<PAGE>
[PIONEER LOGO]
Pioneer Independence Fund
[PHOTO]
Annual Report
December 31, 1999
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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>
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LETTER FROM THE CHAIRMAN 12/31/99
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Dear Shareowner,
In an ever-changing investment environment, it can sometimes be difficult to be
disciplined enough to adhere to your investment goals. We are bombarded every
day with information and advice from a variety of sources. Magazine and
newspaper headlines create a frenzy by shouting - "Top 10 stocks for the year
2000" - sending many investors scrambling to adjust their holdings so that they
too can have a share in these winners. But as history often shows us,
yesterday's winners are in no way tomorrow's sure thing.
How does an investor digest all of this information? We think it's best to take
it with a grain of salt. No one can know with absolute certainty which stocks
or bonds will have good performance from day to day. It is important to keep
sight of your own investment goals and to stick to them. Jumping from one
investment to another based upon the latest hot trend is unlikely to help you
reach your financial goals. We believe a well reasoned investment plan will.
As in any other year, the first few months of this year are a practical time to
take a step back to revisit your investment goals and make appropriate
adjustments in your personal portfolio. Scheduling a review session with your
financial professional is a good starting point. A professional acquainted with
your individual circumstances can help you to distill information, examine your
current strategy and make informed decisions that can effectively satisfy your
long-term investment needs.
Among the key topics to cover with your advisor is your retirement - including
the IRA options available to you. Now is the time to think about making a 1999
contribution to an IRA, if you haven't already. This year, you'll have until
April 17 to make your prior-year IRA contribution because April 15 falls on a
Saturday. And, to begin taking advantage of tax-deferred growth, you might want
to get a head start on your year 2000 contribution. The sooner you invest, the
earlier you have the potential for your money to build toward your retirement.
I encourage you to read on to learn more about Pioneer Independence Fund. If
you have questions, 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 12/31/99
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Portfolio Diversification
(As a percentage of total investment portfolio)
[Tabular Representation of Pie Chart]
U.S. Common Stocks 87%
Depositary Receipts for International Stocks 10%
International Common Stocks 3%
[End of Tabular Representation of Pie Chart]
Sector Diversification
(As a percentage of equity holdings)
[Tabular Representation of Pie Chart]
Technology 21%
Consumer Staples 16%
Financial 12%
Healthcare 11%
Capital Goods 10%
Consumer Cyclicals 9%
Basic Materials 6%
Energy 5%
Communication Services 5%
Other 5%
[End of Tabular Representation of Pie Chart]
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Five Largest Holdings
(As a percentage of equity holdings)
<TABLE>
<S> <C>
1. Oracle Corp. 2.87%
2. Power-One, Inc. 2.34
3. IBM Corp. 2.30
4. Intel Corp. 1.76
5. Norfolk Southern Corp. 1.75
</TABLE>
Holdings will vary for other periods.
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Prices and Distributions
<TABLE>
<CAPTION>
12/31/99 12/31/98
<S> <C> <C>
Net Asset Value per Share $11.36 $9.63
<CAPTION>
Distributions per Share Income Short-Term Long-Term
(12/31/98 - 12/31/99) Dividends Capital Gains Capital Gains
<S> <C> <C> <C>
$ 0.010 $0.427 $0.017
</TABLE>
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Performance of a $10,000 Investment+
The following chart shows the value of an investment made in Pioneer
Independence Fund, compared to the growth of the Russell 1000 Index.
[Tabular Representation of Line Chart]
<TABLE>
<CAPTION>
Pioneer Russell
Independence 1000
Fund* Index
<S> <C> <C>
3/98 10,000 10,000
10,249 10,103
10,000 9,885
6/98 9,900 10,251
9,202 10,128
7,836 8,613
9/98 8,126 9,193
8,853 9,919
9,182 10,533
12/98 9,693 11,204
9,824 11,604
9,552 11,237
3/99 10,015 11,667
10,599 12,155
10,659 11,892
6/99 11,112 12,498
10,951 12,117
10,720 12,003
9/99 10,327 11,673
10,861 12,458
11,250 12,778
12/99 11,946 13,548
</TABLE>
[End of Tabular Representation of Line Chart]
+ 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.
[Sidebar]
Average Annual Total Returns
(As of December 31, 1999)
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Net Asset Value*
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<TABLE>
<CAPTION>
Period
<S> <C>
Life-of-Fund 10.38%
(3/16/98)
1 Year 22.88%
</TABLE>
Returns 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.
