Pioneer
Solutions - Balanced Fund
Prospectus | December 1, 2023
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Class
A Shares |
Class
C Shares |
Class
K Shares |
Class
R Shares |
Class
Y Shares |
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PIALX |
PIDCX |
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BALRX |
IMOYX |
Contents
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None of the
Securities and Exchange Commission, the Commodity Futures Trading Commission, or
any state securities agency has approved or disapproved the fund's shares or
determined whether this prospectus is accurate or complete. Any representation
to the contrary is a crime.
An
investment in the fund is not a bank deposit and is not insured or guaranteed by
the Federal Deposit Insurance Corporation or any other government
agency.
Contact
your investment professional to discuss how the fund may fit into your
portfolio.
Fund
summary
(fees paid directly from your investment)
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Class
A |
Class
C |
Class
K |
Class
R |
Class
Y |
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Maximum
sales charge (load) when you buy shares
(as
a percentage of offering price) |
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Maximum
deferred sales charge (load) (as a
percentage
of offering price or the amount you
receive
when you sell shares, whichever is less) |
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(expenses that you pay each year as a percentage of the value of your investment)
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Class
A |
Class
C |
Class
K |
Class
R |
Class
Y |
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Management
Fees2
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Distribution
and Service (12b-1) Fees |
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Other
Expenses3 |
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Acquired
Fund Fees and Expenses4 |
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Total
Annual Fund Operating Expenses Plus
Acquired
Fund Fees and Expenses4 |
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1
Fund
summary
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Class
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Class
C |
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Class
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Class
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Class
Y |
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3
Fund
summary
4
5
Fund
summary
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Fund
summary
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Fund
summary
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Fund
summary
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Fund
summary
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15
Fund
summary
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1
Year |
5
Years |
10
Years |
Since
Inception |
Inception
Date |
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Class
A |
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Return
before taxes |
- |
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Return
after taxes on distributions |
- |
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Return
after taxes on distributions and
sale
of shares |
- |
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Class
C |
- |
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Class
R |
- |
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Class
Y |
- |
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Blended
Benchmark (60% MSCI World NR
Index/40%
Bloomberg US Aggregate
Bond
Index) (reflects no deduction for
fees,
expenses or taxes) |
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MSCI
World NR Index (reflects no
deduction
for fees, expenses or taxes) |
- |
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Bloomberg
US Aggregate Bond Index
(reflects
no deduction for fees, expenses
or
taxes) |
- |
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16
Management
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Investment
adviser |
Amundi
Asset Management US, Inc. (“Amundi
US”) |
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Portfolio
management |
Kenneth
J. Taubes, Executive Vice President and
Chief
Investment Officer, U.S. of Amundi US
(portfolio
manager of the fund since 2018); and
Marco
Pirondini, Senior Managing Director and
Head
of Equities, U.S. of Amundi US (portfolio
manager
of the fund since 2018) |
Purchase
and sale of fund shares
You may purchase, exchange
or sell (redeem) shares each day the New York Stock Exchange is open through
your financial intermediary or, for accounts held directly with the fund, by
contacting the fund in writing or by telephone: Pioneer Funds, P.O. Box 534427,
Pittsburgh, PA 15253-4427, tel. 1-800-225-6292.
Your
initial investment for Class A or Class C shares must be at least $1,000.
Additional investments must be at least $100 for Class A shares and $500 for
Class C shares. Generally, the initial investment for Class K or Class Y shares
must be at least $5 million. This amount may be invested in one or more of the
Pioneer mutual funds that currently offer Class K or Class Y shares, as
applicable. There is no minimum additional investment amount for Class K or
Class Y shares. There is no minimum investment amount for Class R
shares.
Tax
information
The fund
intends to make distributions that may be taxed as ordinary income, qualified
dividend income, or capital gains.
Payments
to broker-dealers and other financial intermediaries
If you
purchase the fund through a broker-dealer or other financial intermediary (such
as a bank), the fund and its related companies may pay the intermediary for the
sale of fund shares and related services. These payments create a conflict of
interest by influencing the broker-dealer or other intermediary and your
salesperson or investment professional to recommend the fund over another
investment. Ask your salesperson or investment professional or visit your
financial intermediary’s website for more information.
17
More
on the fund’s investment objectives and strategies
Investment
objectives
Long-term
capital growth and current income.
The fund’s
investment objectives may be changed without shareholder approval. The fund will
provide at least 30 days’ written notice prior to implementing any change to its
investment objectives.
Principal
investment strategies
The fund
is a “fund of funds.” The fund seeks to achieve its investment objectives by
investing in other funds (“underlying funds”) and using asset allocation
strategies to allocate its assets among the underlying funds.
Asset
allocation process
The fund
invests in underlying funds managed by Amundi Asset Management US, Inc. (“Amundi
US”) or one of its affiliates.
The fund allocates its
assets among underlying funds with exposure to the broad asset classes of
equity, fixed income and short-term (money market) investments. The fund also
may invest in underlying funds with exposure to non-traditional - so-called
“alternative” - asset classes such as real estate investment trusts (REITs), or
that use alternative strategies, such as market neutral strategies (strategies
that seek to achieve positive returns while attempting to limit general market
exposure) or relative value strategies (strategies that seek to identify
securities that are undervalued relative to each other or historical norms). The
fund may invest in underlying funds with exposure to debt and equity securities
of issuers located throughout the world, including both developed and emerging
markets.
The fund
does not have target ranges for the allocation of assets among asset classes or
individual underlying funds. The fund invests a minimum of 25% of its assets in
each of fixed income and equity securities. The fund’s exposure to different
asset classes and allocations among underlying funds will change from time to
time in response to broad economic and market factors, as well as strategic and
tactical considerations. The equity securities to which the fund may have
exposure may be of any market capitalization. The fixed income securities to
which the fund may have exposure may be of any maturity and of any credit
quality, including high yield or “junk” bonds.
Amundi US
allocates the fund's assets among underlying funds based on strategic
positioning and tactical considerations, taking into account both broad economic
and market factors and factors specific to particular investments. Amundi US
allocates the fund's investments in the underlying funds based on an evaluation
of three components: strategic asset allocation (generally, the weighting of
allocations
18
among
broad asset classes to capture market returns), tactical asset allocation
(generally, the weighting of allocations to various sub-categories within broad
asset classes to add value relative to the general strategic allocations) and
fund selection. Amundi US's analysis in selecting underlying funds includes an
assessment of a fund's historical relative and absolute performance, volatility
and other risk characteristics, and correlation with other funds and benchmarks.
Amundi US considers the relative return potential of investments in view of
their expected relative risk, including potential volatility and drawdown risk
(the risk of significant loss, measured from peak value) among other risks.
Amundi US also analyzes the fund's investment strategies, investment process and
portfolio management team. The goal of this process is to identify a combination
of investments with the potential to provide total return consistent with the
fund's overall risk/return profile.
As part of its asset
allocation strategy, the fund may invest in Pioneer Multi-Asset Income Fund,
among other Pioneer Funds. Pioneer Multi-Asset Income Fund has the flexibility
to invest in a broad range of income-producing investments, including both debt
securities and equity securities. Pioneer Multi-Asset Income Fund’s investments
in debt securities may include instruments and obligations of U.S. and non-U.S.
corporate and other non-governmental entities, those of U.S. and non-U.S.
governmental entities, mortgage-related or mortgage-backed securities (including
“sub-prime” mortgages), asset-backed securities, floating rate loans,
convertible securities, Treasury Inflation Protected Securities (“TIPS”) and
other inflation-linked debt securities, subordinated debt securities,
insurance-linked securities, and funds that invest primarily in debt securities.
Pioneer Multi-Asset Income Fund’s investments in equity securities include
common stocks, rights, warrants, depositary receipts, funds that invest
primarily in equity securities, preferred stock, equity interests in real estate
trusts (REITs), equity-linked notes and master limited partnerships. Pioneer
Multi-Asset Income Fund may invest in the securities of issuers located
throughout the world, including in emerging markets. As of September 30, 2023,
approximately 31% of the fund was allocated to Pioneer Multi-Asset Income Fund.
The fund’s allocation among underlying funds, including Pioneer Multi-Asset
Income Fund, will change from time to time.
As part of
its asset allocation strategy, the fund may invest in Pioneer Global Sustainable
Equity Fund, among other funds. Pioneer Global Sustainable Equity Fund normally
invests at least 80% of its net assets in equity securities of issuers located
throughout the world. Normally, the fund invests at least a minimum percentage
of its net assets in issuers located outside of the United States. The minimum
percentage is the lesser of (a) 40% or (b) the percentage of the MSCI World NR
Index that is represented by non-U.S. issuers from time to time minus 10
percentage points. For example, if non-U.S. issuers represent 45% of the MSCI
19
More
on the fund’s investment objectives and strategies
World NR Index, the
minimum percentage is 35% and in that case the fund will normally invest at
least 35% of its net assets in issuers located outside of the U.S.
Notwithstanding the foregoing, if the minimum percentage determined as described
above is more than 30%, the minimum percentage may be reduced to 30% for so long
as market conditions for these investments or in specific foreign markets are
deemed unfavorable by the adviser. The fund also applies ESG criteria to its
investments. Under normal circumstances, the fund invests at least 80% of its
net assets (plus the amount of borrowings, if any, for investment purposes) in
securities of issuers that the adviser believes adhere to the fund’s ESG
criteria. For purposes of the 80% investment policy, “ESG criteria” is defined
as the exclusion of investments issued by companies significantly involved in
the production of tobacco products and controversial military weapons,
consisting of cluster weapons, anti-personnel mines, nuclear weapons, and
biological and chemical weapons, and the operation of thermal coal mines. To the
extent possible on the basis of information available to the adviser, an issuer
will be deemed to be significantly involved in an activity if it derives more
than 10% of its gross revenues from such activities. As of September 30, 2023,
approximately 20% of the fund was allocated to Pioneer Global Sustainable Equity
Fund. The fund’s allocation among underlying funds, including Pioneer Global
Sustainable Equity Fund, will change from time to time.
Annual and
semi-annual reports for the underlying funds may be obtained on the fund’s
website at amundi.com/us.
Investments
typically are sold when Amundi US's overall assessment of market and economic
conditions changes or the assessments of the attributes of specific investments
change.
The fund’s
investment strategies and policies may be changed from time to time without
shareholder approval, unless specifically stated otherwise in this prospectus or
in the statement of additional information.
Each
underlying fund’s investment strategies may include the following investment
strategies:
Investments
in equity securities
Equity
securities
The fund
may invest in equity securities. Equity securities in which the fund invests
include common stocks and securities with common stock characteristics, such as
exchange-traded funds (ETFs) that invest primarily in equity securities,
depositary receipts, warrants, rights, equity interests in real estate
investment trusts (REITs) and preferred stocks.
20
Equity-linked
notes
An
equity-linked note (ELN) is a structured investment that has principal and/or
interest payments based on the value of a single equity security, a basket of
equity securities or an index of equity securities. An ELN typically provides
interest income, thereby offering a yield advantage over investing directly in
an underlying equity. The fund may purchase ELNs that trade on a securities
exchange or those that trade on the over-the-counter markets, as well as in
privately negotiated transactions with the issuer of the ELN. The liquidity of
an unlisted ELN is normally determined by the willingness of the issuer to make
a market in, or to unwind, the ELN. While the fund seeks to purchase unlisted
ELNs from issuers that it believes to be willing to, and capable of,
repurchasing the ELN at a reasonable price, there can be no assurance that the
fund will be able to sell the ELN at such a price or at all. The fund may or may
not hold an ELN until its maturity.
Investments
in REITs
REITs are
companies that invest primarily in income producing real estate or real estate
related loans or interests. Some REITs invest directly in real estate and derive
their income from the collection of rents and capital gains on the sale of
properties. Other REITs invest primarily in mortgages, including “sub-prime”
mortgages, secured by real estate and derive their income from collection of
interest.
Investments
in fixed income securities
Debt
securities
The fund
may invest in debt securities. Debt securities in which the fund invests include
U.S. government securities, debt securities of corporate and other issuers,
mortgage- and asset-backed securities and short-term debt securities. Generally,
the fund may acquire debt securities that are investment grade, but the fund may
invest in below investment grade debt securities (known as “junk bonds”),
including below investment grade convertible debt securities. A debt security is
investment grade if it is rated in one of the top four categories by a
nationally recognized statistical rating organization or determined to be of
equivalent credit quality by the adviser.
U.S.
government securities
The fund
may invest in U.S. government securities. U.S. government securities are
obligations of, or guaranteed by, the U.S. government, its agencies or
government-sponsored entities. U.S. government securities include obligations:
directly issued by or supported by the full faith and credit of the U.S.
government, like Treasury bills, notes and bonds and Government National
Mortgage Association (GNMA) certificates; supported by the right of the issuer
to borrow from the U.S.
21
More
on the fund’s investment objectives and strategies
Treasury,
like those of the Federal Home Loan Banks (FHLBs); supported by the
discretionary authority of the U.S. government to purchase the agency’s
securities, like those of the Federal National Mortgage Association (FNMA); or
supported only by the credit of the issuer itself, like the Tennessee Valley
Authority. U.S. government securities include issues by non-governmental
entities (like financial institutions) that carry direct guarantees from U.S.
government agencies. U.S. government securities include zero coupon securities
that make payments of interest and principal only upon maturity and which
therefore tend to be subject to greater volatility than interest-bearing
securities with comparable maturities.
Although
the U.S. government guarantees principal and interest payments on securities
issued by the U.S. government and some of its agencies, such as securities
issued by the GNMA, this guarantee does not apply to losses resulting from
declines in the market value of these securities. Some of the U.S. government
securities that the fund may hold are not guaranteed or backed by the full faith
and credit of the U.S. government, such as those issued by FNMA and the Federal
Home Loan Mortgage Corporation (FHLMC).
Mortgage-backed
securities
The fund
may invest in mortgage-backed securities. Mortgage-backed securities may be
issued by private issuers, by government-sponsored entities, such as FNMA or
FHLMC, or by agencies of the U.S. government, such as GNMA. Mortgage-backed
securities represent direct or indirect participation in, or are collateralized
by and payable from, mortgage loans secured by real property. The fund's
investments in mortgage-related securities may include mortgage derivatives and
structured securities.
The fund
may invest in collateralized mortgage obligations (CMOs). A CMO is a
mortgage-backed bond that is issued in multiple classes, each with a specified
fixed or floating interest rate and a final scheduled distribution date. The
holder of an interest in a CMO is entitled to receive specified cash flows from
a pool of underlying mortgages or other mortgage-backed securities. Depending
upon the class of CMO purchased, the holder may be entitled to payment before
the cash flow from the pool is used to pay holders of other classes of the CMO
or, alternatively, the holder may be paid only to the extent that there is cash
remaining after the cash flow has been used to pay other classes. A subordinated
interest may serve as a credit support for the senior securities purchased by
other investors.
The fund
may invest in commercial mortgage-backed securities (“CMBS”). CMBS are subject
to the risks generally associated with mortgage-backed securities. CMBS may not
be backed by the full faith and credit of the U.S. government and are subject to
risk of default on the underlying mortgages. CMBS issued by non-government
entities may offer higher yields than those issued by government
22
entities,
but also may be subject to greater volatility than government issues. CMBS react
differently to changes in interest rates than other bonds and the prices of CMBS
may reflect adverse economic and market conditions. Small movements in interest
rates (both increases and decreases) may quickly and significantly reduce the
value of CMBS.
The
commercial mortgages underlying certain commercial mortgage-backed securities
generally allow all or a substantial portion of the loan balance to be paid at
maturity, commonly known as a balloon payment. Some mortgage loans restrict
periodic adjustments by limiting changes in the borrower’s monthly principal and
interest payments rather than limiting interest rate changes. These payment caps
may result in negative amortization, where payments are less than the amount of
principal and interest owed, with excess amounts added to the outstanding
principal balance, which can extend the average life of the mortgage-backed
securities.
The fund
may invest in credit risk transfer securities. Credit risk transfer securities
are a type of mortgage-related security that transfers the credit risk related
to certain types of mortgage-backed securities to the owner of the credit risk
transfer security. Credit risk transfer securities are commonly issued by
government-sponsored enterprises (GSEs), such as FNMA or FHLMC, but may also be
issued by private entities such as banks or other financial institutions. Credit
risk transfer securities issued by GSEs are unguaranteed and unsecured fixed or
floating rate general obligations and are typically issued at par and have
stated final maturities. In addition, GSE-issued credit risk transfer securities
are structured so that: (i) interest is paid directly by the issuing GSE; and
(ii) principal is paid by the issuing GSE in accordance with the principal
payments and default performance of a pool of residential mortgage loans
acquired by the GSE. In this regard, holders of GSE credit risk transfer
securities receive compensation for providing credit protection to the GSE and,
when a specified level of losses on the underlying mortgage loans occurs, the
principal balance and certain payments owed to the holders of such GSE credit
risk transfer securities may be reduced.
In the
event that a government-sponsored enterprise fails to pay principal or interest
on its credit risk transfer securities or goes through a bankruptcy, insolvency
or similar proceeding, holders of such credit risk transfer securities have no
direct recourse to the underlying mortgage loans and will generally receive
recovery on par with other unsecured note holders in such a scenario. The risks
associated with an investment in credit risk transfer securities are different
than the risks associated with an investment in mortgage-backed securities
issued by FNMA and FHLMC, or other government-sponsored enterprise or issued by
a private issuer, because some or all of the mortgage default or credit risk
associated with the underlying
23
More
on the fund’s investment objectives and strategies
mortgage
loans is transferred to investors. As a result, investors in these securities
could lose some or all of their investment in these securities if the underlying
mortgage loans default.
Asset-backed
securities
The fund
may invest in asset-backed securities. Asset-backed securities represent
participations in, or are secured by and payable from, assets such as
installment sales or loan contracts, leases, credit card receivables and other
categories of receivables. The fund's investments in asset-backed securities may
include derivative and structured securities.
The fund
may invest in asset-backed securities issued by special entities, such as
trusts, that are backed by a pool of financial assets. The fund may invest in
collateralized debt obligations (CDOs), which include collateralized bond
obligations (CBOs), collateralized loan obligations (CLOs) and other similarly
structured securities. A CDO is a trust backed by a pool of fixed income
securities. The trust typically is split into two or more portions, called
tranches, which vary in credit quality, yield, credit support and right to
repayment of principal and interest. Lower tranches pay higher interest rates
but represent lower degrees of credit quality and are more sensitive to the rate
of defaults in the pool of obligations. Certain CDOs may use derivatives, such
as credit default swaps, to create synthetic exposure to assets rather than
holding such assets directly.
Insurance-linked
securities
The fund
may invest in insurance-linked securities (ILS). The fund could lose a portion
or all of the principal it has invested in an ILS, and the right to additional
interest or dividend payments with respect to the security, upon the occurrence
of one or more trigger events, as defined within the terms of an
insurance-linked security. Trigger events, generally, are hurricanes,
earthquakes, or other natural events of a specific size or magnitude that occur
in a designated geographic region during a specified time period, and/or that
involve losses or other metrics that exceed a specific amount. There is no way
to accurately predict whether a trigger event will occur, and accordingly, ILS
carry significant risk. The fund is entitled to receive principal and interest
and/or dividend payments so long as no trigger event occurs of the description
and magnitude specified by the instrument. In addition to the specified trigger
events, ILS may expose the fund to other risks, including but not limited to
issuer (credit) default, adverse regulatory or jurisdictional interpretations
and adverse tax consequences.
The fund’s
investments in ILS may include event-linked bonds. ILS also may include
securities issued by special purpose vehicles (“SPVs”) or similar instruments
structured to comprise a portion of a reinsurer’s catastrophe-oriented business,
24
known as
quota share instruments (sometimes referred to as reinsurance sidecars), or to
provide reinsurance relating to specific risks to insurance or reinsurance
companies through a collateralized instrument, known as collateralized
reinsurance. Structured reinsurance investments also may include industry loss
warranties (“ILWs”). A traditional ILW takes the form of a bilateral reinsurance
contract, but there are also products that take the form of derivatives,
collateralized structures, or exchange-traded instruments. The fund may invest
in interests in pooled entities that invest primarily in ILS.
Where the
ILS are based on the performance of underlying reinsurance contracts, the fund
has limited transparency into the individual underlying contracts, and therefore
must rely upon the risk assessment and sound underwriting practices of the
insurer and/or reinsurer. Accordingly, it may be more difficult for Amundi US to
fully evaluate the underlying risk profile of the fund’s structured reinsurance
investments, and therefore the fund’s assets are placed at greater risk of loss
than if Amundi US had more complete information. Structured reinsurance
instruments generally will be considered illiquid securities by the
fund.
Floating
rate investments
Floating
rate investments are securities and other instruments with interest rates that
adjust or “float” periodically based on a specified interest rate or other
reference and include floating rate loans, repurchase agreements, money market
securities and shares of money market and short-term bond funds.
Floating
rate loans
Floating
rate loans are provided by banks and other financial institutions to large
corporate customers in connection with recapitalizations, acquisitions, and
refinancings. These loans are generally acquired as a participation interest in,
or assignment of, loans originated by a lender or other financial institution.
These loans are rated below investment grade. The rates of interest on the loans
typically adjust periodically by reference to a base lending rate, such as the
London Interbank Offered Rate (LIBOR) or Secured Overnight Financing Rate
(SOFR), a designated U.S. bank’s prime or base rate or the overnight federal
funds rate, plus a premium. Some loans reset on set dates, typically every 30 to
90 days, but not to exceed one year. Other loans reset periodically when the
underlying rate resets.
In most
instances, the fund’s investments in floating rate loans hold a senior position
in the capital structure of the borrower. Having a senior position means that,
if the borrower becomes insolvent, senior debtholders, like the fund, will be
paid before subordinated debtholders and stockholders of the borrower. Senior
loans typically are secured by specific collateral.
25
More
on the fund’s investment objectives and strategies
Floating
rate loans typically are structured and administered by a financial institution
that acts as an agent for the holders of the loan. Loans can be acquired
directly through the agent, by assignment from another holder of the loan, or as
a participation interest in the loan. When the fund is a direct investor in a
loan, the fund may have the ability to influence the terms of the loan, although
the fund does not act as the sole negotiator or originator of the loan.
Participation interests are fractional interests in a loan issued by a lender or
other financial institution. When the fund invests in a loan participation, the
fund does not have a direct claim against the borrower and must rely upon an
intermediate participant to enforce any rights against the
borrower.
Subordinated
securities
The fund
may invest in securities that are subordinated or “junior” to more senior
securities of the issuer. The investor in a subordinated security of an issuer
is entitled to payment after other holders of debt in that issuer.
Investment
grade securities
A debt
security is considered investment grade if it is:
•
Rated BBB
or higher at the time of purchase by Standard & Poor’s Financial Services
LLC;
•
Rated the
equivalent rating by a nationally recognized statistical rating organization;
or
•
Determined
to be of equivalent credit quality by Amundi US.
Securities
in the lowest category of investment grade (i.e., BBB) are considered to have
speculative characteristics. An investor can still lose significant amounts when
investing in investment grade securities.
Below
investment grade securities (“junk bonds”)
The fund
may invest in debt securities rated below investment grade or, if unrated, of
equivalent quality as determined by Amundi US. A debt security is below
investment grade if it is rated BB or lower by Standard & Poor’s Financial
Services LLC or the equivalent rating by another nationally recognized
statistical rating organization or determined to be of equivalent credit quality
by Amundi US. Debt securities rated below investment grade are commonly referred
to as “junk bonds”
and are
considered speculative. Below investment grade debt securities involve greater
risk of loss, are subject to greater price volatility and are less liquid,
especially during periods of economic uncertainty or change, than higher quality
debt securities. Below investment grade securities also may be more difficult to
value.
26
Debt
rating considerations
For
purposes of the fund's credit quality policies, if a security receives different
ratings from nationally recognized statistical rating organizations, the fund
will use the rating chosen by the portfolio manager as most representative of
the security’s credit quality. The ratings of nationally recognized statistical
rating organizations represent their opinions as to the quality of the
securities that they undertake to rate and may not accurately describe the risks
of the securities. A rating organization may have a conflict of interest with
respect to a security for which it assigns a quality rating. In addition, there
may be a delay between a change in the credit quality of a security or other
asset and a change in the quality rating assigned to the security or other asset
by a rating organization. If a rating organization changes the quality rating
assigned to one or more of the fund’s securities, Amundi US will consider if any
action is appropriate in light of the fund's investment objectives and policies.
These ratings are used as criteria for the selection of portfolio securities, in
addition to Amundi US’s own assessment of the credit quality of potential
investments.
Equity
and fixed income investments
ESG
considerations
The
adviser integrates environmental, social and corporate governance (ESG)
considerations into its investment research process for certain underlying funds
by evaluating the business models and practices of issuers and their ESG-related
risks. The adviser believes ESG analysis is a meaningful facet of fundamental
research, the process of evaluating an issuer based on its financial position,
business operations, competitive standing and management. This process considers
ESG information, where available, in assessing an investment’s performance
potential. The adviser generally considers ESG information in the context of an
issuer’s respective sector or industry. The adviser may consider ESG ratings
provided by third parties or internal sources, as well as issuer disclosures and
public information, in evaluating issuers. ESG considerations are not a primary
focus of the fund, and the weight given by the adviser to ESG considerations in
making investment decisions will vary and, for any specific decision, they may
be given little or no weight. Notwithstanding the foregoing, the adviser
generally will not invest underlying fund assets in (i) companies that the
adviser determines have significant involvement in the manufacturing of complete
tobacco products, (ii) companies engaged in the production, sale, storage of, or
providing services for, certain controversial weapons, including chemical,
biological and depleted uranium weapons and certain antipersonnel mines and
cluster bombs, or (iii) companies with involvement in the production or sale of
nuclear weapons. For certain underlying funds that have an ESG focus, the
adviser generally will also not invest fund assets in (a) companies
27
More
on the fund’s investment objectives and strategies
developing
or planning to develop new thermal coal capacities, companies generating more
than 20% of their revenue from thermal coal mining extraction, companies with
annual thermal coal extraction of 70MT or more without intention to reduce, or
companies with revenue in thermal coal mining extraction and thermal coal power
generation that exceeds 50% of their revenue, or (b) issuers that violate,
repeatedly and seriously, one or more of the ten principles of the UN Global
Compact, without credible corrective action.
Non-U.S.
investments
The fund
may invest in securities of non-U.S. issuers, including securities of emerging
markets issuers. Non-U.S. issuers are issuers that are organized and have their
principal offices outside of the United States. Non-U.S. securities may be
issued by non-U.S. governments, banks or corporations, or private issuers, and
certain supranational organizations, such as the World Bank and the European
Union. The fund considers emerging market issuers to include issuers organized
under the laws of an emerging market country, issuers with a principal office in
an emerging market country, issuers that derive at least 50% of their gross
revenues or profits from goods or services produced in emerging market countries
or sales made in emerging market countries, or issuers that have at least 50% of
their assets in emerging market countries. Emerging markets generally will
include, but not be limited to, countries included in the Morgan Stanley Capital
International (MSCI) Emerging + Frontier Markets Index.
