Semi Annual Report by Investment Company (Form N CSRS)
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
under the Investment Company Act of 1940 (17 CFR
Commission may use the information provided on Form
in its regulatory, disclosure review, inspection, and policymaking roles.
and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form
unless the Form displays a currently valid
Ticker Symbol: MAV
|
2 | |
8 | |
11 | |
12 | |
13 | |
24 | |
30 | |
44 | |
47 | |
52 |
|
Q
|
How did the Fund perform during the six-month period ended
|
A
|
|
During the same six-month period, the average retuat NAV of the 24 closed end funds in Morningstar's Closed End High Yield Municipal category (which may or may not be leveraged) was 4.80%, and the average retuat market price of the closed-end funds within the same Morningstar category was 11.03%. The shares of the Fund were selling at a 6.36% discount to NAV on |
* | The 30-day |
Q
|
Which of the Fund's investment strategies contributed positively the Fund's benchmark-relative to performance during the six-month period ended
|
A
|
With respect to ratings categories, the Fund's exposure to lower quality issues within the high-yield municipal bond category benefited benchmark-relative results during the six-month period, as spread tightening, or the premium over the risk-free rate on non-rated securities (securities not assigned a rating by the major rating agencies) outpaced double and single B rated municipal bonds. In terms of asset allocation, the Fund's positioning in hospital, state & local general obligation municipal securities, and electric utility sectors contributed positively to the Fund's relative returns during the six-month period. A longer duration bias within tobacco master settlement agreement (MSA), hospitals, and taxable securities contributed positively to the Fund's benchmark-relative returns. |
Q
|
Which investment strategies detracted from the Fund's benchmark-relative performance results during the six month period ended
|
A
|
The Fund carries leveraged exposure to the municipal bond market. The cost of the Fund's borrowing for leverage detracted from the the Fund's benchmark-relative returns for the period. As short-term leverage costs begin to fall with the change in |
Q
|
Did the Fund's distributions** to stockholders change during the six-month period ended
|
A
|
The Fund's monthly distribution rate increased from |
** | Dividends/Distributions are not guaranteed. |
|
Q
|
Did the level of leverage in the Fund change during the six-month period ended
|
A
|
On |
Q
|
Did the Fund have any exposure to derivatives during the six- month period ended
|
A
|
The Fund's limited exposure to |
Q
|
What is your investment outlook, and how is the Fund positioned heading into the second half of its fiscal year?
|
A
|
The Fund is underweight select sectors within the |
We are paying special attention to call structure and extension risk, repositioning to benefit from a new Fed environment that includes lower interest rates. | |
We have continued to prefer investments in hospital-related issues, since the sector has historically had very low default rates. The revenue received by hospitals has remained diverse, coming from a combination of Medicare, Medicaid, private insurers, and self-payors. The Fund is also overweight to tobacco MSA bonds, due in part to the fact that the sector has never experienced a default. Tobacco bond revenues have provided substantial funding for the advancement of public health and other similar programs to state and local governments that signed the tobacco MSA. Within sectors, we are focused on diversification across states and geographic locations. |
The Fund is also underweight to state general obligation issues, which have tended to be sensitive to political considerations, as certain state governments may have lower flexibility to raise taxes due to constituents' preferences, thus limiting their ability to increase revenues. Likewise, healthcare and labor costs could apply additional pressure. | |
The US economy has experienced stronger growth than anticipated this year, but is gradually decelerating. The once overheated labor market has cooled, with companies reducing their hiring rates, yet layoffs have remained relatively low thus far. The re-emergence of a more dovish Powell has also decreased downside risk for corporate bonds. Currently, high yield spreads are relatively and historically narrow, suggesting that investors have already accounted for limited economic risk. Currently, spreads in taxable credit-sensitive areas are relatively (and historically) narrow, suggesting that investors may find superior value in tax-exempt markets. While yields remain attractive relative to inflation, the market has factored in a very aggressive trajectory for Fed rate cuts over the next year. We anticipate a greater likelihood of curve steepening due to rising long-term |
|
Our goal is to invest the Fund in what we believe are fundamentally sound credits representing relative value opportunities, while maintaining an appropriate level of risk management. We also seek to avoid experiencing defaults in the Fund through our emphasis on fundamental research. We believe this steady, long-term approach remains the most effective way to identify opportunities and to help minimize the risk associated with investing in the high-yield municipal market. |
|
|
|
(As a percentage of total investments)* | ||
1. | 5.38% | |
2. | 5.00 | |
3. | 3.97 | |
4. | 3.88 | |
5. | 3.79 | |
6. | 3.73 | |
7. | City of Houston Airport System Revenue, 4.00%, |
2.63 |
8. | 2.56 | |
9. | 2.38 | |
10. | 2.34 |
, Inc. |
|
|
|
Market Value | ||
Discount | (6.36)% | (11.41)% |
|
|
|
Net Asset Value |
Net Investment
Income |
Short-Term
Capital Gains |
Long-Term
Capital Gains |
|
$0.1950 | $- | $- |
|
|
|
30-Day SEC Yield | 3.52% | 3.31% |
on Saturday,
on Monday and
on Monday and Saturday. Net asset value and market value are published daily on the Fund's
at
.
