-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IuWK4rUwlJJkFL59aWbd/sO4bptErrJ4xyggF6TbmTdW7G5oyrQWiPWwVpsr29/H 1FkWI7NZ0Qg/01ZjeQ+IPg== /in/edgar/work/20000821/0000276776-00-000006/0000276776-00-000006.txt : 20000922 0000276776-00-000006.hdr.sgml : 20000922 ACCESSION NUMBER: 0000276776-00-000006 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000821 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PIONEER BOND FUND /MA/ CENTRAL INDEX KEY: 0000276776 STANDARD INDUSTRIAL CLASSIFICATION: [0000 ] IRS NUMBER: 042652279 STATE OF INCORPORATION: MA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-02864 FILM NUMBER: 706420 BUSINESS ADDRESS: STREET 1: 60 STATE ST 19TH FL CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6177427825 MAIL ADDRESS: STREET 1: 60 STATE ST STREET 2: 19TH FLOOR CITY: BOSTON STATE: MA ZIP: 02109-1820 N-30D 1 0001.txt ANNUAL REPORT [PIONEER LOGO] Pioneer Bond Fund - --------------------- ANNUAL REPORT 6/30/00 - --------------------- Table of Contents - -------------------------------------------------------------------------------- Letter from the Chairman 1 Portfolio Summary 2 Performance Update 3 Portfolio Management Discussion 6 Schedule of Investments 9 Financial Statements 17 Notes to Financial Statements 23 Report of Independent Public Accountants 27 Trustees, Officers and Service Providers 28 Pioneer Family of Mutual Funds 29
Pioneer Bond Fund - -------------------------------------------------------------------------------- LETTER FROM THE CHAIRMAN 6/30/00 - -------------------------------------------------------------------------------- Dear Shareowner, - -------------------------------------------------------------------------------- For over a year, the Federal Reserve has been trying to suppress inflationary pressures and restrain economic growth in the U.S. by raising short-term interest rates. Because they represent increased costs, higher interest rates cut into corporate profits. With the possibility of a slowing economy and an uncertain profit outlook overhanging the stock market, investors shifted from sector to sector in the first half of 2000 looking for attractive opportunities. Heightened stock market volatility was the result. Bonds also lost luster, because existing, lower-paying issues could not compete with the higher rates that now prevail. By summer, we began to see evidence that the Fed's tactics were having some impact, as key statistics hinted at a contraction of the economy's growth rate. Volatile markets should not sidetrack your plans for dealing with your essential financial goals. Whatever your long-range needs may be - money for a child's education, funding a comfortable retirement, or some other cherished objective - those needs remain in place no matter what the market may do this week or next month. For that reason, it makes sense to focus your investment strategy beyond interim ups and downs. Mid-year is a good time to talk to your financial representative to review what has been happening and to make sure your strategy is intact. Part of that discussion should be devoted to your portfolio's diversification. Do you have a blend of stocks and bonds that you are comfortable with and that can help you meet your goals? Or is it time to make adjustments? Be sure to include your IRAs and other retirement vehicles when you evaluate your overall portfolio. I hope you will take time to read the following discussion with Kenneth J. Taubes, co-head of Pioneer's fixed-income team. It's an excellent way to understand Pioneer Bond Fund's performance during the last year and to learn about expectations for the months ahead. If you have questions or would like more information about your fund, visit our web site at www.pioneerfunds.com. Respectfully, /s/ John F. Cogan, Jr. - ---------------------- John F. Cogan, Jr. Chairman and President 1 Pioneer Bond Fund - -------------------------------------------------------------------------------- PORTFOLIO SUMMARY 6/30/00 - -------------------------------------------------------------------------------- Portfolio Quality - -------------------------------------------------------------------------------- (As a percentage of total investment portfolio) [PIE CHART PLOT POINTS] U.S. Government and Agency 29.1% AAA 2.3% AA 9.3% A 24.0% BBB 17.6% BB 7.5% B and lower 10.0% Other 0.2%
[END PLOT POINTS] Portfolio Maturity - -------------------------------------------------------------------------------- (Effective life as a percentage of total investment portfolio) [PIE CHART PLOT POINTS] 0-1 Years 0.3% 1-3 Years 14.1% 3-4 Years 15.7% 4-6 Years 39.9% 6-8 Years 16.4% 8+ Years 13.6%
[END PLOT POINTS] 10 Largest Holdings - -------------------------------------------------------------------------------- (As a percentage of debt holdings) 1. Government National Mortgage Association, 7.0%, 1/15/30 3.91% 2. U.S. Treasury Bonds, 8.0%, 11/15/21 2.53 3. U.S. Treasury Bonds, 7.5%, 11/15/16 2.36 4. Government National Mortgage Association, 7.5%, 2/15/30 2.35 5. Ford Capital BV, 9.5%, 6/1/10 2.33 6. Government National Mortgage Association, 7.0%, 8/15/29 2.29 7. Government National Mortgage Association, 8.0%, 11/15/29 2.06 8. Government National Mortgage Association, 7.0%, 7/15/29 1.82 9. American General Finance Corp., 8.125%, 8/15/09 1.76 10. Government National Mortgage Association I, 8.0%, 5/15/30 1.68
Fund holdings will vary for other periods. 2 Pioneer Bond Fund - -------------------------------------------------------------------------------- PERFORMANCE UPDATE 6/30/00 CLASS A SHARES - -------------------------------------------------------------------------------- Share Prices and Distributions - --------------------------------------------------------------------------------
Net Asset Value per Share 6/30/00 6/30/99 $8.47 $8.94 Distributions per Share Income Short-Term Long-Term (6/30/99 - 6/30/00) Dividends Capital Gains Capital Gains $0.577 - -
Investment Returns - -------------------------------------------------------------------------------- The mountain chart on the right shows the growth of a $10,000 investment made in Pioneer Bond Fund at public offering price, compared to the growth of the Lehman Brothers Government/Corporate Bond Index. Average Annual Total Returns (As of June 30, 2000)
Net Asset Public Offering Period Value Price* 10 Years 6.87% 6.38% 5 Years 4.70 3.75 1 Year 1.30 -3.25
* Reflects deduction of the maximum 4.5% sales charge at the beginning of the period and assumes reinvestment of distributions at net asset value. [BAR CHART PLOT POINTS] Growth of $10,000
Lehman Brothers Pioneer Government/Corporate Bond Fund* Bond Index 6/90 9550 10000 6/91 10518 11020 11888 12580 13394 14235 6/94 13226 14028 14745 15820 15337 16555 6/97 16424 17836 18073 19849 17317 20386 6/00 18555 21263
