-----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, JWB0TfZuXBjOrLtIZf6U7irrEIbNgk4+oxwFQEtjjeclYJ0kQ4DxxK/AfOfAoxYj npVcRWLpBLtAI1VfDK5OEw== 0000950146-96-001513.txt : 19960830 0000950146-96-001513.hdr.sgml : 19960830 ACCESSION NUMBER: 0000950146-96-001513 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960829 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PIONEER BOND FUND /MA/ CENTRAL INDEX KEY: 0000276776 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 042652279 STATE OF INCORPORATION: MA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-02864 FILM NUMBER: 96622998 BUSINESS ADDRESS: STREET 1: 60 STATE ST 18TH FL CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6177427825 N-30D 1 ANNUAL REPORT [Pioneer Logo] Pioneer Bond Fund ANNUAL REPORT 6/30/96 Table of Contents
Letter from the Chairman 1 Portfolio Summary 2 Performance Update 3 Portfolio Management Discussion 6 Schedule of Investments 9 Financial Statements 14 Notes to Financial Statements 20 Report of Independent Public Accountants 24 Tax Treatment of Distributions 25 Trustees' Fees and Share Ownership 26 Trustees, Officers and Service Providers 27
Pioneer Bond Fund LETTER FROM THE CHAIRMAN 6/30/96 Dear Shareowner, It is with great pleasure that I introduce this annual report for Pioneer Bond Fund, covering the year ended June 30, 1996. As you see, we've given your Fund's annual report a facelift. The new, improved style reflects what shareowners told us they want to see in fund reports. We wish to thank all of you who took the time to respond to our questions. Now, in both your annual and semiannual reports, you'll find a Table of Contents and consistent, easy-to-read summaries of portfolio information and performance. We've also included a separate Portfolio Management Discussion, where your Fund's portfolio manager offers insights into market conditions, portfolio strategy and results for the fiscal period. As you no doubt are aware, the bond market experienced a number of changes in the past year. We saw a significant shift from 1995, when the slow-paced economy pushed interest rates down and bond prices up. The trend reversed in February, following reports of accelerating economic growth. We are pleased to report that, despite the far less favorable environment for bonds overall, Pioneer Bond Fund continued to pay shareowners attractive dividends and generated a competitive, positive total return. On a closing note, we wish to welcome the Fund's new shareowners, particularly those who joined us through the Fund's Class C Shares, which were introduced on January 31, 1996. Please contact your investment representative, or Pioneer at 1-800-225-6292, if you have any questions about your investment in Pioneer Bond Fund. Thank you for your continued support. Respectfully, [/s/ John F. Cogan, Jr.] John F. Cogan, Jr. Chairman and President 1 Pioneer Bond Fund PORTFOLIO SUMMARY 6/30/96 Portfolio Quality (As a percentage of total investment portfolio) [Pie Graphic] BB 2% Commercial Paper 9% BBB 12% U.S. Treasury/Agency 25% A 31% AAA 10% AA 11% Effective Portfolio Maturity (As a percentage of total investment portfolio) 10-20 Years 8% 20+ Years 16% 0-2 Years 22% 7-10 Years 6% 5-7 Years 8% 2-5 Years 40% 10 Largest Holdings (As a percentage of investment in securities)
1. U.S. Treasury Notes, 8.25%, 7/15/98 5.23% 2. U.S. Treasury Notes 8.5%, 2/15/00 4.09 3. U.S. Treasury Notes, 8.625%, 8/15/97 3.45 4. Imperical Oil Ltd., 8.75%, 10/15/19 2.69 5. International Bank for Reconstruction and Development, 9.25%, 7/15/17 2.30 6. General Motors Corp., 9.4%, 7/15/21 2.24 7. Commonwealth Edison Co., First Mortgage Bonds, 9.75%, 2/15/20 2.17 8. U.S. Treasury Bonds, 8.75%, 11/05/08 2.13 9. British Telecom Finance Plc, Deb., 9.625%, 2/15/19 2.11 10. Ford Motor Credit Co., 9.14%, 12/30/14 2.10
Fund holdings will vary for other periods. 2 Pioneer Bond Fund PERFORMANCE UPDATE 6/30/96 - CLASS A SHARES Share Prices and Distributions
Net Asset Value per Share 6/30/96 6/30/95 $9.08 $9.35 Distributions per Share Income Short-Term Long-Term (6/30/95-6/30/96) Dividends Capital Gains Capital Gains $0.641 - -
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, 1996) Net Asset Public Offering Period Value Price* 10 Years 7.83% 7.34% 5 Years 7.84 6.86 1 Year 4.02 -0.66
[Mountain Chart] $24,000 20,000 16,000 12,000 8,000 [Plot Points Mountain Chart A] Lehman Brothers Pioneer Government/ Bond Corporate Fund Bond Index -------- ---------------- 6/86 9550 10000 6/87 9989 10468 6/88 10704 11250 6/89 11900 12639 6/90 12642 13537 6/91 13923 14921 6/92 15737 17035 6/93 17731 19274 6/94 17508 18993 6/95 19519 21417 6/96 20302 22414 Growth of $10,000 $22,414 $20,302 [ ] Pioneer Bond Fund* [ ] [ ] Lehman Brothers Government/ Corporate Bond Index * Reflects deduction of the maximum 4.5% sales charge at the beginning of the period and assumes reinvestment of distributions at net asset value. The Lehman Brothers Government/Corporate Bond Index is an unmanaged, composite index of the U.S. bond market. It contains 5,353 issues, including Treasury and government agency securities, investment-grade corporate bonds and Yankee bonds. Index returns 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 6/30/96 - CLASS B SHARES Share Prices and Distributions
