<PAGE>
[logo] PIONEER
Investments(R)
Pioneer High Yield
Fund
ANNUAL REPORT 10/31/00
<PAGE>
Table of Contents
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-
<TABLE>
<S> <C>
Letter from the President 1
Portfolio Summary 2
Performance Update 3
Portfolio Management Discussion 7
Schedule of Investments 10
Financial Statements 15
Notes to Financial Statements 23
Report of Independent Public Accountants 29
Results of Shareowner Meeting 30
Trustees, Officers and Service Providers 31
Programs and Services for Pioneer Shareowners 32
Retirement Plans from Pioneer 34
The Pioneer Family of Mutual Funds 36
</TABLE>
<PAGE>
Pioneer High Yield Fund
LETTER FROM THE PRESIDENT 10/31/00
Dear Shareowner,
-------------------------------------------------------------------------------
-
The year 2000, the last year of the old millennium, is ending on an
historically
unsettling note. The bewildering final days of the presidential election have
come on top of a period of increased market volatility, leaving us all feeling
unsettled. We at Pioneer are convinced that the market's volatility has its
roots not in politics but in the signs of a slowing economy and in the sudden
realization by investors that some market valuations, notably technology, had
become irrational. As the new millennium unfolds we expect investors to
get back
to work assessing the policies of the new administration, evaluating the
prospects for a growing economy and identifying undervalued companies.
As seasoned investors we treat periods of turmoil as periods of opportunity,
looking for the few significant facts and trends that hide well behind the
clutter of daily events. I think that you should do the same thing. This is a
good year, and a good time of year, to evaluate your retirement program
contributions, to compare a Roth IRA with a traditional IRA and to
reassess your
investment allocations in light of current market conditions. A successful
investment program requires not only money, but time and planning. Your
investment professional is your best guide to making these important
decisions.
An important announcement from Pioneer
I'm very happy to report that, on October 24, 2000, Pioneer Investment
Management became a wholly owned subsidiary of UniCredito Italiano S.p.A., one
of Italy's largest and most successful banking groups. All of UniCredito's
investment operations will be combined to form Pioneer Global Asset Management
S.p.A., which will manage over $110 billion for global individual and
institutional clients. The new Pioneer Global will bring to Pioneer greater
analytical resources that complement our investment skills, reinforcing
Pioneer's tradition of fundamental investment analysis and sound long-term
portfolio management. We believe fund shareowners, will benefit from this
merger.
All of us at Pioneer Investments appreciate your decision to invest with
us and
look forward to helping you reach your financial goals.
Sincerely,
/s/ David Tripple
David Tripple
President
Pioneer Investment Management, Inc.
1
<PAGE>
Pioneer High Yield Fund
PORTFOLIO SUMMARY 10/31/00
Portfolio Diversification
-------------------------------------------------------------------------------
-
(As a percentage of total investment portfolio)
[pie chart]
Convertible Corporate Bonds 54.0%
Corporate Bonds 36.4%
Convertible Preferred Stocks 6.2%
Short-Term Cash Equivalents 3.4%
Portfolio Maturity
-------------------------------------------------------------------------------
-
(Effective life as a percentage of total investment portfolio)
[pie chart]
1-3 years 11.3%
3-4 years 21.8%
4-6 years 62.2%
8+ years 4.7%
10 Largest Holdings
-------------------------------------------------------------------------------
-
(As a percentage of total investments in securities)
<TABLE>
<S> <C> <C>
1. Adaptec Inc., 4.75%, 2/1/04 5.86%
2. Quantum Corp., 7.0%, 8/1/04 5.44
3. Nuevo Financing Corp., 5.75%, 12/15/26 4.97
4. Parker Drilling Co., 5.50%, 8/1/04 4.69
5. Fisher Scientific International, 9.0%, 2/1/08 4.55
6. BF Saul Real Estate Investment Trust, 9.75%, 4/1/08 4.42
7. Fairchild Semiconductor, 10.375%, 10/1/07 4.26
8. At Home Corp., 4.75%, 12/15/06 4.13
9. Azurix Corp., 10.75%, 2/15/10 4.01
10. Hilton Hotels, 5.0%, 5/15/06 3.76
</TABLE>
Fund holdings will vary for other periods.
2
<PAGE>
Pioneer High Yield Fund
PERFORMANCE UPDATE 10/31/00 CLASS A SHARES
Share Prices and Distributions
-------------------------------------------------------------------------------
-
<TABLE>
<CAPTION>
Net Asset Value
per Share 10/31/00 10/31/99
<S> <C> <C>
$11.35 $9.65
</TABLE>
<TABLE>
<CAPTION>
Distributions per Share Income Short-Term Long-Term
(10/31/99 - 10/31/00) Dividends Capital Gains Capital Gains
<S> <C> <C> <C>
$1.054 $0.066 $0.085
</TABLE>
Investment Returns
-------------------------------------------------------------------------------
-
The mountain chart on the right shows the growth of a $10,000 investment
made in
Pioneer High Yield Fund at public offering price, compared to the growth
of the
Merrill Lynch High Yield Master II Index and the Merrill Lynch Index of
Convertible Bonds (Speculative Quality).
Average Annual Total Returns+
(As of October 31, 2000)
<TABLE>
<CAPTION>
Net Asset Public Offering
Period Value Price*
<S> <C> <C>
Life of Fund
(2/12/98) 13.11% 11.22%
1 Year 31.12 25.28
</TABLE>
* Reflects deduction of the maximum 4.5% sales charge at the beginning of the
period and assumes reinvestment of distributions at net asset value.
[mountain chart]
<TABLE>
<CAPTION>
Pioneer High Yield Fund* ML High Yield Master II Index++
ML Index of Convertible Bonds++ (Speculative Quality)
<S> <C> <C> <C>
2/98 9550 10000
10000
4/98 9830 10134
10360
9379 10317
10082
10/98 8260 9612
9185
9495 10229
11083
4/99 9489 10466
11591
10142 10358
11520
10/99 10069 10152
12441
11489 10307
15031
4/00 12070 10177
15250
12786 10298
14174
10/00 13203 9981
14164
</TABLE>
+ The performance of each class of the fund from February 12, 1998 to
February
25, 2000 is the performance of Third Avenue High Yield Fund's single class,
which has been restated to reflect any applicable sales charges and Rule
12b-1 fees (but not other differences in expenses). This adjustment has the
effect of reducing the previously reported performance of Third Avenue High
Yield Fund.
++ Index comparisons begin 2/28/98. The Merrill Lynch High Yield Master II
Index
is a broad-based measure of the performance of the non-investment grade
U.S.
domestic bond market. The Merrill Lynch Index of Convertible Bonds
(Speculative Quality) is a market-capitalization weighted index including
mandatory and non-mandatory domestic corporate convertible securities.
