<PAGE>
PIONEER INDEPENDENCE FUND [LOGO]
[PHOTO]
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SEMIANNUAL REPORT
JUNE 30, 1999
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<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter from the Chairman 1
Portfolio and Performance Update 2
Portfolio Management Discussion 3
Schedule of Investments 5
Financial Statements 8
Notes to Financial Statements 12
Report of Independent Public Accountants 14
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
LETTER FROM THE CHAIRMAN 6/30/99
- -------------------------------------------------------------------------------
DEAR SHAREOWNER,
I am delighted to introduce this report for Pioneer Independence Fund, covering
a rewarding six months. On behalf of everyone at Pioneer, I thank you for your
interest and this opportunity to reflect on the investment environment over the
reporting period.
The first half of 1999 proved to be another eventful but positive period for
stock investors. The long running bull market broadened as investors showed a
greater interest in many of the areas that were neglected in 1998, namely
mid-cap and small companies. The improvement in market breadth is an indication
of the cyclical nature of the open marketplace. The large growth stocks that
dominated the market for several years have reached such high price levels that
many investors are beginning to look elsewhere for opportunities. What they're
seeing is a variety of stocks with strong fundamentals, low prices and, we
believe, some real potential. For long-term investors, holding quality companies
at reasonable prices is a simple and time-tested philosophy that makes sense
regardless of the type of stocks in favor. It's a philosophy that Pioneer has
lived by for more than 70 years.
It is quite tempting to abandon a balanced investment plan when the stock market
shows returns over 20%, as it has for each of the past four years. But longer
term, average annual returns of stocks, as measured by the Standard & Poor's 500
Index, are closer to 11%. That is why experts recommend that investors hold a
mix of stocks and bonds, as well as relatively safe investments like money
market funds, to suit their long-term objectives and to seek to achieve balance.
If you think your investments may be out of line, we encourage you to meet with
your investment professional to discuss your asset allocation.
I encourage you to read on to learn more about Pioneer Independence Fund. If you
have questions about your investment, please contact your investment
professional.
Respectfully,
/s/ John F. Cogan, Jr.
John F. Cogan, Jr.
Chairman and President
1
<PAGE>
PIONEER INDEPENDENCE FUND
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PORTFOLIO AND PERFORMANCE UPDATE 6/30/99
- -------------------------------------------------------------------------------
PORTFOLIO DIVERSIFICATION
(As a percentage of total investment portfolio)
[CHART]
<TABLE>
<S> <C>
U.S. Common Stocks 84%
International Common Stocks 5%
Depositary Receipts for International Stocks 11%
</TABLE>
SECTOR DIVERSIFICATION
(As a percentage of equity holdings)
[CHART]
<TABLE>
<S> <C>
Technology 20%
Financial 15%
Consumer Staples 15%
Consumer Cyclicals 11%
Basic Materials 8%
Healthcare 8%
Capital Goods 6%
Communication Services 5%
Energy 5%
Other 7%
</TABLE>
- -------------------------------------------------------------------------------
FIVE LARGEST HOLDINGS
(As a percentage of equity holdings)
1. Vitesse Semiconductor Corp. 2.02%
2. Shell Transportation and Trading Co. (A.D.R.) 1.59
3. Williams Companies, Inc. 1.59
4. Raytheon Co. 1.58
5. Bell Atlantic Corp. 1.56
Holdings will vary for other periods.
- -------------------------------------------------------------------------------
Prices and Distributions
<TABLE>
<CAPTION>
6/30/99 12/31/98
<S> <C> <C>
Net Asset Value per Share $11.04 $9.63
<CAPTION>
Distributions per Share Income Short-Term Long-Term
(12/31/98 - 6/30/99) Dividends Capital Gains Capital Gains
<S> <C> <C> <C>
$ - $ - $ -
</TABLE>
- -------------------------------------------------------------------------------
