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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-21448
Pioneer Tax Advantaged Balanced Trust
(Exact name of registrant as specified in charter)
60 State Street, Boston, MA 02109
(Address of principal executive offices) (ZIP code)
Dorothy E. Bourassa, Pioneer Investment Management, Inc.,
60 State Street, Boston, MA 02109
(Name and address of agent for service)
Registrant's telephone number, including area code: (617) 742-7825
Date of fiscal year end: November 30
Date of reporting period: December 1, 2004 through November 30, 2005
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO SHAREOWNERS.
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PIONEER
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TAX ADVANTAGED
BALANCED
TRUST
Annual
Report
11/30/05
[LOGO] PIONEER
Investments(R)
Table of Contents
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Letter to Shareowners 1
Portfolio Summary 2
Performance Update 3
Portfolio Management Discussion 5
Schedule of Investments 9
Financial Statements 24
Notes to Financial Statements 28
Report of Independent Registered Public Accounting Firm 38
Results of Shareowner Meeting 39
Factors Considered by the Independent Trustees in Approving
the Management Contract 40
Trustees, Officers and Service Providers 45
Pioneer Tax Advantaged Balanced Trust
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LETTER TO SHAREOWNERS 11/30/05
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Dear Shareowner,
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The economy remains strong. Third quarter profits, coming in well above 10%
year-over-year, were surprising in light of the serious economic challenges
that developed over the last three months. The vexing economic questions that
arose from 2005's disastrous hurricane season began to resolve themselves by
late fall, allowing prices for oil and gasoline to retreat from their
storm-induced peaks, as Gulf Coast facilities began to come back on line. The
Federal Reserve Board continued to raise interest rates, and business activity
remained strong, despite storm-related dislocations.
Even with moderating energy prices, businesses and households in colder areas
of the country face uncomfortably large bills for heat and utilities for the
coming winter while ravaged energy production facilities are refurbished. The
national savings rate stands near zero, leaving many households ill prepared
for hefty gasoline and heating costs.
However, costly energy and higher interest rates have not slowed the economy to
date. American consumers, whose outlays are key to the economy's direction, are
notably resilient. Consumer confidence rebounded in November after a
post-hurricane lag, according to the University of Michigan. Furthermore,
hiring trends are fairly positive and recent readings of leading economic
indicators by the Conference Board have shown an upward bias.
The U.S. has enjoyed ten straight quarters of expansion at an annualized rate
of 3% or better. Barring surprises, we expect continued, though possibly
slower, growth in the period ahead. For appropriate investors, carefully
selected high-quality equity and bond mutual funds still have the potential to
deliver solid results even in a slow-growth environment. With that in mind, our
global investment experts are well positioned to seek attractive opportunities
around the world.
Investing for income with Pioneer
Pioneer offers a diverse range of products with different risk/reward profiles
designed to help investors pursue a variety of goals. If income is important to
you, Pioneer's broad selection of bond funds and equity products that have a
meaningful income component, and may improve your overall allocation. Our
variety of income funds are actively managed using a value-oriented, total
return investment philosophy that seeks enhanced return potential and lower
volatility through diversification. Your financial advisor can help you select
among Pioneer's fixed-income choices.
Respectfully,
/s/ Osbert M. Hood
Osbert M. Hood, President
Pioneer Investment Management, Inc.
Any information in this shareowner report regarding market or economic trends
or the factors influencing the Trust's historical or future performance are
statements of the opinion of Trust management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
Please consider a trust's investment objective, risks, charges and expenses
carefully before investing. The prospectus contains this and other information
about each fund and should be read carefully before you invest or send money.
To obtain a prospectus and for other information on any Pioneer fund, contact
your financial advisor, call 1-800-225-6292 or visit our web site at
www.pioneerfunds.com.
1
Pioneer Tax Advantaged Balanced Trust
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PORTFOLIO SUMMARY 11/30/05
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Portfolio Maturity
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(As a percentage of total debt holdings)
[THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
0-1 Year 2.6%
1-3 Years 3.5%
3-6 Years 34.0%
6-8 Years 40.3%
8-10 Years 4.3%
10+ Years 15.3%
Portfolio Diversification
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(As a percentage of total investment portfolio)
[THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
Temporary Cash Investment 0.7%
Convertible Preferred Stocks 1.5%
Non-Convertible Preferred Stocks 21.3%
Common Stocks 23.1%
Tax-Exempt Obligations 53.4%
The portfolio is actively managed, and current holdings may be different.
10 Largest Holdings
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(As a percentage of total long-term holdings)
1. AT&T, Inc. 1.96%
2. Golden State Tobacco Securitization Corp., RIB, 7.9711%,
6/1/45 (144A) 1.62
3. Consolidated Edison, Inc. 1.55
4. Tobacco Settlement Financing Corp., 5.875%, 5/15/39 1.46
5. Fannie Mae, Series L, 5.125% 1.46
6. King County Washington Sewer Revenue, 5.0%, 1/1/35 1.39
7. Duke Energy Corp. 1.39
8. Montana Health Finance Authority Facilities Revenue,
RIB, 7.358%, 2/15/25 1.37
9. Puerto Rico Commonwealth Highway & Transportation
Authority Revenue, 5.125%, 7/1/43 1.37
10. Tobacco Settlement Authority Revenue, 6.625%, 6/1/32 1.28
This list excludes money market and derivative instruments. Portfolio holdings
will vary for other periods.
2
Pioneer Tax Advantaged Balanced Trust
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PERFORMANCE UPDATE 11/30/05
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Share Prices and Distributions
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Market Value
per Common Share 11/30/05 11/30/04
$12.18 $12.74
Net Asset Value
per Common Share 11/30/05 11/30/04
$14.65 $14.55
Distributions
per Common Share Income Short-Term Long-Term
(12/1/04 - 11/30/05) Dividends Capital Gains Capital Gains
$0.7854 $ - $ -
3
Pioneer Tax Advantaged Balanced Trust
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PERFORMANCE UPDATE 11/30/05
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Investment Returns
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The mountain chart on the right shows the change in value of a $10,000
investment made in common shares of Pioneer Tax Advantaged Balanced Trust at
public offering price, compared to that of the Lehman Brothers Municipal Bond
Index and the S&P 500 Index.
Cumulative Total Returns
(As of November 30, 2005)
Net Asset Market
Period Value (NAV) Price
Life-of-Trust
(1/28/04) 13.41% -9.92%
1 Year 6.90 1.51
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
The Value of $10,000 Investments
Pioneer Tax Lehman Brothers Standard &
Advantaged Municipal Bond Poor's 500
Balanced Trust Index
Jan-04 10000 10000 10000
Nov-04 8830 10263 10529
Nov-05 9008 10662 11418
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent
month-end performance results. Current performance may be lower or higher
than the performance data quoted.
Performance data shown represents past performance. Past performance is no
guarantee of future results. Investment return and market price will
fluctuate, and your shares may trade below NAV, due to such factors as
interest rate changes, and the perceived credit quality of borrowers.
Total investment return does not reflect broker sales charges or
commissions. All performance is for common shares of the Trust.
Closed-end funds, unlike open-end funds, are not continuously offered.
There is a one-time public offering and once issued, shares of closed-end
funds are sold in the open market through a stock exchange and frequently
trade at prices lower than their NAV. NAV is total assets less total
liabilities, which includes preferred shares, divided by the number of
common shares outstanding.
When NAV is lower than market price, dividends are assumed to be reinvested
at the greater of NAV or 95% of the market price. When NAV is higher,
dividends are assumed to be reinvested at market price.
The performance table and graph do not reflect the deduction of fees and
taxes that a shareowner would pay on Trust distributions or the redemption
of Trust shares.
Index comparison begins January 31, 2004. The Lehman Brothers Municipal
Bond Index is a broad measure of the municipal bond market. The Standard &
Poor's 500 Stock Index (the S&P 500) is a commonly used measure of the
broad U.S. stock market. Index returns are calculated monthly, assume
reinvestment of dividends and, unlike Trust returns, do not reflect any
fees, expenses or charges. You cannot invest directly in an Index.
4
Pioneer Tax Advantaged Balanced Trust
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PORTFOLIO MANAGEMENT DISCUSSION 11/30/05
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Investors in Pioneer Tax Advantaged Balanced Trust shared in the positive
performance of both municipal bonds and large-cap stocks during the 12-month
period ended November 30, 2005. In the following interview, two members of the
Trust's portfolio management team, David Eurkus, who is responsible for the
Trust's fixed-income portion, and Walter Hunnewell, who is responsible for the
Trust's equity portion, discuss the Trust's investment strategy and outlook.
Q: How did the Trust perform during the period?
A: For the 12-month period ended November 30, 2005, Pioneer Tax Advantaged
Balanced Trust returned 6.90% at net asset value and 1.51% at market
price. As of November 30, 2005, the Trust was selling at a discount of
market price to net asset value of 16.86%. For the same 12-month period,
the Lehman Brothers Municipal Bond Index returned 3.88%, and the S&P 500
Index returned 8.44%. Unlike open-ended funds, a closed-end fund's price
goes up and down based on supply and demand, irrespective of a fund's net
asset value, or NAV, per share. It isn't unusual to find closed-end funds
trading at a discount. At the end of the period, closed-end funds on
average were trading at a discount to their actual underlying value. As
the markets become more efficient and liquid, and more investors have
begun to recognize legitimate value, the trend of funds trading at large
discounts to their NAVs may subside.
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent
month-end performance results. Current performance may be lower or higher
than the performance data quoted.
The performance data quoted represents past performance, which is no
guarantee of future results. Investment return and principal value will
fluctuate, and shares, when redeemed, may be worth more or less than their
original cost.
Information regarding the Trust's principal investment risks is contained
in the Trust's prospectus. Please refer to those documents when
considering the Trust's risks.
There can be no assurance as to the portion of the Trust's dividends that
will be tax-exempt or tax-qualified.
A portion of income may be subject to state, federal, and/or alternative
minimum tax. Capital gains, if any, are subject to a capital gains tax.
When interest rates rise, the prices of fixed-
5
Pioneer Tax Advantaged Balanced Trust
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PORTFOLIO MANAGEMENT DISCUSSION 11/30/05 (continued)
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income securities in the Trust will generally fall. Conversely, when
interest rates fall the prices of fixed-income securities in the Trust
will generally rise. By concentrating in municipal securities, the
portfolio is more susceptible to adverse economic, political or regulatory
developments than is a portfolio that invests more broadly. Investments in
the Trust are subject to possible loss due to the financial failure of
underlying securities and their inability to meet their debt obligations.
The Trust may invest in derivative securities, which may include futures
and options. These types of instruments can increase price fluctuation.
The Trust may use leverage through the issuance of preferred shares with
an aggregate liquidation preference of up to 331/3% of the Trust's total
assets after such issuance. Leverage creates significant risks, including
the risk that the Trust's income or capital appreciation will not be
sufficient to cover the cost of leverage, which may adversely affect the
return for the holders of common shares.
Q: What were the principal strategies used in managing the Trust during the 12
months?
A: We continued to invest in tax-exempt municipal securities and in
dividend-paying equity securities. Our focus on providing income resulted
in a 55% to 45% mix of municipal securities to equity securities. We made
relatively few changes to the fixed-income portion of the Trust,
continuing to emphasize bonds that are crucial to the vitality of the U.S.
economy. This included investments in essential services areas, such as
health care, hospitals, energy, power and education. About 10% of the
Trust's fixed-income assets were in below investment-grade bonds. At the
end of the 12 months, the average credit quality of the fixed-income
holdings was AA.
In the equity portion of the Trust, in order to increase distributable
cash for dividends, we reduced the position in lower-yielding common
stocks and added to our holdings in higher-yielding preferred stocks.
While preferred stocks offer less capital appreciation, they offer a
dependable stream of higher-yielding dividends. At the beginning of the
period, the split between common and preferred stocks was about 60/40; at
period-end it was about 50/50. Preferred stock additions included: Public
Storage, a REIT; JP Morgan Chase, the money center bank; and insurance
6
Pioneer Tax Advantaged Balanced Trust
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companies Scottish Re Group and W.R. Berkeley. We also added some
higher-yielding common stocks. Regal Entertainment Group, a movie theater
chain, and Citizens Communications, a rural wire line telephone company,
are examples. Both companies pay a generous dividend as well as offer the
potential for an attractive longer-term total return.
Q. What contributed to performance?
A: Most of the fixed-income securities were positive, with hospital bonds and
tobacco bonds giving performance the biggest boost. Tobacco bonds are
backed by tobacco companies' payments to states as part of the Master
Settlement Agreement in which states agreed to drop their lawsuits against
tobacco companies in return for a series of payments. Tobacco companies
were positively affected by favorable federal court rulings and a belief
that the intense period of tobacco litigation was moderating.
Equity performance was enhanced by the substantial gains made by the
utilities sector where the Trust was overweight. Two strong performers in
this sector were Exelon Corporation, an electric utility with low-cost
electricity-generating assets, and PG&E, which is a beneficiary of the
resolving of California's electric utility crisis. In selecting utilities,
we focused on companies that have the potential to derive earnings from
activities in both regulated and unregulated competitive markets. Tobacco
holdings were also helpful, with Carolina Group and Altria Group
registering significant returns.
Q: Were there disappointments in the portfolio?
A: Industrial revenue bonds issued by the Gila County Industrial Development
Authority, which is backed by Asarco Copper based in Tucson, Arizona
disappointed, as Asarco voluntarily filed for Chapter 11 protection. The
company has undertaken a restructuring program, and the bonds, which we
believe are significantly undervalued, remain in the portfolio.
On the equity side, General Motors did poorly, as the company's financial
position deteriorated in the face of continued automobile sales-price
concessions and reduced demand for profitable SUVs. We sold our GM
position. KeySpan which provides natural gas to residential customers in
the northeast, also underperformed because of concerns that the company's
bad debt might rise if customers default on their increased heating bills.
We continue to hold KeySpan because we believe that this concern may be
overstated.
7
Pioneer Tax Advantaged Balanced Trust
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PORTFOLIO MANAGEMENT DISCUSSION 11/30/05 (continued)
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Q: What is your outlook?
A: We are positive in our assessment of the investment environment for both
fixed-income securities and stocks. We believe that the Federal Reserve is
nearing the end of its interest-rate raising cycle and that this should
benefit both asset classes. During 2005, we saw a record amount of new
issuance of municipal debt. This was driven primarily by refundings of
older higher-cost debt. Refundings, like mortgage refinancings, typically
occur when interest rates are relatively low. In 2006, we expect new
issuance to slow but demand to increase. This imbalance between supply and
demand should benefit the Trust, as it has the potential to boost the
value of the bonds in the portfolio.
We expect to continue to find good opportunities in the equity market even
as economic growth moderates. While we believe consumer spending may
soften, industrial activity has the potential to fill some of the
resultant gap. A more stable interest-rate environment and an increase in
industrial spending should benefit the Trust's financial sector holdings.
The Trust's commodity-related companies are also poised to do well, as
demand and prices for energy and commodity chemicals are likely to remain
relatively high. In the coming months, we will continue to seek relatively
high levels of current income from fixed-income and dividend-producing
preferred and common stocks, while maintaining our strong emphasis on
quality.
Any information in this shareowner report regarding market or economic trends
or the factors influencing the Trust's historical or future performance are
statements of the opinion of Trust management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
8
Pioneer Tax Advantaged Balanced Trust
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SCHEDULE OF INVESTMENTS 11/30/05
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S&P/Moody's
Principal Ratings
Amount (unaudited) Value
TAX EXEMPT OBLIGATIONS -75.0% of Net Assets
Alabama - 3.3%
$ 6,990,000 AAA/Aaa Birmingham Waterworks & Sewer Revenue,
5.0%, 1/1/43 $ 7,102,190
5,000,000 NR/A2 Huntsville Health Care Authority Revenue,
5.75%, 6/1/32 5,264,150
1,500,000 NR/NR Sylacauga Health Care Authority Revenue,
6.0%, 8/1/35 1,505,310
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$ 13,871,650
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Arizona - 2.4%
10,285,000(a) D/NR Gila County Industrial Development Authority,
5.55%, 1/1/27 $ 5,939,587
1,000,000 BBB/Baa1 Maricopa County Hospital Revenue,
5.0%, 4/1/35 985,850
1,000,000 NR/Baa3 Pima County Industrial Development Authority,
6.375%, 7/1/31 1,037,310
1,000,000 NR/Baa3 Pima County Industrial Development Authority,
6.75%, 7/1/31 1,046,650
1,000,000 NR/NR Pima County Industrial Development Authority,
7.5%, 7/1/34 1,031,120
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$ 10,040,517
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California - 3.6%
1,000,000 A-/A3 California Health Facilities Authority Revenue,
5.25%, 7/1/23 $ 1,034,160
4,000,000 BBB/Baa3 Golden State Tobacco Securitization Corp.,
6.75%, 6/1/39 4,502,680
9,655,000(b) NR/A3 Golden State Tobacco Securitization Corp., RIB,
7.9711%, 6/1/45 (144A) 9,475,996
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$ 15,012,836
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Connecticut - 1.4%
4,190,000 BBB-/Baa1 Connecticut State Development Authority
Pollution Control Revenue, 5.85%, 9/1/28 $ 4,460,590
1,500,000 BB+/NR Mohegan Tribe Indians Gaming Authority, 5.25%,
1/1/33 (144A) 1,491,345
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$ 5,951,935
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District of Columbia - 1.0%
4,000,000 BBB/Baa3 District of Columbia Tobacco Settlement
Financing Corp., 6.75%, 5/15/40 $ 4,329,360
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The accompanying notes are an integral part of these financial statements. 9
Pioneer Tax Advantaged Balanced Trust
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SCHEDULE OF INVESTMENTS 11/30/05 (continued)
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S&P/Moody's
Principal Ratings
Amount (unaudited) Value
Florida - 2.2%
$ 5,000,000 A+/A2 Highlands County Health Facilities Authority
Revenue, 6.0%, 11/15/25 $ 5,397,250
1,100,000 NR/NR Madison County First Mortgage Revenue,
6.0%, 7/1/25 1,077,736
2,025,000 BB+/NR Miami Beach Health Facilities Authority,
5.375%, 11/15/28 2,020,970
500,000 BB+/Ba2 Miami Beach Health Facilities Authority,
6.7%, 11/15/19 547,750
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$ 9,043,706
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Georgia - 2.4%
5,000,000 AAA/Aaa Burke County Development Authority Revenue,
4.75%, 5/1/34 $ 4,984,350
2,500,000 BBB/NR Milledgeville-Baldwin County Development
Authority Revenue, 5.5%, 9/1/24 2,629,175
2,500,000 BBB/NR Milledgeville-Baldwin County Development
Authority Revenue, 5.625%, 9/1/30 2,620,250
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$ 10,233,775
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Illinois - 3.8%
3,000,000 AAA/Aaa Chicago Illinois General Obligation,
5.0%, 1/1/28 $ 3,088,320
4,580,000 NR/Baa1 Illinois Development Finance Authority Revenue,
5.25%, 10/1/24 4,733,338
5,000,000 AA+/Aa1 Illinois Educational Facilities Authority Revenue,
5.0%, 12/1/38 5,082,400
2,000,000 AA+/Aa2 Illinois Finance Authority Revenue,
5.5%, 8/15/43 2,099,980
1,130,000+ CCC/NR Illinois Health Facilities Authority Revenue,
6.375%, 1/1/15 1,130,000
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$ 16,134,038
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Indiana - 2.3%
4,135,000 BBB-/Ba3 Indiana State Development Finance Authority
Revenue, 5.75%, 10/1/11 $ 4,285,762
5,100,000 AAA/Aaa Indiana Transportation Finance Authority
Highway Revenue, 5.0%, 6/1/28 5,247,747
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$ 9,533,509
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Louisiana - 2.0%
8,335,000 BBB/Baa3 Tobacco Settlement Financing Corp.,
5.875%, 5/15/39 $ 8,583,883
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10 The accompanying notes are an integral part of these financial statements.