Derivatives
The fund may, but is not
required to, use futures and options on securities, indices and currencies,
forward foreign currency exchange contracts, swaps and other derivatives. The
fund also may enter into credit default swaps, which can be used to acquire or
to transfer the credit risk of a security or index of securities without buying
or selling the security or securities comprising the relevant index. The fund
may invest in credit default swap index products (“CDX”)
(swaps based
on a portfolio of credit default swaps with similar characteristics, such as
credit default swaps on high-yield bonds). A derivative is a security or
instrument whose value is determined by reference to the value or the change in
value of one or more securities, currencies, indices or other financial
instruments. The fund may use derivatives for a variety of purposes,
including:
•
In an
attempt to hedge against adverse changes in the market prices of securities,
interest rates or currency exchange rates
•
As a
substitute for purchasing or selling securities
•
To attempt
to increase the fund’s return as a non-hedging strategy that may be considered
speculative
28
•
To manage
portfolio characteristics (for example, the fund's exposure to various market
segments)
•
As a cash
flow management technique
The fund
may choose not to make use of derivatives for a variety of reasons, and any use
may be limited by applicable law and regulations.
Inverse
floating rate obligations
The fund
may invest in inverse floating rate obligations (a type of derivative
instrument). The interest rate on inverse floating rate obligations will
generally decrease as short-term interest rates increase, and increase as
short-term rates decrease. Due to their leveraged structure, the sensitivity of
the market value of an inverse floating rate obligation to changes in interest
rates is generally greater than a comparable long-term bond issued by the same
issuer and with similar credit quality, redemption and maturity provisions.
Inverse floating rate obligations may be volatile and involve leverage
risk.
Cash
management and temporary investments
Normally, the fund invests
substantially all of its assets to meet its investment objectives. The fund may
invest the remainder of its assets in money market funds,
securities
with remaining maturities of less than one year or cash equivalents, including
overnight repurchase agreements, or may hold cash. For temporary defensive
purposes, including during periods of unusual cash flows, the fund may depart
from its principal investment strategies and invest part or all of its assets in
these securities or may hold cash. The fund may adopt a defensive strategy when
the adviser believes securities in which the fund normally invests have special
or unusual risks or are less attractive due to adverse market, economic,
political or other conditions. During such periods, it may be more difficult for
the fund to achieve its investment objectives.
Additional
investment strategies
In
addition to the principal investment strategies discussed above, the fund and
each underlying fund may also use other techniques, including the following
non-principal investment strategies.
Repurchase
agreements
In a repurchase agreement,
the fund purchases securities from a broker/dealer or a bank, called the
counterparty, upon the agreement of the counterparty to repurchase the
securities from the fund at a later date, and at a specified price.
The
repurchase price is generally higher than the purchase price paid by the fund,
with the difference being income to the fund. The securities purchased serve as
the fund's collateral
29
More
on the fund’s investment objectives and strategies
for the
obligation of the counterparty to repurchase the securities. If the counterparty
does not repurchase the securities, the fund is entitled to sell the securities,
but the fund may not be able to sell them for the price at which they were
purchased, thus causing a loss. Additionally, if the counterparty becomes
insolvent, there is some risk that the fund will not have a right to the
securities, or the immediate right to sell the securities.
Reverse
repurchase agreements and borrowing
The fund
may enter into reverse repurchase agreements pursuant to which the fund
transfers securities to a counterparty in return for cash, and the fund agrees
to repurchase the securities at a later date and for a higher price. Reverse
repurchase agreements are treated as borrowings by the fund, are a form of
leverage and may make the value of an investment in the fund more volatile and
increase the risks of investing in the fund. The fund also may borrow money from
banks or other lenders for temporary purposes. The fund may borrow up to
33 1∕3% of its
total assets. Entering into reverse repurchase agreements and other borrowing
transactions may cause the fund to liquidate positions when it may not be
advantageous to do so in order to satisfy its obligations.
Short-term
trading
The fund
usually does not trade for short-term profits. The fund will sell an investment,
however, even if it has only been held for a short time, if it no longer meets
the fund's investment criteria. If the fund does a lot of trading, it may incur
additional operating expenses, which would reduce performance, and could cause
shareowners to incur a higher level of taxable income or capital
gains.
30
More
on the risks of investing in the fund
Principal
investment risks
You could
lose money on your investment in a fund. As with any mutual fund, there is no
guarantee that a fund will achieve its objectives. The fund’s investment
performance is directly related to the performance of the underlying funds. The
fund is exposed to the following risks through its investments in underlying
funds.
Market
risk. The
market prices of securities or other assets held by the fund may go up or down,
sometimes rapidly or unpredictably, due to general market conditions, such as
real or perceived adverse economic, political, or regulatory conditions,
political instability, recessions, inflation, changes in interest or currency
rates, lack of liquidity in the bond markets, the spread of infectious illness
or other public health issues, weather or climate events, armed conflict, market
disruptions caused by tariffs, trade disputes, sanctions or other government
actions, or other factors or adverse investor sentiment. If the market prices of
the fund's securities and assets fall, the value of your investment will go
down. A change in financial condition or other event affecting a single issuer
or market may adversely impact securities markets as a
whole.
Changes in market
conditions may not have the same impact on all types of securities. The value of
securities may also fall due to specific conditions that affect a particular
sector of the securities market or a particular issuer. In the past decade,
financial markets throughout the world have experienced increased volatility,
depressed valuations, decreased liquidity and heightened uncertainty.
Governmental and non-governmental issuers have defaulted on, or been forced to
restructure, their debts. These conditions may continue, recur, worsen or
spread. Events that have contributed to these market conditions include, but are
not limited to, major cybersecurity events; geopolitical events (including wars,
terror attacks and economic sanctions); measures to address budget deficits;
downgrading of sovereign debt; changes in oil and commodity prices; dramatic
changes in currency exchange rates; global pandemics; and public sentiment. The
long-term impact of the COVID-19 pandemic and its subsequent variants on
economies, markets, industries and individual issuers,
are not
known. Some sectors of the economy and individual issuers have experienced or
may experience particularly large losses. Periods of extreme volatility in the
financial markets;
reduced
liquidity of many instruments;
and
disruptions
to supply chains, consumer demand and employee availability, may continue
for
some
time.
Raising the ceiling on
U.S. government debt has become increasingly politicized. Any failure to
increase the total amount that the U.S. government is authorized to borrow could
lead to a default on U.S. government obligations, with unpredictable
consequences for economies and markets in the U.S. and elsewhere.
31
More
on the risks of investing in the fund
Inflation and interest
rates have increased and may rise further. These circumstances could adversely
affect the value and liquidity of the fund's investments, impair the fund's
ability to satisfy redemption requests, and negatively impact the fund's
performance. In addition, inflation, rising interest rates, global supply chain
disruptions and other market events could adversely affect the companies or
issuers in which the fund invests. Following Russia’s invasion of Ukraine,
Russian securities lost all, or nearly all, their market value. Other securities
or markets could be similarly affected by past or future political, geopolitical
or other events or conditions.
Governments and central
banks, including the U.S. Federal Reserve, have taken extraordinary and
unprecedented actions to support local and global economies and the financial
markets. These actions have resulted in significant expansion of public debt,
including in the U.S. The consequences of high public debt, including its future
impact on the economy and securities markets, may not be known for some time.
U.S. Federal Reserve or other U.S. or non-U.S. governmental or central bank
actions, including increases or decreases in interest rates, or contrary actions
by different governments, could negatively affect financial markets generally,
increase market volatility and reduce the value and liquidity of securities in
which the fund invests. Policy and legislative changes in the U.S. and in other
countries are affecting many aspects of financial regulation, and these and
other events affecting global markets, such as the United Kingdom’s exit from
the European Union (or Brexit), potential trade imbalances with China or other
countries, or sanctions or other government actions against Russia, other
nations or individuals or companies (or their countermeasures), may contribute
to decreased liquidity and increased volatility in the financial markets. The
impact of these changes on the markets, and the implications for market
participants, may not be fully known for some time.
The U.S. and other
countries are periodically involved in disputes over trade and other matters,
which may result in tariffs, investment restrictions and adverse impacts on
affected companies and securities. For example, the U.S. has imposed tariffs and
other trade barriers on Chinese exports, has restricted sales of certain
categories of goods to China, and has established barriers to investments in
China. Trade disputes may adversely affect the economies of the U.S. and its
trading partners, as well as companies directly or indirectly affected and
financial markets generally. The U.S. government has prohibited U.S. persons,
such as the fund, from investing in Chinese companies designated as related to
the Chinese military. These and possible future restrictions could limit the
fund's opportunities for investment and require the sale of securities at a loss
or make them illiquid. Moreover, the Chinese government is involved in a
longstanding dispute with Taiwan that has included threats of invasion. If the
political climate between the U.S. and China
32
does not improve or
continues to deteriorate, if China were to attempt unification of Taiwan by
force, or if other geopolitical conflicts develop or get worse, economies,
markets and individual securities may be severely affected both regionally and
globally, and the value of the fund's assets may go down.
Economies
and financial markets throughout the world are increasingly interconnected.
Economic, financial or political events, trading and tariff arrangements, armed
conflict including Russia's military invasion of Ukraine, terrorism, natural
disasters, infectious illness or public health issues, cybersecurity events,
supply chain disruptions, sanctions against Russia, other nations or individuals
or companies and possible countermeasures, and other circumstances in one
country or region, could have profound impacts on other countries or regions and
on global economies or markets. As a result, whether or not the fund invests in
securities of issuers located in or with significant exposure to the countries
or regions directly affected, the value and liquidity of the fund’s investments
may be negatively affected. The fund may experience a substantial or complete
loss on any security or derivative position.
Until
recently,
a commonly
used
reference
rate for floating rate securities
was
LIBOR
(London
Interbank
Offered
Rate).
ICE Benchmark
Administration, the administrator of LIBOR, has ceased publication of most LIBOR
settings on a representative basis.
Actions by
regulators have resulted in the establishment of alternative reference rates to
LIBOR in most major currencies. In the U.S.,
a common
benchmark replacement is based
on the
Secured Overnight Financing Rate
(SOFR)
published by
the Federal Reserve Bank of New York,
including
certain spread adjustments and benchmark replacement conforming
changes,
although
other benchmark replacements
(with or
without spread adjustments)
may
be used in
certain transactions. The impact of the transition from LIBOR on the fund's
transactions and financial
markets
generally
cannot yet be determined. The transition away from LIBOR may lead
to increased
volatility and illiquidity in markets for instruments that have relied on
LIBOR
and may
adversely affect the fund's
performance.
Risks
of investment in other funds. Investing
in other investment companies, including exchange-traded funds (ETFs), subjects
the fund to the risks of investing in the underlying securities or assets held
by those funds. Each underlying fund pursues its own investment objectives and
strategies and may not achieve its objectives. When investing in another fund,
the fund will bear a pro rata portion of the underlying fund’s expenses,
including management fees, in addition to its own expenses. Consequently, an
investment in the fund entails more direct and indirect expenses than a direct
investment in the underlying funds. Underlying
33
More
on the risks of investing in the fund
funds may themselves
invest in other investment companies. The fund may invest a significant portion
of its assets in a single underlying fund. Therefore, the performance of a
single underlying fund can have a significant effect on the performance of the
fund and the price of its shares. If underlying funds invest in the same or
similar securities, the fund may indirectly bear concentration risk with respect
to those investments. The adviser may be subject to potential conflicts of
interest in selecting underlying funds because the management fees paid to it by
some affiliated underlying funds are higher than the fees paid by other
affiliated and unaffiliated underlying funds. The portfolio managers may also be
subject to conflicts of interest in allocating fund assets among underlying
funds because the fund’s portfolio management team may also manage some of the
underlying funds. ETFs and closed-end funds are bought and sold based on market
prices and can trade at a premium or a discount to the ETF’s or closed-end
fund’s net asset
value.
The
underlying funds will not necessarily make consistent investment decisions,
which may also increase your costs. One underlying fund may buy the same
security that another underlying fund is selling. You would indirectly bear the
costs of both trades without achieving any investment purpose. These
transactions may also generate taxable gains. If you are a taxable shareholder,
you may receive taxable distributions consisting of gains from transactions by
the underlying funds as well as gains from the fund’s transactions in shares of
the underlying funds.
Furthermore,
Amundi US manages the underlying funds. Because the portfolio management teams
of each of the affiliated underlying funds may draw upon the resources of the
same equity and fixed income analyst team or may share common investment
management styles or approaches, the underlying funds may hold many common
portfolio positions, reducing the diversification benefits of an asset
allocation style.
In
addition, Amundi US will select affiliated underlying funds without considering
or canvassing the universe of unaffiliated underlying funds available, even
though there may (or may not) be one or more unaffiliated underlying funds that
investors might regard as more attractive for the fund or that have superior
returns.
Portfolio
selection risk. The
adviser’s evaluation of asset classes and market sectors in developing an
allocation model, and its selection and weighting of underlying funds,
securities or other investments within the allocation model, may prove to be
incorrect. To the extent that the fund invests a significant percentage of its
assets in any one underlying fund, the fund will be subject to a greater degree
to the risks particular to that underlying fund, and may experience greater
volatility as a result. With respect to an underlying fund, the adviser’s
judgment about the attractiveness, relative value or potential appreciation of
an equity security, or
34
about the
quality, relative yield or relative value of a fixed income security, or about a
particular sector, region, market segment or industry, or about an investment
strategy, or about interest rates or other market factors, may prove to be
incorrect or may not produce the desired results. There may be imperfections,
errors or limitations in the models, tools and information used by the adviser
to the fund or an underlying fund.
ESG
risk. The
fund’s adviser may consider ESG information in its investment research process.
This may mean forgoing some investment opportunities available to funds that do
not consider ESG information. In considering ESG information, the adviser may
use third party ESG ratings information that it believes to be reliable, but
such information may not be accurate or complete, or may be biased. ESG
considerations are not a primary focus of certain underlying funds, and the
weight given by the adviser to ESG considerations in making investment decisions
for such funds will vary and, for any specific decision, they may be given
little or no weight. Certain other underlying funds have ESG criteria which
exclude securities of issuers in certain industries. Excluding specific issuers
limits the universe of investments available to the fund as compared with other
funds that do not consider ESG criteria or ESG factors, which may mean forgoing
some investment opportunities available to funds that do not consider ESG
criteria or ESG factors. Accordingly, the fund may underperform other funds that
do not utilize an investment strategy that considers ESG criteria or ESG
factors. However, the strategy of seeking to identify companies with sustainable
business models is believed to provide potential return and risk benefits,
including the selection of issuers with fewer ESG-related risks.
Market
segment risk. To the
extent the fund emphasizes, from time to time, investments in a market segment,
the fund will be subject to a greater degree to the risks particular to that
segment, and may experience greater market fluctuation, than a fund without the
same focus.
Equity-linked
notes risk.
Investments in equity-linked notes (ELNs) often have risks similar to their
underlying securities, which may include market risk and, as applicable, risks
of non-U.S. investments and currency risks. In addition, since ELNs are in note
form, ELNs are also subject to certain risks of fixed income securities, such as
interest rate and credit risks. If the prices of the underlying securities move
in an unexpected manner, then the fund may not achieve the anticipated benefits
of an investment in an ELN, and may suffer losses, which could be significant
and could include the fund’s entire principal investment. An investment in an
ELN is also subject to counterparty risk, which is the risk that the issuer of
the ELN will default or become bankrupt and the fund will have difficulty being
repaid, or fail to be repaid, the principal amount of, or income from, its
35
More
on the risks of investing in the fund
investment. If an issuer
defaults, the fund would look to any underlying collateral to recover its
losses, but there can be no assurance that the collateral will be sufficient to
cover the fund's losses. Investments in ELNs are also subject to liquidity risk,
which may make ELNs difficult to sell and value. The liquidity of an unlisted
ELN is normally determined by the willingness of the issuer to make a market in
the ELN. While the fund will seek to purchase ELNs only from issuers that it
believes to be willing to, and capable of, repurchasing the ELN at a reasonable
price, there can be no assurance that the fund will be able to sell the ELN at
such price or at all. This may impair the fund’s ability to enter into other
transactions at a time when doing so might be advantageous. In addition, ELNs
may exhibit price behavior that does not correlate with the underlying
securities or a fixed income investment.
Equity
securities risk. Equity
securities are subject to the risk that stock prices may rise and fall in
periodic cycles and may perform poorly relative to other investments. This risk
may be greater in the short term. Equity securities represent an ownership
interest in an issuer, rank junior in a company's capital structure to debt
securities and consequently may entail greater risk of loss than fixed income
securities.
Following
is additional information regarding the risks of investing in equity
securities.
Value
style risk. The
prices of securities the adviser believes are undervalued may not appreciate as
expected or may go down. Value stocks may fall out of favor with investors and
underperform the overall equity market. A value stock may not increase in price
as anticipated by the adviser if other investors fail to recognize the company's
value and bid up the price or the factors that the adviser believes will
increase the price of the security do not occur or do not have the anticipated
effect.
Growth
style risk. The
fund's investments may not have the growth potential originally expected. Growth
stocks may fall out of favor with investors and underperform the overall equity
market. Growth securities may also be more volatile than other investments
because they often do not pay dividends. The values of growth securities tend to
go down when interest rates rise because the rise in interest rates reduces the
current value of future cash flows.
Small
and mid-size companies risk. Compared
to large companies, small- and mid-size companies, and the market for their
equity securities, may be more sensitive to changes in earnings results and
investor expectations, or poor economic or market conditions, including those
experienced during a recession, have more limited product lines, operating
histories, markets or capital resources, may be
36
dependent
upon a limited management group, experience sharper swings in market values,
have limited liquidity, be harder to value or to sell at the times and prices
the adviser thinks appropriate, and offer greater potential for gain and
loss.
Risks
of investments in real estate related securities. The fund
has risks associated with the real estate industry. Although the fund does not
invest directly in real estate, it may invest in REITs and other equity
securities of real estate industry issuers. These risks may include:
•
The U.S.
or a local real estate market declines due to adverse economic conditions,
foreclosures, overbuilding and high vacancy rates, reduced or regulated rents or
other causes
•
Interest
rates go up. Rising interest rates can adversely affect the availability and
cost of financing for property acquisitions and other purposes and reduce the
value of a REIT's fixed income investments
•
The values
of properties owned by a REIT or the prospects of other real estate industry
issuers may be hurt by property tax increases, zoning changes, other
governmental actions, environmental liabilities, natural disasters or increased
operating expenses
•
A REIT in
the fund's portfolio is, or is perceived by the market to be, poorly
managed
•
If the
fund's real estate related investments are concentrated in one geographic area
or property type, the fund will be particularly subject to the risks associated
with that area or property type
REITs can
generally be classified as equity REITs, mortgage REITs or hybrid REITs. Equity
REITs invest primarily in real property and derive income mainly from the
collection of rents. They may also realize gains or losses from the sale of
properties. Equity REITs will be affected by conditions in the real estate
rental market and by changes in the value of the properties they own. Mortgage
REITs invest primarily in mortgages and similar real estate interests and derive
income primarily from interest payments. Mortgage REITs will be affected by
changes in creditworthiness of borrowers and changes in interest rates. Mortgage
REITs are subject to the risks of default of the mortgages or mortgage-related
securities in which they invest, and REITs that invest in so-called “sub-prime”
mortgages are particularly subject to this risk. Hybrid REITs invest both in
real property and in mortgages.
Investing
in REITs involves certain unique risks. REITs are dependent on management
skills, are not diversified and are subject to the risks of financing projects.
REITs are typically invested in a limited number of projects or in a particular
market segment or geographic region, and therefore are more susceptible to
adverse developments affecting a single project, market segment or geographic
region than more broadly diversified investments. REITs are subject to heavy
cash flow
37
More
on the risks of investing in the fund
dependency,
defaults by mortgagors or other borrowers and tenants, self-liquidation and the
possibility of failing to qualify for certain tax and regulatory exemptions.
REITs may have limited financial resources and may experience sharper swings in
market values and trade less frequently and in a more limited volume than
securities of larger issuers. In addition to its own expenses, the fund will
indirectly bear its proportionate share of any management and other expenses
paid by REITs in which it invests. Such expenses are not shown in “Annual fund
operating expenses” above.
Many real
estate companies, including REITs, utilize leverage (and some may be highly
leveraged), which increases investment risk and could adversely affect a real
estate company’s operations and market value. Mortgage REITs tend to be more
leveraged than equity REITs. In addition, many mortgage REITs manage their
interest rate and credit risks through the use of derivatives and other hedging
techniques. In addition, capital to pay or refinance a REIT’s debt may not be
available or reasonably priced. Financial covenants related to real estate
company leveraging may affect the company’s ability to operate
effectively.
Risks
of convertible securities.
Convertible securities generally offer lower interest or dividend yields than
non-convertible securities of similar quality. As with all fixed income
securities, the market values of convertible securities tend to decline as
interest rates increase and, conversely, to increase as interest rates decline.
However, when the market price of the common stock underlying a convertible
security approaches or exceeds the conversion price, the convertible security
tends to reflect the market price of the underlying common stock. As the market
price of the underlying common stock declines, the convertible security tends to
trade increasingly on a yield basis and thus may not decline in price to the
same extent as the underlying common stock. Convertible securities rank senior
to common stocks in an issuer's capital structure and consequently entail less
risk than the issuer's common stock. The value of a synthetic convertible
security will respond differently to market fluctuations than a traditional
convertible security because a synthetic convertible security is composed of two
or more separate securities or instruments, each with its own market value. If
the value of the underlying common stock or the level of the index involved in
the convertible component falls below the exercise price of the warrant or
option, the warrant or option may lose all value.
Preferred
stocks risk.
Preferred stocks may pay fixed or adjustable rates of return. Preferred stocks
are subject to issuer-specific and market risks applicable generally to equity
securities. In addition, a company’s preferred stocks generally pay dividends
only after the company makes required payments to holders of its bonds and other
debt. Thus, the value of preferred stocks will usually react more
38
strongly
than bonds and other debt to actual or perceived changes in the company’s
financial condition or prospects. The market value of preferred stocks generally
decreases when interest rates rise. Also, the market prices of preferred stocks
are more sensitive to changes in the issuer's creditworthiness than are the
prices of debt securities. Generally, under normal circumstances, preferred
stocks do not carry voting rights. Preferred stocks may trade less frequently
and in a more limited volume and may be subject to more abrupt or erratic price
movements than other securities. Preferred stocks of smaller companies may be
more vulnerable to adverse developments than preferred stocks of larger
companies.
Risks
of warrants and rights. Warrants
and rights give the fund the right to buy stock. A warrant specifies the amount
of underlying stock, the purchase (or “exercise”) price, and the date the
warrant expires. The fund has no obligation to exercise the warrant and buy the
stock. A warrant has value only if the fund is able to exercise it or sell it
before it expires. If the price of the underlying stock does not rise above the
exercise price before the warrant expires, the warrant generally expires without
any value and the fund loses any amount it paid for the warrant. Thus,
investments in warrants may involve substantially more risk than investments in
common stock. Warrants may trade in the same markets as their underlying stock;
however, the price of the warrant does not necessarily move with the price of
the underlying stock.
The fund
may purchase securities pursuant to the exercise of subscription rights, which
allow an issuer’s existing shareholders to purchase additional common stock at a
price substantially below the market price of the shares. The failure to
exercise subscription rights to purchase common stock would result in the
dilution of the fund’s interest in the issuing company. The market for such
rights is not well developed and, accordingly, the fund may not always realize
full value on the sale of rights.
Risks
of initial public offerings. Companies
involved in initial public offerings (IPOs) generally have limited operating
histories, and prospects for future profitability are uncertain. Information
about the companies may be available for very limited periods. The market for
IPO issuers has been volatile, and share prices of newly public companies have
fluctuated significantly over short periods of time. Further, stocks of newly
public companies may decline shortly after the IPO. There is no assurance that
the fund will have access to IPOs. The purchase of IPO shares may involve high
transaction costs. Because of the price volatility of IPO shares, the fund may
choose to hold IPO shares for a very short period of time. This may increase the
turnover of the fund’s portfolio and may lead to increased expenses to the fund,
such as commissions and transaction costs. The market for IPO shares
39
More
on the risks of investing in the fund
can be
speculative and/or inactive for extended periods of time. There may be only a
limited number of shares available for trading. The limited number of shares
available for trading in some IPOs may also make it more difficult for the fund
to buy or sell significant amounts of shares without an unfavorable impact on
prevailing prices.
Debt
securities risk. Factors
that could contribute to a decline in the market value of debt securities in the
fund include rising interest rates, if the issuer or other obligor of a security
held by the fund fails to pay principal and/or interest, otherwise defaults or
has its credit rating downgraded or is perceived to be less creditworthy or the
credit quality or value of any underlying assets declines. A general rise in
interest rates could adversely affect the price and liquidity of fixed income
securities and could also result in increased redemptions from the fund. Junk
bonds involve greater risk of loss, are subject to greater price volatility and
are less liquid, especially during periods of economic uncertainty or change,
than higher quality debt securities; they may also be more difficult to value.
Junk bonds have a higher risk of default or are already in default and are
considered speculative.
Following
is additional information regarding the risks of investing in debt
securities.
Interest
rate risk. The
market prices of the fund’s fixed income securities may fluctuate significantly
when interest rates change. When interest rates rise, the value of fixed income
securities and therefore the value of your investment in the fund, generally
falls. For example, if interest rates increase by 1%, the value of a fund’s
portfolio with a portfolio duration of ten years would be expected to decrease
by 10%, all other things being equal.
In recent
years, interest rates and credit spreads in the U.S. have been at historic lows.
The U.S. Federal Reserve has raised certain interest rates, and interest rates
may continue to go up. A general rise in interest rates could adversely affect
the price and liquidity of fixed income securities and could also result in
increased redemptions from the fund. A change in interest rates will not have
the same impact on all fixed income securities. Generally, the longer the
maturity or duration of a fixed income security, the greater the impact of a
rise in interest rates on the security’s value. The maturity of a security may
be significantly longer than its effective duration. A security’s maturity and
other features may be more relevant than its effective duration in determining
the security’s sensitivity to other factors affecting the issuer or markets
generally, such as changes in credit quality or in the yield premium that the
market may establish for certain types of securities (sometimes called “credit
spread”). In general, the longer its maturity the more a security may be
susceptible to these factors. When the credit spread for a fixed income security
goes up or “widens,” the value of the security will generally go down.
Calculations
40
of
duration and maturity may be based on estimates and may not reliably predict a
security’s price sensitivity to changes in interest rates. Moreover, securities
can change in value in response to other factors, such as credit risk. In
addition, different interest rate measures (such as short- and long-term
interest rates and U.S. and foreign interest rates), or interest rates on
different types of securities or securities of different issuers, may not
necessarily change in the same amount or in the same direction. When interest
rates go down, the income received by the fund, and the fund’s yield, may
decline. Also, when interest rates decline, investments made by the fund may pay
a lower interest rate, which would reduce the income received and distributed by
the fund.
Certain
fixed income securities pay interest at variable or floating rates. Variable
rate securities tend to reset at specified intervals, while floating rate
securities may reset whenever there is a change in a specified index rate. In
most cases, these reset provisions reduce the impact of changes in market
interest rates on the value of the security. However, some securities do not
track the underlying index directly, but reset based on formulas that may
produce a leveraging effect; others may also provide for interest payments that
vary inversely with market rates. The market prices of these securities may
fluctuate significantly when interest rates change. Yield generated by the fund
may decline due to a decrease in market interest rates.