PERFORMANCE OF A $10,000 INVESTMENT+
The following chart shows the value of an investment made in Pioneer
Independence Fund at net asset value, compared to the growth of the Russell
1000 Index.
[Begin: Tabular Description of Mountain Chart]
<TABLE>
<CAPTION>
Pioneer Independence Russell 1000
Fund* Index+
<S> <C> <C>
3/31/98 "$10,000" "$10,000"
"$10,249" "$10,103"
"$10,000" "$9,885"
6/30/98 "$9,900" "$10,251"
"$9,202" "$10,128"
"$7,836" "$8,613"
9/30/98 "$8,126" "$9,193"
"$8,853" "$9,919"
"$9,182" "$10,533"
12/31/98 "$9,693" "$11,204"
"$9,824" "$11,604"
"$9,552" "$11,237"
3/31/99 "$10,015" "$11,667"
"$10,599" "$12,155"
"$10,659" "$11,892"
6/30/99 "$11,112" "$12,498"
</TABLE>
+ Index comparison begins 3/31/98. The Russell 1000 Index is an unmanaged
measure of the 1,000 largest companies in the Russell 3000 Index,
representing approximately 92% of the total market capitalization of the
Russell 3000. Index returns are calculated monthly, assume reinvestment of
dividends and, unlike Fund returns, do not reflect any fees or expenses.
You cannot invest directly in the Index.
AVERAGE ANNUAL TOTAL RETURN
(As of June 30, 1999)
- -------------------------------------------------------------------------------
NET ASSET VALUE*
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD
<S> <C>
Life-of-Fund 8.77%
(3/16/98)
1 Year 12.24%
</TABLE>
Returns shown assume reinvestment of distributions at net asset value.
* Reflects Fund performance only at net asset value. Does not reflect
Creation and Sales Charges applicable to purchases of Fund shares through
Pioneer Independence Plans, which vary as discussed in the Plans'
prospectus. For the first 12 investments, these charges can amount to 50%
of the total amount invested. Total return would be reduced if these
charges were taken into account.
2
Past performance does not guarantee future results. Returns and share
prices fluctuate so that your investment, when redeemed, may be worth or less
than its original cost.
<PAGE>
PIONEER INDEPENDENCE FUND
- -------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 6/30/99
- -------------------------------------------------------------------------------
The first half of Pioneer Independence Fund's fiscal year ended on June 30,
1999. In the following discussion Theresa A. Hamacher provides an update on the
economic environment and investment strategies that shaped the Fund's improved
performance over the period. An investment professional for more than 15 years,
Ms. Hamacher -along with David D. Tripple, the Fund's other co-manager -- is
responsible for the daily management of the Fund.
Q: INVESTORS WERE ATTRACTED TO A BROADER GROUP OF STOCKS OVER THE PERIOD. DID
THIS HELP THE FUND?
A: Yes, the global economy improved as the year progressed and, in turn, a
greater cross-section of stocks turned in better earnings. As we moved into
April, investors showed a particular interest in mid-caps and value stocks.
This was a sharp, and welcome, change from the trend of having a limited
focus on a few large growth stocks.
Q: DID THIS RETURN TO VALUE HELP THE FUND'S PERFORMANCE?
A: Yes it did. In fact, the Fund's total return of 14.64%, at net asset value,
outperformed the 11.54% return of its benchmark, the Russell 1000 Index,
for the same period. The Russell 1000 measures the performance of the
largest 1000 stocks in the U.S. market; it's a broader measure than the
Standard & Poor's 500 Index, which returned 12.38% for the period.
Q: IN YOUR LAST REPORT, YOU EXPLAINED THAT THE FUND INCLUDED BOTH VALUE AND
GROWTH STOCKS. IS THIS STILL THE CASE?
A: Yes, the Fund takes an opportunistic approach, choosing the stocks we think
represent the very best ideas of Pioneer's total investment team. During
much of 1998, we accumulated value-oriented stocks, especially mid-sized
value companies, since they seemed to hold the most potential for
appreciation. We are happy to report that our analysis seemed to be on
target.
Today, we remain focused on mid-cap, value-oriented stocks because we
believe they can provide the best of both worlds when you compare them to
small and large businesses. First, compared to small companies, mid-caps
generally have longer operating histories, stronger market niches, better
financial resources and more experienced managements. Relative to large
companies, mid-caps typically do not face the intense scrutiny of Wall
Street, and often fall off other investors' radar-screens. Also, they
generally sell at lower valuations than larger stocks. In addition,
mid-caps often make attractive acquisition candidates. Lastly, mid-cap
stocks have dramatically underperformed over the past few years, and we
believe they have the potential to drive the market for sustained periods.