Net Asset Value per Share 6/30/96 6/30/95 $9.02 $9.31 Distributions per Share Income Short-Term Long-Term (6/30/95-6/30/96) Dividends Capital Gains Capital Gains $0.581 - -
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, 1996) If If Period Held Redeemed* Life-of-Fund 5.70% 4.46% (4/4/94) 1 Year 3.15 -0.73
[Mountain Chart] $16,000 12,000 8,000 4,000 Plot Points Mountain Chart B Lehman Brothers Pioneer Government/ Bond Corporate Fund Bond Index -------- ---------------- 4/94 10000 10000 6/94 9896 9958 9/94 9914 10007 12/94 9906 10044 3/95 10327 10545 6/95 10942 11229 9/95 11089 11444 12/95 11600 11977 3/96 11274 11697 6/96 10986 11752 Growth of $10,000+ $11,752 $10,992 [ ] Pioneer Bond Fund* [ ] [ ] Lehman Brothers Government/ Corporate Bond Index * 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. + 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 5,353 issues, including Treasury and government agency securities, investment-grade corporate bonds and Yankee bonds. Index returns 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 6/30/96 - CLASS C SHARES Share Prices and Distributions
Net Asset Value per Share 6/30/96 1/31/96 $9.02 $9.54 Distributions per Share Income Short-Term Long-Term (1/31/96-6/30/96) Dividends Capital Gains Capital Gains $0.233 - -
Investment Returns The table below shows the Fund's total return since its recent inception. A mountain chart comparing the Fund to the Lehman Brothers Government/ Corporate Bond Index will appear in the Fund's semiannual report dated December 31, 1996.
Cumulative Total Returns (As of June 30, 1996) If If Period Held Redeemed* Life-of-Fund -3.00% -3.95% (1/31/96)
* Reflects deduction of the 1% contingent deferred sales charge (CDSC) at the end of the period and assumes reinvestment of distributions. 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 6/30/96 Dear Shareowner, As portfolio manager for Pioneer Bond Fund, I welcome this opportunity to update you about the bond market for the period covering your Fund's eighteenth fiscal year. First of all, however, allow me to thank you for your interest in the Fund; we at Pioneer believe that conservative, high-quality investments have a place in most financial portfolios. We will continue to do all we can to provide you with dependable dividends and competitive investment returns. A Shifting Bond Market The United States bond market and your Fund began the fiscal year on a strong, positive note. In fact, prices of most bonds increased dramatically throughout 1995, thanks to low inflation, a slow-moving economy and lower- trending interest rates. These conditions remained intact as we moved into 1996, and the feeling was that the bond market would continue to be profitable. The generally optimistic outlook was reinforced when the Federal Reserve (the Fed) cut short-term interest rates in December and January, indicating that too-fast economic growth and inflation were not concerns. The mood changed in February, however, when the monthly employment report, one of many indicators used to monitor the economy's strength, showed the biggest job increase in 12 years. Worries about an overheating economy triggered fears that the Fed would raise short-term rates. At the same time, strong economic forecasts led the stock market in its continued upward surge, further undermining investor confidence in bonds. The resulting drop in bond prices translated into a yield of 6.89% for the benchmark 30-year Treasury bond as of June 30, versus 6.62% one year earlier and 5.95% on December 31, 1995. Pioneer Bond Fund's results tracked those of the general market, with solid performance for the last six months of 1995, and negative results recorded for 1996. When all was said and done, your Fund's Class A Shares posted a total return of 4.02% for the year, at net asset value, a hair below the 4.06% turned in by the average corporate debt A-rated mutual fund tracked by Lipper Analytical Services. Lipper, an indepen- 6 Pioneer Bond Fund dent mutual fund research firm, tracked 116 funds for the period. For additional information about your Fund's performance, please refer to the Performance Updates, which begin on page 3. Focus on a Diversified, High-Quality Portfolio Pioneer Bond Fund invests for current income with capital appreciation through