[End Sidebar]
Past performance does not guarantee future results. Return and share prices
fluctuate so that your investment, when redeemed, may be worth more or less
than its original cost.
2
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Pioneer Independence Fund
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PORTFOLIO MANAGEMENT DISCUSSION 12/31/99
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Pioneer Independence Fund's fiscal year ended on December 31, 1999. Theresa A.
Hamacher, Pioneer's Chief Investment Officer is responsible for day-to-day
management of the Fund. Ms. Hamacher co-manages the Fund, along with David D.
Tripple, President of Pioneer Investment Management. In the following comments,
she reviews last year's investment environment and the factors that affected
the Fund's performance during the year.
Q: Except for a period around mid-year, large-capitalization and technology
stocks dominated market performance in 1999. Was that a positive or
negative factor for the Fund?
A: Fewer technology stocks were represented in the Fund's portfolio than in its
benchmark index, the Russell 1000. This comparative under-representation
hurt results.
The overwhelming emphasis on growth via technology helped the Fund's
performance from one point of view and hindered it from another. Because
their valuations had become so extreme, and because our discipline makes us
wary of high valuations, we avoided many of the stocks that drove results
in the popular market averages.
But the technology boom also brought opportunities for the Fund to
participate in certain Initial Public Offerings (IPOs). Enthusiasm for
technology-related IPOs quickly raised the prices of some of our selections
to levels that met our valuation targets; we took advantage of this rapid
appreciation to realize profits. IPO investments do, however, entail risk,
and there is no assurance that these investments will continue to be
significant contributors to the Fund's performance.
Q: Taking all this into account, how did the Fund perform?
A: The Fund turned in strong results last year, returning 22.88%, at net asset
value. Thus, we outperformed our benchmark - the Russell 1000 Index - which
returned 20.91% for the period. The Russell 1000 Index measures the
performance of the 1,000 largest stocks in the U.S. market. It is a broader
measure of performance than the Standard & Poor's 500 Stock Index, which
returned 20.99% in 1999.
Q: In a growth-focused market you continue to hold many value stocks. Why?
The Fund generally holds both growth and value stocks. Right now we are
finding value stocks particularly attractive. Also, we hold stocks that
have been chosen by other Pioneer managers for the portfolios that they
manage. Pioneer's history is based on more than 70 years of successful
value investing, so it's only natural that many of these stocks fall into
the value category. But our approach is very flexible: We can tilt toward
value or toward growth as conditions warrant, invest domestically or
internationally, and pursue opportunities among small, medium or
large-capitalization stocks.
Q: Other than the IPOs you mentioned, what holdings helped the Fund last year?
We capitalized on the growth of the internet through established,
profitable companies. An example is Oracle which has prospered by creating
sophisticated database management tools that enable e-businesses to target
customers and market their goods and services more effectively. In
addition, radio company Infinity Broadcasting benefited from increased
on-air advertising by internet merchants.
In another example, demand has increased for upgraded telecommunications
infrastructure capable of handling the explosive growth in internet
traffic. Vitesse Semiconductor, a leading manufacturer of high-performance
communications systems, was a strong performer that the Fund owned for most
of the year.
3
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Pioneer Independence Fund
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PORTFOLIO MANAGEMENT DISCUSSION 12/31/99
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Our energy holdings contributed strongly in the first half of the year.
Later, we took advantage of higher prices to pare back energy stocks and
expand exposure to the healthcare sector, an area we feel is undervalued
despite good long-term prospects. Qiagen which offers kits for DNA testing,
performed well. Among nonferrous metals, Alcoa, which represents a dramatic
"value" turnaround, has been a particularly successful holding.
Internationally, Siemens was a successful restructuring story in Germany,
and Canon, a Japanese maker of photo and office products, performed well.
Q: Were there areas where results were disappointing?
Yes. Mattel, Hershey Foods and consumer stocks in general failed to meet
our expectations. Results were also unsatisfactory among retailers,
including Dollar General and Federated Department Stores. And financial
issues of all kinds succumbed to the pressure of higher interest rates.
Q: What changes do you expect for 2000 and how will your outlook affect the
Fund's positioning?
A gearing back of the U.S. economy seems likely and we have structured the
portfolio accordingly. The Federal Reserve is determined to contain
inflation, and interest rate hikes are its principal tool. Rising rates
tend to squeeze corporate profits and slow economic growth.