Q: WHAT SECTORS AND STOCKS CONTRIBUTED TO THE FUND'S STRONG PERFORMANCE?
A: Some opportunistic investments in the technology area really helped
performance. Many of these appreciated so quickly that they soon hit our
target prices and we sold them after a short time. Other technology stocks
-Hewlett Packard and Oracle - also performed well over the period and still
remain in the portfolio. Williams Companies, which does business in both
natural gas and telecommunications by running fiber optic cable through gas
lines, was another standout. We also saw many commodity-related holdings,
purchased near their lows in 1998, rebound sharply as the global economic
picture improved. Alcoa, an aluminum manufacturer, Freeport-McMoRan Copper
and Gold and Temple-Inland, a paper company, are good examples in this
group.
Q: WERE THERE DISAPPOINTMENTS?
A: Of course. The insurance area, especially property casualty companies, were
weak because their earnings did not keep pace with stronger sectors such as
technology. Healthcare was another sector that did not perform well, mainly
because of regulatory concerns. The Fund wasn't as dramatically affected as
it might have been because it holds a smaller percentage of healthcare
stocks than usual.
3
<PAGE>
PIONEER INDEPENDENCE FUND
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PORTFOLIO MANAGEMENT DISCUSSION 6/30/99
- -------------------------------------------------------------------------------
Q: WHAT IS YOUR OUTLOOK FOR THE REST OF THE YEAR?
A: We think that mid-cap and value stocks' recent strong performance may be
just the beginning of a longer trend. So we expect to maintain the mid-cap,
value-oriented focus we have employed for the past year. Interestingly, as
volatility continues, we are seeing more overlap between value and growth
names. The key to long-term performance, as usual, is earnings growth. Over
the past three months, as earnings growth rates for mid-sized value
companies improved, investors broadened their focus and included more than
just large-cap, blue chip stocks in their portfolios. If the global
economic recovery continues, we believe the Fund is positioned to benefit
from investors' renewed interest in a broader offering of stocks.
4
<PAGE>
Pioneer Independence Fund
- ------------------------------------------------------------
SCHEDULE OF INVESTMENTS 6 / 30 / 99
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - 100%
Basic Materials - 8.0%
Aluminum - 1.4%
1,500 Alcoa, Inc. $ 92,813
------------
Chemicals (Diversified) - 1.4%
2,000 Hoechst AG (A.D.R.) $ 92,000
------------
Chemicals (Specialty) - 1.1%
1,300 Minerals Technologies, Inc. $ 72,556
------------
Containers & Packaging (Paper) - 0.8%
800 Temple-Inland Inc. $ 54,600
------------
Metals Mining - 1.5%
5,500 Freeport-McMoRan Copper and Gold Inc. $ 98,656
------------
Paper & Forest Products - 1.8%
3,000 Asia Pulp and Paper Ltd. (A.D.R.)* $ 28,875
2,000 Bowater Inc. 94,500
------------
$ 123,375
------------
Total Basic Materials $ 534,000
------------
Capital Goods - 5.7%
Aerospace - 1.0%
1,000 Gulfstream Aerospace Corp.* $ 67,562
------------
Electrical Equipment - 2.6%
4,000 American Power Conversion Corp.* $ 80,500
2,000 SCI Systems, Inc.* 95,000
------------
$ 175,500
------------
Manufacturing (Specialized) - 1.3%
1,300 Sealed Air Corp.* $ 84,337
------------
Office Equipment & Supplies - 0.8%
3,300 Anacomp, Inc.* $ 56,100