U.S. government securities and high-quality corporate bonds. At least 85% of its total assets must be invested in bonds rated A or better. At the close of the fiscal year, the Fund's holdings maintained an average quality rating of AA. More detailed information about your Fund's portfolio appears on page 2. As the year progressed and bond prices became more volatile, we adjusted the portfolio to make it more conservative. We shortened the Fund's duration (which reflects the sensitivity of bond prices to changes in interest rates), in large part by increasing short-term cash equivalents. We also augmented the Fund's weighting in securities with less than five years to their effective maturity, generally by selling Treasury bonds with more than 20 years to maturity. We prefer to adjust the portfolio with Treasurys, given their ready liquidity. These changes moved the portfolio's average effective life to 7.6 years, versus 11.1 years last June 30 and 9.6 years on December 31, 1995. While short-term issues may not be major contributors to the Fund's income stream, they do add price stability. We believe our strategy will work in the Fund's favor if the economy, bond market and interest rates continue to be as erratic as they were over much of the past year. As mentioned, we make adjustments to the portfolio by buying and selling Treasurys. On the flip side, we prefer to hold corporate securities since we subject each issue to a lengthy credit analysis process before we add it to the portfolio. Your portfolio's corporate holdings remain diversified across a variety of sectors, although we continued to favor industrial issuers. We constantly keep an eye toward quality and try to select issues with the potential for a credit upgrade. As a result, we tend to choose well-known, proven companies. These firms have a solid long-term history of repaying their debt; currently we especially like American Airlines, Wal-Mart and General Motors. 7 Pioneer Bond Fund PORTFOLIO MANAGEMENT DISCUSSION 6/30/96 (continued) Moving Forward The bond market's results over the past 12 months demonstrate how closely investors have watched the economy and how quickly they acted on their emotions. Until the economy or policy-makers appear set on a certain course, prices could remain volatile over the near term. While we all would prefer slow, steady gains from conservative bond investments, you can take solace in the fact that a long-term view is the best way to ride out market turbulence - - and to work toward future financial goals. On a positive note, we think that inflation will remain subdued in the second half of the year. Since February, the economy has shown sustainable and good growth, but with low inflation. At this point, however, it is uncertain what action - if any - the Fed will take. In this election year, the Fed may be hesitant to act in the absence of evidence of extreme inflation or economic growth. Another factor that could benefit bonds is the significant appreciation that has taken place in the stock market. Many investors chose to participate in stocks during the past year and ignored the bond market. We think this could soon change, given the gains the stock market has realized, as well as the heightened volatility stocks have been experiencing. We expect many equity investors who become nervous about stocks will turn to bonds, especially since many bonds are now attractively priced. Regardless of market conditions, our primary focus for your Fund remains the same - to generate a steady stream of income while maintaining principal. We expect Pioneer Bond Fund's conservative focus will continue to provide shareowners with solid long-term results. If you have any questions about your investment in the Fund, please contact your investment representative, or call Pioneer at 1-800-225-6292. Respectfully, /s/ Sherman B. Russ Sherman B. Russ Portfolio Manager 8 Pioneer Bond Fund SCHEDULE OF INVESTMENTS 6/30/96
S&P/Moody's Principal Ratings Amount (Unaudited) Value INVESTMENT IN SECURITIES - 90.7% U.S. Government and Agency Obligations - 24.8% $ 79,155 Federal Home Loan Mortgage Corp., 10.0%, 2002 $ 83,088 140,144 Federal Home Loan Mortgage Corp., 10.5%, 2019 154,377 174,294 Federal Home Loan Mortgage Corp., REMIC Series 1988-24B, 9.5%, 2005 182,997 1,000,000 Federal National Mortgage Association, 8.8%, 1997 1,034,060 1,000,000 Federal National Mortgage Association, 9.2%, 1997 1,029,690 1,500,000 Federal National Mortgage Association, 9.2%, 2000 1,640,385 1,000,000 Federal National Mortgage Association, 10.35%, 2015 1,312,030 118,912 Federal National Mortgage Association, 10.0%, 2019 129,501 856,858 Federal National Mortgage Association, 11.0%, 2019 959,141 1,440,303 Federal National Mortgage Association, REMIC Series 1989-72D, 8.9%, 2019 1,492,053 657,023 Federal National Mortgage Association, REMIC Series 1989-19A, 10.3%, 2019 717,739 7,751 Federal National Mortgage Association, REMIC Series 1989-19B, 10.3%, 2019 7,962 498,753 Government National Mortgage Association, Midget, 10.0%, 2004 to 2006 525,246 361,985 Government National Mortgage Association, 10.0%, 2018 395,128 196,975 Government National Mortgage Association, 9.5%, 2020 210,509 478,486 Government National Mortgage Association, 10.0%, 2020 521,396 1,000,000 Resolution Trust Corp., Series 1992-5A6, 9.238%, 2026 1,010,000 The accompanying notes are an integral part of these financial statements. 