators and existing shareholders. Each fund also may make payments to Service Parties under the Distribution Plan for providing personal service or the maintenance of shareholder accounts. The amounts paid to each recipient may vary based upon certain factors, including, among other things, the levels of sales of fund shares and/or shareholder services provided; provided, however, that the fees paid to a recipient with respect to a particular Class that may be used to cover expenses primarily intended to result in the sale of shares of that Class, or that may be used to cover expenses primarily intended for personal service and/or maintenance of shareholder accounts, may not exceed the maximum amounts, if any, as may from time to time be permitted for such services under the Financial Industry Regulatory Authority ("FINRA") Conduct Rule 2830 or any successor rule, in each case as amended or interpreted by FINRA. The Distribution Plan also provides that the Service Parties may receive all or a portion of any sales charges paid by investors. The Distribution Plan permits each fund to pay fees to the Service Parties as compensation for their services, not as reimbursement for specific expenses incurred. Thus, even if their expenses exceed the fees provided for by the Distribution Plan, a fund will not be obligated to pay more than those fees and, if their expenses are less than the fees paid to them, they will realize a profit. Each fund may pay the fees to the Service Parties until the Distribution Plan or any related distribution agreement is terminated or not renewed. In that event, a Service Party's expenses in excess of fees received or accrued through the termination date will be such Service Party's sole responsibility and not obligations of the fund. In their annual consideration of the continuation of the Distribution Plan for each fund, the Trustees will review the Distribution Plan and the expenses for each Class within a fund separately. Each fund may participate in joint distribution activities with other Pioneer funds. The costs associated with such joint distribution activities are allocated to a fund based on the number of shares sold. The Distribution Plan also recognizes that Pioneer, PFD or any other Service Party may make payments for distribution-related expenses out of its own resources, including past profits, or payments received from a fund for other purposes, such as management fees, and that the Service Parties may from time to time use their own resources for distribution-related services, in addition to the fees paid under the Distribution Plan. The Distribution Plan specifically provides that, to the extent that such payments might be deemed to be indirect financing of any activity primarily intended to result in the sale of shares of a fund within the context of Rule 12b-1, then the payments are deemed to be authorized by the Distribution Plan but not subject to the maximum amounts set forth above. Under its terms, the Distribution Plan continues in effect for one year and thereafter for successive annual periods, provided such continuance is specifically approved at least annually by vote of the Board, including a majority of the Independent Trustees who have no direct or indirect financial interest in the operation of the Distribution Plan. The Distribution Plan may not be amended to increase materially the amount of the service and distribution fees without shareholder approval, and all material amendments of the Distribution Plan also must be approved by the Trustees, including all of the Independent Trustees, in the manner described above. The Distribution Plan may be terminated with respect to a Class of a fund at any time, without penalty, by vote of a majority of the Independent Trustees or by vote of a majority of the outstanding voting securities of such Class of the fund (as defined in the 1940 Act). See "Annual Fee, Expense and Other Information" for fund expenses under the Distribution Plan paid to PFD for the most recently completed fiscal year. 58 CLASS B SHARES PFD pays the selling broker-dealer a commission on the sale of Class B shares equal to 3.75% of the amount invested. This commission is paid at the time of sale of the Class B shares. In order to be entitled to a commission, the selling broker-dealer must have entered into a sales agreement with PFD. Since PFD pays commissions to broker-dealers at the time of the sale of Class B shares but only receives compensation for such expenses over time through the distribution fee and CDSC, PFD may finance the payment of commissions to broker-dealers. In order to facilitate such financing, each fund has agreed that the distribution fee attributable to the Class B shares will not be terminated or modified (including a modification in the rules relating to the conversion of Class B shares into Class A shares) with respect to Class B shares (or the assets attributable to the Class B shares): o issued prior to the date of any termination or modification; o attributable to Class B shares issued through one or a series of exchanges of shares of another investment company for which PFD acts as principal underwriter which were initially issued prior to the date of such termination or modification; or o issued as a dividend or distribution upon Class B shares initially issued or attributable to Class B shares issued prior to the date of any such termination or modification. The foregoing limitation does not apply to Class B shares issued after the termination or modification. The foregoing limitation on terminating or modifying the distribution fee attributable to the Class B shares also does not apply to a termination or modification: o to the extent required by a change in the 1940 Act, the rules or regulations under the 1940 Act, the Conduct Rules of FINRA or an order of any court or governmental agency, in each case enacted, issued or promulgated after September 30, 1998; o if each fund (or any successor) terminates the Distribution Plan and all payments under the Distribution Plan and neither the fund (nor any successor) establishes another class of shares which has substantially similar characteristics to the Class B shares of the fund; or o at any time by the Board of Trustees. However, the Board of Trustees may terminate or modify the Class B Plan only if a fund and Pioneer agree that none of the fund, PFD or any of their affiliates will pay, after the date of termination or modification, a service fee with respect to the fund's Class B shares and the termination or modification of the distribution fee applies equally to all Class B shares outstanding from time to time. In the underwriting agreement, each fund agrees that subsequent to the issuance of a Class B share, the fund will not waive or change any CDSC (including a change in the rules applicable to conversion of Class B shares into another class) in respect of such Class B share, except: o as provided in the fund's prospectus or statement of additional information; or o as required by a change in the 1940 Act and the rules and regulations thereunder, the Conduct Rules of FINRA or any order of any court or governmental agency. PFD pays a service fee to broker-dealers at a rate of up to 0.25% of each fund's average daily net assets attributable to Class B shares owned by shareholders for whom that broker-dealer is the holder or dealer of record. This service fee compensates the broker-dealer for providing personal services and/or account maintenance services rendered by the broker-dealer with respect to Class B shares. PFD may from time to time require that dealers, in addition to providing these services, meet certain criteria in order to receive service fees. 59 At the time of the sale of a Class B share, PFD also may advance to the broker-dealer, from PFD's own assets, the first-year service fee payable under the Class B Plan at a rate up to 0.25% of the purchase price of such shares. If such an advance is made, the broker-dealer would not receive any further service fee until the 13th month following the purchase of Class B shares. As compensation for advancing the service fee, PFD may retain the service fee paid by the fund with respect to such shares for the first year after purchase. CLASS C SHARES PFD will advance to dealers the first-year service fee at a rate equal to 0.25% of the amount invested. As compensation therefor, PFD may retain the service fee paid by the fund with respect to such shares for the first year after purchase. Commencing in the 13th month following the purchase of Class C shares, dealers will become eligible for additional annual distribution fees and service fees of up to 0.75% and 0.25%, respectively, of the net asset value of such shares. Dealers may from time to time be required to meet certain other criteria in order to receive service fees. 6. SHAREHOLDER SERVICING/TRANSFER AGENT Each fund has contracted with PIMSS, 60 State Street, Boston, Massachusetts 02109, to act as shareholder servicing and transfer agent for each fund. Under the terms of its contract with each fund, PIMSS services shareholder accounts, and its duties include: (i) processing sales, redemptions and exchanges of shares of the fund; (ii) distributing dividends and capital gains associated with the fund's portfolio; and (iii) maintaining account records and responding to shareholder inquiries. PIMSS receives an annual fee of $24.75 for each shareholder account from each fund as compensation for the services described above. PIMSS is also reimbursed by each fund for its cash out-of-pocket expenditures. Each fund may compensate entities which have agreed to provide certain sub-accounting services such as specific transaction processing and recordkeeping services. Any such payments by each fund would be in lieu of the per account fee which would otherwise be paid by each fund to PIMSS. 7. CUSTODIAN AND SUB-ADMINISTRATOR Brown Brothers Harriman & Co. ("BBH"), 40 Water Street, Boston, Massachusetts 02109, is the custodian of each fund's assets. The custodian's responsibilities include safekeeping and controlling each fund's cash and securities, handling the receipt and delivery of securities, and collecting interest and dividends on each fund's investments. Effective March 5, 2012, BBH also performs certain fund accounting and fund administration services for the Pioneer Fund complex, including the fund. For performing such services, BBH receives fees based on complex-wide assets. 8. INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLP, 200 Clarendon Street, Boston, Massachusetts 02116-5072, the fund's independent registered public accounting firm, provides audit services, tax return review services, and assistance and consultation with respect to filings with the SEC. 60 9. PORTFOLIO MANAGEMENT ADDITIONAL INFORMATION ABOUT THE PORTFOLIO MANAGERS OTHER ACCOUNTS MANAGED BY THE PORTFOLIO MANAGERS The table below indicates, for the portfolio managers of each fund, information about the accounts other than the fund over which the portfolio manager has day-to-day investment responsibility. All information on the number of accounts and total assets in the table is as of September 30, 2013. For purposes of the table, "Other Pooled Investment Vehicles" may include investment partnerships, undertakings for collective investments in transferable securities ("UCITS") and other non-U.S. investment funds and group trusts, and "Other Accounts" may include separate accounts for institutions or individuals, insurance company general or separate accounts, pension funds and other similar institutional accounts but generally do not include the portfolio manager's personal investment accounts or those which the manager may be deemed to own beneficially under the code of ethics. Certain funds and other accounts managed by the portfolio manager may have substantially similar investment strategies. AGGRESSIVE PORTFOLIO
NUMBER OF ASSETS ACCOUNTS MANAGED MANAGED FOR FOR WHICH WHICH ADVISORY ADVISORY NUMBER OF FEE IS FEE IS NAME OF ACCOUNTS TOTAL ASSETS PERFORMANCE- PERFORMANCE- PORTFOLIO MANAGER TYPE OF ACCOUNT MANAGED MANAGED BASED BASED ------------------- ---------------------------------- ----------- ----------------- ---------------- ------------- Scott Wentsel Other Registered Investment Companies 16 $ 3,432,272,403 N/A N/A Other Pooled Investment Vehicles 0 $ 0 N/A N/A Other Accounts 371 $49,863,961,976 N/A N/A ------------------- ---------------------------------- --- --------------- ---------------- ------------- Brian Huckstep Other Registered Investment Companies 16 $ 3,432,272,403 N/A N/A Other Pooled Investment Vehicles 0 $ 0 N/A N/A Other Accounts 9 $ 2,499,706,578 N/A N/A ------------------- ---------------------------------- --- --------------- ---------------- ------------- Paul Arnold Other Registered Investment Companies 3 $ 915,065,464 N/A N/A Other Pooled Investment Vehicles 0 $ 0 N/A N/A Other Accounts 5 $ 14,810,765 N/A N/A ------------------- ---------------------------------- --- --------------- ---------------- -------------
CONSERVATIVE PORTFOLIO
NUMBER OF ASSETS ACCOUNTS MANAGED MANAGED FOR FOR WHICH WHICH ADVISORY ADVISORY NUMBER OF FEE IS FEE IS NAME OF ACCOUNTS TOTAL ASSETS PERFORMANCE- PERFORMANCE- PORTFOLIO MANAGER TYPE OF ACCOUNT MANAGED MANAGED BASED BASED ------------------- ---------------------------------- ----------- ----------------- ---------------- ------------- Scott Wentsel Other Registered Investment Companies 18 $ 3,487,480,205 N/A N/A Other Pooled Investment Vehicles 0 $ 0 N/A N/A Other Accounts 371 $49,863,961,976 N/A N/A ------------------- ---------------------------------- --- --------------- ---------------- -------------
61
NUMBER OF ASSETS ACCOUNTS MANAGED MANAGED FOR FOR WHICH WHICH ADVISORY ADVISORY NUMBER OF FEE IS FEE IS NAME OF ACCOUNTS TOTAL ASSETS PERFORMANCE- PERFORMANCE- PORTFOLIO MANAGER TYPE OF ACCOUNT MANAGED MANAGED BASED BASED ------------------- ---------------------------------- ----------- ----------------- ---------------- ------------- Brian Huckstep Other Registered Investment Companies 18 $3,487,480,205 N/A N/A Other Pooled Investment Vehicles 0 $ 0 N/A N/A Other Accounts 9 $2,499,706,578 N/A N/A ------------------- ---------------------------------- -- -------------- ---------------- ------------- Paul Arnold Other Registered Investment Companies 3 $ 970,273,266 N/A N/A Other Pooled Investment Vehicles 0 $ 0 N/A N/A Other Accounts 5 $ 14,810,765 N/A N/A ------------------- ---------------------------------- -- -------------- ---------------- -------------
GROWTH PORTFOLIO
NUMBER OF ASSETS ACCOUNTS MANAGED MANAGED FOR FOR WHICH WHICH ADVISORY ADVISORY NUMBER OF FEE IS FEE IS NAME OF ACCOUNTS TOTAL ASSETS PERFORMANCE- PERFORMANCE- PORTFOLIO MANAGER TYPE OF ACCOUNT MANAGED MANAGED BASED BASED ------------------- ---------------------------------- ----------- ----------------- ---------------- ------------- Scott Wentsel Other Registered Investment Companies 18 $ 3,325,585,322 N/A N/A Other Pooled Investment Vehicles 0 $ 0 N/A N/A Other Accounts 371 $49,863,961,976 N/A N/A ------------------- ---------------------------------- --- --------------- ---------------- ------------- Brian Huckstep Other Registered Investment Companies 18 $ 3,325,585,322 N/A N/A Other Pooled Investment Vehicles 0 $ 0 N/A N/A Other Accounts 9 $ 2,499,706,578 N/A N/A ------------------- ---------------------------------- --- --------------- ---------------- ------------- Paul Arnold Other Registered Investment Companies 3 $ 808,378,383 N/A N/A Other Pooled Investment Vehicles 0 $ 0 N/A N/A Other Accounts 5 $ 14,810,765 N/A N/A ------------------- ---------------------------------- --- --------------- ---------------- -------------
MODERATE PORTFOLIO
NUMBER OF ASSETS ACCOUNTS MANAGED MANAGED FOR FOR WHICH WHICH ADVISORY ADVISORY NUMBER OF FEE IS FEE IS NAME OF ACCOUNTS TOTAL ASSETS PERFORMANCE- PERFORMANCE- PORTFOLIO MANAGER TYPE OF ACCOUNT MANAGED MANAGED BASED BASED ------------------- ---------------------------------- ----------- ----------------- ---------------- ------------- Scott Wentsel Other Registered Investment Companies 18 $ 3,343,772,512 N/A N/A Other Pooled Investment Vehicles 0 $ 0 N/A N/A Other Accounts 371 $49,863,961,976 N/A N/A ------------------- ---------------------------------- --- --------------- ---------------- ------------- Brian Huckstep Other Registered Investment Companies 18 $ 3,343,772,512 N/A N/A
62
NUMBER OF ASSETS ACCOUNTS MANAGED MANAGED FOR FOR WHICH WHICH ADVISORY ADVISORY NUMBER OF FEE IS FEE IS NAME OF ACCOUNTS TOTAL ASSETS PERFORMANCE- PERFORMANCE- PORTFOLIO MANAGER TYPE OF ACCOUNT MANAGED MANAGED BASED BASED ------------------- ---------------------------------- ----------- ----------------- ---------------- ------------- Other Pooled Investment Vehicles 0 $ 0 N/A N/A Other Accounts 9 $2,499,706,578 N/A N/A ------------------- ---------------------------------- ----------- -------------- ---------------- ------------- Paul Arnold Other Registered Investment Companies 3 $ 826,565,573 N/A N/A Other Pooled Investment Vehicles 0 $ 0 N/A N/A Other Accounts 5 $ 14,810,765 N/A N/A ------------------- ---------------------------------- ----------- -------------- ---------------- -------------
POTENTIAL CONFLICTS OF INTEREST When a portfolio manager is responsible for the management of more than one account, the potential arises for the portfolio manager to favor one account over another. The principal types of potential conflicts of interest that may arise are discussed below. For the reasons outlined below, Pioneer does not believe that any material conflicts are likely to arise out of a portfolio manager's responsibility for the management of the fund as well as one or more other accounts. Although Pioneer has adopted procedures that it believes are reasonably designed to detect and prevent violations of the federal securities laws and to mitigate the potential for conflicts of interest to affect its portfolio management decisions, there can be no assurance that all conflicts will be identified or that all procedures will be effective in mitigating the potential for such risks. Generally, the risks of such conflicts of interest are increased to the extent that a portfolio manager has a financial incentive to favor one account over another. Pioneer has structured its compensation arrangements in a manner that is intended to limit such potential for conflicts of interest. See "Compensation of Portfolio Managers" below. o A portfolio manager could favor one account over another in allocating new investment opportunities that have limited supply, such as initial public offerings and private placements. If, for example, an initial public offering that was expected to appreciate in value significantly shortly after the offering was allocated to a single account, that account may be expected to have better investment performance than other accounts that did not receive an allocation of the initial public offering. Generally, investments for which there is limited availability are allocated based upon a range of factors including available cash and consistency with the accounts' investment objectives and policies. This allocation methodology necessarily involves some subjective elements but is intended over time to treat each client in an equitable and fair manner. Generally, the investment opportunity is allocated among participating accounts on a pro rata basis. Although Pioneer believes that its practices are reasonably designed to treat each client in an equitable and fair manner, there may be instances where a fund may not participate, or may participate to a lesser degree than other clients, in the allocation of an investment opportunity. o A portfolio manager could favor one account over another in the order in which trades for the accounts are placed. If a portfolio manager determines to purchase a security for more than one account in an aggregate amount that may influence the market price of the security, accounts that purchased or sold the security first may receive a more favorable price than accounts that made subsequent transactions. The less liquid the market for the security or the greater the percentage that the proposed aggregate purchases or sales represent of average daily trading volume, the greater the potential for accounts that make subsequent purchases or sales to receive a less favorable price. When a portfolio manager intends to trade the same security on the same day for more than one account, the trades typically are "bunched," which means that the trades for the individual accounts are aggregated and each account receives the same price. There are some types of accounts as to which bunching may not be possible for contractual reasons (such as directed brokerage arrangements). Circumstances may also arise 63 where the trader believes that bunching the orders may not result in the best possible price. Where those accounts or circumstances are involved, Pioneer will place the order in a manner intended to result in as favorable a price as possible for such client. o A portfolio manager could favor an account if the portfolio manager's compensation is tied to the performance of that account to a greater degree than other accounts managed by the portfolio manager. If, for example, the portfolio manager receives a bonus based upon the performance of certain accounts relative to a benchmark while other accounts are disregarded for this purpose, the portfolio manager will have a financial incentive to seek to have the accounts that determine the portfolio manager's bonus achieve the best possible performance to the possible detriment of other accounts. Similarly, if Pioneer receives a performance-based advisory fee, the portfolio manager may favor that account, whether or not the performance of that account directly determines the portfolio manager's compensation. o A portfolio manager could favor an account if the portfolio manager has a beneficial interest in the account, in order to benefit a large client or to compensate a client that had poor returns. For example, if the portfolio manager held an interest in an investment partnership that was one of the accounts managed by the portfolio manager, the portfolio manager would have an economic incentive to favor the account in which the portfolio manager held an interest. o If the different accounts have materially and potentially conflicting investment objectives or strategies, a conflict of interest could arise. For example, if a portfolio manager purchases a security for one account and sells the same security for another account, such trading pattern may disadvantage either the account that is long or short. In making portfolio manager assignments, Pioneer seeks to avoid such potentially conflicting situations. However, where a portfolio manager is responsible for accounts with differing investment objectives and policies, it is possible that the portfolio manager will conclude that it is in the best interest of one account to sell a portfolio security while another account continues to hold or increase the holding in such security. The Ibbotson portfolio managers' management of "Other Accounts" may give rise to potential conflicts of interest in connection with their management of the Pioneer Ibbotson Asset Allocation Funds'. The Other Accounts may have the same investment objective as the Pioneer Ibbotson Asset Allocation Funds. Therefore, a potential conflict of interest may arise as a result of the similar investment objectives, whereby the portfolio managers could favor one account over another. Another potential conflict could include the portfolio managers' knowledge about the size, timing, and possible market impact of the trades within the Pioneer Ibbotson Asset Allocation Funds, whereby the portfolio managers could use this information to the advantage of another account and to the disadvantage of the Pioneer Ibbotson Asset Allocation Funds. COMPENSATION OF PORTFOLIO MANAGERS. Ibbotson investment management employees are compensated with a base salary plus a discretionary annual bonus. The base salary is derived from the individual's work experience and performance of their duties. At the discretion of the head of the investment management unit, the base salary may change as a result of such things as an annual review or assuming new duties. The annual bonus is derived from Ibbotson's revenue and profitability and is allotted to the investment management employees based on their immediate manager's judgment of their contribution to the investment management unit including meeting the unit's goals and objectives, contributions to the strategic planning and investment decisions of the unit, and if applicable, their fulfillment of their supervisory duties. Investment management employees also are eligible for customary benefits and programs offered generally to Ibbotson employees, including restricted stock units. SHARE OWNERSHIP BY PORTFOLIO MANAGERS The following table indicates as of September 30, 2013 the value, within the indicated range, of shares beneficially owned by the portfolio managers of each fund. 64 AGGRESSIVE PORTFOLIO
BENEFICIAL OWNERSHIP NAME OF PORTFOLIO MANAGER OF THE FUND* --------------------------- --------------------- Scott Wentsel A --------------------------- --------------------- Brian Huckstep C --------------------------- --------------------- Paul Arnold A --------------------------- ---------------------
CONSERVATIVE PORTFOLIO
BENEFICIAL OWNERSHIP NAME OF PORTFOLIO MANAGER OF THE FUND* --------------------------- --------------------- Scott Wentsel A --------------------------- --------------------- Brian Huckstep A --------------------------- --------------------- Paul Arnold A --------------------------- ---------------------
GROWTH PORTFOLIO
BENEFICIAL OWNERSHIP NAME OF PORTFOLIO MANAGER OF THE FUND* --------------------------- --------------------- Scott Wentsel A --------------------------- --------------------- Brian Huckstep A --------------------------- --------------------- Paul Arnold A --------------------------- ---------------------
MODERATE PORTFOLIO
BENEFICIAL OWNERSHIP NAME OF PORTFOLIO MANAGER OF THE FUND* --------------------------- --------------------- Scott Wentsel A --------------------------- --------------------- Brian Huckstep A --------------------------- --------------------- Paul Arnold A --------------------------- ---------------------
* Key to Dollar Ranges A. None B. $1 - $10,000 C. $10,001 - $50,000 D. $50,001 - $100,000 E. $100,001 - $500,000 F. $500,001 - $1,000,000 G. Over $1,000,000
65 10. PORTFOLIO TRANSACTIONS All orders for the purchase or sale of portfolio securities are placed on behalf of the funds by Ibbotson, subject to Pioneer's supervision, or Pioneer pursuant to authority contained in the trust's management contract and subadvisory agreement. Pioneer seeks to obtain the best execution on portfolio trades on behalf of each fund. The price of securities and any commission rate paid are always factors, but frequently not the only factors, in judging best execution. In selecting brokers or dealers, Pioneer considers various relevant factors, including, but not limited to, the size and type of the transaction; the nature and character of the markets for the security to be purchased or sold; the execution efficiency, settlement capability and financial condition of the dealer; the dealer's execution services rendered on a continuing basis; and the reasonableness of any dealer spreads. Transactions in non-U.S. equity securities are executed by broker-dealers in non-U.S. countries in which commission rates may not be negotiable (as such rates are in the U.S.). Pioneer may select broker-dealers that provide brokerage and/or research services to the trust and/or other investment companies or other accounts managed by Pioneer over which they or their affiliates exercise investment discretion. In addition, consistent with Section 28(e) of the Securities Exchange Act of 1934, as amended, if Pioneer determines in good faith that the amount of commissions charged by a broker-dealer is reasonable in relation to the value of the brokerage and research services provided by such broker, each fund may pay commissions to such broker-dealer in an amount greater than the amount another firm may charge. Such services may include advice concerning the value of securities; the advisability of investing in, purchasing or selling securities; the availability of securities or the purchasers or sellers of securities; providing stock quotation services, credit rating service information and comparative fund statistics; furnishing analyses, electronic information services, manuals and reports concerning issuers, industries, securities, economic factors and trends, portfolio strategy, and performance of accounts and particular investment decisions; and effecting securities transactions and performing functions incidental thereto (such as clearance and settlement). Pioneer maintains a listing of broker-dealers who provide such services on a regular basis. However, because many transactions on behalf of the trust and other investment companies or accounts managed by Pioneer are placed with broker-dealers (including broker-dealers on the listing) without regard to the furnishing of such services, it is not possible to estimate the proportion of such transactions directed to such dealers solely because such services were provided. Pioneer believes that no exact dollar value can be calculated for such services. The research received from broker-dealers may be useful to Pioneer in rendering investment management services to the trust as well as other investment companies or other accounts managed by them, although not all such research may be useful to the trust. Conversely, such information provided by brokers or dealers who have executed transaction orders on behalf of such other accounts may be useful to Pioneer in carrying out their obligations to the trust. The receipt of such research has not reduced Pioneer's normal independent research activities; however, it enables each of them to avoid the additional expenses which might otherwise be incurred if they were to attempt to develop comparable information through their own staff. The funds may participate in third-party brokerage and/or expense offset arrangements to reduce the funds' total operating expenses. Pursuant to third-party brokerage arrangements, a fund may incur lower expenses by directing brokerage to third-party broker-dealers which have agreed to use part of their commission to pay the fund's fees to service providers unaffiliated with Pioneer or other expenses. Since the commissions paid to the third party brokers reflect a commission cost that a fund would generally expect to incur on its brokerage transactions but not necessarily the lowest possible commission, this arrangement is intended to reduce the fund's operating expenses without increasing the costs of its brokerage commissions. Since use of such directed brokerage is subject to the requirement to achieve best execution in connection with a fund's brokerage transactions, there can be no assurance that such arrangements will be utilized. Pursuant to expense offset arrangements, a fund may incur lower transfer agency expenses due to interest earned on cash held with the transfer agent. See "Financial highlights" in the prospectus. 66 See the table in "Annual Fee, Expense and Other Information" for aggregate brokerage and underwriting commissions paid by a fund in connection with its portfolio transactions during recently completed fiscal years. The Board of Trustees periodically reviews Pioneer's performance of their responsibilities in connection with the placement of portfolio transactions on behalf of a fund. 11. DESCRIPTION OF SHARES As an open-end management investment company, each fund continuously offers its shares to the public and under normal conditions must redeem its shares upon the demand of any shareholder at the next determined net asset value per share less any applicable contingent deferred sales charge ("CDSC"). See "Sales Charges." When issued and paid for in accordance with the terms of the prospectus and statement of additional information, shares of the fund are fully paid and non-assessable. Shares will remain on deposit with the fund's transfer agent and certificates will not normally be issued. Each fund is a series of Pioneer Ibbotson Asset Allocation Series, a Delaware statutory trust. The Trustees have authorized the issuance of the following classes of shares of each fund, designated as Class A, Class B, Class C, Class R, and Class Y shares. Class R shares have not been issued as of the date of this statement of additional information. Each share of a class of a fund represents an equal proportionate interest in the assets of the fund allocable to that class. Upon liquidation of a fund, shareholders of each class of the fund are entitled to share pro rata in the fund's net assets allocable to such class available for distribution to shareholders. The Trust reserves the right to create and issue additional series or classes of shares, in which case the shares of each class of a series would participate equally in the earnings, dividends and assets allocable to that class of the particular series. The shares of each class represent an interest in the same portfolio of investments of a fund. Each class has identical rights (based on relative net asset values) to assets and liquidation proceeds. Share classes can bear different class-specific fees and expenses such as transfer agent and distribution fees. Differences in class-specific fees and expenses will result in differences in net investment income and, therefore, the payment of different dividends by each class. Share classes have exclusive voting rights with respect to matters affecting only that class, including with respect to the distribution plan for that class. THE TRUST The Trust's operations are governed by the Amended and Restated Agreement and Declaration of Trust, dated as of July 1, 2008 (referred to in this section as the declaration). A copy of the Trust's Certificate of Trust dated as of April 21, 2004, as amended, is on file with the office of the Secretary of State of Delaware. Delaware law provides a statutory framework for the powers, duties, rights and obligations of the board (referred to in this section as the trustees) and shareholders of the Delaware statutory trust, while the more specific powers, duties, rights and obligations of the trustees and the shareholders are determined by the trustees as set forth in the declaration. Some of the more significant provisions of the declaration are described below. SHAREHOLDER VOTING The declaration provides for shareholder voting as required by the 1940 Act or other applicable laws but otherwise permits, consistent with Delaware law, actions by the trustees without seeking the consent of shareholders. The trustees may, without shareholder approval, where approval of shareholders is not otherwise required under the 1940 Act, merge or consolidate the Trust into other entities, reorganize the Trust or any series or class into another trust or entity or a series or class of another entity, sell the assets of the Trust or any series or class to another entity, or a series or class of another entity, or terminate the Trust or any series or class. 67 Each fund is not required to hold an annual meeting of shareholders, but a fund will call special meetings of shareholders whenever required by the 1940 Act or by the terms of the declaration. The declaration gives the board the flexibility to specify either per share voting or dollar-weighted voting. Under per share voting, each share of a fund is entitled to one vote. Under dollar-weighted voting, a shareholder's voting power is determined, not by the number of shares the shareholder owns, but by the dollar value of those shares determined on the record date. All shareholders of all series and classes of the Trust vote together, except where required by the 1940 Act to vote separately by series or by class, or when the trustees have determined that a matter affects only the interests of one or more series or classes of shares. ELECTION AND REMOVAL OF TRUSTEES The declaration provides that the trustees may establish the number of trustees and that vacancies on the board may be filled by the remaining trustees, except when election of trustees by the shareholders is required under the 1940 Act. Trustees are then elected by a plurality of votes cast by shareholders at a meeting at which a quorum is present. The declaration also provides that a mandatory retirement age may be set by action of two-thirds of the trustees and that trustees may be removed at any time or for any reason by a majority of the board or by a majority of the outstanding shareholders of the Trust. AMENDMENTS TO THE DECLARATION The trustees are authorized to amend the declaration without the vote of shareholders, but no amendment may be made that impairs the exemption from personal liability granted in the declaration to persons who are or have been shareholders, trustees, officers or, employees of the trust or that limit the rights to indemnification or insurance provided in the declaration with respect to actions or omissions of persons entitled to indemnification under the declaration prior to the amendment. ISSUANCE AND REDEMPTION OF SHARES Each fund may issue an unlimited number of shares for such consideration and on such terms as the trustees may determine. Shareholders are not entitled to any appraisal, preemptive, conversion, exchange or similar rights, except as the trustees may determine. Each fund may involuntarily redeem a shareholder's shares upon certain conditions as may be determined by the trustees, including, for example, if the shareholder fails to provide the fund with identification required by law, or if the fund is unable to verify the information received from the shareholder. Additionally, as discussed below, shares may be redeemed in connection with the closing of small accounts. DISCLOSURE OF SHAREHOLDER HOLDINGS The declaration specifically requires shareholders, upon demand, to disclose to a fund information with respect to the direct and indirect ownership of shares in order to comply with various laws or regulations, and a fund may disclose such ownership if required by law or regulation. SMALL ACCOUNTS The declaration provides that a fund may close out a shareholder's account by redeeming all of the shares in the account if the account falls below a minimum account size (which may vary by class) that may be set by the trustees from time to time. Alternately, the declaration permits a fund to assess a fee for small accounts (which may vary by class) and redeem shares in the account to cover such fees, or convert the shares into another share class that is geared to smaller accounts. SERIES AND CLASSES The declaration provides that the trustees may establish series and classes in addition to those currently established and to determine the rights and preferences, limitations and restrictions, including qualifications for ownership, conversion and exchange features, minimum purchase and account size, expenses and 68 charges, and other features of the series and classes. The trustees may change any of those features, terminate any series or class, combine series with other series in the trust, combine one or more classes of a series with another class in that series or convert the shares of one class into another class. Each share of a fund, as a series of the Trust, represents an interest in the fund only and not in the assets of any other series of the Trust. SHAREHOLDER, TRUSTEE AND OFFICER LIABILITY The declaration provides that shareholders are not personally liable for the obligations of a fund and requires a fund to indemnify a shareholder against liability arising solely from the shareholder's ownership of shares in the fund. In addition, a fund will assume the defense of any claim against a shareholder for personal liability at the request of the shareholder. The declaration further provides that no trustee, officer or employee of a fund shall be liable to the fund or any shareholder for any action, failure to act, error or mistake except in cases of bad faith, willful misfeasance, gross negligence or reckless disregard of duty. The declaration requires a fund to indemnify each trustee, director, officer, employee and authorized agent to the fullest extent permitted by law against liability and against all expenses reasonably incurred or paid by him in connection with any claim, action, suit or proceeding in which he becomes involved as a party or otherwise by virtue of his being or having been such a trustee, director, officer, employee, or agent and against amounts paid or incurred by him in settlement thereof. The 1940 Act currently provides that no officer or director shall be protected from liability to a fund or shareholders for willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties of office. The declaration extends to trustees, officers and employees of a fund the full protection from liability that the law allows. The declaration provides that the appointment, designation or identification of a trustee as chairperson, a member of a committee, an expert, lead independent trustee, or any other special appointment, designation or identification shall not impose any heightened standard of care or liability on such trustee. DERIVATIVE ACTIONS The declaration provides a detailed process for the bringing of derivative actions by shareholders in order to permit legitimate inquiries and claims while avoiding the time, expense, distraction, and other harm that can be caused to a fund or its shareholders as a result of spurious shareholder demands and derivative actions. Prior to bringing a derivative action, a demand by three unrelated shareholders must first be made on the fund's trustees. The declaration details various information, certifications, undertakings and acknowledgements that must be included in the demand. Following receipt of the demand, the trustees have a period of 90 days, which may be extended by an additional 60 days, to consider the demand. If a majority of the trustees who are considered independent for the purposes of considering the demand determine that maintaining the suit would not be in the best interests of the fund, the trustees are required to reject the demand and the complaining shareholders may not proceed with the derivative action unless the shareholders are able to sustain the burden of proof to a court that the decision of the trustees not to pursue the requested action was not a good faith exercise of their business judgment on behalf of the fund. The declaration further provides that shareholders owning shares representing at least 10% of the voting power of the affected fund must join in bringing the derivative action. If a demand is rejected, the complaining shareholders will be responsible for the costs and expenses (including attorneys' fees) incurred by the fund in connection with the consideration of the demand, if in the judgment of the independent trustees, the demand was made without reasonable cause or for an improper purpose. If a derivative action is brought in violation of the declaration, the shareholders bringing the action may be responsible for the fund's costs, including attorneys' fees. The declaration further provides that a fund shall be responsible for payment of attorneys' fees and legal expenses incurred by a complaining shareholder only if required by law, and any attorneys' fees that the fund is obligated to pay shall be calculated using reasonable hourly rates. The declaration also requires 69 that actions by shareholders against the fund be brought only in federal court in Boston, Massachusetts, or if not permitted to be brought in federal court, then in state court in Boston, Massachusetts, and that shareholders have no right to jury trial for such actions. 12. SALES CHARGES Each fund continuously offers the following classes of shares: Class A, Class B, Class C and Class Y shares, as described in the prospectus. Each fund offers its shares at a reduced sales charge to investors who meet certain criteria that permit the fund's shares to be sold with low distribution costs. These criteria are described below or in the prospectus. CLASS A SHARE SALES CHARGES You may buy Class A shares at the public offering price, including a sales charge, as follows:
SALES CHARGE AS A % OF -------------------------------------- OFFERING NET AMOUNT DEALER AMOUNT OF PURCHASE PRICE INVESTED REALLOWANCE --------------------------------- ---------- ------------ ------------ Less than $50,000 5.75 6.10 5.00 --------------------------------- ---- ---- ---- $50,000 but less than $100,000 4.50 4.71 4.00 --------------------------------- ---- ---- ---- $100,000 but less than $250,000 3.50 3.63 3.00 --------------------------------- ---- ---- ---- $250,000 but less than $500,000 2.50 2.56 2.00 --------------------------------- ---- ---- ---- $500,000 or more 0.00 0.00 see below --------------------------------- ---- ---- ------------
The schedule of sales charges above is applicable to purchases of Class A shares of a fund by (i) an individual, (ii) an individual and his or her spouse and children under the age of 21 and (iii) a trustee or other fiduciary of a trust estate or fiduciary account or related trusts or accounts including pension, profit-sharing and other employee benefit trusts qualified under Sections 401 or 408 of the Code although more than one beneficiary is involved. The sales charges applicable to a current purchase of Class A shares of the fund by a person listed above is determined by adding the value of shares to be purchased to the aggregate value (at the then current offering price) of shares of any of the other Pioneer mutual funds previously purchased and then owned, provided PFD is notified by such person or his or her broker-dealer each time a purchase is made which would qualify. Pioneer mutual funds include all mutual funds for which PFD serves as principal underwriter. At the sole discretion of PFD, holdings of funds domiciled outside the U.S., but which are managed by affiliates of Pioneer, may be included for this purpose. No sales charge is payable at the time of purchase on investments of $500,000 or more, or for purchases by participants in employer-sponsored retirement plans described below subject to a CDSC of 1% which may be imposed in the event of a redemption of Class A shares within 12 months of purchase. PFD may, in its discretion, pay a commission to broker-dealers who initiate and are responsible for such purchases as follows: 1.00% Up to $4 million ---- --------------------------------- Greater than $4 million and less 0.50% than or equal to $50 million ---- --------------------------------- 0.25% Over $50 million ---- ---------------------------------
Commissions are based on cumulative investments in Class A shares of the Pioneer funds. These commissions shall not be payable if the purchaser is affiliated with the broker-dealer or if the purchase represents the reinvestment of a redemption made during the previous 12 calendar months. Broker-dealers who receive a commission in connection with Class A share purchases at net asset value by employer-sponsored retirement plans with at least $500,000 in total plan assets (or that has 1,000 or 70 more eligible participants for employer-sponsored retirement plans with accounts established with Pioneer on or before March 31, 2004) will be required to return any commissions paid or a pro rata portion thereof if the retirement plan redeems its shares within 12 months of purchase. LETTER OF INTENT ("LOI") Reduced sales charges are available for purchases of $50,000 or more of Class A shares (excluding any reinvestments of dividends and capital gain distributions) made within a 13-month period pursuant to an LOI which may be established by completing the Letter of Intent section of the Account Application. The reduced sales charge will be the charge that would be applicable to the purchase of the specified amount of Class A shares as if the shares had all been purchased at the same time. A purchase not made pursuant to an LOI may be included if the LOI is submitted to PIMSS within 90 days of such purchase. You may also obtain the reduced sales charge by including the value (at current offering price) of all your Class A shares in the fund and all other Pioneer mutual funds held of record as of the date of your LOI in the amount used to determine the applicable sales charge for the Class A shares to be purchased under the LOI. Five percent of your total intended purchase amount will be held in escrow by PIMSS, registered in your name, until the terms of the LOI are fulfilled. When you sign the Account Application, you agree to irrevocably appoint PIMSS your attorney-in-fact to surrender for redemption any or all shares held in escrow with full power of substitution. An LOI is not a binding obligation upon the investor to purchase, or a fund to sell, the amount specified in the LOI. Any share class for which no sales charge is paid cannot be included under the LOI. If the total purchases exceed the amount specified under the LOI and are in an amount that would qualify for a further quantity discount, all transactions will be recomputed on the expiration date of the LOI to effect the lower sales charge. Any difference in the sales charge resulting from such recomputation will be either delivered to you in cash or invested in additional shares at the lower sales charge. The dealer, by signing the Account Application, agrees to return to PFD, as part of such retroactive adjustment, the excess of the commission previously reallowed or paid to the dealer over that which is applicable to the actual amount of the total purchases under the LOI. If the total purchases are less than the amount specified under the LOI, you must remit to PFD any difference between the sales charge on the amount actually purchased and the amount originally specified in the LOI. When the difference is paid, the shares held in escrow will be deposited to your account. If you do not pay the difference in sales charge within 20 days after written request from PFD or your dealer, PIMSS, after receiving instructions from PFD, will redeem the appropriate number of shares held in escrow to realize the difference and release any excess. CLASS B SHARES Effective December 31, 2009, Class B shares are no longer offered to new or existing shareholders, except for reinvestment of dividends and/or capital gains distributions and exchanges for Class B shares of other Pioneer funds. You may buy Class B shares at the net asset value per share next computed after receipt of a purchase order without the imposition of an initial sales charge; however, Class B shares redeemed within five years of purchase will be subject to a CDSC at the rates shown in the table below. The charge will be assessed on the amount equal to the lesser of the current market value or the original purchase cost of the shares being redeemed. No CDSC will be imposed on increases in account value above the initial purchase price, including shares derived from the reinvestment of dividends or capital gain distributions. The amount of the CDSC, if any, will vary depending on the number of years from the time of purchase until the time of redemption of Class B shares. In processing redemptions of Class B shares, a fund will first redeem shares not subject to any CDSC and then shares held longest during the five-year period. As a result, you will pay the lowest possible CDSC. The CDSC for Class B shares subject to a CDSC upon redemption will be determined as follows: 71
CDSC AS A % OF DOLLAR YEAR SINCE PURCHASE AMOUNT SUBJECT TO CDSC ---------------------- ----------------------- First 4.0 ---------------------- --- Second 4.0 ---------------------- --- Third 3.0 ---------------------- --- Fourth 2.0 ---------------------- --- Fifth 1.0 ---------------------- --- Sixth and thereafter 0.0 ---------------------- ---
Proceeds from the CDSC are paid to PFD and are used in whole or in part to defray PFD's expenses related to providing distribution-related services to a fund in connection with the sale of Class B shares, including the payment of compensation to broker-dealers. Class B shares will automatically convert into Class A shares eight years after the purchase date, except as noted below. Class B shares acquired by exchange from Class B shares of another Pioneer mutual fund will convert into Class A shares based on the date of the initial purchase and the applicable CDSC. Class B shares acquired through reinvestment of distributions will convert into Class A shares over time in the same proportion as other shares held in the account. For this purpose, Class B shares acquired through reinvestment of distributions will be attributed to particular purchases of Class B shares in accordance with such procedures as the Trustees may determine from time to time. The conversion of Class B shares to Class A shares is subject to the continuing availability of a ruling from the Internal Revenue Service (the "IRS") or an opinion of counsel that such conversions will not constitute taxable events for U.S. federal income tax purposes. The conversion of Class B shares to Class A shares will not occur if such ruling or opinion is not available and, therefore, Class B shares would continue to be subject to higher expenses than Class A shares for an indeterminate period. CLASS C SHARES You may buy Class C shares at the net asset value per share next computed after receipt of a purchase order without the imposition of an initial sales charge; however, Class C shares redeemed within one year of purchase will be subject to a CDSC of 1%. The charge will be assessed on the amount equal to the lesser of the current market value or the original purchase cost of the shares being redeemed. No CDSC will be imposed on increases in account value above the initial purchase price, including shares derived from the reinvestment of dividends or capital gain distributions. Class C shares do not convert to any other class of fund shares. In processing redemptions of Class C shares, a fund will first redeem shares not subject to any CDSC and then shares held for the longest period of time during the one-year period. As a result, you will pay the lowest possible CDSC. Proceeds from the CDSC are paid to PFD and are used in whole or in part to defray PFD's expenses related to providing distribution-related services to a fund in connection with the sale of Class C shares, including the payment of compensation to broker-dealers. CLASS Y SHARES No front-end, deferred or asset-based sales charges are applicable to Class Y shares. ADDITIONAL PAYMENTS TO FINANCIAL INTERMEDIARIES The financial intermediaries through which shares are purchased may receive all or a portion of the sales charges and Rule 12b-1 fees discussed above. In addition to those payments, Pioneer or one or more of its affiliates (collectively, "Pioneer Affiliates") may make additional payments to financial intermediaries in connection with the promotion and sale of shares of Pioneer funds. Pioneer Affiliates make these payments from their own resources, which include resources that derive from compensation for providing 72 services to the Pioneer funds. These additional payments are described below. The categories described below are not mutually exclusive. The same financial intermediary may receive payments under more than one or all categories. Many financial intermediaries that sell shares of Pioneer funds receive one or more types of these payments. The financial intermediary typically initiates requests for additional compensation. Pioneer negotiates these arrangements individually with financial intermediaries and the amount of payments and the specific arrangements may differ significantly. A financial intermediary also may receive different levels of compensation with respect to sales or assets attributable to different types of clients of the same intermediary or different Pioneer funds. Where services are provided, the costs of providing the services and the overall array of services provided may vary from one financial intermediary to another. Pioneer Affiliates do not make an independent assessment of the cost of providing such services. While the financial intermediaries may request additional compensation from Pioneer to offset costs incurred by the financial intermediary in servicing its clients, the financial intermediary may earn a profit on these payments, since the amount of the payment may exceed the financial intermediary's costs. In this context, "financial intermediary" includes any broker, dealer, bank (including bank trust departments), insurance company, transfer agent, registered investment adviser, financial planner, retirement plan administrator and any other financial intermediary having a selling, administrative and shareholder servicing or similar agreement with a Pioneer Affiliate. A financial intermediary's receipt of additional compensation may create conflicts of interest between the financial intermediary and its clients. Each type of payment discussed below may provide your financial intermediary with an economic incentive to actively promote the Pioneer funds over other mutual funds or cooperate with the distributor's promotional efforts. The receipt of additional compensation for Pioneer Affiliates may be an important consideration in a financial intermediary's willingness to support the sale of the Pioneer funds through the financial intermediary's distribution system. Pioneer Affiliates are motivated to make the payments described above since they promote the sale of Pioneer fund shares and the retention of those investments by clients of financial intermediaries. In certain cases these payments could be significant to the financial intermediary. The financial intermediary may charge additional fees or commissions other than those disclosed in the prospectus. Financial intermediaries may categorize and disclose these arrangements differently than Pioneer Affiliates do. To the extent financial intermediaries sell more shares of the funds or retain shares of the funds in their clients' accounts, Pioneer Affiliates benefit from the incremental management and other fees paid to Pioneer Affiliates by the funds with respect to those assets. REVENUE SHARING PAYMENTS Pioneer Affiliates make revenue sharing payments as incentives to certain financial intermediaries to promote and sell shares of Pioneer funds. The benefits Pioneer Affiliates receive when they make these payments include, among other things, entry into or increased visibility in the financial intermediary's sales system, participation by the intermediary in the distributor's marketing efforts (such as helping facilitate or providing financial assistance for conferences, seminars or other programs at which Pioneer personnel may make presentations on the funds to the intermediary's sales force), placement on the financial intermediary's preferred fund list, and access (in some cases, on a preferential basis over other competitors) to individual members of the financial intermediary's sales force or management. Revenue sharing payments are sometimes referred to as "shelf space" payments because the payments compensate the financial intermediary for including Pioneer funds in its fund sales system (on its "shelf space"). Pioneer Affiliates also may pay financial intermediaries "finders'" or "referral" fees for directing investors to the Pioneer funds. Pioneer Affiliates compensate financial intermediaries differently depending typically on the level and/or type of considerations provided by the financial intermediary. The revenue sharing payments Pioneer Affiliates make may be calculated on sales of shares of Pioneer funds ("Sales-Based Payments"); although there is no policy limiting the amount of Sales-Based Payments any one financial intermediary may receive, the total amount of such payments normally does not exceed 0.25% per annum of those assets. Such payments also may be calculated on the average daily net assets 73 of the applicable Pioneer funds attributable to that particular financial intermediary ("Asset-Based Payments"); although there is no policy limiting the amount of Asset-Based Payments any one financial intermediary may receive, the total amount of such payments normally does not exceed 0.16% per annum of those assets. Sales-Based Payments primarily create incentives to make new sales of shares of Pioneer funds and Asset-Based Payments primarily create incentives to retain previously sold shares of Pioneer funds in investor accounts. Pioneer Affiliates may pay a financial intermediary either or both Sales-Based Payments and Asset-Based Payments. ADMINISTRATIVE AND PROCESSING SUPPORT PAYMENTS Pioneer Affiliates also may make payments to certain financial intermediaries that sell Pioneer fund shares for certain administrative services, including record keeping and sub-accounting shareholder accounts, to the extent that the funds do not pay for these costs directly. Pioneer Affiliates also may make payments to certain financial intermediaries that sell Pioneer fund shares in connection with client account maintenance support, statement preparation and transaction processing. The types of payments that Pioneer Affiliates may make under this category include, among others, payment of ticket charges per purchase or exchange order placed by a financial intermediary, payment of networking fees in connection with certain mutual fund trading systems, or one-time payments for ancillary services such as setting up funds on a financial intermediary's mutual fund trading system. OTHER PAYMENTS From time to time, Pioneer Affiliates, at their expense, may provide additional compensation to financial intermediaries which sell or arrange for the sale of shares of the Pioneer funds. Such compensation provided by Pioneer Affiliates may include financial assistance to financial intermediaries that enable Pioneer Affiliates to participate in and/or present at conferences or seminars, sales or training programs for invited registered representatives and other employees, client entertainment, client and investor events, and other financial intermediary-sponsored events, and travel expenses, including lodging incurred by registered representatives and other employees in connection with client prospecting, retention and due diligence trips. Other compensation may be offered to the extent not prohibited by federal or state laws or any self-regulatory agency, such as FINRA. Pioneer Affiliates make payments for entertainment events they deem appropriate, subject to Pioneer Affiliates' guidelines and applicable law. These payments may vary depending upon the nature of the event or the relationship. As of January 1, 2013, Pioneer anticipates that the following broker-dealers or their affiliates will receive additional payments as described in the fund's prospectus and statement of additional information: AIG VALIC ADP Retirement Services Ameriprise Financial Services, Inc. AXA Advisors, LLC Charles Schwab & Co., Inc. Citigroup Global Markets Inc. Commonwealth Financial Network D.A. Davidson & Co. Edward Jones Fidelity Brokerage Services LLC First Clearing, LLC First Command Financial Planning, Inc. FSC Securities Corporation GWFS Equities, Inc. H.D. Investment Services Hartford Securities Distribution Company, Inc. Hewitt Financial Services LLC 74 ING J.J.B. Hilliard, W.L Lyons, Inc. Janney Montgomery Scott LLC Jefferson National Securities Corporation Legend Equities Corporation Lincoln Investment Planning, Inc. LPL Financial Corp. Merrill Lynch & Co., Inc. MetLife Securities Inc. Mid Atlantic Capital Corporation Morgan Keegan & Co., Inc. Morgan Stanley & Co., Inc. MSCS Financial Services, LLC Mutual of Omaha Investor Services, Inc. Mutual Service Corporation N.I.S. Financial Services, Inc. National Financial Services LLC Nationwide Securities, Inc. Northwestern Investment Services, LLC NYLife Securities, LLC OneAmerica Securities, Inc. Oppenheimer & Co., Inc. Penson Financial Services, Inc. Pershing LLC PFS Investments Inc. PNC Investments Prudential Financial Raymond James Financial Services, Inc. RBC Dain Rauscher Inc. Robert W. Baird & Co., Inc. Royal Alliance Associates, Inc. SagePoint Financial Sammons Financial Network, LLC Scott and Stringfellow, Inc. Securities America, Inc. Southwest Securities, Inc. StanCorp Equities, Inc.ING Sterne Agee & Leach, Inc. Stifel Nicholas & Company, Inc. Symetra Investment Services, Inc. TD Ameritrade, Inc. T. Rowe Price Investment Services, Inc. UBS Financial Services Inc. Upromise Investments, Inc. Vanguard Marketing Corporation Wells Fargo Investments, LLC Woodbury Financial Services Please contact your financial intermediary for details about any payments it receives from Pioneer Affiliates or the funds, as well as about fees and/or commissions it charges. 75 13. REDEEMING SHARES Redemptions may be suspended or payment postponed during any period in which any of the following conditions exist: the New York Stock Exchange (the "Exchange") is closed or trading on the Exchange is restricted; an emergency exists as a result of which disposal by a fund of securities owned by it is not reasonably practicable or it is not reasonably practicable for a fund to fairly determine the value of the net assets of its portfolio; or otherwise as permitted by the rules of or by the order of the SEC. Redemptions and repurchases are taxable transactions for shareholders that are subject to U.S. federal income tax. The net asset value per share received upon redemption or repurchase may be more or less than the cost of shares to an investor, depending on the market value of the portfolio at the time of redemption or repurchase. SYSTEMATIC WITHDRAWAL PLAN(S) ("SWP") (CLASS A, CLASS B AND CLASS C SHARES) A SWP is designed to provide a convenient method of receiving fixed payments at regular intervals from fund share accounts having a total value of not less than $10,000. You must also be reinvesting all dividends and capital gain distributions to use the SWP option. Periodic payments of $50 or more will be deposited monthly, quarterly, semiannually or annually directly into a bank account designated by the applicant or will be sent by check to the applicant, or any person designated by the applicant. Payments can be made either by check or electronic funds transfer to a bank account designated by you. Withdrawals from Class B and Class C share accounts are limited to 10% of the value of the account at the time the SWP is established. See "Qualifying for a reduced sales charge" in the prospectus. If you direct that withdrawal payments be paid to another person, want to change the bank where payments are sent or designate an address that is different from the account's address of record after you have opened your account, a medallion signature guarantee must accompany your instructions. Withdrawals under the SWP are redemptions that may have tax consequences for you. While you are making systematic withdrawals from your account, you may pay unnecessary initial sales charges on additional purchases of Class A shares or contingent deferred sales charges. SWP redemptions reduce and may ultimately exhaust the number of shares in your account. In addition, the amounts received by a shareholder cannot be considered as yield or income on his or her investment because part of such payments may be a return of his or her investment. A SWP may be terminated at any time (1) by written notice to PIMSS or from PIMSS to the shareholder; (2) upon receipt by PIMSS of appropriate evidence of the shareholder's death; or (3) when all shares in the shareholder's account have been redeemed. You may obtain additional information by calling PIMSS at 1-800-225-6292. REINSTATEMENT PRIVILEGE (CLASS A AND CLASS B SHARES) Subject to the provisions outlined in the prospectus, you may reinvest all or part of your sale proceeds from Class A and Class B shares without a sales charge into Class A shares of a Pioneer mutual fund. However, the distributor will not pay your investment firm a commission on any reinvested amount. 14. TELEPHONE AND ONLINE TRANSACTIONS You may purchase, exchange or sell Class A, Class B or Class C shares by telephone or online. Class Y shares may not be purchased by telephone, and Class Y shareowners are not eligible for online transaction privileges. See the prospectus for more information. For personal assistance, call 1-800-225-6292 between 8:00 a.m. and 7:00 p.m. (Class Y account holders should contact Pioneer's Group Plans Department at 1-800-665-8839 between 9:00 a.m. and 5:30 p.m.) Eastern time on 76 weekdays. Computer-assisted telephone transactions may be available to shareholders who have prerecorded certain bank information (see "FactFone/SM/"). YOU ARE STRONGLY URGED TO CONSULT WITH YOUR INVESTMENT PROFESSIONAL PRIOR TO REQUESTING ANY TELEPHONE OR ONLINE TRANSACTION. TELEPHONE TRANSACTION PRIVILEGES To confirm that each transaction instruction received by telephone is genuine, the fund will record each telephone transaction, require the caller to provide validating information for the account and send you a written confirmation of each telephone transaction. Different procedures may apply to accounts that are registered to non-U.S. citizens or that are held in the name of an institution or in the name of an investment broker-dealer or other third party. If reasonable procedures, such as those described above, are not followed, the fund may be liable for any loss due to unauthorized or fraudulent instructions. The fund may implement other procedures from time to time. In all other cases, neither the fund, PIMSS nor PFD will be responsible for the authenticity of instructions received by telephone; therefore, you bear the risk of loss for unauthorized or fraudulent telephone transactions. ONLINE TRANSACTION PRIVILEGES If your account is registered in your name, you may be able buy, exchange or sell fund shares online. Your investment firm may also be able to buy, exchange or sell your fund shares online. To establish online transaction privileges: o For new accounts, complete the online section of the account application o For existing accounts, complete an account options form, write to the transfer agent or complete the online authorization screen on www.pioneerinvestments.com To use online transactions, you must read and agree to the terms of an online transaction agreement available on the Pioneer website. When you or your investment firm requests an online transaction the transfer agent electronically records the transaction, requires an authorizing password and sends a written confirmation. The fund may implement other procedures from time to time. Different procedures may apply if you have a non-U.S. account or if your account is registered in the name of an institution, broker-dealer or other third party. You may not be able to use the online transaction privilege for certain types of accounts, including most retirement accounts. TELEPHONE AND WEBSITE ONLINE ACCESS You may have difficulty contacting the fund by telephone or accessing www.pioneerinvestments.com during times of market volatility or disruption in telephone or Internet services. On Exchange holidays or on days when the Exchange closes early, Pioneer will adjust the hours for the telephone center and for online transaction processing accordingly. If you are unable to access www.pioneerinvestments.com or to reach the fund by telephone, you should communicate with the fund in writing. FACTFONE/SM/ FactFone/SM/ is an automated inquiry and telephone transaction system available to Pioneer mutual fund shareholders by dialing 1-800-225-4321. FactFone/SM/ allows shareholder access to current information on Pioneer mutual fund accounts and to the prices and yields of all publicly available Pioneer mutual funds. In addition, you may use FactFone/SM/ to make computer-assisted telephone purchases, exchanges or redemptions from your Pioneer mutual fund accounts, access your account balances and last three transactions and order a duplicate statement if you have activated your PIN. Telephone purchases or redemptions require the establishment of a bank account of record. Computer-assisted Class Y share telephone purchases, exchanges and redemptions and certain other FactFone/SM/ features for Class Y shareholders are not currently available through FactFone/SM/. YOU ARE STRONGLY URGED TO CONSULT WITH 77 YOUR INVESTMENT PROFESSIONAL PRIOR TO REQUESTING ANY TELEPHONE TRANSACTION. Shareholders whose accounts are registered in the name of a broker-dealer or other third party may not be able to use FactFone/SM/. Call PIMSS for assistance. FactFone/SM/ allows shareholders to hear the following recorded fund information: o net asset value prices for all Pioneer mutual funds; o annualized 30-day yields on Pioneer's fixed income funds; o annualized 7-day yields and 7-day effective (compound) yields for Pioneer's money market funds; and o dividends and capital gain distributions on all Pioneer mutual funds. Yields are calculated in accordance with SEC mandated standard formulas. All performance numbers communicated through FactFone/SM/ represent past performance, and figures include the maximum applicable sales charge. A shareholder's actual yield and total return will vary with changing market conditions. The value of each class of shares (except for Pioneer Cash Reserves Fund, which seeks to maintain a stable $1.00 share price) will also vary, and such shares may be worth more or less at redemption than their original cost. 15. PRICING OF SHARES The net asset value per share of each class of a fund is determined as of the close of regular trading on the Exchange (normally 4:00 p.m. Eastern time) on each day on which the Exchange is open for trading. As of the date of this statement of additional information, the Exchange is open for trading every weekday except for the following holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The net asset value per share of each class of each fund is also determined on any other day on which the level of trading in its portfolio securities is sufficiently high that the current net asset value per share might be materially affected by changes in the value of its portfolio securities. A fund is not required to determine its net asset value per share on any day on which no purchase orders in good order for fund shares are received and no shares are tendered and accepted for redemption. The value of a fund's investment in an underlying fund is determined on the basis of the net asset value of the shares of the class of the underlying fund held by the fund. Generally, the underlying funds determine their net asset value based upon the market value of their assets. Certain assets of the underlying funds may be valued at "fair value" using procedures approved by the boards of trustees of the underlying funds. The net asset value per share of each class of a fund is computed by taking the value of all of the fund's assets attributable to a class, less the fund's liabilities attributable to that class, and dividing the result by the number of outstanding shares of that class. For purposes of determining net asset value, expenses of the classes of a fund are accrued daily and taken into account. Each fund's maximum offering price per Class A share is determined by adding the maximum sales charge to the net asset value per Class A share. Class B, Class C, and Class Y shares are offered at net asset value without the imposition of an initial sales charge (Class B and Class C shares may be subject to a CDSC). 16. TAX STATUS Each fund is treated as a separate entity for U.S. federal income tax purposes. Each fund has elected to be treated, and has qualified and intends to continue to qualify each year, as a "regulated investment company" under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"), so that it will not pay U.S. federal income tax on income and capital gains distributed to shareholders. In order to qualify as a regulated investment company under Subchapter M of the Code, each fund must, among other things, (i) derive at least 90% of its gross income for each taxable year from dividends, interest, payments with respect to certain securities loans, gains from the sale or other disposition of stock, securities or 78 foreign currencies, or other income (including gains from options, futures and forward contracts) derived with respect to its business of investing in such stock, securities or currencies, and net income derived from an interest in a qualified publicly traded partnership (as defined in Section 851(h) of the Code) (the "90% income test"), and (ii) diversify its holdings so that, at the end of each quarter of each taxable year: (a) at least 50% of the value of the fund's total assets is represented by (1) cash and cash items, U.S. government securities, securities of other regulated investment companies, and (2) other securities, with such other securities limited, in respect of any one issuer, to an amount not greater than 5% of the value of the fund's total assets and to not more than 10% of the outstanding voting securities of such issuer and (b) not more than 25% of the value of the fund's total assets is invested in (1) the securities (other than U.S. government securities and securities of other regulated investment companies) of any one issuer, (2) the securities (other than securities of other regulated investment companies) of two or more issuers that the fund controls and that are engaged in the same, similar, or related trades or businesses, or (3) the securities of one or more qualified publicly traded partnerships. If a fund qualifies as a regulated investment company and properly distributes to its shareholders each taxable year an amount equal to or exceeding the sum of (i) 90% of its "investment company taxable income" as that term is defined in the Code (which includes, among other things, dividends, taxable interest, and the excess of any net short-term capital gains over net long-term capital losses, as reduced by certain deductible expenses) without regard to the deduction for dividends paid and (ii) 90% of the excess of its gross tax-exempt interest income, if any, over certain disallowed deductions, the fund generally will not be subject to U.S. federal income tax on any income of the fund, including "net capital gain" (the excess of net long-term capital gain over net short-term capital loss), distributed to shareholders. However, if the fund meets such distribution requirements, but chooses to retain some portion of its taxable income or gains, it generally will be subject to U.S. federal income tax at regular corporate rates on the amount retained. Each fund may designate certain amounts retained as undistributed net capital gain in a notice to its shareholders, who (i) will be required to include in income for U.S. federal income tax purposes, as long-term capital gain, their proportionate shares of the undistributed amount so designated, (ii) will be entitled to credit their proportionate shares of the income tax paid by the fund on that undistributed amount against their federal income tax liabilities and to claim refunds to the extent such credits exceed their liabilities and (iii) will be entitled to increase their tax basis, for federal income tax purposes, in their shares by an amount equal to the excess of the amount of undistributed net capital gain included in their respective income over their respective income tax credits. Each fund intends to distribute at least annually all or substantially all of its investment company taxable income (computed without regard to the dividends-paid deduction), net tax-exempt interest income, and net capital gain. If, for any taxable year, a fund does not qualify as a regulated investment company or does not satisfy the 90% distribution requirement, it will be treated as a U.S. corporation subject to U.S. federal income tax, thereby subjecting any income earned by the fund to tax at the corporate level and to a further tax at the shareholder level when such income is distributed. Under certain circumstances, a fund may be able to cure a failure to qualify as a regulated investment company, but in order to do so, the fund may incur significant fund-level taxes and may be forced to dispose of certain assets. Under the Code, each fund will be subject to a nondeductible 4% U.S. federal excise tax on a portion of its undistributed ordinary income and capital gain net income if it fails to meet certain distribution requirements with respect to each calendar year and each year ending October 31, respectively. Each fund intends to make distributions in a timely manner and accordingly does not expect to be subject to the excise tax. Each fund generally distributes any net short- and long-term capital gains in December. Each fund generally pays dividends from any net investment income (excluding capital gains) in December. Dividends from income and/or capital gains may also be paid at such other times as may be necessary for a fund to avoid U.S. federal income or excise tax. Unless a shareholder specifies otherwise, all distributions from a fund to that shareholder will be automatically reinvested in additional full and fractional shares of the fund. 79 For U.S. federal income tax purposes, all dividends generally are taxable whether a shareholder takes them in cash or reinvests them in additional shares of the applicable fund. In general, assuming that a fund has sufficient earnings and profits, dividends from net investment income and net short-term capital gains are taxable either as ordinary income or, if certain conditions are met, as "qualified dividend income," taxable to individual and certain other noncorporate shareholders at U.S. federal income tax rates of up to 20%. In general, dividends may be reported by a fund as qualified dividend income if they are attributable to qualified dividend income received by the fund. A fund's qualified dividend income generally will consist of any dividend income that is (i) received by a fund from underlying funds that themselves received such income as dividends on common and preferred stock of U.S. companies or on stock of certain qualified foreign corporations, and (ii) reported as such by the underlying funds, provided that certain holding period and other requirements are met by both the fund and the shareholders. If 95% or more of a fund's gross income (calculated without taking into account net capital gain derived from sales or other dispositions of stock or securities) consists of qualified dividend income, the fund may report all distributions of such income as qualified dividend income. A foreign corporation is treated as a qualified foreign corporation for this purpose if it is incorporated in a possession of the United States or it is eligible for the benefits of certain income tax treaties with the United States and meets certain additional requirements. Certain foreign corporations that are not otherwise qualified foreign corporations will be treated as qualified foreign corporations with respect to dividends paid by them if the stock with respect to which the dividends are paid is readily tradable on an established securities market in the United States. Passive foreign investment companies are not qualified foreign corporations for this purpose. Dividends received by a fund that are attributable to an underlying fund's investments in REITs generally are not expected to qualify for treatment as qualified dividend income. A dividend that is attributable to qualified dividend income of a fund that is paid by the fund to a shareholder will not be taxable as qualified dividend income to such shareholder (1) if the dividend is received with respect to any share of the fund held for fewer than 61 days during the 121-day period beginning on the date which is 60 days before the date on which such share became ex-dividend with respect to such dividend, (2) to the extent that the shareholder is under an obligation (whether pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar or related property, or (3) if the shareholder elects to have the dividend treated as investment income for purposes of the limitation on deductibility of investment interest. The "ex-dividend" date is the date on which the owner of the share at the commencement of such date is entitled to receive the next issued dividend payment for such share even if the share is sold by the owner on that date or thereafter. Distributions by a fund in excess of the fund's current and accumulated earnings and profits will be treated as a return of capital to the extent of (and in reduction of) the shareholder's tax basis in its shares and any such amount in excess of that basis will be treated as gain from the sale of shares, as discussed below. Certain dividends received by a fund from an underlying fund and attributable to the underlying fund's dividend income from stock of U.S. corporations (generally, dividends received by an underlying fund in respect of any share of stock (1) as to which the underlying fund has a tax holding period of at least 46 days during the 91-day period beginning on the date that is 45 days before the date on which the stock becomes ex-dividend as to that dividend and (2) that is held in an unleveraged position) and distributed and appropriately so reported by the underlying fund may be eligible for the 70% dividends-received deduction generally available to corporations under the Code, provided such dividends are also appropriately so reported as eligible for the dividends-received deduction by the fund. Certain preferred stock must have a holding period of at least 91 days during the 181-day period beginning on the date that is 90 days before the date on which the stock becomes ex-dividend as to that dividend in order to be eligible. Capital gain dividends distributed to a fund from underlying funds and capital gain dividends 80 distributed to an underlying fund from other regulated investment companies are not eligible for the dividends-received deduction. In order to qualify for the dividends-received deduction, corporate shareholders must meet the minimum holding period requirement stated above with respect to their fund shares, taking into account any holding period reductions from certain hedging or other transactions or positions that diminish their risk of loss with respect to their fund shares, and, if they borrow to acquire or otherwise incur debt attributable to fund shares, they may be denied a portion of the dividends-received deduction with respect to those shares. The applicable holding period requirements must also be satisfied by both the fund and the underlying funds. The entire dividend, including the otherwise deductible amount, will be included in determining the excess, if any, of a corporation's adjusted current earnings over its alternative minimum taxable income, which may increase a corporation's alternative minimum tax liability. Any corporate shareholder should consult its tax adviser regarding the possibility that its tax basis in its shares may be reduced, for U.S. federal income tax purposes, by reason of "extraordinary dividends " received with respect to the shares and, to the extent such basis would be reduced below zero, current recognition of income may be required. Distributions from net capital gains, if any, that are reported as capital gain dividends by a fund are taxable as long-term capital gains for U.S. federal income tax purposes without regard to the length of time the shareholder has held shares of the fund. Capital gain dividends distributed by a fund to individual and certain other noncorporate shareholders generally will be taxed as long-term capital gains, which are taxable to noncorporate taxpayers at U.S. federal income tax rates of up to 20%. A shareholder should also be aware that the benefits of the favorable tax rates applicable to long-term capital gains and qualified dividend income may be affected by the application of the alternative minimum tax to individual shareholders. The U.S. federal income tax status of all distributions will be reported to shareholders annually. A 3.8% Medicare contribution tax generally applies to all or a portion of the net investment income of a shareholder who is an individual and not a nonresident alien for federal income tax purposes and who has adjusted gross income (subject to certain adjustments) that exceeds a threshold amount ($250,000 if married filing jointly or if considered a "surviving spouse" for federal income tax purposes, $125,000 if married filing separately, and $200,000 in other cases). This 3.8% tax also applies to all or a portion of the undistributed net investment income of certain shareholders that are estates and trusts. For these purposes, dividends, interest and certain capital gains (among other categories of income) are generally taken into account in computing a shareholder's net investment income. Although dividends generally will be treated as distributed when paid, any dividend declared by a fund in October, November or December and payable to shareholders of record in such a month that is paid during the following January will be treated for U.S. federal income tax purposes as received by shareholders on December 31 of the calendar year in which it was declared. In addition, certain distributions made after the close of a taxable year of the fund may be "spilled back" and treated for certain purposes as paid by a fund during such taxable year. In such case, shareholders generally will be treated as having received such dividends in the taxable year in which the distributions were actually made. For purposes of calculating the amount of a regulated investment company's undistributed income and gain subject to the 4% excise tax described above, such "spilled back" dividends are treated as paid by the regulated investment company when they are actually paid. For purposes of determining the character of income received by a fund when an underlying fund distributes net capital gain to such fund, the fund will treat the distribution as long-term capital gain, even if the fund has held shares of the underlying fund for less than one year. If it is not disallowed under wash sale rules, any loss incurred by a fund on the redemption or other sale of such underlying fund shares that have a tax holding period of six months or less will be treated as a long-term capital loss to the extent of the gain distribution received on the shares disposed of by such fund. 81 Each fund may invest in underlying funds with capital loss carryforwards. If such an underlying fund realizes capital gains, it will be able to offset the gains to the extent of its loss carryforwards in determining the amount of capital gains which must be distributed to shareholders such as a fund. To the extent that gains are offset in this manner, distributions to a fund and its shareholders may be reduced. Similarly, for U.S. federal income tax purposes, each fund is permitted to carry forward a net capital loss from any taxable year that began on or before December 22, 2010 to offset its capital gains, if any, for up to eight years following the year of the loss. Each fund is permitted to carry forward indefinitely a net capital loss from any taxable year that began after December 22, 2010 to offset its capital gains, if any, in years following the year of the loss. To the extent subsequent capital gains are offset by such losses, they will not result in U.S. federal income tax liability to the fund and may not be distributed as capital gains to shareholders. Carryforwards of losses from taxable years that began after December 22, 2010 must be fully utilized before the fund may utilize carryforwards of losses from taxable years that began on or before December 22, 2010. See the prospectus and statement of additional information of each underlying fund for each underlying fund's available capital loss carryforwards. See "Annual Fee, Expense and Other Information" for the funds' available capital loss carryforwards. Generally, neither a fund nor any underlying fund may carry forward any losses other than net capital losses. Under certain circumstances, a fund or an underlying fund may elect to treat certain losses as though they were incurred on the first day of the taxable year immediately following the taxable year in which they were actually incurred. A fund will not be able to offset gains distributed by any underlying fund in which it invests against losses incurred by another underlying fund in which it invests because the underlying funds cannot distribute losses. A fund's redemptions of shares in an underlying fund, including those resulting from changes in the allocation among underlying funds, could cause the fund to recognize taxable gains or losses. A portion of any such gains may be short-term capital gains that would be distributable as ordinary income to shareholders of the fund. Further, a portion of losses on redemptions of shares in the underlying funds may be deferred. Short-term capital gains earned by an underlying fund will be treated as ordinary dividends when distributed to a fund and therefore may not be offset by any short-term capital losses incurred by that fund. Thus, a fund's short-term capital losses may instead offset its long-term capital gains, which might otherwise be eligible for the reduced U.S. federal income tax rates for individuals, as discussed above. As a result of these factors, the use of the fund-of-funds structure by the funds could adversely affect the amount, timing and character of distributions to their shareholders. At the time of an investor's purchase of fund shares, a portion of the purchase price may be attributable to realized or unrealized appreciation in the applicable fund's portfolio or to undistributed taxable income of the applicable fund. Consequently, subsequent distributions by the fund with respect to these shares from such appreciation or income may be taxable to such investor even if the net asset value of the investor's shares is, as a result of the distributions, reduced below the investor's cost for such shares and the distributions economically represent a return of a portion of the investment. Redemptions and exchanges generally are taxable events for shareholders that are subject to tax. Shareholders should consult their own tax advisers with reference to their individual circumstances to determine whether any particular transaction in fund shares is properly treated as a sale for tax purposes, as the following discussion assumes, and the tax treatment of any gains or losses recognized in such transactions. In general, if fund shares are sold, the shareholder will recognize gain or loss equal to the difference between the amount realized on the sale and the shareholder's adjusted basis in the shares. Such gain or loss generally will be treated as long-term capital gain or loss if the shares were held for more than one year and otherwise generally will be treated as short-term capital gain or loss. Any loss recognized by a shareholder upon the redemption, exchange or other disposition of shares with a tax holding period of six months or less will be treated as a long-term capital loss to the extent of any amounts treated as distributions to the shareholder of long-term capital gain with respect to such shares (including any amounts credited to the shareholder as undistributed capital gains). 