To meet that challenge we are investing in world economies that we believe
should outperform the U.S. in the months ahead. We anticipate continued
growth in Europe as well as in emerging markets that are rebounding from
earlier slumps. Of course, international investing may involve special
risks, including differences in accounting and currency, as well as
economic and political instability. As we entered 2000, the Fund's non-U.S.
holdings made up 13% of the portfolio. For the same reasons, we favor U.S.
firms that can benefit from emerging market growth, especially
multinational consumer goods companies.
We continue to pursue a balanced approach. At year-end the portfolio was
modestly biased toward value because value stocks historically have
performed better than growth stocks in a climate of rising interest rates.
Q: Are there any other thoughts you would like to offer to shareowners?
Because they invest through Pioneer Independence Plans, shareowners
accumulate assets systematically and enjoy the benefits of Dollar Cost
Averaging - investing equal amounts at regular intervals. This approach
cannot ensure a profit or protect against a loss, but it has some very
important advantages. For shareowners, it keeps the average cost of shares
down and takes the emotion out of investing; for investment managers, it
ensures a relatively dependable flow of cash into the Fund. This cash flow,
we feel, is a useful tool in pursuing our long-term investment strategy. Of
course, plan owners should consider their ability to continue investing
during periods of falling prices or difficult economic conditions.
4
<PAGE>
Pioneer Independence Fund
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SCHEDULE OF INVESTMENTS 12/31/99
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<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 100%
Basic Materials - 6.1%
Aluminum - 1.3%
1,750 Alcoa, Inc. $ 145,250
-----------
Chemicals - 1.3%
1,400 Eastman Chemical Co. $ 66,762
2,200 Rohm and Haas Co. 89,512
-----------
$ 156,274
-----------
Chemicals (Specialty) - 0.7%
4,200 Millennium Chemicals Inc. $ 82,950
-----------
Metals Mining - 1.5%
8,400 Freeport-McMoRan Copper and
Gold Inc. $ 177,450
-----------
Paper & Forest Products - 1.3%
2,800 Bowater Inc. $ 152,075
-----------
Total Basic Materials $ 713,999
-----------
Capital Goods - 10.0%
Electrical Equipment - 5.5%
6,700 American Power Conversion Corp.* $ 176,712
6,000 Power-One, Inc.* 274,875
2,300 SCI Systems, Inc.* 189,031
-----------
$ 640,618
-----------
Machinery (Diversified) - 1.5%
4,000 Deere Co. $ 173,500
-----------
Manufacturing (Specialized) - 1.3%
3,000 Sealed Air Corp.* $ 155,437
-----------
Office Equipment & Supplies - 1.7%
5,000 Canon Inc. (A.D.R.) $ 202,812
-----------
Total Capital Goods $ 1,172,367
-----------
Communication Services - 5.1%
Telephone - 5.1%
2,300 Bell Atlantic Corp. $ 141,594
800 British Telecom Plc (A.D.R.)* 190,400
4,000 Global Telesystems Group, Inc. 138,500
2,700 SBC Communications, Inc. 131,625
-----------
Total Communication Services $ 602,119
-----------
Consumer Cyclicals - 9.1%
Automobiles - 1.2%
1,900 General Motors Corp. $ 138,106
-----------
Auto Parts & Equipment - 1.1%
8,500 Delphi Automotive Systems Corp.* $ 133,875
-----------
Leisure Time (Products) - 1.0%
9,000 Mattel, Inc. $ 118,125
-----------
Publishers - 1.2%
2,000 Dow Jones & Co. $ 136,000
-----------
<CAPTION>
Shares Value
<S> <C> <C>
Publishing - 1.3%
2,400 McGraw-Hill Co., Inc. $ 147,900
-----------
Retail (Department Stores) - 1.0%
2,400 Federated Department Stores* $ 121,350
-----------
Retail (Discounters) - 1.2%
6,000 Dollar General Corp. $ 136,500
-----------
Services (Commercial & Consumer) - 1.1%
7,500 Vivendi (A.D.R.) $ 135,000
-----------
Total Consumer Cyclicals $ 1,066,856
-----------
Consumer Staples - 16.0%
Beverages (Non-Alcoholic) - 1.2%
2,500 The Coca Cola Co. $ 145,625
-----------
Broadcasting
( Television/Radio/Cable) - 2.4%
3,500 Infinity Broadcasting Corp.* $ 126,656
2,000 MediaOne Group, Inc.* 153,625
-----------
$ 280,281
-----------
Foods - 4.8%
3,000 Bestfoods $ 157,687
7,000 Celestial Seasonings, Inc.* 130,266
3,500 H. J. Heinz Co. 139,344
2,900 Hershey Foods Corp. 137,750
-----------
$ 565,047
-----------
Personal Care - 1.4%
4,000 The Gillette Co. $ 164,750
-----------
Restaurants - 2.1%
11,000 Luby's Cafeterias Inc. $ 125,125
