[Pioneer logo]
Pioneer
Micro-Cap
Fund
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ANNUAL REPORT 11/30/98
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<PAGE>
Table of Contents
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<TABLE>
<S> <C>
Letter from the Chairman 1
Portfolio Summary 2
Performance Update 3
Portfolio Management Discussion 5
Schedule of Investments 8
Financial Statements 13
Notes to Financial Statements 18
Report of Independent Public Accountants 23
Trustees, Officers and Service Providers 24
The Pioneer Family of Mutual Funds 25
Programs and Services for Pioneer Shareowners 26
Retirement Plans from Pioneer 28
</TABLE>
<PAGE>
Pioneer Micro-Cap Fund
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LETTER FROM THE CHAIRMAN 11/30/98
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Dear Shareowner,
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I am pleased to introduce this annual report for Pioneer Micro-Cap Fund,
covering the 12 months ended November 30, 1998. On behalf of your investment
team, I thank you for your interest and this opportunity to comment on today's
investing environment.
In October, Todd Grady took on the Fund's day-to-day management, succeeding
William "Pete" Taussig. Mr. Grady is a five-year member of Pioneer's small
company investment team, and we are pleased to have him lead the Fund and are
hopeful his efforts, and those of the other analysts and managers on the Fund's
investment team, will bring shareowners meaningful rewards. I encourage you to
read the Portfolio Management Discussion to share Mr. Grady's insights and
strategies.
Looking beyond the Fund, the past 12 months were volatile around the globe. In
the United States, we continued to see mixed performance. Large stocks, as
gauged by the Dow Jones Industrial Average, reached an all-time high, while
micro-cap stocks - like those owned by your Fund - struggled. In August, the
whole equity market turned down when economic crises in Russia and Asia
triggered panic worldwide. Since then, small stocks have rallied back, albeit in
a jagged pattern of advances and declines.
We think it is important to point out that the current volatility in U.S. stocks
is relatively normal compared to historical market movements. Short-term memory
to the contrary, it is the extraordinary rise of large company stocks in recent
years that is the aberration, no matter how enjoyable. As we move ahead, the
entire portfolio team will be working hard to bring you solid performance, but
you should be prepared for the inevitable ups and downs that are part of stock
investing.
If you have any questions about the Fund, please contact your investment
professional, or Pioneer at 1-800-225-6292.
Respectfully,
/s/ John F. Cogan, Jr.
John F. Cogan, Jr.
Chairman and President
1
<PAGE>
Pioneer Micro-Cap Fund
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PORTFOLIO SUMMARY 11/30/98
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P o r t f o l i o D i v e r s i f i c a t i o n
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(As a percentage of total investment portfolio)
[Pie Chart]
U.S. Common
Stocks 77%
Short-Term Cash
Equivalents 12%
International Common
Stocks 11%
[End Pie Chart]
S e c t o r D i s t r i b u t i o n
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(As a percentage of equity holdings)
[Pie Chart]
Technology 42%
Capital Goods 14%
Consumer Cyclicals 9%
Consumer Staples 6%
Healthcare 8%
Financial 7%
Energy 8%
Basic Materials 5%
Transportation 1%
[End Pie Chart]
1 0 L a r g e s t H o l d i n g s
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(As a percentage of equity holdings)
<TABLE>
<S> <C> <C> <C>
1. Verity, Inc. 5.59% 6. ATMI, Inc. 3.28%
2. DSP Communications, Inc. 4.97 7. Xionics Document 3.27
Technologies, Inc.
3. Dura Products International, Inc. 4.24 8. Talisman Energy, Inc. 3.05
4. Integrated Circuit Systems, Inc. 3.36 9. Long Beach Financial 2.98
Corp.
5. Netrix Corp. 3.30 10. Kronos, Inc. 2.53
</TABLE>
Fund holdings will vary for other periods.
2
<PAGE>
Pioneer Micro-Cap Fund
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PERFORMANCE UPDATE 11/30/98 CLASS A SHARES
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S h a r e P r i c e s a n d D i s t r i b u t i o n s
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<TABLE>
<S> <C> <C> <C>
Net Asset Value
per Share 11/30/98 11/30/97
$13.85 $17.84
Distributions per Share Income Short-Term Long-Term
(11/30/97 - 11/30/98) Dividends Capital Gains Capital Gains
- $1.074 -
</TABLE>
I n v e s t m e n t R e t u r n s
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The mountain chart on the right shows the growth of a $10,000 investment in
Pioneer Micro-Cap Fund at public offering price, compared to the growth of the
Merrill Lynch Micro-Cap Index.
<TABLE>
<CAPTION>
- ---------------------------------------
Average Annual Total Returns
(As of November 30, 1998)
Public
Net Asset Offering
Period Value Price*
<S> <C> <C>
Life-of-Fund -0.85% -4.17%
(2/28/97)
1 Year -17.17% -21.94%
- ---------------------------------------
</TABLE>
* Reflects deduction of the maximum
5.75% sales charge at the beginning of
the period and assumes reinvestment
of distributions at net asset value.
[Mountain Chart]
Growth of $10,000
<TABLE>
<CAPTION>
Pioneer Micro-Cap Fund* Merrill Lynch Micro-Cap Index
<S> <C> <C>
2/97 9,425 10,000
8,957 9,462
8,650 9,074
5/97 9,874 9,981
9,994 10,518
10,685 11,171
11,099 11,620
11,935 12,714
11,357 12,251
11/97 11,206 12,053
10,930 11,965
10,642 11,887
11,540 12,616
12,130 13,234
12,043 13,488
5/98 11,051 12,810
10,970 12,534
9,684 11,735
7,640 9,282
8,055 9,733
8,404 9,966
11/98 9,282 10,770
</TABLE>
[End Mountain Chart]
The Merrill Lynch Micro-Cap Index measures the performance of 1,980 stocks
ranging in market capitalization from $50 million to $125 million. Index returns
are calculated monthly, assume reinvestment of dividends and, unlike Fund
returns, do not reflect any sales charges, fees or expenses. You cannot invest
directly in the Index.