[END PLOT POINTS] The Lehman Brothers Government/Corporate Bond Index is an unmanaged, composite index of the U.S. bond market. It contains over 5,000 issues, including Treasury and government agency securities, investment-grade corporate bonds and Yankee bonds. Index returns are calculated monthly, assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. You cannot invest directly in the Index. Past performance does not guarantee future results. Return and share price fluctuate, and your shares, when redeemed, may be worth more or less than their original cost. 3 Pioneer Bond Fund - -------------------------------------------------------------------------------- PERFORMANCE UPDATE 6/30/00 CLASS B SHARES - -------------------------------------------------------------------------------- Share Prices and Distributions - --------------------------------------------------------------------------------
Net Asset Value per Share 6/30/00 6/30/99 $8.44 $8.91 Distributions per Share Income Short-Term Long-Term (6/30/99 - 6/30/00) Dividends Capital Gains Capital Gains $0.507 - -
Investment Returns - -------------------------------------------------------------------------------- The mountain chart on the right shows the growth of a $10,000 investment made in Pioneer Bond Fund, compared to the growth of the Lehman Brothers Government/Corporate Bond Index. Average Annual Total Returns (As of June 30, 2000)
If If Period Held Redeemed* Life-of-Fund 4.64% 4.64% (4/4/94) 5 Years 3.88 3.72 1 Year 0.48 -3.31
* Reflects deduction of the maximum applicable contingent deferred sales charge (CDSC) at the end of the period and assumes reinvestment of distributions. The maximum CDSC of 4% declines over six years. [BAR CHART PLOT POINTS] Growth of $10,000+
Lehman Brothers Pioneer Government/Corporate Bond Fund* Bond Index 4/94 10000 10000 6/94 9896 9958 9906 10044 10942 11229 11600 11977 6/96 11286 11752 11729 12325 11990 12663 12713 13527 6/98 13095 14091 13579 14809 13170 14471 13056 14491 6/00 13233 15096
[END PLOT POINTS] + Index comparison begins 4/30/94. The Lehman Brothers Government/Corporate Bond Index is an unmanaged, composite index of the U.S. bond market. It contains over 5,000 issues, including Treasury and government agency securities, investment-grade corporate bonds and Yankee bonds. Index returns are calculated monthly, assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. You cannot invest directly in the Index. Past performance does not guarantee future results. Return and share price fluctuate, and your shares, when redeemed, may be worth more or less than their original cost. 4 Pioneer Bond Fund - -------------------------------------------------------------------------------- PERFORMANCE UPDATE 6/30/00 CLASS C SHARES - -------------------------------------------------------------------------------- Share Prices and Distributions - --------------------------------------------------------------------------------
Net Asset Value per Share 6/30/00 6/30/99 $8.46 $8.89 Distributions per Share Income Short-Term Long-Term (6/30/99 - 6/30/00) Dividends Capital Gains Capital Gains $0.457 - -
Investment Returns - -------------------------------------------------------------------------------- The mountain chart on the right shows the growth of a $10,000 investment made in Pioneer Bond Fund, compared to the growth of the Lehman Brothers Government/Corporate Bond Index. Average Annual Total Returns (As of June 30, 2000)
If If Period Held Redeemed* Life-of-Fund 2.89% 2.87% (1/31/96) 1 Year 0.36 0.36
* Assumes reinvestment of distributions. A 1% contingent deferred sales charge (CDSC) applies to redemptions made within one year of purchase. [BAR CHART PLOT POINTS] Growth of $10,000
Lehman Brothers Pioneer Government/Corporate Bond Fund* Bond Index 1/96 10000 10000 9679 9706 9700 9750 9831 9922 10081 10225 9971 10137 6/97 10294 10505 10607 10873 10904 11222 11024 11393 11233 11691 11700 12269 12/98 11653 12286 11515 12139 11300 12007 11277 12071 11179 12022 11246 12345 6/00 11341 12523
[END PLOT POINTS] The Lehman Brothers Government/Corporate Bond Index is an unmanaged, composite index of the U.S. bond market. It contains over 5,000 issues, including Treasury and government agency securities, investment-grade corporate bonds and Yankee bonds. Index returns are calculated monthly, assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. You cannot invest directly in the Index. Past performance does not guarantee future results. Return and share price fluctuate, and your shares, when redeemed, may be worth more or less than their original cost. 5 Pioneer Bond Fund - -------------------------------------------------------------------------------- PORTFOLIO MANAGEMENT DISCUSSION 6/30/00 - -------------------------------------------------------------------------------- Extraordinarily strong economic growth and the U.S. Federal Reserve Board's efforts to restrain this growth and limit inflation dominated the fixed income market in the United States during the 12 months ended June 30, 2000. In the following discussion, Kenneth J. Taubes details the factors that influenced your Fund's performance during the fiscal year. Mr. Taubes, co-head of Pioneer's fixed income group, oversees the team responsible for the daily management of Pioneer Bond Fund. Q: Pioneer Bond Fund achieved positive returns during a period of rising interest rates and falling prices for most types of fixed income investments. What factors most affected performance? A: The Fund's holdings in long-term Treasury bonds and other types of high- quality long-term investments helped performance. However, corporate bonds in general, especially high yield bonds, lagged Treasuries in performance and detracted from Fund returns. Overall, the Fund's competitive yield overcame price losses to result in positive total returns. On June 30, 2000, the Fund's 30-day SEC yield on Class A shares was 6.83%, an increase from the 6.57% yield on December 31, 1999 and substantially higher than the 5.63% yield a year earlier. For the 12-month period, Class A shares returned 1.30%, Class B shares returned 0.48% and Class C shares had a total return of 0.36%, all at net asset value. In comparison, the average return for the same period of the 173 funds in Lipper, Inc.'s Corporate Debt A-rated category was 2.78%. (Lipper is an independent company that tracks mutual fund performance.) Q: Especially in the final six months of the period, U.S. Treasuries seemed to gain in price even as most corporate securities lost value. What contributed to this environment? A: The main factors were the strong