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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 811-21409
Pioneer Municipal High Income Advantage 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: March 31
Date of reporting period: April 1, 2006 through March 31, 2007
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
-----------------------
MUNICIPAL
HIGH INCOME
ADVANTAGE
TRUST
Annual
Report
3/31/07
[LOGO] PIONEER
Investments(R)
Table of Contents
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Letter to Shareowners 2
Portfolio Management Discussion 4
Portfolio Summary 8
Prices and Distributions 9
Performance Update 10
Schedule of Investments 11
Financial Statements 22
Financial Highlights 25
Notes to Financial Statements 27
Report of Independent Registered Public Accounting Firm 37
Results of Shareowner Meeting 38
Factors Considered by the Independent Trustees in Approving
the Management Contract 39
Trustees, Officers and Service Providers 44
President's
Dear Shareowner,
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Staying diversified and keeping your portfolio invested in the markets are two
general investment principles that have served investors well over time. These
were particularly useful guides during the past year, as U.S. and global stock
and bond markets grew strongly during this period.
The markets were supported by relatively low short-term interest rates and
generally strong economies around the globe. The U.S. stock market, as measured
by the Standard & Poor's 500 Index, gained approximately 10% over the 12 months
ending March 31, 2007. European and emerging markets equities performed even
better, with indexes in those regions rising more than 20% over the same period.
The U.S. bond market, despite growing concerns about the health of the U.S.
mortgage industry, gained roughly 7% over the past 12 months, as measured by the
Lehman Aggregate Bond Index. The high yield market, as measured by the Merrill
Lynch High Yield Bond Master II Index, returned nearly 12%.
We believe that the climate for investors generally will continue to be
positive. While still strong, the U.S. economy has slowed. This was due in part
to the lagging effects of rising energy and commodity prices, rising short-term
interest rates from historically low levels, and the effect of U.S. factories
approaching full utilization.
We have enjoyed a cyclical recovery with strong economic growth, and the U.S.
economy now appears to be slowing to a rate that may be more sustainable. The
Federal Reserve Board has indicated a reduced likelihood of future rate hikes,
and continues to highlight its commitment to keeping inflationary pressures
contained. This is in keeping with "best practices" among the world's central
banks: low and stable inflation is believed to be the best backdrop for stable
economic growth and low average unemployment.
In Europe, healthy labor markets are supporting growing consumption and rising
GDP growth. Inflationary pressures appear to be largely under control, helped by
productivity gains and a positive operating environment for European companies
that are finding strong export markets for their goods and services around the
globe. Japanese economic growth continues to make progress, and the country has
2
Letter
become a more attractive market compared to recent years. China continues its
rise as a world economic power, and its stock market has experienced the wide
market swings that often accompany rapid growth.
While the outlook generally appears favorable for investors, sudden swings in
the markets should be expected. Just as staying diversified and staying invested
are important investment principles, it is also important to pay attention to
asset allocation. As always, we encourage shareowners to work closely with their
financial advisor to find the appropriate mix of investments in stocks, bonds
and money market assets so that it is aligned to your particular risk tolerance
and investment objective.
Respectfully,
/s/ Daniel K. Kingsbury
Daniel K. Kingsbury, President and CEO
Pioneer Investment Management USA 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.
3
Pioneer Municipal High Income Advantage Trust
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PORTFOLIO MANAGEMENT DISCUSSION 3/31/07
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Throughout the Trust's fiscal year, investors in Pioneer Municipal High Income
Advantage Trust benefited from a well-diversified portfolio of securities that
provided a relatively high level of tax-free income. In the following interview,
David Eurkus, who is responsible for daily management of the Trust, discusses
some of the factors that had an impact on the municipal bond market and the
Trust.
Q: How did the Trust perform over the past 12 months?
A: For the 12-month period ended March 31, 2007, Pioneer Municipal High Income
Advantage Trust produced a total return of 11.96% at net asset value and
10.21% at market price. As of March 31, 2007, the Trust was selling at a
discount of market price to net asset value of 1.9%. The Lehman Brothers
Municipal Bond Index returned 5.43%, while the Lehman Brothers
Non-Investment Grade Municipal Bond Index returned 9.84% for the same
period. At the end of the 12 months, the Trust held 144 issues in 35
states, territories and the District of Columbia. On March 31, 2007, the
Trust's 30-day SEC yield was 7.52%. When reviewing the Trust's relative
performance, it is important to note that the Lehman Brothers Municipal
Bond Index tracks the performance only of investment-grade bonds and does
not include below investment-grade bonds, which are a significant part of
the portfolio. At the end of the 12 months, about 45% of the Trust's total
investments were in investment-grade bonds with the remaining in below
investment-grade bonds.
Call 1-800-225-6292 or visit www.pioneerinvestments.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 costs.
Q: What was the investment environment like during the year?
A: The investment backdrop changed substantially during the fiscal year. At
the beginning of the period, interest rates were on an upward trajectory in
the face of relatively strong economic growth. As a result, the Federal
Reserve continued to boost the Federal funds rate, the rate banks charge
for overnight loans. In the second half of the period, economic growth
moderated; and
4
Pioneer Municipal High Income Advantage Trust
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for several months the central bank left the Federal funds rate unchanged
at 5.25%, and market rates declined. Throughout the 12 months, investors
gravitated toward the riskiest investments, boosting the prices of
lower-quality, higher-yielding bonds. For the entire fiscal period, these
lower-quality assets led the fixed-income market.
Q: What strategies did you use in managing the Trust?
A: In keeping with our buy-and-hold strategy, we made relatively few changes
to the Trust, maintaining a mix of 31.3% of total investments in
investment-grade bonds, 68.1% of total investments in below
investment-grade bonds, and 0.6% of total investments in cash equivalents.
At the end of the fiscal period, the Trust's average quality was BBB-. We
kept the Trust invested in sectors that comprise the economic fabric of the
United States, including transportation, education, healthcare, and public
power, among others. In addition, we had a position in tobacco bonds, which
are backed by tobacco companies' payments to states. We also created a
position in bonds issued by correctional institutions that have been
privatized by the federal government and are now being built and managed by
private corporations.
On March 31, 2007, 29% of the Trust was leveraged, which means that in the
past we borrowed funds at relatively low rates and invested those funds in
high-yielding bonds. This leveraging strategy has aided return for several
years. Should rates decline, the cost of borrowing would also go down,
providing the Trust with a modest amount of additional income. A rise in
short-term interest rates in the future would add to the Trust's borrowing
costs, and the ability to sustain present dividend levels could be
affected.
Q: What contributed to performance?
A: Nearly all of the portfolio's positions contributed to results, but the
biggest gains came from transportation and education bonds. In addition,
the Trust's higher-yielding, below investment-grade bonds outperformed the
investment-grade bonds in the portfolio.
5
Pioneer Municipal High Income Advantage Trust
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PORTFOLIO MANAGEMENT DISCUSSION 3/31/07 (continued)
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Q: What detracted from performance?
A: Our holdings in the housing sector, which accounted for 2.1% of total
investments, underperformed because of weakness in the real estate industry
in general and concerns about the rise in sub-prime mortgage defaults in
particular. Because of the relatively strong economy, many issuers have a
surplus of cash which they are using to pay down their bond debt earlier
than expected. As some of our bonds have been called, or redeemed, before
their maturity dates, we have invested the proceeds in new securities that
have lower yields than the redeemed bonds. Having bonds called sooner than
expected is a normal part of the fixed-income process, and we continue to
find attractive investment opportunities.
Q: What is your outlook over the next six months?
A: The environment continues to be attractive for municipal bonds, as economic
growth moderates and interest rates and inflation remain at relatively low
levels. While new bond issuance has declined, demand for high-yield
securities remains robust as new types of investors, such as hedge funds
and property and casualty insurers, seek the tax-advantaged yields that
municipal bonds can provide. This supply/demand dynamic is positive for the
Trust because it has the potential of increasing the value of the bonds in
the portfolio. As we look ahead, we plan to maintain our investment
approach of keeping the Trust fully invested in sectors that are vital to
the U.S. economy.
Investments in high-yield or lower-rated securities are subject to
greater-than-average risk. The Trust may invest in securities of issuers that
are in default or that are in bankruptcy.
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. 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
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Pioneer Municipal High Income Advantage Trust
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financial failure of underlying securities and their inability to meet their
debt obligations.
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.
Risks of investing in the Trust are discussed in greater detail in the Trust's
registration statement on Form N-2 relating to its common shares.
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.