|
Average Annual Total Return
(As of
|
||||
Period
|
Net
Asset Value (NAV) |
Market
Price |
Bloomberg
Municipal Bond Index |
Bloomberg
Municipal High Yield Bond Index |
10 Years | 2.63% | 0.08% | 2.52% | 4.52% |
5 Years | 0.02 | 0.58 | 1.39 | 3.07 |
1 Year | 21.30 | 37.38 | 10.37 | 17.38 |
Principal
Amount USD ($) |
Value
|
|||||
UNAFFILIATED ISSUERS - 119.7%
|
||||||
Municipal Bonds - 119.2%
of Net Assets(a)
|
||||||
|
||||||
2,500,000 | $ 2,599,475 | |||||
Total
|
$2,599,475
|
|||||
|
||||||
1,325,000 | $ 1,345,485 | |||||
1,965,000 | 1,839,004 | |||||
Total
|
$3,184,489
|
|||||
|
||||||
1,500,000 | $ 1,503,000 | |||||
10,000,000 | 10,493,400 | |||||
Total
|
$11,996,400
|
|||||
|
||||||
38,610,000(b) | $ 10,727,788 | |||||
1,500,000 | 1,654,245 | |||||
1,000,000 | 1,102,610 | |||||
300,000 | 310,896 | |||||
600,000 | 607,422 | |||||
1,875,000 | 1,878,675 | |||||
2,000,000 | 2,068,780 |
|
Principal
Amount USD ($) |
Value
|
|||||
|
||||||
5,915,000 | $ 5,987,163 | |||||
4,000,000 | 4,339,000 | |||||
Total
|
$28,676,579
|
|||||
|
||||||
1,000,000 | $ 922,190 | |||||
1,250,000 | 1,320,450 | |||||
1,148,000(c) | Cottonwood Highlands Metropolitan District No. 1, Series A, 5.00%, |
1,159,365 | ||||
2,350,000 | Dominion Water & |
2,414,884 | ||||
Total
|
$5,816,889
|
|||||
|
||||||
450,000 | $ 413,757 | |||||
700,000 | 652,414 | |||||
Total
|
$1,066,171
|
|||||
|
||||||
500,000 | $ 514,925 | |||||
5,715,000 | District of |
5,910,110 | ||||
3,250,000 | Washington Metropolitan Area Transit Authority Dedicated Revenue, Climate Transition Bonds, Series A, 5.25%, |
3,598,368 | ||||
|
$10,023,403
|
|||||
|
||||||
600,000 | $ 603,870 | |||||
940,000 | 943,431 | |||||
750,000 | 757,560 |
Principal
Amount USD ($) |
Value
|
|||||
|
||||||
850,000 | $ 854,768 | |||||
825,000 | County of Lake, |
827,459 | ||||
1,000,000 | 1,046,910 | |||||
1,000,000 | 1,047,500 | |||||
500,000 | 519,445 | |||||
1,000,000 | 1,033,620 | |||||
Total
|
$7,634,563
|
|||||
|
||||||
2,000,000 | $ 2,006,160 | |||||
Total
|
$2,006,160
|
|||||
|
||||||
3,760,000(c) | $ 3,847,420 | |||||
1,000,000(c) | 1,073,660 | |||||
1,200,000(c) | 1,218,264 | |||||
2,000,000(c) | 2,024,020 | |||||
1,250,000 | 1,373,187 | |||||
1,300,000(c) | 1,365,364 | |||||
550,000(c) | 576,092 | |||||
2,000,000(c) | 2,005,340 | |||||
140,903(b)(d) | 2,308 | |||||
223,202(d)(e) | 145,081 | |||||
3,000,000 | 2,889,030 | |||||
964,193(d) | 674,936 | |||||
Total
|
$17,194,702
|
|||||
|
Principal
Amount USD ($) |
Value
|
|||||
|
||||||
750,000 | $ 773,708 | |||||
1,000,000 | 1,020,660 | |||||
Total
|
$1,794,368
|
|||||
|
||||||
6,900,000 | $ 6,905,589 | |||||
2,055,000 | Iowa |
1,977,485 | ||||
Total
|
$8,883,074
|
|||||
|
||||||
700,000 | $ 775,600 | |||||
Total
|
$775,600
|
|||||
|
||||||
1,400,000 | $ 1,400,126 | |||||
8,000,000 | 10,233,120 | |||||
Total
|
$11,633,246
|
|||||
|
||||||
1,955,000 | David Ellis Academy-West, 5.25%, |
$ 1,834,709 | ||||
3,000,000 | 3,326,730 | |||||
205,000 | 205,508 | |||||
Total
|
$5,366,947
|
|||||
|
||||||
1,000,000 | $ 1,000,480 | |||||
Total
|
$1,000,480
|
|||||
Principal
Amount USD ($) |
Value
|
|||||
|
||||||
2,445,000(d)(e) | $ 464,550 | |||||
1,000,000(d) | Two |
40,000 | ||||
Total
|
$504,550
|
|||||
|
||||||
1,375,000 | New Hampshire Health and Education Facilities Authority Act, |
$ 1,224,039 | ||||
Total
|
$1,224,039
|
|||||
|
||||||
3,000,000 | $ 2,801,160 | |||||
2,000,000 | 2,116,120 | |||||
5,000,000 | 4,879,250 | |||||
2,530,000 | 2,400,616 | |||||
3,240,000 | 3,119,051 | |||||
1,750,000 | 1,827,752 | |||||
5,500,000 | 5,879,390 | |||||
1,000,000 | 943,910 | |||||
Total
|
$23,967,249
|
|||||
|
||||||
4,000,000 | $ 4,342,640 | |||||
Total
|
$4,342,640
|
|||||
|
||||||
14,355,000 | $ 13,498,006 | |||||
1,500,000 | County of |
1,500,435 |
|
Principal
Amount USD ($) |
Value
|
|||||
|
||||||
2,000,000 | $ 2,026,440 | |||||
2,000,000 | 2,012,600 | |||||
Total
|
$19,037,481
|
|||||
|
||||||
1,500,000 | $ 1,555,200 | |||||
1,000,000 | 1,011,110 | |||||
6,665,000 | 6,310,355 | |||||
2,000,000 | 1,890,480 | |||||
3,335,000 | 3,291,645 | |||||
2,500,000(e) | 2,464,525 | |||||
500,000 | 504,070 | |||||
1,000,000 | 904,630 | |||||
470,000 | 470,644 | |||||
Total
|
$18,402,659
|
|||||
|
||||||
2,885,151(e) | $ 1,857,604 | |||||
2,375,679(c) | 2,331,776 | |||||
5,021,480(c) | 4,829,961 | |||||
6,810,000(c) | 6,425,167 |
Principal
Amount USD ($) |
Value
|
|||||
|
||||||
14,250,000 | $ 14,536,425 | |||||
9,996,000 | 10,086,564 | |||||
Total
|
$40,067,497
|
|||||
|
||||||
1,355,000(d) | $ 542,000 | |||||
|
$542,000
|
|||||
|
||||||
4,400,000(f) | $ 5,082,000 | |||||
Total
|
$5,082,000
|
|||||
|
||||||
550,000 | Knox County Health Educational & Housing Facility Board, |
$ 588,121 | ||||
Total
|
$588,121
|
|||||
|
||||||
450,000 | $ 452,181 | |||||
300,000 | 300,690 | |||||
500,000 | 535,830 | |||||
1,000,000 | 1,001,980 | |||||
1,500,000 | 1,500,765 | |||||
7,345,000 | City of Houston Airport System Revenue, 4.00%, |
7,110,548 | ||||
1,000,000 | City of Houston Airport System Revenue, Series A, 4.00%, |
963,340 | ||||
5,000,000(d)(e) | 2,850,000 |
|
Principal
Amount USD ($) |
Value
|
|||||
|
||||||
2,430,000 | $ 2,591,401 | |||||
1,000,000(e) | 729,640 | |||||
Total
|
$18,036,375
|
|||||
|
||||||
2,035,000 | $ 1,605,167 | |||||
50,000 | 48,575 | |||||
1,000,000 | 1,016,970 | |||||
1,000,000 | 928,320 | |||||
5,500,000 | 5,588,220 | |||||
2,500,000 | 2,536,900 | |||||
4,600,000 | 4,663,480 | |||||
Total
|
$16,387,632
|
|||||
|
||||||
500,000 | $ 528,050 | |||||
Total
|
$528,050
|
|||||
|
||||||
750,000 | $ 756,030 | |||||
Total
|
$756,030
|
|||||
Total Municipal Bonds
(Cost
|
|
|||||
Principal
Amount USD ($) |
Value
|
|||||
Obligations - 0.5% of Net Assets
|
||||||
1,000,000(b) | $ 996,983 | |||||
Total
(Cost
|
$
996,983
|
|||||
TOTAL INVESTMENTS IN UNAFFILIATED ISSUERS - 119.7%
(Cost
|
|
|||||
OTHER ASSETS AND LIABILITIES - (19.7)%
|
||||||
net assets applicable to common stockholders - 100.0%
|
|
|||||
AGM | |
BAM | |
(144A) | The resale of such security is exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be resold normally to qualified institutional buyers. At |
(a) | Consists of Revenue Bonds unless otherwise indicated. |
(b) | Security issued with a zero coupon. Income is recognized through accretion of discount. |
(c) | Represents a General Obligation Bond. |
(d) | Security is in default. |
(e) | The interest rate is subject to change periodically. The interest rate and/or reference index and spread shown at |
(f) | Escrow to maturity. |
|
Revenue Bonds:
|
|
Development Revenue | 19.3% |
