Neither the
Securities and Exchange Commission nor any state securities agency has approved
or disapproved the fund's shares or determined whether this prospectus is
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)
|
|
Class
A |
Class
C |
Class
C2 |
Class
K |
Class
Y |
|
Maximum
sales charge (load) when you buy
shares
(as a percentage of offering price) |
|
|
|
|
|
|
Maximum
deferred sales charge (load) (as a
percentage
of offering price or the amount you
receive
when you sell shares, whichever is less) |
|
|
|
|
|
(expenses that you pay each year as a percentage of the value of your investment)
|
|
Class
A |
Class
C |
Class
C2 |
Class
K |
Class
Y |
|
Management
Fees |
|
|
|
|
|
|
Distribution
and Service (12b-1) Fees |
|
|
|
|
|
|
Other
Expenses |
|
|
|
|
|
|
Total Annual
Fund Operating Expenses |
|
|
|
|
|
|
Less: Fee
Waiver and Expense Reimbursement1 |
- |
|
|
- |
- |
|
Net
Expenses1 |
|
|
|
|
|
1
Fund
summary
1
|
|
|
| ||||||
|
|
| |||||||
|
|
1 |
3 |
5 |
10 |
1 |
3 |
5 |
10 |
|
Class
A |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
|
Class
C |
|
|
|
|
|
|
|
|
|
Class
C2 |
|
|
|
|
|
|
|
|
|
Class
K |
|
|
|
|
|
|
|
|
|
Class
Y |
|
|
|
|
|
|
|
|
2
3
Fund
summary
4
5
Fund
summary
6
7
Fund
summary
8
9
Fund
summary
10
11
Fund
summary
12
13
Fund
summary
14
15
Fund
summary
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Year |
5
Years |
10
Years |
Since
Inception |
Inception
Date |
|
Class
A |
|
|
|
|
|
|
Return before
taxes |
|
|
|
|
|
|
Return after
taxes on distributions |
|
|
|
|
|
|
Return after
taxes on distributions and
sale of
shares |
|
|
|
|
|
|
Class
C |
|
|
|
|
|
|
Class
C2 |
|
|
|
|
|
|
Class
K |
|
|
|
|
|
|
Class
Y |
|
|
|
|
|
|
Bloomberg
One- to Three-Year
Government/Credit
Index (reflects no
deduction for
fees, expenses or taxes) |
- |
|
|
|
|
17
Fund
summary
Management
|
Investment
adviser |
Amundi
Asset Management US, Inc. (“Amundi
US”) |
|
Portfolio
management |
Noah
Funderburk, Senior Vice President and
Director
of Securitized Credit of Amundi US
(portfolio
manager of the fund since 2018); and
Nicolas
Pauwels, Vice President 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 9897, Providence, RI 02940-8097, tel. 1-800-225-6292).
Your initial investment
for Class A, Class C or Class C2 shares must be at least $1,000. Additional
investments must be at least $100 for Class A shares and $500 for Class C and
Class C2 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.
Tax
information
The fund
intends to make distributions that may be taxed as ordinary income or capital
gains.
18
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.
19
More
on the fund’s investment objective and strategies
Investment
objective
A high
level of current income to the extent consistent with a relatively high level of
stability of principal.
The fund’s
investment objective may be changed without shareholder approval. The fund will
provide at least 30 days’ written notice prior to implementing any change to its
investment objective.
Principal
investment strategies
The fund
invests primarily in:
•
Debt
securities issued or guaranteed by the U.S. government, its agencies or
instrumentalities
•
Investment
grade debt securities, including convertible debt, of U.S. and non-U.S.
corporate and other issuers and commercial paper
•
Mortgage-related
securities, including “sub-prime” mortgages, and asset-backed securities of U.S.
and non-U.S. issuers
•
Short-term
money market instruments of U.S. and non-U.S. issuers
Normally,
at least 80% of the fund's net assets (plus the amount of borrowings, if any,
for investment purposes) are invested in debt securities that are rated
investment grade at the time of purchase or cash and cash equivalents. Cash and
cash equivalents include cash balances, accrued interest and receivables for
items such as the proceeds, not yet received, from the sale of the fund’s
portfolio investments. The fund may invest in debt securities of issuers in any
industry or market sector. Derivative instruments that provide exposure to
investment grade debt securities or have similar economic characteristics may be
used to satisfy the fund’s 80% policy.
The fund
may invest in floating rate loans, subordinated debt securities and
insurance-linked securities. The fund may invest up to 20% of its net assets in
below investment grade debt securities (known as “junk bonds”) including
securities that are in default. The fund may invest in debt securities rated “D”
or better, or comparable unrated securities. Debt securities rated “D” are in
default.
The fund
will normally maintain a dollar-weighted average portfolio maturity of no more
than 3 years. The maturity of a fixed income security is a measure of the time
remaining until final payment on the security is due. The fund's investments may
have fixed or variable principal payments and all types of interest rate payment
and reset terms, including fixed rate, adjustable rate, floating rate, inverse
floating rate, zero coupon, contingent, deferred, payment in kind and auction
rate features.