------------
Total Capital Goods $ 383,499
------------
Communication Services - 5.5%
Cellular / Wireless
Telecommunications - 1.0%
350 Vodafone Airtouch Plc (A.D.R.) $ 68,950
------------
Telephone - 4.5%
1,600 Bell Atlantic Corp. $ 104,600
1,700 SBC Communications, Inc. 98,600
900 Telecom Italia SpA (A.D.R.) 94,669
------------
$ 297,869
------------
Total Communication Services $ 366,819
------------
Consumer Cyclicals - 10.7%
Automobiles - 1.5%
1,500 General Motors Corp. $ 99,000
------------
Auto Parts & Equipment - 0.7%
2,548 Delphi Automotive Systems Corp. $ 47,297
------------
<CAPTION>
Shares Value
<C> <S> <C>
Household Furnishings &
Appliances - 1.2%
1,100 Maytag Corp. $ 76,656
------------
Leisure Time (Products) - 1.1%
2,880 Mattel, Inc. $ 76,140
------------
Publishers - 1.5%
1,900 Dow Jones & Co. $ 100,819
------------
Publishing - 1.1%
1,400 McGraw-Hill Co., Inc. $ 75,512
------------
Retail (Discounters) - 1.4%
3,250 Dollar General Corp. $ 94,250
------------
Retail (General Merchandise) - 0.9%
900 Dayton Hudson Corp. $ 58,500
------------
Services (Commercial & Consumer) - 1.3%
5,400 Vivendi (A.D.R.) $ 88,425
------------
Total Consumer Cyclicals $ 716,599
------------
Consumer Staples - 15.2%
Beverages (Non-Alcoholic) - 1.4%
2,500 PepsiCo Inc. $ 96,719
------------
Broadcasting
(Cable / Television / Radio) - 2.8%
3,000 Infinity Broadcasting Corp.* $ 89,250
1,300 MediaOne Group Inc.* 96,687
------------
$ 185,937
------------
Foods - 4.1%
3,800 Celestial Seasonings, Inc.* $ 81,700
1,600 Hershey Foods Corp. 95,000
4,200 Sara Lee Corp. 95,287
------------
$ 271,987
------------
Personal Care - 1.3%
2,100 The Gillette Co. $ 86,100
------------
Restaurants - 2.5%
4,500 Luby's Cafeterias Inc. $ 67,500
2,400 McDonald's Corp. 99,150
------------
$ 166,650
------------
Retail Stores (Food Chains) - 1.2%
2,200 Winn-Dixie Stores, Inc. $ 81,262
------------
Services (Employment) - 0.6%
3,000 Modis Professional Services Inc.* $ 41,250
------------
Specialty Printing - 1.3%
4,500 John H. Harland Co. $ 89,719
------------
Total Consumer Staples $ 1,019,624
------------
Energy - 5.3%
Oil (Domestic Integrated) - 1.6%
2,300 Shell Transportation and Trading Co.
(A.D.R.) $ 106,663
------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 5
<PAGE>
Pioneer Independence Fund
- ------------------------------------------------------------
SCHEDULE OF INVESTMENTS 6 / 30 / 99 (CONTINUED)
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
Oil (Drilling & Equipment) - 1.1%
8,000 R&B Falcon Corp.* $ 75,000
------------
Oil (International Integrated) - 1.4%
900 Mobil Corp. $ 89,100
------------
Oil & Gas
(Production / Exploration) - 1.2%
2,200 Anadarko Petroleum Corp. $ 80,988
------------
Total Energy $ 351,751
------------
Financial - 15.5%
Banks (Major Regional) - 1.3%
2,000 Fleet Financial Group, Inc. $ 88,750
------------
Banks (Money Centers) - 1.5%
1,400 BankAmerica Corp. $ 102,638
------------
Banks (Regional) - 2.3%
3,500 Commercial Federal Corp. $ 81,156
3,300 North Fork Bancorporation, Inc. 70,331
------------
$ 151,487
------------
Financial (Diversified) - 2.5%
2,000 SLM Holdings Corp. $ 91,625
3,800 Trizec Hahn Corp. 77,425
------------
$ 169,050
------------
Insurance (Multi-Line) - 2.5%
700 American International Group, Inc. $ 81,944
1,900 Nationwide Financial Services Inc. 85,975
------------
$ 167,919
------------
Insurance (Property / Casualty) - 4.2%