82 Each fund will report to the IRS the amount of sale proceeds that a shareholder receives from a sale or exchange of fund shares. For sales or exchanges of shares acquired on or after January 1, 2012, each fund will also report the shareholder's basis in those shares and whether any gain or loss that the shareholder realizes on the sale or exchange is short-term or long-term gain or loss. For purposes of calculating and reporting basis, shares acquired prior to January 1, 2012 and shares acquired on or after January 1, 2012 will be treated as held in separate accounts. If a shareholder has a different basis for different shares of a fund, acquired on or after January 1, 2012, in the same account (e.g., if a shareholder purchased fund shares in the same account at different times for different prices), the fund will calculate the basis of the shares sold using its default method unless the shareholder has properly elected to use a different method. Each fund's default method for calculating basis will be the average basis method, under which the basis per share is reported as the average of the bases of all of the shareholder's fund shares in the account. A shareholder may elect, on an account-by-account basis, to use a method other than average basis by following procedures established by each fund. If such an election is made on or prior to the date of the first exchange or redemption of shares in the account and on or prior to the date that is one year after the shareholder receives notice of the fund's default method, the new election will generally apply as if the average basis method had never been in effect for such account. If such an election is not made on or prior to such dates, the shares in the account at the time of the election will retain their averaged bases. Shareholders should consult their tax advisers concerning the tax consequences of applying the average basis method or electing another method of basis calculation. Losses on redemptions or other dispositions of shares may be disallowed under "wash sale" rules in the event of other investments in a fund (including those made pursuant to reinvestment of dividends and/or capital gain distributions) within a period of 61 days beginning 30 days before and ending 30 days after a redemption or other disposition of shares. In such a case, the disallowed portion of any loss generally would be included in the U.S. federal tax basis of the shares acquired in the other investments. Gain may be increased (or loss reduced) upon a redemption of Class A shares of a fund within 90 days after their purchase followed by any purchase (including purchases by exchange or by reinvestment), without payment of an additional sales charge, of Class A shares of that fund or of another Pioneer fund (or any other shares of a Pioneer fund generally sold subject to a sales charge) before February 1 of the calendar year following the calendar year in which the original Class A shares were redeemed. Under Treasury regulations, if a shareholder recognizes a loss with respect to fund shares of $2 million or more for an individual shareholder, or $10 million or more for a corporate shareholder, in any single taxable year (or certain greater amounts over a combination of years), the shareholder must file with the IRS a disclosure statement on IRS Form 8886. Shareholders who own portfolio securities directly are in many cases excepted from this reporting requirement but, under current guidance, shareholders of regulated investment companies are not excepted. A shareholder who fails to make the required disclosure to the IRS may be subject to substantial penalties. The fact that a loss is reportable under these regulations does not affect the legal determination of whether or not the taxpayer's treatment of the loss is proper. Shareholders should consult with their tax advisers to determine the applicability of these regulations in light of their individual circumstances. Shareholders that are exempt from U.S. federal income tax, such as retirement plans that are qualified under Section 401 of the Code, generally are not subject to U.S. federal income tax on fund dividends or distributions, or on sales or exchanges of fund shares unless the fund shares are "debt-financed property" within the meaning of the Code. However, in the case of fund shares held through a non-qualified deferred compensation plan, fund dividends and distributions received by the plan and gains from sales and exchanges of fund shares by the plan generally are taxable to the employer sponsoring such plan in accordance with the U.S. federal income tax laws that are generally applicable to shareholders receiving such dividends or distributions from regulated investment companies such as the funds. 83 A plan participant whose retirement plan invests in a fund, whether such plan is qualified or not, generally is not taxed on fund dividends or distributions received by the plan or on gains from sales or exchanges of fund shares by the plan for U.S. federal income tax purposes. However, distributions to plan participants from a retirement plan account generally are taxable as ordinary income, and different tax treatment, including penalties on certain excess contributions and deferrals, certain pre-retirement and post-retirement distributions and certain prohibited transactions, is accorded to accounts maintained as qualified retirement plans. Shareholders should consult their tax advisers for more information. Foreign exchange gains and losses realized by an underlying fund in connection with certain transactions involving foreign currency-denominated debt securities, certain options and futures contracts relating to foreign currency, foreign currency forward contracts, foreign currencies, or payables or receivables denominated in a foreign currency are subject to Section 988 of the Code, which generally causes such gains and losses to be treated as ordinary income and losses and may affect the amount, timing and character of distributions to a fund and thus of the fund's income. Under Treasury regulations that may be promulgated in the future, any gains from such transactions that are not directly related to an underlying fund's principal business of investing in stock or securities (or its options contracts or futures contracts with respect to stock or securities) may have to be limited in order to enable the fund to satisfy the 90% income test. If an underlying fund acquires any equity interest (under Treasury regulations that may be promulgated in the future, generally including not only stock but also an option to acquire stock such as is inherent in a convertible bond) in certain foreign corporations (i) that receive at least 75% of their annual gross income from passive sources (such as interest, dividends, certain rents and royalties, or capital gains) or (ii) where at least 50% of the corporation's assets (computed based on average fair market value) either produce or are held for the production of passive income ("passive foreign investment companies"), the underlying fund could be subject to U.S. federal income tax and additional interest charges on "excess distributions" received from such companies or on gain from the sale of stock in such companies, even if all income or gain actually received by the fund is timely distributed to its shareholders. An underlying fund would not be able to pass through to any fund that invests in that underlying fund any credit or deduction for such a tax. A "qualified electing fund" election or a "mark to market" election may be available that would ameliorate these adverse tax consequences, but such elections could require the underlying fund to recognize taxable income or gain (subject to the distribution requirements applicable to regulated investment companies, as described above) without the concurrent receipt of cash. In order to satisfy the distribution requirements and avoid a tax on the underlying fund, the underlying fund may be required to liquidate portfolio securities that it might otherwise have continued to hold, potentially resulting in additional taxable gain or loss to the underlying fund. Gains from the sale of stock of passive foreign investment companies may also be treated as ordinary income. In order for an underlying fund to make a qualified electing fund election with respect to a passive foreign investment company, the passive foreign investment company would have to agree to provide certain tax information to the underlying fund on an annual basis, which it might not agree to do. An underlying fund may limit and/or manage its holdings in passive foreign investment companies to limit its tax liability or maximize its return from these investments. An underlying fund may invest in or hold debt obligations of issuers not currently paying interest or that are in default. Investments in debt obligations that are at risk of or are in default present special tax issues for that underlying fund. Federal income tax rules are not entirely clear about issues such as when the underlying fund may cease to accrue interest, original issue discount or market discount, when and to what extent deductions may be taken for bad debts or worthless securities, how payments received on obligations in default should be allocated between principal and interest and whether certain exchanges of debt obligations in a workout context are taxable. These and other issues will be addressed by an underlying fund, in the event it invests in or holds such securities, in order to seek to ensure that it distributes sufficient income to preserve its status as a regulated investment company and does not become subject to U.S. federal income or excise tax. 84 If an underlying fund invests in certain pay-in-kind securities, zero coupon securities, deferred interest securities or, in general, any other securities with original issue discount (or with market discount if the underlying fund elects to include market discount in income currently), the underlying fund generally must accrue income on such investments for each taxable year, which generally will be prior to the receipt of the corresponding cash payments. However, the underlying fund must distribute to its shareholders, at least annually, all or substantially all of its investment company taxable income (determined without regard to the deduction for dividends paid), including such accrued income, to qualify to be treated as a regulated investment company under the Code and avoid U.S. federal income and excise taxes. Therefore, the underlying fund may have to dispose of its portfolio securities, potentially under disadvantageous circumstances, to generate cash, or may have to borrow the cash, to satisfy distribution requirements. Such a disposition of securities may potentially result in additional taxable gain or loss to the underlying fund and may affect the amount and timing of distributions to a fund investing in the underlying fund. Options written or purchased and futures contracts entered into by an underlying fund on certain securities, indices and foreign currencies, as well as certain forward foreign currency contracts, may cause the underlying fund to recognize gains or losses from marking-to-market even though such options may not have lapsed or been closed out or exercised, or such futures or forward contracts may not have been performed or closed out. The tax rules applicable to these contracts may affect the characterization of some capital gains and losses realized by an underlying fund as long-term or short-term. Certain options, futures and forward contracts relating to foreign currency may be subject to Section 988 of the Code, as described above, and accordingly may produce ordinary income or loss. Additionally, an underlying fund may be required to recognize gain if an option, futures contract, forward contract, short sale or other transaction that is not subject to the mark-to-market rules is treated as a "constructive sale" of an "appreciated financial position" held by the underlying fund under Section 1259 of the Code. Any net mark-to-market gains and/or gains from constructive sales may also have to be distributed to satisfy the distribution requirements referred to above even though the underlying fund may receive no corresponding cash amounts, possibly requiring the disposition of portfolio securities or borrowing to obtain the necessary cash. Such a disposition of securities may potentially result in additional taxable gain or loss to the underlying fund and may affect the amount and timing of distributions to a fund investing in the underlying fund. Losses on certain options, futures or forward contracts and/or offsetting positions (portfolio securities or other positions with respect to which the underlying fund's risk of loss is substantially diminished by one or more options, futures or forward contracts) may also be deferred under the tax straddle rules of the Code, which may also affect the characterization of capital gains or losses from straddle positions and certain successor positions as long-term or short-term. Certain tax elections may be available that would enable the underlying fund to ameliorate some adverse effects of the tax rules described in this paragraph. The tax rules applicable to options, futures, forward contracts and straddles may affect the amount, timing and character of the underlying fund's income and gains or losses and hence of its distributions to the funds. An underlying fund may be subject to withholding and other taxes imposed by foreign countries, including taxes on interest, dividends and capital gains with respect to its investments in those countries. Any such taxes would, if imposed, reduce the yield on or return from those investments. Tax conventions between certain countries and the U.S. may reduce or eliminate such taxes in some cases. If more than 50% of an underlying fund's total assets at the close of any taxable year consist of stock or securities of foreign corporations, then the underlying fund may elect to pass through to its shareholders their pro rata shares of qualified foreign taxes paid by the underlying fund. If at least 50% of the value of a fund's assets at the close of each quarter of a taxable year consist of interests in other regulated investment companies, that fund may elect to pass through to its shareholders their pro rata shares of qualified foreign taxes paid by the fund and any underlying funds in which it invests that also make the election. If a fund so elects, shareholders would be required to include 85 such taxes in their gross incomes (in addition to the dividends and distributions they actually receive), would treat such taxes as foreign taxes paid by them, and as described below may be entitled to a tax deduction for such taxes or a tax credit, subject to a holding period requirement and other limitations under the Code. Qualified foreign taxes generally include taxes that would be treated as income taxes under U.S. tax regulations but do not include most other taxes, such as stamp taxes, securities transaction taxes, and similar taxes. If a fund qualifies to make, and makes, the election described above, shareholders may deduct their pro rata portion of qualified foreign taxes paid by the fund or an underlying fund for that taxable year in computing their income subject to U.S. federal income taxation or, alternatively, claim the taxes as credits, subject to applicable limitations under the Code, against their U.S. federal income taxes. Shareholders who do not itemize deductions for U.S. federal income tax purposes will not, however, be able to deduct their pro rata portion of such qualified foreign taxes, although such shareholders will be required to include their shares of such taxes in gross income if the applicable fund makes the election described above. No deduction for such taxes will be permitted to individuals in computing their alternative minimum tax liability. If a fund makes this election and a shareholder chooses to take a credit for the foreign taxes deemed paid by such shareholder, the amount of the credit that may be claimed in any year may not exceed the same proportion of the U.S. tax against which such credit is taken that the shareholder's taxable income from foreign sources (but not in excess of the shareholder's entire taxable income) bears to his entire taxable income. For this purpose, long-term and short-term capital gains a fund distributes to shareholders will generally not be treated as income from foreign sources in their hands, nor will distributions of certain foreign currency gains subject to Section 988 of the Code or of any other income that is deemed, under the Code, to be U.S.-source income in the hands of the fund. This foreign tax credit limitation may also be applied separately to certain specific categories of foreign-source income and the related foreign taxes. As a result of these rules, which may have different effects depending upon each shareholder's particular tax situation, certain shareholders may not be able to claim a credit for the full amount of their proportionate share of the foreign taxes paid by the applicable fund and the underlying funds in which it invests. Shareholders who are not liable for U.S. federal income taxes, including tax-exempt shareholders, will ordinarily not benefit from this election. If a fund does make the election, it will provide required tax information to shareholders. Each fund generally may deduct any foreign taxes that are not passed through to its shareholders in computing its income available for distribution to shareholders to satisfy applicable tax distribution requirements. Each fund is required to withhold (as "backup withholding") a portion of reportable payments, including dividends, capital gain distributions and the proceeds of redemptions and exchanges or repurchases of fund shares, paid to shareholders who have not complied with certain IRS regulations. The backup withholding rate is 28%. In order to avoid this withholding requirement, shareholders, other than certain exempt entities, must generally certify that the Social Security Number or other Taxpayer Identification Number they provide is their correct number and that they are not currently subject to backup withholding, or that they are exempt from backup withholding. A fund may nevertheless be required to backup withhold if it receives notice from the IRS or a broker that the number provided is incorrect or backup withholding is applicable as a result of previous underreporting of interest or dividend income. The description of certain federal tax provisions above relates only to U.S. federal income tax consequences for shareholders who are U.S. persons, i.e., generally, U.S. citizens or residents or U.S. corporations, partnerships, trusts or estates, and who are subject to U.S. federal income tax and hold their shares as capital assets. Except as otherwise provided, this description does not address the special tax rules that may be applicable to particular types of investors, such as financial institutions, insurance companies, securities dealers, other regulated investment companies, or tax-exempt or 86 tax-deferred plans, accounts or entities. Investors other than U.S. persons may be subject to different U.S. federal income tax treatment, including a non-resident alien U.S. withholding tax at the rate of 30% or any lower applicable treaty rate on amounts treated as ordinary dividends from a fund (other than, for taxable years of the fund that began on or before December 31, 2013, certain dividends reported by the fund as (i) interest-related dividends, to the extent such dividends are derived from the fund's "qualified net interest income," or (ii) short-term capital gain dividends, to the extent such dividends are derived from the fund's "qualified short-term gain") or, in certain circumstances, unless an effective IRS Form W-8BEN or other authorized withholding certificate is on file, to backup withholding on certain other payments from the fund. "Qualified net interest income" is a fund's net income derived from U.S.-source interest and original issue discount, subject to certain exceptions and limitations, and also includes interest-related dividends received by the fund from other regulated investment companies. "Qualified short-term gain" generally means the excess of the net short-term capital gain of a fund for the taxable year (including short-term capital gain dividends received by the fund from other regulated investment companies) over its net long-term capital loss, if any. Backup withholding will not be applied to payments that have been subject to the 30% (or lower applicable treaty rate) withholding tax on shareholders who are neither citizens nor residents of the United States. Unless certain non-U.S. entities that hold fund shares comply with IRS requirements that will generally require them to report information regarding U.S. persons investing in, or holding accounts with, such entities, a 30% withholding tax may apply to fund distributions payable to such entities after June 30, 2014 (or, in certain cases, after later dates) and redemptions and certain capital gain dividends payable to such entities after December 31, 2016. A non-U.S. shareholder may be exempt from the withholding described in this paragraph under an applicable intergovernmental agreement between the U.S. and a foreign government, provided that the shareholder and the applicable foreign government comply with the terms of such agreement. Shareholders should consult their own tax advisers on these matters and on state, local, foreign and other applicable tax laws. If a fund qualifies as a regulated investment company under the Code (as is anticipated to be the case for each fund), that fund will not be required to pay any Massachusetts income, corporate excise or franchise taxes or any Delaware corporation income tax. A state income (and possibly local income and/or intangible property) tax exemption is generally available to the extent each fund's distributions are derived from interest on (or, in the case of intangible property taxes, to the extent the value of its assets is attributable to) certain U.S. government obligations, provided in some states that certain thresholds for holdings of such obligations and/or reporting requirements are satisfied. No fund will seek to satisfy any threshold or reporting requirements that may apply in particular taxing jurisdictions, although each fund may in its sole discretion provide relevant information to shareholders. 17. FINANCIAL STATEMENTS The fund's financial statements and financial highlights for the fiscal year ended July 31, 2013 appearing in the fund's annual report, filed with the SEC on September 26, 2013 (Accession No. 0001331854-13-000003) are incorporated by reference into this statement of additional information. Those financial statements and financial highlights have been audited by Ernst & Young LLP, independent registered public accounting firm, as indicated in their report thereon, and are incorporated herein by reference in reliance upon such report, given on the authority of Ernst & Young LLP as experts in accounting and auditing. The fund's annual report includes the financial statements referenced above and is available without charge upon request by calling Shareholder Services at 1-800-225-6292. 87 18. ANNUAL FEE, EXPENSE AND OTHER INFORMATION PORTFOLIO TURNOVER Each fund's annual portfolio turnover rate for the fiscal years ended July 31:
2013 2012 ------ ------ Pioneer Ibbotson Conservative Allocation Fund 17% 20% ----------------------------------------------- -- -- -- Pioneer Ibbotson Moderate Allocation Fund 9% 9% ----------------------------------------------- -- -- -- Pioneer Ibbotson Growth Allocation Fund 6% 7% ----------------------------------------------- -- -- -- Pioneer Ibbotson Aggressive Allocation Fund 6% 7% ----------------------------------------------- -- -- --
SHARE OWNERSHIP As of November 1, 2013, the Trustees and officers of the fund owned beneficially in the aggregate less than 1% of the outstanding shares of the fund. The following is a list of the holders of 5% or more of any class of the fund's outstanding shares as of November 1, 2013: PIONEER IBBOTSON CONSERVATIVE ALLOCATION FUND
RECORD HOLDER SHARE CLASS NUMBER OF SHARES % OF CLASS ---------------------------------------- ------------- ------------------ ----------- Special Custody Acct for the Exclusive Class B 22,519.326 8.12 ------------- ----------- ----- Benefit of Customer 2801 Market St Saint Louis, MO 63103 ---------------------------------------- Raymond James Class B 66,028.427 23.08 ------------- ----------- ----- Omnibus For Mutual Funds Attn Courtney Waller 880 Carillon Pkwy St Petersburg, FL ---------------------------------------- Pershing LLC Class B 15,185.779 5.47 ------------- ----------- ----- 1 Pershing Plaza Jersey City, NJ 07399 ---------------------------------------- MLPF&S Class C 558,224.757 30.50 ------------- ----------- ----- For the benefit of its customers Mutual Fund Administration 4800 Deer Lake Dr E Floor 2 Jacksonville, FL 32246-6484 ---------------------------------------- MLPF&S Class Y 12,400.664 97.23 ------------- ----------- ----- For the benefit of its customers Mutual Fund Administration 4800 Deer Lake Dr E Floor 2 Jacksonville, FL 32246-6484 ----------------------------------------
PIONEER IBBOTSON MODERATE ALLOCATION FUND
RECORD HOLDER SHARE CLASS NUMBER OF SHARES % OF CLASS ------------------------- ------------- ------------------ ----------- Raymond James Class A 845,053.571 7.82 ------------- ----------- ----- Omnibus For Mutual Funds Attn Courtney Waller 880 Carillon Pkwy St Petersburg, FL ------------------------- Raymond James Class B 148,470.893 18.26 ------------- ----------- ----- Omnibus For Mutual Funds Attn Courtney Waller 880 Carillon Pkwy St Petersburg, FL -------------------------
88
RECORD HOLDER SHARE CLASS NUMBER OF SHARES % OF CLASS ------------------------------------------- ------------- ------------------ ----------- MLPF&S Class C 1,388,207.365 23.23 ------------- ------------- ----- For the benefit of its customers Mutual Fund Administration 4800 Deer Lake Dr E Floor 2 Jacksonville, FL 32246-6484 ------------------------------------------- National Financial Services LLC Class Y 172,568.869 59.94 ------------- ------------- ----- For the exclusive benefit of its customers 499 Washington Blvd Attn Mutual Fund Dept 4th Floor -------------------------------------------
PIONEER IBBOTSON GROWTH ALLOCATION FUND
RECORD HOLDER SHARE CLASS NUMBER OF SHARES % OF CLASS ---------------------------------------- ------------- ------------------ ----------- Raymond James Class A 1,076,243.653 8.85 ------------- ------------- ----- Omnibus For Mutual Funds Attn Courtney Waller 880 Carillon Pkwy St Petersburg, FL ---------------------------------------- Raymond James Class B 336,488.702 23.81 ------------- ------------- ----- Omnibus For Mutual Funds Attn Courtney Waller 880 Carillon Pkwy St Petersburg, FL ---------------------------------------- MLPF&S Class C 1,078,817.014 23.21 ------------- ------------- ----- For benefit of its customers Mutual Fund Administration 4800 Deer Lake Dr E Floor 2 Jacksonville, FL 32246-6484 ---------------------------------------- Special Custody Acct for the Exclusive Class Y 13,883.322 12.77 ------------- ------------- ----- Benefit of Customer 2801 Market St Saint Louis, MO 63103 ----------------------------------------
PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND
RECORD HOLDER SHARE CLASS NUMBER OF SHARES % OF CLASS --------------------------------- ------------- ------------------ ----------- Raymond James Class A 459,989,724 6.40 ------------- ----------- ----- Omnibus For Mutual Funds Attn Courtney Waller 880 Carillon Pkwy St Petersburg, FL --------------------------------- Raymond James Class B 126,534.674 18.86 ------------- ----------- ----- Omnibus For Mutual Funds Attn Courtney Waller 880 Carillon Pkwy St Petersburg, FL --------------------------------- Pershing LLC Class B 34,151.062 5.09 ------------- ----------- ----- 1 Pershing Plaza Jersey City, NJ 07399 --------------------------------- MLPF&S Class C 433,797.498 25.83 ------------- ----------- ----- For the benefit of its customers Mutual Fund Administration 4800 Deer Lake Dr E Floor 2 Jacksonville, FL 32246-6484 ---------------------------------
89
RECORD HOLDER SHARE CLASS NUMBER OF SHARES % OF CLASS ------------------------------------------- ------------- ------------------ ----------- National Financial Services LLC Class Y 7,563.764 18.94 ------------- --------- ----- For the exclusive benefit of its customers 499 Washington Blvd Attn Mutual Fund Dept 4th Floor -------------------------------------------
TRUSTEE OWNERSHIP OF SHARES OF THE TRUST AND OTHER PIONEER FUNDS The following table indicates the value of shares that each Trustee beneficially owned in the trust and Pioneer Funds in the aggregate as of December 31, 2012. Beneficial ownership is determined in accordance with SEC rules. The share value of any closed-end fund is based on its closing market price on December 31, 2012. The share value of any open-end Pioneer Fund is based on the net asset value of the class of shares on December 31, 2012. The dollar ranges in this table are in accordance with SEC requirements.
AGGREGATE DOLLAR RANGE OF EQUITY DOLLAR RANGE DOLLAR RANGE DOLLAR RANGE SECURITIES IN OF EQUITY OF EQUITY OF EQUITY DOLLAR RANGE ALL REGISTERED SECURITIES IN SECURITIES IN SECURITIES IN OF EQUITY INVESTMENT PIONEER PIONEER PIONEER SECURITIES IN COMPANIES IBBOTSON IBBOTSON IBBOTSON PIONEER OVERSEEN BY CONSERVATIVE MODERATE GROWTH IBBOTSON TRUSTEE IN THE ALLOCATION ALLOCATION ALLOCATION AGGRESSIVE PIONEER FAMILY NAME OF TRUSTEE FUND FUND FUND ALLOCATION FUND OF FUNDS ----------------------- --------------- --------------- --------------- ----------------- --------------- INTERESTED TRUSTEES: ----------------------- --------------- --------------- --------------- ----------------- --------------- John F. Cogan, Jr. + None None None None Over $100,000 ----------------------- --------------- --------------- --------------- ----------------- --------------- Daniel K. Kingsbury None None None None Over $100,000 ----------------------- --------------- --------------- --------------- ----------------- --------------- INDEPENDENT TRUSTEES: ----------------------- --------------- --------------- --------------- ----------------- --------------- David R. Bock None None None None Over $100,000 ----------------------- --------------- --------------- --------------- ----------------- --------------- Benjamin M. Friedman None None None None Over $100,000 ----------------------- --------------- --------------- --------------- ----------------- --------------- Margaret B.W. Graham None None None None Over $100,000 ----------------------- --------------- --------------- --------------- ----------------- --------------- Thomas J. Perna None None None None Over $100,000 ----------------------- --------------- --------------- --------------- ----------------- --------------- Marguerite A. Piret None None None None Over $100,000 ----------------------- --------------- --------------- --------------- ----------------- --------------- Stephen K. West None None None None Over $100,000 ----------------------- --------------- --------------- --------------- ----------------- ---------------
+ Mr. Cogan resigned as a Trustee of the Pioneer Funds effective November 12, 2013. 90 COMPENSATION OF OFFICERS AND TRUSTEES The following table sets forth certain information with respect to the compensation of each Trustee of the trust.
AGGREGATE AGGREGATE AGGREGATE AGGREGATE PENSION OR COMPENSATION COMPENSATION COMPENSATION COMPENSATION RETIREMENT TOTAL FROM PIONEER FROM PIONEER FROM PIONEER FROM PIONEER BENEFITS COMPENSATION IBBOTSON IBBOTSON IBBOTSON IBBOTSON ACCRUED AS FROM THE TRUST CONSERVATIVE MODERATE GROWTH AGGRESSIVE PART OF AND OTHER ALLOCATION ALLOCATION ALLOCATION ALLOCATION FUND PIONEER NAME OF TRUSTEE FUND ** FUND ** FUND ** FUND ** EXPENSES FUNDS** ----------------- -------------- -------------- -------------- -------------- ------------ --------------- INTERESTED TRUSTEES: ----------------- --------- --------- --------- --------- ----- ------------- John F. Cogan, Jr.* + $ 500.00 $ 500.00 $ 500.00 $ 500.00 $0.00 $ 25,600.00 ----------------- --------- --------- --------- --------- ----- ------------- Daniel K. Kingsbury $ 0.00 $ 0.00 $ 0.00 $ 0.00 $0.00 $ 0.00 ----------------- --------- --------- --------- --------- ----- ------------- INDEPENDENT TRUSTEES: ----------------- --------- --------- --------- --------- ----- ------------- David R. Bock $1,000.00 $1,000.00 $1,000.00 $1,000.00 $0.00 $ 246,751.00 ----------------- --------- --------- --------- --------- ----- ------------- Benjamin M. Friedman $1,000.00 $1,000.00 $1,000.00 $1,000.00 $0.00 $ 217,751.00 ----------------- --------- --------- --------- --------- ----- ------------- Margaret B.W. Graham $1,000.00 $1,000.00 $1,000.00 $1,000.00 $0.00 $ 202,752.00 ----------------- --------- --------- --------- --------- ----- ------------- Thomas J. Perna $1,000.00 $1,000.00 $1,000.00 $1,000.00 $0.00 $ 265,333.00 ----------------- --------- --------- --------- --------- ----- ------------- Marguerite A. Piret $1,000.00 $1,000.00 $1,000.00 $1,000.00 $0.00 $ 228,000.00 ----------------- --------- --------- --------- --------- ----- ------------- Stephen K. West $1,000.00 $1,000.00 $1,000.00 $1,000.00 $0.00 $ 202,752.00 ----------------- --------- --------- --------- --------- ----- ------------- Total $6,500.00 $6,500.00 $6,500.00 $6,500.00 $0.00 $1,388,939.00 ----------------- --------- --------- --------- --------- ----- -------------
* Under the management contract, Pioneer reimburses the trust for any Interested Trustee fees paid by the trust. ** For the fiscal year ended July 31, 2013. As of July 31, 2013, there were 52 U.S. registered investment portfolios in the Pioneer Family of Funds. + Mr. Cogan resigned as a Trustee of the Pioneer Funds effective November 12, 2013. APPROXIMATE MANAGEMENT FEES THE TRUST PAID OR OWED PIONEER The following table shows the dollar amount of gross investment management fees incurred by each fund, along with the net amount of fees that were paid after applicable fee waivers or expense reimbursements, if any. The data is for the past three fiscal years or shorter period if the fund has been in operation for a shorter period. 91
FOR THE FISCAL YEARS ENDED JULY 31 ----------------------------------------------------------------------------------- 2013 2012 2011 ----------------------------------------------- -------- -------- -------- PIONEER IBBOTSON CONSERVATIVE ALLOCATION FUND ----------------------------------------------- -------- -------- -------- Gross Fee Incurred $ 86,296 $ 80,277 $ 79,903 ----------------------------------------------- -------- -------- -------- Net Fee Paid $ 86,296 $ 80,277 $ 69,977 ----------------------------------------------- -------- -------- -------- PIONEER IBBOTSON MODERATE ALLOCATION FUND ----------------------------------------------- -------- -------- -------- Gross Fee Incurred $259,507 $254,742 $288,118 ----------------------------------------------- -------- -------- -------- Net Fee Paid $251,214 $254,742 $285,391 ----------------------------------------------- -------- -------- -------- PIONEER IBBOTSON GROWTH ALLOCATION FUND ----------------------------------------------- -------- -------- -------- Gross Fee Incurred $278,714 $272,243 $295,458 ----------------------------------------------- -------- -------- -------- Net Fee Paid $271,451 $272,243 $277,653 ----------------------------------------------- -------- -------- -------- PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND ----------------------------------------------- -------- -------- -------- Gross Fee Incurred $151,063 $152,428 $173,437 ----------------------------------------------- -------- -------- -------- Net Fee Paid $141,501 $152,428 $160,019 ----------------------------------------------- -------- -------- --------
FEES THE TRUST PAID TO PIONEER UNDER THE ADMINISTRATION AGREEMENT
FOR THE FISCAL YEARS ENDED JULY 31 2013 2012 2011 ----------------------------------------------- ---------- ---------- ---------- Pioneer Ibbotson Conservative Allocation Fund $33,546 $17,075 $15,782 ----------------------------------------------- ------- ------- ------- --- -- Pioneer Ibbotson Moderate Allocation Fund $72,827 $54,042 $56,915 ----------------------------------------------- ------- ------- ------- --- -- Pioneer Ibbotson Growth Allocation Fund $77,291 $57,830 $58,325 ----------------------------------------------- ------- ------- ------- --- -- Pioneer Ibbotson Aggressive Allocation Fund $48,938 $32,314 $34,257 ----------------------------------------------- ------- ------- ------- --- --
UNDERWRITING EXPENSES AND COMMISSIONS
FOR THE FISCAL YEARS ENDED JULY 31 2013 2012 2011 --------------------------------------------------------------- ---------- ---------- ---------- PIONEER IBBOTSON CONSERVATIVE ALLOCATION FUND --------------------------------------------------------------- -------- -------- -------- --- -- Approximate Net Underwriting Expenses Retained by PFD $ 16,485 $ 22,486 $ 19,386 --------------------------------------------------------------- -------- -------- -------- --- -- Approximate Commissions Reallowed to Dealers (Class A shares) $ 89,146 $124,351 $110,399 --------------------------------------------------------------- -------- -------- -------- --- -- Approximate Brokerage and Underwriting Commissions (Portfolio Transactions) $ 0 $ 0 $ 0 --------------------------------------------------------------- -------- -------- -------- --- -- PIONEER IBBOTSON MODERATE ALLOCATION FUND --------------------------------------------------------------- -------- -------- -------- --- -- Approximate Net Underwriting Expenses Retained by PFD $ 42,874 $ 37,667 $ 54,755 --------------------------------------------------------------- -------- -------- -------- --- -- Approximate Commissions Reallowed to Dealers (Class A shares) $234,011 $208,625 $287,859 --------------------------------------------------------------- -------- -------- -------- --- -- Approximate Brokerage and Underwriting Commissions (Portfolio Transactions) $ 0 $ 0 $ 0 --------------------------------------------------------------- -------- -------- -------- --- -- PIONEER IBBOTSON GROWTH ALLOCATION FUND --------------------------------------------------------------- -------- -------- -------- --- -- Approximate Net Underwriting Expenses Retained by PFD $ 52,482 $ 59,026 $ 74,952 --------------------------------------------------------------- -------- -------- -------- --- -- Approximate Commissions Reallowed to Dealers (Class A shares) $286,336 $323,098 $416,421 --------------------------------------------------------------- -------- -------- -------- --- -- Approximate Brokerage and Underwriting Commissions (Portfolio Transactions) $ 0 $ 0 $ 0 --------------------------------------------------------------- -------- -------- -------- --- -- PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND --------------------------------------------------------------- -------- -------- -------- --- -- Approximate Net Underwriting Expenses Retained by PFD $ 34,407 $ 39,216 $ 47,138 --------------------------------------------------------------- -------- -------- -------- --- -- Approximate Commissions Reallowed to Dealers (Class A shares) $190,632 $221,036 $266,126 --------------------------------------------------------------- -------- -------- -------- --- -- Approximate Brokerage and Underwriting Commissions (Portfolio Transactions) $ 0 $ 0 $ 0 --------------------------------------------------------------- -------- -------- -------- --- --
92 FUND EXPENSES UNDER THE DISTRIBUTION PLANS
FOR THE FISCAL YEAR ENDED JULY 31, 2013 COMBINED PLAN CLASS A CLASS B CLASS C ----------------------------------------------- --------------- ----------- ----------- ----------- Pioneer Ibbotson Conservative Allocation Fund $ 335,125 $109,188 $ 40,893 $185,044 ----------------------------------------------- ---------- -------- -------- -------- Pioneer Ibbotson Moderate Allocation Fund $1,025,854 $307,391 $129,587 $588,876 ----------------------------------------------- ---------- -------- -------- -------- Pioneer Ibbotson Growth Allocation Fund $1,064,360 $354,231 $216,901 $493,228 ----------------------------------------------- ---------- -------- -------- -------- Pioneer Ibbotson Aggressive Allocation Fund $ 504,785 $215,982 $105,368 $183,435 ----------------------------------------------- ---------- -------- -------- --------
ALLOCATION OF FUND EXPENSES UNDER THE DISTRIBUTION PLAN - CONSERVATIVE FUND An estimate by category of the allocation of fees paid by each class of shares of the fund during the period ended September 30, 2013 is set forth in the following table:
PAYMENTS TO SERVICING SALES PRINTING PARTIES/1/ ADVERTISING MEETINGS AND MAILING TOTAL -------------- ------------- ---------- ------------- ----------- Class A $121,764 $1,775 $5,480 $4,140 $133,159 --------- -------- ------ ------ ------ -------- Class B $ 9,733 $ 0 $ 0 $ 0 $ 9,733 --------- -------- ------ ------ ------ -------- Class C $191,627 $1,417 $4,939 $3,418 $201,401 --------- -------- ------ ------ ------ --------
1 Payments to Servicing Parties include Pioneer Funds Distributor, Inc., broker-dealers, financial intermediaries and other parties that enter into a distribution, selling or service agreement with respect to one or more classes of the fund (annualized for the period ended September 30, 2013). ALLOCATION OF FUND EXPENSES UNDER THE DISTRIBUTION PLAN - MODERATE FUND An estimate by category of the allocation of fees paid by each class of shares of the fund during the period ended September 30, 2013 is set forth in the following table:
PAYMENTS TO SERVICING SALES PRINTING PARTIES/1/ ADVERTISING MEETINGS AND MAILING TOTAL -------------- ------------- ---------- ------------- ----------- Class A $326,471 $3,762 $12,594 $ 8,965 $351,792 --------- -------- ------ ------- ------- -------- Class B $ 29,897 $ 0 $ 0 $ 0 $ 29,897 --------- -------- ------ ------- ------- -------- Class C $613,907 $4,291 $15,031 $10,371 $643,600 --------- -------- ------ ------- ------- --------
1 Payments to Servicing Parties include Pioneer Funds Distributor, Inc., broker-dealers, financial intermediaries and other parties that enter into a distribution, selling or service agreement with respect to one or more classes of the fund (annualized for the period ended September 30, 2013). ALLOCATION OF FUND EXPENSES UNDER THE DISTRIBUTION PLAN - GROWTH FUND An estimate by category of the allocation of fees paid by each class of shares of the fund during the period ended September 30, 2013 is set forth in the following table:
PAYMENTS TO SERVICING SALES PRINTING PARTIES/1/ ADVERTISING MEETINGS AND MAILING TOTAL -------------- ------------- ---------- ------------- ----------- Class A $358,076 $3,940 $13,220 $9,376 $384,612 --------- -------- ------ ------- ------ -------- Class B $ 50,840 $ 0 $ 0 $ 0 $ 50,840 --------- -------- ------ ------- ------ -------- Class C $507,353 $2,675 $ 9,383 $6,450 $525,861 --------- -------- ------ ------- ------ --------
1 Payments to Servicing Parties include Pioneer Funds Distributor, Inc., broker-dealers, financial intermediaries and other parties that enter into a distribution, selling or service agreement with respect to one or more classes of the fund (annualized for the period ended September 30, 2013). 93 ALLOCATION OF FUND EXPENSES UNDER THE DISTRIBUTION PLAN - AGGRESSIVE FUND An estimate by category of the allocation of fees paid by each class of shares of the fund during the period ended September 30, 2013 is set forth in the following table:
PAYMENTS TO SERVICING SALES PRINTING PARTIES/1/ ADVERTISING MEETINGS AND MAILING TOTAL -------------- ------------- ---------- ------------- ----------- Class A $212,962 $2,515 $8,422 $5,993 $229,892 --------- -------- ------ ------ ------ -------- Class B $ 24,748 $ 0 $ 0 $ 0 $ 24,748 --------- -------- ------ ------ ------ -------- Class C $189,536 $ 846 $2,788 $2,013 $195,183 --------- -------- ------ ------ ------ --------
1 Payments to Servicing Parties include Pioneer Funds Distributor, Inc., broker-dealers, financial intermediaries and other parties that enter into a distribution, selling or service agreement with respect to one or more classes of the fund (annualized for the period ended September 30, 2013). CDSCS During the fiscal year ended July 31, 2013, the following CDSCs were paid to PFD: Pioneer Ibbotson Conservative Allocation Fund $ 3,795 ----------------------------------------------- ------- Pioneer Ibbotson Moderate Allocation Fund $ 7,665 ----------------------------------------------- ------- Pioneer Ibbotson Growth Allocation Fund $14,536 ----------------------------------------------- ------- Pioneer Ibbotson Aggressive Allocation Fund $ 6,560 ----------------------------------------------- -------
CAPITAL LOSS CARRYFORWARDS AS OF JULY 31, 2013 At July 31, 2013, the funds had the following net capital loss carryforward: Pioneer Ibbotson Conservative Allocation Fund $ 2,788,108 ----------------------------------------------- ----------- Pioneer Ibbotson Moderate Allocation Fund $32,484,474 ----------------------------------------------- ----------- Pioneer Ibbotson Growth Allocation Fund $42,274,920 ----------------------------------------------- ----------- Pioneer Ibbotson Aggressive Allocation Fund $30,672,473 ----------------------------------------------- -----------
94 19. APPENDIX A - DESCRIPTION OF SHORT-TERM DEBT, CORPORATE BOND AND PREFERRED STOCK RATINGS/1/ DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S ("MOODY'S") SHORT-TERM RATINGS: Moody's short-term ratings are opinions of the ability of issuers to honor short-term financial obligations. Ratings may be assigned to issuers, short-term programs or to individual short-term debt instruments. Such obligations generally have an original maturity not exceeding thirteen months, unless explicitly noted. Moody's employs the following designations to indicate the relative repayment ability of rated issuers: P-1: Issuers (or supporting institutions) rated Prime-1 have a superior ability to repay short-term debt obligations. P-2: Issuers (or supporting institutions) rated Prime-2 have a strong ability to repay short-term debt obligations. P-3: Issuers (or supporting institutions) rated Prime-3 have an acceptable ability to repay short-term obligations. NP: Issuers (or supporting institutions) rated Not Prime do not fall within any of the Prime rating categories. NOTE: Canadian issuers rated P-1 or P-2 have their short-term ratings enhanced by the senior-most long-term rating of the issuer, its guarantor or support-provider. DESCRIPTION OF MOODY'S LONG-TERM CORPORATE RATINGS: Moody's long-term obligation ratings are opinions of the relative credit risk of fixed-income obligations with an original maturity of one year or more. They address the possibility that a financial obligation will not be honored as promised. Such ratings use Moody's Global Scale and reflect both the likelihood of default and any financial loss suffered in the event of default. AAA: Obligations rated Aaa are judged to be of the highest quality, with minimal credit risk. AA: Obligations rated Aa are judged to be of high quality and are subject to very low credit risk. A: Obligations rated A are considered upper-medium grade and are subject to low credit risk. BAA: Obligations rated Baa are subject to moderate credit risk. They are considered medium-grade and as such may possess certain speculative characteristics. BA: Obligations rated Ba are judged to have speculative elements and are subject to substantial credit risk. B: Obligations rated B are considered speculative and are subject to high credit risk. CAA: Obligations rated Caa are judged to be of poor standing and are subject to very high credit risk. CA: Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest. ------------------------ /1/ The ratings indicated herein are believed to be the most recent ratings available at the date of this statement of additional information for the securities listed. Ratings are generally given to securities at the time of issuance. While the rating agencies may from time to time revise such ratings, they undertake no obligation to do so, and the ratings indicated do not necessarily represent ratings which will be given to these securities on the date of the fund's fiscal year-end. 95 C: Obligations rated C are the lowest rated class of bonds and are typically in default, with little prospect for recovery of principal or interest. NOTE: Moody's appends numerical modifiers "1", "2", and "3" to each generic rating classification from "Aa" through "Caa". The modifier "1" indicates that the obligation ranks in the higher end of its generic rating category; the modifier "2" indicates a mid-range ranking; and the modifier "3" indicates a ranking in the lower end of that generic rating category. DESCRIPTION OF MOODY'S MEDIUM-TERM NOTE RATINGS: Moody's assigns long-term ratings to individual debt securities issued from medium-term note (MTN) programs, in addition to indicating ratings to MTN programs themselves. These long-term ratings are expressed on Moody's general long-term scale. Notes issued under MTN programs with such indicated ratings are rated at issuance at the rating applicable to all pari passu notes issued under the same program, at the program's relevant indicated rating, provided such notes do not exhibit any of the characteristics listed below: o Notes containing features that link interest or principal to the credit performance of any third party or parties (i.e., credit-linked notes); o Notes allowing for negative coupons, or negative principal; o Notes containing any provision that could obligate the investor to make any additional payments; o Notes containing provisions that subordinate the claim. For notes with any of these characteristics, the rating of the individual note may differ from the indicated rating of the program. STANDARD & POOR'S RATINGS GROUP'S LONG-TERM ISSUE CREDIT RATINGS: Issue credit ratings are based, in varying degrees, on Standard & Poor's analysis of the following considerations: o Likelihood of payment-capacity and willingness of the obligor to meet its financial commitment on an obligation in accordance with the terms of the obligation; o Nature of and provisions of the obligation; o Protection afforded by, and relative position of, the obligation in the event of bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws affecting creditors' rights. Issue ratings are an assessment of default risk, but may incorporate an assessment of relative seniority or ultimate recovery in the event of default. Junior obligations are typically rated lower than senior obligations, to reflect the lower priority in bankruptcy, as noted above. (Such differentiation may apply when an entity has both senior and subordinated obligations, secured and unsecured obligations, or operating company and holding company obligations.) AAA: An obligation rated "AAA" has the highest rating assigned by Standard & Poor's. The obligor's capacity to meet its financial commitment on the obligation is extremely strong. AA: An obligation rated "AA" differs from the highest-rated obligations only to a small degree. The obligor's capacity to meet its financial commitment on the obligation is very strong. A: An obligation rated "A" is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. However, the obligor's capacity to meet its financial commitment on the obligation is still strong. 96 BBB: An obligation rated "BBB" exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation. BB, B, CCC, CC, AND C: Obligations rated "BB", "B", "CCC", "CC", and "C" are regarded as having significant speculative characteristics. "BB" indicates the least degree of speculation and "C" the highest. While such obligations will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions. BB: An obligation rated "BB" is less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation. B: An obligation rated "B" is more vulnerable to nonpayment than obligations rated "BB", but the obligor currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial, or economic conditions will likely impair the obligor's capacity or willingness to meet its financial commitment on the obligation. CCC: An obligation rated "CCC" is currently vulnerable to nonpayment, and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation. CC: An obligation rated "CC" is currently highly vulnerable to nonpayment. C: A "C" rating is assigned to obligations that are currently highly vulnerable to nonpayment, obligations that have payment arrearages allowed by the terms of the documents, or obligations of an issuer that is the subject of a bankruptcy petition or similar action which have not experienced a payment default. Among others, the "C" rating may be assigned to subordinated debt, preferred stock or other obligations on which cash payments have been suspended in accordance with the instrument's terms or when preferred stock is the subject of a distressed exchange offer, whereby some or all of the issue is either repurchased for an amount of cash or replaced by other instruments having a total value that is less than par. D: An obligation rated "D" is in payment default. The "D" rating category is used when payments on an obligation, including a regulatory capital instrument, are not made on the date due even if the applicable grace period has not expired, unless Standard & Poor's believes that such payments will be made during such grace period. The "D" rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized. An obligation's rating is lowered to "D" upon completion of a distressed exchange offer, whereby some or all of the issue is either repurchased for an amount of cash or replaced by other instruments having a total value that is less than par. PLUS (+) OR MINUS (-): The ratings from "AA" to "CCC" may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories. NR: This indicates that no rating has been requested, that there is insufficient information on which to base a rating, or that Standard & Poor's does not rate a particular obligation as a matter of policy. STANDARD & POOR'S SHORT-TERM ISSUE CREDIT RATINGS: Short-term ratings are generally assigned to those obligations considered short-term in the relevant market. In the U.S., for example, that means obligations with an original maturity date of no more than 365 days - including commercial paper. Short-term ratings are also used to indicate the creditworthiness of an obligor with respect to put features on long-term obligations. The result is a dual rating, in which the short-term rating addresses the put feature, in addition to the usual long-term rating. 97 A-1: A short-term obligation rated "A-1" is rated in the highest category by Standard & Poor's. The obligor's capacity to meet its financial commitment on the obligation is strong. Within this category, certain obligations are designated with a plus sign (+). This indicates that the obligor's capacity to meet its financial commitment on these obligations is extremely strong. A-2: A short-term obligation rated "A-2" is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor's capacity to meet its financial commitment on the obligation is satisfactory. A-3: A short-term obligation rated "A-3" exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation. B: A short-term obligation rated "B" is regarded as having significant speculative characteristics. Ratings of "B-1", "B-2", and "B-3" may be assigned to indicate finer distinctions within the "B" category. The obligor currently has the capacity to meet its financial commitment on the obligation; however, it faces major ongoing uncertainties which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation. B-1: A short-term obligation rated "B-1" is regarded as having significant speculative characteristics, but the obligor has a relatively stronger capacity to meet its financial commitments over the short-term compared to other speculative-grade obligors. B-2: A short-term obligation rated "B-2" is regarded as having significant speculative characteristics, and the obligor has an average speculative-grade capacity to meet its financial commitments over the short-term compared to other speculative-grade obligors. B-3: A short-term obligation rated "B-3" is regarded as having significant speculative characteristics, and the obligor has a relatively weaker capacity to meet its financial commitments over the short-term compared to other speculative-grade obligors. C: A short-term obligation rated "C" is currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. D: A short-term obligation rated "D" is in payment default. The "D" rating category is used when payments on an obligation, including a regulatory capital instrument, are not made on the date due even if the applicable grace period has not expired, unless Standard & Poor's believes that such payments will be made during such grace period. The "D" rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized. LOCAL CURRENCY AND FOREIGN CURRENCY RISKS Country risk considerations are a standard part of Standard & Poor's analysis for credit ratings on any issuer or issue. Currency of repayment is a key factor in this analysis. An obligor's capacity to repay foreign currency obligations may be lower than its capacity to repay obligations in its local currency due to the sovereign government's own relatively lower capacity to repay external versus domestic debt. These sovereign risk considerations are incorporated in the debt ratings assigned to specific issues. Foreign currency issuer ratings are also distinguished from local currency issuer ratings to identify those instances where sovereign risks make them different for the same issuer. 98 20. APPENDIX B - PROXY VOTING POLICIES AND PROCEDURES POLICY Each of Pioneer Investment Management, Inc. and Pioneer Institutional Asset Management, Inc. (collectively, "Pioneer") is a fiduciary that owes each of its clients the duties of care and loyalty with respect to all services undertaken on the client's behalf, including voting proxies for securities held by the client. When Pioneer has been delegated proxy-voting authority for a client, the duty of care requires Pioneer to monitor corporate events and to vote the proxies. To satisfy its duty of loyalty, Pioneer must place the client's interests ahead of its own and must cast proxy votes in a manner consistent with the best interest of the client. It is Pioneer's policy to vote proxies presented to Pioneer in a timely manner in accordance with these principles. Pioneer's sole concern in voting proxies is the economic effect of the proposal on the value of portfolio holdings, considering both the short- and long-term impact. In many instances, Pioneer believes that supporting the company's strategy and voting "for" management's proposals builds portfolio value. In other cases, however, proposals set forth by management may have a negative effect on that value, while some shareholder proposals may hold the best prospects for enhancing it. Pioneer monitors developments in the proxy-voting arena and will revise this policy as needed. Pioneer's clients may request copies of their proxy voting records and of Pioneer's proxy voting policies and procedures by either sending a written request to Pioneer's Proxy Coordinator, or clients may review Pioneer's proxy voting policies and procedures online at pioneerinvestments.com. Pioneer may describe to clients its proxy voting policies and procedures by delivering a copy of Pioneer's Form ADV (Part II), by separate notice to the client or by other means. APPLICABILITY This Proxy Voting policy and the procedures set forth below are designed to complement Pioneer's investment policies and procedures regarding its general responsibility to monitor the performance and/or corporate events of companies that are issuers of securities held in accounts managed by Pioneer. This policy sets forth Pioneer's position on a number of issues for which proxies may be solicited, but it does not include all potential voting scenarios or proxy events. Furthermore, because of the special issues associated with proxy solicitations by closed-end Funds, Pioneer will vote shares of closed-end Funds on a case-by-case basis. PURPOSE The purposes of this policy is to ensure that proxies for United States ("US") and non-US companies that are received in a timely manner will be voted in accordance with the principles stated above. Unless the Proxy Voting Oversight Group (as described below) specifically determines otherwise, all shares in a company held by Pioneer-managed accounts for which Pioneer has proxy-voting authority will be voted alike, unless a client has given specific voting instructions on an issue. Pioneer does not delegate the authority to vote proxies relating to securities held by its clients to any of its affiliates, which include other subsidiaries of UniCredit S.p.A. ("UniCredit"). Any questions about this policy should be directed to Pioneer's Director of Investment Operations (the "Proxy Coordinator"). 99 PROCEDURES PROXY VOTING SERVICE Pioneer has engaged an independent proxy voting service to assist in the voting of proxies. The proxy voting service works with custodians to ensure that all proxy materials are received by the custodians and are processed in a timely fashion. To the extent applicable, the proxy voting service votes all proxies in accordance with the proxy voting guidelines established by Pioneer and set forth herein. The proxy voting service will refer proxy questions to the Proxy Coordinator (described below) for instructions under circumstances where: (1) the application of the proxy voting guidelines is unclear; (2) a particular proxy question is not covered by the guidelines; or (3) the guidelines call for specific instructions on a case-by-case basis. The proxy voting service is also requested to call to the Proxy Coordinator's attention specific proxy questions that, while governed by a guideline, appear to involve unusual or controversial issues. Pioneer reserves the right to attend a meeting in person and may do so when it determines that the company or the matters to be voted on at the meeting are strategically important to its clients. PROXY COORDINATOR The Proxy Coordinator coordinates the voting, procedures and reporting of proxies on behalf of Pioneer's clients. The Proxy Coordinator will deal directly with the proxy voting service and, in the case of proxy questions referred by the proxy voting service, will solicit voting recommendations and instructions from the Portfolio Management Group or, to the extent applicable, investment sub-advisers. The Proxy Coordinator is responsible for ensuring that these questions and referrals are responded to in a timely fashion and for transmitting appropriate voting instructions to the proxy voting service. The Proxy Coordinator is responsible for verifying with the Chief Legal Officer or his or her designee whether Pioneer's voting power is subject to any limitations or guidelines issued by the client (or in the case of an employee benefit plan, the plan's trustee or other fiduciaries). REFERRAL ITEMS The proxy voting service will refer proxy questions to the Proxy Coordinator or his or her designee that are described by Pioneer's proxy voting guidelines as to be voted on a case-by-case basis, that are not covered by Pioneer's guidelines or where Pioneer's guidelines may be unclear with respect to the matter to be voted on. Under such circumstances, the Proxy Coordinator will seek a written voting recommendation from the Head of Portfolio Management U.S. or his or her designated equity portfolio-management representative. Any such recommendation will include: (i) the manner in which the proxies should be voted; (ii) the rationale underlying any such decision; and (iii) the disclosure of any contacts or communications made between Pioneer and any outside parties concerning the proxy proposal prior to the time that the voting instructions are provided. SECURITIES LENDING In accordance with industry standards, proxies are not available to be voted when the shares are out on loan through either Pioneer's lending program or a client's managed security lending program. However, Pioneer will reserve the right to recall lent securities so that they may be voted according to the Pioneer's instructions. If a portfolio manager would like to vote a block of previously lent shares, the Proxy Coordinator will work with the portfolio manager and Investment Operations to recall the security, to the extent possible, to facilitate the vote on the entire block of shares. Certain clients participate in securities lending programs. Although such programs allow for the recall of securities for any reason, Pioneer may determine not to vote securities on loan and it may not always be possible for securities on loan to be recalled in time to be voted. 100 SHARE-BLOCKING "Share-blocking" is a market practice whereby shares are sent to a custodian (which may be different than the account custodian) for record keeping and voting at the general meeting. The shares are unavailable for sale or delivery until the end of the blocking period (typically the day after general meeting date). Pioneer will vote in those countries with "share-blocking." In the event a manager would like to sell a security with "share-blocking", the Proxy Coordinator will work with the Portfolio Manager and Investment Operations Department to recall the shares (as allowable within the market time frame and practices) and/or communicate with executing brokerage firm. A list of countries with "share-blocking" is available from the Investment Operations Department upon request. PROXY VOTING OVERSIGHT GROUP The members of the Proxy Voting Oversight Group include Pioneer's Head of Portfolio Management U.S. or his or her designated equity portfolio management representative, the Director of Investment Operations, and the Chief Compliance Officer of the Adviser and Funds. Other members of Pioneer will be invited to attend meetings and otherwise participate as necessary. The Director of Investment Operations will chair the Proxy Voting Oversight Group. The Proxy Voting Oversight Group is responsible for developing, evaluating, and changing (when necessary) Pioneer's proxy voting policies and procedures. The group meets at least annually to evaluate and review this policy and procedures and the services of its third-party proxy voting service. In addition, the Proxy Voting Oversight Group will meet as necessary to vote on referral items and address other business as necessary. AMENDMENTS Pioneer may not amend this policy without the prior approval of the Proxy Voting Oversight Group and its corporate parent, Pioneer Global Asset Management S.p.A. ("PGAM"). FILING FORM N-PX The Proxy Coordinator and the Regulatory Compliance Manager are responsible for ensuring that Form N-PX documents receive the proper review by a member of the Proxy Voting Oversight Group prior to a Fund officer signing the forms. The Investment Operations department will provide the Compliance department with a copy of each Form N-PX filing prepared by the proxy voting service. COMPLIANCE FILES N-PX. The Compliance department will ensure that a corresponding Form N-PX exists for each Pioneer registered investment company. Following this review, each Form N-PX is formatted for public dissemination via the EDGAR system. Prior to submission, each Form N-PX is to be presented to the Fund officer for a final review and signature. Copies of the Form N-PX filings and their submission receipts are maintained according to Pioneer record keeping policies. PROXY VOTING GUIDELINES ADMINISTRATIVE While administrative items appear infrequently in U.S. issuer proxies, they are quite common in non-U.S. proxies. We will generally support these and similar management proposals: 101 o Corporate name change. o A change of corporate headquarters. o Stock exchange listing. o Establishment of time and place of annual meeting. o Adjournment or postponement of annual meeting. o Acceptance/approval of financial statements. o Approval of dividend payments, dividend reinvestment plans and other dividend-related proposals. o Approval of minutes and other formalities. o Authorization of the transferring of reserves and allocation of income. o Amendments to authorized signatories. o Approval of accounting method changes or change in fiscal year-end. o Acceptance of labor agreements. o Appointment of internal auditors. Pioneer will vote on a case-by-case basis on other routine administrative items; however, Pioneer will oppose any routine proposal if insufficient information is presented in advance to allow Pioneer to judge the merit of the proposal. Pioneer has also instructed its proxy voting service to inform Pioneer of its analysis of any administrative items that may be inconsistent, in its view, with Pioneer's goal of supporting the value of its clients' portfolio holdings so that Pioneer may consider and vote on those items on a case-by-case basis. AUDITORS We normally vote for proposals to: o Ratify the auditors. We will consider a vote against if we are concerned about the auditors' independence or their past work for the company. Specifically, we will oppose the ratification of auditors and withhold votes for audit committee members if non-audit fees paid by the company to the auditing firm exceed the sum of audit fees plus audit-related fees plus permissible tax fees according to the disclosure categories proposed by the Securities and Exchange Commission. o Restore shareholder rights to ratify the auditors. We will normally oppose proposals that require companies to: o Seek bids from other auditors. o Rotate auditing firms, except where the rotation is statutorily required or where rotation would demonstrably strengthen financial disclosure. o Indemnify auditors. o Prohibit auditors from engaging in non-audit services for the company. BOARD OF DIRECTORS On issues related to the board of directors, Pioneer normally supports management. We will, however, consider a vote against management in instances where corporate performance has been very poor or where the board appears to lack independence. GENERAL BOARD ISSUES Pioneer will vote for: o Audit, compensation and nominating committees composed of independent directors exclusively. o Indemnification for directors for actions taken in good faith in accordance with the business judgment rule. We will vote against proposals for broader indemnification. 102 o Changes in board size that appear to have a legitimate business purpose and are not primarily for anti-takeover reasons. o Election of an honorary director. We will vote against: o Minimum stock ownership by directors. o Term limits for directors. Companies benefit from experienced directors, and shareholder control is better achieved through annual votes. o Requirements for union or special interest representation on the board. o Requirements to provide two candidates for each board seat. We will vote on a case-by case basis on these issues: o Separate chairman and CEO positions. We will consider voting with shareholders on these issues in cases of poor corporate performance. ELECTIONS OF DIRECTORS In uncontested elections of directors we will vote against: o Individual directors with absenteeism above 25% without valid reason. We support proposals that require disclosure of director attendance. o Insider directors and affiliated outsiders who sit on the audit, compensation, stock option or nominating committees. For the purposes of our policy, we accept the definition of affiliated directors provided by our proxy voting service. We will also vote against: o Directors who have failed to act on a takeover offer where the majority of shareholders have tendered their shares. o Directors who appear to lack independence or are associated with very poor corporate performance. We will vote on a case-by-case basis on these issues: o Re-election of directors who have implemented or renewed a dead-hand or modified dead-hand poison pill (a "dead-hand poison pill" is a shareholder rights plan that may be altered only by incumbent or "dead" directors. These plans prevent a potential acquirer from disabling a poison pill by obtaining control of the board through a proxy vote). o Contested election of directors. o Election of a greater number of independent directors (in order to move closer to a majority of independent directors in cases of poor performance. o Mandatory retirement policies. o Directors who have ignored a shareholder proposal that has been approved by shareholders for two consecutive years. We will vote for: o Precatory and binding resolutions requesting that the board changes the company's bylaws to stipulate that directors need to be elected with affirmative majority of votes cast, provided that the resolutions allow for plurality voting in cases of contested elections. 103 TAKEOVER-RELATED MEASURES Pioneer is generally opposed to proposals that may discourage takeover attempts. We believe that the potential for a takeover helps ensure that corporate performance remains high. Pioneer will vote for: o Cumulative voting. o Increasing the ability for shareholders to call special meetings. o Increasing the ability for shareholders to act by written consent. o Restrictions on the ability to make greenmail payments. o Submitting rights plans to shareholder vote. o Rescinding shareholder rights plans ("poison pills"). o Opting out of the following state takeover statutes: - Control share acquisition statutes, which deny large holders voting rights on holdings over a specified threshold. - Control share cash-out provisions, which require large holders to acquire shares from other holders - Freeze-out provisions, which impose a waiting period on large holders before they can attempt to gain control - Stakeholder laws, which permit directors to consider interests of non-shareholder constituencies. - Disgorgement provisions, which require acquirers to disgorge profits on purchases made before gaining control. - Fair price provisions. - Authorization of shareholder rights plans. - Labor protection provisions. - Mandatory classified boards. We will vote on a case-by-case basis on the following issues: o Fair price provisions. We will vote against provisions requiring supermajority votes to approve takeovers. We will also consider voting against proposals that require a supermajority vote to repeal or amend the provision. Finally, we will consider the mechanism used to determine the fair price; we are generally opposed to complicated formulas or requirements to pay a premium. o Opting out of state takeover statutes regarding fair price provisions. We will use the criteria used for fair price provisions in general to determine our vote on this issue. o Proposals that allow shareholders to nominate directors. We will vote against: o Classified boards, except in the case of closed-end funds, where we shall vote on a case-by-case basis. o Limiting shareholder ability to remove or appoint directors. We will support proposals to restore shareholder authority in this area. We will review on case-by-case basis proposals that authorize the board to make interim appointments. o Classes of shares with unequal voting rights. o Supermajority vote requirements. o Severance packages ("golden" and "tin" parachutes). We will support proposals to put these packages to shareholder vote. o Reimbursement of dissident proxy solicitation expenses. While we ordinarily support measures that encourage takeover bids, we believe that management should have full control over corporate funds. 104 o Extension of advance notice requirements for shareholder proposals. o Granting board authority normally retained by shareholders (e.g., amend charter, set board size). o Shareholder rights plans ("poison pills"). These plans generally allow shareholders to buy additional shares at a below-market price in the event of a change in control and may deter some bids. CAPITAL STRUCTURE Managements need considerable flexibility in determining the company's financial structure, and Pioneer normally supports managements' proposals in this area. We will, however, reject proposals that impose high barriers to potential takeovers. Pioneer will vote for: o Changes in par value. o Reverse splits, if accompanied by a reduction in number of shares. o Shares repurchase programs, if all shareholders may participate on equal terms. o Bond issuance. o Increases in "ordinary" preferred stock. o Proposals to have blank check common stock placements (other than shares issued in the normal course of business) submitted for shareholder approval. o Cancellation of company treasury shares. We will vote on a case-by-case basis on the following issues: o Reverse splits not accompanied by a reduction in number of shares, considering the risk of delisting. o Increase in authorized common stock. We will make a determination considering, among other factors: - Number of shares currently available for issuance; - Size of requested increase (we would normally approve increases of up to 100% of current authorization); - Proposed use of the proceeds from the issuance of additional shares, and - Potential consequences of a failure to increase the number of shares outstanding (e.g., delisting or bankruptcy). o Blank check preferred. We will normally oppose issuance of a new class of blank check preferred, but may approve an increase in a class already outstanding if the company has demonstrated that it uses this flexibility appropriately. o Proposals to submit private placements to shareholder vote. o Other financing plans. We will vote against preemptive rights that we believe limit a company's financing flexibility. COMPENSATION Pioneer supports compensation plans that link pay to shareholder returns and believes that management has the best understanding of the level of compensation needed to attract and retain qualified people. At the same time, stock-related compensation plans have a significant economic impact and a direct effect on the balance sheet. Therefore, while we do not want to micromanage a company's compensation programs, we will place limits on the potential dilution these plans may impose. Pioneer will vote for: o 401(k) benefit plans. 