20
The fund may invest up to
20% of its total assets in securities of non-U.S. issuers, including up to 5% of
its total assets in debt securities of emerging market issuers. 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 and certain supranational organizations, such as the World Bank
and the European Union. The fund does not count securities of Canadian issuers
against the limit on investment in securities of non-U.S. issuers. In the case
of mortgage-backed and asset-backed securities that are issued by special
purpose vehicles backed by a pool of financial assets, the fund will consider
the location of the underlying assets for this
purpose.
The fund may invest a
substantial portion of its assets in asset-backed securities and
mortgage-related securities, including credit risk transfer securities, and
commercial mortgage-backed securities, collateralized mortgage obligations
(CMOs) and other mortgage-related securities issued by private issuers. The
fund's investments in mortgage-related securities may include instruments, the
underlying assets of which allow for balloon payments (where a substantial
portion of a mortgage loan balance is paid at maturity, which can shorten the
average life of the mortgage-backed instrument) or negative amortization
payments (where as a result of a payment cap, payments on a mortgage loan 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 instrument).
Amundi Asset Management
US, Inc. (“Amundi US“ or the “adviser”), the fund’s investment adviser,
considers both broad economic and issuer specific factors in selecting
investments. In assessing the appropriate maturity, credit quality and sector
weighting of the fund's portfolio, the adviser considers a variety of factors
that are expected to influence economic activity and interest rates.
Amundi US
selects individual securities to buy and sell based upon such factors as a
security’s yield, liquidity and rating, an assessment of credit quality, and
sector and issuer diversification.
The
adviser integrates environmental, social and corporate governance (ESG)
considerations into its investment research process 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
21
More
on the fund’s investment objective and strategies
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 fund assets in:
•
companies that the adviser
determines have significant involvement in the manufacturing of complete tobacco
products;
•
companies engaged in (i)
the production, sale or storage of chemical, biological and depleted uranium
weapons, or (ii) the production, sale, storage of, or providing services for,
antipersonnel mines and cluster bombs prohibited by the Ottawa and Oslo
treaties; or
•
companies (i) with
involvement in the production, sale or storage of nuclear weapons of countries
that are non-parties to the Treaty on the Non-Proliferation of Nuclear Weapons,
(ii) with involvement in the production of nuclear warheads and/or whole nuclear
missiles; or (iii) that the adviser determines have significant involvement in
the production or sale of nuclear weapons.
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.
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
22
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.
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 objective 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.
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. 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
23
More
on the fund’s investment objective and strategies
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 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
24
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 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.
25
More
on the fund’s investment objective and strategies
The fund
may invest in asset-backed securities issued by special entities, such as
trusts, that are backed by a pool of financial assets. The fund may invest in
collateralized debt obligations (CDOs), which include collateralized bond
obligations (CBOs), collateralized loan obligations (CLOs) and other similarly
structured securities. A CDO is a trust backed by a pool of fixed income
securities. The trust typically is split into two or more portions, called
tranches, which vary in credit quality, yield, credit support and right to
repayment of principal and interest. Lower tranches pay higher interest rates
but represent lower degrees of credit quality and are more sensitive to the rate
of defaults in the pool of obligations. Certain CDOs may use derivatives, such
as credit default swaps, to create synthetic exposure to assets rather than
holding such assets directly.
Subordinated
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.
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.
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.
26
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.
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.
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
27
More
on the fund’s investment objective and strategies
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,
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.
Zero
coupon securities
The fund
may invest in zero coupon securities. Zero coupon securities are debt
instruments that do not pay interest during the life of the security but are
issued at a discount from the amount the investor will receive when the issuer
repays the amount borrowed (the face value). The discount approximates the total
amount of interest that would be paid at an assumed interest rate.
Derivatives
The fund
may, but is not required to, use futures and options on securities, indices and
currencies, forward foreign currency exchange contracts, swaps and other
derivatives. The fund also may enter into credit default swaps, which can be
used to acquire or to transfer the credit risk of a security or index of
securities without buying or selling the security or securities comprising the
relevant index. A derivative is a security or instrument whose value is
determined by reference to the value or the change in value of one or more
securities, currencies, indices or other financial instruments. The fund may use
derivatives for a variety of purposes, including:
28
•
In an
attempt to hedge against adverse changes in the market prices of securities,
interest rates or currency exchange rates
•
As a
substitute for purchasing or selling securities
•
To attempt
to increase the fund’s return as a non-hedging strategy that may be considered
speculative
•
To manage
portfolio characteristics (for example, the duration or credit quality of the
fund's portfolio)
•
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
objective. The fund may invest the remainder of its assets in securities with
remaining maturities of less than one year or cash equivalents, or may hold
cash. For temporary defensive purposes, including during periods of unusual cash
flows, the fund may depart from its principal investment strategies and invest
part or all of its assets in these securities or may hold cash. The fund may
adopt a defensive strategy when the adviser believes securities in which the
fund normally invests have special or unusual risks or are less attractive due
to adverse market, economic, political or other conditions. During such periods,
it may be more difficult for the fund to achieve its investment
objective.