9 Pioneer Bond Fund SCHEDULE OF INVESTMENTS 6/30/96 (continued) S&P/Moody's Principal Ratings Amount (Unaudited) Value U.S. Government and Agency Obligations - (Continued) $2,000,000 U.S. Treasury Bonds, 8.75%, 2008 $ 2,218,440 1,565,000 U.S. Treasury Notes, 8.5%, 1997 1,605,831 3,500,000 U.S. Treasury Notes, 8.625%, 1997 3,602,270 5,250,000 U.S. Treasury Notes, 8.25%, 1998 5,457,533 4,000,000 U.S. Treasury Notes, 8.5%, 2000 4,266,240 ----------- Total U.S. Government and Agency Obligations (Cost $28,662,712) $28,555,616 ----------- Industrials - 29.0% 1,000,000 A-/A2 Alcan Aluminum, Ltd., Deb., 9.625%, 2019 $ 1,094,790 1,923,825 BBB-/A3 American Airlines Inc., 9.71%, 2007 2,124,115 1,000,000 A/A3 ARCO Chemical Co., Deb., 9.8%, 2020 1,229,580 500,000 A/A2 Atlantic Richfield Co., Deb., 9.875%, 2016 615,795 1,500,000 A/A2 Caterpillar Inc., 9.75%, 2019 1,676,445 1,200,000 BBB/Baa3 Centex Corp., Deb., 8.75%, 2007 1,248,000 1,500,000 BB+/Baa3 Coastal Corp., Deb., 9.625%, 2012 1,708,785 2,000,000 A-/A3 General Motors Corp., Notes, 9.4%, 2021 2,337,700 1,000,000 BBB-/Baa2 Georgia-Pacific Corp., Deb., 9.5%, 2022 1,059,230 2,600,000 AA+/Aa2 Imperial Oil Ltd., 8.75%, 2019 2,802,436 1,000,000 BBB/Ba1 Joy Technologies Co., Sen. Notes, 10.25%, 2003 1,100,000 1,500,000 BBB/Baa3 News America Holdings, 10.125%, 2012 1,686,750 1,000,000 AA/Aa3 Norfolk Southern Corp., Notes, 9.0%, 2021 1,162,280 1,000,000 A+/A1 J.C. Penney Co., Inc., Deb., 9.75%, 2021 1,120,210 2,000,000 BBB/Baa1 Phillips Petroleum Co., Deb., 9.18%, 2021 2,146,800 1,500,000 AA/Aa2 Proctor & Gamble Co., Notes, 9.36%, 2021 1,776,825 1,000,000 BBB+/A3 Supervalue, Inc., Notes, 8.875%, 2022 1,039,870 1,500,000 BBB-/Baa2 Tenneco, Inc., Notes, 9.875%, 2001 1,656,720 The accompanying notes are an integral part of these financial statements 10 Pioneer Bond Fund S&P/Moody's Principal Ratings Amount (Unaudited) Value Industrials - (Continued) $1,250,000 A+/A1 Texaco Capital Corp., Gtd. Deb., 9.75%, 2020 $ 1,545,050 2,000,000 BBB-/Ba1 Time Warner Inc., Deb., 9.15%, 2023 2,067,880 1,000,000 BB+/Baa3 USX Corp.-U.S. Steel Group, Deb., 9.375%, 2012 1,102,540 1,000,000 AA/Aa2 Wal-Mart Stores, Inc., Deb., 8.50%, 2024 1,054,470 ----------- Total Industrials (Cost $32,680,551) $33,356,271 ----------- Financial - 8.8% 2,000,000 A+/A1 Ford Motor Credit Co., 9.14%, 2014 $ 2,194,320 1,500,000 AA/Aa2 GEICO Corp., Deb., 9.15%, 2021 1,607,085 2,000,000 AAA/Aaa Standard Credit Card Master Trust, Series 1991-3A, 8.875%, 1998 2,091,860 2,000,000 AAA/Aaa Standard Credit Card Trust, Series 1990-6A, 9.375%, 1997 2,060,000 1,000,000 A/A2 Transamerica Corp., 9.875%, 1998 1,048,950 1,000,000 A+/A3 W.R. Berkley, Deb., 8.7%, 2022 1,067,990 ----------- Total Financial (Cost $10,032,928) $10,070,205 ----------- Banks - 15.5% 1,000,000 A+/A1 Banc One Corp., Sub. Notes, 10.0%, 2010 $ 1,201,320 1,000,000 A/A3 BankAmerica, Sub. Notes, 9.375%, 2001 1,095,020 1,000,000 AA-/Aa3 Barclays North American Capital Corp., Gtd. Sub. Cap. Notes, 9.75%, 2021 1,127,490 1,000,000 A-/A2 Chase Manhattan, 8.5%, 2002 1,069,800 1,000,000 A-/A2 Chemical NY Corp., Sub. Notes, 9.75%, 1999 1,077,300 898,000 A/A3 Citicorp, Sub. Notes, 10.75%, 2015 943,448 1,250,000 A-/A3 Comerica Inc., Sub. Deb., 10.125%, 1998 1,323,725 1,550,000 A-/A2 CoreStates Capital Corp., Gtd. Sub. Notes, 9.375%, 2003 1,729,505 1,500,000 A-/A2 First Chicago Corp., Sub. Notes, 10.25%, 2001 1,699,650 2,000,000 BBB+/A3 First Interstate Bancorp, Sub. Notes, 9.0%, 2004 2,086,820 The accompanying notes are an integral part of these financial statements 11 Pioneer Bond Fund SCHEDULE OF INVESTMENTS 6/30/96 (continued) S&P/Moody's Principal Ratings Amount (Unaudited) Value Banks - (Continued) $1,500,000 BBB+/A3 Fleet/Norstar Financial Group, Sub. Notes, 9.9%, 2001 $ 1,678,425 1,000,000 A-/A3 Mellon Financial, Sub. Deb., 9.75%, 2001 1,109,690 1,000,000 AA-/Aa3 National Westminster Bancorp Inc., Gtd. Cap. Notes, 9.375%, 2003 1,127,530 500,000 AA-/A1 Republic New York Corp., Sub. Notes, 9.3%, 2021 585,920 ----------- Total Banks (Cost $17,146,014) $17,855,643 ----------- Utilities - 5.2% 500,000 AAA/Aaa Cajun Electric Power, Cooperative Utility