3,000 McDonald's Corp. 120,937
-----------
$ 246,062
-----------
Retail Stores (Drug Stores) - 1.3%
5,000 Walgreen Co. $ 146,250
-----------
Retail Stores (Food Chains) - 1.2%
7,200 Kroger Co.* $ 135,900
-----------
Services (Employment) - 0.7%
7,000 Servicemaster Co. $ 86,187
-----------
Specialty Printing - 0.9%
6,000 John H. Harland Co. $ 109,875
-----------
Total Consumer Staples $ 1,879,977
-----------
Energy - 5.2%
Oil (Domestic Integrated) - 2.6%
6,000 Conoco Inc. $ 148,500
3,000 Shell Transportation and Trading Co.
( A.D.R.) 147,750
-----------
$ 296,250
-----------
Oil (Drilling & Equipment) - 1.1%
10,000 R&B Falcon Corp.* $ 132,500
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements. 5
<PAGE>
Pioneer Independence Fund
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SCHEDULE OF INVESTMENTS 12/31/99 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Oil & Gas (Production/Exploration) - 1.5%
5,200 Anadarko Petroleum Corp. $ 177,450
----------
Total Energy $ 606,200
----------
Financial - 11.9%
Banks (Money Centers) - 0.6%
1,300 Bank of America Corp. $ 65,244
----------
Banks (Regional) - 3.1%
6,500 North Fork Bancorporation, Inc. $ 113,750
4,000 TCF Financial Corp. 99,500
2,600 Zions Bancorporation Inc. 153,887
----------
$ 367,137
----------
Financial Diversified - 0.8%
6,000 Trizec Hahn Corp. $ 101,250
----------
Insurance (Life/Health) - 0.5%
3,000 Conseco Inc. $ 53,625
----------
Insurance (Multi-Line) - 2.9%
1,125 American International Group, Inc. $ 121,641
1,700 Axa (A.D.R.) 120,700
3,500 Nationwide Financial Services Inc. 97,781
----------
$ 340,122
----------
Insurance (Property/Casualty) - 3.0%
7,000 ACE Ltd. $ 116,813
60 Berkshire Hathaway, Inc. (Class B)* 109,800
1,700 Progressive Corp. 124,313
----------
$ 350,926
----------
Savings & Loan Companies - 1.0%
4,300 Washington Mutual Inc. $ 111,800
----------
Total Financial $1,390,104
----------
Healthcare - 10.8%
Biotechnology - 1.5%
3,000 Amgen Inc.* $ 180,188
----------
Healthcare (Diversified) - 2.1%
3,000 American Home Products Corp. $ 118,313
4,600 Elan Plc (A.D.R.)* 135,700
----------
$ 254,013
----------
Healthcare (Drugs/Major
Pharmaceuticals) - 3.2%
1,950 Adventis (A.D.R.) $ 110,906
2,200 Eli Lilly and Co. 146,300
2,600 Pharmacia and Upjohn Inc. 117,000
----------
$ 374,206
----------
Healthcare (Managed Care) - 1.9%
11,000 Humana Inc.* $ 90,063
2,000 Wellpoint Health Networks, Inc.* 131,875
----------
$ 221,938
----------
<CAPTION>
Shares Value
<S> <C> <C>
Healthcare (Medical
Products/Supplies) - 2.1%
5,500 Boston Scientific Corp. $ 120,313
1,600 Qiagen NV* 120,800
----------
$ 241,113
----------
Total Healthcare $1,271,458
----------
Technology - 20.7%
Computers (Hardware) - 5.4%
6,000 Compaq Computer Corp. $ 162,375
1,700 Hewlett-Packard Co. 193,694
2,500 IBM Corp. 270,000
----------
$ 626,069
----------
Computers (Peripherals) - 1.1%
8,500 Quantum Corp. $ 128,563
----------
Computers (Software & Services) - 4.0%
2,000 Adobe Systems, Inc. $ 134,500
3,000 Oracle Corp.* 336,188
----------
$ 470,688
----------
Electronics (Component
Distributors) - 1.5%
1,400 Siemens AG (A.D.R.) $ 178,500
----------
Electronics (Defense) - 2.0%
1,700 General Motors Corp. (Class H) $ 163,200
2,500 Raytheon Co. 66,406
----------
$ 229,606
----------
Electronics (Semiconductors) - 2.9%
2,500 Intel Corp. $ 205,781
1,400 Texas Instruments Inc. 135,625
----------
$ 341,406
----------
Equipment (Semiconductors) - 2.8%
3,000 Teradyne Inc.* $ 198,000
2,800 Veeco Instruments Inc.* 131,075
----------
$ 329,075
----------
Photography/Imaging - 1.0%
1,800 Eastman Kodak Co. $ 119,250
----------
Total Technology $2,423,157
----------
Transportation - 3.3%
Airlines - 1.0%
800 AMR Corp.* $ 53,600
4,000 Southwest Airlines Co. 64,750
----------
$ 118,350
----------
Railroads - 1.8%
10,000 Norfolk Southern Corp. $ 205,000
----------
Truckers - 0.5%
900 United Parcel Service Inc. $ 62,100
----------
Total Transportation $ 385,450
----------
</TABLE>
6 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Independence Fund
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- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Utilities - 1.8%
Electric Companies - 0.9%
2,700 Dominion Resources Inc. $ 105,975
-----------
Natural Gas - 0.9%
3,500 Williams Companies, Inc. $ 106,969
-----------
Total Utilities $ 212,944
-----------
TOTAL INVESTMENT IN SECURITIES