Additional
investment strategies and related risks
In
addition to the principal investment strategies and related risks discussed in
this prospectus, the fund may also use other techniques, including the following
non-principal investment strategies and related risks.
29
More
on the fund’s investment objective and 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, which is
typically higher than the purchase price paid by the fund. The securities
purchased serve as the fund's collateral 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 the fund. As with any mutual fund, there is no
guarantee that the fund will achieve its objective.
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, 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. Rates of inflation have recently risen. The value of assets or income
from an investment may be worth less in the future as inflation decreases the
value of money. As inflation increases, the real value of the fund’s assets can
decline as can the value of the fund’s
distributions.
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
global pandemic of the novel coronavirus respiratory disease designated COVID-19
has resulted in major disruption to economies and markets around the world,
including the United States. Global financial markets have experienced extreme
volatility and severe losses, and trading in many instruments has been
disrupted. Liquidity for many instruments has been greatly reduced for periods
of time. Some sectors of the economy and individual issuers have experienced
particularly large losses. These circumstances may continue to affect adversely
the value and liquidity of the fund’s investments. Following Russia’s invasion
of Ukraine, Russian securities have 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.
31
More
on the risks of investing in the fund
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.
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. 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.
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.
LIBOR (London Interbank
Offered Rate) is used extensively in the U.S. and globally as a “benchmark” or
“reference rate” for various commercial and financial contracts, including
corporate and municipal bonds, bank loans, asset-backed and mortgage-related
securities, and interest rate swaps and other derivatives. ICE Benchmark
Administration,
the
administrator
of LIBOR, ceased publication of most LIBOR settings on a representative basis at
the end of 2021 and is expected to cease publication of a majority of U.S.
dollar LIBOR settings on a representative
32
basis after June 30, 2023.
In addition,
global
regulators have announced that, with limited exceptions,
no new
LIBOR-based contracts should be entered into after 2021. Actions by regulators
have resulted in the establishment of alternative reference rates to LIBOR in
most major currencies. Markets are developing in response to these new rates,
but questions around liquidity in these rates and how to appropriately adjust
these rates to eliminate
any economic
value transfer at the time of transition remain a significant concern. The
effect of any changes to - or discontinuation of - LIBOR on the fund will vary
depending on, among other things, existing fallback provisions in individual
contracts and whether, how, and when industry participants develop and widely
adopt new reference rates and fallbacks for both legacy and new products and
instruments. The transition process may involve, among other things, increased
volatility or illiquidity in markets for instruments that rely on LIBOR. The
transition may also result in a reduction in the value of certain LIBOR-based
investments held by the fund or reduce the effectiveness of related transactions
such as hedges. Any such effects of the transition away from LIBOR, as well as
other unforeseen effects, could result in losses for the fund. Because the
usefulness of LIBOR as a benchmark may deteriorate during the transition period,
these effects could occur at any
time.
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
33
More
on the risks of investing in the fund
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.
The values of securities
with floating interest rates generally are less sensitive to interest rate
changes but may decline in value if their interest rates do not rise as much, or
as quickly, as prevailing interest rates. In addition, rising interest rates can
also lead to increased default rates, as issuers of floating rate securities
find themselves faced with higher payments. Further, in the case of some
instruments, if the underlying reference interest rate does not move by at least
a prescribed increment, no adjustment will occur in the floating rate
instrument’s interest rate. This means that, when prevailing interest rates
increase, a corresponding increase in the instrument’s interest rate may not
result and the instrument may decline in value. Similarly, certain floating rate
obligations have an interest rate floor feature, which prevents the interest
rate payable by the security from dropping below a specified level as compared
to a reference interest rate. Such a floor protects the fund from losses
resulting from a decrease in the reference interest rate below the specified
level. However, if the reference interest rate is below the floor, there will be
a lag between a rise in the reference interest rate and a rise in the interest
rate payable by the obligation, and the fund may not benefit from increasing
interest rates for a significant amount of time. Unlike fixed rate securities,
floating rate securities generally will not increase in value if interest rates
decline. Changes in
34
interest
rates also will affect the amount of interest income the fund earns on its
floating rate investments. Unlike fixed rate securities, when prevailing
interest rates decrease, the interest rate payable on floating rate investments
will decrease.
The interest rates of some
floating rate obligations adjust only periodically. Between the times that
interest rates on floating rate obligations adjust, the interest rate on those
obligations may not correlate to prevailing rates,
which will
affect the value of the loans and may cause the net asset values of the fund’s
shares to fluctuate.
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 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
35
More
on the risks of investing in the fund
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 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.
36
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.