Credit
risk. If an
obligor (such as the issuer itself or a party offering credit enhancement) for a
security held by the fund fails to pay, otherwise defaults, is perceived to be
less creditworthy, becomes insolvent or files for bankruptcy, a security’s
credit rating is downgraded or the credit quality or value of an underlying
asset declines, the value of your investment could decline. Changes in actual or
perceived creditworthiness may occur quickly. If the fund enters into financial
contracts (such as certain derivatives, repurchase agreements, reverse
repurchase agreements, and when-issued, delayed delivery and forward commitment
transactions), the fund will be subject to the credit risk presented by the
counterparty. In addition, the fund may incur expenses and suffer delays in an
effort to protect the fund's interests or to enforce its rights. A security may
change in price for a variety of reasons. For example, floating rate securities
may have final maturities of ten or more years, but their effective durations
will tend to be very short. If there is an adverse credit event, or a perceived
change in the issuer’s creditworthiness, these securities could experience a far
greater negative price movement than would be predicted by the change in the
security’s yield in relation to their effective duration. The fund evaluates the
credit quality of issuers and counterparties prior to investing in securities.
Credit risk is broadly gauged by the credit ratings of the securities in which
the fund invests. However, ratings are only the opinions of the
41
More
on the risks of investing in the fund
companies
issuing them and are not guarantees as to quality. Securities rated in the
lowest category of investment grade (Baa/BBB) may possess certain speculative
characteristics.
Prepayment
or call risk. Many
fixed income securities give the issuer the option to prepay or call the
security prior to its maturity date. Issuers often exercise this right when
interest rates fall. Accordingly, if the fund holds a fixed income security that
can be prepaid or called prior to its maturity date, it will not benefit fully
from the increase in value that other fixed income securities generally
experience when interest rates fall. Upon prepayment of the security, the fund
also would be forced to reinvest the proceeds at then current yields, which
would be lower than the yield of the security that was prepaid or called. In
addition, if the fund purchases a fixed income security at a premium (at a price
that exceeds its stated par or principal value), the fund may lose the amount of
the premium paid in the event of prepayment.
Extension
risk. During
periods of rising interest rates, the average life of certain types of
securities may be extended because of slower than expected principal payments.
This may lock in a below market interest rate, increase the security's duration
and reduce the value of the security.
To the
extent the fund invests significantly in mortgage-related and asset-backed
securities, its exposure to extension risks may be greater than if it invested
in other fixed income securities.
Liquidity
risk.
Liquidity risk is the risk that particular investments, or investments
generally, may be or become impossible or difficult to purchase or sell.
Although most of the fund's securities and other investments must be liquid at
the time of investment, securities and other investments may become illiquid
after purchase by the fund, particularly during periods of market turmoil or due
to adverse changes in the conditions of a particular issuer. Liquidity and value
of investments can deteriorate rapidly. Markets may become illiquid when, for
instance, there are few, if any, interested buyers and sellers or when dealers
are unwilling to make a market for certain securities or when dealer
market-making capacity is otherwise reduced. During times of market turmoil,
there have been, and may be, no buyers for securities in entire asset classes,
including U.S. Treasury securities. A lack of liquidity or other adverse credit
market conditions may affect the fund's ability to sell the securities in which
it invests or to find and purchase suitable investments. When the fund holds
illiquid investments, the fund may be harder to value, especially in changing
markets. If the fund is forced to sell or unwind an illiquid investment to meet
redemption requests or for other cash needs, or to try to limit losses, the fund
may suffer a substantial loss or may not be able to sell at all. The fund may
experience heavy redemptions that could cause the fund to liquidate its assets
at inopportune
42
times or
at a loss or depressed value, which could cause the value of your investment to
decline. In addition, when there is illiquidity in the market for certain
securities and other investments, the fund, due to limitations on investments in
illiquid securities, may be unable to achieve its desired level of exposure to a
certain sector. Further, certain securities, once sold, may not settle for an
extended period (for example, several weeks or even longer). The fund will not
receive its sales proceeds until that time, which may constrain the fund’s
ability to meet its obligations (including obligations to redeeming
shareholders). Liquidity risk may be magnified in an environment of rising
interest rates or widening credit spreads in which investor redemptions from
fixed income mutual funds may be higher than normal. If an auction fails for an
auction rate security, there may be no secondary market for the security and the
fund may be forced to hold the security until the security is refinanced by the
issuer or a secondary market develops. To the extent the fund holds a material
percentage of the outstanding debt securities of an issuer, this practice may
impact adversely the liquidity and market value of those
investments.
U.S.
Treasury obligations risk. The
market value of direct obligations of the U.S. Treasury may vary due to changes
in interest rates. In addition, changes to the financial condition or credit
rating of the U.S. government may cause the value of the fund’s investments in
obligations issued by the U.S. Treasury to decline.
U.S.
government agency obligations risk. The fund
invests in obligations issued by agencies and instrumentalities of the U.S.
government. Government-sponsored entities such as FNMA, FHLMC and the FHLBs,
although chartered or sponsored by Congress, are not funded by congressional
appropriations and the debt and mortgage-backed securities issued by them are
neither guaranteed nor issued by the U.S. government. The maximum potential
liability of the issuers of some U.S. government obligations may greatly exceed
their current resources, including any legal right to support from the U.S.
government. Such debt and mortgage-backed securities are subject to the risk of
default on the payment of interest and/or principal, similar to debt of private
issuers. Although the U.S. government has provided financial support to FNMA and
FHLMC in the past, there can be no assurance that it will support these or other
government-sponsored entities in the future.
Mortgage-related
and asset-backed securities risk. The
repayment of certain mortgage-backed and asset-backed securities depends
primarily on the cash collections received from the issuer’s underlying asset
portfolio and, in certain cases, the issuer’s ability to issue replacement
securities. As a result, there could be losses to the fund in the event of
credit or market value deterioration in the issuer’s underlying portfolio,
mismatches in the timing of the cash flows of the underlying asset interests
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on the risks of investing in the fund
and the
repayment obligations of maturing securities, or the issuer’s inability to issue
new or replacement securities. Mortgage-backed securities tend to be more
sensitive to changes in interest rates than other types of debt securities.
These securities are also subject to interest rate, prepayment and extension
risks. Upon the occurrence of certain triggering events or defaults, the
investors in a security held by the fund may become the holders of underlying
assets at a time when those assets may be difficult to sell or may be sold only
at a loss. In the event of a default, the value of the underlying collateral may
be insufficient to pay certain expenses, such as litigation and foreclosure
expenses, and inadequate to pay any principal or unpaid interest. The risk of
default is generally higher in the case of mortgage-backed investments offered
by private issuers and those that include so-called “sub-prime”
mortgages.
Privately issued mortgage-backed and asset-backed securities are not traded on
an exchange and may have a limited market. Without an active trading market,
these securities may be particularly difficult to value given the complexities
in valuing the underlying collateral.
Certain
mortgage-backed and asset-backed securities may pay principal only at maturity
or may represent only the right to receive payments of principal or interest on
the underlying obligations, but not both. The value of these types of
instruments may change more than the value of debt securities that pay both
principal and interest during periods of changing interest rates. Principal only
instruments generally increase in value if interest rates decline, but are also
subject to the risk of prepayment. Interest only instruments generally increase
in value in a rising interest rate environment when fewer of the underlying
obligations are prepaid. Interest only instruments could lose their entire value
in a declining interest rate environment if the underlying obligations are
prepaid.
Unlike
mortgage-related securities issued or guaranteed by the U.S. government or its
agencies and instrumentalities, mortgage-related securities issued by private
issuers do not have a government or government-sponsored entity guarantee (but
may have other credit enhancement), and may, and frequently do, have less
favorable collateral, credit risk or other characteristics. The fund may invest
in other mortgage-related securities, including mortgage derivatives and
structured securities. These securities typically are not secured by real
property. Because these securities have embedded leverage features, small
changes in interest or prepayment rates may cause large and sudden price
movements. These securities also can become illiquid and difficult to value in
volatile or declining markets. Privately issued mortgage-related securities are
also not subject to the same underwriting requirements for the underlying
mortgages that are applicable to those mortgage-related securities that have a
government or government-sponsored entity guarantee. Privately issued
mortgage-related securities are not traded on an exchange and there may
44
be a
limited market for the securities, especially when there is a perceived weakness
in the mortgage and real estate market sectors. Without an active trading
market, mortgage-related securities held in the fund’s portfolio may be
particularly difficult to value because of the complexities involved in
assessing the value of the underlying mortgage loans.
Mortgage-backed
securities are particularly susceptible to prepayment and extension risks,
because prepayments on the underlying mortgages tend to increase when interest
rates fall and decrease when interest rates rise. Prepayments may also occur on
a scheduled basis or due to foreclosure. When market interest rates increase,
mortgage refinancings and prepayments slow, which lengthens the effective
duration of these securities. As a result, the negative effect of the interest
rate increase on the market value of mortgage-backed securities is usually more
pronounced than it is for other types of fixed income securities, potentially
increasing the volatility of the fund. Conversely, when market interest rates
decline, while the value of mortgage-backed securities may increase, the rates
of prepayment of the underlying mortgages tend to increase, which shortens the
effective duration of these securities. Mortgage-backed securities are also
subject to the risk that the underlying borrowers will be unable to meet their
obligations.
At times,
some of the mortgage-backed securities in which the fund may invest will have
higher than market interest rates and therefore will be purchased at a premium
above their par value. Prepayments may cause losses on securities purchased at a
premium.
The value of
mortgage-backed and asset-backed securities may be affected by changes in credit
quality or value of the mortgage loans or other assets that support the
securities. In addition, for mortgage-backed securities, when market conditions
result in an increase in the default rates on the underlying mortgages and the
foreclosure values of the underlying real estate are below the outstanding
amount of the underlying mortgages, collection of the full amount of accrued
interest and principal on these investments may be less likely. Certain types of
real estate may be adversely affected by changing usage trends, such as office
buildings as a result of work-from-home practices and commercial facilities as a
result of an increase in online shopping, which could in turn result in defaults
and declines in value of mortgage-backed securities secured by such
properties.
The fund
may invest in CMOs. Principal prepayments on the underlying mortgage loans may
cause a CMO to be retired substantially earlier than its stated maturity or
final distribution date. If there are defaults on the underlying mortgage loans,
the fund will be less likely to receive payments of principal and interest, and
will be more likely to suffer a loss. This risk may be increased to the extent
the underlying
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on the risks of investing in the fund
mortgages
include sub-prime mortgages. As market conditions change, and particularly
during periods of rapid or unanticipated changes in market interest rates, the
attractiveness of a CMO class and the ability of the structure to provide the
anticipated investment characteristics may be significantly reduced. Such
changes can result in volatility in the market value, and in some instances
reduced liquidity, of a CMO class.
The fund
may invest in credit risk transfer (“CRT”) securities. CRT securities are
unguaranteed and unsecured fixed income securities issued by
government-sponsored or private entities that transfer the credit risk related
to certain types of mortgage-backed securities to the holder of the CRT
security. In the event of an issuer default, the holder of a CRT security has no
direct recourse to the underlying mortgage loans. In addition, if the underlying
mortgage loans default, the principal of the holders of the CRT security is used
to pay back holders of the mortgage-backed securities. As a result, all or part
of the mortgage default or credit risk associated with the underlying mortgage
loans is transferred to the fund. Therefore, the fund could lose all or part of
its investments in credit risk transfer securities in the event of default by
the underlying mortgage loans.
The fund
may invest in commercial mortgage-backed securities (“CMBS”). CMBS are subject
to the risks generally associated with mortgage-backed securities. CMBS may not
be backed by the full faith and credit of the U.S. government and are subject to
risk of default on the underlying mortgages. CMBS issued by non-government
entities may offer higher yields than those issued by government entities, but
also may be subject to greater volatility than government issues. CMBS react
differently to changes in interest rates than other bonds and the prices of CMBS
may reflect adverse economic and market conditions. Small movements in interest
rates (both increases and decreases) may quickly and significantly reduce the
value of CMBS.
Asset-backed
securities are structured like mortgage-backed securities and are subject to
many of the same risks. The ability of an issuer of asset-backed securities to
enforce its security interest in the underlying assets or to otherwise recover
from the underlying obligor may be limited. Certain asset-backed securities
present a heightened level of risk because, in the event of default, the
liquidation value of the underlying assets may be inadequate to pay any unpaid
principal or interest.
Risks of investing
in collateralized debt obligations. Investment in a
collateralized debt obligation (CDO) is subject to the credit, subordination,
interest rate, valuation, prepayment, extension and other risks of the
obligations underlying the CDO and the tranche of the CDO in which the fund
invests. CDOs are subject to liquidity risk. CDOs carry additional risks
including, but not limited to: (i) the
46
possibility that
distributions from collateral securities will not be adequate to make interest
or other payments; (ii) the risk that the collateral may default or decline in
value or be downgraded, if rated by a nationally recognized statistical rating
organization; (iii) the fund may invest in tranches of CDOs that are subordinate
to other tranches; (iv) the structure and complexity of the transaction and the
legal documents could lead to disputes among investors regarding the
characterization of proceeds; (v) the investment return achieved by the fund
could be significantly different than those predicted by financial models; (vi)
the lack of a readily available secondary market for CDOs; (vii) the risk of
forced “fire sale” liquidation due to technical defaults such as coverage test
failures; and (viii) the CDO's manager may perform poorly. In addition,
investments in CDOs may be characterized by the fund as illiquid securities.
CDOs may be highly leveraged (which could make them highly volatile). Synthetic
CDOs are also subject to the risks of investing in derivatives, such as credit
default swaps, and leverage risk. The fund may invest in or be exposed to CDOs
that are sometimes referred to as “covenant-lite” obligations, which generally
are debt obligations that lack financial maintenance covenants or possess fewer
or contingent financial maintenance covenants and other financial protections
for lenders and investors. These “covenant-lite” obligations typically are
particularly subject to the risks associated with investments in loans as
described in this prospectus.
Risks
of instruments that allow for balloon payments or negative amortization
payments. Certain
debt instruments allow for balloon payments or negative amortization payments.
Such instruments permit the borrower to avoid paying currently a portion of the
interest accruing on the instrument. While these features make the debt
instrument more affordable to the borrower in the near term, they increase the
risk that the borrower will be unable to make the resulting higher payment or
payments that become due at the maturity of the loan.
High
yield or “junk” bond risk. Debt
securities that are below investment grade, called “junk bonds,” are
speculative, have a higher risk of default or are already in default, tend to be
less liquid and are more difficult to value than higher grade securities and may
involve major risk of exposure to adverse conditions and negative sentiments.
These securities have a higher risk of issuer default because, among other
reasons, issuers of junk bonds often have more debt in relation to total
capitalization than issuers of investment grade securities. Junk bonds tend to
be volatile and more susceptible to adverse events and negative sentiments.
These risks are more pronounced for securities that are already in default. The
fund may not receive interest payments on defaulted securities and may incur
costs to protect its investment. In addition, defaulted securities involve the
substantial risk that principal will not be repaid. Changes in economic
conditions or developments regarding the individual issuer are more likely to
cause price volatility and weaken
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on the risks of investing in the fund
the
capacity of such securities to make principal and interest payments than is the
case for higher grade debt securities. The value of lower-quality debt
securities often changes in response to company, political, or economic
developments and can decline significantly over short as well as long periods of
time or during periods of general or regional economic difficulty. Junk bonds
may also be less liquid than higher-rated securities, which means that the fund
may have difficulty selling them at times, and it may have to apply a greater
degree of judgment in establishing a price for purposes of valuing fund shares.
Junk bonds generally are issued by less creditworthy issuers. Issuers of junk
bonds may have a larger amount of outstanding debt securities relative to their
assets than issuers of investment grade bonds. In the event of an issuer’s
bankruptcy, claims of other creditors may have priority over the claims of junk
bond holders, leaving few or no assets available to repay junk bond holders. The
fund may incur expenses to the extent necessary to seek recovery upon default or
to negotiate new terms with a defaulting issuer. Junk bonds frequently have
redemption features that permit an issuer to repurchase the security from the
fund before it matures. If the issuer redeems junk bonds, the fund may have to
invest the proceeds in bonds with lower yields and may lose income.
Risks of investing
in loans.
Floating rate loans and similar investments may be illiquid or less liquid than
other investments and difficult to value. The value of collateral, if any,
securing a floating rate loan can decline or may be insufficient to meet the
issuer’s obligations or may be difficult to liquidate. In the event of a
default, the fund may have difficulty collecting on any collateral and would not
have the ability to collect on any collateral for an uncollateralized loan.
Further, the fund’s access to collateral, if any, may be limited by bankruptcy
law. Market quotations for these securities may be volatile and/or subject to
large spreads between bid and ask prices. No active trading market may exist for
many floating rate loans, and many loans are subject to restrictions on resale.
Any secondary market may be subject to irregular trading activity and extended
trade settlement periods. In particular, loans may take longer than seven days
to settle, potentially leading to the sale proceeds of loans not being available
to meet redemption requests for a substantial period of time after the sale of
the loans. To the extent that sale proceeds of loans are not available, the fund
may sell securities that have shorter settlement periods or may access other
sources of liquidity to meet redemption requests. During periods of heightened
redemption activity or distressed market conditions, the fund may seek to obtain
expedited trade settlement, which will generally incur additional costs
(although expedited trade settlement will not always be available). If the fund
invests in loans that contain fewer or less restrictive constraints on the
borrower than certain other types of loans (“covenant-lite” loans), it may have
fewer rights against the borrowers of such loans, including fewer protections
against
48
the
possibility of default and fewer remedies in the event of default. An economic
downturn generally leads to a higher non-payment rate, and a loan may lose
significant value before a default occurs. There is less readily available,
reliable information about most floating rate loans than is the case for many
other types of securities. Normally, Amundi US will seek to avoid receiving
material, non-public information about the issuer of a loan either held by, or
considered for investment by, the fund, and this decision could place it at a
disadvantage, relative to other loan investors, in assessing a loan or the
loan’s issuer, and adversely affect the fund’s investment performance. Because
affiliates of Amundi US may participate in the primary and secondary market for
senior loans, limitations under applicable law may restrict the fund’s ability
to participate in structuring a senior loan or to acquire some senior loans, or
affect the timing or price of such acquisition. Loans may not be considered
“securities,” and purchasers, such as the fund, therefore may not be entitled to
rely on the anti-fraud protections afforded by federal securities
laws.
Risks of investing
in insurance-linked securities. The fund could lose a
portion or all of the principal it has invested in an insurance-linked security,
and the right to additional interest and/or dividend payments with respect to
the security, upon the occurrence of one or more trigger events, as defined
within the terms of an insurance-linked security. Trigger events may include
natural or other perils of a specific size or magnitude that occur in a
designated geographic region during a specified time period, and/or that involve
losses or other metrics that exceed a specific amount. Natural perils include
disasters such as hurricanes, earthquakes, windstorms, fires, floods and other
weather-related occurrences, as well as mortality or longevity events.
Non-natural perils include disasters resulting from human-related activity such
as commercial and industrial accidents or business interruptions. Major natural
disasters (such as in the cases of Super Typhoon Goni in the Philippines in
2020, monsoon flooding in China in 2020, Hurricane Irma in Florida and the
Caribbean in 2017, Super Storm Sandy in 2012, and Hurricane Ian in Florida in
2022) or commercial and industrial accidents (such as aviation disasters and oil
spills) can result in significant losses, and investors in ILS with exposure to
such natural or other disasters may also experience substantial losses. If the
likelihood and severity of natural and other large disasters increase, the risk
of significant losses to reinsurers may increase. Typically, one significant
triggering event (even in a major metropolitan area) will not result in
financial failure to a reinsurer. However, a series of major triggering events
could cause the failure of a reinsurer. Similarly, to the extent the fund
invests in ILS for which a triggering event occurs, losses associated with such
event will result in losses to the fund and a series of major triggering events
affecting a large portion of the ILS held by the fund will
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on the risks of investing in the fund
result in substantial
losses to the fund. The fund may also invest in insurance-linked securities that
are subject to “indemnity triggers.” An indemnity trigger is a trigger based on
the actual losses of the ceding sponsor (i.e., the party seeking reinsurance).
Insurance-linked securities subject to indemnity triggers are often regarded as
being subject to potential moral hazard, since such insurance-linked securities
are triggered by actual losses of the ceding sponsor and the ceding sponsor may
have an incentive to take actions and/or risks that would have an adverse effect
on the fund. For example, a ceding sponsor might inflate its total claims paid
above the ILS trigger level, in order to share its losses with investors in the
ILS. Thus, bonds with indemnity triggers may be subject to moral hazard, because
the trigger depends on the ceding sponsor to properly identify and calculate
losses that do and do not apply in determining whether the trigger amount has
been reached. In short, “moral hazard” refers to this potential for the sponsor
to influence bond performance, as payouts are based on the individual policy
claims against the sponsor and the way the sponsor settles those claims. There
is no way to accurately predict whether a trigger event will occur and,
accordingly, insurance-linked securities carry significant risk. In addition to
the specified trigger events, insurance-linked securities may expose the fund to
other risks, including but not limited to issuer (credit) default, adverse
regulatory or jurisdictional interpretations and adverse tax consequences.
Insurance-linked securities are also subject to the risk that the model used to
calculate the probability of a trigger event was not accurate and underestimated
the likelihood of a trigger event. Insurance-linked securities may provide for
extensions of maturity in order to process and audit loss claims in those cases
when a trigger event has, or possibly has, occurred. Certain insurance-linked
securities may have limited liquidity, or may be illiquid. Upon the occurrence
or possible occurrence of a trigger event, and until the completion of the
processing and auditing of applicable loss claims, the fund's investment in an
insurance-linked security may be priced using fair value methods. Lack of a
liquid market may impose the risk of higher transaction costs and the
possibility that the fund may be forced to liquidate positions when it would not
be advantageous to do so. Certain insurance-linked securities represent
interests in baskets of underlying reinsurance contracts. The fund has limited
transparency into the individual contracts underlying such securities and
therefore must rely on the risk assessment and sound underwriting practices of
the insurer and/or reinsurer. Certain insurance-linked securities may be
difficult to value.
Risks
of subordinated securities. A holder
of securities that are subordinated or “junior” to more senior securities of an
issuer is entitled to payment after holders of more senior securities of the
issuer. Subordinated securities are more likely to suffer a credit loss than
non-subordinated securities of the same issuer, any loss
50
incurred
by the subordinated securities is likely to be proportionately greater, and any
recovery of interest or principal may take more time. If there is a default,
bankruptcy or liquidation of the issuer, most subordinated securities are paid
only if sufficient assets remain after payment of the issuer’s non-subordinated
securities. As a result, even a perceived decline in creditworthiness of the
issuer is likely to have a greater impact on subordinated securities than more
senior securities.
Inflation-linked
securities risk. Unlike a
conventional bond, whose issuer makes regular fixed interest payments and repays
the face value of the bond at maturity, an inflation-indexed security provides
principal payments and interest payments, both of which are adjusted over time
to reflect a rise (inflation) or a drop (deflation) in the general price level.
The inflation index generally used is a non-seasonally adjusted index, which is
not statistically smoothed to overcome highs and lows observed at different
points each year. The use of a non-seasonally adjusted index can cause the
fund’s income level to fluctuate. As inflationary expectations increase,
inflation-linked securities will become more attractive, because they protect
future interest payments against inflation. Conversely, as inflationary concerns
decrease, inflation-linked securities will become less attractive and less
valuable. The inflation index used may not accurately measure the real rate of
inflation. Inflation-linked securities may lose value or interest payments on
such securities may decline in the event that the actual rate of inflation is
different than the rate of the inflation index, and losses may exceed those
experienced by other debt securities with similar durations. The values of
inflation-linked securities may not be directly correlated to changes in
interest rates, for example if interest rates rise for reasons other than
inflation. In general, the price of an inflation-linked security tends to
decline when real interest rates increase.
Risks
of zero coupon bonds, payment in kind, deferred and contingent payment
securities. Zero
coupon bonds (which do not pay interest until maturity) and payment in kind
securities (which pay interest in the form of additional securities) may be more
speculative and may fluctuate more in value than securities which pay income
periodically and in cash. Payment in kind securities are usually less volatile
than zero coupon bonds, but more volatile than cash pay securities. These
securities are more likely to respond to changes in interest rates than
interest-bearing securities having similar maturities and credit quality. The
higher interest rates of payment in kind securities reflect the payment deferral
and increased credit risk associated with these instruments, and payment in kind
instruments generally represent a significantly higher credit risk than coupon
bonds. These securities are more sensitive to the credit quality of the
underlying issuer. Payment in kind securities may be difficult to value because
their continuing accruals require continuing judgments about the collectability
of the deferred payments and the
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on the risks of investing in the fund
value of
any associated collateral. Deferred interest securities are obligations that
generally provide for a period of delay before the regular payment of interest
begins and are issued at a significant discount from face value. The interest
rate on contingent payment securities is determined by the outcome of an event,
such as the performance of a financial index. If the financial index does not
increase by a prescribed amount, the fund may receive no interest.
Unlike
bonds that pay interest throughout the period to maturity, the fund generally
will realize no cash until maturity and, if the issuer defaults, the fund may
obtain no return at all on its investment. In addition, although the fund
receives no periodic cash payments on such securities, the fund is deemed for
tax purposes to receive income from such securities, which applicable tax rules
require the fund to distribute to shareholders. Such distributions may be
taxable when distributed to shareholders and, in addition, could reduce the
fund’s reserve position and require the fund to sell securities and incur a gain
or loss at a time it may not otherwise want in order to provide the cash
necessary for these distributions.
Risks
of non-U.S. investments. Investing
in non-U.S. issuers, or in U.S. issuers that have significant exposure to
foreign markets, may involve unique risks compared to investing in securities of
U.S. issuers. These risks are more pronounced for issuers in emerging markets or
to the extent that the fund invests significantly in one region or country.
These risks may include:
•
Less
information about non-U.S. issuers or markets may be available due to less
rigorous disclosure or accounting standards or regulatory practices
•
Many
non-U.S. markets are smaller, less liquid and more volatile. In a changing
market, the adviser may not be able to sell the fund's securities at times, in
amounts and at prices it considers reasonable
•
Adverse
effect of currency exchange rates or controls on the value of the fund's
investments, or its ability to convert non-U.S. currencies to U.S.
dollars
•
The
economies of non-U.S. countries may grow at slower rates than expected or may
experience a downturn or recession
•
Economic,
political, regulatory and social developments, military conflicts and sanctions,
nationalization or expropriation of assets, arbitrary application of laws and
regulations or lack of rule of law, may adversely affect the securities
markets
•
It may be
difficult for the fund to pursue claims or enforce judgments against a foreign
bank, depository or issuer of a security, or any of their agents, in the courts
of a foreign country
•
The value
of the fund’s foreign investments may also be affected by foreign tax laws,
special U.S. tax considerations and restrictions on receiving the investment
proceeds from a foreign country. Withholding and other non-U.S. taxes may
52
decrease
the fund's return. The value of the fund’s foreign investments also may be
affected by U.S. tax considerations and restrictions in receiving investment
proceeds from a foreign country
•
Some
markets in which the fund may invest are located in parts of the world that have
historically been prone to natural disasters that could result in a significant
adverse impact on the economies of those countries and investments made in those
countries
•
It is
often more expensive for the fund to buy, sell and hold securities in certain
foreign markets than in the U.S.