Tobacco Revenue | 16.9 |
Transportation Revenue | 15.1 |
Health Revenue | 13.4 |
Education Revenue | 11.0 |
Other Revenue | 6.7 |
Water Revenue | 6.3 |
Facilities Revenue | 0.5 |
General Revenue | 0.2 |
89.4% | |
General Obligation Bonds:
|
10.6% |
100.0% |
FIXED INCOME INDEX FUTURES CONTRACTS
Number of
Contracts Long |
Description
|
Expiration
Date |
Notional
Amount |
Market
Value |
Unrealized
(Depreciation) |
135 | |||||
TOTAL FUTURES CONTRACTS
|
|
|
|
||
CBT |
Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost | |
Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value | (6,095,601) |
Net unrealized appreciation |
Level 1 | - | unadjusted quoted prices in active markets for identical securities. |
Level 2 | - | other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). See Notes to Financial Statements - Note 1A. |
Level 3 | - | significant unobservable inputs (including the Adviser's own assumptions in determining fair value of investments). See Notes to Financial Statements - Note 1A. |
Level 1
|
Level 2
|
Level 3
|
Total
|
|
Municipal Bonds | $- | $- | ||
- | 996,983 | - | 996,983 | |
Total Investments in Securities
|
$-
|
|
$-
|
|
Other Financial Instruments
|
||||
Variable Rate MuniFund Term Preferred Shares
(a)
|
$- | $- | ||
Net unrealized depreciation on futures contracts | (88,950) | - | - | (88,950) |
Total Other Financial Instruments
|
|
|
$-
|
|
(a) | The Fund may hold liabilities in which the fair value approximates the carrying amount for financial statement purposes. |
|
ASSETS:
|
|
Investments in unaffiliated issuers, at value (cost |
|
Cash | 965,410 |
Futures collateral | 1,682,024 |
Due from broker for futures | 92,813 |
Receivables - | |
Interest | 3,167,811 |
Other assets | 3,236 |
Total assets
|
|
LIABILITIES:
|
|
Variable Rate MuniFund Term Preferred Shares* | |
Payables - | |
Distributions | 5,148 |
Directors' fees | 372 |
Variation margin for futures contracts | 92,813 |
Management fees | 22,628 |
Administrative expenses | 28,145 |
Accrued expenses | 180,952 |
Total liabilities
|
|
NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS:
|
|
Paid-in capital | |
Distributable earnings (loss) | (58,517,513) |
Net assets
|
|
NET ASSET VALUE PER COMMON SHARE:
|
|
No par value | |
Based on |
INVESTMENT INCOME:
|
||
Interest from unaffiliated issuers | ||
Total Investment Income |
|
|
EXPENSES:
|
||
Management fees | ||
Administrative expenses | 37,880 | |
Transfer agent fees | 9,302 | |
Stockholder communications expense | 47,525 | |
Custodian fees | 1,224 | |
Professional fees | 234,324 | |
Printing expense | 7,676 | |
Officers' and Directors' fees | 4,566 | |
Insurance expense | 2,675 | |
Interest expense | 1,477,992 | |
Miscellaneous | 66,179 | |
Total expenses | ||
Net investment income |
|
|
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
|
||
Net realized gain (loss) on: | ||
Investments in unaffiliated issuers | ||
Futures contracts | 740,020 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investments in unaffiliated issuers | ||
Futures contracts | (280,546) | |
Net realized and unrealized gain (loss) on investments |
|
|
Net increase in net assets resulting from operations |
|
|
Six Months
Ended (unaudited) |
Year
Ended |
|
FROM OPERATIONS:
|
||
Net investment income (loss) | ||
Net realized gain (loss) on investments | (9,300,679) | (18,508,575) |
Change in net unrealized appreciation (depreciation) on investments | 15,172,927 | 13,054,389 |
Net increase in net assets resulting from operations |
|
|
DISTRIBUTIONS TO COMMON STOCKHOLDERS:
|
||
( |
||
Total distributions to common stockholders | ||
Net increase (decrease) in net assets applicable to common stockholders
|
|
|
NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS:
|
||
Beginning of period | ||
End of period |
|
|
Six Months
Ended Common Shares (unaudited) |
Six Months
Ended Amount (unaudited) |
Year
Ended Common Shares |
Year
Ended Amount |
|
FUND SHARE TRANSACTIONS
|
||||
Common Shares sold | - | $- | - | $- |
Reinvestment of distributions | - | - | - | - |
Less Common Shares repurchased | - | - | - | - |
Net increase | - | $- | - | $- |
Cash Flows From Operating Activities
|
|
Net increase in net assets resulting from operations | |
Adjustments to reconcile net decrease in net assets resulting from operations to net cash and restricted cash from operating activities:
|
|
Purchases of investment securities | |
Proceeds from disposition and maturity of investment securities | 53,067,308 |
Net sales of short term investments | 2,019,462 |
Net accretion and amortization of discount/premium on investment securities | (620,555) |
Net realized loss on investments in unaffiliated issuers | 10,040,699 |
Change in unrealized appreciation on investments in unaffiliated issuers | (15,453,473) |
Increase in due from broker for futures | (92,813) |
Decrease in interest receivable | 246,229 |
Decrease in distributions paid in advance | 741,348 |
Increase in other assets | (3,136) |
Increase in variation margin for futures contracts | 126,563 |
Decrease in management fees payable | (3,928) |
Decrease in directors' fees payable | (1,135) |
Decrease in due to broker for futures | (33,750) |
Increase in administrative expenses payable | 1,225 |
Decrease in accrued expenses payable | (34,724) |
Net cash and restricted cash from operating activities | |
Cash Flows Used In Financing Activities:
|
|
Distributions to stockholders | (5,399,516) |
Net cash flows used in financing activities | |
NET INCREASE (DECREASE) IN CASH AND RESTRICTED CASH
|
|
Cash and Restricted Cash:
|
|
Beginning of period* | |
End of period* | |
Cash Flow Information:
|
|
Cash paid for interest |
* | The following table provides a reconciliation of cash, restricted cash and foreign currencies reported within the Statement of Assets and Liabilities that sum to the total of the same such amounts shown in the Statement of Cash Flows: |
Six Months
Ended |
Year Ended
|
|
Cash | ||
Restricted cash | 1,682,024 | 847,852 |
Total cash and restricted cash shown in the Statement of Cash Flows
|
|
|
|
Six Months
Ended (unaudited) |
Year
Ended |
Year
Ended |
Year
Ended |
Year
Ended |
Year
Ended |
|
Per Share Operating Performance
|
||||||
Net asset value, beginning of period | ||||||
Increase (decrease) from investment operations:(a) | ||||||
Net investment income (loss)(b) | ||||||
Net realized and unrealized gain (loss) on investments | 0.26 | (0.23) | (1.28) | (1.38) | 0.42 | 0.06 |
Net increase (decrease) from investment operations
|
|
|
|
|
|
|
Distributions to stockholders: | ||||||