Portfolio
selection risk. The adviser’s judgment
about the quality, relative yield, relative value or market trends affecting a
particular sector or region, market segment, security,
industry or
about interest rates or other market factors may prove to be incorrect or may
not produce the desired results, or there may be imperfections, errors or
limitations in the models, tools and information used by the
adviser.
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 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.
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.
37
More
on the risks of investing in the fund
Mortgage-related
and asset-backed securities risk. The repayment of certain
mortgage-backed and asset-backed securities depends primarily on the cash
collections received from the issuer’s underlying asset portfolio and, in
certain cases, the issuer’s ability to issue replacement securities. As a
result, there could be losses to the fund in the event of credit or market value
deterioration in the issuer’s underlying portfolio, mismatches in the timing of
the cash flows of the underlying asset interests and the repayment obligations
of maturing securities, or the issuer’s inability to issue new or replacement
securities. 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
38
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 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.
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,
39
More
on the risks of investing in the fund
the fund
will be less likely to receive payments of principal and interest, and will be
more likely to suffer a loss. This risk may be increased to the extent the
underlying mortgages include sub-prime mortgages. As market conditions change,
and particularly during periods of rapid or unanticipated changes in market
interest rates, the attractiveness of a CMO class and the ability of the
structure to provide the anticipated investment characteristics may be
significantly reduced. Such changes can result in volatility in the market
value, and in some instances reduced liquidity, of a CMO class.
The fund may invest in
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
40
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
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
structure and complexity of the transaction and the legal documents could lead
to disputes among investors regarding the characterization of
proceeds;
(iv) the
investment return achieved by the fund could be significantly different than
those predicted by financial models;
(v) the lack
of a readily available secondary market for CDOs;
(vi) the risk
of forced “fire sale” liquidation due to technical defaults such as coverage
test failures; and (vii) 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
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on the risks of investing in the fund
regarding
the individual issuer are more likely to cause price volatility and weaken 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 redemptions 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
42
fewer rights against the
borrowers of such loans, including fewer protections against 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
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More
on the risks of investing in the fund
major triggering events
affecting a large portion of the ILS held by the fund will 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
44
suffer a
credit loss than non-subordinated securities of the same issuer, any loss
incurred by the subordinated securities is likely to be proportionately greater,
and any recovery of interest or principal may take more time. 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.
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 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.
45
More
on the risks of investing in the fund
Risks
of non-U.S. investments. Investing
in non-U.S. issuers, or in U.S. issuers that have significant exposure to
foreign markets, may involve unique risks compared to investing in securities of
U.S. issuers. These risks are more pronounced for issuers in emerging markets or
to the extent that the fund invests significantly in one region or country.
These risks may include:
•
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
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
46
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. In addition, the
U.S. 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. 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
•
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
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More
on the risks of investing in the fund
•
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. 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 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,
particularly with respect to securities and commodities, such as oil, natural
gas and food commodities, as well as other sectors with exposure to Russian
issuers or issuers in other countries affected by the invasion, and are likely
to have collateral impacts on market sectors globally (including global food
supplies)
•
Circumstances that impact
one country could have profound impacts on other countries and on global
economies or 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
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.
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
48
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.
Derivatives
risk. Using
swaps 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 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.
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More
on the risks of investing in the fund
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.
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 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. The fund's ability to use certain derivative instruments
currently is limited by Commodity Futures Trading Commission rules.
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
50
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. New regulations
require many kinds of 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.
Structured
securities risk. The
structured securities in which the fund invests are a type of derivative
instrument. The payment and credit qualities of these instruments derive from
the underlying assets and the terms of the particular security, and they may
behave in ways not anticipated by the fund. Some of these instruments may have
the effect of increasing the fund’s exposure to interest rate, market or credit
risk, even if they are not primarily intended for these purposes. Distributions
from collateral securities may not be adequate to make interest or other
payments, and the quality of the collateral may decline in value or default.
Investments in structured securities raise certain tax, legal, regulatory and
accounting issues that may not be presented by direct investments in the
underlying assets. These issues could be resolved in a manner that could hurt
the performance of the fund. Certain structured securities are thinly traded or
have limited trading markets. The structured securities may be subordinate to
other classes.
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.
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
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More
on the risks of investing in the fund
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.
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 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.
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.
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.
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
52
significantly and affect
fund investments more broadly during periods of market volatility. Nearly all of
the fund's investments are valued using fair value methodologies. Investors who
purchase or redeem fund shares 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 market
on which they are valued, but before the fund determines its net asset value.
The fund’s ability to value its 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,
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 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.
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
53
More
on the risks of investing in the fund
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 objective.
Expense
risk. Your
actual costs of investing in the fund may be higher than the expenses shown in
“Annual fund operating expenses” for a variety of reasons. For example, expense
ratios may be higher than those shown if overall net assets decrease. Net assets
are more likely to decrease and fund expense ratios are more likely to increase
when markets are volatile.
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.
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.