105 o Employee stock ownership plans (ESOPs), as long as shares allocated to ESOPs are less than 5% of outstanding shares. Larger blocks of stock in ESOPs can serve as a takeover defense. We will support proposals to submit ESOPs to shareholder vote. o Various issues related to the Omnibus Budget and Reconciliation Act of 1993 (OBRA), including: - Amendments to performance plans to conform with OBRA; - Caps on annual grants or amendments of administrative features; - Adding performance goals, and - Cash or cash and stock bonus plans. o Establish a process to link pay, including stock-option grants, to performance, leaving specifics of implementation to the company. o Require that option repricing be submitted to shareholders. o Require the expensing of stock-option awards. o Require reporting of executive retirement benefits (deferred compensation, split-dollar life insurance, SERPs, and pension benefits). o Employee stock purchase plans where the purchase price is equal to at least 85% of the market price, where the offering period is no greater than 27 months and where potential dilution (as defined below) is no greater than 10%. We will vote on a case-by-case basis on the following issues: o Shareholder proposals seeking additional disclosure of executive and director pay information. o Executive and director stock-related compensation plans. We will consider the following factors when reviewing these plans: - The program must be of a reasonable size. We will approve plans where the combined employee and director plans together would generate less than 15% dilution. We will reject plans with 15% or more potential dilution. Dilution = (A + B + C) / (A + B + C + D), where A = Shares reserved for plan/amendment, B = Shares available under continuing plans, C = Shares granted but unexercised and D = Shares outstanding. - The plan must not: - Explicitly permit unlimited option repricing authority or that have repriced in the past without shareholder approval - Be a self-replenishing "evergreen" plan, or a plan that grants discount options and tax offset payments - We are generally in favor of proposals that increase participation beyond executives. - We generally support proposals asking companies to adopt rigorous vesting provisions for stock option plans such as those that vest incrementally over, at least, a three- or four-year period with a pro rata portion of the shares becoming exercisable on an annual basis following grant date. - We generally support proposals asking companies to disclose their window period policies for stock transactions. Window period policies ensure that employees do not exercise options based on insider information contemporaneous with quarterly earnings releases and other material corporate announcements. - We generally support proposals asking companies to adopt stock holding periods for their executives. o All other employee stock purchase plans. 106 o All other compensation-related proposals, including deferred compensation plans, employment agreements, loan guarantee programs and retirement plans. o All other proposals regarding stock compensation plans, including extending the life of a plan, changing vesting restrictions, repricing options, lengthening exercise periods or accelerating distribution of awards and pyramiding and cashless exercise programs. We will vote against: o Pensions for non-employee directors. We believe these retirement plans reduce director objectivity. o Elimination of stock option plans. We will vote on a case-by-case basis on these issues: o Limits on executive and director pay. o Stock in lieu of cash compensation for directors. CORPORATE GOVERNANCE Pioneer will vote for: o Confidential voting. o Equal access provisions, which allow shareholders to contribute their opinions to proxy materials. o Proposals requiring directors to disclose their ownership of shares in the company. We will vote on a case-by-case basis on the following issues: o Change in the state of incorporation. We will support reincorporations supported by valid business reasons. We will oppose those that appear to be solely for the purpose of strengthening takeover defenses. o Bundled proposals. We will evaluate the overall impact of the proposal. o Adopting or amending the charter, bylaws or articles of association. o Shareholder appraisal rights, which allow shareholders to demand judicial review of an acquisition price. We will vote against: o Shareholder advisory committees. While management should solicit shareholder input, we prefer to leave the method of doing so to management's discretion. o Limitations on stock ownership or voting rights. o Reduction in share ownership disclosure guidelines. 107 MERGERS AND RESTRUCTURINGS Pioneer will vote on the following and similar issues on a case-by-case basis: o Mergers and acquisitions. o Corporate restructurings, including spin-offs, liquidations, asset sales, joint ventures, conversions to holding company and conversions to self-managed REIT structure. o Debt restructurings. o Conversion of securities. o Issuance of shares to facilitate a merger. o Private placements, warrants, convertible debentures. o Proposals requiring management to inform shareholders of merger opportunities. We will normally vote against shareholder proposals requiring that the company be put up for sale. MUTUAL FUNDS Many of our portfolios may invest in shares of closed-end funds or exchange-traded funds. The non-corporate structure of these investments raises several unique proxy-voting issues. Pioneer will vote for: o Establishment of new classes or series of shares. o Establishment of a master-feeder structure. Pioneer will vote on a case-by-case on: o Changes in investment policy. We will normally support changes that do not affect the investment objective or overall risk level of the fund. We will examine more fundamental changes on a case-by-case basis. o Approval of new or amended advisory contracts. o Changes from closed-end to open-end format. o Election of a greater number of independent directors (in order to move closer to a majority of independent directors) in cases of poor performance. o Authorization for, or increase in, preferred shares. o Disposition of assets, termination, liquidation, or mergers. o Classified boards of closed-end funds, but will typically support such proposals. SOCIAL ISSUES Pioneer will abstain on stockholder proposals calling for greater disclosure of corporate activities with regard to social issues. "Social Issues" may generally be described as shareholder proposals for a company to: o Conduct studies regarding certain issues of public concern and interest; o Study the feasibility of the company taking certain actions with regard to such issues; or o Take specific action, including ceasing certain behavior and adopting company standards and principles, in relation to issues of public concern and interest. We believe these issues are important and should receive management attention. Pioneer will vote against proposals calling for substantial changes in the company's business or activities. We will also normally vote against proposals with regard to contributions, believing that management should control the routine disbursement of funds. 108 AVOIDING CONFLICTS OF INTEREST Pioneer recognizes that in certain circumstances a conflict of interest may arise when Pioneer votes a proxy. A conflict of interest occurs when Pioneer's interests interfere, or appear to interfere with the interests of Pioneer's clients. A conflict may be actual or perceived and may exist, for example, when the matter to be voted on concerns: o An affiliate of Pioneer, such as another company belonging to the UniCredit S.p.A. banking group (a "UniCredit Affiliate"); o An issuer of a security for which Pioneer acts as a sponsor, advisor, manager, custodian, distributor, underwriter, broker, or other similar capacity (including those securities specifically declared by PGAM to present a conflict of interest for Pioneer); o An issuer of a security for which UniCredit has informed Pioneer that a UniCredit Affiliate acts as a sponsor, advisor, manager, custodian, distributor, underwriter, broker, or other similar capacity; or o A person with whom Pioneer (or any of its affiliates) has an existing, material contract or business relationship. Any member of the Proxy Voting Oversight Group and any other associate involved in the proxy voting process with knowledge of any apparent or actual conflict of interest must disclose such conflict to the Proxy Coordinator and the Chief Compliance Officer of Pioneer and the Funds. If any associate is lobbied or pressured with respect to any voting decision, whether within or outside of Pioneer, he or she should contact a member of the Proxy Voting Oversight Group or Pioneer's Chief Compliance Officer. The Proxy Voting Oversight Group will review each item referred to Pioneer by the proxy voting service to determine whether an actual or potential conflict of interest exists in connection with the proposal(s) to be voted upon. The review will be conducted by comparing the apparent parties affected by the proxy proposal being voted upon against the Controller's and Compliance Department's internal list of interested persons and, for any matches found, evaluating the anticipated magnitude and possible probability of any conflict of interest being present. The Proxy Voting Oversight Group may cause any of the following actions to be taken when a conflict of interest is present: o Vote the proxy in accordance with the vote indicated under "Voting Guidelines," If a vote is indicated; o Direct the independent proxy voting service to vote the proxy in accordance with its independent assessment; or o As determined by the Proxy Voting Oversight Group in its discretion consistent with its fiduciary duty. If the Proxy Voting Oversight Group perceives a material conflict of interest, the group may also choose to disclose the conflict to the affected clients and solicit their consent to proceed with the vote, or may take such other action in good faith (in consultation with counsel) that would protect the interest of clients. For each referral item, the determination regarding the presence or absence of any actual or potential conflict of interest will be documented in a Conflicts of Interest Report prepared by the Proxy Coordinator. The Proxy Voting Oversight Group will review periodically the independence of the proxy voting service. This may include a review of the service's conflict management procedures and other documentation, and an evaluation as to whether the service continues to have the competency and capacity to vote proxies. DECISION NOT TO VOTE PROXIES Although it is Pioneer's general policy to vote all proxies in accordance with the principles set forth in this policy, there may be situations in which the Proxy Voting Oversight Group does not vote a proxy referred to it. For example, because of the potential conflict of interest inherent in voting shares of a UniCredit 109 affiliate, Pioneer will abstain from voting the shares unless otherwise directed by a client. In such a case, the Proxy Coordinator will inform PGAM Global Compliance and the PGAM Independent Directors before exercising voting rights. There exist other situations in which the Proxy Voting Oversight Group may refrain from voting a proxy. For example, if the cost of voting a foreign security outweighs the benefit of voting, the Group may not vote the proxy. The Group may not be given enough time to process a vote, perhaps because it receives a meeting notice too late or it cannot obtain a translation of the agenda in the time available. If Pioneer has outstanding "sell" orders, the proxies for shares subject to the order may not be voted to facilitate the sale. Although Pioneer may hold shares on a company's record date, if the shares are sold prior to the meeting date, the Group may decide not to vote those shares. SUPERVISION ESCALATION It is each associate's responsibility to contact his or her business unit head, the Proxy Coordinator, a member of the Proxy Voting Oversight Group or Pioneer's Chief Compliance Officer if he or she becomes aware of any possible noncompliance with this policy. TRAINING Pioneer will conduct periodic training regarding proxy voting and this policy. It is the responsibility of the business line policy owner and the applicable Compliance Department to coordinate and conduct such training. RELATED POLICIES AND PROCEDURES Pioneer Investment Management, Inc.'s Books and Records Policy and the Books and Records of the Pioneer Funds' Policy. RECORD KEEPING The Proxy Coordinator shall ensure that Pioneer's proxy voting service: o Retains a copy of each proxy statement received (unless the proxy statement is available from the SEC's Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system); o Retains a record of the vote cast; o Prepares Form N-PX for filing on behalf of each client that is a registered investment company; and o Is able to promptly provide Pioneer with a copy of the voting record upon its request. The Proxy Coordinator shall ensure that for those votes that may require additional documentation (i.e. conflicts of interest, exception votes and case-by-case votes) the following records are maintained: o A record memorializing the basis for each referral vote cast; o A copy of any document created by Pioneer that was material in making the decision on how to vote the subject proxy; o A copy of any recommendation of the proxy voting service; and o A copy of any conflict notice, conflict consent or any other written communication (including emails or other electronic communications) to or from the client (or in the case of an employee benefit plan, the plan's trustee or other fiduciaries) regarding the subject proxy vote cast by, or the vote recommendation of, Pioneer. Pioneer shall maintain the above records in the client's file in accordance with applicable regulations. RELATED REGULATIONS Form N-1A, ICA Rule 30b1-4, Rule 31a1-3, Rule 38a-1 & IAA 206(4)-6, 204-2 110 ADOPTED BY THE PIONEER FUNDS' BOARD OF TRUSTEES October 5, 2004 EFFECTIVE DATE: October 5, 2004 REVISION DATE: September 2009 22109-07-1213 111 EX-99.(17)(C) 9 ex9917c.txt COMBINED ANNUAL REPORT Pioneer Ibbotson Asset Allocation Series -------------------------------------------------------------------------------- Annual Report | July 31, 2013 -------------------------------------------------------------------------------- Ticker Symbols: Conservative Moderate Growth Aggressive Allocation Allocation Allocation Allocation Class Fund Fund Fund Fund ----- ---- ---- ---- ---- A PIAVX PIALX GRAAX PIAAX B PIBVX PIBLX GRABX IALBX C PICVX PIDCX GRACX IALCX Y IBBCX IMOYX IBGYX IBAYX [LOGO] PIONEER Investment(R) visit us: us.pioneerinvestments.com Table of Contents Letter to Shareowners 2 Portfolio Management Discussion 4 Fund Reviews 8 Comparing Ongoing Fund Expenses 10 Prices and Distributions 18 Portfolio Summary & Performance Update 21 Schedule of Investments 41 Financial Statements 49 Notes to Financial Statements 71 Report of Independent Registered Public Accounting Firm 82 Trustees, Officers and Service Providers 83
Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 1 President's Letter Dear Shareowner, When we look at the U.S. economy as we head into the second half of 2013, we continue to see slow, but ongoing, growth. Employment has been steadily rising. Consumer incomes, savings, wealth, and debt-servicing capacity have been solid buttresses for the recovering housing and auto industries. Industrial activity is growing only modestly, but current corporate profits are generally solid and balance sheets appear able to support needed capital spending and dividend* payouts. The scaled-back "fiscal cliff" tax increases and spending cuts have meaningfully cut the budget deficit without, it seems, driving the economy back into recession. In addition, we feel that continuing slack in labor markets and capacity utilization offers the potential for continuing growth without bottlenecks and rising inflation. After observing the strengthening economic trends, the Federal Reserve (the Fed) has hinted that it may begin to scale back its bond purchases (currently $85 billion per month in quantitative easing, or "QE") later in 2013, and could terminate the purchases altogether sometime in 2014, depending on subsequent economic data releases. Pioneer believes that, barring an external shock, modest economic growth can be sustained at least over the next couple of years without continuous, aggressive intervention from the Fed. The Fed has also said that short-term interest rates are likely to remain near zero for some time to come. Given that inflation remains subdued and unemployment remains high, there is no urgency about raising rates. While inflation is not a near-term concern, the Fed's aggressive monetary policies helped investors drive long-term Treasury yields to unsustainably low levels. A return to more normal levels in response to expectations of a stronger economy and the potential for less QE resulted in disappointing returns for bond investors during the first half of 2013, but the stock market rewarded shareholders who were undaunted by the double-barreled threat of the "fiscal cliff" and debt-ceiling debates at the beginning of 2013. The Standard & Poor's 500 Index, a broad measure of the U.S. stock market, returned 13.82% during the first six months of 2013, while the Barclays Aggregate Bond Index, which tracks the performance of a higher-quality U.S. bond universe, returned -2.44%. Investors showed a rising preference for higher-yielding corporate paper over government bonds during the first half of 2013, helping the Bank of America Merrill Lynch High Yield Master II Index, which measures the performance of high-yield corporate bonds, to post a 1.50% return for the six months ended June 30, 2013. Three-month Treasury bills, generally regarded as essentially "risk free" by the markets, returned 0.03% in the first half of 2013. * Dividends are not guaranteed. 2 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 There are certainly risks and uncertainties that continue to plague the global economy. Europe remains in recession and a number of countries in the emerging markets have experienced difficulties. Still, a potential ending of the European recession, continuing economic improvement in Japan in response to the new government's quantitative easing policies, and a "soft landing" of 7% growth in China could very well result in an improving global outlook over the remainder of 2013. There are also geopolitical worries abroad and political fights at home, and while most of the widely recognized risks we've outlined may already be "priced in" to the market, we believe investors should continue to expect market volatility. At Pioneer, we have long advocated the benefits of staying diversified and investing for the long term. And while diversification alone does not assure a profit or protect against loss in a declining market, we believe there are still opportunities for prudent investors to earn attractive returns. Our advice, as always, is to work closely with a trusted financial advisor to discuss your goals and work together to develop an investment strategy that meets your individual needs, keeping in mind that there is no single best strategy that works for every investor. Pioneer's investment teams have, since 1928, sought out attractive opportunities in global equity and bond markets, using in-depth research to identify undervalued individual securities, and using thoughtful risk management to construct portfolios which balance potential risks and rewards in an ever-changing world. We encourage you to learn more about Pioneer and our time-tested approach to investing by consulting with your financial advisor or visiting us online at us.pioneerinvestments.com. We greatly appreciate your trust in us, and we thank you for investing with Pioneer. Sincerely, /s/ Daniel K. Kingsbury Daniel K. Kingsbury President and CEO Pioneer Investment Management USA, Inc. Any information in this shareowner report regarding market or economic trends or the factors influencing the Fund's historical or future performance are statements of opinion as of the date of this report. These statements should not be relied upon for any other purposes. Past performance is no guarantee of future results, and there is no guarantee that market forecasts discussed will be realized. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 3 Portfolio Management Discussion | 7/31/13 In the following interview, portfolio manager Brian Huckstep, CFA, Ibbotson Associates, Inc., sub-adviser to the Pioneer Ibbotson Asset Allocation Series funds, discusses the market environment and the investment strategies that applied to the funds during the 12 months ended July 31, 2013. Q How would you characterize the economic and market backdrop during the 12 months ended July 31, 2013? A For much of the 12-month period, markets appeared unfazed by the political dysfunction as well as the underlying structural issues confronting the global economy. As the period began in August 2012, concern over the European sovereign-debt crisis continued to constrain investor sentiment. However, markets increasingly began to anticipate accommodative policy measures from global central banks. The expectations were met in September 2012 as the European Central Bank lowered its overnight deposit rate to zero and announced a plan for open-ended purchases of short-term bonds issued by countries requesting aid, a move that greatly diminished the risk of sovereign defaults. Then, citing worrisome employment data, the U.S. Federal Reserve (the Fed) announced plans for another program of monthly bond purchases (QE3) and declared its intention to maintain short-term rates at near-zero levels for an undetermined amount of time (most investors assumed that meant at least into 2014, and perhaps beyond). The prospect of prolonged monetary support for the global economy led to an increase in risk appetites and boosted stock valuations. The upward momentum for risk assets was tempered following the November 2012 U.S. elections, as markets began to focus on the political stalemate that threatened the U.S. economy with automatic budget cuts and tax increases scheduled to take effect at the end of 2012 (the so-called "fiscal cliff"). While the standoff affected equities around the world, U.S. stocks materially underperformed international stocks late in 2012. The "fiscal cliff" was ultimately averted, and stocks resumed their upward momentum in January of 2013, supported by continued improvements in U.S. auto and housing data. Indications that economic growth in China would remain at levels sufficient to meaningfully bolster the global outlook further supported riskier assets. The U.S. economy would continue to surprise to the upside, despite the tax hike at the beginning of 2013 and the automatic spending cuts that went into effect under the "sequestration" agreement at the beginning of March. Domestic economic highlights included positive news on consumer spending, private hiring and business investment. In Europe, the sovereign-debt crisis continued to be papered over, although events in Cyprus during March served as a warning to policymakers that much heavy lifting remained before the problem could be considered under control. 4 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 On the monetary policy front, the Fed continued to pursue measures designed to maintain extraordinarily low interest rates, and central banks in Europe and Japan followed suit. Despite the level of monetary accommodation, inflation remained modest. As the 12-month period progressed and economic data continued to be encouraging, markets increasingly speculated over the extent to which the Fed would maintain its level of policy support. As a result, interest rates began to trend higher and stocks began to slide. The anxiety reached a pinnacle in late June of 2013 as Fed Chairman Bernanke confirmed earlier comments to the effect that the stabilizing economy might soon permit a "tapering" of QE3. Foreign stocks were additionally affected by recessionary data in the euro zone. As the 12-month period drew to a close, stock prices resumed their upward trend as investors seemed to put the likely extent and effect of any Fed policy shift into perspective--a view aided by the fact that Mr. Bernanke, in mid-summer, implied that future U.S. economic data releases would be a determining factor with regard to any tapering of QE3. During the 12-month period ended July 31, 2013, the U.S. equity market returned 24.98%, as measured by the Standard & Poor's 500 Index (the S&P 500), while international equities, as measured by the Morgan Stanley Capital International (MSCI) Europe, Australasia, Far East (EAFE) ND Index, returned 23.48%. Within the U.S. market, small-capitalization stocks outperformed large-cap stocks, and value-oriented stocks outperformed their growth counterparts. Domestic bonds returned -1.90% during the 12-month period, as measured by the Barclays Aggregate Bond Index (the Barclays Index), the most popular measure of the performance of the U.S. bond market. Q What were the considerations and tactical shifts that you applied to the Pioneer funds in allocating assets during the 12 months ended July 31, 2013? A Overall, our tactical emphases within the funds' portfolios were defensive, and that approach detracted from the funds' performance during the 12-month period. Throughout the period, we maintained an underweight to equities and an overweight to bonds in the funds' portfolios. The positioning was initially driven by our concerns over the subpar U.S. economic recovery as well as the difficulties in Europe. We have maintained the underweight to equities in view of what appears to be a trend of weakening company fundamentals, in aggregate. The portfolios' tilt towards bonds acted as a constraint on the funds' returns during the period as equities turned in strong performance over the full 12 months, largely in response to the extraordinarily accommodative policies of the world's central banks. We also implemented a tilt in favor of international stocks over domestic stocks within the portfolios' overall equity allocations, as we believe U.S. stock valuations to be stretched. The shift was a more or less neutral factor in the funds' performance during the 12-month period, as international Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 5 stocks roughly kept pace with U.S. stock returns. We continue to view international stocks as more attractively valued than domestic equities. At the end of June 2013, we added a slight overweight to emerging markets equities in the funds, based on our belief that markets overreacted to news of a slowdown of growth in China that occurred in May and June. Within the U.S. equity portions of the funds, we have been favoring larger- cap stocks while, in turn, maintaining somewhat reduced exposure to smaller-cap stocks and real estate investment trusts (REITs). The positioning reflects our view that large-cap companies, in general, are not only in the best position to weather an uncertain climate, but also are displaying the most attractive valuations within the U.S. equity market. The tilt away from REITs added to the funds' performance during the period, while reduced exposure to small-cap equities constrained returns. We continue to believe that large-cap company fundamentals will be rewarded on a relative basis as we navigate a period of higher-than-usual economic uncertainty and market volatility. We also continue to believe that U.S. property stocks are trading at valuations that may be difficult to sustain and that are hard to justify by fundamentals. Q What factors are you watching most closely as you determine strategy for the funds going forward? A In our view the fundamental picture for most companies continues to be on the decline, as reflected in the increasing number of earnings revisions and negative outlook statements. While governments continue to provide economic stimulus, a weakening corporate picture appears to be emerging and we believe it is likely to mostly counterbalance the ongoing policy support of central banks. In addition, we believe fiscal policy will most likely be less expansionary going forward, with slightly higher taxes and some restraints on government spending. In the United States, the good news is that the economy seems to have surmounted a number of obstacles. With that said, in our view U.S. stock valuations are high by historical measures and expectations are quite positive for the U.S. economy and corporate earnings. We feel that all of those factors add to the downside risk for U.S. stocks and support the reasoning behind our underweighting of stocks in general, and domestic equities in particular. In short, we are comfortable with our continued bias towards reducing risk in the funds' portfolios. The uncertain near-term environment continues to reinforce the importance of maintaining a diversified* investment portfolio consistent with one's long-term objectives. We will continue to closely monitor the economic backdrop as we manage the funds within their strategic asset allocation guidelines. * Diversification does not guarantee a profit nor protect against loss in a declining market. 6 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 Please refer to the Schedule of Investments on pages 41-48 for a full listing of fund securities. Each portfolio in the Ibbotson Asset Allocation Series is a "fund-of-funds" which seeks to achieve its investment objectives by investing in other funds, rather than direct positions in securities. In addition to the Fund's operating expenses, investors will indirectly bear the operating expenses of investments in any underlying funds. The Fund's performance depends on the adviser's skill in determining the strategic asset allocations, the mix of underlying Pioneer funds, as well as the performance of those underlying funds. The underlying funds' performance may be lower than the performance of the asset class that they were selected to represent. Each of the underlying funds has its own investment risks. Stocks and bonds can decline due to adverse issuer, market, regulatory, or economic developments. International markets are subject to additional risks, including that they may be less liquid and more volatile than U.S. markets; these risks may be magnified in emerging markets. Some of the underlying funds can invest in high-yield securities and/or small/emerging growth companies, which are generally subject to greater volatility than higher-grade securities and/or more-established companies. These risks may increase share price volatility. Before making an investment in any fund, you should consider all the risks associated with it. Please see the Fund Reviews beginning on page 8 for information on specific weightings and performance for each of the four funds in the Pioneer Ibbotson Asset Allocation Series. Any information in this shareowner report regarding market or economic trends or the factors influencing each fund's historical or future performance are statements of opinion as of the date of this report. These statements should not be relied upon for any other purposes. Past performance is no guarantee of future results, and there is no guarantee that market forecasts discussed will be realized. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 7 Fund Reviews | 7/31/13 Pioneer Ibbotson Conservative Allocation Fund The Fund's Class A shares returned 8.72% at net asset value during the 12 months ended July 31, 2013, while the S&P 500 returned 24.98% and the Barclays Index returned -1.90%. During the same period, the average return of the 724 mutual funds in Morningstar's Conservative Allocation category was 6.94%. At period end, the Fund was targeting an asset allocation of 29% equities and 71% fixed income, versus a neutral allocation of 30% equities and 70% fixed income. Within the fixed-income portion of the Fund, the largest holding at the end of the period was in Pioneer Bond Fund, at 22.8% of assets, followed by Pioneer Short Term Income Fund, at 16.1%. The next-largest position was also a fixed-income fund, Pioneer Strategic Income Fund, at 10% of assets, while the largest equity position was Pioneer International Value Fund, at 8.3% of assets. Pioneer Ibbotson Moderate Allocation Fund The Fund's Class A shares returned 14.32% at net asset value during the 12 months ended July 31, 2013, while the S&P 500 returned 24.98% and the Barclays Index returned -1.90%. During the same period, the average return of the 890 mutual funds in Morningstar's Moderate Allocation category was 14.67%. At period end, the Fund was targeting an asset allocation of 57% equities and 43% fixed income, versus a neutral allocation of 60% equities, 40% fixed income. Within the fixed-income portion of the Fund, the largest holding at the end of the period was in Pioneer Bond Fund, at 11.2% of assets, followed Pioneer Short Term Income Fund, at 10.6% of assets. Within the equity portion of the Fund, Pioneer International Value Fund was the largest holding, at 12.2% of assets. Pioneer Global Equity Fund was the next-largest equity holding, at 8.9% of assets, followed by Pioneer Mid Cap Value Fund, at 7.2%. Pioneer Ibbotson Growth Allocation Fund The Fund's Class A shares returned 16.40% at net asset value during the 12 months ended July 31, 2013, while the S&P 500 returned 24.98% and the Barclays Index returned -1.90%. During the same period, the average return of the 414 mutual funds in Morningstar's Aggressive Allocation category was 18.67%. At period end, the Fund was targeting an asset allocation of 70% equities and 30% fixed income. Within the equity portion of the Fund, Pioneer International Value Fund was the largest holding, at 14.2% of assets. Pioneer Global Equity Fund was the next-largest equity holding, at 10.0% of assets, followed by Pioneer Mid Cap Value Fund, at 7.9%. Within the fixed-income portion of the Fund, the largest holding at the end of the period was in Pioneer Bond Fund, at 9.6% of assets, followed by Pioneer Short Term Income Fund, at 7.4%. 8 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 Pioneer Ibbotson Aggressive Allocation Fund The Fund's Class A shares returned 18.86% at net asset value during the 12 months ended July 31, 2013, while the S&P 500 returned 24.98% and the Barclays Index returned -1.90%. During the same period, the average return of the 414 mutual funds in Morningstar's Aggressive Allocation category was 18.67%. At period end, the Fund was targeting an asset allocation of 83.5% equities and 16.5% fixed income, versus a neutral allocation of 90% equities and 10% fixed income. Within the equity portion of the Fund, Pioneer International Value Fund was the largest holding, at 19.4% of assets. Pioneer Global Equity Fund was the next-largest equity holding, at 11.4% of assets, followed by Pioneer Mid Cap Value Fund, at 10.8%. The largest fixed-income position in the portfolio was Pioneer Bond Fund, at 5.7% of assets. Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 9 Comparing Ongoing Fund Expenses Pioneer Ibbotson Conservative Allocation Fund As a shareowner in the Fund, you incur two types of costs: (1) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses; and (2) transaction costs, including sales charges (loads) on purchase payments. This example is intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 at the beginning of the Fund's latest six-month period and held throughout the six months. Using the Tables -------------------------------------------------------------------------------- Actual Expenses The first table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period as follows: (1) Divide your account value by $1,000 Example: an $8,600 account value (divided by) $1,000 = 8.6 (2) Multiply the result in (1) above by the corresponding share class's number in the third row under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. Expenses Paid on a $1,000 Investment in Pioneer Ibbotson Conservative Allocation Fund Based on actual returns from February 1, 2013 through July 31, 2013.
-------------------------------------------------------------------------------- Share Class A B C Y -------------------------------------------------------------------------------- Beginning Account $1,000.00 $1,000.00 $1,000.00 $1,000.00 Value on 2/1/13 -------------------------------------------------------------------------------- Ending Account Value $1,024.21 $1,019.22 $1,021.21 $1,018.68 (after expenses) on 7/31/13 -------------------------------------------------------------------------------- Expenses Paid $ 7.43 $ 11.62 $ 11.13 $ 10.71 During Period* --------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized net expense ratio plus the expense ratios of the underlying funds. These combined totals were 1.48%, 2.32%, 2.22% and 2.14% for Class A, Class B, Class C and Class Y shares, respectively. These combined ratios were multiplied by the average account value over the period, and then multiplied by 181/365 (to reflect the one-half year period) to calculate the "Expenses Paid During Period" in the table above. 10 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 Hypothetical Example for Comparison Purposes The table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) that are charged at the time of the transaction. Therefore, the table below is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. Expenses Paid on a $1,000 Investment in Pioneer Ibbotson Conservative Allocation Fund Based on a hypothetical 5% per year return before expenses, reflecting the period from February 1, 2013 through July 31, 2013.
-------------------------------------------------------------------------------- Share Class A B C Y -------------------------------------------------------------------------------- Beginning Account $1,000.00 $1,000.00 $1,000.00 $1,000.00 Value on 2/1/13 -------------------------------------------------------------------------------- Ending Account Value $1,017.46 $1,013.29 $1,013.79 $1,014.18 (after expenses) on 7/31/13 -------------------------------------------------------------------------------- Expenses Paid $ 7.40 $ 11.58 $ 11.08 $ 10.69 During Period* --------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized net expense ratio plus the expense ratios of the underlying funds. These combined totals were 1.48%, 2.32%, 2.22% and 2.14% for Class A, Class B, Class C and Class Y shares, respectively. These combined ratios were multiplied by the average account value over the period, and then multiplied by 181/365 (to reflect the one-half year period) to calculate the "Expenses Paid During Period" in the table above. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 11 Comparing Ongoing Fund Expenses Pioneer Ibbotson Moderate Allocation Fund As a shareowner in the Fund, you incur two types of costs: (1) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses; and (2) transaction costs, including sales charges (loads) on purchase payments. This example is intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 at the beginning of the Fund's latest six-month period and held throughout the six months. Using the Tables -------------------------------------------------------------------------------- Actual Expenses The first table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period as follows: (1) Divide your account value by $1,000 Example: an $8,600 account value (divided by) $1,000 = 8.6 (2) Multiply the result in (1) above by the corresponding share class's number in the third row under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. Expenses Paid on a $1,000 Investment in Pioneer Ibbotson Moderate Allocation Fund Based on actual returns from February 1, 2013 through July 31, 2013.
-------------------------------------------------------------------------------- Share Class A B C Y -------------------------------------------------------------------------------- Beginning Account $1,000.00 $1,000.00 $1,000.00 $1,000.00 Value on 2/1/13 -------------------------------------------------------------------------------- Ending Account Value $1,054.03 $1,049.17 $1,050.99 $1,056.08 (after expenses) on 7/31/13 -------------------------------------------------------------------------------- Expenses Paid $ 7.38 $ 11.74 $ 10.83 $ 5.86 During Period* --------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized net expense ratio plus the expense ratios of the underlying funds. These combined totals were 1.45%, 2.31%, 2.13% and 1.15% for Class A, Class B, Class C and Class Y shares, respectively. These combined ratios were multiplied by the average account value over the period, and then multiplied by 181/365 (to reflect the one-half year period) to calculate the "Expenses Paid During Period" in the table above. 12 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 Hypothetical Example for Comparison Purposes The table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) that are charged at the time of the transaction. Therefore, the table below is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. Expenses Paid on a $1,000 Investment in Pioneer Ibbotson Moderate Allocation Fund Based on a hypothetical 5% per year return before expenses, reflecting the period from February 1, 2013 through July 31, 2013.
-------------------------------------------------------------------------------- Share Class A B C Y -------------------------------------------------------------------------------- Beginning Account $1,000.00 $1,000.00 $1,000.00 $1,000.00 Value on 2/1/13 -------------------------------------------------------------------------------- Ending Account Value $1,017.60 $1,013.34 $1,014.23 $1,019.09 (after expenses) on 7/31/13 -------------------------------------------------------------------------------- Expenses Paid $ 7.25 $ 11.53 $ 10.64 $ 5.76 During Period* --------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized net expense ratio plus the expense ratios of the underlying funds. These combined totals were 1.45%, 2.31%, 2.13% and 1.15% for Class A, Class B, Class C and Class Y shares, respectively. These combined ratios were multiplied by the average account value over the period, and then multiplied by 181/365 (to reflect the one-half year period) to calculate the "Expenses Paid During Period" in the table above. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 13 Comparing Ongoing Fund Expenses Pioneer Ibbotson Growth Allocation Fund As a shareowner in the Fund, you incur two types of costs: (1) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses; and (2) transaction costs, including sales charges (loads) on purchase payments. This example is intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 at the beginning of the Fund's latest six-month period and held throughout the six months. Using the Tables -------------------------------------------------------------------------------- Actual Expenses The first table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period as follows: (1) Divide your account value by $1,000 Example: an $8,600 account value (divided by) $1,000 = 8.6 (2) Multiply the result in (1) above by the corresponding share class's number in the third row under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. Expenses Paid on a $1,000 Investment in Pioneer Ibbotson Growth Allocation Fund Based on actual returns from February 1, 2013 through July 31, 2013.
-------------------------------------------------------------------------------- Share Class A B C Y -------------------------------------------------------------------------------- Beginning Account $1,000.00 $1,000.00 $1,000.00 $1,000.00 Value on 2/1/13 -------------------------------------------------------------------------------- Ending Account Value $1,063.99 $1,059.07 $1,059.98 $1,064.39 (after expenses) on 7/31/13 -------------------------------------------------------------------------------- Expenses Paid $ 7.83 $ 12.30 $ 11.44 $ 6.55 During Period* --------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized net expense ratio plus the expense ratios of the underlying funds. These combined totals were 1.53%, 2.41%, 2.24% and 1.28% for Class A, Class B, Class C and Class Y shares, respectively. These combined ratios were multiplied by the average account value over the period, and then multiplied by 181/365 (to reflect the one-half year period) to calculate the "Expenses Paid During Period" in the table above. 14 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 Hypothetical Example for Comparison Purposes The table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) that are charged at the time of the transaction. Therefore, the table below is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. Expenses Paid on a $1,000 Investment in Pioneer Ibbotson Growth Allocation Fund Based on a hypothetical 5% per year return before expenses, reflecting the period from February 1, 2013 through July 31, 2013.
-------------------------------------------------------------------------------- Share Class A B C Y -------------------------------------------------------------------------------- Beginning Account $1,000.00 $1,000.00 $1,000.00 $1,000.00 Value on 2/1/13 -------------------------------------------------------------------------------- Ending Account Value $1,017.21 $1,012.84 $1,013.69 $1,018.45 (after expenses) on 7/31/13 -------------------------------------------------------------------------------- Expenses Paid $ 7.65 $ 12.03 $ 11.18 $ 6.41 During Period* --------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized net expense ratio plus the expense ratios of the underlying funds. These combined totals were 1.53%, 2.41%, 2.24% and 1.28% for Class A, Class B, Class C and Class Y shares, respectively. These combined ratios were multiplied by the average account value over the period, and then multiplied by 181/365 (to reflect the one-half year period) to calculate the "Expenses Paid During Period" in the table above. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 15 Comparing Ongoing Fund Expenses Pioneer Ibbotson Aggressive Allocation Fund As a shareowner in the Fund, you incur two types of costs: (1) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses; and (2) transaction costs, including sales charges (loads) on purchase payments. This example is intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 at the beginning of the Fund's latest six-month period and held throughout the six months. Using the Tables -------------------------------------------------------------------------------- Actual Expenses The first table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period as follows: (1) Divide your account value by $1,000 Example: an $8,600 account value (divided by) $1,000 = 8.6 (2) Multiply the result in (1) above by the corresponding share class's number in the third row under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. Expenses Paid on a $1,000 Investment in Pioneer Ibbotson Aggressive Allocation Fund Based on actual returns from February 1, 2013 through July 31, 2013.
-------------------------------------------------------------------------------- Share Class A B C Y -------------------------------------------------------------------------------- Beginning Account $1,000.00 $1,000.00 $1,000.00 $1,000.00 Value on 2/1/13 -------------------------------------------------------------------------------- Ending Account Value $1,072.26 $1,067.42 $1,068.67 $1,071.19 (after expenses) on 7/31/13 -------------------------------------------------------------------------------- Expenses Paid $ 8.73 $ 12.92 $ 12.26 $ 7.96 During Period* --------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized net expense ratio plus the expense ratios of the underlying funds. These combined totals were 1.70%, 2.52%, 2.39% and 1.55% for Class A, Class B, Class C and Class Y shares, respectively. These combined ratios were multiplied by the average account value over the period, and then multiplied by 181/365 (to reflect the one-half year period) to calculate the "Expenses Paid During Period" in the table above. 16 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 Hypothetical Example for Comparison Purposes The table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) that are charged at the time of the transaction. Therefore, the table below is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. Expenses Paid on a $1,000 Investment in Pioneer Ibbotson Aggressive Allocation Fund Based on a hypothetical 5% per year return before expenses, reflecting the period from February 1, 2013 through July 31, 2013.
-------------------------------------------------------------------------------- Share Class A B C Y -------------------------------------------------------------------------------- Beginning Account $1,000.00 $1,000.00 $1,000.00 $1,000.00 Value on 2/1/13 -------------------------------------------------------------------------------- Ending Account Value $1,016.36 $1,012.30 $1,012.94 $1,017.11 (after expenses) on 7/31/13 -------------------------------------------------------------------------------- Expenses Paid $ 8.50 $ 12.57 $ 11.93 $ 7.75 During Period* --------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized net expense ratio plus the expense ratios of the underlying funds. These combined totals were 1.70%, 2.52%, 2.39% and 1.55% for Class A, Class B, Class C and Class Y shares, respectively. These combined ratios were multiplied by the average account value over the period, and then multiplied by 181/365 (to reflect the one-half year period) to calculate the "Expenses Paid During Period" in the table above. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 17 Prices and Distributions | 7/31/13 Net Asset Value per Share --------------------------------------------------------------------------------
Conservative Allocation Fund -------------------------------------------------------------------------------- Class 7/31/13 7/31/12 -------------------------------------------------------------------------------- A $11.42 $10.73 -------------------------------------------------------------------------------- B $11.18 $10.51 -------------------------------------------------------------------------------- C $11.09 $10.44 -------------------------------------------------------------------------------- Y $10.86 $10.21 -------------------------------------------------------------------------------- Moderate Allocation Fund -------------------------------------------------------------------------------- Class 7/31/13 7/31/12 -------------------------------------------------------------------------------- A $11.72 $10.46 -------------------------------------------------------------------------------- B $11.31 $10.04 -------------------------------------------------------------------------------- C $10.92 $ 9.77 -------------------------------------------------------------------------------- Y $11.86 $10.58 -------------------------------------------------------------------------------- Growth Allocation Fund -------------------------------------------------------------------------------- Class 7/31/13 7/31/12 -------------------------------------------------------------------------------- A $12.32 $10.75 -------------------------------------------------------------------------------- B $10.93 $ 9.52 -------------------------------------------------------------------------------- C $11.65 $10.18 -------------------------------------------------------------------------------- Y $12.56 $10.95 -------------------------------------------------------------------------------- Aggressive Allocation Fund -------------------------------------------------------------------------------- Class 7/31/13 7/31/12 -------------------------------------------------------------------------------- A $12.47 $10.60 -------------------------------------------------------------------------------- B $11.72 $ 9.95 -------------------------------------------------------------------------------- C $11.83 $10.07 -------------------------------------------------------------------------------- Y $12.49 $10.65 --------------------------------------------------------------------------------
18 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 Distributions per Share: 8/1/12-7/31/13 --------------------------------------------------------------------------------
Conservative Allocation Fund -------------------------------------------------------------------------------- Net Investment Short-Term Long-Term Class Income Capital Gains Capital Gains -------------------------------------------------------------------------------- A $ 0.2343 $ -- $ -- -------------------------------------------------------------------------------- B $ 0.1261 $ -- $ -- -------------------------------------------------------------------------------- C $ 0.1603 $ -- $ -- -------------------------------------------------------------------------------- Y $ 0.1599 $ -- $ -- -------------------------------------------------------------------------------- Moderate Allocation Fund -------------------------------------------------------------------------------- Net Investment Short-Term Long-Term Class Income Capital Gains Capital Gains -------------------------------------------------------------------------------- A $ 0.2164 $ -- $ -- -------------------------------------------------------------------------------- B $ 0.0610 $ -- $ -- -------------------------------------------------------------------------------- C $ 0.1603 $ -- $ -- -------------------------------------------------------------------------------- Y $ 0.2481 $ -- $ -- -------------------------------------------------------------------------------- Growth Allocation Fund -------------------------------------------------------------------------------- Net Investment Short-Term Long-Term Class Income Capital Gains Capital Gains -------------------------------------------------------------------------------- A $ 0.1726 $ -- $ -- -------------------------------------------------------------------------------- B $ 0.0560 $ -- $ -- -------------------------------------------------------------------------------- C $ 0.1047 $ -- $ -- -------------------------------------------------------------------------------- Y $ 0.1955 $ -- $ -- -------------------------------------------------------------------------------- Aggressive Allocation Fund -------------------------------------------------------------------------------- Net Investment Short-Term Long-Term Class Income Capital Gains Capital Gains -------------------------------------------------------------------------------- A $ 0.1136 $ -- $ -- -------------------------------------------------------------------------------- B $ -- $ -- $ -- -------------------------------------------------------------------------------- C $ 0.0443 $ -- $ -- -------------------------------------------------------------------------------- Y $ 0.1494 $ -- $ -- --------------------------------------------------------------------------------
Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 19 Prices and Distributions | 7/31/13 (continued) Index Definitions -------------------------------------------------------------------------------- The Standard & Poor's 500 Index (the S&P 500) is an unmanaged, commonly used measure of the broad U.S. stock market. The Barclays Aggregate Bond Index is an unmanaged measure of the U.S. bond market. Index returns are calculated monthly, assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. It is not possible to invest directly in an index. The indices defined here pertain to the "Value of $10,000 Investment" and "Value of $5 Million Investment" charts on pages 22-25, 27-30, 32-35 and 37-40. 20 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 Portfolio Summary | 7/31/13 Pioneer Ibbotson Conservative Allocation Fund [THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
Target Asset Allocations -------------------------------------------------------------------------------- Fixed Income 70% Equity 30%
[THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
Actual Asset Allocations -------------------------------------------------------------------------------- Fixed Income 67.3% U.S. Equity 19.1% International Equity 13.6%
Actual Portfolio Holdings (based on total portfolio) --------------------------------------------------------------------------------
U.S. Stocks -------------------------------------------------------------------------------- Pioneer Disciplined Value Fund Class Y 3.62% -------------------------------------------------------------------------------- Pioneer Fund Class Y 3.29 -------------------------------------------------------------------------------- Pioneer Mid Cap Value Fund Class Y 2.25 -------------------------------------------------------------------------------- Pioneer Core Equity Fund Class Y 2.18 -------------------------------------------------------------------------------- Pioneer Fundamental Growth Fund Class Y 2.18 -------------------------------------------------------------------------------- Pioneer Select Mid Cap Growth Fund Class Y 1.42 -------------------------------------------------------------------------------- Pioneer Equity Income Fund Class Y 1.09 -------------------------------------------------------------------------------- Pioneer Disciplined Growth Fund Class Y 1.04 -------------------------------------------------------------------------------- Pioneer Real Estate Shares Class Y 1.02 -------------------------------------------------------------------------------- Pioneer Oak Ridge Small Cap Growth Fund Class Y 0.98 -------------------------------------------------------------------------------- International Stocks -------------------------------------------------------------------------------- Pioneer International Value Fund Class Y 8.29% -------------------------------------------------------------------------------- Pioneer Global Equity Fund Class Y 4.28 -------------------------------------------------------------------------------- Pioneer Emerging Markets Fund Class Y 1.01 -------------------------------------------------------------------------------- Bonds -------------------------------------------------------------------------------- Pioneer Bond Fund Class Y 22.81% -------------------------------------------------------------------------------- Pioneer Short Term Income Fund Class Y 16.10 -------------------------------------------------------------------------------- Pioneer Strategic Income Fund Class Y 10.00 -------------------------------------------------------------------------------- Pioneer Global High Yield Fund Class Y 6.14 -------------------------------------------------------------------------------- Pioneer High Yield Fund Class Y 4.10 -------------------------------------------------------------------------------- Pioneer Dynamic Credit Fund Class Y 4.09 -------------------------------------------------------------------------------- Pioneer Global Aggregate Bond Fund Class Y 2.05 -------------------------------------------------------------------------------- Pioneer Floating Rate Fund Class Y 1.03 -------------------------------------------------------------------------------- Pioneer Multi-Asset Ultrashort Income Fund Class Y 1.03 --------------------------------------------------------------------------------
This list excludes temporary cash investments and derivative instruments. The portfolio is actively managed, and current holdings may be different. The holdings listed should not be considered recommendations to buy or sell any security listed. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 21 Performance Update | 7/31/13 Class A Shares Pioneer Ibbotson Conservative Allocation Fund Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Pioneer Ibbotson Conservative Allocation Fund at public offering price, compared to that of the Standard & Poor's 500 Index and the Barclays Aggregate Bond Index.
Average Annual Total Returns (As of July 31, 2013) -------------------------------------------------------------------------------- Public Net Asset Offering Period Value (NAV) Price (POP) -------------------------------------------------------------------------------- Life-of-Class 5/12/2005 4.64% 3.89% 5 Years 5.24 4.00 1 Year 8.72 2.42 -------------------------------------------------------------------------------- Expense Ratio (Per prospectus dated December 1, 2012) -------------------------------------------------------------------------------- Gross Net -------------------------------------------------------------------------------- 1.52% 1.48% --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $10,000 Investment
Pioneer Ibbotson Conservative Standard & Poor's Barclays Aggregate Allocation Fund 500 Index Bond Index 5/31/2005 $ 9,425 $ 10,000 $ 10,000 7/31/2005 $ 9,599 $ 10,387 $ 9,963 7/31/2006 $ 9,919 $ 10,945 $ 10,108 7/31/2007 $ 10,800 $ 12,710 $ 10,672 7/31/2008 $ 10,490 $ 11,300 $ 11,329 7/31/2009 $ 10,024 $ 9,046 $ 12,217 7/31/2010 $ 11,215 $ 10,298 $ 13,306 7/31/2011 $ 12,230 $ 12,322 $ 13,896 7/31/2012 $ 12,456 $ 13,444 $ 14,904 7/31/2013 $ 13,542 $ 16,802 $ 14,620
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. NAV results represent the percent change in net asset value per share. Returns would have been lower had sales charges been reflected. POP returns reflect deduction of maximum 5.75% sales charge. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results shown reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The net expense ratio reflects contractual expense limitations currently in effect through December 1, 2014, for Class A shares. There can be no assurance that Pioneer will extend the expense limitation beyond such time. Please see the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. 22 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 Performance Update | 7/31/13 Class B Shares Pioneer Ibbotson Conservative Allocation Fund Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Pioneer Ibbotson Conservative Allocation Fund, compared to that of the Standard & Poor's 500 Index and the Barclays Aggregate Bond Index.
Average Annual Total Returns (As of July 31, 2013) -------------------------------------------------------------------------------- If If Period Held Redeemed -------------------------------------------------------------------------------- Life-of-Class 5/12/2005 3.72% 3.72% 5 Years 4.29 4.29 1 Year 7.63 3.63 -------------------------------------------------------------------------------- Expense Ratio (Per prospectus dated December 1, 2012) -------------------------------------------------------------------------------- Gross Net -------------------------------------------------------------------------------- 2.41% 2.38% --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $10,000 Investment
Pioneer Ibbotson Conservative Standard & Poor's Barclays Aggregate Allocation Fund 500 Index Bond Index 5/31/2005 $ 10,000 $ 10,000 $ 10,000 7/31/2005 $ 10,178 $ 10,387 $ 9,963 7/31/2006 $ 10,409 $ 10,945 $ 10,108 7/31/2007 $ 11,250 $ 12,710 $ 10,672 7/31/2008 $ 10,832 $ 11,300 $ 11,329 7/31/2009 $ 10,257 $ 9,046 $ 12,217 7/31/2010 $ 11,364 $ 10,298 $ 13,306 7/31/2011 $ 12,290 $ 12,322 $ 13,896 7/31/2012 $ 12,419 $ 13,444 $ 14,904 7/31/2013 $ 13,366 $ 16,802 $ 14,620
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. "If Held" results represent the percent change in net asset value per share. Returns would have been lower had sales charges been reflected. "If Redeemed" returns reflect the deduction of applicable contingent deferred sales charge (CDSC). The maximum CDSC for Class B shares is 4% and declines over five years. For more complete information, please see the prospectus. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results shown reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The net expense ratio reflects contractual expense limitations currently in effect through December 1, 2014, for Class B shares. There can be no assurance that Pioneer will extend the expense limitation beyond such time. Please see the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 23 Performance Update | 7/31/13 Class C Shares Pioneer Ibbotson Conservative Allocation Fund Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Pioneer Ibbotson Conservative Allocation Fund, compared to that of the Standard & Poor's 500 Index and the Barclays Aggregate Bond Index.
Average Annual Total Returns (As of July 31, 2013) -------------------------------------------------------------------------------- If If Period Held Redeemed -------------------------------------------------------------------------------- Life-of-Class 5/12/2005 3.74% 3.74% 5 Years 4.33 4.33 1 Year 7.83 7.83 -------------------------------------------------------------------------------- Expense Ratio (Per prospectus dated December 1, 2012) -------------------------------------------------------------------------------- Gross -------------------------------------------------------------------------------- 2.26% --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $10,000 Investment
Pioneer Ibbotson Conservative Standard & Poor's Barclays Aggregate Allocation Fund 500 Index Bond Index 5/31/2005 $ 10,000 $ 10,000 $ 10,000 7/31/2005 $ 10,168 $ 10,387 $ 9,963 7/31/2006 $ 10,419 $ 10,945 $ 10,108 7/31/2007 $ 11,253 $ 12,710 $ 10,672 7/31/2008 $ 10,844 $ 11,300 $ 11,329 7/31/2009 $ 10,244 $ 9,046 $ 12,217 7/31/2010 $ 11,362 $ 10,298 $ 13,306 7/31/2011 $ 12,291 $ 12,322 $ 13,896 7/31/2012 $ 12,433 $ 13,444 $ 14,904 7/31/2013 $ 13,407 $ 16,802 $ 14,620
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Class C shares held for less than one year are also subject to a 1% contingent deferred sales charge (CDSC). "If Held" results represent the percent change in net asset value per share. Returns would have been lower had sales charges been reflected. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results shown reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. 24 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 Performance Update | 7/31/13 Class Y Shares Pioneer Ibbotson Conservative Allocation Fund Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $5 million investment made in Pioneer Ibbotson Conservative Allocation Fund, compared to that of the Standard & Poor's 500 Index and the Barclays Aggregate Bond Index.
Average Annual Total Returns (As of July 31, 2013) -------------------------------------------------------------------------------- If If Period Held Redeemed -------------------------------------------------------------------------------- Life-of-Class 5/12/2005 3.47% 3.47% 5 Years 3.41 3.41 1 Year 8.00 8.00 -------------------------------------------------------------------------------- Expense Ratio (Per prospectus dated December 1, 2012) -------------------------------------------------------------------------------- Gross -------------------------------------------------------------------------------- 2.96% --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $5 Million Investment
Pioneer Ibbotson Conservative Standard & Poor's Barclays Aggregate Allocation Fund 500 Index Bond Index 5/31/2005 $ 5,000,000 $ 5,000,000 $ 5,000,000 7/31/2005 $ 5,094,059 $ 5,193,292 $ 4,981,499 7/31/2006 $ 5,268,849 $ 5,472,491 $ 5,054,204 7/31/2007 $ 5,738,328 $ 6,354,930 $ 5,336,140 7/31/2008 $ 5,541,848 $ 5,650,116 $ 5,664,329 7/31/2009 $ 4,950,847 $ 4,522,985 $ 6,108,716 7/31/2010 $ 5,539,507 $ 5,149,094 $ 6,652,993 7/31/2011 $ 6,047,788 $ 6,160,781 $ 6,948,116 7/31/2012 $ 6,068,113 $ 6,721,766 $ 7,452,144 7/31/2013 $ 6,553,856 $ 8,401,029 $ 7,310,182
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Performance shown for periods prior to the inception of the Fund's Class Y shares on October 5, 2005, reflects the NAV performance of the Fund's Class A shares. The performance does not reflect differences in expenses, including the Rule 12b-1 fees applicable to Class A shares. Since fees for Class A shares are generally higher than those of Class Y shares, the performance for Class Y shares prior to their inception would have been higher than the performance shown. Class Y shares are not subject to sales charges and are available for limited groups of eligible investors, including institutional investors. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results shown reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 25 Portfolio Summary | 7/31/13 Pioneer Ibbotson Moderate Allocation Fund [THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
Target Asset Allocations -------------------------------------------------------------------------------- Equity 60% Fixed Income 40% Actual Asset Allocations -------------------------------------------------------------------------------- U.S. Equity 38.3% Fixed Income 37.0% International Equity 24.7%
Actual Portfolio Holdings (based on total portfolio) --------------------------------------------------------------------------------
-------------------------------------------------------------------------------- U.S. Stocks -------------------------------------------------------------------------------- Pioneer Mid Cap Value Fund Class Y 7.22% -------------------------------------------------------------------------------- Pioneer Disciplined Value Fund Class Y 6.41 -------------------------------------------------------------------------------- Pioneer Select Mid Cap Growth Fund Class Y 4.55 -------------------------------------------------------------------------------- Pioneer Oak Ridge Small Cap Growth Fund Class Y 4.55 -------------------------------------------------------------------------------- Pioneer Fundamental Growth Fund Class Y 3.50 -------------------------------------------------------------------------------- Pioneer Fund Class Y 3.46 -------------------------------------------------------------------------------- Pioneer Equity Income Fund Class Y 2.32 -------------------------------------------------------------------------------- Pioneer Real Estate Shares Class Y 2.25 -------------------------------------------------------------------------------- Pioneer Core Equity Fund Class Y 2.25 -------------------------------------------------------------------------------- Pioneer Disciplined Growth Fund Class Y 1.78 -------------------------------------------------------------------------------- International Stocks -------------------------------------------------------------------------------- Pioneer International Value Fund Class Y 12.22% -------------------------------------------------------------------------------- Pioneer Global Equity Fund Class Y 8.88 -------------------------------------------------------------------------------- Pioneer Emerging Markets Fund Class Y 3.64 -------------------------------------------------------------------------------- Bonds -------------------------------------------------------------------------------- Pioneer Bond Fund Class Y 11.19% -------------------------------------------------------------------------------- Pioneer Short Term Income Fund Class Y 10.64 -------------------------------------------------------------------------------- Pioneer Global High Yield Fund Class Y 4.49 -------------------------------------------------------------------------------- Pioneer Strategic Income Fund Class Y 3.02 -------------------------------------------------------------------------------- Pioneer Dynamic Credit Fund Class Y 2.84 -------------------------------------------------------------------------------- Pioneer High Yield Fund Class Y 2.12 -------------------------------------------------------------------------------- Pioneer Global Aggregate Bond Fund Class Y 1.77 -------------------------------------------------------------------------------- Pioneer Multi-Asset Ultrashort Income Fund Class Y 0.90 --------------------------------------------------------------------------------
This list excludes temporary cash investments and derivative instruments. The portfolio is actively managed, and current holdings may be different. The holdings listed should not be considered recommendations to buy or sell any security listed. 26 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 Performance Update | 7/31/13 Class A Shares Pioneer Ibbotson Moderate Allocation Fund Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Pioneer Ibbotson Moderate Allocation Fund at public offering price, compared to that of the Standard & Poor's 500 Index and the Barclays Aggregate Bond Index.
Average Annual Total Returns (As of July 31, 2013) -------------------------------------------------------------------------------- Public Net Asset Offering Period Value (NAV) Price (POP) -------------------------------------------------------------------------------- Life-of-Class 8/9/2004 5.52% 4.82% 5 Years 5.30 4.07 1 Year 14.32 7.72 -------------------------------------------------------------------------------- Expense Ratio (Per prospectus dated December 1, 2012) -------------------------------------------------------------------------------- Gross -------------------------------------------------------------------------------- 1.50% --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $10,000 Investment
Pioneer Ibbotson Moderate Standard & Poor's Barclays Aggregate Allocation Fund 500 Index Bond Index 8/31/2004 $ 9,425 $ 10,000 $ 10,000 7/31/2005 $ 10,570 $ 11,359 $ 10,283 7/31/2006 $ 11,097 $ 11,970 $ 10,433 7/31/2007 $ 12,493 $ 13,900 $ 11,015 7/31/2008 $ 11,560 $ 12,358 $ 11,692 7/31/2009 $ 10,266 $ 9,893 $ 12,610 7/31/2010 $ 11,627 $ 11,262 $ 13,733 7/31/2011 $ 13,128 $ 13,475 $ 14,342 7/31/2012 $ 13,092 $ 14,702 $ 15,383 7/31/2013 $ 14,966 $ 18,375 $ 15,090
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. NAV results represent the percent change in net asset value per share. Returns would have been lower had sales charges been reflected. POP returns reflect deduction of the maximum 5.75% sales charge. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results shown reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 27 Performance Update | 7/31/13 Class B Shares Pioneer Ibbotson Moderate Allocation Fund Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Pioneer Ibbotson Moderate Allocation Fund, compared to that of the Standard & Poor's 500 Index and the Barclays Aggregate Bond Index.
Average Annual Total Returns (As of July 31, 2013) -------------------------------------------------------------------------------- If If Period Held Redeemed -------------------------------------------------------------------------------- Life-of-Class 8/9/2004 4.30% 4.30% 5 Years 4.47 4.47 1 Year 13.31 9.31 -------------------------------------------------------------------------------- Expense Ratio (Per prospectus dated December 1, 2012) -------------------------------------------------------------------------------- Gross Net -------------------------------------------------------------------------------- 2.38% 2.30% --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $10,000 Investment
Pioneer Ibbotson Moderate Standard & Poor's Barclays Aggregate Allocation Fund 500 Index Bond Index 8/31/2004 $ 10,000 $ 10,000 $ 10,000 7/31/2005 $ 10,978 $ 11,359 $ 10,283 7/31/2006 $ 11,417 $ 11,970 $ 10,433 7/31/2007 $ 12,753 $ 13,900 $ 11,015 7/31/2008 $ 11,691 $ 12,358 $ 11,692 7/31/2009 $ 10,311 $ 9,893 $ 12,610 7/31/2010 $ 11,588 $ 11,262 $ 13,733 7/31/2011 $ 12,967 $ 13,475 $ 14,342 7/31/2012 $ 12,838 $ 14,702 $ 15,383 7/31/2013 $ 14,547 $ 18,375 $ 15,090
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. "If Held" results represent the percent change in net asset value per share. Returns would have been lower had sales charges been reflected. "If Redeemed" returns reflect the deduction of applicable contingent deferred sales charge (CDSC). The maximum CDSC for Class B shares is 4% and declines over five years. For more complete information, please see the prospectus. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results shown reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The net expense ratio reflects contractual expense limitations currently in effect through December 1, 2014, for Class B shares. There can be no assurance that Pioneer will extend the expense limitation beyond such time. Please see the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. 28 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 Performance Update | 7/31/13 Class C Shares Pioneer Ibbotson Moderate Allocation Fund Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Pioneer Ibbotson Moderate Allocation Fund, compared to that of the Standard & Poor's 500 Index and the Barclays Aggregate Bond Index.
Average Annual Total Returns (As of July 31, 2013) -------------------------------------------------------------------------------- If If Period Held Redeemed -------------------------------------------------------------------------------- Life-of-Class 8/9/2004 4.29% 4.29% 5 Years 4.54 4.54 1 Year 13.56 13.56 -------------------------------------------------------------------------------- Expense Ratio (Per prospectus dated December 1, 2012) -------------------------------------------------------------------------------- Gross -------------------------------------------------------------------------------- 2.19% --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $10,000 Investment
Pioneer Ibbotson Moderate Standard & Poor's Barclays Aggregate Allocation Fund 500 Index Bond Index 8/31/2004 $ 10,000 $ 10,000 $ 10,000 7/31/2005 $ 11,122 $ 11,359 $ 10,283 7/31/2006 $ 11,573 $ 11,970 $ 10,433 7/31/2007 $ 12,941 $ 13,900 $ 11,015 7/31/2008 $ 11,882 $ 12,358 $ 11,692 7/31/2009 $ 10,474 $ 9,893 $ 12,610 7/31/2010 $ 11,776 $ 11,262 $ 13,733 7/31/2011 $ 13,203 $ 13,475 $ 14,342 7/31/2012 $ 13,061 $ 14,702 $ 15,383 7/31/2013 $ 14,833 $ 18,375 $ 15,090
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Class C shares held for less than one year are also subject to a 1% contingent deferred sales charge (CDSC). "If Held" results represent the percent change in net asset value per share. Returns would have been lower had sales charges been reflected. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results shown reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 29 Performance Update | 7/31/13 Class Y Shares Pioneer Ibbotson Moderate Allocation Fund Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $5 million investment made in Pioneer Ibbotson Moderate Allocation Fund, compared to that of the Standard & Poor's 500 Index and the Barclays Aggregate Bond Index.
Average Annual Total Returns (As of July 31, 2013) -------------------------------------------------------------------------------- If If Period Held Redeemed -------------------------------------------------------------------------------- Life-of-Class 8/9/2004 5.97% 5.97% 5 Years 5.86 5.86 1 Year 14.68 14.68 -------------------------------------------------------------------------------- Expense Ratio (Per prospectus dated December 1, 2012) -------------------------------------------------------------------------------- Gross -------------------------------------------------------------------------------- 1.16% --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $5 Million Investment
Pioneer Ibbotson Moderate Standard & Poor's Barclays Aggregate Allocation Fund 500 Index Bond Index 8/31/2004 $ 5,000,000 $ 5,000,000 $ 5,000,000 7/31/2005 $ 5,606,494 $ 5,679,424 $ 5,141,454 7/31/2006 $ 5,913,111 $ 5,984,757 $ 5,216,493 7/31/2007 $ 6,680,624 $ 6,949,801 $ 5,507,482 7/31/2008 $ 6,206,468 $ 6,179,011 $ 5,846,209 7/31/2009 $ 5,580,029 $ 4,946,373 $ 6,304,865 7/31/2010 $ 6,347,323 $ 5,631,091 $ 6,866,618 7/31/2011 $ 7,195,925 $ 6,737,480 $ 7,171,216 7/31/2012 $ 7,195,817 $ 7,350,977 $ 7,691,429 7/31/2013 $ 8,252,035 $ 9,187,432 $ 7,544,908
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Performance shown for periods prior to the inception of the Fund's Class Y shares on September 23, 2005, reflects the NAV performance of the Fund's Class A shares. The performance does not reflect differences in expenses, including the Rule 12b-1 fees applicable to Class A shares. Since fees for Class A shares are generally higher than those of Class Y shares, the performance for Class Y shares prior to their inception would have been higher than the performance shown. Class Y shares are not subject to sales charges and are available for limited groups of eligible investors, including institutional investors. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results shown reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. 30 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 Portfolio Summary | 7/31/13 Pioneer Ibbotson Growth Allocation Fund
Target Asset Allocations -------------------------------------------------------------------------------- Equity 70% Fixed Income 30% Actual Asset Allocations -------------------------------------------------------------------------------- U.S. Equity 46.1% International Equity 29.2% Fixed Income 24.7%
Actual Portfolio Holdings (based on total portfolio) --------------------------------------------------------------------------------
-------------------------------------------------------------------------------- U.S. Stocks -------------------------------------------------------------------------------- Pioneer Mid Cap Value Fund Class Y 7.85% -------------------------------------------------------------------------------- Pioneer Disciplined Value Fund Class Y 7.31 -------------------------------------------------------------------------------- Pioneer Select Mid Cap Growth Fund Class Y 6.41 -------------------------------------------------------------------------------- Pioneer Oak Ridge Small Cap Growth Fund Class Y 4.15 -------------------------------------------------------------------------------- Pioneer Fundamental Growth Fund Class Y 4.04 -------------------------------------------------------------------------------- Pioneer Fund Class Y 3.63 -------------------------------------------------------------------------------- Pioneer Equity Income Fund Class Y 3.53 -------------------------------------------------------------------------------- Pioneer Real Estate Shares Class Y 3.39 -------------------------------------------------------------------------------- Pioneer Core Equity Fund Class Y 3.38 -------------------------------------------------------------------------------- Pioneer Disciplined Growth Fund Class Y 2.42 -------------------------------------------------------------------------------- Pioneer Oak Ridge Large Cap Growth Fund Class Y 0.00* -------------------------------------------------------------------------------- International Stocks -------------------------------------------------------------------------------- Pioneer International Value Fund Class Y 14.15% -------------------------------------------------------------------------------- Pioneer Global Equity Fund Class Y 9.95 -------------------------------------------------------------------------------- Pioneer Emerging Markets Fund Class Y 5.09 -------------------------------------------------------------------------------- Bonds -------------------------------------------------------------------------------- Pioneer Bond Fund Class Y 9.61% -------------------------------------------------------------------------------- Pioneer Short Term Income Fund Class Y 7.43 -------------------------------------------------------------------------------- Pioneer Strategic Income Fund Class Y 2.94 -------------------------------------------------------------------------------- Pioneer Global High Yield Fund Class Y 1.92 -------------------------------------------------------------------------------- Pioneer Global Aggregate Bond Fund Class Y 1.70 -------------------------------------------------------------------------------- Pioneer High Yield Fund Class Y 0.94 -------------------------------------------------------------------------------- Pioneer Dynamic Credit Fund Class Y 0.16 --------------------------------------------------------------------------------
This list excludes temporary cash investments and derivative instruments. The portfolio is actively managed, and current holdings may be different. The holdings listed should not be considered recommendations to buy or sell any security listed. * Rounds to less than 0.01%. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 31 Performance Update | 7/31/13 Class A Shares Pioneer Ibbotson Growth Allocation Fund Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Pioneer Ibbotson Growth Allocation Fund at public offering price, compared to that of the Standard & Poor's 500 Index and the Barclays Aggregate Bond Index.
Average Annual Total Returns (As of July 31, 2013) -------------------------------------------------------------------------------- Public Net Asset Offering Period Value (NAV) Price (POP) -------------------------------------------------------------------------------- Life-of-Class 8/9/2004 5.71% 5.01% 5 Years 4.89 3.66 1 Year 16.40 9.66 -------------------------------------------------------------------------------- Expense Ratio (Per prospectus dated December 1, 2012) -------------------------------------------------------------------------------- Gross -------------------------------------------------------------------------------- 1.58% --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $10,000 Investment
Pioneer Ibbotson Standard & Poor's Barclays Aggregate Growth Allocation Fund 500 Index Bond Index 8/31/2004 $ 9,425 $ 10,000 $ 10,000 7/31/2005 $ 10,892 $ 11,359 $ 10,283 7/31/2006 $ 11,577 $ 11,970 $ 10,433 7/31/2007 $ 13,281 $ 13,900 $ 11,015 7/31/2008 $ 11,969 $ 12,358 $ 11,692 7/31/2009 $ 10,115 $ 9,893 $ 12,610 7/31/2010 $ 11,520 $ 11,262 $ 13,733 7/31/2011 $ 13,231 $ 13,475 $ 14,342 7/31/2012 $ 13,058 $ 14,702 $ 15,383 7/31/2013 $ 15,199 $ 18,375 $ 15,090
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. NAV results represent the percent change in net asset value per share. Returns would have been lower had sales charges been reflected. POP returns reflect deduction of the maximum 5.75% sales charge. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results shown reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. 32 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 Performance Update | 7/31/13 Class B Shares Pioneer Ibbotson Growth Allocation Fund Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Pioneer Ibbotson Growth Allocation Fund, compared to that of the Standard & Poor's 500 Index and the Barclays Aggregate Bond Index.