Index
returns are calculated monthly, assume reinvestment of dividends and,
unlike
Fund returns, do not reflect any fees, expenses or sales charges. You
cannot
invest directly in either Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than
their original cost.
3
<PAGE>
Pioneer High Yield Fund
PERFORMANCE UPDATE 10/31/00 CLASS B SHARES
Share Prices and Distributions
-------------------------------------------------------------------------------
-
<TABLE>
<CAPTION>
Net Asset Value
per Share 10/31/00 2/25/00
<S> <C> <C>
$11.41 $11.34
</TABLE>
<TABLE>
<CAPTION>
Distributions per Share Income Short-Term Long-Term
(2/25/00 - 10/31/00) Dividends Capital Gains Capital Gains
<S> <C> <C> <C>
$0.705 - -
</TABLE>
Investment Returns
-------------------------------------------------------------------------------
-
The mountain chart on the right shows the growth of a $10,000 investment
made in
Pioneer High Yield Fund, compared to the growth of the Merrill Lynch High
Yield
Master II Index and the Merrill Lynch Index of Convertible Bonds (Speculative
Quality).
Average Annual Total Returns+
(As of October 31, 2000)
<TABLE>
<CAPTION>
If If
Period Held Redeemed*
<S> <C> <C>
Life of Fund
(2/12/98) 12.48% 11.57%
1 Year 30.80 26.80
</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]
<TABLE>
<CAPTION>
Pioneer High Yield Fund* ML High Yield Master II Index++ ML
Index of Convertible Bonds++ (Speculative Quality)
<S> <C> <C> <C>
2/98 10000 10000 10000
4/98 10287 10138 10360
9787 10317 10082
10/98 8602 9612 9185
9872 10229 11083
4/99 9848 10466 11591
10507 10358 11520
10/99 10412 10152 12441
11860 10307 15031
4/00 12623 10177 15250
13319 10298 14174
10/00 13738 9981 14164
</TABLE>
+ The performance of each class of the fund from February 12, 1998 to
February
25, 2000 is the performance of Third Avenue High Yield Fund's single class,
which has been restated to reflect any applicable sales charges and Rule
12b-1 fees (but not other differences in expenses). This adjustment has the
effect of reducing the previously reported performance of Third Avenue High
Yield Fund.
++ Index comparisons begin 2/28/98. The Merrill Lynch High Yield Master II
Index
is a broad-based measure of the performance of the non-investment grade
U.S.
domestic bond market. The Merrill Lynch Index of Convertible Bonds
(Speculative Quality) is a market-capitalization weighted index including
mandatory and non-mandatory domestic corporate convertible securities.
Index
returns are calculated monthly, assume reinvestment of dividends and,
unlike
Fund returns, do not reflect any fees, expenses or sales charges. You
cannot
invest directly in either Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than
their original cost.
4
<PAGE>
Pioneer High Yield Fund
PERFORMANCE UPDATE 10/31/00 CLASS C SHARES
Share Prices and Distributions
-------------------------------------------------------------------------------
-
<TABLE>
<CAPTION>
Net Asset Value
per Share 10/31/00 2/25/00
<S> <C> <C>
$11.51 $11.34
</TABLE>
<TABLE>
<CAPTION>
Distributions per Share Income Short-Term Long-Term
(2/25/00 - 10/31/00) Dividends Capital Gains Capital Gains
<S> <C> <C> <C>
$0.709 - -
</TABLE>
Investment Returns
-------------------------------------------------------------------------------
-
The mountain chart on the right shows the growth of a $10,000 investment
made in
Pioneer High Yield Fund, compared to the growth of the Merrill Lynch High
Yield
Master II Index and the Merrill Lynch Index of Convertible Bonds (Speculative
Quality).
Average Annual Total Returns+
(As of October 31, 2000)
<TABLE>
<CAPTION>
If If
Period Held Redeemed*
<S> <C> <C>
Life of Fund
(2/12/98) 12.84% 12.84%
1 Year 31.94 31.94
</TABLE>
* Assumes reinvestment of distributions. A 1% contingent deferred sales charge
(CDSC) applies to redemptions made within one year of purchase.
[mountain chart]
<TABLE>
<CAPTION>
Pioneer High Yield Fund* ML High Yield Master II Index++ ML
Index of Convertible Bonds++ (Speculative Quality)
<S> <C> <C> <C>
2/98 10000 10000 10000
4/98 10287 10138 10360
9787 10317 10082
10/98 8602 9612 9185
9872 10229 11083
4/99 9848 10466 11591
10507 10358 11520
10/99 10412 10152 12441
11860 10307 15031
4/00 12623 10177 15250
13319 10298 14174
10/00 13738 9981 14164
</TABLE>
+ The performance of each class of the fund from February 12, 1998 to
February
25, 2000 is the performance of Third Avenue High Yield Fund's single class,
which has been restated to reflect any applicable sales charges and Rule
12b-1 fees (but not other differences in expenses). This adjustment has the
effect of reducing the previously reported performance of Third Avenue High
Yield Fund.
++ Index comparisons begin 2/28/98. The Merrill Lynch High Yield Master II
Index
is a broad-based measure of the performance of the non-investment grade
U.S.
domestic bond market. The Merrill Lynch Index of Convertible Bonds
(Speculative Quality) is a market-capitalization weighted index including
mandatory and non-mandatory domestic corporate convertible securities.
Index
returns are calculated monthly, assume reinvestment of dividends and,
unlike
Fund returns, do not reflect any fees, expenses or sales charges. You
cannot
invest directly in either Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than
their original cost.
5
<PAGE>
Pioneer High Yield Fund
PERFORMANCE UPDATE 10/31/00 CLASS Y SHARES
Share Prices and Distributions
-------------------------------------------------------------------------------
-
<TABLE>
<CAPTION>
Net Asset Value
per Share 10/31/00 2/25/00
<S> <C> <C>
$11.32 $11.34
</TABLE>
<TABLE>
<CAPTION>
Distributions per Share Income Short-Term Long-Term
(2/25/00 - 10/31/00) Dividends Capital Gains Capital Gains
<S> <C> <C> <C>
$0.740 - -
</TABLE>
Investment Returns
-------------------------------------------------------------------------------
-
The mountain chart on the right shows the growth of a $10,000 investment
made in
Pioneer High Yield Fund, compared to the growth of the Merrill Lynch High
Yield
Master II Index and the Merrill Lynch Index of Convertible Bonds (Speculative
Quality).
Average Annual Total Returns+
(As of October 31, 2000)
<TABLE>
<CAPTION>
If If
Period Held Redeemed
<S> <C> <C>
Life of Fund
(2/12/98) 13.11% 13.11%
1 Year 30.58 30.58%
</TABLE>
* Assumes reinvestment of distributions.