54
Management
Investment
adviser
Amundi Asset Management
US, Inc.
(“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, 2022, Amundi had more than
$1.85 trillion in assets under management worldwide. As of September 30, 2022,
Amundi US (and its U.S. affiliates) had over $84 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 fund’s portfolio is the responsibility of Noah Funderburk and
Nicolas Pauwels. Mr. Funderburk and Mr. Pauwels are supported by the Amundi US
fixed income team. Members of this team manage other Pioneer funds investing
primarily in fixed income securities. The portfolio managers and the team may
also draw upon the research and investment management expertise of the global
research teams, which provide fundamental and quantitative research on
securities and include members from one or more of Amundi US’s
affiliates.
Mr.
Funderburk, a Senior Vice President and Director of Securitized Credit of Amundi
US, joined Amundi US in 2008 and has served as a portfolio manager of the fund
since 2018.
Mr.
Pauwels, a Vice President of Amundi US, joined Amundi US in 2006 and has served
as a portfolio manager of the fund since 2018.
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.
55
Management
Management
fee
The fund
pays Amundi US a fee for managing the fund and to cover the cost of providing
certain services to the fund.
Amundi
US's annual fee is equal to 0.35% of the fund's average daily net assets up to
$1 billion and 0.30% of the fund's average daily net assets over $1 billion. The
fee is accrued daily and paid monthly.
For the fiscal year ended
August 31, 2022, the fund paid management fees (excluding waivers and/or
assumption of expenses) equivalent to 0.35% of the fund's average daily net
assets.
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
February 28, 2022.
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.
56
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, amundi.com/us.
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.
Senior
loans are valued at the mean between the last available bid and asked prices for
one or more brokers or dealers as obtained from an independent third party
pricing service. If no reliable prices are available from either the primary or
an alternative pricing service, broker quotes will be solicited. Event-linked
bonds are valued at the bid price obtained from an independent third party
pricing service. Other insurance-linked securities may be valued at the bid
price obtained from an independent third party pricing service, or through a
third party using a pricing matrix, insurance industry valuation models, or
other fair value methods or techniques to provide an estimated value of the
instrument.
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.
57
Pricing
of shares
To the
extent that 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
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 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.
58
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, Class C or Class C2 shares, you should be aware that, generally
speaking, the longer your investment horizon, the more likely it will be that
Class C and Class C2 shares will not be as advantageous as Class A shares. The
annual distribution and service fees on Class C and Class C2 shares will cost
you more than the distribution and service fees you would have paid for
purchases of Class A shares. Class A shares and Class
C
shares
are not
subject to an initial sales charge; however, Class C2 shares are subject to a 1%
contingent deferred sales charge. Class C2 shares generally are available only
through certain broker-dealers where Class C shares of the fund are not
available.
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,
Class C or
Class C2 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.
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.
59
Choosing
a class of shares
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
•
No initial
or contingent deferred sales charge.
•
Distribution
and service fees of 0.20% of average daily net assets.
Class
C shares
•
No
contingent deferred sales charge.
•
Distribution
and service fees of 0.50% of average daily net assets.
•
Maximum
purchase amount (per transaction) of $499,999.
60
•
Class C
shares automatically convert to Class A shares after 8 years.
Class
C2 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 0.50% of average daily net assets.
•
Maximum
purchase amount (per transaction) of $499,999.
•
Class C2
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
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.
Share
class eligibility
Class
C2 shares
Class C2
shares are available for purchase only through certain broker-dealers where
Class C shares of the fund are not available.
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,
61
Choosing
a class of shares
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.”
Automatic
conversion of Class C and Class C2 shares
Class C
shares and Class C2 shares automatically convert to Class A shares after 8
years. Conversions 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 or Class C2
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 or Class C2 shares have been held
for 8 years. Class C shares or Class C2 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 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 and Class C2 shares to
Class A shares.
62
Distribution
and service arrangements
Distribution
plan
The fund
has adopted a distribution plan for Class A, Class C and Class C2 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.
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.
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
63
Distribution
and service arrangements
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.
64
Sales
charges
Class
A shares
You
may purchase
Class A shares at net asset value without paying an initial sales charge or a
contingent deferred sales charge (CDSC). However, if you invest in Class A
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 C
shares
You purchase Class C
shares at net asset value without paying an initial sales charge or a contingent
deferred sales charge (CDSC). However, if you invest in Class C 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 C2
shares
You purchase Class C2
shares at net asset value per share without paying an initial sales charge. For
Class C2 shares, if you sell your 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
•
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 C2 shares are exchanged for Class C2 shares of another
Pioneer fund (or for Class C shares of funds that do not offer Class C2 shares),
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”
65
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 C2 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);
−
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:
66
−
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.
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.
67
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 9897
Providence, RI 02940-8097
Telephone 1-800-225-6292
P.O. Box 9897
Providence, RI 02940-8097
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
68
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.”