7
Pioneer Municipal High Income Advantage Trust
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PORTFOLIO SUMMARY 3/31/07
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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]
Health Revenue 25.1%
Insured 13.1%
Development Revenue 11.6%
Airport Revenue 11.4%
Tobacco Revenue 9.6%
Transportation Revenue 6.1%
Facilities Revenue 6.0%
Pollution Control Revenue 5.7%
General Obligation 4.6%
Other Revenue 2.1%
Housing Revenue 1.8%
Education Revenue 1.5%
Water Revenue 1.1%
Power Revenue 0.3%
Portfolio Maturity
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(As a percentage of long-term holdings)
[The following data was represented as a pie chart in the printed material]
0-1 years 11.1%
1-3 years 13.2%
3-6 years 41.2%
6-8 years 15.6%
8-10 years 3.6%
10+ years 15.3%
Quality Distribution
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(As a percentage of total investment portfolio; based on S&P ratings)
[The following data was represented as a pie chart in the printed material]
AAA 10.2%
AA 0.4%
A 2.7%
BBB 18.0%
BB 8.9%
B 13.9%
CCC 1.2%
Not Rated 44.1%
Cash Equivalents 0.6%
8
Pioneer Municipal High Income Advantage Trust
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PRICES AND DISTRIBUTIONS 3/31/07
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Share Prices and Distributions
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Market Value
per Common Share 3/31/07 3/31/06
$15.61 $14.99
Net Asset Value
per Common Share 3/31/07 3/31/06
$15.91 $15.04
Net
Distributions per Investment Short-Term Long-Term
Common Share Income Capital Gains Capital Gains
(4/1/06 - 3/31/07) $0.86 $ - $ -
10 Largest Holdings
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(As a percentage of long-term holdings)*
1. New Jersey Economic Development Authority Revenue,
6.25%, 9/15/29 2.75%
2. Non-Profit Preferred Funding Trust I, Series E, 8.0%,
9/15/37 (144A) 2.66
3. Charlotte North Carolina Special Facilities Revenue,
5.6%, 7/1/27 2.34
4. University of California, RIB, 6.275%, 5/15/38 (144A) 2.31
5. Houston Texas Airport System Revenue, 6.75%, 7/1/29 2.19
6. Miami-Dade County Aviation Revenue, 5.0%, 10/1/37 2.14
7. Indiana State Development Finance Authority Revenue,
5.75%, 10/1/11 2.13
8. Tobacco Settlement Financing Corp., 5.875%, 5/15/39 2.06
9. Brazos River Authority Pollution Control Revenue,
6.75%, 10/1/38 1.94
10. Valley Health System Hospital Revenue, 6.875%, 5/15/23 1.91
* This list excludes temporary cash and derivative investments. The portfolio
is actively managed, and current holdings may be different.
9
Pioneer Municipal High Income Advantage Trust
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PERFORMANCE UPDATE 3/31/07
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Investment Returns
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The mountain chart on the right shows the change in market value, including
reinvestment of dividends and distributions, of a $10,000 investment made in
common shares of Pioneer Municipal High Income Advantage Trust, compared to that
of the Lehman Brothers Municipal Bond Index and Lehman Brothers Non-Investment
Grade Municipal Bond Index.
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Cumulative Total Returns
(As of March 31, 2007)
Net Asset
Value Market
Period (NAV) Price
Life-of-Trust
(10/20/03) 40.50% 31.69%
1 Year 11.96 10.21
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[The following data was represented as a line graph in the printed material]
Value of $10,000 Investment
Lehman
Pioneer Brothers
Municipal Lehman Non-Investment
High Income Brothers Grade
Advantage Municipal Municipal
Trust Bond Index Bond Index
10/03 $10,000 $10,000 $10,000
3/04 $10,293 $10,364 $10,565
3/05 $10,712 $10,641 $11,536
3/06 $11,949 $11,046 $12,588
3/07 $13,169 $11,645 $13,827
Call 1-800-225-6292 or visit www.pioneerinvestments.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 net asset value ("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 prices obtained under the Trust's dividend
reinvestment plan.
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 October 31, 2003. The Lehman Brothers Municipal Bond
Index is a broad measure of the municipal bond market. Lehman Brothers
Non-Investment Grade Municipal Bond Index totals over $26 billion in market
value and maintains over 1300 securities. Municipal bonds in this index have the
following requirements: maturities of one year or greater, sub investment grade
(below Baa or non-rated), fixed coupon rate, issue date later than 12/31/90,
deal size over $20 million, maturity size of at least $3 million. Index returns
are calculated monthly, assume reinvestment of dividends and, unlike Trust
returns, do not reflect any fees, expenses or sales charges. You cannot invest
directly in the Indices.
10
Pioneer Municipal High Income Advantage Trust
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SCHEDULE OF INVESTMENTS 3/31/07
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S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
TAX-EXEMPT OBLIGATIONS - 131.4% of Net Assets
Alaska - 1.2%
$ 3,875,000(a) NR/Aaa Alaska State Housing Finance Corp., RIB, 9.315%,
6/1/49 (144A) $ 4,374,836
------------
Arizona - 4.1%
5,000,000 NR/NR Casa Grande Industrial Development Authority
Hospital Revenue, 7.625%, 12/1/29 $ 5,535,300
3,000,000(a) NR/Aaa Downtown Phoenix Hotel Corp., RIB, 6.103%,
7/1/40 (144A) 3,414,870
1,000,000 NR/Baa3 Pima County Industrial Development Authority,
6.3%, 7/1/31 (144A) 1,076,200
1,560,000 NR/Baa3 Pima County Industrial Development Authority,
6.75%, 7/1/31 1,673,755
1,000,000+ NR/NR Pima County Industrial Development Authority,
7.5%, 7/1/34 1,206,480
2,000,000 NR/NR San Luis Facility Development Corp.,
7.25%, 5/1/27 2,038,900
------------
$ 14,945,505
------------
California - 6.6%
2,680,000+ AAA/Aaa Golden State Tobacco Securitization Corp.,
6.75%, 6/1/39 $ 3,122,522
9,520,000(a) NR/Aaa University of California, RIB,
6.275%, 5/15/38 (144A) 11,277,868
9,320,000 B+/NR Valley Health System Hospital Revenue,
6.875%, 5/15/23 9,334,353
------------
$ 23,734,743
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Colorado - 1.9%
2,850,000 BBB/Baa3 Denver Health & Hospital Authority Healthcare
Revenue, 6.0%, 12/1/31 $ 3,031,602
3,520,000 CCC/B3 Northwest Parkway Public Highway Authority,
7.125%, 6/15/41 3,785,162
------------
$ 6,816,764
------------
District of Columbia - 2.1%
2,700,000 BBB/Baa3 District of Columbia Tobacco Settlement Financing
Corp., 6.5%, 5/15/33 $ 3,216,996
4,000,000 BBB/Baa3 District of Columbia Tobacco Settlement Financing
Corp., 6.75%, 5/15/40 4,398,360
------------
$ 7,615,356
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The accompanying notes are an integral part of these financial statements. 11
Pioneer Municipal High Income Advantage Trust
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SCHEDULE OF INVESTMENTS 3/31/07 (continued)
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S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
Florida - 5.6%
$ 1,000,000 NR/NR Greater Orlando Aviation Authority,
6.5%, 11/15/36 $ 1,067,010
4,500,000 BBB-/Baa2 Hillsborough County Florida Industrial Development
Authority Pollution Control Revenue,
5.5%, 10/1/23 4,757,580
1,980,000 NR/NR Hillsborough County Florida Industrial Development
Authority Pollution Control Revenue,
6.75%, 7/1/29 2,027,698
500,000 BB+/NR Miami Beach Health Facilities Authority,
5.375%, 11/15/28 507,190
1,500,000 BB+/Ba1 Miami Beach Health Facilities Authority,
6.7%, 11/15/19 1,639,065
10,000,000 AAA/Aaa Miami-Dade County Aviation Revenue,
5.0%, 10/1/37 10,438,300
------------
$ 20,436,843
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Georgia - 2.1%
4,000,000(a) NR/Aaa Atlanta Georgia Water and Wastewater Revenue,
RIB, 6.193%, 11/1/43 (144A) $ 4,562,640
1,065,000 NR/B2 Effingham County Industrial Development Authority,
6.5%, 6/1/31 1,129,315
1,650,000 NR/NR Savannah Georgia Economic Development
Authority Revenue, 7.4%, 1/1/34 1,803,747
------------
$ 7,495,702
------------
Guam - 1.5%
5,000,000 B+/Ba3 Northern Mariana Islands, 6.75%, 10/1/33 $ 5,589,350
------------
Idaho - 2.3%
2,000,000 BBB-/Baa3 Power County Industrial Development Corp.,
6.45%, 8/1/32 $ 2,121,920
5,920,000 BBB-/Baa3 Power County Pollution Control Revenue,
5.625%, 10/1/14 6,071,493
------------
$ 8,193,413
------------
Illinois - 6.1%
4,000,000 NR/NR Centerpoint Intermodal Center, 8.0%,