Average Annual Total Returns (As of July 31, 2013) -------------------------------------------------------------------------------- If If Period Held Redeemed -------------------------------------------------------------------------------- Life-of-Class 8/9/2004 3.90% 3.90% 5 Years 4.11 4.11 1 Year 15.46 11.46 -------------------------------------------------------------------------------- Expense Ratio (Per prospectus dated December 1, 2012) -------------------------------------------------------------------------------- Gross Net -------------------------------------------------------------------------------- 2.48% 2.39% --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $10,000 Investment
Pioneer Ibbotson Standard & Poor's Barclays Aggregate Growth Allocation Fund 500 Index Bond Index 8/31/2004 $ 10,000 $ 10,000 $ 10,000 7/31/2005 $ 11,046 $ 11,359 $ 10,283 7/31/2006 $ 11,657 $ 11,970 $ 10,433 7/31/2007 $ 13,250 $ 13,900 $ 11,015 7/31/2008 $ 11,838 $ 12,358 $ 11,692 7/31/2009 $ 9,938 $ 9,893 $ 12,610 7/31/2010 $ 11,233 $ 11,262 $ 13,733 7/31/2011 $ 12,795 $ 13,475 $ 14,342 7/31/2012 $ 12,538 $ 14,702 $ 15,383 7/31/2013 $ 14,476 $ 18,375 $ 15,090
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. "If Held" results represent the percent change in net asset value per share. Returns would have been lower had sales charges been reflected. "If Redeemed" returns reflect the deduction of applicable contingent deferred sales charge (CDSC). The maximum CDSC for Class B shares is 4% and declines over five years. For more complete information, please see the prospectus. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results shown reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The net expense ratio reflects contractual expense limitations currently in effect through December 1, 2014, for Class B shares. There can be no assurance that Pioneer will extend the expense limitation beyond such time. Please see the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 33 Performance Update | 7/31/13 Class C Shares Pioneer Ibbotson Growth Allocation Fund Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Pioneer Ibbotson Growth Allocation Fund, compared to that of the Standard & Poor's 500 Index and the Barclays Aggregate Bond Index.
Average Annual Total Returns (As of July 31, 2013) -------------------------------------------------------------------------------- If If Period Held Redeemed -------------------------------------------------------------------------------- Life-of-Class 8/9/2004 4.62% 4.62% 5 Years 4.19 4.19 1 Year 15.58 15.58 -------------------------------------------------------------------------------- Expense Ratio (Per prospectus dated December 1, 2012) -------------------------------------------------------------------------------- Gross -------------------------------------------------------------------------------- 2.28% --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $10,000 Investment
Pioneer Ibbotson Standard & Poor's Barclays Aggregate Growth Allocation Fund 500 Index Bond Index 8/31/2004 $ 10,000 $ 10,000 $ 10,000 7/31/2005 $ 11,310 $ 11,359 $ 10,283 7/31/2006 $ 11,933 $ 11,970 $ 10,433 7/31/2007 $ 13,575 $ 13,900 $ 11,015 7/31/2008 $ 12,158 $ 12,358 $ 11,692 7/31/2009 $ 10,203 $ 9,893 $ 12,610 7/31/2010 $ 11,537 $ 11,262 $ 13,733 7/31/2011 $ 13,164 $ 13,475 $ 14,342 7/31/2012 $ 12,913 $ 14,702 $ 15,383 7/31/2013 $ 14,925 $ 18,375 $ 15,090
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Class C shares held for less than one year are also subject to a 1% contingent deferred sales charge (CDSC). "If Held" results represent the percent change in net asset value per share. Returns would have been lower had sales charges been reflected. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results shown reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. 34 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 Performance Update | 7/31/13 Class Y Shares Pioneer Ibbotson Growth Allocation Fund Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $5 million investment made in Pioneer Ibbotson Growth Allocation Fund, compared to that of the Standard & Poor's 500 Index and the Barclays Aggregate Bond Index.
Average Annual Total Returns (As of July 31, 2013) -------------------------------------------------------------------------------- If If Period Held Redeemed -------------------------------------------------------------------------------- Life-of-Class 8/9/2004 6.20% 6.20% 5 Years 5.36 5.36 1 Year 16.70 16.70 -------------------------------------------------------------------------------- Expense Ratio (Per prospectus dated December 1, 2012) -------------------------------------------------------------------------------- Gross -------------------------------------------------------------------------------- 1.32% --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $5 Million Investment
Pioneer Ibbotson Standard & Poor's Barclays Aggregate Growth Allocation Fund 500 Index Bond Index 8/31/2004 $ 5,000,000 $ 5,000,000 $ 5,000,000 7/31/2005 $ 5,776,725 $ 5,679,424 $ 5,141,454 7/31/2006 $ 6,193,377 $ 5,984,757 $ 5,216,493 7/31/2007 $ 7,114,596 $ 6,949,801 $ 5,507,482 7/31/2008 $ 6,470,796 $ 6,179,011 $ 5,846,209 7/31/2009 $ 5,585,334 $ 4,946,373 $ 6,304,865 7/31/2010 $ 6,385,461 $ 5,631,091 $ 6,866,618 7/31/2011 $ 7,368,224 $ 6,737,480 $ 7,171,216 7/31/2012 $ 7,200,258 $ 7,350,977 $ 7,691,429 7/31/2013 $ 8,402,575 $ 9,187,432 $ 7,544,908
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Performance shown for periods prior to the inception of the Fund's Class Y shares on September 26, 2005, reflects the NAV performance of the Fund's Class A shares. The performance does not reflect differences in expenses, including the Rule 12b-1 fees applicable to Class A shares. Since fees for Class A shares are generally higher than those of Class Y shares, the performance for Class Y shares prior to their inception would have been higher than the performance shown. Class Y shares are not subject to sales charges and are available for limited groups of eligible investors, including institutional investors. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results shown reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 35 Portfolio Summary | 7/31/13 Pioneer Ibbotson Aggressive Allocation Fund
Target Asset Allocations -------------------------------------------------------------------------------- Equity 90% Fixed Income 10% Actual Asset Allocations -------------------------------------------------------------------------------- U.S. Equity 51.4% International Equity 37.6% Fixed Income 11.0%
Actual Portfolio Holdings (based on total portfolio) --------------------------------------------------------------------------------
-------------------------------------------------------------------------------- U.S. Stocks -------------------------------------------------------------------------------- Pioneer Mid Cap Value Fund Class Y 10.80% -------------------------------------------------------------------------------- Pioneer Select Mid Cap Growth Fund Class Y 7.55 -------------------------------------------------------------------------------- Pioneer Disciplined Value Fund Class Y 6.68 -------------------------------------------------------------------------------- Pioneer Oak Ridge Small Cap Growth Fund Class Y 5.70 -------------------------------------------------------------------------------- Pioneer Real Estate Shares Class Y 4.52 -------------------------------------------------------------------------------- Pioneer Fundamental Growth Fund Class Y 3.57 -------------------------------------------------------------------------------- Pioneer Fund Class Y 3.48 -------------------------------------------------------------------------------- Pioneer Equity Income Fund Class Y 3.39 -------------------------------------------------------------------------------- Pioneer Core Equity Fund Class Y 3.22 -------------------------------------------------------------------------------- Pioneer Disciplined Growth Fund Class Y 2.49 -------------------------------------------------------------------------------- International Stocks -------------------------------------------------------------------------------- Pioneer International Value Fund Class Y 19.40% -------------------------------------------------------------------------------- Pioneer Global Equity Fund Class Y 11.35 -------------------------------------------------------------------------------- Pioneer Emerging Markets Fund Class Y 6.84 -------------------------------------------------------------------------------- Bonds -------------------------------------------------------------------------------- Pioneer Bond Fund Class Y 5.69% -------------------------------------------------------------------------------- Pioneer Short Term Income Fund Class Y 2.72 -------------------------------------------------------------------------------- Pioneer Strategic Income Fund Class Y 2.60 --------------------------------------------------------------------------------
This list excludes temporary cash investments and derivative instruments. The portfolio is actively managed, and current holdings may be different. The holdings listed should not be considered recommendations to buy or sell any security listed. 36 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 Performance Update | 7/31/13 Class A Shares Pioneer Ibbotson Aggressive Allocation Fund Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Pioneer Ibbotson Aggressive Allocation Fund at public offering price, compared to that of the Standard & Poor's 500 Index and the Barclays Aggregate Bond Index.
Average Annual Total Returns (As of July 31, 2013) -------------------------------------------------------------------------------- Public Net Asset Offering Period Value (NAV) Price (POP) -------------------------------------------------------------------------------- Life-of-Class 8/9/2004 5.78% 5.08% 5 Years 4.39 3.16 1 Year 18.86 11.99 -------------------------------------------------------------------------------- Expense Ratio (Per prospectus dated December 1, 2012) -------------------------------------------------------------------------------- Gross Net -------------------------------------------------------------------------------- 1.72% 1.70% --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $10,000 Investment
Pioneer Ibbotson Aggressive Standard & Poor's Barclays Aggregate Allocation Fund 500 Index Bond Index 8/31/2004 $ 9,425 $ 10,000 $ 10,000 7/31/2005 $ 11,173 $ 11,359 $ 10,283 7/31/2006 $ 11,989 $ 11,970 $ 10,433 7/31/2007 $ 13,956 $ 13,900 $ 11,015 7/31/2008 $ 12,276 $ 12,358 $ 11,692 7/31/2009 $ 9,938 $ 9,893 $ 12,610 7/31/2010 $ 11,345 $ 11,262 $ 13,733 7/31/2011 $ 13,208 $ 13,475 $ 14,342 7/31/2012 $ 12,804 $ 14,702 $ 15,383 7/31/2013 $ 15,218 $ 18,375 $ 15,090
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. NAV results represent the percent change in net asset value per share. Returns would have been lower had sales charges been reflected. POP returns reflect deduction of the maximum 5.75% sales charge. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results shown reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The net expense ratio reflects contractual expense limitations currently in effect through December 1, 2014, for Class A shares. There can be no assurance that Pioneer will extend the expense limitation beyond such time. Please see the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 37 Performance Update | 7/31/13 Class B Shares Pioneer Ibbotson Aggressive Allocation Fund Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Pioneer Ibbotson Aggressive Allocation Fund, compared to that of the Standard & Poor's 500 Index and the Barclays Aggregate Bond Index.
Average Annual Total Returns (As of July 31, 2013) -------------------------------------------------------------------------------- If If Period Held Redeemed -------------------------------------------------------------------------------- Life-of-Class 8/9/2004 4.58% 4.58% 5 Years 3.56 3.56 1 Year 17.79 13.79 -------------------------------------------------------------------------------- Expense Ratio (Per prospectus dated December 1, 2012) -------------------------------------------------------------------------------- Gross Net -------------------------------------------------------------------------------- 2.62% 2.49% --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $10,000 Investment
Pioneer Ibbotson Aggressive Standard & Poor's Barclays Aggregate Allocation Fund 500 Index Bond Index 8/31/2004 $ 10,000 $ 10,000 $ 10,000 7/31/2005 $ 11,690 $ 11,359 $ 10,283 7/31/2006 $ 12,434 $ 11,970 $ 10,433 7/31/2007 $ 14,361 $ 13,900 $ 11,015 7/31/2008 $ 12,534 $ 12,358 $ 11,692 7/31/2009 $ 10,066 $ 9,893 $ 12,610 7/31/2010 $ 11,397 $ 11,262 $ 13,733 7/31/2011 $ 13,165 $ 13,475 $ 14,342 7/31/2012 $ 12,675 $ 14,702 $ 15,383 7/31/2013 $ 14,929 $ 18,375 $ 15,090
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. "If Held" results represent the percent change in net asset value per share. Returns would have been lower had sales charges been reflected. "If Redeemed" returns reflect the deduction of applicable contingent deferred sales charge (CDSC). The maximum CDSC for Class B shares is 4% and declines over five years. For more complete information, please see the prospectus. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results shown reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The net expense ratio reflects contractual expense limitations currently in effect through December 1, 2014, for Class B shares. There can be no assurance that Pioneer will extend the expense limitation beyond such time. Please see the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. 38 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 Performance Update | 7/31/13 Class C Shares Pioneer Ibbotson Aggressive Allocation Fund Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Pioneer Ibbotson Aggressive Allocation Fund, compared to that of the Standard & Poor's 500 Index and the Barclays Aggregate Bond Index.
Average Annual Total Returns (As of July 31, 2013) -------------------------------------------------------------------------------- If If Period Held Redeemed -------------------------------------------------------------------------------- Life-of-Class 8/9/2004 4.80% 4.80% 5 Years 3.64 3.64 1 Year 17.97 17.97 -------------------------------------------------------------------------------- Expense Ratio (Per prospectus dated December 1, 2012) -------------------------------------------------------------------------------- Gross -------------------------------------------------------------------------------- 2.41% --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $10,000 Investment
Pioneer Ibbotson Aggressive Standard & Poor's Barclays Aggregate Allocation Fund 500 Index Bond Index 8/31/2004 $ 10,000 $ 10,000 $ 10,000 7/31/2005 $ 11,563 $ 11,359 $ 10,283 7/31/2006 $ 12,299 $ 11,970 $ 10,433 7/31/2007 $ 14,221 $ 13,900 $ 11,015 7/31/2008 $ 12,429 $ 12,358 $ 11,692 7/31/2009 $ 9,979 $ 9,893 $ 12,610 7/31/2010 $ 11,302 $ 11,262 $ 13,733 7/31/2011 $ 13,069 $ 13,475 $ 14,342 7/31/2012 $ 12,597 $ 14,702 $ 15,383 7/31/2013 $ 14,861 $ 18,375 $ 15,090
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Class C shares held for less than one year are also subject to a 1% contingent deferred sales charge (CDSC). "If Held" results represent the percent change in net asset value per share. Returns would have been lower had sales charges been reflected. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results shown reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 39 Performance Update | 7/31/13 Class Y Shares Pioneer Ibbotson Aggressive Allocation Fund Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $5 million investment made in Pioneer Ibbotson Aggressive Allocation Fund, compared to that of the Standard & Poor's 500 Index and the Barclays Aggregate Bond Index.
Average Annual Total Returns (As of July 31, 2013) -------------------------------------------------------------------------------- If If Period Held Redeemed -------------------------------------------------------------------------------- Life-of-Class 8/9/2004 6.04% 6.04% 5 Years 4.39 4.39 1 Year 18.87 18.87 -------------------------------------------------------------------------------- Expense Ratio (Per prospectus dated December 1, 2012) -------------------------------------------------------------------------------- Gross -------------------------------------------------------------------------------- 1.40% --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $5 Million Investment
Pioneer Ibbotson Aggressive Barclays Aggregate Standard & Poor's Allocation Fund Bond Index 500 Index 8/31/2004 $ 5,000,000 $ 5,000,000 $ 5,000,000 7/31/2005 $ 5,929,998 $ 5,141,454 $ 5,679,424 7/31/2006 $ 6,379,347 $ 5,216,493 $ 5,984,757 7/31/2007 $ 7,470,251 $ 5,507,482 $ 6,949,801 7/31/2008 $ 6,661,413 $ 5,846,209 $ 6,179,011 7/31/2009 $ 5,372,710 $ 6,304,865 $ 4,946,373 7/31/2010 $ 6,151,437 $ 6,866,618 $ 5,631,091 7/31/2011 $ 7,216,848 $ 7,171,216 $ 6,737,480 7/31/2012 $ 6,945,791 $ 7,691,429 $ 7,350,977 7/31/2013 $ 8,256,149 $ 7,544,908 $ 9,187,432
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Performance shown for periods prior to the inception of the Fund's Class Y shares on September 23, 2005 reflects the NAV performance of the Fund's Class A shares. The performance does not reflect differences in expenses, including the Rule 12b-1 fees applicable to Class A shares. Since fees for Class A shares are generally higher than those of Class Y shares, the performance for Class Y shares prior to their inception would have been higher than the performance shown. Class Y shares are not subject to sales charges and are available for limited groups of eligible investors, including institutional investors. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results shown reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. 40 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 Schedule of Investments | 7/31/13 Pioneer Ibbotson Conservative Allocation Fund
------------------------------------------------------------------------------------- Shares Value ------------------------------------------------------------------------------------- MUTUAL FUNDS -- 95.1% PIONEER FUNDS* -- 95.1% 1,548,643 Pioneer Bond Fund Class Y $ 14,805,024 98,861 Pioneer Core Equity Fund Class Y 1,417,667 45,907 Pioneer Disciplined Growth Fund Class Y 676,665 113,201 Pioneer Disciplined Value Fund Class Y 2,350,063 269,721 Pioneer Dynamic Credit Fund Class Y 2,656,747 27,575 Pioneer Emerging Markets Fund Class Y 654,901 21,310 Pioneer Equity Income Fund Class Y 710,249 96,168 Pioneer Floating Rate Fund Class Y 670,293 54,532 Pioneer Fund Class Y 2,133,294 91,257 Pioneer Fundamental Growth Fund Class Y 1,412,661 120,905 Pioneer Global Aggregate Bond Fund Class Y 1,327,531 238,910 Pioneer Global Equity Fund Class Y 2,778,521 402,965 Pioneer Global High Yield Fund Class Y 3,981,293 245,139 Pioneer High Yield Fund Class Y 2,662,214 256,804 Pioneer International Value Fund Class Y 5,382,618 53,075 Pioneer Mid Cap Value Fund Class Y 1,459,570 66,345 Pioneer Multi-Asset Ultrashort Income Fund Class Y 667,433 17,226 Pioneer Oak Ridge Small Cap Growth Fund Class Y 635,122 25,358 Pioneer Real Estate Shares Class Y 658,542 24,463 Pioneer Select Mid Cap Growth Fund Class Y 921,515 1,082,933 Pioneer Short Term Income Fund Class Y 10,450,302 589,216 Pioneer Strategic Income Fund Class Y 6,487,267 ------------------------------------------------------------------------------------- TOTAL MUTUAL FUNDS (Cost $56,875,160) $ 64,899,492 ------------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 95.1% (Cost $56,875,160) (a) $ 64,899,492 ------------------------------------------------------------------------------------- OTHER ASSETS AND LIABILITIES -- 4.9% $ 3,362,256 ------------------------------------------------------------------------------------- TOTAL NET ASSETS -- 100.0% $ 68,261,748 =====================================================================================
* Affiliated funds managed by Pioneer Investment Management, Inc. (a) At July 31, 2013, the net unrealized appreciation on investments based on cost for federal tax purposes of $57,756,227 was as follows:
Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost $ 8,054,364 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value (911,099) ----------- Net unrealized appreciation $ 7,143,265 ===========
The accompanying notes are an integral part of these financial statements. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 41 Schedule of Investments | 7/31/13 Pioneer Ibbotson Conservative Allocation Fund (continued) Purchases and sales of securities (excluding temporary cash investments) for the year ended July 31, 2013 aggregated $12,163,155 and $10,462,993, respectively. Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in the three broad levels below. Level 1 -- quoted prices in active markets for identical securities. Level 2 -- other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.) See Notes to Financial Statements -- Note 1A. Level 3 -- significant unobservable inputs (including the Fund's own assumptions in determining fair value of investments) See Notes to Financial Statements -- Note 1A. Generally, equity securities are categorized as Level 1, fixed income securities and senior loans as Level 2 and securities valued using fair value methods (other than prices supplied by independent pricing services) as Level 3. See Notes to Financial Statements -- Note 1A. The following is a summary of the inputs used as of July 31, 2013, in valuing the Fund's assets:
-------------------------------------------------------------------------------- Level 1 Level 2 Level 3 Total -------------------------------------------------------------------------------- Mutual Funds $64,899,492 $ -- $ -- $64,899,492 -------------------------------------------------------------------------------- Total $64,899,492 $ -- $ -- $64,899,492 ================================================================================
During the year ended July 31, 2013, there were no transfers between Levels 1, 2 and 3. The accompanying notes are an integral part of these financial statements. 42 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 Schedule of Investments | 7/31/13 Pioneer Ibbotson Moderate Allocation Fund
------------------------------------------------------------------------------------- Shares Value ------------------------------------------------------------------------------------- MUTUAL FUNDS -- 98.0% PIONEER FUNDS* -- 98.0% 2,381,615 Pioneer Bond Fund Class Y $ 22,768,238 318,554 Pioneer Core Equity Fund Class Y 4,568,064 245,880 Pioneer Disciplined Growth Fund Class Y 3,624,266 627,827 Pioneer Disciplined Value Fund Class Y 13,033,686 587,132 Pioneer Dynamic Credit Fund Class Y 5,783,250 311,641 Pioneer Emerging Markets Fund Class Y 7,401,474 141,847 Pioneer Equity Income Fund Class Y 4,727,765 180,119 Pioneer Fund Class Y 7,046,239 459,807 Pioneer Fundamental Growth Fund Class Y 7,117,807 328,579 Pioneer Global Aggregate Bond Fund Class Y 3,607,802 1,552,569 Pioneer Global Equity Fund Class Y 18,056,376 924,837 Pioneer Global High Yield Fund Class Y 9,137,388 396,720 Pioneer High Yield Fund Class Y 4,308,375 1,186,270 Pioneer International Value Fund Class Y 24,864,225 533,860 Pioneer Mid Cap Value Fund Class Y 14,681,144 182,130 Pioneer Multi-Asset Ultrashort Income Fund Class Y 1,832,227 250,990 Pioneer Oak Ridge Small Cap Growth Fund Class Y 9,254,015 175,992 Pioneer Real Estate Shares Class Y 4,570,507 245,795 Pioneer Select Mid Cap Growth Fund Class Y 9,259,096 2,243,233 Pioneer Short Term Income Fund Class Y 21,647,196 557,557 Pioneer Strategic Income Fund Class Y 6,138,707 ------------------------------------------------------------------------------------- TOTAL MUTUAL FUNDS (Cost $163,136,458) $203,427,847 ------------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 98.0% (Cost $163,136,458) (a) $203,427,847 ------------------------------------------------------------------------------------- OTHER ASSETS AND LIABILITIES -- 2.0% $ 4,187,490 ------------------------------------------------------------------------------------- TOTAL NET ASSETS -- 100.0% $207,615,337 =====================================================================================
* Affiliated funds managed by Pioneer Investment Management, Inc. (a) At July 31, 2013, the net unrealized appreciation on investments based on cost for federal tax purposes of $165,960,743 was as follows:
Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost $37,616,584 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value (149,480) ----------- Net unrealized appreciation $37,467,104 ===========
The accompanying notes are an integral part of these financial statements. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 43 Schedule of Investments | 7/31/13 Pioneer Ibbotson Moderate Allocation Fund (continued) Purchases and sales of securities (excluding temporary cash investments) for the year ended July 31, 2013 aggregated $18,075,444 and $21,942,285, respectively. Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in the three broad levels below. Level 1 -- quoted prices in active markets for identical securities. Level 2 -- other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.) See Notes to Financial Statements -- Note 1A. Level 3 -- significant unobservable inputs (including the Fund's own assumptions in determining fair value of investments) See Notes to Financial Statements -- Note 1A. Generally, equity securities are categorized as Level 1, fixed income securities and senior loans as Level 2 and securities valued using fair value methods (other than prices supplied by independent pricing services) as Level 3. See Notes to Financial Statements -- Note 1A. The following is a summary of the inputs used as of July 31, 2013, in valuing the Fund's assets:
-------------------------------------------------------------------------------- Level 1 Level 2 Level 3 Total -------------------------------------------------------------------------------- Mutual Funds $203,427,847 $ -- $ -- $203,427,847 -------------------------------------------------------------------------------- Total $203,427,847 $ -- $ -- $203,427,847 ================================================================================
During the year ended July 31, 2013, there were no transfers between Levels 1, 2 and 3. The accompanying notes are an integral part of these financial statements. 44 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 Schedule of Investments | 7/31/13 Pioneer Ibbotson Growth Allocation Fund
------------------------------------------------------------------------------------- Shares Value ------------------------------------------------------------------------------------- MUTUAL FUNDS -- 100.1% PIONEER FUNDS* -- 100.1% 2,229,163 Pioneer Bond Fund Class Y $ 21,310,800 521,874 Pioneer Core Equity Fund Class Y 7,483,672 363,811 Pioneer Disciplined Growth Fund Class Y 5,362,579 780,471 Pioneer Disciplined Value Fund Class Y 16,202,568 35,382 Pioneer Dynamic Credit Fund Class Y 348,514 475,550 Pioneer Emerging Markets Fund Class Y 11,294,303 234,993 Pioneer Equity Income Fund Class Y 7,832,301 205,658 Pioneer Fund Class Y 8,045,339 578,521 Pioneer Fundamental Growth Fund Class Y 8,955,509 343,220 Pioneer Global Aggregate Bond Fund Class Y 3,768,553 1,895,863 Pioneer Global Equity Fund Class Y 22,048,889 430,640 Pioneer Global High Yield Fund Class Y 4,254,728 190,861 Pioneer High Yield Fund Class Y 2,072,752 1,496,636 Pioneer International Value Fund Class Y 31,369,491 632,892 Pioneer Mid Cap Value Fund Class Y 17,404,527 597 Pioneer Oak Ridge Large Cap Growth Fund Class Y 9,627 249,458 Pioneer Oak Ridge Small Cap Growth Fund Class Y 9,197,515 289,590 Pioneer Real Estate Shares Class Y 7,520,639 377,365 Pioneer Select Mid Cap Growth Fund Class Y 14,215,336 1,705,742 Pioneer Short Term Income Fund Class Y 16,460,406 592,011 Pioneer Strategic Income Fund Class Y 6,518,044 ------------------------------------------------------------------------------------- TOTAL MUTUAL FUNDS (Cost $172,150,299) $221,676,092 ------------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 100.1% (Cost $172,150,299) (a) $221,676,092 ------------------------------------------------------------------------------------- OTHER ASSETS AND LIABILITIES -- (0.1)% $ (303,032) ------------------------------------------------------------------------------------- TOTAL NET ASSETS -- 100.0% $221,373,060 =====================================================================================
* Affiliated funds managed by Pioneer Investment Management, Inc. (a) At July 31, 2013, the net unrealized appreciation on investments based on cost for federal tax purposes of $173,792,825 was as follows:
Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost $47,995,800 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value (112,533) ----------- Net unrealized appreciation $47,883,267 ===========
The accompanying notes are an integral part of these financial statements. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 45 Schedule of Investments | 7/31/13 Pioneer Ibbotson Growth Allocation Fund (continued) Purchases and sales of securities (excluding temporary cash investments) for the year ended July 31, 2013 aggregated $13,593,543 and $22,681,829, respectively. Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in the three broad levels below. Level 1 -- quoted prices in active markets for identical securities. Level 2 -- other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.) See Notes to Financial Statements -- Note 1A. Level 3 -- significant unobservable inputs (including the Fund's own assumptions in determining fair value of investments) See Notes to Financial Statements -- Note 1A. Generally, equity securities are categorized as Level 1, fixed income securities and senior loans as Level 2 and securities valued using fair value methods (other than prices supplied by independent pricing services) as Level 3. See Notes to Financial Statements -- Note 1A. The following is a summary of the inputs used as of July 31, 2013, in valuing the Fund's assets:
-------------------------------------------------------------------------------- Level 1 Level 2 Level 3 Total -------------------------------------------------------------------------------- Mutual Funds $221,676,092 $ -- $ -- $221,676,092 -------------------------------------------------------------------------------- Total $221,676,092 $ -- $ -- $221,676,092 ================================================================================
During the year ended July 31, 2013, there were no transfers between Levels 1, 2 and 3. The accompanying notes are an integral part of these financial statements. 46 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 Schedule of Investments | 7/31/13 Pioneer Ibbotson Aggressive Allocation Fund
--------------------------------------------------------------------------------------- Shares Value --------------------------------------------------------------------------------------- MUTUAL FUNDS -- 100.1% PIONEER FUNDS* -- 100.1% 711,759 Pioneer Bond Fund Class Y $ 6,804,417 268,530 Pioneer Core Equity Fund Class Y 3,850,720 202,305 Pioneer Disciplined Growth Fund Class Y 2,981,983 384,654 Pioneer Disciplined Value Fund Class Y 7,985,411 344,399 Pioneer Emerging Markets Fund Class Y 8,179,467 121,608 Pioneer Equity Income Fund Class Y 4,053,180 106,445 Pioneer Fund Class Y 4,164,138 275,621 Pioneer Fundamental Growth Fund Class Y 4,266,615 1,166,639 Pioneer Global Equity Fund Class Y 13,568,011 1,106,954 Pioneer International Value Fund Class Y 23,201,758 469,757 Pioneer Mid Cap Value Fund Class Y 12,918,306 184,764 Pioneer Oak Ridge Small Cap Growth Fund Class Y 6,812,237 208,201 Pioneer Real Estate Shares Class Y 5,406,978 239,740 Pioneer Select Mid Cap Growth Fund Class Y 9,031,022 337,445 Pioneer Short Term Income Fund Class Y 3,256,345 282,231 Pioneer Strategic Income Fund Class Y 3,107,358 --------------------------------------------------------------------------------------- TOTAL MUTUAL FUNDS (Cost $87,624,946) $ 119,587,946 --------------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 100.1% (Cost $87,624,946) (a) $ 119,587,946 --------------------------------------------------------------------------------------- OTHER ASSETS AND LIABILITIES -- (0.1)% $ (100,399) --------------------------------------------------------------------------------------- TOTAL NET ASSETS -- 100.0% $ 119,487,547 =======================================================================================
* Affiliated funds managed by Pioneer Investment Management, Inc. (a) At July 31, 2013, the net unrealized appreciation on investments based on cost for federal tax purposes of $89,261,074 was as follows:
Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost $30,326,872 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value -- ----------- Net unrealized appreciation $30,326,872 ===========
The accompanying notes are an integral part of these financial statements. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 47 Schedule of Investments | 7/31/13 Pioneer Ibbotson Aggressive Allocation Fund (continued) Purchases and sales of securities (excluding temporary cash investments) for the year ended July 31, 2013 aggregated $6,706,912 and $16,326,902, respectively. Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in the three broad levels below. Level 1 -- quoted prices in active markets for identical securities. Level 2 -- other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.) See Notes to Financial Statements -- Note 1A. Level 3 -- significant unobservable inputs (including the Fund's own assumptions in determining fair value of investments) See Notes to Financial Statements -- Note 1A. Generally, equity securities are categorized as Level 1, fixed income securities and senior loans as Level 2 and securities valued using fair value methods (other than prices supplied by independent pricing services) as Level 3. See Notes to Financial Statements -- Note 1A. The following is a summary of the inputs used as of July 31, 2013, in valuing the Fund's assets:
-------------------------------------------------------------------------------- Level 1 Level 2 Level 3 Total -------------------------------------------------------------------------------- Mutual Funds $119,587,946 $-- $-- $119,587,946 -------------------------------------------------------------------------------- Total $119,587,946 $-- $-- $119,587,946 ================================================================================
During the year ended July 31, 2013, there were no transfers between Levels 1, 2 and 3. The accompanying notes are an integral part of these financial statements. 48 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 Statements of Assets and Liabilities | 7/31/13
--------------------------------------------------------------------------------------------------------------------- Conservative Moderate Growth Aggressive Allocation Allocation Allocation Allocation Fund Fund Fund Fund --------------------------------------------------------------------------------------------------------------------- ASSETS: Investments in securities of underlying affiliated funds, at value (at cost $56,875,160, $163,136,458, $172,150,299 and $87,624,946, respectively) $64,899,492 $203,427,847 $ 221,676,092 $119,587,946 Cash 3,310,925 4,216,849 -- 129,311 Receivables for: Investment Funds sold 6,653 11,289 245,161 97,772 Capital stock sold 41,497 18,026 30,928 73,281 Dividends 138,296 236,466 166,631 39,076 Due from Pioneer Investment Management, Inc. -- 1,574 2,173 2,898 Other assets 48,143 49,109 49,201 55,398 --------------------------------------------------------------------------------------------------------------------- Total assets $68,445,006 $207,961,160 $ 222,170,186 $119,985,682 ===================================================================================================================== LIABILITIES: Payables for: Investments Fund purchased $ 13,300 $ 82,702 $ -- $ 49,972 Capital stock redeemed 70,269 39,949 477,944 288,089 Due to affiliates 55,453 169,218 178,412 91,126 Due to custodian -- -- 74,164 -- Accrued expenses and other liabilities 44,236 53,954 66,606 68,948 --------------------------------------------------------------------------------------------------------------------- Total liabilities: $ 183,258 $ 345,823 $ 797,126 $ 498,135 ===================================================================================================================== NET ASSETS: Paid-in capital $62,736,310 $199,335,674 $ 212,936,338 $118,791,466 Undistributed net investment income 1,170,281 3,297,033 2,829,068 1,041,682 Accumulated net realized loss on investments (3,669,175) (35,308,759) (43,918,139) (32,308,601) Net unrealized appreciation on investments 8,024,332 40,291,389 49,525,793 31,963,000 --------------------------------------------------------------------------------------------------------------------- Total net assets $68,261,748 $207,615,337 $ 221,373,060 $119,487,547 ===================================================================================================================== NET ASSET VALUE PER SHARE: (No par value, unlimited number of shares authorized) Net Assets of Class A shares $44,238,769 $128,424,721 $ 149,585,853 $ 90,921,491 Net Assets of Class B shares $ 3,339,887 $ 10,067,617 $ 17,441,388 $ 8,495,309 Net Assets of Class C shares $20,541,699 $ 64,988,623 $ 53,031,848 $ 19,581,873 Net Assets of Class Y shares $ 141,393 $ 4,134,376 $ 1,313,971 $ 488,874 Class A Shares outstanding 3,875,494 10,955,453 12,140,314 7,293,606 Class B Shares outstanding 298,655 889,851 1,595,947 724,630 Class C Shares outstanding 1,852,976 5,951,362 4,553,071 1,655,440 Class Y Shares outstanding 13,018 348,743 104,607 39,148 Net Asset Value - Class A share $ 11.42 $ 11.72 $ 12.32 $ 12.47 Net Asset Value - Class B share $ 11.18 $ 11.31 $ 10.93 $ 11.72 Net Asset Value - Class C share $ 11.09 $ 10.92 $ 11.65 $ 11.83 Net Asset Value - Class Y share $ 10.86 $ 11.86 $ 12.56 $ 12.49 MAXIMUM OFFERING PRICE: Class A (100/94.25 x net asset value per share) $ 12.12 $ 12.44 $ 13.07 $ 13.23 =====================================================================================================================
The accompanying notes are an integral part of these financial statements. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 49 Statements of Operations For the Year Ended 7/31/13
----------------------------------------------------------------------------------------------------------- Conservative Moderate Growth Aggressive Allocation Allocation Allocation Allocation Fund Fund Fund Fund ----------------------------------------------------------------------------------------------------------- INVESTMENT INCOME: Dividend income from underlying affiliated funds $ 2,164,342 $ 5,008,286 $ 4,699,043 $ 2,119,590 Interest 1,015 1,460 230 93 ----------------------------------------------------------------------------------------------------------- Total investment income $ 2,165,357 $ 5,009,746 $ 4,699,273 $ 2,119,683 ----------------------------------------------------------------------------------------------------------- EXPENSES: Management fees $ 86,296 $ 259,507 $ 278,714 $ 151,063 Transfer agent fees Class A 37,845 139,145 220,676 167,771 Class B 7,042 33,635 61,211 34,874 Class C 12,386 35,307 43,721 24,075 Class Y 279 636 575 567 Distribution fees Class A 109,188 307,391 354,231 215,982 Class B 40,893 129,587 216,901 105,368 Class C 185,044 588,876 493,228 183,475 Shareholder communications expense 38,049 123,194 131,773 79,264 Administrative fees 33,546 72,827 77,291 48,938 Custodian fees 10,467 5,305 2,459 3,449 Registration fees 55,743 58,262 58,390 58,248 Professional fees 37,824 26,664 40,675 38,165 Printing fees 18,758 30,234 31,875 46,852 Fees and expenses of non-affiliated Trustees 6,318 7,340 6,754 6,927 Insurance expense 943 2,914 3,556 1,684 Miscellaneous 4,070 4,360 5,610 4,743 ----------------------------------------------------------------------------------------------------------- Total expenses $ 684,691 $ 1,825,184 $ 2,027,640 $ 1,171,445 Less fees waived and expenses reimbursed by Pioneer Investment Management, Inc. $ -- $ (8,293) $ (7,263) $ (9,562) ----------------------------------------------------------------------------------------------------------- Net expenses $ 684,691 $ 1,816,891 $ 2,020,377 $ 1,161,883 ----------------------------------------------------------------------------------------------------------- Net investment income $ 1,480,666 $ 3,192,855 $ 2,678,896 $ 957,800 ----------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain on underlying affiliated funds $ 897,703 $ 3,185,087 $ 3,800,620 $ 2,728,735 Capital gain distributions from underlying affiliated funds 734,829 3,679,080 4,629,451 2,624,653 ----------------------------------------------------------------------------------------------------------- $ 1,632,532 $ 6,864,167 $ 8,430,071 $ 5,353,388 ----------------------------------------------------------------------------------------------------------- Change in net unrealized appreciation on investments $ 2,220,532 $16,019,476 $20,860,423 $13,474,283 ----------------------------------------------------------------------------------------------------------- Net gain on investments $ 3,853,064 $22,883,643 $29,290,494 $18,827,671 ----------------------------------------------------------------------------------------------------------- Net increase in net assets resulting from operations $ 5,333,730 $26,076,498 $31,969,390 $19,785,471 ===========================================================================================================
The accompanying notes are an integral part of these financial statements. 50 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 Statements of Changes in Net Assets
------------------------------------------------------------------------------------------------------ Conservative Moderate Allocation Fund Allocation Fund --------------------------- ---------------------------- Year Year Year Year Ended Ended Ended Ended 7/31/13 7/31/12 7/31/13 7/31/12 ------------------------------------------------------------------------------------------------------ FROM OPERATIONS: Net investment income $ 1,480,666 $ 1,498,635 $ 3,192,855 $ 2,977,148 Net realized gain on investments 1,632,532 444,562 6,864,167 3,159,731 Change in net unrealized appreciation (depreciation) on investments 2,220,532 (975,558) 16,019,476 (8,605,957) ------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets resulting from operations $ 5,333,730 $ 967,639 $ 26,076,498 $ (2,469,078) ------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO SHAREOWNERS: Net investment income: Class A ($0.23, $0.31, $0.22 and $0.24, respectively) $ (955,483) $ (1,183,335) $ (2,347,138) $ (2,675,027) Class B ($0.13, $0.20, $0.06 and $0.11, respectively) (49,375) (91,836) (76,356) (244,751) Class C ($0.16, $0.23, $0.16 and $0.18, respectively) (270,274) (352,605) (878,923) (951,582) Class Y ($0.16, $0.23, $0.25 and $0.29, respectively) (1,718) (1,682) (113,775) (195,125) ------------------------------------------------------------------------------------------------------ Total distributions to shareowners $ (1,276,850) $ (1,629,458) $ (3,416,192) $ (4,066,485) ------------------------------------------------------------------------------------------------------ FROM FUND SHARE TRANSACTIONS: Net proceeds from sales or exchange of shares $ 19,342,329 $ 15,727,021 $ 38,645,530 $ 35,940,163 Reinvestment of distributions 1,169,434 1,491,380 3,147,019 3,714,500 Cost of shares repurchased (19,670,549) (16,501,428) (50,543,688) (57,872,210) ------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets resulting from Fund share transactions 841,214 716,973 (8,751,139) (18,217,547) ------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets $ 4,898,094 $ 55,154 $ 13,909,167 $ (24,753,110) NET ASSETS: Beginning of year 63,363,654 63,308,500 193,706,170 218,459,280 ------------------------------------------------------------------------------------------------------ End of year $ 68,261,748 $ 63,363,654 $207,615,337 $ 193,706,170 ====================================================================================================== Undistributed net investment income, end of year $ 1,170,281 $ 945,174 $ 3,297,033 $ 3,415,089 ======================================================================================================
The accompanying notes are an integral part of these financial statements. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 51 Statements of Changes in Net Assets (continued)
------------------------------------------------------------------------------------------------------ Growth Aggressive Allocation Fund Allocation Fund ---------------------------- ---------------------------- Year Year Year Year Ended Ended Ended Ended 7/31/13 7/31/12 7/31/13 7/31/12 ------------------------------------------------------------------------------------------------------ FROM OPERATIONS: Net investment income $ 2,678,896 $ 2,187,731 $ 957,800 $ 662,809 Net realized gain on investments 8,430,071 3,249,263 5,353,388 2,916,441 Change in net unrealized appreciation (depreciation) on investments 20,860,423 (9,518,002) 13,474,283 (8,039,169) ------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets resulting from operations $ 31,969,390 $ (4,081,008) $ 19,785,471 $ (4,459,919) ------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO SHAREOWNERS: Net investment income: Class A ($0.17, $0.19, $0.11 and $0.13, respectively) $ (2,100,205) $ (2,327,559) $ (843,947) $ (1,026,414) Class B ($0.06, $0.08, $0.00 and $0.01, respectively) (124,014) (254,128) -- (21,009) Class C ($0.10, $0.11, $0.04 and $0.05, respectively) (463,365) (512,265) (74,121) (84,457) Class Y ($0.20, $0.23, $0.15 and $0.16, respectively) (28,499) (41,853) (16,667) (17,652) ------------------------------------------------------------------------------------------------------ Total distributions to shareowners $ (2,716,083) $ (3,135,805) $ (934,735) $ (1,149,532) ------------------------------------------------------------------------------------------------------ FROM FUND SHARE TRANSACTIONS: Net proceeds from sales or exchange of shares $ 34,726,733 $ 31,220,224 $ 16,103,690 $ 17,689,729 Reinvestment of distributions 2,589,712 2,989,892 904,418 1,113,126 Cost of shares repurchased (52,707,882) (46,561,663) (29,890,561) (30,405,283) ------------------------------------------------------------------------------------------------------ Net decrease in net assets resulting from Fund share transactions (15,391,437) (12,351,547) (12,882,453) (11,602,428) ------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets $ 13,861,870 $ (19,568,360) $ 5,968,283 $ (17,211,879) NET ASSETS: Beginning of year 207,511,190 227,079,550 113,519,264 130,731,143 ------------------------------------------------------------------------------------------------------ End of year $221,373,060 $ 207,511,190 $119,487,547 $ 113,519,264 ====================================================================================================== Undistributed net investment income, end of year $ 2,829,068 $ 2,718,010 $ 1,041,682 $ 934,352 ======================================================================================================
The accompanying notes are an integral part of these financial statements. 52 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 Statements of Changes in Net Assets (continued)
------------------------------------------------------------------------------------------------ Conservative Allocation Fund ----------------------------------------------------------- '13 Shares '13 Amount '12 Shares '12 Amount ------------------------------------------------------------------------------------------------ Class A Shares sold 1,020,934 $ 11,402,241 997,333 $ 10,516,102 Reinvestment of distributions 85,658 931,997 111,770 1,145,640 Less shares repurchased (1,200,704) (13,407,002) (1,090,725) (11,477,406) ------------------------------------------------------------------------------------------------ Net increase (decrease) (94,112) $ (1,072,764) 18,378 $ 184,336 ================================================================================================ Class B Shares sold or exchanged 18,697 $ 204,015 65,405 $ 672,958 Reinvestment of distributions 4,413 47,265 8,527 85,946 Less shares repurchased (146,078) (1,606,168) (150,497) (1,547,463) ------------------------------------------------------------------------------------------------ Net decrease (122,968) $ (1,354,888) (76,565) $ (788,559) ================================================================================================ Class C Shares sold 705,703 $ 7,658,490 442,570 $ 4,530,773 Reinvestment of distributions 17,918 190,116 25,946 259,717 Less shares repurchased (428,536) (4,649,918) (337,214) (3,463,432) ------------------------------------------------------------------------------------------------ Net increase 295,085 $ 3,198,688 131,302 $ 1,327,058 ================================================================================================ Class Y Shares sold 7,322 $ 77,583 719 $ 7,188 Reinvestment of distributions 5 56 8 77 Less shares repurchased (704) (7,461) (1,291) (13,127) ------------------------------------------------------------------------------------------------ Net increase (decrease) 6,623 $ 70,178 (564) $ (5,862) ================================================================================================
------------------------------------------------------------------------------------------------ Moderate Allocation Fund ----------------------------------------------------------- '13 Shares '13 Amount '12 Shares '12 Amount ------------------------------------------------------------------------------------------------ Class A Shares sold 1,920,609 $ 21,359,645 2,068,964 $ 21,265,053 Reinvestment of distributions 216,417 2,311,349 263,615 2,628,511 Less shares repurchased (2,541,970) (28,078,906) (3,275,964) (33,161,682) ------------------------------------------------------------------------------------------------ Net decrease (404,944) $ (4,407,912) (943,385) $ (9,268,118) ================================================================================================ Class B Shares sold or exchanged 45,000 $ 485,670 43,190 $ 422,180 Reinvestment of distributions 7,130 73,866 24,677 236,900 Less shares repurchased (763,142) (8,143,861) (1,016,431) (10,005,913) ------------------------------------------------------------------------------------------------ Net decrease (711,012) $ (7,584,325) (948,564) $ (9,346,833) ================================================================================================ Class C Shares sold 1,549,226 $ 16,124,813 1,350,846 $ 13,060,006 Reinvestment of distributions 66,229 661,627 77,571 725,290 Less shares repurchased (1,149,577) (11,914,231) (1,114,511) (10,741,161) ------------------------------------------------------------------------------------------------ Net increase 465,878 $ 4,872,209 313,906 $ 3,044,135 ================================================================================================ Class Y Shares sold 60,167 $ 675,402 117,189 $ 1,192,924 Reinvestment of distributions 9,293 100,177 12,306 123,799 Less shares repurchased (213,103) (2,406,690) (378,802) (3,963,454) ------------------------------------------------------------------------------------------------ Net decrease (143,643) $ (1,631,111) (249,307) $ (2,646,731) ================================================================================================
The accompanying notes are an integral part of these financial statements. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 53 Statements of Changes in Net Assets (continued)
------------------------------------------------------------------------------------------------ Growth Allocation Fund ----------------------------------------------------------- '13 Shares '13 Amount '12 Shares '12 Amount ------------------------------------------------------------------------------------------------ Class A Shares sold 1,955,642 $ 22,648,749 2,003,752 $ 21,129,016 Reinvestment of distributions 188,344 2,079,338 225,622 2,306,260 Less shares repurchased (2,559,993) (29,481,905) (2,384,121) (25,028,435) ------------------------------------------------------------------------------------------------ Net decrease (416,007) $ (4,753,818) (154,747) $ (1,593,159) ================================================================================================ Class B Shares sold or exchanged 20,819 $ 210,358 34,878 $ 326,306 Reinvestment of distributions 12,344 121,589 27,418 249,232 Less shares repurchased (1,055,789) (10,840,758) (1,072,262) (9,989,741) ------------------------------------------------------------------------------------------------ Net decrease (1,022,626) $ (10,508,811) (1,009,966) $ (9,414,203) ================================================================================================ Class C Shares sold 1,054,542 $ 11,590,420 896,095 $ 8,966,029 Reinvestment of distributions 35,111 368,013 41,731 405,623 Less shares repurchased (1,014,165) (11,149,890) (1,086,051) (10,818,416) ------------------------------------------------------------------------------------------------ Net increase (decrease) 75,488 $ 808,543 (148,225) $ (1,446,764) ================================================================================================ Class Y Shares sold 23,464 $ 277,206 76,808 $ 798,873 Reinvestment of distributions 1,848 20,772 2,764 28,777 Less shares repurchased (104,455) (1,235,329) (65,844) (725,071) ------------------------------------------------------------------------------------------------ Net increase (decrease) (79,143) $ (937,351) 13,728 $ 102,579 ================================================================================================
------------------------------------------------------------------------------------------------ Aggressive Allocation Fund ----------------------------------------------------------- '13 Shares '13 Amount '12 Shares '12 Amount ------------------------------------------------------------------------------------------------ Class A Shares sold 1,058,283 $ 12,251,455 1,265,738 $ 13,140,808 Reinvestment of distributions 75,771 834,246 100,201 1,013,032 Less shares repurchased (1,662,968) (19,104,816) (1,931,678) (20,155,382) ------------------------------------------------------------------------------------------------ Net decrease (528,914) $ (6,019,115) (565,739) $ (6,001,542) ================================================================================================ Class B Shares sold or exchanged 10,143 $ 111,293 14,573 $ 141,783 Reinvestment of distributions -- -- 2,120 20,203 Less shares repurchased (498,768) (5,436,594) (507,652) (4,947,628) ------------------------------------------------------------------------------------------------ Net decrease (488,625) $ (5,325,301) (490,959) $ (4,785,642) ================================================================================================ Class C Shares sold 323,630 $ 3,543,347 411,387 $ 4,072,579 Reinvestment of distributions 5,445 57,135 7,028 67,759 Less shares repurchased (393,437) (4,286,335) (497,759) (4,886,040) ------------------------------------------------------------------------------------------------ Net decrease (64,362) $ (685,853) (79,344) $ (745,702) ================================================================================================ Class Y Shares sold 16,401 $ 197,595 32,610 $ 334,559 Reinvestment of distributions 1,182 13,037 1,196 12,132 Less shares repurchased (90,026) (1,062,816) (38,940) (416,233) ------------------------------------------------------------------------------------------------ Net decrease (72,443) $ (852,184) (5,134) $ (69,542) ================================================================================================
The accompanying notes are an integral part of these financial statements. 54 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 Financial Highlights
-------------------------------------------------------------------------------------------------------------------------- Conservative Allocation Fund ------------------------------------------------------- Year Year Year Year Year Ended Ended Ended Ended Ended 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 -------------------------------------------------------------------------------------------------------------------------- Class A Net asset value, beginning of period $ 10.73 $ 10.85 $ 10.19 $ 9.40 $ 10.48 -------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income (a) $ 0.28 $ 0.28 $ 0.26 $ 0.25 $ 0.39 Net realized and unrealized gain (loss) on investments 0.64 (0.09) 0.65 0.86 (0.94) -------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 0.92 $ 0.19 $ 0.91 $ 1.11 $ (0.55) -------------------------------------------------------------------------------------------------------------------------- Distributions to shareowners: Net investment income $ (0.23) $ (0.31) $ (0.25) $ (0.32) $ (0.31) Net realized gain -- -- -- -- (0.22) -------------------------------------------------------------------------------------------------------------------------- Total distributions to shareowners $ (0.23) $ (0.31) $ (0.25) $ (0.32) $ (0.53) -------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 0.69 $ (0.12) $ 0.66 $ 0.79 $ (1.08) -------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 11.42 $ 10.73 $ 10.85 $ 10.19 $ 9.40 ========================================================================================================================== Total return* 8.72% 1.85% 9.04% 11.88% (4.44)% Ratio of net expenses to average net assets+++ 0.77% 0.78% 0.78% 0.78% 0.78% Ratio of net investment income to average net assets+++ 2.51% 2.69% 2.47% 2.55% 4.43% Portfolio turnover rate 17% 20% 15% 13% 53% Net assets, end of period (in thousands) $44,239 $42,613 $42,882 $35,986 $25,992 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 0.77% 0.82% 0.80% 0.84% 1.09% Net investment income 2.51% 2.65% 2.45% 2.49% 4.12% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 0.77% 0.78% 0.78% 0.78% 0.78% Net investment income 2.51% 2.69% 2.47% 2.55% 4.43% ==========================================================================================================================
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. ++ Ratios with no reduction for fees paid indirectly. The accompanying notes are an integral part of these financial statements. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 55 Financial Highlights (continued)
-------------------------------------------------------------------------------------------------------------------------- Conservative Allocation Fund ------------------------------------------------------- Year Year Year Year Year Ended Ended Ended Ended Ended 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 -------------------------------------------------------------------------------------------------------------------------- Class B Net asset value, beginning of period $ 10.51 $ 10.61 $ 9.99 $ 9.24 $ 10.31 -------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income (a) $ 0.18 $ 0.19 $ 0.17 $ 0.16 $ 0.31 Net realized and unrealized gain (loss) on investments 0.62 (0.09) 0.64 0.83 (0.93) -------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 0.80 $ 0.10 $ 0.81 $ 0.99 $ (0.62) -------------------------------------------------------------------------------------------------------------------------- Distributions to shareowners: Net investment income $ (0.13) $ (0.20) $ (0.19) $ (0.24) $ (0.23) Net realized gain -- -- -- -- (0.22) -------------------------------------------------------------------------------------------------------------------------- Total distributions to shareowners $ (0.13) $ (0.20) $ (0.19) $ (0.24) $ (0.45) -------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 0.67 $ (0.10) $ 0.62 $ 0.75 $ (1.07) -------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 11.18 $ 10.51 $ 10.61 $ 9.99 $ 9.24 ========================================================================================================================== Total return* 7.63% 1.04% 8.15% 10.80% (5.31)% Ratio of net expenses to average net assets+++ 1.61% 1.68% 1.64% 1.68% 1.68% Ratio of net investment income to average net assets+++ 1.67% 1.82% 1.62% 1.67% 3.58% Portfolio turnover rate 17% 20% 15% 13% 53% Net assets, end of period (in thousands) $ 3,340 $ 4,429 $ 5,285 $ 6,214 $ 5,957 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 1.61% 1.71% 1.64% 1.70% 1.90% Net investment income 1.67% 1.79% 1.62% 1.64% 3.36% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 1.61% 1.68% 1.64% 1.68% 1.68% Net investment income 1.67% 1.82% 1.62% 1.67% 3.58% ==========================================================================================================================
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. ++ Ratios with no reduction for fees paid indirectly. The accompanying notes are an integral part of these financial statements. 56 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13
-------------------------------------------------------------------------------------------------------------------------- Conservative Allocation Fund ------------------------------------------------------- Year Year Year Year Year Ended Ended Ended Ended Ended 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 -------------------------------------------------------------------------------------------------------------------------- Class C Net asset value, beginning of period $ 10.44 $ 10.56 $ 9.96 $ 9.21 $ 10.30 -------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income (a) $ 0.18 $ 0.20 $ 0.18 $ 0.17 $ 0.31 Net realized and unrealized gain (loss) on investments 0.63 (0.09) 0.63 0.83 (0.95) -------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 0.81 $ 0.11 $ 0.81 $ 1.00 $ (0.64) -------------------------------------------------------------------------------------------------------------------------- Distributions to shareowners: Net investment income $ (0.16) $ (0.23) $ (0.21) $ (0.25) $ (0.23) Net realized gain -- -- -- -- (0.22) -------------------------------------------------------------------------------------------------------------------------- Total distributions to shareowners $ (0.16) $ (0.23) $ (0.21) $ (0.25) $ (0.45) -------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 0.65 $ (0.12) $ 0.60 $ 0.75 $ (1.09) -------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 11.09 $ 10.44 $ 10.56 $ 9.96 $ 9.21 ========================================================================================================================== Total return* 7.83% 1.16% 8.18% 10.91% (5.53)% Ratio of net expenses to average net assets+++ 1.51% 1.56% 1.55% 1.59% 1.68% Ratio of net investment income to average net assets+++ 1.70% 1.91% 1.71% 1.73% 3.54% Portfolio turnover rate 17% 20% 15% 13% 53% Net assets, end of period (in thousands) $20,542 $16,257 $15,068 $14,063 $11,184 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 1.51% 1.56% 1.55% 1.59% 1.80% Net investment income 1.70% 1.91% 1.71% 1.73% 3.43% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 1.51% 1.56% 1.55% 1.59% 1.68% Net investment income 1.70% 1.91% 1.71% 1.73% 3.54% ==========================================================================================================================
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. ++ Ratios with no reduction for fees paid indirectly. The accompanying notes are an integral part of these financial statements. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 57 Financial Highlights (continued)
-------------------------------------------------------------------------------------------------------------------------- Conservative Allocation Fund ------------------------------------------------------- Year Year Year Year Year Ended Ended Ended Ended Ended 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 -------------------------------------------------------------------------------------------------------------------------- Class Y Net asset value, beginning of period $ 10.21 $ 10.41 $ 9.79 $ 9.02 $ 10.50 -------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income (a) $ 0.20 $ 0.13 $ 0.24 $ 0.28 $ (0.18) Net realized and unrealized gain (loss) on investments 0.61 (0.10) 0.65 0.78 (0.97) -------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 0.81 $ 0.03 $ 0.89 $ 1.06 $ (1.15) -------------------------------------------------------------------------------------------------------------------------- Distributions to shareowners: Net investment income $ (0.16) $ (0.23) $ (0.27) $ (0.29) $ (0.11) Net realized gain -- -- -- -- (0.22) -------------------------------------------------------------------------------------------------------------------------- Total distributions to shareowners $ (0.16) $ (0.23) $ (0.27) $ (0.29) $ (0.33) -------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 0.65 $ (0.20) $ 0.62 $ 0.77 $ (1.48) -------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 10.86 $ 10.21 $ 10.41 $ 9.79 $ 9.02 ========================================================================================================================== Total return* 8.00% 0.34% 9.18% 11.89% (10.66)% Ratio of net expenses to average net assets+++ 1.43% 2.26% 0.82% 0.63% 7.26% Ratio of net investment income to average net assets+++ 1.88% 1.28% 2.36% 2.94% (2.03)% Portfolio turnover rate 17% 20% 15% 13% 53% Net assets, end of period (in thousands) $ 141 $ 65 $ 72 $ 119 $ 9 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 1.43% 2.26% 0.82% 0.63% 7.26% Net investment income (loss) 1.88% 1.28% 2.36% 2.94% (2.03)% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 1.43% 2.26% 0.82% 0.63% 7.26% Net investment income (loss) 1.88% 1.28% 2.36% 2.94% (2.03)% ==========================================================================================================================
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions and the complete redemption of the investment at net asset value at the end of each period. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. ++ Ratios with no reduction for fees paid indirectly. The accompanying notes are an integral part of these financial statements. 58 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13
------------------------------------------------------------------------------------------------------------------------- Moderate Allocation Fund --------------------------------------------------------- Year Year Year Year Year Ended Ended Ended Ended Ended 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ------------------------------------------------------------------------------------------------------------------------- Class A Net asset value, beginning of period $ 10.46 $ 10.74 $ 9.68 $ 8.79 $ 10.89 ------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income (a) $ 0.21 $ 0.18 $ 0.17 $ 0.16 $ 0.27 Net realized and unrealized gain (loss) on investments 1.27 (0.22) 1.07 1.00 (1.63) ------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 1.48 $ (0.04) $ 1.24 $ 1.16 $ (1.36) ------------------------------------------------------------------------------------------------------------------------- Distributions to shareowners: Net investment income $ (0.22) $ (0.24) $ (0.18) $ (0.27) $ (0.13) Net realized gain -- -- -- -- (0.61) ------------------------------------------------------------------------------------------------------------------------- Total distributions to shareowners $ (0.22) $ (0.24) $ (0.18) $ (0.27) $ (0.74) ------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 1.26 $ (0.28) $ 1.06 $ 0.89 $ (2.10) ------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 11.72 $ 10.46 $ 10.74 $ 9.68 $ 8.79 ========================================================================================================================= Total return* 14.32% (0.27)% 12.91% 13.26% (11.20)% Ratio of net expenses to average net assets+++ 0.66% 0.72% 0.71% 0.73% 0.74% Ratio of net investment income to average net assets+++ 1.85% 1.75% 1.59% 1.70% 3.20% Portfolio turnover rate 9% 9% 14% 10% 44% Net assets, end of period (in thousands) $128,425 $118,833 $132,166 $125,354 $120,786 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 0.66% 0.72% 0.71% 0.73% 0.76% Net investment income 1.85% 1.75% 1.59% 1.70% 3.18% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 0.66% 0.72% 0.71% 0.73% 0.74% Net investment income 1.85% 1.75% 1.59% 1.70% 3.20% =========================================================================================================================
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. ++ Ratios with no reduction for fees paid indirectly. The accompanying notes are an integral part of these financial statements. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 59 Financial Highlights (continued)
------------------------------------------------------------------------------------------------------------------------- Moderate Allocation Fund ------------------------------------------------------ Year Year Year Year Year Ended Ended Ended Ended Ended 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ------------------------------------------------------------------------------------------------------------------------- Class B Net asset value, beginning of period $ 10.04 $ 10.26 $ 9.25 $ 8.41 $ 10.39 ------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income (a) $ 0.11 $ 0.11 $ 0.08 $ 0.08 $ 0.19 Net realized and unrealized gain (loss) on investments 1.22 (0.22) 1.02 0.96 (1.53) ------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 1.33 $ (0.11) $ 1.10 $ 1.04 $ (1.34) ------------------------------------------------------------------------------------------------------------------------- Distributions to shareowners: Net investment income $ (0.06) $ (0.11) $ (0.09) $ (0.20) $ (0.03) Net realized gain -- -- -- -- (0.61) ------------------------------------------------------------------------------------------------------------------------- Total distributions to shareowners $ (0.06) $ (0.11) $ (0.09) $ (0.20) $ (0.64) ------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 1.27 $ (0.22) $ 1.01 $ 0.84 $ (1.98) ------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 11.31 $ 10.04 $ 10.26 $ 9.25 $ 8.41 ========================================================================================================================= Total return* 13.31% (0.99)% 11.89% 12.39% (11.81)% Ratio of net expenses to average net assets+++ 1.52% 1.52% 1.52% 1.52% 1.52% Ratio of net investment income to average net assets+++ 1.06% 1.11% 0.83% 0.92% 2.44% Portfolio turnover rate 9% 9% 14% 10% 44% Net assets, end of period (in thousands) $10,068 $16,072 $26,166 $33,115 $35,197 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 1.58% 1.60% 1.53% 1.56% 1.63% Net investment income 0.99% 1.03% 0.82% 0.88% 2.33% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 1.52% 1.52% 1.52% 1.52% 1.52% Net investment income 1.06% 1.11% 0.83% 0.92% 2.44% =========================================================================================================================
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. ++ Ratios with no reduction for fees paid indirectly. The accompanying notes are an integral part of these financial statements. 60 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13
------------------------------------------------------------------------------------------------------------------------- Moderate Allocation Fund ------------------------------------------------------ Year Year Year Year Year Ended Ended Ended Ended Ended 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ------------------------------------------------------------------------------------------------------------------------- Class C Net asset value, beginning of period $ 9.77 $ 10.07 $ 9.10 $ 8.29 $ 10.30 ------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income (a) $ 0.12 $ 0.10 $ 0.09 $ 0.09 $ 0.19 Net realized and unrealized gain (loss) on investments 1.19 (0.22) 1.01 0.94 (1.53) ------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 1.31 $ (0.12) $ 1.10 $ 1.03 $ (1.34) ------------------------------------------------------------------------------------------------------------------------- Distributions to shareowners: Net investment income $ (0.16) $ (0.18) $ (0.13) $ (0.22) $ (0.06) Net realized gain -- -- -- -- (0.61) ------------------------------------------------------------------------------------------------------------------------- Total distributions to shareowners $ (0.16) $ (0.18) $ (0.13) $ (0.22) $ (0.67) ------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 1.15 $ (0.30) $ 0.97 $ 0.81 $ (2.01) ------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 10.92 $ 9.77 $ 10.07 $ 9.10 $ 8.29 ========================================================================================================================= Total return* 13.56% (1.08)% 12.12% 12.43% (11.85)% Ratio of net expenses to average net assets+++ 1.34% 1.41% 1.40% 1.44% 1.52% Ratio of net investment income to average net assets+++ 1.15% 1.06% 0.89% 0.98% 2.44% Portfolio turnover rate 9% 9% 14% 10% 44% Net assets, end of period (in thousands) $64,989 $53,594 $52,059 $43,725 $37,513 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 1.34% 1.41% 1.40% 1.44% 1.52% Net investment income 1.15% 1.06% 0.89% 0.98% 2.44% Ratios with waiver of fees and assumption of expenses by the Adviserand reduction for fees paid indirectly: Net expenses 1.34% 1.41% 1.40% 1.44% 1.52% Net investment income 1.15% 1.06% 0.89% 0.98% 2.44% =========================================================================================================================
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. ++ Ratios with no reduction for fees paid indirectly. The accompanying notes are an integral part of these financial statements. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 61 Financial Highlights (continued)
----------------------------------------------------------------------------------------------------------------------- Moderate Allocation Fund ------------------------------------------------------- Year Year Year Year Year Ended Ended Ended Ended Ended 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ----------------------------------------------------------------------------------------------------------------------- Class Y Net asset value, beginning of period $ 10.58 $ 10.88 $ 9.80 $ 8.89 $ 10.94 ----------------------------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income (a) $ 0.25 $ 0.22 $ 0.21 $ 0.20 $ 0.29 Net realized and unrealized gain (loss) on investments 1.28 (0.23) 1.09 1.02 (1.55) ----------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 1.53 $ (0.01) $ 1.30 $ 1.22 $ (1.26) ----------------------------------------------------------------------------------------------------------------------- Distributions to shareowners: Net investment income $ (0.25) $ (0.29) $ (0.22) $ (0.31) $ (0.18) Net realized gain -- -- -- -- (0.61) ----------------------------------------------------------------------------------------------------------------------- Total distributions to shareowners $ (0.25) $ (0.29) $ (0.22) $ (0.31) $ (0.79) ----------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 1.28 $ (0.30) $ 1.08 $ 0.91 $ (2.05) ----------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 11.86 $ 10.58 $ 10.88 $ 9.80 $ 8.89 ======================================================================================================================= Total return* 14.68% 0.00%(b) 13.37% 13.75% (10.09)% Ratio of net expenses to average net assets+++ 0.36% 0.38% 0.32% 0.33% 0.33% Ratio of net investment income to average net assets+++ 2.26% 2.14% 2.00% 2.10% 3.59% Portfolio turnover rate 9% 9% 14% 10% 44% Net assets, end of period (in thousands) $ 4,134 $ 5,208 $ 8,069 $ 8,120 $ 8,015 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 0.36% 0.38% 0.32% 0.33% 0.33% Net investment income 2.26% 2.14% 2.00% 2.10% 3.59% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 0.36% 0.38% 0.32% 0.33% 0.33% Net investment income 2.26% 2.14% 2.00% 2.10% 3.59% =======================================================================================================================
(a) Calculated using average shares outstanding for the period. (b) Amount rounds to less than 0.01%. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions and the complete redemption of the investment at net asset value at the end of each period. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. ++ Ratios with no reduction for fees paid indirectly. The accompanying notes are an integral part of these financial statements. 62 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13
------------------------------------------------------------------------------------------------------------------------- Growth Allocation Fund --------------------------------------------------------- Year Year Year Year Year Ended Ended Ended Ended Ended 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ------------------------------------------------------------------------------------------------------------------------- Class A Net asset value, beginning of period $ 10.75 $ 11.09 $ 9.77 $ 8.74 $ 11.50 ------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income (a) $ 0.17 $ 0.14 $ 0.12 $ 0.11 $ 0.19 Net realized and unrealized gain (loss) on investments 1.57 (0.29) 1.33 1.10 (2.14) ------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 1.74 $ (0.15) $ 1.45 $ 1.21 $ (1.95) ------------------------------------------------------------------------------------------------------------------------- Distributions to shareowners: Net investment income $ (0.17) $ (0.19) $ (0.13) $ (0.18) $ (0.04) Net realized gain -- -- -- -- (0.77) ------------------------------------------------------------------------------------------------------------------------- Total distributions to shareowners $ (0.17) $ (0.19) $ (0.13) $ (0.18) $ (0.81) ------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 1.57 $ (0.34) $ 1.32 $ 1.03 $ (2.76) ------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 12.32 $ 10.75 $ 11.09 $ 9.77 $ 8.74 ========================================================================================================================= Total return* 16.40% (1.31)% 14.85% 13.90% (15.49)% Ratio of net expenses to average net assets+++ 0.69% 0.76% 0.76% 0.79% 0.79% Ratio of net investment income to average net assets+++ 1.50% 1.29% 1.11% 1.12% 2.24% Portfolio turnover rate 6% 7% 12% 11% 49% Net assets, end of period (in thousands) $149,586 $134,988 $140,979 $125,433 $111,447 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 0.69% 0.76% 0.76% 0.80% 0.89% Net investment income 1.50% 1.29% 1.11% 1.11% 2.14% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 0.69% 0.76% 0.76% 0.79% 0.79% Net investment income 1.50% 1.29% 1.11% 1.12% 2.24% =========================================================================================================================
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. ++ Ratios with no reduction for fees paid indirectly. The accompanying notes are an integral part of these financial statements. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 63 Financial Highlights (continued)
------------------------------------------------------------------------------------------------------------------------- Growth Allocation Fund ------------------------------------------------------- Year Year Year Year Year Ended Ended Ended Ended Ended 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ------------------------------------------------------------------------------------------------------------------------- Class B Net asset value, beginning of period $ 9.52 $ 9.80 $ 8.64 $ 7.75 $ 10.33 ------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income (a) $ 0.07 $ 0.06 $ 0.03 $ 0.03 $ 0.11 Net realized and unrealized gain (loss) on investments 1.40 (0.26) 1.17 0.98 (1.92) ------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 1.47 $ (0.20) $ 1.20 $ 1.01 $ (1.81) ------------------------------------------------------------------------------------------------------------------------- Distributions to shareowners: Net investment income $ (0.06) $ (0.08) $ (0.04) $ (0.12) $ -- Net realized gain -- -- -- -- (0.77) ------------------------------------------------------------------------------------------------------------------------- Total distributions to shareowners $ (0.06) $ (0.08) $ (0.04) $ (0.12) $ (0.77) ------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 1.41 $ (0.28) $ 1.16 $ 0.89 $ (2.58) ------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 10.93 $ 9.52 $ 9.80 $ 8.64 $ 7.75 ========================================================================================================================= Total return* 15.46% (2.01)% 13.90% 13.03% (16.05)% Ratio of net expenses to average net assets+++ 1.57% 1.57% 1.57% 1.57% 1.57% Ratio of net investment income to average net assets+++ 0.68% 0.59% 0.35% 0.36% 1.47% Portfolio turnover rate 6% 7% 12% 11% 49% Net assets, end of period (in thousands) $17,441 $24,941 $35,567 $39,902 $ 43,390 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 1.60% 1.66% 1.61% 1.66% 1.77% Net investment income 0.64% 0.50% 0.31% 0.27% 1.27% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 1.57% 1.57% 1.57% 1.57% 1.57% Net investment income 0.68% 0.59% 0.35% 0.36% 1.47% =========================================================================================================================
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. ++ Ratios with no reduction for fees paid indirectly. The accompanying notes are an integral part of these financial statements. 64 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13
------------------------------------------------------------------------------------------------------------------------- Growth Allocation Fund ------------------------------------------------------- Year Year Year Year Year Ended Ended Ended Ended Ended 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ------------------------------------------------------------------------------------------------------------------------- Class C Net asset value, beginning of period $ 10.18 $ 10.50 $ 9.26 $ 8.30 $ 10.99 ------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income (a) $ 0.09 $ 0.06 $ 0.04 $ 0.04 $ 0.11 Net realized and unrealized gain (loss) on investments 1.48 (0.27) 1.26 1.04 (2.03) ------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 1.57 $ (0.21) $ 1.30 $ 1.08 $ (1.92) ------------------------------------------------------------------------------------------------------------------------- Distributions to shareowners: Net investment income $ (0.10) $ (0.11) $ (0.06) $ (0.12) $ -- Net realized gain -- -- -- -- (0.77) ------------------------------------------------------------------------------------------------------------------------- Total distributions to shareowners $ (0.10) $ (0.11) $ (0.06) $ (0.12) $ (0.77) ------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 1.47 $ (0.32) $ 1.24 $ 0.96 $ (2.69) ------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 11.65 $ 10.18 $ 10.50 $ 9.26 $ 8.30 ========================================================================================================================= Total return* 15.58% (1.91)% 14.10% 13.08% (16.08)% Ratio of net expenses to average net assets+++ 1.40% 1.46% 1.46% 1.51% 1.57% Ratio of net investment income to average net assets+++ 0.78% 0.59% 0.40% 0.40% 1.44% Portfolio turnover rate 6% 7% 12% 11% 49% Net assets, end of period (in thousands) $53,032 $45,570 $48,586 $43,087 $ 36,602 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 1.40% 1.46% 1.46% 1.51% 1.60% Net investment income 0.78% 0.59% 0.40% 0.40% 1.40% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 1.40% 1.46% 1.46% 1.51% 1.57% Net investment income 0.78% 0.59% 0.40% 0.40% 1.44% =========================================================================================================================
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. ++ Ratios with no reduction for fees paid indirectly. The accompanying notes are an integral part of these financial statements. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 65 Financial Highlights (continued)
------------------------------------------------------------------------------------------------------------------------- Growth Allocation Fund ------------------------------------------------------ Year Year Year Year Year Ended Ended Ended Ended Ended 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ------------------------------------------------------------------------------------------------------------------------- Class Y Net asset value, beginning of period $ 10.95 $ 11.45 $ 10.07 $ 9.00 $ 11.64 ------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income (a) $ 0.20 $ 0.17 $ 0.17 $ 0.15 $ 0.20 Net realized and unrealized gain (loss) on investments 1.61 (0.44) 1.37 1.14 (1.97) ------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 1.81 $ (0.27) $ 1.54 $ 1.29 $ (1.77) ------------------------------------------------------------------------------------------------------------------------- Distributions to shareowners: Net investment income $ (0.20) $ (0.23) $ (0.16) $ (0.22) $ (0.10) Net realized gain -- -- -- -- (0.77) ------------------------------------------------------------------------------------------------------------------------- Total distributions to shareowners $ (0.20) $ (0.23) $ (0.16) $ (0.22) $ (0.87) ------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 1.61 $ (0.50) $ 1.38 $ 1.07 $ (2.64) ------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 12.56 $ 10.95 $ 11.45 $ 10.07 $ 9.00 ========================================================================================================================= Total return* 16.70% (2.28)% 15.39% 14.33% (13.68)% Ratio of net expenses to average net assets+++ 0.44% 0.50% 0.36% 0.39% 0.39% Ratio of net investment income to average net assets+++ 1.71% 1.60% 1.58% 1.54% 2.44% Portfolio turnover rate 6% 7% 12% 11% 49% Net assets, end of period (in thousands) $ 1,314 $ 2,012 $ 1,947 $ 2,508 $ 1,614 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 0.44% 0.50% 0.36% 0.39% 0.39% Net investment income 1.71% 1.60% 1.58% 1.54% 2.44% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 0.44% 0.50% 0.36% 0.39% 0.39% Net investment income 1.71% 1.60% 1.58% 1.54% 2.44% =========================================================================================================================
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions and the complete redemption of the investment at net asset value at the end of each period. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. ++ Ratios with no reduction for fees paid indirectly. The accompanying notes are an integral part of these financial statements. 66 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13
------------------------------------------------------------------------------------------------------------------------- Aggressive Allocation Fund ------------------------------------------------------- Year Year Year Year Year Ended Ended Ended Ended Ended 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ------------------------------------------------------------------------------------------------------------------------- Class A Net asset value, beginning of period $ 10.60 $ 11.07 $ 9.56 $ 8.45 $ 11.85 ------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income (a) $ 0.11 $ 0.08 $ 0.06 $ 0.04 $ 0.09 Net realized and unrealized gain (loss) on investments 1.87 (0.42) 1.51 1.16 (2.54) ------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 1.98 $ (0.34) $ 1.57 $ 1.20 $ (2.45) ------------------------------------------------------------------------------------------------------------------------- Distributions to shareowners: Net investment income $ (0.11) $ (0.13) $ (0.06) $ (0.09) $ -- Net realized gain -- -- -- -- (0.95) ------------------------------------------------------------------------------------------------------------------------- Total distributions to shareowners $ (0.11) $ (0.13) $ (0.06) $ (0.09) $ (0.95) ------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 1.87 $ (0.47) $ 1.51 $ 1.11 $ (3.40) ------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 12.47 $ 10.60 $ 11.07 $ 9.56 $ 8.45 ========================================================================================================================= Total return* 18.86% (3.06)% 16.42% 14.16% (19.05)% Ratio of net expenses to average net assets+++ 0.82% 0.85% 0.85% 0.85% 0.85% Ratio of net investment income to average net assets+++ 0.99% 0.76% 0.52% 0.44% 1.07% Portfolio turnover rate 6% 7% 11% 12% 55% Net assets, end of period (in thousands) $90,921 $82,940 $92,878 $85,488 $ 79,480 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 0.82% 0.87% 0.85% 0.88% 1.01% Net investment income 0.99% 0.74% 0.52% 0.41% 0.91% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 0.82% 0.85% 0.85% 0.85% 0.85% Net investment income 0.99% 0.76% 0.52% 0.44% 1.07% =========================================================================================================================
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. ++ Ratios with no reduction for fees paid indirectly. The accompanying notes are an integral part of these financial statements. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 67 Financial Highlights (continued)
----------------------------------------------------------------------------------------------------------------------- Aggressive Allocation Fund -------------------------------------------------------- Year Year Year Year Year Ended Ended Ended Ended Ended 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ----------------------------------------------------------------------------------------------------------------------- Class B Net asset value, beginning of period $ 9.95 $ 10.35 $ 8.96 $ 7.93 $ 11.29 ----------------------------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income (a) $ 0.03 $ 0.01 $ (0.02) $ (0.03) $ 0.02 Net realized and unrealized gain (loss) on investments 1.74 (0.40) 1.41 1.08 (2.43) ----------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 1.77 $ (0.39) $ 1.39 $ 1.05 $ (2.41) ----------------------------------------------------------------------------------------------------------------------- Distributions to shareowners: Net investment income $ -- $ (0.01) $ -- $ (0.02) $ -- Net realized gain -- -- -- -- (0.95) ----------------------------------------------------------------------------------------------------------------------- Total distributions to shareowners $ -- $ (0.01) $ -- $ (0.02) $ (0.95) ----------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 1.77 $ (0.40) $ 1.39 $ 1.03 $ (3.36) ----------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 11.72 $ 9.95 $ 10.35 $ 8.96 $ 7.93 ======================================================================================================================= Total return* 17.79% (3.72)% 15.51% 13.22% (19.69)% Ratio of net expenses to average net assets+++ 1.64% 1.64% 1.64% 1.64% 1.64% Ratio of net investment income to average net assets+++ 0.25% 0.05% (0.21)% (0.33)% 0.28% Portfolio turnover rate 6% 7% 11% 12% 55% Net assets, end of period (in thousands) $ 8,495 $12,074 $ 17,642 $19,256 $ 20,884 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 1.73% 1.77% 1.71% 1.76% 1.89% Net investment income (loss) 0.16% (0.08)% (0.28)% (0.45)% 0.04% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 1.64% 1.64% 1.64% 1.64% 1.64% Net investment income (loss) 0.25% 0.05% (0.21)% (0.33)% 0.28% =======================================================================================================================
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. ++ Ratios with no reduction for fees paid indirectly. The accompanying notes are an integral part of these financial statements. 68 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13
---------------------------------------------------------------------------------------------------------------------- Aggressive Allocation Fund ------------------------------------------------------- Year Year Year Year Year Ended Ended Ended Ended Ended 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ---------------------------------------------------------------------------------------------------------------------- Class C Net asset value, beginning of period $ 10.07 $ 10.50 $ 9.08 $ 8.04 $ 11.43 ---------------------------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income (a) $ 0.03 0.00(b) $ (0.01) $ (0.03) $ 0.02 Net realized and unrealized gain (loss) on investments 1.77 (0.38) 1.43 1.10 (2.46) ---------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 1.80 $ (0.38) $ 1.42 $ 1.07 $ (2.44) ---------------------------------------------------------------------------------------------------------------------- Distributions to shareowners: Net investment income $ (0.04) $ (0.05) $ -- $ (0.03) $ -- Net realized gain -- -- -- -- (0.95) ---------------------------------------------------------------------------------------------------------------------- Total distributions to shareowners $ (0.04) $ (0.05) $ -- $ (0.03) $ (0.95) ---------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 1.76 $ (0.43) $ 1.42 $ 1.04 $ (3.39) ---------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 11.83 $ 10.07 $ 10.50 $ 9.08 $ 8.04 ====================================================================================================================== Total return* 17.97% (3.61)% 15.64% 13.25% (19.71)% Ratio of net expenses to average net assets+++ 1.51% 1.56% 1.55% 1.58% 1.64% Ratio of net investment income to average net assets+++ 0.31% 0.01% (0.14)% (0.31)% 0.27% Portfolio turnover rate 6% 7% 11% 12% 55% Net assets, end of period (in thousands) $19,582 $17,317 $ 18,899 $18,161 $ 17,171 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 1.51% 1.56% 1.55% 1.58% 1.70% Net investment income (loss) 0.31% 0.01% (0.14)% (0.31)% 0.21% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 1.51% 1.56% 1.55% 1.58% 1.64% Net investment income (loss) 0.31% 0.01% (0.14)% (0.31)% 0.27% ======================================================================================================================
(a) Calculated using average shares outstanding for the period. (b) Amount rounds to less than $0.01. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. ++ Ratios with no reduction for fees paid indirectly. The accompanying notes are an integral part of these financial statements. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 69 Financial Highlights (continued)
------------------------------------------------------------------------------------------------------------------------- Aggressive Allocation Fund ------------------------------------------------------- Year Year Year Year Year Ended Ended Ended Ended Ended 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ------------------------------------------------------------------------------------------------------------------------- Class Y Net asset value, beginning of period $ 10.65 $ 11.24 $ 9.67 $ 8.55 $ 12.02 ------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income (a) $ 0.22 $ 0.12 $ 0.11 $ 0.08 $ 0.13 Net realized and unrealized gain (loss) on investments 1.77 (0.55) 1.56 1.16 (2.65) ------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 1.99 $ (0.43) $ 1.67 $ 1.24 $ (2.52) ------------------------------------------------------------------------------------------------------------------------- Distributions to shareowners: Net investment income $ (0.15) $ (0.16) $ (0.10) $ (0.12) $ -- Net realized gain -- -- -- -- (0.95) ------------------------------------------------------------------------------------------------------------------------- Total distributions to shareowners $ (0.15) $ (0.16) $ (0.10) $ (0.12) $ (0.95) ------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 1.84 $ (0.59) $ 1.57 $ 1.12 $ (3.47) ------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 12.49 $ 10.65 $ 11.24 $ 9.67 $ 8.55 ========================================================================================================================= Total return* 18.87% (3.76)% 17.32% 14.49% (19.35)% Ratio of net expenses to average net assets+++ 0.67% 0.55% 0.46% 0.42% 0.43% Ratio of net investment income to average net assets+++ 1.89% 1.11% 0.99% 0.88% 1.58% Portfolio turnover rate 6% 7% 11% 12% 55% Net assets, end of period (in thousands) $ 489 $ 1,189 $ 1,311 $ 1,868 $ 1,627 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 0.67% 0.55% 0.46% 0.42% 0.43% Net investment income 1.89% 1.11% 0.99% 0.88% 1.58% Ratios with waiver of fees and assumption of expenses by the Adviser and reduction for fees paid indirectly: Net expenses 0.67% 0.55% 0.46% 0.42% 0.43% Net investment income 1.89% 1.11% 0.99% 0.88% 1.58% =========================================================================================================================
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions and the complete redemption of the investment at net asset value at the end of each period. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. ++ Ratios with no reduction for fees paid indirectly. The accompanying notes are an integral part of these financial statements. 70 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 Notes to Financial Statements | 7/31/13 1. Organization and Significant Accounting Policies Pioneer Ibbotson Asset Allocation Series (the Trust) is organized as a Delaware statutory trust and is registered with the Securities and Exchange Commission under the Investment Company Act of 1940 (the 1940 Act) as an open-end management investment company. The Trust consists of four separate funds, each issuing four classes of shares (collectively, the Funds, individually, the Fund) as follows: Pioneer Ibbotson Conservative Allocation Fund (Conservative Fund) Pioneer Ibbotson Moderate Allocation Fund (Moderate Fund) Pioneer Ibbotson Growth Allocation Fund (Growth Fund) Pioneer Ibbotson Aggressive Allocation Fund (Aggressive Fund) The investment objective of the Conservative Fund, the Moderate Fund and the Growth Fund is to seek long-term capital growth and current income. The investment objective of the Aggressive Fund is to seek long-term capital growth. Each Fund is a "fund of funds," which means that it seeks to achieve its investment objective by investing exclusively in other Pioneer funds ("underlying funds") managed by Pioneer Investment Management, Inc. (PIM) rather than by direct investment in securities. In the future, the Funds also may invest in regulated investment companies that are not managed by PIM. The Funds indirectly pay a portion of the expenses incurred by the underlying funds. Consequently, an investment in the Funds entails more direct and indirect expenses than direct investment in the underlying funds. Effective as of the close of business on December 31, 2009, the Fund's Class B shares are no longer offered to new or existing shareholders, except that dividends and/or capital gain distributions may continue to be reinvested in Class B shares, and shareholders may exchange their Class B shares for Class B shares of other Pioneer funds, as permitted by existing exchange privileges. Each class of shares represents an interest in the same portfolio of investments of each Fund and has identical rights (based on relative net asset values) to assets and liquidation proceeds. Share classes can bear different rates of class-specific fees and expenses such as transfer agent and distribution fees. Differences in class specific fees and expenses will result in differences in net investment income and, therefore, the payment of different dividends from net investment income earned by each class. The Amended and Restated Declaration of Trust of each Fund gives the Board of Trustees the flexibility to specify either per-share voting or dollar-weighted voting when submitting matters for shareholder approval. Under per-share voting, each share of a class of a Fund is entitled to one vote. Under dollar-weighted voting, a shareholder's Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 71 voting power is determined not by the number of shares owned, but by the dollar value of the shares on the record date. Each share class has exclusive voting rights with respect to matters affecting only that class, including with respect to the distribution plan for that class. There is no distribution plan for Class Y shares. Class B shares convert to Class A shares approximately eight years after the date of purchase. The financial statements have been prepared in conformity with U.S. generally accepted accounting principles that require the management of the Funds to, among other things, make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements, which are consistent with those policies generally accepted in the investment company industry: A. Security Valuation Security transactions are recorded as of trade date. The net asset value is computed once daily, on each day the New York Stock Exchange (NYSE) is open, as of the close of regular trading on the NYSE. In computing the net asset value, holdings of mutual fund shares are valued at the net asset value. Dividend income and realized capital gain distributions from investment company shares held are recorded on the ex-dividend date. Temporary cash investments are valued at amortized cost which approximates market value. Gains and losses on sales of investments are calculated on the identified cost method for both financial reporting and federal income tax purposes. To obtain information on the investment policies of an underlying affiliated fund, please refer to that fund's individual prospectus. B. Federal Income Taxes It is the Funds' policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all taxable income and net realized capital gains, if any, to its shareowners. Therefore, no provision for federal income tax is required. As of July 31, 2013, the Fund did not have any interest and penalties related to uncertain tax positions, which, if applicable, would be recorded as an income tax expense on the Statement of Operations. Tax years for the prior three fiscal years remain subject to examination by federal and state tax authorities. 72 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 The amount and character of income and capital gain distributions to shareowners are determined in accordance with federal income tax rules, which may differ from U.S. generally accepted accounting principles. Distributions in excess of net investment income or net realized gains are temporary overdistributions for financial statement purposes resulting from differences in recognition or classification of income or distributions for financial statement and tax purposes. Capital accounts within the financial statements are adjusted for permanent book/tax differences to reflect tax character, but are not adjusted for temporary differences. The Conservative Fund, Moderate Fund, Growth Fund and Aggressive Fund have net capital loss carryforwards of $2,788,108, $32,484,474, $42,274,920 and $30,672,473, respectively, of which the following amounts will expire in between 2018 and 2019 if not utilized:
-------------------------------------------------------------------------------- Conservative Moderate Growth Aggressive Fund Fund Fund Fund -------------------------------------------------------------------------------- 2018 $2,788,108 $30,598,239 $37,717,045 $29,213,192 2019 -- 1,886,235 4,557,875 1,459,281 -------------------------------------------------------------------------------- $2,788,108 $32,484,474 $42,274,920 $30,672,473 --------------------------------------------------------------------------------
At July 31, 2013, the Funds made reclassifications as listed below. These reclassifications have no impact on the net asset values of the respective Funds and are designed to present the Funds' capital accounts on a tax basis.
