Pioneer Multi-Asset Ultrashort Income Fund Performance Analysis & Commentary December 2017 COMMENTARY Fund Ticker Symbol: MAFRX (Class A); MYFRX (Class Y) amundipioneer.com Fourth Quarter Review The Fund s Class A shares returned 0.31% at net asset value in the fourth quarter, and Class Y shares returned 0.45%, while the Fund s benchmark, the ICE Bank of America Merrill Lynch (BofA ML) US Dollar 3-Month LIBOR Index, returned 0.28%. Asset allocation was the largest positive contributor to the Fund s performance in the fourth quarter, including investments in all parts of the securitized credit market, particularly portfolio exposures to asset-backed securities (ABS), commercial mortgagebacked securities (CMBS), and collateralized mortgage obligations (CMOs). We believe economic growth will remain robust in both the US and globally during 2018. In the US, we believe gross domestic product (GDP) growth may increase to nearly 3% over the course of 2018, benefiting from significant tax cuts, deregulation, and greater infrastructure spending. Strong global GDP growth and corporate earnings, declining unemployment, modestly less-accommodative global monetary policy, US tax reform legislation, and subdued inflation all contributed to strong equity and credit market performance during the fourth quarter of 2017. Despite the Federal Reserve (the Fed) beginning to taper its balance sheet in October by gradually reducing its purchases of Treasuries and agency mortgage-backed securities (MBS), the latter still enjoyed relatively strong performance in the fourth quarter of 2017. The agency MBS sector delivered excess returns of 0.24%, benefiting from stable interest rates and strong demand. (Excess returns represent investment performance generated by a security or portfolio that exceed the riskless performance of a security generally perceived by the market to be risk-free, such as a certificate of deposit or a government-issued bond.) Investment-grade corporates enjoyed the strongest returns in the credit-sensitive sectors, posting absolute returns of 1.17% and excess returns of 0.99%, as the sector benefited from strong profits and the US tax cuts as well as continued market demand for high-quality credit. High-yield corporates underperformed investment grade this quarter due to increasing investor concerns regarding risks in specific industries/sectors, including cable, telecommunication services, and retail. The high-yield market sustained $11 billion worth of outflows over the three-month period. With respect to floating-rate assets, bank loans produced significantly better performance than high-yield corporates, returning 1.10% for the quarter. The sector benefited from strong collateralized loan obligation bids as well as demand for floating-rate investments. Event-linked bonds returned 3.9% this quarter, rebounding from their September 2017 sell-off as investor demand grew in anticipation of higher insurance premiums. With the exception of the 30-year Treasury, interest rates rose over the quarter, while the expectation for continued Fed interest-rate increases contributed to a significant flattening of the yield curve. Yields rose across the short end of the curve, as six-month US Treasury yields increased from 1.20% to 1.53%, and two-year Treasury yields rose from 1.48% to 1.89%. ICE LIBOR (London Interbank Offered Rates) also increased, as the one-month rate moved up from 1.23% to 1.56% and the three-month rate rose from 1.33% to 1.69%. Meanwhile, the five-year Treasury yield moved from 1.94% to 2.20%, and the 10-year yield rose from 2.33% to 2.40% over the quarter. Treasury Inflation-Protected Securities (TIPS) outperformed this quarter as inflation expectations rose, with 10-year and 30-year breakevens rising to 2%. Sector Allocation and Security Selection Asset allocation was the largest positive contributor to the Fund s performance in the fourth quarter, including investments in all parts of the securitized credit market, particularly portfolio exposures to ABS, CMBS, and CMOs. Other positive drivers of the Fund s performance this quarter were allocations to event-linked bonds and investment-grade corporates. Within investment grade, holdings in financials and industrials, in particular, contributed to the Fund s performance, as yields in those sectors are relatively more attractive than yields of government securities. In addition, the income generated from the core layer of the portfolio has continued to be an important contributor to the Fund s positive total returns over time. On the negative side, the Fund s allocation to bank loans detracted from performance in the fourth quarter.