economy and the reactions to this strength. We had high rates of Gross Domestic Product (GDP) growth and falling unemployment rates. The Federal Reserve Board became increasingly concerned that the growth rates were unsustainable and could drive up the costs of resources, increasing inflationary pressures. Starting in June 1999, the Fed raised short-term interest rates six different times, by a total of 1.75%. However, during the final six months of the fiscal 6 Pioneer Bond Fund - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- period, the strong economy resulted in a rising revenue flow to the federal government, which was able to reduce debt by buying back higher-coupon, long-term Treasury bonds. This resulted in rising prices and declining interest rates for both intermediate- and long-term Treasury obligations. As a consequence, the yields on longer-term Treasury obligations actually fell below those of shorter-term government notes. Investors in fixed income securities call this an inversion of the yield curve. Under most conditions the yield curve is characterized by higher yields for longer-maturity securities. While long-term Treasuries rallied, corporate bonds presented a much different situation. Lower credit quality securities in general underperformed Treasuries as investors feared that economic growth would eventually slow and undermine the financial health of companies issuing bonds. Corporate securities, especially high-yielding, lower quality bonds, fell in price and their yields rose. The difference - or spread - between the yields of corporate securities and government securities grew wider and corporate bonds underperformed government bonds of comparable maturities. While investment grade corporate securities also underperformed Treasuries, they still performed better than higher yielding, lower quality bonds. Mortgage securities did better than investment grade corporate bonds, although not as well as Treasuries. Q: Did you make any changes in strategy during this period? A: As the end of the fiscal year approached, the spread widening - or growing difference in yields between Treasuries and non-Treasuries - resulted in extremely attractive yields in the corporate sector, especially the high yield sector. Believing that high yield securities offered very good value after two years of underperformance, we increased our allocation to this sector close to our mandated maximum of 20% of total assets. We did this by redeploying assets, principally from mortgage securities that had been performing well for the Fund. We invested where we saw the greatest relative value at current prices. For the same reason, we also invested in more intermediate-term securities, which had been underperforming. This resulted in a lower average maturity and lower duration for the Fund, which we thought made sense in a period following a rally in long-term Treasuries. 7 Pioneer Bond Fund - -------------------------------------------------------------------------------- PORTFOLIO MANAGEMENT DISCUSSION 6/30/00 (continued) - -------------------------------------------------------------------------------- Q: What is your outlook? A: During the closing months of the last fiscal year, we saw some signs that economic growth was beginning to cool down in the United States. Growth in consumer spending was lower, and the manufacturing sector was beginning to slow. Investors in the bond market are beginning to think that the Fed Board may be approaching the end of its series of interest-rate hikes, although some further rate increases certainly are possible. While we don't think the economy will slow dramatically, we do think growth will become more moderate, providing a better opportunity for a decline in interest rates later in the current fiscal year. 8 Pioneer Bond Fund - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS 6/30/00 - --------------------------------------------------------------------------------
S&P's/Moody's Principal Ratings Amount (unaudited) Value CONVERTIBLE CORPORATE BONDS - 1.0% $ 800,000 B+/B1 Mascotech, Inc., 4.5%, 12/15/03 $ 604,000 1,007,000 BB-/B2 Pogo Producing Co., 5.5%, 6/15/06 840,261 ---------- Total Convertible Corporate Bonds $1,444,261 ---------- (Cost $1,468,178) COLLATERALIZED MORTGAGE OBLIGATIONS - 1.2% 847,697 AAA/Aaa Prudential Securities Secured Financing Co., Series 1999-NRF1 A1, 6.074%, 1/15/08 $ 803,325 1,000,000 AAA/Aaa Prudential Securities Secured Financing Co., Series 1999-NRF1 A1, 6.48%, 1/15/09 934,375 8,164 AAA/Aaa Resolution Trust Corp., Series 1992-5A6, 9.24%, 5/25/26 8,123 ---------- Total Collateralized Mortgage Obligations $1,745,823 ---------- (Cost $1,875,231) CORPORATE BONDS - 66.4% Basic Materials - 4.1% Chemicals (Diversified) - 0.7% 1,000,000 B+/B2 Huntsman ICI Chemicals, 10.125%, 7/1/09 $1,005,000 ---------- Chemicals (Specialty) - 0.6% 1,000,000 BB/Ba2 Arco Chemical Co., 9.8%, 2/1/20 $ 910,000 ---------- Iron & Steel - 2.0% 1,000,000 AA-/A1 Nucor Corp., 6.0%, 1/1/09 (144A) $ 880,880 2,000,000 BBB-/Baa2 USX Corp., 8.125%, 7/15/23 1,988,900 ---------- $2,869,780 ---------- Metals Mining - 0.1% 1,000,000 CC/Ca AEI Resources, Inc., 11.5%, 12/15/06 (144A) $ 100,000 ---------- Paper & Forest Products - 0.7% 1,000,000 A-/A3 Mead Corp., 8.125%, 2/1/23 $ 957,850 ---------- Total Basic Materials $5,842,630 ----------
The accompanying notes are an integral part of these financial statements. 9 Pioneer Bond Fund - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS 6/30/00 (continued) - --------------------------------------------------------------------------------
S&P's/Moody's Principal Ratings Amount (unaudited) Value Capital Goods - 1.4% Engineering & Construction - 0.6% $ 895,000 B+/B2 Metromedia Fiber Network Inc., 10.0%, 11/15/08 $ 886,050 ---------- Waste Management - 0.8% 1,000,000 B+/B2 Azurix Corp., 10.375%, 2/15/07 (144A) $ 965,000 300,000 BB-/Ba3 Browning-Ferris Industries, Inc., 6.375%, 1/15/08 234,000 ---------- $1,199,000 ---------- Total Capital Goods $2,085,050 ---------- Communication Services - 2.0% Cellular/Wireless Telecommunications - 1.3% 1,000,000 B/B3 Crown Castle International Corp., 9.0%, 5/15/11 $ 920,000 1,000,000 B/B2 NEXTLINK Communications, Inc., 10.75%, 6/1/09 987,500 ---------- $1,907,500 ---------- Telecommunications (Long Distance) - 0.7% 1,000,000 AA-/A1 AT&T Corp., 8.125%, 1/15/22 $ 968,120 ---------- Total Communication Services $2,875,620 ---------- Consumer Cyclicals - 6.6% Automobiles - 1.6% 2,000,000 A/A2 General Motors Corp., 9.4%, 7/15/21 $2,276,280 ---------- Building Materials - 1.0% 750,000 B/B2 NCI Building Systems, Inc., 9.25%, 5/1/09 $ 705,000 750,000 B+/B1 Nortek Inc., 9.125%, 9/1/07 695,625 ---------- $1,400,625 ---------- Hardware & Tools - 0.3% 500,000 B+/B1 Scott's Corp., 8.625%, 1/15/09 (144A) $ 475,000 ---------- Homebuilding - 0.2% 370,000 BB+/Ba2 Toll Corp, 8.125%, 2/1/09 $ 333,000 ---------- Publishing (Newspapers) - 1.1% 1,500,000 BBB-/Baa3 News America Holdings, Inc., 10.125%, 10/15/12 $1,615,350 ----------