6/15/23 (144A) $ 4,134,480
1,000,000 NR/NR Illinois Finance Authority Revenue,
5.1%, 8/15/31 1,018,450
1,100,000 NR/NR Illinois Finance Authority Revenue,
5.5%, 5/15/26 1,127,390
12 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Advantage Trust
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S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
Illinois - (continued)
$ 1,850,000 NR/NR Illinois Finance Authority Revenue,
5.75%, 5/15/38 $ 1,926,960
1,000,000 NR/NR Illinois Finance Authority Revenue,
6.0%, 11/15/27 1,056,030
3,000,000 NR/NR Illinois Finance Authority Revenue,
6.0%, 11/15/39 3,140,400
1,645,000 NR/NR Illinois Health Facilities Authority Revenue,
5.5%, 11/15/19 1,652,008
1,265,000 NR/B2 Illinois Health Facilities Authority Revenue,
6.7%, 3/1/14 1,265,316
2,400,000 NR/B2 Illinois Health Facilities Authority Revenue,
6.75%, 3/1/24 2,400,096
1,500,000 NR/NR Illinois Health Facilities Authority Revenue,
6.9%, 11/15/33 1,657,245
2,700,000 NR/NR Southwestern Illinois Development Authority
Revenue, 5.625%, 11/1/26 2,747,898
------------
$ 22,126,273
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Indiana - 4.9%
10,000,000 BBB/Ba1 Indiana State Development Finance Authority
Revenue, 5.75%, 10/1/11 $ 10,378,600
5,000,000 NR/B2 Jasper County Industrial Economic Development
Revenue, 5.6%, 4/1/29 5,064,250
2,245,000 NR/NR Vincennes Industrial Economic Development
Revenue, 6.25%, 1/1/24 2,265,160
------------
$ 17,708,010
------------
Kentucky - 1.4%
500,000 BB-/NR Kentucky Economic Development Finance Authority
Hospital System Revenue, 5.7%, 10/1/10 $ 509,565
4,400,000 BB-/NR Kentucky Economic Development Finance Authority
Hospital System Revenue, 5.875%, 10/1/22 4,482,192
------------
$ 4,991,757
------------
Louisiana - 3.0%
750,000 BBB+/NR Opelousas Louisiana General Hospital Authority
Revenue, 5.75%, 10/1/23 $ 795,420
9,415,000 BBB/Baa3 Tobacco Settlement Financing Corp.,
5.875%, 5/15/39 10,053,337
------------
$ 10,848,757
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The accompanying notes are an integral part of these financial statements. 13
Pioneer Municipal High Income Advantage Trust
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SCHEDULE OF INVESTMENTS 3/31/07 (continued)
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S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
Maryland - 0.6%
$ 710,000 NR/NR Maryland Health & Higher Educational Facilities
Authority Revenue, 5.25%, 1/1/27 $ 729,582
1,250,000 NR/NR Maryland Health & Higher Educational Facilities
Authority Revenue, 5.3%, 1/1/37 1,283,325
------------
$ 2,012,907
------------
Massachusetts - 7.4%
1,000,000 AAA/Aaa Lynn Massachusetts Water & Sewer Commission
General Revenue, 5.0%, 12/1/32 $ 1,055,580
5,000,000 AAA/Aa1 Massachusetts Bay Transportation Authority
Revenue, 5.25%, 7/1/31 5,760,150
2,195,000 BBB-/Baa3 Massachusetts Health & Educational Facilities
Authority Revenue, 5.375%, 7/15/28 2,238,527
1,000,000+ BBB-/Baa3 Massachusetts Health & Educational Facilities
Authority Revenue, 6.35%, 7/15/32 1,127,270
3,520,000(a) NR/Aaa Massachusetts State College Building Authority
Project Revenue, RIB, 6.28%, 5/1/41 (144A) 4,107,840
900,000 BB/NR Massachusetts State Development Finance
Agency, 5.25%, 10/1/18 893,106
2,920,000 NR/Ba2 Massachusetts State Development Finance
Agency, 6.0%, 11/1/28 2,982,926
4,710,000 NR/NR Massachusetts State Development Finance
Agency, 7.1%, 7/1/32 4,911,965
3,335,000(a) NR/Aa3 Massachusetts State Housing Finance Agency,
RIB, 6.989%, 12/1/45 (144A) 3,518,192
------------
$ 26,595,556
------------
Michigan - 5.0%
1,650,000 NR/NR Crescent Academy Project, 5.75%, 12/1/36 $ 1,696,497
3,000,000+ AAA/Baa3 Delta County Michigan Economic Development
Corp., 6.25%, 4/15/27 3,344,490
3,000,000 BB/NR Macomb County Hospital Finance Authority
Revenue, 5.875%, 11/15/34 3,179,250
4,130,000 BB-/Ba3 Michigan State Hospital Finance Authority
Revenue, 5.5%, 8/15/23 4,103,279
1,000,000 NR/NR Michigan State Strategic Fund Solid Waste
Disposal Revenue, 7.375%, 1/15/22 1,017,080
3,000,000(b) NR/NR Wayne Charter County Michigan Special Airport
Facilities Revenue, 6.0%, 12/1/29 2,341,170
3,405,000(b) NR/NR Wayne Charter County Michigan Special Airport
Facilities Revenue, 6.75%, 12/1/15 2,312,880
------------
$ 17,994,646
------------
14 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Advantage Trust
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S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
Missouri - 1.4%
$ 1,850,000 NR/NR Kansas City Industrial Development Authority
Revenue, 5.875%, 1/1/37 (144A) $ 1,863,079
1,500,000 NR/Caa2 St. Louis Industrial Development Authority
Revenue, 7.2%, 12/15/28 1,490,820
1,840,000 NR/Caa2 St. Louis Industrial Development Authority
Revenue, 7.25%, 12/15/35 1,826,531
------------
$ 5,180,430
------------
Montana - 0.7%
2,445,000(c) NR/NR Hardin Increment Industrial Infrastructure
Development Revenue, 0.0%, 9/1/31 $ 1,617,685
1,000,000 NR/NR Two Rivers Authority, Inc., Project Revenue,
7.375%, 11/1/27 1,031,500
------------
$ 2,649,185
------------
Nevada - 2.1%
2,425,000 B/NR Clark County Industrial Development Revenue,
5.5%, 10/1/30 $ 2,416,440
2,500,000 B/NR Clark County Industrial Development Revenue,
5.9%, 11/1/32 2,501,100
1,600,000 NR/NR Nevada State Department of Business & Industry,
7.25%, 1/1/23 1,677,664
1,000,000 NR/NR Nevada State Department of Business & Industry,
7.375%, 1/1/30 1,051,670
70,000 NR/NR Nevada State Department of Business & Industry,
7.375%, 1/1/40 73,599
------------
$ 7,720,473
------------
New Hampshire - 1.5%
1,000,000 A/NR New Hampshire Health & Educational Facilities
Authority Revenue, 5.375%, 1/1/34 $ 1,058,400
1,125,000 NR/NR New Hampshire Health & Educational Facilities
Authority Revenue, 5.875%, 7/1/34 1,184,580
3,000,000+ NR/NR New Hampshire Higher Educational & Health
Facilities Authority Revenue, 6.25%, 1/1/18 3,107,790
------------
$ 5,350,770
------------
New Jersey - 8.5%
13,000,000 B/B3 New Jersey Economic Development Authority
Revenue, 6.25%, 9/15/29 $ 13,440,310
2,500,000 BBB/Baa1 New Jersey Health Care Facilities Financing
Authority Revenue, 5.375%, 7/1/33 2,609,575
2,495,000(a) NR/Aaa New Jersey State Turnpike Authority, RIB,
7.785%, 1/1/28 (144A) 4,015,353
The accompanying notes are an integral part of these financial statements. 15
Pioneer Municipal High Income Advantage Trust
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 3/31/07 (continued)
--------------------------------------------------------------------------------
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
New Jersey - (continued)
$ 1,000,000+ AAA/Aaa Tobacco Settlement Financing Corp.,
6.25%, 6/1/43 $ 1,137,080
3,250,000+ AAA/Aaa Tobacco Settlement Financing Corp.,
6.75%, 6/1/39 3,784,300
5,000,000+ AAA/Aaa Tobacco Settlement Financing Corp.,
7.0%, 6/1/41 5,887,300
------------
$ 30,873,918
------------
New York - 10.6%
3,000,000 NR/NR Dutchess County Industrial Development Agency
Revenue, 7.5%, 3/1/29 $ 3,334,980
5,000,000 A/A3 Nassau County New York Industrial Development
Agency Revenue, 5.25%, 6/1/27 5,186,100
6,980,000 BB-/Ba2 New York City Industrial Development Agency,
5.25%, 12/1/32 6,944,402
2,000,000 A/NR New York City Industrial Development Agency,
5.375%, 6/1/23 2,100,880
2,000,000 CCC+/Caa1 New York City Industrial Development Agency,
6.9%, 8/1/24 2,018,000
3,950,000 BB-/Ba2 New York City Industrial Development Agency,
7.625%, 12/1/32 4,415,389
2,600,000 NR/NR New York City Industrial Development Agency,
7.8%, 1/1/16 2,633,332
5,000,000 AAA/Aaa New York State Environmental Facilities Corp.,
5.0%, 6/15/33 5,221,850
4,500,000 A/NR Suffolk County New York Industrial Development
Agency, 5.0%, 6/1/36 4,660,380
2,000,000 NR/NR Yonkers Industrial Development Agency Civic
Facilities Revenue, 6.15%, 3/1/15 2,010,820
------------
$ 38,526,133
------------
North Carolina - 5.8%
11,350,000 NR/NR Charlotte North Carolina Special Facilities
Revenue, 5.6%, 7/1/27 $ 11,413,787
7,140,000 NR/NR Charlotte North Carolina Special Facilities
Revenue, 7.75%, 2/1/28 7,633,445
2,000,000 AA+/Aa1 North Carolina Capital Facilities Finance Agency
Revenue, 5.0%, 10/1/41 2,095,920
------------
$ 21,143,152
------------
16 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Advantage Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
Ohio - 2.7%
$ 3,800,000 B/NR Belmont County Health System Revenue,
5.7%, 1/1/13 $ 3,746,648
1,000,000 B/NR Belmont County Health System Revenue,