Pioneer Tax Advantaged Balanced Trust
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S&P/Moody's
Principal Ratings
Amount (unaudited) Value
Maryland - 0.6%
$ 2,500,000 A/A3 Maryland State Health & Higher Educational
Facilities Authority Revenue, 5.125%, 7/1/34 $ 2,545,950
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Massachusetts - 5.0%
2,000,000 AA+/Aa1 Massachusetts Health & Educational Facilities
Authority Revenue, 5.0%, 7/1/33 $ 2,055,820
5,000,000 BBB/Baa2 Massachusetts Health & Educational Facilities
Authority Revenue, Series D, 5.0%, 7/1/33 4,933,450
1,550,000 BBB-/Baa3 Massachusetts Health & Educational Facilities
Authority Revenue, 5.25%, 7/15/18 1,553,627
1,600,000 BBB/NR Massachusetts Health & Educational Facilities
Authority Revenue, 5.45%, 11/15/23 1,640,816
2,120,000 BBB/Baa3 Massachusetts Health & Educational Facilities
Authority Revenue, 5.625%, 7/1/20 2,166,343
900,000 BBB/Baa3 Massachusetts Health & Educational Facilities
Authority Revenue, 6.25%, 7/1/22 964,215
2,750,000 BBB/Baa2 Massachusetts Health & Educational Facilities
Authority Revenue, 6.625%, 7/1/32 2,968,790
500,000 BBB-/NR Massachusetts State Development Finance
Agency, 5.5%, 1/1/35 495,460
1,100,000 BBB/Baa2 Massachusetts State Development Finance
Agency, 5.625%, 10/1/24 1,150,138
1,000,000 BBB/Baa2 Massachusetts State Development Finance
Agency, 5.7%, 10/1/34 1,043,910
2,000,000 AAA/Aaa University of Massachusetts Building Authority
Project Revenue, 5.25%, 11/1/29 2,127,260
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$21,099,829
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Michigan - 2.1%
5,000,000 BB/NR Macomb County Hospital Finance Authority
Revenue, 5.875%, 11/15/34 $ 5,057,450
2,000,000 NR/NR Michigan State Hospital Finance Authority
Revenue, 5.25%, 11/15/25 1,963,580
1,000,000 NR/NR Michigan State Hospital Finance Authority
Revenue, 5.5%, 11/15/35 993,430
695,000 BB/Ba2 Pontiac Hospital Finance Authority Revenue,
6.0%, 8/1/07 694,388
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$ 8,708,848
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The accompanying notes are an integral part of these financial statements. 11
Pioneer Tax Advantaged Balanced Trust
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SCHEDULE OF INVESTMENTS 11/30/05 (continued)
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S&P/Moody's
Principal Ratings
Amount (unaudited) Value
Minnesota - 0.8%
$ 2,000,000 A-/NR Duluth Economic Development Authority Health
Care Facilities Revenue, 5.25%, 2/15/28 $ 2,042,620
1,500,000 A-/NR Duluth Economic Development Authority Health
Care Facilities Revenue, 5.25%, 2/15/33 1,523,865
-------------
$ 3,566,485
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Missouri - 0.4%
1,720,000 AA/Aa3 Missouri State Health & Educational Authority
Health Facilities Revenue, 5.25%, 8/15/28 $ 1,776,158
-------------
Montana - 2.2%
1,000,000 NR/A3 Montana Finance Authority Hospital Facilities
Revenue, 5.0%, 6/1/24 $ 1,008,960
8,000,000(b) AAA/Aaa Montana Health Facility Authority Revenue, RIB,
7.358%, 2/15/25 8,045,440
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$ 9,054,400
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Nebraska - 0.9%
3,500,000(b) AAA/Aaa Nebraska Investment Finance Authority
Revenue, RIB, 8.983%, 3/1/26 $ 3,620,960
-------------
Nevada - 1.7%
3,000,000 B-/NR Clark County Industrial Development Revenue,
5.5%, 10/1/30 $ 2,944,380
1,500,000 A-/A3 Henderson Nevada Health Care Facilities
Revenue, 5.625%, 7/1/24 1,592,685
2,500,000 BB/Ba1 Washoe County Water Facility Revenue,
5.0%, 3/1/36 2,527,750
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$ 7,064,815
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New Hampshire - 0.7%
1,900,000 NR/NR New Hampshire Business Finance Authority
Revenue, 6.05%, 9/1/29 (144A) $ 1,852,386
1,000,000 A+/A2 New Hampshire Health & Education Facilities
Authority Revenue, 5.75%, 10/1/31 1,056,410
-------------
$ 2,908,796
-------------
New Jersey - 4.0%
1,250,000 BBB/Baa3 Camden County Improvement Authority
Revenue, 5.75%, 2/15/34 $ 1,303,775
710,000 NR/NR New Jersey Economic Development Authority
Revenue, 5.75%, 1/1/25 719,479
1,230,000 NR/NR New Jersey Economic Development Authority
Revenue, 5.875%, 1/1/37 1,249,213
12 The accompanying notes are an integral part of these financial statements.
Pioneer Tax Advantaged Balanced Trust
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S&P/Moody's
Principal Ratings
Amount (unaudited) Value
New Jersey (continued)
$ 1,500,000 BB/Ba2 New Jersey Health Care Facilities Financing
Authority Revenue, 5.125%, 7/1/14 $ 1,391,910
5,000,000 BBB/Baa1 New Jersey Health Care Facilities Financing
Authority Revenue, 5.375%, 7/1/33 5,124,850
3,500,000 NR/NR New Jersey Health Care Facilities Financing
Authority Revenue, 7.25%, 7/1/27 3,594,150
3,000,000 BBB/Baa3 Tobacco Settlement Financing Corp.,
6.25%, 6/1/43 3,255,630
-------------
$ 16,639,007
-------------
New Mexico - 0.6%
1,000,000 AA/NR Dona Ana County PILT Revenue,
5.25%, 12/1/25 $ 1,045,970
1,500,000 NR/A3 Farmington New Mexico Hospital Revenue,
5.0%, 6/1/23 1,524,930
-------------
$ 2,570,900
-------------
New York - 5.1%
2,000,000 NR/NR Dutchess County Industrial Development Agency
Revenue, 7.5%, 3/1/29 $ 2,171,440
1,000,000 NR/Aa2 New York City Industrial Development Agency,
5.0%, 7/1/27 1,034,530
1,000,000 NR/Aa2 New York City Industrial Development Agency,
5.25%, 7/1/24 1,068,680
8,820,000(c) AAA/Aa1 New York City Transitional Finance Authority
Revenue, 0.0%, 11/1/29 7,005,109
5,000,000 AA-/A1 Port Authority of New York & New Jersey
Revenue, 5.0%, 9/1/38 5,139,550
4,900,000 AAA/Aaa Triborough Bridge & Tunnel Authority,
5.25%, 11/15/30 5,187,140
-------------
$ 21,606,449
-------------
North Carolina - 1.4%
3,000,000 AA+/Aa1 North Carolina Capital Facilities Finance Agency
Revenue, 5.125%, 7/1/42 $ 3,079,800
1,000,000 AA/Aa3 North Carolina Capital Facilities Finance Agency
Student Revenue, 5.0%, 6/1/27 1,013,830
1,000,000 AA/Aa3 North Carolina Capital Facilities Finance Agency
Student Revenue, 5.0%, 6/1/32 1,009,380
1,000,000 NR/NR North Carolina Medical Care Commission Health
Care Facilities Revenue, 5.0%, 11/1/23 1,010,000
-------------
$ 6,113,010
-------------
The accompanying notes are an integral part of these financial statements. 13
Pioneer Tax Advantaged Balanced Trust
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 11/30/05 (continued)
--------------------------------------------------------------------------------
S&P/Moody's
Principal Ratings
Amount (unaudited) Value
Ohio - 1.4%
$ 2,000,000 B-/Caa2 Cleveland Airport Special Revenue,
5.7%, 12/1/19 $ 1,610,940
3,000,000 AAA/Aaa Columbus City School District, 5.0%, 12/1/32 3,103,290
1,000,000 AAA/Aaa Hamilton County Hospital Facilities Revenue,
5.125%, 5/15/28 1,039,260
-------------
$ 5,753,490
-------------
Oregon - 0.7%
2,935,000 NR/Aaa Oregon State Housing & Community Services
Department Multi-Family Revenue,
6.0%, 7/1/31 $ 3,018,471
-------------
Pennsylvania - 2.8%
5,000,000 AAA/Aaa Pennsylvania State Turnpike Commission Oil
Franchise Tax Revenue, 5.0%, 12/1/31 $ 5,152,900
3,000,000 A-/NR Sayre Health Care Facilities Authority Revenue,
5.875%, 12/1/31 3,191,460
280,000 B-/NR Scranton-Lackawanna Health and Welfare
Authority Hospital Revenue, 5.9%, 7/1/08 273,515
700,000 B-/NR Scranton-Lackawanna Health and Welfare
Authority Hospital Revenue, 6.0%, 7/1/09 679,371
460,000 B-/NR Scranton-Lackawanna Health and Welfare
Authority Hospital Revenue, 6.05%, 7/1/10 443,247
2,165,000 AA+/Aa1 Swarthmore Borough Authority College Revenue,
5.0%, 9/15/31 2,208,452
-------------
$ 11,948,945
-------------
Puerto Rico - 3.4%
8,000,000 BBB+/Baa2 Puerto Rico Commonwealth Highway &
Transportation Authority Revenue,
5.125%, 7/1/43 $ 8,013,360
5,000,000 BBB/Baa2 Puerto Rico Public Buildings Authority Revenue,
5.25%, 7/1/33 5,117,700
1,000,000 BBB-/Baa3 Puerto Rico Public Finance Corp., 5.75%, 8/1/27 1,078,510
-------------
$ 14,209,570
-------------
Rhode Island - 1.1%
1,545,000 BBB/Baa3 Tobacco Settlement Financing Corp.,
6.125%, 6/1/32 $ 1,597,190
3,100,000 BBB/Baa3 Tobacco Settlement Financing Corp.,
6.25%, 6/1/42 3,232,556
-------------
$ 4,829,746
-------------
14 The accompanying notes are an integral part of these financial statements.
Pioneer Tax Advantaged Balanced Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
S&P/Moody's
Principal Ratings
Amount (unaudited) Value
South Carolina - 4.2%
$ 6,000,000 A-/A3 Berkeley County School District Installment
Lease, 5.0%, 12/1/28 $ 6,027,480
5,000,000 AAA/Aaa Florence County Hospital Revenue,
5.25%, 11/1/34 5,239,850
3,500,000 A/A2 Lexington County Health Services District, Inc.,
Hospital Revenue, 5.5%, 11/1/32 3,636,325
2,500,000 A-/A3 South Carolina Jobs Economic Development
Authority Revenue, 5.5%, 11/15/23 2,617,475
-------------
$ 17,521,130
-------------
Tennessee - 0.6%
2,500,000 NR/Baa3 Knox County Health Educational & Housing
Facilities Board Hospital Revenue,
6.5%, 4/15/31 $ 2,635,750
-------------
Texas - 2.9%
1,552,000 NR/Aaa Houston Housing Financing Corp.,
6.25%, 9/20/31 $ 1,654,851
2,750,000 AAA/Aaa Lower Colorado River Authority, 5.0%, 5/15/31 2,804,643
1,711,000 NR/Aaa Panhandle Regional Housing Finance Corp.,
6.6%, 7/20/31 1,862,458
3,000,000 BBB/Baa2 Richardson Hospital Authority, 6.0%, 12/1/34 3,203,610
1,000,000 BBB-/NR Seguin Higher Education Facilities Corp.
Revenue, 5.0%, 9/1/23 986,040
1,500,000 NR/Baa3 Texas State Student Housing Revenue,
6.5%, 9/1/34 1,579,935
-------------
$ 12,091,537
-------------
Vermont - 0.3%
1,295,000 AA/Aa3 Vermont Educational & Health Buildings
Financing Agency Revenue, 5.0%, 7/1/24 $ 1,330,431
-------------
Virginia - 1.3%
1,500,000 NR/A3 Prince William County Industrial Development
Hospital Revenue, 5.2%, 10/1/26 $ 1,552,335
3,925,000 NR/A3 Prince William County Industrial Development
Hospital Revenue, 5.35%, 10/1/36 4,085,219
-------------
$ 5,637,554
-------------
The accompanying notes are an integral part of these financial statements. 15
Pioneer Tax Advantaged Balanced Trust
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 11/30/05 (continued)
--------------------------------------------------------------------------------
S&P/Moody's
Principal Ratings
Amount (unaudited) Value
Washington - 4.5%
$ 8,000,000 AAA/Aaa King County Washington Sewer Revenue,
5.0%, 1/1/35 $ 8,166,720
3,000,000 AAA/Aaa Spokane County General Obligation,
5.0%, 12/1/33 3,062,040
7,000,000 BBB/Baa3 Tobacco Settlement Authority Revenue,
6.625%, 6/1/32 7,518,770
-------------
$ 18,747,530
-------------
West Virginia - 1.0%
4,000,000 A-/NR Monongalia County Building Commission
Hospital Revenue, 5.25%, 7/1/35 $ 4,007,560
-------------
Wisconsin - 0.9%
3,500,000 BBB+/NR Wisconsin State Health & Educational Facilities
Authority Revenue, 5.6%, 2/15/29 $ 3,574,270
-------------
TOTAL TAX-EXEMPT OBLIGATIONS
(Cost $304,751,858)(d) $ 315,316,800
-------------
16 The accompanying notes are an integral part of these financial statements.
Pioneer Tax Advantaged Balanced Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shares Value
COMMON STOCKS - 32.5% of Net Assets
Materials - 0.4%
Diversified Chemicals - 0.4%
94,000 Olin Corp. $ 1,809,500
-------------
Construction Materials - 0.0%
3,950 Monarch Cement Co. $ 91,838
-------------
Steel - 0.0%
200 Worthington Industries, Inc. $ 4,058
-------------
Total Materials $ 1,905,396
-------------
Consumer Durables & Apparel - 1.4%
Home Furnishings - 0.5%
50,000 Bassett Furniture Industries, Inc. $ 901,500
48,386 Kimball International, Inc. 515,311
33,700 Knape & Vogt Manufacturing Co. 486,965
-------------
$ 1,903,776
-------------
Housewares & Specialties - 0.9%
166,444 Tupperware Corp. $ 3,839,863
-------------
Total Consumer Durables & Apparel $ 5,743,639
-------------
Consumer Services - 0.6%
Specialized Consumer Services - 0.6%
200,227 ServiceMaster Co. $ 2,384,704
-------------
Total Consumer Services $ 2,384,704
-------------
Media - 1.0%
Movies & Entertainment - 1.0%
206,487 Regal Entertainment Group $ 4,177,232
-------------
Total Media $ 4,177,232
-------------
Food, Beverage & Tobacco - 4.7%
Packaged Foods & Meats - 0.6%
140,947 Lance, Inc. $ 2,584,968
-------------
Tobacco - 4.1%
76,000 Altria Group, Inc. $ 5,532,040
172,872 Loews Corp. - Carolina Group 6,958,098
120,356 UST, Inc. 4,643,334
-------------
$ 17,133,472
-------------
Total Food Beverage & Tobacco $ 19,718,440
-------------
The accompanying notes are an integral part of these financial statements. 17
Pioneer Tax Advantaged Balanced Trust
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 11/30/05 (continued)