10 The accompanying notes are an integral part of these financial statements. Pioneer Bond Fund - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
S&P's/Moody's Principal Ratings Amount (unaudited) Value Retail - 1.5% $1,000,000 AA/Aa2 Wal-Mart Stores, Inc., 8.62%, 1/1/10 $ 1,056,680 1,000,000 AA/Aa2 Wal-Mart Stores, Inc., 8.5%, 9/15/24 1,045,390 ----------- $ 2,102,070 ----------- Services (Commerical & Consumer) - 0.2% 1,100,000 BBB/Baa3 Laidlaw Inc., 7.65%, 5/15/06 $ 275,000 ----------- Textiles (Apparel) - 0.7% 1,000,000 BBB-/Baa2 Jones Apparel Group, Inc., 7.875%, 6/15/06 $ 973,000 ----------- Total Consumer Cyclicals $ 9,450,325 ----------- Consumer Staples - 10.1% Broadcasting (Television/Radio/Cable) - 5.7% 1,000,000 BBB-/Baa2 British Sky Broadcasting Corp., 8.2%, 7/15/09 $ 940,870 1,000,000 B+/B2 Charter Communications Holdings LLC, 8.25%, 4/1/07 885,000 2,200,000 BBB/Baa3 Continental Cablevision, Inc., 9.5%, 8/1/13 2,399,738 1,500,000 BBB+/Baa1 Cox Enterprises, 7.375%, 6/15/09 (144A) 1,406,610 1,040,000 B/B2 Echostar DBS Corp., 9.25%, 2/1/06 1,008,800 1,250,000 AA-/Ba1 Tele-Communications, Inc., 10.125%, 4/15/22 1,506,950 ----------- $ 8,147,968 ----------- Distributors (Food & Health) - 1.7% 500,000 B-/B3 Fisher Scientific International Inc., 9.0%, 2/1/08 $ 463,750 1,000,000 BBB+/Baa1 SUPERVALU Inc., 8.875%, 11/15/22 992,750 1,000,000 B/B2 Wesco Distribution Inc., 9.125%, 6/1/08 915,000 ----------- $ 2,371,500 ----------- Entertainment - 2.2% 1,000,000 B-/B3 Premier Parks, Inc., 9.75%, 6/15/07 $ 965,000 2,000,000 BBB/Baa3 Time Warner Inc., 9.15%, 2/1/23 2,187,460 ----------- $ 3,152,460 ----------- Household Products (Non-Durables) - 0.5% 750,000 B2/B Playtex Family Products, Inc., 9.0%, 12/15/03 $ 727,500 ----------- Total Consumer Staples $14,399,428 -----------
The accompanying notes are an integral part of these financial statements. 11 Pioneer Bond Fund - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS 6/30/00 (continued) - --------------------------------------------------------------------------------
S&P's/Moody's Principal Ratings Amount (unaudited) Value Energy - 9.3% Oil (Domestic Integrated) - 1.5% $2,000,000 A-/A3 Phillips Petroleum Co., 9.18%, 9/15/21 $ 2,066,400 ----------- Oil (International Integrated) - 2.0% 1,580,000 AA+/Aa2 Imperial Oil Ltd., 8.75%, 10/15/19 $ 1,633,293 1,200,000 A+/A1 Texaco Capital Corp., 8.25%, 10/1/06 1,249,848 ----------- $ 2,883,141 ----------- Oil & Gas (Drilling & Equipment) - 2.3% 1,500,000 A-/A3 Nabors Industries Inc., 6.8%, 4/15/04 $ 1,450,575 750,000 B+/B1 Parker Drilling Co., 9.75%, 11/15/06 723,750 1,000,000 BB-/Ba3 RBF Finance Co., 11.0%, 3/15/06 1,075,000 ----------- $ 3,249,325 ----------- Oil & Gas (Production/Exploration) - 2.8% 1,000,000 BB/Ba2 EOTT Energy Partners L.P., 11.0%, 10/1/09 $ 1,010,000 2,000,000 BB-/Ba2 Gulf Canada Resources Ltd., 9.625%, 7/1/05 2,044,680 975,000 BB+/Ba1 Santa Fe Snyder Corp., 8.05%, 6/15/04 965,182 ----------- $ 4,019,862 ----------- Oil & Gas (Refining & Marketing) - 0.7% 1,000,000 BBB/Baa2 Ashland Oil Co., 8.8%, 11/15/12 $ 1,029,670 ----------- Total Energy $13,248,398 ----------- Financial - 18.4% Banks (Major Regional) - 3.6% 1,000,000 AA-/Aa3 Barclays North America Capital Corp., 9.75%, 5/15/21 $ 1,067,930 1,550,000 A-/A2 Corestates Capital Corp., 9.375%, 4/15/03 1,605,258 2,000,000 A+/A2 Mellon Bank NA, 7.375%, 5/15/07 1,952,440 500,000 A/A1 Republic New York Corp., 9.3%, 6/1/21 544,505 ----------- $ 5,170,133 ----------- Banks (Money Center) - 0.7% 1,000,000 AA-/Aa3 National Westminster Bancorp, Inc., 9.375%, 11/15/03 $ 1,062,490 ----------- Banks (Regional) - 1.4% 2,000,000 A+/A1 Bank of Montreal, 7.8%, 4/1/07 $ 2,009,260 -----------
12 The accompanying notes are an integral part of these financial statements. Pioneer Bond Fund - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
S&P's/Moody's Principal Ratings Amount (unaudited) Value Consumer Finance - 3.0% $1,000,000 BB+/Baa3 Capital One Financial Corp., 7.125%, 8/1/08 $ 901,000 3,000,000 A+/A1 Ford Capital BV, 9.5%, 6/1/10 3,336,660 ----------- $ 4,237,660 ----------- Financial (Diversified) - 6.8% 2,500,000 A+/A2 American General Finance Corp., 8.125%, 8/15/09 $ 2,513,675 1,100,000 A+/A1 Associates Corp., 8.15%, 8/1/09 1,105,005 1,000,000 BBB+/Baa1 AvalonBay Communities Inc., 6.8%, 7/15/06 933,510 1,000,000 BBB-/Baa3 Colonial Realty L.P., 1.0%, 7/14/07 898,610 1,500,000 A/A3 Deere (John) Capital Corp., 8.625%, 8/1/19 1,469,400 1,500,000 A-/A3 Hertz Corp., 6.25%, 3/15/09 1,352,625 1,500,000 BBB/Baa3 Mack-Cali Realty, 7.25%, 3/15/9 1,360,755 ----------- $ 9,633,580 ----------- Insurance (Property/Casualty) - 2.9% 1,500,000 AAA/Aa1 GEICO Corp., 9.15%, 9/15/21 $ 1,584,360 1,535,000 AA/Aa2 National Re Corp., 8.85%, 1/15/59 1,598,979 1,000,000 BBB+/Baa1 W.R. Berkley, 8.7%, 1/1/22 938,600 ----------- $ 4,121,939 ----------- Total Financial $26,235,062 ----------- Healthcare - 3.9% Healthcare (Diversified) - 0.9% 1,175,000 B/B3 King Pharmaceutical Inc., 10.75%, 2/15/09 $ 1,216,125 ----------- Healthcare (Hospital Management) - 0.8% 375,000 BB+/Ba2 Columbia/HCA Healthcare Corp., 7.25%, 5/20/08 $ 334,478 1,000,000 BB-/Ba3 Tenet Healthcare Corp., 8.125%, 12/1/08 920,000 ----------- $ 1,254,478 ----------- Healthcare (Medical Products/Supplies) - 2.2% 1,070,000 BB+/Ba1 Beckman Instruments, Inc., 7.05%, 6/1/26 $ 1,002,579 750,000 NR/NR Bio-Rad Labs Inc., 11.625%, 2/15/07 772,500
The accompanying notes are an integral part of these financial statements. 13 Pioneer Bond Fund - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS 6/30/00 (continued) - --------------------------------------------------------------------------------