Past performance does not guarantee future results. Returns and share prices
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
3
<PAGE>
Pioneer Micro-Cap Fund
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PERFORMANCE UPDATE 11/30/98 CLASS B SHARES
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S h a r e P r i c e s a n d D i s t r i b u t i o n s
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<TABLE>
<S> <C> <C> <C>
Net Asset Value
per Share 11/30/98 11/30/97
$ 13.69 $ 17.77
Distributions per Share Income Short-Term Long-Term
(11/30/97 - 11/30/98) Dividends Capital Gains Capital Gains
- $ 1.074 -
</TABLE>
I n v e s t m e n t R e t u r n s
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The mountain chart on the right shows the growth of a $10,000 investment in
Pioneer Micro-Cap Fund compared to the growth of the Merrill Lynch Micro-Cap
Index.
<TABLE>
<CAPTION>
- ---------------------------------------
Average Annual Total Returns
(As of November 30, 1998)
If If
Period Held Redeemed*
<S> <C> <C>
Life-of-Fund -1.49% -3.62%
(2/28/97)
1 Year -17.78 -20.86
- ---------------------------------------
</TABLE>
* Reflects deduction of the maximum applicable contingent deferred sales charge
(CDSC) at the end of the period and assumes reinvestment of distributions. The
maximum CDSC of 4% declines over six years.
[Mountain Chart]
Growth of $10,000
<TABLE>
<CAPTION>
Pioneer Micro-Cap Fund* Merrill Lynch Micro-Cap Index
<S> <C> <C>
2/97 10,000 10,000
9,507 9,462
9,173 9,074
5/97 10,473 9,981
10,593 10,518
11,320 11,171
11,753 11,620
12,633 12,714
12,007 12,251
11/97 11,847 12,053
11,540 11,965
11,227 11,887
12,173 12,616
12,778 13,234
12,679 13,488
5/98 11,633 12,810
11,540 12,534
10,181 11,735
8,025 9,282
8,459 9,733
8,822 9,966
11/98 9,375 10,770
</TABLE>
[End Mountain Chart]
The Merrill Lynch Micro-Cap Index measures the performance of 1,980 stocks
ranging in market capitalization from $50 million to $125 million. Index returns
are calculated monthly, assume reinvestment of dividends and, unlike Fund
returns, do not reflect any sales charges, fees or expenses. You cannot invest
directly in the Index.
Past performance does not guarantee future results. Returns and share prices
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
4
<PAGE>
Pioneer Micro-Cap Fund
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PORTFOLIO MANAGEMENT DISCUSSION 11/30/98
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On October 23, 1998 Todd Grady assumed responsibility for the day-to-day
management of Pioneer Micro-Cap Fund. The following discussion details the
investment environment for the past year and the strategies Mr. Grady expects to
employ going forward. Mr. Grady has been an investment professional for over
eight years, five as an analyst and manager at Pioneer.
Q: How did the Fund perform?
A: It was a rough period for smaller stocks and an especially difficult period
for micro-caps. The Merrill Lynch Micro-Cap Index, an unmanaged measure of
micro-cap stocks, posted a -10.64% return for the fiscal year. Smaller
stocks suffered when economic troubles in emerging markets spread, even
though many small companies didn't have direct exposures to these
economies. Investors turned to "safe havens," mostly large-company stocks
and U.S. Treasury bonds. To sum it up, in 1998 the stock market was driven
by liquidity, so that smaller, less liquid stocks - even those with strong
fundamentals - did not perform as well as the large, liquid names.
The Fund's Class A Shares, in keeping with its emphasis on very small
issuers and a value-oriented strategy, concluded its annual period with a
-17.17% total return, at net asset value. However, the news for the Fund may
be brightening. In fact, over the past three months, the Fund outperformed
the Merrill Lynch Micro-Cap Index by over five percentage points.
Q: What specific sectors or stocks affected Fund performance?
A: Disappointments were not limited to any one industry or sector. The sharp
drop in oil prices throughout the year hurt energy-related stocks such as
Abacan Resources and Eagle Geophysical. Many technology-related companies
suffered because of their exposure to Asian economies. Examples include
Xionics Document Technologies, a developer of software for printers and
scanners, and Omega Research, a provider of investment analysis software.
5
<PAGE>
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PORTFOLIO MANAGEMENT DISCUSSION 11/30/98 (continued)
- --------------------------------------------------------------------------------
Biotechnology holdings were also hit hard during the year. Aronex
Pharmaceuticals, Immulogic Pharmaceutical and Texas Biotechnology each
dropped more than 30% over the period.
On a positive note, many sizable positions performed well. One example of
the tremendous potential of micro-caps is Verity, a producer of database
software. Initially profitable, the company encountered business
difficulties, specifically around its pricing policies. This drove down
profits and its stock price. Management brought in an outside team to review
and correct these and other fundamental problems. Following their review,
the company installed a new tracking system and a better pricing policy. It
also improved products and identified new sales opportunities, all of which
led to an improvement in profits. These positive developments were reflected
in the company's stock price, which more than doubled over the past six
months.
Q: What is important to the team as you pick stocks for the Fund?
A: First of all, the Fund is value oriented. This means we focus on stocks
that are out of favor and selling at relatively low prices - even though
they have strong market share and quality management. It is not enough for
a stock to be cheap - we want to know why it's cheap. We typically get our
answer by focusing on a company's underlying business. Does it have a
legitimate franchise and competitive position? If the answer is yes, we
are interested. We pay particular attention to companies we think can
return to success after hitting a bump in the road.
6
<PAGE>
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One change we are making is with respect to the Fund's investment mix. We
intend to broaden the portfolio to gradually reduce its exposure to the
technology sector, currently 42% of equity assets, so performance of one
group is less likely to have such a profound effect on Fund performance.
Other sectors presently attracting our attention include retail, financial
and consumer cyclicals.
Q: What is your outlook for the Fund over the next six months?