Trust, 10.125%, 2019 $ 551,120 2,000,000 BBB/Baa2 Commonwealth Edison, First Mortgage Bonds, 9.75%, 2020 2,260,720 1,000,000 A/A2 Virginia Electric Power, 8.75%, 2021 1,048,000 1,000,000 A-/A3 ONEOK Inc. Deb., 9.7%, 2019 1,055,540 1,000,000 BBB+/Baa1 GTE Corp., Deb., 10.3%, 2017 1,095,500 ----------- Total Utilities (Cost $5,850,410) $ 6,010,880 ----------- Sovereigns and Supranationals - 7.4% 500,000 AA+/Aa1 British Columbia Hydro Power, 15.5%, 2011 $ 549,990 2,000,000 AAA/Aaa British Telecom Finance, Deb., 9.625%, 2019 2,204,040 1,000,000 AAA/Aaa Inter-American Development Bank, Notes, 9.45%, 1998 1,060,550 2,000,000 AAA/Aaa International Bank for Reconstruction and Development, Deb., 9.25%, 2017 2,393,940 500,000 AA-/Aa3 Province of Ontario, 15.75%, 2012 558,730 1,000,000 BBB+/A2 Province of Saskatchewan, 9.375%, 2020 1,191,060 The accompanying notes are an integral part of these financial statements 12 Pioneer Bond Fund S&P/Moody's Principal Ratings Amount (Unaudited) Value Sovereigns and Supranationals - (Continued) $ 500,000 AAA/Aaa Tokyo (Metropolis of), Gtd. Bonds, 10.375%, 1997 $ 524,570 ----------- Total Sovereigns and Supranationals (Cost $8,383,337) $ 8,482,880 ----------- TOTAL INVESTMENT IN SECURITIES (Cost $102,755,952) $104,331,495 ----------- TEMPORARY CASH INVESTMENTS - 9.3% Commercial Paper - 9.3% 3,573,000 Commercial Credit Corp., 5.37%, 7/2/96 $ 3,573,000 4,338,000 Ford Motor Credit Co., 5.45%, 7/3/96 4,338,000 2,723,000 General Electric Credit Corp., 5.37%, 7/1/96 2,723,000 TOTAL TEMPORARY CASH INVESTMENTS (Cost $10,634,000) $ 10,634,000 ----------- TOTAL INVESTMENT IN SECURITIES AND TEMPORARY CASH INVESTMENTS - 100% (Cost $113,389,952)(a)(b) $114,965,495 -----------
(a) At June 30, 1996, the net unrealized gain on investments based on cost for federal income tax purposes of $113,389,952 was as follows:
Aggregate gross unrealized gain for all investments in which there is an excess of value over tax cost $ 3,180,303 Aggregate gross unrealized loss for all investments in which there is an excess of tax cost over value (1,604,760) ---------- Net unrealized gain $ 1,575,543 ----------
(b) At June 30, 1996, the Fund had a net capital loss carryforward of approximately $3,200,964 which will expire between 1998 and 2004 if not utilized. Note: The Fund's investments in mortgage-backed securities of the Government National Mortgage Association (GNMA) are interests in separate pools of mortgages. All separate investments in this issuer 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, 1996 were as follows:
Purchases Sales -------- ---------- Long-term U.S. Government $20,923,787 $39,787,869 Other Long-term Securities 22,676,391 10,200,891
The accompanying notes are an integral part of these financial statements 13 Pioneer Bond Fund BALANCE SHEET 6/30/96
ASSETS: Investment in securities, at value (including temporary cash investments of $10,634,000) (cost $113,389,952) $114,965,495 Receivables - Interest 2,543,689 Fund shares sold 321,226 Other 11,045 --------- Total assets $117,841,455 --------- LIABILITIES: Payables - Fund shares repurchased $ 335,332 Dividends 175,159 Due to affiliates 140,062 Accrued expenses 48,470 --------- Total liabilities $ 699,023 --------- NET ASSETS: Paid-in capital $119,332,609 Distributions in excess of net investment income (50,490) Accumulated net realized loss on investments (3,715,230) Net unrealized gain on investments 1,575,543 --------- Total net assets $117,142,432 --------- Net Asset Value Per Share: (Unlimited number of shares authorized) Class A - (based on $101,956,701/11,229,772 shares) $ 9.08 --------- Class B - (based on $14,842,995/1,645,017 shares) $ 9.02 --------- Class C - (based on $342,736/37,978 shares) $ 9.02 --------- Maximum Offering Price: Class A $ 9.51 ---------
The accompanying notes are an integral part of these financial statements 14 Pioneer Bond Fund STATEMENT OF OPERATIONS For the Year Ended 6/30/96
INVESTMENT INCOME: Interest $9,441,368 --------- EXPENSES: Management fees $588,432 Transfer agent fees Class A 226,695 Class B 27,817 Class C 351 Distribution fees Class A 248,056 Class B 119,908 Class C 789 Accounting 76,880 Professional fees 69,850 Registration fees 57,227 Custodian fees 28,048 Printing 20,799 Fees and expenses of nonaffiliated trustees 17,961 Miscellaneous 20,164 ---- Total expenses $ 1,502,977 Less fees paid indirectly (19,157) --------- Net expenses $ 1,483,820 --------- Net investment income $ 7,957,548 --------- REALIZED AND UNREALIZED LOSS ON INVESTMENTS: Net realized loss on investments $ (759,570) Change in net unrealized gain on investments $(2,778,133) --------- Net loss on investments $(3,537,703) --------- Net increase in net assets resulting from operations $ 4,419,845 ---------