[mountain chart]
<TABLE>
<CAPTION>
Pioneer High Yield Fund* ML High Yield Master II Index++ ML
Index of Convertible Bonds++ (Speculative Quality)
<S> <C> <C> <C>
2/98 10000 10000 10000
4/98 10287 10138 10360
9787 10317 10082
10/98 8602 9612 9185
9872 10229 11083
4/99 9848 10466 11591
10507 10358 11520
10/99 10412 10152 12441
11860 10307 15031
4/00 12623 10177 15250
13319 10298 14174
10/00 13827 9981 14164
</TABLE>
+ The performance of each class of the fund from February 12, 1998 to
February
25, 2000 is the performance of Third Avenue High Yield Fund's single class,
which has been restated to reflect any applicable sales charges and Rule
12b-1 fees (but not other differences in expenses). This adjustment has the
effect of reducing the previously reported performance of Third Avenue High
Yield Fund.
++ Index comparisons begin 2/28/98. The Merrill Lynch High Yield Master II
Index
is a broad-based measure of the performance of the non-investment grade
U.S.
domestic bond market. The Merrill Lynch Index of Convertible Bonds
(Speculative Quality) is a market-capitalization weighted index including
mandatory and non-mandatory domestic corporate convertible securities.
Index
returns are calculated monthly, assume reinvestment of dividends and,
unlike
Fund returns, do not reflect any fees, expenses or sales charges. You
cannot
invest directly in either Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than
their original cost.
6
<PAGE>
Pioneer High Yield Fund
PORTFOLIO MANAGEMENT DISCUSSION 10/31/00
During its fiscal year that ended October 31, 2000, fund manager Margaret
Patel
piloted Pioneer High Yield Fund to a superlative return of more than 30%
during
a period when most of the Fund's competitors could not break even. Here, Ms.
Patel describes the market environment and how she was able to post such a
strong return.
Q: How did the Fund perform?
A: In spite of the trials and tribulations of the high-yield market, the
Fund's
structure helped it post a very strong return relative to its peers. For
example, the 12-month total return based on net asset value for the Fund's
Class A shares was 31.12%. To compare, the average return for the same
period
of the 363 funds in Lipper Inc.'s High Current Yield category was -2.77%.
Q: Why did the Fund post such a strong return?
A: Because the portfolio concentrated on investments in sectors offering
improving fundamentals and avoided sectors suffering from weak prospects.
During the past year, the overall high-yield market environment offered
negative and lackluster returns because price declines of high-yield bonds
offset their relatively high income. Investors shied away from the
high-yield
market in part because they feared that short-term interest rate hikes
implemented by the Federal Reserve Board - designed to brake economic
growth
and head off inflation - would cause defaults to rise. Within the
high-yield
market, there was a sharp divergence between the returns offered by the
various sectors. This backdrop played well given my approach to the Fund,
which is to focus on sectors or industries that are growing faster than the
economy. In the end, the Fund benefited from an emphasis on industries that
ended up posting positive rates of return, such as technology, energy, real
estate, building products, and health care. Conversely, the Fund had
minimal
exposure to poor-performing sectors such as basic industries,
telecommunications, and steel.
7
<PAGE>
Pioneer High Yield Fund
PORTFOLIO MANAGEMENT DISCUSSION 10/31/00 (continued)
Q: Let's take a closer look at the Fund and examine some of the sectors you
emphasized . . .
A: Certainly. As I said, we emphasized sectors that we felt would do well
within
the current economic backdrop. To that end, we invested a significant
amount
of the Fund's assets in technology companies, because the sector is growing
faster than the economy as a whole. While technology investments have
experienced some volatility over recent months, we believe the longer-term
trends remain quite positive. Within technology, we were attracted to
semiconductor manufacturers like Conexant Systems - which performed
exceptionally well - and manufacturers of computer peripherals, such as
Quantum Corp., which builds computer storage devices.
With oil and natural gas prices on the rise, we also found energy
companies -
and, in particular, energy services firms like Parker Drilling - to be very
appealing. We believe that activity for energy exploration and development
will continue at very high levels, even if energy prices moderate.
We've also made a small commitment to utilities companies. These tend to be
very high-quality companies that offer stable financial results along with
growth that is in line with economic trends. Among the solid-performing
investments in this area was Azurix, a water utility.
Q: You mentioned some other sectors that caught your eye . . .
A: Yes. Real estate and building products attracted us because we believe the
U.S. economy is still growing enough to help the sector advance. The
possibility that the Fed has finished its rate hike cycle also should help
create a positive backdrop for the sector. Among the investments we favored
was Forest City Enterprises, a national real estate developer.
Health care also proved to be fertile ground for the Fund. We believe this
sector can outpace overall U.S. economic growth. Investments here included
Bio-Rad Labs, which provides supplies to research laboratories.
8
<PAGE>
Pioneer High Yield Fund
Q: Which areas did you de-emphasize?
A: We've steered away from basic materials and basic industries, because we
believe they are volatile, vulnerable to any weakening in economic
activity,
and offer limited growth opportunities. The Fund currently has investments
only in a few capital goods companies that we feel enjoy strong niches
within
their industries. In addition, the Fund held minimal exposure to
telecommunications, as companies in this sector encountered difficulties
accessing capital needed to build out their systems.
Q: Did you focus on any particular types of securities?
A: We paid substantial attention to discounted convertible securities that
provide high yields and offer exposure to attractive industries where
straight high-yield bonds are not available. These investments offer the
possibility of price appreciation when the value of the company's
underlying
stock is on the rise. The Fund has benefited significantly from this
strategy.
Q: Were there any disappointments?
A: Each period brings with it some investments that don't work out as planned.
This time around, some of our investments in Internet
infrastructure-related
holdings struggled, including At-Home Corp. and Digital Island. These
companies suffered from investor uncertainty over the outlook for the
industry. However, I've held on to the investments because I believe their
long-term prospects remain good.
Q: What is your outlook?
A: I'm very positive about the prospects for the high-yield market because its
fundamentals are very favorable. The economy is still growing, and it
appears
that the Fed will either maintain interest rates at a steady level or lower
them. Such an environment should prove to be a catalyst for higher
high-yield
bond prices, which are almost as low as they were at the end of 1990
and the
beginning of 1999 when the high-yield market collapsed. The downdraft we've
witnessed has made yields on these bonds very attractive compared to their
risks. Therefore I'm very optimistic.