3,000 ACE Ltd. $ 84,750
41 Berkshire Hathaway, Inc. (Class B)* 92,209
700 Progressive Corp. 101,500
------------
$ 278,459
------------
Savings & Loan Companies - 1.2%
2,200 Washington Mutual Inc. $ 77,825
------------
Total Financial $ 1,036,128
------------
Healthcare - 7.7%
Biotechnology - 1.2%
1,300 Amgen Inc.* $ 79,138
------------
Healthcare (Diversified) - 1.1%
1,300 American Home Products Corp. $ 74,750
------------
Healthcare (Drugs / Major
Pharmaceuticals) - 2.4%
1,500 Pharmacia & UpJohn Inc. $ 85,219
1,400 Schering-Plough Corp. 74,200
------------
$ 159,419
------------
Healthcare (Managed Care) - 1.4%
1,100 Wellpoint Health Networks, Inc.* $ 93,363
------------
<CAPTION>
Shares Value
<C> <S> <C>
Healthcare (Medical
Products / Supplies) - 1.6%
2,000 Becton, Dickinson & Co. $ 60,000
700 Qiagen NV* 47,600
------------
$ 107,600
------------
Total Healthcare $ 514,270
------------
Technology - 19.6%
Communications Equipment - 2.2%
4,000 American Tower Corp.* $ 96,000
1,500 ECI Telecom Ltd. 49,781
------------
$ 145,781
------------
Computers (Hardware) - 2.7%
3,500 Compaq Computer Corp. $ 82,906
1,000 Hewlett-Packard Co. 100,500
------------
$ 183,406
------------
Computers (Software & Services) - 2.8%
2,500 Cadence Design Systems Inc.* $ 31,875
2,000 Oracle Corp.* 74,250
2,300 SAP AG (A.D.R.) 79,638
------------
$ 185,763
------------
Electronics (Component
Distribution) - 2.1%
2,000 Avid Thermal Technology Inc.* $ 45,250
1,200 Siemens AG (A.D.R.) 93,180
------------
$ 138,430
------------
Electronics (Defense) - 1.5%
1,500 Raytheon Co. $ 105,563
------------
Electronics (Semiconductors) - 5.8%
2,000 Etec Systems Inc.* $ 66,500
1,400 Intel Corp. 83,300
700 Texas Instruments Inc. 101,500
2,000 Vitesse Semiconductor Corp.* 134,875
------------
$ 386,175
------------
Equipment (Semiconductors) - 1.3%
1,200 Teradyne Inc.* $ 86,100
------------
Photography / Imaging - 1.2%
1,200 Eastman Kodak Co. $ 81,300
------------
Total Technology $ 1,312,518
------------
Transportation - 4.0%
Airlines - 1.2%
1,200 AMR Corp.* $ 81,900
------------
Railroads - 2.8%
1,500 Canadian National Railway Co. $ 100,500
1,500 Union Pacific Corp. 87,469
------------
$ 187,969
------------
Total Transportation $ 269,869
------------
</TABLE>
6 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Independence Fund
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
Utilities - 2.8%
Electric Companies - 1.2%
2,300 Scottish Power Plc (A.D.R.) $ 80,500
------------
Natural Gas - 1.6%
2,500 Williams Companies, Inc. $ 106,406
------------
Total Utilities $ 186,906
------------
TOTAL INVESTMENT IN SECURITIES
(Cost $6,054,972)(a)(b) $ 6,691,983
------------
</TABLE>
* Non-income producing security.
(a) At June 30, 1999, the net unrealized gain on investments based on cost for
federal income tax purposes of $6,056,856 was as follows:
Aggregate gross unrealized gain for all investments in which
there is an excess of value over cost $ 789,358
Aggregate gross unrealized gain for all investments in which
there is an excess of tax cost over value (154,231)
----------
Net unrealized gain $635,127
----------
(b) At December 31, 1998, the Fund had a net capital loss carryforward of
$49,000 which will expire in 2006 if not utilized.
Purchases and sales of securities (excluding temporary cash investments)
for the six months ended June 30, 1999 aggregated $5,582,496 and
$2,893,461, respectively.