-------------------------------------------------------------------------------- Undistributed Net Accumulated Paid in Investment Realized Fund Capital Income Gain (Loss) -------------------------------------------------------------------------------- Conservative Fund $ (4) $ 21,291 $ (21,287) Moderate Fund -- 105,281 (105,281) Growth Fund -- 148,245 (148,245) Aggressive Fund 1 84,265 (84,266)
The tax character of distributions paid during the year ended July 31, 2013 was as follows:
-------------------------------------------------------------------------------- Ordinary Long-Term Fund Income Capital Gains Total -------------------------------------------------------------------------------- Conservative Fund $1,276,850 $ -- $1,276,850 Moderate Fund 3,416,192 -- 3,416,192 Growth Fund 2,716,083 -- 2,716,083 Aggressive Fund 934,735 -- 934,735
Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 73 The tax character of distributions paid during the year ended July 31, 2012 was as follows:
-------------------------------------------------------------------------------- Ordinary Long-Term Fund Income Capital Gains Total -------------------------------------------------------------------------------- Conservative Fund $1,629,458 $ -- $1,629,458 Moderate Fund 4,066,485 -- 4,066,485 Growth Fund 3,135,805 -- 3,135,805 Aggressive Fund 1,149,532 -- 1,149,532
The following table shows the components of distributable earnings on a federal income tax basis at July 31, 2013:
-------------------------------------------------------------------------------- Other Net Undistributed Book/Tax Unrealized Ordinary Capital Loss Temporary Appreciation Fund Income Carryforward Differences (Depreciation) -------------------------------------------------------------------------------- Conservative Fund $1,170,281 $ (2,788,108) $ -- $ 7,143,265 Moderate Fund 3,297,033 (32,484,474) -- 37,467,104 Growth Fund 2,828,375 (42,274,920) -- 47,883,267 Aggressive Fund 1,041,682 (30,672,473) -- 30,326,872
The differences between book-basis and tax-basis net unrealized appreciation are attributable to the tax deferral of losses on wash sales. C. Fund Shares The Funds record sales and repurchases of Fund shares as of trade date. Pioneer Funds Distributor, Inc. (PFD), the principal underwriter for the Funds and a wholly owned indirect subsidiary of UniCredit S.p.A.(UniCredit), earned the following in underwriting commissions on the sale of Class A shares during the year ended July 31, 2013:
-------------------------------------------------------------------------------- Fund Amount -------------------------------------------------------------------------------- Conservative Fund $16,485 Moderate Fund $42,874 Growth Fund $52,482 Aggressive Fund $34,407
74 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 D. Class Allocations Income, common expenses and realized and unrealized gains and losses are calculated at the Fund level and allocated daily to each class of shares based on its respective percentage of adjusted net assets at the beginning of the day. Distribution fees are calculated based on the average daily net asset value attributable to Class A, Class B and Class C shares of each Fund, respectively (see Note 4). Class Y shares do not pay distribution fees. All expenses and fees paid to the transfer agent, Pioneer Investment Management Shareholder Services, Inc. (PIMSS), for its services are allocated among the class of shares based on the number of accounts in each class and the ratable allocation of related out-of-pocket expenses (see Note 3). Distributions to shareowners are recorded as of the ex-dividend date. Distributions paid by each of the Funds with respect to each class of shares are calculated in the same manner and at the same time, except that net investment income dividends to Class A, Class B, Class C and Class Y shares of each Fund can reflect different transfer agent and distribution expense rates. E. Risks Some of the underlying funds can invest in either high yield securities or small/emerging growth companies. Investments in these types of securities generally are subject to greater volatility than either higher-grade securities or more-established companies in more developed markets, respectively. The Funds' prospectus contains unaudited information regarding the Fund's principal risks. Please refer to that document when considering the Funds' principal risks. 2. Management Agreement PIM, a wholly owned indirect subsidiary of UniCredit, manages the Funds' portfolios. Management fees are calculated daily at the following annual rates for each Fund: On assets up to 0.13% on investments in underlying funds managed by $2.5 billion Pioneer (and cash); and 0.17% on other investments On the next $1.5 billion 0.11% on investments in underlying funds managed by Pioneer (and cash); and 0.14% on other investments On the next $1.5 billion 0.10% on investments in underlying funds managed by Pioneer (and cash); and 0.12% on other investments On the next $1.5 billion 0.08% on investments in underlying funds managed by Pioneer (and cash); and 0.10% on other investments Over $7 billion 0.08% on investments in underlying funds managed by Pioneer (and cash); and 0.09% on other investments Each Fund may pay management fees equal to 0.17% of average daily net assets attributable to investments in underlying funds that are not managed by Pioneer. For the year ended July 31, 2013, the effective management fee for Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 75 each Fund was equivalent to 0.13% of the Fund's average daily net assets. Fees waived and expenses reimbursed during the year ended July 31, 2013 are reflected in the Statement of Operations. PIM has entered into a sub-advisory agreement with Ibbotson Associates, Inc. (Ibbotson). PIM, not the Funds, pays a portion of the fee it receives from each Fund to Ibbotson as compensation for its services to the Funds. In addition, under the PIM's management and administration agreements, certain other services and costs, including accounting, regulatory reporting and insurance premiums, are paid by the Funds as administrative reimbursements. Included in "Due to affiliates" reflected on the Statements of Assets and Liabilities are the following amounts payable to PIM at July 31, 2013:
-------------------------------------------------------------------------------- Fund Amount -------------------------------------------------------------------------------- Conservative Fund $10,948 Moderate Fund $31,559 Growth Fund $33,724 Aggressive Fund $19,258
PIM has contractually agreed to limit ordinary operating expenses to the extent required to reduce fund expenses, other than underlying fund fees and expenses, as follows. These expense limitations are in effect through December 1, 2014. There can be no assurance that PIM will extend the expense limitation agreement for a class of shares beyond the date referred to above:
-------------------------------------------------------------------------------- Fund Class A Class B Class C -------------------------------------------------------------------------------- Conservative Fund 0.78% 1.68% 1.68% Moderate Fund 0.74% 1.52% 1.52% Growth Fund 0.79% 1.57% 1.57% Aggressive Fund 0.85% 1.64% 1.64%
3. Transfer Agent PIMSS, a wholly owned indirect subsidiary of UniCredit, provides substantially all transfer agent and shareowner services to the Funds at negotiated rates. Included in "Due to affiliates" reflected on the Statement of Assets and Liabilities are the following amounts of transfer agent fees payable to PIMSS at July 31, 2013:
-------------------------------------------------------------------------------- Fund Amount -------------------------------------------------------------------------------- Conservative Fund $12,393 Moderate Fund $39,138 Growth Fund $44,936 Aggressive Fund $25,115
76 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 4. Distribution Plan The Funds have adopted a Distribution Plan pursuant to Rule 12b-1 of the 1940 Act with respect to Class A, Class B and Class C shares. Pursuant to the Plan, each Fund pays PFD 0.25% of the Fund's average daily net assets attributable to Class A shares as compensation for personal services and/or account maintenance services or distribution services with respect to Class A shares. Pursuant to the Plan, each Fund also pays PFD 1.00% of the average daily net assets attributable to Class B and Class C shares. The fee for Class B and C consists of a 0.25% service fee and a 0.75% distribution fee paid as compensation for personal services and/or account maintenance services or distribution services with regard to Class B and Class C shares. Included in "Due to affiliates" reflected on the Statements of Assets and Liabilities are the following amounts in distribution fees payable to PFD at July 31, 2013.
-------------------------------------------------------------------------------- Fund Amount -------------------------------------------------------------------------------- Conservative Fund $32,112 Moderate Fund $98,521 Growth Fund $99,752 Aggressive Fund $46,753
In addition, redemptions of each class of shares (except Class Y shares) may be subject to a contingent deferred sales charge (CDSC). A CDSC of 1.00% may be imposed on redemptions of certain net asset value purchases of Class A shares within 12 months of purchase. Class B shares that are redeemed within five years of purchase are subject to a CDSC at declining rates beginning at 4.00%, based on the lower of cost or market value of shares being redeemed. Redemptions of Class C shares within one year of purchase are subject to a CDSC of 1.00%, based on the lower of cost or market value of shares being redeemed. Shares purchased as part of an exchange remain subject to any CDSC that applied to the original purchase of those shares. There is no CDSC for Class Y shares. Proceeds from the CDSCs are paid to PFD. For the year ended July 31, 2013, the following CDSCs were paid to PFD:
-------------------------------------------------------------------------------- Fund Amount -------------------------------------------------------------------------------- Conservative Fund $ 3,795 Moderate Fund $ 7,665 Growth Fund $14,536 Aggressive Fund $ 6,560
5. Transactions in Underlying Funds - Affiliated Issuers An affiliated issuer may be considered one in which each Fund owns 5% or more of the outstanding voting securities, or a company which is under common control. For the purposes of this report, each Fund assumes the following to be affiliated issuers: Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 77 Pioneer Ibbotson Conservative Allocation Fund
------------------------------------------------------------------------------------------------ Beginning Acquisitions Dispositions Ending Underlying Funds (Affiliated) (Class Y) Shares Shares Shares Shares ------------------------------------------------------------------------------------------------ Pioneer Bond Fund 1,232,963 416,319 (100,639) 1,548,643 Pioneer Core Equity Fund * 122,519 6,212 (29,870)^ 98,861 Pioneer Disciplined Growth Fund * 127,353 4,197 (85,643)^ 45,907 Pioneer Disciplined Value Fund * 241,476 61,739 (190,014)^ 113,201 Pioneer Dynamic Credit Fund 260,971 27,303 (18,553) 269,721 Pioneer Emerging Markets Fund 25,329 4,432 (2,186) 27,575 Pioneer Equity Income Fund 29,515 1,008 (9,213) 21,310 Pioneer Floating Rate Fund 91,392 10,165 (5,389) 96,168 Pioneer Fund 51,083 13,932 (10,483) 54,532 Pioneer Fundamental Growth Fund 98,410 6,481 (13,634) 91,257 Pioneer Global Aggregate Bond Fund 111,467 15,765 (6,327) 120,905 Pioneer Global Equity Fund 249,168 21,128 (31,386) 238,910 Pioneer Global High Yield Fund 389,879 43,172 (30,086) 402,965 Pioneer High Yield Fund 248,164 18,901 (21,926) 245,139 Pioneer International Value Fund 205,544 73,015 (21,755) 256,804 Pioneer Mid Cap Value Fund 58,110 2,974 (8,009) 53,075 Pioneer Multi-Asset Ultrashort Income Fund 62,498 7,296 (3,449) 66,345 Pioneer Oak Ridge Small Cap Growth Fund -- 17,226 -- 17,226 Pioneer Real Estate Shares 18,643 9,369 (2,654) 25,358 Pioneer Select Mid Cap Growth Fund * 54,020 4,637 (34,194)^ 24,463 Pioneer Short Term Income Fund 1,331,421 90,011 (338,499) 1,082,933 Pioneer Strategic Income Fund 443,966 174,714 (29,464) 589,216 ------------------------------------------------------------------------------------------------ Realized Capital Gain Dividend Ending Underlying Funds (Affiliated) (Class Y) Gain (Loss) Distributions Income Value ------------------------------------------------------------------------------------------------ Pioneer Bond Fund $ 74,365 $ -- $ 525,476 $14,805,024 Pioneer Core Equity Fund 59,346 -- 17,485 1,417,667 Pioneer Disciplined Growth Fund 163,118 96,048 10,185 676,665 Pioneer Disciplined Value Fund 175,412 105,454 89,669 2,350,063 Pioneer Dynamic Credit Fund 3,180 -- 148,423 2,656,747 Pioneer Emerging Markets Fund (3,348) 2,712 6,668 654,901 Pioneer Equity Income Fund 51,129 -- 24,470 710,249 Pioneer Floating Rate Fund 656 -- 31,371 670,293 Pioneer Fund (22,227) 443,238 29,281 2,133,294 Pioneer Fundamental Growth Fund 64,052 10,411 9,588 1,412,661 Pioneer Global Aggregate Bond Fund 991 10,897 45,215 1,327,531 Pioneer Global Equity Fund 59,676 -- 55,232 2,778,521 Pioneer Global High Yield Fund 15,249 -- 287,132 3,981,293 Pioneer High Yield Fund 14,893 -- 142,451 2,662,214 Pioneer International Value Fund 24,089 -- 98,734 5,382,618 Pioneer Mid Cap Value Fund 11,673 -- 15,804 1,459,570 Pioneer Multi-Asset Ultrashort Income Fund 223 -- 10,105 667,433 Pioneer Oak Ridge Small Cap Growth Fund -- -- -- 635,122 Pioneer Real Estate Shares 3,329 -- 15,593 658,542 Pioneer Select Mid Cap Growth Fund 201,107 66,069 -- 921,515 Pioneer Short Term Income Fund (10,404) -- 335,188 10,450,302 Pioneer Strategic Income Fund 11,194 -- 266,272 6,487,267 --------- -------- ---------- ----------- $ 897,703 $734,829 $2,164,342 $64,899,492 ========= ======== ========== ===========
* The Fund was involved in a reorganization on June 7, 2013, please see the Fund's prospectus for additional information. ^ Includes share adjustments related to the reorganization. 78 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 Pioneer Ibbotson Moderate Allocation Fund
-------------------------------------------------------------------------------------------------- Beginning Acquisitions Dispositions Ending Underlying Funds (Affiliated) (Class Y) Shares Shares Shares Shares -------------------------------------------------------------------------------------------------- Pioneer Bond Fund 2,354,173 153,779 (126,337) 2,381,615 Pioneer Core Equity Fund * 398,069 -- (79,515)^ 318,554 Pioneer Disciplined Growth Fund * 739,321 -- (493,441)^ 245,880 Pioneer Disciplined Value Fund * 1,286,492 72,955 (731,620)^ 627,827 Pioneer Dynamic Credit Fund 520,922 66,210 -- 587,132 Pioneer Emerging Markets Fund 293,382 18,997 (738) 311,641 Pioneer Equity Income Fund 174,594 -- (32,747) 141,847 Pioneer Fund 243,002 -- (62,883) 180,119 Pioneer Fundamental Growth Fund 585,548 -- (125,741) 459,807 Pioneer Global Aggregate Bond Fund 266,852 61,727 -- 328,579 Pioneer Global Equity Fund 1,479,826 77,464 (4,721) 1,552,569 Pioneer Global High Yield Fund 779,217 149,012 (3,392) 924,837 Pioneer High Yield Fund 419,072 16,214 (38,566) 396,720 Pioneer International Value Fund 914,157 272,113 -- 1,186,270 Pioneer Mid Cap Value Fund 517,071 44,768 (27,979) 533,860 Pioneer Multi-Asset Ultrashort Income Fund 141,624 40,506 -- 182,130 Pioneer Oak Ridge Small Cap Growth Fund 202,273 56,117 (7,400) 250,990 Pioneer Real Estate Shares 126,821 49,171 -- 175,992 Pioneer Select Mid Cap Growth Fund * 417,940 -- (172,145)^ 245,795 Pioneer Short Term Income Fund 2,419,243 883 (176,893) 2,243,233 Pioneer Strategic Income Fund 405,682 151,875 -- 557,557 -------------------------------------------------------------------------------------------------- Realized Capital Gain Dividend Ending Underlying Funds (Affiliated) (Class Y) Gain (Loss) Distributions Income Value -------------------------------------------------------------------------------------------------- Pioneer Bond Fund $ 95,308 $ -- $ 893,408 $ 22,768,238 Pioneer Core Equity Fund 86,654 -- 54,530 4,568,064 Pioneer Disciplined Growth Fund 903,512 534,893 53,126 3,624,266 Pioneer Disciplined Value Fund 477,454 624,289 460,799 13,033,686 Pioneer Dynamic Credit Fund -- -- 308,411 5,783,250 Pioneer Emerging Markets Fund (3,515) 30,800 76,258 7,401,474 Pioneer Equity Income Fund 45,139 -- 161,511 4,727,765 Pioneer Fund 194,139 1,821,286 106,990 7,046,239 Pioneer Fundamental Growth Fund 644,057 54,019 48,579 7,117,807 Pioneer Global Aggregate Bond Fund -- 26,542 117,525 3,607,802 Pioneer Global Equity Fund 6,381 -- 318,119 18,056,376 Pioneer Global High Yield Fund (2,673) -- 627,547 9,137,388 Pioneer High Yield Fund 10,332 -- 233,981 4,308,375 Pioneer International Value Fund -- -- 410,482 24,864,225 Pioneer Mid Cap Value Fund 18,725 -- 143,504 14,681,144 Pioneer Multi-Asset Ultrashort Income Fund -- -- 25,203 1,832,227 Pioneer Oak Ridge Small Cap Growth Fund (9,847) 177,513 -- 9,254,015 Pioneer Real Estate Shares -- -- 94,301 4,570,507 Pioneer Select Mid Cap Growth Fund 723,055 409,738 -- 9,259,096 Pioneer Short Term Income Fund (3,634) -- 620,526 21,647,196 Pioneer Strategic Income Fund -- -- 253,486 6,138,707 ----------- ----------- ---------- ------------- $ 3,679,080 $ 3,185,087 $5,008,286 $ 203,427,847 =========== =========== ========== =============
* The Fund was involved in a reorganization on June 7, 2013, please see the Fund's prospectus for additional information. ^ Includes share adjustments related to the reorganization. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 79 Pioneer Ibbotson Growth Allocation Fund
------------------------------------------------------------------------------------------------ Beginning Acquisitions Dispositions Ending Underlying Funds (Affiliated) (Class Y) Shares Shares Shares Shares ------------------------------------------------------------------------------------------------ Pioneer Bond Fund 2,062,995 170,513 (4,345) 2,229,163 Pioneer Core Equity Fund * 647,219 -- (125,345)^ 521,874 Pioneer Disciplined Growth Fund * 967,921 -- (604,110)^ 363,811 Pioneer Disciplined Value Fund * 1,639,723 7,571 (866,823)^ 780,471 Pioneer Dynamic Credit Fund -- 35,382 -- 35,382 Pioneer Emerging Markets Fund 442,066 33,484 -- 475,550 Pioneer Equity Income Fund 283,723 -- (48,730) 234,993 Pioneer Fund 252,530 -- (46,872) 205,658 Pioneer Fundamental Growth Fund 869,642 -- (291,121) 578,521 Pioneer Global Aggregate Bond Fund 307,375 35,845 -- 343,220 Pioneer Global Equity Fund 1,752,987 142,876 -- 1,895,863 Pioneer Global High Yield Fund 444,668 621 (14,649) 430,640 Pioneer High Yield Fund 177,204 13,657 -- 190,861 Pioneer International Value Fund 1,323,293 173,343 -- 1,496,636 Pioneer Mid Cap Value Fund 649,261 1,261 (17,630) 632,892 Pioneer Oak Ridge Large Cap Growth Fund 597 -- -- 597 Pioneer Oak Ridge Small Cap Growth Fund 213,778 39,354 (3,674) 249,458 Pioneer Real Estate Shares 232,851 56,739 -- 289,590 Pioneer Select Mid Cap Growth Fund * 578,659 14,948 (216,242)^ 377,365 Pioneer Short Term Income Fund 1,768,363 12,956 (75,577) 1,705,742 Pioneer Strategic Income Fund 409,289 182,722 -- 592,011 ------------------------------------------------------------------------------------------------ Realized Capital Gain Dividend Ending Underlying Funds (Affiliated) (Class Y) Gain (Loss) Distributions Income Value ------------------------------------------------------------------------------------------------ Pioneer Bond Fund $ 3,062 $ -- $ 829,826 $ 21,310,800 Pioneer Core Equity Fund 124,612 -- 89,121 7,483,672 Pioneer Disciplined Growth Fund 900,329 762,723 75,133 5,362,579 Pioneer Disciplined Value Fund 500,748 769,458 559,822 16,202,568 Pioneer Dynamic Credit Fund -- -- 3,224 348,514 Pioneer Emerging Markets Fund -- 46,496 116,896 11,294,303 Pioneer Equity Income Fund (16,863) -- 265,919 7,832,301 Pioneer Fund (116,882) 2,139,931 121,706 8,045,339 Pioneer Fundamental Growth Fund 1,485,851 74,840 65,734 8,955,509 Pioneer Global Aggregate Bond Fund -- 29,948 128,292 3,768,553 Pioneer Global Equity Fund -- -- 381,792 22,048,889 Pioneer Global High Yield Fund 36,100 -- 317,775 4,254,728 Pioneer High Yield Fund -- -- 104,554 2,072,752 Pioneer International Value Fund -- -- 567,159 31,369,491 Pioneer Mid Cap Value Fund (30,639) -- 171,831 17,404,527 Pioneer Oak Ridge Large Cap Growth Fund -- -- -- 9,627 Pioneer Oak Ridge Small Cap Growth Fund (8,972) 189,680 -- 9,197,515 Pioneer Real Estate Shares -- -- 161,846 7,520,639 Pioneer Select Mid Cap Growth Fund 924,286 616,375 -- 14,215,336 Pioneer Short Term Income Fund (1,012) -- 464,052 16,460,406 Pioneer Strategic Income Fund -- -- 274,361 6,518,044 ---------- ---------- ---------- ------------ $3,800,620 $4,629,451 $4,699,043 $221,676,092 ========== ========== ========== ============
* The Fund was involved in a reorganization on June 7, 2013, please see the Fund's prospectus for additional information. ^ Includes share adjustments related to the reorganization. 80 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 Pioneer Ibbotson Aggressive Allocation Fund
--------------------------------------------------------------------------------------------------- Beginning Acquisitions Dispositions Ending Underlying Funds (Affiliated) (Class Y) Shares Shares Shares Shares --------------------------------------------------------------------------------------------------- Pioneer Bond Fund 741,519 1,368 (31,128) 711,759 Pioneer Core Equity Fund * 307,413 2,325 (41,208)^ 268,530 Pioneer Disciplined Growth Fund * 477,390 9,886 (284,971)^ 202,305 Pioneer Disciplined Value Fund * 894,773 9,864 (519,983)^ 384,654 Pioneer Emerging Markets Fund 323,695 20,704 -- 344,399 Pioneer Equity Income Fund 160,219 -- (38,611) 121,608 Pioneer Fund 150,102 -- (43,657) 106,445 Pioneer Fundamental Growth Fund 464,276 -- (188,655) 275,621 Pioneer Global Equity Fund 1,137,125 38,891 (9,377) 1,166,639 Pioneer International Value Fund 1,026,973 81,024 (1,043) 1,106,954 Pioneer Mid Cap Value Fund 536,100 -- (66,343) 469,757 Pioneer Oak Ridge Small Cap Growth Fund 157,040 34,263 (6,539) 184,764 Pioneer Real Estate Shares 184,210 23,991 -- 208,201 Pioneer Select Mid Cap Growth Fund * 397,785 11,371 (169,416)^ 239,740 Pioneer Short Term Income Fund 225,815 111,630 -- 337,445 Pioneer Strategic Income Fund 217,619 70,955 (6,343) 282,231 --------------------------------------------------------------------------------------------------- Realized Capital Gain Dividend Ending Underlying Funds (Affiliated) (Class Y) Gain (Loss) Distributions Income Value --------------------------------------------------------------------------------------------------- Pioneer Bond Fund $ 33,291 $ -- $ 278,801 $ 6,804,417 Pioneer Core Equity Fund 21,495 -- 44,799 3,850,720 Pioneer Disciplined Growth Fund 608,403 388,714 38,260 2,981,983 Pioneer Disciplined Value Fund 377,958 375,733 289,492 7,985,411 Pioneer Emerging Markets Fund -- 34,024 85,518 8,179,467 Pioneer Equity Income Fund 81,232 -- 142,257 4,053,180 Pioneer Fund (21,868) 1,190,414 66,354 4,164,138 Pioneer Fundamental Growth Fund 957,841 37,586 32,940 4,266,615 Pioneer Global Equity Fund 12,533 -- 242,660 13,568,011 Pioneer International Value Fund 930 -- 431,060 23,201,758 Pioneer Mid Cap Value Fund (116,211) -- 137,719 12,918,306 Pioneer Oak Ridge Small Cap Growth Fund (11,375) 137,935 -- 6,812,237 Pioneer Real Estate Shares -- -- 120,971 5,406,978 Pioneer Select Mid Cap Growth Fund 783,228 460,247 -- 9,031,022 Pioneer Short Term Income Fund -- -- 77,137 3,256,345 Pioneer Strategic Income Fund 1,278 -- 131,622 3,107,358 ---------- ----------- ---------- ------------ $2,728,735 $ 2,624,653 $2,119,590 $119,587,946 ========== =========== ========== ============
* The Fund was involved in a reorganization on June 7, 2013, please see the Fund's prospectus for additional information. ^ Includes share adjustments related to the reorganization. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 81 Report of Independent Registered Public Accounting Firm To the Board of Trustees and the Shareowners of Pioneer Ibbotson Asset Allocation Series: -------------------------------------------------------------------------------- We have audited the accompanying statements of assets and liabilities of Pioneer Ibbotson Asset Allocation Series (comprising, respectively, the Pioneer Ibbotson Conservative Allocation Fund, the Pioneer Ibbotson Moderate Allocation Fund, the Pioneer Ibbotson Growth Allocation Fund and the Pioneer Ibbotson Aggressive Allocation Fund, the "Funds"), including the schedules of investments, as of July 31, 2013, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Funds' internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of July 31, 2013 by correspondence with the custodian and others or by other appropriate auditing procedures where replies from others were not received. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the respective Funds constituting the Pioneer Ibbotson Asset Allocation Series at July 31, 2013, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles. /s/ Ernst & Young LLP Boston, Massachusetts September 24, 2013 82 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 Trustees, Officers and Service Providers Investment Adviser Pioneer Investment Management, Inc. Investment Subadviser Ibbotson Associates, Inc. Custodian and Sub-Administrator Brown Brothers Harriman & Co. Independent Registered Public Accounting Firm Ernst & Young LLP Principal Underwriter Pioneer Funds Distributor, Inc. Legal Counsel Bingham McCutchen LLP Shareowner Services and Transfer Agent Pioneer Investment Management Shareholder Services, Inc. Proxy voting policies and procedures of the Fund are available without charge, upon request, by calling our toll free number (1-800-225-6292). Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is publicly available to shareowners at us.pioneerinvestments.com. This information is also available on the Securities and Exchange Commission's web site at www.sec.gov. Trustees and Officers The Fund's Trustees and Officers are listed on the following pages, together with their principal occupations during at least the past five years. Trustees who are interested persons of the Fund within the meaning of the 1940 Act are referred to as Interested Trustees. Trustees who are not interested persons of the Fund are referred to as Independent Trustees. Each of the Trustees serves as a trustee of each of the 52 U.S. registered investment portfolios for which Pioneer serves as investment adviser (the "Pioneer Funds"). The address for all Trustees and all officers of the Fund is 60 State Street, Boston, Massachusetts 02109. The Statement of Additional Information of the Fund includes additional information about the Trustees and is available, without charge, upon request, by calling 1-800-225-6292. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 83 Independent Trustees
----------------------------------------------------------------------------------------------------------------------------- Name, Age and Term of Office and Other Directorships Position Held with the Fund Length of Service Principal Occupation Held by Trustee ----------------------------------------------------------------------------------------------------------------------------- Thomas J. Perna (62) Trustee since 2006. Chairman and Chief Executive Director, Broadridge Financial Chairman of the Board Serves until a Officer, Quadriserv, Inc. Solutions, Inc. (investor and Trustee successor trustee is (technology products for communications and securities elected or earlier securities lending industry) processing provider for financial retirement or (2008 - present); private services industry) (2009 - present); removal. investor (2004 - 2008); and Director, Quadriserv, Inc. (2005 - Senior Executive Vice present); and Commissioner, New President, The Bank of New Jersey State Civil Service York (financial and securities Commission (2011 - present) services) (1986 - 2004) ----------------------------------------------------------------------------------------------------------------------------- David R. Bock (69) Trustee since 2005. Managing Partner, Federal City Director of Enterprise Community Trustee Serves until a Capital Advisors (corporate Investment, Inc. (privately-held successor trustee is advisory services company) affordable housing finance company) elected or earlier (1997 - 2004 and 2008 - (1985 - 2010); Director of Oxford retirement or present); Interim Chief Analytica, Inc. (2008 - present); removal. Executive Officer, Oxford Director of The Swiss Helvetia Fund, Analytica, Inc. (privately Inc. (closed-end fund) (2010 - held research and consulting present); and Director of New York company) (2010); Executive Mortgage Trust (publicly traded Vice President and Chief mortgage REIT) (2004 - 2009, 2012 - Financial Officer, I-trax, present) Inc. (publicly traded health care services company) (2004 - 2007); and Executive Vice President and Chief Financial Officer, Pedestal Inc. (internet-based mortgage trading company) (2000 - 2002) -----------------------------------------------------------------------------------------------------------------------------
84 Pioneer Ibbotson Asset Allocation Series |Annual Report|7/31/13
----------------------------------------------------------------------------------------------------------------------------- Name, Age and Term of Office and Other Directorships Position Held with the Fund Length of Service Principal Occupation Held by Trustee ----------------------------------------------------------------------------------------------------------------------------- Benjamin M. Friedman (68) Trustee since 2008. William Joseph Maier Professor of Trustee, Mellon Trustee Serves until a Political Economy, Harvard Institutional Funds successor trustee is University (1972 - present) Investment Trust and elected or earlier Mellon Institutional retirement or removal. Funds Master Portfolio (oversaw 17 portfolios in fund complex) (1989-2008) ----------------------------------------------------------------------------------------------------------------------------- Margaret B.W. Graham (66) Trustee since 2004. Founding Director, Vice President None Trustee Serves until a and Corporate Secretary, The successor trustee is Winthrop Group, Inc. (consulting elected or earlier firm) (1982-present); Desautels retirement or removal. Faculty of Management, McGill University (1999 - present); and Manager of Research Operations and Organizational Learning, Xerox PARC, Xerox's advance research center (1990-1994) ----------------------------------------------------------------------------------------------------------------------------- Marguerite A. Piret (65) Trustee since 2004. President and Chief Executive Director of New America Trustee Serves until a Officer, Newbury, Piret & Company, High Income Fund, Inc. successor trustee is Inc. (investment banking firm) (closed-end investment elected or earlier (1981 - present) company) (2004 - retirement or removal. present); and member, Board of Governors, Investment Company Institute (2000 - 2006) ----------------------------------------------------------------------------------------------------------------------------- Stephen K. West (84) Trustee since 2004. Senior Counsel, Sullivan & Director, The Swiss Trustee Serves until a Cromwell LLP (law firm) (1998 - Helvetia Fund, Inc. successor trustee is present); and Partner, Sullivan & (closed-end investment elected or earlier Cromwell LLP (prior to 1998) company); and Director, retirement or removal. Invesco, Ltd. (formerly AMVESCAP, PLC) (investment manager) (1997-2005) -----------------------------------------------------------------------------------------------------------------------------
Pioneer Ibbotson Asset Allocation Series |Annual Report|7/31/13 85 Interested Trustees
----------------------------------------------------------------------------------------------------------------------------- Name, Age and Term of Office and Other Directorships Position Held with the Fund Length of Service Principal Occupation Held by Trustee ----------------------------------------------------------------------------------------------------------------------------- John F. Cogan, Jr. (87)* Trustee since 2004. Non-Executive Chairman and a director of None Trustee, President and Chief Serves until a Pioneer Investment Management USA Inc. Executive Officer of the Fund successor trustee is ("PIM-USA"); Chairman and a director of elected or earlier Pioneer; Chairman and Director of retirement or removal. Pioneer Institutional Asset Management, Inc. (since 2006); Director of Pioneer Alternative Investment Management Limited (Dublin) (until October 2011); President and a director of Pioneer Alternative Investment Management (Bermuda) Limited and affiliated funds; Deputy Chairman and a director of Pioneer Global Asset Management S.p.A. ("PGAM") (until April 2010); Director of Nano-C, Inc. (since 2003); Director of Cole Management Inc. (2004 - 2011); Director of Fiduciary Counseling, Inc. (until December 2011); President of all of the Pioneer Funds; and Retired Partner, Wilmer Cutler Pickering Hale and Dorr LLP ----------------------------------------------------------------------------------------------------------------------------- Daniel K. Kingsbury (54)* Trustee since 2007. Director, CEO and President of PIM-USA None Trustee and Executive Serves until a (since February 2007); Director and Vice President successor trustee is President of Pioneer and Pioneer elected or earlier Institutional Asset Management, Inc. retirement or removal. (since February 2007); Executive Vice President of all of the Pioneer Funds (since March 2007); Director of PGAM (2007 - 2010); Head of New Europe Division, PGAM (2000 - 2005); Head of New Markets Division, PGAM (2005 - 2007) -----------------------------------------------------------------------------------------------------------------------------
* Mr. Cogan and Mr. Kingsbury are Interested Trustees because they are officers or directors of the Fund's investment adviser and certain of its affiliates. 86 Pioneer Ibbotson Asset Allocation Series |Annual Report|7/31/13 Fund Officers
----------------------------------------------------------------------------------------------------------------------------- Name, Age and Term of Office and Other Directorships Position Held with the Fund Length of Service Principal Occupation Held by Officer ----------------------------------------------------------------------------------------------------------------------------- Christopher J. Kelley (48) Since 2010. Serves at Vice President and Associate None Secretary the discretion of the General Counsel of Pioneer since Board. January 2008 and Secretary of all of the Pioneer Funds since June 2010; Assistant Secretary of all of the Pioneer Funds from September 2003 to May 2010; and Vice President and Senior Counsel of Pioneer from July 2002 to December 2007 ----------------------------------------------------------------------------------------------------------------------------- Carol B. Hannigan (52) Since 2010. Serves at Fund Governance Director of None Assistant Secretary the discretion of the Pioneer since December 2006 and Board. Assistant Secretary of all the Pioneer Funds since June 2010; Manager - Fund Governance of Pioneer from December 2003 to November 2006; and Senior Paralegal of Pioneer from January 2000 to November 2003 ----------------------------------------------------------------------------------------------------------------------------- Thomas Reyes (50) Since 2010. Serves at Counsel of Pioneer since June 2007 None Assistant Secretary the discretion of the and Assistant Secretary of all the Board. Pioneer Funds since June 2010; and Vice President and Counsel at State Street Bank from October 2004 to June 2007 ----------------------------------------------------------------------------------------------------------------------------- Mark E. Bradley (53) Since 2008. Serves at Vice President - Fund Treasury of None Treasurer and Chief the discretion of the Pioneer; Treasurer of all of the Financial and Board. Pioneer Funds since March 2008; Accounting Officer of Deputy Treasurer of Pioneer from the Fund March 2004 to February 2008; and Assistant Treasurer of all of the Pioneer Funds from March 2004 to February 2008 ----------------------------------------------------------------------------------------------------------------------------- Luis I. Presutti (48) Since 2004. Serves at Assistant Vice President - Fund None Assistant Treasurer the discretion of the Treasury of Pioneer; and Assistant Board. Treasurer of all of the Pioneer Funds ----------------------------------------------------------------------------------------------------------------------------- Gary Sullivan (55) Since 2004. Serves at Fund Accounting Manager - Fund None Assistant Treasurer the discretion of the Treasury of Pioneer; and Assistant Board. Treasurer of all of the Pioneer Funds -----------------------------------------------------------------------------------------------------------------------------
Pioneer Ibbotson Asset Allocation Series |Annual Report|7/31/13 87 Fund Officers(continued)
----------------------------------------------------------------------------------------------------------------------------- Name, Age and Term of Office and Other Directorships Position Held with the Fund Length of Service Principal Occupation Held by Officer ----------------------------------------------------------------------------------------------------------------------------- David F. Johnson (33) Since 2009. Serves at the Fund Administration Manager - Fund None Assistant Treasurer discretion of the Board. Treasury of Pioneer since November 2008; Assistant Treasurer of all of the Pioneer Funds since January 2009; and Client Service Manager - Institutional Investor Services at State Street Bank from March 2003 to March 2007 ----------------------------------------------------------------------------------------------------------------------------- Jean M. Bradley (60) Since 2010. Serves at the Chief Compliance Officer of None Chief Compliance Officer discretion of the Board. Pioneer and of all the Pioneer Funds since March 2010; Director of Adviser and Portfolio Compliance at Pioneer since October 2005; and Senior Compliance Officer for Columbia Management Advisers, Inc. from October 2003 to October 2005 ----------------------------------------------------------------------------------------------------------------------------- Kelley O'Donnell (42) Since 2006. Serves at the Director--Transfer Agency None Anti-Money Laundering discretion of the Board. Compliance of Pioneer and Officer Anti-Money Laundering Officer of all the Pioneer Funds since 2006 -----------------------------------------------------------------------------------------------------------------------------
88 Pioneer Ibbotson Asset Allocation Series |Annual Report|7/31/13 This page for your notes. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 89 This page for your notes. 90 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 This page for your notes. Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 91 This page for your notes. 92 Pioneer Ibbotson Asset Allocation Series | Annual Report | 7/31/13 How to Contact Pioneer We are pleased to offer a variety of convenient ways for you to contact us for assistance or information. Call us for: -------------------------------------------------------------------------------- Account Information, including existing accounts, new accounts, prospectuses, applications and service forms 1-800-225-6292 FactFone(SM) for automated fund yields, prices, account information and transactions 1-800-225-4321 Retirement plans information 1-800-622-0176 Write to us: -------------------------------------------------------------------------------- PIMSS, Inc. P.O. Box 55014 Boston, Massachusetts 02205-5014 Our toll-free fax 1-800-225-4240 Our internet e-mail address ask.pioneer@pioneerinvestments.com (for general questions about Pioneer only) Visit our web site: us.pioneerinvestments.com This report must be preceded or accompanied by a prospectus. The Fund files a complete schedule of investments with the Securities and Exchange Commission for the first and third quarters for each fiscal year on Form N-Q. Shareholders may view the filed Form N-Q by visiting the Commission's web site at http://www.sec.gov. The filed form may also be viewed and copied at the Commission's Public Reference Room in Washington, DC. Information regarding the operations of the Public Reference Room may be obtained by calling 1-800-SEC-0330. [LOGO] PIONEER Investment(R) Pioneer Investment Management, Inc. 60 State Street Boston, MA 02109 us.pioneerinvestments.com Securities offered through Pioneer Funds Distributor, Inc. 60 State Street, Boston, MA 02109 Underwriter of Pioneer Mutual Funds, Member SIPC (C) 2013 Pioneer Investments 19417-07-0913 EX-99.(17)(D) 10 ex9917d.txt COMBINED SEMI-ANNUAL REPORT Pioneer Ibbotson Asset Allocation Series -------------------------------------------------------------------------------- Semiannual Report | January 31, 2014 -------------------------------------------------------------------------------- Ticker Symbols: Conservative Moderate Growth Aggressive Allocation Allocation Allocation Allocation Class Fund Fund Fund Fund ----- ---- ---- ---- ---- A PIAVX PIALX GRAAX PIAAX B PIBVX PIBLX GRABX IALBX C PICVX PIDCX GRACX IALCX Y IBBCX IMOYX IBGYX IBAYX [LOGO] PIONEER Investments(R) visit us: us.pioneerinvestments.com Table of Contents
Letter to Shareowners 2 Portfolio Management Discussion 4 Fund Reviews 8 Comparing Ongoing Fund Expenses 10 Prices and Distributions 18 Portfolio Summary & Performance Update 21 Schedule of Investments 41 Financial Statements 49 Notes to Financial Statements 71 Approval of Investment Advisory and Sub-Advisory Agreements 82 Trustees, Officers and Service Providers 102
Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 1 President's Letter Dear Shareowner, When we look into 2014, we foresee U.S. economic growth matching or exceeding 2013 levels. While unemployment remains high, employment has been rising steadily. Consumer incomes, savings, wealth, and debt-servicing capacity have been solid buttresses for the recovering housing and auto industries. Industrial activity is growing only moderately, but current corporate profits are generally solid and balance sheets appear able to support needed capital spending and dividend* payouts. Tax hikes, spending restraint and a better economy have meaningfully cut the federal budget deficit. A modestly improving European economy, continuing economic improvement in Japan, and a "soft landing" of growth in China appear likely to result in improving global growth in 2014, further supporting the U.S. economy. In addition, we feel that continuing slack in labor markets and capacity utilization offers the potential for continuing growth without bottlenecks and rising inflation, making it possible for the Federal Reserve (the Fed) to continue its accommodative monetary policies. After observing the strengthening economic trends, the Fed decided in December 2013 to start scaling back its QE (quantitative easing) program, but also said that short-term interest rates are likely to remain near zero for some time to come, given that inflation remains subdued and unemployment remains high. The U.S. government's partial shutdown in October 2013 rattled the markets to a degree, but does not appear to have had a significant negative impact on the economy or capital markets. As the year drew to a close, leaders in Washington reached a bipartisan budget agreement that establishes top-line government spending levels for the next two fiscal years, a move which should help to defuse the threat of another shutdown. That certainly was welcome news for investors who had grown weary of infighting in Washington and wary of the risks the policy uncertainty caused. There are certainly risks and uncertainties facing the global economy as we head into 2014. The European economy, while improving, remains weak, the Japanese economy faces a tax hike this spring, and a number of emerging market countries are experiencing difficulties. There are also geopolitical worries abroad and the aforementioned political fights at home. While most of the widely recognized risks we've outlined may already be "priced into" the market, we believe investors should continue to expect market volatility. * Dividends are not guaranteed. 2 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 At Pioneer, we have long advocated the benefits of staying diversified and investing for the long term. And while diversification does not assure a profit or protect against loss in a declining market, we believe there are still opportunities for prudent investors to earn attractive returns. Our advice, as always, is to work closely with a trusted financial advisor to discuss your goals and work together to develop an investment strategy that meets your individual needs, keeping in mind that there is no single best strategy that works for every investor. Pioneer's investment teams have, since 1928, sought out attractive opportunities in global equity and bond markets, using in-depth research to identify undervalued individual securities, and using thoughtful risk management to construct portfolios which seek to balance potential risks and reward in an ever-changing world. We encourage you to learn more about Pioneer and our time-tested approach to investing by consulting with your financial advisor or visiting us online at us.pioneerinvestments.com. We greatly appreciate your trust in us, and we thank you for investing with Pioneer. Sincerely, /s/ Daniel K. Kingsbury Daniel K. Kingsbury President and CEO Pioneer Investment Management USA, Inc. Any information in this shareowner report regarding market or economic trends or the factors influencing the Fund's historical or future performance are statements of opinion as of the date of this report. These statements should not be relied upon for any other purposes. Past performance is no guarantee of future results, and there is no guarantee that market forecasts discussed will be realized. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 3 Portfolio Management Discussion | 1/31/14 In the following interview, portfolio manager Brian Huckstep, CFA, Ibbotson Associates, Inc., sub-adviser to the Pioneer Ibbotson Asset Allocation Series funds, discusses the market environment and the investment strategies that applied to the funds during the six-month period ended January 31, 2014. Q How would you describe the economic and market backdrop during the six-month period ended January 31, 2014? A As the period opened, investors seemed to have put into perspective the likely extent and impact of the inevitable reduction in monetary policy accommodation by the Federal Reserve (the Fed). U.S. Treasury rates generally drifted higher during the period, but the change did not impede equity market gains. Positive market sentiment was supported by continued signs of strengthening in the U.S. economy. Abroad, while slowing economic growth in China remained a concern, a consensus seemed to emerge that Europe was finally pulling out of recession. The good news on the domestic economic front was capped in December 2013 by an upward revision in gross domestic product (GDP) growth for the third quarter, to 4.1%. Also in December, the improved tone among lawmakers in Washington concerning U.S. budget talks, which resulted in a bipartisan agreement establishing top-line spending levels for the next two fiscal years, also fueled optimism. The net result was a strong finish to 2013 for stocks, with most broad U.S. equity indices providing returns in the 10% range for the final three months of the year. Market sentiment would change, however, in January 2014. U.S. economic data, as gauged by key employment and manufacturing indicators, came in below expectations; China's manufacturing data showed also signs of contracting, causing emerging markets equities to swoon and yield spreads on sovereign-debt instruments to widen. As emerging markets currencies dipped along with other asset classes tied to the emerging economies, many investors saw a threat to the profitability of U.S. multinational corporations doing business in those nations. The net result was that in January most broad stock market indices gave up roughly half their gains attained during the first five months of the six-month period. For the full six-month period, the U.S. equity market, as measured by the Standard & Poor's 500 Index (the S&P 500), returned 6.85%, modestly lagging international equities, which gained 7.51% as measured by the Morgan Stanley Capital International (MSCI) Europe, Australasia, Far East (EAFE) ND Index. Within the U.S. market, small-capitalization stocks modestly outperformed their large-cap counterparts, while growth stocks significantly outperformed across all market capitalizations. Domestic bonds, as measured by the Barclays Aggregate Bond Index (the Barclays Index), the most popular measure of the performance of the U.S. bond market, returned 1.78% for the six-month period. 4 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Q What were the considerations and tactical shifts that you applied to the Pioneer portfolios in allocating their assets during the six-month period ended January 31, 2014? A Overall during the six-month period, our tactical emphases within the portfolios continued to be defensive, which detracted from benchmark- relative performance. Throughout the period, we maintained an underweight to equities within the portfolios. The positioning decision was initially driven by our concerns over the subpar U.S. economic recovery (as of the beginning of the period last summer), as well as the ongoing economic difficulties in Europe. While the tilt away from equities helped to mitigate the negative effects on the portfolios of the equity market reversal in January 2014, it constrained the funds' returns, to a certain degree, during the full six-month period. We have maintained the overall underweight to equities within the portfolios, in light of what appears to be a softening in company fundamentals combined with what, in our view, are excessive equity valuations. Within domestic equities, the portfolios are overweight to large caps as compared with both small caps and real estate investment trusts (REITs). The positioning reflects our view that large-cap firms, overall, are in the best position to weather an uncertain economic climate and a potential lowering of earnings expectations. While underweighting the portfolios to REITs proved beneficial for the funds' performance during the six-month period, that positive factor was offset somewhat by our decision to underweight small-cap stocks in relation to large caps. Finally, we have long viewed international equities as offering somewhat better value than the U.S. equity market, and so we maintained a tilt within the portfolios' overall equity allocations in favor of international stocks. That positioning had more or less a neutral effect on the funds' returns during the six-month period given that performance of both the broad international stock market and the U.S. markets were roughly comparable. Within the fixed-income sleeves of the portfolios, we underweighted longer-term bonds. The underweight helped the funds' relative returns for most of the six-month period as bonds with longer maturities were negatively affected by rising interest rates. For the full six-month period, however, the positioning was a relatively neutral performance factor given the decline in Treasury yields during January 2014. Our decision to trim the portfolios' exposures to lower-rated, high-yield corporate bonds was a modest negative performance factor, as having more exposure to credit sectors was rewarded in the optimistic market environment driven by an improving economy, which prevailed for most of the period. Q What factors are you watching most closely as you determine strategy for the Portfolios going forward? A For some time, we have viewed key sentiment indicators in the equity markets as pointing to excessive optimism. January's decline aside, investor positioning overall also has appeared strongly biased towards further Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 5 strength in stock markets. This is against a backdrop of what we see as challenged corporate fundamentals, with moderate earnings growth and stretched margins prevailing across most industries. As a consequence, the recent upward move in equity markets has mostly come from significant multiple expansions. Overall, stocks continue to appear to us to be trading at significantly overvalued levels, with U.S. stocks the most overvalued. Valuations of international stocks, we believe, continue to be more reasonable than those of U.S. stocks, but have become less attractive following their recent strong performance. Emerging markets equities have lagged the developed markets, as sustained outflows from the asset class have taken their toll. While growth has slowed across the emerging economies, based on our assessment of fair value, equities in the emerging markets are attractive relative to those in the developed markets. Within fixed-income, the risk/reward profile for most assets remains unattractive in our view. Investment-grade corporate bonds continue to offer better value than government bonds, but tighter credit spreads and a growing focus on the part of companies on increasing returns to equity shareholders have reduced their appeal. (Credit spreads are commonly defined as the differences in yield between Treasuries and other types of fixed-income securities with similar maturities.) High-yield and emerging markets bonds are somewhat more attractively valued within the context of current low default rates, but these assets present meaningful downside risks over the longer term as default rates eventually normalize. Against this backdrop, we expect to maintain the portfolios' exposures to short-term bonds at levels above our long-term strategic targets. It is possible that the recent levels of investor exuberance may continue in the short term as fundamentals are seemingly overlooked and central banks continue to take strong measures to act as a backstop for the markets. At some point, however, the focus will return to the true fundamental quality of assets. We expect the result will be to highlight for investors how expensive many assets have become, particularly given the significant challenges faced by the global economy. Given this outlook, we believe is it is wise to allow for a margin of safety in positioning the Pioneer portfolios. We will continue to closely monitor the economic backdrop as we manage the portfolios within their strategic asset allocation guidelines. 6 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Please refer to the Schedule of Investments on pages 41-48 for a full listing of fund securities. Each portfolio in the Ibbotson Asset Allocation Series is a "fund-of-funds" which seeks to achieve its investment objectives by investing in other funds, rather than direct positions in securities. In addition to the Fund's operating expenses, investors will indirectly bear the operating expenses of investments in any underlying funds. The Fund's performance depends on the adviser's skill in determining the strategic asset allocations, the mix of underlying Pioneer funds, as well as the performance of those underlying funds. The underlying funds' performance may be lower than the performance of the asset class that they were selected to represent. Each of the underlying funds has its own investment risks. Stocks and bonds can decline due to adverse issuer, market, regulatory, or economic developments. International markets are subject to additional risks, including that they may be less liquid and more volatile than U.S. markets; these risks may be magnified in emerging markets. Some of the underlying funds can invest in high-yield securities and/or small/emerging growth companies, which are generally subject to greater volatility than higher-grade securities and/or more-established companies. These risks may increase share price volatility. Before making an investment in any fund, you should consider all the risks associated with it. Please see the Fund Reviews beginning on page 8 for information on specific weightings and performance for each of the four funds in the Pioneer Ibbotson Asset Allocation Series. Any information in this shareowner report regarding market or economic trends or the factors influencing each fund's historical or future performance are statements of opinion as of the date of this report. These statements should not be relied upon for any other purposes. Past performance is no guarantee of future results, and there is no guarantee that market forecasts discussed will be realized. Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 7 Fund Reviews | 1/31/14 Portfolio Reviews Conservative Allocation The Fund's Class A shares returned 3.12% at net asset value during the six- month period ended January 31, 2014, while the S&P 500 returned 6.85% and the Barclays Index returned 1.78%. During the same period, the average return of the 739 mutual funds in Morningstar's Conservative Allocation Funds category was 2.93%, and the average return of the 364 mutual funds in Lipper's Mixed-Asset Target Conservative Allocation Funds category was 2.97%. At period end, the Fund was targeting an asset allocation of 31% to equities and 69% to fixed income, compared with a neutral allocation of 30% equities and 70% fixed income. Within the fixed-income portion of the portfolio, the largest position was in Pioneer Bond Fund, at 24.5% of total invested assets on January 31, 2014, followed by Pioneer Short Term Income Fund, at 16%, and Pioneer Strategic Income Fund, at 10.6%. The largest equity position in the portfolio at period end was in Pioneer International Value Fund, at 8.2% of total invested assets. Moderate Allocation The Fund's Class A shares returned 4.67% at net asset value during the six- month period ended January 31, 2014, while the S&P 500 returned 6.85% and the Barclays Index returned 1.78%. During the same period, the average return of the 902 mutual funds in Morningstar's Moderate Allocation Funds category was 4.53%, and the average return of the 546 mutual funds in Lipper's Mixed-Asset Target Moderate Allocation Funds category was 4.24%. At period end, the Fund was targeting an asset allocation of 61% to equities and 39% to fixed income, compared with a neutral allocation of 60% equities and 40% fixed income. Within the fixed-income portion of the portfolio, the largest position was in Pioneer Bond Fund, at 12.1% of total invested assets on January 31, 2014, followed by Pioneer Short Term Income Fund, at 10.2%. The largest equity position in the portfolio at period end was in Pioneer International Value Fund, at 12.7% of total invested assets, followed by Pioneer Global Equity Fund, at 8.9%, and Pioneer Mid Cap Value Fund, at 6.3%. Growth Allocation The Fund's Class A shares returned 5.21% at net asset value during the six- month period ended January 31, 2014, while the S&P 500 returned 6.85% and the Barclays Index returned 1.78%. During the same period, the average return of the 420 mutual funds in Morningstar's Aggressive Allocation Funds category was 5.51%, and the average return of the 581 mutual funds in Lipper's Mixed-Asset Target Growth Allocation Funds category was 5.10%. 8 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 At period end, the Fund was targeting an asset allocation of 74% to equities and 26% to fixed income, compared with a neutral allocation of 70% equities and 30% fixed income. Within the equity portion of the portfolio, the largest position was in Pioneer International Value Fund, at 14.3% of total invested assets on January 31, 2014, followed by Pioneer Global Equity Fund, at 10.2%, and Pioneer Mid Cap Value Fund, at 7.1%. Within the fixed-income portion of the portfolio, the largest position at period end was in Pioneer Bond Fund, at 10.2% of total invested assets, followed by Pioneer Short Term Income Fund, at 6.9%. Aggressive Allocation The Fund's Class A shares returned 5.59% at net asset value during the six- month period ended January 31, 2014, while the S&P 500 returned 6.85% and the Barclays Index returned 1.78%. During the same period, the average return of the 420 mutual funds in Morningstar's Aggressive Allocation Funds category was 5.51%, and the average return of the 834 mutual funds in Lipper's Multi-Cap Core Funds category was 7.32%. At period end, the Fund was targeting an asset allocation of 88% to equities and 12% to fixed income, compared with a neutral allocation of 90% equities and 10% fixed income. Within the equity portion of the portfolio, the largest position was in Pioneer International Value Fund, at 19.1% of total invested assets on January 31, 2014, followed by Pioneer Global Equity Fund, at 11.5%, and Pioneer Mid Cap Value Fund, at 9.5%. Within the fixed-income portion of the portfolio, the largest position at period end was in Pioneer Bond Fund, at 5.5% of total invested assets. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 9 Comparing Ongoing Fund Expenses Pioneer Ibbotson Conservative Allocation Fund As a shareowner in the Fund, you incur two types of costs: (1) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses; and (2) transaction costs, including sales charges (loads) on purchase payments. This example is intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 at the beginning of the Fund's latest six-month period and held throughout the six months. Using the Tables -------------------------------------------------------------------------------- Actual Expenses The first table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period as follows: (1) Divide your account value by $1,000 Example: an $8,600 account value (divided by) $1,000 = 8.6 (2) Multiply the result in (1) above by the corresponding share class's number in the third row under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. Expenses Paid on a $1,000 Investment in Pioneer Ibbotson Conservative Allocation Fund Based on actual returns from August 1, 2013 through January 31, 2014.