A: We remain optimistic about the prospects for micro-cap stocks, despite the
turbulent times of the past year. We think that the current disparity
between small-cap and large-cap market performance will eventually narrow
and begin to return to more normal levels. And while there is concern
regarding the ability of large companies to meet earnings expectations,
overall, smaller companies' earnings-growth patterns remain strong. In
plain English, this means we think investors will tire of paying a premium
for large familiar companies and will redirect their attention and money
to small stocks. If this occurs, there should be nice gains for patient
investors.
While it's impossible to know when a change will occur, we feel it's
important to stay with our value-based investment discipline and to exercise
the kind of patience required in a volatile and uncertain market. We would
like to thank all of the Fund's shareowners for their support in a difficult
year. Our expectations are high for 1999, and we remain committed to helping
you achieve your goals.
7
<PAGE>
Pioneer Micro-Cap Fund
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SCHEDULE OF INVESTMENTS 11/30/98
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 87.6%
Basic Materials - 4.0%
Agricultural Products - 0.7%
37,500 Alico, Inc. $ 637,500
-----------
Chemicals (Specialty) - 2.2%
200,000 Brunswick Technologies, Inc.* $ 1,100,000
200,000 Triple S Plastics, Inc.*+ 1,068,750
-----------
$ 2,168,750
-----------
Metals & Mining - 0.3%
300,000 Geomaque Explorations Ltd.* $ 305,018
-----------
Paper & Forest Products - 0.8%
40,000 Deltic Timber Corp. $ 800,000
-----------
Total Basic Materials $ 3,911,268
-----------
Capital Goods - 12.0%
Machinery (Diversified) - 3.7%
2,258,765 Dura Products International, Inc.*+ $ 3,630,026
-----------
Manufacturing (Diversified) - 0.7%
35,000 Vallen Corp.* $ 686,875
-----------
Manufacturing (Specialized) - 1.9%
567,000 Ocal Inc.*+ $ 1,842,750
-----------
Metal Fabricators - 3.8%
100,000 IMCO Recycling, Inc. $ 1,493,750
160,000 N N Ball & Roller, Inc. 1,000,000
205,485 Riviera Tool Co.*+ 1,220,067
-----------
$ 3,713,817
-----------
Waste Management - 1.9%
90,312 Tetra Tech, Inc.* $ 1,896,552
-----------
Total Capital Goods $11,770,020
-----------
Consumer Cyclicals - 7.8%
Footwear - 1.3%
102,800 R. G. Barry Corp.* $ 1,220,750
-----------
Household Furniture & Appliances - 0.7%
25,000 ITI Technologies, Inc.* $ 664,062
-----------
</TABLE>
8 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Micro-Cap Fund
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- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Household Products (Non-durables) - 3.9%
53,000 Jan Bell Marketing, Inc.* $ 245,125
120,000 Koala Corp.* 1,920,000
40,000 National Presto Industries, Inc. 1,652,500
-----------
$ 3,817,625
-----------
Leisure Time (Products) - 0.1%
13,000 Equity Marketing, Inc.* $ 127,500
-----------
Retail (Specialty) - 1.2%
100,000 West Marine, Inc.* $ 1,137,500
-----------
Textiles (Home Furnishings) - 0.6%
168,500 EKCO Group, Inc.* $ 621,344
-----------
Total Consumer Cyclicals $ 7,588,781
-----------
Consumer Staples - 6.3%
Foods - 0.2%
15,000 Sanderson Farms, Inc. $ 240,000
-----------
Restaurants - 1.8%
260,500 Taco Cabana, Inc.* $ 1,807,219
-----------
Services (Commercial & Consumer) - 1.3%
174,700 PIA Merchandising Services, Inc.* $ 502,263
51,500 Right Management Consultants, Inc.* 733,875
-----------
$ 1,236,138
-----------
Services (Employment) - 1.0%
280,000 Transmedia Network Inc.* $ 997,500
-----------
Services (Facilities & Environment) - 2.0%
160,000 FirstService Corp.* $ 1,920,000
-----------
Total Consumer Staples $ 6,200,857
-----------
Energy - 6.9%
Oil & Gas (Drilling & Equipment) - 1.1%
24,500 Dawson Geophysical Co.* $ 223,563
160,000 Eagle Geophysical, Inc.* 880,000
-----------
$ 1,103,563
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements. 9
<PAGE>
Pioneer Micro-Cap Fund
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SCHEDULE OF INVESTMENTS 11/30/98 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Oil & Gas (Exploration/Production) - 5.8%
4,700,000 Abacan Resources* $ 1,468,750
25,760 CMS Energy Corp. 1,255,800
17,500 St. Mary Land & Exploration 332,500
150,000 Talisman Energy, Inc.* 2,615,625
-----------
$ 5,672,675
-----------
Total Energy $ 6,776,238
-----------
Financial - 5.8%
Consumer Finance - 4.6%
90,000 Litchfield Financial Corp. $ 1,608,750
320,000 Long Beach Financial Corp.* 2,550,000
75,000 United PanAm Financial Corp.* 375,000
-----------
$ 4,533,750
-----------
Financial (Diversified) - 1.1%
52,000 LaSalle Hotel Properties $ 698,750
21,100 Prime Group Realty Trust 316,500
-----------
$ 1,015,250
-----------
Insurance (Property/Casualty) - 0.1%
11,600 Gainsco, Inc. $ 76,850
-----------
Total Financial $ 5,625,850
-----------
Healthcare - 6.6%
Biotechnology - 2.8%
365,000 Aronex Pharmaceuticals, Inc.* $ 1,095,000
142,500 Immulogic Pharmaceutical Corp.* 222,656
375,000 Texas Biotechnology Corp.* 1,429,687
-----------
$ 2,747,343
-----------
Healthcare (Medical Products/Supplies) - 2.7%
140,000 ArQule, Inc.* $ 840,000
365,000 General Surgical Innovations* 1,095,000
22,500 Premier Laser Systems, Inc.* 64,688
50,000 Young Innovations, Inc.* 687,500
-----------
$ 2,687,188
-----------
Healthcare (Specialized Services) - 1.1%
60,000 National Dentex Corp.* $ 1,027,500
-----------
Total Healthcare $ 6,462,031
-----------
</TABLE>
10 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Micro-Cap Fund
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- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Technology - 37.0%
Communications Equipment - 2.4%
237,500 Centigram Communications Corp.* $ 1,810,937
70,000 Davox Corp.* 498,750
-----------
$ 2,309,687
-----------
Computers (Peripherals) - 2.4%
120,000 Nashua Corp.* $ 2,002,500
88,500 QMS, Inc.* 365,063