5.8%, 1/1/18 978,020
5,000,000 B-/B3 Cleveland Airport Special Revenue,
5.375%, 9/15/27 5,014,700
------------
$ 9,739,368
------------
Oklahoma - 1.0%
2,045,000 BB/NR Jackson County Memorial Hospital Authority
Revenue, 7.3%, 8/1/15 $ 2,055,900
1,500,000 B/Caa1 Tulsa Municipal Airport Transportation Revenue,
7.35%, 12/1/11 1,505,310
------------
$ 3,561,210
------------
Pennsylvania - 7.1%
3,000,000 B+/Ba3 Allegheny County Hospital Development Authority
Revenue, 9.25%, 11/15/22 $ 3,541,380
500,000 B+/Ba3 Allegheny County Hospital Development Authority
Revenue, 9.25%, 11/15/30 591,195
1,000,000 BBB-/NR Clarion County Hospital Authority Revenue,
5.625%, 7/1/21 1,013,290
3,600,000 B/NR Columbia County Hospital Authority Revenue,
5.85%, 6/1/24 3,364,596
3,200,000 NR/NR Delaware County Industrial Development Authority
Revenue, 9.0%, 8/1/31 2,596,000
1,250,000 BBB/Ba2 Hazleton Health Services Authority Hospital
Revenue, 6.125%, 7/1/16 1,253,100
3,360,000 NR/Baa3 Montgomery County Higher Education & Health
Authority Hospital Revenue, 6.6%, 7/1/10 3,418,834
1,430,000 BB+/NR Pennsylvania Economic Development Financing
Authority Revenue, 5.125%, 6/1/18 1,413,741
1,805,000 BB+/NR Pennsylvania Economic Development Financing
Authority Revenue, 5.3%, 6/1/10 1,810,343
2,330,000 BB+/NR Pennsylvania Economic Development Financing
Authority Revenue, 5.35%, 6/1/11 2,337,409
2,005,000 B-/NR Scranton-Lackawanna Health & Welfare Authority
Revenue, 6.1%, 7/1/11 2,050,253
2,245,000 B-/NR Scranton-Lackawanna Health & Welfare Authority
Revenue, 6.15%, 7/1/12 2,295,647
------------
$ 25,685,788
------------
The accompanying notes are an integral part of these financial statements. 17
Pioneer Municipal High Income Advantage Trust
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 3/31/07 (continued)
--------------------------------------------------------------------------------
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
Rhode Island - 3.9%
$ 4,485,000 NR/NR Central Falls Rhode Island Detention Facilities
Revenue, 7.25%, 7/15/35 $ 5,039,122
8,285,000 BBB/Baa3 Tobacco Settlement Financing Corp.,
6.25%, 6/1/42 8,942,083
------------
$ 13,981,205
------------
South Carolina - 5.7%
1,500,000 B-/NR Connector 2000 Association, Inc., Toll Road
Revenue, 5.375%, 1/1/38 $ 1,394,910
1,600,000 BBB/NR Loris Community Hospital District,
5.625%, 1/1/29 1,650,800
7,140,000+ BBB+/Baa1 South Carolina Jobs Economic Development
Authority Revenue, 6.375%, 8/1/34 8,174,872
860,000+ BBB+/Baa1 South Carolina Jobs Economic Development
Authority Revenue, 6.375%, 8/1/34 980,753
3,000,000+ AAA/NR South Carolina Jobs Economic Development
Authority Revenue, 8.0%, 10/1/31 3,467,550
4,400,000 BBB/Baa3 Tobacco Settlement Revenue Management,
6.375%, 5/15/30 5,118,740
------------
$ 20,787,625
------------
Tennessee - 2.4%
1,000,000 BBB+/Baa2 Johnson City Health & Educational Facilities Board
Hospital Revenue, 7.5%, 7/1/33 $ 1,159,530
7,000,000 NR/Ba2 Knox County Health Educational & Housing
Facilities Board Hospital Revenue,
6.5%, 4/15/31 7,348,180
------------
$ 8,507,710
------------
Texas - 13.6%
8,650,000 BB/NR Brazos River Authority Pollution Control Revenue,
6.75%, 10/1/38 $ 9,501,419
7,350,000 NR/NR Gulf Coast Industrial Development Authority,
7.0%, 12/1/36 7,902,058
10,000,000 B-/B3 Houston Texas Airport System Revenue,
6.75%, 7/1/29 10,703,400
1,000,000 NR/NR IAH Public Facility Corp., 6.0%, 5/1/16 1,000,010
1,000,000 NR/NR IAH Public Facility Corp., 6.0%, 5/1/21 977,840
1,350,000 NR/NR IAH Public Facility Corp., 6.125%, 5/1/26 1,314,832
845,000 NR/NR Lubbock Health Facilities Development Corp.,
6.5%, 7/1/26 884,816
2,000,000 NR/NR Lubbock Health Facilities Development Corp.,
6.625%, 7/1/36 2,100,540
18 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Advantage Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
Texas - (continued)
$ 7,750,000 BBB-/Ba1 Matagorda County Navigation District Number 1
Revenue, 5.95%, 5/1/30 $ 7,964,443
1,885,000(b) NR/Ca Panhandle Texas Regional Housing Finance,
8.125%, 3/1/31 189,782
5,000,000 NR/Baa3 Tomball Hospital Authority, 6.0%, 7/1/25 5,188,550
1,500,000 NR/NR Willacy County Local Government Corp.,
6.0%, 3/1/09 1,519,665
------------
$ 49,247,355
------------
Utah - 0.5%
1,600,000 NR/NR Spanish Fork Charter School Revenue,
5.7%, 11/15/36 (144A) $ 1,648,144
------------
Virginia - 0.4%
1,555,000+ AAA/NR Pocahontas Parkway Association of Virginia Toll
Road Revenue, 5.25%, 8/15/09 $ 1,618,662
------------
Washington - 7.1%
5,000,000 AAA/Aaa Port Seattle Washington Special Facilities
Revenue, 5.0%, 4/1/31 $ 5,160,500
5,500,000(b) NR/NR Port Seattle Washington Special Facilities
Revenue, 7.25%, 4/1/30 5,502,695
1,385,000 BBB/Baa3 Tobacco Settlement Authority Revenue,
6.5%, 6/1/26 1,516,215
6,960,000(a) NR/Aaa Washington State Economic Development Finance
Authority, RIB, 6.1%, 6/1/38 (144A) 8,223,031
5,000,000 NR/NR Washington State Housing Finance Commission
Nonprofit Revenue Bonds, 5.625%, 1/1/27 5,164,000
------------
$ 25,566,441
------------
Wisconsin - 0.6%
1,000,000 NR/NR Wisconsin State Health & Educational Facilities
Authority Revenue, 6.125%, 4/1/24 $ 1,055,510
1,000,000 NR/NR Wisconsin State Health & Educational Facilities
Authority Revenue, 6.25%, 4/1/34 1,058,150
------------
$ 2,113,660
------------
TOTAL TAX-EXEMPT OBLIGATIONS
(Cost $427,158,444) $475,381,647
------------
The accompanying notes are an integral part of these financial statements. 19
Pioneer Municipal High Income Advantage Trust
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 3/31/07 (continued)
--------------------------------------------------------------------------------
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
MUNICIPAL COLLATERALIZED DEBT
OBLIGATION - 3.6% of Net Assets
$ 13,000,000(d) NR/NR Non-Profit Preferred Funding Trust I, Series E,
8.0%, 9/15/37 (144A) $ 13,011,310
-------------
TOTAL MUNICIPAL COLLATERALIZED DEBT
OBLIGATION
(Cost $13,000,000) $ 13,011,310
-------------
Shares TAX-EXEMPT MONEY MARKET MUTUAL
FUND - 0.8% of Net Assets
3,152,545 BlackRock Liquidity Funds MuniFund Portfolio $ 3,152,545
-------------
TOTAL TAX-EXEMPT MONEY MARKET MUTUAL
FUND
(Cost $3,152,545) $ 3,152,545
-------------
TOTAL INVESTMENTS IN SECURITIES - 135.8%
(Cost $443,310,989)(e)(f) $ 491,545,502
-------------
OTHER ASSETS AND LIABILITIES - 5.7% $ 20,423,204
-------------
PREFERRED SHARES AT REDEMPTION VALUE,
INCLUDING DIVIDENDS PAYABLE - (41.5)% $(150,080,237)
-------------
NET ASSETS APPLICABLE TO COMMON
SHAREOWNERS - 100.0% $ 361,888,469
=============
20 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Advantage Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(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
March 31, 2007, the value of these securities amounted to $65,227,843,
or 18.0% of total net assets applicable to common shareowners.
RIB Residual Interest Bonds.
NR Security not rated by S&P or Moody's.
+ Prerefunded bonds have been collateralized by U.S. Treasury securities
or U.S. Government Agencies 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) The interest rate is subject to change periodically and inversely
based upon prevailing market rates. The interest rate shown is the
rate at March 31, 2007.
(b) Security is in default and is non-income producing.
(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 March
31, 2007.
(d) The interest rate is subject to change periodically. The interest rate
shown is the rate at March 31, 2007.
(e) The concentration of investments by type of obligation/market sector
is as follows:
Insured 13.1%
General Obligation 4.6
Revenue Bonds:
Health Revenue 25.1
Development Revenue 11.6
Airport Revenue 11.4
Tobacco Revenue 9.6
Transportation Revenue 6.1
Facilities Revenue 6.0
Pollution Control Revenue 5.7
Other Revenue 2.1
Housing Revenue 1.8
Education Revenue 1.5
Water Revenue 1.1
Power Revenue 0.3
----
100.0%
=====
(f) At March 31, 2007, the net unrealized gain on investments based on
cost for federal income tax purposes of $440,347,551 was as follows:
Aggregate gross unrealized gain for all investments in which
there is an excess of value over tax cost $54,372,846
Aggregate gross unrealized loss for all investments in which
there is an excess of tax cost over value (3,174,895)
-----------
Net unrealized gain $51,197,951
===========
For financial reporting purposes net unrealized gain on investments was
$48,234,513 and cost of investments aggregated $443,310,989.