-------------------------------------------------------------------------------- Share Class A B C Y -------------------------------------------------------------------------------- Beginning Account $1,000.00 $1,000.00 $1,000.00 $1,000.00 Value on 8/1/13 -------------------------------------------------------------------------------- Ending Account Value $1,031.20 $1,027.90 $1,028.10 $1,032.50 (after expenses) on 1/31/14 -------------------------------------------------------------------------------- Expenses Paid $ 7.73 $ 12.37 $ 11.40 $7.24 During Period* --------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized net expense ratio plus the expense ratios of the underlying funds. These combined totals were 1.51%, 2.42%, 2.23% and 1.42% for Class A, Class B, Class C and Class Y shares, respectively. These combined ratios were multiplied by the average account value over the period, and then multiplied by 184/365 (to reflect the one-half year period) to calculate the "Expenses Paid During Period" in the table above. 10 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Hypothetical Example for Comparison Purposes The table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) that are charged at the time of the transaction. Therefore, the table below is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. Expenses Paid on a $1,000 Investment in Pioneer Ibbotson Conservative Allocation Fund Based on a hypothetical 5% per year return before expenses, reflecting the period from August 1, 2013 through January 31, 2014.
-------------------------------------------------------------------------------- Share Class A B C Y -------------------------------------------------------------------------------- Beginning Account $1,000.00 $1,000.00 $1,000.00 $1,000.00 Value on 8/1/13 -------------------------------------------------------------------------------- Ending Account Value $1,017.59 $1,013.01 $1,013.96 $1,018.05 (after expenses) on 1/31/14 -------------------------------------------------------------------------------- Expenses Paid $ 7.68 $ 12.28 $ 11.32 $ 7.22 During Period* --------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized net expense ratio plus the expense ratios of the underlying funds. These combined totals were 1.51%, 2.42%, 2.23% and 1.42% for Class A, Class B, Class C and Class Y shares, respectively. These combined ratios were multiplied by the average account value over the period, and then multiplied by 184/365 (to reflect the one-half year period) to calculate the "Expenses Paid During Period" in the table above. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 11 Comparing Ongoing Fund Expenses Pioneer Ibbotson Moderate Allocation Fund As a shareowner in the Fund, you incur two types of costs: (1) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses; and (2) transaction costs, including sales charges (loads) on purchase payments. This example is intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 at the beginning of the Fund's latest six-month period and held throughout the six months. Using the Tables -------------------------------------------------------------------------------- Actual Expenses The first table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period as follows: (1) Divide your account value by $1,000 Example: an $8,600 account value (divided by) $1,000 = 8.6 (2) Multiply the result in (1) above by the corresponding share class's number in the third row under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. Expenses Paid on a $1,000 Investment in Pioneer Ibbotson Moderate Allocation Fund Based on actual returns from August 1, 2013 through January 31, 2014.
-------------------------------------------------------------------------------- Share Class A B C Y -------------------------------------------------------------------------------- Beginning Account $1,000.00 $1,000.00 $1,000.00 $1,000.00 Value on 8/1/13 -------------------------------------------------------------------------------- Ending Account Value $1,046.70 $1,042.80 $1,043.20 $1,047.50 (after expenses) on 1/31/14 -------------------------------------------------------------------------------- Expenses Paid $ 7.53 $ 12.05 $ 11.07 $ 5.99 During Period* --------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized net expense ratio plus the expense ratios of the underlying funds. These combined totals were 1.46%, 2.34%, 2.15% and 1.16% for Class A, Class B, Class C and Class Y shares, respectively. These combined ratios were multiplied by the average account value over the period, and then multiplied by 184/365 (to reflect the one-half year period) to calculate the "Expenses Paid During Period" in the table above. 12 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Hypothetical Example for Comparison Purposes The table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) that are charged at the time of the transaction. Therefore, the table below is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. Expenses Paid on a $1,000 Investment in Pioneer Ibbotson Moderate Allocation Fund Based on a hypothetical 5% per year return before expenses, reflecting the period from August 1, 2013 through January 31, 2014.
-------------------------------------------------------------------------------- Share Class A B C Y -------------------------------------------------------------------------------- Beginning Account $1,000.00 $1,000.00 $1,000.00 $1,000.00 Value on 8/1/13 -------------------------------------------------------------------------------- Ending Account Value $1,017.85 $1,013.41 $1,014.37 $1,019.36 (after expenses) on 1/31/14 -------------------------------------------------------------------------------- Expenses Paid $ 7.43 $ 11.88 $ 10.92 $ 5.90 During Period* --------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized net expense ratio plus the expense ratios of the underlying funds. These combined totals were 1.46%, 2.34%, 2.15% and 1.16% for Class A, Class B, Class C and Class Y shares, respectively. These combined ratios were multiplied by the average account value over the period, and then multiplied by 184/365 (to reflect the one-half year period) to calculate the "Expenses Paid During Period" in the table above. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 13 Comparing Ongoing Fund Expenses Pioneer Ibbotson Growth Allocation Fund As a shareowner in the Fund, you incur two types of costs: (1) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses; and (2) transaction costs, including sales charges (loads) on purchase payments. This example is intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 at the beginning of the Fund's latest six-month period and held throughout the six months. Using the Tables -------------------------------------------------------------------------------- Actual Expenses The first table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period as follows: (1) Divide your account value by $1,000 Example: an $8,600 account value (divided by) $1,000 = 8.6 (2) Multiply the result in (1) above by the corresponding share class's number in the third row under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. Expenses Paid on a $1,000 Investment in Pioneer Ibbotson Growth Allocation Fund Based on actual returns from August 1, 2013 through January 31, 2014.
-------------------------------------------------------------------------------- Share Class A B C Y -------------------------------------------------------------------------------- Beginning Account $1,000.00 $1,000.00 $1,000.00 $1,000.00 Value on 8/1/13 -------------------------------------------------------------------------------- Ending Account Value $1,052.10 $1,047.70 $1,048.50 $1,053.80 (after expenses) on 1/31/14 -------------------------------------------------------------------------------- Expenses Paid $ 7.81 $ 12.49 $ 11.36 $ 6.16 During Period* --------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized net expense ratio plus the expense ratios of the underlying funds. These combined totals were 1.51%, 2.42%, 2.20% and 1.19% for Class A, Class B, Class C and Class Y shares, respectively. These combined ratios were multiplied by the average account value over the period, and then multiplied by 184/365 (to reflect the one-half year period) to calculate the "Expenses Paid During Period" in the table above. 14 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Hypothetical Example for Comparison Purposes The table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) that are charged at the time of the transaction. Therefore, the table below is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. Expenses Paid on a $1,000 Investment in Pioneer Ibbotson Growth Allocation Fund Based on a hypothetical 5% per year return before expenses, reflecting the period from August 1, 2013 through January 31, 2014.
-------------------------------------------------------------------------------- Share Class A B C Y -------------------------------------------------------------------------------- Beginning Account $1,000.00 $1,000.00 $1,000.00 $1,000.00 Value on 8/1/13 -------------------------------------------------------------------------------- Ending Account Value $1,017.59 $1,013.01 $1,014.12 $1,019.21 (after expenses) on 1/31/14 -------------------------------------------------------------------------------- Expenses Paid $ 7.68 $ 12.28 $ 11.17 $ 6.06 During Period* --------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized net expense ratio plus the expense ratios of the underlying funds. These combined totals were 1.51%, 2.42%, 2.20% and 1.19% for Class A, Class B, Class C and Class Y shares, respectively. These combined ratios were multiplied by the average account value over the period, and then multiplied by 184/365 (to reflect the one-half year period) to calculate the "Expenses Paid During Period" in the table above. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 15 Comparing Ongoing Fund Expenses Pioneer Ibbotson Aggressive Allocation Fund As a shareowner in the Fund, you incur two types of costs: (1) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses; and (2) transaction costs, including sales charges (loads) on purchase payments. This example is intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 at the beginning of the Fund's latest six-month period and held throughout the six months. Using the Tables -------------------------------------------------------------------------------- Actual Expenses The first table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period as follows: (1) Divide your account value by $1,000 Example: an $8,600 account value (divided by) $1,000 = 8.6 (2) Multiply the result in (1) above by the corresponding share class's number in the third row under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. Expenses Paid on a $1,000 Investment in Pioneer Ibbotson Aggressive Allocation Fund Based on actual returns from August 1, 2013 through January 31, 2014.
-------------------------------------------------------------------------------- Share Class A B C Y -------------------------------------------------------------------------------- Beginning Account $1,000.00 $1,000.00 $1,000.00 $1,000.00 Value on 8/1/13 -------------------------------------------------------------------------------- Ending Account Value $1,055.90 $1,052.00 $1,052.20 $1,058.40 (after expenses) on 1/31/14 -------------------------------------------------------------------------------- Expenses Paid $ 8.71 $ 13.09 $ 12.31 $ 7.00 During Period* --------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized net expense ratio plus the expense ratios of the underlying funds. These combined totals were 1.68%, 2.53%, 2.38% and 1.35% for Class A, Class B, Class C and Class Y shares, respectively. These combined ratios were multiplied by the average account value over the period, and then multiplied by 184/365 (to reflect the one-half year period) to calculate the "Expenses Paid During Period" in the table above. 16 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Hypothetical Example for Comparison Purposes The table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) that are charged at the time of the transaction. Therefore, the table below is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. Expenses Paid on a $1,000 Investment in Pioneer Ibbotson Aggressive Allocation Fund Based on a hypothetical 5% per year return before expenses, reflecting the period from August 1, 2013 through January 31, 2014.
-------------------------------------------------------------------------------- Share Class A B C Y -------------------------------------------------------------------------------- Beginning Account $1,000.00 $1,000.00 $1,000.00 $1,000.00 Value on 8/1/13 -------------------------------------------------------------------------------- Ending Account Value $1,016.74 $1,012.45 $1,013.21 $1,018.40 (after expenses) on 1/31/14 -------------------------------------------------------------------------------- Expenses Paid $ 8.54 $ 12.83 $ 12.08 $ 6.87 During Period* --------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized net expense ratio plus the expense ratios of the underlying funds. These combined totals were 1.68%, 2.53%, 2.38% and 1.35% for Class A, Class B, Class C and Class Y shares, respectively. These combined ratios were multiplied by the average account value over the period, and then multiplied by 184/365 (to reflect the one-half year period) to calculate the "Expenses Paid During Period" in the table above. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 17 Prices and Distributions | 1/31/14 Net Asset Value per Share -------------------------------------------------------------------------------- Conservative Allocation Fund
-------------------------------------------------------------------------------- Class 1/31/14 7/31/13 -------------------------------------------------------------------------------- A $11.42 $11.42 -------------------------------------------------------------------------------- B $11.27 $11.18 -------------------------------------------------------------------------------- C $11.12 $11.09 -------------------------------------------------------------------------------- Y $10.94 $10.86 -------------------------------------------------------------------------------- Moderate Allocation Fund -------------------------------------------------------------------------------- Class 1/31/14 7/31/13 -------------------------------------------------------------------------------- A $12.06 $11.72 -------------------------------------------------------------------------------- B $11.75 $11.31 -------------------------------------------------------------------------------- C $11.24 $10.92 -------------------------------------------------------------------------------- Y $12.19 $11.86 -------------------------------------------------------------------------------- Growth Allocation Fund -------------------------------------------------------------------------------- Class 1/31/14 7/31/13 -------------------------------------------------------------------------------- A $12.78 $12.32 -------------------------------------------------------------------------------- B $11.43 $10.93 -------------------------------------------------------------------------------- C $12.10 $11.65 -------------------------------------------------------------------------------- Y $13.03 $12.56 -------------------------------------------------------------------------------- Aggressive Allocation Fund -------------------------------------------------------------------------------- Class 1/31/14 7/31/13 -------------------------------------------------------------------------------- A $13.04 $12.47 -------------------------------------------------------------------------------- B $12.33 $11.72 -------------------------------------------------------------------------------- C $12.39 $11.83 -------------------------------------------------------------------------------- Y $13.12 $12.49 --------------------------------------------------------------------------------
18 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Distributions per Share: 7/31/13-1/31/14 -------------------------------------------------------------------------------- Conservative Allocation Fund
-------------------------------------------------------------------------------- Net Investment Short-Term Long-Term Class Income Capital Gains Capital Gains -------------------------------------------------------------------------------- A $0.3586 $-- $-- -------------------------------------------------------------------------------- B $0.2232 $-- $-- -------------------------------------------------------------------------------- C $0.2834 $-- $-- -------------------------------------------------------------------------------- Y $0.2724 $-- $-- -------------------------------------------------------------------------------- Moderate Allocation Fund -------------------------------------------------------------------------------- Net Investment Short-Term Long-Term Class Income Capital Gains Capital Gains -------------------------------------------------------------------------------- A $0.2108 $-- $-- -------------------------------------------------------------------------------- B $0.0445 $-- $-- -------------------------------------------------------------------------------- C $0.1539 $-- $-- -------------------------------------------------------------------------------- Y $0.2380 $-- $-- -------------------------------------------------------------------------------- Growth Allocation Fund -------------------------------------------------------------------------------- Net Investment Short-Term Long-Term Class Income Capital Gains Capital Gains -------------------------------------------------------------------------------- A $0.1855 $-- $-- -------------------------------------------------------------------------------- B $0.0218 $-- $-- -------------------------------------------------------------------------------- C $0.1181 $-- $-- -------------------------------------------------------------------------------- Y $0.2097 $-- $-- -------------------------------------------------------------------------------- Aggressive Allocation Fund -------------------------------------------------------------------------------- Net Investment Short-Term Long-Term Class Income Capital Gains Capital Gains -------------------------------------------------------------------------------- A $0.1308 $-- $-- -------------------------------------------------------------------------------- B $ -- $-- $-- -------------------------------------------------------------------------------- C $0.0589 $-- $-- -------------------------------------------------------------------------------- Y $0.1020 $-- $-- --------------------------------------------------------------------------------
Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 19 Prices and Distributions | 1/31/14 (continued) Index Definitions -------------------------------------------------------------------------------- The Standard & Poor's 500 Index (the S&P 500) is an unmanaged, commonly used measure of the broad U.S. stock market. The Barclays Aggregate Bond Index is an unmanaged measure of the U.S. bond market. Index returns are calculated monthly, assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. It is not possible to invest directly in an index. The indices defined here pertain to the "Value of $10,000 Investment" and "Value of $5 Million Investment" charts on pages 22-25, 27-30, 32-35 and 37-40. 20 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Portfolio Summary | 1/31/14 Pioneer Ibbotson Conservative Allocation Fund Target Asset Allocations -------------------------------------------------------------------------------- [THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
Fixed Income 70% Equity 30%
Actual Asset Allocations -------------------------------------------------------------------------------- [THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
Fixed Income 69.1% U.S. Equity 17.6% International Equity 13.3%
Actual Portfolio Holdings (based on total portfolio) --------------------------------------------------------------------------------
U.S. Stocks -------------------------------------------------------------------------------- Pioneer Fund Class Y 3.10% -------------------------------------------------------------------------------- Pioneer Disciplined Value Fund Class Y 3.06 -------------------------------------------------------------------------------- Pioneer Mid Cap Value Fund Class Y 2.07 -------------------------------------------------------------------------------- Pioneer Core Equity Fund Class Y 2.07 -------------------------------------------------------------------------------- Pioneer Fundamental Growth Fund Class Y 2.07 -------------------------------------------------------------------------------- Pioneer Real Estate Shares Class Y 1.07 -------------------------------------------------------------------------------- Pioneer Select Mid Cap Growth Fund Class Y 1.04 -------------------------------------------------------------------------------- Pioneer Equity Income Fund Class Y 1.04 -------------------------------------------------------------------------------- Pioneer Oak Ridge Small Cap Growth Fund Class Y 1.04 -------------------------------------------------------------------------------- Pioneer Disciplined Growth Fund Class Y 1.03 -------------------------------------------------------------------------------- International Stocks -------------------------------------------------------------------------------- Pioneer International Value Fund Class Y 8.16% -------------------------------------------------------------------------------- Pioneer Global Equity Fund Class Y 4.12 -------------------------------------------------------------------------------- Pioneer Emerging Markets Fund Class Y 1.02 -------------------------------------------------------------------------------- Bonds -------------------------------------------------------------------------------- Pioneer Bond Fund Class Y 24.54% -------------------------------------------------------------------------------- Pioneer Short Term Income Fund Class Y 15.98 -------------------------------------------------------------------------------- Pioneer Strategic Income Fund Class Y 10.62 -------------------------------------------------------------------------------- Pioneer Global High Yield Fund Class Y 6.32 -------------------------------------------------------------------------------- Pioneer Dynamic Credit Fund Class Y 4.24 -------------------------------------------------------------------------------- Pioneer High Yield Fund Class Y 3.17 -------------------------------------------------------------------------------- Pioneer Global Multisector Income Fund Class Y 2.12 -------------------------------------------------------------------------------- Pioneer Floating Rate Fund Class Y 1.06 -------------------------------------------------------------------------------- Pioneer Multi-Asset Ultrashort Income Fund Class Y 1.06 --------------------------------------------------------------------------------
This list excludes temporary cash investments and derivative instruments. The portfolio is actively managed, and current holdings may be different. The holdings listed should not be considered recommendations to buy or sell any security listed. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 21 Performance Update | 1/31/14 Class A Shares Pioneer Ibbotson Conservative Allocation Fund Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Class A shares of Pioneer Ibbotson Conservative Allocation Fund at public offering price during the periods shown, compared to that of the Standard & Poor's 500 Index and the Barclays Aggregate Bond Index.
Average Annual Total Returns (As of January 31, 2014) -------------------------------------------------------------------------------- Public Net Asset Offering Period Value (NAV) Price (POP) -------------------------------------------------------------------------------- Life-of-Class 5/12/2005 4.73% 4.03% 5 Years 10.14 8.85 1 Year 5.62 -0.45 -------------------------------------------------------------------------------- Expense Ratio (Per prospectus dated December 1, 2013) -------------------------------------------------------------------------------- Gross -------------------------------------------------------------------------------- 1.48% --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $10,000 Investment
Pioneer Ibbotson Barclays Aggregate Standard & Poor's Conservative Allocation Fund Bond Index 500 Index 5/31/2005 $ 9,425 $ 10,000 $ 10,000 1/31/2006 $ 9,900 $ 10,047 $ 10,872 1/31/2007 $ 10,542 $ 10,477 $ 12,448 1/31/2008 $ 10,820 $ 11,400 $ 12,160 1/31/2009 $ 8,617 $ 11,695 $ 7,465 1/31/2010 $ 10,819 $ 12,690 $ 9,938 1/31/2011 $ 12,015 $ 13,332 $ 12,145 1/31/2012 $ 12,212 $ 14,487 $ 12,654 1/31/2013 $ 13,222 $ 14,862 $ 14,775 1/31/2014 $ 13,966 $ 14,880 $ 17,953
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. NAV results represent the percent change in net asset value per share. Returns would have been lower had sales charges been reflected. POP returns reflect deduction of maximum 5.75% sales charge. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results shown reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. 22 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Performance Update | 1/31/14 Class B Shares Pioneer Ibbotson Conservative Allocation Fund Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Class B shares of Pioneer Ibbotson Conservative Allocation Fund during the periods shown, compared to that of the Standard & Poor's 500 Index and the Barclays Aggregate Bond Index.
Average Annual Total Returns (As of January 31, 2014) -------------------------------------------------------------------------------- If If Period Held Redeemed -------------------------------------------------------------------------------- Life-of-Class 5/12/2005 3.83% 3.83% 5 Years 9.20 9.20 1 Year 4.76 0.76 -------------------------------------------------------------------------------- Expense Ratio (Per prospectus dated December 1, 2013) -------------------------------------------------------------------------------- Gross -------------------------------------------------------------------------------- 2.32% --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $10,000 Investment
Pioneer Ibbotson Barclays Aggregate Standard & Poor's Conservative Allocation Fund Bond Index 500 Index 5/31/2005 $ 10,000 $ 10,000 $ 10,000 1/31/2006 $ 10,448 $ 10,047 $ 10,872 1/31/2007 $ 11,027 $ 10,477 $ 12,448 1/31/2008 $ 11,210 $ 11,400 $ 12,160 1/31/2009 $ 8,847 $ 11,695 $ 7,465 1/31/2010 $ 11,000 $ 12,690 $ 9,938 1/31/2011 $ 12,117 $ 13,332 $ 12,145 1/31/2012 $ 12,218 $ 14,487 $ 12,654 1/31/2013 $ 13,115 $ 14,862 $ 14,775 1/31/2014 $ 13,739 $ 14,880 $ 17,953
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. "If Held" results represent the percent change in net asset value per share. Returns would have been lower had sales charges been reflected. "If Redeemed" returns reflect the deduction of applicable contingent deferred sales charge (CDSC). The maximum CDSC for Class B shares is 4% and declines over five years. For more complete information, please see the prospectus. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results shown reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 23 Performance Update | 1/31/14 Class C Shares Pioneer Ibbotson Conservative Allocation Fund Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Class C shares of Pioneer Ibbotson Conservative Allocation Fund during the periods shown, compared to that of the Standard & Poor's 500 Index and the Barclays Aggregate Bond Index.
Average Annual Total Returns (As of January 31, 2014) -------------------------------------------------------------------------------- If If Period Held Redeemed -------------------------------------------------------------------------------- Life-of-Class 5/12/2005 3.85% 3.85% 5 Years 9.28 9.28 1 Year 4.99 4.99 -------------------------------------------------------------------------------- Expense Ratio (Per prospectus dated December 1, 2013) -------------------------------------------------------------------------------- Gross -------------------------------------------------------------------------------- 2.22% --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $10,000 Investment
Pioneer Ibbotson Barclays Aggregate Standard & Poor's Conservative Allocation Fund Bond Index 500 Index 5/31/2005 $ 10,000 $ 10,000 $ 10,000 1/31/2006 $ 10,439 $ 10,047 $ 10,872 1/31/2007 $ 11,029 $ 10,477 $ 12,448 1/31/2008 $ 11,223 $ 11,400 $ 12,160 1/31/2009 $ 8,843 $ 11,695 $ 7,465 1/31/2010 $ 10,985 $ 12,690 $ 9,938 1/31/2011 $ 12,128 $ 13,332 $ 12,145 1/31/2012 $ 12,231 $ 14,487 $ 12,654 1/31/2013 $ 13,129 $ 14,862 $ 14,775 1/31/2014 $ 13,784 $ 14,880 $ 17,953
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Class C shares held for less than one year are also subject to a 1% contingent deferred sales charge (CDSC). "If Held" results represent the percent change in net asset value per share. Returns would have been lower had sales charges been reflected. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results shown reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. 24 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Performance Update | 1/31/14 Class Y Shares Pioneer Ibbotson Conservative Allocation Fund Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $5 million investment made in Class Y shares of Pioneer Ibbotson Conservative Allocation Fund during the periods shown, compared to that of the Standard & Poor's 500 Index and the Barclays Aggregate Bond Index.
Average Annual Total Returns (As of January 31, 2014) -------------------------------------------------------------------------------- If If Period Held Redeemed -------------------------------------------------------------------------------- Life-of-Class 5/12/2005 3.65% 3.65% 5 Years 8.87 8.87 1 Year 5.18 5.18 -------------------------------------------------------------------------------- Expense Ratio (Per prospectus dated December 1, 2013) -------------------------------------------------------------------------------- Gross -------------------------------------------------------------------------------- 2.14% --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $5 Million Investment
Pioneer Ibbotson Barclays Aggregate Standard & Poor's Conservative Allocation Fund Bond Index 500 Index 5/31/2005 $ 5,000,000 $ 5,000,000 $ 5,000,000 1/31/2006 $ 5,263,864 $ 5,023,369 $ 5,435,945 1/31/2007 $ 5,591,061 $ 5,238,604 $ 6,224,088 1/31/2008 $ 5,726,575 $ 5,700,033 $ 6,080,128 1/31/2009 $ 4,423,927 $ 5,847,553 $ 3,732,378 1/31/2010 $ 5,330,149 $ 6,344,969 $ 4,969,179 1/31/2011 $ 5,937,406 $ 6,666,058 $ 6,072,375 1/31/2012 $ 6,008,680 $ 7,243,481 $ 6,326,910 1/31/2013 $ 6,433,159 $ 7,430,763 $ 7,387,467 1/31/2014 $ 6,766,675 $ 7,439,973 $ 8,976,294
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Performance shown for periods prior to the inception of the Fund's Class Y shares on October 5, 2005, reflects the NAV performance of the Fund's Class A shares. The performance does not reflect differences in expenses, including the Rule 12b-1 fees applicable to Class A shares. Since fees for Class A shares are generally higher than those of Class Y shares, the performance for Class Y shares prior to their inception would have been higher than the performance shown. Class Y shares are not subject to sales charges and are available for limited groups of eligible investors, including institutional investors. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results shown reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 25 Portfolio Summary | 1/31/14 Pioneer Ibbotson Moderate Allocation Fund Target Asset Allocations -------------------------------------------------------------------------------- [THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
Equity 60% Fixed Income 40%
Actual Asset Allocations -------------------------------------------------------------------------------- [THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
Fixed Income 39.0% U.S. Equity 35.0% International Equity 26.0%
Actual Portfolio Holdings (based on total portfolio) --------------------------------------------------------------------------------
U.S. Stocks -------------------------------------------------------------------------------- Pioneer Mid Cap Value Fund Class Y 6.26% -------------------------------------------------------------------------------- Pioneer Oak Ridge Small Cap Growth Fund Class Y 5.66 -------------------------------------------------------------------------------- Pioneer Disciplined Value Fund Class Y 5.13 -------------------------------------------------------------------------------- Pioneer Fund Class Y 3.32 -------------------------------------------------------------------------------- Pioneer Fundamental Growth Fund Class Y 3.25 -------------------------------------------------------------------------------- Pioneer Select Mid Cap Growth Fund Class Y 3.19 -------------------------------------------------------------------------------- Pioneer Real Estate Shares Class Y 2.53 -------------------------------------------------------------------------------- Pioneer Core Equity Fund Class Y 2.17 -------------------------------------------------------------------------------- Pioneer Equity Income Fund Class Y 2.12 -------------------------------------------------------------------------------- Pioneer Disciplined Growth Fund Class Y 1.39 -------------------------------------------------------------------------------- International Stocks -------------------------------------------------------------------------------- Pioneer International Value Fund Class Y 12.71% -------------------------------------------------------------------------------- Pioneer Global Equity Fund Class Y 8.88 -------------------------------------------------------------------------------- Pioneer Emerging Markets Fund Class Y 4.45 -------------------------------------------------------------------------------- Bonds -------------------------------------------------------------------------------- Pioneer Bond Fund Class Y 12.06% -------------------------------------------------------------------------------- Pioneer Short Term Income Fund Class Y 10.16 -------------------------------------------------------------------------------- Pioneer Global High Yield Fund Class Y 4.15 -------------------------------------------------------------------------------- Pioneer Strategic Income Fund Class Y 3.80 -------------------------------------------------------------------------------- Pioneer Dynamic Credit Fund Class Y 3.78 -------------------------------------------------------------------------------- Pioneer High Yield Fund Class Y 2.04 -------------------------------------------------------------------------------- Pioneer Global Multisector Income Fund Class Y 1.96 -------------------------------------------------------------------------------- Pioneer Multi-Asset Ultrashort Income Fund Class Y 0.99 --------------------------------------------------------------------------------
This list excludes temporary cash investments and derivative instruments. The portfolio is actively managed, and current holdings may be different. The holdings listed should not be considered recommendations to buy or sell any security listed. 26 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Performance Update | 1/31/14 Class A Shares Pioneer Ibbotson Moderate Allocation Fund Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Class A shares of Pioneer Ibbotson Moderate Allocation Fund at public offering price during the periods shown, compared to that of the Standard & Poor's 500 Index and the Barclays Aggregate Bond Index.
Average Annual Total Returns (As of January 31, 2014) -------------------------------------------------------------------------------- Public Net Asset Offering Period Value (NAV) Price (POP) -------------------------------------------------------------------------------- Life-of-Class 8/9/2004 5.72% 5.07% 5 Years 13.12 11.80 1 Year 10.32 3.96 -------------------------------------------------------------------------------- Expense Ratio (Per prospectus dated December 1, 2013) -------------------------------------------------------------------------------- Gross -------------------------------------------------------------------------------- 1.45% --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $10,000 Investment
Pioneer Ibbotson Barclays Aggregate Standard & Poor's Moderate Allocation Fund Bond Index 500 Index 8/31/2004 $ 9,425 $ 10,000 $ 10,000 1/31/2005 $ 10,077 $ 10,186 $ 10,772 1/31/2006 $ 11,175 $ 10,369 $ 11,890 1/31/2007 $ 12,183 $ 10,814 $ 13,613 1/31/2008 $ 12,134 $ 11,766 $ 13,299 1/31/2009 $ 8,455 $ 12,071 $ 8,164 1/31/2010 $ 11,158 $ 13,097 $ 10,869 1/31/2011 $ 12,883 $ 13,760 $ 13,282 1/31/2012 $ 12,954 $ 14,952 $ 13,838 1/31/2013 $ 14,200 $ 15,339 $ 16,158 1/31/2014 $ 15,665 $ 15,358 $ 19,633
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. NAV results represent the percent change in net asset value per share. Returns would have been lower had sales charges been reflected. POP returns reflect deduction of the maximum 5.75% sales charge. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results shown reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 27 Performance Update | 1/31/14 Class B Shares Pioneer Ibbotson Moderate Allocation Fund Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Class B shares of Pioneer Ibbotson Moderate Allocation Fund during the periods shown, compared to that of the Standard & Poor's 500 Index and the Barclays Aggregate Bond Index.
Average Annual Total Returns (As of January 31, 2014) -------------------------------------------------------------------------------- If If Period Held Redeemed -------------------------------------------------------------------------------- Life-of-Class 8/9/2004 4.53% 4.53% 5 Years 12.23 12.23 1 Year 9.40 5.40 -------------------------------------------------------------------------------- Expense Ratio (Per prospectus dated December 1, 2013) -------------------------------------------------------------------------------- Gross Net -------------------------------------------------------------------------------- 2.37% 2.31% --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $10,000 Investment
Pioneer Ibbotson Barclays Aggregate Standard & Poor's Moderate Allocation Fund Bond Index 500 Index 8/31/2004 $ 10,000 $ 10,000 $ 10,000 1/31/2005 $ 10,519 $ 10,186 $ 10,772 1/31/2006 $ 11,553 $ 10,369 $ 11,890 1/31/2007 $ 12,486 $ 10,814 $ 13,613 1/31/2008 $ 12,332 $ 11,766 $ 13,299 1/31/2009 $ 8,521 $ 12,071 $ 8,164 1/31/2010 $ 11,162 $ 13,097 $ 10,869 1/31/2011 $ 12,777 $ 13,760 $ 13,282 1/31/2012 $ 12,736 $ 14,952 $ 13,838 1/31/2013 $ 13,866 $ 15,339 $ 16,158 1/31/2014 $ 15,169 $ 15,358 $ 19,633
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. "If Held" results represent the percent change in net asset value per share. Returns would have been lower had sales charges been reflected. "If Redeemed" returns reflect the deduction of applicable contingent deferred sales charge (CDSC). The maximum CDSC for Class B shares is 4% and declines over five years. For more complete information, please see the prospectus. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results shown reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The net expense ratio reflects the contractual expense limitation currently in effect through December 1, 2015, for Class B shares. There can be no assurance that Pioneer will extend the expense limitation beyond such time. Please see the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. 28 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Performance Update | 1/31/14 Class C Shares Pioneer Ibbotson Moderate Allocation Fund Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Class C shares of Pioneer Ibbotson Moderate Allocation Fund during the periods shown, compared to that of the Standard & Poor's 500 Index and the Barclays Aggregate Bond Index.
Average Annual Total Returns (As of January 31, 2014) -------------------------------------------------------------------------------- If If Period Held Redeemed -------------------------------------------------------------------------------- Life-of-Class 8/9/2004 4.52% 4.52% 5 Years 12.32 12.32 1 Year 9.64 9.64 -------------------------------------------------------------------------------- Expense Ratio (Per prospectus dated December 1, 2013) -------------------------------------------------------------------------------- Gross -------------------------------------------------------------------------------- 2.13% --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $10,000 Investment
Pioneer Ibbotson Barclays Aggregate Standard & Poor's Moderate Allocation Fund Bond Index 500 Index 8/31/2004 $ 10,000 $ 10,000 $ 10,000 1/31/2005 $ 10,653 $ 10,186 $ 10,772 1/31/2006 $ 11,701 $ 10,369 $ 11,890 1/31/2007 $ 12,658 $ 10,814 $ 13,613 1/31/2008 $ 12,517 $ 11,766 $ 13,299 1/31/2009 $ 8,655 $ 12,071 $ 8,164 1/31/2010 $ 11,336 $ 13,097 $ 10,869 1/31/2011 $ 12,993 $ 13,760 $ 13,282 1/31/2012 $ 12,968 $ 14,952 $ 13,838 1/31/2013 $ 14,113 $ 15,339 $ 16,158 1/31/2014 $ 15,473 $ 15,358 $ 19,633
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Class C shares held for less than one year are also subject to a 1% contingent deferred sales charge (CDSC). "If Held" results represent the percent change in net asset value per share. Returns would have been lower had sales charges been reflected. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results shown reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 29 Performance Update | 1/31/14 Class Y Shares Pioneer Ibbotson Moderate Allocation Fund Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $5 million investment made in Class Y shares of Pioneer Ibbotson Moderate Allocation Fund during the periods shown, compared to that of the Standard & Poor's 500 Index and the Barclays Aggregate Bond Index.
Average Annual Total Returns (As of January 31, 2014) -------------------------------------------------------------------------------- If If Period Held Redeemed -------------------------------------------------------------------------------- Life-of-Class 8/9/2004 6.17% 6.17% 5 Years 13.60 13.60 1 Year 10.63 10.63 -------------------------------------------------------------------------------- Expense Ratio (Per prospectus dated December 1, 2013) -------------------------------------------------------------------------------- Gross -------------------------------------------------------------------------------- 1.15% --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $5 Million Investment
Pioneer Ibbotson Barclays Aggregate Standard & Poor's Moderate Allocation Fund Bond Index 500 Index 8/31/2004 $ 5,000,000 $ 5,000,000 $ 5,000,000 1/31/2005 $ 5,345,025 $ 5,093,214 $ 5,385,956 1/31/2006 $ 5,944,151 $ 5,184,668 $ 5,944,789 1/31/2007 $ 6,504,958 $ 5,406,815 $ 6,806,710 1/31/2008 $ 6,501,474 $ 5,883,059 $ 6,649,275 1/31/2009 $ 4,569,473 $ 6,035,316 $ 4,081,758 1/31/2010 $ 6,075,295 $ 6,548,703 $ 5,434,335 1/31/2011 $ 7,043,805 $ 6,880,102 $ 6,640,799 1/31/2012 $ 7,107,400 $ 7,476,066 $ 6,919,159 1/31/2013 $ 7,813,689 $ 7,669,361 $ 8,078,994 1/31/2014 $ 8,644,438 $ 7,678,866 $ 9,816,546
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Performance shown for periods prior to the inception of the Fund's Class Y shares on September 23, 2005, reflects the NAV performance of the Fund's Class A shares. The performance does not reflect differences in expenses, including the Rule 12b-1 fees applicable to Class A shares. Since fees for Class A shares are generally higher than those of Class Y shares, the performance for Class Y shares prior to their inception would have been higher than the performance shown. Class Y shares are not subject to sales charges and are available for limited groups of eligible investors, including institutional investors. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results shown reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. 30 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Portfolio Summary | 1/31/14 Pioneer Ibbotson Growth Allocation Fund Target Asset Allocations -------------------------------------------------------------------------------- [THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
Equity 70% Fixed Income 30%
Actual Asset Allocations -------------------------------------------------------------------------------- [THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
U.S. Equity 43.6% International Equity 30.7% Fixed Income 25.7%
Actual Portfolio Holdings (based on total portfolio) --------------------------------------------------------------------------------
U.S. Stocks -------------------------------------------------------------------------------- Pioneer Mid Cap Value Fund Class Y 7.14% -------------------------------------------------------------------------------- Pioneer Disciplined Value Fund Class Y 5.83 -------------------------------------------------------------------------------- Pioneer Select Mid Cap Growth Fund Class Y 5.48 -------------------------------------------------------------------------------- Pioneer Oak Ridge Small Cap Growth Fund Class Y 5.47 -------------------------------------------------------------------------------- Pioneer Fundamental Growth Fund Class Y 3.72 -------------------------------------------------------------------------------- Pioneer Real Estate Shares Class Y 3.68 -------------------------------------------------------------------------------- Pioneer Core Equity Fund Class Y 3.34 -------------------------------------------------------------------------------- Pioneer Equity Income Fund Class Y 3.28 -------------------------------------------------------------------------------- Pioneer Fund Class Y 3.25 -------------------------------------------------------------------------------- Pioneer Disciplined Growth Fund Class Y 2.38 -------------------------------------------------------------------------------- Pioneer Oak Ridge Large Cap Growth Fund Class Y 0.01 -------------------------------------------------------------------------------- International Stocks -------------------------------------------------------------------------------- Pioneer International Value Fund Class Y 14.32% -------------------------------------------------------------------------------- Pioneer Global Equity Fund Class Y 10.19 -------------------------------------------------------------------------------- Pioneer Emerging Markets Fund Class Y 6.16 -------------------------------------------------------------------------------- Bonds -------------------------------------------------------------------------------- Pioneer Bond Fund Class Y 10.23% -------------------------------------------------------------------------------- Pioneer Short Term Income Fund Class Y 6.90 -------------------------------------------------------------------------------- Pioneer Strategic Income Fund Class Y 3.39 -------------------------------------------------------------------------------- Pioneer Global High Yield Fund Class Y 1.92 -------------------------------------------------------------------------------- Pioneer Global Multisector Income Fund Class Y 1.81 -------------------------------------------------------------------------------- Pioneer High Yield Fund Class Y 0.94 -------------------------------------------------------------------------------- Pioneer Dynamic Credit Fund Class Y 0.56 --------------------------------------------------------------------------------
This list excludes temporary cash investments and derivative instruments. The portfolio is actively managed, and current holdings may be different. The holdings listed should not be considered recommendations to buy or sell any security listed. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 31 Performance Update | 1/31/14 Class A Shares Pioneer Ibbotson Growth Allocation Fund Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Class A shares of Pioneer Ibbotson Growth Allocation Fund at public offering price during the periods shown, compared to that of the Standard & Poor's 500 Index and the Barclays Aggregate Bond Index.
Average Annual Total Returns (As of January 31, 2014) -------------------------------------------------------------------------------- Public Net Asset Offering Period Value (NAV) Price (POP) -------------------------------------------------------------------------------- Life-of-Class 8/9/2004 5.96% 5.30% 5 Years 14.40 13.06 1 Year 11.93 5.46 -------------------------------------------------------------------------------- Expense Ratio (Per prospectus dated December 1, 2013) -------------------------------------------------------------------------------- Gross -------------------------------------------------------------------------------- 1.53% --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $10,000 Investment
Pioneer Ibbotson Barclays Aggregate Standard & Poor's Growth Allocation Fund Bond Index 500 Index 8/31/2004 $ 9,425 $ 10,000 $ 10,000 1/31/2005 $ 10,267 $ 10,186 $ 10,772 1/31/2006 $ 11,702 $ 10,369 $ 11,890 1/31/2007 $ 12,897 $ 10,814 $ 13,613 1/31/2008 $ 12,687 $ 11,766 $ 13,299 1/31/2009 $ 8,159 $ 12,071 $ 8,164 1/31/2010 $ 11,013 $ 13,097 $ 10,869 1/31/2011 $ 12,980 $ 13,760 $ 13,282 1/31/2012 $ 12,961 $ 14,952 $ 13,838 1/31/2013 $ 14,286 $ 15,339 $ 16,158 1/31/2014 $ 15,990 $ 15,358 $ 19,633
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. NAV results represent the percent change in net asset value per share. Returns would have been lower had sales charges been reflected. POP returns reflect deduction of the maximum 5.75% sales charge. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results shown reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. 32 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Performance Update | 1/31/14 Class B Shares Pioneer Ibbotson Growth Allocation Fund Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Class B shares of Pioneer Ibbotson Growth Allocation Fund during the periods shown, compared to that of the Standard & Poor's 500 Index and the Barclays Aggregate Bond Index.
Average Annual Total Returns (As of January 31, 2014) -------------------------------------------------------------------------------- If If Period Held Redeemed -------------------------------------------------------------------------------- Life-of-Class 8/9/2004 4.20% 4.20% 5 Years 13.53 13.53 1 Year 10.96 6.96 -------------------------------------------------------------------------------- Expense Ratio (Per prospectus dated December 1, 2013) -------------------------------------------------------------------------------- Gross Net -------------------------------------------------------------------------------- 2.44% 2.41% --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $10,000 Investment
Pioneer Ibbotson Barclays Aggregate Standard & Poor's Growth Allocation Fund Bond Index 500 Index 8/31/2004 $ 10,000 $ 10,000 $ 10,000 1/31/2005 $ 10,467 $ 10,186 $ 10,772 1/31/2006 $ 11,827 $ 10,369 $ 11,890 1/31/2007 $ 12,923 $ 10,814 $ 13,613 1/31/2008 $ 12,594 $ 11,766 $ 13,299 1/31/2009 $ 8,040 $ 12,071 $ 8,164 1/31/2010 $ 10,765 $ 13,097 $ 10,869 1/31/2011 $ 12,599 $ 13,760 $ 13,282 1/31/2012 $ 12,485 $ 14,952 $ 13,838 1/31/2013 $ 13,669 $ 15,339 $ 16,158 1/31/2014 $ 15,167 $ 15,358 $ 19,633
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. "If Held" results represent the percent change in net asset value per share. Returns would have been lower had sales charges been reflected. "If Redeemed" returns reflect the deduction of applicable contingent deferred sales charge (CDSC). The maximum CDSC for Class B shares is 4% and declines over five years. For more complete information, please see the prospectus. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results shown reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The net expense ratio reflects the contractual expense limitation currently in effect through December 1, 2015, for Class B shares. There can be no assurance that Pioneer will extend the expense limitation beyond such time. Please see the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 33 Performance Update | 1/31/14 Class C Shares Pioneer Ibbotson Growth Allocation Fund Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Class C shares of Pioneer Ibbotson Growth Allocation Fund during the periods shown, compared to that of the Standard & Poor's 500 Index and the Barclays Aggregate Bond Index.
Average Annual Total Returns (As of January 31, 2014) -------------------------------------------------------------------------------- If If Period Held Redeemed -------------------------------------------------------------------------------- Life-of-Class 8/9/2004 4.89% 4.89% 5 Years 13.60 13.60 1 Year 11.15 11.15 -------------------------------------------------------------------------------- Expense Ratio (Per prospectus dated December 1, 2013) -------------------------------------------------------------------------------- Gross -------------------------------------------------------------------------------- 2.24% --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $10,000 Investment
Pioneer Ibbotson Barclays Aggregate Standard & Poor's Growth Allocation Fund Bond Index 500 Index 8/31/2004 $ 10,000 $ 10,000 $ 10,000 1/31/2005 $ 10,709 $ 10,186 $ 10,772 1/31/2006 $ 12,098 $ 10,369 $ 11,890 1/31/2007 $ 13,238 $ 10,814 $ 13,613 1/31/2008 $ 12,933 $ 11,766 $ 13,299 1/31/2009 $ 8,273 $ 12,071 $ 8,164 1/31/2010 $ 11,063 $ 13,097 $ 10,869 1/31/2011 $ 12,951 $ 13,760 $ 13,282 1/31/2012 $ 12,849 $ 14,952 $ 13,838 1/31/2013 $ 14,080 $ 15,339 $ 16,158 1/31/2014 $ 15,650 $ 15,358 $ 19,633
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Class C shares held for less than one year are also subject to a 1% contingent deferred sales charge (CDSC). "If Held" results represent the percent change in net asset value per share. Returns would have been lower had sales charges been reflected. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results shown reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. 34 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Performance Update | 1/31/14 Class Y Shares Pioneer Ibbotson Growth Allocation Fund Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $5 million investment made in Class Y shares of Pioneer Ibbotson Growth Allocation Fund during the periods shown, compared to that of the Standard & Poor's 500 Index and the Barclays Aggregate Bond Index.
Average Annual Total Returns (As of January 31, 2014) -------------------------------------------------------------------------------- If If Period Held Redeemed -------------------------------------------------------------------------------- Life-of-Class 8/9/2004 6.45% 6.45% 5 Years 14.47 14.47 1 Year 12.16 12.16 -------------------------------------------------------------------------------- Expense Ratio (Per prospectus dated December 1, 2013) -------------------------------------------------------------------------------- Gross -------------------------------------------------------------------------------- 1.28% --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $5 Million Investment
Pioneer Ibbotson Barclays Aggregate Standard & Poor's Growth Allocation Fund Bond Index 500 Index 8/31/2004 $ 5,000,000 $ 5,000,000 $ 5,000,000 1/31/2005 $ 5,445,191 $ 5,093,214 $ 5,385,956 1/31/2006 $ 6,229,118 $ 5,184,668 $ 5,944,789 1/31/2007 $ 6,909,821 $ 5,406,815 $ 6,806,710 1/31/2008 $ 6,837,697 $ 5,883,059 $ 6,649,275 1/31/2009 $ 4,505,503 $ 6,035,316 $ 4,081,758 1/31/2010 $ 6,093,772 $ 6,548,703 $ 5,434,335 1/31/2011 $ 7,207,346 $ 6,880,102 $ 6,640,799 1/31/2012 $ 7,141,078 $ 7,476,066 $ 6,919,159 1/31/2013 $ 7,894,139 $ 7,669,361 $ 8,078,994 1/31/2014 $ 8,854,340 $ 7,678,866 $ 9,816,546
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Performance shown for periods prior to the inception of the Fund's Class Y shares on September 26, 2005, reflects the NAV performance of the Fund's Class A shares. The performance does not reflect differences in expenses, including the Rule 12b-1 fees applicable to Class A shares. Since fees for Class A shares are generally higher than those of Class Y shares, the performance for Class Y shares prior to their inception would have been higher than the performance shown. Class Y shares are not subject to sales charges and are available for limited groups of eligible investors, including institutional investors. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results shown reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 35 Portfolio Summary | 1/31/14 Pioneer Ibbotson Aggressive Allocation Fund Target Asset Allocations -------------------------------------------------------------------------------- [THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
Equity 90% Fixed Income 10%
Actual Asset Allocations -------------------------------------------------------------------------------- [THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
U.S. Equity 49.1% International Equity 39.2% Fixed Income 11.7%
Actual Portfolio Holdings (based on total portfolio) --------------------------------------------------------------------------------
U.S. Stocks -------------------------------------------------------------------------------- Pioneer Mid Cap Value Fund Class Y 9.47% -------------------------------------------------------------------------------- Pioneer Oak Ridge Small Cap Growth Fund Class Y 7.54 -------------------------------------------------------------------------------- Pioneer Select Mid Cap Growth Fund Class Y 6.10 -------------------------------------------------------------------------------- Pioneer Disciplined Value Fund Class Y 5.32 -------------------------------------------------------------------------------- Pioneer Real Estate Shares Class Y 4.85 -------------------------------------------------------------------------------- Pioneer Fundamental Growth Fund Class Y 3.33 -------------------------------------------------------------------------------- Pioneer Core Equity Fund Class Y 3.21 -------------------------------------------------------------------------------- Pioneer Equity Income Fund Class Y 3.15 -------------------------------------------------------------------------------- Pioneer Fund Class Y 3.12 -------------------------------------------------------------------------------- Pioneer Disciplined Growth Fund Class Y 2.93 -------------------------------------------------------------------------------- International Stocks -------------------------------------------------------------------------------- Pioneer International Value Fund Class Y 19.07% -------------------------------------------------------------------------------- Pioneer Global Equity Fund Class Y 11.45 -------------------------------------------------------------------------------- Pioneer Emerging Markets Fund Class Y 8.73 -------------------------------------------------------------------------------- Bonds -------------------------------------------------------------------------------- Pioneer Bond Fund Class Y 5.49% -------------------------------------------------------------------------------- Pioneer Strategic Income Fund Class Y 3.37 -------------------------------------------------------------------------------- Pioneer Short Term Income Fund Class Y 2.87 --------------------------------------------------------------------------------
This list excludes temporary cash investments and derivative instruments. The portfolio is actively managed, and current holdings may be different. The holdings listed should not be considered recommendations to buy or sell any security listed. 36 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Performance Update | 1/31/14 Class A Shares Pioneer Ibbotson Aggressive Allocation Fund Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Class A shares of Pioneer Ibbotson Aggressive Allocation Fund at public offering price during the periods shown, compared to that of the Standard & Poor's 500 Index and the Barclays Aggregate Bond Index.
Average Annual Total Returns (As of January 31, 2014) -------------------------------------------------------------------------------- Public Net Asset Offering Period Value (NAV) Price (POP) -------------------------------------------------------------------------------- Life-of-Class 8/9/2004 6.07% 5.41% 5 Years 15.28 13.92 1 Year 13.22 6.70 -------------------------------------------------------------------------------- Expense Ratio (Per prospectus dated December 1, 2013) -------------------------------------------------------------------------------- Gross -------------------------------------------------------------------------------- 1.70% --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $10,000 Investment
Pioneer Ibbotson Barclays Aggregate Standard & Poor's Aggressive Allocation Fund Bond Index 500 Index 8/31/2004 $ 9,425 $ 10,000 $ 10,000 1/31/2005 $ 10,436 $ 10,186 $ 10,772 1/31/2006 $ 12,163 $ 10,369 $ 11,890 1/31/2007 $ 13,543 $ 10,814 $ 13,613 1/31/2008 $ 13,126 $ 11,766 $ 13,299 1/31/2009 $ 7,891 $ 12,071 $ 8,164 1/31/2010 $ 10,811 $ 13,097 $ 10,869 1/31/2011 $ 12,957 $ 13,760 $ 13,282 1/31/2012 $ 12,816 $ 14,952 $ 13,838 1/31/2013 $ 14,193 $ 15,339 $ 16,158 1/31/2014 $ 16,068 $ 15,358 $ 19,633
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. NAV results represent the percent change in net asset value per share. Returns would have been lower had sales charges been reflected. POP returns reflect deduction of the maximum 5.75% sales charge. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results shown reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 37 Performance Update | 1/31/14 Class B Shares Pioneer Ibbotson Aggressive Allocation Fund Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Class B shares of Pioneer Ibbotson Aggressive Allocation Fund during the periods shown, compared to that of the Standard & Poor's 500 Index and the Barclays Aggregate Bond Index.
Average Annual Total Returns (As of January 31, 2014) -------------------------------------------------------------------------------- If If Period Held Redeemed -------------------------------------------------------------------------------- Life-of-Class 8/9/2004 4.89% 4.89% 5 Years 14.38 14.38 1 Year 12.30 8.30 -------------------------------------------------------------------------------- Expense Ratio (Per prospectus dated December 1, 2013) -------------------------------------------------------------------------------- Gross Net -------------------------------------------------------------------------------- 2.61% 2.52% --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $10,000 Investment
Pioneer Ibbotson Barclays Aggregate Standard & Poor's Aggressive Allocation Fund Bond Index 500 Index 8/31/2004 $ 10,000 $ 10,000 $ 10,000 1/31/2005 $ 10,962 $ 10,186 $ 10,772 1/31/2006 $ 12,676 $ 10,369 $ 11,890 1/31/2007 $ 13,990 $ 10,814 $ 13,613 1/31/2008 $ 13,455 $ 11,766 $ 13,299 1/31/2009 $ 8,022 $ 12,071 $ 8,164 1/31/2010 $ 10,914 $ 13,097 $ 10,869 1/31/2011 $ 12,961 $ 13,760 $ 13,282 1/31/2012 $ 12,726 $ 14,952 $ 13,838 1/31/2013 $ 13,987 $ 15,339 $ 16,158 1/31/2014 $ 15,707 $ 15,358 $ 19,633
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. "If Held" results represent the percent change in net asset value per share. Returns would have been lower had sales charges been reflected. "If Redeemed" returns reflect the deduction of applicable contingent deferred sales charge (CDSC). The maximum CDSC for Class B shares is 4% and declines over five years. For more complete information, please see the prospectus. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results shown reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The net expense ratio reflects the contractual expense limitation currently in effect through December 1, 2015, for Class B shares. There can be no assurance that Pioneer will extend the expense limitation beyond such time. Please see the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. 38 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Performance Update | 1/31/14 Class C Shares Pioneer Ibbotson Aggressive Allocation Fund Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $10,000 investment made in Class C shares of Pioneer Ibbotson Aggressive Allocation Fund during the periods shown, compared to that of the Standard & Poor's 500 Index and the Barclays Aggregate Bond Index.
Average Annual Total Returns (As of January 31, 2014) -------------------------------------------------------------------------------- If If Period Held Redeemed -------------------------------------------------------------------------------- Life-of-Class 8/9/2004 5.10% 5.10% 5 Years 14.47 14.47 1 Year 12.44 12.44 -------------------------------------------------------------------------------- Expense Ratio (Per prospectus dated December 1, 2013) -------------------------------------------------------------------------------- Gross -------------------------------------------------------------------------------- 2.39% --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $10,000 Investment
Pioneer Ibbotson Barclays Aggregate Standard & Poor's Aggressive Allocation Fund Bond Index 500 Index 8/31/2004 $ 10,000 $ 10,000 $ 10,000 1/31/2005 $ 10,841 $ 10,186 $ 10,772 1/31/2006 $ 12,525 $ 10,369 $ 11,890 1/31/2007 $ 13,848 $ 10,814 $ 13,613 1/31/2008 $ 13,342 $ 11,766 $ 13,299 1/31/2009 $ 7,956 $ 12,071 $ 8,164 1/31/2010 $ 10,804 $ 13,097 $ 10,869 1/31/2011 $ 12,858 $ 13,760 $ 13,282 1/31/2012 $ 12,647 $ 14,952 $ 13,838 1/31/2013 $ 13,906 $ 15,339 $ 16,158 1/31/2014 $ 15,636 $ 15,358 $ 19,633
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Class C shares held for less than one year are also subject to a 1% contingent deferred sales charge (CDSC). "If Held" results represent the percent change in net asset value per share. Returns would have been lower had sales charges been reflected. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results shown reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 39 Performance Update | 1/31/14 Class Y Shares Pioneer Ibbotson Aggressive Allocation Fund Investment Returns -------------------------------------------------------------------------------- The mountain chart on the right shows the change in value of a $5 million investment made in Class Y shares of Pioneer Ibbotson Aggressive Allocation Fund during the periods shown, compared to that of the Standard & Poor's 500 Index and the Barclays Aggregate Bond Index.