-----------
$ 2,367,563
-----------
Computers (Software & Services) - 13.5%
43,500 Ardent Software, Inc.* $ 772,125
50,000 Kronos, Inc.* 2,162,500
33,600 The Learning Company, Inc.* 976,500
242,100 Mortice Kern Systems, Inc.* 1,103,703
170,000 Puma Technology, Inc.* 595,000
277,500 Verity, Inc.* 4,786,875
700,000 Xionics Document Technologies, Inc.*+ 2,800,000
-----------
$13,196,703
-----------
Electronics (Component Distributors) - 4.9%
51,500 Del Global Technologies Corp.* $ 515,000
285,000 DSP Communications, Inc.* 4,257,188
-----------
$ 4,772,188
-----------
Electronics (Semiconductor) - 3.7%
200,000 Integrated Circuit Systems, Inc.* $ 2,875,000
82,600 Parlex Corp.* 774,375
-----------
$ 3,649,375
-----------
Equipment (Semiconductor) - 7.0%
33,000 Align-Rite International, Inc.* $ 398,062
147,000 ATMI, Inc.* 2,811,375
130,000 Helix Technology Corp. 1,592,500
83,500 PRI Automation, Inc.* 2,004,000
-----------
$ 6,805,937
-----------
Services (Computer Systems) - 3.1%
1,130,000 Netrix Corp.*+ $ 2,825,000
87,500 Omega Research, Inc.* 185,937
-----------
$ 3,010,937
-----------
Total Technology $36,112,390
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements. 11
<PAGE>
Pioneer Micro-Cap Fund
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SCHEDULE OF INVESTMENTS 11/30/98 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Transportation - 1.2%
Air Freight - 1.2%
285,000 First Aviation Services, Inc.* $ 1,193,437
-----------
Total Transportation $ 1,193,437
-----------
TOTAL COMMON STOCKS
(Cost $95,123,091) $85,640,872
-----------
Principal
Amount
TEMPORARY CASH INVESTMENTS - 12.4%
Commercial Paper - 12.4%
$3,457,000 Chevron Corp., 5.33%, 12/4/98 $ 3,457,000
2,700,000 Ford Motor Credit Co., 4.9%, 12/2/98 2,700,000
2,286,000 Prudential Finance Corp., 4.95%, 12/3/98 2,286,000
3,698,000 Travelers/AETNA Property Casualty Corp., 4.83%, 12/1/98 3,698,000
-----------
TOTAL TEMPORARY CASH INVESTMENTS
(Cost $12,141,000) $12,141,000
-----------
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $107,264,091)(a)(b) $97,781,872
===========
</TABLE>
* Non-income producing security.
+ Investment held by the Fund representing 5% or more of the outstanding
voting stock of such company.
(a) At November 30, 1998, the net unrealized loss on investments based on cost
for federal income tax purposes of $108,378,949 was as follows:
<TABLE>
<S> <C>
Aggregate gross unrealized gain for all investments in which
there is an excess of value over tax cost $ 13,311,953
Aggregate gross unrealized loss for all investments in which
there is an excess of tax cost over value (23,909,030)
------------
Net unrealized loss $(10,597,077)
============
</TABLE>
(b) At November 30, 1998, the Fund had a capital loss carryforward of $6,126,718
which will expire by 2006 if not used.
Purchases and sales of securities (excluding temporary cash investments) for the
year ended November 30, 1998, aggregated $90,693,360 and $101,507,763,
respectively.
12 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Micro-Cap Fund
- --------------------------------------------------------------------------------
BALANCE SHEET 11/30/98
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (including temporary cash
investments of $12,141,000)(cost $107,264,091) $ 97,781,872
Cash 580
Receivables -
Fund shares sold 387,924
Dividends and interest 9,423
Organizational costs - net 17,217
Other 3,813
------------
Total assets $ 98,200,829
------------
LIABILITIES:
Payables -
Investment securities purchased $ 3,560,786
Fund shares repurchased 559,830
Due to affiliates 224,901
Accrued expenses 75,506
------------
Total liabilities $ 4,421,023
------------
NET ASSETS:
Paid-in capital $113,345,803
Accumulated net realized loss on investments (10,083,778)
Net unrealized loss on investments (9,482,219)
------------
Total net assets $ 93,779,806
============
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $36,528,178/2,637,198 shares) $ 13.85
============
Class B (based on $57,251,628/4,181,748 shares) $ 13.69
============
MAXIMUM OFFERING PRICE:
Class A $ 14.69
============
</TABLE>
The accompanying notes are an integral part of these financial statements. 13
<PAGE>
Pioneer Micro-Cap Fund
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STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the Year Ended 11/30/98
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends $ 863,005
Interest 347,129
----------
Total investment income $ 1,210,134
------------
EXPENSES:
Management fees $1,313,202
Transfer agent fees
Class A 134,823
Class B 152,920
Distribution fees
Class A 123,805
Class B 698,603
Accounting 34,351
Custodian fees 42,802
Registration fees 65,560
Professional fees 47,669
Printing 22,372
Organization costs 16,008
Fees and expenses of nonaffiliated trustees 18,314
Miscellaneous 12,464
----------
Total expenses $ 2,682,893
Less management fees waived by Pioneer
Investment Management, Inc. (5,532)
Less fees paid indirectly (11,585)
------------
Net expenses $ 2,665,776
------------
Net investment loss $ (1,455,642)
------------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS:
Net realized loss on investments (including net realized
loss of $16,326 from affiliated companies) $(10,063,557)
Change in net unrealized gain on investments (12,712,316)
------------
Net loss on investments $(22,775,873)
------------
Net decrease in net assets resulting from operations $(24,231,515)
============
</TABLE>
14 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Micro-Cap Fund
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
For the Year Ended 11/30/98 and the Period from 2/28/97
(Commencement of Operations) to 11/30/97
<TABLE>
<CAPTION>
Year Period
Ended Ended
11/30/98 11/30/97
<S> <C> <C>
FROM OPERATIONS:
Net investment loss $ (1,455,642) $ (514,454)
Net realized gain (loss) on investments (10,063,557) 7,941,761