•
A
governmental entity may delay, or refuse or be unable to pay, interest or
principal on its sovereign debt due to cash flow problems, insufficient foreign
currency reserves, political considerations, the relative size of the
governmental entity’s debt position in relation to the economy or the failure to
put in place economic reforms
•
Investing
in depositary receipts is subject to many of the same risks as investing
directly in non-U.S. issuers. Depositary receipts may involve higher expenses
and may trade at a discount (or premium) to the underlying security. In
addition, depositary receipts may not pass through voting and other shareholder
rights, and may be less liquid than the underlying securities listed on an
exchange
•
A number
of countries in the European Union (EU) have experienced, and may continue to
experience, severe economic and financial difficulties. Additional EU member
countries may also fall subject to such difficulties. A number of countries in
Europe have suffered terror attacks, and additional attacks may occur in the
future. In addition, the United Kingdom has withdrawn from the EU (commonly
known as “Brexit”). The range and potential implications of possible political,
regulatory, economic, and market outcomes of Brexit cannot be fully known but
could be significant, potentially resulting in increased volatility, illiquidity
and potentially lower economic growth in the affected markets, which will
adversely affect the fund’s investments, particularly in euro-denominated
securities and derivative contracts, securities of issuers located in the EU or
with significant exposure to EU issuers or countries
•
China and other developing
market countries may be subject to considerable degrees of economic, political
and social instability. Markets in China and other Asian countries are
relatively new and undeveloped. China’s economic health is largely dependent
upon exports, and may be dependent upon the economies of other Asian countries.
Investments in Chinese and other Asian issuers could be adversely affected by
changes in government policies, or trade or political disputes with major
trading partners, including the U.S. China’s growing trade surplus with the U.S.
has given rise to trade disputes and the imposition of tariffs. The U.S. has
also restricted the sale of certain goods to China. In addition, the U.S.
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on the risks of investing in the fund
government has imposed
restrictions on U.S. investor participation in certain Chinese investments.
These matters could adversely affect China’s economy. China's central government
exercises significant control over China's economy and may intervene in the
financial markets, such as by imposing trading restrictions, and investments in
Chinese issuers could be adversely affected by changes in government policies.
The Chinese economy could be adversely affected by supply chain disruptions. The
effect of China's recent relaxation of its zero-COVID policy on China's economy
and global supply chains may not be fully known for some time. An economic
slowdown in China could adversely affect economies of other emerging market
countries that trade with China, as well as companies operating in those
countries. Economies of Asian countries and Asian issuers could be adversely
affected by regional security threats. In addition, China's long-running
conflict over Taiwan's sovereignty, border disputes with many neighbors and
historically strained relations with other Asian countries could result in
military conflict that could adversely impact the economies of China and other
Asian countries, disrupt supply chains, and severely affect global economies
and
markets
•
If one or
more stockholders of a supranational entity such as the World Bank fail to make
necessary additional capital contributions, the entity may be unable to pay
interest or repay principal on its debt securities
•
Sanctions
or other government actions against certain countries could negatively impact
the fund’s investments in securities that have exposure to those
countries
•
Russia launched a
large-scale invasion of Ukraine on February 24, 2022. In response to the
military action by Russia, various countries, including the U.S., the United
Kingdom, and European Union, issued broad-ranging economic sanctions against
Russia and Belarus and certain companies and individuals. Russia has taken
retaliatory actions, including preventing repatriation of capital by U.S. and
other investors. Since then, Russian securities have lost all, or nearly all,
their market value, and many other issuers, securities and markets have been
adversely affected. The ongoing conflict has resulted in significant market
disruptions, including in certain markets, industries and sectors, such as the
oil and natural gas markets, and negatively affected global supply chains, food
supplies, inflation and global growth. The U.S. and other countries may impose
sanctions on other countries, companies and individuals in light of Russia’s
military invasion. The extent and duration of the military action or future
escalation of such hostilities, the extent and impact of existing and future
sanctions, market disruptions and volatility, and the result of any diplomatic
negotiations cannot be predicted. These and any related events could have a
significant impact on the value and liquidity of certain fund investments, on
fund performance and the value of an investment in the
fund
54
•
Circumstances
that impact one country could have profound impacts on other countries and on
global economies or markets
Additional
risks of investing in emerging markets include:
•
The extent
of economic development, political stability, market depth, infrastructure,
capitalization and regulatory oversight can be less than in more developed
markets. Emerging market economies tend to be less diversified than those of
more developed countries. They typically have fewer medical and economic
resources than more developed countries and thus they may be less able to
control or mitigate the effects of a pandemic
•
Emerging
market countries may experience rising interest rates, or, more significantly,
rapid inflation or hyperinflation
•
The fund
could experience a loss from settlement and custody practices in some emerging
markets
•
The
possibility that a counterparty may not complete a currency or securities
transaction
•
Low
trading volumes may result in a lack of liquidity and in extreme price
volatility
Currency
risk. Because
the fund may invest in non-U.S. currencies, securities denominated in non-U.S.
currencies, and other currency-related investments, the fund is subject to
currency risk, meaning that the fund could experience losses based on changes in
the exchange rate between non-U.S. currencies and the U.S. dollar or as a result
of currency conversion costs. Currency exchange rates can be volatile, and are
affected by factors such as general economic conditions, the actions of the U.S.
and foreign governments or central banks, the imposition of currency controls
and speculation.
Derivatives
risk. Using
swaps, futures and other derivatives exposes the fund to special risks and costs
and may result in losses to the fund, even when used for hedging purposes. Using
derivatives can increase losses and reduce opportunities for gain when market
prices, interest rates or currencies, or the derivative instruments themselves,
behave in a way not anticipated by the fund, especially in abnormal market
conditions. Using derivatives can have a leveraging effect (which may increase
investment losses) and increase the fund’s volatility, which is the degree to
which the fund’s share price may fluctuate within a short time period. Certain
derivatives have the potential for unlimited loss, regardless of the size of the
fund’s initial investment. Derivatives are generally subject to the risks
applicable to the assets, rates, indices or other indicators underlying the
derivative. If changes in a derivative’s value do not correspond to changes in
the value of the fund’s other investments or do not correlate well with the
underlying assets, rate or index, the fund may not fully benefit from, or could
lose money on, or could experience
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unusually
high expenses as a result of, the derivative position. The other parties to
certain derivative transactions present the same types of credit risk as issuers
of fixed income securities. Derivatives also tend to involve greater liquidity
risk and they may be difficult to value. The fund may be unable to terminate or
sell its derivative positions. In fact, many over-the-counter derivatives will
not have liquidity beyond the counterparty to the instrument. The fund also may
have to sell assets at inopportune times to satisfy its obligations. Use of
derivatives or similar instruments may have different tax consequences for the
fund than an investment in the underlying security, and those differences may
affect the amount, timing and character of income distributed to shareholders.
The fund’s use of derivatives may also increase the amount of taxes payable by
shareholders. Risks associated with the use of derivatives are magnified to the
extent that an increased portion of the fund’s assets are committed to
derivatives in general or are invested in just one or a few types of
derivatives.
Investments
by the fund in structured securities, a type of derivative, raise certain tax,
legal, regulatory and accounting issues that may not be presented by direct
investments in securities. These issues could be resolved in a manner that could
hurt the performance of the fund.
Swap agreements and options to enter into swap agreements (“swaptions”) tend to shift the fund’s investment exposure from one type of investment to another. For example, the fund may enter into interest rate swaps, which involve the exchange of interest payments by the fund with another party, such as the exchange of floating rate payments for fixed interest payments with respect to a notional amount of principal. If an interest rate swap intended to be used as a hedge negates a favorable interest rate movement, the investment performance of the fund would be less than it would have been if the fund had not entered into the interest rate swap.
Swap agreements and options to enter into swap agreements (“swaptions”) tend to shift the fund’s investment exposure from one type of investment to another. For example, the fund may enter into interest rate swaps, which involve the exchange of interest payments by the fund with another party, such as the exchange of floating rate payments for fixed interest payments with respect to a notional amount of principal. If an interest rate swap intended to be used as a hedge negates a favorable interest rate movement, the investment performance of the fund would be less than it would have been if the fund had not entered into the interest rate swap.
The U.S.
government and foreign governments have adopted and implemented or are in the
process of adopting and implementing regulations governing derivatives markets,
including mandatory clearing of certain derivatives, margin and reporting
requirements. The ultimate impact of the regulations remains unclear. Additional
regulation of derivatives may make derivatives more costly, limit their
availability or utility, otherwise adversely affect their performance or disrupt
markets. The fund may be exposed to additional risks as a result of the
additional regulations. The extent and impact of the regulations are not yet
fully known and may not be for some time.
The fund
will be required to maintain its positions with a clearing organization through
one or more clearing brokers. The clearing organization will require the fund to
post margin and the broker may require the fund to post additional margin
56
to secure
the fund’s obligations. The amount of margin required may change from time to
time. In addition, cleared transactions may be more expensive to maintain than
over-the-counter transactions and may require the fund to deposit larger amounts
of margin. The fund may not be able to recover margin amounts if the broker has
financial difficulties. Also, the broker may require the fund to terminate a
derivatives position under certain circumstances. This may cause the fund to
lose money.
Credit default
swap risk.
Credit default swap contracts, a type of derivative instrument, involve
heightened risks and may result in losses to the fund. Credit default swaps may
in some cases be illiquid and difficult to value, and they increase credit risk
since the fund has exposure to both the issuer of the referenced obligation and
the counterparty to the credit default swap. If the fund buys a credit default
swap, it will be subject to the risk that the credit default swap may expire
worthless, as the credit default swap would only generate income in the event of
a default on the underlying debt security or other specified event. As a buyer,
the fund would also be subject to credit risk relating to the seller’s payment
of its obligations in the event of a default (or similar event). If the fund
sells a credit default swap, it will be exposed to the credit risk of the issuer
of the obligation to which the credit default swap relates. As a seller, the
fund would also be subject to leverage risk, because it would be liable for the
full notional amount of the swap in the event of default (or similar event).
Swaps may be difficult to unwind or terminate. Certain index-based credit
default swaps are structured in tranches, whereby junior tranches assume greater
default risk than senior tranches. The absence of a central exchange or market
for swap transactions may lead, in some instances, to difficulties in trading
and valuation, especially in the event of market disruptions. Relatively recent
legislation requires certain swaps to be executed through a centralized exchange
or regulated facility and be cleared through a regulated clearinghouse. Although
this clearing mechanism is generally expected to reduce counterparty credit
risk, it may disrupt or limit the swap market and may not result in swaps being
easier to trade or value. As swaps become more standardized, the fund may not be
able to enter into swaps that meet its investment needs. The fund also may not
be able to find a clearinghouse willing to accept the swaps for clearing. In a
cleared swap, a central clearing organization will be the counterparty to the
transaction. The fund will assume the risk that the clearinghouse may be unable
to perform its obligations.
Credit default
swap index risk. The fund may invest in
credit default swap index products (“CDX”) (swaps based on a portfolio of credit
default swaps with similar characteristics, such as credit default swaps on
high-yield bonds) in an effort to obtain exposure to a diversified portfolio of
credits or to hedge against existing credit risks. CDX have similar risks as
other credit default swaps contracts.
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on the risks of investing in the fund
The use of CDX is subject
to the risk that the fund's counterparty will default on its obligations.
Investments in CDX are also subject to credit risk with respect to the issuers
of the underlying reference obligations in the index, liquidity risk and
operational risks. The fund will also normally indirectly bear its proportionate
share of any expenses paid by a CDX in addition to the expenses of the
fund.
Forward
foreign currency transactions risk. To the
extent that the fund enters into forward foreign currency transactions, it may
not fully benefit from or may lose money on the transactions if changes in
currency rates do not occur as anticipated or do not correspond accurately to
changes in the value of the fund's holdings, or if the counterparty defaults.
Such transactions may also prevent the fund from realizing profits on favorable
movements in exchange rates. Risk of counterparty default is greater for
counterparties located in emerging markets. The fund's ability to use forward
foreign currency transactions successfully depends on a number of factors,
including the forward foreign currency transactions being available at prices
that are not too costly, the availability of liquid markets, and Amundi US’s
judgment regarding the direction of changes in currency exchange
rates.
Risks
of investing in inverse floating rate obligations. The
interest rate on inverse floating rate obligations will generally decrease as
short-term interest rates increase, and increase as short-term rates decrease.
Due to their leveraged structure, the sensitivity of the market value of an
inverse floating rate obligation to changes in interest rates is generally
greater than a comparable long-term bond issued by the same issuer and with
similar credit quality, redemption and maturity provisions. Inverse floating
rate obligations may be volatile and involve leverage risk.
Leveraging
risk. The value
of your investment may be more volatile and other risks tend to be compounded if
the fund borrows or uses derivatives or other investments, such as ETFs, that
have embedded leverage. Leverage generally magnifies the effect of any increase
or decrease in the value of the fund's underlying assets and creates a risk of
loss of value on a larger pool of assets than the fund would otherwise have,
potentially resulting in the loss of all assets. Engaging in such transactions
may cause the fund to liquidate positions when it may not be advantageous to do
so to satisfy its obligations. New derivatives regulations require the fund, to
the extent it uses derivatives to a material extent, to, among other things,
comply with certain overall limits on leverage. These regulations may limit the
ability of the fund to pursue its investment strategies and may not be effective
to mitigate the fund's risk of loss from derivatives.
Repurchase
agreement risk. In the
event that the other party to a repurchase agreement defaults on its
obligations, the fund may encounter delay and incur costs before being able to
sell the security. Such a delay may involve loss of interest
58
or a
decline in price of the security. In addition, if the fund is characterized by a
court as an unsecured creditor, it would be at risk of losing some or all of the
principal and interest involved in the transaction.
Valuation
risk. Many
factors may influence the price at which the fund could sell any particular
portfolio investment. The sales price may well differ - higher or lower - from
the fund’s valuation of the investment, and such differences could be
significant, particularly for illiquid securities and securities that trade in
thin markets and/or markets that experience extreme volatility. These
differences may increase significantly and affect fund investments more broadly
during periods of market volatility. The fund may value investments using fair
value methodologies. Investors who purchase or redeem fund shares on days when
the fund is holding fair-valued securities may receive fewer or more shares, or
lower or higher redemption proceeds, than they would have received if the
securities had not been fair-valued or if a different valuation methodology had
been used. Fixed income securities are typically valued using fair value
methodologies. The value of foreign securities, certain fixed income securities
and currencies, as applicable, may be materially affected by events after the
close of the markets on which they are traded, but before the fund determines
its net asset value. The ability to value the fund’s investments may also be
impacted by technological issues and/or errors by pricing services or other
third party service providers.
Redemption
risk. The
fund may experience periods of heavy redemptions that could cause the fund to
liquidate its assets at inopportune times or at a loss or depressed value, or
accelerate taxable gains or transaction costs, particularly during periods of
declining or illiquid markets. Redemption risk is greater to the extent that the
fund has investors with large shareholdings, short investment horizons, or
unpredictable cash flow needs. In addition, redemption risk is heightened during
periods of overall market turmoil. The redemption by one or more large
shareholders of their holdings in the fund could hurt performance and/or cause
the remaining shareholders in the fund to lose money. If one decision maker has
control of fund shares owned by separate fund shareholders, including clients or
affiliates of the fund’s adviser, redemptions by these shareholders may further
increase the fund’s redemption risk. If the fund is forced to liquidate its
assets under unfavorable conditions or at inopportune times, the value of your
investment could decline.
Cybersecurity
risk.
Cybersecurity failures by and breaches of the fund’s adviser, transfer agent,
distributor, custodian, fund accounting agent or other service providers may
disrupt fund operations, interfere with the fund’s ability to calculate its NAV,
prevent fund shareholders from purchasing, redeeming or exchanging shares or
receiving distributions or receiving timely information regarding the
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on the risks of investing in the fund
fund or their investment
in the fund, cause loss of or unauthorized access to private shareholder
information, and result in financial losses to the fund and its shareholders,
regulatory fines, penalties, reputational damage, or additional compliance
costs. Substantial costs may be incurred in order to prevent any cyber incidents
in the future. The fund and its shareholders could be negatively impacted as a
result. New ways to carry out cyber attacks continue to develop. Therefore,
there is a chance that some risks have not been identified or prepared for, or
that an attack may not be detected, which puts limitations on the fund's ability
to plan for or respond to a cyber
attack.
Non-diversification
risk. To the
extent an underlying fund is classified as “not diversified,” the underlying
fund may invest a larger percentage of its assets in a smaller number of issuers
than a diversified fund. Being non-diversified may magnify the fund’s and the
underlying fund’s losses from adverse events affecting a particular
issuer.
Portfolio
turnover risk. If the
fund does a lot of trading, it may incur additional operating expenses, which
would reduce performance. A higher level of portfolio turnover may also cause
shareholders to incur a higher level of taxable income or capital
gains.
Cash
management risk. The value
of the investments held by the fund for cash management or temporary defensive
purposes may be affected by market risks, changing interest rates and by changes
in credit ratings of the investments. To the extent that the fund has any
uninvested cash, the fund would be subject to credit risk with respect to the
depository institution holding the cash. If the fund holds cash uninvested, the
fund will not earn income on the cash and the fund’s yield will go down. During
such periods, it may be more difficult for the fund to achieve its investment
objectives.
Expense
risk. Your
actual costs of investing in the fund may be higher than the expenses shown in
“Annual fund operating expenses” for a variety of reasons. For example, expense
ratios may be higher than those shown if the expenses of underlying funds
increase or if overall net assets decrease. Net assets are more likely to
decrease and fund expense ratios are more likely to increase when markets are
volatile.
To learn
more about the fund's investments and risks, you should obtain and read the
statement of additional information. Please note that there are many other
factors that could adversely affect your investment and that could prevent the
fund from achieving its goals.
60
Disclosure
of portfolio holdings
The fund's
policies and procedures with respect to disclosure of the fund's securities are
described in the statement of additional information.
61
Management
Investment
adviser
Effective
January 1, 2021, Amundi Pioneer Asset Management, Inc. changed its name to
Amundi Asset Management US, Inc. (“Amundi US”).
Amundi US,
the fund’s investment adviser, selects the fund’s investments and oversees the
fund’s operations.
Amundi US is an indirect,
wholly owned subsidiary of Amundi and Amundi’s wholly owned subsidiary, Amundi
Holdings US, Inc. Amundi, one of the world’s largest asset managers, is
headquartered in Paris, France. As of September 30, 2023, Amundi had more than
$2.0 trillion in assets under management worldwide. As of September 30, 2023,
Amundi US (and its U.S. affiliates) had over $92 billion in assets under
management.
Amundi
US’s main office is at 60 State Street, Boston, Massachusetts
02109.
The firm’s
U.S. mutual fund investment history includes creating in 1928 one of the first
mutual funds.
Amundi US
has received an order from the Securities and Exchange Commission that permits
Amundi US, subject to the approval of the fund's Board of Trustees, to hire and
terminate a subadviser that is not affiliated with Amundi US (an “unaffiliated
subadviser”) or to materially modify an existing subadvisory contract with an
unaffiliated subadviser for the fund without shareholder approval. Amundi US
retains the ultimate responsibility to oversee and recommend the hiring,
termination and replacement of any unaffiliated subadviser.
Portfolio
management
Day-to-day
management of the portfolio is the responsibility of Kenneth J. Taubes and Marco
Pirondini. Mr. Taubes and Mr. Pirondini are supported by the firm’s research
teams, which provide fundamental and quantitative research on companies on a
global basis, and include members from one or more of Amundi US’s
affiliates.
Mr.
Taubes, Executive Vice President and Chief Investment Officer, U.S. of Amundi
US, is responsible for overseeing the U.S. fixed income team. He joined Amundi
US as a senior vice president in September 1998 and has been an investment
professional since 1982. Mr. Taubes has served as portfolio manager of the fund
since 2018.
Mr.
Pirondini, Senior Managing Director and Head of Equities, U.S., has served as a
portfolio manager of the fund since 2018. From 2004 until 2010, Mr. Pirondini
was Global Chief Investment Officer of Amundi US, overseeing equity, fixed
62
income,
balanced, and quantitative portfolio management, and quantitative and
fundamental research divisions. Mr. Pirondini joined a predecessor organization
to Amundi US in 1991.
The fund’s
statement of additional information provides additional information about the
portfolio managers’ compensation, other accounts managed by the portfolio
managers, and the portfolio managers’ ownership of shares of the
fund.
Management
fee
The fund
does not pay a direct management fee to Amundi US. The fund bears a pro rata
portion of the fees and expenses, including management fees, of each underlying
fund in which the fund invests. The fund invests primarily in funds managed by
Amundi US. Accordingly, Amundi US may be subject to potential conflicts of
interest in selecting underlying funds because the management fees paid to it by
some underlying funds are higher than the fees paid by other affiliated and
unaffiliated underlying funds.
A discussion regarding the
basis for the Board of Trustees’ approval of the management contract is
available in the fund’s semi-annual report to shareholders for the period ended
January 31, 2023.
Distributor
Amundi
Distributor US, Inc. is the fund's distributor. The fund compensates the
distributor for its services. The distributor is an affiliate of Amundi
US.
63
Pricing
of shares
Net
asset value
The fund's
net asset value is the value of its securities plus any other assets minus its
accrued operating expenses and other liabilities. The fund calculates a net
asset value for each class of shares every day the New York Stock Exchange is
open as of the close of regular trading (normally 4:00 p.m. Eastern time). On
days when the New York Stock Exchange is closed for trading, including certain
holidays listed in the statement of additional information, a net asset value is
not calculated. The fund’s most recent net asset value is available on the
fund’s website, us.amundipioneer.com.
The fund
invests in shares of other funds that are not traded on an exchange. Such shares
of other funds are valued at their net asset values as provided by those funds.
The prospectuses for those funds explain the circumstances under which those
funds will use fair value pricing methods and the effects of using fair value
pricing methods.
The fund generally values
its equity securities and certain derivative instruments that are traded on an
exchange using the last sale price on the principal exchange on which they are
traded. Equity securities that are not traded on the date of valuation, or
securities for which no last sale prices are available, are valued at the mean
between the last bid and asked prices or, if both last bid and asked prices are
not available, at the last quoted bid price. Last sale, bid and asked prices are
provided by independent third party pricing services. In the case of equity
securities not traded on an exchange, prices are typically determined by
independent third party pricing services using a variety of techniques and
methods. Amundi US, the fund’s valuation designee, may use a fair value model
developed by an independent pricing service to value non-U.S. equity
securities.
The fund
generally values debt securities and certain derivative instruments by using the
prices supplied by independent third party pricing services. A pricing service
may use market prices or quotations from one or more brokers or other sources, a
pricing matrix, or other fair value methods or techniques to provide an
estimated value of the security or instrument. A pricing matrix is a means of
valuing a debt security on the basis of current market prices for other debt
securities, historical trading patterns in the market for fixed income
securities and/or other factors. Non-U.S. debt securities that are listed on an
exchange will be valued at the bid price obtained from an independent third
party pricing service.
The
valuations of securities traded in non-U.S. markets and certain fixed income
securities will generally be determined as of the earlier closing time of the
markets on which they primarily trade. When the fund holds securities or other
assets that are denominated in a foreign currency, the fund will normally use
the currency
64
exchange
rates as of 3:00 p.m. (Eastern time). Non-U.S. markets are open for trading on
weekends and other days when the fund does not price its shares. Therefore, the
value of the fund’s shares may change on days when you will not be able to
purchase or redeem fund shares.
Amundi US has been
designated as the fund's valuation designee, with responsibility for fair
valuation subject to oversight by the fund's Board of Trustees. When independent
third party pricing services are unable to supply prices for an investment, or
when prices or market quotations are considered by Amundi US to be unreliable,
the value of that security may be determined using quotations from one or more
broker-dealers. When such prices or quotations are not available, or when they
are considered by Amundi US to be unreliable, Amundi US uses other fair value
methods to value the fund’s securities. Amundi US also may use fair value
methods if it is determined that a significant event has occurred between the
time at which a price is determined and the time at which the fund’s net asset
value is calculated. Because the fund may invest in securities rated below
investment grade — some of which may be thinly traded and for which prices may
not be readily available or may be unreliable — Amundi US may use fair value
methods more frequently with respect to the fund’s investments than funds that
primarily invest in securities that are more widely traded. Valuing securities
using fair value methods may cause the net asset value of the fund’s shares to
differ from the net asset value that would be calculated only using market
prices.
The prices used by Amundi
US to value the fund’s securities may differ from the amounts that would be
realized if these securities were sold and these differences may be significant,
particularly for securities that trade in relatively thin markets and/or markets
that experience extreme volatility.
65
Choosing
a class of shares
The fund
offers five classes of shares through this prospectus. Each class has different
eligibility requirements, sales charges and expenses, allowing you to choose the
class that best meets your needs.
Factors
you should consider include:
•
The
eligibility requirements that apply to purchases of a particular share
class
•
The
expenses paid by each class
•
The
initial sales charges and contingent deferred sales charges (CDSCs), if any,
applicable to each class
•
Whether
you qualify for any reduction or waiver of sales charges
•
How long
you expect to own the shares
•
Any
services you may receive from a financial intermediary
When
choosing between Class A or Class C shares, you should be aware that, generally
speaking, the longer your investment horizon, the more likely it will be that
Class C shares will not be as advantageous as Class A shares. The annual
distribution and service fees on Class C shares may cost you more over the
longer term than the initial sales charge and distribution and service fees you
would have paid for purchases of Class A shares.
If you are
eligible to purchase Class K or Class Y shares, you should be aware that Class K
and Class Y shares are not subject to an initial sales charge, CDSC or
distribution and service fees and generally have lower annual expenses than
Class A or Class C shares. However, if you invest in Class K shares or Class Y
shares through an investment professional or financial intermediary, that
investment professional or financial intermediary may charge you a commission in
an amount determined and separately disclosed to you by that investment
professional or financial intermediary.
Class R
shares generally are available only through certain tax-deferred retirement
plans and related accounts, and are not subject to an initial sales charge but
are subject to distribution and service fees.
Your
investment professional can help you determine which class meets your goals.
Your investment professional or financial intermediary may receive different
compensation depending upon which class you choose, and may impose its own
investment fees and practices for purchasing and selling fund shares, which are
not described in this prospectus or in the statement of additional information.
Consult your investment professional or financial intermediary about the
availability of fund shares, the investment professional or financial
intermediary’s practices, and other information.
66
Please
note that the fund does not charge any initial sales charge, CDSC or other
asset-based fee for sales or distribution of Class K shares or Class Y shares.
However, if you invest in Class K shares or Class Y shares through an investment
professional or financial intermediary, that investment professional or
financial intermediary may charge you a commission in an amount determined and
separately disclosed to you by that investment professional or financial
intermediary.
Because
the fund is not party to any commission arrangement between you and your
investment professional or financial intermediary, any purchases and redemptions
of Class K shares or Class Y shares will be made by the fund at the applicable
net asset value (before imposition of the sales commission). Any commissions
charged by an investment professional or financial intermediary are not
reflected in the fees and expenses listed in the fee table or expense example in
this prospectus nor are they reflected in the performance in the bar chart and
table in this prospectus because these commissions are not charged by the
fund.