The accompanying notes are an integral part of these financial statements 15 Pioneer Bond Fund STATEMENTS OF CHANGES IN NET ASSETS For the Years Ended 6/30/96 and 6/30/95
Year Ended Year Ended FROM OPERATIONS: 6/30/96 6/30/95 Net investment income $ 7,957,548 $ 8,154,313 Net realized loss on investments (759,570) (2,541,990) Change in net unrealized gain/loss on investments (2,778,133) 6,451,657 --------- ----------- Net increase in net assets resulting from operations $ 4,419,845 $ 12,063,980 --------- ----------- DISTRIBUTIONS TO SHAREHOLDERS: From net investment income Class A ($0.64 and 0.68 per share, respectively) $ (7,298,352) $ (7,888,862) Class B ($0.57 and 0.62 per share, respectively) (714,880) (258,198) Class C ($0.22 and 0.00 per share, respectively) (4,649) - In excess of net investment income Class B ($0.01 and 0.00 per share, respectively) (34,464) - Class C ($0.01 and 0.00 per share, respectively) (189) - --------- ----------- Total distributions to shareholders $ (8,052,534) $ (8,147,060) --------- ----------- FROM FUND SHARE TRANSACTIONS: Net proceeds from sale of shares $ 32,345,460 $ 26,149,127 Reinvestment of distributions 5,865,063 6,062,601 Cost of shares repurchased (34,931,359) (26,503,240) --------- ----------- Net increase in net assets resulting from fund share transactions $ 3,279,164 $ 5,708,488 --------- ----------- Net increase (decrease) in net assets $ (353,525) $ 9,625,408 NET ASSETS: Beginning of year $117,495,957 $107,870,549 --------- ----------- End of year (including (distributions in excess of)/ accumulated undistributed net investment income of $(50,490) and $66,799, respectively) $117,142,432 $117,495,957 --------- -----------
'96 Shares '96 Amount '95 Shares '95 Amount Class A Shares sold 2,099,659 $ 19,598,057 2,143,981 $ 19,180,561 Reinvestment of distributions 574,935 5,351,873 654,382 5,879,994 Less shares repurchased (3,229,151) (30,032,780) (2,814,975) (25,231,568) -------- --------- ---------- ----------- Net decrease (554,557) $ (5,082,850) (16,612) $ (171,013) -------- --------- ---------- ----------- Class B Shares sold 1,330,447 $ 12,402,112 773,773 $ 6,968,566 Reinvestment of distributions 55,012 508,688 20,268 182,607 Less shares repurchased (528,935) (4,897,315) (139,897) (1,271,672) -------- --------- ---------- ----------- Net increase 856,524 $ 8,013,485 654,144 $ 5,879,501 -------- --------- ---------- ----------- Class C* Shares sold 37,622 $ 345,291 Reinvestment of distributions 497 4,502 Less shares repurchased (141) (1,264) -------- --------- Net increase 37,978 $ 348,529 -------- ---------
*Class C shares were first publicly offered on January 31, 1996. The accompanying notes are an integral part of these financial statements 16 Pioneer Bond Fund FINANCIAL HIGHLIGHTS 6/30/96
Year Ended Year Ended Year Ended Year Ended Year Ended 6/30/96 6/30/95 6/30/94 6/30/93 6/30/92 CLASS A Net asset value, beginning of year $ 9.35 $ 9.04 $ 9.81 $ 9.37 $ 8.99 -------- -------- -------- -------- ---------- Increase (decrease) from investment operations: Net investment income $ 0.64 $ 0.68 $ 0.67 $ 0.70 $ 0.74 Net realized and unrealized gain (loss) on investments (0.27) 0.31 (0.77) 0.44 0.39 -------- -------- -------- -------- ---------- Net increase (decrease) from investment operations $ 0.37 $ 0.99 $ (0.10) $ 1.14 $ 1.13 Distributions to shareholders from: Net investment income (0.64) (0.68) (0.67) (0.70) (0.75) -------- -------- -------- -------- ---------- Net increase (decrease) in net asset value $ (0.27) $ 0.31 $ (0.77) $ 0.44 $ 0.38 -------- -------- -------- -------- ---------- Net asset value, end of year $ 9.08 $ 9.35 $ 9.04 $ 9.81 $ 9.37 -------- -------- -------- -------- ---------- Total return* 4.02% 11.48% (1.26%) 12.67% 13.03% Ratio of net expenses to average net assets 1.19%+ 1.14% 1.05% 1.10% 1.09% Ratio of net investment income to average net assets 6.80%+ 7.55% 6.93% 7.37% 8.04% Portfolio turnover rate 39% 37% 39% 37% 17% Net assets, end of year (in thousands) $101,957 $110,158 $106,659 $112,900 $102,503 Ratios assuming reduction for fees paid indirectly: Net expenses 1.18% - - - - Net investment income 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 17 Pioneer Bond Fund FINANCIAL HIGHLIGHTS 6/30/96