Average Annual Total Returns (As of January 31, 2014) -------------------------------------------------------------------------------- If If Period Held Redeemed -------------------------------------------------------------------------------- Life-of-Class 8/9/2004 6.34% 6.34% 5 Years 15.45 15.45 1 Year 13.37 13.37 -------------------------------------------------------------------------------- Expense Ratio (Per prospectus dated December 1, 2013) -------------------------------------------------------------------------------- Gross -------------------------------------------------------------------------------- 1.55% --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL] Value of $5 Million Investment
Pioneer Ibbotson Barclays Aggregate Standard & Poor's Aggressive Allocation Fund Bond Index 500 Index 8/31/2004 $ 5,000,000 $ 5,000,000 $ 5,000,000 1/31/2005 $ 5,538,679 $ 5,093,214 $ 5,385,956 1/31/2006 $ 6,482,157 $ 5,184,668 $ 5,944,789 1/31/2007 $ 7,229,275 $ 5,406,815 $ 6,806,710 1/31/2008 $ 7,093,685 $ 5,883,059 $ 6,649,275 1/31/2009 $ 4,260,465 $ 6,035,316 $ 4,081,758 1/31/2010 $ 5,852,453 $ 6,548,703 $ 5,434,335 1/31/2011 $ 7,037,069 $ 6,880,102 $ 6,640,799 1/31/2012 $ 6,939,269 $ 7,476,066 $ 6,919,159 1/31/2013 $ 7,707,502 $ 7,669,361 $ 8,078,994 1/31/2014 $ 8,738,362 $ 7,678,866 $ 9,816,546
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Performance shown for periods prior to the inception of the Fund's Class Y shares on September 23, 2005 reflects the NAV performance of the Fund's Class A shares. The performance does not reflect differences in expenses, including the Rule 12b-1 fees applicable to Class A shares. Since fees for Class A shares are generally higher than those of Class Y shares, the performance for Class Y shares prior to their inception would have been higher than the performance shown. Class Y shares are not subject to sales charges and are available for limited groups of eligible investors, including institutional investors. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results shown reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. 40 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Schedule of Investments | 1/31/14 (unaudited) Pioneer Ibbotson Conservative Allocation Fund
-------------------------------------------------------------------------------- Shares Value -------------------------------------------------------------------------------- MUTUAL FUNDS -- 94.8% PIONEER FUNDS* -- 94.8% 1,635,956 Pioneer Bond Fund Class Y $ 15,754,257 86,597 Pioneer Core Equity Fund Class Y 1,329,264 41,312 Pioneer Disciplined Growth Fund Class Y 663,885 105,027 Pioneer Disciplined Value Fund Class Y 1,968,198 274,261 Pioneer Dynamic Credit Fund Class Y 2,720,667 27,203 Pioneer Emerging Markets Fund Class Y 652,605 19,892 Pioneer Equity Income Fund Class Y 665,592 97,943 Pioneer Floating Rate Fund Class Y 683,644 52,375 Pioneer Fund Class Y 1,990,758 82,103 Pioneer Fundamental Growth Fund Class Y 1,328,421 213,242 Pioneer Global Equity Fund Class Y 2,648,463 415,156 Pioneer Global High Yield Fund Class Y 4,060,225 125,604 Pioneer Global Multisector Income Fund Class Y 1,362,798 190,456 Pioneer High Yield Fund Class Y 2,037,881 243,258 Pioneer International Value Fund Class Y 5,239,788 50,332 Pioneer Mid Cap Value Fund Class Y 1,331,796 67,760 Pioneer Multi-Asset Ultrashort Income Fund Class Y 683,021 17,273 Pioneer Oak Ridge Small Cap Growth Fund Class Y 665,539 26,962 Pioneer Real Estate Shares Class Y 689,137 16,519 Pioneer Select Mid Cap Growth Fund Class Y 670,158 1,060,265 Pioneer Short Term Income Fund Class Y 10,252,765 627,208 Pioneer Strategic Income Fund Class Y 6,817,746 -------------------------------------------------------------------------------- TOTAL MUTUAL FUNDS (Cost $56,442,640) $ 64,216,608 -------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 94.8% (Cost $56,442,640) (a) $ 64,216,608 -------------------------------------------------------------------------------- OTHER ASSETS AND LIABILITIES -- 5.2% $ 3,496,893 -------------------------------------------------------------------------------- TOTAL NET ASSETS -- 100.0% $ 67,713,501 ================================================================================
* Affiliated funds managed by Pioneer Investment Management, Inc. (a) At January 31, 2014, the net unrealized appreciation on investments based on cost for federal tax purposes of $57,323,707 was as follows:
Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost $7,817,368 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value (924,467) ---------- Net unrealized appreciation $6,892,901 ==========
The accompanying notes are an integral part of these financial statements. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 41 Schedule of Investments | 1/31/14 (unaudited) Pioneer Ibbotson Conservative Allocation Fund (continued) Purchases and sales of securities (excluding temporary cash investments) for the six months ended January 31, 2014 aggregated $4,178,992 and $5,208,963, respectively. Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in the three broad levels below. Highest priority is given to Level 1 inputs and lowest priority is given to Level 3. Level 1 -- quoted prices in active markets for identical securities. Level 2 -- other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). See Notes to Financial Statements -- Note 1A. Level 3 -- significant unobservable inputs (including the Fund's own assumptions in determining fair value of investments). See Notes to Financial Statements -- Note 1A. Generally, equity securities are categorized as Level 1, fixed income securities and senior loans as Level 2 and securities valued using fair value methods (other than prices supplied by independent pricing services) as Level 3. See Notes to Financial Statements -- Note 1A. The following is a summary of the inputs used as of January 31, 2014, in valuing the Fund's assets:
-------------------------------------------------------------------------------- Level 1 Level 2 Level 3 Total -------------------------------------------------------------------------------- Mutual Funds $64,216,608 $-- $-- $64,216,608 -------------------------------------------------------------------------------- Total $64,216,608 $-- $-- $64,216,608 ================================================================================
During the six months ended January 31, 2014, there were no transfers between Levels 1, 2, and 3. The accompanying notes are an integral part of these financial statements. 42 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Schedule of Investments | 1/31/14 (unaudited) Pioneer Ibbotson Moderate Allocation Fund
-------------------------------------------------------------------------------- Shares Value -------------------------------------------------------------------------------- MUTUAL FUNDS -- 98.4% PIONEER FUNDS* -- 98.4% 2,624,649 Pioneer Bond Fund Class Y $ 25,275,368 296,605 Pioneer Core Equity Fund Class Y 4,552,887 181,015 Pioneer Disciplined Growth Fund Class Y 2,908,908 574,076 Pioneer Disciplined Value Fund Class Y 10,758,186 797,905 Pioneer Dynamic Credit Fund Class Y 7,915,217 389,314 Pioneer Emerging Markets Fund Class Y 9,339,647 132,759 Pioneer Equity Income Fund Class Y 4,442,108 183,387 Pioneer Fund Class Y 6,970,554 421,070 Pioneer Fundamental Growth Fund Class Y 6,812,906 1,498,492 Pioneer Global Equity Fund Class Y 18,611,268 889,896 Pioneer Global High Yield Fund Class Y 8,703,179 378,844 Pioneer Global Multisector Income Fund Class Y 4,110,455 400,551 Pioneer High Yield Fund Class Y 4,285,900 1,236,672 Pioneer International Value Fund Class Y 26,637,907 496,232 Pioneer Mid Cap Value Fund Class Y 13,130,289 205,699 Pioneer Multi-Asset Ultrashort Income Fund Class Y 2,073,448 307,804 Pioneer Oak Ridge Small Cap Growth Fund Class Y 11,859,670 207,395 Pioneer Real Estate Shares Class Y 5,301,026 164,591 Pioneer Select Mid Cap Growth Fund Class Y 6,677,443 2,203,062 Pioneer Short Term Income Fund Class Y 21,303,613 733,651 Pioneer Strategic Income Fund Class Y 7,974,790 -------------------------------------------------------------------------------- TOTAL MUTUAL FUNDS (Cost $169,630,619) $209,644,769 -------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 98.4% (Cost $169,630,619) (a) $209,644,769 -------------------------------------------------------------------------------- OTHER ASSETS AND LIABILITIES -- 1.6% $ 3,482,747 -------------------------------------------------------------------------------- TOTAL NET ASSETS -- 100.0% $213,127,516 ================================================================================
* Affiliated funds managed by Pioneer Investment Management, Inc. (a) At January 31, 2014, the net unrealized appreciation on investments based on cost for federal tax purposes of $172,454,904 was as follows:
Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost $40,269,116 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value (3,079,251) ----------- Net unrealized appreciation $37,189,865 ===========
The accompanying notes are an integral part of these financial statements. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 43 Schedule of Investments | 1/31/14 (unaudited) Pioneer Ibbotson Moderate Allocation Fund (continued) Purchases and sales of securities (excluding temporary cash investments) for the six months ended January 31, 2014 aggregated $15,148,058 and $10,752,842, respectively. Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in the three broad levels below. Highest priority is given to Level 1 inputs and lowest priority is given to Level 3. Level 1 -- quoted prices in active markets for identical securities. Level 2 -- other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). See Notes to Financial Statements -- Note 1A. Level 3 -- significant unobservable inputs (including the Fund's own assumptions in determining fair value of investments). See Notes to Financial Statements -- Note 1A. Generally, equity securities are categorized as Level 1, fixed income securities and senior loans as Level 2 and securities valued using fair value methods (other than prices supplied by independent pricing services) as Level 3. See Notes to Financial Statements -- Note 1A. The following is a summary of the inputs used as of January 31, 2014, in valuing the Fund's assets:
-------------------------------------------------------------------------------- Level 1 Level 2 Level 3 Total -------------------------------------------------------------------------------- Mutual Funds $209,644,769 $-- $-- $209,644,769 -------------------------------------------------------------------------------- Total $209,644,769 $-- $-- $209,644,769 ================================================================================
During the six months ended January 31, 2014, there were no transfers between Levels 1, 2, and 3. The accompanying notes are an integral part of these financial statements. 44 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Schedule of Investments | 1/31/14 (unaudited) Pioneer Ibbotson Growth Allocation Fund
-------------------------------------------------------------------------------- Shares Value -------------------------------------------------------------------------------- MUTUAL FUNDS -- 100.3% PIONEER FUNDS* -- 100.3% 2,438,071 Pioneer Bond Fund Class Y $ 23,478,622 499,456 Pioneer Core Equity Fund Class Y 7,666,645 339,583 Pioneer Disciplined Growth Fund Class Y 5,457,102 713,603 Pioneer Disciplined Value Fund Class Y 13,372,917 128,981 Pioneer Dynamic Credit Fund Class Y 1,279,487 588,759 Pioneer Emerging Markets Fund Class Y 14,124,326 224,978 Pioneer Equity Income Fund Class Y 7,527,770 196,223 Pioneer Fund Class Y 7,458,431 527,687 Pioneer Fundamental Growth Fund Class Y 8,537,974 1,882,304 Pioneer Global Equity Fund Class Y 23,378,219 450,057 Pioneer Global High Yield Fund Class Y 4,401,554 382,938 Pioneer Global Multisector Income Fund Class Y 4,154,876 201,751 Pioneer High Yield Fund Class Y 2,158,739 1,525,574 Pioneer International Value Fund Class Y 32,860,854 619,063 Pioneer Mid Cap Value Fund Class Y 16,380,405 597 Pioneer Oak Ridge Large Cap Growth Fund Class Y 10,338 325,869 Pioneer Oak Ridge Small Cap Growth Fund Class Y 12,555,716 330,328 Pioneer Real Estate Shares Class Y 8,443,193 309,712 Pioneer Select Mid Cap Growth Fund Class Y 12,565,034 1,636,382 Pioneer Short Term Income Fund Class Y 15,823,818 716,538 Pioneer Strategic Income Fund Class Y 7,788,772 -------------------------------------------------------------------------------- TOTAL MUTUAL FUNDS (Cost $179,037,600) $229,424,792 -------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 100.3% (Cost $179,037,600) (a) $229,424,792 -------------------------------------------------------------------------------- OTHER ASSETS AND LIABILITIES -- (0.3)% $ (605,583) -------------------------------------------------------------------------------- TOTAL NET ASSETS -- 100.0% $228,819,209 ================================================================================
* Affiliated funds managed by Pioneer Investment Management, Inc. (a) At January 31, 2014, the net unrealized appreciation on investments based on cost for federal tax purposes of $180,680,126 was as follows:
Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost $50,539,047 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value (1,794,381) ----------- Net unrealized appreciation $48,744,666 ===========
The accompanying notes are an integral part of these financial statements. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 45 Schedule of Investments | 1/31/14 (unaudited) Pioneer Ibbotson Growth Allocation Fund (continued) Purchases and sales of securities (excluding temporary cash investments) for the six months ended January 31, 2014 aggregated $13,985,016 and $8,942,513, respectively. Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in the three broad levels below. Highest priority is given to Level 1 inputs and lowest priority is given to Level 3. Level 1 -- quoted prices in active markets for identical securities. Level 2 -- other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). See Notes to Financial Statements -- Note 1A. Level 3 -- significant unobservable inputs (including the Fund's own assumptions in determining fair value of investments). See Notes to Financial Statements -- Note 1A. Generally, equity securities are categorized as Level 1, fixed income securities and senior loans as Level 2 and securities valued using fair value methods (other than prices supplied by independent pricing services) as Level 3. See Notes to Financial Statements -- Note 1A. The following is a summary of the inputs used as of January 31, 2014, in valuing the Fund's assets:
-------------------------------------------------------------------------------- Level 1 Level 2 Level 3 Total -------------------------------------------------------------------------------- Mutual Funds $229,424,792 $-- $-- $229,424,792 -------------------------------------------------------------------------------- Total $229,424,792 $-- $-- $229,424,792 ================================================================================
During the six months ended January 31, 2014, there were no transfers between Levels 1, 2, and 3. The accompanying notes are an integral part of these financial statements. 46 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Schedule of Investments | 1/31/14 (unaudited) Pioneer Ibbotson Aggressive Allocation Fund
-------------------------------------------------------------------------------- Shares Value -------------------------------------------------------------------------------- MUTUAL FUNDS -- 100.2% PIONEER FUNDS* -- 100.2% 701,037 Pioneer Bond Fund Class Y $ 6,750,989 257,540 Pioneer Core Equity Fund Class Y 3,953,234 223,844 Pioneer Disciplined Growth Fund Class Y 3,597,178 348,972 Pioneer Disciplined Value Fund Class Y 6,539,729 447,558 Pioneer Emerging Markets Fund Class Y 10,736,923 115,763 Pioneer Equity Income Fund Class Y 3,873,428 100,885 Pioneer Fund Class Y 3,834,622 252,768 Pioneer Fundamental Growth Fund Class Y 4,089,782 1,133,594 Pioneer Global Equity Fund Class Y 14,079,242 1,089,091 Pioneer International Value Fund Class Y 23,459,028 439,876 Pioneer Mid Cap Value Fund Class Y 11,639,123 240,643 Pioneer Oak Ridge Small Cap Growth Fund Class Y 9,271,989 233,549 Pioneer Real Estate Shares Class Y 5,969,502 184,921 Pioneer Select Mid Cap Growth Fund Class Y 7,502,250 364,817 Pioneer Short Term Income Fund Class Y 3,527,778 381,266 Pioneer Strategic Income Fund Class Y 4,144,361 -------------------------------------------------------------------------------- TOTAL MUTUAL FUNDS (Cost $90,606,702) $122,969,158 -------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES -- 100.2% (Cost $90,606,702) (a) $122,969,158 -------------------------------------------------------------------------------- OTHER ASSETS AND LIABILITIES -- (0.2)% $ (192,627) -------------------------------------------------------------------------------- TOTAL NET ASSETS -- 100.0% $122,776,531 ================================================================================
* Affiliated funds managed by Pioneer Investment Management, Inc. (a) At January 31, 2014, the net unrealized appreciation on investments based on cost for federal tax purposes of $92,242,830 was as follows:
Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost $32,362,456 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value (1,636,128) ----------- Net unrealized appreciation $30,726,328 ===========
The accompanying notes are an integral part of these financial statements. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 47 Schedule of Investments | 1/31/14 (unaudited) Pioneer Ibbotson Aggressive Allocation Fund (continued) Purchases and sales of securities (excluding temporary cash investments) for the six months ended January 31, 2014 aggregated $8,706,140 and $7,190,475, respectively. Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in the three broad levels below. Highest priority is given to Level 1 inputs and lowest priority is given to Level 3. Level 1 -- quoted prices in active markets for identical securities. Level 2 -- other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). See Notes to Financial Statements -- Note 1A. Level 3 -- significant unobservable inputs (including the Fund's own assumptions in determining fair value of investments). See Notes to Financial Statements -- Note 1A. Generally, equity securities are categorized as Level 1, fixed income securities and senior loans as Level 2 and securities valued using fair value methods (other than prices supplied by independent pricing services) as Level 3. See Notes to Financial Statements -- Note 1A. The following is a summary of the inputs used as of January 31, 2014, in valuing the Fund's assets:
-------------------------------------------------------------------------------- Level 1 Level 2 Level 3 Total -------------------------------------------------------------------------------- Mutual Funds $122,969,158 $-- $-- $122,969,158 -------------------------------------------------------------------------------- Total $122,969,158 $-- $-- $122,969,158 ================================================================================
During the six months ended January 31, 2014, there were no transfers between Levels 1, 2, and 3. The accompanying notes are an integral part of these financial statements. 48 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Statements of Assets and Liabilities | 1/31/14 (unaudited)
---------------------------------------------------------------------------------------------------------- Conservative Moderate Growth Aggressive Allocation Allocation Allocation Allocation Fund Fund Fund Fund ---------------------------------------------------------------------------------------------------------- ASSETS: Investments in securities of affiliated issuers, at value (at cost $56,442,640, $169,630,619, $179,037,600 and $90,606,702, respectively) $64,216,608 $209,644,769 $229,424,792 $122,969,158 Cash 3,382,909 3,246,275 -- -- Receivables for: Investment Funds sold 149,266 264,468 370,870 294,772 Capital stock sold 6,845 79,277 147,421 62,856 Dividends 138,789 249,057 177,068 41,423 Other assets 30,519 30,984 33,688 23,110 ---------------------------------------------------------------------------------------------------------- Total assets $67,924,936 $213,514,830 $230,153,839 $123,391,319 ========================================================================================================== LIABILITIES: Payables for: Investment Funds purchased $ 30,921 $ 79,546 $ 46,319 $ 32,300 Capital stock redeemed 85,002 96,728 175,730 97,778 Due to affiliates 48,990 160,928 168,872 90,255 Due to Pioneer Investment Management, Inc. 3,879 4,932 6,879 2,941 Due to custodian -- -- 879,311 324,876 Accrued expenses and other liabilities 42,643 45,180 57,519 66,638 ---------------------------------------------------------------------------------------------------------- Total liabilities: $ 211,435 $ 387,314 $ 1,334,630 $ 614,788 ========================================================================================================== NET ASSETS: Paid-in capital $62,037,796 $198,893,496 $211,948,881 $116,559,044 Undistributed net investment income 87,492 2,225,423 2,184,734 1,034,842 Accumulated net realized loss on investments (2,185,755) (28,005,553) (35,701,598) (27,179,811) Net unrealized appreciation on investments 7,773,968 40,014,150 50,387,192 32,362,456 ---------------------------------------------------------------------------------------------------------- Total net assets $67,713,501 $213,127,516 $228,819,209 $122,776,531 ========================================================================================================== NET ASSET VALUE PER SHARE: (No par value, unlimited number of shares authorized) Net Assets of Class A shares $44,140,487 $130,751,452 $154,710,951 $ 94,074,263 Net Assets of Class B shares $ 2,655,976 $ 8,692,051 $ 14,449,956 $ 7,474,266 Net Assets of Class C shares $20,762,402 $ 70,491,291 $ 58,426,367 $ 20,822,320 Net Assets of Class Y shares $ 154,636 $ 3,192,722 $ 1,231,935 $ 405,682 Class A Shares outstanding 3,863,786 10,839,825 12,102,370 7,214,281 Class B Shares outstanding 235,735 740,037 1,264,708 606,158 Class C Shares outstanding 1,867,475 6,272,315 4,829,763 1,680,091 Class Y Shares outstanding 14,140 261,817 94,522 30,922 Net Asset Value -- Class A share $ 11.42 $ 12.06 $ 12.78 $ 13.04 Net Asset Value -- Class B share $ 11.27 $ 11.75 $ 11.43 $ 12.33 Net Asset Value -- Class C share $ 11.12 $ 11.24 $ 12.10 $ 12.39 Net Asset Value -- Class Y share $ 10.94 $ 12.19 $ 13.03 $ 13.12 MAXIMUM OFFERING PRICE: Class A (100/94.25 x net asset value per share) $ 12.12 $ 12.80 $ 13.56 $ 13.84 ==========================================================================================================
The accompanying notes are an integral part of these financial statements. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 49 Statements of Operations (unaudited) For the Six Months Ended 1/31/14
------------------------------------------------------------------------------------------------ Conservative Moderate Growth Aggressive Allocation Allocation Allocation Allocation Fund Fund Fund Fund ------------------------------------------------------------------------------------------------ INVESTMENT INCOME: Dividend income from underlying affiliated funds $1,197,006 $3,175,424 $ 3,207,712 $1,631,851 Interest 522 663 76 54 ------------------------------------------------------------------------------------------------ Total Investment Income $1,197,528 $3,176,087 $ 3,207,788 $1,631,905 ================================================================================================ EXPENSES: Management fees $ 44,815 $ 138,611 $ 149,278 $ 80,346 Transfer agent fees Class A 18,147 63,214 101,607 75,755 Class B 2,814 11,753 21,775 12,372 Class C 5,919 17,027 20,580 11,004 Class Y 113 263 196 222 Distribution fees Class A 55,910 164,644 194,724 117,728 Class B 15,326 47,608 80,418 40,815 Class C 105,034 341,491 281,804 103,822 Shareholder communications expense 13,373 52,732 61,445 42,587 Administrative fees 16,675 40,148 41,562 25,139 Custodian fees 9,818 5,068 2,119 8,510 Registration fees 32,633 34,557 32,403 49,282 Professional fees 20,228 22,794 22,402 20,675 Printing fees 5,321 6,510 9,723 6,957 Fees and expenses of non-affiliated Trustees 3,567 3,632 3,300 2,913 Insurance expense 424 1,142 1,480 757 Miscellaneous 1,326 1,425 1,375 1,977 ------------------------------------------------------------------------------------------------ Total expenses $ 351,443 $ 952,619 $ 1,026,191 $ 600,861 Less fees waived and expenses reimbursed by Pioneer Investment Management, Inc. $ -- $ (2,300) $ (3,730) $ (4,297) ------------------------------------------------------------------------------------------------ Net expenses $ 351,443 $ 950,319 $ 1,022,461 $ 596,564 ------------------------------------------------------------------------------------------------ Net investment income $ 846,085 $2,225,768 $ 2,185,327 $1,035,341 ------------------------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain on underlying affiliated funds $ 597,450 $2,098,945 $ 1,845,316 $1,466,091 Capital gain distributions from underlying affiliated funds 885,970 5,204,261 6,371,225 3,662,699 ------------------------------------------------------------------------------------------------ $1,483,420 $7,303,206 $ 8,216,541 $5,128,790 ------------------------------------------------------------------------------------------------ Change in net unrealized appreciation (depreciation) on investments $ (250,364) $ (277,239) $ 861,399 $ 399,456 ------------------------------------------------------------------------------------------------ Net gain on investments $1,233,056 $7,025,967 $ 9,077,940 $5,528,246 ------------------------------------------------------------------------------------------------ Net increase in net assets resulting from operations $2,079,141 $9,251,735 $11,263,267 $6,563,587 ================================================================================================
The accompanying notes are an integral part of these financial statements. 50 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Statements of Changes in Net Assets
------------------------------------------------------------------------------------------------ Conservative Moderate Allocation Fund Allocation Fund ---------------------------- ---------------------------- Six Months Six Months Ended Year Ended Year 1/31/2014 Ended 1/31/2014 Ended (unaudited) 7/31/13 (unaudited) 7/31/13 ------------------------------------------------------------------------------------------------ FROM OPERATIONS: Net investment income $ 846,085 $ 1,480,666 $ 2,225,768 $ 3,192,855 Net realized gain on investments 1,483,420 1,632,532 7,303,206 6,864,167 Change in net unrealized appreciation (depreciation) on investments (250,364) 2,220,532 (277,239) 16,019,476 ------------------------------------------------------------------------------------------------ Net increase in net assets resulting from operations $ 2,079,141 $ 5,333,730 $ 9,251,735 $ 26,076,498 ------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO SHAREOWNERS: Net investment income: Class A ($0.36, $0.23, $0.21 and $0.22, respectively) $ (1,350,144) $ (955,483) $ (2,249,407) $ (2,347,138) Class B ($0.22, $0.13, $0.04 and $0.06, respectively) (55,077) (49,375) (34,305) (76,356) Class C ($0.28, $0.16, $0.15 and $0.16, respectively) (519,914) (270,274) (947,689) (878,923) Class Y ($0.27, $0.16, $0.24 and $0.25, respectively) (3,739) (1,718) (65,977) (113,775) ------------------------------------------------------------------------------------------------ Total distributions to shareowners $ (1,928,874) $ (1,276,850) $ (3,297,378) $ (3,416,192) ------------------------------------------------------------------------------------------------ FROM FUND SHARE TRANSACTIONS: Net proceeds from sales or exchange of shares $ 7,962,119 $ 19,342,329 $ 20,361,899 $ 38,645,530 Reinvestment of distributions 1,723,528 1,169,434 3,035,991 3,147,019 Cost of shares repurchased (10,384,161) (19,670,549) (23,840,068) (50,543,688) ------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets resulting from Fund share transactions (698,514) 841,214 (442,178) (8,751,139) ------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets $ (548,247) $ 4,898,094 $ 5,512,179 $ 13,909,167 NET ASSETS: Beginning of period 68,261,748 63,363,654 207,615,337 193,706,170 ------------------------------------------------------------------------------------------------ End of period $ 67,713,501 $ 68,261,748 $213,127,516 $207,615,337 ------------------------------------------------------------------------------------------------ Undistributed net investment income, end of period $ 87,492 $ 1,170,281 $ 2,225,423 $ 3,297,033 ================================================================================================
The accompanying notes are an integral part of these financial statements. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 51 Statements of Changes in Net Assets (continued)
------------------------------------------------------------------------------------------------ Growth Aggressive Allocation Fund Allocation Fund ---------------------------- ---------------------------- Six Months Six Months Ended Year Ended Year 1/31/2014 Ended 1/31/2014 Ended (unaudited) 7/31/13 (unaudited) 7/31/13 ------------------------------------------------------------------------------------------------ FROM OPERATIONS: Net investment income $ 2,185,327 $ 2,678,896 $ 1,035,341 $ 957,800 Net realized gain on investments 8,216,541 8,430,071 5,128,790 5,353,388 Change in net unrealized appreciation on investments 861,399 20,860,423 399,456 13,474,283 ------------------------------------------------------------------------------------------------ Net increase in net assets resulting from operations $ 11,263,267 $ 31,969,390 $ 6,563,587 $ 19,785,471 ------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO SHAREOWNERS: Net investment income: Class A ($0.19, $0.17, $0.13 and $0.11, respectively) $ (2,221,392) $ (2,100,205) $ (940,355) $ (843,947) Class B ($0.02, $0.06, $0.00 and $0.00, respectively) (28,898) (124,014) -- -- Class C ($0.12, $0.10, $0.06 and $0.04, respectively) (555,724) (463,365) (97,900) (74,121) Class Y ($0.21, $0.20, $0.10 and $0.15, respectively) (23,647) (28,499) (3,926) (16,667) ------------------------------------------------------------------------------------------------ Total distributions to shareowners $ (2,829,661) $ (2,716,083) $ (1,042,181) $ (934,735) ------------------------------------------------------------------------------------------------ FROM FUND SHARE TRANSACTIONS: Net proceeds from sales or exchange of shares $ 18,501,384 $ 34,726,733 $ 9,210,511 $ 16,103,690 Reinvestment of distributions 2,677,939 2,589,712 1,011,947 904,418 Cost of shares repurchased (22,166,780) (52,707,882) (12,454,880) (29,890,561) ------------------------------------------------------------------------------------------------ Net decrease in net assets resulting from Fund share transactions (987,457) (15,391,437) (2,232,422) (12,882,453) ------------------------------------------------------------------------------------------------ Net increase in net assets $ 7,446,149 $ 13,861,870 $ 3,288,984 $ 5,968,283 NET ASSETS: Beginning of period 221,373,060 207,511,190 119,487,547 113,519,264 ------------------------------------------------------------------------------------------------ End of period $228,819,209 $221,373,060 $122,776,531 $119,487,547 ------------------------------------------------------------------------------------------------ Undistributed net investment income, end of period $ 2,184,734 $ 2,829,068 $ 1,034,842 $ 1,041,682 ================================================================================================
The accompanying notes are an integral part of these financial statements. 52 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14
------------------------------------------------------------------------------------------------ Conservative Allocation Fund ------------------------------------------------------------ '14 Shares '14 Amount (unaudited) (unaudited) '13 Shares '13 Amount ------------------------------------------------------------------------------------------------ Class A Shares sold 428,808 $ 4,934,037 1,020,934 $ 11,402,241 Reinvestment of distributions 114,328 1,312,494 85,658 931,997 Less shares repurchased (554,844) (6,395,208) (1,200,704) (13,407,002) ------------------------------------------------------------------------------------------------ Net decrease (11,708) $ (148,677) (94,112) $ (1,072,764) ================================================================================================ Class B Shares sold or exchanged 4,406 $ 50,078 18,697 $ 204,015 Reinvestment of distributions 4,767 54,004 4,413 47,265 Less shares repurchased (72,093) (816,920) (146,078) (1,606,168) ------------------------------------------------------------------------------------------------ Net decrease (62,920) $ (712,838) (122,968) $ (1,354,888) ================================================================================================ Class C Shares sold 264,179 $ 2,962,629 705,703 $ 7,658,490 Reinvestment of distributions 31,902 356,669 17,918 190,116 Less shares repurchased (281,582) (3,168,765) (428,536) (4,649,918) ------------------------------------------------------------------------------------------------ Net increase 14,499 $ 150,533 295,085 $ 3,198,688 ================================================================================================ Class Y Shares sold 1,390 $ 15,375 7,322 $ 77,583 Reinvestment of distributions 33 361 5 56 Less shares repurchased (301) (3,268) (704) (7,461) ------------------------------------------------------------------------------------------------ Net increase 1,122 $ 12,468 6,623 $ 70,178 ================================================================================================
------------------------------------------------------------------------------------------------ Moderate Allocation Fund ------------------------------------------------------------ '14 Shares '14 Amount (unaudited) (unaudited) '13 Shares '13 Amount ------------------------------------------------------------------------------------------------ Class A Shares sold 875,008 $ 10,558,488 1,920,609 $ 21,359,645 Reinvestment of distributions 181,366 2,225,349 216,417 2,311,349 Less shares repurchased (1,172,002) (14,113,104) (2,541,970) (28,078,906) ------------------------------------------------------------------------------------------------ Net decrease (115,628) $ (1,329,267) (404,944) $ (4,407,912) ================================================================================================ Class B Shares sold or exchanged 22,140 $ 258,799 45,000 $ 485,670 Reinvestment of distributions 2,819 33,719 7,130 73,866 Less shares repurchased (174,773) (2,032,724) (763,142) (8,143,861) ------------------------------------------------------------------------------------------------ Net decrease (149,814) $ (1,740,206) (711,012) $ (7,584,325) ================================================================================================ Class C Shares sold 827,733 $ 9,337,364 1,549,226 $ 16,124,813 Reinvestment of distributions 63,297 724,114 66,229 661,627 Less shares repurchased (570,077) (6,382,136) (1,149,577) (11,914,231) ------------------------------------------------------------------------------------------------ Net increase 320,953 $ 3,679,342 465,878 $ 4,872,209 ================================================================================================ Class Y Shares sold 16,969 $ 207,248 60,167 $ 675,402 Reinvestment of distributions 4,258 52,809 9,293 100,177 Less shares repurchased (108,153) (1,312,104) (213,103) (2,406,690) ------------------------------------------------------------------------------------------------ Net decrease (86,926) $ (1,052,047) (143,643) $ (1,631,111) ================================================================================================
The accompanying notes are an integral part of these financial statements. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 53 Statements of Changes in Net Assets (continued)
------------------------------------------------------------------------------------------------ Growth Allocation Fund ------------------------------------------------------------ '14 Shares '14 Amount (unaudited) (unaudited) '13 Shares '13 Amount ------------------------------------------------------------------------------------------------ Class A Shares sold 845,542 $ 10,769,330 1,955,642 $ 22,648,749 Reinvestment of distributions 168,985 2,208,632 188,344 2,079,338 Less shares repurchased (1,052,471) (13,459,778) (2,559,993) (29,481,905) ------------------------------------------------------------------------------------------------ Net decrease (37,944) $ (481,816) (416,007) $ (4,753,818) ================================================================================================ Class B Shares sold or exchanged 8,413 $ 94,830 20,819 $ 210,358 Reinvestment of distributions 2,458 28,738 12,344 121,589 Less shares repurchased (342,110) (3,856,533) (1,055,789) (10,840,758) ------------------------------------------------------------------------------------------------ Net decrease (331,239) $ (3,732,965) (1,022,626) $ (10,508,811) ================================================================================================ Class C Shares sold 606,982 $ 7,337,416 1,054,542 $ 11,590,420 Reinvestment of distributions 34,448 426,110 35,111 368,013 Less shares repurchased (364,738) (4,396,376) (1,014,165) (11,149,890) ------------------------------------------------------------------------------------------------ Net increase 276,692 $ 3,367,150 75,488 $ 808,543 ================================================================================================ Class Y Shares sold 23,002 $ 299,808 23,464 $ 277,206 Reinvestment of distributions 1,086 14,459 1,848 20,772 Less shares repurchased (34,173) (454,093) (104,455) (1,235,329) ------------------------------------------------------------------------------------------------ Net decrease (10,085) $ (139,826) (79,143) $ (937,351) ================================================================================================
------------------------------------------------------------------------------------------------ Aggressive Allocation Fund ------------------------------------------------------------ '14 Shares '14 Amount (unaudited) (unaudited) '13 Shares '13 Amount ------------------------------------------------------------------------------------------------ Class A Shares sold 475,868 $ 6,162,429 1,058,283 $ 12,251,455 Reinvestment of distributions 69,780 935,742 75,771 834,246 Less shares repurchased (624,973) (8,078,738) (1,662,968) (19,104,816) ------------------------------------------------------------------------------------------------ Net decrease (79,325) $ (980,567) (528,914) $ (6,019,115) ================================================================================================ Class B Shares sold or exchanged 8,267 $ 99,928 10,143 $ 111,293 Reinvestment of distributions -- -- -- -- Less shares repurchased (126,739) (1,547,440) (498,768) (5,436,594) ------------------------------------------------------------------------------------------------ Net decrease (118,472) $ (1,447,512) (488,625) $ (5,325,301) ================================================================================================ Class C Shares sold 237,137 $ 2,922,188 323,630 $ 3,543,347 Reinvestment of distributions 5,764 73,490 5,445 57,135 Less shares repurchased (218,250) (2,689,861) (393,437) (4,286,335) ------------------------------------------------------------------------------------------------ Net increase (decrease) 24,651 $ 305,817 (64,362) $ (685,853) ================================================================================================ Class Y Shares sold 1,986 $ 25,966 16,401 $ 197,595 Reinvestment of distributions 202 2,715 1,182 13,037 Less shares repurchased (10,414) (138,841) (90,026) (1,062,816) ------------------------------------------------------------------------------------------------ Net decrease (8,226) $ (110,160) (72,443) $ (852,184) ================================================================================================
The accompanying notes are an integral part of these financial statements. 54 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Financial Highlights
-------------------------------------------------------------------------------------------------------------------------------- Conservative Allocation Fund -------------------------------------------------------------- Six Months Ended Year Year Year Year Year 1/31/14 Ended Ended Ended Ended Ended (unaudited) 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 -------------------------------------------------------------------------------------------------------------------------------- Class A Net asset value, beginning of period $ 11.42 $ 10.73 $ 10.85 $ 10.19 $ 9.40 $ 10.48 -------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income (a) $ 0.16 $ 0.28 $ 0.28 $ 0.26 $ 0.25 $ 0.39 Net realized and unrealized gain (loss) on investments 0.20 0.64 (0.09) 0.65 0.86 (0.94) -------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 0.36 $ 0.92 $ 0.19 $ 0.91 $ 1.11 $ (0.55) -------------------------------------------------------------------------------------------------------------------------------- Distributions to shareowners: Net investment income $ (0.36) $ (0.23) $ (0.31) $ (0.25) $ (0.32) $ (0.31) Net realized gain -- -- -- -- -- (0.22) -------------------------------------------------------------------------------------------------------------------------------- Total distributions to shareowners $ (0.36) $ (0.23) $ (0.31) $ (0.25) $ (0.32) $ (0.53) -------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 0.00(b) $ 0.69 $ (0.12) $ 0.66 $ 0.79 $ (1.08) -------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 11.42 $ 11.42 $ 10.73 $ 10.85 $ 10.19 $ 9.40 ================================================================================================================================ Total return* 3.12%** 8.72% 1.85% 9.04% 11.88% (4.44)% Ratio of net expenses to average net assets+ 0.76%*** 0.77% 0.78% 0.78% 0.78% 0.78% Ratio of net investment income to average net assets+ 2.73%*** 2.51% 2.69% 2.47% 2.55% 4.43% Portfolio turnover rate 6%*** 17% 20% 15% 13% 53% Net assets, end of period (in thousands) $44,140 $44,239 $42,613 $42,882 $35,986 $25,992 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 0.76%*** 0.77% 0.82% 0.80% 0.84% 1.09% Net investment income 2.73%*** 2.51% 2.65% 2.45% 2.49% 4.12% ================================================================================================================================
(a) Calculated using average shares outstanding for the period. (b) Amount rounds to less than $0.01. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. ** Not annualized. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. *** Annualized. The accompanying notes are an integral part of these financial statements. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 55 Financial Highlights (continued)
----------------------------------------------------------------------------------------------------------------------------------- Conservative Allocation Fund -------------------------------------------------------------- Six Months Ended Year Year Year Year Year 1/31/14 Ended Ended Ended Ended Ended (unaudited) 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ----------------------------------------------------------------------------------------------------------------------------------- Class B Net asset value, beginning of period $ 11.18 $ 10.51 $ 10.61 $ 9.99 $ 9.24 $ 10.31 ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income (a) $ 0.09 $ 0.18 $ 0.19 $ 0.17 $ 0.16 $ 0.31 Net realized and unrealized gain (loss) on investments 0.22 0.62 (0.09) 0.64 0.83 (0.93) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 0.31 $ 0.80 $ 0.10 $ 0.81 $ 0.99 $ (0.62) ----------------------------------------------------------------------------------------------------------------------------------- Distributions to shareowners: Net investment income $ (0.22) $ (0.13) $ (0.20) $ (0.19) $ (0.24) $ (0.23) Net realized gain -- -- -- -- -- (0.22) ----------------------------------------------------------------------------------------------------------------------------------- Total distributions to shareowners $ (0.22) $ (0.13) $ (0.20) $ (0.19) $ (0.24) $ (0.45) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 0.09 $ 0.67 $ (0.10) $ 0.62 $ 0.75 $ (1.07) ----------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 11.27 $ 11.18 $ 10.51 $ 10.61 $ 9.99 $ 9.24 =================================================================================================================================== Total return* 2.79%** 7.63% 1.04% 8.15% 10.80% (5.31)% Ratio of net expenses to average net assets+ 1.67%*** 1.61% 1.68% 1.64% 1.68% 1.68% Ratio of net investment income to average net assets+ 1.60%*** 1.67% 1.82% 1.62% 1.67% 3.58% Portfolio turnover rate 6%*** 17% 20% 15% 13% 53% Net assets, end of period (in thousands) $ 2,656 $ 3,340 $ 4,429 $ 5,285 $ 6,214 $ 5,957 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 1.67%*** 1.61% 1.71% 1.64% 1.70% 1.90% Net investment income 1.60%*** 1.67% 1.79% 1.62% 1.64% 3.36% ===================================================================================================================================
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. ** Not annualized. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. *** Annualized. The accompanying notes are an integral part of these financial statements. 56 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14
-------------------------------------------------------------------------------------------------------------------------------- Conservative Allocation Fund -------------------------------------------------------------- Six Months Ended Year Year Year Year Year 1/31/14 Ended Ended Ended Ended Ended (unaudited) 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 -------------------------------------------------------------------------------------------------------------------------------- Class C Net asset value, beginning of period $ 11.09 $ 10.44 $ 10.56 $ 9.96 $ 9.21 $ 10.30 -------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income (a) $ 0.11 $ 0.18 $ 0.20 $ 0.18 $ 0.17 $ 0.31 Net realized and unrealized gain (loss) on investments 0.20 0.63 (0.09) 0.63 0.83 (0.95) -------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 0.31 $ 0.81 $ 0.11 $ 0.81 $ 1.00 $ (0.64) -------------------------------------------------------------------------------------------------------------------------------- Distributions to shareowners: Net investment income $ (0.28) $ (0.16) $ (0.23) $ (0.21) $ (0.25) $ (0.23) Net realized gain -- -- -- -- -- (0.22) -------------------------------------------------------------------------------------------------------------------------------- Total distributions to shareowners $ (0.28) $ (0.16) $ (0.23) $ (0.21) $ (0.25) $ (0.45) -------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 0.03 $ 0.65 $ (0.12) $ 0.60 $ 0.75 $ (1.09) -------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 11.12 $ 11.09 $ 10.44 $ 10.56 $ 9.96 $ 9.21 ================================================================================================================================ Total return* 2.81%** 7.83% 1.16% 8.18% 10.91% (5.53)% Ratio of net expenses to average net assets+ 1.48%*** 1.51% 1.56% 1.55% 1.59% 1.68% Ratio of net investment income to average net assets+ 2.00%*** 1.70% 1.91% 1.71% 1.73% 3.54% Portfolio turnover rate 6%*** 17% 20% 15% 13% 53% Net assets, end of period (in thousands) $20,762 $20,542 $16,257 $15,068 $14,063 $11,184 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 1.48%*** 1.51% 1.56% 1.55% 1.59% 1.80% Net investment income 2.00%*** 1.70% 1.91% 1.71% 1.73% 3.43% ================================================================================================================================
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. ** Not annualized. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. *** Annualized. The accompanying notes are an integral part of these financial statements. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 57 Financial Highlights (continued)
-------------------------------------------------------------------------------------------------------------------------------- Conservative Allocation Fund -------------------------------------------------------------- Six Months Ended Year Year Year Year Year 1/31/14 Ended Ended Ended Ended Ended (unaudited) 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 -------------------------------------------------------------------------------------------------------------------------------- Class Y Net asset value, beginning of period $ 10.86 $ 10.21 $ 10.41 $ 9.79 $ 9.02 $ 10.50 -------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income (a) $ 0.16 $ 0.20 $ 0.13 $ 0.24 $ 0.28 $ (0.18) Net realized and unrealized gain (loss) on investments 0.19 0.61 (0.10) 0.65 0.78 (0.97) -------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 0.35 $ 0.81 $ 0.03 $ 0.89 $ 1.06 $ (1.15) -------------------------------------------------------------------------------------------------------------------------------- Distributions to shareowners: Net investment income $ (0.27) $ (0.16) $ (0.23) $ (0.27) $ (0.29) $ (0.11) Net realized gain -- -- -- -- -- (0.22) -------------------------------------------------------------------------------------------------------------------------------- Total distributions to shareowners $ (0.27) $ (0.16) $ (0.23) $ (0.27) $ (0.29) $ (0.33) -------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 0.08 $ 0.65 $ (0.20) $ 0.62 $ 0.77 $ (1.48) -------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 10.94 $ 10.86 $ 10.21 $ 10.41 $ 9.79 $ 9.02 ================================================================================================================================ Total return* 3.25%** 8.00% 0.34% 9.18% 11.89% (10.66)% Ratio of net expenses to average net assets+ 0.67%*** 1.43% 2.26% 0.82% 0.63% 7.26% Ratio of net investment income to average net assets+ 2.83%*** 1.88% 1.28% 2.36% 2.94% (2.03)% Portfolio turnover rate 6%*** 17% 20% 15% 13% 53% Net assets, end of period (in thousands) $ 155 $ 141 $ 65 $ 72 $ 119 $ 9 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 0.67%*** 1.43% 2.26% 0.82% 0.63% 7.26% Net investment income (loss) 2.83%*** 1.88% 1.28% 2.36% 2.94% (2.03)% ================================================================================================================================
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions and the complete redemption of the investment at net asset value at the end of each period. ** Not annualized. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. *** Annualized. The accompanying notes are an integral part of these financial statements. 58 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14
------------------------------------------------------------------------------------------------------------------------------------ Moderate Allocation Fund --------------------------------------------------------------------- Six Months Ended Year Year Year Year Year 1/31/14 Ended Ended Ended Ended Ended (unaudited) 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ------------------------------------------------------------------------------------------------------------------------------------ Class A Net asset value, beginning of period $ 11.72 $ 10.46 $ 10.74 $ 9.68 $ 8.79 $ 10.89 ------------------------------------------------------------------------------------------------------------------------------------ Increase (decrease) from investment operations: Net investment income (a) $ 0.14 $ 0.21 $ 0.18 $ 0.17 $ 0.16 $ 0.27 Net realized and unrealized gain (loss) on investments 0.41 1.27 (0.22) 1.07 1.00 (1.63) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) from investment operations $ 0.55 $ 1.48 $ (0.04) $ 1.24 $ 1.16 $ (1.36) ------------------------------------------------------------------------------------------------------------------------------------ Distributions to shareowners: Net investment income $ (0.21) $ (0.22) $ (0.24) $ (0.18) $ (0.27) $ (0.13) Net realized gain -- -- -- -- -- (0.61) ------------------------------------------------------------------------------------------------------------------------------------ Total distributions to shareowners $ (0.21) $ (0.22) $ (0.24) $ (0.18) $ (0.27) $ (0.74) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net asset value $ 0.34 $ 1.26 $ (0.28) $ 1.06 $ 0.89 $ (2.10) ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $ 12.06 $ 11.72 $ 10.46 $ 10.74 $ 9.68 $ 8.79 ==================================================================================================================================== Total return* 4.67%** 14.32% (0.27)% 12.91% 13.26% (11.20)% Ratio of net expenses to average net assets+ 0.64%*** 0.66% 0.72% 0.71% 0.73% 0.74% Ratio of net investment income to average net assets+ 2.35%*** 1.85% 1.75% 1.59% 1.70% 3.20% Portfolio turnover rate 5%*** 9% 9% 14% 10% 44% Net assets, end of period (in thousands) $130,751 $128,425 $118,833 $132,166 $125,354 $120,786 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 0.64%*** 0.66% 0.72% 0.71% 0.73% 0.76% Net investment income 2.35%*** 1.85% 1.75% 1.59% 1.70% 3.18% ====================================================================================================================================
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. ** Not annualized. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. *** Annualized. The accompanying notes are an integral part of these financial statements. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 59 Financial Highlights (continued)
----------------------------------------------------------------------------------------------------------------------------- Moderate Allocation Fund --------------------------------------------------------------- Six Months Ended Year Year Year Year Year 1/31/14 Ended Ended Ended Ended Ended (unaudited) 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ----------------------------------------------------------------------------------------------------------------------------- Class B Net asset value, beginning of period $ 11.31 $ 10.04 $ 10.26 $ 9.25 $ 8.41 $ 10.39 ----------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income (a) $ 0.07 $ 0.11 $ 0.11 $ 0.08 $ 0.08 $ 0.19 Net realized and unrealized gain (loss) on investments 0.41 1.22 (0.22) 1.02 0.96 (1.53) ----------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 0.48 $ 1.33 $ (0.11) $ 1.10 $ 1.04 $ (1.34) ----------------------------------------------------------------------------------------------------------------------------- Distributions to shareowners: Net investment income $ (0.04) $ (0.06) $ (0.11) $ (0.09) $ (0.20) $ (0.03) Net realized gain -- -- -- -- -- (0.61) ----------------------------------------------------------------------------------------------------------------------------- Total distributions to shareowners $ (0.04) $ (0.06) $ (0.11) $ (0.09) $ (0.20) $ (0.64) ----------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 0.44 $ 1.27 $ (0.22) $ 1.01 $ 0.84 $ (1.98) ----------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 11.75 $ 11.31 $ 10.04 $ 10.26 $ 9.25 $ 8.41 ============================================================================================================================= Total return* 4.28%** 13.31% (0.99)% 11.89% 12.39% (11.81)% Ratio of net expenses to average net assets+ 1.52%*** 1.52% 1.52% 1.52% 1.52% 1.52% Ratio of net investment income to average net assets+ 1.27%*** 1.06% 1.11% 0.83% 0.92% 2.44% Portfolio turnover rate 5%*** 9% 9% 14% 10% 44% Net assets, end of period (in thousands) $ 8,692 $10,068 $16,072 $26,166 $33,115 $35,197 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 1.57%*** 1.58% 1.60% 1.53% 1.56% 1.63% Net investment income 1.22%*** 0.99% 1.03% 0.82% 0.88% 2.33% =============================================================================================================================
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. ** Not annualized. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. *** Annualized. The accompanying notes are an integral part of these financial statements. 60 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14
--------------------------------------------------------------------------------------------------------------------------------- Moderate Allocation Fund --------------------------------------------------------------- Six Months Ended Year Year Year Year Year 1/31/14 Ended Ended Ended Ended Ended (unaudited) 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 --------------------------------------------------------------------------------------------------------------------------------- Class C Net asset value, beginning of period $ 10.92 $ 9.77 $ 10.07 $ 9.10 $ 8.29 $ 10.30 --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income (a) $ 0.10 $ 0.12 $ 0.10 $ 0.09 $ 0.09 $ 0.19 Net realized and unrealized gain (loss) on investments 0.37 1.19 (0.22) 1.01 0.94 (1.53) --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 0.47 $ 1.31 $ (0.12) $ 1.10 $ 1.03 $ (1.34) --------------------------------------------------------------------------------------------------------------------------------- Distributions to shareowners: Net investment income $ (0.15) $ (0.16) $ (0.18) $ (0.13) $ (0.22) $ (0.06) Net realized gain -- -- -- -- -- (0.61) --------------------------------------------------------------------------------------------------------------------------------- Total distributions to shareowners $ (0.15) $ (0.16) $ (0.18) $ (0.13) $ (0.22) $ (0.67) --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 0.32 $ 1.15 $ (0.30) $ 0.97 $ 0.81 $ (2.01) --------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 11.24 $ 10.92 $ 9.77 $ 10.07 $ 9.10 $ 8.29 ================================================================================================================================= Total return* 4.32%** 13.56% (1.08)% 12.12% 12.43% (11.85)% Ratio of net expenses to average net assets+ 1.33%*** 1.34% 1.41% 1.40% 1.44% 1.52% Ratio of net investment income to average net assets+ 1.69%*** 1.15% 1.06% 0.89% 0.98% 2.44% Portfolio turnover rate 5%*** 9% 9% 14% 10% 44% Net assets, end of period (in thousands) $70,491 $64,989 $53,594 $52,059 $43,725 $37,513 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 1.33%*** 1.34% 1.41% 1.40% 1.44% 1.52% Net investment income 1.69%*** 1.15% 1.06% 0.89% 0.98% 2.44% =================================================================================================================================
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. ** Not annualized. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. *** Annualized. The accompanying notes are an integral part of these financial statements. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 61 Financial Highlights (continued)
----------------------------------------------------------------------------------------------------------------------------------- Moderate Allocation Fund ----------------------------------------------------------------- Six Months Ended Year Year Year Year Year 1/31/14 Ended Ended Ended Ended Ended (unaudited) 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ----------------------------------------------------------------------------------------------------------------------------------- Class Y Net asset value, beginning of period $ 11.86 $ 10.58 $ 10.88 $ 9.80 $ 8.89 $ 10.94 ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income (a) $ 0.14 $ 0.25 $ 0.22 $ 0.21 $ 0.20 $ 0.29 Net realized and unrealized gain (loss) on investments 0.43 1.28 (0.23) 1.09 1.02 (1.55) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 0.57 $ 1.53 $ (0.01) $ 1.30 $ 1.22 $ (1.26) ----------------------------------------------------------------------------------------------------------------------------------- Distributions to shareowners: Net investment income $ (0.24) $ (0.25) $ (0.29) $ (0.22) $ (0.31) $ (0.18) Net realized gain -- -- -- -- -- (0.61) ----------------------------------------------------------------------------------------------------------------------------------- Total distributions to shareowners $ (0.24) $ (0.25) $ (0.29) $ (0.22) $ (0.31) $ (0.79) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 0.33 $ 1.28 $ (0.30) $ 1.08 $ 0.91 $ (2.05) ----------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 12.19 $ 11.86 $ 10.58 $ 10.88 $ 9.80 $ 8.89 =================================================================================================================================== Total return* 4.75%** 14.68% 0.00%(b) 13.37% 13.75% (10.09)% Ratio of net expenses to average net assets+ 0.34%*** 0.36% 0.38% 0.32% 0.33% 0.33% Ratio of net investment income to average net assets+ 2.30%*** 2.26% 2.14% 2.00% 2.10% 3.59% Portfolio turnover rate 5%*** 9% 9% 14% 10% 44% Net assets, end of period (in thousands) $ 3,193 $ 4,134 $ 5,208 $ 8,069 $ 8,120 $ 8,015 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 0.34%*** 0.36% 0.38% 0.32% 0.33% 0.33% Net investment income 2.30%*** 2.26% 2.14% 2.00% 2.10% 3.59% ===================================================================================================================================
(a) Calculated using average shares outstanding for the period. (b) Amount rounds to less than $0.01%. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions and the complete redemption of the investment at net asset value at the end of each period. ** Not annualized. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. *** Annualized. The accompanying notes are an integral part of these financial statements. 62 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14
------------------------------------------------------------------------------------------------------------------------------------ Growth Allocation Fund --------------------------------------------------------------------- Six Months Ended Year Year Year Year Year 1/31/14 Ended Ended Ended Ended Ended (unaudited) 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ------------------------------------------------------------------------------------------------------------------------------------ Class A Net asset value, beginning of period $ 12.32 $ 10.75 $ 11.09 $ 9.77 $ 8.74 $ 11.50 ------------------------------------------------------------------------------------------------------------------------------------ Increase (decrease) from investment operations: Net investment income (a) $ 0.14 $ 0.17 $ 0.14 $ 0.12 $ 0.11 $ 0.19 Net realized and unrealized gain (loss) on investments 0.51 1.57 (0.29) 1.33 1.10 (2.14) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) from investment operations $ 0.65 $ 1.74 $ (0.15) $ 1.45 $ 1.21 $ (1.95) ------------------------------------------------------------------------------------------------------------------------------------ Distributions to shareowners: Net investment income $ (0.19) $ (0.17) $ (0.19) $ (0.13) $ (0.18) $ (0.04) Net realized gain -- -- -- -- -- (0.77) ------------------------------------------------------------------------------------------------------------------------------------ Total distributions to shareowners $ (0.19) $ (0.17) $ (0.19) $ (0.13) $ (0.18) $ (0.81) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net asset value $ 0.46 $ 1.57 $ (0.34) $ 1.32 $ 1.03 $ (2.76) ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $ 12.78 $ 12.32 $ 10.75 $ 11.09 $ 9.77 $ 8.74 ==================================================================================================================================== Total return* 5.21%** 16.40% (1.31)% 14.85% 13.90% (15.49)% Ratio of net expenses to average net assets+ 0.66%*** 0.69% 0.76% 0.76% 0.79% 0.79% Ratio of net investment income to average net assets+ 2.15%*** 1.50% 1.29% 1.11% 1.12% 2.24% Portfolio turnover rate 4%*** 6% 7% 12% 11% 49% Net assets, end of period (in thousands) $154,711 $149,586 $134,988 $140,979 $125,433 $111,447 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 0.66%*** 0.69% 0.76% 0.76% 0.80% 0.89% Net investment income 2.15%*** 1.50% 1.29% 1.11% 1.11% 2.14% ====================================================================================================================================
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. ** Not annualized. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. *** Annualized. The accompanying notes are an integral part of these financial statements. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 63 Financial Highlights (continued)
---------------------------------------------------------------------------------------------------------------------------------- Growth Allocation Fund ---------------------------------------------------------------- Six Months Ended Year Year Year Year Year 1/31/14 Ended Ended Ended Ended Ended (unaudited) 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ---------------------------------------------------------------------------------------------------------------------------------- Class B Net asset value, beginning of period $ 10.93 $ 9.52 $ 9.80 $ 8.64 $ 7.75 $ 10.33 ---------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income (a) $ 0.05 $ 0.07 $ 0.06 $ 0.03 $ 0.03 $ 0.11 Net realized and unrealized gain (loss) on investments 0.47 1.40 (0.26) 1.17 0.98 (1.92) ---------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 0.52 $ 1.47 $ (0.20) $ 1.20 $ 1.01 $ (1.81) ---------------------------------------------------------------------------------------------------------------------------------- Distributions to shareowners: Net investment income $ (0.02) $ (0.06) $ (0.08) $ (0.04) $ (0.12) $ -- Net realized gain -- -- -- -- -- (0.77) ---------------------------------------------------------------------------------------------------------------------------------- Total distributions to shareowners $ (0.02) $ (0.06) $ (0.08) $ (0.04) $ (0.12) $ (0.77) ---------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 0.50 $ 1.41 $ (0.28) $ 1.16 $ 0.89 $ (2.58) ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 11.43 $ 10.93 $ 9.52 $ 9.80 $ 8.64 $ 7.75 ================================================================================================================================== Total return* 4.77%** 15.46% (2.01)% 13.90% 13.03% (16.05)% Ratio of net expenses to average net assets+ 1.57%*** 1.57% 1.57% 1.57% 1.57% 1.57% Ratio of net investment income to average net assets+ 0.96%*** 0.68% 0.59% 0.35% 0.36% 1.47% Portfolio turnover rate 4%*** 6% 7% 12% 11% 49% Net assets, end of period (in thousands) $14,450 $17,441 $24,941 $35,567 $39,902 $ 43,390 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 1.62%*** 1.60% 1.66% 1.61% 1.66% 1.77% Net investment income 0.91%*** 0.64% 0.50% 0.31% 0.27% 1.27% ==================================================================================================================================
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. ** Not annualized. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. *** Annualized. The accompanying notes are an integral part of these financial statements. 64 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14
---------------------------------------------------------------------------------------------------------------------------------- Growth Allocation Fund ---------------------------------------------------------------- Six Months Ended Year Year Year Year Year 1/31/14 Ended Ended Ended Ended Ended (unaudited) 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ---------------------------------------------------------------------------------------------------------------------------------- Class C Net asset value, beginning of period $ 11.65 $ 10.18 $ 10.50 $ 9.26 $ 8.30 $ 10.99 ---------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income (a) $ 0.09 $ 0.09 $ 0.06 $ 0.04 $ 0.04 $ 0.11 Net realized and unrealized gain (loss) on investments 0.48 1.48 (0.27) 1.26 1.04 (2.03) ---------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 0.57 $ 1.57 $ (0.21) $ 1.30 $ 1.08 $ (1.92) ---------------------------------------------------------------------------------------------------------------------------------- Distributions to shareowners: Net investment income $ (0.12) $ (0.10) $ (0.11) $ (0.06) $ (0.12) $ -- Net realized gain -- -- -- -- -- (0.77) ---------------------------------------------------------------------------------------------------------------------------------- Total distributions to shareowners $ (0.12) $ (0.10) $ (0.11) $ (0.06) $ (0.12) $ (0.77) ---------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 0.45 $ 1.47 $ (0.32) $ 1.24 $ 0.96 $ (2.69) ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 12.10 $ 11.65 $ 10.18 $ 10.50 $ 9.26 $ 8.30 ================================================================================================================================== Total return* 4.85%** 15.58% (1.91)% 14.10% 13.08% (16.08)% Ratio of net expenses to average net assets+ 1.35%*** 1.40% 1.46% 1.46% 1.51% 1.57% Ratio of net investment income to average net assets+ 1.48%*** 0.78% 0.59% 0.40% 0.40% 1.44% Portfolio turnover rate 4%*** 6% 7% 12% 11% 49% Net assets, end of period (in thousands) $58,426 $53,032 $45,570 $48,586 $43,087 $ 36,602 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 1.35%*** 1.40% 1.46% 1.46% 1.51% 1.60% Net investment income 1.48%*** 0.78% 0.59% 0.40% 0.40% 1.40% ==================================================================================================================================
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. ** Not annualized. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. *** Annualized. The accompanying notes are an integral part of these financial statements. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 65 Financial Highlights (continued)
--------------------------------------------------------------------------------------------------------------------------------- Growth Allocation Fund --------------------------------------------------------------- Six Months Ended Year Year Year Year Year 1/31/14 Ended Ended Ended Ended Ended (unaudited) 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 --------------------------------------------------------------------------------------------------------------------------------- Class Y Net asset value, beginning of period $ 12.56 $ 10.95 $ 11.45 $ 10.07 $ 9.00 $ 11.64 --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income (a) $ 0.18 $ 0.20 $ 0.17 $ 0.17 $ 0.15 $ 0.20 Net realized and unrealized gain (loss) on investments 0.50 1.61 (0.44) 1.37 1.14 (1.97) --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 0.68 $ 1.81 $ (0.27) $ 1.54 $ 1.29 $ (1.77) --------------------------------------------------------------------------------------------------------------------------------- Distributions to shareowners: Net investment income $ (0.21) $ (0.20) $ (0.23) $ (0.16) $ (0.22) $ (0.10) Net realized gain -- -- -- -- -- (0.77) --------------------------------------------------------------------------------------------------------------------------------- Total distributions to shareowners $ (0.21) $ (0.20) $ (0.23) $ (0.16) $ (0.22) $ (0.87) --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 0.47 $ 1.61 $ (0.50) $ 1.38 $ 1.07 $ (2.64) --------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 13.03 $ 12.56 $ 10.95 $ 11.45 $ 10.07 $ 9.00 ================================================================================================================================= Total return* 5.38%** 16.70% (2.28)% 15.39% 14.33% (13.68)% Ratio of net expenses to average net assets+ 0.34%*** 0.44% 0.50% 0.36% 0.39% 0.39% Ratio of net investment income to average net assets+ 2.71%*** 1.71% 1.60% 1.58% 1.54% 2.44% Portfolio turnover rate 4%*** 6% 7% 12% 11% 49% Net assets, end of period (in thousands) $ 1,232 $ 1,314 $ 2,012 $ 1,947 $ 2,508 $ 1,614 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 0.34%*** 0.44% 0.50% 0.36% 0.39% 0.39% Net investment income 2.71%*** 1.71% 1.60% 1.58% 1.54% 2.44% =================================================================================================================================
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions and the complete redemption of the investment at net asset value at the end of each period. ** Not annualized. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. *** Annualized. The accompanying notes are an integral part of these financial statements. 66 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14
---------------------------------------------------------------------------------------------------------------------------------- Aggressive Allocation Fund ---------------------------------------------------------------- Six Months Ended Year Year Year Year Year 1/31/14 Ended Ended Ended Ended Ended (unaudited) 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ---------------------------------------------------------------------------------------------------------------------------------- Class A Net asset value, beginning of period $ 12.47 $ 10.60 $ 11.07 $ 9.56 $ 8.45 $ 11.85 ---------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income (a) $ 0.12 $ 0.11 $ 0.08 $ 0.06 $ 0.04 $ 0.09 Net realized and unrealized gain (loss) on investments 0.58 1.87 (0.42) 1.51 1.16 (2.54) ---------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 0.70 $ 1.98 $ (0.34) $ 1.57 $ 1.20 $ (2.45) ---------------------------------------------------------------------------------------------------------------------------------- Distributions to shareowners: Net investment income $ (0.13) $ (0.11) $ (0.13) $ (0.06) $ (0.09) $ -- Net realized gain -- -- -- -- -- (0.95) ---------------------------------------------------------------------------------------------------------------------------------- Total distributions to shareowners $ (0.13) $ (0.11) $ (0.13) $ (0.06) $ (0.09) $ (0.95) ---------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 0.57 $ 1.87 $ (0.47) $ 1.51 $ 1.11 $ (3.40) ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 13.04 $ 12.47 $ 10.60 $ 11.07 $ 9.56 $ 8.45 ================================================================================================================================== Total return* 5.59%** 18.86% (3.06)% 16.42% 14.16% (19.05)% Ratio of net expenses to average net assets+ 0.79%*** 0.82% 0.85% 0.85% 0.85% 0.85% Ratio of net investment income to average net assets+ 1.85%*** 0.99% 0.76% 0.52% 0.44% 1.07% Portfolio turnover rate 6%*** 6% 7% 11% 12% 55% Net assets, end of period (in thousands) $94,074 $90,921 $82,940 $92,878 $85,488 $ 79,480 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 0.79%*** 0.82% 0.87% 0.85% 0.88% 1.01% Net investment income 1.85%*** 0.99% 0.74% 0.52% 0.41% 0.91% ==================================================================================================================================
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. ** Not annualized. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. *** Annualized. The accompanying notes are an integral part of these financial statements. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 67 Financial Highlights (continued)
----------------------------------------------------------------------------------------------------------------------------------- Aggressive Allocation Fund ------------------------------------------------------------------- Six Months Ended Year Year Year Year Year 1/31/14 Ended Ended Ended Ended Ended (unaudited) 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ----------------------------------------------------------------------------------------------------------------------------------- Class B Net asset value, beginning of period $ 11.72 $ 9.95 $ 10.35 $ 8.96 $ 7.93 $ 11.29 ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income (a) $ 0.05 $ 0.03 $ 0.01 $ (0.02) $ (0.03) $ 0.02 Net realized and unrealized gain (loss) on investments 0.56 1.74 (0.40) 1.41 1.08 (2.43) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 0.61 $ 1.77 $ (0.39) $ 1.39 $ 1.05 $ (2.41) ----------------------------------------------------------------------------------------------------------------------------------- Distributions to shareowners: Net investment income $ -- $ -- $ (0.01) $ -- $ (0.02) $ -- Net realized gain -- -- -- -- -- (0.95) ----------------------------------------------------------------------------------------------------------------------------------- Total distributions to shareowners $ -- $ -- $ (0.01) $ -- $ (0.02) $ (0.95) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 0.61 $ 1.77 $ (0.40) $ 1.39 $ 1.03 $ (3.36) ----------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 12.33 $ 11.72 $ 9.95 $ 10.35 $ 8.96 $ 7.93 =================================================================================================================================== Total return* 5.20%** 17.79% (3.72)% 15.51% 13.22% (19.69)% Ratio of net expenses to average net assets+ 1.64%*** 1.64% 1.64% 1.64% 1.64% 1.64% Ratio of net investment income to average net assets+ 0.80%*** 0.25% 0.05% (0.21)% (0.33)% 0.28% Portfolio turnover rate 6%*** 6% 7% 11% 12% 55% Net assets, end of period (in thousands) $ 7,474 $ 8,495 $12,074 $ 17,642 $19,256 $ 20,884 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 1.75%*** 1.73% 1.77% 1.71% 1.76% 1.89% Net investment income (loss) 0.69%*** 0.16% (0.08)% (0.28)% (0.45)% 0.04% ===================================================================================================================================
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. ** Not annualized. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. *** Annualized. The accompanying notes are an integral part of these financial statements. 68 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14
------------------------------------------------------------------------------------------------------------------------------------ Aggressive Allocation Fund -------------------------------------------------------------------- Six Months Ended Year Year Year Year Year 1/31/14 Ended Ended Ended Ended Ended (unaudited) 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ------------------------------------------------------------------------------------------------------------------------------------ Class C Net asset value, beginning of period $ 11.83 $ 10.07 $ 10.50 $ 9.08 $ 8.04 $ 11.43 ------------------------------------------------------------------------------------------------------------------------------------ Increase (decrease) from investment operations: Net investment income (a) $ 0.08 $ 0.03 $ 0.00(b) $ (0.01) $ (0.03) $ 0.02 Net realized and unrealized gain (loss) on investments 0.54 1.77 (0.38) 1.43 1.10 (2.46) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) from investment operations $ 0.62 $ 1.80 $ (0.38) $ 1.42 $ 1.07 $ (2.44) ------------------------------------------------------------------------------------------------------------------------------------ Distributions to shareowners: Net investment income $ (0.06) $ (0.04) $ (0.05) $ -- $ (0.03) $ -- Net realized gain -- -- -- -- -- (0.95) ------------------------------------------------------------------------------------------------------------------------------------ Total distributions to shareowners $ (0.06) $ (0.04) $ (0.05) $ -- $ (0.03) $ (0.95) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net asset value $ 0.56 $ 1.76 $ (0.43) $ 1.42 $ 1.04 $ (3.39) ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $ 12.39 $ 11.83 $ 10.07 $ 10.50 $ 9.08 $ 8.04 ==================================================================================================================================== Total return* 5.22%** 17.97% (3.61)% 15.64% 13.25% (19.71)% Ratio of net expenses to average net assets+ 1.49%*** 1.51% 1.56% 1.55% 1.58% 1.64% Ratio of net investment income to average net assets+ 1.23%*** 0.31% 0.01% (0.14)% (0.31)% 0.27% Portfolio turnover rate 6%*** 6% 7% 11% 12% 55% Net assets, end of period (in thousands) $20,822 $19,582 $17,317 $ 18,899 $18,161 $ 17,171 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 1.49%*** 1.51% 1.56% 1.55% 1.58% 1.70% Net investment income (loss) 1.23%*** 0.31% 0.01% (0.14)% (0.31)% 0.21% ====================================================================================================================================
(a) Calculated using average shares outstanding for the period. (b) Amount rounds to less than $0.01. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. ** Not annualized. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. *** Annualized. The accompanying notes are an integral part of these financial statements. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 69 Financial Highlights (continued)
---------------------------------------------------------------------------------------------------------------------------------- Aggressive Allocation Fund ---------------------------------------------------------------- Six Months Ended Year Year Year Year Year 1/31/14 Ended Ended Ended Ended Ended (unaudited) 7/31/13 7/31/12 7/31/11 7/31/10 7/31/09 ---------------------------------------------------------------------------------------------------------------------------------- Class Y Net asset value, beginning of period $ 12.49 $ 10.65 $ 11.24 $ 9.67 $ 8.55 $ 12.02 ---------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from investment operations: Net investment income (a) $ 0.15 $ 0.22 $ 0.12 $ 0.11 $ 0.08 $ 0.13 Net realized and unrealized gain (loss) on investments 0.58 1.77 (0.55) 1.56 1.16 (2.65) ---------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from investment operations $ 0.73 $ 1.99 $ (0.43) $ 1.67 $ 1.24 $ (2.52) ---------------------------------------------------------------------------------------------------------------------------------- Distributions to shareowners: Net investment income $ (0.10) $ (0.15) $ (0.16) $ (0.10) $ (0.12) $ -- Net realized gain -- -- -- -- -- (0.95) ---------------------------------------------------------------------------------------------------------------------------------- Total distributions to shareowners $ (0.10) $ (0.15) $ (0.16) $ (0.10) $ (0.12) $ (0.95) ---------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net asset value $ 0.63 $ 1.84 $ (0.59) $ 1.57 $ 1.12 $ (3.47) ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 13.12 $ 12.49 $ 10.65 $ 11.24 $ 9.67 $ 8.55 ================================================================================================================================== Total return* 5.84%** 18.87% (3.76)% 17.32% 14.49% (19.35)% Ratio of net expenses to average net assets+ 0.46%*** 0.67% 0.55% 0.46% 0.42% 0.43% Ratio of net investment income to average net assets+ 2.28%*** 1.89% 1.11% 0.99% 0.88% 1.58% Portfolio turnover rate 6%*** 6% 7% 11% 12% 55% Net assets, end of period (in thousands) $ 406 $ 489 $ 1,189 $ 1,311 $ 1,868 $ 1,627 Ratios with no waivers of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: Total expenses 0.46%*** 0.67% 0.55% 0.46% 0.42% 0.43% Net investment income 2.28%*** 1.89% 1.11% 0.99% 0.88% 1.58% ==================================================================================================================================
(a) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions and the complete redemption of the investment at net asset value at the end of each period. ** Not annualized. + In addition to the expenses which the Fund bears directly, the Fund indirectly bears pro rata shares of the expenses of the funds in which the Fund invests. Because each of the underlying funds bears its own varying expense levels and because the Fund may own differing proportions of each fund at different times, the amount of expenses incurred indirectly by the Fund will vary from time to time. *** Annualized. The accompanying notes are an integral part of these financial statements. 70 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Notes to Financial Statements | 1/31/14 (unaudited) 1. Organization and Significant Accounting Policies Pioneer Ibbotson Asset Allocation Series (the Trust) is organized as a Delaware statutory trust and is registered with the Securities and Exchange Commission under the Investment Company Act of 1940 (the 1940 Act) as an open-end management investment company. The Trust consists of four separate funds, each issuing four classes of shares (collectively, the Funds, individually, the Fund) as follows: Pioneer Ibbotson Conservative Allocation Fund (Conservative Fund) Pioneer Ibbotson Moderate Allocation Fund (Moderate Fund) Pioneer Ibbotson Growth Allocation Fund (Growth Fund) Pioneer Ibbotson Aggressive Allocation Fund (Aggressive Fund) The investment objective of the Conservative Fund, the Moderate Fund and the Growth Fund is to seek long-term capital growth and current income. The investment objective of the Aggressive Fund is to seek long-term capital growth. Each Fund is a "fund of funds," which means that it seeks to achieve its investment objective by investing exclusively in other Pioneer funds ("underlying funds") managed by Pioneer Investment Management, Inc. (PIM) rather than by direct investment in securities. In the future, the Funds also may invest in regulated investment companies that are not managed by PIM. The Funds indirectly pay a portion of the expenses incurred by the underlying funds. Consequently, an investment in the Funds entails more direct and indirect expenses than direct investment in the underlying funds. Effective as of the close of business on December 31, 2009, the Fund's Class B shares are no longer offered to new or existing shareholders, except that dividends and/or capital gain distributions may continue to be reinvested in Class B shares, and shareholders may exchange their Class B shares for Class B shares of other Pioneer funds, as permitted by existing exchange privileges. Each class of shares represents an interest in the same portfolio of investments of each Fund and has identical rights (based on relative net asset values) to assets and liquidation proceeds. Share classes can bear different rates of class-specific fees and expenses such as transfer agent and distribution fees. Differences in class specific fees and expenses will result in differences in net investment income and, therefore, the payment of different dividends from net investment income earned by each class. The Amended and Restated Declaration of Trust of each Fund gives the Board the flexibility to specify either per-share voting or dollar-weighted voting when submitting matters for shareholder approval. Under per-share voting, each share of a class of a Fund is Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 71 entitled to one vote. Under dollar-weighted voting, a shareholder's voting power is determined not by the number of shares owned, but by the dollar value of the shares on the record date. Each share class has exclusive voting rights with respect to matters affecting only that class, including with respect to the distribution plan for that class. There is no distribution plan for Class Y shares. Class B shares convert to Class A shares approximately eight years after the date of purchase. The financial statements have been prepared in conformity with U.S. generally accepted accounting principles that require the management of the Funds to, among other things, make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from these estimates. The following is a summary of significant accounting policies followed by the Trust in preparation of its financial statements, which are consistent with those policies generally accepted in the investment company industry: A. Security Valuation Security transactions are recorded as of the trade date. The net asset value is computed once daily, on each day the New York Stock Exchange (NYSE) is open, as of the close of regular trading on the NYSE. In computing the net asset value, holdings of mutual fund shares are valued at the net asset value of each fund held. Dividend income and realized capital gain distributions from investment company shares held are recorded on the ex-dividend date. Temporary cash investments are valued at amortized cost which approximates market value. Gains and losses on sales of investments are calculated on the identified cost method for both financial reporting and federal income tax purposes. B. Federal Income Taxes It is the Funds' policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all taxable income and net realized capital gains, if any, to shareholders. Therefore, no federal income tax provisions are required. Tax returns filed within the prior three years remain subject to examination by federal and state tax authorities. 72 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 The amounts and characterizations of distributions to shareowners for financial reporting purposes are determined in accordance with federal income tax rules. Therefore, the sources of the Funds' distributions may be shown in the accompanying financial statements as from or in excess of net investment income or as from net realized gain on investment transactions, or as from paid-in capital, depending on the type of book/tax differences that may exist. The tax character of current year distributions paid will be determined at the end of the current taxable year. The tax character of distributions paid during the year ended July 31, 2013 was as follows:
---------------------------------------------------------------------------- Ordinary Long-Term Fund Income Capital Gains Total ---------------------------------------------------------------------------- Conservative Fund $1,276,850 $ -- $1,276,850 Moderate Fund 3,416,192 -- 3,416,192 Growth Fund 2,716,083 -- 2,716,083 Aggressive Fund 934,735 -- 934,735
The following table shows the components of distributable earnings on a federal income tax basis at July 31, 2013:
---------------------------------------------------------------------------- Other Net Undistributed Book/Tax Unrealized Ordinary Capital Loss Temporary Appreciation Fund Income Carryforward Differences Depreciation ---------------------------------------------------------------------------- Conservative Fund $1,170,281 $ (2,788,108) $ -- $ 7,143,265 Moderate Fund 3,297,033 (32,484,474) -- 37,467,104 Growth Fund 2,828,375 (42,274,920) -- 47,883,267 Aggressive Fund 1,041,682 (30,672,473) -- 30,326,872
The differences between book-basis and tax-basis net unrealized appreciation are attributable to the tax deferral of losses on wash sales. C. Fund Shares The Funds record sales and repurchases of Fund shares as of trade date. Pioneer Funds Distributor, Inc. (PFD), the principal underwriter for the Funds and a wholly owned indirect subsidiary of UniCredit S.p.A.(UniCredit), earned the following in underwriting commissions on the sale of Class A shares during the six months ended January 31, 2014:
---------------------------------------------------------------------------- Fund Amount ---------------------------------------------------------------------------- Conservative Fund $ 8,207 Moderate Fund $19,179 Growth Fund $31,750 Aggressive Fund $17,051
Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 73 D. Class Allocations Income, common expenses and realized and unrealized gains and losses are calculated at the Fund level and allocated daily to each class of shares based on its respective percentage of adjusted net assets at the beginning of the day. Distribution fees are calculated based on the average daily net asset value attributable to Class A, Class B and Class C shares of each Fund, respectively (see Note 4). Class Y shares do not pay distribution fees. All expenses and fees paid to the transfer agent, Pioneer Investment Management Shareholder Services, Inc. (PIMSS), for its services are allocated among the class of shares based on the number of accounts in each class and the ratable allocation of related out-of-pocket expenses (see Note 3). Distributions to shareowners are recorded as of the ex-dividend date. Distributions paid by each of the Funds with respect to each class of shares are calculated in the same manner and at the same time, except that net investment income dividends to Class A, Class B, Class C and Class Y shares of each Fund can reflect different transfer agent and distribution expense rates. E. Risks Some of the underlying funds can invest in either high yield securities or small/ emerging growth companies. Investments in these types of securities generally are subject to greater volatility than either higher- grade securities or more- established companies in more developed markets, respectively. The Funds' prospectus contains unaudited information regarding the Fund's principal risks. Please refer to that document when considering the Funds' principal risks. 2. Management Agreement PIM, a wholly owned indirect subsidiary of UniCredit, manages the Funds' portfolios. Management fees are calculated daily at the following annual rates for each Fund:
On assets up to $2.5 billion 0.13% on investments in underlying funds managed by Pioneer (and cash); and 0.17% on other investments On the next $1.5 billion 0.11% on investments in underlying funds managed by Pioneer (and cash); and 0.14% on other investments On the next $1.5 billion 0.10% on investments in underlying funds managed by Pioneer (and cash); and 0.12% on other investments On the next $1.5 billion 0.08% on investments in underlying funds managed by Pioneer (and cash); and 0.10% on other investments Over $7 billion 0.08% on investments in underlying funds managed by Pioneer (and cash); and 0.09% on other investments
74 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 For the six months ended January 31, 2014, the effective management fee for each Fund was equivalent to 0.13% of the Fund's average daily net assets. Fees waived and expenses reimbursed during the six months ended January 31, 2014 are reflected in the Statement of Operations. PIM has entered into a sub-advisory agreement with Ibbotson Associates, Inc. (Ibbotson). PIM, not the Funds, pays a portion of the fee it receives from each Fund to Ibbotson as compensation for its services to the Funds. In addition, under the PIM's management and administration agreements, certain other services and costs, including accounting, regulatory reporting and insurance premiums, are paid by the Funds as administrative reimbursements. Included in "Due to affiliates" reflected on the Statement of Assets and Liabilities are the following amounts payable to PIM at January 31, 2014:
-------------------------------------------------------------------------------- Fund Amount -------------------------------------------------------------------------------- Conservative Fund $10,275 Moderate Fund $31,113 Growth Fund $33,088 Aggressive Fund $18,953
PIM has contractually agreed to limit ordinary operating expenses to the extent required to reduce fund expenses, other than underlying fund fees and expenses, as follows. These expense limitations are in effect through December 1, 2015. There can be no assurance that PIM will extend the expense limitation agreement for a class of shares beyond the date referred to above:
-------------------------------------------------------------------------------- Fund Class A Class B Class C -------------------------------------------------------------------------------- Conservative Fund 0.78% 1.68% 1.68% Moderate Fund 0.74% 1.52% 1.52% Growth Fund 0.79% 1.57% 1.57% Aggressive Fund 0.85% 1.64% 1.64%
3. Transfer Agent PIMSS, a wholly owned indirect subsidiary of UniCredit, provides substantially all transfer agent and shareowner services to the Funds at negotiated rates. Included in "Due to affiliates" reflected on the Statement of Assets and Liabilities are the following amounts of transfer agent fees payable to PIMSS at January 31, 2014:
-------------------------------------------------------------------------------- Fund Amount -------------------------------------------------------------------------------- Conservative Fund $ 8,054 Moderate Fund $29,982 Growth Fund $36,145 Aggressive Fund $24,617
Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 75 4. Distribution Plan The Funds have adopted a Distribution Plan pursuant to Rule 12b-1 of the 1940 Act with respect to Class A, Class B and Class C shares. Pursuant to the Plan, each Fund pays PFD 0.25% of the Fund's average daily net assets attributable to Class A shares as compensation for personal services and/or account maintenance services or distribution services with respect to Class A shares. Pursuant to the Plan, each Fund also pays PFD 1.00% of the average daily net assets attributable to Class B and Class C shares. The fee for Class B and C consists of a 0.25% service fee and a 0.75% distribution fee paid as compensation for personal services and/or account maintenance services or distribution services with regard to Class B and Class C shares. Included in "Due to affiliates" reflected on the Statement of Assets and Liabilities are the following amounts in distribution fees payable to PFD at January 31, 2014.