Current Outlook and Positioning We believe economic growth will remain robust in both the US and globally during 2018. In the US, we believe GDP growth may increase to nearly 3% over the course of 2018, benefiting from significant tax cuts, deregulation, and greater infrastructure spending. Solid employment may continue to support consumption and the housing market. Higher corporate profits, benefiting from strong global growth, tax cuts, and the 100% expensing of fixed investment, could in turn support increased fixed investment. However, protectionist trade policies could temper this outlook. Nascent signs of wage-growth acceleration, service inflation, tighter labor markets in key industries such as homebuilding, and more restrictive immigration policies may contribute to higher price levels in the coming year. Producer price indices are already increasing, in fact, on the heels of higher prices for oil and metals. In addition, the recent tax reform legislation has the potential to further fuel inflation. Data that continues to support rising inflation would certainly give the Fed reason to move forward on its path toward higher interest rates this year. The portfolio continues to be positioned for rising interest rates and a solid economy. Given the portfolio s exposure to floating-rate securities, we believe this positioning could lead to greater income for the Fund s shareholders. In addition, we believe the portfolio s low duration of 0.27 can also help mitigate mark-to-market risk. (Duration is a measure of the sensitivity of the price, or the value of principal, of a fixed-income investment to a change in interest rates, expressed as a number of years. Mark-to-market refers to the reasonable value of accounts that can vary over a period, depending on assets and liabilities.) We also continue to view credit more favorably than US Treasuries. We find most US government debt unattractive, while we believe the credit sectors may benefit from stronger economic growth, lower taxes, and less regulation. However we have maintained a lower spread duration in the portfolio due to uncertain global monetary policies, tighter credit spreads, and geopolitical risks. (Credit spreads are commonly defined as the differences in yield between Treasuries and other types of fixed-income securities with similar maturities.) We continue to diversify* the Fund s portfolio across sectors and individual securities in an effort to take advantage of different supply/demand dynamics, and thereby minimize idiosyncratic risk. *Diversification does not assure a profit nor protect against loss.
Performance Review Pioneer Multi-Asset Ultrashort Income Fund s Class A shares returned 0.31% at net asset value in the fourth quarter, and Class Y shares returned 0.45%, while the Fund s benchmark, the ICE Bank of America Merrill Lynch (BofA ML) US Dollar 3-Month LIBOR Index, returned 0.28%. Average Annual Total Return (Class A shares) Average Annual Total Return (Class Y shares) December 31, 2017 (at NAV) (at POP) ICE BofA ML US Dollar 3-Month LIBOR Index December 31, 2017 (at NAV) ICE BofA ML US Dollar 3-Month LIBOR Index 1 year 1.56% 1.01% 1.10% 1 year 1.79% 1.10% 3 years 1.38% 0.51% 0.66% 3 years 1.54% 0.66% 5 years 1.14% 0.63% 0.50% 5 years 1.29% 0.50% Since Inception (4/29/2011) Expense Ratio (As of prospectus dated August 1, 2017) 1.35% 0.96% 0.48% Since Inception (4/29/2011) Class A shares: Gross, 0.61% Class Y shares: Gross, 0.50% 1.53% 0.48% Call 1-800-225-6292 or visit amundipioneer.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. NAV results represent the percent change in net asset value per share. Returns would have been lower had sales charges been reflected. POP returns reflect deduction of the maximum 2.50% sales charge at the beginning of the period. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance expenses will differ. Class Y shares are not subject to sales charges and are available for limited groups of eligible investors, including institutional investors. Performance results reflect any applicable expense waivers in effect during the periods shown. Without such waivers fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus for more information.