Change in net unrealized gain on investments (12,712,316) 3,230,097
------------ ------------
Net increase (decrease) in net assets resulting from
operations $(24,231,515) $ 10,657,404
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net realized gain:
Class A ($1.07 and $0.00 per share, respectively) $ (3,170,761) $ -
Class B ($1.07 and $0.00 per share, respectively) (4,352,791) -
------------ ------------
Total distributions to shareholders $ (7,523,552) $ -
------------ ------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 30,957,122 $117,365,612
Reinvestment of distributions 6,150,072 -
Cost of shares repurchased (34,367,830) (5,327,507)
------------ -------------
Net increase in net assets resulting from fund share
transactions $ 2,739,364 $112,038,105
------------ ------------
Net increase (decrease) in net assets $(29,015,703) $122,695,509
NET ASSETS:
Beginning of period 122,795,509 100,000
------------ ------------
End of period (including accumulated undistributed net
investment income of $0 and $0, respectively) $ 93,779,806 $122,795,509
============ ============
</TABLE>
<TABLE>
<CAPTION>
CLASS A '98 Shares '98 Amount '97 Shares '97 Amount
<S> <C> <C> <C> <C>
Shares sold 767,876 $12,406,032 3,093,613 $50,077,252
Reinvestment of distributions 176,116 2,828,423 - -
Less shares repurchased (1,211,206) (17,264,814) (192,534) (3,283,449)
---------- ----------- --------- -----------
Net increase (decrease) (267,214) $(2,030,359) 2,901,079 $46,793,803
========== =========== ========= ===========
CLASS B
Shares sold 1,146,851 $18,551,090 4,105,789 $67,288,360
Reinvestment of distributions 207,863 3,321,649 - -
Less shares repurchased (1,167,093) (17,103,016) (114,995) (2,044,058)
---------- ----------- --------- -----------
Net increase 187,621 $ 4,769,723 3,990,794 $65,244,302
========== =========== ========= ===========
</TABLE>
The accompanying notes are an integral part of these financial statements. 15
<PAGE>
Pioneer Micro-Cap Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 11/30/98
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year 2/28/97
Ended to
11/30/98 11/30/97(a)
<S> <C> <C>
CLASS A
Net asset value, beginning of period $ 17.84 $ 15.00
------- -------
Increase (decrease) from investment operations:
Net investment loss $ (0.15) $ (0.07)
Net realized and unrealized gain (loss) on investments (2.77) 2.91
------- -------
Net increase (decrease) from investment operations $ (2.92) $ 2.84
Distributions to shareholders:
Net realized gain (1.07) -
------- -------
Net increase (decrease) in net asset value $ (3.99) $ 2.84
------- -------
Net asset value, end of period $ 13.85 $ 17.84
======= =======
Total return* (17.17)% 18.93%
Ratio of net expenses to average net assets 1.85%+ 1.76%**+
Ratio of net investment loss to average net assets (0.83)%+ (0.60)%**+
Portfolio turnover rate 81% 55%**
Net assets, end of period (in thousands) $36,528 $51,825
Ratios assuming no waiver of management fees and assumption
of expenses by PIM and no reduction for fees paid
indirectly:
Net expenses 1.85% 2.12%**
Net investment loss (0.83)% (0.96)%**
Ratios assuming waiver of management fees and assumption of
expenses by PIM and reduction for fees paid indirectly:
Net expenses 1.84% 1.70%**
Net investment loss (0.82)% (0.54)%**
</TABLE>
(a) The per share data presented above is based upon the average shares
outstanding for the period presented.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
16 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Micro-Cap Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 11/30/98
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year 2/28/97
Ended to
11/30/98 11/30/97(a)
<S> <C> <C>
CLASS B
Net asset value, beginning of period $ 17.77 $ 15.00
------- -------
Increase (decrease) from investment operations:
Net investment loss $ (0.25) $ (0.16)
Net realized and unrealized gain (loss) on investments (2.76) 2.93
------- -------
Net increase (decrease) from investment operations $ (3.01) $ 2.77
Distributions to shareholders:
Net realized gain (1.07) -
------- -------
Net increase (decrease) in net asset value $ (4.08) $ 2.77
------- -------
Net asset value, end of period $ 13.69 $ 17.77
======= =======
Total return* (17.78)% 18.47%
Ratio of net expenses to average net assets 2.55%+ 2.48%**+
Ratio of net investment loss to average net assets (1.53)%+ (1.32)%**+
Portfolio turnover rate 81% 55%**
Net assets, end of period (in thousands) $57,252 $70,971
Ratios assuming no waiver of management fees and
assumption of expenses by PIM and no reduction for
fees paid indirectly:
Net expenses 2.55% 2.81%**
Net investment loss (1.53)% (1.65)%**
Ratios assuming waiver of management fees and assumption
of expenses by PIM and reduction for fees paid indirectly:
Net expenses 2.54% 2.42%**
Net investment loss (1.52)% (1.26)%**
</TABLE>
(a) The per share data presented above is based upon the average shares
outstanding for the period presented.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements. 17
<PAGE>
Pioneer Micro-Cap Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 11/30/98
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
Pioneer Micro-Cap Fund (the Fund) is a Delaware business trust registered under
the Investment Company Act of 1940 as a diversified, open-end management
investment company. The investment objective of the Fund is to seek long-term
growth of capital.
The Fund offers two classes of shares - Class A and Class B shares. Shares of
Class A and Class B each represent an interest in the same portfolio of
investments of the Fund and have equal rights to voting, redemptions, dividends
and liquidation, except that each class of shares can bear different transfer
agent and distribution fees and have exclusive voting rights with respect to the
distribution plans that have been adopted by Class A and Class B shareholders,
respectively.