S&P's/Moody's Principal Ratings Amount (unaudited) Value Healthcare (Medical Products/Supplies) - (continued) $1,500,000 A-/Baa1 Guidant Corp., 6.15%, 2/15/06 $ 1,392,150 ----------- $ 3,167,229 ----------- Total Healthcare $ 5,637,832 ----------- Technology - 0.6% Computers (Hardware) - 0.6% 900,000 BBB+/Baa1 Sun Microsystems Inc., 7.65%, 8/15/09 $ 891,954 ----------- Total Technology $ 891,954 ----------- Transportation - 5.9% Airfreight - 1.5% 2,000,000 BBB+/A3 Federal Express Corp., 8.4%, 3/23/10 $ 2,067,180 ----------- Airlines - 3.7% 1,481,649 BBB/A2 American Airlines, Inc., 9.71%, 1/2/07 $ 1,579,838 1,000,000 BB/Ba2 Northwest Airlines, Inc., 8.52%, 4/7/04 931,770 1,876,673 A/A1 Southwest Airlines Co., 7.67%, 1/2/14 1,884,968 1,000,000 BB+/Baa3 United Air Lines, Inc., 9.125%, 1/15/12 935,900 ----------- $ 5,332,476 ----------- Railroads - 0.7% 1,000,000 BBB+/Baa1 Norfolk Southern Corp., 9.0%, 3/1/21 $ 1,068,570 ----------- Total Transportation $ 8,468,226 ----------- Utilities - 4.1% Electric Companies - 1.4% 1,000,000 BBB-/Baa3 Great Lakes Power Inc., 8.3%, 3/1/05 $ 987,770 1,000,000 A/A2 Virginia Electric and Power Co., 8.75%, 4/1/21 1,029,040 ----------- $ 2,016,810 ----------- Natural Gas - 2.7% 1,000,000 BBB-/Baa2 KN Energy Inc., 6.45%, 11/30/01 $ 983,510 1,000,000 A-/Baa1 Northern Natural Gas, 7.0%, 6/1/11 (144A) 943,470 1,000,000 A/A2 Oneok, Inc., 6.0%, 2/1/09 876,060 1,000,000 BBB/Baa2 Sonat Inc., 7.625%, 7/15/11 976,610 ----------- $ 3,779,650 ----------- Total Utilities $ 5,796,460 ----------- Total Corporate Bonds (Cost $101,261,252) $94,930,985 -----------
14 The accompanying notes are an integral part of these financial statements. Pioneer Bond Fund - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
Principal Amount Value U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 29.5% $ 12,930 Federal Home Loan Mortgage Corp., 10.0%, 11/1/02 $ 13,041 25,501 Federal Home Loan Mortgage Corp., 10.5%, 4/1/19 27,323 32,862 Federal Home Loan Mortgage Corp., REMIC Series 1988-24B, 9.5%, 1/15/05 33,517 118,142 Federal National Mortgage Association, 11.0%, 6/1/19 129,164 27,953 Federal National Mortgage Association, 10.0%, 7/1/19 29,547 169,717 Federal National Mortgage Association, REMIC 1989-19A, 10.3%, 4/25/19 179,837 7,751 Federal National Mortgage Association, REMIC 1989-19B, 10.3%, 4/25/19 8,439 21,024 Government National Mortgage Association, 9.5%, 5/15/20 21,851 193,966 Government National Mortgage Association, 10.0%, 1/15/18 to 7/15/20 205,012 8,441,987 Government National Mortgage Association, 8.0%, 11/15/29 to 1/15/30 8,537,465 9,316,210 Government National Mortgage Association, 7.5%, 5/15/27 to 2/15/30 9,254,545 8,680,904 Government National Mortgage Association, 7.0%, 7/15/29 to 12/15/30 8,447,293 66,619 Government National Mortgage Association I, 10.0%, 1/15/06 67,862 2,398,325 Government National Mortgage Association I, 8.0%, 5/15/30 2,425,450 30,038 Government National Mortgage Association II, 9.5%, 12/20/20 31,003 27,514 Government National Mortgage Association, Midget, 10.0%, 5/15/04 28,035 1,500,000 Government National Mortgage Association, REMIC Series 1998-21, 6.5%, 10/20/11 1,429,125 3,000,000 U.S. Treasury Bonds, 7.5%, 11/15/16 3,380,550 3,000,000 U.S. Treasury Bonds, 8.0%, 11/15/21 3,619,560
The accompanying notes are an integral part of these financial statements. 15 Pioneer Bond Fund - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS 6/30/00 (continued) - --------------------------------------------------------------------------------
S&P's/Moody's Principal Ratings Amount (unaudited) Value U.S. Government and Agency Obligations - (continued) $ 400,000 U.S. Treasury Notes, 6.375%, 9/30/01 $ 399,436 1,000,000 U.S. Treasury Notes, 5.875%, 11/15/04 985,700 2,000,000 U.S. Treasury Notes, 7.0%, 7/15/06 2,073,280 750,000 U.S. Treasury Notes, 6.25%, 8/15/23 754,545 ------------ Total U.S. Government and Agency Obligations (Cost $41,831,247) $ 42,081,580 ------------ FOREIGN GOVERNMENT SPONSORED - 1.9% 1,500,000 A+/A2 Hydro-Quebec, 8.0%, 2/1/13 $ 1,565,595 1,000,000 A/A2 Province of Saskatchewan, 9.375%, 12/15/20 1,180,460 ------------ Total Foreign Government Sponsored (Cost $2,740,700) $ 2,746,055 ------------ TOTAL INVESTMENT IN SECURITIES - 100.0% (Cost $149,176,608) (a)(b) $142,948,704 ============
144A Security is exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be resold normally to qualified institutional buyers in a transaction exempt from registration. At June 30, 2000, the value of these securities amounted to $4,770,960 or 3.3% of total net assets. (a) At June 30, 2000, the net unrealized loss on investments, based on cost for federal income tax purposes of $149,355,671 was as follows: Aggregate gross unrealized gain for all investments in which there is an excess of value over tax cost $ 778,859 Aggregate gross unrealized loss for all investments in which there is an excess of tax cost over value (7,185,826) ----------- Net unrealized loss $(6,406,967) ===========
(b) At June 30, 2000, the Fund had a net capital loss carryforward of $6,644,799 which will expire between 2003 and 2008 if not utilized. Note: The Fund's investments in mortgage-backed securities of the Government National Mortgage Association (GNMA) and Federal National Mortgage Association (FNMA) are interests in separate pools of mortgages. All separate investments in these issuers which have the same coupon rate have been aggregated for the purpose of presentation in this schedule of investments. Purchases and sales of securities (excluding temporary cash investments) for the year ended June 30, 2000 were as follows:
Purchases Sales ----------- ------------ Long-term U.S. Government $76,112,571 $108,438,303 Other Long-term Securities 23,284,284 22,376,772
16 The accompanying notes are an integral part of these financial statements. Pioneer Bond Fund - -------------------------------------------------------------------------------- BALANCE SHEET 6/30/00 - -------------------------------------------------------------------------------- ASSETS: Investment in securities, at value (cost $149,176,608) $142,948,704 Cash 494,315 Receivables - Fund shares sold 404,989 Interest 2,887,327 Other 477 ------------ Total assets $146,735,812 ------------ LIABILITIES: Payables - Fund shares repurchased $ 389,747 Dividends 208,957 Due to affiliates 142,183 Accrued expenses 113,160 ------------ Total liabilities $ 854,047 ------------ NET ASSETS: Paid-in capital $162,604,600 Accumulated undistributed net investment income 55,980 Accumulated net realized loss on investments (10,550,911) Net unrealized loss on investments (6,227,904) ------------ Total net assets $145,881,765 ============ NET ASSET VALUE PER SHARE: (Unlimited number of shares authorized) Class A (based on $102,348,683/12,077,569 shares) $ 8.47 ============ Class B (based on $37,268,744/4,413,872 shares) $ 8.44 ============ Class C (based on $6,264,338/740,876 shares) $ 8.46 ============ MAXIMUM OFFERING PRICE: Class A $ 8.87 ============