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
Pioneer Independence Fund
- ------------------------------------------------------------
BALANCE SHEET 6 / 30 / 99
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (cost
$6,054,972) $6,691,983
Cash 405,626
Receivables -
Investment securities sold 380,807
Fund shares sold 9,847
Dividends and interest 6,376
Due from Pioneer Investment Management, Inc. 47,346
Organizational costs - net 37,183
Other 371
----------
Total assets $7,579,539
----------
LIABILITIES:
Payables -
Investment securities purchased $ 541,304
Fund shares repurchased 3,036
Due to affiliates 38,629
Accrued expenses 33,541
----------
Total liabilities $ 616,510
----------
NET ASSETS:
Paid-in capital $6,014,898
Accumulated undistributed net investment income 4,195
Accumulated undistributed net realized gain on
investments 306,925
Net unrealized gain on investments 637,011
----------
Total net assets $6,963,029
----------
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Based on $6,963,029/630,679 shares $ 11.04
----------
</TABLE>
8 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Independence Fund
- ------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED 6/30/99
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign taxes
withheld of $2,053) $42,031
Interest 225
-------
Total investment income $ 42,256
---------
EXPENSES:
Management fees $19,030
Transfer agent fees 64,851
Distribution fees 38
Administrative fees 19,703
Custodian fees 6,922
Registration fees 18,375
Professional fees 17,722
Printing 9,804
Fees and expenses of nonaffiliated
trustees 12,792
Organizational costs 11,040
Other 4,419
-------
Total expenses $ 184,696
Less management fees waived and
expenses reimbursed by Pioneer
Investment Management, Inc. (143,468)
Less fees paid indirectly (3,167)
---------
Net expenses $ 38,061
---------
Net investment income $ 4,195
---------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain on investments $ 355,925
Change in net unrealized gain on
investments 404,491
---------
Net gain on investments $ 760,416
---------
Net increase in net assets resulting
from operations $ 764,611
---------
</TABLE>
The accompanying notes are an integral part of these financial statements. 9
<PAGE>
Pioneer Independence Fund
- ------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED 6/30/99 AND THE PERIOD ENDED 12/31/98
<TABLE>
<CAPTION>
Six Months
Ended 3 / 16 / 98 to
6 / 30 / 99 12 / 31 / 98
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $ 4,195 $ (1,317)
Net realized gain (loss) on
investments 355,925 (49,000)
Change in net unrealized gain
on investments 404,491 232,520
---------- ------------
Net increase in net assets
resulting from operations $ 764,611 $ 182,203
---------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
In excess of net investment
income ($0.00 and $0.09 per
share, respectively) $ - $ (29,968)
---------- ------------
Total distributions to
shareholders $ - $ (29,968)
---------- ------------
<CAPTION>
'99 '98
Shares Shares
<S> <C> <C> <C> <C>
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of
shares 339,859 366,217 $3,402,185 $3,350,061
Reinvestment of distributions - 2,994 - 27,752
Cost of shares repurchased (55,607 ) (32,784 ) (538,973 ) (294,842)
-------- -------- ---------- ------------
Net increase in net assets
resulting from fund share
transactions 284,252 336,427 $2,863,212 $3,082,971
-------- -------- ---------- ------------
Net increase in net assets $3,627,823 $3,235,206
NET ASSETS:
Beginning of period 3,335,206 100,000
---------- ------------
End of period (including
accumulated undistributed net
investment income of $4,195
and $0, respectively) $6,963,029 $3,335,206
---------- ------------
</TABLE>
10 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Independence Fund
- ------------------------------------------------------------
FINANCIAL HIGHLIGHTS 6 / 30 / 99
<TABLE>
<CAPTION>
Six Months
Ended 3 / 16 / 98 to
6 / 30 / 99 12 / 31 / 98(a)
<S> <C> <C>
Net asset value, beginning of period $ 9.63 $ 10.00
----------- --------
Net increase (decrease) from investment
operations:
Net investment income (loss) $ 0.01 $ (0.01)
Net realized and unrealized gain
(loss) on investments 1.40 (0.27)
----------- --------
Net increase (decrease) from
investment operations $ 1.41 $ (0.28)
Distributions to shareholders:
In excess of net investment income - (0.09)
----------- --------
Net increase (decrease) in net asset
value $ 1.41 $ (0.37)
----------- --------
Net asset value, end of period $ 11.04 $ 9.63
----------- --------
Total return* 14.64% (2.78)%
Ratio of net expenses to average net
assets 1.62%**+ 1.68%**+
Ratio of net investment income (loss) to
average net assets 0.04%**+ (0.30)%**+
Portfolio turnover rate 119%** 118%**
Net assets, end of period (in thousands) $ 6,963 $ 3,335
Ratios assuming no waiver of management
fees and assumption of expenses by PIM
and no reduction for fees paid
indirectly:
Net expenses 7.25%** 17.26%**
Net investment loss (5.59)%** (15.88)%**
Ratios assuming waiver of management
fees and assumption of expenses by PIM
and reduction for fees paid indirectly:
Net expenses 1.50%** 1.50%**
Net investment income (loss) 0.16%** (0.12)%**
</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 and the complete redemption of the
investment at net asset value at the end of each period.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
Pioneer Independence Fund
- ------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6 / 30 / 99
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Pioneer Independence 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 Fund is available to the general public only through
Pioneer Independence Plans, a systematic investment plan sponsored by Pioneer
Funds Distributor, Inc. (PFD). The investment objective of the Fund is to seek
capital appreciation.