(Cost $10,641,721) (a) (b) $11,724,631
===========
*Non-income producing security.
(a) At December 31, 1999, the net unrealized gain on
investments based on cost for federal income tax
purposes of $10,648,503 was as follows:
Aggregate gross unrealized gain for all investments
in which there is an excess of value over cost $ 1,846,704
Aggregate gross unrealized gain for all investments
in hich there is an excess of tax cost over value (770,576)
-----------
Net unrealized gain $ 1,076,128
===========
Purchases and sales of securities (excluding temporary cash investments)
for the year ended December 31, 1999 aggregated $13,986,109 and
$7,142,722, respectively.
</TABLE>
The accompanying notes are an integral part of these financial statements. 7
<PAGE>
Pioneer Independence Fund
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BALANCE SHEET 12/31/99
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (cost $10,641,721) $ 11,724,631
Cash 267,231
Receivables -
Fund shares sold 17,833
Dividends and interest 13,925
Due from Pioneer Investment Management, Inc. 90,283
Organizational costs - net 32,079
Other 3,950
------------
Total assets $ 12,149,932
------------
LIABILITIES:
Due to affiliates $ 55,713
Accrued expenses 75,902
------------
Total liabilities $ 131,615
------------
NET ASSETS:
Paid-in capital $ 10,608,053
Accumulated net investment loss 3,395
Accumulated undistributed net realized gain on investments 323,959
Net unrealized gain on investments 1,082,910
------------
Total net assets $ 12,018,317
============
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Based on $12,018,317/1,058,000 shares $ 11.36
============
</TABLE>
8 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Independence Fund
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the Year Ended 12/31/99
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $3,453) $101,097
Interest 3,878
--------
Total investment income $104,975
--------
EXPENSES:
Management fees $ 53,227
Transfer agent fees 211,107
Distribution fees 1,278
Administrative fees 31,652
Custodian fees 20,741
Registration fees 40,715
Professional fees 14,877
Printing 14,452
Fees and expenses of nonaffiliated trustees 22,983
Organizational costs 16,144
Other 6,666
--------
Total expenses $ 433,842
Less management fees waived and expenses reimbursed by
Pioneer Investment Management, Inc. (321,176)
Less fees paid indirectly (6,212)
----------
Net expenses $ 106,454
----------
Net investment loss $ (1,479)
----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments $ 788,350
Change in net unrealized gain on investments 850,390
----------
Net gain on investments $1,638,740
----------
Net increase in net assets resulting from operations $1,637,261
==========
</TABLE>
The accompanying notes are an integral part of these financial statements. 9
<PAGE>
Pioneer Independence Fund
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STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
For the Year Ended 12/31/99 and the Period Ended 12/31/98
<TABLE>
<CAPTION>
Year 3/16/98
Ended to
12/31/99 12/31/98
<S> <C> <C>
FROM OPERATIONS:
Net investment loss $ (1,479) $ (1,317)
Net realized gain (loss) on investments 788,350 (49,000)
Change in net unrealized gain on investments 850,390 232,520
---------- ---------
Net increase in net assets resulting from operations $1,637,261 $ 182,203
---------- ---------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income ($0.01 and $0.09 per share, respectively) $ (11,270) $ (29,968)
Net realized gain ($0.44 and $0.00 per share, respectively) (415,418) -
---------- ---------
Total distributions to shareholders $ (426,688) $ (29,968)
---------- ---------
<CAPTION>
'99 '98
Shares Shares
<S> <C> <C>
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares 787,365 366,217
Reinvestment of distributions 37,959 2,994
Cost of shares repurchased (113,751) (32,784)
-------- -------
Net increase in net assets resulting from fund share transactions 711,573 336,427
======== =======
Net increase in net assets
NET ASSETS:
Beginning of period
End of period (including accumulated undistributed net investment income of
$3,395 and $0, respectively)
<CAPTION>
<S> <C> <C>
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 8,236,803 $3,350,061
Reinvestment of distributions 414,702 27,752
Cost of shares repurchased (1,178,967) (294,842)
----------- ----------