--------------------------------------------------------------------------------
Shares Value
Pharmaceuticals & Biotechnology - 3.0%
Pharmaceuticals - 3.0%
281,215 Bristol-Myers Squibb Co. $ 6,071,432
216,536 Merck & Co., Inc. 6,366,158
-------------
Total Pharmaceuticals & Biotechnology $ 12,437,590
-------------
Banks - 3.9%
Diversified Banks - 0.3%
28,642 Wachovia Corp. $ 1,529,483
-------------
Regional Banks - 3.1%
78,200 FirstMerit Corp. $ 2,084,812
81,550 KeyCorp 2,704,198
90,000 National City Corp. 3,051,900
67,800 Regions Financial Corp. 2,284,182
222,700 TrustCo Bank Corp., NY 2,890,646
-------------
$ 13,015,738
-------------
Thrifts & Mortgage Finance - 0.5%
50,000 Washington Mutual, Inc. $ 2,059,500
-------------
Total Banks $ 16,604,721
-------------
Telecommunication Services - 5.2%
Integrated Telecommunication Services - 5.2%
461,012 AT&T, Inc. $ 11,483,819
182,750 BellSouth Corp. 4,981,765
403,500 Citizens Communications Co. 5,265,675
-------------
Total Telecommunication Services $ 21,731,259
-------------
Utilities - 12.3%
Electric Utilities - 2.6%
138,400 Empire District Electric Co. $ 2,810,904
74,383 Great Plains Energy, Inc. 2,161,570
179,000 Southern Co. 6,213,090
-------------
$ 11,185,564
-------------
Gas Utilities - 1.1%
172,185 Atmos Energy Corp. $ 4,574,955
-------------
Multi-Utilities - 6.7%
137,135 Ameren Corp. $ 7,194,102
200,000 Consolidated Edison, Inc. 9,108,000
167,249 KeySpan Corp. 5,612,876
134,112 NSTAR 3,767,206
64,000 PG&E Corp. 2,353,920
-------------
$ 28,036,104
-------------
18 The accompanying notes are an integral part of these financial statements.
Pioneer Tax Advantaged Balanced Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shares Value
Independent Power Producers & Energy Trades - 1.9%
303,253 Duke Energy Corp. $ 8,145,376
-------------
Total Utilities $ 51,941,999
-------------
TOTAL COMMON STOCKS
(Cost $133,252,504) $ 136,644,980
-------------
NON-CONVERTIBLE PREFERRED STOCKS - 29.9% of Net Assets
Energy - 1.2%
Oil & Gas Exploration & Production - 1.2%
49,300 Apache Corp., Series B, 5.68% $ 4,979,300
-------------
Total Energy $ 4,979,300
-------------
Banks - 9.7%
Diversified Banks - 2.9%
94,000 Bank of America Corp., Series VI, 6.75% $ 4,858,860
27,000 Fleet Capital Trust VII, 7.2% 682,543
200,000 Royal Bank of Scotland Group Plc, Series L, 5.75% 4,662,000
71,000 Wachovia Preferred Funding Corp., Series A, 7.25% 1,942,560
-------------
$ 12,145,963
-------------
Regional Banks - 0.8%
30,000 Bank One Capital V, 8.0% $ 752,993
105,000 Bank One Capital VI, 7.2% 2,641,321
-------------
$ 3,394,314
-------------
Thrifts & Mortgage Finance - 6.0%
21,500 Countrywide Capital IV, 6.75% $ 526,646
201,000 Fannie Mae, Series L, 5.125% 8,532,450
114,000 Fannie Mae, Series M, 4.75% 4,548,600
100,000 Fannie Mae, Series N, 5.5% 4,388,000
57,000 Freddie Mac, 5.81% 2,821,500
39,000 Freddie Mac, Series F, 5.0% 1,622,400
58,000 Freddie Mac, Series K, 5.79% 2,781,100
-------------
$ 25,220,696
-------------
Total Banks $ 40,760,973
-------------
Diversified Financials - 6.7%
Other Diversified Financial Services - 2.5%
55,000 Citigroup, Inc., Series G, 6.213% $ 2,737,350
81,500 Citigroup, Inc., Series M, 5.864% 3,993,500
150,000 JP Morgan Chase Capital Trust XVI, 6.35% 3,679,500
-------------
$ 10,410,350
-------------
The accompanying notes are an integral part of these financial statements. 19
Pioneer Tax Advantaged Balanced Trust
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 11/30/05 (continued)
--------------------------------------------------------------------------------
Shares Value
Consumer Finance - 1.0%
18,000 MBNA Capital, Series D, 8.125% $ 465,601
70,000 SLM Holding Corp., Series A, 6.97% 3,738,000
-------------
$ 4,203,601
-------------
Investment Banking & Brokerage - 3.2%
57,000 Bear Stearns Companies, Inc., Series F, 5.72% $ 2,679,000
40,000 Bear Stearns Companies, Inc., Series G, 5.49% 1,976,000
100,000 Lehman Brothers Holdings, Inc., 6.5% 2,540,000
19,000 Lehman Brothers Holdings, Inc., Series C, 5.94% 935,750
30,000 Lehman Brothers Holdings, Inc., Series D, 5.67% 1,387,500
65,000 Merrill Lynch Preferred Capital Trust IV, 7.12% 1,657,000
87,000 Merrill Lynch Preferred Capital Trust V, 7.28% 2,250,269
-------------
$ 13,425,519
-------------
Total Diversified Financials $ 28,039,470
-------------
Insurance - 4.4%
Life & Health Insurance - 0.9%
159,000 Scottish Re Group, Ltd., 7.25% $ 3,955,920
-------------
Property & Casualty Insurance - 2.7%
110,000 ACE, Ltd., Series C, 7.8% $ 2,889,700
161,000 Berkley W.R. Capital Trust II, 6.75% 3,805,976
70,000 St. Paul Capital Trust I, 7.6% 1,769,729
109,000 XL Capital, Ltd., Series B, 7.625% 2,755,520
-------------
$ 11,220,925
-------------
Reinsurance - 0.8%
170,500 RenaissanceRe Holdings, Ltd., Series C, 6.08% $ 3,440,690
-------------
Total Insurance $ 18,617,535
-------------
Real Estate - 3.9%
Real Estate Investment Trusts - 3.2%
15,000 Brandywine Realty Trust, Series C, 7.5% $ 376,200
34,500 Brandywine Realty Trust, Series D, 7.375% 853,185
27,000 Equity Office Properties Trust, Series G, 7.75% 687,150
92,000 Home Properties New York, Inc., Series F, 9.0% 2,346,920
40,000 Prologis Trust, Series G, 6.75% 989,600
128,000 PS Business Parks, Inc., Series H, 7.0% 3,110,400
32,440 PS Business Parks, Inc., Series I, 6.875% 763,962
35,480 Public Storage, Inc., Series T, 7.625% 906,514
53,500 Regency Centers Corp., 6.7% 1,284,000
94,000 Regency Centers Corp., Series C, 7.45% 2,371,620
-------------
$ 13,689,551
-------------
20 The accompanying notes are an integral part of these financial statements.
Pioneer Tax Advantaged Balanced Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shares Value
Real Estate Management & Development - 0.7%
124,000 Public Storage, Inc., Series F, 6.45% $ 2,865,640
-------------
Total Real Estate $ 16,555,191
-------------
Utilities - 4.0%
Electric Utilities - 3.6%
98,000 Alabama Power Co., 5.3% $ 2,290,750
113,000 Alabama Power Co., 5.83% 2,791,100
80,000 Energy East Capital Trust I, 8.25% 2,022,707
78,000 Interstate Power and Light Co., Series B, 8.375% 2,574,000
40,000 Mississippi Power Co., 5.25% 968,752
7,700 PPL Electric Utilities Corp., 4.5% 606,375
73,000 Southern California Edison Co., 4.32% 1,401,600
94,000 Virginia Power Capital Trust II, 7.375% 2,384,276
-------------
$ 15,039,560
-------------
Gas Utilities - 0.4%
62,000 Southern Union Co., Series C, 7.55% $ 1,655,400
-------------
Total Utilities $ 16,694,960
-------------
TOTAL NON-CONVERTIBLE PREFERRED STOCKS
(Cost $132,805,895) $ 125,647,429
-------------
CONVERTIBLE PREFERRED STOCKS - 2.0% of Net Assets
Capital Goods - 0.4%
Aerospace & Defense - 0.4%
15,000 Northrop Grumman Corp., 7.0% $ 1,860,000
-------------
Total Capital Goods $ 1,860,000
-------------
Diversified Financials - 1.1%
Other Diversified Financial Services - 1.1%
161,000 Lazard, Ltd., 6.625% $ 4,725,350
-------------
Total Diversified Financials $ 4,725,350
-------------
Utilities - 0.5%
Multi-Utilities - 0.5%
39,000 Dominion Resources, Inc., 8.75% $ 2,039,700
-------------
Total Utilities $ 2,039,700
-------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $8,083,510) $ 8,625,050
-------------
TAX-EXEMPT MONEY MARKET MUTUAL FUND - 1.0%
of Net Assets
4,092,466 BlackRock Provident Institutional Municipal Fund $ 4,092,466
-------------
TOTAL TAX-EXEMPT MONEY MARKET MUTUAL FUND
(Cost $4,092,466) $ 4,092,466
-------------
The accompanying notes are an integral part of these financial statements. 21
Pioneer Tax Advantaged Balanced Trust
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 11/30/05 (continued)
--------------------------------------------------------------------------------
Value
TOTAL INVESTMENTS IN SECURITIES - 140.4%
(Cost $582,986,233)(e) $ 590,326,725
-------------
OTHER ASSETS AND LIABILITIES - 1.5% $ 6,462,665
-------------
PREFERRED SHARES AT REDEMPTION VALUE,
INCLUDING DIVIDENDS PAYABLE - (41.9)% $(176,312,916)
-------------
NET ASSETS APPLICABLE TO COMMON
SHAREOWNERS - 100.0% $ 420,476,474
=============
(144A) Security is exempt from registration under Rule 144A of the Securities
Act of 1933. Such securities may be resold normally to qualified
institutional buyers in a transaction exempt from registration. At
November 30, 2005, the value of these securities amounted $12,819,727 or
3.0% of total net assets.
NR Security not rated by S&P or Moody's.
+ Prefunded bonds have been collateralized by U.S. Treasury securities
which are held in escrow to pay interest and principal on the tax exempt
issue and to retire the bonds in full at the earliest refunding date.
(a) Security is in default and is non-income producing.
(b) The interest rate is subject to change periodically and inversely based
upon prevailing market rates. The interest rate shown is the rate at
November 30, 2005.
(c) Debt obligation initially issued at one coupon which converts to a higher
coupon at a specific date. The rate shown is the rate at period end.
(d) The concentration of tax-exempt investments by type of obligation/market
sector is as follows:
Insured 22.1%
Revenue Bonds:
Medical Revenue 30.4
Tobacco Revenue 13.3
Development Revenue 10.0
Education Revenue 5.7
Other 4.5
Transportation Revenue 4.1
Housing Revenue 3.2
School District Revenue 1.9
Facilities Revenue 1.6
Pollution Revenue 1.4
Water Revenue 0.8
Airport Revenue 0.5
Gaming Revenue 0.5
-----
100.0%
=====
22 The accompanying notes are an integral part of these financial statements.
Pioneer Tax Advantaged Balanced Trust
--------------------------------------------------------------------------------
(e) At November 30, 2005, the net unrealized gain on investments based on
cost for federal income tax purposes of $582,772,209 was as follows:
Aggregate gross unrealized gain for all investments in which there is
an excess of value over tax cost $23,966,997
Aggregate gross unrealized loss for all investments in which there is
an excess of tax cost over value (16,412,481)
-----------
Net unrealized gain $ 7,554,516
===========
For financial reporting purposes net unrealized gain on investments was
$7,340,492 and cost of investments aggregated $582,986,233.
Portfolio Abbreviations
RIB Residual Interest Bonds
Purchases and sales of securities (excluding temporary cash investments) for
the year ended November 30, 2005, aggregated $162,380,352 and $162,243,014,
respectively.
The accompanying notes are an integral part of these financial statements. 23
Pioneer Tax Advantaged Balanced Trust
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES 11/30/05
--------------------------------------------------------------------------------
ASSETS:
Investments in securities, at value (cost $582,986,233) $590,326,725
Cash 113,262
Receivables -
Investment securities sold 7,433
Dividends and interest 5,984,750
Unrealized appreciation on interest rate swaps 2,429,371
Prepaid expenses 12,580
------------
Total assets $598,874,121
------------
LIABILITIES:
Dividend payable to common shareowners $ 1,598,979
Due to affiliate 294,488
Administration fee payable 31,117
Accrued expenses 160,147
------------
Total liabilities $ 2,084,731
------------
PREFERRED SHARES AT REDEMPTION VALUE:
$25,000 liquidation value per share applicable to
7,050 shares, including dividends payable of $25,219
from net investment income and $37,697 from net
realized capital gains $176,312,916
------------
NET ASSETS APPLICABLE TO COMMON SHAREOWNERS:
Paid-in capital $408,360,057
Distributions in excess of net investment income (540,578)
Accumulated net realized gain on investments 2,887,132
Net unrealized gain on investments 7,340,492
Net unrealized gain on interest rate swaps 2,429,371
------------
Net assets applicable to common shareowners $420,476,474
============
NET ASSET VALUE PER SHARE:
No par value, (unlimited number of shares authorized)
Based on $420,476,474/28,706,981 common shares $ 14.65
============
24 The accompanying notes are an integral part of these financial statements.
Pioneer Tax Advantaged Balanced Trust
-----------------------------------------------------------------------------
STATEMENT OF OPERATIONS
--------------------------------------------------------------------------------
For the Year Ended 11/30/05
INVESTMENT INCOME:
Dividends $13,835,581
Interest 18,081,834
-----------
$31,917,415
-----------
EXPENSES:
Management fees $ 3,632,242
Administration fees and reimbursements 453,536
Transfer agent fees and expenses 57,629
Auction agent fees 467,866
Custodian fees 18,187
Registration fees 36,944
Professional fees 65,063
Printing expense 20,811
Trustees' fees 15,180
Pricing fees 18,222
Miscellaneous 26,862
-----------
Total expenses $ 4,812,542
-----------
Net investment income $27,104,873
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND INTEREST RATE SWAPS:
Net realized gain (loss) from:
Investments $ 9,850,830
Interest rate swaps (562,861) $ 9,287,969
----------- -----------
Change in net unrealized gain from:
Investments $(7,084,053)
Interest rate swaps 1,466,255 $(5,617,798)
----------- -----------
Net gain on investments and interest rate swaps $ 3,670,171
-----------
DIVIDENDS AND DISTRIBUTIONS TO PREFERRED
SHAREOWNERS FROM:
Net investment income $(5,503,680)
Net realized gains (37,697)
-----------
Total distributions $(5,541,377)
-----------
Net increase in net assets applicable to common
shareowners resulting from operations $25,233,667
===========
The accompanying notes are an integral part of these financial statements. 25
Pioneer Tax Advantaged Balanced Trust
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
For the Year Ended 11/30/05 and the Period from 1/28/04
(Commencement of Operations) to 11/30/04
Year 1/28/04
Ended to
11/30/05 11/30/04
FROM OPERATIONS:
Net investment income $ 27,104,873 $ 18,780,875
Net realized gain (loss) on investments and interest
rate swaps 9,287,969 (7,159,776)
Change in net unrealized gain on investments and
interest rate swaps (5,617,798) 15,387,661
Dividends and distributions to preferred
shareowners from:
Net investment income (5,503,680) (1,802,192)
Net realized gains (37,697) -
------------- -------------
Net increase in net assets applicable to
common shareowners $ 25,233,667 $ 25,206,568
------------- -------------
DISTRIBUTIONS TO COMMON SHAREOWNERS:
Net investment income ($0.79 and $0.55 per
share, respectively) $ (22,546,462) $ (15,777,356)
------------- -------------
Total dividends to common shareowners $ (22,546,462) $ (15,777,356)
------------- -------------
FROM TRUST SHARE TRANSACTIONS:
Net proceeds from the issuance of common shares $ - $ 366,720,000
Net proceeds from underwriters' over-allotment
option exercised - 44,407,500
Common share offering expenses charged to
paid-in capital - (851,752)
Preferred share offering expenses charged to
paid-in capital - (2,015,694)
------------- -------------
Net increase in net assets applicable to
common shareowners resulting from Trust
share transactions $ - $ 408,260,054
------------- -------------
Net increase in net assets applicable to
common shareowners $ 2,687,205 $ 417,689,266
NET ASSETS APPLICABLE TO COMMON
SHAREOWNERS:
Beginning of period 417,789,269 100,003
------------- -------------
End of period (including distributions in excess
of net investment income and undistributed
net investment income of ($540,578) and
$872,076, respectively) $ 420,476,474 $ 417,789,269
============= =============
26 The accompanying notes are an integral part of these financial statements.
Pioneer Tax Advantaged Balanced Trust
--------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 11/30/05
--------------------------------------------------------------------------------
Year 1/28/04(b)
Ended to
11/30/05 11/30/04
Per Common Share Operating Performance
Net asset value, beginning of period $ 14.55 $ 14.33(c)
-------- --------
Increase (decrease) from investment operations:(a)
Net investment income $ 0.95 $ 0.66
Net realized and unrealized gain on investments
and interest rate swaps 0.13 0.27
Dividends and distributions to preferred shareowners from:
Net investment income (0.19) (0.06)
Net realized gain -(d) -
-------- --------
Net increase from investment operations $ 0.89 $ 0.87
Distributions to common shareowners from:
Net investment income (0.79) (0.55)
Capital charge with respect to issuance of:
Common shares - (0.03)
Preferred shares - (0.07)
-------- --------
Net increase in net asset value $ 0.10 $ 0.22
-------- --------
Net asset value, end of period(e) $ 14.65 $ 14.55
======== ========
Market value, end of period(e) $ 12.18 $ 12.74
-------- --------
Total return(f) 1.51% (11.26)%
Ratios to average net assets of common shareowners
Net expenses(g) 1.12% 1.04%(h)
Net investment income before preferred share dividends(g) 6.32% 5.69%(h)
Preferred share dividends 1.28% 0.55%(h)
Net investment income available to common shareowners 5.04% 5.14%(h)
Portfolio turnover 27% 63%
Net assets of common shareowners, end of period (in thousands) $420,476 $417,789
Preferred shares outstanding (in thousands) $176,250 $176,250
Asset coverage per preferred share, end of period $84,651 $84,264
Average market value per preferred share $25,000 $25,000
Liquidation value, including dividends payable, per preferred share $25,009 $25,003
Ratios to average net assets of common shareowners before
reimbursement of organization expenses and expense reductions
Net expenses(g) 1.12% 1.05%(h)
Net investment income before preferred share dividends(g) 6.32% 5.68%(h)
Preferred share dividends 1.28% 0.55%(h)
Net investment income available to common shareowners 5.04% 5.13%(h)
(a) The per common share data presented above is based upon the average common
shares outstanding for the periods presented.
(b) Trust shares were first publicly offered on January 28, 2004.
(c) Net asset value immediately after the closing of the first public offering
was $14.30.
(d) Amount is less than $0.01 per common share.
(e) Net asset value and market value are published in Barron's on Saturday, The
Wall Street Journal on Monday and The New York Times on Monday and Saturday.
(f) Total investment return is calculated assuming a purchase of common shares
at the current market value on the first day and a sale at the current
market value on the last day of the periods reported. Dividends and
distributions, if any, are assumed for purposes of this calculation to be
reinvested at prices obtained under the Trust's dividend reinvestment plan.
Total investment return does not reflect brokerage commissions. Total
investment return less than a full period is not annualized. Past
performance is not a guarantee of future results.
(g) Ratios do not reflect the effect of dividend payments to preferred
shareowners.
(h) Annualized.
The information above represents the audited operating performance data for a
share of common stock outstanding, total investment return, ratios to average
net assets of common shareowners and other supplemental data for the periods
indicated. This information has been determined based upon financial
information provided in the financial statements and market value data for the
Trust's common shares.
The accompanying notes are an integral part of these financial statements. 27
Pioneer Tax Advantaged Balanced Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 11/30/05
--------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
Pioneer Tax Advantaged Balanced Trust (the "Trust") was organized as a Delaware
business trust on October 16, 2003. Prior to commencing operations on January
28, 2004, the Trust had no operations other than matters relating to its
organization and registration as a diversified, closed-end management
investment company under the Investment Company Act of 1940, as amended, and
the sale and issuance to Pioneer Funds Distributor, Inc., an affiliate of
Pioneer Investment Management, Inc. ("PIM"), the Trust's investment adviser, a
wholly owned indirect subsidiary of UniCredito Italiano S.p.A. (UniCredito
Italiano), of 6,981 shares of beneficial interest at an aggregate purchase
price of $100,003. The investment objective of the Trust is to provide a high
level of total after-tax return, including attractive tax-advantaged income.
The Trust may invest in municipal securities with a broad range of maturities
and credit ratings, including both investment grade and below investment grade
municipal securities. By concentrating in municipal securities, the portfolio
is more susceptible to adverse economic, political or regulatory developments
than is a portfolio that invests more broadly. Investments in the Trust are
subject to possible loss due to the financial failure of underlying securities
and their inability to meet their debt obligations. The Trust may also invest
in common stocks and preferred securities that pay tax-qualified dividends. In
addition, the Trust may invest in other securities, including debt instruments,
real estate investment trusts ("REITS") and equity securities, that generate
income taxable at ordinary income rates, rather than long-term capital gain
rates.
Information regarding the Trust's principal investment risks is contained in
the Trust's prospectus. Please refer to those documents when considering the
Trust's risks.
There can be no assurance as to the portion of the Fund's dividends that will
be tax-exempt or tax-qualified.
A portion of income may be subject to state, federal, and/or alternative
minimum tax. Capital gains, if any, are subject to a capital gains tax. When
interest rates rise, the prices of fixed-income securities in the Trust will
generally fall. Conversely, when interest rates fall the prices of fixed-income
securities in the Trust will generally rise.
28
Pioneer Tax Advantaged Balanced Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The Trust may invest in derivative securities, which may include futures and
options. These types of instruments can increase price fluctuation.
The Trust's financial statements have been prepared in conformity with U.S.
generally accepted accounting principles that require the management of the
Trust to, among other things, make estimates and assumptions that affect the
reported amounts of assets and liabilities, and the reported amounts of income,
expenses and gains and losses on investments during the reporting period.
Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Trust in preparation of its financial statements, which are consistent with
those policies generally accepted in the investment company industry:
A. Security Valuation
Security transactions are recorded as of trade date. Debt securities are
valued at prices supplied by independent pricing services, which consider
such factors as Treasury spreads, yields, maturities and ratings.