Purchases and sales of securities (excluding temporary cash investments) for the
year ended March 31, 2007, aggregated $85,707,843 and $94,249,595, respectively.
The accompanying notes are an integral part of these financial statements. 21
Pioneer Municipal High Income Advantage Trust
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES 3/31/07
--------------------------------------------------------------------------------
ASSETS:
Investments in securities, at value (cost $443,310,989) $491,545,502
Receivables -
Investment securities sold 11,628,396
Interest 9,189,086
Unrealized appreciation on interest rate swaps 1,055,792
Other assets 443,638
Prepaid expenses 40,007
------------
Total assets $513,902,421
------------
LIABILITIES:
Dividends payable to common shareowners $ 1,591,844
Due to custodian 9,243
Due to affiliate 269,435
Administration fee payable 30,543
Accrued expenses 32,650
------------
Total liabilities $ 1,933,715
------------
PREFERRED SHARES AT REDEMPTION VALUE:
$25,000 liquidation value per share applicable to 6,000
shares including dividends payable of $80,237 $150,080,237
------------
NET ASSETS APPLICABLE TO COMMON SHAREOWNERS:
Paid-in capital $323,671,003
Undistributed net investment income 3,083,246
Accumulated net realized loss on investments and interest
rate swaps (14,156,085)
Net unrealized gain on investments 48,234,513
Net unrealized gain on interest rate swaps 1,055,792
------------
Net assets applicable to common shareowners $361,888,469
============
NET ASSET VALUE PER SHARE:
No par value, (unlimited number of shares authorized)
Based on $361,888,469/22,740,627 common shares $ 15.91
============
22 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Advantage Trust
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
--------------------------------------------------------------------------------
For the Year Ended 3/31/07
INVESTMENT INCOME:
Interest $ 30,485,266
------------
EXPENSES:
Management fees $ 3,019,562
Administration fees and reimbursement 459,068
Transfer agent fees and expenses 39,158
Auction agent fees 390,422
Custodian fees 23,272
Registration fees 23,848
Professional fees 126,680
Printing expense 17,071
Trustees' fees 10,238
Pricing fees 20,267
Insurance fees 11,764
Miscellaneous 17,751
-----------
Total expenses $ 4,159,101
Less management fees waived and expenses
reimbursed by Pioneer Investment
Management, Inc. (47,982)
Less fees paid indirectly (63)
------------
Net expenses $ 4,111,056
------------
Net investment income $ 26,374,210
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND
INTEREST RATE SWAPS:
Net realized gain from:
Investments $ 4,858,790
Interest rate swaps 651,446 $ 5,510,236
----------- ------------
Change in net unrealized gain from:
Investments $13,733,640
Interest rate swaps (981,568) $ 12,752,072
----------- ------------
Net gain on investments and interest rate swaps $ 18,262,308
------------
DISTRIBUTIONS TO PREFERRED SHAREOWNERS FROM
NET INVESTMENT INCOME $ (5,202,891)
------------
Net increase in net assets applicable to common
shareowners resulting from operations $ 39,433,627
============
The accompanying notes are an integral part of these financial statements. 23
Pioneer Municipal High Income Advantage Trust
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
For the Years Ended 3/31/07 and 3/31/06
Year Year
Ended Ended
3/31/07 3/31/06
FROM OPERATIONS:
Net investment income $ 26,374,210 $ 26,621,808
Net realized gain (loss) on investments and
interest rate swaps 5,510,236 (13,577,265)
Change in net unrealized gain on investments
and interest rate swaps 12,752,072 22,405,597
Distributions to preferred shareowners from net
investment income (5,202,891) (3,961,976)
------------- -------------
Net increase in net assets applicable to
common shareowners $ 39,433,627 $ 31,488,164
------------- -------------
DISTRIBUTIONS TO COMMON SHAREOWNERS FROM:
Net investment income
($0.86 and $0.99 per share, respectively) $ (19,556,939) $ (22,481,571)
------------- -------------
Total distributions to common shareowners $ (19,556,939) $ (22,481,571)
------------- -------------
FROM TRUST SHARE TRANSACTIONS:
Reinvestment of distributions $ - $ 630,886
------------- -------------
Net increase in net assets applicable to
common shareowners resulting from Trust
share transactions $ - $ 630,886
------------- -------------
Net increase in net assets applicable to
common shareowners $ 19,876,688 $ 9,637,479
NET ASSETS APPLICABLE TO COMMON
SHAREOWNERS:
Beginning of year 342,011,781 332,374,302
------------- -------------
End of year $ 361,888,469 $ 342,011,781
============= =============
Undistributed net investment income $ 3,083,246 $ 850,071
============= =============
24 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Advantage Trust
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
Year Year Year 10/20/03 (b)
Ended Ended Ended to
3/31/07 3/31/06 3/31/05 3/31/04
Per Common Share Operating Performance
Net asset value, beginning of period $ 15.04 $ 14.64 $ 14.51 $ 14.33(c)
-------- -------- -------- --------
Increase (decrease) from investment
operations:(a)
Net investment income $ 1.16 $ 1.17 $ 1.26 $ 0.46
Net realized and unrealized gain on
investments and interest rate swaps 0.80 0.39 0.18 0.23
Dividends and distributions to preferred
shareowners from:
Net investment income (0.23) (0.17) (0.09) (0.02)
Net realized gains - - (0.01) -
-------- -------- -------- --------
Net increase from investment operations $ 1.73 $ 1.39 $ 1.34 $ 0.67
Dividends and distributions to common
shareowners from:
Net investment income (0.86) (0.99) (1.13) (0.38)
Net realized gains - - (0.09) -
Capital charge with respect to issuance of:
Common shares - - 0.01 (0.03)
Preferred shares - - - (0.08)
-------- -------- -------- --------
Net increase in net asset value $ 0.87 $ 0.40 $ 0.13 $ 0.18
-------- -------- -------- --------
Net asset value, end of period(d) $ 15.91 $ 15.04 $ 14.64 $ 14.51
======== ======== ======== ========
Market value, end of period(d) $ 15.61 $ 14.99 $ 14.37 $ 15.05
======== ======== ======== ========
Total return(e) 10.21% 11.55% 4.07% 2.93%
Ratios to average net assets of common
shareowners
Net expenses(f) 1.16% 1.16% 1.18% 1.01%(g)
Net investment income before preferred
share dividends 7.47% 7.88% 8.94% 6.98%(g)
Preferred share dividends 1.47% 1.17% 0.64% 0.26%(g)
Net investment income available to
common shareowners 6.00% 6.71% 8.30% 6.72%(g)
Portfolio turnover 17% 19% 39% 62%
Net assets of common shareowners,
end of period (in thousands) $361,888 $342,012 $332,374 $327,492
Preferred shares outstanding (in thousands) $150,000 $150,000 $150,000 $150,000
Asset coverage per preferred share,
end of period $ 85,328 $ 82,011 $ 80,396 $ 79,582
Average market value per preferred share $ 25,000 $ 25,000 $ 25,000 $ 25,000
Liquidation value, including dividends
payable, per preferred share $ 25,013 $ 25,009 $ 25,000 $ 25,000
Ratios to average net assets of common
shareowners before waivers and
reimbursement of expenses
Net expenses(f) 1.18% 1.16% 1.19% 1.04%(g)
Net investment income before preferred
share dividends 7.45% 7.88% 8.93% 6.95%(g)
Preferred share dividends 1.47% 1.17% 0.64% 0.26%(g)
Net investment income available to
common shareowners 5.98% 6.71% 8.29% 6.69%(g)
The accompanying notes are an integral part of these financial statements. 25
Pioneer Municipal High Income Advantage Trust
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
--------------------------------------------------------------------------------
(a) The per common share data presented above is based upon the average common
shares outstanding for the periods presented.
(b) The Trust's common shares were first publicly offered on October 15, 2003.
(c) Net asset value immediately after the closing of the first public offering
was $14.30.
(d) 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.
(e) 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.
(f) Expense ratios do not reflect the effect of dividend payments to preferred
shareowners.
(g) 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.
26 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Advantage Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 3/31/07
--------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
Pioneer Municipal High Income Advantage Trust (the "Trust") was organized as a
Delaware statutory trust on August 6, 2003. Prior to commencing operations on
October 20, 2003, 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.
The Trust may invest in both investment and below investment grade (high-yield)
municipal securities with a broad range of maturities and credit ratings. Debt
securities rated below investment grade are commonly referred to as "junk bonds"
and are considered speculative. These securities involve greater risk of loss,
are subject to greater price volatility, and are less liquid, especially during
periods of economic uncertainty or change, than higher rated debt securities.
Information regarding the Trust's principal risks is contained in the Trust's
original offering prospectus, with additional information included in the
Trust's Shareowner reports from time to time. Please refer to those documents
when considering the Trust's risks. At times, the Trust's investments may
represent industries or industry sectors that are interrelated or have common
risks, making it more susceptible to any economic, political, or regulatory
developments or other risks affecting those industries and sectors.
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 year. Actual
results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Trust in the 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. Securities are valued
at prices supplied by independent pricing services, which consider such
factors as Treasury spreads, yields, maturities
27
Pioneer Municipal High Income Advantage Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 3/31/07 (continued)
--------------------------------------------------------------------------------
and ratings. Valuations may be supplemented by dealers and other sources,
as required. 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. At March 31, 2007, there were no
securities fair valued. Temporary cash investments are valued at net asset
value.
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, including 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 investments transactions,
or from paid-in capital, depending on the type of book/tax differences that
may exist.