The Fund's financial statements have been prepared in conformity with generally
accepted accounting principles that require the management of the Fund to,
among other things, make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements, and the reported amounts of
revenues and expenses during the reporting periods. Actual results could differ
from those estimates. The following is a summary of significant accounting
policies consistently followed by the Fund, which are in conformity with those
generally accepted in the investment company industry:
A. Security Valuation
Security transactions are recorded on trade date. The net asset value is
computed once daily, on each day the New York Stock Exchange is open, as of
the close of regular trading on the exchange. In computing the net asset
value, securities are valued at the last sale price on the principal exchange
where they are traded. Securities that have not traded on the date of
valuation, or securities for which sale prices are not generally reported,
are valued at the mean between the last bid and asked prices. 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.
Dividend income is recorded on the ex-dividend date and interest income is
recorded on the accrual basis. Temporary cash investments are valued at
amortized cost.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes. It
is the Fund's practice to first select for sale those securities
18
<PAGE>
Pioneer Micro-Cap Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
that have the highest cost and also qualify for long-term capital gain or
loss treatment for tax purposes.
B. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its taxable income and net realized capital gains, if any, to its
shareholders. Therefore, no federal income tax provision is required.
The characterization of distributions to shareholders for financial reporting
purposes is determined in accordance with federal income tax rules.
Therefore, the source of the Fund's distributions may be shown in the
accompanying financial statements as either from or in excess of net
investment income or net realized gain on investment transactions, or from
paid-in capital, depending on the type of book/tax differences that may
exist.
The Fund has reclassified $16,151 and $1,439,491 from accumulated net
realized loss on investments and paid-in capital, respectively, to
accumulated net investment loss. The reclassification has no impact on the
net asset value of the Fund and is designed to present the Fund's capital
accounts on a tax basis.
C. Fund Shares
The Fund records sales and repurchases of its shares on trade date. Net
losses, if any, as a result of cancellations are absorbed by PFD, the
principal underwriter for the Fund and an indirect subsidiary of The Pioneer
Group, Inc. (PGI). PFD earned $54,979 in underwriting commissions on the sale
of fund shares during the year ended November 30, 1998.
D. Class Allocations
Distribution fees are calculated based on the average daily net asset value
attributable to Class A and Class B shares of the Fund, respectively.
Shareholders of each class share all expenses and fees paid to the transfer
agent, Pioneering Services Corporation (PSC), for their services, which are
allocated based on the number of accounts in each class and the ratable
allocation of related out-of-pocket expense (see Note 3). Income, common
expenses and realized and unrealized gains and losses are calculated at the
Fund level and allocated daily to each class of shares based on the
respective percentage of adjusted net assets at the beginning of the day.
19
<PAGE>
Pioneer Micro-Cap Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 11/30/98 (continued)
- --------------------------------------------------------------------------------
Distributions to shareholders are recorded as of the ex-dividend date.
Distributions paid by the Fund with respect to each class of shares are
calculated in the same manner, at the same time, and in the same amount,
except that Class A and Class B shares can bear different transfer agent and
distribution fees.
E. Repurchase Agreements
With respect to repurchase agreements entered into by the Fund, the value of
the underlying securities (collateral), including accrued interest received
from counterparties, is required to be at least equal to or in excess of the
value of the repurchase agreement at the time of purchase. The collateral for
all repurchase agreements is held in safekeeping in the customer-only account
of the Fund's custodian, or subcustodians. The Fund's investment adviser,
Pioneer Investment Management, Inc. (PIM) (formerly Pioneering Management
Corporation), is responsible for determining that the value of the collateral
remains at least equal to the repurchase price.
F. Deferred Organization Costs
The costs incurred by the Fund in connection with its organization have been
deferred and are amortized on a straight-line basis over a period of up to
five years. If PIM redeems any of its initial investment prior to the end of
the amortization period, the redemption proceeds will be decreased by the pro
rata share of the unamortized expenses as of the date of redemption. The pro
rata share is derived by dividing the number of original shares redeemed by
the total number of original shares outstanding at the time of redemption.
2. Management Agreement
PIM manages the Fund's portfolio and is a wholly owned subsidiary of PGI.
Management fees are calculated daily at the annual rate of 1.10% of the Fund's
average daily net assets.
Until March 31, 1998, PIM agreed not to impose a portion of its management fee
and to assume other operating expenses of the Fund to the extent necessary to
limit Class A expenses to 1.75% of the average daily net assets attributable to
Class A shares; the portion of the Fund-wide expenses attributable to Class B
shares was reduced only to the extent that such expenses were reduced for Class
A shares.
20
<PAGE>
Pioneer Micro-Cap Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In addition, under the management and administration agreements, certain other
services and costs, including accounting, regulatory reporting and insurance
premiums, are paid by the Fund. At November 30, 1998, $114,013 was payable to
PIM related to management fees, administrative and certain other services.
3. Transfer Agent
PSC, a wholly owned subsidiary of PGI, provides substantially all transfer agent
and shareholder services to the Fund at negotiated rates. Included in due to
affiliates is $54,789 in transfer agent fees payable to PSC at November 30,
1998.
4. Distribution Plans
The Fund adopted a Plan of Distribution for each class of shares (Class A Plan
and Class B Plan) in accordance with Rule 12b-1 of the Investment Company Act of
1940. Pursuant to the Class A Plan, the Fund pays PFD a service fee of up to
0.25% of the Fund's average daily net assets in reimbursement of its actual
expenditures to finance activities primarily intended to result in the sale of
Class A shares. Pursuant to the Class B Plan, the Fund pays PFD 1.00% of the
average daily net assets attributable to Class B shares. The fee consists of a
0.25% service fee and a 0.75% distribution fee paid as compensation for personal
services and/or account maintenance services or distribution services with
regard to Class B shares. Included in due to affiliates is $56,099 in
distribution fees payable to PFD at November 30, 1998.
In addition, redemptions of each Class of shares may be subject to a contingent
deferred sales charge (CDSC). A CDSC of 1.00% may be imposed on redemptions of
certain net asset value purchases of Class A shares within one year of purchase.