Valuations may be supplemented by dealers and other sources, as required.
Equity securities are valued at the last sale price on the principal
exchange where they are traded. The values of interest rate swaps are
determined by obtaining dealer quotations. Securities for which market
quotations are not readily available are valued at their fair values as
determined by, or under the direction of, the Board of Trustees. The Trust
may also use the fair value of a security, including a non U.S. security,
when the closing market price on the principal exchange where the security
is traded no longer accurately reflects the value of the security as of
the close of the exchange. As of November 30, 2005, there were no
securities fair valued. Temporary cash investments are valued at amortized
cost.
Dividend income is recorded on the ex-dividend date, except that certain
dividends from foreign securities where the ex-dividend date may have
passed are recorded as soon as the Trust becomes aware of the ex-dividend
data in the exercise of reasonable diligence. Discount and premium on debt
securities are accreted or amortized, respectively, daily, on an effective
yield to maturity basis and are included in interest income. Interest
income, includ-
29
Pioneer Tax Advantaged Balanced Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 11/30/05 (continued)
--------------------------------------------------------------------------------
ing income on interest bearing cash accounts, is recorded on an accrual
basis.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
B. Federal Income Taxes
It is the Trust's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income and net realized capital gains, if
any, to its shareowners. Therefore, no federal income tax provision is
required.
The amounts and characterizations of distributions to shareowners for
financial reporting purposes are determined in accordance with federal
income tax rules. Therefore, the source of the Trust's distributions may
be shown in the accompanying financial statements as either from or in
excess of net investment income or net realized gain on investment
transactions, or from paid-in capital, depending on the type of book/tax
differences that may exist.
At November 30, 2005, the Trust reclassified $467,385 to increase
distributions in excess of net investment income and to increase
accumulated net realized gain on investments. The reclassification has no
impact on the net asset value of the Trust and presents the Trust's
capital accounts on a tax basis.
The tax character of current year distributions paid to common and
preferred shareowners during the year ended November 30, 2005 and the
period ended November 30, 2004 was as follows:
--------------------------------------------------------------------------------
2005 2004
--------------------------------------------------------------------------------
Distributions paid from:
Tax-Exempt income $15,382,197 $ 9,413,848
Ordinary income 12,667,945 8,165,700
Long-term capital gain 37,697 -
----------- -----------
$28,087,839 $17,579,548
=========== ===========
--------------------------------------------------------------------------------
The following shows the components of distributable earnings on a
federal income tax basis at November 30, 2005.
30
Pioneer Tax Advantaged Balanced Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
-------------------------------------------------------------------------------
2005
-------------------------------------------------------------------------------
Undistributed tax-exempt income $ 486,802
Undistributed ordinary income 383,388
Undistributed long term gain 2,924,829
Dividends payable (1,661,895)
Unrealized appreciation 9,983,293
-----------
Total $12,116,417
===========
-------------------------------------------------------------------------------
The difference between book basis and tax basis unrealized appreciation is
primarily attributable to the difference between book and tax amortization
methods for premiums and discounts on fixed income securities.
C. Automatic Dividend Reinvestment Plan
All common shareowners automatically participate in the Automatic Dividend
Reinvestment Plan (the "Plan"), under which participants receive all
dividends and capital gain distributions (collectively, "dividends") in
full and fractional common shares of the Trust in lieu of cash.
Shareowners may elect not to participate in the Plan. Shareowners not
participating in the Plan receive all dividends and capital gain
distributions in cash. Participation in the Plan is completely voluntary
and may be terminated or resumed at any time without penalty by notifying
Mellon Investor Services LLC, the agent for shareowners in administering
the Plan (the "Plan Agent"), in writing prior to any dividend record date;
otherwise such termination or resumption will be effective with respect to
any subsequently declared dividend or other distribution. Whenever the
Trust declares a dividend on common shares payable in cash, participants
in the Plan will receive the equivalent in common shares acquired by the
Plan Agent either (i) through receipt of additional unissued but
authorized common shares from the Trust or (ii) by purchase of outstanding
common shares on the New York Stock Exchange or elsewhere. If, on the
payment date for any dividend, the net asset value per common share is
equal to or less than the market price per share plus estimated brokerage
trading fees ("market premium"), the Plan Agent will invest the dividend
amount in newly issued common shares. The number of newly issued common
shares to be credited to each account will be determined by dividing the
dollar amount of the dividend by the net asset value
31
Pioneer Tax Advantaged Balanced Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 11/30/05 (continued)
--------------------------------------------------------------------------------
per common share on the date the shares are issued, provided that the
maximum discount from the then current market price per share on the date
of issuance does not exceed 5%. If, on the payment date for any dividend,
the net asset value per common share is greater than the market value
("market discount"), the Plan Agent will invest the dividend amount in
common shares acquired in open-market purchases. There are no brokerage
charges with respect to newly issued common shares. However, each
participant will pay a pro rata share of brokerage trading fees incurred
with respect to the Plan Agent's open-market purchases. Participating in
the Plan does not relieve shareowners from any federal, state or local
taxes which may be due on dividends paid in any taxable year. Shareowners
holding Plan shares in a brokerage account may not be able to transfer the
shares to another broker and continue to participate in the Plan.
2. Management Agreement
PIM manages the Trust's portfolio. Management fees are calculated daily at the
annual rate of 0.60% of the Trust's average daily managed assets. "Managed
assets" is the average daily value of the Trust's total assets minus the sum of
the Trust's liabilities, which liabilities exclude debt related to leverage,
short-term debt and the aggregate liquidation preference of any outstanding
preferred shares. At November 30, 2005, $294,488 was payable to PIM related to
management fees.
In addition, under PIM's management and administration agreements, certain
other services and costs are paid by PIM and reimbursed by the Trust. For the
year ended, the Trust recorded $71,924 in reimbursements and is included in
"Administration fees and reimbursement" on the Statement of Operations.
The Trust has retained Princeton Administrators, L.P., ("Princeton") an
affiliate of Merrill Lynch & Co., to provide certain administrative services to
the Trust on its behalf. The Trust pays Princeton a monthly fee at an annual
rate of 0.07% of the average daily value of the Trust's managed assets up to
$500 million and 0.03% for average daily managed assets in excess of $500
million, subject to a minimum monthly fee of $10,000.
Also, PIM has agreed for the first three years of the Trust's investment
operations to limit the Trust's total annual expenses [excluding
32
Pioneer Tax Advantaged Balanced Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
offering costs for common and preferred shares, interest expense, the cost of
defending or prosecuting any claim or litigation to which the Trust is a party
(together with any amount in judgment or settlement), indemnification expenses
or taxes incurred due to the failure of the Trust to qualify as a regulated
investment company under the Code or any other non-recurring or non-operating
expenses] to 0.80% of the Trust's average daily managed assets. The dividend on
any preferred shares is not an expense for this purpose. For the year ended,
November 30, 2005, the Trust's expenses were not reduced under such
arrangements.
3. Transfer Agents
Pioneer Investment Management Shareholder Services, Inc. ("PIMSS"), a wholly
owned indirect subsidiary of UniCredito Italiano, through a sub-transfer agency
agreement with Mellon Investor Services LLC, provides substantially all
transfer agent and shareowner services related to the Trust's common shares at
negotiated rates. Deutsche Bank Trust Company Americas is the transfer agent,
registrar, dividend paying agent and redemption agent with respect to the
Trust's Auction Market Preferred Shares ("AMPS"). The Trust pays Deutsche Bank
Trust Company Americas an annual fee, as is agreed to from time to time by the
Trust and Deutsche Bank Trust Company Americas, for providing such services.
4. Interest Rate Swaps
The Trust may enter into interest rate swap transactions to attempt to protect
itself from increasing dividend or interest expense on its leverage resulting
from increasing short-term interest rates. The cost of leverage may rise with
an increase in interest rates, generally having the effect of lower yields and
potentially lower dividends to common shareowners. Interest rate swaps can be
used to "lock in" the cost of leverage and reduce the negative impact that
rising short-term interest rates would have on the Trust's leveraging costs.
An interest rate swap is an agreement between two parties, which involves
exchanging a floating rate and fixed rate interest payments for a specified
period of time. Interest rate swaps involve the accrual of the net interest
payments between the parties on a daily basis, with the net amount recorded
within the unrealized appreciation/ depreciation of interest rate swaps on the
Statement of Assets and Liabilities. Once the interim payments are settled in
cash, at the
33
Pioneer Tax Advantaged Balanced Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 11/30/05 (continued)
--------------------------------------------------------------------------------
pre-determined dates specified in the agreement, the net amount is recorded as
realized gain or loss from interest rate swaps on the Statement of Operations.
During the term of the swap, changes in the value of the swap are recognized as
unrealized gains and losses by "marking-to market" the market value of the swap
based on values obtained from dealer quotations. When the swap is terminated,
the Trust will record a realized gain or loss equal to the difference, if any,
between the proceeds from (or cost of) closing the contract and the cost basis
of the contract. The Trust is exposed to credit risk in the event of
non-performance by the other party to the interest rate swap. However, at
November 30, 2005 the Trust does not anticipate non-performance by any
counterparty. Risk may also arise with regard to market movements in the value
of the swap arrangement that do not exactly offset the changes in the related
dividend requirement or interest expense on the Trust's leverage.
Under the terms of the agreement entered into by the Trust, the Trust receives
a floating rate of interest and pays a fixed rate of interest for the term.
Details of the swap agreement outstanding as of November 30, 2005 were as
follows:
------------------------------------------------------------------------------------
Termination Notional Fixed Unrealized
Counterparty Date Amount (000) Rate Floating Rate Appreciation
------------------------------------------------------------------------------------
UBS AG Sept. 1, 2009 $106,000 2.855% 1 month BMA $2,429,371
------------------------------------------------------------------------------------
5. Trust Shares
There are an unlimited number of common shares of beneficial interest
authorized. Of the 28,706,981 common shares of beneficial interest outstanding
at November 30, 2005, PIM owned 6,981 shares.
Transactions in common shares of beneficial interest for the year ended
November 30, 2005 and the period from January 28, 2004 (commencement of
operations) to November 30, 2004 were as follows:
34
Pioneer Tax Advantaged Balanced Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
2005 2004
--------------------------------------------------------------------------------
Shares issued in connection with
initial public offering - 25,600,000
Shares issued from underwriters'
over-allotment option exercised - 3,100,000
---------- ----------
Net increase in shares outstanding - 28,700,000
Shares outstanding at beginning
of period 28,706,981 6,981
---------- ----------
Shares outstanding at end of period 28,706,981 28,706,981
========== ==========
--------------------------------------------------------------------------------
Offering costs of $851,752 incurred in connection with the Trust's offering of
common shares have been charged to paid-in capital. The Trust may classify or
reclassify any unissued common shares of beneficial interest into one or more
series of preferred shares of beneficial interest. As of November 30, 2005,
there were 7,050 AMPS as follows: Series T7-2,350, Series F7-2,350 and Series
TH28-2,350. Offering costs of $253,194 and underwriting discounts of $1,762,500
have been charged to paid-in capital.
Dividends on Series T7 and Series F7 are cumulative at a rate which is reset
every seven days based on the results of an auction. Dividends on Series TH28
are also cumulative at a rate reset every 28 days based on the results of an
auction. Dividend rates ranged from 2.05% to 3.95% during the year ended
November 30, 2005.
The Trust may not declare dividends or make other distributions on its common
shares or purchase any such shares if, at the time of the declaration,
distribution or purchase, asset coverage with respect to the outstanding
preferred shares would be less than 200%.
The AMPS are redeemable at the option of the Trust, in whole or in part, on any
dividend payment date at $25,000 per share plus any accumulated or unpaid
dividends, whether or not declared. The AMPS are also subject to mandatory
redemption at $25,000 per share plus any accumulated or unpaid dividends,
whether or not declared, if certain requirements relating to the composition of
the assets and liabilities of the Trust as set forth in the Agreement and
Declaration of Trust are not satisfied.
The holders of AMPS have voting rights equal to the holders of the Trust's
common shares (one vote per share) and will vote together with holders of the
common shares as a single class. However, hold-
35
Pioneer Tax Advantaged Balanced Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 11/30/05 (continued)
--------------------------------------------------------------------------------
ers of AMPS are also entitled to elect two of the Trust's Trustees. In
addition, the Investment Company Act of 1940, as amended, requires that along
with approval by shareowners that might otherwise be required, the approval of
the holders of a majority of any outstanding preferred shares, voting
separately as a class, would be required to (a) adopt any plan of
reorganization that would adversely affect the preferred shares and (b) take
any action requiring a vote of security holders, including, among other things,
changes in the Trust's subclassification as a closed-end investment company or
changes in its fundamental investment restrictions.
6. Subsequent Events
Subsequent to November 30, 2005, the Board of Trustees of the Trust declared a
dividend from undistributed net investment income of $0.0557 per common share
and from accumulated net long term capital gains of $0.080658 per common share
payable December 30, 2005, to common shareowners of record on December 12,
2005.
For the period December 1, 2005 to December 31, 2005, dividends and
distributions declared on preferred shares totaled $153,005 from net investment
income and $382,107 from net realized gain in aggregate, respectively, for the
three outstanding preferred share series
ADDITIONAL INFORMATION (unaudited)
During the period, there have been no material changes in the Trust's
investment objective or fundamental policies that have not been approved by the
shareowners. There have been no changes in the Trust's charter or By-Laws that
would delay or prevent a change in control of the Trust which have not been
approved by the shareowners. There have been no changes in the principal risk
factors associated with investment in the Trust. There have been no changes in
the persons who are primarily responsible for the day-to-day management of the
Trust's portfolio.
Notice is hereby given in accordance with Section 23(C) of the Investment
Company Act of 1940 that the Trust may purchase, from time to time, its common
shares in the open market.
36
Pioneer Tax Advantaged Balanced Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CEO CERTIFICATION DISCLOSURE (unaudited)
The Trust's Chief Executive Officer has submitted to the New York Stock
Exchange the annual CEO certification as required by Section 303A.12(a) of the
NYSE Listed Company Manual. In addition, the Trust has filed with the
Securities and Exchange Commission the certification of its Chief Executive
Officer and Chief Financial Officer required by Section 302 of the
Sarbanes-Oxley Act.
IMPORTANT TAX INFORMATION (unaudited)
The following information is provided with respect to the distributions paid by
the Pioneer Tax Advantaged Balanced Trust during the taxable year ended
November 30, 2005:
COMMON SHAREOWNERS
--------------------------------------------------------------------------------
Qualified Dividends
Dividend Received
Tax-Exempt Income for Deduction for
Payable Date Income Individuals* Corporations
--------------------------------------------------------------------------------
December 31, 2004 -
January 19, 2005 52.99% 46.30% 43.48%
February 28, 2005 -
October 31, 2005 55.22% 44.78% 40.93%
--------------------------------------------------------------------------------
* The Trust hereby designates the percentage indicated above or the maximum
amount allowable by law.
PREFERRED SHAREOWNERS
--------------------------------------------------------------------------------------------
Qualified Dividends Received
Dividend Income Deduction for
Tax-Exempt Income for Individuals* Corporations
------------------------ ------------------------ -----------------------
January - January - January -
December November December November December November
2004 2005 2004 2005 2004 2005
--------------------------------------------------------------------------------------------
Series: T 52.99% 55.03% 46.30% 44.97% 43.48% 41.14%
Series: H 52.99% 55.02% 46.30% 44.98% 43.48% 41.16%
Series: F 52.99% 55.04% 46.30% 44.96% 43.48% 41.13%
--------------------------------------------------------------------------------------------
* The Trust hereby designates the percentage indicated above or the maximum
amount allowable by law.
37
Pioneer Tax Advantaged Balanced Trust
--------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
--------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
Pioneer Tax Advantaged Balanced Trust:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Pioneer Tax Advantaged Balanced Trust (the
"Trust") as of November 30, 2005, and the related statement of operations for
the year then ended, the statements of changes in net assets and the financial
highlights for each of the periods indicated therein. These financial
statements and financial highlights are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. We were not engaged to perform an audit of the Trust's internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Trust's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights, assessing the accounting
principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. Our procedures included
confirmation of securities owned as of November 30, 2005, by correspondence
with the custodian and brokers or by other appropriate auditing procedures
where replies from brokers were not received. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Pioneer Tax Advantaged Balanced Trust at November 30, 2005, the results of its
operations for the year then ended, the changes in its net assets and the
financial highlights for each of the periods indicated therein, in conformity
with U.S. generally accepted accounting principles.
/s/ Ernst & Young LLP
Boston, Massachusetts
January 20, 2006
38
Pioneer Tax Advantaged Balanced Trust
--------------------------------------------------------------------------------
RESULTS OF SHAREOWNER MEETING
--------------------------------------------------------------------------------
On August 16, 2005, Pioneer Tax Advantaged Balanced Trust held its annual
meeting of shareowners to elect Trustees. All Trustees were elected. Here are
the detailed results of the votes.
Proposal 1 - To elect Class II Trustees.
-------------------------------------------------------
Nominee Affirmative Withheld
-------------------------------------------------------
Margaret B.W. Grahman 23,530,216 553,249
Osbert M. Hood 23,541,612 541,853
John Winthrop 23,534,266 549,199
-------------------------------------------------------
39
Pioneer Tax Advantaged Balanced Trust
--------------------------------------------------------------------------------
FACTORS CONSIDERED BY THE INDEPENDENT TRUSTEES IN
APPROVING THE MANAGEMENT CONTRACT
--------------------------------------------------------------------------------
The Investment Company Act of 1940 requires that both the Board of Trustees and
a majority of the Independent Trustees (collectively "the Trustees") voting
separately annually approve the Trust's management contract (the "Management
Contract"). The Trustees have determined that the terms of the Management
Contract are fair and reasonable and that renewal of the contract will enable
the Trust to receive quality investment advisory services at a cost deemed
reasonable and in the best interests of the Trust and its shareowners. In
making such determinations, the Independent Trustees relied upon the assistance
of counsel to the Independent Trustees and counsel to the Trust.
Throughout the year, the Independent Trustees regularly met in executive
sessions separately from the Interested Trustees of the Trust and any officers
of Pioneer Investment Management, Inc., the Trust's adviser (the "Investment
Adviser"), or its affiliates. While the Trustees, including the Independent
Trustees, act on all major matters relating to the Trust, a significant portion
of the activities of the Board of Trustees (including certain of those
described herein) is conducted through committees, the members of which are
comprised exclusively of Independent Trustees. Such committee meetings are
attended by officers of the Trust or the Investment Adviser to the extent
requested by the members of the committee.
In evaluating the Management Contract, the Trustees conducted a review that was
specifically focused upon the renewal of the Management Contract and also
relied upon their knowledge, resulting from their meetings throughout the year,
of the Investment Adviser, its services and the Trust. Both in meetings
specifically dedicated to renewal of the Management Contract and at other
meetings during the course of the year, the Trustees, including the Independent
Trustees, received materials relating to the Investment Adviser's investment
and management services under the Management Contract. These materials included
(i) information on the investment performance of the Trust, a peer group of
funds and two indices, in each case selected by the Independent Trustees for
this purpose, (ii) the general investment outlook in the markets in which the
Trust invests, (iii) the procedures employed to determine the value of each of
the Trust's assets, (iv) the Investment Adviser's management of the
relationships with the Trust's unaffiliated service providers, (v) the record
of compliance with the Trust's investment policies and restrictions and with
the Trust's Code of Ethics and the structure and responsibilities of the
Investment Adviser's compliance department, (vi) the nature, cost and
40
Pioneer Tax Advantaged Balanced Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
character of non-investment management services provided by the Investment
Adviser and its affiliates, (vii) the disclosures included in the Trust's
reports to shareowners, (viii) analyses of the benefits and costs of the use of
leverage through the issuance of the Trust's preferred shares and sensitivity
analyses based on changes in interest rates and (ix) the discount or premium of
the market price of the Trust's common stock relative to its net asset value
and measures that are or could be taken to address any discount.