A Word about Risk: All investments are subject to risk, including the possible loss of principal. Pioneer Multi-Asset Ultrashort Income Fund has the ability to invest in a wide variety of debt securities. The Fund may invest in underlying fund, including ETFs. In addition to the Fund's operating expenses, you will indirectly bear the operating expenses of investments in any underlying funds. The Fund and some of the underlying funds employ leverage, which increases the volatility of investment returns and subjects the Fund to magnified losses if an underlying fund's investments decline in value. The Fund and some of the underlying funds may use derivatives, such as options and futures, which can be illiquid, may disproportionately increase losses, and have a potentially large impact on Fund performance. The Fund may invest in inflation-linked securities. As inflationary expectations increase, inflation-linked securities may become more attractive, because they protect future interest payments against inflation. Conversely, as inflationary concerns decrease, inflation-linked securities will become less attractive and less valuable. The Fund may invest in credit default swaps, which may in some cases be illiquid, and they increase credit risk since the fund has exposure to both the issuer of the referenced obligation and the counterparty to the credit default swap. The Fund may invest in subordinated securities which may be disproportionately adversely affected by a default or even a perceived decline in creditworthiness of the issuer. The Fund may invest in floating rate loans. The value, if any, of collateral securing a floating-rate loan can decline or may be insufficient to meet the issuer's obligations, or may be difficult to liquidate. The Fund may invest in eventlinked bonds. The return of principal and the payment of interest on event-linked bonds are contingent on the non-occurrence of a pre-defined "trigger" event, such as a hurricane or an earthquake of a specific magnitude. The Fund may invest in zero coupon bonds and payment in kind securities, which may be more speculative and fluctuate more in value than other fixed income securities. The accrual of income from these securities are payable as taxable annual dividends to shareholders. Investments in equity securities are subject to price fluctuation. International investments are subject to special risks including currency fluctuations, social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. Investments in fixed income securities involve interest rate, credit, inflation, and reinvestment risks. As interest rates rise, the value of fixed income securities falls. The Fund may invest in mortgage-backed securities, which during times of fluctuating interest rates may increase or decrease more than other fixed-income securities. Mortgagebacked securities are also subject to pre-payments. Prepayment risk is the chance that an issuer may exercise its right to prepay its security, if falling interest rates prompt the issuer to do so. Forced to reinvest the unanticipated proceeds at lower interest rates, the Fund would experience a decline in income and lose the opportunity for additional price appreciation. High yield bonds possess greater price volatility, illiquidity, and possibility of default. There may be insufficient or illiquid collateral securing the floating rate loans held within the Fund. This may reduce the future redemption or recovery value of such loans. The Fund may have disadvantaged access to confidential information that could be used to assess a loan issuer, as Pioneer normally seeks to avoid receiving material, non-public information. Multi-Asset Ultrashort Income Fund is not a money market fund. These risks may increase share price volatility. There is no assurance that these and other strategies used by the Fund or underlying funds will be successful. Please see the prospectus for a more complete discussion of the Fund's risks. The ICE Bank of America Merrill Lynch US Dollar 3-Month LIBOR Index is an unmanaged index that represents the London interbank offered rate (LIBOR) with a constant 3-month average maturity. LIBOR is a composite of the rates of interest at which banks borrow from one another in the London market, and it is a widely used benchmark for short-term interest rates. Index returns are calculated monthly, assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. It is not possible to invest directly in an index. The views expressed in this commentary are those of the portfolio manager and are subject to change at any time. These views do not necessarily reflect the views of Amundi Pioneer or others in the Amundi Pioneer organization, and should not be relied upon as investment advice, as securities recommendations, or as an indication of trading intent on behalf of any Amundi Pioneer investment product.
Top 10 Holdings % of Portfolio as of December 31, 2017 1. United States Treasury Floating Rate Note, 4/30/19 1.12% 2. United States Treasury Floating Rate Note, 1/31/19 1.11% 3. United States Treasury Floating Rate Note, 7/31/18 1.08% 4. United States Treasury Floating Rate Note, 10/31/18 1.08% 5. United States Treasury Floating Rate Note, 1/31/18 1.08% 6. United States Treasury Floating Rate Note, 4/30/18 1.07% 7. United States Treasury Floating Rate Note, 7/31/19 0.69% 8. CCDJ CP, 0.00%, 1/3/18 0.51% 9. Chesapeake Funding II LLC, Floating Rate Note, 11/15/29 (144A) 0.34% 10. ABN AMRO Bank NV, Floating Rate Note, 1/18/19 (144A) 0.34% The portfolio is actively managed, and current holdings may be different. The holdings listed should not be considered recommendations to buy or sell any security listed. Before investing, consider the Fund s investment objectives, risks, charges and expenses. Contact your advisor or Amundi Pioneer Asset Management for a prospectus or summary prospectus containing this information. Read it carefully. Neither Amundi Pioneer, nor its representatives are legal or tax advisors. In addition, Amundi Pioneer does not provide advice or recommendations. The investments you choose should correspond to your needs, goals, and risk tolerance. For assistance in determining your financial situation, please consult an investment professional.
Not FDIC insured May lose value No bank guarantee Securities offered through Amundi Pioneer Distributor, Inc., 60 State Street, Boston, MA 02109 Underwriter of Pioneer mutual funds, Member SIPC 2018 Amundi Pioneer Asset Management amundipioneer.com 25258-26-0118