69
Buying,
exchanging and selling shares
Buying
You may
buy fund shares from any financial intermediary that has a sales agreement or
other arrangement with the distributor.
You can
buy shares at net asset value per share plus any applicable sales charge. The
distributor may reject any order until it has confirmed the order in writing and
received payment. Normally, your financial intermediary will send your purchase
request to the fund's transfer agent. Consult
your investment professional for more information. Your
investment firm receives a commission from the distributor, and may receive
additional compensation from Amundi US, for your purchase of fund
shares.
Minimum
investment amounts
Class
A, Class C and Class C2 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 and Class C2
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
70
(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
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
(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
71
Buying,
exchanging and selling shares
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.
Maximum
purchase amounts
Purchases
of fund shares are limited to $499,999 for Class C and Class C2 shares. This
limit is applied on a per transaction basis. Class A, Class K and Class Y shares
are not subject to a maximum purchase amount.
72
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 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.
73
Buying,
exchanging and selling shares
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.
Short
Term Income 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.
Exchanging
You may, under certain
circumstances, exchange your shares for shares of the same class of another
Pioneer mutual fund. Class C2 shares also may be exchanged for Class C shares of
funds that do not offer Class C2 shares.
74
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 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
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:
75
Buying,
exchanging and selling shares
•
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.
You
generally will have to pay income taxes on a sale.
76
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 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.
77
Buying,
exchanging and selling shares
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.
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
78
By
mail
Send your
written instructions to:
Pioneer Funds
P.O. Box 9897
Providence, RI 02940-8097
Pioneer Funds
P.O. Box 9897
Providence, RI 02940-8097
Amundi
US website
amundi.com/us
By
fax
Fax your
exchange and sale requests to:
1-800-225-4240
1-800-225-4240
79
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.
80
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 C2 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.
81
Account
options
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 C2 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.
82
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.
83
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.
84
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.
85
Shareholder
services and policies
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 objective 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
86
•
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.
87
Shareholder
services and policies
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.
88
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
89
Dividends,
capital gains and taxes
Dividends
and capital gains
The fund
declares dividends daily. The daily dividends consist of substantially all of
the fund's net income (excluding any net short- and long-term capital gains).
You begin to earn dividends on the first business day following receipt of
payment for shares. You continue to earn dividends up to and including the date
of sale. Dividends are normally paid on the last business day of each
month.
The fund
generally pays any distribution of net short- and long-term capital gains in
November. 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 distribution described in this
paragraph, 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
generally taxable as ordinary income. Since the fund's income is derived
primarily from sources that do not pay dividends, it is not expected that a
substantial portion of the dividends paid by the fund will qualify either for
the dividends-received deduction for corporations or for any favorable U.S.
federal income tax rate available to noncorporate shareholders on “qualified
dividend income.”
The fund
will report to shareholders annually the U.S. federal income tax status of all
fund distributions.
If the
fund declares a dividend in October, November or December, payable to
shareholders of record in such a month, and pays it in January of the following
year, you will be taxed on the dividend as if you received it in the year in
which it was declared.
Sales and
exchanges generally will be taxable transactions to shareowners. When you sell
or exchange fund shares you will generally recognize a capital gain or capital
loss in an amount equal to the difference between the net amount of sale
proceeds (or, in the case of an exchange, the fair market value of the shares)
that you receive and your tax basis for the shares that you sell or
exchange.
90
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
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.
91
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 C2, Class K and Class Y shares of the fund (assuming
reinvestment of all dividends and distributions).
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.