Specifically in connection with the Independent Trustees' review of the
Management Contract, the Independent Trustees requested and the Investment
Adviser provided additional information in order to evaluate the quality of the
Investment Adviser's services and the reasonableness of the fee under the
Management Contract. Among other items, this information included data or
analyses of (1) investment performance for one year period for the Trust and a
peer group selected by the Independent Trustees for this purpose, (2)
management and other fees incurred by a peer group of funds selected by the
Independent Trustees for this purpose, (3) the advisory fees of other
comparable portfolios managed by the Investment Adviser, (4) expense ratios for
the Trust and a peer group of funds selected by the Independent Trustees for
this purpose, (5) the overall organization of the Investment Adviser, (6) the
Investment Adviser's financial results and condition, including its and certain
of its affiliates' profitability from services per formed for the Trust, (7)
administrative reimbursements paid to the Investment Adviser or affiliates, (8)
investment management staffing, and (9) operating expenses paid to third
parties.
The following summarizes factors considered by the Trustees in connection with
reviewing the information described above and their renewal of the Trust's
Management Contract. The Trustees did not identify any single factor as
all-important or controlling, and the summary does not detail all the matters
that were considered.
A. Ancillary Benefits to Shareowners. The Trustees considered the benefits to
shareowners of investing in a closed-end fund that is part of an
established group of open and closed-end funds. The Trustees also noted
that the relationship of the market price relative to the Trust's net
assets attributed to its common shares was at least comparable to other
closed-end funds with similar investment approaches.
41
Pioneer Tax Advantaged Balanced Trust
--------------------------------------------------------------------------------
FACTORS CONSIDERED BY THE INDEPENDENT TRUSTEES IN
APPROVING THE MANAGEMENT CONTRACT (continued)
--------------------------------------------------------------------------------
B. Compliance and Investment Performance. The Trustees determined that the
Investment Adviser had policies and systems reasonably designed to achieve
compliance with the Trust's investment objectives and regulatory
requirements. The Trustees also reviewed the Trust's investment
performance, based on total return, as well as the Trust's performance
compared to both the performance of a peer group and the results of an
index, in each case selected by the Independent Trustees for this purpose.
The Trust's performance, on the basis of total return, was in the first
quintile for the 12 months ended June 30, 2005. (In all quintile rankings
referred to throughout this discussion first quintile is most favorable to
the Trust's shareowners. Thus, highest relative performance would be first
quintile and lowest relative expenses also would be first quintile.) The
Trustees also considered the yield (gross of expenses) to the Trust's
common shareowners relative to the yield (at June 30, 2005) of the Lehman
Municipal Bond Index and the Standard & Poor's Stock 500 Index for the
twelve months ended June 30, 2005. The Trustees concluded that the
performance of the Trust supported the continuation of the Management
Contract.
C. The Investment Adviser's Personnel and Methods. The Trustees reviewed the
background of members of the team responsible for the daily management of
the Trust and the Trust's investment objective and discipline. The
Independent Trustees also have had discussions with senior management of
the Investment Adviser responsible for investment operations and the
senior management of the Investment Adviser's fixed-income and equity
groups. Among other things, the Trustees considered the number, education
and experience of the Investment Adviser's investment staff and their use
of technology and emphasis on analytics in view of the risk profile of
securities in which the Trust invests. The Trustees concluded that the
Investment Adviser had the quality and depth of personnel and the
well-developed methods essential to per forming its duties under the
Management Contract.
D. Nature and Quality of Other Services. The Trustees considered the nature,
quality, cost and extent of other services provided to shareowners of the
Trust, including administrative and shareowner services performed by the
Investment Adviser under the Management Contract. The Trustees also
considered the reasonableness of the arrangements for reimbursement of the
Investment
42
Pioneer Tax Advantaged Balanced Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Adviser's out-of-pocket costs and expenses, including overhead, for
certain administrative services that the Investment Adviser is not
required to provide under the Management Contract. The Trustees also
considered the nature and extent of the other services provided by the
Investment Adviser's affiliates under other contracts and its supervision
of third party service providers. Based on these considerations, the
Trustees concluded that the nature, quality, cost and extent of such
services are satisfactory and reliable and serve the shareowners of the
Trust well.
E. Management Fee and Expenses. The Trustees considered the Investment
Adviser's fee under the Management Contract relative to the management
fees charged by a peer group of funds selected by the Independent Trustees
for this purpose using data provided by an independent third party. The
Trust's management fee for the 12 months ended June 30, 2005 was in the
first quintile (after fee waivers) relative to the management fees paid by
the other funds in that peer group for the comparable period ad in the
second quintile without giving effect to fee waivers. The Trustees
determined that the fee under the Management Contract was reasonable and
fair in light of both the overall nature and quality of services provided
by the Investment Adviser and the fees charged by the funds in the peer
group. The Trustees also considered the Trust's expense ratio for the 12
months ended June 30, 2005 and expense ratios for the comparable period of
a peer group of funds selected by the Independent Trustees for this
purpose. The Trust's expense ratio was in the first quintile of the
applicable peer group for the most recent fiscal year of the peer group.
The Trustees concluded that the Trust's expense ratio was below the
average of comparable funds.
F. Profitability. The Trustees considered the level of the Investment Adviser's
profits with respect to the management of the Pioneer funds, including
details with respect to the Trust. This consideration included a review of
the Investment Adviser's methodology in allocating certain of its costs to
the management of each fund. The Trustees also considered the financial
results realized by the Investment Adviser in connection with the
operation of the Trust. They further considered the profits realized by
the Investment Adviser and its affiliates from non-fund businesses that
may benefit from or be related to the Trust's business. The Trustees
considered the Investment Adviser's profit margins in comparison with
43
Pioneer Tax Advantaged Balanced Trust
--------------------------------------------------------------------------------
FACTORS CONSIDERED BY THE INDEPENDENT TRUSTEES IN
APPROVING THE MANAGEMENT CONTRACT (continued)
--------------------------------------------------------------------------------
the limited available industry data. The Trustees concluded that the
Investment Adviser's profits from management of the Pioneer funds,
including the financial results derived from the Trust, bear a reasonable
relationship to the services rendered and are fair for the management of
the Trust.
G. Economies of Scale. The Trustees considered whether the Trust had
appropriately benefited from any economies of scale, and whether there was
potential for realization of any further economies of scale. Since the
Trust is a closed-end fund and its size is relatively stable at an asset
level that was anticipated when the management fee was initially set, the
Trustees concluded that economies of scale were not a relevant
consideration.
H. Other Benefits to the Investment Adviser. The Trustees also considered the
character and amount of fees paid by the Trust, other than under the
Management Contract, for services provided by the Investment Adviser and
affiliates. The Trustees further considered the revenues and profitability
of the Investment Adviser's businesses other than the fund business,
including the Investment Adviser's institutional investment advisory
business. The Trustees considered the intangible benefits that accrue to
the Investment Adviser and its affiliates by virtue of its relationship
with the Trust and the Pioneer funds as a group. The Trustees concluded
that all these types of benefits accruing to the Investment Adviser were
reasonable in the context of the overall relationship between the
Investment Adviser and the Trust.
Conclusion. The Trustees, in light of the Investment Adviser's overall
performance, considered it appropriate to continue to retain the management
services of the Investment Adviser. Based on their evaluation of all material
factors deemed relevant and the advice of independent counsel, the Trustees
concluded that the Management Contract with the Trust is fair and reasonable
and voted to approve the continuation of the Management Contract for another
year.
44
Pioneer Tax Advantaged Balanced Trust
--------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
--------------------------------------------------------------------------------
Investment Adviser
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Independent Registered Public Accounting Firm
Ernst & Young LLP
Legal Counsel
Wilmer Cutler Pickering Hale and Dorr LLP
Transfer Agent
Pioneer Investment Management Shareholder Services, Inc.
Shareowner Services and Sub-Transfer Agent
Mellon Investor Services LLC
Preferred Share Auction/Transfer Agent and Registrar
Deutsche Bank Trust Company Americas
Sub-Administrator
Princeton Administrators, L.P.
Trustees and Officers
The Trust's Board of Trustees provides broad supervision over the Trust's
affairs. The officers of the Trust are responsible for the Trust's operations.
The Trust's Trustees and officers are listed below, together with their
principal occupations during the past five years. Trustees who are interested
persons of the Trust within the meaning of the Investment Company Act of 1940
are referred to as Interested Trustees. Trustees who are not interested persons
of the Trust are referred to as Independent Trustees. Each of the Trustees may
serve as a trustee of each of the 91 U.S. registered investment portfolios for
which Pioneer Investment Management, Inc. ("Pioneer") serves as investment
adviser (the "Pioneer Funds"). The address for all Interested Trustees and all
officers of the Fund is 60 State Street, Boston, Massachusetts 02109.
The Trust's statement of additional information provides more detailed
information regarding the Trust's Trustees and is available upon request,
without charge, by calling 1-800-225-6292.
Proxy Voting Policies and Procedures of the Trust are available without charge,
upon request, by calling our toll free number (1-800-225-6292). Information
regarding how the Trust voted proxies relating to portfolio securities during
the most recent 12-month period ended June 30 is publicly available to
shareowners at www.pioneerfunds.com and on the SEC's web site at
http://www.sec.gov.
45
Pioneer Tax Advantaged Balanced Trust
----------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEES
----------------------------------------------------------------------------------------------------------------------------------
Positions Held Length of Service Principal Occupation During Other Directorships Held
Name and Age With the Trust and Term of Office Past Five Years by this Trustee
John F. Cogan, Jr. (79)* Chairman of the Trustee since Deputy Chairman and a Chairman and Director of ICI
Board, December, 2003. Director of Pioneer Global Mutual Insurance Company;
Trustee and Term expires in 2007. Asset Management S.p.A. Director of Harbor Global
President ("PGAM"); Non-Executive Company, Ltd.
Chairman and a Director of
Pioneer Investment
Management USA Inc.
("PIM-USA"); Chairman and a
Director of Pioneer;
Director of Pioneer
Alternative Investment
Management Limited (Dublin);
President and a Director of
Pioneer Alternative
Investment Management
(Bermuda) Limited and
affiliated funds; President
and Director of Pioneer
Funds Distributor, Inc.
("PFD"); President of all of
the Pioneer Funds; and Of
Counsel (since 2000, partner
prior to 2000), Wilmer
Cutler Pickering Hale and
Dorr LLP (counsel to PIM-USA
and the Pioneer Funds).
*Mr. Cogan is an Interested Trustee because he is an officer or director of Pioneer and certain of its affiliates.
----------------------------------------------------------------------------------------------------------------------------------
Osbert M. Hood (53)** Trustee and Trustee since President and Chief None
Executive Vice October, 2003. Term Executive Officer, PIM-USA
President expires in 2005. since May 2003 (Director
since January 2001);
President and Director of
Pioneer since May 2003;
Chairman and Director of
Pioneer Investment
Management Shareholder
Services, Inc. ("PIMSS")
since May 2003; Executive
Vice President of all of the
Pioneer Funds since June
2003; Executive Vice
President and Chief
Operating Officer of
PIM-USA, November 2000 to
May 2003.
**Mr. Hood is an Interested Trustee because he is an officer or director of Pioneer and certain of its affiliates.
----------------------------------------------------------------------------------------------------------------------------------
46
Pioneer Tax Advantaged Balanced Trust
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INDEPENDENT TRUSTEES
----------------------------------------------------------------------------------------------------------------------------------
Positions Held Length of Service Principal Occupation During Other Directorships Held
Name, Age and Address With the Trust and Term of Office Past Five Years by this Trustee
David R. Bock (61)** Trustee Trustee since 2005. Senior Vice President and Director of The Enterprise
3050 K. Street NW, Term expires in 2007. Chief Financial Officer, Social Investment
Washington, DC 20007 I-trax, Inc. (publicly Company (privately-held
traded health care services affordable housing
company) (2001 - present); finance company);
Managing Partner, Federal Director of New York
City Capital Advisors Mortgage Trust (publicly
(boutique merchant bank) traded mortgage REIT)
(1995 - 2000; 2002 to 2004);
Executive Vice President and
Chief Financial Officer,
Pedestal Inc.
(internet-based mortgage
trading company) (2000 -
2002).
**Mr. Bock became a Trustee of the Fund on January 1, 2005.
----------------------------------------------------------------------------------------------------------------------------------
Mary K. Bush (57) Trustee Trustee since President, Bush Director of Brady
3509 Woodbine Street, December, 2003. International (international Corporation (industrial
Chevy Chase, MD 20815 Term expires in 2006. financial advisory firm). identification and specialty
coated material products
manufacturer), Millennium
Chemicals, Inc. (commodity
chemicals), Mortgage
Guaranty Insurance
Corporation, and R.J.
Reynolds Tobacco Holdings,
Inc. (tobacco)
----------------------------------------------------------------------------------------------------------------------------------
Margaret B.W. Graham (58) Trustee Trustee since Founding Director, The None
1001 Sherbrooke Street West, December, 2003. Winthrop Group, Inc.
Montreal, Quebec, Canada Term expires in 2005. (consulting firm); Professor
H3A 1G5 of Management, Faculty of
Management, McGill
University.
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47
Pioneer Tax Advantaged Balanced Trust
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Positions Held Length of Service Principal Occupation During Other Directorships Held
Name, Age and Address With the Trust and Term of Office Past Five Years by this Trustee
Marguerite A. Piret (57) Trustee Trustee since President and Chief Director of New America High
One Boston Place, 28th Floor, December, 2003. Executive Officer, Newbury, Income Fund, Inc.
Boston, MA 02108 Term expires in 2006. Piret & Company, Inc. (closed-end investment
(investment banking firm) company)
-----------------------------------------------------------------------------------------------------------------------------------
Stephen K. West (77) Trustee Trustee since Senior Counsel, Sullivan & Director, The Swiss Helvetia
125 Broad Street, December, 2003. Cromwell (law firm) Fund, Inc. (closed-end
New York, NY 10004 Term expires in 2007. investment company) and
AMVESCAP PLC (investment
managers)
-----------------------------------------------------------------------------------------------------------------------------------
John Winthrop (69) Trustee Trustee since President, John Winthrop & None
One North Adgers Wharf, December, 2003. Co., Inc. (private
Charleston, SC 29401 Term expires in 2005. investment firm)
-----------------------------------------------------------------------------------------------------------------------------------
48
Pioneer Tax Advantaged Balanced Trust
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EXECUTIVE OFFICERS
-----------------------------------------------------------------------------------------------------------------------------------
Positions Held Length of Service Principal Occupation During Other Directorships Held
Name and Age With the Trust and Term of Office Past Five Years by this Officer
Dorothy E. Bourassa (57) Secretary Since October, 2003. Secretary of PIM-USA; Senior None
Serves until her Vice President - Legal of
successor is chosen Pioneer; and Secretary/Clerk
and qualified or until of most of PIM-USA's
her resignation or subsidiaries; and Secretary
removal by the Board. of all of the Pioneer Funds
since September 2003
(Assistant Secretary from
November 2000 to September
2003).
-----------------------------------------------------------------------------------------------------------------------------------
Christopher J. Kelley (40) Assistant Since October, 2003. Assistant Vice President and None
Secretary Serves until his Senior Counsel of Pioneer
successor is chosen since July 2002; Vice
and qualified or until President and Senior Counsel
his resignation or of BISYS Fund Services, Inc.
removal by the Board. (April 2001 to June 2002);
Senior Vice President and
Deputy General Counsel of
Funds Distributor, Inc.
(July 2000 to April 2001);
and Assistant Secretary of
all Pioneer Funds since
September 2003.
-----------------------------------------------------------------------------------------------------------------------------------
David C. Phelan (48) Assistant Since October, 2003. Partner, Wilmer Cutler None
Secretary Serves until his Pickering Hale and Dorr LLP;
successor is chosen Assistant Secretary of all
and qualified or until Pioneer Funds since
his resignation or September 2003.
removal by the Board.
-----------------------------------------------------------------------------------------------------------------------------------
Vincent Nave (60) Treasurer Since October, 2003. Vice President - Fund None
Serves until his Accounting, Administration
successor is chosen and Custody Services of
and qualified or until Pioneer; and Treasurer of
his resignation or all of the Pioneer Funds.
removal by the Board.
-----------------------------------------------------------------------------------------------------------------------------------
49
Pioneer Tax Advantaged Balanced Trust
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
Positions Held Length of Service Principal Occupation During Other Directorships Held
Name and Age With the Trust and Term of Office Past Five Years by this Officer
Mark E. Bradley (46) Assistant Since November, Deputy Treasurer of Pioneer None
Treasurer 2004. Serves until his since 2004; Treasurer and
successor is chosen Senior Vice President, CDC
and qualified or until IXIS Asset Management
his resignation or Services from 2002 to 2003;
removal by the Board. Assistant Treasurer and Vice
President, MFS Investment
Management from 1997 to
2002; and Assistant
Treasurer of all of the
Pioneer Funds since November
2004.
-----------------------------------------------------------------------------------------------------------------------------------
Luis I. Presutti (40) Assistant Since October, 2003. Assistant Vice President - None
Treasurer Serves until his Fund Accounting,
successor is chosen Administration and Custody
and qualified or until Services of Pioneer; and
his resignation or Assistant Treasurer of all
removal by the Board. of the Pioneer Funds.
-----------------------------------------------------------------------------------------------------------------------------------
Gary Sullivan (47) Assistant Since October, 2003. Fund Accounting Manager - None
Treasurer Serves until his Fund Accounting,
successor is chosen Administration and Custody
and qualified or until Services of Pioneer; and
his resignation or Assistant Treasurer of all
removal by the Board. of the Pioneer Funds since
May 2002.
-----------------------------------------------------------------------------------------------------------------------------------
Katherine Kim Sullivan (31) Assistant Since October, 2003. Fund Administration Manager None
Treasurer Serves until her - Fund Accounting,
successor is chosen Administration and Custody
and qualified or until Services since June 2003;
her resignation or Assistant Vice President -
removal by the Board. Mutual Fund Operations of
State Street Corporation
from June 2002 to June 2003
(formerly Deutsche Bank
Asset Management); Pioneer
Fund Accounting,
Administration and Custody
Services (Fund Accounting
Manager from August 1999 to
May 2002); and Assistant
Treasurer of all Pioneer
Funds since September 2003.
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50
Pioneer Tax Advantaged Balanced Trust
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-----------------------------------------------------------------------------------------------------------------------------------
Positions Held Length of Service Principal Occupation During Other Directorships Held
Name and Age With the Trust and Term of Office Past Five Years by this Officer
Martin J. Wolin (38) Chief Compliance Since October, 2004. Chief Compliance Officer of None
Officer Serves until his Pioneer (Director of
successor is chosen Compliance and Senior
and qualified or until Counsel from November 2000
his resignation or to September 2004); and
removal by the Board. Chief Compliance Officer of
all of the Pioneer Funds
since 2004.