Net investment income and previously undistributed net investment income | ||||||
Tax retuof capital | - | - | (0.07) | - | - | - |
Total distributions
|
|
|
|
|
|
|
Net increase (decrease) in net asset value
|
|
|
|
|
|
|
Net asset value, end of period | ||||||
Market value, end of period | ||||||
Total retuat net asset value(c)
|
5.01%(d)
|
2.49%(e)
|
(7.42)%
|
(7.54)%
|
8.60%
|
5.12%
|
Total retuat market value(c)
|
11.01%(d)
|
3.59%
|
(11.26)%
|
(13.03)%
|
22.05%
|
(1.30)%
|
Ratios to average net assets of stockholders: | ||||||
Total expenses plus interest expense(f)(g) | 2.44%(h) | 4.76% | 3.40% | 1.86% | 1.82% | 2.61% |
Net investment income | 3.99%(h) | 4.32% | 4.29% | 4.02% | 4.33% | 4.14% |
Portfolio turnover rate | 20%(d) | 16% | 63% | 11% | 12% | 11% |
Net assets of common stockholders, end of period (in thousands) | ||||||
Preferred shares outstanding (in thousands)(i)(j)(k)(l) | ||||||
Asset coverage per preferred share, end of period | ||||||
Average market value per preferred share(m) |
Six Months
Ended (unaudited) |
Year
Ended |
Year
Ended |
Year
Ended |
Year
Ended |
Year
Ended |
|
Liquidation value, including interest expense payable, per preferred share |
* | The amount of distributions made to stockholders during the period was in excess of the net investment income earned by the Fund during the period. The Fund has accumulated undistributed net investment income which is part of the Fund's NAV. A portion of this accumulated net investment income was distributed to stockholders during the period. A decrease in distributions may have a negative effect on the market value of the Fund's shares. |
(a) | The per common share data presented above is based upon the average common shares outstanding for the periods presented. |
(b) | Beginning |
(c) | Total investment retuis calculated assuming a purchase of common shares at the current net asset value or market value on the first day and a sale at the current net asset value or 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 Fund's dividend reinvestment plan. Total investment retudoes not reflect brokerage commissions. Past performance is not a guarantee of future results. |
(d) | Not annualized. |
(e) | For the period ended |
(f) | Includes interest expense of 1.34%, 3.47%, 2.09%, 0.56%, 0.64% and 1.50%, respectively. |
(g) | Prior to |
(h) | Annualized. |
(i) | The Fund redeemed 900 Variable Rate MuniFund Term Preferred Shares, with a liquidation preference of |
(j) | The Fund redeemed 200 Variable Rate MuniFund Term Preferred Shares, with a liquidation preference of |
(k) | The Fund redeemed 200 Variable Rate MuniFund Term Preferred Shares, with a liquidation preference of |
(l) | The Fund issued 200 Variable Rate MuniFund Term Preferred Shares, with a liquidation preference of |
(m) | Market value is redemption value without an active market. |
|
A.
|
Security Valuation
|
The net asset value of the Fund is computed once daily, on each day the |
|
Fixed income securities are valued by using prices supplied by independent pricing services, which consider such factors as market prices, market events, quotations from one or more brokers, |
|
Securities for which independent pricing services or broker-dealers are unable to supply prices or for which market prices and/or quotations are not readily available or are considered to be unreliable are valued by a fair valuation team comprised of certain personnel of the Adviser. The Adviser is designated as the valuation designee for the Fund pursuant to Rule 2a-5 under the 1940 Act. The Adviser's fair valuation team is responsible for monitoring developments that may impact fair valued securities. | |
Inputs used when applying fair value methods to value a security may include credit ratings, the financial condition of the company, current market conditions and comparable securities. The Adviser may use fair value methods if it is determined that a significant event has occurred after the close of the exchange or market on which the security trades and prior to the determination of the Fund's net asset value. Examples of a significant event might include political or economic news, corporate restructurings, natural disasters, terrorist activity or trading halts. Thus, the valuation of the Fund's securities may differ significantly from exchange prices, and such differences could be material. |
|
Futures contracts are generally valued at the closing settlement price established by the exchange on which they are traded. | |
B.
|
Investment Income and Transactions
|
Interest income, including interest on income-bearing cash accounts, is recorded on the accrual basis. Dividend and interest income are reported net of unrecoverable foreign taxes withheld at the applicable country rates and net of income accrued on defaulted securities. | |
Discounts and premiums on purchase prices of debt securities are accreted or amortized, respectively, daily, into interest income on an effective yield to maturity basis with a corresponding increase or decrease in the cost basis of the security. Premiums and discounts related to certain mortgage backed securities are amortized or accreted in proportion to the monthly paydowns. | |
Interest and dividend income payable by delivery of additional shares is reclassified as PIK (payment-in-kind) income upon receipt and is included in interest and dividend income, respectively. | |
Security transactions are recorded as of trade date. Gains and losses on sales of investments are calculated on the identified cost method for both financial reporting and federal income tax purposes. | |
C.
|
Federal Income Taxes
|
It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its net taxable income and net realized capital gains, if any, to its stockholders. Therefore, no provision for federal income taxes is required. As of |
|
The amount and character of income and capital gain distributions to stockholders are determined in accordance with federal income tax rules, which may differ from |
The tax character of current year distributions payable will be determined at the end of the current taxable year. The tax character of distributions paid during the year ended |
2024
|
|
Distributions paid from:
|
|
Tax-exempt income | |
Ordinary income | 67,364 |
Total
|
|
2024
|
|
Distributable earnings/(losses):
|
|
Undistributed ordinary income | |
Undistributed tax-exempt income | 214,763 |
Capital loss carryforward | (61,541,713) |
Other book/tax temporary differences | (741,351) |
Net unrealized depreciation | (2,530,797) |
Total
|
|
D.