9
<PAGE>
Pioneer High Yield Fund
SCHEDULE OF INVESTMENTS 10/31/00
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
CONVERTIBLE PREFERRED STOCK - 6.2%
Financial - 4.8%
Consumer Finance - 4.8%
224,000 Nuevo Financing, 5.75%, 12/15/26 $ 6,160,000
-----------
Total Financial $ 6,160,000
-----------
Technology - 0.1%
Electronics (Defense) - 0.1%
3,000 Titan Cap Trust, 5.75%, 2/15/05 (144A) $ 85,215
-----------
Total Technology $ 85,215
-----------
Utilities - 1.3%
Natural Gas - 1.3%
143,000 Semco Energy Inc., 11.0%, 8/16/03 $ 1,698,125
-----------
Total Utilities $ 1,698,125
-----------
TOTAL CONVERTIBLE PREFERRED STOCK
(Cost $7,766,824) $ 7,943,340
-----------
Principal
Amount CONVERTIBLE CORPORATE BONDS - 54.0%
Basic Materials - 3.3%
Metals Mining - 3.3%
4,700,000 Inco Ltd., 7.75%, 3/15/16 $ 4,265,250
-----------
Total Basic Materials $ 4,265,250
-----------
Capital Goods - 0.1%
Electrical Equipment - 0.1%
400,000 Itron Inc., 6.75%, 3/31/04 $ 240,000
-----------
Total Capital Goods $ 240,000
-----------
Consumer Cyclicals - 9.2%
Auto Parts & Equipment - 4.2%
1,545,000 MascoTech Inc., 4.5%, 12/15/03 $ 1,011,975
5,615,000 Tower Automotive Inc., 5.0%, 8/1/04 4,395,871
-----------
$ 5,407,846
-----------
Lodging: Hotels - 3.6%
5,730,000 Hilton Hotels, 5.0%, 5/15/06 $ 4,669,950
-----------
Services (Advertising/Marketing) - 1.4%
2,350,000 Getty Images Inc., 5.0%, 3/15/07 (144A) $ 1,734,606
-----------
Total Consumer Cyclicals $11,812,402
-----------
</TABLE>
10 The accompanying notes are an integral part of these financial
statements.
<PAGE>
Pioneer High Yield Fund
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
Energy - 8.0%
Oil & Gas (Drilling & Equipment) - 5.6%
1,585,000 Key Energy Group, 5.0%, 9/15/04 $ 1,322,667
6,802,000 Parker Drilling Co., 5.0%, 8/1/04 5,824,213
-----------
$ 7,146,880
-----------
Oil & Gas (Production/Exploration) - 2.4%
3,487,000 Pogo Producing Co., 5.5%, 6/15/06 $ 3,059,843
-----------
Total Energy $10,206,723
-----------
Financial - 2.0%
Real Estate - 2.0%
2,520,000 EOP Operating LP, 7.25%, 11/15/08 (144A) $ 2,520,000
-----------
Total Financial $ 2,520,000
-----------
Technology - 31.4%
Communications Equipment - 3.9%
2,380,000 American Tower Corp., 5.0%, 2/15/10 $ 2,421,341
710,000 Commscope, Inc., 4.0%, 12/15/06 (144A) 611,693
2,575,000 Efficient Network, 5.0%, 3/15/05 1,737,713
500,000 P-Com Inc., 4.25%, 11/1/02 310,000
-----------
$ 5,080,747
-----------
Computers (Networking) - 7.4%
1,500,000 At Home Corp., 4.75%, 2/15/06 (144A) $ 941,760
8,155,000 At Home Corp., 4.75%, 12/15/06 5,120,034
8,200,000 Digital Island Inc., 6.0%, 2/15/05 3,471,880
-----------
$ 9,533,674
-----------
Computers (Peripherals) - 5.3%
8,310,000 Quantum Corp., 7.0%, 8/1/04 $ 6,751,957
-----------
Computers (Software & Services) - 0.7%
1,150,000 Critical Path Inc., 5.75%, 4/1/05 (144A) $ 950,073
-----------
Electronics (Component Distributors) - 5.7%
8,920,000 Adaptec Inc., 4.75%, 2/1/04 $ 7,266,500
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
Pioneer High Yield Fund
SCHEDULE OF INVESTMENTS 10/31/00 (continued)
<TABLE>
<CAPTION>
Principal
Amount
Value
<S> <C> <C>
Electronics (Semiconductors) - 6.2%
6,880,000 Conexant Systems Inc., 4%, 2/1/07 $
4,184,898
1,150,000 Cypress Semiconductor, 3.75%, 7/1/05
1,035,725
300,000 General Semiconductor Inc., 5.75%, 12/15/06
(144A)
273,291
114,000 Intevac Inc., 6.50%, 3/1/04
51,300
2,870,000 LSI Logic, 4.0%, 2/15/05
2,436,021
-----------
$
7,981,235
-----------
Equipment (Semiconductor) - 2.2%
3,645,000 Advanced Energy Industries, Inc., 5.25%, 11/15/06 $
2,792,980
-----------
Total Technology
$40,357,166
-----------
Total Convertible Corporate Bonds
(Cost $73,320,847)
$69,401,541
-----------
CORPORATE BONDS - 36.4%
Capital Goods - 6.4%
Electrical Equipment - 2.5%
4,000,000 Advanced Lighting Technologies, 8.0%, 3/15/08 $
2,760,000
465,000 Hadco Corp., 9.5%, 6/15/08
467,325
-----------
$
3,227,325
-----------
Waste Management - 3.9%
5,355,000 Azurix Corp., 10.75%, 2/15/10 (144A) $
4,980,150
-----------
Total Capital Goods $
8,207,475
-----------
Consumer Services - 2.5%
Telecommunications (Long Distance) - 2.5%
4,315,000 SBA Communications Corp., 12.0%, 3/1/08 $
3,236,250
-----------
Total Consumer Services $
3,236,250
-----------
Consumer Cyclicals - 6.0%
Auto Parts & Equipment - 1.0%
1,300,000 Lear Corp., 7.96%, 5/15/05 $
1,228,500
-----------
Building Materials - 5.0%
3,475,000 NCI Building Systems Inc., 9.25%, 5/1/09 $
3,336,000
3,480,000 Nortek Inc., 9.125%, 9/1/07
3,097,200
-----------
$
6,433,200
-----------
Total Consumer Cyclicals $
7,661,700
-----------
</TABLE>
12 The accompanying notes are an integral part of these financial
statements.