-----------------------------------------------------------------------------------------------------------------------------------
The outstanding capital stock of PFD, PIM and PIMSS is indirectly wholly owned by UniCredito Italiano S.p.A.
("UniCredito Italiano"), one of the largest banking groups in Italy. PIM, the Trust's investment adviser,
provides investment management and financial services to mutual funds, institutional and other clients.
51
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This page for your notes.
52
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HOW TO CONTACT PIONEER
--------------------------------------------------------------------------------
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
You can call Mellon Investor Services LLC for:
Account Information 1-800-710-0935
Telecommunications Device for the Deaf (TDD) 1-800-231-5469
Or write to Mellon Investor Services LLC:
For Write to
General inquiries, lost dividend checks P.O. Box 3315
South Hackensack, NJ
07606-1915
Change of address, account consolidation P.O. Box 3316
South Hackensack, NJ
07606-1916
Lost stock certificates P.O. Box 3317
South Hackensack, NJ
07606-1917
Stock transfer P.O. Box 3312
South Hackensack, NJ
07606-1912
Dividend reinvestment plan (DRIP) P.O. Box 3338
South Hackensack, NJ
07606-1938
For additional information, please contact your investment advisor or visit
our web site www.pioneerfunds.com.
The Trust files a complete statement of investments with the Securities and
Exchange Commission for the first and third quarters for each fiscal year on
Form N-Q. Shareowners may view the filed Form N-Q by visiting the Commission's
web site at http://www.sec.gov. The filed form may also be viewed and copied
at the Commission's Public Reference Room in Washington, DC. Information
regarding the operations of the Public Reference Room may be obtained by
calling 1-800-SEC-0330.
The Trust's Chief Executive Officer - Finance and Administration is required
by the New York Stock Exchange's Listing Standards to file annually with the
Exchange a certification that he is not aware of any violation by the Trust of
the Exchange's Corporate Governance Standards applicable to the Trust. The
Trust has filed such certification.
ITEM 2. CODE OF ETHICS.
(a) Disclose whether, as of the end of the period covered by the report, the
registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions, regardless of
whether these individuals are employed by the registrant or a third party. If
the registrant has not adopted such a code of ethics, explain why it has not
done so.
The registrant has adopted, as of the end of the period covered by this report,
a code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer and controller.
(b) For purposes of this Item, the term "code of ethics" means written standards
that are reasonably designed to deter wrongdoing and to promote:
(1) Honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;
(2) Full, fair, accurate, timely, and understandable disclosure in
reports and documents that a registrant files with, or submits to, the
Commission and in other public communications made by the registrant;
(3) Compliance with applicable governmental laws, rules, and
regulations;
(4) The prompt internal reporting of violations of the code to an
appropriate person or persons identified in the code; and
(5) Accountability for adherence to the code.
(c) The registrant must briefly describe the nature of any amendment, during the
period covered by the report, to a provision of its code of ethics that applies
to the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, and that relates to any element of the code of
ethics definition enumerated in paragraph (b) of this Item. The registrant must
file a copy of any such amendment as an exhibit pursuant to Item 10(a), unless
the registrant has elected to satisfy paragraph (f) of this Item by posting its
code of ethics on its website pursuant to paragraph (f)(2) of this Item, or by
undertaking to provide its code of ethics to any person without charge, upon
request, pursuant to paragraph (f)(3) of this Item.
The registrant has made no amendments to the code of ethics during the period
covered by this report.
(d) If the registrant has, during the period covered by the report, granted a
waiver, including an implicit waiver, from a provision of the code of ethics to
the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, that relates to one or more of the items set forth
in paragraph (b) of this Item, the registrant must briefly describe the nature
of the waiver, the name of the person to whom the waiver was granted, and the
date of the waiver.
Not applicable.
(e) If the registrant intends to satisfy the disclosure requirement under
paragraph (c) or (d) of this Item regarding an amendment to, or a waiver from,
a provision of its code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions and that relates to any
element of the code of ethics definition enumerated in paragraph (b) of this
Item by posting such information on its Internet website, disclose the
registrant's Internet address and such intention.
Not applicable.
(f) The registrant must:
(1) File with the Commission, pursuant to Item 10(a), a copy of its code
of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller,
or persons performing similar functions, as an exhibit to its annual
report on this Form N-CSR;
(2) Post the text of such code of ethics on its Internet website and
disclose, in its most recent report on this Form N-CSR, its Internet
address and the fact that it has posted such code of ethics on its
Internet website; or
(3) Undertake in its most recent report on this Form N-CSR to provide to
any person without charge, upon request, a copy of such code of ethics
and explain the manner in which such request may be made.
See Item 10(2)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a) (1) Disclose that the registrant's board of trustees has determined that
the registrant either:
(i) Has at least one audit committee financial expert serving on its audit
committee; or
(ii) Does not have an audit committee financial expert serving on its audit
committee.
The registrant's Board of Trustees has determined that the registrant has at
least one audit committee financial expert.
(2) If the registrant provides the disclosure required by paragraph
(a)(1)(i) of this Item, it must disclose the name of the audit committee
financial expert and whether that person is "independent." In order to be
considered "independent" for purposes of this Item, a member of an audit
committee may not, other than in his or her capacity as a member of the audit
committee, the board of trustees, or any other board committee:
(i) Accept directly or indirectly any consulting, advisory, or other
compensatory fee from the issuer; or
(ii) Be an "interested person" of the investment company as defined in
Section 2(a)(19) of the Act (15 U.S.C. 80a-2(a)(19)).
Ms. Marguerite A. Piret, an independent trustee, is such an audit committee
financial expert.
(3) If the registrant provides the disclosure required by paragraph (a)(1)
(ii) of this Item, it must explain why it does not have an audit committee
financial expert.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Disclose, under the caption AUDIT FEES, the aggregate fees billed for each
of the last two fiscal years for professional services rendered by the principal
accountant for the audit of the registrant's annual financial statements or
services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for those fiscal years.
Audit Fees
Fees for audit services provided to the Trust, including fees associated with
the initial and updated filings of its Form N-2 and issuance of various comfort
and bring down letters letters, totaled approximately $35,075 in 2005 and
$80,500 in 2004.
(b) Disclose, under the caption AUDIT-RELATED FEES, the aggregate fees billed in
each of the last two fiscal years for assurance and related services by the
principal accountant that are reasonably related to the performance of the audit
of the registrant's financial statements and are not reported under
paragraph (a) of this Item. Registrants shall describe the nature of the
services comprising the fees disclosed under this category.
Audit-Related Fees
Fees for the Trust's audit-related services totaled approximately $8,500 in
2005 and $13,000 in 2004. These services included issuance of agreed upon
procedures report to the rating agencies.
(c) Disclose, under the caption TAX FEES, the aggregate fees billed in each of
the last two fiscal years for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning. Registrants shall
describe the nature of the services comprising the fees disclosed under this
category.
Tax Fees
Fees for tax compliance services, primarily for tax return, totaled $6,800 in
2005 and $6,000 in 2004.
(d) Disclose, under the caption ALL OTHER FEES, the aggregate fees billed in
each of the last two fiscal years for products and services provided by the
principal accountant, other than the services reported in paragraphs (a) through
(c) of this Item. Registrants shall describe the nature of the services
comprising the fees disclosed under this category.
Other Fees
There were no other services provided to the Trust during the fiscal year
ended November 30, 2005 and 2004.
(e) (1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
PIONEER TrustS
APPROVAL OF AUDIT, AUDIT-RELATED, TAX AND OTHER SERVICES
PROVIDED BY THE INDEPENDENT AUDITOR
SECTION I - POLICY PURPOSE AND APPLICABILITY
The Pioneer Trusts recognize the importance of maintaining the independence of
their outside auditors. Maintaining independence is a shared responsibility
involving Pioneer Investment Management, Inc ("PIM"), the audit committee and
the independent auditors.
The Trusts recognize that a Trust's independent auditors: 1) possess knowledge
of the Trusts, 2) are able to incorporate certain services into the scope of the
audit, thereby avoiding redundant work, cost and disruption of Trust personnel
and processes, and 3) have expertise that has value to the Trusts. As a result,
there are situations where it is desirable to use the Trust's independent
auditors for services in addition to the annual audit and where the potential
for conflicts of interests are minimal. Consequently, this policy, which is
intended to comply with Rule 210.2-01(C)(7), sets forth guidelines and
procedures to be followed by the Trusts when retaining the independent audit
firm to perform audit, audit-related tax and other services under those
circumstances, while also maintaining independence.
Approval of a service in accordance with this policy for a Trust shall also
constitute approval for any other Trust whose pre-approval is required pursuant
to Rule 210.2-01(c)(7)(ii).
In addition to the procedures set forth in this policy, any non-audit services
that may be provided consistently with Rule 210.2-01 may be approved by the
Audit Committee itself and any pre-approval that may be waived in accordance
with Rule 210.2-01(c)(7)(i)(C) is hereby waived.
Selection of a Trust's independent auditors and their compensation shall be
determined by the Audit Committee and shall not be subject to this policy.
SECTION II - POLICY
---------------- -------------------------------- -------------------------------------------------
SERVICE SERVICE CATEGORY DESCRIPTION SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
CATEGORY
---------------- -------------------------------- -------------------------------------------------
I. AUDIT Services that are directly o Accounting research assistance
SERVICES related to performing the o SEC consultation, registration
independent audit of the Trusts statements, and reporting
o Tax accrual related matters
o Implementation of new accounting
standards
o Compliance letters (e.g. rating agency
letters)
o Regulatory reviews and assistance
regarding financial matters
o Semi-annual reviews (if requested)
o Comfort letters for closed end
offerings
---------------- -------------------------------- -------------------------------------------------
II. Services which are not o AICPA attest and agreed-upon procedures
AUDIT-RELATED prohibited under Rule o Technology control assessments
SERVICES 210.2-01(C)(4) (the "Rule") o Financial reporting control assessments
and are related extensions of o Enterprise security architecture
the audit services support the assessment
audit, or use the
knowledge/expertise gained
from the audit procedures as a
foundation to complete the
project. In most cases, if
the Audit-Related Services are
not performed by the Audit
firm, the scope of the Audit
Services would likely
increase. The Services are
typically well-defined and
governed by accounting
professional standards (AICPA,
SEC, etc.)
---------------- -------------------------------- -------------------------------------------------
------------------------------------- ------------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the audit period for all services and related fees
pre-approved specific service reported at each regularly
subcategories. Approval of the scheduled Audit Committee
independent auditors as meeting.
auditors for a Trust shall
constitute pre approval for
these services.
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the Trust fiscal year within services and related fees
a specified dollar limit (including comparison to
for all pre-approved specified dollar limits)
specific service subcategories reported quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limit for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Trust's
auditors for Audit-Related
Services not denoted as
"pre-approved", or
to add a specific service
subcategory as "pre-approved"
------------------------------------- ------------------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- --------------------------- -----------------------------------------------
III. TAX SERVICES Services which are not o Tax planning and support
prohibited by the Rule, o Tax controversy assistance
if an officer of the Trust o Tax compliance, tax returns, excise
determines that using the tax returns and support
Trust's auditor to provide o Tax opinions
these services creates
significant synergy in
the form of efficiency,
minimized disruption, or
the ability to maintain a
desired level of
confidentiality.
----------------------- --------------------------- -----------------------------------------------
------------------------------------- -------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- -------------------------
------------------------------------- -------------------------
o "One-time" pre-approval o A summary of
for the Trust fiscal year all such services and
within a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Trust's
auditors for tax services not
denoted as pre-approved, or to add a specific
service subcategory as
"pre-approved"
------------------------------------- -------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- --------------------------- -----------------------------------------------
IV. OTHER SERVICES Services which are not o Business Risk Management support
prohibited by the Rule, o Other control and regulatory
A. SYNERGISTIC, if an officer of the Trust compliance projects
UNIQUE QUALIFICATIONS determines that using the
Trust's auditor to provide
these services creates
significant synergy in
the form of efficiency,
minimized disruption,
the ability to maintain a
desired level of
confidentiality, or where
the Trust's auditors
posses unique or superior
qualifications to provide
these services, resulting
in superior value and
results for the Trust.
----------------------- --------------------------- -----------------------------------------------
--------------------------------------- ------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- --------------------------
o "One-time" pre-approval o A summary of
for the Trust fiscal year within all such services and
a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Trust's
auditors for "Synergistic" or
"Unique Qualifications" Other
Services not denoted as
pre-approved to the left, or to
add a specific service
subcategory as "pre-approved"
------------------------------------- --------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- ------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PROHIBITED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- ------------------------- -----------------------------------------------
PROHIBITED SERVICES Services which result 1. Bookkeeping or other services
in the auditors losing related to the accounting records or
independence status financial statements of the audit
under the Rule. client*
2. Financial information systems design
and implementation*
3. Appraisal or valuation services,
fairness* opinions, or
contribution-in-kind reports
4. Actuarial services (i.e., setting
actuarial reserves versus actuarial
audit work)*
5. Internal audit outsourcing services*
6. Management functions or human
resources
7. Broker or dealer, investment
advisor, or investment banking services
8. Legal services and expert services
unrelated to the audit
9. Any other service that the Public
Company Accounting Oversight Board
determines, by regulation, is
impermissible
----------------------- ------------------------- -----------------------------------------------
------------------------------------------- ------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------------- ------------------------------
o These services are not to be o A summary of all
performed with the exception of the(*) services and related
services that may be permitted fees reported at each
if they would not be subject to audit regularly scheduled
procedures at the audit client (as Audit Committee meeting
defined in rule 2-01(f)(4)) level will serve as continual
the firm providing the service. confirmation that has
not provided any
restricted services.
------------------------------------------- ------------------------------
--------------------------------------------------------------------------------
GENERAL AUDIT COMMITTEE APPROVAL POLICY:
o For all projects, the officers of the Trusts and the Trust's auditors will
each make an assessment to determine that any proposed projects will not
impair independence.
o Potential services will be classified into the four non-restricted service
categories and the "Approval of Audit, Audit-Related, Tax and Other
Services" Policy above will be applied. Any services outside the specific
pre-approved service subcategories set forth above must be specifically
approved by the Audit Committee.
o At least quarterly, the Audit Committee shall review a report summarizing the
services by service category, including fees, provided by the Audit firm as
set forth in the above policy.
--------------------------------------------------------------------------------
(2) Disclose the percentage of services described in each of paragraphs (b)
through (d) of this Item that were approved by the audit committee pursuant
to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
Non-Audit Services
Beginning with non-audit service contracts entered into on or after May 6,
2003, the effective date of the new SEC pre-approval rules, the Trust's audit
committee is required to pre-approve services to affiliates defined by SEC
rules to the extent that the services are determined to have a direct impact
on the operations or financial reporting of the Trust. For the years ended
November 30, 2005 and 2004, there were no services provided to an affiliate
that required the Trust's audit committee pre-approval.
(f) If greater than 50 percent, disclose the percentage of hours expended on the
principal accountant's engagement to audit the registrant's financial statements
for the most recent fiscal year that were attributed to work performed by
persons other than the principal accountant's full-time, permanent employees.
N/A
(g) Disclose the aggregate non-audit fees billed by the registrant's accountant
for services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common control
with the adviser that provides ongoing services to the registrant for each of
the last two fiscal years of the registrant.
The aggregate non-audit fees for the Trust and affiliates, as previously
defined, totaled $15,300 in 2005 and $19,000 in 2004.
The Trust's audit committee of the Board of Trustees has considered whether the
provision of non-audit services that were rendered to the Affiliates (as
defined) that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
(h) Disclose whether the registrant's audit committee of the board of trustees
has considered whether the provision of non-audit services that were rendered to
the registrant's investment adviser (not including any subadviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of
Rule 2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
The Trust's independent auditor, Ernst &
Young LLP ("E&Y"), has advised the Audit
Committee of the Trust's Board of Trustees that
E&Ys Spanish affiliate (E&Y Spain) performed
certain non-audit work for Pioneer Global
Investments Limited ("PGIL"), an affiliate of the
Trusts investment adviser. The services involved
the receipt and disbursement of monies transferred
to E&Y Spain by PGIL in payment of individual
payroll and related income tax withholdings due on
returns prepared by E&Y Spain for certain PGIL
employees located in Spain from February 2001 to
October 2005. E&Y became auditors of the Trust in
May 2002. These payroll and tax services were
discontinued in November 2005. The annual fee
received by E&Y Spain for all such services totaled
approximately 9,000 Euro per year. E&Y has informed
the Audit Committee that based on its internal
reviews and the de minimus nature of the services
provided and fees received, E&Y does not believe
its independence with respect to the Trust has been
impaired or that it is disqualified from acting as
independent auditors to the Trust.
N/A
Item 5. Audit Committee of Listed Registrants
(a) If the registrant is a listed issuer as defined in Rule 10A-3
under the Exchange Act (17 CFR 240.10A-3), state whether
or not the registrant has a separately-designated standing
audit committee established in accordance with Section
3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)).
If the registrant has such a committee, however designated,
identify each committee member. If the entire board of directors
is acting as the registrants audit committee as specified in
Section 3(a)(58)(B) of the Exchange Act (15 U.S.C. 78c(a)(58)(B)),
so state.
The registrant has a separately-designated standing audit
committe eestablished in accordance with Section
3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)).
(b) If applicable, provide the disclosure required by Rule 10A-3(d)
under the Exchange Act (17 CFR 240.10A-3(d)) regarding an exemption
from the listing standards for audit committees.
N/A
Item 6. Schedule of Investments.
File Schedule I Investments in securities of unaffiliated issuers
as of the close of the reporting period as set forth in 210.12-
12 of Regulation S-X [17 CFR 210.12-12], unless the schedule is
included as part of the report to shareholders filed under Item
1 of this Form.
Included in Item 1
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
A closed-end management investment company that is filing an annual report on
this Form N-CSR must, unless it invests exclusively in non-voting securities,
describe the policies and procedures that it uses to determine how to vote
proxies relating to portfolio securities, including the procedures that the
company uses when a vote presents a conflict between the interests of its
shareholders, on the one hand, and those of the company's investment adviser;
principal underwriter; or any affiliated person (as defined in Section 2(a)(3)
of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules
thereunder) of the company, its investment adviser, or its principal
underwriter, on the other. Include any policies and procedures of the company's
investment adviser, or any other third party, that the company uses, or that are
used on the company's behalf, to determine how to vote proxies relating to
portfolio securities.
Proxy Voting Policies and Procedures of
Pioneer Investment Management, Inc.
VERSION DATED July, 2004
Overview
Pioneer Investment Management, Inc. ("Pioneer") is a fiduciary that owes
each of its client's duties of care and loyalty with respect to all
services undertaken on the client's behalf, including proxy voting. When
Pioneer has been delegated proxy-voting authority for a client, the duty of
care requires Pioneer to monitor corporate events and to vote the proxies.
To satisfy its duty of loyalty, Pioneer must place its client's interests
ahead of its own and must cast proxy votes in a manner consistent with the
best interest of its clients. Pioneer will vote all proxies presented in a
timely manner.