For
information on the fund’s expenses, please see “Fund Summary.”
The
availability of certain sales charge waivers and discounts may depend on whether
you purchase and sell your shares directly from the fund or through a financial
intermediary. Specific intermediaries may have different policies and procedures
regarding the availability of front-end sales charge waivers or contingent
deferred (back-end) sales charge (CDSC) waivers, which are discussed under
“Intermediary defined sales charge waiver policies.” In all instances, it is
your responsibility to notify the fund or your financial intermediary at the
time of purchase of any relationship or other facts qualifying you for sales
charge waivers or discounts. For waivers and discounts not available through a
particular intermediary, you will have to purchase fund shares directly from the
fund or through another intermediary to receive these waivers or discounts.
Please see the “Intermediary defined sales charge waiver policies” section to
determine any sales charge discounts and waivers that may be available to you
through your financial intermediary.
Class
A shares
•
You pay a
sales charge of up to 5.75% of the offering price, which is reduced or waived
for large purchases and certain types of investors. At the time of your
purchase, your investment firm may receive a commission from the distributor of
up to 5%, declining as the size of your investment increases.
•
There is
no contingent deferred sales charge, except in certain circumstances when no
initial sales charge is charged.
•
Distribution
and service fees of 0.25% of average daily net assets.
67
Choosing
a class of shares
Class
C shares
•
A 1%
contingent deferred sales charge is assessed if you sell your shares within one
year of purchase. Your investment firm may receive a commission from the
distributor at the time of your purchase of up to 1%.
•
Distribution
and service fees of 1.00% of average daily net assets.
•
Maximum
purchase amount (per transaction) of $499,999.
•
Class C
shares automatically convert to Class A shares after 8 years.
Class
K shares
•
No initial
or contingent deferred sales charge. However, if you invest in Class K shares
through an investment professional or financial intermediary, that investment
professional or financial intermediary may charge you a commission in an amount
determined and separately disclosed to you by that investment professional or
financial intermediary.
•
Initial
investments by discretionary accounts and direct investors are subject to a $5
million investment minimum, which may be waived in some
circumstances.
•
There is
no investment minimum for other eligible investors.
Class
R shares
•
No initial
or contingent deferred sales charge.
•
Distribution
fees of 0.50% of average daily net assets. Separate service plan provides for
payment to financial intermediaries of up to 0.25% of average daily net
assets.
•
Generally,
available only through certain tax-deferred retirement plans and related
accounts.
Class
Y shares
•
No initial
or contingent deferred sales charge. However, if you invest in Class Y shares
through an investment professional or financial intermediary, that investment
professional or financial intermediary may charge you a commission in an amount
determined and separately disclosed to you by that investment professional or
financial intermediary.
•
Initial
investments are subject to a $5 million investment minimum, which may be waived
in some circumstances.
68
Share
class eligibility
Class
K shares
Class K
shares are available to certain discretionary accounts at Amundi US or its
affiliates, certain direct investors, other funds in the Pioneer Funds mutual
fund complex, and certain tax-deferred retirement plans (including 401(k) plans,
employer-sponsored 403(b) plans, 457 plans, health savings accounts, profit
sharing and money purchase pension plans, defined benefit plans and
non-qualified deferred compensation plans) held in plan level or omnibus
accounts.
Direct
investors may be individuals, institutions, trusts, foundations and other
institutional investors.
Class K
shares are also available to certain mutual fund programs. See “Minimum
investment amounts - Waivers of the minimum investment amount for Class
K.”
Class
R shares
Class R
shares are available to certain tax-deferred retirement plans (including 401(k)
plans, employer-sponsored 403(b) plans, 457 plans, profit sharing and money
purchase pension plans, defined benefit plans and non-qualified deferred
compensation plans) held in plan level or omnibus accounts. Class R shares also
are available to IRAs that are rollovers from eligible retirement plans that
offered one or more Class R share Pioneer funds as investment options and to
individual 401(k) plans. Class R shares are not available to non-retirement
accounts, traditional or Roth IRAs, Coverdell Education Savings Accounts, SEPs,
SAR-SEPs, SIMPLE IRAs, individual 403(b)s and most individual retirement
accounts or retirement plans that are not subject to the Employee Retirement
Income Security Act of 1974 (ERISA).
Automatic
conversion of Class C Shares
Class C
shares automatically convert to Class A shares after 8 years. Conversions of
Class C shares to Class A shares occur during the month of or following the 8th
anniversary of the share purchase date. The automatic conversion is based on the
relative net asset values of the two share classes without the imposition of a
sales charge or fee. Generally, in order for your Class C shares to be eligible
for automatic conversion to Class A shares, the fund or the financial
intermediary through which you purchased your shares must have records which
confirm that your Class C shares have been held for 8 years. Class C shares held
through group retirement plan recordkeeping platforms of certain financial
intermediaries that hold such shares in an omnibus account and do not track
participant level share lot aging to
69
Choosing
a class of shares
facilitate
such a conversion are not eligible for automatic conversion to Class A shares.
Specific intermediaries may have different policies and procedures regarding the
conversion of Class C shares to Class A shares
70
Distribution
and service arrangements
Distribution
plan
The fund
has adopted a distribution plan for Class A, Class C and Class R shares in
accordance with Rule 12b-1 under the Investment Company Act of 1940. Under the
plan, the fund pays distribution and service fees to the distributor. Because
these fees are an ongoing expense of the fund, over time they increase the cost
of your investment and your shares may cost more than shares that are subject to
other types of sales charges.
Class
R shares service plan
The fund
has adopted a separate service plan for Class R shares. Under the service plan,
the fund may pay securities dealers, plan administrators or other financial
intermediaries who agree to provide certain services to plans or plan
participants holding shares of the fund a service fee of up to 0.25% of average
daily net assets attributable to Class R shares held by such plan participants.
The services provided under the service plan include acting as a shareholder of
record, processing purchase and redemption orders, maintaining participant
account records and answering participant questions regarding the
fund.
Additional
payments to financial intermediaries
Your
financial intermediary may receive compensation from the fund, Amundi US or its
affiliates for the sale of fund shares and related services. Compensation may
include sales commissions and distribution and service (Rule 12b-1) fees, as
well as compensation for administrative services and transaction
processing.
Amundi US
or its affiliates may make additional payments to your financial intermediary.
These payments may provide your financial intermediary with an incentive to
favor the Pioneer funds over other mutual funds or assist the distributor in its
efforts to promote the sale of the fund’s shares. Financial intermediaries
include broker-dealers, banks (including bank trust departments), registered
investment advisers, financial planners, retirement plan administrators and
other types of intermediaries.
Amundi US
or its affiliates make these additional payments (sometimes referred to as
“revenue sharing”) to financial intermediaries out of its own assets, which may
include profits derived from services provided to the fund, or from the
retention of a portion of sales charges or distribution and service fees. Amundi
US may base these payments on a variety of criteria, including the amount of
sales or assets of the Pioneer funds attributable to the financial intermediary
or as a per transaction fee.
71
Distribution
and service arrangements
Not all
financial intermediaries receive additional compensation and the amount of
compensation paid varies for each financial intermediary. In certain cases,
these payments may be significant. Amundi US determines which firms to support
and the extent of the payments it is willing to make, generally choosing firms
that have a strong capability to effectively distribute shares of the Pioneer
funds and that are willing to cooperate with Amundi US’s promotional efforts.
Amundi US also may compensate financial intermediaries (in addition to amounts
that may be paid by the fund) for providing certain administrative services and
transaction processing services.
Amundi US
may benefit from revenue sharing if the intermediary features the Pioneer funds
in its sales system (such as by placing certain Pioneer funds on its preferred
fund list or giving access on a preferential basis to members of the financial
intermediary’s sales force or management). In addition, the financial
intermediary may agree to participate in the distributor’s marketing efforts
(such as by helping to facilitate or provide financial assistance for
conferences, seminars or other programs at which Amundi US personnel may make
presentations on the Pioneer funds to the intermediary’s sales force). To the
extent intermediaries sell more shares of the Pioneer funds or retain shares of
the Pioneer funds in their clients’ accounts, Amundi US receives greater
management and other fees due to the increase in the Pioneer funds’ assets. The
intermediary may earn a profit on these payments if the amount of the payment to
the intermediary exceeds the intermediary’s costs.
The
compensation that Amundi US pays to financial intermediaries is discussed in
more detail in the fund’s statement of additional information. Your intermediary
may charge you additional fees or commissions other than those disclosed in this
prospectus. Intermediaries may categorize and disclose these arrangements
differently than in the discussion above and in the statement of additional
information. You can ask your financial intermediary about any payments it
receives from Amundi US or the Pioneer funds, as well as about fees and/or
commissions it charges.
Amundi US
and its affiliates may have other relationships with your financial intermediary
relating to the provision of services to the Pioneer funds, such as providing
omnibus account services or effecting portfolio transactions for the Pioneer
funds. If your intermediary provides these services, Amundi US or the Pioneer
funds may compensate the intermediary for these services. In addition, your
intermediary may have other relationships with Amundi US or its affiliates that
are not related to the Pioneer funds.
72
Sales
charges
Initial
sales charges (Class A shares only)
You pay
the offering price (the net asset value per share plus any initial sales charge)
when you buy Class A shares unless you qualify to purchase shares at net asset
value. You pay a lower sales charge as the size of your investment increases.
You do not pay a sales charge when you reinvest dividends or capital gain
distributions paid by the fund.
Sales
charges for Class A shares
|
|
Sales
charge as % of | |
|
Amount
of purchase |
Offering
price |
Net
amount
invested |
|
Less
than $50,000 |
5.75 |
6.10 |
|
$50,000
but less than $100,000 |
4.50 |
4.71 |
|
$100,000
but less than $250,000 |
3.50 |
3.63 |
|
$250,000
but less than $500,000 |
2.50 |
2.56 |
|
$500,000
or more |
-0- |
-0- |
The dollar
amount of the sales charge is the difference between the offering price of the
shares purchased (based on the applicable sales charge in the table) and the net
asset value of those shares. Since the offering price is calculated to two
decimal places using standard rounding methodology, the dollar amount of the
sales charge as a percentage of the offering price and of the net amount
invested for any particular purchase of fund shares may be higher or lower due
to rounding.
Reduced
sales charges – Class A shares
You may
qualify for a reduced Class A sales charge if you own or are purchasing shares
of Pioneer mutual funds. The investment levels required to obtain a reduced
sales charge are commonly referred to as “breakpoints.” Amundi US offers two
principal means of taking advantage of breakpoints in sales charges for
aggregate purchases of Class A shares of the Pioneer funds over time
if:
•
The amount
of shares you own of the Pioneer funds plus the amount you are investing now is
at least $50,000 (Rights
of accumulation)
•
You plan
to invest at least $50,000 over the
next 13 months (Letter of intent)
Rights
of accumulation – Class A shares only
If you
qualify for rights of accumulation, your sales charge will be based on the
combined value (at the current offering price) of all your Pioneer mutual fund
shares, the shares of your spouse and the shares of any children under the age
of 21.
73
Sales
charges
Letter
of intent - Class A shares only
You can
use a letter of intent to qualify for reduced sales charges in
two situations:
two situations:
•
If you
plan to invest at least $50,000
(excluding any reinvestment of dividends and capital gain distributions) in the
fund's Class A shares during the next 13 months
•
If you
include in your letter of intent the value (at the current offering price) of
all of your Class A shares of the fund and Class A shares of all other Pioneer
mutual fund shares held of record in the amount used to determine the applicable
sales charge for the fund shares you plan to buy
Completing
a letter of intent does not obligate you to purchase additional shares, but if
you do not buy enough shares to qualify for the projected level of sales charges
by the end of the 13-month period (or when you sell your shares, if earlier),
the distributor will recalculate your sales charge. Any share class for which no
sales charge is paid cannot be included under the letter of intent. For more
information regarding letters of intent, please contact your investment
professional or obtain and read the statement of additional
information.
Qualifying
for a reduced Class A sales charge
In
calculating your total account value in order to determine whether you have met
sales charge breakpoints, you can include your Pioneer mutual fund shares, those
of your spouse and the shares of any children under the age of 21. Amundi US
will use each fund’s current offering price to calculate your total account
value. Certain trustees and fiduciaries may also qualify for a reduced sales
charge.
To receive
a reduced sales charge, you or your investment professional must, at the time of
purchase, notify the distributor of your eligibility. In order to verify your
eligibility for a discount, you may need to provide your investment professional
or the fund with information or records, such as account numbers or statements,
regarding shares of the fund or other Pioneer mutual funds held in all accounts
by you, your spouse or children under the age of 21 with that investment
professional or with any other financial intermediary. Eligible accounts may
include joint accounts, retirement plan accounts, such as IRA and 401(k)
accounts, and custodial accounts, such as ESA, UGMA and UTMA
accounts.
It is your
responsibility to confirm that your investment professional has notified the
distributor of your eligibility for a reduced sales charge at the time of sale.
If you or your investment professional do not notify the distributor of your
eligibility, you will risk losing the benefits of a reduced sales
charge.
74
For this
purpose, Pioneer mutual funds include any fund for which the distributor is
principal underwriter and, at the distributor’s discretion, may include funds
organized outside the U.S. and managed by Amundi US or an affiliate.
You can
locate information regarding the reduction or waiver of sales charges free of
charge on Amundi US’s website at amundi.com/us. The website includes hyperlinks
that facilitate access to this information.
Class
A purchases at net asset value
You may
purchase Class A shares at net asset value (without a sales charge) as follows.
If you believe you qualify for any of the Class A sales charge waivers discussed
below, contact your investment professional or the distributor. You are required
to provide written confirmation of your eligibility. You may not resell these
shares except to or on behalf of the fund.
Investments of
$500,000 or more and certain retirement plans
You do not pay a sales
charge when you purchase Class A shares if you are investing $500,000 or more,
are a participant in an employer-sponsored retirement plan with at least
$500,000 in total plan assets or are a participant in certain employer-sponsored
retirement plans with accounts established with Amundi US on or before March 31,
2004 with 100 or more eligible employees or at least $500,000 in total plan
assets. However, you may pay a contingent deferred sales charge if you sell your
Class A shares within 12 months of purchase. The sales charge is equal to 1% of
your investment or your sale proceeds, whichever is less.
Class
A purchases at net asset value are available to:
•
Current or
former trustees and officers of the fund;
•
Partners
and employees of legal counsel to the fund (at the time of initial share
purchase);
•
Directors,
officers, employees or sales representatives of Amundi US and its affiliates (at
the time of initial share purchase);
•
Directors,
officers, employees or sales representatives of any subadviser or a predecessor
adviser (or their affiliates) to any investment company for which Amundi US
serves as investment adviser (at the time of initial share
purchase);
•
Officers,
partners, employees or registered representatives of broker-dealers (at the time
of initial share purchase) which have entered into sales agreements with the
distributor;
•
Employees
of Regions Financial Corporation and its affiliates (at the time of initial
share purchase);
•
Members of
the immediate families of any of the persons above;
75
Sales
charges
•
Any trust,
custodian, pension, profit sharing or other benefit plan of the foregoing
persons;
•
Insurance
company separate accounts;
•
Certain
wrap accounts for the benefit of clients of investment professionals or other
financial intermediaries adhering to standards established by the
distributor;
•
Other
funds and accounts for which Amundi US or any of its affiliates serves as
investment adviser or manager;
•
Investors
in connection with certain reorganization, liquidation or acquisition
transactions involving other investment companies or personal holding
companies;
•
Certain
unit investment trusts;
•
Group
employer-sponsored retirement plans with at least $500,000 in total plan assets.
Waivers for group employer-sponsored retirement plans do not apply to
traditional IRAs, Roth IRAs, SEPs, SARSEPs, SIMPLE IRAs, KEOGHs, individual
401(k) or individual 403(b) plans, or to brokerage relationships in which sales
charges are customarily imposed;
•
Group
employer-sponsored retirement plans with accounts established with Amundi US on
or before March 31, 2004 with 100 or more eligible employees or at least
$500,000 in total plan assets;
•
Participants
in an employer-sponsored 403(b) plan or employer-sponsored 457 plan if (i) your
employer has made special arrangements for your plan to operate as a group
through a single broker, dealer or financial intermediary and (ii) all
participants in the plan who purchase shares of a Pioneer mutual fund do so
through a single broker, dealer or other financial intermediary designated by
your employer;
•
Investors
purchasing shares pursuant to the reinstatement privilege applicable to Class A
shares;
•
Redemption
proceeds from a non-retirement account used by the shareholder to purchase fund
shares in an IRA or other individual-type retirement account: and
•
Shareholders
of record (i.e., shareholders whose shares are not held in the name of a broker
or an omnibus account) on the date of the reorganization of a predecessor Safeco
fund into a corresponding Pioneer fund, shareholders who owned shares in the
name of an omnibus account provider on that date that agrees with the fund to
distinguish beneficial holders in the same manner, and retirement plans with
assets invested in the predecessor Safeco fund on that date.
In
addition, Class A shares may be purchased at net asset value through certain
mutual fund programs sponsored by qualified intermediaries, such as
broker-dealers and investment advisers. In each case, the intermediary has
entered into an agreement with Amundi US to include the Pioneer funds in their
program without the imposition of a sales charge. The intermediary provides
investors participating in the program
76
with
additional services, including advisory, asset allocation, recordkeeping or
other services. You should ask your investment firm if it offers and you are
eligible to participate in such a mutual fund program and whether participation
in the program is consistent with your investment goals. The intermediaries
sponsoring or participating in these mutual fund programs also may offer their
clients other classes of shares of the funds, and investors may receive
different levels of services or pay different fees depending upon the class of
shares included in the program. Investors should consider carefully any separate
transaction and other fees charged by these programs in connection with
investing in each available share class before selecting a share class. Such
mutual fund programs include certain self-directed brokerage services accounts
held through qualified intermediaries that may or may not charge participating
investors transaction fees.
Contingent
deferred sales charges (CDSCs)
Class
A shares
Purchases
of Class A shares of $500,000 or more may be subject to a contingent deferred
sales charge upon redemption. A contingent deferred sales charge is payable to
the distributor in the event of a share redemption within 12 months
following
the share purchase at the rate of 1% of the lesser of the value of the shares
redeemed (exclusive of reinvested dividend and capital gain distributions) or
the total cost of such shares. However, the contingent deferred sales charge is
waived for redemptions of Class A shares purchased by an employer-sponsored
retirement plan that has at least $500,000 in total plan assets (or that has
1,000 or more eligible employees for plans with accounts established with Amundi
US on or before March 31, 2004).
Class
C shares
You buy
Class C shares at net asset value per share without paying an initial sales
charge. However, if you sell your Class C shares within one year of purchase,
upon redemption you will pay the distributor a contingent deferred sales charge
of 1% of the current market value or the original cost of the shares you are
selling, whichever is less.
Paying
the contingent deferred sales charge (CDSC)
Several
rules apply for calculating CDSCs so that you pay the lowest possible
CDSC.
•
The CDSC
is calculated on the current market value or the original cost of the shares you
are selling, whichever is less
•
You do not
pay a CDSC on reinvested dividends or distributions
77
Sales
charges
•
If you
sell only some of your shares, the transfer agent will first sell your shares
that are not subject to any CDSC and then the shares that you have owned the
longest
•
CDSCs are
not imposed when Class C shares are exchanged for Class C shares of another fund
in the Pioneer Funds mutual fund complex, but the new shares will remain subject
to the CDSC based on the original purchase date of the exchanged shares. The
transfer agent processes exchanges in proportion to your shares subject to a
CDSC, not subject to a CDSC, and purchased through reinvestment of dividends and
distributions.
•
You may
qualify for a waiver of the CDSC normally charged. See “Waiver or reduction of
contingent deferred sales charges”
Waiver
or reduction of contingent deferred sales charges
It is your
responsibility to confirm that your investment professional has notified the
distributor of your eligibility for a reduced sales charge at the time of sale.
If you or your investment professional do not notify the distributor of your
eligibility, you will risk losing the benefits of a reduced sales
charge.
The
distributor may waive or reduce the CDSC for Class A shares that are subject to
a CDSC or for Class C shares if:
•
The
distribution results from the death of all registered account owners or a
participant in an employer-sponsored plan. For UGMAs, UTMAs and trust accounts,
the waiver applies only upon the death of all beneficial owners;
•
You become
disabled (within the meaning of Section 72 of the Internal Revenue Code of 1986,
as amended (the “Internal Revenue Code”)) after the purchase of the shares being
sold. For UGMAs, UTMAs and trust accounts, the waiver only applies upon the
disability of all beneficial owners;
•
The
distribution is made in connection with limited automatic redemptions as
described in “Systematic withdrawal plans” (limited in any year to 10% of the
value of the account in the fund at the time the withdrawal plan is
established);
•
The
distribution is from any type of IRA, 403(b) or employer-sponsored plan
described under Section 401(a) or 457 of the Internal Revenue Code and, in
connection with the distribution, one of the following applies:
−
It is part
of a series of substantially equal periodic payments made over the life
expectancy of the participant or the joint life expectancy of the participant
and his or her beneficiary (limited in any year to 10% of the value of the
participant's account at the time the distribution amount is
established);
−
It is a
required minimum distribution due to the attainment of age 70½, in which case
the distribution amount may exceed 10% (based solely on total plan assets held
in Pioneer mutual funds);
78
−
It is
rolled over to or reinvested in another fund in the Pioneer Funds mutual fund
complex in the same class of shares, which will be subject to the CDSC of the
shares originally held; or
−
It is in
the form of a loan to a participant in a plan that permits loans (each repayment
applied to the purchase of shares will be subject to a CDSC as though a new
purchase);
•
The
distribution is to a participant in an employer-sponsored retirement plan
described under Section 401(a) of the Internal Revenue Code or to a participant
in an employer-sponsored 403(b) plan or employer-sponsored 457 plan if (i) your
employer has made special arrangements for your plan to operate as a group
through a single broker, dealer or financial intermediary and (ii) all
participants in the plan who purchase shares of a Pioneer mutual fund do so
through a single broker, dealer or other financial intermediary designated by
your employer and is or is in connection with:
−
A return
of excess employee deferrals or contributions;
−
A
qualifying hardship distribution as described in the Internal Revenue
Code;
−
Due to
retirement or termination of employment;
−
From a
qualified defined contribution plan and represents a participant's directed
transfer, provided that this privilege has been preauthorized through a prior
agreement with the distributor regarding participant directed
transfers;
•
The
distribution is made pursuant to the fund's right to liquidate or involuntarily
redeem shares in a shareholder's account;
•
The
distribution is made to pay an account's advisory or custodial fees;
or
•
The
distributor does not pay the selling broker a commission normally paid at the
time of the sale.
Please see
the fund's statement of additional information for more information regarding
reduced sales charges and breakpoints.
The
availability of certain sales charge waivers and discounts may depend on whether
you purchase your shares directly from the fund or through a financial
intermediary. Please see the “Intermediary defined sales charge waiver
policies”
section
for more information.
Class
K shares
Class K
shares are purchased at net asset value with no initial sales charge and no CDSC
when redeemed. However, if you invest in Class K shares through an investment
professional or financial intermediary, that investment professional or
financial intermediary may charge you a commission in an amount determined and
separately disclosed to you by that investment professional or financial
intermediary.
79
Sales
charges
Class
Y shares
Class Y
shares are purchased at net asset value with no initial sales charge and no CDSC
when redeemed. However, if you invest in Class Y shares through an investment
professional or financial intermediary, that investment professional or
financial intermediary may charge you a commission in an amount determined and
separately disclosed to you by that investment professional or financial
intermediary.
80
Buying,
exchanging and selling shares
Opening
your account
You may
open an account by completing an account application and sending it to the fund
by mail or by fax. Please call the fund to obtain an account application.
Certain types of accounts, such as retirement accounts, have separate
applications.
Use your
account application to select options and privileges for your account. You can
change your selections at any time by sending a completed account options form
to the fund. You may be required to obtain a signature guarantee to make certain
changes to an existing account.
Call or
write to the fund for account applications, account options forms and other
account information:
Pioneer
Funds
P.O. Box 534427
Pittsburgh, PA 15253-4427
Telephone 1-800-225-6292
P.O. Box 534427
Pittsburgh, PA 15253-4427
Telephone 1-800-225-6292
Please
note that there may be a delay in receipt by the fund’s transfer agent of
applications submitted by regular mail to a post office address.
Each fund
is generally available for purchase in the United States, Puerto Rico, Guam,
American Samoa and the U.S. Virgin Islands. Except to the extent otherwise
permitted by the funds’ distributor, the funds will only accept accounts from
U.S. citizens with a U.S. address (including an APO or FPO address) or resident
aliens with a U.S. address (including an APO or FPO address) and a U.S. taxpayer
identification number.
Identity
verification
To help
the government fight the funding of terrorism and money laundering activities,
federal law requires all financial institutions to obtain, verify and record
information that identifies each person who opens an account. When you open an
account, you will need to supply your name, address, date of birth, and other
information that will allow the fund to identify you.
The fund
may close your account if we cannot adequately verify your identity. The
redemption price will be the net asset value on the date of
redemption.
Investing
through financial intermediaries and retirement plans
If you
invest in the fund through your financial intermediary or through a retirement
plan, the options and services available to you may be different from those
discussed in this prospectus. Shareholders investing through financial
intermediaries, programs sponsored by financial intermediaries and retirement
plans may only purchase funds and classes of shares that are available. When you
invest through an account
81
Buying,
exchanging and selling shares
that is
not in your name, you generally may buy and sell shares and complete other
transactions only through the account. Ask your investment professional or
financial intermediary for more information.
Additional
conditions may apply to your investment in the fund, and the investment
professional or intermediary may charge you a transaction-based, administrative
or other fee for its services. These conditions and fees are in addition to
those imposed by the fund and its affiliates. You should ask your investment
professional or financial intermediary about its services and any applicable
fees.
Share
prices for transactions
If you
place an order to purchase, exchange or sell shares that is received in good
order by the fund’s transfer agent or an authorized agent by the close of
regular trading on the New York Stock Exchange (usually 4:00 p.m. Eastern time),
the share price for your transaction will be based on the net asset value
determined as of the close of regular trading on the New York Stock Exchange on
that day (plus or minus any applicable sales charges). If your order is received
by the fund’s transfer agent or an authorized agent after the close of regular
trading on the New York Stock Exchange, or your order is not in good order, the
share price will be based on the net asset value next determined after your
order is received in good order by the fund or authorized agent. The authorized
agent is responsible for transmitting your order to the fund in a timely
manner.
Good
order means that:
•
You have
provided adequate instructions
•
There are
no outstanding claims against your account
•
There are
no transaction limitations on your account
•
Your
request includes a signature guarantee if you:
−
Are
selling over $100,000 or exchanging over $500,000 worth of shares
−
Changed
your account registration or address within the last 30 days
−
Instruct
the transfer agent to mail the check to an address different from the one on
your account
−
Want the
check paid to someone other than the account’s record owner(s)
−
Are
transferring the sale proceeds to a Pioneer mutual fund account with a different
registration
Transaction
limitations
Your
transactions are subject to certain limitations, including the limitation on the
purchase of the fund’s shares within 30 calendar days of a redemption. See
“Excessive trading.”