The accompanying notes are an integral part of these financial statements. 17 Pioneer Bond Fund - -------------------------------------------------------------------------------- STATEMENT OF OPERATIONS - -------------------------------------------------------------------------------- For the Year Ended 6/30/00 INVESTMENT INCOME: Interest $13,264,833 ----------- EXPENSES: Management fees $844,331 Transfer agent fees Class A 294,305 Class B 160,089 Class C 55,266 Distribution fees Class A 292,375 Class B 433,236 Class C 85,925 Administrative fees 44,975 Custodian fees 43,314 Registration fees 42,889 Professional fees 84,396 Printing 42,644 Fees and expenses of nonaffiliated trustees 25,432 Miscellaneous 9,495 -------- Total expenses $ 2,458,672 Less fees paid indirectly (39,376) ----------- Net expenses $ 2,419,296 ----------- Net investment income $10,845,537 ----------- REALIZED AND UNREALIZED LOSS ON INVESTMENTS: Net realized loss on investments $(6,904,742) Change in net unrealized loss on investments (2,601,649) ----------- Net loss on investments $(9,506,391) ----------- Net increase in net assets resulting from operations $ 1,339,146 ===========
18 The accompanying notes are an integral part of these financial statements. Pioneer Bond Fund - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS - -------------------------------------------------------------------------------- For the Years Ended 6/30/00 and 6/30/99
Year Ended Year Ended FROM OPERATIONS: 6/30/00 6/30/99 Net investment income $ 10,845,537 $ 10,582,259 Net realized gain (loss) on investments (6,904,742) 937,466 Change in net unrealized gain or loss on investments (2,601,649) (10,260,323) ------------ ------------ Net increase in net assets resulting from operations $ 1,339,146 $ 1,259,402 ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS: Net investment income: Class A ($0.58 and $0.56 per share, respectively) $ (7,812,946) $ (7,701,473) Class B ($0.51 and $0.48 per share, respectively) (2,547,821) (2,283,992) Class C ($0.46 and $0.48 per share, respectively) (456,721) (599,723) ------------ ------------ Total distributions to shareholders $(10,817,488) $(10,585,188) ------------ ------------ FROM FUND SHARE TRANSACTION Net proceeds from sale of shares $ 90,338,479 $220,458,929 Reinvestment of distributions 8,109,094 7,689,631 Cost of shares repurchased (132,759,583) (182,879,191) ------------ ------------ Net increase (decrease) in net assets resulting from fund share transactions $(34,312,010) $ 45,269,369 ------------ ------------ Net increase (decrease) in net assets $(43,790,352) $ 35,943,583 NET ASSETS: Beginning of year 189,672,117 153,728,534 ------------ ------------ End of year (including accumulated undistributed net investment income of $55,980 and $12,118, respectively) $145,881,765 $189,672,117 ============ ============
CLASS A '00 Shares '00 Amount '99 Shares '99 Amount Shares sold 6,961,511 $ 59,973,090 16,837,950 $157,202,981 Reinvestment of distributions 710,968 6,121,497 638,020 5,941,487 Less shares repurchased (10,081,538) (86,763,886) (15,191,420) (141,713,341) ----------- ------------ ----------- ------------ Net increase (decrease) (2,409,059) $(20,669,299) 2,284,550 $ 21,431,127 ----------- ------------ ----------- ------------ CLASS B Shares sold 1,752,374 $ 15,137,966 4,694,027 $ 43,795,349 Reinvestment of distributions 195,908 1,681,866 160,668 1,489,392 Less shares repurchased (3,126,491) (26,892,331) (2,573,656) (23,845,332) ----------- ------------ ----------- ------------ Net increase (decrease) (1,178,209) $(10,072,499) 2,281,039 $ 21,439,409 ----------- ------------ ----------- ------------ CLASS C Shares sold 1,740,006 $ 15,227,423 2,092,821 $ 19,460,599 Reinvestment of distributions 35,624 305,731 27,934 258,752 Less shares repurchased (2,200,860) (19,103,366) (1,869,099) (17,320,518) ----------- ------------ ----------- ------------ Net increase (decrease) (425,230) $ (3,570,212) 251,656 $ 2,398,833 ----------- ------------ ----------- ------------
The accompanying notes are an integral part of these financial statements. 19 Pioneer Bond Fund - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS 6/30/00 - --------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended 6/30/00 6/30/99 6/30/98 6/30/97 6/30/96 CLASS A Net asset value, beginning of year $ 8.94 $ 9.37 $ 9.07 $ 9.08 $ 9.35 -------- -------- -------- ------- -------- Increase (decrease) from investment operations: Net investment income $ 0.58 $ 0.56 $ 0.59 $ 0.63 $ 0.64 Net realized and unrealized gain (loss) on investments (0.47) (0.43) 0.30 (0.01) (0.27) -------- -------- -------- ------- -------- Net increase from investment operations $ 0.11 $ 0.13 $ 0.89 $ 0.62 $ 0.37 Distributions to shareholders: Net investment income (0.58) (0.56) (0.59) (0.63) (0.64) -------- -------- -------- ------- -------- Net increase (decrease) in net asset value $ (0.47) $ (0.43) $ 0.30 $ (0.01) $ (0.27) -------- -------- -------- ------- -------- Net asset value, end of year $ 8.47 $ 8.94 $ 9.37 $ 9.07 $ 9.08 ======== ======== ======== ======= ======== Total return* 1.30% 1.35% 10.04% 7.09% 4.02% Ratio of net expenses to average net assets+ 1.18% 1.04% 1.18% 1.14% 1.19% Ratio of net investment income to average net assets+ 6.68% 6.01% 6.34% 6.97% 6.80% Portfolio turnover rate 60% 46% 44% 48% 39% Net assets, end of year (in thousands) $102,349 $129,487 $114,326 $98,310 $101,957 Ratios assuming reduction for fees paid indirectly: Net expenses 1.15% 1.02% 1.17% 1.12% 1.18% Net investment income 6.71% 6.03% 6.35% 6.99% 6.81%
* 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. + Ratios assuming no reduction for fees paid indirectly. The accompanying notes are an integral part of these financial statements. 20 Pioneer Bond Fund - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS 6/30/00 - --------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended 6/30/00 6/30/99 6/30/98 6/30/97 6/30/96 CLASS B Net asset value, beginning of year $ 8.91 $ 9.33 $ 9.03 $ 9.02 $ 9.31 ------- ------- ------- ------- ------- Increase (decrease) from investment operations: Net investment income $ 0.50 $ 0.48 $ 0.51 $ 0.56 $ 0.57 Net realized and unrealized gain (loss) on investments (0.46) (0.42) 0.31 (0.01) (0.28) ------- ------- ------- ------- ------- Net increase from investment operations $ 0.04 $ 0.06 $ 0.82 $ 0.55 $ 0.29 Distributions to shareholders: Net investment income (0.51) (0.48) (0.52) (0.54) (0.57) In excess of net investment income - - - - (0.01) ------- ------- ------- ------- ------- Net increase (decrease) in net asset value $ (0.47) $ (0.42) $ 0.30 $ 0.01 $ (0.29) ------- ------- ------- ------- ------- Net asset value, end of year $ 8.44 $ 8.91 $ 9.33 $ 9.03 $ 9.02 ======= ======= ======= ======= ======= Total return* 0.48% 0.57% 9.21% 6.24% 3.15% Ratio of net expenses to average net assets+ 2.05% 1.86% 1.98% 1.97% 1.96% Ratio of net investment income to average net assets+ 5.81% 5.18% 5.52% 6.12% 6.01% Portfolio turnover rate 60% 46% 44% 48% 39% Net assets, end of year (in thousands) $37,269 $49,816 $30,888 $20,104 $14,843 Ratios assuming reduction for fees paid indirectly: Net expenses 2.03% 1.83% 1.97% 1.96% 1.94% Net investment income 5.83% 5.21% 5.53% 6.13% 6.03%