The Proxy Voting Policies and Procedures are designed to complement
Pioneer's investment policies and procedures regarding its general
responsibility to monitor the performance and/or corporate events of
companies that are issuers of securities held in accounts managed by
Pioneer. Pioneer's Proxy Voting Policies summarize Pioneer's position on a
number of issues solicited by companies held by Pioneer's clients. The
policies are guidelines that provide a general indication on how Pioneer
would vote but do not include all potential voting scenarios.
Pioneer's Proxy Voting Procedures detail monitoring of voting, exception
votes, and review of conflicts of interest and ensure that case-by-case
votes are handled within the context of the overall guidelines (i.e. best
interest of client). The overriding goal is that all proxies for US and
non-US companies that are received promptly will be voted in accordance
with Pioneer's policies or specific client instructions. All shares in a
company held by Pioneer-managed accounts will be voted alike, unless a
client has given us specific voting instructions on an issue or has not
delegated authority to us or the Proxy Voting Oversight Group determines
that the circumstances justify a different approach.
Pioneer does not delegate the authority to vote proxies relating to its
clients to any of its affiliates, which include other subsidiaries of
UniCredito.
Any questions about these policies and procedures should be directed to the
Proxy Coordinator.
1
Proxy Voting Procedures
Proxy Voting Service
Pioneer has engaged an independent proxy voting service to assist in the
voting of proxies. The proxy voting service works with custodians to ensure
that all proxy materials are received by the custodians and are processed
in a timely fashion. To the extent applicable, the proxy voting service
votes all proxies in accordance with the proxy voting policies established
by Pioneer. The proxy voting service will refer proxy questions to the
Proxy Coordinator (described below) for instructions under circumstances
where: (1) the application of the proxy voting guidelines is unclear; (2) a
particular proxy question is not covered by the guidelines; or (3) the
guidelines call for specific instructions on a case-by-case basis. The
proxy voting service is also requested to call to the Proxy Coordinator's
attention specific proxy questions that, while governed by a guideline,
appear to involve unusual or controversial issues. Pioneer reserves the
right to attend a meeting in person and may do so when it determines that
the company or the matters to be voted on at the meeting are strategically
important to its clients.
Proxy Coordinator
Pioneer's Director of Investment Operations (the "Proxy Coordinator")
coordinates the voting, procedures and reporting of proxies on behalf of
Pioneer's clients. The Proxy Coordinator will deal directly with the proxy
voting service and, in the case of proxy questions referred by the proxy
voting service, will solicit voting recommendations and instructions from
the Director of Portfolio Management US or, to the extent applicable,
investment sub-advisers. The Proxy Coordinator is responsible for ensuring
that these questions and referrals are responded to in a timely fashion and
for transmitting appropriate voting instructions to the proxy voting
service. The Proxy Coordinator is responsible for verifying with the
Compliance Department whether Pioneer's voting power is subject to any
limitations or guidelines issued by the client (or in the case of an
employee benefit plan, the plan's trustee or other fiduciaries).
Referral Items
From time to time, the proxy voting service will refer proxy questions to
the Proxy Coordinator that are described by Pioneer's policy as to be voted
on a case-by-case basis, that are not covered by Pioneer's guidelines or
where Pioneer's guidelines may be unclear with respect to the matter to be
voted on. Under such certain circumstances, the Proxy Coordinator will seek
a written voting recommendation from the Director of Portfolio Management
US. Any such recommendation will include: (i) the manner in which the
proxies should be voted; (ii) the rationale underlying any such decision;
and (iii) the disclosure of any contacts or communications made between
Pioneer and any outside parties concerning the proxy proposal prior to the
time that the voting instructions are provided. In addition, the Proxy
Coordinator will ask the Compliance Department to review the question for
any actual or apparent conflicts of interest as described below under
"Conflicts of
2
Interest." The Compliance Department will provide a "Conflicts of Interest
Report," applying the criteria set forth below under "Conflicts of
Interest," to the Proxy Coordinator summarizing the results of its review.
In the absence of a conflict of interest, the Proxy Coordinator will vote
in accordance with the recommendation of the Director of Portfolio
Management US.
If the matter presents a conflict of interest for Pioneer, then the Proxy
Coordinator will refer the matter to the Proxy Voting Oversight Group for a
decision. In general, when a conflict of interest is present, Pioneer will
vote according to the recommendation of the Director of Portfolio
Management US where such recommendation would go against Pioneer's interest
or where the conflict is deemed to be immaterial. Pioneer will vote
according to the recommendation of its proxy voting service when the
conflict is deemed to be material and the Pioneer's internal vote
recommendation would favor Pioneer's interest, unless a client specifically
requests Pioneer to do otherwise. When making the final determination as to
how to vote a proxy, the Proxy Voting Oversight Group will review the
report from the Director of Portfolio Management US and the Conflicts of
Interest Report issued by the Compliance Department.
Conflicts of Interest
A conflict of interest occurs when Pioneer's interests interfere, or appear
to interfere with the interests of Pioneer's clients. Occasionally, Pioneer
may have a conflict that can affect how its votes proxies. The conflict may
be actual or perceived and may exist when the matter to be voted on
concerns:
o An affiliate of Pioneer, such as another company belonging to
the UniCredito Italiano S.p.A. banking group (a "UniCredito
Affiliate");
o An issuer of a security for which Pioneer acts as a sponsor,
advisor, manager, custodian, distributor, underwriter, broker, or
other similar capacity (including those securities specifically
declared by PGAM to present a conflict of interest for Pioneer);
o An issuer of a security for which UniCredito has informed Pioneer
that a UniCredito Affiliate acts as a sponsor, advisor, manager,
custodian, distributor, underwriter, broker, or other similar
capacity; or
o A person with whom Pioneer (or any of its affiliates) has an
existing, material contract or business relationship that was not
entered into in the ordinary course of Pioneer's business.
o Pioneer will abstain from voting with respect to companies
directly or indirectly owned by UniCredito Italiano Group, unless
otherwise directed by a client. In addition, Pioneer will inform
PGAM Global Compliance and the PGAM Independent Directors before
exercising such rights.
Any associate involved in the proxy voting process with knowledge of any
apparent or actual conflict of interest must disclose such conflict to the
Proxy Coordinator and the Compliance Department. The Compliance Department
will review each item referred to Pioneer to determine whether an actual or
potential conflict of interest with Pioneer exists in connection with the
proposal(s) to be voted upon. The review will be conducted by comparing the
apparent parties affected by the proxy proposal being
3
voted upon against the Compliance Department's internal list of interested
persons and, for any matches found, evaluating the anticipated magnitude
and possible probability of any conflict of interest being present. For
each referral item, the determination regarding the presence or absence of
any actual or potential conflict of interest will be documented in a
Conflicts of Interest Report to the Proxy Coordinator.
Securities Lending
In conjunction with industry standards Proxies are not available to be
voted when the shares are out on loan through either Pioneer's lending
program or a client's managed security lending program. However, Pioneer
will reserve the right to recall lent securities so that they may be voted
according to the Pioneer's instructions. If a portfolio manager would like
to vote a block of previously lent shares, the Proxy Coordinator will work
with the portfolio manager and Investment Operations to recall the
security, to the extent possible, to facilitate the vote on the entire
block of shares.
Share-Blocking
"Share-blocking" is a market practice whereby shares are sent to a
custodian (which may be different than the account custodian) for record
keeping and voting at the general meeting. The shares are unavailable for
sale or delivery until the end of the blocking period (typically the day
after general meeting date).
Pioneer will vote in those countries with "share-blocking." In the event a
manager would like to sell a security with "share-blocking", the Proxy
Coordinator will work with the Portfolio Manager and Investment Operations
Department to recall the shares (as allowable within the market time-frame
and practices) and/or communicate with executing brokerage firm. A list of
countries with "share-blocking" is available from the Investment Operations
Department upon request.
Record Keeping
The Proxy Coordinator shall ensure that Pioneer's proxy voting service:
o Retains a copy of the proxy statement received (unless the proxy
statement is available from the SEC's Electronic Data Gathering,
Analysis, and Retrieval (EDGAR) system);
o Retains a record of the vote cast;
o Prepares Form N-PX for filing on behalf of each client that is a
registered investment company; and
o Is able to promptly provide Pioneer with a copy of the voting
record upon its request.
4
The Proxy Coordinator shall ensure that for those votes that may require
additional documentation (i.e. conflicts of interest, exception votes and
case-by-case votes) the following records are maintained:
o A record memorializing the basis for each referral vote cast;
o A copy of any document created by Pioneer that was material in
making the decision on how to vote the subject proxy; and
o A copy of any conflict notice, conflict consent or any other
written communication (including emails or other electronic
communications) to or from the client (or in the case of an
employee benefit plan, the plan's trustee or other fiduciaries)
regarding the subject proxy vote cast by, or the vote
recommendation of, Pioneer.
o Pioneer shall maintain the above records in the client's file for a
period not less than ten (10) years.
Disclosure
Pioneer shall take reasonable measures to inform its clients of the process
or procedures clients must follow to obtain information regarding how
Pioneer voted with respect to assets held in their accounts. In addition,
Pioneer shall describe to clients its proxy voting policies and procedures
and will furnish a copy of its proxy voting policies and procedures upon
request. This information may be provided to clients through Pioneer's Form
ADV (Part II) disclosure, by separate notice to the client, or through
Pioneer's website.
Proxy Voting Oversight Group
The members of the Proxy Voting Oversight Group are Pioneer's: Director of
Portfolio Management US, Head of Investment Operations, and Director of
Compliance. Other members of Pioneer will be invited to attend meetings and
otherwise participate as necessary. The Head of Investment Operations will
chair the Proxy Voting Oversight Group.
The Proxy Voting Oversight Group is responsible for developing, evaluating,
and changing (when necessary) Pioneer's Proxy Voting Policies and
Procedures. The group meets at least annually to evaluate and review these
policies and procedures and the services of its third-party proxy voting
service. In addition, the Proxy Voting Oversight Group will meet as
necessary to vote on referral items and address other business as
necessary.
Amendments
Pioneer may not amend its Proxy Voting Policies And Procedures without the
prior approval of the Proxy Voting Oversight Group and its corporate
parent, Pioneer Global Asset Management S.p.A
5
Proxy Voting Policies
Pioneer's sole concern in voting proxies is the economic effect of the
proposal on the value of portfolio holdings, considering both the short-
and long-term impact. In many instances, Pioneer believes that supporting
the company's strategy and voting "for" management's proposals builds
portfolio value. In other cases, however, proposals set forth by management
may have a negative effect on that value, while some shareholder proposals
may hold the best prospects for enhancing it. Pioneer monitors developments
in the proxy-voting arena and will revise this policy as needed.
All proxies that are received promptly will be voted in accordance with the
specific policies listed below. All shares in a company held by
Pioneer-managed accounts will be voted alike, unless a client has given us
specific voting instructions on an issue or has not delegated authority to
us. Proxy voting issues will be reviewed by Pioneer's Proxy Voting
Oversight Group, which consists of the Director of Portfolio Management US,
the Director of Investment Operations (the Proxy Coordinator), and the
Director of Compliance.
Pioneer has established Proxy Voting Procedures for identifying and
reviewing conflicts of interest that may arise in the voting of proxies.
Clients may request, at any time, a report on proxy votes for securities
held in their portfolios and Pioneer is happy to discuss our proxy votes
with company management. Pioneer retains a proxy voting service to provide
research on proxy issues and to process proxy votes.
Administrative
While administrative items appear infrequently in U.S. issuer proxies, they
are quite common in non-U.S. proxies.
We will generally support these and similar management proposals:
o Corporate name change.
o A change of corporate headquarters.
o Stock exchange listing.
o Establishment of time and place of annual meeting.
o Adjournment or postponement of annual meeting.
o Acceptance/approval of financial statements.
o Approval of dividend payments, dividend reinvestment plans and other
dividend-related proposals.
o Approval of minutes and other formalities.
6
o Authorization of the transferring of reserves and allocation of
income.
o Amendments to authorized signatories.
o Approval of accounting method changes or change in fiscal year-end.
o Acceptance of labor agreements.
o Appointment of internal auditors.
Pioneer will vote on a case-by-case basis on other routine business;
however, Pioneer will oppose any routine business proposal if insufficient
information is presented in advance to allow Pioneer to judge the merit of
the proposal. Pioneer has also instructed its proxy voting service to
inform Pioneer of its analysis of any administrative items inconsistent, in
its view, with supporting the value of Pioneer portfolio holdings so that
Pioneer may consider and vote on those items on a case-by-case basis.
Auditors
We normally vote for proposals to:
o Ratify the auditors. We will consider a vote against if we are
concerned about the auditors' independence or their past work for
the company. Specifically, we will oppose the ratification of
auditors and withhold votes from audit committee members if
non-audit fees paid by the company to the auditing firm exceed the
sum of audit fees plus audit-related fees plus permissible tax
fees according to the disclosure categories proposed by the
Securities and Exchange Commission.
o Restore shareholder rights to ratify the auditors.
We will normally oppose proposals that require companies to:
o Seek bids from other auditors.
o Rotate auditing firms, except where the rotation is statutorily
required or where rotation would demonstrably strengthen financial
disclosure.
o Indemnify auditors.
o Prohibit auditors from engaging in non-audit services for the
company.
Board of Directors
On issues related to the board of directors, Pioneer normally supports
management. We will, however, consider a vote against management in
instances where corporate performance has been very poor or where the board
appears to lack independence.
7
General Board Issues
Pioneer will vote for:
o Audit, compensation and nominating committees composed of
independent directors exclusively.
o Indemnification for directors for actions taken in good faith in
accordance with the business judgment rule. We will vote against
proposals for broader indemnification.
o Changes in board size that appear to have a legitimate business
purpose and are not primarily for anti-takeover reasons.
o Election of an honorary director.
We will vote against:
o Minimum stock ownership by directors.
o Term limits for directors. Companies benefit from experienced
directors, and shareholder control is better achieved through
annual votes.
o Requirements for union or special interest representation on the
board.
o Requirements to provide two candidates for each board seat.
We will vote on a case-by case basis on these issues:
o Separate chairman and CEO positions. We will consider voting with
shareholders on these issues in cases of poor corporate
performance.
Elections of Directors
In uncontested elections of directors we will vote against:
o Individual directors with absenteeism above 25% without valid
reason. We support proposals that require disclosure of director
attendance.
o Insider directors and affiliated outsiders who sit on the audit,
compensation, stock option or nominating committees. For the
purposes of our policy, we accept the definition of affiliated
directors provided by our proxy voting service.
We will also vote against:
o Directors who have failed to act on a takeover offer where the
majority of shareholders have tendered their shares.
o Directors who appear to lack independence or are associated with
very poor corporate performance.
8
We will vote on a case-by case basis on these issues:
o Re-election of directors who have implemented or renewed a
dead-hand or modified dead-hand poison pill (a "dead-hand poison
pill" is a shareholder rights plan that may be altered only by
incumbent or "dead " directors. These plans prevent a potential
acquirer from disabling a poison pill by obtaining control of the
board through a proxy vote).
o Contested election of directors.
o Prior to phase-in required by SEC, we would consider supporting
election of a majority of independent directors in cases of poor
performance.
o Mandatory retirement policies.
o Directors who have ignored a shareholder proposal that has been
approved by shareholders for two consecutive years.
Takeover-Related Measures
Pioneer is generally opposed to proposals that may discourage takeover
attempts. We believe that the potential for a takeover helps ensure that
corporate performance remains high.
Pioneer will vote for:
o Cumulative voting.
o Increase ability for shareholders to call special meetings.
o Increase ability for shareholders to act by written consent.
o Restrictions on the ability to make greenmail payments.
o Submitting rights plans to shareholder vote.
o Rescinding shareholder rights plans ("poison pills").
o Opting out of the following state takeover statutes:
o Control share acquisition statutes, which deny large holders voting
rights on holdings over a specified threshold.
o Control share cash-out provisions, which require large holders to
acquire shares from other holders.
o Freeze-out provisions, which impose a waiting period on large
holders before they can attempt to gain control.
o Stakeholder laws, which permit directors to consider interests of
non-shareholder constituencies.
9
o Disgorgement provisions, which require acquirers to disgorge profits
on purchases made before gaining control.
o Fair price provisions.
o Authorization of shareholder rights plans.
o Labor protection provisions.
o Mandatory classified boards.
We will vote on a case-by-case basis on the following issues:
o Fair price provisions. We will vote against provisions requiring
supermajority votes to approve takeovers. We will also consider
voting against proposals that require a supermajority vote to
repeal or amend the provision. Finally, we will consider the
mechanism used to determine the fair price; we are generally
opposed to complicated formulas or requirements to pay a premium.
o Opting out of state takeover statutes regarding fair price
provisions. We will use the criteria used for fair price
provisions in general to determine our vote on this issue.
o Proposals that allow shareholders to nominate directors.
We will vote against:
o Classified boards, except in the case of closed-end mutual funds.
o Limiting shareholder ability to remove or appoint directors. We
will support proposals to restore shareholder authority in this
area. We will review on a case-by-case basis proposals that
authorize the board to make interim appointments.
o Classes of shares with unequal voting rights.
o Supermajority vote requirements.
o Severance packages ("golden" and "tin" parachutes). We will support
proposals to put these packages to shareholder vote.
o Reimbursement of dissident proxy solicitation expenses. While we
ordinarily support measures that encourage takeover bids, we
believe that management should have full control over corporate
funds.
o Extension of advance notice requirements for shareholder proposals.
o Granting board authority normally retained by shareholders (e.g.,
amend charter, set board size).
o Shareholder rights plans ("poison pills"). These plans generally
allow shareholders to buy additional shares at a below-market
price in the event of a change in control and may deter some bids.
10
Capital Structure
Managements need considerable flexibility in determining the company's
financial structure, and Pioneer normally supports managements' proposals
in this area. We will, however, reject proposals that impose high barriers
to potential takeovers.
Pioneer will vote for:
o Changes in par value.
o Reverse splits, if accompanied by a reduction in number of shares.
o Share repurchase programs, if all shareholders may participate on
equal terms.
o Bond issuance.
o Increases in "ordinary" preferred stock.
o Proposals to have blank-check common stock placements (other than
shares issued in the normal course of business) submitted for
shareholder approval.
o Cancellation of company treasury shares.
We will vote on a case-by-case basis on the following issues:
o Reverse splits not accompanied by a reduction in number of shares,
considering the risk of delisting.
o Increase in authorized common stock. We will make a determination
considering, among other factors:
o Number of shares currently available for issuance;
o Size of requested increase (we would normally approve increases of up to
100% of current authorization);
o Proposed use of the additional shares; and
o Potential consequences of a failure to increase the number of shares
outstanding (e.g., delisting or bankruptcy).
o Blank-check preferred. We will normally oppose issuance of a new
class of blank-check preferred, but may approve an increase in a
class already outstanding if the company has demonstrated that it
uses this flexibility appropriately.
o Proposals to submit private placements to shareholder vote.
o Other financing plans.
We will vote against preemptive rights that we believe limit a company's
financing flexibility.
11
Compensation
Pioneer supports compensation plans that link pay to shareholder returns
and believes that management has the best understanding of the level of
compensation needed to attract and retain qualified people. At the same
time, stock-related compensation plans have a significant economic impact
and a direct effect on the balance sheet. Therefore, while we do not want
to micromanage a company's compensation programs, we will place limits on
the potential dilution these plans may impose.