92
Pioneer Short
Term Income Fund
|
|
Year
Ended
8/31/22 |
Year
Ended
8/31/21 |
Year
Ended
8/31/20 |
Year
Ended
8/31/19 |
Year
Ended
8/31/18 |
|
Class
A |
|
|
|
|
|
|
Net asset
value, beginning of period |
$9.39 |
$9.21 |
$9.52 |
$9.40 |
$9.54 |
|
Increase
(decrease) from investment operations: |
|
|
|
|
|
|
Net
investment income (loss) (a) |
$0.18 |
$0.19 |
$0.23 |
$0.27 |
$0.18 |
|
Net realized
and unrealized gain (loss) on investments |
(0.52) |
0.20 |
(0.29) |
0.14 |
(0.12) |
|
Net
increase (decrease) from investment operations |
$(0.34) |
$0.39 |
$(0.06) |
$0.41 |
$0.06 |
|
Distributions
to shareowners: |
|
|
|
|
|
|
Net
investment income |
$(0.20) |
$(0.21) |
$(0.25) |
$(0.29) |
$(0.20) |
|
Net
increase (decrease) in net asset value |
$(0.54) |
$0.18 |
$(0.31) |
$0.12 |
$(0.14) |
|
Net asset
value, end of period |
$8.85 |
$9.39 |
$9.21 |
$9.52 |
$9.40 |
|
Total
return (b) |
(3.65)% |
4.25% |
(0.61)% |
4.39% |
0.68% |
|
Ratio of net
expenses to average net assets |
0.83% |
0.81% |
0.82% |
0.82% |
0.88% |
|
Ratio of net
investment income (loss) to average net assets |
1.97% |
1.98% |
2.44% |
2.87% |
1.90% |
|
Portfolio
turnover rate |
68% |
43% |
113% |
84% |
54% |
|
Net assets,
end of period (in thousands) |
$124,028 |
$144,818 |
$146,659 |
$176,601 |
$134,382 |
|
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 |
0.97% |
0.85% |
0.85% |
0.86% |
0.88% |
|
Net
investment income (loss) to average net assets |
1.83% |
1.94% |
2.41% |
2.83% |
1.90% |
|
(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. |
93
Financial
highlights
Pioneer Short
Term Income Fund
|
|
Year
Ended
8/31/22 |
Year
Ended
8/31/21 |
Year
Ended
8/31/20 |
Year
Ended
8/31/19 |
Year
Ended
8/31/18 |
|
Class
C |
|
|
|
|
|
|
Net asset
value, beginning of period |
$9.41 |
$9.23 |
$9.52 |
$9.39 |
$9.53 |
|
Increase
(decrease) from investment operations: |
|
|
|
|
|
|
Net
investment income (loss) (a) |
$0.16 |
$0.17 |
$0.20 |
$0.25 |
$0.16 |
|
Net realized
and unrealized gain (loss) on investments |
(0.52) |
0.20 |
(0.26) |
0.14 |
(0.12) |
|
Net
increase (decrease) from investment operations |
$(0.36) |
$0.37 |
$(0.06) |
$0.39 |
$0.04 |
|
Distributions
to shareowners: |
|
|
|
|
|
|
Net
investment income |
$(0.18) |
$(0.19) |
$(0.23) |
$(0.26) |
$(0.18) |
|
Net
increase (decrease) in net asset value |
$(0.54) |
$0.18 |
$(0.29) |
$0.13 |
$(0.14) |
|
Net asset
value, end of period |
$8.87 |
$9.41 |
$9.23 |
$9.52 |
$9.39 |
|
Total
return (b) |
(3.85)% |
4.04% |
(0.62)% |
4.25% |
0.45% |
|
Ratio of net
expenses to average net assets |
1.03% |
1.03% |
1.04% |
1.03% |
1.06% |
|
Ratio of net
investment income (loss) to average net assets |
1.74% |
1.77% |
2.22% |
2.66% |
1.72% |
|
Portfolio
turnover rate |
68% |
43% |
113% |
84% |
54% |
|
Net assets,
end of period (in thousands) |
$12,069 |
$18,885 |
$31,557 |
$32,889 |
$58,380 |
|
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 |
1.04% |
1.07% |
1.06% |
1.07% |
1.06% |
|
Net
investment income (loss) to average net assets |
1.73% |
1.73% |
2.20% |
2.62% |
1.72% |
|
(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. |
94
Pioneer Short
Term Income Fund
|
|
Year
Ended
8/31/22 |
Year
Ended
8/31/21 |
Year
Ended
8/31/20 |
Year
Ended
8/31/19 |
Year
Ended
8/31/18 |
|
Class
C2 |
|
|
|
|
|
|
Net asset
value, beginning of period |
$9.42 |
$9.24 |
$9.52 |
$9.39 |
$9.53 |
|
Increase
(decrease) from investment operations: |
|
|
|
|
|
|
Net
investment income (loss) (a) |
$0.16 |
$0.17 |
$0.20 |
$0.25 |
$0.16 |
|
Net realized
and unrealized gain (loss) on investments |
(0.51) |
0.20 |
(0.25) |
0.15 |
(0.12) |
|
Net
increase (decrease) from investment operations |
$(0.35) |
$0.37 |
$(0.05) |
$0.40 |
$0.04 |
|
Distributions
to shareowners: |
|
|
|
|
|
|
Net
investment income |
$(0.19) |
$(0.19) |
$(0.23) |
$(0.27) |
$(0.18) |
|
Net
increase (decrease) in net asset value |
$(0.54) |
$0.18 |
$(0.28) |
$0.13 |
$(0.14) |
|
Net asset
value, end of period |
$8.88 |
$9.42 |
$9.24 |
$9.52 |
$9.39 |
|
Total
return (b) |
(3.80)% |
4.04% |
(0.52)% |
4.27% |
0.44% |
|
Ratio of net
expenses to average net assets |
1.00% |
1.01% |
1.03% |
1.05% |
1.06% |
|
Ratio of net
investment income (loss) to average net assets |