Class B shares that are redeemed within six years of purchase are subject to a
CDSC at declining rates beginning at 4.0% based on the lower of cost or market
value of shares being redeemed. Proceeds from the CDSC are paid to PFD. For the
year ended November 30, 1998, CDSCs in the amount of $305,039 were paid to PFD.
5. Expense Offsets
The Fund has entered into certain directed brokerage and expense offset
arrangements resulting in a reduction in the Fund's total expenses. For the year
ended November 30, 1998, the Fund's expenses were reduced by $11,585 under such
arrangements.
21
<PAGE>
Pioneer Micro-Cap Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 11/30/98 (continued)
- --------------------------------------------------------------------------------
6. Line of Credit Facility
Effective April 14, 1998, the Fund, along with certain other funds in the
Pioneer Family of Funds (the Funds), collectively participate in a $50 million
committed, unsecured revolving line of credit facility. Borrowings are used
solely for temporary or emergency purposes. The Fund may borrow up to the lesser
of $50 million or the limits set by its prospectus for borrowings. Interest on
collective borrowings of up to $25 million is payable at the Federal Funds Rate
plus 3/8% on an annualized basis, or at the Federal Funds Rate plus 1/2% if the
borrowing exceeds $25 million at any one time. The Funds pay an annual
commitment fee for this facility. The commitment fee is allocated among such
Funds based on their respective borrowing limits. For the period ended November
30, 1998, there were no borrowings under this agreement.
7. Affiliated Companies
The Fund primarily invests in smaller capitalized company securities that tend
to be more sensitive to changes in earnings expectations and have lower trading
volumes than mid to large capitalized company securities, and as a result, they
may experience more abrupt and erratic price movements. The Fund's investment in
these smaller capitalized companies may exceed 5% of the outstanding voting
stock. Such companies are deemed affiliates of the Fund for financial reporting
purposes. The following summarizes transactions with affiliates of the Fund as
of November 30, 1998:
<TABLE>
<CAPTION>
Dividend
Affiliates Purchases Sales Income Value
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dura Products International, Inc. $ 822,941 $ - $ - $3,630,026
Netrix Corp. 2,209,338 - - 2,825,000
Ocal Inc. - 21,562 - 1,842,750
Riviera Tool Co. 61,905 91,223 32,614 1,220,067
Triple S Plastics, Inc. 146,163 - - 1,068,750
Xionics Document Technologies, Inc. 2,803,284 - - 2,800,000
- -----------------------------------------------------------------------------------
</TABLE>
22
<PAGE>
Pioneer Micro-Cap Fund
- -------------------------------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- -------------------------------------------------------------------------------
To the Shareowners and the Board of Trustees of Pioneer Micro-Cap Fund:
We have audited the accompanying balance sheet, including the schedule of
investments, of Pioneer Micro-Cap Fund as of November 30, 1998, and the related
statement of operations, the statements of changes in net assets, and the
financial highlights for the periods presented. These financial statements and
financial highlights are the responsibility of the Fund'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 generally accepted auditing
standards. 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. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
November 30, 1998, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
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 Micro-Cap Fund as of November 30, 1998, the results of its operations,
the changes in its net assets, and the financial highlights for the periods
presented, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
January 8, 1999
23
<PAGE>
Pioneer Micro-Cap Fund
- -------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
Trustees Officers
John F. Cogan, Jr. John F. Cogan, Jr., Chairman and
Mary K. Bush President
Richard H. Egdahl, M.D. David D. Tripple, Executive Vice President
Margaret B.W. Graham John A. Boynton, Treasurer
John W. Kendrick Joseph P. Barri, Secretary
Marguerite A. Piret
David D. Tripple
Stephen K. West
John Winthrop
Investment Adviser
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Independent Public Accountants
Arthur Andersen LLP
Principal Underwriter
Pioneer Funds Distributor, Inc.
Legal Counsel
Hale and Dorr LLP
Shareowner Services and Transfer Agent
Pioneering Services Corporation
</TABLE>
24
<PAGE>
- -------------------------------------------------------------------------------
THE PIONEER FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
For information about any Pioneer mutual fund, please contact your investment
representative, or call Pioneer at 1-800-225-6292. Ask for a free fund
information kit, which includes a fund prospectus. Please read the prospectus
carefully before you invest or send money.
<TABLE>
<S> <C>
Growth Funds Income Funds
United States Taxable
Pioneer Capital Growth Fund Pioneer America Income Trust
Pioneer Growth Shares Pioneer Bond Fund
Pioneer Micro-Cap Fund Pioneer Short-Term Income Trust
Pioneer Mid-Cap Fund
Pioneer Small Company Fund Tax-Free
Pioneer Tax-Free Income Fund
International/Global
Pioneer Emerging Markets Fund Money Market Fund
Pioneer Europe Fund Pioneer Cash Reserves Fund
Pioneer Gold Shares
Pioneer Indo-Asia Fund
Pioneer International Growth Fund
Pioneer World Equity Fund
Growth and Income Funds
Pioneer Balanced Fund
Pioneer Equity-Income Fund
Pioneer Fund
Pioneer Real Estate Shares
Pioneer II
</TABLE>
25
<PAGE>
- -------------------------------------------------------------------------------
PROGRAMS AND SERVICES FOR PIONEER SHAREOWNERS
- -------------------------------------------------------------------------------
Your investment representative can give you additional information on Pioneer's
programs and services. If you want to order literature on any of the following
items directly, simply call Pioneer at 1-800-225-6292.
FactFone(SM)
Our automated account information service, available to you 24 hours a day,
seven days a week. FactFone gives you a quick and easy way to check fund share
prices, yields, dividends and distributions, as well as information about your
own account. Simply call 1-800-225-4321. For specific account information, have
your 13-digit account number and four-digit personal identification number at
hand.
90-Day Reinstatement Privilege (for Class A Shares)
Enables you to reinvest all or a portion of the money you redeem from your
Pioneer account - without paying a sales charge - within 90 days of your
redemption. You have the choice of investing in any Pioneer fund, as long as you
meet its minimum investment requirement.