|
Automatic Dividend Reinvestment Plan
|
All stockholders whose shares are registered in their own names 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 shares of the Fund in lieu of cash. Stockholders may elect not to participate in the Plan. Stockholders 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 |
|
If a stockholder's shares are held in the name of a brokerage firm, bank or other nominee, the stockholder can ask the firm or nominee to participate in the Plan on the stockholder's behalf. If the firm or |
|
nominee does not offer the Plan, dividends will be paid in cash to the stockholder of record. A firm or nominee may reinvest a stockholder's cash dividends in shares of the Fund on terms that differ from the terms of the Plan. | |
Whenever the Fund declares a dividend on shares payable in cash, participants in the Plan will receive the equivalent in shares acquired by the Plan Agent either (i) through receipt of additional unissued but authorized shares from the Fund or (ii) by purchase of outstanding shares on the |
E. | Risks |
The value of securities held by the Fund may go up or down, sometimes rapidly or unpredictably, due to general market conditions, such as real or perceived adverse economic, political or regulatory conditions, recessions, the spread of infectious illness or other public health issues, inflation, changes in interest rates, armed conflict such as between |
adversely affect the value and liquidity of the Fund's investments and negatively impact the Fund's performance. | |
Some sectors of the economy and individual issuers have experienced or may experience particularly large losses. Periods of extreme volatility in the financial markets, reduced liquidity of many instruments, increased government debt, inflation, and disruptions to supply chains, consumer demand and employee availability, may continue for some time. Following |
|
Governments and central banks, including the |
|
The |
|
At times, the Fund's investments may represent industries or industry sectors that are interrelated or have common risks, making the Fund more susceptible to any economic, political, or regulatory developments or other risks affecting those industries and sectors. | |
Under normal circumstances, the Fund will invest substantially all of its assets in municipal securities. The municipal bond market can be susceptible to unusual volatility, particularly for lower-rated and unrated securities. Liquidity can be reduced unpredictably in response to overall economic conditions or credit tightening. Municipal issuers may be adversely affected by rising health care costs, increasing unfunded |
|
pension liabilities, and by the phasing out of federal programs providing financial support. Unfavorable conditions and developments relating to projects financed with municipal securities can result in lower revenues to issuers of municipal securities, potentially resulting in defaults. Issuers often depend on revenues from these projects to make principal and interest payments. The value of municipal securities can also be adversely affected by changes in the financial condition of one or more individual municipal issuers or insurers of municipal issuers, regulatory and political developments, tax law changes or other legislative actions, and by uncertainties and public perceptions concerning these and other factors. Municipal securities may be more susceptible to down-grades or defaults during recessions or similar periods of economic stress. Financial difficulties of municipal issuers may continue or get worse, particularly in the event of economic or market turmoil or a recession. To the extent the Fund invests significantly in a single state (including |
|
The Fund invests in below investment grade (high yield) municipal securities. Debt securities rated below investment grade are commonly referred to as "junk bonds" and are considered speculative with respect to the issuer's capacity to pay interest and repay principal. These securities involve greater risk of loss, are subject to greater price volatility, and may be less liquid and more difficult to value, especially during periods of economic uncertainty or change, than higher rated debt securities. | |
The market prices of the Fund's fixed income securities may fluctuate significantly when interest rates change. The value of your investment will generally go down when interest rates rise. A rise in rates tends to have a greater impact on the prices of longer term or duration securities. For example, if interest rates increase by 1%, the value of a Fund's portfolio with a portfolio duration of ten years would be expected to decrease by 10%, all other things being equal. A general rise in interest rates could adversely affect the price and liquidity of fixed income securities. The maturity of a security may be significantly longer than its effective duration. A security's maturity and other features may be more relevant than its effective duration in determining the security's sensitivity to other factors affecting the issuer or markets generally, such as changes in credit quality or in the yield premium that the |
market may establish for certain types of securities (sometimes called "credit spread"). In general, the longer its maturity the more a security may be susceptible to these factors. When the credit spread for a fixed income security goes up, or "widens", the value of the security will generally go down. | |
If an issuer or guarantor of a security held by the Fund or a counterparty to a financial contract with the Fund defaults on its obligation to pay principal and/or interest, has its credit rating downgraded or is perceived to be less creditworthy, or the credit quality or value of any underlying assets declines, the value of your investment will typically decline. Changes in actual or perceived creditworthiness may occur quickly. The Fund could be delayed or hindered in its enforcement of rights against an issuer, guarantor or counterparty. | |
With the increased use of technologies such as the Internet to conduct business, the Fund is susceptible to operational, information security and related risks. While the Fund's Adviser has established business continuity plans in the event of, and risk management systems to prevent, limit or mitigate, such cyber-attacks, there are inherent limitations in such plans and systems, including the possibility that certain risks have not been identified. Furthermore, the Fund cannot control the cybersecurity plans and systems put in place by service providers to the Fund such as the Fund's custodian and accounting agent, and the Fund's transfer agent. In addition, many beneficial owners of Fund shares hold them through accounts at broker-dealers, retirement platforms and other financial market participants over which neither the Fund nor the Adviser exercises control. Each of these may in turely on service providers to them, which are also subject to the risk of cyber-attacks. Cybersecurity failures or breaches at the Adviser or the Fund's service providers or intermediaries have the ability to cause disruptions and impact business operations, potentially resulting in financial losses, interference with the Fund's ability to calculate its net asset value, impediments to trading, the inability of Fund stockholders to effect share purchases or sales or receive distributions, loss of or unauthorized access to private stockholder information and violations of applicable privacy and other laws, regulatory fines, penalties, reputational damage, or additional compliance costs. Such costs and losses may not be covered under any insurance. In addition, maintaining vigilance against cyber-attacks may involve substantial costs over time, and system enhancements may themselves be subject to cyber-attacks. |
|
F.
|
Statement of Cash Flows
|
Information on financial transactions which have been settled through the receipt or disbursement of cash or restricted cash is presented in the Statement of Cash Flows. Cash as presented in the Fund's Statement of Assets and Liabilities includes cash on hand at the Fund's custodian bank and does not include any short-term investments. For the six months ended |
|
G.