82
Buying
You may
buy fund shares from any financial intermediary that has a sales agreement or
other arrangement with the distributor.
You can
buy shares at net asset value per share plus any applicable sales charge. The
distributor may reject any order until it has confirmed the order in writing and
received payment. Normally, your financial intermediary will send your purchase
request to the fund's transfer agent. Consult
your investment professional for more information. Your
investment firm receives a commission from the distributor, and may receive
additional compensation from Amundi US, for your purchase of fund
shares.
Minimum
investment amounts
Class
A and Class C shares
Your
initial investment must be at least $1,000. Additional investments must be at
least $100 for Class A shares and $500 for Class C shares.
You may
qualify for lower initial or subsequent investment minimums if you are
establishing an automatic investment plan or placing your trade through your
investment firm. The fund may waive the initial or subsequent investment
minimums. Minimum investment amounts may be waived for, among other things,
share purchases made through certain mutual fund programs (e.g., asset based fee
program accounts) sponsored by qualified intermediaries, such as broker-dealers
and investment advisers, that have entered into an agreement with Amundi
US.
Class
K shares
Initial
investments by discretionary accounts and direct investors in Class K shares
must be at least $5 million. There is no investment minimum for other eligible
investors. This amount may be invested in one or more of the Pioneer mutual
funds that currently offer Class K shares. There is no minimum additional
investment amount. The fund may waive the initial investment amount, if
applicable.
Waivers
of the minimum investment amount for Class K
The fund
will accept an initial investment of less than $5 million if:
(a)
The
investment is made by a retirement plan that is an eligible investor in Class K
shares; or
(b)
The
investment is made by another fund in the Pioneer Funds mutual fund complex;
or
83
Buying,
exchanging and selling shares
(c)
The
investment is made through certain mutual fund programs sponsored by qualified
intermediaries, such as broker-dealers and investment advisers. In each case,
the intermediary has an arrangement with Amundi US to include Class K shares of
the Pioneer mutual funds in their program. In one model, the intermediary
provides investors participating in the program with additional services,
including advisory, asset allocation, recordkeeping or other services, as a
combined service offering. In another model, a brokerage firm may provide
transactional services in accordance with a commission schedule set by the
firm.
You should ask your investment firm if it offers and you are eligible to participate in such a mutual fund program and whether participation in the program is consistent with your investment goals. The intermediaries sponsoring or participating in these mutual fund programs also may offer their clients other classes of shares of the funds, and investors may receive different levels of services or pay different fees depending upon the class of shares included in the program. Investors should consider carefully any separate transaction and other fees charged by these programs in connection with investing in each available share class before selecting a share class.
You should ask your investment firm if it offers and you are eligible to participate in such a mutual fund program and whether participation in the program is consistent with your investment goals. The intermediaries sponsoring or participating in these mutual fund programs also may offer their clients other classes of shares of the funds, and investors may receive different levels of services or pay different fees depending upon the class of shares included in the program. Investors should consider carefully any separate transaction and other fees charged by these programs in connection with investing in each available share class before selecting a share class.
The fund
reserves the right to waive the initial investment minimum in other
circumstances.
Class
R shares
There is
no minimum investment amount for Class R shares, although investments are
subject to the fund’s policies regarding small accounts.
Class
Y shares
Your
initial investment in Class Y shares must be at least $5 million. This amount
may be invested in one or more of the Pioneer mutual funds that currently offer
Class Y shares. There is no minimum additional investment amount. The fund may
waive the initial investment amount.
Waivers
of the minimum investment amount for Class Y
The fund
will accept an initial investment of less than $5 million if:
(a)
The
investment is made by a trust company or bank trust department which is
initially investing at least $1 million in any of the Pioneer mutual funds and,
at the time of the purchase, such assets are held in a fiduciary, advisory,
custodial or similar capacity over which the trust company or bank trust
department has full or shared investment discretion; or
84
(b)
The
investment is at least $1 million in any of the Pioneer mutual funds and the
purchaser is an insurance company separate account; or
(c)
The
account is not represented by a broker-dealer and the investment is made by (1)
an ERISA-qualified retirement plan that meets the requirements of Section 401 of
the Internal Revenue Code, (2) an employer-sponsored retirement plan that meets
the requirements of Sections 403 or 457 of the Internal Revenue Code, (3) a
private foundation that meets the requirements of Section 501(c)(3) of the
Internal Revenue Code or (4) an endowment or other organization that meets the
requirements of Section 509(a)(1) of the Internal Revenue Code; or
(d)
The
investment is made by an employer-sponsored retirement plan established for the
benefit of (1) employees of Amundi US or its affiliates, or (2)
employees
or the
affiliates of broker-dealers who have a Class Y shares sales agreement with the
distributor; or
(e)
The
investment is made through certain mutual fund programs sponsored by qualified
intermediaries, such as broker-dealers and investment advisers. In each case,
the intermediary has an arrangement with Amundi US to include Class Y shares of
the Pioneer mutual funds in its program. In one model, the intermediary provides
investors participating in the program with additional services, including
advisory, asset allocation, recordkeeping or other services, as a combined
service offering. In another model, a brokerage firm may provide transactional
services in accordance with a commission schedule set by the firm.
You should
ask your investment firm if it offers and you are eligible to participate in
such a mutual fund program and whether participation in the program is
consistent with your investment goals. The intermediaries sponsoring or
participating in these mutual fund programs also may offer their clients other
classes of shares of the funds, and investors may receive different levels of
services or pay different fees depending upon the class of shares included in
the program. Investors should consider carefully any separate transaction and
other fees charged by these programs in connection with investing in each
available share class before selecting a share class; or
(f)
The
investment is made by another fund in the Pioneer Funds mutual fund
complex.
The fund
reserves the right to waive the initial investment minimum in other
circumstances.
85
Buying,
exchanging and selling shares
Maximum
purchase amounts
Purchases
of fund shares are limited to $499,999 for Class C shares. This limit is applied
on a per transaction basis. Class A, Class K, Class R and Class Y shares are not
subject to a maximum purchase amount.
Retirement
plan accounts
You can
purchase fund shares through tax-deferred retirement plans for individuals,
businesses and tax-exempt organizations.
Your
initial investment for most types of retirement plan accounts must be at least
$1,000. Additional investments for most types of retirement plans must be at
least $100.
You may
not use the account application accompanying this prospectus to establish an
Amundi US retirement plan. You can obtain retirement plan applications from your
investment firm or by calling the Retirement Plans Department at
1-800-622-0176.
How
to buy shares
Through
your investment firm
Normally,
your investment firm will send your purchase request to the fund’s distributor
and/or transfer agent. Consult
your investment professional for more information. Your
investment firm receives a commission from the distributor, and may receive
additional compensation from Amundi US, for your purchase of fund
shares.
By
phone or online
You
can use the telephone or online purchase privilege if you have
an existing non-retirement account. Certain IRAs can use the telephone purchase
privilege. If your account is eligible, you can purchase additional fund shares
by phone or online if:
•
You
established your bank account of record at least 30 days ago
•
Your bank
information has not changed for at least 30 days
•
You are
not purchasing more than $100,000 worth of shares per account per
day
•
You can
provide the proper account identification information
When you
request a telephone or online purchase, the fund’s transfer agent will
electronically debit the amount of the purchase from your bank account of
record. The fund’s transfer agent will purchase fund shares for the amount of
the debit at the offering price determined after the fund’s transfer agent
receives your telephone
86
or online
purchase instruction and good funds. It usually takes three business days for
the fund’s transfer agent to receive notification from your bank that good funds
are available in the amount of your investment.
In
writing, by mail
You can
purchase fund shares for an existing fund account by mailing
a check to the fund. Make
your check payable to the fund. Neither initial nor subsequent investments
should be made by third party check, travelers check, or credit card check. Your
check must be in U.S. dollars and drawn on a U.S. bank. Include in your purchase
request the fund’s name, the account number and the name or names in the account
registration. Please note that there may be a delay in receipt by the fund’s
transfer agent of purchase orders submitted by regular mail to a post office
address.
By
wire (Class K or Class Y shares only)
If you
have an existing (Class K or Class Y shares only) account, you may wire funds to
purchase shares. Note, however, that:
•
BNY Mellon
must receive your wire no later than 11:00 a.m. Eastern time on the business day
after the fund receives your request to purchase shares
•
If BNY
Mellon does not receive your wire by 11:00 a.m. Eastern time on the next
business day, your transaction will be canceled at your expense and
risk
•
Wire
transfers normally take two or more hours to complete and a fee may be charged
by the sending bank
•
Wire
transfers may be restricted on holidays and at certain other times
Instruct
your bank to wire funds to:
|
Receiving
Bank: |
BNY
Mellon, NA
ABA
Routing No. 011001234
BNY
Mellon Investment Servicing (US) Inc. as agent
FBO
Amundi
US Funds Consolidated Account
Account
727296 |
|
For
further credit to: |
Shareholder
Name
Existing
Pioneer Account No.
Solutions
- Balanced Fund |
The fund’s
transfer agent must receive your account application before you send your
initial check or federal funds wire. In addition, you must provide a bank wire
address of record when you establish your account.
87
Buying,
exchanging and selling shares
Exchanging
You may,
under certain circumstances, exchange your shares for shares of the same class
of another fund in the Pioneer Funds mutual fund complex.
Your
exchange request must be for at least $1,000. The fund allows you to exchange
your shares at net asset value without charging you either an initial or
contingent deferred sales charge at the time of the exchange. Shares you acquire
as part of an exchange will continue to be subject to any contingent deferred
sales charge that applies to the shares you originally purchased. When you
ultimately sell your shares, the date of your original purchase will determine
your contingent deferred sales charge.
Before you
request an exchange, consider each fund’s investment objective(s) and policies
as described in the fund’s prospectus. You generally will have to pay income
taxes on an exchange.
Same-fund
exchange privilege
Certain
shareholders may be eligible to exchange their shares for shares of another
class. If eligible, no sales charges or other charges will apply to any such
exchange. Generally, shareholders will not recognize a gain or loss for federal
income tax purposes upon such an exchange. Investors should contact their
financial intermediary to learn more about the details of this
privilege.
How
to exchange shares
Through
your investment firm
Normally,
your investment firm will send your exchange request to the fund’s transfer
agent. Consult
your investment professional for more information about exchanging your
shares.
By
phone or online
After you
establish an eligible fund account, you
can exchange fund shares by phone or online if:
•
You are
exchanging into an existing account or using the exchange to establish a new
account, provided the new account has a registration identical to the original
account
•
The fund
into which you are exchanging offers the same class of shares
•
You are
not exchanging more than $500,000 worth of shares per account per
day
•
You can
provide the proper account identification information
88
In
writing, by mail or by fax
You can
exchange fund shares by mailing
or faxing a letter of instruction to the fund. You can
exchange fund shares directly through the fund only if your account is
registered in your name. However, you may not fax an exchange request for more
than $500,000. Include in your letter:
•
The name
and signature of all registered owners
•
A
signature guarantee for each registered owner if the amount of the exchange is
more than $500,000
•
The name
of the fund out of which you are exchanging and the name of the fund into which
you are exchanging
•
The class
of shares you are exchanging
•
The dollar
amount or number of shares you are exchanging
Please
note that there may be a delay in receipt by the fund’s transfer agent of
exchange requests submitted by regular mail to a post office
address.
Selling
Your
shares will be sold at the share price (net asset value less any applicable
sales charge) next calculated after the fund or its authorized agent, such as a
broker-dealer, receives your request in good order. If a signature guarantee is
required, you must submit your request in writing.
If the
shares you are selling are subject to a deferred sales charge, it will be
deducted from the sale proceeds. The fund generally will send your sale proceeds
by check, bank wire or electronic funds transfer. Your redemption proceeds
normally will be sent within 1 business day after your request is received in
good order, but in any event within 7 days, regardless of the method the fund
uses to make such payment. If you recently sent a check to purchase the shares
being sold, the fund may delay payment of the sale proceeds until your check has
cleared. This may take up to 10 calendar days from the purchase
date.
Your
redemption proceeds may be delayed, or your right to receive redemption proceeds
suspended, if the New York Stock Exchange is closed (other than on weekends or
holidays) or trading is restricted, if the Securities and Exchange Commission
determines an emergency or other circumstances exist that make it impracticable
for the fund to sell or value its portfolio securities, or otherwise as
permitted by the rules of or by the order of the Securities and Exchange
Commission.
If you are
selling shares from a non-retirement account or certain IRAs, you may use any of
the methods described below. If you are selling shares from a retirement account
other than an IRA, you must make your request in writing.
89
Buying,
exchanging and selling shares
You
generally will have to pay income taxes on a sale.
If you
must use a written request to exchange or sell your shares and your account is
registered in the name of a corporation or other fiduciary you must include the
name of an authorized person and a certified copy of a current corporate
resolution, certificate of incumbency or similar legal document showing that the
named individual is authorized to act on behalf of the record owner.
Under
normal circumstances, the fund expects to meet redemption requests by using cash
or cash equivalents in its portfolio and/or selling portfolio assets to generate
cash. Under stressed or abnormal market conditions or circumstances, including
circumstances adversely affecting the liquidity of the fund’s investments, the
fund may be more likely to be forced to sell portfolio assets to meet
redemptions than under normal market circumstances. Under such circumstances,
the fund could be forced to liquidate assets at inopportune times or at a loss
or depressed value. The fund also may pay redemption proceeds using cash
obtained through a committed, unsecured revolving credit facility, or an
interfund lending facility, if available, and other borrowing arrangements that
may be available from time to time.
The fund
reserves the right to redeem in kind, that is, to pay all or a portion of your
redemption proceeds by giving you securities. If the fund redeems in kind, it
generally will deliver to you a proportionate share of the portfolio securities
owned by the fund. Securities you receive this way may increase or decrease in
value while you hold them and you may incur brokerage and transaction charges
and tax liability when you convert the securities to cash. The fund may redeem
in kind at a shareholder’s request or if, for example, the fund reasonably
believes that a cash redemption may have a substantial impact on the fund and
its remaining shareholders.
During
periods of deteriorating or stressed market conditions, when an increased
portion of the fund’s portfolio may be comprised of less-liquid investments, or
during extraordinary or emergency circumstances, the fund may be more likely to
pay redemption proceeds with cash obtained through short-term borrowing
arrangements (if available) or by giving you securities.
How
to sell shares
Through
your investment firm
Normally,
your investment firm will send your request to sell shares to the fund’s
transfer agent. Please note that your investment firm may have its own earlier
deadlines for the receipt of a request to sell shares. Consult
your investment
90
professional
for more information. The fund
has authorized the distributor to act as its agent in the repurchase of fund
shares from qualified investment firms. The fund reserves the right to terminate
this procedure at any time.
By
phone or online
If
you have an eligible non-retirement account, you may sell up to $100,000 per
account per day by phone or online. You may
sell fund shares held in a retirement plan account by phone only if your account
is an eligible IRA (tax penalties may apply). You may not sell your shares by
phone or online if you have changed your address (for checks) or your bank
information (for wires and transfers) in the last 30 days.
You may
receive your sale proceeds:
•
By check,
provided the check is made payable exactly as your account is
registered
•
By bank
wire or by electronic funds transfer, provided the sale proceeds are being sent
to your bank address of record
For Class
Y shares, shareholders may sell up to $5 million per account per day if the
proceeds are directed to your bank account of record ($100,000 per account per
day if the proceeds are not directed to your bank account of
record).
In
writing, by mail or by fax
You can
sell some or all of your fund shares by writing
directly to the fund
only if
your account is registered in your name. Include in your request your name, the
fund’s name, your fund account number, the class of shares to be sold, the
dollar amount or number of shares to be sold and any other applicable
requirements as described below. The fund’s transfer agent will send the sale
proceeds to your address of record unless you provide other instructions. Your
request must be signed by all registered owners and be in good
order.
The fund’s
transfer agent will not process your request until it is received in good
order.
You may
sell up to $100,000 per account per day by fax.
Please
note that there may be a delay in receipt by the fund’s transfer agent of
redemption requests submitted by regular mail to a post office
address.
91
Buying,
exchanging and selling shares
How
to contact us
By
phone
For
information or to request a telephone transaction between 8:00 a.m. and 7:00
p.m. (Eastern time) by speaking with a shareholder services
representative call
1-800-225-6292
representative call
1-800-225-6292
To request
a transaction using FactFoneSM
call
1-800-225-4321
1-800-225-4321
By
mail
Send your written
instructions to:
Pioneer Funds
P.O. Box 534427
Pittsburgh, PA 15253-4427
Pioneer Funds
P.O. Box 534427
Pittsburgh, PA 15253-4427
Amundi
US website
amundi.com/us
By
fax
Fax your
exchange and sale requests to:
1-800-225-4240
1-800-225-4240
92
Account
options
See the
account application form for more details on each of the following services or
call the fund for details and availability.
Telephone
transaction privileges
If your
account is registered in your name, you can buy, exchange or sell fund shares by
telephone. If you do not want your account to have telephone transaction
privileges, you must indicate that choice on your account application or by
writing to the fund.
When you
request a telephone transaction the fund’s transfer agent will try to confirm
that the request is genuine. The transfer agent records the call, requires the
caller to provide validating information for the account and sends you a written
confirmation. The fund may implement other confirmation procedures from time to
time. Different procedures may apply if you have a non-U.S. account or if your
account is registered in the name of an institution, broker-dealer or other
third party. If the fund’s confirmation procedures are followed, neither the
fund nor its agents will bear any liability for these transactions.
Online
transaction privileges
If your
account is registered in your name, you may be able to buy, exchange or sell
fund shares online. Your investment firm may also be able to buy, exchange or
sell your fund shares online.
To
establish online transaction privileges:
•
For new
accounts, complete the online section of the account application
•
For
existing accounts, complete an account options form, write to the
fund or complete the online authorization screen at amundi.com/us
fund or complete the online authorization screen at amundi.com/us
To use
online transactions, you must read and agree to the terms of an online
transaction agreement available on the Amundi US website. When you or your
investment firm requests an online transaction, the fund’s transfer agent
electronically records the transaction, requires an authorizing password and
sends a written confirmation. The fund may implement other procedures from time
to time. Different procedures may apply if you have a non-U.S. account or if
your account is registered in the name of an institution, broker-dealer or other
third party. You may not be able to use the online transaction privilege for
certain types of accounts, including most retirement accounts.
93
Account
options
Periodic
investments
You can
make periodic investments in the fund by setting up monthly bank drafts,
government allotments, payroll deductions, or an Automatic Investment Plan.
Periodic investments may be made only through U.S. banks. You may use a periodic
investment plan to establish a Class A share account with a small initial
investment. If you have a Class C or Class R share account and your balance is
at least $1,000, you may establish a periodic investment plan.
Automatic
Investment Plan (AIP)
If you
establish an Automatic Investment Plan with Amundi US, the fund’s transfer agent
will make a periodic investment in fund shares by means of a preauthorized
electronic funds transfer from your bank account. Your plan investments are
voluntary. You may discontinue your plan at any time or change the plan’s dollar
amount, frequency or investment date by calling or writing to the fund’s
transfer agent. You should allow up to 30 days for the fund’s transfer agent to
establish your plan.
Automatic
exchanges
You can
automatically exchange your fund shares for shares of the same class of another
fund in the Pioneer Funds mutual fund complex. The automatic exchange will begin
on the day you select when you complete the appropriate section of your account
application or an account options form. In order to establish automatic
exchange:
•
You must
select exchanges on a monthly or quarterly basis
•
Both the
originating and receiving accounts must have identical registrations
•
The
originating account must have a minimum balance of $5,000
You may
have to pay income taxes on an exchange.
Distribution
options
The fund
offers three distribution options. Any fund shares you buy by reinvesting
distributions will be priced at the applicable net asset value per
share.
(1)
Unless you
indicate another option on your account application, any dividends and capital
gain distributions paid to you by the fund will automatically be invested in
additional fund shares.
(2)
You may
elect to have the amount of any dividends paid to you in cash and any capital
gain distributions reinvested in additional shares.
(3)
You may
elect to have the full amount of any dividends and/or capital gain distributions
paid to you in cash.
94
Options
(2) and (3) are not available to retirement plan accounts or accounts with a
current value of less than $500. When electing a cash distribution option, you
may only select one destination for the cash distribution portion (i.e., bank
account or directed to another mutual fund). The other distribution portion must
be reinvested into your current mutual fund account or follow the same cash
election.
If you are
under 59½, taxes and tax penalties may apply.
If your
distribution check is returned to the fund’s transfer agent or you do not cash
the check for six months or more, the fund’s transfer agent may reinvest the
amount of the check in your account and automatically change the distribution
option on your account to option (1) until you request a different option in
writing. If the amount of a distribution check would be less than $25, the fund
may reinvest the amount in additional shares of the fund instead of sending a
check. Additional shares of the fund will be purchased at the then-current net
asset value.
Directed
dividends
You can
invest the dividends paid by one of your Pioneer mutual fund accounts in a
second Pioneer mutual fund account. The value of your second account must be at
least $1,000. You may direct the investment of any amount of dividends. There
are no fees or charges for directed dividends.
Systematic
withdrawal plans
When you
establish a systematic withdrawal plan for your account, the transfer agent will
sell the number of fund shares you specify on a periodic basis and the proceeds
will be paid to you or to any person you select. You must obtain a signature
guarantee to direct payments to another person after you have established your
systematic withdrawal plan. Payments can be made either by check or by
electronic transfer to a U.S. bank account you designate.
To
establish a systematic withdrawal plan:
•
Your
account must have a total value of at least $10,000 when you establish your
plan
•
You may
not request a periodic withdrawal of more than 10% of the value of any Class C
or Class R share account (valued at the time the plan is
implemented)
These
requirements do not apply to scheduled (Internal Revenue Code Section 72(t)
election) or mandatory (required minimum distribution) withdrawals from IRAs and
certain retirement plans.
95
Account
options
Systematic
sales of fund shares may be taxable transactions for you. While you are making
systematic withdrawals from your account, you may pay unnecessary initial sales
charges on additional purchases of Class A shares or contingent deferred sales
charges.
Direct
deposit
If you
elect to take dividends or dividends and capital gain distributions in cash, or
if you establish a systematic withdrawal plan, you may choose to have those cash
payments deposited directly into your savings, checking or NOW bank
account.
Voluntary tax
withholding
You may have the fund’s
transfer agent withhold 28% of the dividends and capital gain distributions paid
from your fund account (before any reinvestment) and forward the amount withheld
to the Internal Revenue Service as a credit against your federal income taxes.
Voluntary tax withholding is not available for retirement plan accounts or for
accounts subject to backup withholding.
96
Shareholder
services and policies
Excessive
trading
Frequent
trading into and out of the fund can disrupt portfolio management strategies,
harm fund performance by forcing the fund to hold excess cash or to liquidate
certain portfolio securities prematurely and increase expenses for all
investors, including long-term investors who do not generate these costs. An
investor may use short-term trading as a strategy, for example, if the investor
believes that the valuation of the fund’s portfolio securities for purposes of
calculating its net asset value does not fully reflect the then-current fair
market value of those holdings. The fund discourages, and does not take any
intentional action to accommodate, excessive and short-term trading practices,
such as market timing. Although there is no generally applied standard in the
marketplace as to what level of trading activity is excessive, we may consider
trading in the fund’s shares to be excessive for a variety of reasons, such as
if:
•
You sell
shares within 30 days after the shares were purchased;
•
You make
two or more purchases and redemptions within a short period of time;
•
You enter
into a series of transactions that indicate a timing pattern or strategy;
or
•
We
reasonably believe that you have engaged in such practices in connection with
other mutual funds.
The fund’s
Board of Trustees has adopted policies and procedures with respect to frequent
purchases and redemptions of fund shares by fund investors. Pursuant to these
policies and procedures, we monitor selected trades on a daily basis in an
effort to detect excessive short-term trading. If we determine that an investor
or a client of a broker or other intermediary has engaged in excessive
short-term trading that we believe may be harmful to the fund, we will ask the
investor, broker or other intermediary to cease such activity and we will refuse
to process purchase orders (including purchases by exchange) of such investor,
broker, other intermediary or accounts that we believe are under their control.
In determining whether to take such actions, we seek to act in a manner that is
consistent with the best interests of the fund’s shareholders.
While we
use our reasonable efforts to detect excessive trading activity, there can be no
assurance that our efforts will be successful or that market timers will not
employ tactics designed to evade detection. If we are not successful, your
return from an investment in the fund may be adversely affected. Frequently,
fund shares are held through omnibus accounts maintained by financial
intermediaries such as brokers and retirement plan administrators, where the
holdings of multiple shareholders, such as all the clients of a particular
broker or other intermediary, are aggregated. Our ability to monitor trading
practices by investors purchasing shares through omnibus accounts may be limited
and dependent upon the cooperation of the broker or other intermediary in taking
steps to limit this type of activity.
97
Shareholder
services and policies
The fund
may reject a purchase or exchange order before its acceptance or the issuance of
shares. The fund may also restrict additional purchases or exchanges in an
account. Each of these steps may be taken for any transaction, for any reason,
without prior notice, including transactions that the fund believes are
requested on behalf of market timers. The fund reserves the right to reject any
purchase or exchange request by any investor or financial institution if the
fund believes that any combination of trading activity in the account or related
accounts is potentially disruptive to the fund. A prospective investor whose
purchase or exchange order is rejected will not achieve the investment results,
whether gain or loss, that would have been realized if the order had been
accepted and an investment made in the fund. A fund and its shareholders do not
incur any gain or loss as a result of a rejected order. The fund may impose
further restrictions on trading activities by market timers in the
future.
To limit
the negative effects of excessive trading on the fund, the fund has adopted the
following restriction on investor transactions. If an investor redeems $5,000 or
more (including redemptions that are a part of an exchange transaction) from the
fund, that investor shall be prevented (or “blocked”) from purchasing shares of
the fund (including purchases that are a part of an exchange transaction) for 30
calendar days after the redemption. This policy does not apply to systematic
purchase or withdrawal plan transactions, transactions made through
employer-sponsored retirement plans described under Section 401(a), 403(b) or
457 of the Internal Revenue Code or employee benefit plans, scheduled (Internal
Revenue Code Section 72(t) election) or mandatory (required minimum
distribution) withdrawals from IRAs, rebalancing transactions made through
certain asset allocation or “wrap”
programs,
transactions by insurance company separate accounts or transactions by other
funds that invest in the fund. This policy does not apply to purchase or
redemption transactions of less than $5,000 or to Pioneer U.S. Government Money
Market Fund or Pioneer Multi-Asset Ultrashort Income Fund.
We rely on
financial intermediaries that maintain omnibus accounts to apply to their
customers either the fund’s policy described above or their own policies or
restrictions designed to limit excessive trading of fund shares. However, we do
not impose this policy at the omnibus account level.
Purchases
pursuant to the reinstatement privilege (for Class A shares) are subject to this
policy.
98
Purchases
in kind
You may
use securities you own to purchase shares of the fund provided that Amundi US,
in its sole discretion, determines that the securities are consistent with the
fund's objectives and policies and their acquisition is in the best interests of
the fund. If the fund accepts your securities, they will be valued for purposes
of determining the number of fund shares to be issued to you in the same way the
fund will value the securities for purposes of determining its net asset value.