At March 31, 2007, the Trust reclassified $618,795 to increase
undistributed net investment income and to increase accumulated net
realized loss 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.
At March 31, 2007, the Trust had a capital loss carryforward of $14,156,085
which will expire in 2014, if not utilized.
28
Pioneer Municipal High Income Advantage Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The tax character of distributions paid to common and preferred shareowners
during the years ended March 31, 2007 and March 31, 2006 were as follows:
--------------------------------------------------------------------------------
2007 2006
--------------------------------------------------------------------------------
Distributions paid from:
Tax exempt income $23,734,616 $26,443,547
Ordinary income 1,025,214 -
----------- -----------
Total $24,759,830 $26,443,547
=========== ===========
--------------------------------------------------------------------------------
The following shows components of distributable earnings on a federal
income tax basis at March 31, 2007.
--------------------------------------------------------------------------------
2007
--------------------------------------------------------------------------------
Undistributed tax-exempt income $ 1,869,583
Undistributed ordinary income 274,297
Capital loss carry forward (14,156,085)
Dividends payable (1,672,081)
Unrealized appreciation 51,901,752
------------
Total $ 38,217,466
============
--------------------------------------------------------------------------------
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, the accrual
of income on securities in default and the difference between book and tax
accounting for swap agreements.
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 American Stock Transfer &
Trust
29
Pioneer Municipal High Income Advantage Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 3/31/07 (continued)
--------------------------------------------------------------------------------
Company, 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 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
Pioneer Investment Management, Inc. ("PIM"), a wholly owned indirect subsidiary
of UniCredito Italiano S.p.A. ("UniCredito Italiano") manages the Trust's
portfolio. Management fees payable under the Trust's Advisory Agreement with PIM
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
30
Pioneer Municipal High Income Advantage Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
to leverage, short-term debt and the aggregate liquidation preference of any
outstanding preferred shares. Also, PIM has agreed for the first three years of
the Trust's investment operations to limit the Trust's total annual expenses
excluding 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
expense 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 Trusts average daily managed assets. The
dividend on any preferred shares is not an expense for this purpose. For the
year ended March 31, 2007, the expense reduction under such arrangements was
$47,982. For the year ended March 31, 2007, the net management fee was
equivalent to 0.59% of the Trust's average daily managed assets, which was
equivalent to 0.84% of the Trust's average daily net assets attributable to the
common shareowners.
In addition, under PIM's management and administration agreements, certain other
services and costs are paid by PIM and reimbursed by the Trust. At March 31,
2007, $269,435 was payable to PIM related to management costs, administrative
costs and certain other services and is included in "Due to affiliate" on the
Statement of Assets and Liabilities.
The Trust has retained Princeton Administrators, LLC ("Princeton") 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, subject to a minimum monthly fee of $10,000.
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 American Stock Transfer & Trust Company provides substantially
all transfer agent and shareowner services related to the Trust's common shares
at negotiated rates. Deutsche Bank Trust Company Americas ("Deutsche Bank") is
the transfer agent, registrar, dividend paying agent and redemption agent with
respect to the Trust's Auction Preferred Shares ("APS"). The Trust pays Deutsche
Bank an annual fee,
31
Pioneer Municipal High Income Advantage Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 3/31/07 (continued)
--------------------------------------------------------------------------------
as is agreed to from time to time by the Trust and Deutsche Bank, for providing
such services.
4. Expense Offset Arrangements
The Trust has entered into an arrangement with its custodian whereby credits
realized as a result of uninvested cash balances are used to reduce a portion of
the Trust's custodian expenses. For the year ended March 31, 2007, the Trust's
expenses were reduced by $63 under such arrangement.
5. 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 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
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 March
31, 2007 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
32
Pioneer Municipal High Income Advantage Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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 March 31, 2007 were as follows:
------------------------------------------------------------------------------------
Termination Notional Fixed Floating Unrealized
Counterparty Date Amount (000) Rate Rate Appreciation
------------------------------------------------------------------------------------
UBS AG April 5, 2009 $75,000 2.665% 1 month BMA $1,055,792
------------------------------------------------------------------------------------
6. Trust Shares
There are an unlimited number of common shares of beneficial interest
authorized. Of the 22,740,627 common shares of beneficial interest outstanding
at March 31, 2007, PIM owned 6,981 shares.
Transactions in common shares of beneficial interest for the years ended March
31, 2007 and March 31, 2006 were as follows:
--------------------------------------------------------------------------------
2007 2006
--------------------------------------------------------------------------------
Shares outstanding at
beginning of year 22,740,627 22,698,047
Reinvestment of distributions - 42,580
---------- ----------
Shares outstanding at
end of year 22,740,627 22,740,627
========== ==========
--------------------------------------------------------------------------------
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 March 31, 2007, there were 6,000 APS as follows: Series A - 3,000 and Series
B - 3,000.
Dividends on Series A and Series B are cumulative at a rate, which is reset
every seven days based on the results of an auction. Dividend rates ranged from
2.94% to 4.05% during the year ended March 31, 2007.
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%.
33
Pioneer Municipal High Income Advantage Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 3/31/07 (continued)
--------------------------------------------------------------------------------
The APS 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 APS 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 APS 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, holders of APS 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 management
investment company or changes in its fundamental investment restrictions.
7. New Pronouncements
On July 13, 2006, the Financial Accounting Standards Board ("FASB") released
FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" ("FIN
48"). FIN 48 provides guidance for how uncertain tax positions should be
recognized, measured, presented and disclosed in the financial statements. FIN
48 requires the evaluation of tax positions taken or expected to be taken in the
course of preparing the Trust's tax returns to determine whether the tax
positions have a "more-likely-than-not" probability of being sustained by the
applicable tax authority. Tax positions deemed to not meet the
more-likely-than-not threshold would be recorded as a tax benefit or expense in
the reporting period in which they are realized. Adoption of FIN 48 is required
for fiscal years beginning after December 15, 2006 and is to be applied to all
open tax years as of no later than September 28, 2007. At this time, management
is evaluating the implications of FIN 48 and any impact in the financial
statements has not yet been determined.
34
Pioneer Municipal High Income Advantage Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
In addition, in September 2006, Statement of Financial Accounting Standards No.
157, Fair Value Measurements ("SFAS 157"), was issued and is effective for
fiscal years beginning after November 15, 2007. SFAS 157 defines fair value,
establishes a framework for measuring fair value and expands disclosures about
fair value measurements. At this time, management is currently evaluating the
implications of SFAS 157 and its impact on the Trust's financial statement
disclosures, if any, has not been determined.
8. Subsequent Events
Subsequent to March 31, 2007, the Board of Trustees of the Trust declared a
dividend from undistributed net investment income of $0.07 per common share
payable April 30, 2007, to shareowners of record on April 16, 2007.
Subsequent to March 31, 2007, dividends declared and paid on preferred shares
totaled $485,460 in aggregate for the two outstanding preferred share series
through May 8, 2007.
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. Day-to-day management of the
Trust's portfolio 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
Pioneer's affiliate, Pioneer Investment Management Limited. Mr. Eurkus joined
Pioneer as a senior vice president in January 2000 and has been an investment
professional since 1969.
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.
35
Pioneer Municipal High Income Advantage Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 3/31/07 (continued)
--------------------------------------------------------------------------------
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)
All of the net investment income distributions paid by Pioneer Municipal High
Income Advantage Trust during the taxable year ended March 31, 2007 qualified as
tax-exempt interest dividends for federal income tax purposes except the
following per share distributions:
--------------------------------------------------------------------------------
Ordinary
Payable Date Income
--------------------------------------------------------------------------------
Common Shareowners 12/20/2006 $0.0365
Preferred Shareowners
Series A 12/5/2006 $ 17.31
Series A 12/12/2006 $ 15.24
Series B 12/11/2006 $ 17.26
Series B 12/18/2006 $ 15.00
--------------------------------------------------------------------------------
36
Pioneer Municipal High Income Advantage Trust
--------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
--------------------------------------------------------------------------------
To the Board of Trustees and the Shareowners of
Pioneer Municipal High Income Advantage Trust:
We have audited the accompanying statement of assets and liabilities of Pioneer
Municipal High Income Advantage Trust (the "Trust"), including the schedule of
investments, as of March 31, 2007, and the related statement of operations for
the year then ended, the statements of changes in net assets for each of the two
years in the period then ended, 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 March 31, 2007, by correspondence with the custodian. 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 Municipal High Income Advantage Trust at March 31, 2007, the results of
its operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended, 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
May 15, 2007
37
Pioneer Municipal High Income Advantage Trust
--------------------------------------------------------------------------------
RESULTS OF SHAREHOLDER MEETING
--------------------------------------------------------------------------------
On September 21, 2006, Pioneer Municipal High Income Advantage Trust held its
annual meeting of shareowners to elect Class III Trustees. All Class III
Trustees were elected. Here are the detailed results of the votes.
Proposal 1 - To elect Class III Trustees.