Pioneer will vote for:
o 401(k) benefit plans.
o Employee stock ownership plans (ESOPs), as long as shares
allocated to ESOPs are less than 5% of outstanding shares. Larger
blocks of stock in ESOPs can serve as a takeover defense. We will
support proposals to submit ESOPs to shareholder vote.
o Various issues related to the Omnibus Budget and Reconciliation Act
of 1993 (OBRA), including:
o Amendments to performance plans to conform with OBRA;
o Caps on annual grants or amendments of administrative features;
o Adding performance goals; and
o Cash or cash-and-stock bonus plans.
o Establish a process to link pay, including stock-option grants, to
performance, leaving specifics of implementation to the company.
o Require that option repricings be submitted to shareholders.
o Require the expensing of stock-option awards.
o Require reporting of executive retirement benefits (deferred
compensation, split-dollar life insurance, SERPs, and pension
benefits).
o Employee stock purchase plans where the purchase price is equal to
at least 85% of the market price, where the offering period is no
greater than 27 months and where potential dilution (as defined
below) is no greater than 10%.
12
We will vote on a case-by-case basis on the following issues:
o Executive and director stock-related compensation plans. We will
consider the following factors when reviewing these plans:
o The program must be of a reasonable size. We will approve plans
where the combined employee and director plans together would
generate less than 15% dilution. We will reject plans with 15% or
more potential dilution.
Dilution = (A + B + C) / (A + B + C + D), where
A = Shares reserved for plan/amendment,
B = Shares available under continuing plans,
C = Shares granted but unexercised and
D = Shares outstanding.
o The plan must not:
o Explicitly permit unlimited option repricing authority or that
have repriced in the past without shareholder approval.
o Be a self-replenishing "evergreen" plan, plans that grant
discount options and tax offset payments.
o We are generally in favor of proposals that increase participation beyond
executives.
o We generally support proposals asking companies to adopt rigorous
vesting provisions for stock option plans such as those that vest
incrementally over, at least, a three- or four-year period with a pro
rata portion of the shares becoming exercisable on an annual basis
following grant date.
o We generally support proposals asking companies to disclose their
window period policies for stock transactions. Window period policies
ensure that employees do not exercise options based on insider
information contemporaneous with quarterly earnings releases and other
material corporate announcements.
o We generally support proposals asking companies to adopt stock holding
periods for their executives.
o All other employee stock purchase plans.
o All other compensation-related proposals, including deferred
compensation plans, employment agreements, loan guarantee programs
and retirement plans.
o All other proposals regarding stock compensation plans, including
extending the life of a plan, changing vesting restrictions,
repricing options, lengthening exercise periods or accelerating
distribution of awards and pyramiding and cashless exercise
programs.
13
We will vote against:
o Pensions for non-employee directors. We believe these retirement
plans reduce director objectivity.
o Elimination of stock option plans.
We will vote on a case-by case basis on these issues:
o Limits on executive and director pay.
o Stock in lieu of cash compensation for directors.
Corporate Governance
Pioneer will vote for:
o Confidential Voting.
o Equal access provisions, which allow shareholders to contribute
their opinion to proxy materials.
o Proposals requiring directors to disclose their ownership of shares
in the company.
We will vote on a case-by-case basis on the following issues:
o Change in the state of incorporation. We will support
reincorporations supported by valid business reasons. We will
oppose those that appear to be solely for the purpose of
strengthening takeover defenses.
o Bundled proposals. We will evaluate the overall impact of the
proposal.
o Adopting or amending the charter, bylaws or articles of association.
o Shareholder appraisal rights, which allow shareholders to demand
judicial review of an acquisition price.
We will vote against:
o Shareholder advisory committees. While management should solicit
shareholder input, we prefer to leave the method of doing so to
management's discretion.
o Limitations on stock ownership or voting rights.
o Reduction in share ownership disclosure guidelines.
14
Mergers and Restructurings
Pioneer will vote on the following and similar issues on a case-by-case
basis:
o Mergers and acquisitions.
o Corporate restructurings, including spin-offs, liquidations, asset
sales, joint ventures, conversions to holding company and
conversions to self-managed REIT structure.
o Debt restructurings.
o Conversion of securities.
o Issuance of shares to facilitate a merger.
o Private placements, warrants, convertible debentures.
o Proposals requiring management to inform shareholders of merger
opportunities.
We will normally vote against shareholder proposals requiring that the
company be put up for sale.
Mutual Funds
Many of our portfolios may invest in shares of closed-end mutual funds or
exchange-traded funds. The non-corporate structure of these investments
raises several unique proxy voting issues.
Pioneer will vote for:
o Establishment of new classes or series of shares.
o Establishment of a master-feeder structure.
Pioneer will vote on a case-by-case on:
o Changes in investment policy. We will normally support changes
that do not affect the investment objective or overall risk level
of the fund. We will examine more fundamental changes on a
case-by-case basis.
o Approval of new or amended advisory contracts.
o Changes from closed-end to open-end format.
o Authorization for, or increase in, preferred shares.
o Disposition of assets, termination, liquidation, or mergers.
o Classified boards of closed-end mutual funds, but will typically
support such proposals.
15
Social Issues
Pioneer will abstain on stockholder proposals calling for greater
disclosure of corporate activities with regard to social issues. "Social
Issues" may generally be described as shareholder proposals for a company
to:
o Conduct studies regarding certain issues of public concern and
interest;
o Study the feasibility of the company taking certain actions with
regard to such issues; or
o Take specific action, including ceasing certain behavior and
adopting company standards and principles, in relation to issues
of public concern and interest.
We believe these issues are important and should receive management
attention.
Pioneer will vote against proposals calling for substantial changes in the
company's business or activities. We will also normally vote against
proposals with regard to contributions, believing that management should
control the routine disbursement of funds.
16
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
(a)(1)
As of the date of this report, day-to-day management of the fund's portfolio of
municipal securities is the responsibility of David Eurkus. Mr. Eurkus is
supported by the fixed income team. Members of this team manage other Pioneer
funds investing primarily in fixed income securities. The portfolio manager and
the team also may draw upon the research and investment management expertise of
the global research team, which provides fundamental research on companies and
includes members from Pioneer's affiliate, Pioneer Investment Management Limited
(PIML). Mr. Eurkus joined Pioneer as a senior vice president in January 2000 and
has been an investment professional since 1969. As of the date of this report,
day-to-day management of the fund's portfolio of equity securities is the
responsibility of Walter Hunnewell, Jr. Mr. Hunnewell is supported by the
domestic equity team. Members of this team manage other Pioneer funds investing
primarily in U.S. equity securities. The portfolio manager and the team also may
draw upon the research and investment management expertise of the global
research team, which provides fundamental research on companies and includes
members from Pioneer's affiliate, PIML. Mr. Hunnewell, a vice president, joined
Pioneer in August 2001 and has been an investment professional since 1985. Prior
to joining Pioneer, Mr. Hunnewell was an independent investment manager and a
fiduciary of private asset portfolios from 2000 to 2001.
(a)(2)
Other Accounts Managed by the Portfolio Managers. The table below indicates, for
each portfolio manager of the fund, information about the accounts other than
the fund over which the portfolio manager has day-to-day investment
responsibility. All information on the number of accounts and total assets in
the table is as of November 30, 2005. For purposes of the table, "Other Pooled
Investment Vehicles" may include investment partnerships, undertakings for
collective investments in transferable securities ("UCITS") and other non-U.S.
investment funds and group trusts, and "Other Accounts" may include separate
accounts for institutions or individuals, insurance company general or separate
accounts, pension funds and other similar institutional accounts. Certain funds
and other accounts managed by the portfolio manager may have substantially
similar investment strategies.
-----------------------------------------------------------------------------------------------------------------------
Name of Portfolio Type of Account Number of Total Assets Number of Accounts Assets Managed
Manager Accounts Managed Managed for which for which
Managed Advisory Fee is Advisory Fee is
Performance-Based Performance-Based
-----------------------------------------------------------------------------------------------------------------------
David Eurkus Other Registered
Investment
Companies 5 1,801,166,000 N/A N/A
-------------------------------------------------------------------------------------------------
Other Pooled
Investment
Vehicles 0 N/A N/A N/A
-------------------------------------------------------------------------------------------------
Other Accounts 3 1,432,000 N/A N/A
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
Name of Portfolio Type of Account Number of Total Assets Number of Accounts Assets Managed
Manager Accounts Managed Managed for which for which
Managed Advisory Fee is Advisory Fee is
Performance-Based Performance-Based
-----------------------------------------------------------------------------------------------------------------------
Walter Hunnewell Other Registered
Investment
Companies 7 9,497,865,000 1 7,332,479,000
-------------------------------------------------------------------------------------------------
Other Pooled
Investment
Vehicles 4 1,042,144,000 N/A N/A
-------------------------------------------------------------------------------------------------
Other Accounts 16 347,740,000 N/A N/A
-----------------------------------------------------------------------------------------------------------------------
Potential Conflicts of Interest. When a portfolio manager is responsible for the
management of more than one account, the potential arises for the portfolio
manager to favor one account over another. The principal types of potential
conflicts of interest that may arise are discussed below. For the reasons
outlined below, Pioneer does not believe that any material conflicts are likely
to arise out of a portfolio manager's responsibility for the management of the
fund as well as one or more other accounts. Although Pioneer has adopted
procedures that it believes are reasonably designed to detect and prevent
violations of the federal securities laws and to mitigate the potential for
conflicts of interest to affect its portfolio management decisions, there can be
no assurance that all conflicts will be identified or that all procedures will
be effective in mitigating the potential for such risks. Generally, the risks of
such conflicts of interests are increased to the extent that a portfolio manager
has a financial incentive to favor one account over another. Pioneer has
structured its compensation arrangements in a manner that is intended to limit
such potential for conflicts of interests. See "Compensation of Portfolio
Managers" below.
o A portfolio manager could favor one account over another in allocating
new investment opportunities that have limited supply, such as initial
public offerings and private placements. If, for example, an initial
public offering that was expected to appreciate in value significantly
shortly after the offering was allocated to a single account, that
account may be expected to have better investment performance than
other accounts that did not receive an allocation of the initial
public offering. Generally, investments for which there is limited
availability are allocated based upon a range of factors including
available cash and consistency with the accounts' investment
objectives and policies. This allocation methodology necessarily
involves some subjective elements but is intended over time to treat
each client in an equitable and fair manner. Generally, the investment
opportunity is allocated among participating accounts on a pro rata
basis. Although Pioneer believes that its practices are reasonably
designed to treat each client in an equitable and fair manner, there
may be instances where a fund may not participate, or may participate
to a lesser degree than other clients, in the allocation of an
investment opportunity.
o A portfolio manager could favor one account over another in the order
in which trades for the accounts are placed. If a portfolio manager
determines to purchase a security for more than one account in an
aggregate amount that may influence the market price of the security,
accounts that purchased or sold the security first may receive a more
favorable price than accounts that made subsequent transactions. The
less liquid the market for the security or the greater the percentage
that the proposed aggregate purchases or sales represent of average
daily trading volume, the greater the potential for accounts that make
subsequent purchases or sales to receive a less favorable price. When
a portfolio manager intends to trade the same security on the same day
for more than one account, the trades typically are "bunched," which
means that the trades for the individual accounts are aggregated and
each account receives the same price. There are some types of accounts
as to which bunching may not be possible for contractual reasons (such
as directed brokerage arrangements). Circumstances may also arise
where the trader believes that bunching the orders may not result in
the best possible price. Where those accounts or circumstances are
involved, Pioneer will place the order in a manner intended to result
in as favorable a price as possible for such client.
o A portfolio manager could favor an account if the portfolio manager's
compensation is tied to the performance of that account to a greater
degree than other accounts managed by the portfolio manager. If, for
example, the portfolio manager receives a bonus based upon the
performance of certain accounts relative to a benchmark while other
accounts are disregarded for this purpose, the portfolio manager will
have a financial incentive to seek to have the accounts that determine
the portfolio manager's bonus achieve the best possible performance to
the possible detriment of other accounts. Similarly, if Pioneer
receives a performance-based advisory fee, the portfolio manager may
favor that account, whether or not the performance of that account
directly determines the portfolio manager's compensation.
o A portfolio manager could favor an account if the portfolio manager
has a beneficial interest in the account, in order to benefit a large
client or to compensate a client that had poor returns. For example,
if the portfolio manager held an interest in an investment partnership
that was one of the accounts managed by the portfolio manager, the
portfolio manager would have an economic incentive to favor the
account in which the portfolio manager held an interest.
o If the different accounts have materially and potentially conflicting
investment objectives or strategies, a conflict of interest could
arise. For example, if a portfolio manager purchases a security for
one account and sells the same security for another account, such
trading pattern may disadvantage either the account that is long or
short. In making portfolio manager assignments, Pioneer seeks to avoid
such potentially conflicting situations. However, where a portfolio
manager is responsible for accounts with differing investment
objectives and policies, it is possible that the portfolio manager
will conclude that it is in the best interest of one account to sell a
portfolio security while another account continues to hold or increase
the holding in such security.
(a)(3)
Compensation of Portfolio Managers. Pioneer has adopted a system of compensation
for portfolio managers and seeks to align the financial interests of the
portfolio managers with both those of shareholders of the accounts the portfolio
managers manage, through incentive payments based in part on the relative
investment performance of those funds, and also Pioneer through incentive
payments based in part on Pioneer's financial performance. Pioneer's
compensation arrangements with its portfolio managers are determined on the
basis of the portfolio manager's overall services to Pioneer and its affiliates
and not on the basis of specific funds or accounts managed by the portfolio
manager. The compensation program for all Pioneer portfolio managers includes a
base salary (determined by the rank and tenure of the employee) and an annual
bonus program, as well as customary benefits that are offered generally to all
full-time employees. Base compensation is fixed and normally reevaluated on an
annual basis. Pioneer seeks to set base compensation at market rates, taking
into account the experience and responsibilities of the portfolio manager. The
bonus plan is intended to provide a competitive level of annual bonus
compensation that is tied to the portfolio manager achieving superior investment
performance and aligns the financial incentives of Pioneer and the investment
professional. Any bonus under the plan is completely discretionary, with a
maximum annual bonus that may be in excess of base salary. The annual bonus is
based upon a combination of the following factors:
o Quantitative Investment Performance. The quantitative investment
performance calculation is based on pre-tax performance of all of
the accounts managed by the portfolio manager (which includes the
fund and any other accounts managed by the portfolio manager)
over a one-year period (20% weighting) and four-year period (80%
weighting), measured for periods ending on December 31. The
accounts, which include the fund, are ranked against a group of
mutual funds with similar investment objectives and investment
focus (60%) and a broad-based securities market index measuring
the performance of the same type of securities in which the
accounts invest (40%), which, in the case of the fund are the
Lehman Brothers Municipal Bond Index and the S&P 500 Index. As a
result of these benchmarks, the performance of the portfolio
manager for compensation purposes is measured against criteria
that are relevant to the portfolio manager's competitive
universe.
o Qualitative Performance. The qualitative performance component
with respect to all of the accounts managed by the portfolio
manager includes objectives, such as effectiveness in the areas
of teamwork, leadership, communications and marketing, that are
mutually established and evaluated by each portfolio manager and
management.
o Pioneer Results and Business Line Results. Pioneer's financial
performance, as well as the investment performance of its
investment management group, affect a portfolio manager's actual
bonus by a leverage factor of plus or minus (+/-) a predetermined
percentage.
Certain portfolio managers participate in an incentive plan whereby senior
executives or other key employees are granted options in stock of Pioneer Global
Asset Management S.p.A., an affiliate of Pioneer, at the then fair value of the
underlying stock. These options are generally exercisable within three years.
(a)(4)
Share Ownership by Portfolio Managers. The following table indicates as of
November 30, 2005 the value, within the indicated range, of shares beneficially
owned by the portfolio managers of the fund.
--------------------------------------------------------------------------------
Name of Portfolio Manager Beneficial Ownership of the Fund*
--------------------------------------------------------------------------------
David Eurkus A
--------------------------------------------------------------------------------
Walter Hunnewell A
--------------------------------------------------------------------------------
*Key to Dollar Ranges
A. None
B. $1 - $10,000
C. $10,001 - $50,000
D. $50,001 - $100,000
E. $100,001 - $500,000
F. $500,001 - $1,000,000
G. Over $1,000,000
Item 9. Purchases of Equity Securities by Closed-End Management
Investment Company and Affiliated Purchasers.
(a) If the registrant is a closed-end management investment company,
in the following tabular format, provide the information specified in
paragraph (b) of this Item with respect to any purchase made by or on
behalf of the registrant or any affiliated purchaser, as defined in
Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of
shares or other units of any class of the registrants equity securities
that is registered by the registrant pursuant to Section 12 of the
Exchange Act (15 U.S.C. 781). Instruction to paragraph (a). Disclose
all purchases covered by this Item, including purchases that do not
satisfy the conditions of the safe harbor of Rule 10b-18 under the
Exchange Act (17 CFR 240.10b-18), made in the period covered by the
report. Provide disclosures covering repurchases made on a monthly basis.
For example, if the reporting period began on January 16 and ended on
July 15, the chart would show repurchases for the months from January 16
through February 15, February 16 through March 15, March 16 through
April 15, April 16 through May 15, May 16 through June 15, and June 16
through July 15.
During the period covered by this report, there were no purchases
made by or on behalf of the registrant or any affiliated purchaser
as defined in Rule 10b-18(a)(3) under the Securities Exchange Act
of 1934 (the Exchange Act), of shares of the registrants equity
securities that are registered by the registrant pursuant to
Section 12 of the Exchange Act.
Item 10. Submission of Matters to a Vote of Security Holders.
Describe any material changes to the procedures by which shareholders
may recommend nominees to the registrants board of directors, where
those changes were implemented after the registrant last provided
disclosure in response to the requirements of Item 7(d)(2)(ii)(G)
of Schedule 14A (17 CFR 240.14a-101), or this Item.
There have been no material changes to the procedures by which the
shareholders may recommend nominees to the registrants board of
directors since the registrant last provided disclosure in response
to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14(A) in
its definitive proxy statement, or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Disclose the conclusions of the registrant's principal executive officer or
officers and principal financial officer or officers, or persons performing
similar functions, about the effectiveness of the registrant's disclosure
controls and procedures (as defined in Rule 30a-2(c) under the Act (17 CFR
270.30a-2(c))) based on their evaluation of these controls and procedures as of
a date within 90 days of the filing date of the report that includes the
disclosure required by this paragraph.
The registrant's principal executive officer and principal financial
officer have concluded, that the registrant's disclosure controls and
procedures are effective based on their evaluation of these controls and
procedures as of a date within 90 days of the filing date of this report.
(b) Disclose whether or not there were significant changes in the registrant's
internal controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
There were no significant changes in the registrant's internal controls or
in other factors that could significantly affect these controls subsequent to
the date of their evaluation, including any corrective actions with regard
to significant deficiencies and material weaknesses.
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit.
(b) A separate certification for each principal executive officer and principal
financial officer of the registrant as required by Rule 30a-2 under the Act
(17 CFR 270.30a-2).
Filed herewith.
SIGNATURES
[See General Instruction F]
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Pioneer Tax Advantaged Balanced Trust
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr, President
Date January 30, 2006
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr., President
Date January 30, 2006
By (Signature and Title)* /s/ Vincent Nave
Vincent Nave, Treasurer
Date January 30, 2006
* Print the name and title of each signing officer under his or her signature.