<PAGE>
Pioneer High Yield Fund
<TABLE>
<CAPTION>
Principal
Amount
Value
<S> <C> <C>
Consumer Staples - 6.7%
Distributors (Food & Health) - 6.7%
6,135,000 Fisher Scientific International, 9.0%, 2/1/08 $
5,644,200
3,300,000 Wesco Distribution Inc., 9.125%, 6/1/08
2,970,000
------------
Total Consumer Staples $
8,614,200
------------
Energy - 2.7%
Oil & Gas (Production/Exploration) - 2.7%
3,280,000 Eott Energy Partners LP, 11.0%, 10/1/09 $
3,460,400
------------
Total Energy $
3,460,400
------------
Financial - 4.9%
Financial (Diversified) - 0.6%
905,000 Forest City Enterprises, 8.50%, 3/15/08 $
841,650
------------
Real Estate - 4.3%
6,300,000 BF Saul Real Estate Investment Trust, 9.75%,
4/1/08 $
5,481,000
------------
Total Financial $
6,322,650
------------
Health Care - 2.8%
Health Care (Medical Products/Supplies) - 2.8%
3,500,000 Bio-Rad Labs, 11.625%, 2/15/07 $
3,605,000
------------
Total Health Care $
3,605,000
------------
Technology - 4.4%
Communications Equipment - 0.3%
340,000 L-3 Communications Holding Corp., 8.5%, 5/15/08 $
317,900
------------
Electronics (Semiconductors) - 4.1%
5,390,000 Fairchild Semiconductor, 10.375%, 10/1/07 $
5,282,200
------------
Total Technology $
5,600,100
------------
Total Corporate Bonds
(Cost $47,144,700) $
46,707,775
------------
TOTAL INVESTMENT IN SECURITIES
(Cost $128,232,371)
$124,052,656
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
13
<PAGE>
Pioneer High Yield Fund
SCHEDULE OF INVESTMENTS 10/31/00 (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
TEMPORARY CASH INVESTMENT - 3.4%
Commercial Paper - 3.4%
4,335,000 Home Financing Corp., 6.58%, Due 11/1/00 $ 4,335,000
------------
TOTAL TEMPORARY CASH INVESTMENT
(Cost $4,335,000) $ 4,335,000
------------
148,338,000 TOTAL INVESTMENT IN SECURITIES AND
TEMPORARY CASH INVESTMENT - 100%
(Cost $132,567,371) (a) $128,387,656
============
</TABLE>
144A Security is exempt from registration under Rule 144A of the
Securities Act
of 1933. Such securities may be resold normally to qualified
institutional
buyers in a transaction exempt from registration. At October 31,
2000, the
value of these securities amounted to $7,116,638 or 5.64% of total net
assets.
(a) At October 31, 2000, the net unrealized gain on investments, based
on cost
for federal income tax purposes of $132,567,371, was as follows:
<TABLE>
<S> <C>
Aggregate gross unrealized gain for all investments in
which there is an excess of value over tax cost $ 1,501,830
Aggregate gross unrealized loss for all investments in
which there is an excess of tax cost over value (5,681,545)
-----------
Net unrealized loss $(4,179,715)
===========
</TABLE>
Purchases and sales of securities (excluding temporary cash investments)
for the
period ended October 31, 2000 aggregated $139,126,536 and $24,490,678,
respectively.
14 The accompanying notes are an integral part of these financial
statements.
<PAGE>
Pioneer High Yield Fund
BALANCE SHEET 10/31/00
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (including temporary cash
investment of $4,335,000) (cost $132,567,371)
$128,387,656
Receivables -
Fund shares sold
3,511,851
Dividends and interest
2,250,401
Organizational costs - net
8,908
Other
9,661
------------
Total assets
$134,168,477
------------
LIABILITIES:
Payables -
Investment securities purchased $
6,675,722
Fund shares repurchased
96,602
Dividends
442,325
Due to Bank
539,887
Due to affiliates
122,887
Accrued expenses
73,530
------------
Total liabilities $
7,950,953
------------
NET ASSETS:
Paid-in capital
$126,438,644
Accumulated distributions in excess of net investment
income
(219,619)
Accumulated undistributed net realized gain on investments
4,178,214
Net unrealized loss on investments
(4,179,715)
------------
Total net assets
$126,217,524
============
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $57,592,316/5,074,859 shares) $
11.35
============
Class B (based on $46,068,676/4,038,181 shares) $
11.41
============
Class C (based on $20,787,863/1,806,854 shares) $
11.51
============
Class Y (based on $1,768,669/156,312 shares) $
11.32
============
MAXIMUM OFFERING PRICE:
Class A $
11.88
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
15
<PAGE>
Pioneer High Yield Fund
STATEMENT OF OPERATIONS
For the Year Ended 10/31/00
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends $ 12,456
Interest 4,098,787
----------
Total investment income
$ 4,111,243
-----------
EXPENSES:
Management fees $ 295,133
Transfer agent fees
Class A 59,943
Class B 15,319
Class C 5,807
Class Y 67
Distribution fees
Class A 55,059
Class B 111,348
Class C 46,604
Administrative fees 53,929
Custodian fees 23,666
Registration fees 62,755
Organizational fees 961
Professional fees 46,328
Printing 18,193
Fees and expenses of nonaffiliated trustees 39,332
Miscellaneous 3,206
----------
Total expenses
$ 837,650
Less management fees waived and expenses
assumed by Pioneer Investment Management, Inc.
(365,050)
Less fees paid indirectly
(28,835)
-----------
Net expenses
$ 443,765
-----------
Net investment income
$ 3,667,478
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments
$ 4,178,251
Change in net unrealized loss on investments
(3,092,109)
-----------
Net gain on investments
$ 1,086,142
-----------
Net increase in net assets resulting from operations
$ 4,753,620
===========
</TABLE>
16 The accompanying notes are an integral part of these financial
statements.