--------------------------------------------------------------------------------
Nominee Affirmative Withheld
--------------------------------------------------------------------------------
Mary K. Bush 21,679,438 352,341
Thomas J. Perna 21,693,730 338,049
Marguerite A. Piret+ 5,269 37
--------------------------------------------------------------------------------
+ Elected by Preferred Shares only
38
Pioneer Municipal High Income Advantage 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: (i) will
enable the Trust to receive quality investment advisory services at a fee deemed
reasonable; and (ii) is 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
session, separately from the Interested Trustees of the Trust and any officer of
Pioneer Investment Management, Inc., the Trust's adviser (the "Investment
Adviser"), or its affiliates. While the Trustees, including the Interested
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 and/or officers of 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
information on (i) the investment performance of the Trust, a peer group of
funds as classified by Morningstar, Inc., an independent evaluation service
("Morningstar") and two indices considered appropriate 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
39
Pioneer Municipal High Income Advantage Trust
--------------------------------------------------------------------------------
FACTORS CONSIDERED BY THE INDEPENDENT TRUSTEES IN
APPROVING THE MANAGEMENT CONTRACT (continued)
--------------------------------------------------------------------------------
and restrictions and with the Trust's Code of Ethics and the structure and
responsibilities of the Investment Adviser's compliance department and (vi) the
nature, cost and character of non-investment management services provided by the
Investment Adviser and its affiliates , (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 of funds selected on the basis of criteria considered appropriate by
the Independent Trustees for this purpose, (2) management and other fees
incurred by a peer group of funds selected on the basis of criteria considered
appropriate by the Independent Trustees for this purpose, (3) the advisory fees
of comparable portfolios of other clients of the Investment Adviser, (4) expense
ratios for the Trust and a peer group of funds selected on the basis of criteria
considered appropriate 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 in providing services to the Trust, (7) administrative
reimbursements paid to the Investment Adviser or affiliates, (8) investment
management staffing, and (9) operating expenses paid by the funds 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
40
Pioneer Municipal High Income Advantage Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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.
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 objective and regulatory
requirements. The Trustees also reviewed the Trust's absolute investment
performance based upon total return, as well as the Trust's performance
relative to the performance of both a peer group considered appropriate by
the Independent Trustees for this purpose and the Lehman Municipal Bond
Index. The Trust's performance, based upon total return, was in the fourth
quintile of its Morningstar category peer group for the 12 months ended
June 30, 2006. (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 of the Trust, before deduction of expenses, compared
to the yield of the index. The Trustees concluded that the Trust
underperformed relative to its peers during the short period since its
inception.
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 group. Among other
things, the Trustees considered the size, 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 perform its duties under the Management Contract.
D. Nature and Quality of Other Services. The Trustees considered the nature,
quality and extent of other services provided to shareowners of the Trust,
including administrative and shareowner
41
Pioneer Municipal High Income Advantage Trust
--------------------------------------------------------------------------------
FACTORS CONSIDERED BY THE INDEPENDENT TRUSTEES IN
APPROVING THE MANAGEMENT CONTRACT (continued)
--------------------------------------------------------------------------------
services performed by the Investment Adviser under the Management Contract.
The Trustees also considered the reasonableness of the arrangements for
reimbursement of the Investment 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 or its affiliates under other contracts,
as well as the Investment Adviser's supervision of third party service
providers. Based on these considerations, the Trustees concluded that the
nature, quality 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 its Morningstar category peer group. The Trust's management fee
for the 12 months ended June 30, 2006 was in the third quintile relative to
the management fees paid by the other funds in that peer group for the
comparable period. The Trustees also considered the Trust's expense ratio
for the 12 months ended June 30, 2006 and expense ratios for the comparable
period of the peer group of funds selected on the basis of criteria
considered appropriate by the Independent Trustees for this purpose using
data provided by Strategic Insight Mutual Fund Research and Consulting,
LLC, an independent third party. The Trustees found the Trust's expense
ratio for the 12 months ended June 30, 2006 (after giving effect to the
expense limitation) to be in the third quintile, according to data for the
applicable peer group for the most recent fiscal year.
F. Profitability. The Trustees considered the level of the Investment
Adviser's profits with respect to the management of the Pioneer funds,
including a review of the Investment Adviser's methodology in allocating
certain of its costs to the management of each fund, as well as 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 the limited
industry data available. The Trustees concluded that the Investment
42
Pioneer Municipal High Income Advantage Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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 Trust 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. In light of the Investment Adviser's overall performance, the
Trustees considered it appropriate to continue to retain the management services
of the Investment Adviser. Based on their review of the overall nature and
quality of services provided by the Investment Adviser and the fees charged by
other funds in the Trust's relevant peer group, and taking into account all
material factors deemed relevant by the Trustees as well as the advice of
independent counsel, the Trustees concluded that the Management Contract with
the Trust, including the fee payable thereunder, was fair and reasonable and
that its renewal was in the best interests of the Trust and its shareholders.
Accordingly, the Trustees voted to approve the continuation of the Management
Contract for another year.
43
Pioneer Municipal High Income Advantage Trust
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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
American Stock Transfer & Trust Company
Preferred Share Auction/Transfer Agent and Registrar
Deutsche Bank Trust Company Americas
Sub-Administrator
Princeton Administrators, LLC
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 82 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 Trust is 60 State Street, Boston, Massachusetts 02109.
Proxy Voting Policies and Procedures of the Trust are available without charge,
upon request, by calling toll free 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.
44
Pioneer Municipal High Income Advantage Trust
--------------------------------------------------------------------------------
INTERESTED TRUSTEES
--------------------------------------------------------------------------------
Position Held Length of Service Principal Occupation Other Directorships
Name and Age With the Trust and Term of Office During Past Five Years Held by this Trustee
John F. Cogan, Jr. (80)* Chairman of the Class I Trustee since Deputy Chairman and a Director of Director of ICI
Board, Trustee 2003. Term expires Pioneer Global Asset Management S.p.A. Mutual Insurance
and President in 2007. Elected by ("PGAM"); Non-Executive Chairman and a Company
Preferred Shares Director of Pioneer Investment
only. Management USA Inc. ("PIM-USA");
Chairman and a Director of Pioneer;
Chairman and Director of Pioneer
Institutional Asset Management, Inc.
(since 2006); Director of Pioneer
Alternative Investment Management
Limited (Dublin); President and a
Director of Pioneer Alternative
Investment Management (Bermuda)
Limited and affiliated funds; Director
of PIOGLOBAL Real Estate Investment
Fund (Russia) (until June 2006);
Director of Nano-C, Inc. (since 2003);
Director of Cole Management Inc.
(since 2004); Director of Fiduciary
Counseling, Inc.; President and
Director of Pioneer Funds Distributor,
Inc. ("PFD") (until May 2006);
President of all of the Pioneer Funds;
and Of Counsel, Wilmer Cutler
Pickering Hale and Dorr LLP (counsel
to PIM-USA and the Pioneer Funds)
------------------------------------------------------------------------------------------------------------------------------------
Daniel K. Kingsbury (48)* Trustee and Class II Trustee Director, CEO and President of Pioneer None
Executive Vice since 2007. Term Investment Management USA Inc.;
President expires in 2008. Pioneer Investment Management, Inc.
and Pioneer Institutional Asset
Management, Inc. (since March 2007);
Executive Vice President of all of the
Pioneer Funds (since March 2007);
Director of Pioneer Global Asset
Management S.p.A. (since March 2007);
Head of New Markets Division, Pioneer
Global Asset Management S.p.A. (2000 -
2007)
* Mr. Cogan and Mr. Kingsbury are Interested Trustees because they are an officer or director of the
Trust's investment adviser and certain of its affiliates.
------------------------------------------------------------------------------------------------------------------------------------
45
Pioneer Municipal High Income Advantage Trust
--------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
--------------------------------------------------------------------------------
Name, Age and Position Held Length of Service Principal Occupation Other Directorships
Address With the Trust and Term of Office During Past Five Years Held by this Trustee
David R. Bock (63) Trustee Class I Trustee Executive Vice President and Chief Director of The
3050 K Street NW, since 2005. Term Financial Officer, I-trax, Inc. Enterprise Social
Washington, DC 20007 expires in 2007. (publicly traded health care services Investment Company
company) (2004 - present); Partner, (privately-held
Federal City Capital Advisors affordable housing
(boutique merchant bank) (1997 to finance company);
2004); and Executive Vice President and Director of New
and Chief Financial Officer, Pedestal York Mortgage Trust
Inc. (internet-based mortgage trading (publicly traded
company) (2000 - 2002) mortgage REIT)
------------------------------------------------------------------------------------------------------------------------------------
Mary K. Bush (58) Trustee Class III Trustee President, Bush International, LLC Director of Brady
3509 Woodbine Street since 2003. Term (international financial advisory Corporation
Chevy Chase, MD 20815 expires in 2009. firm) (industrial
identification and
specialty coated
material products
manufacturer);
Director of Briggs &
Stratton Co. (engine
manufacturer);
Director of UAL
Corporation (airline
holding company);
and Director of
Mantech
International
Corporation
(national security,
defense, and
intelligence
technology firm)
------------------------------------------------------------------------------------------------------------------------------------
Margaret B.W. Graham (59) Trustee Class II Trustee Founding Director, Vice-President and None
1001 Sherbrooke Street since 2003. Term Corporate Secretary, The Winthrop
West, Montreal, Quebec, expires in 2008. Group, Inc. (consulting firm); and
Canada H3A 1G5 Desautels Faculty of Management,
McGill University
------------------------------------------------------------------------------------------------------------------------------------
46
Pioneer Municipal High Income Advantage Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Name, Age and Position Held Length of Service Principal Occupation Other Directorships
Address With the Trust and Term of Office During Past Five Years Held by this Trustee
Thomas J. Perna (56) Trustee Class III Trustee Private investor (2004 - present); and Director of
89 Robbins Avenue, since 2006. Term Senior Executive Vice President, The Quadriserv Inc.
Berkeley Heights, NJ 07922 expires in 2009. Bank of New York (financial and (technology products
securities services) (1986 - 2004) for securities
lending industry)
------------------------------------------------------------------------------------------------------------------------------------
Marguerite A. Piret (58) Trustee Class III Trustee President and Chief Executive Officer, Director of New
200 State Street, since 2003. Term Newbury, Piret & Company, Inc. America High Income
12th Floor, expires in 2009. (investment banking firm) Fund, Inc.