|
Futures Contracts
|
The Fund may enter into futures transactions in order to attempt to hedge against changes in interest rates, securities prices and currency exchange rates or to seek to increase total return. Futures contracts are types of derivatives. | |
All futures contracts entered into by the Fund are traded on a futures exchange. Upon entering into a futures contract, the Fund is required to deposit with a broker an amount of cash or securities equal to the minimum "initial margin" requirements of the associated futures exchange. The amount of cash deposited with the broker as collateral at |
|
Subsequent payments for futures contracts ("variation margin") are paid or received by the Fund, depending on the daily fluctuation in the value of the contracts, and are recorded by the Fund as unrealized appreciation or depreciation. Cash received from or paid to the broker related to previous margin movement is held in a segregated account at the broker and is recorded as either "Due from broker for futures" or "Due to broker for futures" on the Statement of Assets and Liabilities. When the contract is closed, the Fund realizes a gain or loss equal to the difference between the opening and closing value of the contract as well as any fluctuation in foreign currency exchange rates where applicable. Futures contracts are subject to market risk, interest rate risk and currency exchange rate risk. Changes in value of the contracts may not directly correlate to the changes in value of the underlying securities. With futures, there is reduced counterparty credit risk to the Fund since futures are exchange-traded and the exchange's clearinghouse, as counterparty to all exchange-traded futures, guarantees the futures against default. |
The average notional value of long position futures contracts during the six months ended |
|
Statement of Assets
and Liabilities |
Interest
Rate Risk |
Credit
Risk |
Foreign
Exchange Rate Risk |
Equity
Risk |
Commodity
Risk |
Liabilities
|
|||||
Net unrealized depreciation on futures contracts* | $- | $- | $- | $- | |
Total Value
|
|
$-
|
$-
|
$-
|
$-
|
* | Includes cumulative unrealized appreciation (depreciation) of futures contracts as reported in the Schedule of Investments. Only net variation margin is reported within the assets and/or liabilities on the Statement of Assets and Liabilities. |
Statement of Operations
|
Interest
Rate Risk |
Credit
Risk |
Foreign
Exchange Rate Risk |
Equity
Risk |
Commodity
Risk |
Net Realized Gain (Loss) on
|
|||||
Futures contracts | $- | $- | $- | $- | |
Total Value
|
|
$-
|
$-
|
$-
|
$-
|
Change in Net Unrealized Appreciation (Depreciation) on
|
|||||
Futures contracts | $- | $- | $- | $- | |
Total Value
|
|
$-
|
$-
|
$-
|
$-
|
|
|
|
Shares outstanding at beginning of period | 23,914,439 | 23,914,439 |
Shares outstanding at end of period
|
23,914,439
|
23,914,439
|
|
prior reporting periods were as follows:
Period Ended
|
Year Ended
|
|||
Shares
|
Amount
|
Shares
|
Amount
|
|
VMTP Shares issued | - | $- | - | $- |
VMTP Shares redeemed | - | - | (900) | (90,000,000) |
Net decrease | - | $- | (900) |
|
Nominee
|
Votes For
|
Votes Against
|
Votes Abstained
|
500.00 | 0.00 | 0.00 | |
12,568,742.00 | 4,612,000.00 | 576,727.00 | |
12,552,234.00 | 4,622,258.00 | 582,979.00 |
|
|
|
|
Chief Executive Officer
and Chief Financial and
Accounting Officer
Chief Legal Officer
change of address, lost stock certificates,
stock transferOperations Center
P.O. Box 922
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 19(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 19(a)(1), 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(see attachment);
(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-CSRto 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 19(2)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a) (1) Disclose that the registrant's Board of Directors 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 Directors 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 Directors, 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)).
Mr.
(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.
N/A
(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.
N/A
(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.
N/A
(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.
N/A
(e) (1) Disclose the audit committee's pre-approvalpolicies and procedures described in paragraph (c)(7) of Rule 2-01of Regulation S-X.
PIONEER FUNDS
APPROVAL OF AUDIT, AUDIT-RELATED, TAX AND OTHER SERVICES
PROVIDED BY THE INDEPENDENT AUDITOR
SECTION I - POLICY PURPOSE AND APPLICABILITY
The Pioneer Funds recognize the importance of maintaining the independence of their outside auditors. Maintaining independence is a shared responsibility involving
The Funds recognize that a Fund's independent auditors: 1) possess knowledge of the Funds, 2) are able to incorporate certain services into the scope of the audit, thereby avoiding redundant work, cost and disruption of Fund personnel and processes, and 3) have expertise that has value to the Funds. As a result, there are situations where it is desirable to use the Fund'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 Funds 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 Fund shall also constitute approval for any other Fund whose pre-approvalis required pursuant to Rule 210.2-01(c)(7)(ii).
In addition to the procedures set forth in this policy, any non-auditservices that may be provided consistently with Rule 210.2-01may be approved by the Audit Committee itself and any pre-approvalthat may be waived in accordance with Rule 210.2-01(c)(7)(i)(C)is hereby waived.
Selection of a Fund'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 CATEGORY |
SERVICE CATEGORY DESCRIPTION |
SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES |
||
I. AUDIT SERVICES | Services that are directly related to performing the independent audit of the Funds |
• Accounting research assistance • SEC consultation, registration statements, and reporting • Tax accrual related matters • Implementation of new accounting standards • Compliance letters (e.g. rating agency letters) • Regulatory reviews and assistance regarding financial matters • Semi-annual reviews (if requested) • Comfort letters for closed end offerings |
||
II. AUDIT-RELATED SERVICES | Services which are not prohibited under Rule 210.2-01(C)(4)(the "Rule") and are related extensions of the audit services support the 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, |
• AICPA attest and agreed-upon procedures • Technology control assessments • Financial reporting control assessments • Enterprise security architecture assessment |
AUDIT COMMITTEE APPROVAL POLICY |
AUDIT COMMITTEE REPORTING POLICY |
|
• "One-time"pre-approvalfor the audit period for all pre-approvedspecific service subcategories. Approval of the independent auditors as auditors for a Fund shall constitute pre approval for these services. • "One-time"pre-approvalfor the fund fiscal year within a specified dollar limit for all pre-approvedspecific service subcategories |
• A summary of all such services and related fees reported at each regularly scheduled Audit Committee meeting. • A summary of all such services and related fees (including comparison to specified dollar limits) reported quarterly. |
• Specific approval is needed to exceed the pre-approveddollar limit for these services (see general Audit Committee approval policy below for details on obtaining specific approvals) |
|
• Specific approval is needed to use the Fund'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 DESCRIPTION |
SPECIFIC PRE-APPROVEDSERVICE |
||
III. TAX SERVICES | Services which are not prohibited by the Rule, if an officer of the Fund determines that using the Fund's auditor to provide these services creates significant synergy in the form of efficiency, minimized disruption, or the ability to maintain a desired level of confidentiality. |
• Tax planning and support • Tax controversy assistance • Tax compliance, tax returns, excise tax returns and support • Tax opinions |
AUDIT COMMITTEE APPROVAL POLICY |
AUDIT COMMITTEE REPORTING POLICY |
|
• "One-time"pre-approvalfor the fund fiscal year within a specified dollar limit |
• A summary of all such services and related fees (including comparison to specified dollar limits) reported quarterly. |
|
• Specific approval is needed to exceed the pre-approveddollar limits for these services (see general Audit Committee approval policy below for details on obtaining specific approvals) • Specific approval is needed to use the Fund'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 DESCRIPTION |
SPECIFIC PRE-APPROVEDSERVICE |
||
IV. OTHER SERVICES A. SYNERGISTIC, UNIQUE QUALIFICATIONS |
Services which are not prohibited by the Rule, if an officer of the Fund determines that using the Fund'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 Fund's auditors posses unique or superior qualifications to provide these services, resulting in superior value and results for the Fund. |
• Business Risk Management support • Other control and regulatory compliance projects |
AUDIT COMMITTEE APPROVAL POLICY |
AUDIT COMMITTEE REPORTING POLICY |
|
• "One-time"pre-approvalfor the fund fiscal year within a specified dollar limit |
• A summary of all such services and related fees (including comparison to specified dollar limits) reported quarterly. |
|
• Specific approval is needed to exceed the pre-approveddollar limits for these services (see general Audit Committee approval policy below for details on obtaining specific approvals) |
||
• Specific approval is needed to use the Fund's auditors for "Synergistic" or "Unique Qualifications" Other Services not denoted as pre-approvedto the left, or to add a specific service subcategory as "pre-approved" |
SECTION III - POLICY DETAIL, CONTINUED
SERVICE CATEGORY |
SERVICE CATEGORY DESCRIPTION |
SPECIFIC PROHIBITED SERVICE SUBCATEGORIES |
||
PROHIBITED SERVICES | Services which result in the auditors losing independence status under the Rule. | 1. Bookkeeping or other services related to the accounting records or financial statements of the audit client* | ||
2. Financial information systems design and implementation* | ||||
3. Appraisal or valuation services, fairness* opinions, or contribution-in-kindreports | ||||
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 |
AUDIT COMMITTEE APPROVAL POLICY |
AUDIT COMMITTEE REPORTING POLICY |
|
• These services are not to be performed with the exception of the(*) services that may be permitted if they would not be subject to audit procedures at the audit client (as defined in rule 2-01(f)(4))level the firm providing the service. |
• A summary of all services and related fees reported at each regularly scheduled Audit Committee meeting will serve as continual confirmation that has not provided any restricted services. |
GENERAL AUDIT COMMITTEE APPROVAL POLICY:
• |
For all projects, the officers of the Funds and the Fund's auditors will each make an assessment to determine that any proposed projects will not impair independence. |
• |
Potential services will be classified into the four non-restrictedservice categories and the "Approval of Audit, Audit-Related, Tax and Other Services" Policy above will be applied. Any services outside the specific pre-approvedservice subcategories set forth above must be specifically approved by the Audit Committee. |
• |
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 2-01of Regulation S-X.