<PAGE>
Pioneer High Yield Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended 10/31/00 and 10/31/99
<TABLE>
<CAPTION>
Year Ended
Year Ended
10/31/00
10/31/99
<S> <C> <C>
FROM OPERATIONS:
Net investment income $ 3,667,478
$ 593,528
Net realized gain on investments 4,178,251
183,311
Change in net unrealized gain (loss) on investments (3,092,109)
834,889
------------
-----------
Net increase in net assets resulting
from operations $ 4,753,620
$ 1,611,728
------------
-----------
DISTRIBUTIONS TO SHAREOWNERS:
Net investment income:
Class A ($1.05 and $0.69 per share, respectively) $ (2,452,543)
$ (592,389)
Class B ($0.70 and $0.00 per share, respectively) (1,012,350)
-
Class C ($0.71 and $0.00 per share, respectively) (423,040)
-
Class Y ($0.74 and $0.00 per share, respectively) (59,127)
-
------------
-----------
Total distributions to shareowners from
net income: $ (3,947,060)
$ (592,389)
Net realized gain:
Class A ($0.15 and $0.00 per share, respectively) (132,723)
-
------------
-----------
Total distributions to shareowners $ (4,079,783)
$ (592,389)
------------
-----------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $143,744,343
$ 3,087,088
Reinvestment of distributions 2,657,491
529,189
Cost of shares repurchased (28,448,820)
(4,736,179)
------------
-----------
Net increase (decrease) in net assets resulting
from Fund share transactions $117,953,014
$(1,119,902)
------------
-----------
Net increase (decrease) in net assets $118,626,851
$ (100,563)
NET ASSETS:
Beginning of year 7,590,673
7,691,236
------------
-----------
End of year (including accumulated
undistributed/(distributions in excess of) net
investment income of $(219,619) and
$59,002, respectively) $126,217,524
$ 7,590,673
============
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
17
<PAGE>
Pioneer High Yield Fund
STATEMENTS OF CHANGES IN NET ASSETS
(continued)
For the Years Ended 10/31/00 and 10/31/99 (continued)
<TABLE>
<CAPTION>
CLASS A '00 Shares '00 Amount '99
Shares '99 Amount
<S> <C> <C> <C>
<C>
Shares sold 6,380,623 $ 72,483,978
326,545 $ 3,087,088
Reinvestment of distributions 178,378 1,998,763
56,746 529,189
Less shares repurchased (2,270,485) (25,461,620)
(501,388) (4,736,179)
---------- ------------
-------- -----------
Net increase (decrease) 4,288,516 $ 49,021,121
(118,097) $(1,119,902)
========== ============
======== ===========
CLASS B*
Shares sold 4,187,697 $ 47,914,144
Reinvestment of distributions 39,965 458,357
Less shares repurchased (189,481) (2,177,137)
---------- ------------
Net increase 4,038,181 $ 46,195,364
========== ============
CLASS C*
Shares sold 1,865,219 $ 21,608,359
Reinvestment of distributions 12,735 147,284
Less shares repurchased (71,100) (782,164)
---------- ------------
Net increase 1,806,854 $ 20,973,479
========== ============
CLASS Y*
Shares sold 154,111 $ 1,737,862
Reinvestment of distributions 4,642 53,087
Less shares repurchased (2,441) (27,899)
---------- ------------
Net increase 156,312 $ 1,763,050
========== ============
</TABLE>
* Class B, Class C, and Class Y Shares were first publicly offered on February
28, 2000.
18 The accompanying notes are an integral part of these financial
statements.
<PAGE>
Pioneer High Yield Fund
FINANCIAL HIGHLIGHTS 10/31/00
<TABLE>
<CAPTION>
2/12/98
Year Ended Year Ended
to
10/31/00(a) 10/31/99
10/31/98
<S> <C> <C>
<C>
CLASS A
Net asset value, beginning of period $ 9.65 $ 8.50
$ 10.00
------- ------
-------
Increase (decrease) from investment operations:
Net investment income $ 0.96 $ 0.70
$ 0.34
Net realized and unrealized gain (loss)
on investments 1.94 1.14
(1.56)
------- ------
-------
Net increase (decrease) from
investment operations $ 2.90 $ 1.84
$ (1.22)
Distributions to shareowners:
Net investment income (1.05) (0.69)
(0.28)
Net realized gain (0.15) -
-
------- ------
-------
Net increase (decrease) in net asset value $ 1.70 $ 1.15
$ (1.50)
------- ------
-------
Net asset value, end of period $ 11.35 $ 9.65
$ 8.50
======= ======
=======
Total return* 31.12% 22.20%
(12.39)%
Ratio of net expenses to average net assets 0.95%+ 1.90%
1.90%**
Ratio of net investment income to average
net assets 8.96%+ 7.13%
6.22%**
Portfolio turnover rate 57% 64%
38%
Net assets, end of period (in thousands) $57,592 $7,591
$ 7,691
Ratios assuming no waiver of management
fees and assumption of expenses by PIM
and no reduction for fees paid indirectly:
Net expenses 1.94% 3.67%
3.99%**
Net investment income 7.97% 5.36%
4.13%**
Ratios assuming waiver of management
fees and assumption of expenses by PIM and
reduction for fees paid indirectly:
Net expenses 0.88% 1.90%
1.90%**
Net investment income 9.03% 7.13%
6.22%**
</TABLE>
(a) Pioneer Investment Management, Inc. assumed investment management of the
Fund on February 25, 2000. Prior to that date, the Fund was advised by
EQSF
Advisers, Inc.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all 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.
19
<PAGE>
Pioneer High Yield Fund
FINANCIAL HIGHLIGHTS 10/31/00
<TABLE>
<CAPTION>
2/25/00
to
10/31/00
<S> <C>
CLASS B (a)
Net asset value, beginning of period $ 11.34
-------
Increase from investment operations:
Net investment income $ 0.69
Net realized and unrealized gain (loss) on investments 0.08
-------
Net increase from investment operations $ 0.77
Distributions to shareowners:
Net investment income (0.70)
-------
Net increase in net asset value $ 0.07
-------
Net asset value, end of period $ 11.41
=======
Total return* 7.04%
Ratio of net expenses to average net assets+
0.67%**
Ratio of net investment income to average net assets+
3.85%**
Portfolio turnover rate 57%
Net assets, end of period (in thousands) $46,069
Ratios assuming no waiver of management fees and assumption of
expenses by PIM and no reduction for fees paid indirectly:
Net expenses 1.00%**
Net investment income 3.52%**
Ratios assuming waiver of management fees and assumption of
expenses by PIM and reduction for fees paid indirectly:
Net expenses 0.64%**
Net investment income 3.88%**
</TABLE>
(a) Class B shares were first publicly offered on February 28, 2000.
* Assumes initial investment at net asset value at the beginning of the
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of the 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.
20 The accompanying notes are an integral part of these financial
statements.
<PAGE>
Pioneer High Yield Fund
FINANCIAL HIGHLIGHTS 10/31/00
<TABLE>
<CAPTION>
2/25/00
to
10/31/00
<S> <C>
CLASS C (a)
Net asset value, beginning of period $ 11.34
-------
Increase from investment operations:
Net investment income $ 0.69
Net realized and unrealized gain (loss) on investments 0.19
-------
Net increase from investment operations $ 0.88
Distributions to shareholders:
Net investment income (0.71)
-------
Net increase in net asset value $ 0.17
-------
Net asset value, end of period $ 11.51
=======
Total return* 7.98%
Ratio of net expenses to average net assets+
0.66%**
Ratio of net investment income to average net assets+
3.83%**
Portfolio turnover rate 57%
Net assets, end of period (in thousands) $20,788
Ratios assuming no waiver of management fees and assumption of
expenses by PIM and no reduction for fees paid indirectly:
Net expenses 0.98%**
Net investment income 3.51%**
Ratios assuming waiver of management fees and assumption of
expenses by PIM and reduction for fees paid indirectly:
Net expenses 0.63%**
Net investment income 3.86%**
</TABLE>
(a) Class C shares were first publicly offered on February 28, 2000.
* Assumes initial investment at net asset value at the beginning of the
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of the 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.