-------------------------------------------------------------------------------- Fund Amount -------------------------------------------------------------------------------- Conservative Fund $30,661 Moderate Fund $99,833 Growth Fund $99,639 Aggressive Fund $46,685
In addition, redemptions of each class of shares (except Class Y shares) may be subject to a contingent deferred sales charge (CDSC). A CDSC of 1.00% may be imposed on redemptions of certain net asset value purchases of Class A shares within 12 months of purchase. Class B shares that are redeemed within five years of purchase are subject to a CDSC at declining rates beginning at 4.00%, based on the lower of cost or market value of shares being redeemed. Redemptions of Class C shares within 12 months of purchase are subject to a CDSC of 1.00% based on the lower of cost or market value of shares being redeemed. Shares purchased as part of an exchange remain subject to any CDSC that applied to the original purchase of those shares. There is no CDSC for Class Y shares. Proceeds from the CDSCs are paid to PFD. For the six months ended January 31, 2014, the following CDSCs were paid to PFD:
-------------------------------------------------------------------------------- Fund Amount -------------------------------------------------------------------------------- Conservative Fund $5,339 Moderate Fund $6,919 Growth Fund $5,032 Aggressive Fund $1,525
76 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 5. Transactions in Underlying Funds - Affiliated Issuers An affiliated issuer may be considered one in which each Fund owns 5% or more of the outstanding voting securities, or a company which is under common control. For the purposes of this report, each Fund assumes the following to be affiliated issuers: Pioneer Ibbotson Conservative Allocation Fund
--------------------------------------------------------------------------------------------- Beginning Acquisitions Dispositions Ending Underlying Funds (Affiliated) (Class Y) Shares Shares Shares Shares --------------------------------------------------------------------------------------------- Pioneer Bond Fund 1,548,643 138,962 (51,649) 1,635,956 Pioneer Core Equity Fund 98,861 1,399 (13,663) 86,597 Pioneer Disciplined Growth Fund 45,907 784 (5,379) 41,312 Pioneer Disciplined Value Fund 113,201 11,665 (19,839) 105,027 Pioneer Dynamic Credit Fund 269,721 15,057 (10,517) 274,261 Pioneer Emerging Markets Fund 27,575 2,325 (2,697) 27,203 Pioneer Equity Income Fund 21,310 798 (2,216) 19,892 Pioneer Floating Rate Fund 96,168 4,687 (2,912) 97,943 Pioneer Fund 54,532 4,193 (6,350) 52,375 Pioneer Fundamental Growth Fund 91,257 2,497 (11,651) 82,103 Pioneer Global Equity Fund 238,910 4,112 (29,780) 213,242 Pioneer Global High Yield Fund 402,965 25,656 (13,465) 415,156 Pioneer Global Multisector Income Fund (FKA Pioneer Global Aggregate Bond Fund) 120,905 8,572 (3,873) 125,604 Pioneer High Yield Fund 245,139 8,647 (63,330) 190,456 Pioneer International Value Fund 256,804 11,590 (25,136) 243,258 Pioneer Mid Cap Value Fund 53,075 4,620 (7,363) 50,332 Pioneer Multi-Asset Ultrashort Income Fund 66,345 3,266 (1,851) 67,760 Pioneer Oak Ridge Small Cap Growth Fund 17,226 1,535 (1,488) 17,273 Pioneer Real Estate Shares 25,358 4,533 (2,929) 26,962 Pioneer Select Mid Cap Growth Fund 24,463 784 (8,728) 16,519 Pioneer Short Term Income Fund 1,082,933 40,705 (63,373) 1,060,265 Pioneer Strategic Income Fund 589,216 58,345 (20,353) 627,208
Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 77 Pioneer Ibbotson Conservative Allocation Fund (continued)
------------------------------------------------------------------------------------------------ Realized Capital Gain Dividend Ending Underlying Funds (Affiliated) (Class Y) Gain (Loss) Distributions Income Value ------------------------------------------------------------------------------------------------ Pioneer Bond Fund $ (2,269) $ -- $ 359,388 $15,754,257 Pioneer Core Equity Fund 64,328 -- 7,355 1,329,264 Pioneer Disciplined Growth Fund 21,615 261,204 14,613 663,885 Pioneer Disciplined Value Fund 79,101 -- -- 1,968,198 Pioneer Dynamic Credit Fund (507) -- 54,263 2,720,667 Pioneer Emerging Markets Fund 975 -- 6,132 652,605 Pioneer Equity Income Fund 27,132 22,815 8,440 665,592 Pioneer Floating Rate Fund 56 -- 13,054 683,644 Pioneer Fund 9,225 175,268 13,561 1,990,758 Pioneer Fundamental Growth Fund 58,986 51,557 7,284 1,328,421 Pioneer Global Equity Fund 72,426 -- 54,716 2,648,463 Pioneer Global High Yield Fund (574) -- 150,486 4,060,225 Pioneer Global Multisector Income Fund (FKA Pioneer Global Aggregate Bond Fund) (2,144) 7,756 25,020 1,362,798 Pioneer High Yield Fund 53,884 72,286 58,090 2,037,881 Pioneer International Value Fund 86,209 -- 143,393 5,239,788 Pioneer Mid Cap Value Fund 38,802 132,723 9,778 1,331,796 Pioneer Multi-Asset Ultrashort Income Fund (27) -- 3,908 683,021 Pioneer Oak Ridge Small Cap Growth Fund 2,606 33,336 -- 665,539 Pioneer Real Estate Shares 1,975 -- 9,300 689,137 Pioneer Select Mid Cap Growth Fund 97,515 29,881 -- 670,158 Pioneer Short Term Income Fund (4,971) -- 105,020 10,252,765 Pioneer Strategic Income Fund (6,893) 99,144 153,205 6,817,746 -------- -------- ---------- ----------- $597,450 $885,970 $1,197,006 $64,216,608 ======== ======== ========== ===========
78 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Pioneer Ibbotson Moderate Allocation Fund
--------------------------------------------------------------------------------------------------- Beginning Acquisitions Dispositions Ending Underlying Funds (Affiliated) (Class Y) Shares Shares Shares Shares --------------------------------------------------------------------------------------------------- Pioneer Bond Fund 2,381,615 243,034 -- 2,624,649 Pioneer Core Equity Fund 318,554 -- (21,949) 296,605 Pioneer Disciplined Growth Fund 245,880 -- (64,865) 181,015 Pioneer Disciplined Value Fund 627,827 -- (53,751) 574,076 Pioneer Dynamic Credit Fund 587,132 210,773 -- 797,905 Pioneer Emerging Markets Fund 311,641 77,673 -- 389,314 Pioneer Equity Income Fund 141,847 -- (9,088) 132,759 Pioneer Fund 180,119 25,233 (21,965) 183,387 Pioneer Fundamental Growth Fund 459,807 -- (38,737) 421,070 Pioneer Global Equity Fund 1,552,569 -- (54,077) 1,498,492 Pioneer Global High Yield Fund 924,837 202 (35,143) 889,896 Pioneer Global Multisector Income Fund (FKA Pioneer Global Aggregate Bond Fund) 328,579 50,265 -- 378,844 Pioneer High Yield Fund 396,720 8,575 (4,744) 400,551 Pioneer International Value Fund 1,186,270 50,402 -- 1,236,672 Pioneer Mid Cap Value Fund 533,860 -- (37,628) 496,232 Pioneer Multi-Asset Ultrashort Income Fund 182,130 23,569 -- 205,699 Pioneer Oak Ridge Small Cap Growth Fund 250,990 56,814 -- 307,804 Pioneer Real Estate Shares 175,992 31,403 -- 207,395 Pioneer Select Mid Cap Growth Fund 245,795 -- (81,204) 164,591 Pioneer Short Term Income Fund 2,243,233 87,016 (127,187) 2,203,062 Pioneer Strategic Income Fund 557,557 176,094 -- 733,651
------------------------------------------------------------------------------------------------ Realized Capital Gain Dividend Ending Underlying Funds (Affiliated) (Class Y) Gain (Loss) Distributions Income Value ------------------------------------------------------------------------------------------------ Pioneer Bond Fund $ -- $ -- $ 541,177 $ 25,275,368 Pioneer Core Equity Fund 102,216 -- 25,140 4,552,887 Pioneer Disciplined Growth Fund 373,507 1,535,886 13,358 2,908,908 Pioneer Disciplined Value Fund 191,783 38,215 80,314 10,758,186 Pioneer Dynamic Credit Fund -- -- 131,368 7,915,217 Pioneer Emerging Markets Fund -- -- 86,509 9,339,647 Pioneer Equity Income Fund 56,064 155,457 56,352 4,442,108 Pioneer Fund 69,515 667,945 50,212 6,970,554 Pioneer Fundamental Growth Fund 286,776 270,638 37,534 6,812,906 Pioneer Global Equity Fund 121,807 -- 383,934 18,611,268 Pioneer Global High Yield Fund (28,236) -- 328,310 8,703,179 Pioneer Global Multisector Income Fund (FKA Pioneer Global Aggregate Bond Fund) -- 21,245 69,783 4,110,455 Pioneer High Yield Fund 2,715 151,843 116,361 4,285,900 Pioneer International Value Fund -- -- 715,339 26,637,907 Pioneer Mid Cap Value Fund 105,022 1,403,761 95,266 13,130,289 Pioneer Multi-Asset Ultrashort Income Fund -- -- 11,052 2,073,448 Pioneer Oak Ridge Small Cap Growth Fund -- 521,394 -- 11,859,670 Pioneer Real Estate Shares -- -- 64,427 5,301,026 Pioneer Select Mid Cap Growth Fund 827,597 341,289 -- 6,677,443 Pioneer Short Term Income Fund (9,821) -- 214,452 21,303,613 Pioneer Strategic Income Fund -- 96,588 154,536 7,974,790 ---------- ---------- ---------- ------------ $5,204,261 $2,098,945 $3,175,424 $209,644,769 ========== ========== ========== ============
Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 79 Pioneer Ibbotson Growth Allocation Fund
----------------------------------------------------------------------------------------------------- Beginning Acquisitions Dispositions Ending Underlying Funds (Affiliated) (Class Y) Shares Shares Shares Shares ----------------------------------------------------------------------------------------------------- Pioneer Bond Fund 2,229,163 208,908 -- 2,438,071 Pioneer Core Equity Fund 521,874 -- (22,418) 499,456 Pioneer Disciplined Growth Fund 363,811 66,711 (90,939) 339,583 Pioneer Disciplined Value Fund 780,471 -- (66,868) 713,603 Pioneer Dynamic Credit Fund 35,382 93,599 -- 128,981 Pioneer Emerging Markets Fund 475,550 113,209 -- 588,759 Pioneer Equity Income Fund 234,993 -- (10,015) 224,978 Pioneer Fund 205,658 -- (9,435) 196,223 Pioneer Fundamental Growth Fund 578,521 -- (50,834) 527,687 Pioneer Global Equity Fund 1,895,863 -- (13,559) 1,882,304 Pioneer Global High Yield Fund 430,640 19,417 -- 450,057 Pioneer Global Multisector Income Fund (FKA Pioneer Global Aggregate Bond Fund) 343,220 39,718 -- 382,938 Pioneer High Yield Fund 190,861 10,890 -- 201,751 Pioneer International Value Fund 1,496,636 28,938 -- 1,525,574 Pioneer Mid Cap Value Fund 632,892 -- (13,829) 619,063 Pioneer Oak Ridge Large Cap Growth Fund 597 -- -- 597 Pioneer Oak Ridge Small Cap Growth Fund 249,458 76,411 -- 325,869 Pioneer Real Estate Shares 289,590 40,738 -- 330,328 Pioneer Select Mid Cap Growth Fund 377,365 -- (67,653) 309,712 Pioneer Short Term Income Fund 1,705,742 42,150 (111,510) 1,636,382 Pioneer Strategic Income Fund 592,011 124,527 -- 716,538
---------------------------------------------------------------------------------------------------- Realized Capital Gain Dividend Ending Underlying Funds (Affiliated) (Class Y) Gain (Loss) Distributions Income Value ---------------------------------------------------------------------------------------------------- Pioneer Bond Fund $ -- $ -- $ 504,699 $ 23,478,622 Pioneer Core Equity Fund 103,039 -- 42,037 7,666,645 Pioneer Disciplined Growth Fund 544,544 -- 24,761 5,457,102 Pioneer Disciplined Value Fund 95,025 2,008,339 100,639 13,372,917 Pioneer Dynamic Credit Fund -- -- 13,536 1,279,487 Pioneer Emerging Markets Fund -- -- 131,185 14,124,326 Pioneer Equity Income Fund 40,615 263,477 94,880 7,527,770 Pioneer Fund (12,262) 697,664 51,642 7,458,431 Pioneer Fundamental Growth Fund 380,916 344,295 47,123 8,537,974 Pioneer Global Equity Fund 31,470 -- 479,051 23,378,219 Pioneer Global High Yield Fund -- -- 159,222 4,401,554 Pioneer Global Multisector Income Fund (FKA Pioneer Global Aggregate Bond Fund) -- 21,896 71,821 4,154,876 Pioneer High Yield Fund -- 74,314 57,280 2,158,739 Pioneer International Value Fund -- -- 888,744 32,860,854 Pioneer Mid Cap Value Fund 18,894 1,736,413 118,251 16,380,405 Pioneer Oak Ridge Large Cap Growth Fund -- -- -- 10,338 Pioneer Oak Ridge Small Cap Growth Fund -- 522,630 -- 12,555,716 Pioneer Real Estate Shares -- -- 104,025 8,443,193 Pioneer Select Mid Cap Growth Fund 651,157 603,585 -- 12,565,034 Pioneer Short Term Income Fund (8,082) -- 161,428 15,823,818 Pioneer Strategic Income Fund -- 98,612 157,388 7,788,772 ------------ ----------- ---------- ------------ $ 6,371,225 $ 1,845,316 $3,207,712 $229,424,792 ============ =========== ========== ============
80 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Pioneer Ibbotson Aggressive Allocation Fund
---------------------------------------------------------------------------------------------- Beginning Acquisitions Dispositions Ending Underlying Funds (Affiliated) (Class Y) Shares Shares Shares Shares ---------------------------------------------------------------------------------------------- Pioneer Bond Fund 711,759 94,654 (105,376) 701,037 Pioneer Core Equity Fund 268,530 -- (10,990) 257,540 Pioneer Disciplined Growth Fund 202,305 66,711 (45,172) 223,844 Pioneer Disciplined Value Fund 384,654 -- (35,682) 348,972 Pioneer Emerging Markets Fund 344,399 103,159 -- 447,558 Pioneer Equity Income Fund 121,608 -- (5,845) 115,763 Pioneer Fund 106,445 -- (5,560) 100,885 Pioneer Fundamental Growth Fund 275,621 -- (22,853) 252,768 Pioneer Global Equity Fund 1,166,639 -- (33,045) 1,133,594 Pioneer International Value Fund 1,106,954 -- (17,863) 1,089,091 Pioneer Mid Cap Value Fund 469,757 -- (29,881) 439,876 Pioneer Oak Ridge Small Cap Growth Fund 184,764 55,879 -- 240,643 Pioneer Real Estate Shares 208,201 25,348 -- 233,549 Pioneer Select Mid Cap Growth Fund 239,740 -- (54,819) 184,921 Pioneer Short Term Income Fund 337,445 27,372 -- 364,817 Pioneer Strategic Income Fund 282,231 99,035 -- 381,266
------------------------------------------------------------------------------------------------- Realized Capital Gain Dividend Ending Underlying Funds (Affiliated) (Class Y) Gain (Loss) Distributions Income Value ------------------------------------------------------------------------------------------------- Pioneer Bond Fund $ 86,517 $ -- $ 145,790 $ 6,750,989 Pioneer Core Equity Fund 47,856 -- 21,717 3,953,234 Pioneer Disciplined Growth Fund 275,066 -- 16,523 3,597,178 Pioneer Disciplined Value Fund 84,373 968,059 49,201 6,539,729 Pioneer Emerging Markets Fund -- -- 99,534 10,736,923 Pioneer Equity Income Fund 44,465 134,867 48,719 3,873,428 Pioneer Fund 12,225 162,595 22,621 3,834,622 Pioneer Fundamental Growth Fund 170,006 356,279 26,444 4,089,782 Pioneer Global Equity Fund 74,490 -- 290,032 14,079,242 Pioneer International Value Fund 34,323 -- 639,999 23,459,028 Pioneer Mid Cap Value Fund 85,061 1,246,515 84,610 11,639,123 Pioneer Oak Ridge Small Cap Growth Fund -- 383,182 -- 9,271,989 Pioneer Real Estate Shares -- -- 74,589 5,969,502 Pioneer Select Mid Cap Growth Fund 551,709 363,042 -- 7,502,250 Pioneer Short Term Income Fund -- -- 34,132 3,527,778 Pioneer Strategic Income Fund -- 48,160 77,940 4,144,361 ---------- ---------- ---------- ------------ $1,466,091 $3,662,699 $1,631,851 $122,969,158 ========== ========== ========== ============
Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 81 Pioneer Ibbotson Conservative Allocation Fund Approval of Investment Advisory and Sub-Advisory Agreements Pioneer Investment Management, Inc. (PIM) serves as the investment adviser to Pioneer Ibbotson Conservative Allocation Fund (the Fund) pursuant to an investment advisory agreement between PIM and the Fund. PIM has retained Ibbotson Associates, Inc. (the Sub-Adviser) to serve as the sub-adviser to the Fund pursuant to a sub-advisory agreement between PIM and the sub-adviser. In order for PIM and the Sub-Adviser to remain the investment adviser and sub-adviser of the Fund, respectively, the Trustees of the Fund must determine annually whether to renew the investment advisory agreement and the sub- advisory agreement for the Fund. The contract review process began in March 2013 as the Trustees of the Fund agreed on, among other things, an overall approach and timeline for the process. In July 2013, the Trustees approved the format of the contract review materials and submitted their formal request to PIM to furnish information necessary to evaluate the terms of the investment advisory agreement and the sub-advisory agreement. The contract review materials were provided to the Trustees in July 2013 and September 2013. After reviewing and discussing the materials, the Trustees submitted a request for additional information to PIM, and materials were provided in response to this request. Meetings of the Independent Trustees of the Fund were held in July, September, and November, 2013 to review and discuss the contract review materials. In addition, the Trustees took into account the information related to the Fund provided to the Trustees at regularly scheduled meetings. At a meeting held on November 12, 2013, based on their evaluation of the information provided by PIM, the Sub-Adviser and third parties, the Trustees of the Fund, including the Independent Trustees voting separately, unanimously approved the renewal of the investment advisory agreement and the sub-advisory agreement for another year. In considering the renewal of the investment advisory agreement and the sub-advisory agreement, the Trustees considered various factors that they determined were relevant, including the factors described below. In all quintile rankings referred to throughout this disclosure, first quintile is most favorable to the Fund's shareowners. Thus, highest relative performance would be first quintile and lowest relative expenses would also be first quintile. The Trustees did not identify any single factor as the controlling factor in determining to approve the renewal of the agreements. 82 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Nature, Extent and Quality of Services The Trustees considered the nature, extent and quality of the services that had been provided by each of PIM and the Sub-Adviser to the Fund, taking into account the investment objective and strategy of the Fund. The Trustees reviewed the terms of the investment advisory agreement and the sub-advisory agreement. With respect to PIM, the Trustees considered that PIM supervises and monitors the performance of the Sub-Adviser and the Fund's other service providers and provides the Fund with personnel (including Fund officers) and other resources that are necessary for the Fund's business management and operations. The Trustees considered the non-investment resources and personnel of PIM involved in PIM's services to the Fund, including PIM's compliance and legal resources and personnel. The Trustees noted the substantial attention and high priority given by PIM's senior management to the Pioneer fund complex. The Trustees also considered that, as administrator, PIM is responsible for the administration of the Fund's business and other affairs. The Trustees considered the fees paid to PIM for the provision of administration services. With respect to the Sub-Adviser, the Trustees considered the Sub-Adviser's investment approach for the Fund and its research process. The Trustees considered the resources of the Sub-Adviser and the personnel of the Sub- Adviser who provide investment management services to the Fund. They noted that the Sub-Adviser does not provide investment advice with respect to the purchase and sale of individual portfolio securities by the Fund, and further noted that the Sub-Adviser's responsibilities are limited to developing the asset class model, selecting the underlying funds in the Pioneer family of funds in which the Fund invests, determining the allocations to those funds and changing those allocations from time to time. Based on these considerations, the Trustees concluded that the nature, extent and quality of services that had been provided by each of PIM and the Sub- Adviser to the Fund were satisfactory and consistent with the terms of the investment advisory agreement and the sub-advisory agreement, respectively. Performance of the Fund The Trustees review the Fund's performance on a regular basis, based on analysis and data prepared by PIM for this purpose and discuss performance issues with PIM on an ongoing basis. For purposes of their contract renewal deliberations, the Trustees considered the performance results of the Fund over various time periods. They reviewed information comparing the Fund's performance with the performance of its peer group of funds as classified by Morningstar, Inc. (Morningstar), an independent provider of investment company data, and with the performance of the Fund's benchmark index. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 83 The Trustees considered that the Fund's annualized total return was in the second quintile of its Morningstar category for the one year period ended June 30, 2013, in the fourth quintile of its Morningstar category for the three year period ended June 30, 2013, and in the third quintile of its Morningstar category for the five year period ended June 30, 2013. The Trustees noted the discussions held throughout the year regarding the Fund's performance and confirmed that those discussions were factored into the Trustees' deliberations concerning the renewal of the advisory and sub-advisory agreements. The Trustees considered reasons for the underperformance of the Fund relative to its peer group. The Trustees agreed that they would continue to closely monitor the Fund's performance. Management Fee and Expenses The Trustees considered information showing the fees and expenses of the Fund in comparison to the management fees and expense ratios of its peer group of funds as classified by Morningstar and also to the expense ratios of a peer group of funds selected on the basis of criteria determined by the Independent Trustees for this purpose using data provided by Strategic Insight Mutual Fund Research and Consulting, LLC (Strategic Insight), an independent third party. The Trustees also considered that PIM, not the Fund, paid the Sub-Adviser pursuant to the sub-advisory agreement. The Trustees evaluated the fee under the sub-advisory agreement and the portion of the fee under the investment advisory agreement retained by PIM, and the services provided by the respective parties under such agreements. The Trustees considered that the Fund's management fee for the twelve months ended June 30, 2013 was in the third quintile relative to the management fees paid by other funds in its Morningstar peer group for the comparable period. The Trustees also considered the breakpoints in the management fee schedule and the reduced fee rates above certain asset levels. The Trustees considered that the Fund's expense ratio for the twelve months ended June 30, 2013 was in the fifth quintile relative to both its Morningstar peer group and its Strategic Insight peer group for the comparable period. The Trustees noted that PIM was waiving fees and/or reimbursing expenses in order to limit the ordinary operating expenses of the Fund. They noted the Fund's relatively small asset size compared to most of the other funds in its peer groups. The Trustees considered the impact of transfer agency, sub-transfer agency, and other non-management fee expenses on the expense ratios of the Fund. They noted that such non-management fee operating expenses generally are spread over a smaller asset base than the other funds in the peer group, which results in these fees being significantly higher as a percentage of assets. The Trustees noted that they separately review the Fund's 84 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 transfer agency, sub-transfer agency and intermediary arrangements. The Trustees also considered information showing significant expense reimbursements by the sponsors of the other funds in the peer groups. The Trustees reviewed management fees charged by PIM and PIM's affiliate, Pioneer Institutional Asset Management, Inc. (together with PIM, "Pioneer") to institutional and other clients, including publicly offered European funds sponsored by affiliates of Pioneer, unaffiliated U.S. registered investment companies (in a sub-advisory capacity), and unaffiliated foreign and domestic separate accounts. The Trustees also considered PIM's costs in providing services to the Fund and Pioneer's costs in providing services to the other clients and considered the differences in management fees and profit margins for Fund and non-Fund services. In evaluating the fees associated with Pioneer's client accounts, the Trustees took into account the respective demands, resources and complexity associated with the Fund and client accounts. The Trustees noted that, in some instances, the fee rates for those clients were lower than the management fee for the Fund and considered that, under the investment advisory agreement with the Fund, PIM performs additional services for the Fund that it does not provide to those other clients or services that are broader in scope, including oversight of the Sub-Adviser and the Fund's other service providers and activities related to compliance and the extensive regulatory and tax regimes to which the Fund is subject. The Trustees also considered the different entrepreneurial risks associated with PIM's management of the Fund and Pioneer's management of the other client accounts. The Trustees reviewed management fees charged by the Sub-Adviser to its other clients. The Trustees noted that the sub-advisory fees paid to the Sub- Adviser with respect to the Fund were within the range of the fee rates charged by the Sub-Adviser to its other clients. The Trustees concluded that the management fee payable by the Fund to PIM, as well as the fees payable by PIM to the Sub-Adviser, were reasonable in relation to the nature and quality of the services provided by PIM and the Sub- Adviser to the Fund. Profitability The Trustees considered information provided by PIM regarding the profitability of PIM with respect to the advisory services provided by PIM to the Fund, including the methodology used by PIM in allocating certain of its costs to the management of the Fund. The Trustees also considered PIM's profit margin in connection with the overall operation of the Fund. They further reviewed the financial results realized by PIM and its affiliates from non-fund businesses. The Trustees considered PIM's profit margins with respect to the Fund in comparison to the limited industry data available and Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 85 noted that the profitability of any adviser was affected by numerous factors, including its organizational structure and method for allocating expenses. The Trustees concluded that PIM's profitability with respect to the management of the Fund was not unreasonable. Economies of Scale The Trustees considered PIM's views relating to economies of scale in connection with the Pioneer Funds as fund assets grow and the extent to which any such economies of scale are shared with funds and fund shareholders. The Trustees noted the breakpoints in the management fee schedule. The Trustees recognize that economies of scale are difficult to identify and quantify, rarely identifiable on a fund-by-fund basis, and that, among other factors that may be relevant, are the following: fee levels, expense subsidization, investment by PIM in research and analytical capabilities and PIM's commitment and resource allocation to the Fund. The Trustees noted that profitability also may be an indicator of the availability of any economies of scale, although profitability may vary for other reasons particularly, for example during the recent difficult periods for financial markets, as the level of services was maintained notwithstanding a significant decline in PIM's fee revenues from the Fund. Accordingly, the Trustees concluded that economies of scale, if any, were being appropriately shared with the Fund. Other Benefits The Trustees considered the other benefits to each of PIM and the Sub-Adviser from its relationship with the Fund. The Trustees considered the character and amount of fees paid by the Fund, other than under the investment advisory agreement, for services provided by PIM and its affiliates. The Trustees further considered the revenues and profitability of PIM's businesses other than the fund business. The Trustees considered the intangible benefits to each of PIM and the Sub-Adviser by virtue of its relationship with the Fund and the other Pioneer funds. The Trustees concluded that the receipt of these benefits was reasonable in the context of the overall relationship between each of PIM and the Sub-Adviser and the Fund. Conclusion After consideration of the factors described above as well as other factors, the Trustees, including all of the Independent Trustees, concluded that each of the investment advisory agreement between PIM and the Fund and the sub-advisory agreement between PIM and the Sub-Adviser, including, in each case, the fees payable thereunder, was fair and reasonable and voted to approve the proposed renewal of each of the investment advisory agreement and the sub-advisory agreement for the Fund. 86 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Pioneer Ibbotson Moderate Allocation Fund Approval of Investment Advisory and Sub-Advisory Agreements Pioneer Investment Management, Inc. (PIM) serves as the investment adviser to Pioneer Ibbotson Moderate Allocation Fund (the Fund) pursuant to an investment advisory agreement between PIM and the Fund. PIM has retained Ibbotson Associates, Inc. (the Sub-Adviser) to serve as the sub-adviser to the Fund pursuant to a sub-advisory agreement between PIM and the sub-adviser. In order for PIM and the Sub-Adviser to remain the investment adviser and sub-adviser of the Fund, respectively, the Trustees of the Fund must determine annually whether to renew the investment advisory agreement and the sub-advisory agreement for the Fund. The contract review process began in March 2013 as the Trustees of the Fund agreed on, among other things, an overall approach and timeline for the process. In July 2013, the Trustees approved the format of the contract review materials and submitted their formal request to PIM to furnish information necessary to evaluate the terms of the investment advisory agreement and the sub-advisory agreement. The contract review materials were provided to the Trustees in July 2013 and September 2013. After reviewing and discussing the materials, the Trustees submitted a request for additional information to PIM, and materials were provided in response to this request. Meetings of the Independent Trustees of the Fund were held in July, September, and November, 2013 to review and discuss the contract review materials. In addition, the Trustees took into account the information related to the Fund provided to the Trustees at regularly scheduled meetings. At a meeting held on November 12, 2013, based on their evaluation of the information provided by PIM, the Sub-Adviser and third parties, the Trustees of the Fund, including the Independent Trustees voting separately, unanimously approved the renewal of the investment advisory agreement and the sub-advisory agreement for another year. In considering the renewal of the investment advisory agreement and the sub-advisory agreement, the Trustees considered various factors that they determined were relevant, including the factors described below. In all quintile rankings referred to throughout this disclosure, first quintile is most favorable to the Fund's shareowners. Thus, highest relative performance would be first quintile and lowest relative expenses would also be first quintile. The Trustees did not identify any single factor as the controlling factor in determining to approve the renewal of the agreements. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 87 Nature, Extent and Quality of Services The Trustees considered the nature, extent and quality of the services that had been provided by each of PIM and the Sub-Adviser to the Fund, taking into account the investment objective and strategy of the Fund. The Trustees reviewed the terms of the investment advisory agreement and the sub-advisory agreement. With respect to PIM, the Trustees considered that PIM supervises and monitors the performance of the Sub-Adviser and the Fund's other service providers and provides the Fund with personnel (including Fund officers) and other resources that are necessary for the Fund's business management and operations. The Trustees considered the non-investment resources and personnel of PIM involved in PIM's services to the Fund, including PIM's compliance and legal resources and personnel. The Trustees noted the substantial attention and high priority given by PIM's senior management to the Pioneer fund complex. The Trustees also considered that, as administrator, PIM is responsible for the administration of the Fund's business and other affairs. The Trustees considered the fees paid to PIM for the provision of administration services. With respect to the Sub-Adviser, the Trustees considered the Sub-Adviser's investment approach for the Fund and its research process. The Trustees considered the resources of the Sub-Adviser and the personnel of the Sub- Adviser who provide investment management services to the Fund. They noted that the Sub-Adviser does not provide investment advice with respect to the purchase and sale of individual portfolio securities by the Fund, and further noted that the Sub-Adviser's responsibilities are limited to developing the asset class model, selecting the underlying funds in the Pioneer family of funds in which the Fund invests, determining the allocations to those funds and changing those allocations from time to time. Based on these considerations, the Trustees concluded that the nature, extent and quality of services that had been provided by each of PIM and the Sub- Adviser to the Fund were satisfactory and consistent with the terms of the investment advisory agreement and the sub-advisory agreement, respectively. Performance of the Fund The Trustees review the Fund's performance on a regular basis, based on analysis and data prepared by PIM for this purpose and discuss performance issues with PIM on an ongoing basis. For purposes of their contract renewal deliberations, the Trustees considered the performance results of the Fund over various time periods. They reviewed information comparing the Fund's performance with the performance of its peer group of funds as classified by Morningstar, Inc. (Morningstar), an independent provider of investment company data, and with the performance of the Fund's benchmark index. 88 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 The Trustees considered that the Fund's annualized total return was in the fourth quintile of its Morningstar category for the one and five year periods ended June 30, 2013, and in the fifth quintile of its Morningstar category for the three year period ended June 30, 2013. The Trustees noted the discussions held throughout the year regarding the Fund's performance and confirmed that those discussions were factored into the Trustees' deliberations concerning the renewal of the advisory and sub-advisory agreements. The Trustees considered reasons for the underperformance of the Fund relative to its peer group. The Trustees agreed that they would continue to closely monitor the Fund's performance. Management Fee and Expenses The Trustees considered information showing the fees and expenses of the Fund in comparison to the management fees and expense ratios of its peer group of funds as classified by Morningstar and also to the expense ratios of a peer group of funds selected on the basis of criteria determined by the Independent Trustees for this purpose using data provided by Strategic Insight Mutual Fund Research and Consulting, LLC (Strategic Insight), an independent third party. The Trustees also considered that PIM, not the Fund, paid the Sub-Adviser pursuant to the sub-advisory agreement. The Trustees evaluated the fee under the sub-advisory agreement and the portion of the fee under the investment advisory agreement retained by PIM, and the services provided by the respective parties under such agreements. The Trustees considered that the Fund's management fee for the twelve months ended June 30, 2013 was in the third quintile relative to the management fees paid by other funds in its Morningstar peer group for the comparable period. The Trustees also considered the breakpoints in the management fee schedule and the reduced fee rates above certain asset levels. The Trustees considered that the Fund's expense ratio for the twelve months ended June 30, 2013 was in the fifth quintile relative to both its Morningstar peer group and its Strategic Insight peer group for the comparable period. The Trustees noted that PIM was waiving fees and/or reimbursing expenses in order to limit the ordinary operating expenses of the Fund. They noted the Fund's relatively small asset size compared to most of the other funds in its peer groups. The Trustees considered the impact of transfer agency, sub-transfer agency, and other non-management fee expenses on the expense ratios of the Fund. They noted that such non-management fee operating expenses generally are spread over a smaller asset base than the other funds in the peer group, which results in these fees being significantly higher as a percentage of assets. The Trustees noted that they separately review the Fund's transfer agency, sub-transfer agency and intermediary arrangements. The Trustees also considered information showing significant expense reimbursements by the sponsors of the other funds in the peer groups. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 89 The Trustees reviewed management fees charged by PIM and PIM's affiliate, Pioneer Institutional Asset Management, Inc. (together with PIM, "Pioneer") to institutional and other clients, including publicly offered European funds sponsored by affiliates of Pioneer, unaffiliated U.S. registered investment companies (in a sub-advisory capacity), and unaffiliated foreign and domestic separate accounts. The Trustees also considered PIM's costs in providing services to the Fund and Pioneer's costs in providing services to the other clients and considered the differences in management fees and profit margins for Fund and non-Fund services. In evaluating the fees associated with Pioneer's client accounts, the Trustees took into account the respective demands, resources and complexity associated with the Fund and client accounts. The Trustees noted that, in some instances, the fee rates for those clients were lower than the management fee for the Fund and considered that, under the investment advisory agreement with the Fund, PIM performs additional services for the Fund that it does not provide to those other clients or services that are broader in scope, including oversight of the Sub-Adviser and the Fund's other service providers and activities related to compliance and the extensive regulatory and tax regimes to which the Fund is subject. The Trustees also considered the different entrepreneurial risks associated with PIM's management of the Fund and Pioneer's management of the other client accounts. The Trustees reviewed management fees charged by the Sub-Adviser to its other clients. The Trustees noted that the sub-advisory fees paid to the Sub- Adviser with respect to the Fund were within the range of the fee rates charged by the Sub-Adviser to its other clients. The Trustees concluded that the management fee payable by the Fund to PIM, as well as the fees payable by PIM to the Sub-Adviser, were reasonable in relation to the nature and quality of the services provided by PIM and the Sub- Adviser to the Fund. Profitability The Trustees considered information provided by PIM regarding the profitability of PIM with respect to the advisory services provided by PIM to the Fund, including the methodology used by PIM in allocating certain of its costs to the management of the Fund. The Trustees also considered PIM's profit margin in connection with the overall operation of the Fund. They further reviewed the financial results realized by PIM and its affiliates from non-fund businesses. The Trustees considered PIM's profit margins with respect to the Fund in comparison to the limited industry data available and noted that the profitability of any adviser was affected by numerous factors, including its organizational structure and method for allocating expenses. The Trustees concluded that PIM's profitability with respect to the management of the Fund was not unreasonable. 90 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Economies of Scale The Trustees considered PIM's views relating to economies of scale in connection with the Pioneer Funds as fund assets grow and the extent to which any such economies of scale are shared with funds and fund shareholders. The Trustees noted the breakpoints in the management fee schedule. The Trustees recognize that economies of scale are difficult to identify and quantify, rarely identifiable on a fund-by-fund basis, and that, among other factors that may be relevant, are the following: fee levels, expense subsidization, investment by PIM in research and analytical capabilities and PIM's commitment and resource allocation to the Fund. The Trustees noted that profitability also may be an indicator of the availability of any economies of scale, although profitability may vary for other reasons particularly, for example during the recent difficult periods for financial markets, as the level of services was maintained notwithstanding a significant decline in PIM's fee revenues from the Fund. Accordingly, the Trustees concluded that economies of scale, if any, were being appropriately shared with the Fund. Other Benefits The Trustees considered the other benefits to each of PIM and the Sub-Adviser from its relationship with the Fund. The Trustees considered the character and amount of fees paid by the Fund, other than under the investment advisory agreement, for services provided by PIM and its affiliates. The Trustees further considered the revenues and profitability of PIM's businesses other than the fund business. The Trustees considered the intangible benefits to each of PIM and the Sub-Adviser by virtue of its relationship with the Fund and the other Pioneer funds. The Trustees concluded that the receipt of these benefits was reasonable in the context of the overall relationship between each of PIM and the Sub-Adviser and the Fund. Conclusion After consideration of the factors described above as well as other factors, the Trustees, including all of the Independent Trustees, concluded that each of the investment advisory agreement between PIM and the Fund and the sub-advisory agreement between PIM and the Sub-Adviser, including, in each case, the fees payable thereunder, was fair and reasonable and voted to approve the proposed renewal of each of the investment advisory agreement and the sub-advisory agreement for the Fund. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 91 Pioneer Ibbotson Growth Allocation Fund Approval of Investment Advisory and Sub-Advisory Agreements Pioneer Investment Management, Inc. (PIM) serves as the investment adviser to Pioneer Ibbotson Growth Allocation Fund (the Fund) pursuant to an investment advisory agreement between PIM and the Fund. PIM has retained Ibbotson Associates, Inc. (the Sub-Adviser) to serve as the sub-adviser to the Fund pursuant to a sub-advisory agreement between PIM and the sub-adviser. In order for PIM and the Sub-Adviser to remain the investment adviser and sub-adviser of the Fund, respectively, the Trustees of the Fund must determine annually whether to renew the investment advisory agreement and the sub-advisory agreement for the Fund. The contract review process began in March 2013 as the Trustees of the Fund agreed on, among other things, an overall approach and timeline for the process. In July 2013, the Trustees approved the format of the contract review materials and submitted their formal request to PIM to furnish information necessary to evaluate the terms of the investment advisory agreement and the sub-advisory agreement. The contract review materials were provided to the Trustees in July 2013 and September 2013. After reviewing and discussing the materials, the Trustees submitted a request for additional information to PIM, and materials were provided in response to this request. Meetings of the Independent Trustees of the Fund were held in July, September, and November, 2013 to review and discuss the contract review materials. In addition, the Trustees took into account the information related to the Fund provided to the Trustees at regularly scheduled meetings. At a meeting held on November 12, 2013, based on their evaluation of the information provided by PIM, the Sub-Adviser and third parties, the Trustees of the Fund, including the Independent Trustees voting separately, unanimously approved the renewal of the investment advisory agreement and the sub-advisory agreement for another year. In considering the renewal of the investment advisory agreement and the sub-advisory agreement, the Trustees considered various factors that they determined were relevant, including the factors described below. In all quintile rankings referred to throughout this disclosure, first quintile is most favorable to the Fund's shareowners. Thus, highest relative performance would be first quintile and lowest relative expenses would also be first quintile. The Trustees did not identify any single factor as the controlling factor in determining to approve the renewal of the agreements. 92 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Nature, Extent and Quality of Services The Trustees considered the nature, extent and quality of the services that had been provided by each of PIM and the Sub-Adviser to the Fund, taking into account the investment objective and strategy of the Fund. The Trustees reviewed the terms of the investment advisory agreement and the sub-advisory agreement. With respect to PIM, the Trustees considered that PIM supervises and monitors the performance of the Sub-Adviser and the Fund's other service providers and provides the Fund with personnel (including Fund officers) and other resources that are necessary for the Fund's business management and operations. The Trustees considered the non-investment resources and personnel of PIM involved in PIM's services to the Fund, including PIM's compliance and legal resources and personnel. The Trustees noted the substantial attention and high priority given by PIM's senior management to the Pioneer fund complex. The Trustees also considered that, as administrator, PIM is responsible for the administration of the Fund's business and other affairs. The Trustees considered the fees paid to PIM for the provision of administration services. With respect to the Sub-Adviser, the Trustees considered the Sub-Adviser's investment approach for the Fund and its research process. The Trustees considered the resources of the Sub-Adviser and the personnel of the Sub- Adviser who provide investment management services to the Fund. They noted that the Sub-Adviser does not provide investment advice with respect to the purchase and sale of individual portfolio securities by the Fund, and further noted that the Sub-Adviser's responsibilities are limited to developing the asset class model, selecting the underlying funds in the Pioneer family of funds in which the Fund invests, determining the allocations to those funds and changing those allocations from time to time. Based on these considerations, the Trustees concluded that the nature, extent and quality of services that had been provided by each of PIM and the Sub- Adviser to the Fund were satisfactory and consistent with the terms of the investment advisory agreement and the sub-advisory agreement, respectively. Performance of the Fund The Trustees review the Fund's performance on a regular basis, based on analysis and data prepared by PIM for this purpose and discuss performance issues with PIM on an ongoing basis. For purposes of their contract renewal deliberations, the Trustees considered the performance results of the Fund over various time periods. They reviewed information comparing the Fund's performance with the performance of its peer group of funds as classified by Morningstar, Inc. (Morningstar), an independent provider of investment company data, and with the performance of the Fund's benchmark index. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 93 The Trustees considered that the Fund's annualized total return was in the fifth quintile of its Morningstar category for the one and three year periods ended June 30, 2013, and in the fourth quintile of its Morningstar category for the five year period ended June 30, 2013. The Trustees noted the discussions held throughout the year regarding the Fund's performance and confirmed that those discussions were factored into the Trustees' deliberations concerning the renewal of the advisory and sub-advisory agreements. The Trustees considered reasons for the underperformance of the Fund relative to its peer group. The Trustees agreed that they would continue to closely monitor the Fund's performance. Management Fee and Expenses The Trustees considered information showing the fees and expenses of the Fund in comparison to the management fees and expense ratios of its peer group of funds as classified by Morningstar and also to the expense ratios of a peer group of funds selected on the basis of criteria determined by the Independent Trustees for this purpose using data provided by Strategic Insight Mutual Fund Research and Consulting, LLC (Strategic Insight), an independent third party. The Trustees also considered that PIM, not the Fund, paid the Sub-Adviser pursuant to the sub-advisory agreement. The Trustees evaluated the fee under the sub-advisory agreement and the portion of the fee under the investment advisory agreement retained by PIM, and the services provided by the respective parties under such agreements. The Trustees considered that the Fund's management fee for the twelve months ended June 30, 2013 was in the third quintile relative to the management fees paid by other funds in its Morningstar peer group for the comparable period. The Trustees also considered the breakpoints in the management fee schedule and the reduced fee rates above certain asset levels. The Trustees considered that the Fund's expense ratio for the twelve months ended June 30, 2013 was in the fifth quintile relative to both its Morningstar peer group and its Strategic Insight peer group for the comparable period. The Trustees noted that PIM was waiving fees and/or reimbursing expenses in order to limit the ordinary operating expenses of the Fund. They noted the Fund's relatively small asset size compared to most of the other funds in its peer groups. The Trustees considered the impact of transfer agency, sub-transfer agency, and other non-management fee expenses on the expense ratios of the Fund. They noted that such non-management fee operating expenses generally are spread over a smaller asset base than the other funds in the peer group, which results in these fees being significantly higher as a percentage of assets. The Trustees noted that they separately review the Fund's transfer agency, sub-transfer agency and intermediary arrangements. The Trustees also considered information showing significant expense reimbursements by the sponsors of the other funds in the peer groups. 94 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 The Trustees reviewed management fees charged by PIM and PIM's affiliate, Pioneer Institutional Asset Management, Inc. (together with PIM, "Pioneer") to institutional and other clients, including publicly offered European funds sponsored by affiliates of Pioneer, unaffiliated U.S. registered investment companies (in a sub-advisory capacity), and unaffiliated foreign and domestic separate accounts. The Trustees also considered PIM's costs in providing services to the Fund and Pioneer's costs in providing services to the other clients and considered the differences in management fees and profit margins for Fund and non-Fund services. In evaluating the fees associated with Pioneer's client accounts, the Trustees took into account the respective demands, resources and complexity associated with the Fund and client accounts. The Trustees noted that, in some instances, the fee rates for those clients were lower than the management fee for the Fund and considered that, under the investment advisory agreement with the Fund, PIM performs additional services for the Fund that it does not provide to those other clients or services that are broader in scope, including oversight of the Sub-Adviser and the Fund's other service providers and activities related to compliance and the extensive regulatory and tax regimes to which the Fund is subject. The Trustees also considered the different entrepreneurial risks associated with PIM's management of the Fund and Pioneer's management of the other client accounts. The Trustees reviewed management fees charged by the Sub-Adviser to its other clients. The Trustees noted that the sub-advisory fees paid to the Sub- Adviser with respect to the Fund were within the range of the fee rates charged by the Sub-Adviser to its other clients. The Trustees concluded that the management fee payable by the Fund to PIM, as well as the fees payable by PIM to the Sub-Adviser, were reasonable in relation to the nature and quality of the services provided by PIM and the Sub- Adviser to the Fund. Profitability The Trustees considered information provided by PIM regarding the profitability of PIM with respect to the advisory services provided by PIM to the Fund, including the methodology used by PIM in allocating certain of its costs to the management of the Fund. The Trustees also considered PIM's profit margin in connection with the overall operation of the Fund. They further reviewed the financial results realized by PIM and its affiliates from non-fund businesses. The Trustees considered PIM's profit margins with respect to the Fund in comparison to the limited industry data available and noted that the profitability of any adviser was affected by numerous factors, including its organizational structure and method for allocating expenses. The Trustees concluded that PIM's profitability with respect to the management of the Fund was not unreasonable. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 95 Economies of Scale The Trustees considered PIM's views relating to economies of scale in connection with the Pioneer Funds as fund assets grow and the extent to which any such economies of scale are shared with funds and fund shareholders. The Trustees noted the breakpoints in the management fee schedule. The Trustees recognize that economies of scale are difficult to identify and quantify, rarely identifiable on a fund-by-fund basis, and that, among other factors that may be relevant, are the following: fee levels, expense subsidization, investment by PIM in research and analytical capabilities and PIM's commitment and resource allocation to the Fund. The Trustees noted that profitability also may be an indicator of the availability of any economies of scale, although profitability may vary for other reasons particularly, for example during the recent difficult periods for financial markets, as the level of services was maintained notwithstanding a significant decline in PIM's fee revenues from the Fund. Accordingly, the Trustees concluded that economies of scale, if any, were being appropriately shared with the Fund. Other Benefits The Trustees considered the other benefits to each of PIM and the Sub-Adviser from its relationship with the Fund. The Trustees considered the character and amount of fees paid by the Fund, other than under the investment advisory agreement, for services provided by PIM and its affiliates. The Trustees further considered the revenues and profitability of PIM's businesses other than the fund business. The Trustees considered the intangible benefits to each of PIM and the Sub-Adviser by virtue of its relationship with the Fund and the other Pioneer funds. The Trustees concluded that the receipt of these benefits was reasonable in the context of the overall relationship between each of PIM and the Sub-Adviser and the Fund. Conclusion After consideration of the factors described above as well as other factors, the Trustees, including all of the Independent Trustees, concluded that each of the investment advisory agreement between PIM and the Fund and the sub-advisory agreement between PIM and the Sub-Adviser, including, in each case, the fees payable thereunder, was fair and reasonable and voted to approve the proposed renewal of each of the investment advisory agreement and the sub-advisory agreement for the Fund. 96 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Pioneer Ibbotson Aggressive Allocation Fund Approval of Investment Advisory and Sub-Advisory Agreements Pioneer Investment Management, Inc. (PIM) serves as the investment adviser to Pioneer Ibbotson Aggressive Allocation Fund (the Fund) pursuant to an investment advisory agreement between PIM and the Fund. PIM has retained Ibbotson Associates, Inc. (the Sub-Adviser) to serve as the sub-adviser to the Fund pursuant to a sub-advisory agreement between PIM and the sub-adviser. In order for PIM and the Sub-Adviser to remain the investment adviser and sub-adviser of the Fund, respectively, the Trustees of the Fund must determine annually whether to renew the investment advisory agreement and the sub-advisory agreement for the Fund. The contract review process began in March 2013 as the Trustees of the Fund agreed on, among other things, an overall approach and timeline for the process. In July 2013, the Trustees approved the format of the contract review materials and submitted their formal request to PIM to furnish information necessary to evaluate the terms of the investment advisory agreement and the sub-advisory agreement. The contract review materials were provided to the Trustees in July 2013 and September 2013. After reviewing and discussing the materials, the Trustees submitted a request for additional information to PIM, and materials were provided in response to this request. Meetings of the Independent Trustees of the Fund were held in July, September, and November, 2013 to review and discuss the contract review materials. In addition, the Trustees took into account the information related to the Fund provided to the Trustees at regularly scheduled meetings. At a meeting held on November 12, 2013, based on their evaluation of the information provided by PIM, the Sub-Adviser and third parties, the Trustees of the Fund, including the Independent Trustees voting separately, unanimously approved the renewal of the investment advisory agreement and the sub-advisory agreement for another year. In considering the renewal of the investment advisory agreement and the sub-advisory agreement, the Trustees considered various factors that they determined were relevant, including the factors described below. In all quintile rankings referred to throughout this disclosure, first quintile is most favorable to the Fund's shareowners. Thus, highest relative performance would be first quintile and lowest relative expenses would also be first quintile. The Trustees did not identify any single factor as the controlling factor in determining to approve the renewal of the agreements. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 97 Nature, Extent and Quality of Services The Trustees considered the nature, extent and quality of the services that had been provided by each of PIM and the Sub-Adviser to the Fund, taking into account the investment objective and strategy of the Fund. The Trustees reviewed the terms of the investment advisory agreement and the sub-advisory agreement. With respect to PIM, the Trustees considered that PIM supervises and monitors the performance of the Sub-Adviser and the Fund's other service providers and provides the Fund with personnel (including Fund officers) and other resources that are necessary for the Fund's business management and operations. The Trustees considered the non-investment resources and personnel of PIM involved in PIM's services to the Fund, including PIM's compliance and legal resources and personnel. The Trustees noted the substantial attention and high priority given by PIM's senior management to the Pioneer fund complex. The Trustees also considered that, as administrator, PIM is responsible for the administration of the Fund's business and other affairs. The Trustees considered the fees paid to PIM for the provision of administration services. With respect to the Sub-Adviser, the Trustees considered the Sub-Adviser's investment approach for the Fund and its research process. The Trustees considered the resources of the Sub-Adviser and the personnel of the Sub- Adviser who provide investment management services to the Fund. They noted that the Sub-Adviser does not provide investment advice with respect to the purchase and sale of individual portfolio securities by the Fund, and further noted that the Sub-Adviser's responsibilities are limited to developing the asset class model, selecting the underlying funds in the Pioneer family of funds in which the Fund invests, determining the allocations to those funds and changing those allocations from time to time. Based on these considerations, the Trustees concluded that the nature, extent and quality of services that had been provided by each of PIM and the Sub- Adviser to the Fund were satisfactory and consistent with the terms of the investment advisory agreement and the sub-advisory agreement, respectively. Performance of the Fund The Trustees review the Fund's performance on a regular basis, based on analysis and data prepared by PIM for this purpose and discuss performance issues with PIM on an ongoing basis. For purposes of their contract renewal deliberations, the Trustees considered the performance results of the Fund over various time periods. They reviewed information comparing the Fund's performance with the performance of its peer group of funds as classified by Morningstar, Inc. (Morningstar), an independent provider of investment company data, and with the performance of the Fund's benchmark index. 98 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 The Trustees considered that the Fund's annualized total return was in the fourth quintile of its Morningstar category for the one, three and five year periods ended June 30, 2013. The Trustees noted the discussions held throughout the year regarding the Fund's performance and confirmed that those discussions were factored into the Trustees' deliberations concerning the renewal of the advisory and sub-advisory agreements. The Trustees considered reasons for the underperformance of the Fund relative to its peer group. The Trustees agreed that they would continue to closely monitor the Fund's performance. Management Fee and Expenses The Trustees considered information showing the fees and expenses of the Fund in comparison to the management fees and expense ratios of its peer group of funds as classified by Morningstar and also to the expense ratios of a peer group of funds selected on the basis of criteria determined by the Independent Trustees for this purpose using data provided by Strategic Insight Mutual Fund Research and Consulting, LLC (Strategic Insight), an independent third party. The Trustees also considered that PIM, not the Fund, paid the Sub-Adviser pursuant to the sub-advisory agreement. The Trustees evaluated the fee under the sub-advisory agreement and the portion of the fee under the investment advisory agreement retained by PIM, and the services provided by the respective parties under such agreements. The Trustees considered that the Fund's management fee for the twelve months ended June 30, 2013 was in the third quintile relative to the management fees paid by other funds in its Morningstar peer group for the comparable period. The Trustees also considered the breakpoints in the management fee schedule and the reduced fee rates above certain asset levels. The Trustees considered that the Fund's expense ratio for the twelve months ended June 30, 2013 was in the fifth quintile relative to both its Morningstar peer group and its Strategic Insight peer group for the comparable period. The Trustees noted that PIM was waiving fees and/or reimbursing expenses in order to limit the ordinary operating expenses of the Fund. They noted the Fund's relatively small asset size compared to most of the other funds in its peer groups. They also noted the lower average account size of shareholders in the Fund. The Trustees considered the impact of transfer agency, sub-transfer agency, and other non-management fee expenses on the expense ratios of the Fund. They noted that such non-management fee operating expenses generally are spread over a smaller asset base than the other funds in the peer group, which results in these fees being significantly higher as a percentage of assets. The Trustees noted that they separately review the Fund's transfer agency, sub-transfer agency and intermediary arrangements. The Trustees also considered information showing significant expense reimbursements by the sponsors of the other funds in the peer groups. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 99 The Trustees reviewed management fees charged by PIM and PIM's affiliate, Pioneer Institutional Asset Management, Inc. (together with PIM, "Pioneer") to institutional and other clients, including publicly offered European funds sponsored by affiliates of Pioneer, unaffiliated U.S. registered investment companies (in a sub-advisory capacity), and unaffiliated foreign and domestic separate accounts. The Trustees also considered PIM's costs in providing services to the Fund and Pioneer's costs in providing services to the other clients and considered the differences in management fees and profit margins for Fund and non-Fund services. In evaluating the fees associated with Pioneer's client accounts, the Trustees took into account the respective demands, resources and complexity associated with the Fund and client accounts. The Trustees noted that, in some instances, the fee rates for those clients were lower than the management fee for the Fund and considered that, under the investment advisory agreement with the Fund, PIM performs additional services for the Fund that it does not provide to those other clients or services that are broader in scope, including oversight of the Sub-Adviser and the Fund's other service providers and activities related to compliance and the extensive regulatory and tax regimes to which the Fund is subject. The Trustees also considered the different entrepreneurial risks associated with PIM's management of the Fund and Pioneer's management of the other client accounts. The Trustees reviewed management fees charged by the Sub-Adviser to its other clients. The Trustees noted that the sub-advisory fees paid to the Sub-Adviser with respect to the Fund were within the range of the fee rates charged by the Sub-Adviser to its other clients. The Trustees concluded that the management fee payable by the Fund to PIM, as well as the fees payable by PIM to the Sub-Adviser, were reasonable in relation to the nature and quality of the services provided by PIM and the Sub- Adviser to the Fund. Profitability The Trustees considered information provided by PIM regarding the profitability of PIM with respect to the advisory services provided by PIM to the Fund, including the methodology used by PIM in allocating certain of its costs to the management of the Fund. The Trustees also considered PIM's profit margin in connection with the overall operation of the Fund. They further reviewed the financial results realized by PIM and its affiliates from non-fund businesses. The Trustees considered PIM's profit margins with respect to the Fund in comparison to the limited industry data available and noted that the profitability of any adviser was affected by numerous factors, including its organizational structure and method for allocating expenses. The Trustees concluded that PIM's profitability with respect to the management of the Fund was not unreasonable. 100 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 Economies of Scale The Trustees considered PIM's views relating to economies of scale in connection with the Pioneer Funds as fund assets grow and the extent to which any such economies of scale are shared with funds and fund shareholders. The Trustees noted the breakpoints in the management fee schedule. The Trustees recognize that economies of scale are difficult to identify and quantify, rarely identifiable on a fund-by-fund basis, and that, among other factors that may be relevant, are the following: fee levels, expense subsidization, investment by PIM in research and analytical capabilities and PIM's commitment and resource allocation to the Fund. The Trustees noted that profitability also may be an indicator of the availability of any economies of scale, although profitability may vary for other reasons particularly, for example during the recent difficult periods for financial markets, as the level of services was maintained notwithstanding a significant decline in PIM's fee revenues from the Fund. Accordingly, the Trustees concluded that economies of scale, if any, were being appropriately shared with the Fund. Other Benefits The Trustees considered the other benefits to each of PIM and the Sub-Adviser from its relationship with the Fund. The Trustees considered the character and amount of fees paid by the Fund, other than under the investment advisory agreement, for services provided by PIM and its affiliates. The Trustees further considered the revenues and profitability of PIM's businesses other than the fund business. The Trustees considered the intangible benefits to each of PIM and the Sub-Adviser by virtue of its relationship with the Fund and the other Pioneer funds. The Trustees concluded that the receipt of these benefits was reasonable in the context of the overall relationship between each of PIM and the Sub-Adviser and the Fund. Conclusion After consideration of the factors described above as well as other factors, the Trustees, including all of the Independent Trustees, concluded that each of the investment advisory agreement between PIM and the Fund and the sub-advisory agreement between PIM and the Sub-Adviser, including, in each case, the fees payable thereunder, was fair and reasonable and voted to approve the proposed renewal of each of the investment advisory agreement and the sub-advisory agreement for the Fund. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 101 Trustees, Officers and Service Providers Trustees Officers Thomas J. Perna, Chairman Daniel K. Kingsbury, President* David R. Bock Mark D. Goodwin, Executive Benjamin M. Friedman Vice President Margaret B.W. Graham Mark E. Bradley, Treasurer** Daniel K. Kingsbury Christopher J. Kelley, Secretary Marc O. Mayer Marguerite A. Piret Kenneth J. Taubes Stephen K. West Investment Adviser and Administrator Pioneer Investment Management, Inc. Custodian and Sub-Administrator Brown Brothers Harriman & Co. Principal Underwriter Pioneer Funds Distributor, Inc. Legal Counsel Bingham McCutchen LLP Shareowner Services and Transfer Agent Pioneer Investment Management Shareholder Services, Inc. Proxy Voting Policies and Procedures of the Fund are available without charge, upon request, by calling our toll free number (1-800-225-6292). Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is publicly available to shareowners at us.pioneerinvestments.com. This information is also available on the Securities and Exchange Commission's web site at www.sec.gov. * Chief Executive Officer of the Fund. ** Chief Financial and Accounting Officer of the Fund. 102 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 This page for your notes. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 103 This page for your notes. 104 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 This page for your notes. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 105 This page for your notes. 106 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 This page for your notes. Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 107 This page for your notes. 108 Pioneer Ibbotson Asset Allocation Series | Semiannual Report | 1/31/14 How to Contact Pioneer We are pleased to offer a variety of convenient ways for you to contact us for assistance or information. Call us for: -------------------------------------------------------------------------------- Account Information, including existing accounts, new accounts, prospectuses, applications and service forms 1-800-225-6292 FactFone(SM) for automated fund yields, prices, account information and transactions 1-800-225-4321 Retirement plans information 1-800-622-0176 Write to us: -------------------------------------------------------------------------------- PIMSS, Inc. P.O. Box 55014 Boston, Massachusetts 02205-5014 Our toll-free fax 1-800-225-4240 Our internet e-mail address ask.pioneer@pioneerinvestments.com (for general questions about Pioneer only) Visit our web site: us.pioneerinvestments.com This report must be preceded or accompanied by a prospectus. The Fund files a complete schedule of investments with the Securities and Exchange Commission for the first and third quarters for each fiscal year on Form N-Q. Shareholders may view the filed Form N-Q by visiting the Commission's web site at http://www.sec.gov. The filed form may also be viewed and copied at the Commission's Public Reference Room in Washington, DC. Information regarding the operations of the Public Reference Room may be obtained by calling 1-800-SEC-0330. [LOGO] PIONEER Investments(R) Pioneer Investment Management, Inc. 60 State Street Boston, MA 02109 us.pioneerinvestments.com Securities offered through Pioneer Funds Distributor, Inc. 60 State Street, Boston, MA 02109 Underwriter of Pioneer Mutual Funds, Member SIPC (C) 2014 Pioneer Investments 19016-08-0314