For federal income tax purposes, you may be taxed in the same manner as if you
sold the securities that you use to purchase fund shares for cash in an amount
equal to the value of the fund shares that you purchase. Your broker may also
impose a fee in connection with processing your purchase of fund shares with
securities.
Reinstatement
privilege (Class A shares)
If you
recently sold all or part of your Class A shares, you may be able to reinvest
all or part of your sale proceeds without a sales charge in Class A shares of
any Pioneer mutual fund. To qualify for reinstatement:
•
You must
send a written request to the fund no more than 90 days after selling your
shares and
•
The
registration of the account in which you reinvest your sale proceeds must be
identical to the registration of the account from which you sold your
shares.
Purchases
pursuant to the reinstatement privilege are subject to limitations on investor
transactions, including the limitation on the purchase of the fund’s shares
within 30 calendar days of redemption. See “Excessive trading.”
When you
elect reinstatement, you are subject to the provisions outlined in the selected
fund’s prospectus, including the fund’s minimum investment requirement. Your
sale proceeds will be reinvested in shares of the fund at the Class A net asset
value per share determined after the fund receives your written request for
reinstatement. You may realize a gain or loss for federal income tax purposes as
a result of your sale of fund shares, and special tax rules may apply if you
elect reinstatement. Consult your tax adviser for more information.
Amundi
US website
amundi.com/us
amundi.com/us
The
website includes a full selection of information on mutual fund investing. You
can also use the website to get:
•
Your
current account information
•
Prices,
returns and yields of all publicly available Pioneer mutual funds
•
Prospectuses,
statements of additional information and shareowner reports for all the Pioneer
mutual funds
99
Shareholder
services and policies
•
A copy of
Amundi US’s privacy notice
If you or
your investment firm authorized your account for the online transaction
privilege, you may buy, exchange and sell shares online.
FactFoneSM
1-800-225-4321
You can
use FactFoneSM
to:
•
Obtain
current information on your Pioneer mutual fund accounts
•
Inquire
about the prices of all publicly available Pioneer mutual funds
•
Make
computer-assisted telephone purchases, exchanges and redemptions for your fund
accounts
•
Request
account statements
If you
plan to use FactFoneSM to make
telephone purchases and redemptions, first you must activate your personal
identification number and establish your bank account of record. If your account
is registered in the name of a broker-dealer or other third party, you may not
be able to use FactFoneSM
to obtain
account information.
Household
delivery of fund documents
With your
consent, Amundi US may send a single proxy statement, prospectus and shareowner
report to your residence for you and any other member of your household who has
an account with the fund. If you wish to revoke your consent to this practice,
you may do so by notifying Amundi US, by phone or in writing (see “How to
contact us”). Amundi US will begin mailing separate proxy statements,
prospectuses and shareowner reports to you within 30 days after receiving your
notice.
Confirmation
statements
The fund’s
transfer agent maintains an account for each investment firm or individual
shareowner and records all account transactions. You will be sent confirmation
statements showing the details of your transactions as they occur, except
automatic investment plan transactions, which are confirmed quarterly. If you
have more than one Pioneer mutual fund account registered in your name, the
Pioneer combined account statement will be mailed to you each
quarter.
Tax
information
Early each
year, the fund will mail you information about the tax status of the dividends
and distributions paid to you by the fund.
100
Tax
information for IRA rollovers
In January
(or by the applicable Internal Revenue Service deadline) following the year in
which you take a reportable distribution, the fund’s transfer agent will mail
you a tax form reflecting the total amount(s) of distribution(s) received by the
end of January.
Privacy
The fund
has a policy designed to protect the privacy of your personal information. A
copy of Amundi US’s privacy notice was given to you at the time you opened your
account. The fund will send you a copy of the privacy notice each year. You may
also obtain the privacy notice by calling the fund or through Amundi US’s
website.
Signature
guarantees and other requirements
You are
required to obtain a signature guarantee when:
•
Requesting
certain types of exchanges or sales of fund shares
•
Requesting
certain types of changes for your existing account
You can
obtain a signature guarantee from most broker-dealers, banks, credit unions (if
authorized under state law) and federal savings and loan associations. You
cannot obtain a signature guarantee from a notary public.
The
Pioneer funds generally accept only medallion signature guarantees. A medallion
signature guarantee may be obtained from a domestic bank or trust company,
broker, dealer, clearing agency, savings association, or other financial
institution that is participating in a medallion program recognized by the
Securities Transfer Association. Signature guarantees from financial
institutions that are not participating in one of these programs are not
accepted as medallion signature guarantees. The fund may accept other forms of
guarantee from financial intermediaries in limited circumstances.
Fiduciaries
and corporations are required to submit additional documents to sell fund
shares.
Minimum
account size
The fund
requires that you maintain a minimum account value of $500. If you hold less
than $500 in your account, the fund reserves the right to notify you that it
intends to sell your shares and close your account. You will be given 60 days
from the date of the notice to make additional investments to avoid having your
shares sold. This policy does not apply to certain qualified retirement plan
accounts.
101
Shareholder
services and policies
Telephone
and website access
You may
have difficulty contacting the fund by telephone or accessing amundi.com/us
during times of market volatility or disruption in telephone or Internet
service. On New York Stock Exchange holidays or on days when the exchange closes
early, Amundi US will adjust the hours for the telephone center and for online
transaction processing accordingly. If you are unable to access amundi.com/us or
reach the fund by telephone, you should communicate with the fund in
writing.
Share
certificates
The fund
does not offer share certificates. Shares are electronically
recorded.
Other
policies
The fund
and the distributor reserve the right to:
•
reject any
purchase or exchange order for any reason, without prior notice
•
charge a
fee for exchanges or to modify, limit or suspend the exchange privilege at any
time without notice. The fund will provide 60 days’ notice of material
amendments to or termination of the exchange privilege
•
revise,
suspend, limit or terminate the account options or services available to
shareowners at any time, except as required by the rules of the Securities and
Exchange Commission
The fund
reserves the right to:
•
charge
transfer, shareholder servicing or similar agent fees, such as an account
maintenance fee for small balance accounts, directly to accounts upon at least
30 days’ notice. The fund may do this by deducting the fee from your
distribution of dividends and/or by redeeming fund shares to the extent
necessary to cover the fee
•
close your
account after a period of inactivity, as determined by state law, and transfer
your shares to the appropriate state
102
Dividends,
capital gains and taxes
Dividends
and capital gains
The fund
generally pays any distributions of net short- and long-term capital gains in
December.
The fund
generally pays dividends from any net investment income in
December.
The fund
may also pay dividends and capital gain distributions at other times if
necessary for the fund to avoid U.S. federal income or excise tax. If you invest
in the fund shortly before a dividend or other distribution, generally you will
pay a higher price per share and, unless you are exempt from tax, you will pay
taxes on the amount of the distribution whether you reinvest the distribution in
additional shares or receive it as cash.
Taxes
You will
normally have to pay federal income taxes, and any state or local taxes, on the
dividends and other distributions you receive from the fund, whether you take
the distributions in cash or reinvest them in additional shares. For U.S.
federal income tax purposes, distributions from the fund's net capital gains (if
any) are considered long-term capital gains and are generally taxable to
noncorporate shareholders at reduced rates. Distributions from the fund’s net
short-term capital gains are generally taxable as ordinary income. Other
dividends are taxable either as ordinary income or, in general, if paid from the
fund's “qualified dividend income” and if certain conditions, including holding
period requirements, are met by the fund and the shareholder, as qualified
dividend income taxable to noncorporate shareholders at reduced U.S. federal
income tax rates.
“Qualified
dividend income” generally is income derived from dividends paid to underlying
funds by U.S. corporations or certain foreign corporations that are either
incorporated in a U.S. possession or eligible for tax benefits under certain
U.S. income tax treaties. In addition, dividends that an underlying fund
receives in respect of stock of certain foreign corporations may be qualified
dividend income if that stock is readily tradable on an established U.S.
securities market.
A portion
of dividends received from the fund (but none of the fund's capital gain
distributions) may qualify for the dividends-received deduction for
corporations. To the extent that the fund pays dividends attributable to income
received by it from underlying fixed income funds, these dividends generally
will not qualify for the dividends-received deduction for corporations or for
any favorable U.S. federal income tax rate available to noncorporate
shareholders on qualified dividend income.
The fund
will report to shareholders annually the U.S. federal income tax status of all
fund distributions.
103
Dividends,
capital gains and taxes
If the
fund declares a dividend in October, November or December, payable to
shareholders of record in such a month, and pays it in January of the following
year, you will be taxed on the dividend as if you received it in the year in
which it was declared.
Sales and
exchanges generally will be taxable transactions to shareowners. When you sell
or exchange fund shares you will generally recognize a capital gain or capital
loss in an amount equal to the difference between the net amount of sale
proceeds (or, in the case of an exchange, the fair market value of the shares)
that you receive and your tax basis for the shares that you sell or
exchange.
You may
receive distributions that are attributable to appreciation that was present in
the fund’s or an underlying fund’s portfolio securities at the time you made
your investment but had not been realized at that time, or that are attributable
to capital gains or other income that, although realized by the fund or an
underlying fund, had not yet been distributed at the time you made your
investment. Unless you purchase shares through a tax-advantaged account, these
distributions will be taxable to you even though they economically represent a
return of a portion of your investment. You may want to avoid buying shares when
the fund is about to declare a dividend or capital gain distribution. You should
consult your tax adviser before buying shares no matter when you are
investing.
A 3.8%
Medicare contribution tax generally applies to all or a portion of the net
investment income of a shareholder who is an individual and not a nonresident
alien for federal income tax purposes and who has adjusted gross income (subject
to certain adjustments) that exceeds a threshold amount. This 3.8% tax also
applies to all or a portion of the undistributed net investment income of
certain shareholders that are estates and trusts. For these purposes, dividends,
interest and certain capital gains are generally taken into account in computing
a shareholder’s net investment income.
You must
provide your social security number or other taxpayer identification number to
the fund along with the certifications required by the Internal Revenue Service
when you open an account. If you do not or if it is otherwise legally required
to do so, the fund will apply “backup withholding” tax on your dividends and
other distributions, sale proceeds and any other payments to you that are
subject to backup withholding. The backup withholding rate is currently
24%.
Shareholders
that are exempt from U.S. federal income tax, such as retirement plans that are
qualified under Section 401 of the Internal Revenue Code, generally are not
subject to U.S. federal income tax on fund dividends or other distributions or
on sales or exchanges of fund shares. However, in the case of fund shares held
104
through a
nonqualified deferred compensation plan, fund dividends and other distributions
received by the plan and sales and exchanges of fund shares by the plan
generally will be taxable to the employer sponsoring such plan in accordance
with U.S. federal income tax laws that are generally applicable to shareholders
receiving such dividends and other distributions from regulated investment
companies such as the fund or effecting such sales or exchanges.
Plan
participants whose retirement plan invests in the fund generally are not subject
to federal income tax on fund dividends or other distributions received by the
plan or on sales or exchanges of fund shares by the plan. However, distributions
to plan participants from a retirement plan generally are taxable to plan
participants as ordinary income.
Distributions
derived from interest on U.S. government obligations (but generally not
distributions of gain from the sale of such obligations) may be exempt from
certain state and local taxes.
You should
ask your tax adviser about any federal, state, local and foreign tax
considerations relating to an investment in the fund. You may also consult the
fund's statement of additional information for a more detailed discussion of the
U.S. federal income tax considerations that may affect the fund and its
shareowners.
105
Financial
highlights
The
financial highlights table helps you understand the fund's financial performance
for the past five years.
Certain
information reflects financial results for a single fund share. The total
returns in the table represent the rate that you would have earned or lost on an
investment in Class A, Class C, Class R and Class Y shares of the fund (assuming
reinvestment of all dividends and distributions).
No
financial information is presented for Class K shares because no Class K shares
were outstanding during the periods shown.
The
information below has been audited by Ernst & Young LLP, independent
registered public accounting firm, whose report is included in the fund’s annual
report along with the fund’s financial statements. The fund’s annual report is
incorporated by reference in the statement of additional information and is
available upon request.
106
Pioneer
Solutions - Balanced Fund
|
|
Year
Ended
7/31/23 |
Year
Ended
7/31/22 |
Year
Ended
7/31/21 |
Year
Ended
7/31/20 |
Year
Ended
7/31/19 |
|
Class
A |
|
|
|
|
|
|
Net
asset value, beginning of period |
$11.55 |
$13.20 |
$10.93 |
$11.29 |
$12.12 |
|
Increase
(decrease) from investment operations: |
|
|
|
|
|
|
Net
investment income (loss) (a) |
$0.38 |
$0.37 |
$0.24 |
$0.34 |
$0.32 |
|
Net
realized and unrealized gain (loss) on investments |
0.55 |
(1.22) |
2.36 |
0.02 |
(0.54) |
|
Net
increase (decrease) from investment operations |
$0.93 |
$(0.85) |
$2.60 |
$0.36 |
$(0.22) |
|
Distributions
to shareowners: |
|
|
|
|
|
|
Net
investment income |
$(0.36) |
$(0.45) |
$(0.26) |
$(0.36) |
$(0.34) |
|
Net
realized gain |
(1.09) |
(0.35) |
(0.07) |
(0.36) |
(0.27) |
|
Total
distributions |
$(1.45) |
$(0.80) |
$(0.33) |
$(0.72) |
$(0.61) |
|
Net
increase (decrease) in net asset value |
$(0.52) |
$(1.65) |
$2.27 |
$(0.36) |
$(0.83) |
|
Net
asset value, end of period |
$11.03 |
$11.55 |
$13.20 |
$10.93 |
$11.29 |
|
Total
return (b) |
9.03%(c) |
(6.98)% |
24.15% |
3.06% |
(1.32)% |
|
Ratio
of net expenses to average net assets† |
0.46% |
0.44% |
0.46% |
0.49% |
0.45% |
|
Ratio
of net investment income (loss) to average net
assets†^ |
3.44% |
2.93% |
1.95% |
3.16% |
2.82% |
|
Portfolio
turnover rate |
57% |
51% |
24% |
30% |
44% |
|
Net
assets, end of period (in thousands) |
$339,852 |
$339,265 |
$395,303 |
$330,784 |
$349,505 |
|
† |
In
addition to the expenses which the Fund bears directly, the Fund
indirectly bears pro rata shares of the expenses of the funds in which the
Fund
invests.
Because each of the underlying funds bears its own varying expense levels
and because the Fund may own differing proportions of each
fund
at different times, the amount of expenses incurred indirectly by the Fund
will vary from time to time. |
|
^ |
Ratios
do not reflect the Fund's proportionate share of the income and expenses
of the underlying funds. |
|
(a) |
The
per-share data presented above is based on the average shares outstanding
for the period presented. |
|
(b) |
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. |
|
(c) |
For
the year ended July 31, 2023, the Fund's total return includes a
reimbursement by the Adviser (see Notes to the Financial Statements-Note
1.B).
If the Fund had not been reimbursed by the Adviser, the total return would
have been 8.93%. |
107
Financial
highlights
Pioneer
Solutions - Balanced Fund
|
|
Year
Ended
7/31/23 |
Year
Ended
7/31/22 |
Year
Ended
7/31/21 |
Year
Ended
7/31/20 |
Year
Ended
7/31/19 |
|
Class
C |
|
|
|
|
|
|
Net
asset value, beginning of period |
$10.44 |
$11.99 |
$9.94 |
$10.32 |
$11.12 |
|
Increase
(decrease) from investment operations: |
|
|
|
|
|
|
Net
investment income (loss) (a) |
$0.27 |
$0.25 |
$0.14 |
$0.25 |
$0.20 |
|
Net
realized and unrealized gain (loss) on investments |
0.48 |
(1.10) |
2.15 |
0.01 |
(0.49) |
|
Net
increase (decrease) from investment operations |
$0.75 |
$(0.85) |
$2.29 |
$0.26 |
$(0.29) |
|
Distributions
to shareowners: |
|
|
|
|
|
|
Net
investment income |
$(0.28) |
$(0.35) |
$(0.17) |
$(0.28) |
$(0.24) |
|
Net
realized gain |
(1.09) |
(0.35) |
(0.07) |
(0.36) |
(0.27) |
|
Total
distributions |
$(1.37) |
$(0.70) |
$(0.24) |
$(0.64) |
$(0.51) |
|
Net
increase (decrease) in net asset value |
$(0.62) |
$(1.55) |
$2.05 |
$(0.38) |
$(0.80) |
|
Net
asset value, end of period |
$9.82 |
$10.44 |
$11.99 |
$9.94 |
$10.32 |
|
Total
return (b) |
8.14%(c) |
(7.62)% |
23.34% |
2.35% |
(2.14)% |
|
Ratio
of net expenses to average net assets† |
1.19% |
1.16% |
1.18% |
1.17% |
1.19% |
|
Ratio
of net investment income (loss) to average net
assets†^ |
2.71% |
2.19% |
1.29% |
2.50% |
1.96% |
|
Portfolio
turnover rate |
57% |
51% |
24% |
30% |
44% |
|
Net
assets, end of period (in thousands) |
$40,542 |
$43,133 |
$58,428 |
$62,213 |
$76,524 |
|
† |
In
addition to the expenses which the Fund bears directly, the Fund
indirectly bears pro rata shares of the expenses of the funds in which the
Fund
invests.
Because each of the underlying funds bears its own varying expense levels
and because the Fund may own differing proportions of each
fund
at different times, the amount of expenses incurred indirectly by the Fund
will vary from time to time. |
|
^ |
Ratios
do not reflect the Fund's proportionate share of the income and expenses
of the underlying funds. |
|
(a) |
The
per-share data presented above is based on the average shares outstanding
for the period presented. |
|
(b) |
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. |
|
(c) |
For
the year ended July 31, 2023, the Fund's total return includes a
reimbursement by the Adviser (see Notes to the Financial Statements-Note
1.B).
The impact on Class C's total return was less than
0.005%. |
108
Pioneer
Solutions - Balanced Fund
|
|
Year
Ended
7/31/23 |
Year
Ended
7/31/22 |
Year
Ended
7/31/21 |
Year
Ended
7/31/20 |
Year
Ended
7/31/19 |
|
Class
R |
|
|
|
|
|
|
Net
asset value, beginning of period |
$11.46 |
$13.10 |
$10.86 |
$11.19 |
$12.04 |
|
Increase
(decrease) from investment operations: |
|
|
|
|
|
|
Net
investment income (loss) (a) |
$0.34 |
$0.34 |
$0.22 |
$0.31 |
$0.23 |
|
Net
realized and unrealized gain (loss) on investments |
0.54 |
(1.21) |
2.35 |
0.03 |
(0.49) |
|
Net
increase (decrease) from investment operations |
$0.88 |
$(0.87) |
$2.57 |
$0.34 |
$(0.26) |
|
Distributions
to shareowners: |
|
|
|
|
|
|
Net
investment income |
$(0.31) |
$(0.42) |
$(0.26) |
$(0.31) |
$(0.32) |
|
Net
realized gain |
(1.09) |
(0.35) |
(0.07) |
(0.36) |
(0.27) |
|
Total
distributions |
$(1.40) |
$(0.77) |
$(0.33) |
$(0.67) |
$(0.59) |
|
Net
increase (decrease) in net asset value |
$(0.52) |
$(1.64) |
$2.24 |
$(0.33) |
$(0.85) |
|
Net
asset value, end of period |
$10.94 |
$11.46 |
$13.10 |
$10.86 |
$11.19 |
|
Total
return (b) |
8.66%(c) |
(7.18)% |
23.97% |
2.90% |
(1.64)% |
|
Ratio
of net expenses to average net assets† |
0.73% |
0.69% |
0.63% |
0.62% |
0.78% |
|
Ratio
of net investment income (loss) to average net
assets†^ |
3.16% |
2.68% |
1.82% |
2.86% |
2.05% |
|
Portfolio
turnover rate |
57% |
51% |
24% |
30% |
44% |
|
Net
assets, end of period (in thousands) |
$1,151 |
$1,061 |
$1,870 |
$1,602 |
$982 |
|
Ratios
with no waiver of fees and assumption of expenses by the Adviser and
no
reduction for fees paid indirectly: |
|
|
|
|
|
|
Total
expenses to average net assets† |
0.73% |
0.69% |
0.63% |
0.62% |
1.03% |
|
Net
investment income (loss) to average net assets†^ |
3.16% |
2.68% |
1.82% |
2.86% |
1.80% |
|
† |
In
addition to the expenses which the Fund bears directly, the Fund
indirectly bears pro rata shares of the expenses of the funds in which the
Fund
invests.
Because each of the underlying funds bears its own varying expense levels
and because the Fund may own differing proportions of each
fund
at different times, the amount of expenses incurred indirectly by the Fund
will vary from time to time. |
|
^ |
Ratios
do not reflect the Fund's proportionate share of the income and expenses
of the underlying funds. |
|
(a) |
The
per-share data presented above is based on the average shares outstanding
for the period presented. |
|
(b) |
Assumes
initial investment at net asset value at the beginning of each period,
reinvestment of all distributions and the complete redemption of the
investment
at net asset value at the end of each period. |
|
(c) |
For
the year ended July 31, 2023, the Fund's total return includes a
reimbursement by the Adviser (see Notes to the Financial Statements-Note
1.B).
If the Fund had not been reimbursed by the Adviser, the total return would
have been 8.56%. |
109
Financial
highlights
Pioneer
Solutions - Balanced Fund
|
|
Year
Ended
7/31/23 |
Year
Ended
7/31/22 |
Year
Ended
7/31/21 |
Year
Ended
7/31/20 |
Year
Ended
7/31/19 |
|
Class
Y |
|
|
|
|
|
|
Net
asset value, beginning of period |
$11.77 |
$13.42 |
$11.11 |
$11.46 |
$12.29 |
|
Increase
(decrease) from investment operations: |
|
|
|
|
|
|
Net
investment income (loss) (a) |
$0.41 |
$0.41 |
$0.26 |
$0.38 |
$0.39 |
|
Net
realized and unrealized gain (loss) on investments |
0.54 |
(1.22) |
2.41 |
0.02 |
(0.59) |
|
Net
increase (decrease) from investment operations |
$0.95 |
$(0.81) |
$2.67 |
$0.40 |
$(0.20) |
|
Distributions
to shareowners: |
|
|
|
|
|
|
Net
investment income |
$(0.39) |
$(0.49) |
$(0.29) |
$(0.39) |
$(0.36) |
|
Net
realized gain |
(1.09) |
(0.35) |
(0.07) |
(0.36) |
(0.27) |
|
Total
distributions |
$(1.48) |
$(0.84) |
$(0.36) |
$(0.75) |
$(0.63) |
|
Net
increase (decrease) in net asset value |
$(0.53) |
$(1.65) |
$2.31 |
$(0.35) |
$(0.83) |
|
Net
asset value, end of period |
$11.24 |
$11.77 |
$13.42 |
$11.11 |
$11.46 |
|
Total
return (b) |
9.08%(c) |
(6.61)% |
24.41% |
3.31% |
(1.14)% |
|
Ratio
of net expenses to average net assets† |
0.34% |
0.14% |
0.19% |
0.25% |
0.27% |
|
Ratio
of net investment income (loss) to average net
assets†^ |
3.67% |
3.22% |
2.06% |
3.44% |
3.37% |
|
Portfolio
turnover rate |
57% |
51% |
24% |
30% |
44% |
|
Net
assets, end of period (in thousands) |
$2,698 |
$2,708 |
$2,733 |
$1,479 |
$1,562 |
|
† |
In
addition to the expenses which the Fund bears directly, the Fund
indirectly bears pro rata shares of the expenses of the funds in which the
Fund
invests.
Because each of the underlying funds bears its own varying expense levels
and because the Fund may own differing proportions of each
fund
at different times, the amount of expenses incurred indirectly by the Fund
will vary from time to time. |
|
^ |
Ratios
do not reflect the Fund's proportionate share of the income and expenses
of the underlying funds. |
|
(a) |
The
per-share data presented above is based on the average shares outstanding
for the period presented. |
|
(b) |
Assumes
initial investment at net asset value at the beginning of each period,
reinvestment of all distributions and the complete redemption of the
investment
at net asset value at the end of each period. |
|
(c) |
For
the year ended July 31, 2023, the Fund's total return includes a
reimbursement by the Adviser (see Notes to the Financial Statements-Note
1.B).
If the Fund had not been reimbursed by the Adviser, the total return would
have been 8.98%. |
110
Intermediary
defined sales charge waiver policies
The
information below has been provided by the named financial intermediaries.
Please contact the applicable financial intermediary with any questions
regarding how it applies the policies described below and for assistance in
determining whether you may qualify for a particular sales charge waiver or
discount.
Ameriprise
Financial
Class
A Shares Front-End Sales Charge Waivers Available at Ameriprise
Financial:
Effective
January 15, 2021, the following information applies to Class A shares purchases
if you have an account with or otherwise purchase Fund shares through Ameriprise
Financial:
Shareholders
purchasing Fund shares through an Ameriprise Financial brokerage account are
eligible for the following front-end sales charge waivers, which may differ from
those disclosed elsewhere in this Fund’s prospectus or SAI:
•
Employer-sponsored
retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b)
plans, profit sharing and money purchase pension plans and defined benefit
plans). For purposes of this provision, employer-sponsored retirement plans do
not include SEP IRAs, Simple IRAs or SAR-SEPs.
•
Shares
purchased through reinvestment of capital gains distributions and dividend
reinvestment when purchasing shares of the same Fund (but not any other fund
within the same fund family).
•
Shares
exchanged from Class C shares of the same fund in the month of or following the
7-year anniversary of the purchase date. To the extent that this prospectus
elsewhere provides for a waiver with respect to exchanges of Class C shares or
conversion of Class C shares following a shorter holding period, that waiver
will apply.
•
Employees
and registered representatives of Ameriprise Financial or its affiliates and
their immediate family members.
•
Shares
purchased by or through qualified accounts (including IRAs, Coverdell Education
Savings Accounts, 401(k)s, 403(b) TSCAs subject to ERISA and defined benefit
plans) that are held by a covered family member, defined as an Ameriprise
financial advisor and/or the advisor’s spouse, advisor’s lineal ascendant
(mother, father, grandmother, grandfather, great grandmother, great
grandfather), advisor’s lineal descendant (son, step-son, daughter,
step-daughter, grandson, granddaughter, great grandson, great granddaughter) or
any spouse of a covered family member who is a lineal descendant.
•
Shares
purchased from the proceeds of redemptions within the same fund family, provided
(1) the repurchase occurs within 90 days following the redemption,
111
Intermediary
defined sales charge waiver policies
(2) the
redemption and purchase occur in the same account, and (3) redeemed shares were
subject to a front-end or deferred sales load (i.e. Rights of
Reinstatement).
Edward
D. Jones & Co., L.P. (“Edward Jones”)
Policies
Regarding Transactions Through Edward Jones
The
following information has been provided by Edward Jones:
Effective
on or after March 1, 2021, the following information supersedes prior
information with respect to transactions and positions held in fund shares
through an Edward Jones system. Clients of Edward Jones (also referred to as
“shareholders”) purchasing fund shares on the Edward Jones commission and
fee-based platforms are eligible only for the following sales charge discounts
(also referred to as “breakpoints”) and waivers, which can differ from discounts
and waivers described elsewhere in the mutual fund prospectus or statement of
additional information (“SAI”) or through another broker-dealer. In all
instances, it is the shareholder's responsibility to inform Edward Jones at the
time of purchase of any relationship, holdings of Pioneer Funds or other facts
qualifying the purchaser for discounts or waivers. Edward Jones can ask for
documentation of such circumstance. Shareholders should contact Edward Jones if
they have questions regarding their eligibility for these discounts and
waivers.