21
<PAGE>
Pioneer High Yield Fund
FINANCIAL HIGHLIGHTS 10/31/00
<TABLE>
<CAPTION>
2/25/00
to
10/31/00
<S> <C>
CLASS Y (a)
Net asset value, beginning of period $ 11.34
-------
Increase (decrease) from investment operations:
Net investment income $ 0.74
Net realized and unrealized gain (loss) on investments (0.02)
-------
Net increase from investment operations $ 0.72
Distributions to shareholders:
Net investment income (0.74)
-------
Net decrease in net asset value $ (0.02)
-------
Net asset value, end of period $ 11.32
=======
Total return* 6.56%
Ratio of net expenses to average net assets+
0.15%**
Ratio of net investment income to average net assets+
4.45%**
Portfolio turnover rate 57%
Net assets, end of period (in thousands) $ 1,769
Ratios assuming no waiver of management fees and assumption of
expenses by PIM and no reduction for fees paid indirectly:
Net expenses 0.48%**
Net investment income 4.12%**
Ratios assuming waiver of management fees and assumption of
expenses by PIM and reduction for fees paid indirectly:
Net expenses 0.13%**
Net investment income 4.47%**
</TABLE>
(a) Class Y shares were first publicly offered on February 28, 2000.
* Assumes initial investment at net asset value at the beginning of the
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of the 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.
22 The accompanying notes are an integral part of these financial
statements.
<PAGE>
Pioneer High Yield Fund
NOTES TO FINANCIAL STATEMENTS 10/31/00
1. Organization and Significant Accounting Policies
Pioneer High Yield Fund (the Fund), a Delaware business trust, is registered
under the Investment Company Act of 1940 as a non-diversified, open-end
management investment company. The Fund is the successor to Third Avenue High
Yield Fund, a series of Third Avenue Trust. Third Avenue High Yield Fund
transferred all of its assets to the Fund's Class A shares on February 25,
2000
pursuant to an agreement and plan of reorganization. The reorganization had no
effect on the Fund's operations. The Fund, through its predecessor, commenced
investment operations on February 12, 1998. The investment objective of
the Fund
is to maximize total return through a combination of income and capital
appreciation.
The Fund offers four classes of shares - Class A, Class B, Class C and Class Y
shares. The inception date for Class B, Class C and Class Y shares was
February
25, 2000, and shares of each class were first publicly offered on February 28,
2000. Each class of shares represents an interest in the same portfolio of
investments of the Fund and has equal rights to voting, redemptions, dividends
and liquidation, except that the level of transfer agent and distribution fees
may differ among classes. Class A, Class B and Class C shareowners have
exclusive voting rights with respect to the distribution plan for each class.
There is no distribution plan for Class Y shares.
The Fund's financial statements have been prepared in conformity with
accounting
principles generally accepted in the United States 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 as of trade date. Securities are valued
at prices supplied by independent pricing services, which consider such
factors as Treasury spreads, yields, maturities and
23
<PAGE>
Pioneer High Yield Fund
NOTES TO FINANCIAL STATEMENTS 10/31/00 (continued)
ratings. Valuations may be supplemented by dealers and other sources, as
required and may include the use of yield equivalents or pricing matrices.
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. Market discount and premium are accreted or amortized
daily on
a yield-to-maturity basis. Original issue discount is accreted daily into
interest income on a yield-to-maturity basis with a corresponding increase
in the cost basis of the security. Interest income, including interest on
income bearing cash accounts, is recorded on the accrual basis. Temporary
cash investments are valued at amortized cost.
The Fund invests in below investment grade (high yield) debt
securities and
preferred stocks. These high yield securities may be convertible into
equity
securities of the issuer. Debt securities rated below investment grade are
commonly referred to as "junk bonds" and are considered speculative. These
securities involve greater risk of loss, are subject to greater price
volatility, and are less liquid, especially during periods of economic
uncertainty or change, than higher rated debt securities. The Fund is not
diversified, which means it can invest a higher percentage of its
assets in
any one issuer than a diversified fund. Being non-diversified may magnify
the Fund's losses from adverse events affecting a particular issuer.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
B. Federal Income Taxes
It is the 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
shareowners. Therefore, no federal income tax provision is required.
The characterization of distributions to shareowners 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
24
<PAGE>
Pioneer High Yield Fund
investment transactions, or from paid-in capital, depending on the type of
book/tax differences that may exist.
At October 31, 2000, the Fund reclassified $961 from paid-in capital to
accumulated distributions in excess of net investment income. 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 as of trade date.
Pioneer Funds Distributor, Inc. (PFD), the principal underwriter for the
Fund and a wholly owned subsidiary of UniCredito Italiano S.p.A.
(UniCredito
Italiano) earned $32,632 in underwriting commissions on the sale of fund
shares during the period ended October 31, 2000.
D. Class Allocations
Distribution fees are calculated based on the average daily net asset
values
attributable to Class A, Class B and Class C shares of the Fund,
respectively. Class Y shares are not subject to a distribution plan.
Shareowners 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 its
respective percentage of adjusted net assets at the beginning of the day.
The Fund declares as daily dividends substantially all of its net
investment
income. All dividends are paid on a monthly basis. Short-term capital gain
distributions, if any, may be declared with the daily dividends.
Distributions to shareowners 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, Class B, Class C and Class Y shares can bear
different
transfer agent and distribution fees.
25
<PAGE>
Pioneer High Yield Fund
NOTES TO FINANCIAL STATEMENTS 10/31/00 (continued)
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), 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.
2. Management Agreement
PIM manages the Fund's portfolio and is a wholly owned subsidiary of
UniCredito
Italiano. Management fees are calculated daily at the annual rate of 0.70% of
the Fund's average daily net assets up to $500 million; 0.65% of the next $500
million; and 0.60% of the excess over $1 billion.
PIM has agreed not to impose its management fee and to assume other operating
expenses of the Fund to the extent necessary to limit the Class A expenses to
0.75% of average daily net assets attributable to Class A shares; the
portion of
the Fund-wide expenses attributable to Class B, Class C and Class Y shares
will
be reduced only to the extent that such expenses are reduced for Class A
shares.
Prior to February 25, 2000, expenses were limited to 1.90% of the Fund's
average
daily net assets. PIM's agreement is voluntary and temporary 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. At October 31, 2000, approximately $26,944 was
payable to PIM related to management fees, administrative fees, and certain
other services.
26
<PAGE>
Pioneer High Yield Fund
3. Transfer Agent
PSC, a wholly owned subsidiary of UniCredito Italiano, provides substantially
all transfer agent and shareowner services to the Fund at negotiated rates.
Included in due to affiliates is $28,392 in transfer agent fees payable to PSC
at October 31, 2000.