1.78% |
1.78% |
2.20% |
2.61% |
1.73% |
|
Portfolio
turnover rate |
68% |
43% |
113% |
84% |
54% |
|
Net assets,
end of period (in thousands) |
$1,228 |
$1,855 |
$1,436 |
$1,173 |
$1,650 |
|
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 |
1.01% |
1.05% |
1.05% |
1.09% |
1.06% |
|
Net
investment income (loss) to average net assets |
1.77% |
1.74% |
2.18% |
2.57% |
1.73% |
|
(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. |
95
Financial
highlights
Pioneer Short
Term Income Fund
|
|
Year
Ended
8/31/22 |
Year
Ended
8/31/21 |
Year
Ended
8/31/20 |
Year
Ended
8/31/19 |
Year
Ended
8/31/18 |
|
Class
K |
|
|
|
|
|
|
Net asset
value, beginning of period |
$9.45 |
$9.27 |
$9.54 |
$9.42 |
$9.56 |
|
Increase
(decrease) from investment operations: |
|
|
|
|
|
|
Net
investment income (loss) (a) |
$0.22 |
$0.22 |
$0.27 |
$0.31 |
$0.21 |
|
Net realized
and unrealized gain (loss) on investments |
(0.52) |
0.20 |
(0.26) |
0.13 |
(0.11) |
|
Net
increase (decrease) from investment operations |
$(0.30) |
$0.42 |
$0.01 |
$0.44 |
$0.10 |
|
Distributions
to shareowners: |
|
|
|
|
|
|
Net
investment income |
$(0.24) |
$(0.24) |
$(0.28) |
$(0.32) |
$(0.24) |
|
Net
increase (decrease) in net asset value |
$(0.54) |
$0.18 |
$(0.27) |
$0.12 |
$(0.14) |
|
Net asset
value, end of period |
$8.91 |
$9.45 |
$9.27 |
$9.54 |
$9.42 |
|
Total
return (b) |
(3.26)% |
4.62% |
0.16% |
4.73% |
1.03% |
|
Ratio of net
expenses to average net assets |
0.46% |
0.46% |
0.46% |
0.47% |
0.50% |
|
Ratio of net
investment income (loss) to average net assets |
2.36% |
2.36% |
2.86% |
3.26% |
2.26% |
|
Portfolio
turnover rate |
68% |
43% |
113% |
84% |
54% |
|
Net assets,
end of period (in thousands) |
$1,001 |
$661 |
$3,408 |
$14,451 |
$10,166 |
|
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 |
0.49% |
0.51% |
0.47% |
0.51% |
0.50% |
|
Net
investment income (loss) to average net assets |
2.33% |
2.31% |
2.85% |
3.22% |
2.26% |
|
(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. |
96
Pioneer Short
Term Income Fund
|
|
Year
Ended
8/31/22 |
Year
Ended
8/31/21 |
Year
Ended
8/31/20 |
Year
Ended
8/31/19 |
Year
Ended
8/31/18 |
|
Class
Y |
|
|
|
|
|
|
Net asset
value, beginning of period |
$9.41 |
$9.23 |
$9.51 |
$9.38 |
$9.52 |
|
Increase
(decrease) from investment operations: |
|
|
|
|
|
|
Net
investment income (loss) (a) |
$0.21 |
$0.22 |
$0.26 |
$0.30 |
$0.20 |
|
Net realized
and unrealized gain (loss) on investments |
(0.52) |
0.20 |
(0.26) |
0.14 |
(0.12) |
|
Net
increase (decrease) from investment operations |
$(0.31) |
$0.42 |
$(0.00)(b) |
$0.44 |
$0.08 |
|
Distributions
to shareowners: |
|
|
|
|
|
|
Net
investment income |
$(0.23) |
$(0.24) |
$(0.28) |
$(0.31) |
$(0.22) |
|
Net
increase (decrease) in net asset value |
$(0.54) |
$0.18 |
$(0.28) |
$0.13 |
$(0.14) |
|
Net asset
value, end of period |
$8.87 |
$9.41 |
$9.23 |
$9.51 |
$9.38 |
|
Total
return (c) |
(3.29)% |
4.63% |
0.05% |
4.81% |
0.90% |
|
Ratio of net
expenses to average net assets |
0.46% |
0.46% |
0.46% |
0.47% |
0.64% |
|
Ratio of net
investment income (loss) to average net assets |
2.34% |
2.33% |
2.80% |
3.23% |
2.14% |
|
Portfolio
turnover rate |
68% |
43% |
113% |
84% |
54% |
|
Net assets,
end of period (in thousands) |
$270,281 |
$274,235 |
$286,499 |
$302,658 |
$258,634 |
|
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 |
0.57% |
0.60% |
0.59% |
0.59% |
0.64% |
|
Net
investment income (loss) to average net assets |
2.23% |
2.19% |
2.67% |
3.11% |
2.14% |
|
(a) |
The per-share
data presented above is based on the average shares outstanding for the
period presented. |
|
(b) |
Amount rounds
to less than $0.01 or $(0.01) per share. |
|
(c) |
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. |
97
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,
98
(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.
99
Intermediary
defined sales charge waiver policies
•
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
100
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
101
Intermediary
defined sales charge waiver policies
−
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.
102
•
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.