Breakpoints
•
Breakpoint
pricing, otherwise known as volume pricing, at dollar thresholds as described in
the prospectus.
Rights
of Accumulation (“ROA”)
•
The
applicable sales charge on a purchase of Class A shares is determined by taking
into account all share classes (except certain money market funds and any assets
held in group retirement plans) of Pioneer Funds held by the shareholder or in
an account grouped by Edward Jones with other accounts for the purpose of
providing certain pricing considerations (“pricing groups”). If grouping assets
as a shareholder, this includes all share classes held on the Edward Jones
platform and/or held on another platform. The inclusion of eligible fund family
assets in the ROA calculation is dependent on the shareholder notifying Edward
Jones of such assets at the time of calculation. Money market funds are included
only if such shares were sold with a sales charge at the time of purchase or
acquired in exchange for shares purchased with a sales charge.
112
•
The
employer maintaining a SEP IRA plan and/or SIMPLE IRA plan may elect to
establish or change ROA for the IRA accounts associated with the plan to a
plan-level grouping as opposed to including all share classes at a shareholder
or pricing group level.
•
ROA is
determined by calculating the higher of cost minus redemptions or market value
(current shares x NAV).
Letter
of Intent (“LOI”)
•
Through a
LOI, shareholders can receive the sales charge and breakpoint discounts for
purchases shareholders intend to make over a 13-month period from the date
Edward Jones receives the LOI. The LOI is determined by calculating the higher
of cost or market value of qualifying holdings at LOI initiation in combination
with the value that the shareholder intends to buy over a 13-month period to
calculate the front-end sales charge and any breakpoint discounts. Each purchase
the shareholder makes during that 13-month period will receive the sales charge
and breakpoint discount that applies to the total amount. The inclusion of
eligible fund family assets in the LOI calculation is dependent on the
shareholder notifying Edward Jones of such assets at the time of calculation.
Purchases made before the LOI is received by Edward Jones are not adjusted under
the LOI and will not reduce the sales charge previously paid. Sales charges will
be adjusted if LOI is not met.
•
If the
employer maintaining a SEP IRA plan and/or SIMPLE IRA plan has elected to
establish or change ROA for the IRA accounts associated with the plan to a
plan-level grouping, LOIs will also be at the plan-level and may only be
established by the employer.
Sales
Charge Waivers
Sales
charges are waived for the following shareholders and in the following
situations:
•
Associates
of Edward Jones and its affiliates and their family members who are in the same
pricing group (as determined by Edward Jones under its policies and procedures)
as the associate. This waiver will continue for the remainder of the associate's
life if the associate retires from Edward Jones in good-standing and remains in
good standing pursuant to Edward Jones’ policies and procedures.
•
Shares
purchased in an Edward Jones fee-based program.
•
Shares
purchased through reinvestment of capital gains distributions and dividend
reinvestment.
•
Shares
purchased from the proceeds of redeemed shares of the same fund family so long
as the following conditions are met: 1) the proceeds are from the sale of
113
Intermediary
defined sales charge waiver policies
shares
within 60 days of the purchase, and 2) the sale and purchase are made in the
same share class and the same account or the purchase is made in an individual
retirement account with proceeds from liquidations in a non-retirement
account.
•
Shares
exchanged into Class A shares from another share class so long as the exchange
is into the same fund and was initiated at the discretion of Edward Jones.
Edward Jones is responsible for any remaining CDSC due to the fund company, if
applicable. Any future purchases are subject to the applicable sales charge as
disclosed in the prospectus.
•
Exchanges
from Class C shares to Class A shares of the same fund, generally, in the
84th month
following the anniversary of the purchase date or earlier at the discretion of
Edward Jones.
Contingent
Deferred Sales Charge (“CDSC”) Waivers
If the
shareholder purchases shares that are subject to a CDSC and those shares are
redeemed before the CDSC is expired, the shareholder is responsible to pay the
CDSC except in the following conditions:
•
The death
or disability of the shareholder.
•
Systematic
withdrawals with up to 10% per year of the account value.
•
Return of
excess contributions from an Individual Retirement Account (IRA).
•
Shares
sold as part of a required minimum distribution for IRA and retirement accounts
if the redemption is taken in or after the year the shareholder reaches
qualified age based on applicable IRS regulations.
•
Shares
sold to pay Edward Jones fees or costs in such cases where the transaction is
initiated by Edward Jones.
•
Shares
exchanged in an Edward Jones fee-based program.
•
Shares
acquired through NAV reinstatement.
•
Shares
redeemed at the discretion of Edward Jones for Minimum Balances, as described
below.
Other
Important Information Regarding Transactions Through Edward Jones
Minimum
Purchase Amounts
•
Initial
purchase minimum: $250
•
Subsequent
purchase minimum: none
Minimum
Balances
•
Edward
Jones has the right to redeem at its discretion fund holdings with a balance of
$250 or less. The following are examples of accounts that are not included in
this policy:
−
A
fee-based account held on an Edward Jones platform
114
−
A 529
account held on an Edward Jones platform
−
An account
with an active systematic investment plan or LOI
Exchanging
Share Classes
•
At any
time it deems necessary, Edward Jones has the authority to exchange at NAV a
shareholder's holdings in a fund to Class A shares of the same
fund.
Janney
Montgomery Scott
Effective
May 1, 2020, if you purchase fund shares through a Janney Montgomery Scott LLC
(“Janney”) brokerage account, you will be eligible for the following load
waivers (front-end sales charge waivers and contingent deferred sales charge
(“CDSC”), or back-end sales charge, waivers) and discounts, which may differ
from those disclosed elsewhere in this fund’s prospectus or statement of
additional information.
Front-end
sales charge* waivers on Class A shares available at Janney
•
Shares
purchased through reinvestment of capital gains distributions and dividend
reinvestment when purchasing shares of the same fund (but not any other fund
within the fund family).
•
Shares
purchased by employees and registered representatives of Janney or its
affiliates and their family members as designated by Janney.
•
Shares
purchased from the proceeds of redemptions within the same fund family, provided
(1) the repurchase occurs within ninety (90) days following the redemption, (2)
the redemption and purchase occur in the same account, and (3) redeemed shares
were subject to a front-end or deferred sales load (i.e., right of
reinstatement).
•
Employer-sponsored
retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b)
plans, profit sharing and money purchase pension plans and defined benefit
plans). For purposes of this provision, employer-sponsored retirement plans do
not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh plans.
•
Shares
acquired through a right of reinstatement.
•
Class C
shares that are no longer subject to a contingent deferred sales charge and are
converted to Class A shares of the same fund pursuant to Janney’s policies and
procedures.
CDSC
waivers on Class A and C shares available at Janney
•
Shares
sold upon the death or disability of the shareholder.
•
Shares
sold as part of a systematic withdrawal plan as described in the fund’s
prospectus.
•
Shares
purchased in connection with a return of excess contributions from an IRA
account.
115
Intermediary
defined sales charge waiver policies
•
Shares
sold as part of a required minimum distribution for IRA and retirement accounts
if the redemption is taken in or after the year the shareholder reaches
qualified age based on applicable IRS regulations
•
Shares
sold to pay Janney fees but only if the transaction is initiated by
Janney.
•
Shares
acquired through a right of reinstatement.
•
Shares
exchanged into the same share class of a different fund.
Front-end
sales charge* discounts available at Janney: breakpoints, rights of
accumulation, and/or letters of intent
•
Breakpoints
as described in the fund’s prospectus.
•
Rights of
accumulation (“ROA”), which entitle shareholders to breakpoint discounts, will
be automatically calculated based on the aggregated holding of fund family
assets held by accounts within the purchaser’s household at Janney. Eligible
fund family assets not held at Janney may be included in the ROA calculation
only if the shareholder notifies his or her financial advisor about such
assets.
•
Letters of
intent which allow for breakpoint discounts based on anticipated purchases
within a fund family, over a 13-month time period. Eligible fund family assets
not held at Janney Montgomery Scott may be included in the calculation of
letters of intent only if the shareholder notifies his or her financial advisor
about such assets.
*Also
referred to as an “initial sales charge.”
J.P. Morgan
Securities LLC
Effective September 29,
2023, if you purchase or hold fund shares through an applicable J.P. Morgan
Securities LLC brokerage account, you will be eligible for the following sales
charge waivers (front-end sales charge waivers and contingent deferred sales
charge (“CDSC”), or back-end sales charge, waivers), share class conversion
policy and discounts, which may differ from those disclosed elsewhere in this
fund’s prospectus or Statement of Additional Information.
Front-end sales
charge waivers on Class A shares available at J.P. Morgan Securities
LLC
•
Shares exchanged from
Class C (i.e. level-load) shares that are no longer subject to a CDSC and are
exchanged into Class A shares of the same fund pursuant to J.P. Morgan
Securities LLC’s share class exchange policy.
116
•
Qualified
employer-sponsored defined contribution and defined benefit retirement plans,
nonqualified deferred compensation plans, other employee benefit plans and
trusts used to fund those plans. For purposes of this provision, such plans do
not include SEP IRAs, SIMPLE IRAs, SAR-SEPs or 501(c)(3) accounts.
•
Shares of funds purchased
through J.P. Morgan Securities LLC Self-Directed Investing accounts.
•
Shares purchased through
rights of reinstatement.
•
Shares purchased through
reinvestment of capital gains distributions and dividend reinvestment when
purchasing shares of the same fund (but not any other fund within the fund
family).
•
Shares purchased by
employees and registered representatives of J.P. Morgan Securities LLC or its
affiliates and their spouse or financial dependent as defined by J.P. Morgan
Securities LLC.
Class C to Class A
share conversion
•
A shareholder in the
fund’s Class C shares will have their shares converted to Class A shares (or the
appropriate share class) of the same fund if the shares are no longer subject to
a CDSC and the conversion is consistent with J.P. Morgan Securities LLC’s
policies and procedures.
CDSC waivers on
Class A and C shares available at J.P. Morgan Securities LLC
•
Shares sold upon the death
or disability of the shareholder.
•
Shares sold as part of a
systematic withdrawal plan as described in the fund’s prospectus.
•
Shares purchased in
connection with a return of excess contributions from an IRA
account.
•
Shares sold as part of a
required minimum distribution for IRA and retirement accounts pursuant to the
Internal Revenue Code.
•
Shares acquired through a
right of reinstatement.
Front-end load
discounts available at J.P. Morgan Securities LLC: breakpoints, rights of
accumulation & letters of intent
•
Breakpoints as described
in the prospectus.
•
Rights of Accumulation
(“ROA”) which entitle shareholders to breakpoint discounts as described in the
fund’s prospectus will be automatically calculated based on the aggregated
holding of fund family assets held by accounts within the purchaser’s household
at J.P. Morgan Securities LLC. Eligible fund family assets not held at J.P.
Morgan Securities LLC (including 529 program holdings, where applicable) may be
included in the ROA calculation only if the shareholder notifies their financial
advisor about such assets.
117
Intermediary
defined sales charge waiver policies
•
Letters of Intent (“LOI”)
which allow for breakpoint discounts based on anticipated purchases within a
fund family, through J.P. Morgan Securities LLC, over a 13-month period of time
(if applicable).
Merrill
Lynch
The
availability of certain sales charge waivers and discounts will depend on
whether you purchase your shares directly from the fund or through a financial
intermediary. Intermediaries may have different policies and procedures
regarding the availability of front-end sales charge waivers or contingent
deferred (back-end) sales charge (“CDSC”) waivers, which are discussed below. In
all instances, it is the purchaser’s responsibility to notify the fund or the
purchaser’s financial intermediary at the time of purchase of any relationship
or other facts qualifying the purchaser for sales charge waivers or discounts.
For waivers and discounts not available through a particular intermediary,
shareholders will have to purchase fund shares directly from the fund or through
another intermediary to receive these waivers or discounts.
Shareholders
purchasing fund shares through a Merrill Lynch platform or account will be
eligible only for the following sales charge waivers (front-end sales charge
waivers and contingent deferred or back-end, sales charge waivers) and
discounts, which may differ from those disclosed elsewhere in this fund’s
prospectus or statement of additional information.
Front-End
Sales Charge Waivers on Class A Shares available at Merrill Lynch
•
Employer-sponsored
retirement, deferred compensation and employee benefit plans (including health
savings accounts) and trusts used to fund those plans, provided that the shares
are not held in a commission-based brokerage account and shares are held for the
benefit of the plan
•
Shares
purchased by a 529 Plan (does not include 529 Plan units or 529-specific share
classes or equivalents)
•
Shares
purchased through a Merrill Lynch affiliated investment advisory
program
•
Shares
exchanged due to the holdings moving from a Merrill Lynch affiliated investment
advisory program to a Merrill Lynch brokerage (non-advisory) account pursuant to
Merrill Lynch’s policies relating to sales charge discounts and
waivers
•
Shares
purchased by third party investment advisors on behalf of their advisory clients
through Merrill Lynch’s platform
•
Shares of
funds purchased through the Merrill Edge Self-Directed platform (if
applicable)
•
Shares
purchased through reinvestment of capital gains distributions and dividend
reinvestment when purchasing shares of the same fund (but not any other fund
within the fund family)
118
•
Shares
exchanged from Class C (i.e. level-load) shares of the same fund pursuant to
Merrill Lynch’s policies relating to sales charge discounts and
waivers
•
Employees
and registered representatives of Merrill Lynch or its affiliates and their
family members
•
Directors
or Trustees of the fund, and employees of the fund’s investment adviser or any
of its affiliates, as described in this prospectus
•
Eligible
shares purchased from the proceeds of redemptions within the same fund family,
provided (1) the repurchase occurs within 90 days following the redemption, (2)
the redemption and purchase occur in the same account, and (3) redeemed shares
were subject to a front-end or deferred sales charge (known as Rights of
Reinstatement). Automated transactions (i.e. systematic purchases and
withdrawals) and purchases made after shares are automatically sold to pay
Merrill Lynch’s account maintenance fees are not eligible for
reinstatement.
CDSC
Waivers on Class A and C Shares available at Merrill Lynch
•
Death or
disability of the shareholder
•
Shares
sold as part of a systematic withdrawal plan as described in the fund’s
prospectus
•
Return of
excess contributions from an IRA Account
•
Shares
sold as part of a required minimum distribution for IRA and retirement accounts
pursuant to the Internal Revenue Code
•
Shares
sold to pay Merrill Lynch fees but only if the transaction is initiated by
Merrill Lynch
•
Shares
acquired through a right of reinstatement
•
Shares
held in retirement brokerage accounts, that are exchanged for a lower cost share
class due to transfer to certain fee based accounts or platforms (applicable to
Class A and C shares only)
•
Shares
received through an exchange due to the holdings moving from a Merrill Lynch
affiliated investment advisory program to a Merrill Lynch brokerage
(non-advisory) account pursuant to Merrill Lynch’s policies relating to sales
charge discounts and waivers
Front-End
Sales Charge Discounts available at Merrill Lynch: Breakpoints, Rights of
Accumulation and Letters of Intent
•
Breakpoints
as described in this prospectus
•
Rights of
Accumulation (ROA), which entitle shareholders to breakpoint discounts as
described in the fund’s prospectus will be automatically calculated based on the
aggregated holding of fund family assets held by accounts (including 529 program
holdings, where applicable) within the purchaser’s household at Merrill
119
Intermediary
defined sales charge waiver policies
Lynch.
Eligible fund family assets not held at Merrill Lynch may be included in the ROA
calculation only if the shareholder notifies his or her financial advisor about
such assets
•
Letters of
Intent (LOI) which allow for breakpoint discounts based on anticipated purchases
within a fund family, through Merrill Lynch, over a 13-month period of time (if
applicable)
Morgan
Stanley
Effective
July 1, 2018, shareholders purchasing fund shares through a Morgan Stanley
Wealth Management transactional brokerage account will be eligible only for the
following front-end sales charge waivers with respect to Class A shares, which
may differ from and may be more limited than those disclosed elsewhere in this
fund’s prospectus or statement of additional information.
Front-end
Sales Charge Waivers on Class A Shares available at Morgan Stanley Wealth
Management
•
Employer-sponsored
retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b)
plans, profit sharing and money purchase pension plans and defined benefit
plans). For purposes of this provision, employer-sponsored retirement plans do
not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh plans
•
Morgan
Stanley employee and employee-related accounts according to Morgan Stanley’s
account linking rules
•
Shares
purchased through reinvestment of dividends and capital gains distributions when
purchasing shares of the same fund
•
Shares
purchased through a Morgan Stanley self-directed brokerage account
•
Class C
(i.e., level-load) shares that are no longer subject to a contingent deferred
sales charge and are converted to Class A shares of the same fund pursuant to
Morgan Stanley Wealth Management’s share class conversion program
•
Shares
purchased from the proceeds of redemptions within the same fund family, provided
(1) the repurchase occurs within 90 days following the redemption, (2) the
redemption and purchase occur in the same account, and (3) redeemed shares were
subject to a front-end or deferred sales charge.
Oppenheimer
& Co. Inc. (“OPCO”)
Shareholders
purchasing fund shares through an OPCO platform or account are eligible only for
the following load waivers (front-end sales charge waivers and contingent
deferred or back-end, sales charge waivers) and discounts, which may differ from
those disclosed elsewhere in this fund’s prospectus or statement of additional
information.
Front-end
Sales Load Waivers on Class A Shares available at OPCO
120
•
Employer-sponsored
retirement, deferred compensation and employee benefit plans (including health
savings accounts) and trusts used to fund those plans, provided that the shares
are not held in a commission-based brokerage account and shares are held for the
benefit of the plan
•
Shares
purchased by or through a 529 Plan
•
Shares
purchased through an OPCO affiliated investment advisory program
•
Shares
purchased through reinvestment of capital gains distributions and dividend
reinvestment when purchasing shares of the same fund (but not any other fund
within the fund family)
•
Shares
purchased form the proceeds of redemptions within the same fund family, provided
(1) the repurchase occurs within 90 days following the redemption, (2) the
redemption and purchase occur in the same amount, and (3) redeemed shares were
subject to a front-end or deferred sales load (known as Rights of
Restatement).
•
A
shareholder in the fund’s Class C shares will have their shares converted at net
asset value to Class A shares (or the appropriate share class) of the fund if
the shares are no longer subject to a CDSC and the conversion is in line with
the policies and procedures of OPCO
•
Employees
and registered representatives of OPCO or its affiliates and their family
members
•
Directors
or Trustees of the fund, and employees of the fund’s investment adviser or any
of its affiliates, as described in this prospectus
CDSC
Waivers on A, B and C Shares available at OPCO
•
Death or
disability of the shareholder
•
Shares
sold as part of a systematic withdrawal plan as described in the fund’s
prospectus
•
Return of
excess contributions from an IRA Account
•
Shares
sold as part of a required minimum distribution for IRA and retirement accounts
due to the shareholder reaching age 70½ as described in the
prospectus
•
Shares
sold to pay OPCO fees but only if the transaction is initiated by
OPCO
•
Shares
acquired through a right of reinstatement
Front-end
load Discounts Available at OPCO: Breakpoints, Rights of Accumulation &
Letters of Intent
•
Breakpoints
as described in this prospectus.
•
Rights of
Accumulation (ROA), which entitle shareholders to breakpoint discounts, will be
automatically calculated based on the aggregated holding of fund family assets
held by accounts within the purchaser’s household at OPCO. Eligible fund family
assets not held at OPCO may be included in the ROA calculation only if the
shareholder notifies his or her financial advisor about such assets
121
Intermediary
defined sales charge waiver policies
Raymond
James
Raymond
James & Associates, Inc., Raymond James Financial Services, Inc., and each
entity’s affiliates (“Raymond James”)
Effective
March 1, 2019, shareholders purchasing fund shares through a Raymond James
platform or account, or through an introducing broker-dealer or independent
registered investment adviser for which Raymond James provides trade execution,
clearance, and/or custody services, will be eligible only for the following load
waivers (front-end sales charge waivers and contingent deferred, or back-end,
sales charge waivers) and discounts, which may differ from those disclosed
elsewhere in this fund’s prospectus or SAI.
Front-end
sales load waivers on Class A shares available at Raymond James
•
Shares
purchased in an investment advisory program.
•
Shares
purchased within the same fund family through a systematic reinvestment of
capital gains and dividend distributions.
•
Employees
and registered representatives of Raymond James or its affiliates and their
family members as designated by Raymond James.
•
Shares
purchased from the proceeds of redemptions within the same fund family, provided
(1) the repurchase occurs within 90 days following the redemption, (2) the
redemption and purchase occur in the same account, and (3) redeemed shares were
subject to a front-end or deferred sales load (known as rights of
reinstatement).
•
A
shareholder in the fund’s Class C shares will have their shares converted at net
asset value to Class A shares (or the appropriate share class) of the fund if
the shares are no longer subject to a CDSC and the conversion is in line with
the policies and procedures of Raymond James.
CDSC
Waivers on Class A and Class C shares available at Raymond James
•
Death or
disability of the shareholder.
•
Shares
sold as part of a systematic withdrawal plan as described in the fund’s
prospectus.
•
Return of
excess contributions from an IRA Account.
•
Shares
sold as part of a required minimum distribution for IRA and retirement accounts
due to the shareholder reaching the qualified age based on applicable IRS
regulations as described in the fund’s prospectus.
•
Shares
sold to pay Raymond James fees but only if the transaction is initiated by
Raymond James.
•
Shares
acquired through a right of reinstatement.
122
Front-end
load discounts available at Raymond James: breakpoints, rights of accumulation
and/or letters of intent
•
Breakpoints
as described in this prospectus.
•
Rights of
accumulation which entitle shareholders to breakpoint discounts will be
automatically calculated based on the aggregated holding of fund family assets
held by accounts within the purchaser’s household at Raymond James. Eligible
fund family assets not held at Raymond James may be included in the calculation
of rights of accumulation calculation only if the shareholder notifies his or
her financial advisor about such assets.
•
Letters of
intent which allow for breakpoint discounts based on anticipated purchases
within a fund family, over a 13-month time period. Eligible fund family assets
not held at Raymond James may be included in the calculation of letters of
intent only if the shareholder notifies his or her financial advisor about such
assets.
Robert
W. Baird & Co. (“Baird”):
Effective
June 15, 2020, shareholders purchasing fund shares through a Baird platform or
account will only be eligible for the following sales charge waivers (front-end
sales charge waivers and CDSC waivers) and discounts, which may differ from
those disclosed elsewhere in this prospectus or the SAI.
Front-End
Sales Charge Waivers on Investors A shares Available at Baird
•
Shares
purchased through reinvestment of capital gains distributions and dividend
reinvestment when purchasing share of the same fund
•
Share
purchase by employees and registers representatives of Baird or its affiliate
and their family members as designated by Baird
•
Shares
purchased using the proceeds of redemptions from a Pioneer Fund, provided (1)
the repurchase occurs within 90 days following the redemption, (2) the
redemption and purchase occur in the same accounts, and (3) redeemed shares were
subject to a front-end or deferred sales charge (known as rights of
reinstatement)
•
A
shareholder in the funds Investor C Shares will have their share converted at
net asset value to Investor A shares of the same fund if the shares are no
longer subject to CDSC and the conversion is in line with the policies and
procedures of Baird
•
Employer-sponsored
retirement plans or charitable accounts in a transactional brokerage account at
Baird, including 401(k) plans, 457 plans, employer-sponsored 403(b) plans,
profit sharing and money purchase pension plans and defined benefit plans. For
purposes of this provision, employer-sponsored retirement plans do not include
SEP IRAs, Simple IRAs or SAR-SEPs
123
Intermediary
defined sales charge waiver policies
CDSC
Waivers on Investor A and C shares Available at Baird
•
Shares
sold due to death or disability of the shareholder
•
Shares
sold as part of a systematic withdrawal plan as described in the fund’s
prospectus
•
Shares
bought due to returns of excess contributions from an IRA Account
•
Shares
sold as part of a required minimum distribution for IRA and retirement accounts
due to the shareholder reaching the qualified age based on applicable Internal
Revenue Service regulations as described in the fund’s prospectus
•
Shares
sold to pay Baird fees but only if the transaction is initiated by
Baird
•
Shares
acquired through a right of reinstatement
Front-End
Sales Charge Discounts Available at Baird: Breakpoints and/or Rights of
Accumulations
•
Breakpoints
as described in this prospectus
•
Rights of
accumulations which entitles shareholders to breakpoint discounts will be
automatically calculated based on the aggregated holding of Pioneer assets held
by accounts within the purchaser’s household at Baird. Eligible Pioneer assets
not held at Baird may be included in the rights of accumulations calculation
only if the shareholder notifies his or her financial advisor about such
assets
•
Letters of
Intent (LOI) allow for breakpoint discounts based on anticipated purchases of
Pioneer through Baird, over a 13-month period of time
Waivers
Specific to Stifel, Nicolaus & Company, Incorporated (“Stifel”)
Effective
July 1, 2020, shareholders purchasing fund shares through a Stifel platform or
account or who own shares for which Stifel or an affiliate is the broker-dealer
of record are eligible for the following additional sales charge
waiver.
Front-end
Sales Load Waiver on Class A Shares
•
Class C
shares that have been held for more than seven (7) years will be converted to
Class A shares of the same fund pursuant to Stifel’s policies and
procedures
All other
sales charge waivers and reductions described elsewhere in the fund’s prospectus
or statement of additional information still apply.
124
Pioneer
Solutions - Balanced Fund
You
can obtain more free information about the
fund from your investment firm or by writing to Pioneer Funds, 60 State Street,
Boston, Massachusetts 02109. You may also call 1-800-225-6292 for more
information about the fund, to request copies of the fund’s statement of
additional information and shareowner reports, and to make other
inquiries.
Visit
our website
amundi.com/us
The fund makes
available the statement of additional information and shareowner reports, free
of charge, on the fund’s website at amundi.com/us. You also may find other
information and updates about Amundi US and the fund, including fund performance
information and the fund’s most recent net asset value, on the fund’s
website.
Shareowner
reports
Annual and
semiannual reports to shareowners, and quarterly reports filed with the
Securities and Exchange Commission, provide additional information about the
fund's investments. The annual report discusses market conditions and investment
strategies that significantly affected the fund's performance during its last
fiscal year.
Statement
of additional information
The statement
of additional information provides more detailed information about the
fund.
The statement of additional
information, dated December 1, 2023, as may be amended from time to time, and
filed with the Securities and Exchange Commission, is incorporated by reference
into this prospectus.
The fund's
shareowner reports, prospectus and statement of additional information are
available on the Securities and Exchange Commission's EDGAR database on the
Commission's Internet site at https://www.sec.gov. Copies of this information
may be obtained, after paying a duplicating fee, by electronic request at the
following e-mail address: [email protected].
(Investment
Company Act file no. 811-21569)
 |
|
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Amundi
Distributor US, Inc.
60
State Street
Boston,
MA 02109
amundi.com/us |
30956-06-1223
©2023 Amundi Distributor
US, Inc.
Member
SIPC |