N/A
(f) If greater than 50 percent, disclose the percentage of hours expended on the principal accountants 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-auditfees billed by the registrants accountant for services rendered to the registrant, and rendered to the registrants investment adviser (not including any sub-adviserwhose 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.
N/A
(h) Disclose whether the registrants audit committee of the Board of Directors has considered whether the provision of non-auditservices that were rendered to the registrants 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-approvedpursuant to paragraph (c)(7)(ii) of Rule 2-01of Regulation S-Xis compatible with maintaining the principal accountant's independence.
The Fund's audit committee of the Board of Directors has considered whether the provision of non-auditservices that were rendered to the Affiliates (as defined) that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01of Regulation S-Xis compatible with maintaining the principal accountant's independence.
(i) A registrant identified by the Commission pursuant to Section 104(i)(2)(A) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7214(i)(2)(A)), as having retained, for the preparation of the audit report on its financial statements included in the Form NCSR, a registered public accounting firm that has a branch or office that is located in a foreign jurisdiction and that the
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(j) A registrant that is a foreign issuer, as defined in 17 CFR 240.3b-4,identified by the Commission pursuant to Section 104(i)(2)(A) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7214(i)(2)(A)), as having retained, for the preparation of the audit report on its financial statements included in the Form N-CSR,a registered public accounting firm that has a branch or office that is located in a foreign jurisdiction and that the
(1) That, for the immediately preceding annual financial statement period, a registered public accounting firm that the PCAOB was unable to inspect or investigate completely, because of a position taken by an authority in the foreign jurisdiction, issued an audit report for the registrant;
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(2) The percentage of shares of the registrant owned by governmental entities in the foreign jurisdiction in which the registrant is incorporated or otherwise organized;
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(3) Whether governmental entities in the applicable foreign jurisdiction with respect to that registered public accounting firm have a controlling financial interest with respect to the registrant;
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(4) The name of each official of the
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(5) Whether the articles of incorporation of the registrant (or equivalent organizing document) contains any charter of the
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ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
(a) If the registrant is a listed issuer as defined in Rule 10A-3under 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 registrant's audit committee as specified in Section 3(a)(58)(B) of the Exchange Act (15 U.S.C. 78c(a)(58)(B)), so state.
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(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.
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ITEM 6. SCHEDULE OF INVESTMENTS.
File Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period as set forth in 210.1212 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. FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS FOR CLOSED-ENDMANAGEMENT INVESTMENT COMPANIES
Included in Item 1
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS FOR CLOSED-ENDMANAGEMENT INVESTMENT COMPANIES.
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Item 10. REMUNERATION PAID TO DIRECTORS, OFFICERS, AND OTHERS OF CLOSED-ENDMANAGEMENT INVESTMENT COMPANIES. (Unaudited)
Each Board Member also serves as a Board Member of other Funds in the Pioneer Family of Funds complex. Annual retainer fees and attendance fees are allocated to each Fund based on net assets. Directors' fees paid by the Fund are within Item 1. Statement of Operations as Directors' fees and expenses.
Item 11. STATEMENT REGARDING BASIS FOR APPROVAL OF INVESMENT ADVISORY CONTRACT. (Unaudited)
Approval of Renewal of Investment Management Agreement
The contract review process began in
In
At a meeting held on
Nature, Extent and Quality of Services. The Directors considered the nature, extent and quality of the services that had been provided by Amundi US to the Fund, taking into account the investment objective and strategy of the Fund. The Directors also reviewed Amundi US's investment approach for the Fund and its research process. The Directors considered the resources of Amundi US and the personnel of Amundi US who provide investment management services to the Fund. They also reviewed the amount of non-Fundassets managed by the portfolio managers of the Fund. They considered the non-investmentresources and personnel of Amundi US that are involved in Amundi US's services to the Fund, including Amundi US's compliance, risk management, and legal resources and personnel. The Directors considered the compliance services being provided to the Fund by Amundi US and how Amundi US has addressed any compliance issues during the past year. The Directors noted the substantial attention and high priority given by Amundi US's senior management to the
The Directors considered that Amundi US supervises and monitors the performance of the Fund's service providers and provides the Fund with personnel (including Fund officers) and other resources that are necessary for the Fund's business management and operations. The Directors also considered that, as administrator, Amundi US is responsible for the administration of the Fund's business and other affairs. The Directors considered that the Fund reimburses Amundi US its pro rata share of Amundi US's costs of providing administration services to the Pioneer Funds.
Based on these considerations, the Directors concluded that the nature, extent and quality of services that had been provided by Amundi US to the Fund were satisfactory and consistent with the terms of the investment management agreement.