Investomatic Plan
An easy and convenient way for you to invest on a regular basis. All you need to
do is authorize a set amount of money to be moved out of your bank account into
the Pioneer fund of your choice. Investomatic also allows you to change the
dollar amount, frequency and investment date right over the phone. By putting
aside affordable amounts of money regularly, you can build a long-term
investment - without sacrificing your current standard of living.
Payroll Investment Program (PIP)
Lets you invest in a Pioneer fund directly through your paycheck. All that's
involved is for your employer to fill out an authorization form allowing Pioneer
to deduct from participating employees' paychecks. You specify the dollar amount
you want to invest into the Pioneer fund(s) of your choice.
26
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Automatic Exchange Program
A simple way to move money from one Pioneer fund to another over a period of
time. Just invest a lump sum in one fund, and select the other Pioneer funds you
wish to invest in. You choose the amounts and dates for Pioneer to sell shares
of your original fund and use the proceeds to buy shares of the other funds you
have chosen. Over time, your investment will be shifted out of the original
fund. (Automatic Exchange is available for originating accounts with a balance
of $5,000 or more.)
Directed Dividends
Lets you invest cash dividends from one Pioneer fund to an account in another
Pioneer fund with no sales charge or fee. Simply fill out the applicable
information on a Pioneer Account Options Form. (This program is available for
dividend payments only; capital gains distributions are not eligible at this
time.)
Direct Deposit
Lets you move money into your bank account using electronic funds transfer
(EFT). EFT moves your money faster than you would receive a check, eliminates
unnecessary paper and mail, and avoids lost checks. Simply fill out a Pioneer
Direct Deposit Form, giving your instructions.
Systematic Withdrawal Plan (SWP)
Lets you establish automatic withdrawals from your account at set intervals. You
decide the frequency and the day of the month you want. Pioneer will send the
proceeds by check to the address you designate, or electronically to your bank
account. You also can authorize Pioneer to make the redemptions payable to
someone else. (SWPs are available for accounts with a value of $10,000 or more.)
27
<PAGE>
- -------------------------------------------------------------------------------
RETIREMENT PLANS FROM PIONEER
- -------------------------------------------------------------------------------
Pioneer has a long history of helping people work toward their retirement goals,
offering plans suited to the individual investor and businesses of all sizes.
For more information on Pioneer retirement plans, contact your investment
professional, or call Pioneer at 1-800-622-0176.
Individual Retirement Account (IRA)
Traditional IRA
A Traditional IRA allows anyone under age 701/2 with earned income to contribute
up to $2,000 annually. Spouses may contribute up to $2,000 annually into a
separate IRA, for a total of $4,000 per year for a married couple. Earnings are
tax-deferred, and contributions may be tax-deductible.
Roth IRA
Contributions, up to $2,000 a year per person in earned income, are not
tax-deductible, but earnings are tax-free for qualified withdrawals. You can
contribute beyond age 70-1/2.
401(k) Plan
The traditional 401(k) plan allows employees to make pre-tax contributions
through payroll deduction, up to $9,500 per year or 25% of pay, whichever is
less. Employers may contribute.
SIMPLE (Savings Incentive Match Plan for Employees)
401(k) or IRA Plan
Businesses with 100 or fewer eligible employees can establish either plan; both
resemble the traditional 401(k), but with less testing and lower administration
costs. Employees can make pre-tax contributions of up to $6,000 per year, and an
employer contribution is required.
Most retirement plan withdrawals must meet specific conditions to avoid
penalties.
28
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
403(b) Plan
Also known as a Tax-Sheltered Account (TSA), a 403(b) plan is available only to
employees of public schools, not-for-profit hospitals and other tax-exempt
organizations. A 403(b) plan lets employees set aside a portion of their salary,
before taxes, through payroll deduction.
Simplified Employee Pension Plan (SEP)
SEPs let self-employed people and small-business owners make tax-deductible
contributions of up to 15% of their income. Generally, employers must contribute
the same percentage of pay for themselves and any eligible employees;
contributions are made directly to employees' IRAs. SEPs are easy to administer
and can be an especially good choice for firms with few or no employees.
Profit Sharing Plan
Profit sharing plans offer companies considerable flexibility, allowing them to
decide each year whether a contribution will be made and how much, up to 15% of
each participant's pay. These plans can include provisions for loans and vesting
schedules.
Age-Weighted Profit Sharing Plan
Like traditional profit sharing plans, employer contributions are flexible, but
age-weighted plans allocate contributions based on both age and salary.
Age-weighted plans are designed for employers who want to maximize their own
contributions while keeping contributions to employees affordable.
Money Purchase Pension Plan (MPP)
Money purchase plans are similar to profit-sharing plans, but allow for higher
annual contributions - up to 25% of pay. MPPs aren't as flexible as profit
sharing plans; a fixed percentage of pay must be contributed each year,
determined when the plan is established. Businesses often set up both MPPs and
profit sharing plans.
Most retirement plan withdrawals must meet specific conditions to avoid
penalties.
29
<PAGE>
- -------------------------------------------------------------------------------
HOW TO CONTACT PIONEER
- -------------------------------------------------------------------------------
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
Call us for:
<TABLE>
<S> <C>
Account information, including existing accounts,
new accounts, prospectuses, applications
and service forms 1-800-225-6292
FactFone(SM) for automated fund yields, prices,
account information and transactions 1-800-225-4321
Retirement plans information 1-800-622-0176
Telecommunications Device for the Deaf (TDD) 1-800-225-1997
Write to us:
Pioneering Services Corporation
60 State Street
Boston, Massachusetts 02109
Our toll-free fax 1-800-225-4240
Our Internet e-mail address [email protected]
(for general questions about Pioneer only)
Visit our web site: www.pioneerfunds.com
</TABLE>
This report must be preceded or accompanied by a current Fund prospectus.
[Pioneer Logo]
<TABLE>
<S> <C>
Pioneer Investment Management, Inc.
60 State Street 0199-5881
Boston, Massachusetts 02109 (C)Pioneer Funds Distributor,Inc.
www.pioneerfunds.com (Recycle Symbol)Printed on Recycled Paper
</TABLE>