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 that the New York Stock Exchange is open, as
of the close of the 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.
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.
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 that have the
highest cost and also qualify for long-term capital gain or loss treatment for
tax purposes.
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.
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).
D. 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), is responsible for determining that
the value of the collateral remains at least equal to the repurchase price.
E. 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 PFD 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 shares 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 0.75% of the Fund's
average daily net assets.
PIM has agreed not to impose all or a portion of its management fee and to
assume other operating expenses of the Fund to the extent necessary to limit the
Fund's expenses to 1.50% of average daily net assets. PIM's agreement is
temporary and voluntary and may be revised or terminated at any time.
In addition, under the management and administration agreements, certain other
services and costs, including
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Pioneer Independence Fund
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accounting, regulatory reporting and insurance premiums, are paid by the Fund.
3. TRANSFER AGENT
Pioneering Services Corporation (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 $38,629 in transfer agent
fees payable to PSC at June 30, 1999.
4. DISTRIBUTION PLAN
The Fund adopted a Plan of Distribution in accordance with Rule 12b-1 of the
Investment Company Act of 1940. Pursuant to the Distribution Plan, the Fund pays
PFD a service fee of up to 0.25% of the Fund's average daily net assets related
to shares that have been outstanding for more than twelve months in
reimbursement of its actual expenditures to finance activities primarily
intended to result in the sale of fund shares.
5. EXPENSE OFFSETS
The Fund has entered into certain expense offset arrangements resulting in a
reduction in the Fund's total expenses. For the six months ended June 30, 1999,
the Fund's expenses were reduced by $3,167 under such arrangements.
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Pioneer Independence Fund
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareowners and the Board of Trustees of Pioneer Independence Fund:
We have audited the accompanying balance sheet, including the schedule of
investments, of Pioneer Independence Fund as of June 30, 1999, and the related
statement of operations, the statements of changes in net assets, and 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 June
30, 1999, 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 Independence Fund as of June 30, 1999, 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
August 6, 1999
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PIONEER INDEPENDENCE FUND
[LOGO]
Officers
John F. Cogan, Jr., CHAIRMAN AND PRESIDENT
David D. Tripple, EXECUTIVE VICE PRESIDENT
Eric W. Reckard, TREASURER
Joseph P. Barri, SECRETARY
Trustees
John F. Cogan, Jr.
Mary K. Bush
Richard H. Egdahl, M.D.
Margaret B.W. Graham
John W. Kendrick
Marguerite A. Piret
David D. Tripple
Stephen K. West
John Winthrop
Investment Adviser
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Distributor
Pioneer Funds Distributor, Inc.
Independent Public Accountants
Arthur Andersen LLP
Legal Counsel
Hale and Dorr LLP
Pioneer Independence Fund is available to the general public only through
Pioneer Independence Plans, a systematic investment plan sponsored by Pioneer
Funds Distributor, Inc.
This report must be preceded or accompanied by a prospectus for Pioneer
Independence Fund, which includes more information about charges and expenses.
Please read the prospectus carefully before you invest or send money.
0899-6835
-C- Pioneer Funds Distributor, Inc.