* 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. + Ratios assuming no reduction for fees paid indirectly. The accompanying notes are an integral part of these financial statements. 21 Pioneer Bond Fund - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS 6/30/00 - --------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended 1/31/96 to 6/30/00 6/30/99 6/30/98 6/30/97 6/30/96 CLASS C Net asset value, beginning of period $ 8.89 $ 9.31 $ 9.02 $ 9.02 $ 9.54 ------ ------- ------ ------ ------ Increase (decrease) from investment operations: Net investment income $ 0.48 $ 0.48 $ 0.52 $ 0.54 $ 0.23 Net realized and unrealized gain (loss) on investments (0.45) (0.42) 0.29 - (0.52) ------- ------- ------ ------ ------ Net increase (decrease) from investment operations $ 0.03 $ 0.06 $ 0.81 $ 0.54 $(0.29) Distributions to shareholders: Net investment income (0.46) (0.48) (0.52) (0.54) (0.22) In excess of net investment income - - - - (0.01) ------ ------- ------ ------ ------ Net increase (decrease) in net asset value $(0.43) $ (0.42) $ 0.29 $ - $(0.52) ------ ------- ------ ------ ------ Net asset value, end of period $ 8.46 $ 8.89 $ 9.31 $ 9.02 $ 9.02 ====== ======= ====== ====== ====== Total return* 0.36% 0.60% 9.12% 6.13% (3.00)% Ratio of net expenses to average net assets+ 2.32% 1.86% 1.90% 2.05% 2.18%** Ratio of net investment income to average net assets+ 5.53% 5.17% 5.58% 5.83% 5.79%** Portfolio turnover rate 60% 46% 44% 48% 39% Net assets, end of period (in thousands) $6,264 $10,369 $8,515 $4,588 $ 343 Ratios assuming reduction for fees paid indirectly: Net expenses 2.30% 1.83% 1.89% 1.92% 2.13%** Net investment income 5.55% 5.20% 5.59% 5.96% 5.84%**
* 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. ** Annualized. + Ratios assuming no reduction for fees paid indirectly. The accompanying notes are an integral part of these financial statements. 22 Pioneer Bond Fund - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS 6/30/00 - -------------------------------------------------------------------------------- 1. Organization and Significant Accounting Policies Pioneer Bond Fund (the Fund) is a Delaware business trust registered under the Investment Company Act of 1940 as a diversified, open-end management investment company. The investment objective of the Fund is to seek current income consistent with preservation of capital. The Fund offers three classes of shares - Class A, Class B and Class C shares. Shares of Class A, Class B and Class C each represent an interest in the same portfolio of investments of the Fund and have equal rights to voting, redemptions, dividends and liquidation, except that each class of shares can bear different transfer agent and distributions fees and has exclusive voting rights with respect to the distribution plans that have been adopted by Class A, Class B, and Class C shareholders, respectively. The Fund's financial statements have been prepared in conformity with generally accepted accounting principles that require the management of the Fund to, among other things, make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The following is a summary of significant accounting policies consistently followed by the Fund, which are in conformity with those generally accepted in the investment company industry: A. Security Valuation Security transactions are recorded as of trade date. Securities are valued at prices supplied by independent pricing services, which consider such factors as Treasury spreads, yields, maturities and ratings. Valuations may be supplemented by dealers and other sources, as required. Principal amounts of mortgage-backed securities are adjusted for monthly paydowns. Premium and discount related to certain mortgage-backed securities are amortized or accreted in proportion to the underlying monthly paydowns. Interest income, including interest on income bearing cash accounts, is recorded on the accrual basis. Temporary cash investments are valued at amortized cost. Gains and losses on sales of investments are calculated on the identified cost method for both financial reporting and federal income tax purposes. It is the Fund's practice to first select for sale those securities that have the highest cost and also qualify for long-term capital gain or loss treatment for tax purposes. 23 Pioneer Bond Fund - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS 6/30/00 (continued) - -------------------------------------------------------------------------------- B. Federal Income Taxes It is 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 shareholders. Therefore, no federal income tax provision is required. The characterization of distributions to shareholders for financial reporting purposes is determined in accordance with federal income tax rules. Therefore, the source of the Fund's distributions may be shown in the accompanying financial statements as either from or in excess of net investment income or net realized gain on investment transactions, or from paid-in-capital, depending on the type of book/tax differences that may exist. At June 30, 2000, the Fund has reclassified $15,813 from accumulated net realized loss on investments to accumulated undistributed net investment income. The reclassification has no impact on the net asset value of the Fund and is designed to present the Fund's capital accounts on a tax basis. C. Fund Shares The Fund records sales and repurchases of its shares as of trade date. Pioneer Funds Distributor, Inc. (PFD), the principal underwriter for the Fund and an indirect subsidiary of The Pioneer Group, Inc. (PGI), earned $20,714 in underwriting commissions on the sale of fund shares for the year ended June 30, 2000. D. Class Allocations Distribution fees are calculated based on the average daily net asset values attributable to Class A, Class B, and Class C shares of the Fund, respectively. Shareholders of each class share all expenses and fees paid to the transfer agent, Pioneering Services Corporation (PSC), for their services, which are allocated based on the number of accounts in each class and the ratable allocation of related out-of-pocket expense (see Note 3). 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 the respective percentage of adjusted net assets at the beginning of the day. The Fund declares as daily dividends substantially all of its net investment income. All dividends are paid on a monthly basis. Short-term capital gain distributions, if any, may be declared with the daily dividends. 