Net increase in net assets resulting from fund share transactions $ 7,472,538 $3,082,971
----------- ----------
Net increase in net assets $ 8,683,111 $3,235,206
NET ASSETS:
Beginning of period 3,335,206 100,000
----------- ----------
End of period (including accumulated undistributed net investment income of
$3,395 and $0, respectively) $12,018,317 $3,335,206
=========== ==========
</TABLE>
10 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Independence Fund
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FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year 3/16/98
Ended to
12/31/99 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 loss $ (0.01) $ (0.01)
Net realized and unrealized gain (loss) on investments 2.19 (0.27)
------- -------
Net increase (decrease) from investment operations $ 2.18 $ (0.28)
Distributions to shareholders:
Net investment income (0.01) (0.09)
Net realized gain (0.44) --
------- -------
Net increase (decrease) in net asset value $ 1.73 $ (0.37)
------- -------
Net asset value, end of period $ 11.36 $ 9.63
======= =======
Total return* 22.88% (2.78)%
Ratio of net expenses to average net assets+ 1.58% 1.68%**
Ratio of net investment loss to average net assets+ (0.11)% (0.30)%**
Portfolio turnover rate 106% 118%**
Net assets, end of period (in thousands) $12,018 $ 3,335
Ratios assuming no waiver of management fees and assumption of expenses by PIM and
no reduction for fees paid indirectly:
Net expenses 6.18% 17.26%**
Net investment loss (4.71)% (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 loss (0.03)% (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 all distributions and the complete redemption of the
investment at net asset value at the end of each period.
** Annualized.
+ Ratios assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements. 11
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Pioneer Independence Fund
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NOTES TO FINANCIAL STATEMENTS 12/31/99
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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.
At December 31, 1999, the Fund reclassified $16,144 and $27 from paid-in
capital to accumulated net investment loss and accumulated undistributed
net realized gain on investments, respectively. 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.
In order to comply with federal income tax regulations, the Fund has
designated $22,834 as a capital gain dividends for the purposes of the
dividend paid deduction.
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 being 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 share is derived by dividing the number of
original shares redeemed by the total number of original shares outstanding
at the time of redemption.
12
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Pioneer Independence Fund
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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 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 $55,186 in transfer agent
fees payable to PSC at December 31, 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
attributable 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. Included in due to affiliates is
$527 in distribution fees payable to PFD at December 31, 1999.
5. Expense Offsets
The Fund has entered into certain expense offset arrangements resulting in a
reduction in the Fund's total expenses. For the year ended December 31, 1999,
the Fund's expenses were reduced by $6,212 under such arrangements.
13
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Pioneer Independence Fund
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
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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 December 31, 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
December 31, 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 December 31, 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
February 4, 2000
14
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This page for your notes.
15
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16
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17
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[Pioneer Logo] PIONEER INDEPENDENCE FUND
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.
7323-00-0200
[c] Pioneer Funds Distributor, Inc.