Year Ended Year Ended 4/4/94 to 6/30/96 6/30/95 6/30/94 CLASS B Net asset value, beginning of period $ 9.31 $ 9.02 $ 9.23 -------- -------- ----------- Increase (decrease) from investment operations: Net investment income 0.57 0.60 0.14 Net realized and unrealized gain (loss) on investments (0.28) 0.31 (0.21) -------- -------- ----------- Net increase (decrease) from investment operations $ 0.29 $ 0.91 $(0.07) Distributions to shareholders: From net investment income (0.57) (0.62) (0.14) In excess of net investment income (0.01) - - -------- -------- ----------- Net increase (decrease) in net asset value $ (0.29) $ 0.29 $(0.21) -------- -------- ----------- Net asset value, end of period $ 9.02 $ 9.31 $ 9.02 -------- -------- ----------- Total return* 3.15% 10.57% (0.73%) Ratio of net expenses to average net assets 1.96%+ 1.97% 1.92%** Ratio of net investment income to average net assets 6.01%+ 6.60% 6.09%** Porfolio turnover rate 39% 37% 39% Net assets, end of period (in thousands) $14,843 $7,338 $1,212 Ratios assuming reduction for fees paid indirectly: Net expenses 1.94% - - Net investment income 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. ** Annualized. + Ratios assuming no reduction for fees paid indirectly. The accompanying notes are an integral part of these financial statements 18 Pioneer Bond Fund FINANCIAL HIGHLIGHTS 6/30/96
1/31/96 to 6/30/96 CLASS C+ Net asset value, beginning of period $ 9.54 -------- Increase (decrease) from investment operations: Net investment income 0.23 Net realized and unrealized loss on investments (0.52) -------- Net decrease from investment operations $(0.29) Distributions to shareholders: From net investment income (0.22) In excess of net investment income (0.01) -------- Net decrease in net asset value $(0.52) -------- Net asset value, end of period $ 9.02 -------- Total return* (3.00%) Ratio of net expenses to average net assets 2.18%**+ Ratio of net investment income to average net assets 5.79%**+ Porfolio turnover rate 39% Net assets, end of period (in thousands) $ 343 Ratios assuming reduction for fees paid indirectly: Net expenses 2.13%** Net investment income 5.84%**
+ Class C shares were first publicly offered on January 31, 1996. * 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 19 Pioneer Bond Fund NOTES TO FINANCIAL STATEMENTS 6/30/96 1. Organization and Significant Accounting Policies Pioneer Bond Fund (the Fund) is a Massachusetts 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 from a high quality portfolio. The Fund offers three classes of shares - Class A, Class B and Class C shares. Class C shares were first publicly offered on January 31, 1996. The shares of Class A, Class B and Class C 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 have 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 on trade date. Securities are valued based on valuations furnished by an independent pricing service that utilizes a matrix system. This matrix system reflects such factors as security prices, yields, maturities, and ratings and is supplemented by dealer and exchange quotations and fair market value information from other sources, as required. Principal amounts of mortgage-backed securities are adjusted for monthly paydowns. Temporary cash investments are valued at amortized cost. Interest income is recorded on the accrual basis. 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. 20 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, 1996, the Fund has reclassed $22,303 to paid-in capital and to distributions in excess of net investment income. This 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 on trade date. Net losses, if any, as a result of cancellations are absorbed by Pioneer Funds Distributor, Inc. (PFD), the principal underwriter for the Fund and an indirect subsidiary of The Pioneer Group, Inc. (PGI). PFD earned $39,583 in underwriting commissions on the sale of fund shares during the year ended June 30, 1996. 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. Distributions paid by the Fund, if any, with respect to each class of shares are calculated in the same manner, at the same time, on the same day and in the same amount, except that Class A, Class B and Class C shares can bear different transfer agent and distribution fees. D. Class Allocations Distribution fees are calculated based on the average daily net asset value 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 expenses (see Note 3). Income, common expenses and realized and unrealized 21 Pioneer Bond Fund NOTES TO FINANCIAL STATEMENTS 6/30/96 (continued) 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. 2. Management Agreement Pioneering Management Corporation (PMC), 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 agreement, certain other services and costs, including accounting, regulatory reporting and insurance premiums, are paid by the Fund. Included in due to affiliates is $44,246 and $6,085 in management and accounting fees, respectively, payable to PMC at June 30, 1996. 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 $23,103 in transfer agent fees payable to PSC at June 30, 1996. 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 sevice fee of up to 0.25% of the Fund's average daily net assets 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 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 $66,628 in distribution fees payable to PFD at June 30, 1996. 