4. Plans of Distribution
The Fund adopted a Plan of Distribution with respect to each of Class A,
Class B
and Class C shares (Class A Plan, Class B Plan and Class C 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 average daily net
assets attributable to Class A shares 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 and the Class C Plan, the
Fund pays
PFD 1.00% of the average daily net assets attributable to each class of
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 and Class C shares. Included
in due
to affiliates is $67,551 in distribution fees payable to PFD at October 31,
2000.
In addition, redemptions of each class of shares (except Class Y 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 4.00%, based
on the lower of cost or market value of shares being redeemed. Redemptions of
Class C shares within one year of purchase are subject to a CDSC of 1.00%.
Proceeds from the CDSCs are paid to PFD. For the period ended October 31,
2000,
CDSCs in the amount of $28,713 were paid to PFD.
5. Expense Offset Arrangements
The Fund has entered into certain expense offset arrangements resulting in a
reduction in the Fund's total expenses. For the period ended October 31, 2000,
the Fund's expenses were reduced by $28,835 under such arrangements.
27
<PAGE>
Pioneer High Yield Fund
NOTES TO FINANCIAL STATEMENTS 10/31/00 (continued)
6. Line of Credit Facility
The Fund, along with certain others 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 October 31, 2000, there were
no borrowings under this agreement.
28
<PAGE>
Pioneer High Yield Fund
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareowners and the Board of Trustees
of Pioneer High Yield Fund:
We have audited the accompanying balance sheet, including the schedule of
investments, of Pioneer High Yield Fund as of October 31, 2000, and the
related
statement of operations, the statement of changes in net assets, and the
financial highlights for the year then ended. 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 audit. The financial Statements of Third
Avenue High Yield Fund (the predecessor to the Pioneer High Yield Fund as
described in Note 1) as of October 31, 1999, were audited by other auditors
whose report dated December 17, 1999 expressed an unqualified opinion on those
statements.
We conducted our audit in accordance with auditing standards generally
accepted
in the United States. Those standards require that we plan and perform the
audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. 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 October 31, 2000 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 audit provides 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 High Yield Fund as of October 31, 2000, the results of its operations,
the changes in its net assets, and the financial highlights for the year then
ended, in conformity with accounting principles generally accepted in the
United
States.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
December 5, 2000
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<PAGE>
Pioneer High Yield Fund
RESULTS OF SHAREOWNER MEETING
On September 11, 2000, Pioneer High Yield Fund held a special meeting of
shareowners to approve a new management contract between the Fund and Pioneer
Investment Management, Inc., the Fund's investment adviser. Shareowners also
voted to elect trustees. Both proposals passed by shareowner vote. The new
management contract took effect when UniCredito Italiano S.p.A. completed its
acquisition of The Pioneer Group, Inc. on October 24, 2000. Here are the
detailed results of the votes.
Proposal 1 - To approve a new management contract.
<TABLE>
<CAPTION>
Affirmative Against Abstain
<S> <C> <C>
3,544,789.531 43,101.959 44,985.646
</TABLE>
Proposal 2 - To elect trustees.
<TABLE>
<CAPTION>
Nominee Affirmative Withheld
<S> <C> <C>
M.K. Bush 3,570,600.307 62,276.829
J.F. Cogan, Jr. 3,573,450.493 59,426.643
Dr. R. H. Egdahl 3,571,560.811 61,316.325
M.B.W. Graham 3,571,560.811 61,316.325
M.A. Piret 3,573,450.493 59,426.643
D.D. Tripple 3,573,450.493 59,426.643
S.K. West 3,571,560.811 61,316.325
J. Winthrop 3,573,450.493 59,426.643
</TABLE>
30
<PAGE>
Pioneer High Yield Fund
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
Trustees Officers
John F. Cogan, Jr., Chairman John F. Cogan, Jr., President
Mary K. Bush David D. Tripple, Executive Vice President
Richard H. Egdahl, M.D. Vincent Nave, Treasurer
Margaret B.W. Graham 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
31
<PAGE>
Pioneer High Yield Fund
PROGRAMS AND SERVICES FOR PIONEER SHAREOWNERS
Your investment professional 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 1-8O0-225-6292.
FactFone(SM)
Our automated account information service, available to you 24 hours a day,
seven days a week. FactFone(SM) 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.
32
<PAGE>
Pioneer High Yield Fund
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.)
33
<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 Plans
Individual Retirement Account (IRA)
An IRA is a tax-favored account that allows anyone under age 70-1/2 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
The Roth IRA came about as part of the Taxpayer Relief Act of 1997 and became
available to investors in 1998. Contributions, up to $2,000 a year, are not
tax-deductible, but earnings are tax-free for qualified withdrawals.
401(k) Plan
The traditional 401(k) plan allows employees to make pre-tax contributions
through payroll deduction, up to $10,500 per year or 25% of pay, whichever is
less. Employers may contribute.
SIMPLE (Savings Incentive Match PLan for Employees) IRA Plan
Businesses with 100 or fewer eligible employees can establish a plan; it
resembles a 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.
34
<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.
35
<PAGE>
THE PIONEER FAMILY OF MUTUAL FUNDS
For information about any Pioneer mutual fund, please contact your investment
professional, 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.
Growth Funds
United States
Pioneer Growth Shares
Pioneer Micro-Cap Fund
Pioneer Mid-Cap Fund
Pioneer Mid-Cap Value Fund
Pioneer Science & Technology Fund
Pioneer Small Company Fund
Pioneer Tax-Managed Fund
International/Global
Pioneer Emerging Markets Fund
Pioneer Europe Fund
Pioneer Indo-Asia Fund
Pioneer International Growth Fund
Pioneer World Equity Fund
Growth and Income Funds
Pioneer Fund
Pioneer II
Pioneer Balanced Fund
Pioneer Equity-Income Fund
Pioneer Real Estate Shares
Income Funds
Taxable
Pioneer America Income Trust
Pioneer Bond Fund
Pioneer High Yield Fund
Pioneer Limited Maturity Bond Fund
Pioneer Strategic Income Fund
Tax-Free
Pioneer Tax-Free Income Fund
Money Market Fund
Pioneer Cash Reserves Fund*
* An investment in the Fund is not insured or guaranteed by the Federal
Deposit
Insurance Corporation or any other government agency. Although the Fund
seeks
to preserve the value of your investment at $1 per share, it is possible to
lose money by investing in the Fund.
36
<PAGE>
This page for your notes.
37
<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:
Account Information, including existing accounts,
new accounts, propectuses, 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
This report must be preceded or accompanied by a current Fund prospectus.
<TABLE>
<S> <C> <C>
[logo] PIONEER Pioneer Investment Management, Inc.
9441-00-1200
Investments(R) 60 State Street (C)
Pioneer Funds Distributor, Inc.
Boston, Massachusetts 02109 [recycle
logo] Printed on Recycled Paper
www.pioneerfunds.com
</TABLE>