Performance of the Fund. In considering the Fund's performance, the Directors regularly review and discuss throughout the year data prepared by Amundi US and information comparing the Fund's performance with the performance of its peer group of funds, as classified by
Management Fee and Expenses. The Directors considered information showing the fees and expenses of the Fund in comparison to the management fees and expense ratios of a peer group of funds selected on the basis of criteria determined by the Independent Directors for this purpose using data provided by
The Directors considered that the Fund's management fee (based on managed assets) for the most recent fiscal year was in the second quintile relative to the management fees paid by other funds in its Strategic Insight peer group for the comparable period. The Directors considered that the expense ratio (based on managed assets) of the Fund's common shares for the most recent fiscal year was in the first quintile (including investment-related expenses) and in the fourth quintile (excluding investment-related expenses), in each case relative to its Strategic Insight peer group for the comparable period. The Directors noted Amundi US's explanation of the reasons that the expense ratio of the Fund's common shares was in the fourth quintile (excluding investment-related expenses) relative to its Strategic Insight peer group.
The Directors reviewed management fees charged by Amundi US to institutional and other clients, including publicly offered European funds sponsored by Amundi US's affiliates, unaffiliated
and considered the differences in management fees and profit margins for fund and non-fundservices. In evaluating the fees associated with Amundi US's client accounts, the Directors took into account the respective demands, resources and complexity associated with the Fund and other client accounts. The Directors noted that, in some instances, the fee rates for those clients were lower than the management fee for the Fund and considered that, under the investment management and administration agreements with the Fund, Amundi US performs additional services for the Fund that it does not provide to those other clients or services that are broader in scope, including oversight of the Fund's other service providers and activities related to compliance and the extensive regulatory and tax regimes to which the Fund is subject. The Directors also considered the entrepreneurial risks associated with Amundi US's management of the Fund.
The Directors concluded that the management fee payable by the Fund to Amundi US was reasonable in relation to the nature and quality of the services provided by Amundi US.
Profitability. The Directors considered information provided by Amundi US regarding the profitability of Amundi US with respect to the advisory services provided by Amundi US to the Fund, including the methodology used by Amundi US in allocating certain of its costs to the management of the Fund. The Directors also considered Amundi US's profit margin in connection with the overall operation of the Fund. They further reviewed the financial results, including the profit margins, realized by Amundi US from non-fundbusinesses. The Directors considered Amundi US's profit margins in comparison to the limited industry data available and noted that the profitability of any adviser was affected by numerous factors, including its organizational structure and method for allocating expenses. The Directors concluded that Amundi US's profitability with respect to the management of the Fund was not unreasonable.
Economies of Scale. The Directors considered the extent to which Amundi US may realize economies of scale or other efficiencies in managing and supporting the Fund. Since the Fund is a closed-endfund that has not raised additional capital, the Directors concluded that economies of scale were not a relevant consideration in the renewal of the investment advisory agreement.
Other Benefits. The Directors considered the other benefits that Amundi US enjoys from its relationship with the Fund. The Directors considered the character and amount of fees paid or to be paid by the Fund, other than under the investment management agreement, for services provided by Amundi US and its affiliates. The Directors further considered the revenues and profitability of Amundi US's businesses other than the Fund business. To the extent applicable, the Directors also considered the benefits to the Fund and to Amundi US and its affiliates from the use of "soft" commission dollars generated by the Fund to pay for research and brokerage services.
The Directors considered that Amundi US is the principal
Conclusion. After consideration of the factors described above as well as other factors, the Directors, including the Independent Directors, concluded that the investment management agreement for the Fund, including the fees payable thereunder, was fair and reasonable and voted to approve the proposed renewal of the investment management agreement.
ITEM 12. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-ENDMANAGEMENT INVESTMENT COMPANIES. (Unaudited)
A closed-endmanagement investment company that is filing an annual report on this Form N-CSRmust, unless it invests exclusively in non-votingsecurities, 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.
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ITEM 13. PORTFOLIO MANAGERS OF CLOSED-ENDMANAGEMENT INVESTMENT COMPANIES.
(a) If the registrant is a closed-endmanagement investment company that is filing an annual report on this Form N-CSR,provide the following information:
(1) State the name, title, and length of service of the person or persons employed by or associated with the registrant or an investment adviser of the registrant who are primarily responsible for the day-to-daymanagement of the registrant's portfolio ("Portfolio Manager"). Also state each Portfolio Manager's business experience during the past 5 years.
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.
ITEM 14. PURCHASES OF EQUITY SECURITIES BY CLOSED-ENDMANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
(a) If the registrant is a closed-endmanagement 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 registrant's equity securities that is registered by the registrant pursuant to Section 12 of the Exchange Act (15 U.S.C. 781).
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ITEM 15. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Describe any material changes to the procedures by which shareholders may recommend nominees to the registrant's Board of Directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-R(17 CFR 229.407)(as required by Item 22(b)(15)) 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 registrant's Board of Directors since the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-Rof Schedule 14(A) in its definitive proxy statement, or this item.
ITEM 16. CONTROLS AND PROCEDURES.
(a) Disclose the conclusions of the registrant's principal executive and principal financials officers, or persons performing similar functions, regarding the effectiveness of the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c)under the Act (17 CFR 270.30a-3(c)))as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule 30a-3(b)under the Act (17 CFR 270.30(a)-3(b)and Rules 13a-15(b)or 15d-15(b)under the Exchange Act (17 CFR 240.13a-15(b)or 240.15d-15(b)).
The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures are effective based on the evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.
(b) Disclose any change in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d)under the Act (17CFR 270.30a-3(d))that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
There were no significant changes in the registrant's internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting.
Item 17. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-ENDMANAGEMENT INVESTMENT COMPANIES.
(a) If the registrant is a closed-endmanagement investment company, provide the following dollar amounts of income and compensation related to the securities lending activities of the registrant during its most recent fiscal year:
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(1) Gross income from securities lending activities;
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(2) All fees and/or compensation for each of the following securities lending activities and related services: any share of revenue generated by the securities lending program paid to the securities lending agent(s) (revenue split); fees paid for cash collateral management services (including fees deducted from a pooled cash collateral reinvestment vehicle) that are not included in the revenue split; administrative fees that are not included in the revenue split; fees for indemnification that are not included in the revenue split; rebates paid to borrowers; and any other fees relating to the securities lending program that are not included in the revenue split, including a description of those other fees;
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(3) The aggregate fees/compensation disclosed pursuant to paragraph (2); and
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(4) Net income from securities lending activities (i.e., the dollar amount in paragraph (1) minus the dollar amount in paragraph (3)).
If a fee for a service is included in the revenue split, state that the fee is included in the revenue split.
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(b) If the registrant is a closed-endmanagement investment company, describe the services provided to the registrant by the securities lending agent in the registrants most recent fiscal year.
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Item 18. RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION.
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ITEM 19. EXHIBITS.
(a) File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated.
(2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule30a-2(a)under the Act (17 CFR270.30a-2(a)), exactly as set forth below:
Filed herewith.
(b) Certifications pursuant to Rule30a-2(b)under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(3) Not applicable.
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)
By (Signature and Title)* /s/
Date
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/
Date
By (Signature and Title)* /s/
Date
* |
Print the name and title of each signing officer under his or her signature. |
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