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 certain net asset value purchases of Class A shares that are redeemed 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 4.0%, based on the lower of cost or market value of shares being 22 Pioneer Bond Fund redeemed. Redemptions of Class C shares within one year of purchase are subject to a CDSC of 1.00%. Proceeds from the CDSC are paid to PFD. For the year ended June 30, 1996, CDSCs in the amount of $33,807 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, 1996, the Fund's expenses were reduced by $19,157 under such arrangements. 23 Pioneer Bond Fund REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Shareholders and the Board of Trustees of Pioneer Bond Fund: We have audited the accompanying balance sheet of Pioneer Bond Fund, including the schedule of investments, as of June 30, 1996, and the related statement of operations, the statements of changes in net assets and 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 generally accepted auditing standards. 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, 1996 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, 1996, the results of its operations, the changes in its net assets and financial highlights for the periods presented, in conformity with generally accepted accounting principles. ARTHUR ANDERSEN LLP Boston, Massachusetts August 1, 1996 24 Pioneer Bond Fund TAX TREATMENT OF DISTRIBUTIONS Made during the Year Ended 6/30/96 During the year ended 6/30/96, Pioneer Bond Fund paid the following distributions from net investment income:
Distributions Distributions Distributions Payment Per Share Per Share Per Share Date (Class A) (Class B) (Class C)* 7/31/95 $0.055 $0.053 $ - 8/31/95 0.055 0.053 - 9/29/95 0.053 0.048 - 10/31/95 0.053 0.048 - 11/30/95 0.053 0.048 - 12/29/95 0.054 0.049 - 1/31/96 0.054 0.049 - 2/29/96 0.052 0.047 0.047 3/29/96 0.053 0.047 0.047 4/30/96 0.054 0.047 0.047 5/31/96 0.054 0.047 0.047 6/28/96 0.051 0.045 0.045 --------- --------- ----------- Total $0.641 $0.581 $0.233 --------- --------- -----------
For purposes of the dividend exclusion, none of the distributions per share qualify for the exclusion. *Class C shares were first publicly offered on January 31, 1996. 25 Pioneer Bond Fund TRUSTEES' FEES AND SHARE OWNERSHIP 6/30/96 Trustees' Fees, Principal Shareholders and Share Ownership of Trustees and Officers (Unaudited) The aggregate direct remuneration paid by the Fund to trustees and officers during the year ended June 30, 1996 was $13,571, plus expenses incurred in attending trustees meetings of $3,618. Fees of trustees who are affiliated with or are "interested persons" of Pioneering Management Corporation and Pioneer Funds Distributor, Inc., investment adviser and underwriter, respectively, of the Fund ($19,206 in 1996), are reimbursed to the Fund by Pioneering Management Corporation in accordance with the management contract with the Fund. At June 30, 1996, the trustees and officers of the Fund owned beneficially 146,331 Class A shares of the Fund (approximately 1.3% of the outstanding Class A shares). The Pioneer Group, Inc. is a publicly held corporation of which Mr. Cogan beneficially owned approximately 15% of the outstanding shares of capital stock at June 30, 1996. 26 Pioneer Bond Fund TRUSTEES, OFFICERS AND SERVICE PROVIDERS Trustees Officers John F. Cogan, Jr. John F. Cogan, Jr., Chairman and Richard H. Egdahl, M.D. President Margaret B.W. Graham David D. Tripple, Executive Vice President John W. Kendrick Sherman B. Russ, Vice President Marguerite A. Piret William H. Keough, Treasurer David D. Tripple Joseph P. Barri, Secretary Stephen K. West John Winthrop Investment Adviser Pioneering Management Corporation Custodian Brown Brothers Harriman & Co. Independent Public Accountants Arthur Andersen LLP Principal Underwriter Pioneer Funds Distributor, Inc. Legal Counsel Hale and Dorr Shareholder Services and Transfer Agent Pioneering Services Corporation 27 This page for your notes. How to Contact Pioneer We are pleased to offer a variety of convenient ways for you to contact us for assistance or information. You can call us for:
Account information, including existing accounts, new accounts, prospectuses, applications and service forms 1-800-225-6292 FactFoneSM 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 Or write to us at: 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)
This report must be preceded or accompanied by a current Fund prospectus. [Pioneer Logo] Pioneer Funds Distributor, Inc. 60 State Street Boston, Massachusetts 02109 0896-3597 (c) Pioneer Funds Distributor, Inc. [Recycle symbol]Printed on Recycled Paper -----END PRIVACY-ENHANCED MESSAGE-----