Boston, MA 02109 Elected by Preferred (closed-end
Shares only. investment company)
------------------------------------------------------------------------------------------------------------------------------------
Stephen K. West (78) Trustee Class I Trustee since Senior Counsel, Sullivan & Cromwell Director, The Swiss
125 Broad Street, 2003. Term expires (law firm) Helvetia Fund, Inc.
New York, NY 10004 in 2007. (closed-end
investment company)
------------------------------------------------------------------------------------------------------------------------------------
John Winthrop (70) Trustee Class II Trustee President, John Winthrop & Co., Inc. None
One North Adgers Wharf, since 2003. Term (private investment firm)
Charleston, SC 29401 expires in 2008.
------------------------------------------------------------------------------------------------------------------------------------
47
Pioneer Municipal High Income Advantage Trust
--------------------------------------------------------------------------------
FUND OFFICERS
--------------------------------------------------------------------------------
Position Held Length of Service Principal Occupation Other Directorships
Name and Age With the Trust and Term of Office During Past Five Years Held by this Officer
Dorothy E. Bourassa (59) Secretary Since 2003. Serves Secretary of PIM-USA; Senior Vice None
at the discretion of President - Legal of Pioneer;
the Board Secretary/Clerk of most of PIM-USA's
subsidiaries; and Secretary of all
of the Pioneer Funds since September
2003 (Assistant Secretary from
November 2000 to September 2003)
------------------------------------------------------------------------------------------------------------------------------------
Christopher J. Kelley (42) Assistant Secretary Since 2003. Serves Vice President and Senior Counsel of None
at the discretion of Pioneer since July 2002; Vice
the Board President and Senior Counsel of
BISYS Fund Services, Inc. (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 of the Pioneer
Funds since September 2003
------------------------------------------------------------------------------------------------------------------------------------
Christopher P. Harvey (45) Assistant Secretary Since 2006. Serves Partner, Wilmer Cutler Pickering None
at the discretion of Hale and Dorr LLP; and Assistant
the Board Secretary of all of the Pioneer
Funds since July 2006
------------------------------------------------------------------------------------------------------------------------------------
Vincent Nave (61) Treasurer Since 2003. Serves Vice President - Fund Accounting, None
at the discretion of Administration and Controllership
the Board Services of Pioneer; and Treasurer
of all of the Pioneer Funds
------------------------------------------------------------------------------------------------------------------------------------
Mark E. Bradley (47) Assistant Treasurer Since 2004. Serves Deputy Treasurer of Pioneer since None
at the discretion of 2004; Treasurer and Senior Vice
the Board President, CDC IXIS Asset Management
Services from 2002 to 2003; and
Assistant Treasurer of all of the
Pioneer Funds since November 2004
------------------------------------------------------------------------------------------------------------------------------------
Luis I. Presutti (42) Assistant Treasurer Since 2003. Serves Director of Fund Administration of None
at the discretion of Pioneer; and Assistant Treasurer of
the Board all of the Pioneer Funds
------------------------------------------------------------------------------------------------------------------------------------
48
Pioneer Municipal High Income Advantage Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Position Held Length of Service Principal Occupation Other Directorships
Name and Age With the Trust and Term of Office During Past Five Years Held by this Officer
Gary Sullivan (48) Assistant Treasurer Since 2003. Fund Accounting Manager - Fund None
Serves at the Accounting, Administration and
discretion of Controllership Services of Pioneer;
the Board and Assistant Treasurer of all of
the Pioneer Funds since May 2002
------------------------------------------------------------------------------------------------------------------------------------
Katherine Kim Assistant Treasurer Since 2003. Fund Administration Manager - Fund None
Sullivan (33) Serves at the Accounting, Administration and
discretion of Controllership Services since June
the Board 2003; Assistant Vice President -
Mutual Fund Operations of State
Street Corporation from June 2002 to
June 2003 (formerly Deutsche Bank
Asset Management); Pioneer Fund
Accounting, Administration and
Controllership Services (Fund
Accounting Manager from August 1999
to May 2002); and Assistant
Treasurer of all of the Pioneer
Funds since September 2003
------------------------------------------------------------------------------------------------------------------------------------
Teri W. Anderholm (47) Chief Compliance Since 2007. Chief Compliance Officer of Pioneer None
Officer Serves at the since December 2006 and of all the
discretion of Pioneer Funds since January 2007;
the Board Vice President and Compliance
Officer, MFS Investment Management
(August 2005 to December 2006);
Consultant, Fidelity Investments
(February 2005 to July 2005):
Independent Consultant (July 1997 to
February 2005)
------------------------------------------------------------------------------------------------------------------------------------
The outstanding capital stock of PFD, Pioneer and PIMSS is indirectly wholly owned by UniCredito Italiano S.p.A. ("UniCredito
Italiano"), one of the largest banking groups in Italy. Pioneer, the Trust's investment adviser, provides investment management and
financial services to mutual funds, institutional and other clients.
49
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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 American Stock Transfer & Trust Company (AST) for:
Account Information 1-800-710-0935
Or write to AST:
For Write to
General inquiries, lost dividend checks, American Stock
change of address, lost stock certificates, Transfer & Trust
stock transfer Operations Center
6201 15th Ave.
Brooklyn, NY 11219
Dividend reinvestment plan (DRIP) American Stock
Transfer & Trust
Wall Street Station
P.O. Box 922
New York, NY 10269-0560
Website www.amstock.com
For additional information, please contact your investment advisor or visit our
web site www.pioneerinvestments.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 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 filings to update its Form N-2 and issuance
of comfort letters, totaled approximately $38,545 in 2007 and
$26,335 in 2006.
(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 Trusts audit-related services totaled
approximately $9,285 in 2007 and $8,500 in 2006, which were
related to the 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 returns,
totaled approximately $7,820 and $6,800 for 2007 and 2006,
respectively.
(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 years ended March 31, 2007 and 2006.
(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 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 Pioneer Investment Management, Inc ("PIM"), the audit committee and
the independent auditors.
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-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 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 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 Funds 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 Fund shall
constitute pre approval for
these services.
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the fund 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 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 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 Fund o Tax compliance, tax returns, excise
determines that using the tax returns and support
Fund'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 fund 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 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 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 Fund compliance projects
UNIQUE QUALIFICATIONS 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.
----------------------- --------------------------- -----------------------------------------------
--------------------------------------- ------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- --------------------------
o "One-time" pre-approval o A summary of
for the fund 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 Fund'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 Funds and the Fund'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 Trusts 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 March 31, 2007 and 2006, there were no services
provided to an affiliate that required the Trusts 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 approximately $17,110 in 2007 and
$15,300 in 2006. These fees include services provided prior to
May 6, 2003, the effective date of the pre-approval process.
(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 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.
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.
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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
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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
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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.
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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.
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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%.
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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.
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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.
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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) If the registrant is a closed-end management 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-day management
of the registrants portfolio (Portfolio Manager). Also state each Portfolio
Managers business experience during the past 5 years.
PORTFOLIO MANAGEMENT
Additional Information About the Portfolio Managers
Other Accounts Managed by the Portfolio Managesr. 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 March 31, 2007. 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 but generally
do not include the portfolio manager's personal investment accounts or those
which the manager may be deemed to own beneficially under the code of ethics.
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 Assets Managed
Manager Accounts Managed Managed Accounts Managed for which
for which Advisory Fee is
Advisory Fee is Performance-Based
Performance-Based
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
David Eurkus Other Registered 6 $2,401,396,000 N/A N/A
Investment
Companies
-------------------- ----------------- ------------------- ------------------ -------------------
-------------------- ----------------- ------------------- ------------------ -------------------
Other Pooled 0 $0 N/A N/A
Investment Vehicles
-------------------- ----------------- ------------------- ------------------ -------------------
-------------------- ----------------- ------------------- ------------------ -------------------
Other Accounts 1 $6,024,000 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.
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, is the Lehman Brothers Municipal Bond Index and the Lehman
Brothers Non-Investment Grade Municipal Bond Index. As a result of
these benchmarks, the performance of the portfolio manager for
compensation purposes is measured against the 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.
Share Ownership by Portfolio Managers. The following table indicates as of March
31, 2007 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
--------------------------------------- ----------------------------------------
*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 control over financial
reporting that occurred during the second
fiscal quarter of 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.
The registrant's principal executive officer and principal financial
officer, however, voluntarily are reporting the following information:
In August of 2006 the registrant's investment adviser
enhanced its internal procedures for reporting performance
information required to be included in prospectuses.
Those enhancements involved additional internal controls
over the appropriateness of performance data
generated for this purpose. Such enhancements were made
following an internal review which identified
prospectuses relating to certain classes of shares of
a limited number of registrants where, inadvertently,
performance information not reflecting the deduction of
applicable sales charges was included. Those prospectuses
were revised, and the revised prospectuses were distributed to
shareholders.
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 Municipal High Income Advantage Trust
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr, President
Date May 30, 2007
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 May 30, 2007
By (Signature and Title)* /s/ Vincent Nave
Vincent Nave, Treasurer
Date May 30, 2007
* Print the name and title of each signing officer under his or her signature.