24 Pioneer Bond Fund - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Distributions to shareholders are recorded as of the ex-dividend date. Distributions paid by the Fund with respect to each class of shares are calculated in the same manner, at the same time, and in the same amount, except that Class A, Class B and Class C shares can bear different transfer agent and distribution fees. 2. Management Agreement Pioneer Investment Management, Inc. (PIM), the Fund's investment adviser, manages the Fund's portfolio and is a wholly owned subsidiary of PGI. Management fees are calculated daily at the annual rate of 0.50% of the Fund's average daily net assets. In addition, under the management and administration agreements, certain other services and costs, including accounting, regulatory reporting, and insurance premiums, are paid by the Fund. At June 30, 2000, $63,758 was payable to PIM related to management fees, administrative fees and certain other services. 3. Transfer Agent PSC, a wholly owned subsidiary of PGI, provides substantially all transfer agent and shareholder services to the Fund at negotiated rates. Included in due to affiliates is $31,736 in transfer agent fees payable to PSC at June 30, 2000. 4. Distribution Plans The Fund adopted a Plan of Distribution for each class of shares (Class A Plan, Class B Plan and Class C Plan) in accordance with Rule 12b-1 of the Investment Company Act of 1940. Pursuant to the Class A Plan, the Fund pays PFD a service fee of up to 0.25% of the average daily net assets attributable to Class A shares in reimbursement of its actual expenditures to finance activities primarily intended to result in the sale of Class A shares. Pursuant to the Class B Plan and the Class C Plan, the Fund pays PFD 1.00% of the average daily net assets attributable to each class of shares. The fee 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 is $46,689 in distribution fees payable to PFD at June 30, 2000. In addition, redemptions of each class of 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 25 Pioneer Bond Fund - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS 6/30/00 (continued) - -------------------------------------------------------------------------------- within one year of purchase. Class B shares that are redeemed within six 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%. Proceeds from the CDSCs are paid to PFD. For the year ended June 30, 2000, CDSCs in the amount of $323,507 were paid to PFD. 5. Expense Offsets The Fund has entered into certain expense offset arrangements resulting in a reduction in the Fund's total expenses. For the year ended June 30, 2000, the Fund's expenses were reduced by $39,376 under such arrangements. 26 Pioneer Bond Fund - -------------------------------------------------------------------------------- REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS - -------------------------------------------------------------------------------- To the Shareowners and the Board of Trustees of Pioneer Bond Fund: We have audited the accompanying balance sheet, including the schedule of investments, of Pioneer Bond Fund as of June 30, 2000, and the related statement of operations, the statements of changes in net assets, and the financial highlights for the periods presented. These financial statements and financial highlights are the responsibility of the Fund's 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 auditing standards generally accepted in the 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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of June 30, 2000 by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. 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 Pioneer Bond Fund as of June 30, 2000, the results of its operations, the changes in its net assets, and the financial highlights for the periods presented, in conformity with accounting principles generally accepted in the United States. ARTHUR ANDERSEN LLP Boston, Massachusetts August 11, 2000 27 Pioneer Bond Fund TRUSTEES, OFFICERS AND SERVICE PROVIDERS Trustees Officers Trustees John F. Cogan, Jr. John F. Cogan, Jr., Chairman and Mary K. Bush President Richard H. Egdahl, M.D. David D. Tripple, Executive Vice President Margaret B.W. Graham Sherman B. Russ, Vice President Marguerite A. Piret Eric W. Reckard, Treasurer David D. Tripple Joseph P. Barri, Secretary Stephen K. West John Winthrop Investment Adviser Pioneer Investment Management, Inc. Custodian Brown Brothers Harriman & Co. Independent Public Accountants Arthur Andersen LLP Principal Underwriter Pioneer Funds Distributor, Inc. Legal Counsel Hale and Dorr LLP Shareowner Services and Transfer Agent Pioneering Services Corporation 28 Pioneer Bond Fund - -------------------------------------------------------------------------------- THE PIONEER FAMILY OF MUTUAL FUNDS - -------------------------------------------------------------------------------- For information about any Pioneer mutual fund, please contact your investment professional, or call Pioneer at 1-800-225-6292. Ask for a free fund information kit, which includes a fund prospectus. Please read the prospectus carefully before you invest or send money. Growth Funds Income Funds United States Taxable Pioneer Growth Shares Pioneer America Income Trust Pioneer Micro-Cap Fund Pioneer Bond Fund Pioneer Mid-Cap Fund Pioneer High Yield Fund Pioneer Mid-Cap Value Fund Pioneer Limited Maturity Bond Fund Pioneer Science & Technology Fund Pioneer Strategic Income Fund Pioneer Small Company Fund Pioneer Tax-Managed Fund Tax-Free Pioneer Tax-Free Income Fund International/Global Pioneer Emerging Markets Fund Money Market Fund Pioneer Europe Fund Pioneer Cash Reserves Fund* Pioneer Indo-Asia Fund Pioneer International Growth Fund Pioneer World Equity Fund Growth and Income Funds Pioneer Fund Pioneer II Pioneer Balanced Fund Pioneer Equity-Income Fund Pioneer Real Estate Shares * An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in the Fund. 29 - -------------------------------------------------------------------------------- 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 Telecommunications Device for the Deaf (TDD) 1-800-225-1997 Write to us: Pioneering Services Corporation 60 State Street Boston, Massachusetts 02109 Our toll-free fax 1-800-225-4240 Our Internet e-mail address ask.pioneer@piog.com (for general questions about Pioneer only) Visit our web site: www.pioneerfunds.com This report must be preceded or accompanied by a current Fund prospectus. [PIONEER LOGO] Pioneer Investment Management, Inc. 60 State Street 8636-00-0800 Boston, Massachusetts 02109 (C) Pioneer Funds Distributor, Inc. www.pioneerfunds.com [recycle bug] Printed on Recycled Paper -----END PRIVACY-ENHANCED MESSAGE-----